John Ransom - William's Edge Webinar for Friday February 7th
Posted: 2/7/2014 12:22:00 PM EST
Ransom Notes Radio Webinar
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John Ransom - The Soda Wars Get Bubbly
Posted: 2/7/2014 12:02:00 PM EST

Welcome to John Ransom’s Stocks in the News for February 6th, 2014- where the headlines meet the trendlines:

Stock number one: Green Mountain Coffee Roasters, Inc.

Green Mountain Vs. SodaStream Next Coke Vs. Pepsi?- IBD.com

David Williams with PageTrader.com and Williams-Edge talk to John about the day’s market trends for February 6th 2014.

SodaStream (SODA) rebounded Thursday on speculation PepsiCo (PEP) could reach a deal with the in-home soft drink maker after Green Mountain Coffee Roasters (GMCR) stunned the industry late Wednesday by announcing a deal with Coca-Cola (KO) to develop a cold beverage machine. Deutsche Bank's Bill Schmitz believes there is a "small possibility" PepsiCo will form a similar partnership with SodaStream. He kept his hold rating and $53 price target on the stock.

Symbol: GMCR

Trailing PE 33; Forward PE: 24

PEG: 1.17

Dividend: 1.20%

Estimate Trend: UP

Ransom Note Trendline: Buy Green Mountain Coffee

GMCR Chart

GMCR data by YCharts

Stock number two: Akamai Technologies, Inc.

Akamai Reports Strong Q4 Earnings- Zacks

Akamai Technologies, Inc. (AKAM) reported fourth-quarter 2013 earnings of 55 cents per share, which increased 10.0% on both year-over-year and quarter-over-quarter basis. Earnings were above the higher-end of management’s guided range of 49 cents to 53 cents per share. Shares jumped 17.8% ($8.46) in after-hours trading, as Akamai provided a better-than-expected outlook for the first quarter of 2014. According to Bloomberg, the company also put to rest investors’ fears regarding Apple’s (AAPL) plan of building its own content delivery network.

Symbol: AKAM

Trailing PE: 37 Forward PE: 23

PEG: 1.57

Dividend: NA

Estimate Trend: UP

Ransom Note Trendline: Hold Akamai

AKAM Chart

AKAM data by YCharts

Stock number three: Spirit AeroSystems Holdings, Inc.

Why Spirit Aerosystems (SPR) Is Down Today- The Street.com

Spirit Aerosystems (SPR_) fell 18.3% to $27.02 Thursday after reporting a loss in its fourth-quarter earnings report. For its fourth quarter, Spirit posted a net loss of $587 million, or $4.15 a share, compared to a profit of $61 million, or 43 cents a share, in the year-ago quarter. Revenue rose 5% in the quarter to $1.49 billion. The loss in the quarter is partly due to a $546 million charge related to its Boeing (BA_) 787 program. Spirit produces the fuselage for the Boeing 787 Dreamliner.

Symbol: SPR

Trailing PE: 142; Forward PE: 10

PEG: 0.51

Dividend: NA

Estimate Trend: Has been UP

Ransom Note Trendline: Avoid Spirit AeroSystems Holdings

SPR Chart

SPR data by YCharts

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Nick Sorrentino - Don’t Worry About Stocks, Worry About the Economy, and Your Job
Posted: 2/6/2014 2:33:00 PM EST

(Alternatively just keep your head down and keep working hard, which is probably best.)

QE is failing. (It was destined to, as we have said many times.) They may be able to jack the system up again. That is extremely possible. But I think it it is equally possible that an alternative scenario plays out here.

Keep watching Japanese debt.

(From CNN Money)

Berkshire Hathaway, for instance, is generally seen as pure of a play on the U.S. economy as you can get. And shares of Berkshire (BRKA) have fallen 7.4%, a larger dip than the rest of the market. What’s more, Dow Jones’ index of U.S. retailers is down 8.4%, which is also a greater decrease than the rest of the market, and, again, a group of stocks that tend to be tied to the U.S. economy.

Click here for the article.

Read more at Against Crony Capitalism.org

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Mike Shedlock - Voters in Bankrupt San Bernardino Sweep Pro-Union Guard from Office
Posted: 2/6/2014 2:31:00 PM EST

The inevitable shape-of-things-to-come has finally arrived in a major California city. I am pleased to report Voters in bankrupt San Bernardino sweep old guard from power.

Residents of bankrupt San Bernardino, California on Tuesday voted to complete a rout of the city's pro-union old guard, electing business-friendly pragmatists who have pledged to try to reduce pension costs and take on vested interests.

As San Bernardino enters into a fourth month of mediation with its creditors, the biggest of which is Calpers, California's giant retirement system, voters on Tuesday elected Carey Davis as the crisis-hit city's new mayor.

Davis, a businessman and political novice, ran in part on a campaign to reduce the city's pension obligations. In an interview in November, when he became one of two mayoral candidates, he said the city had to cut spending on police and fire departments, currently more than 70 percent of the budget.

"You have to roll the pensions back," Davis said in November. Davis did not return calls on Wednesday.

Davis will play a big role in how the city approaches negotiations with its creditors. He will be part of a small team of elected officials who represent the city as the debtor in the bankruptcy.

Along with Detroit, the biggest U.S. city to seek Chapter 9 protection, San Bernardino is likely to set precedent on whether retirees or Wall Street bondholders suffer the most when a city goes broke.

Davis defeated a San Bernardino political veteran, Wendy McCammack. She ran for mayor despite having been ousted by voters from her own council seat in a recall election in November.

Also on Tuesday, another political novice, Henry Nickel, became a new council member, saying he wanted to take on special interests. Nickel's biggest challenger was Randy Wilson, a police sergeant endorsed by the police union, the only candidate for that seat who did not support pension reform efforts.

Tuesday's results follow elections in November, when the balance of power in San Bernardino's seven-member council shifted dramatically away from an old guard reluctant to take on unions and reduce pension obligations.

After Tuesday night, six of seven council members are now on record as saying they want to explore reducing San Bernardino's pensions, along with Davis, the new mayor, and a new city attorney, Gary Saenz.

Expect a Hard Line On CalPERS

This kind of broad sweep eventually had to happen. I am not sure why it took so long, but even Taxifornia is finally fed up with public unions and the damage they cause. One bankrupt city after another will go this route.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Read more at http://globaleconomicanalysis.blogspot.com/2014/02/residents-of-bankrupt-san-bernardino.html#sLWYzVmMWPHKo0OY.99

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John Ransom - William's Edge Webinar for Thursday February 6th
Posted: 2/6/2014 12:59:00 PM EST

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Date: Thursday, February 6, 2014
Time: 11:20 AM - 12:20 PM PST

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John Ransom - Wings and Wages Hurt Earnings
Posted: 2/6/2014 12:50:00 PM EST

Welcome to John Ransom’s Stocks in the News where the headlines meet the trendlines:

Stock number one: Buffalo Wild Wings Inc.

Buffalo Wild Wings Tries To Reinvent The Sports Bar- IBD.com

Buffalo Wild Wings (BWLD) shares plunged Wednesday on concerns over possible wage increases and wing costs, but the chain is moving ahead with attempts to reinvent the sports bar concept. Morgan Stanley analyst John Glass reaffirmed his underweight (sell) rating and $143 price target, writing that strong comps and margins are expected to continue into the first half of the year but minimum wage hikes and chicken costs could put pressure on the back half of the year.

Goldman Sachs lowered its price target on the stock to $142 from $150. Feltl & Co. was even more concerned about Buffalo's Q4 report, saying January sales were "disappointing."

Symbol: BWLD

Trailing PE 36; Forward PE: 27

PEG: 2.17

Dividend: NA

Estimate Trend: UP

Ransom Note Trendline: Sell Buffalo Wild Wings

BWLD Chart

BWLD data by YCharts

Stock number two: The Hain Celestial Group, Inc.

Hain Celestial (HAIN) Pulls Back on As-Expected Earnings- The Street.com

Hain Celestial Group (HAIN_) dumped 10.1% to $81.84 on Wednesday after releasing second-quarter earnings which matched expectations a day earlier. The organic and health foods company recorded quarterly net income of 87 cents a share, meeting expectations of analysts surveyed by Thomson Reuters. However, the Lake Success, NY.-based business fell slightly short on the top line. Revenue of $535 million was 17.6% higher year-over-year but missed consensus by $2 million.

Symbol: HAIN

Trailing PE: 32 Forward PE: 24

PEG: 1.97

Dividend: NA

Estimate Trend: UP

Ransom Note Trendline: Avoid Hain Celestial

HAIN Chart

HAIN data by YCharts

Stock number three: Tableau Software, Inc.

Tableau Software (DATA) Raised at UBS- The Street.com

Tableau Software (DATA_) reported impressive fourth-quarter results after the bell Tuesday, and UBS noticed. The investment firm reiterated Tableau as a "buy" and upped its price target to $100 from $76. "With impressive 82% y/y revenue growth in CY13, DATA was the 2nd fastest growing company in our universe last year -- and the setup for CY14 looks promising," wrote analyst Brent Thill in the report.

Symbol: DATA

Trailing PE: NA; Forward PE: 905

PEG: NA

Dividend: NA

Estimate Trend: Flat

Ransom Note Trendline: Avoid Tableau Software

DATA Chart

DATA data by YCharts

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Mike Shedlock - "Situation Impossible"
Posted: 2/5/2014 2:31:00 PM EST
Greek economist Costas Lapavitsas says "The Euro has Already Failed" and it's "Situation Impossible" for France.

Via translation from La Vanguardia here is the complete interview ....

LV: When I interviewed you for the first time in late 2011, you said that the ECB was not the magic solution to the eurozone crisis. Then in July 2012 Mario Draghi stated "The ECB is ready to do whatever it takes to preserve the euro and believe me, it will be enough." Do you still believe that the ECB is not the solution?

CL: The ECB is not the solution. What happened in 2011 and 2012 is that the peripheral countries accepted the austerity demanded by Berlin and Brussels. They accepted wage cuts and unemployment. Their economies are headed for a recession. Have stabilized public finances and external deficit has stabilized. The fundamental answer is recession.

LV: Is that what the ECB wanted?

CL: The announcement of Mario Draghi pacified the financial markets but only because recession was accepted by the population in the peripheral countries. The ECB did not solve the crisis in the real economy.

LV: Are we far from a stable eurozone crisis solution?

CL: The ECB stabilized the fiscal deficit and the trade deficit and hence financial markets. But the crisis has become a crisis in the real economy. There is foul growth and impoverishment.

LV: Has the crisis moved from the periphery crisis to other countries?

CL: Yes. The euro crisis has moved to the heart of the eurozone. France and Italy are now facing the same problems as the periphery in 2010 and 2011. The crisis is now in France and Italy.

LV: Is there more inequality now than at the beginning of the crisis?

CL: Of course. Here's how the situation has stabilized: recession, austerity without growth, more impoverishment and huge social problems for most of the working class.

LV: Can we forget the idea introduced a couple of years ago regarding a two-speed euro?

CL: I do not think it's going to be a two-speed euro. I think the policy that comes from Berlin and Brussels is the austerity of all European countries. France is now in a situation impossible. The real problem in the eurozone is now France. It has great competitiveness gap with Germany.

LV: Why?

CL: The competitiveness gap that the periphery had in 2010-11 is now in France. Wages in Germany have gone up a bit or frozen, wages in France have grown in line with inflation. This gap makes it difficult for the French economy to grow significantly. If France is moving towards austerity, as the periphery, Europe faces serious problems. Depression. And France is facing huge social and political problems. The eurozone crisis has moved to the heart of the euro.

LV: How does situation look in five years?

CL: It is difficult to say precisely. The eurozone will continue to be unstable as in recent years. It will be even worse than now because of tension between France and Germany. The currency is not sustainable. If the common currency fails, the EU is facing a huge crisis.

LV: Do you think that the euro will fail?

CL: The euro has already failed. It was a project that was supposed to create convergence, growth and solidarity between the peoples of Europe, it was supposed to create a commonality among Europeans. The euro has created divergences, recession, poverty, it is like a straitjacket for Europe, increases the national and the social tensions in Europe. It succeeds now only because it instills fear. I do not think this is sustainable for long.

LV: How is the situation in Greece?

CL: Greece is a mess. In 2010 Greece should have left the euro and put its economy in another direction. The economic and social catastrophe in Greece is worse than what happened in Argentina in the late 90s and early 2000. This is what happens when you're within this monetary structure that is the euro.

LV: This is your first trip to Barcelona. How do you assess issues such as the independence of Catalunya?

CL: The situation in Barcelona is very interesting. I am very surprised by the strength of the independence movement in Catalonia. I'm amazed by the vitality of social movements. Yet, I think the level of understanding of the economic problems of Spain and Catalunya are not as high as they should be.

LV: Why?

CL: I think there should be more understanding of the implications of would happen if there was eventual independence in the Catalan economy. There is a lot of complexity that is not completely understood. Social movements in Catalonia need to further discuss these issues.

Mish Comments

I have little to add other than I agree with Costas Lapavitsas on major points. The euro has already failed. The question is: when will that be politically recognized?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Read more at http://globaleconomicanalysis.blogspot.com/2014/02/situation-impossible.html#7Bd9fIWb5i7rRzgm.99

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John Ransom - William's Edge Webinar for Wednesday February 5th
Posted: 2/5/2014 12:24:00 PM EST

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Date: Wednesday, February 5, 2014
Time: 11:20 AM - 12:20 PM PST

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John Ransom - Luxury Brands Doing Great in Europe
Posted: 2/5/2014 11:05:00 AM EST

Welcome to John Ransom’s Stocks in the News where the headlines meet the trendlines:

Stock number one: Michael Kors Holdings Limited

Michael Kors continues to outshine luxury rivals- FT.com

Michael Kors raised its full-year sales and profit forecasts as it reported a 144 per cent rise in European third-quarter sales, confirming that the retailer’s assault on the continent’s luxury market continued unabated. The better-than-expected results sent the company’s share price up almost 21 per cent in early trading on Tuesday, as Wall Street reacted to the growth recorded across Michael Kors’ retail, wholesale and licensing segments, as well as international markets.

Symbol: KORS

Trailing PE 37; Forward PE: 26

PEG: 1.13

Dividend: NA

Estimate Trend: UP

Ransom Note Trendline: Buy on Pullback to $85

KORS Chart

KORS data by YCharts

Stock number two: Yum! Brands, Inc.

Yum! Brands rises after reaffirming profit growth outlook- Fly on the Wall

Shares of Yum! Brands (YUM), which owns the KFC, Taco Bell and Pizza Hut restaurant concepts, are rising after the company reported mixed fourth quarter results, but reaffirmed its fiscal 2014 profit growth view of at least 20%. WHAT'S NEW: Last night, Yum! Brands reported fourth quarter adjusted earnings per share of 86c and revenue of $4.18B, compared to expectations of 80c and $4.26B, respectively. The company reported same store sales in its China division fell 4%, while U.S. SSS fell 2%.

Symbol: VIP

Trailing PE: 30 Forward PE: 17

PEG: 1.47

Dividend: 2.20%

Estimate Trend: Flat

Ransom Note Trendline: Avoid Yum

YUM Chart

YUM data by YCharts

Stock number three: Zynga, Inc.

For $527 Million, Zynga Buys an Entirely New Game-Making Strategy- Motley Fool

Zynga (NASDAQ: ZNGA) is in trouble. Five years ago, as it rode the Facebook wave, the Silicon Valley gaming outfit was all the rage, but things are so very different now. On Thursday, it laid off 15 percent of its staff. But at the same time, in an effort to save its bacon, the company made a big bet on the future. It paid $527 million for a new technology that might just give it an edge on mobile devices, an area where Zynga hasn't traditionally fared that well. It acquired NaturalMotion, a U.K. company best known for doing the background animation for the video games such as Grand Theft Auto and Max Payne.

Symbol: ZNGA

Trailing PE: NA; Forward PE: 120

PEG: NA

Dividend: NA

Estimate Trend: Up

Ransom Note Trendline: Sell Zynga

ZNGA Chart

ZNGA data by YCharts

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Nick Sorrentino - Are we looking at a “global deflationary shock” triggered by the Fed?
Posted: 1/30/2014 3:01:00 PM EST

The economic tide has been going out for quite a while, but the pace has just quickened in emerging markets – big time. Things have become quite unsteady and no one knows whether the current instability will trigger something broader in the developed economies. China is slowing. Japan has horns locked with China economically and increasingly politically. Europe is catching its breath before another wave rolls through.

All because the Fed has indicated that it is modestly reducing the amount of money it will pour into world markets. The addict is feeling withdrawal pains.

Those who have argued that the US market was rallying because of fundamental political issues and not because of the QE party created by the Federal Reserve are clearly wrong. Cotton candy and unicorn dreams underlie much of this market. Proceed with caution.

(From The Telegraph)

The report said they may need capital controls to navigate the storm – or technically to overcome the “Impossible Trinity” of monetary autonomy, a stable exchange rate and free flows of funds. William Browder from Hermitage says that is exactly where the crisis is leading, and it will be sobering for investors to learn that their money is locked up – already the case in Cyprus, and starting in Egypt. The chain-reaction becomes self-fulfilling. “People will start asking themselves which country is next,” he said.

Emerging markets are now half the global economy, so we are in uncharted waters. Roughly $4 trillion of foreign funds swept into emerging markets after the Lehman crisis, much of it by then “momentum money” late to the party. The IMF says $470bn is directly linked to money printing by the Fed . “We don’t know how much of this is going to come out again, or how quickly,” said an official from the Fund.

One country after another is now having to tighten into weakness. The longer this goes on, and the wider it spreads, the greater the risk that it will metamorphose into a global deflationary shock.

Click here for the article.

Read more at Against Crony Capitalism

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