The Peridot Capitalist

Homepage

Articles: 1, 2, 3, 4, 5

Browser Compatibility Update
2007-04-23 15:26:00
The blog should now be viewable in all Internet Explorer version 6.0 browsers. The color scheme just below the header section might be a little off until I dig deeper into the situation, but at least now you should be able to see the entire page's content. If you are still having issues, let me know which browser version you are using.
More About: Update , Browser , Bili , Compatibility , Compa

Could We Get a 7-Year Double Top on the S&P 500?
2007-04-22 18:57:00
This really isn't a prediction as much as it is just mere speculation about what could happen to the market in the coming weeks and months. Short term movements don't really concern me as I mostly just focus on undervalued companies regardless of market level, but sometimes it's still interesting to point things out.A lot is being made about the Dow making new all-time highs lately, but as many of you know, the S&P 500 is still about 3 percent below its peak from the year 2000 at the 1,527 level. Here's a 10-year chart of the S&P 500 index:One possible scenario would be for a long term double top around that level. A lot of strategists are dissatisfied with the 7 percent correction we got in March and want some kind of retest of that level, or even better, a full 10 percent correction in the S&P 500 so we can get that monkey off our back.Is a double top around 1,527 the most likely scenario? Of course not, but it's still interesting to think about. I definitely would no...
More About: Double , Year

Changes to the Blog
2007-04-21 20:47:00
As many of you know, I started this blog in 2004 not really knowing whether it would catch on at all. It seemed like a great way to communicate with people about the stock market and investing, and not only clients and friends, but also other investors who might enjoy reading it. As the site grew, it became apparent that the blog would last for a long time and had outgrown its original web address on blogger.As a result, last year I began posting the content in duplicate at its own dedicated domain. I kept the blogspot site active to accommodate existing readers and advertisers, but having two sites really was a hassle. Accordingly, this weekend I finally decided to merge the sites, allowing The Peridot Capitalist to be hosted at only one address. The blogspot site is now pointed to the dedicated address.As is usually the case with technology modifications, the potential for problems was one of the reasons it took me so long to go ahead with this consolidation process. I don't exp...
More About: Blog , Changes , Chang , Chan

Don't Get Caught Up in Optimism from Company Management
2007-04-18 19:53:00
Aside from company-specific issues at Yahoo! (YHOO), the main takeaway from the search giant's poorly received first quarter earnings report should be to take what management says with a grain of salt. Yahoo! stock soared from the high 20's to...
More About: Management , Company , Caught , Mana , Opti

Don't Get Caught Up in Optimism from Company Management
2007-04-18 19:51:00
Aside from company-specific issues at Yahoo! (YHOO), the main takeaway from the search giant's poorly received first quarter earnings report should be to take what management says with a grain of salt. Yahoo! stock soared from the high 20's to the low 30's after CEO Terry Semel went on the record saying how great its new online advertising system, Panama, was going to be. Obviously, when investors saw poor results and a lackluster outlook from the company, they felt blindsided.Why would Terry Semel be so optimistic when the numbers didn't reflect that optimism? Because he's the CEO. Mana gement always sees the glass half-full. Many of them believe it is their job to be company cheerleaders. Very few executives refrain from trying to spin anything to be as positive as they can. Investors need to keep that in mind. Don't go out and buy a stock just because you saw the CEO on television and he or she was bullish.It can be hard to ignore that sometimes. After all, if you watch sh...
More About: Company , Caught , Opti

Five Reasons to Sell Your Yahoo Stock
2007-04-17 23:19:00
Shares of Yahoo ! (YHOO) are falling 5 percent in after-hours trading tonight after the company reported first quarter earnings of 10 cents per share, a penny below analyst estimates. If you are an investor in the company, here are five...
More About: Stock , Your , Reason , Reasons

Five Reasons to Sell Your Yahoo Stock
2007-04-17 22:50:00
Shares of Yahoo ! (YHOO) are falling 5 percent in after-hours trading tonight after the company reported first quarter earnings of 10 cents per share, a penny below analyst estimates. If you are an investor in the company, here are five reasons to sell your stock.1) They are overhyping PanamaCEO Terry Semel and company have been hyping their new ad platform, Panama, ever since it launched. Yahoo! stock has risen 25% so far in 2007 mostly due to the fact that it appeared the new system would really boost results. With first quarter profits below expectations and second quarter guidance in-line with projections, it appears they are overhyping Panama's potential and any benefits from it are clearly priced into the shares already.2) Growth in the U.S. is over I was amazed when I saw this figure in their press release. Revenue in the United States for the first quarter was $1.1 billion, growth of zero percent over 2006. This should be a red flag. It's true that international market opp...
More About: Stock , Reasons , Sell , Sons

Market Correction Comes and Goes Much Like Last Year
2007-04-17 01:05:00
Did you notice the SP 500 hit a new high today? It seems this market corrects much more fast and furious than in prior periods, but the corresponding snap back is just as quick. If you blink, you might miss...
More About: Market , Last , Come , Much , Mark

Market Correction Comes and Goes Much Like Last Year
2007-04-17 00:14:00
Did you notice the S&P 500 hit a new high today? It seems this market corrects much more fast and furious than in prior periods, but the corresponding snap back is just as quick. If you blink, you might miss it. Just last month we were spooked by a 400-point one-day drop in the Dow after a huge sell-off in the China market. Chinese stocks rebounded to make new highs and now the U.S. market has done the same. The 2006 correction was very similar, short and swift. In fact, compare the two charts:Bears will undoubtedly be looking for a failed breakout and another leg down. Despite the fact that the market has been pricing in an interest rate cut, and yet no rate cut seems imminent, stock prices keep chugging along. I am in the camp that believes the Fed is on hold and won't cut rates due to a perceived credit crunch. Things would have to get meaningfully worse on that front for Bernanke to move, in my opinion.Where does that leave stocks? I am still standing by my mid-to-high single ...
More About: Market , Come , Much , Mark , Like

Merck Does Investors a Favor
2007-04-13 13:37:00
Shareholders in Merck (MRK) must be breathing a sigh of relief. An FDA panel voted 20-1 against approving Arcoxia, the company's experimental arthritis pain killer, but the stock rallied $1.50 in after-hours trading Thursday night. Why such enthusiasm? Merck just...
More About: Investor , Vest , Stor , Invest

Merck Does Investors a Favor
2007-04-13 13:35:00
Shareholders in Merc k (MRK) must be breathing a sigh of relief. An FDA panel voted 20-1 against approving Arcoxia, the company's experimental arthritis pain killer, but the stock rallied $1.50 in after-hours trading Thursday night. Why such enthusiasm? Merck just happened to announce an increase in earnings guidance for 2007 right after news of the FDA committee's decision hit the wires.While many companies fail when it comes to looking out for investors, Merck deserves kudos for the timing of this announcement. An increase in 2007 guidance to $2.80 per share, versus current consensus estimates of $2.65 is more than enough to reverse the stock's direction short term. Had the company waited until later in the month to announce the profit projections, the stock likely would have just recouped the losses suffered due to the FDA decision. Now, investors get a higher stock price despite the overwhelming angst over Arcoxia.Now, one could argue that Arcoxia was not expected to be approv...
More About: Stor , Invest , Investors

The Saks Turnaround is Worth Watching
2007-04-12 20:58:00
Followers of Peridot Capital are well aware that I am a big fan of turnaround stories in the retail industry. Historically poorly run retailers can be revitalized if the right management team is brought in to oversee the turnaround. Not...
More About: Watch , Naro , Saks , Worth , Watching

The Saks Turnaround is Worth Watching
2007-04-12 20:28:00
Followers of Peridot Capital are well aware that I am a big fan of turnaround stories in the retail industry. Historically poorly run retailers can be revitalized if the right management team is brought in to oversee the turnaround. Not every instance will result in the 1,200 percent return Kmart shareholders have earned since the company came out of bankruptcy and merged with Sears (SHLD). However, RadioShack (RSH) was the best performing stock in the S&P 500 during the first quarter, and other retailers like Eddie Bauer (EBHI) and Pier One (PIR) have been run into the ground in recent years, so there is a lot of upside potential if the right people are hired to run the business. One other retail stock I think warrants value investors’ attention is Saks (SKS). The company unloaded its lower end department store brands last year to focus more on its upscale luxury offerings. A new management team is trying to boost merchandising in order to get margins up to the level of competito...
More About: Worth , Watching , Round , Turn

AMD Warning Brings Out Buyers
2007-04-11 13:56:00
Whenever a company issues an earnings warning and its stock jumps on heavy volume, it is usually a signal that an abundance of bad news has already been priced into the shares and a bottoming phase might be underway. I...
More About: War , Buyer , Ring , Warning , Rings

M&T Bank Preannouncement Shows Alt-A Mortgages Not Immune
2007-04-10 15:24:00
Was anyone else surprised that news of a first quarter profit warning from MT Bank (MTB) hardly had any effect on the market and received fairly little attention on Wall Street? One of the arguments we have heard from many...
More About: Show , Men , Announcement , Mortgage , Mortgages

Sears Holdings Securitizes Its Brand Names
2007-04-06 19:57:00
According to a story in Business Week magazine, there is more evidence that Eddie Lampert's Sears Holding s (SHLD) is a lot more than just a company that has supposedly lost its relevance in consumer retailing. A move to securitize the...
More About: Name , Brand

Kraft Shares Still Not Overly Attractive, Even After Altria Spin-Off Sellin
2007-04-04 16:17:00
With the Altri a (MO) spin-off of Kraft Foods (KFT) completed on Monday, there has been renewed selling pressure on Kraft shares as investors shed their newly claimed small position in the company. Such negative price action will likely be a...
More About: Altria , Share , Stil , Over

Sam Zell Epitomizes Contrarian Investing
2007-04-03 14:39:00
There is a reason you won't see any day traders, market timers, or technical analysts on the Forbes 400 list of richest Americans. Those strategies simply have not proven to be consistently successful ways to make money over the long...
More About: Investing , Vest , Aria , Sting , Invest

Despite Flat Market, Peridot's Select List Shines in Q1
2007-04-02 15:05:00
For those of you who are looking for new ideas in a flat market, Peridot Capital's 2007 Selec t List outperformed in the first quarter, posting a gain of 3.6% for the period. The list, a research product in its second...
More About: Market , Shine , Mark

Online Business Model Allows for Numerous High Yield Savings Account Option
2007-03-31 18:26:00
Before the Federal Reserve began their interest rate raising campaign, consumers keeping money in savings accounts were pretty much out of luck. Banks were paying 1% if you were lucky and there weren't many options for highly liquid short term...
More About: Business , Online Business , Model , Online , High

The Rising Cost of Healthcare Taken To Another Extreme
2007-03-29 20:29:00
LOS ANGELES, March 26 (Reuters) - Shares of Alexion Pharmaceuticals Inc. (ALXN) rose more than 9 percent on Monday after the company told analysts that its treatment for a rare blood disorder would be priced at $389,000 per year. The...
More About: Health , Healthcare , Other , Extreme , Cost

Response to Iran Rumors Shows that Energy Should Be Owned as a Geopolitical
2007-03-28 14:27:00
In case you haven't heard yet, oil prices spiked more than $5 per barrel late Tuesday on rumors that Iran had fired shots at U.S. warships. Although the gains were pared once the news went unconfirmed, one only needs to...
More About: Rumor , Political , Rumors , Energy

Patient Investors: Take a Look at Amgen
2007-03-26 14:49:00
As a value investor, it is often easier to find undiscovered or unloved stocks in the small and mid cap universe. After all, bigger companies are well known, followed by more analysts, and are very popular with retail investors. Those...
More About: Take , Investor , Vest , Stor , Invest

Blackstone IPO Signals Private Equity Market is "As Good as it Gets"
2007-03-23 14:31:00
Throughout history, what has been one of the worst types of investments to buy? If you answered IPOs, you're correct. Before commenting on the $4 billion IPO of private equity behemoth Black stone Group, let's review why exactly IPOs are such...
More About: Market , Private Equity , Stone

Motorola Earnings Warning Highlights Failure to Find Next Hit After RAZR
2007-03-22 12:31:00
Shares of Moto r ola (MOT) are getting smacked in pre-market trading after the mobile phone giant shocked Wall Street yesterday by forecasting a first quarter loss. After having failed to find another hit after the wildly popular RAZR phone, rumors are...
More About: War , Find

After Losing Caremark Bid, Will Express Scripts Target Medco Next?
2007-03-20 13:58:00
Shares of Express Script s (ESRX) have been on fire lately, rising 30% within months as the company tried to pry competitor Care mark Rx (CMX) from CVS (CVS). Somewhat surprisingly, ESRX shares have jumped to over $84 on news that the...
More About: Press , Next

Use Sites Like Yahoo! Finance With Caution
2007-03-19 14:30:00
Investors need to be careful when they do stock research on portal sites like Yahoo ! Finance . If you enter a symbol in these sites you will quickly get a summary of where the stock trades. Not only do current prices...
More About: Site , With , Sites

Should We Blame the Fed for Sub-Prime's Woes?
2007-03-16 14:46:00
I just heard an argument about this and I think it's extremely unfair to blame the Fed for the current crisis in the sub-prime mortgage industry. The rationale for doing so postulates that without record low interest rates for so...
More About: Should , Blame , Prime , The Fed , Lame

Great Companies Don't Always Make Great Stocks
2007-03-15 13:57:00
Many times one will look at a value investor's portfolio and wonder why on earth they own some of the stocks they do. Usually the answer lies in the fact that the manager understands that just because a firm isn't...
More About: Companies , Stocks , Comp , Great , Stock

March Madness
2007-03-15 00:28:00
My pick: KansasI came up with the idea too late to do it, but next year I will definitely have some sort of Marc h Madness contest on the blog. If you have any ideas, let me know.Good luck with your...
More About: Ness