Archive: June, 2008

CNBC Bonus Bucks Trivia: Which U.S. airline announced on Monday June 23 that it plans to lay off 950 pilots?

Which U.S. airline announced on Monday June 23 that it plans to lay off 950 pilots?

United Airlines said Monday it plans to eliminate about 950 pilot jobs beginning this summer in addition to an already announced plan to cut 1,600 salaried positions and reduce its fleet.

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LSTR: Updating Landstar vs. CH Robinson

On December 4 2007 I wrote a piece called Roll with Landstar, Short CHRW, saying:

“Based solely on sales or operating margins, Landstar (LSTR - Annual Report) is about 35% the size of CH Robinson (CHRW - Annual Report). If it had the same relative valuation, it would trade at $52 per share.

CH Robinson’s forward price-to-earnings multiple is 24.6, compared with 19.3 for Landstar. At 24.6 times estimated 2008 earnings, Landstar would be trading north of $54. Assigning CHRW’s 1.67 PEG ratio (P/E ratio related to its growth rate) to Landstar would give it a $49 value.

CH Robinson has a lofty 16.1 times EV/EBITDA ratio. If Landstar got that multiple, its stock would be $60.”

The day I wrote the article, Landstar closed at $43.02 and CH Robinson was $53.03. Today, they are in a dead heat price-wise, with LSTR at $55.59 and CH Robinson at $55.03.

While I’m still bullish on (and own) Landstar, I’d probably cover any CHRW shorts at this point. The trade has been fulfilled according to plan for a >25% relative gain.

Disclosure: At time of publication, William Trent is long Landstar (LSTR - Annual Report)

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CNBC Bonus Bucks Trivia: In Fast Money’s Web Extra video “Najarian’s Sweet Trade” which home builder rated the opinion, “I’d stay away”?

In Fast Money’s Web Extra video “Najarian’s Sweet Trade” which home builder rated the opinion, “I’d stay away”?

Lennar (LEN)

In the models I follow, Lennar scores highly for free cash flow. However, it ranks among the worst in terms of earnings quality, price momentum, and return potential.

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Getting Defense-ive

My latest column is up at RealMoney.

New orders for manufactured durable goods in May increased slightly to $213.6 billion, the U.S. Census Bureau announced last week. This was the first increase in three months, and it followed a 1.0% April decrease. Excluding transportation, new orders decreased 0.9%. Excluding defense, new orders decreased 0.6%.

Behind that bland summary, though, is usually a wealth of information that I believe could be useful for picking the best industries in which to invest. This month, the signal was clear. Get defensive. Among a sea of industries seeing declining sales and orders, one stood out for its strength: defense aircraft and parts.

Disclosure: At time of publication, William Trent has no financial position in the companies mentioned in this article.

Topics: DRS Technologies (DRS), Esterline (ESL), Heico (HEI), L-3 Communications (LLL), Northrop Grumman (NOC), Raytheon (RTN) | No Comments

CNBC Bonus Bucks Trivia: According to the CNBC Stock Blog “Powering Your Portfolio: Uranium” what is uranium miner Cameco’s other business?

According to the CNBC Stock Blog “Powering Your Portfolio: Uranium” what is uranium miner Cameco’s other business?

Looking to miners, Canada’s Cameco (CCJ) has a market capitalization of more than $13 billion and is the world’s largest uranium producer. It also mines gold.

Cameco scores average for each of the models I follow with the exception of return potential. It gets a low score there.

Disclosure: Author is long STREETTRACKS GOLD (GLD) at time of publication.

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CNBC Bonus Bucks Trivia: In the CNBC.com video “Go Short” how does Options University strategist Ron Ianieri define a “speculator”?

In the CNBC.com video “Go Short” how does Options University strategist Ron Ianieri define a “speculator”?

Everyone who is in the market.”

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CNBC Bonus Bucks Trivia: According to the blog post, “Air Products: Cutting Edge of Alt Energy?”, how does Jim Cramer describe the U.S.?

According to the blog post, “Air Products: Cutting Edge of Alt Energy?”, how does Jim Cramer describe the U.S.?

Since the U.S. is known as the Saudi Arabia of coal – at least that’s what Cramer calls it – this could be a big step toward energy independence.

Air Products and Chemicals (APD) gets high marks in the models I follow for both earnings momentum and price momentum. However, the potential return score is low.

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CNBC Bonus Bucks Weekly Quiz: In shorting, the difference between where you sell a stock and where you buy it back is called _____.

In shorting, the difference between where you sell a stock and where you buy it back is called _____.

Profit 

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CNBC Bonus Bucks Trivia: In his blog, Darren Rovell paid tribute to the late George Carlin. Which of Rovell’s terms refers to options trades?

In his blog, Darren Rovell paid tribute to the late George Carlin. Which of Rovell’s terms refers to options trades?

Long straddle

Taking a long position in both a put and a call option.

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CNBC Bonus Bucks Trivia: In Fast Money’s Web Extra segment “Najarian’s Sweet Trade” which food & beverage purveyor did Pete Najarian praise?

In Fast Money’s Web Extra segment “Najarian’s Sweet Trade” which food & beverage purveyor did Pete Najarian praise?

In Wednesday’s Web Extra Pete Najarian reveals why sweet tea makes him sweet on McDonald’s.

I haven’t tried MCD’s sweet tea. However, I like the strong scores it posted for earnings momentum, earnings quality and price momentum. It’s score on return potential, however, is low.

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