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Oil it is different this time:
http://www.bloomberg.com/apps/news?pid=10000087&sid=akim.xUWeN38&refer=top_world_news
Market recognizing Hubbert's Peak
In the earnings booth on Tuesday evening, INTC said fourth-quarter earnings rose 16 percent to $2.45 billion, or 40 cents per share, compared with 33 cents per share in the year-earlier period. Starry-eyed analysts, however, were expecting the company to bank 43 cents per share. The story was the same for revenue numbers, with the company posting sales of $10.2 billion compared to analysts' expectations for $10.6 billion.
In reaction to this news the stock gapped 11.5 percent lower in Wednesday's trading. But only a handful of downgrades ensued, leaving INTC with 23 "buys," 19 "holds," and a pair of "sells." All on a stock that has moved virtually nowhere since a short-term peak in January 2004. This one is, quite literally, a "sleeping giant!"
On the flip side, AMD wandered into the earnings confessional with 13 "buy" ratings, 17 "holds," and six "sells," two of which were of the "strong" variety, according to Yahoo!Finance.The second-largest chip-maker reported Wednesday night that its fourth-quarter net income stretched to 21 cents per share, from eight cents the previous year. Excluding items, AMD banked 45 cents per share, well above the cautious consensus of 26 cents per share. Revenue rose 45 percent to $1.84 billion, easily outpacing analysts' expectations for $1.67 billion.
The stock had to be halted in after-hours trading and was indicated 12 percent higher early Thursday morning. But Wall-Street analysts couldn't let AMD enjoy its day of prosperity, coloring the news with skepticism. Susquehanna opined that the firm will need to accelerate its market-share gains into order to drive continued growth and sustained margins. Goldman Sachs issued a downgrade on the stock, dropping it to "underperform," thanks to valuation concerns and an "excess supply problem" in the next two years. Wall Street generally prefers companies that gain market share from a fundamental perspective. But because of a pre-disposed preference for Intel, market-share erosion is seen as bad for AMD because now the "sleeping giant has awoken," said Goldman.
Currently, AMD has just 13 "buy" ratings, 15 "holds," six "sell" designations, and three "strong sell" ratings. All on a stock that has doubled in value since its October low along increasingly reliable support from its 10-day and 20-day moving averages.
But it isn't just Wall Street that has a rather cloudy and backward vision of this semiconductor pair. Data released late Friday indicated that short interest on AMD increased by 21 percent this month, leaving more than 5.4 percent of the equity's float devoted to the short side. Conversely, only one percent of INTC's float is sold short, amounting to a meager short-interest ratio of less than one day to cover.
Options players have followed the Street's lead. The Schaeffer's put/call open interest ratio (SOIR) for AMD stands at 1.75, with short-term puts easily outweighing short-term calls. This rating is higher than all but six percent of the past year's worth of data. But speculative players are notably sanguine on INTC, judging from the SOIR of 0.57, which resides in the 32nd annual percentile. In other words, I find it interesting that around the earnings events of last week that saw AMD shares surge and INTC shares get hammered, there were nearly two puts for every call on AMD, while on INTC there were almost two calls for every put.
Turning to some sanity, AMD earns a Schaeffer's Equity Scorecard rating of 8.0 (in a range from zero to 10), suggesting its upward drive is likely to continue. But bumbling INTC only registers a 4.0 on this proprietary scale. If you are looking to play a major semiconductor name, I'd recommend buying AMD and ignoring (or possibly even shorting) INTC. The relative-strength performance of the pair, going back to last May, speaks volumes.
INTC and AMD from B. Schaeffer:
But enough generalizations. I've noticed of late that not only does Wall Street tend to overlook or downplay traditional small caps, but when given a chance, even between two formidable companies, it will almost always prefer the stumbling, bumbling giant. This is never truer than in the case of Intel (INTC: sentiment, chart, options) versus Advanced Micro Devices (AMD: sentiment, chart, options) . With a market cap of $14 billion, AMD is not exactly meek, but it is dwarfed compared to the $131 billion market cap soldiered by INTC.
Both semiconductor companies headed into the earnings confessional last week, to very different results. Not only were the absolute findings different, but the reaction to the results was so transparently biased that I had to laugh. Analysts' ratings ahead of the reports were comical and the post-earning fallout was even more ridiculous. Allow me to walk you through this tale of two earnings.
According to Yahoo!Finance, there was no shortage of love on INTC ahead of its earnings report last Tuesday. The Pentium parent boasted 30 ratings that were "buy" or better, along with just 12 "holds" and a single "sell" rating (the chart below illustrates the history of analysts' ratings, as measured by Zacks).
Oil trading transparency.
http://www.atimes.com/atimes/Middle_East/HA21Ak01.html
Your lifestyle is about to change! "Just kiss it goodbye"
http://321energy.com/editorials/gnazzo/gnazzo012006.html
US with 2% of worlds population using 25% of the oil!
Wouldn't you say a slight readjustment is in order?
Interesting that China is buying the future instead of US real estate. Recycling those soon to be worthless dollars backed by the full faith and credit of a debt ridden,fat,lazy society.
The earnings are there;but only for oil and gas.
Kuwait reserves not there.Believe in Hubbert's peak cause it is hitting the environuts in the face right now.
The global warming crowd only looks at the US. 50 year cold in Russia and Japan. Amazing the environuts want only to tax or regulate;never mind it is excess population destroying the earth. We need a big war or a plague soon!
Laughable the conservationists; China has 2.3 billion people;India 2 billion. We have 300 million and they want to conserve[vbg]. They will not get it until there is a systems failure in the US.
Gold
Schaeffer's comment today:
12/20/2005 9:36 AM
In addition to the article below...I see that Goldman Sachs is out with some upbeat comments on gold. It looks like they are upping their forecast for the yellow metal and singling out Newmont Mining (NEM) and Freeport Mcmoran Copper & Gold (FCX) as their favorite stocks
AMD must be cleaning INTC clock! Big move today.
AJ, NEM quad breakout on P&F at 50
http://stockcharts.com/def/servlet/SC.pnf?chart=nem,PLTADANRBO[PA][D][F1!3!!!2!20]&pref=G
PAAS 20 breakout as well!
HANS done!
Good call MARS!
Bought BRCM
PAAS looks to BO. Silver shorts getting crushed.
Crooks eh? All the King's Horses[technology] and all the King's Men[ NYC and Washington politicos,traders,lawyers] couldn't put Humpty together again.
http://www.rrc.state.tx.us/divisions/og/information-data/stats/ogismcon.html
If technology can't ride to the rescue there, where will it?
US oil production peaked in the 70's. Now NG has peaked.
Plenty of NG elsewhere but Environuts don't want it brought into US.
Personally I'm rooting for ALL the oil companies to leave the US and take their unwanted jobs with them.They would certainly receive better tax treatment.
Maybe the US can import "everything", on credit of course.
Mars Oil Food:
http://321energy.com/editorials/chan/chan120305.html
Watch the Nat Gas withdrawals after the first hard cold snap in the NE as I beleive that holds the key to pricing. With processing plants still off line and production lost[some permanently] from the gulf, only demand price destruction will suffice.
Bastardi thinks the winter will be normal. If true we should get rather large withdrawals of NG unless pricing has squelched demand.
Long ECA and XTO.
Notice BBY offering no interest on purchases until 2008.
next:no payments?
One thing for sure: when the debt monster succumbs it should not be boring.
TLM rejects takeover.
http://www.theglobeandmail.com/servlet/story/RTGAM.20051116.wxtalis1117/BNStory/Business/
Natives are restless!
Tuna,
NTO may move today for gold.Bought at 2.48 before the close yesterday.
Anyer
Guys take a look at REDF. Gang buster earnings.
The Indian Google.
Disclosure LONG.
Tea,
So far looks like a good call!
Where is all that money they keep saying is on the sidelines waiting to come in?
Rally looks sort of Feeble to me.
Justa,
Wasn't the low volume suspect for you?
It seems like a very feeble rally to me off of a noticeable trendline.
Anyer
Hussman Warning!
http://www.hussmanfunds.com/wmc/wmc051024.htm
Yep, keep those disasters coming so we can stimulate economic activity!
http://www.safehaven.com/article-3704.htm
Fed pumping with funny money. They are AFRAID.
http://www.bullandbearwise.com/FOMOOutChart.asp
John Law would be proud indeed.
Helicopter Ben rode in on a white horse.
I need to know how much more the market would have rallied if we had lost 2-3 cities and 40% of the refining as well as 50 rigs.
Very interesting times. You no longer shoot looters, just increase the rewards.
When they rebuild New Orleans hope they up the ante and dig the city a little deeper [say 80 feet below sea level]. That way al quieda will know this nation is bullet proof.
Recession proof,eh. Gas rationing on the way!
Let the charade continue!
My scenario:
Crude peaks this week: Demand killing event as price of gasoline and availability curtail driving and economic activity in general. Meanwhile tankers back up with no way to deliver crude. Crude glut a possibility until gasoline normality returns.
Consumer tapped out. Several hundred thousand vehicles won't be driven any time soon. No jobs for these people. Thumb twiddlers?
5 billion out of consumer each month with gas up .75 in last week. Commercial costs up even more. Heating oil and NG to hit soon. Up to 20-25 billion per month[2% GDP]whacked off in a flash. Still climbing as it ripples through food supply.
Would not be surprised to see gasoline rationed or price controls placed soon.Harvest time near in the midwest and if the river is not open, extreme difficulty getting crops out not to mention other commerce disruptions.
Kiss this economy Ciao!
All experts still optimistic!
This is a demand killing event extraordinaire. I thought it would take something like war or bird flu to kill demand, but this should suffice.
Extraordinary Popular Delusions and the Madness of Crowds as pertinent today as in 1851.
Mississippi River blocked for months!
Coastal and geological survey- US
Denial:A large river in Egypt!
http://www.siliconinvestor.com/readmsg.aspx?msgid=21652121
Schaeffer's on QQQQ
Turning to a popular technology-centric ETF, the 38 strike has huge bearish implications for the Nasdaq-100 Trust (QQQQ: sentiment, chart, options) if penetrated. The September 38 put strike is currently home to nearly 500,000 open positions, dwarfing all other strikes in this series. And as of today's close, the QQQQ is less than two percent away from violating this threshold.
Too bad your theory can't be tested with a hurricane hitting the Netherlands!
DSTI
Solar play with low float and high short interest.
Long 14.75
Oil COT showing speculators swung back to bearish; exactly what happened in December prior to ramp[Schaefers].
Climbing a wall of disbelief; but China knows.
http://www.resourceinvestor.com/pebble.asp?relid=10327
What Lee Raymond says to calm the masses and what the company really thinks are different animals!
http://www.thebulletin.org/article.php?art_ofn=mj05cavallo
XOM was only able to replace its reserves this year with an LNG deal in Qatar. Next year it will join Shell and the other majors, except BP[who bought 50% of TNK], with declines in reserves. They will have to buy somebody to say it isn't so!
China is driving this bus! So much for US crude oil inventories.Talk about clinging to the past:CNBC focused on US egocentricity.
http://www.robtv.com/servlet/HTMLTemplate/!robVideo/robtv0726.20050406.00028000-00028135-clip1/h/220...
Re Oil:
Evans' credentials seem impressive but he reveals all when he says the Saudi's have 1.5 million spare capacity. Capacity of what?
Oil inventories are reported as ALL oil where the type needed for gasoline is light sweet. Only a minority of the world's refineries can process heavy crude and they are reaping a huge profit margin.
They can ship more oil only suitable for asphalt e.g. and not the type needed by the refineries. So don't pay attention to the oil inventories which are a canard as the price standard is light sweet.
An analogy would be saying that Google would have to crash because the market is glutted with search engine companies.
Google[light sweet]+ASKJ[heavy sour]+LOOK[asphalt]= Total search[oil inventories]
In reality it is a lot harder to find light sweet than it is to build a new search company. There have been no elephant fields[those capable of producing a million or more barrels a day]discovered in over 25 years and the giants are aging.
IMO there is concrete support under light sweet that has never existed before. Can it crash? Sure with a plague or world recession. In reality Hubbert's peak has already hit light sweet while there is still room to produce more heavy oil from Athabasca e.g. But it will cost more and the infrastructure needed to produce it is not there.
Ask yourself why the Saudi's claim their aging fields are not going into decline when all the other elephants have peaked.
For more on Hubbert's Peak:
http://corporate.bmo.com/HarrisNesbitt/bresource/basicpoint/default.asp?id=4887
March issue in PDF.
Also Matt Simmons has some good work at Simmons international.
IMO the oil "bubble" is music to my ears.
Regards,
Anyer
You are quite correct. VLO and PCO the main sour refiners in the independents. However since the price point is set by what the refiners can use, don't count on Total Oil inventories as a weathervane; which CNBC likes to point to.
It would help if we could import more gasoline, but with 16 different grades required by the different states other countries don't want to bother.
Personally I am amazed the street didn't see this coming sooner.
Crude oil inventories are being touted as high. This is true but it includes heavy oil and the price is for light sweet.
Hubbert's peak has hit light sweet already[world production falling].
They can overload the market with oil only suitable for asphalt and it won't matter. CNBC and the public don't understand this. US refineries courtesy of the NIMBY's need light sweet!
Anyer