Tuesday, July 28, 2009

Daily Wrapup For July 28th

Another mostly down day for the three major averages ended with only one of them up: this day, it was the NASDAQ that beat the other two. Both the Dow and S&P were slightly lower, although the former was down more than 1% at the day's low and the other was close to -1%. The NASDAQ was down for most of the day, but managed to rally strongly around 1 PM to push up to about a 0.50% gain by 2:30 PM ET. It fell back to about even later, but a late-afternoon rally pushed it back up to close with a 0.39% gain. The same rally shaved off most of the other two averages' losses. This day, the most featured economic news was a drop in the Conference Board's consumer-confidence reading. Another report, showing that the Case-Schiller housing index turned up as of May, was largely shrugged off. Making things even more muddied, ABC News' own consumer-confidence survey shows an uptick for last week. The Conference Board's index is monthly.

The lowest-quintile P/E cut-off fell today, roughly in line with the Dow and S&P. It dropped to 10.88 from yesterday's 10.92. Once again, the S&P dividend yield remained unchanged. After ETFs and stocks with market caps of less than 500M were eliminated, along with any issue that yielded more than 10%, the Low P/E Bin was left with ninety-two stocks: once again, unchanged from yesterday. Here are today's changes in the Bin, as dash-listed below:

- FirstEnergy Corp.
- Sempra Energy

- Bank of Hawaii Corporation
- SK Telecom Co., Ltd.

Today's Arrivals got back in the Bin through P/E compression. Both FirstEnergy and Sempra are utilites whose P/Es have recently fluctuated around the lowest-quintile cut-off. They've both been the beneficiaries of a relatively unnoticed climb in both natural gas and electric utilities lately, which was interrupted today. FirstEnergy got knocked down 2.57%, without any news to explain it, and Sempra declined 1.09%. The utilities themselves were the third-worst sector performer, dropping 1.10% on the day. Only basic materials and energy fared worse.

Both Departures left because of better than expected earnings. The first, Bank of Hawaii, got out because of a run sparked by its earnings report released yesterday before the bell. After languishing around $35 for the balance of this month, the stock leapt up 8% yesterday after drifting upwards for the last two trading sessions of last week. It closed at $39.18 today, enough to put its P/E above the cut-off. SKM's earnings report was received less dramatically. It announced a 2Q '09 profit last night that was up slightly as compared to 2Q '08, one that was somewhat above expectations. The stock climbed 1.73% today, although a small part of this gain was shaved off in after-hours trading.

One stock that leaped up today was CVB Financial, closing at $7.31 for a gain of 5.48%. When the stock was much lower, although above its 52-week nadir reached two-and-a-half weeks ago, the company announced a secondary offering whose proceeds are to be used for repaying the TARP money it took. That offering was set at $5.90/share, which puts today's closing price at 23.9% above the offering price. Nice gain if you can get it; the underwriters got as many as they could. The over-allotment for the offering was, I need hardly elaborate, taken up.

That's all for today's Wrapup. Thanks for reading, and may you enjoy finding 24% gains by way of the good-old-fashioned means of analysis.

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