Thursday, August 13, 2009

Daily Wrapup For August 13th

Despite the morning news disclosing weaker retail sales and an unexpected rise in first-time jobless claims, the rally ended up continuing. After a plummet in the early morning, which took the three major averages to about a 0.5% drop on the day, they recovered and were in positive territory by 10:30 AM ET. After reaching the morning's high point at about 11 AM ET, they sunk back somewhat until an aborted rise in early afternoon ET, after which they briefly plummeted. By 2 PM, all three were down on the day. The last two hours of trading saw them pull back up, to close with all three on the upside. The Dow gained 0.39%, the S&P 500 was up 0.69% and the NASDAQ gained 0.53%. After being up considerably more earlier in the day, light sweet crude ended at $70.52/barrel for a gain of 36 cents.

In sympathy with the averages, the lowest-quintile P/E cut-off rose to 11.74 from yesterday's 11.65. The S&P dividend yield, which forms the Low P/E Bin yield cut-off, dropped two basis points to reach 2.62%. After ETFs and stocks with less than 500M market cap were eliminated, along with ones with yields greater then 10%, the Bin was left with one hundred and six stocks for a gain of two from yesterday. Here are the changes in the Low P/E Bin, as dash-listed below:

- Edison International
- Permian Basin Royalty Trust
- Plains All American Pipeline, LP
- UIL Holdings Corporation

- Allianz SE
- Barclays PLC

Of the Arrivals, all but one are returns. Edison International, an electric utility in Southern California with electricity selling and investment arms also, got back in the Bin because its P/E fell below the upped cut-off; Edison dropped 1.34%. Permian Basin Trust, a holder of several oil and gas producing properties in Texas, got back because its market cap rose above 500M. UIL Holding stock wasn't down; in fact, it gained 0.39%. This electric utility got back in because the P/E cut-off rose to exceed its own.

The new Arrival is Plains All American Pipeline. The stock was down 1.29% today, which brought its P/E down to cross the lowest-quintile cut-off. Plains is a company that transports crude oil, natural gas and liquified petroleum gas. Its pipelines are in several regions of the United States and extend into Canada.

The two Departures were both up on the day, but each got out for a different reason. Allianz, global insurance and banking services provider, saw its P/E shoot up because its 12-month trailing earnings sunk: that, plus its 2.02% rise, got it out of the Bin. Barclays was also up, but it hasn't declared a dividend in about a year. Hence, it's left the Bin because it has no more yield - and won't until it declares another dividend of sufficient amount.

This list of insider transactions, which I got from today's edition of the Casey Research Daily Dispatch, presents a sobering (and comprehensive) sight. A large majority of the listed transactions are sales. One exception that sticks out is a 3,500 share purchase of electric utility Ameren Corporation, bought by VP and Controller Mark Clarke two days ago. After hitting a low of $23.36 on July 10th, in part because of cap-and-trade fears, Ameren drifted upwards until it settled into its current above-$26 trading range. It closed up 0.30% today at $26.35, for a P/E of 9.87 and a yield of 5.84%. The stock is virtually unchanged from Tuesday's range.

That's all for today's Daily Wrapup. Thanks for reading, and I hope your outsider trading has gone well.

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