Diamonds and Dogs
8/10/09Monday, August 10, 2009
Who thought the day would come? Freddie Mac (FRE) reported its first quarterly profit in over two years. This unforeseen news drove the stock skyward, causing a more than 80% surge as the market opened today. We may be finally seeing an end to the housing crisis as the country's second largest mortgage issuer is beginning to turn.
Despite a great rally through the end of last week and a reporting of a 14% increase in quarterly profit, Berkshire Hathaway Inc. (BRK-A) was downgraded today by Fox-Pitt. This downgrade forced a drop of $5,600, a share or more than 5% decrease from the previous close. The lowered recommendation is said to be based on valuation.
Friday, August 7, 2009
I'm thinking Arby's&and Wendy's. This fast food duo (WEN) comes in as today's diamond after rallying almost 7%. The company is now moving away from price cutting recession strategies and instead focusing on new products and promotions to attract customers.
Survival of the fittest is the motto in the telecommunications industry and MetroPCS may have forgotten that recently. The fifteen year old industry leader suffered a stock drop of about 30% today citing their inability to retain customers due to intense competition. PCS will have to do some restructuring to regain their advantage over opponents.
Thursday, August 6, 2009
The government owned insurance company (AIG) experienced an enormous rally today as the stock surged $8.48 or 63%. The stock seems to be trading up ahead of an earnings report that will be given tomorrow. We will see if the bulls were correct in driving this rally when the report comes out tomorrow.
Electronic Arts (EA), the home to video game business is suffering a 7% loss today as revenue fell and profits declined. The company has been reporting losses for such a long time that many analysts want to give up on the firm. Maybe that's good news. EA has failed to recognize market trends and seems to lack urgency in retooling their business. Hopefully they will give merit to their critics and make some structural changes.