Caterpillar What Up? We all saw it coming! $CAT

Caterpillar (NYSE:CAT) missed expectations by some 45%. The noise and fury from the financial press is impressive. A blue chip missed. The China play is broken. commodities are so over. So its panic stations or is this the value play entry point.

The stock is close to the 52 week low. So like the market has sold off because none of the points being raised are new news. China has slowed down. Commodities are cooling. The western world is not catching fire.

The stock yields some 2.51% and they are making noises about more stock repurchases. Well if you must go ahead and lower the float, increase EPS and shrink the pie go ahead.

Here is the silver lining in your cloud of doom. Normally dealers buy inventory as they prepare for the busy season. This time the dealers did a 180 and reduced inventories.This will revert itself. The classic squeeze is setting up.

If you follow commodities and understand cycles. Take a long cold sober look and then keep watching. When media gets negative reach for your spread sheet and start crunching the numbers.

Buy low sell high. Buy ugly sell pretty.

George Gutowski writes from a caveat emptor perspective.

Google Scream Danger Danger Street Really Surprised $GOOG

Google (Nasdaq:GOOG) in a rare move issued a chilling statement that most analysts had it wrong. Google’s real numbers are coming out Tuesday.

It appears that most analysts have not adjusted their estimates to reflect the pending $2.35-billion sale of the Motorola Home business. It is no secret. So whats up with the analysts.

Under US Accounting Rules the business must be shown separately. Most analysts are including the numbers.

So where is the fail. The sale is an announced deal. The accounting rules should be well understood but clearly are not. Management rarely speaks to the street about its earnings. But this time it could see the train wreck coming and felt compelled to yell danger danger.

The sell side analysts as a herd missed the point. So before they stampeded off the cliff management issued a public service announcement warning of the carnage. Management was under no obligation to do so.

The sell side analysts missed the point and shame on them. The conference call will be hilarious as everyone tippy toes around the mass incompetence.

George Gutowski writes from a caveat emptor perspective. Follow him on twitter@financialskepti or maybe follow his evil twin who is writing a Wall Street Murder Thriller at twitter@georgegutowski

Dirty Laundry During Elections $QQQ, $SPY $VIS $VXX $VXV #IR #corpgov

All our press releases (Photo credit: Christopher S. Penn)

Usually companies may try to sneak out bad news before a weekend or holiday when the market may be distracted. This week the market will be distracted with the presidential elections. Disclosure may be in done in the open when no one is paying attention.

Read corporate press releases very carefully. Volatility will be high anyway.

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Twitter Power WSJ vs NYT $NYT $NWSA $TWIT

Image via CrunchBase

Two major newspapers shape opinion in NYC. Wall Street Journal and New York Times. WSJ is primarily business and investment. NYT is the classic we cover everything. Look at the big difference in twitter power ratings.

1. Twitter@nytimes 6.4 million followers. Power rank 248
2. Twitter@wsj 2.2 million followers. Power rank 1,062

That’s out of about 13.1 million twitter accounts that account to something.

George Gutowski writes from a caveat emptor perspective. Follow him on twitter@financialskepti

Twitter Wars Business Wire vs PR Newswire $TWIT #earnings #corpgov #IR #newswire

Image via CrunchBase

PR Newswire and Warren Buffett owned Business Wire have been hotly competitive for decades. Who dominates the twitter power rankings? Power rankings cover 13.1 million active twitter accounts that are worthwhile in some fashion.

1. Twitter@prnewswire 64K followers. Power Ranking 10,736
2. Twitter@businesswire 26K followers. Power Ranking 34,154

Each service has many specialty wires so it’s all about a nuanced view if you are an investor relations or public relations pro.

George Gutowski writes from a caveat emptor perspective. Follow him on twitter@financialskepti where he ranks at 1.1 million.

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Surprising Twitter Power of Financial News $YHOO $NWSA $TWIT #IR #corpgov

If you are a serious investor you are also a serious business news junkie. The blood sport known as investing is an information seeking culture to the extreme. So lets look at the power of various business news outlets and their supposed power grading in the twitter world. You may be surprised to learn that CNBC does not get a top billing.

So a few words about the power ratings. Followers count big time. You need followers to outnumber following by quantum amounts. Your followers are also graded and if they have more followers than following that’s very powerful. The more often you are retweeted the better.

The power rankings are out of 13.1 million. That’s how many twitter users actually count and register. So here are the results in order of power.

1. twitter@businessinsider 144K followers. Power rank 298
2. twitter@cnnmoney 445K followers. Power rank 1035
3. twitter@yahoofinance 158K followers. Power rank 1690
4. twitter@foxbusiness 116K followers. Power rank 2361
5. twitter@ft 709K followers. Power rank 2672
6. twitter@forbes 1108k followers. Power rank 3721
7. twitter@bloombergnow 186K followers. Power Rank 4202
8. twitter@cnbc 932K followers. Power Rank 4839
9. twitter@bw  156K followers. Power Rank 5739
10. twitter@fortunemagazine 691K Followers. Power Rank 6821

This is not taking into account the power rankings of individual journalists and editors who are the real hard-working heroes getting the stories. But if you’re an investor relations pro trying to work the social media angles the twitter power rankings do not match up to the usual mind share that some of these news organizations normally have.

George Gutowski writes from a caveat emptor perspective. Follow him on twitter@financialskepti where he has a power rank of 1.1 million.

 

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Yahoo Shareholders Need to Sync up with Marissa Mayer. She wants to Spend not Liquidate. $YHOO

Marissa Mayer (Photo credit: jdlasica)

Yahoo (Nasdaq:YHOO) new boss is doing a review of all businesses. No surprise there. So media comment seems to be mis-focused. Any new boss will review. At Yahoo you will review and then x-ray everything. What some shareholders are freaking about is the potential non return of the some $4 billion cash from the Ali-Baba divestiture. Many investors were expecting a large cash haul after suffering through many Yahoo generated frustrations.

Investors may need to re-align their expectations. You do  not hire someone like a Marissa Mayer and hand her some blanks and expect results. She needs cash to spend on product and probably M&A. I am on record as thinking that Yahoo shares should be a viable currency for acquisitions but you never take cash completely out of the picture.

Great generals did not win by retreat. Attack and audacity have carried more than one day.

Yahoo shareholders will need to reconcile with the new normal under Marisa Mayer. She has been hired to grow Yahoo not liquidate it. Many Yahoo shareholders need to ask themselves why do I own Yahoo? Yahoo investor relations has a large communications job ahead of itself.

George Gutowski writes from a caveat emptor perspective.

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Smuckers Too Much Sugar for Now. Interest Coverage Tricks $SJM

English: Smuckers sign (Photo credit: Wikipedia)

Smuckers (NYSE:SJM) is in the business of selling sugar driven consumer edibles. Here is the diabetes effect for investors. Last Oct 2011 the company issued a ton of debt. Y/o/Y long-term debt is up some $700 million. Normally this has an impact, a big impact on EBITDA. MDA says they have it under control because of swaps and they are capitalizing interest on capital expenditures. But the debt holder is expecting regular cash interest payments. So the numbers are tricked into looking good.

Now because they are disclosing it it’s probably not illegal. But it’s just accounting tricks to get through the quarter or year. If you look at the fundamentals cash and working capital are down significantly.

Seems this company not only has trouble selling coffee they have trouble smelling the coffee.

George Gutowski writes from a caveat emptor perspective.

Chesapeake Annual Meeting Becomes a Shoot Out in Not OK Corral $CHK

Chesapeake Energy (Photo credit: Wikipedia)

Chesapeake (NYSE:CHK) will attempt to hold something called an annual meeting on June 8, 2012. Normally annual meetings are very close to Kabuki theater. Chesapeake would love to experience a Kabuki theater moment. Kabuki theater is highly predictable and without surprises, or so I’m told. Carl Icahn has walked onto the stage with an activist agenda wanting to replace four directors. CHK is responded they want to find a chairman first. Not sure who would want the job to be very frank about it. Snakes everywhere and declining energy prices.

The entire situation has been dysfunctional so expect the dysfunctional.  Here are a few possible problems that may arise.

1. Board may adjourn claiming extraordinary situation.
2. Activists may seek to postpone the meeting until only God knows when.
3. Enough directors resign seeking to flee continued personal responsibility.
4. Courts may rule annual meeting should be adjourned.
5. Annual meeting may actually be held and no one will be happy with outcomes.

In any event Friday June 8, 2012. Bring your heavy artillery.

George Gutowski writes from a caveat emptor perspective.

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Groupon Major Global Technology Integration Initiative Has Started. Why Do They Need This Already? Silence on Costs! $GRPN

Logo of Groupon (Photo credit: Wikipedia)

Groupon Inc.  (Nasdaq:GRPN) announced some better results and encouraged the market to keep believing. Investor relations is subtly promoting the classic buy and hold lets us do the work approach to investing. OK so a new tech company out of the chute should be showing improvement that’s what investors have bought into, a rapidly improving story. Emphasis on “rapidly”.

In reading the conference call transcript  I was struck by a comment made by Andrew Mason CEO on the second page. He announced  Groupon had kicked off their first major global technology integration initiative. According the Andrew Mason there will be some foundational rebuilding in the short-term, but he believes that over the long-term, this project will allow Groupon to move much faster  and more easily apply technology.

Err excuse me. What does this all mean? Just what is a global technology integration initiative. You are a brand new tech company with a lot of answers supposedly. Everyone anticipated a global approach. Given that you are so brand new what has happened that you need a global integration initiative. What did or did not happen to your platforms.  Class action lawyers need to review the underwriting documents. Was this requirement identified.

At this point no mention of costs but Groupon does have the ability to say “As previously disclosed”. This gives them some wiggle room in the Reg FD challenged space. Not one analyst picked up on the point in the conference call. So we have no explanation as to the true scope and nature. Groupon can rightfully say we mentioned it in the conference call but no one wanted to talk about it.

Well Groupon in the interest of clarity and visibility why don’t you add more colour on that point. if it is important enough to mention from the CEO’s lips than it must have big costs and big impact. How can investors feel well-informed without understanding the scope, scale and costs.

George Gutowski writes from a caveat emptor perspective.

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