Consumer confidence falls to an unprecedented low in December, surprising economists who had expected a slight rise in the key economic barometer.

There’s no reason to overpay to own an ETF.

Are we really saving “American” jobs when they build their cars in Mexico?

Mr. Softy ponders a metered “pay-as-you-go” PC.

Filed under: Management

No one would be shocked that more CEOs travel on commercial flights. Shareholders and workers don’t understand why big companies should put management on nice private aircrafts while they suffer.

But in a downturn, stupidity often rules. According to The Wall Street Journal, more and more CEOs are taking public flights and companies are trying to sell company aircraft.

Flying a business jet from coast-to-coast can cost tens of thousands of dollars. What does it cost if senior management misses one critical meeting though? What is the value of time if four executives at one company, each of whom makes over a million dollars a year, spend an extra 100 hours per person in the air each year instead of doing their jobs?

Another aspect to the math of private aircraft is that selling used planes is nearly impossible. As The Journal points out, there is such a flood of these planes hitting the market that resale value has gone through the floor.

Shareholders may want to see every last dime taken out of costs as the recession deepens and share prices fall, but as the old saying goes, “cheap gets expensive.” Putting CEOs on long and often delayed airline flights hurts management efficiency even if its appears to help the bottom line.

Douglas A. McIntyre is an editor at 24/7 Wall St.

CEOs fly commercial, hurt productivity originally appeared on BloggingStocks on Tue, 30 Dec 2008 03:51:00 EST. Please see our terms for use of feeds.

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Filed under: Earnings reports, Commodities

Egg producer Cal-Maine Foods Inc. ( NASDAQ: CALM) reported on Monday that its fiscal second-quarter earnings fell 32% to $27.2 million, or $1.14 per share. Revenue rose 7% from a year ago to $238.3 million.

Analysts surveyed by Thomson Financial had on average expected a $1.26 per share profit. The company said sales to the institutional and food-service sector in the quarter ended Nov. 29 were slower while feed costs remained high. They added that those prices are likely to remain relatively high and volatile over the year ahead.

Shares fell Monday by $1.97, or 6.7%, and continued to fall in after-hours trading. The share price is still up 4.4% in the past three months, and about the same as it was a year ago.

Shares of rivals Kraft Foods Inc. (NYSE: KFT), Tyson Foods Inc. (NYSE: TSN), and ConAgra Foods Inc. (NYSE: CAG) also declined on Monday.

Based in Jackson, Miss., Cal-Maine is one of the largest fresh shell egg producers in the U.S., selling its products to supermarkets in 29 states. It has a market cap of $588.4 million and its operations include breeding facilities, hatcheries, wholesale distribution centers, feed mills, shell-egg production facilities, pullet-growing facilities, and processing and packing facilities.

Cal-Maine drops on Q2 earnings miss originally appeared on BloggingStocks on Mon, 29 Dec 2008 19:00:00 EST. Please see our terms for use of feeds.

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Filed under: Law, Scandals

Discount clothier Steve & Barry’s has filed for bankruptcy twice over the past few months, and is not undergoing a total liquidation of all of its stores. But there’s more drama still to be had.

The New York Post reports that New York City mega-landlord Jeff Sutton has sued founders Steven Shore and Barry Prevor, along with the company’s CFO and real estate director for fraud, alleging that they misappropriated $1 million set aside for store improvements.

Lawyers for the creditors’ committee are also looking into the company’s methods for inventory accounting.

Steve & Barry’s relied heavily on payments made by landlords for opening new stores in spots vacated by downsizing chains. The landlords were desperate for tenants, and were willing to make larger than usual allowances for renovation. But Sutton claims that the company collected $122 million from landlords but only spent $59 million on building new stores. The balance of the money, he claims, was inappropriately used for operating expenses.

Steve & Barry’s founders accused of fraud originally appeared on BloggingStocks on Mon, 29 Dec 2008 18:31:00 EST. Please see our terms for use of feeds.

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Filed under: Ford Motor (F)

Back in October I wrote that super investor Kirk Kerkorian has slashed his stake in Ford Motor Company (NYSE: F) by a few million shares but in a press release, Kerkorian’s Tracinda was careful to note that “in light of current economic and market conditions, it sees unique value in the gaming and hospitality and oil and gas industries and has, therefore, decided to reallocate its resources and to focus on those industries.”

Apparently the reallocation continued: Reuters is reporting that Mr. Kerkorian has now eliminated entirely his stake in the beleaguered auto company. It’s not yet known when or how he disposed of the stake but it’s been a costly foray for Mr. Kerkorian. Tracinda had previously disclosed that it had hired an investment bank to look for a buyer for its stake in Ford.

Last week on BloggingStocks, Brent Archer named him one of our money losers of 2008 for his losses in Ford and MGM Mirage (NYSE: MGM).

Kerkorian dumps entire stake in Ford originally appeared on BloggingStocks on Mon, 29 Dec 2008 18:00:00 EST. Please see our terms for use of feeds.

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Filed under: Morgan Stanley (MS)

Tonight I am appearing on a Boston TV program to discuss whether there are other Madoff disasters lurking as well as eight lessons from 2008. The first half of the program will feature Congressman Barney Frank (D-MA) who chairs the House Financial Services Committee.

The TV producer suggested that I should give Congressman Frank some thoughts about how to fix the financial services industry if I get a chance to talk with him in the green room before the show starts. I am not sure whether I will get to do this or not; however, here are four ideas I will share if I get the chance:

• Limit leverage. Starting with an SEC ruling in 2004, banks could borrow as much as they wanted — in some cases over $30 for every $1 of equity. This borrowing has endangered the global financial system. Washington should limit leverage to 8:1 or less.
• Put banker pay in escrow. As I posted, banks should not pay bankers to close big deals and then let them keep the bonuses after the deals fall apart. Instead, they should do what Morgan Stanley (NYSE: MS) is starting to do, which is to put the bonuses in an escrow account — if the deals lose money in the years following the contract signing, the money goes to pay off the investors. Otherwise, they get to keep the money.

Continue reading Memo to Barney Frank: Four steps to fix finance

Memo to Barney Frank: Four steps to fix finance originally appeared on BloggingStocks on Mon, 29 Dec 2008 17:30:00 EST. Please see our terms for use of feeds.

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Filed under: Other issues, Products and services, Competitive strategy, Chasing Value, Oil, Atlas Energy Resources (ATN)

This morning I had a pleasant conversation with Brian Begley, Vice President, Investor relations for Atlas Energy Resources (NYSE: ATN), a gas exploration company set up as a Limited Liability Company. Although it is an LLC it operates similar to a Master Lease Partnership (MLP); according to their website: ATN pays cash distributions each quarter, which represent a return of invested capital to each common unit-holder. Therefore, these distributions are tax-deferred until the units are sold or the unit-holder’s basis goes below zero, whichever occurs first.

In English this means that if you were to invest $10,000 in the shares you would not pay taxes until you sell the shares or get back in excess of the $10,000 and only pay taxes on the overage.

Brian gets high marks for being very straight forward in answering all of my questions. He was upbeat about the company as you would expect but I do not think he was sugar coating anything nor was he ever evasive and I asked some very direct questions. I have to give credit for my initial attraction to this stock to the Motley Fools and their story 5-Star Stocks Poised to Pop: Atlas Energy

The 5-Stars refers to the sites “Caps” rating system by participants that vote for the stocks they favor. A majority of the stock pickers on this site believe there is a high probability the stock will be a winner. I was drawn to it for more practical reasons then looking for ratings systems or analysts calls. The stock has been paying about a 20% yield and that’s some serious cash even if it goes nowhere.

Continue reading Chasing Value: Atlas Energy Resources — about natural gas and taxes

Chasing Value: Atlas Energy Resources — about natural gas and taxes originally appeared on BloggingStocks on Mon, 29 Dec 2008 17:00:00 EST. Please see our terms for use of feeds.

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