The Exchange
  • Cisco Earnings: 2 Key Things Investors Should Know

    By Marek Fuchs

    Cisco (CSCO) reports its second-quarter earnings after market close on Wednesday, and traders and analysts can hardly contain their excitement.  The stock recently skipped through its 52-week high, hitting $21.27 in intraday trade on Tuesday, as analysts from Citigroup (C), Raymond James (RJF), Piper Jaffray (PJC) and more tumbled over each other to reaffirm their happy thoughts and raise expectations.

    But is all the go-go energy warranted?

    Perhaps.  Cisco is obviously a great company with flush margins and mounds of cash.  As is always the case with quality companies, we must avoid the temptation to simply hate them because they are beautiful.  By the same token, however, the media and traders might be ignoring – or, at least, downplaying – two significant elements.

    For one, Cisco is commonly dubbed “the bellwether for the technology sector” by The Wall Street Journal and other media outlets. Of course Cisco provides the routers and switches that provide architectural

    Read More »from Cisco Earnings: 2 Key Things Investors Should Know
  • If you're Michael Dell, you contend you're doing shareholders of your company a favor. If you're an investor in Dell (DELL), you may well feel like you're getting low-balled.

    Dell Stock Values

    Dell's largest outside investor, Memphis-based Southeastern Asset Management, agrees with the latter position, saying it won't support the $13.65-a-share management-led buyout of the computer seller. Dell responded to that announcement by arguing that the plan to take the company private "offers an attractive and immediate premium for stockholders and shifts the risks facing the business to the buyer group." Southeastern doesn't remotely believe that.

    It's problem isn't with an acquisition. It's that the firm thinks the takeover price needs to be substantially higher, about $10 a share higher, in fact. By the money manager's calculations, Dell is worth $23.72 a share.

    The last time Dell, of Round Rock, Texas, traded there was six years ago, in February 2007. It's not been above $20 since 2008, and in the last 52

    Read More »from Big Dell Investor Cries Foul, but Traders Don’t Care
  • Sequestration, Like the Debt Ceiling, Is a Weapon of Mass Destruction

    By Terry Connelly

    While we are on the subject of banning assault rifles and machine-gun ammo clips, it might be good to take a quick second look, not only at the doomsday machine heretofore known as the “Debt Ceiling,” but also at its close relative, the “Sequestration” legislation.

    The “Sequester” was the deal concocted in Congress to back its way out of the summer 2011 Debt Ceiling fiasco: to get the Republican radicals to give up their threat to put America into default unless the budget was cut by an mount equal to any Debt Ceiling increase, Congress agreed to $1 trillion in across-the-board cuts to military and discretionary domestic spending (not including most “entitlement” programs) over 10 years, starting with 10 percent of that in the very first year (2013). Thus, there would be no Sequestration but for the manufactured Debt Ceiling crisis.

    Self-Inflicted Economic Suicide

    Virtually every reputable economist who has studied the U.S. debt situation, including the Federal

    Read More »from Sequestration, Like the Debt Ceiling, Is a Weapon of Mass Destruction
  • In a case of one ratings agency cutting a set of ratings because it's fretting about another ratings agency, Fitch has downgraded McGraw-Hill (MHP), citing the legal threats its Standard & Poor's division is facing.

    Standard & Poor's Sign: Credit AP Late Thursday, Fitch lowered McGraw-Hill's issuer default rating to BBB+ from A- and put a negative Rating Watch tag on the debt, meaning another downgrade could come in the future. The decision was driven by the news that S&P is being sued by the Justice Department and some U.S. states over ratings it maintained on a group of debt securities that were central to the 2008 financial crisis.

    Fitch said that while the financial risk attached to McGraw-Hill historically has been reflected in the ratings it assigns, "recent events have heightened this risk. The increased uncertainties are no longer consistent with an 'A-' rating," it said. However, Fitch isn't declaring these end times around S&P and its parent, saying it "believes that the company maintains significant

    Read More »from Rater vs. Rater? Fitch Cuts S&P Parent on Lawsuit Worry

Pagination

(693 Stories)
 
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