Interview: Oil prices
>> where do you think that is?
>> more in the mid 30’s i think. it would have to fall a bit before i would be really interested in buying it.
>> so technology i’m sure will be a big theme for investors tomorrow. oil will continue to be a theme for investors. i’m curious to get your reaction to the fact that we had a rally in stocks today despite fact that oil prices touched $66 a barrel. how do you think that happened?
>> well, i think that there is a lot of money that is sitting on the sidelines and has been sitting on the sidelines and i think that you have people that are starting to be kind of picky and start picking stocks that are starting to move. they know the economy is actually doing very well even though oil prices are at record highs. you still have a strong economy even with that and i think that that is driving people to be investing in the equity markets .
>> and indeed today we saw financials and industrials among the two strongest groups in the s&p. are these groups attractive to you at this point?
>> well, financials pwe have been investing in. as a matter of fact, we’re actually overweighted to the s&p 500 in the financial area. so the answer to that is yes, we have actually liked them for quite some time.
>> in terms of oil, i want to bring your thoughts on oil into the discussion and then get into your picks in energy. you talk about fear being one of the factors having to do with oil prices. are you, in fact, positioned for higher or lower oil prices.
>> we’re positioned for oil prices to stay in a fairly trading range. i have felt that oil would trade somewhere between $48 to $58 a barrel. and i think that the oil stocks and refineries will do very well at those prices. now i think you have a bump in the road here with the prices hitting the $65 plus range.
>> and i know you sold valero recently. give us the thought process there.
>> well, the thought was that we bought it relatively inexpensive. it had run up over 100% in returns for us. we thought it was just time to take money off the table so we used the derivative selling calls on the stock and sold it.
>> any other energy names you have been selling?
>> well, we did trim some positions in b.p. and concophilips. nothing that we blanketly sold like valero. we haven’t had any other stocks in the oil area that have run up over 100%.
>> i know you are still buying somewhat in the energy space. give us one or two names of what you are buying.
>> we have been buying devon energy and buying b.p. we think that those stocks, you know, for one being a mid cap and one a large cap still have a lot to offer. radio ao i’m sorry i thought you said you were also triming in b adding or trimming on b.p.
>> we have trimmed in certain accounts based on where we bought it. we still are adding to those positions, though.
>> so how do you then in this environment decide what energy stocks remain a buy when you have had such a surge in both the stock price as well as the commodity price?
>> well, you got to look for companies that still have drivers that will drive those companies forward stock price wise. you have to look at the intrinsic value. we value corporations based on their cash flow, their ability to produce revenue and then look at what we feel is their intrinsic value. the stocks trading below that we’re interested in buying. if above, then we’re looking somewhere else.
>> what about when you look at market a little more broadly. you have the s&p near a four- year high. you started off with comments talking about the economic strength. what do you think will happen? where do you think the s&p will be by year end?
>> well, the s&p is the only index at this point in time that is in positive territory. it’s only up 2% year to date. we’re not looking for any of the markets to do a whole lot this year. if you look at it, you could almost fall asleep on january and wake up in the end of december and think that actually nothing happened. but in reality you will have a lot of volatility in the middle. we really feel that that is what the markets will look like through the rest of the year.
>> andrew, pleasure speaking with you. thank you for taking some time. andrew seibert. we take a break and then coming up we have the details on the sentencing today of worldcom’s former chief financial officer, scott sullivan. our bob bowdon was in the courtroom. he will join us with the details.
点击播报
Listen Market briefing --- Ellen (slow)
Energy beat --- Su (fast)
NYSE --- Deb (fast)
>> dell is the second technology company to deliver bad news to investor this is week. cisco said tuesday that its own sales forecast this quarter may miss analyst estimates. an hour ago, dell said the same. let’s take a look at the company’s forecast for the current quarter. earnings per share are expected to fall within a range of 3w9 cents to 41 cents that is airing on the saoeufd caution compared to the median number among analysts. dell said flat out it expects sales to be short of estimates, somewhere between 14.1 billion and 14.5 billion. revenue last quarter also missed the average analyst estimate of $13.7 billion.
>> i don’t think anything necessarily went wrong. we actually beat our unit volume projections by growing units 25% and taking significant revenue share. what didn’t happen is that those additional units did not bring along quite as much revenue as we thought it would. so we were slightly short of guidance on rove new but yet made our e.p.s. projections.
>> that said, sales were up 15% from a year earlier as consumers snapped up higher profit notebook p.c.’s. business customers bolstered laptop purchases after delled a newer, lighter models. consumer orders picked up as the company gave printers away free with p.c.’s. even with the promotion, dell managed to post record earnings. meeting wall street’s estimate of 38 cents a share. and gross margins widened to 18.6% from 18.2%.
>> i think this remains a great story. this is a company which has a number of different segments, all in a growth track and the company has the ability to push a number of different levers to manage earnings. so i think this remains a very strong long-term buy for the value investor.
>> the company said it plans to repurchase at least $1.2 billion more during the current fiscal quarter. ellen?
>> ok, brett, thank you so much. more on dell later in the hour. we’ll hear my entire interview with chief financial officer james schneider. that at 5:39 new york time. our other top story today, the record energy prices. they keep on coming. several drivers behind today’s never before seen price of $66 a barrel. among them, the international energy agency cutting its oil production estimates for russia. new concern as well about stability in the middle east and citigroup raising its forecast for prices. su keenan on the energy beat. she has the latest.
>> citigroup saying there’s no cushion for supply, ellen. crude oil is now almost 8% more expensive than it was just a week ago. the record setting today extends to gasoline and natural gas. the big question on the trading floor, according to ira eckstein how soon will oil rise to $70 a barrel.
>> i think realistically we’ll see $70 but i think there will be a pullback before that. you might see short covering going into the weekend tomorrow. there are u.s. refineries that are refining all out. any disruption will send the market a lot higher.
>> meantime, demand for energy products is fueling higher profits for companies such as st. mary land & exploration where shares doubled this year. the chairman and c.e.o. says he has a new challenge.
>> the difficulty as a company is what do you do from here forward. the higher oil prices not totally but to some extent are figured into the stock price. we as a company have to figure out what do we do from here.
>> well, this afternoon venezuela’s president said energy prices would continue to rise, placing the world in what he called the srerpl of an oil crisis. j.p. morgan’s commodity strategist is among analysts adjustsing their forecast.
>> $70 is not out of the question if we hold that $65 level. $100 oil is certainly not in our baseline forecast but we are a very event driven market . those sorts of events that we don’t necessarily see coming could be critical.
>> the latest retail sales figures show filling the gas tank may be taking a bigger bite out of consumer spending an that concerns treasury secretary john snow.
>> at these prices, they’re unwelcome. as you quoted me saying they’re clearly a negative. they create head winds. and they slow the economy down.
>> nymex crude oil futures are up 56% year to date. ellen, many analysts saying we could hit the $70 mark before labor day.
>> well, that oil sphraeu ago factor in today’s stock market . energy shares rising. retail another theme today for investors. let’s get a wrapup of the trading. here’s a report from deborah kostroun.
>> the dow jones industrials closing at its best level of the day. take a look at gainers in the s&p 500. really kind of helping out the market . you saw capital goods and also hotel, restaurant and leisure and energy stocks. capital goods led by aerospace and defense names. they have been puting in a good performance. united technologies a big gainer in the dow. oil-related stocks performing well as oil he closed at $65.82 a barrel. oil and also oil services. as we talk about commodities, we saw the biggest rally for gold in over a year. gold sitting atd an eight-month high. it was helping out gold stocks. as we were talking about commodities, let’s look at aluminum. u.b.s. upgrading alcan and alcoa. alcoa started the week with that positive article from barron’s over the weekend. a look at laggards in the s&p 500. retail at top of the list. as can you see, household products really ending the day higher. the rest of the retail stocks were lower as retail sales were disappointing. a look at news corp. second quarter earnings came in better than expected, helping out media stocks. delta was the worst performer in the s&p 500. that amex airline index one of the worst individual performers. delta downgraded to a sell at merrill lynch. also hearing today that united, delta and continental increasing u.s. fares because of rising fuel prices. we also saw three i.p.o.’s in the session. all three performing quite well. in fact, heartland, that is a bank card payment processing company. performing well. revco, an execution and clearing firm. many people from the chicago mercantile exchange and chicago board of trade know that name very well. also performing quite well. also, c.f. industries, a fertilizer manufacturer. also performing well in its first day of trading. we have been seeing a lot more of those i.p.o.’s recently in this market . i’m deborah kostroun at the new york stock exchange for bloomberg news.
>> intel’s stock lower today. goldman sachs said the company’s stock and profits may be peaking. intel may raise its dividend or boost the share buyback program. the chief financial officer, andy bryant, said in an interview with a citigroup analyst that intel has too much cash and wants to see some continued growth in its dividends. bryant says the board will meet in the fall in order to set a new policy. here’s how the stock ended the session, down .2%, 26.82 per share. earnings after the close from kohl’s. the discount retailer has profit up 27% to 54 cents a share for the second quarter. that does beat analyst expectations by two cents a share. sales for the quarter essentially coming in matching what analysts were looking for. $2.89 billion. shares down 1.4% in the extended trade. keep in mind over the past year they have risen 23%. sales forecasts to grow 16% annually in each of the next three years. the company also saying that same store sales were up 5.1% for that second quarter. also out with earnings after the close, analog devices. the company saying it earned 32 cents a share. analysts were looking for 31 cents per share. sales coming in at $582.4 million. this is the world’s fourth biggest maker of digital signal processors that run mobile phones. back on august 2, the company said third quarter profit and sales fell short of the highest forecast because of weaker than expected demand from asian customers. the shares down 1.6% in the extended trade. and with that we are going to wrap up this first few minutes of “after the bell.” thank you for joining us. we take a quick break and be back straight ahead. . felt overvalued compared to where i think their intrinsic value is.
