Barchart Morning Call 9/4

Barchart Morning Call

BC - Wed Sep 04, 6:49AM CDT

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OVERNIGHT MARKETS AND NEWS

September E-mini S&Ps (ESU13 unch) this morning are down -0.02% and European stocks are down -0.71%. Asian stocks closed mixed: Japan +0.54%, Hong Kong -0.31%, China -0.16%, Taiwan -0.06%, Australia -0.67%, Singapore -1.29%, South Korea +0.04%, India +1.83%. U.S. and European stocks are under pressure amid concern the U.S. is closer to a military strike against Syria. The U.S. Senate Foreign Relations Committee is due today to vote on a resolution that sets a 90-day limit on military action against Syria. Commodity prices are mostly lower. Oct crude oil (CLV13 -0.41%) is down -0.61% after Russia raised objections to military action against Syria, which further clouds the prospects for an attack, when Russian President Putin said he will only support a UN resolution for military strikes if there's conclusive proof the Syrian government used chemical weapons. Oct gasoline (RBV13 -0.36%) is down -0.48%. Dec gold (GCZ13 -0.59%) is down -0.63% and Dec copper (HGZ13 -1.56%) is down -1.69%. Agricultural and livestock prices are mixed. The dollar index (DXY00 -0.11%) is down -0.15%. EUR/USD (^EURUSD) is up +0.09% and USD/JPY (^USDJPY) is down -0.10%. December T-note prices (ZNZ13 -0.16%) are down -6.5 ticks.
China's Aug HSBC services PMI rose +1.5 points from July to 52.8, its fastest pace of expansion in 5-months.
Eurozone Q2 GDP was revised slightly higher to +0.3% q/q and -0.5% y/y from the originally reported +0.3% q/q and -0.7% y/y.
Eurozone Aug PMI composite was revised lower to 51.5 from the originally reported 51.7.
Eurozone July retail sales rose +0.1% m/m and fell -1.3% y/y, weaker than expectations of +0.2% m/m and -0.3% y/y, while Jun retail sales were revised lower to -0.7% m/m and -1.1% y/y from the originally reported -0.5% m/m and -0.9% y/y.
UK Aug PMI services unexpectedly rose +0.3 from July to 60.5, stronger than expectations of a -0.5 point decline to 59.7 and the fastest pace of expansion in 6-1/2 years.
The UK Aug BRC Nielsen shop price index all items fell -0.5% y/y, the fourth consecutive month of declines, the most since data for the series began in 2006.

U.S. STOCK PREVIEW

Today’s July U.S. trade deficit report is expected to widen moderately to -$38.7 billion from -$34.2 billion in June. However, even after today’s expected widening of the trade deficit to -$38.7 billion, the deficit will still be much narrower than the -$44.1 billion level seen in May. The Fed today will release its Beige Book report ahead of the FOMC meeting in two weeks on Sep 17-18. The FOMC in its last Beige Book released on July 17 said that the U.S. economy maintained a “modest to moderate pace.” Today’s Aug U.S. total vehicle sales report is expected to edge higher to 15.80 million from 15.73 million in July. There are 5 of the Russell 1000 companies that report earnings today: Navistar (consensus -$1.30), SAIC (0.21), Dollar General (0.74), Greif (0.91), and Forest City Enterprises (-0.02).
Conferences this week include: 16th Annual Asian Shared Services & Outsourcing Week on Tue/Wed, Barclays Capital Back to School Conference on Tue-Wed, Citi Global Technology Conference on Tue-Wed, Barclays CEO Energy Conference on Wed, Barrington Research Growth Conference on Wed, Brean Capital Global Technology Conference on Wed, Pareto Securities Oil & Offshore Conference on Wed, 18th Handelsblatt Annual Conference - Banks in Upheaval on Thu, and Scotiabank Financials Conference 2013 on Thu.

OVERNIGHT U.S. STOCK MOVERS

Prudential (PRU +1.39%) was upgraded to "Overweight" from "Equal Weight" at Barclays who also raised their price target on the stock to $95 from $83.
Best Buy (BBY +2.75%) was upgraded to "Neutral" from "Underperform" at BofA/Merrill.
Loews (L +0.16%) was initiated with a "Buy" at Deutsche Bank with a target of $52.
Dollar General (DG -0.17%) reported Q2 EPS of 77 cents, better than consensus of 74 cents.
SAIC (SAI +0.53%) reported Q2 EPS of 13 cents, well below consensus of 21 cents, and lowered guidance on fscal 2014 EPS view to 95 cents-$1.03, below consensus of $1.13.
ZOLL Medical (ZOLL) was awarded a $210 million government contract for defibrillators, monitors, warmers, and infusers.
Hain Celestial (HAIN +0.12%) fell over 3% in after-hours trading after Carl Icahn filed to sell 3.65 million shares of the company.
Cedar Fair Entertainment (FUN +0.33%) raised its fiscal 2013 revenue estimate to $1.10 billion-$1.25 billion, from $1.09 billion-$1.115 billion.
Glenview Capital reported a 9.1% passive stake in J. C. Penney (JCP +1.92%) .
Consolidated Press International Holdings reported a 9.35% passive stake and Cavalane Holdings reported a 9.35% passive stake in Zillow (Z +2.74%) .
Matrix Service (MTRX +1.80%) reported Q4 EPS of 28 cents, better than consensus of 26 cents.
H&R Block (HRB -0.11%) is down 4% in after-hours trading after it reported a Q1 EPS loss of -40 cents, a wider loss than consensus of -37 cents.
Bank of America (BAC +0.92%) sold its remaining stake in China Construction Bank, approxiamtely 2 billion shares, and said it sees a pretax gain of approximately $750 million from the sale.

MARKET COMMENTS

Sep E-mini S&Ps (ESU13 unch) this morning aredown -0.25 of a point (-0.02%). The S&P 500 index on Tuesday closed higher but fell back from its best levels after Speaker of the House Boehner said he will support President Obama’s call for military action against Syria. Bullish factors included (1) reduced concern of an immediate U.S. attack on Syria after President Obama said he will seek authorization from Congress, which is in recess until Sep 9, before ordering a strike against Syria, and (2) signs of strength in the global economy after the Aug ISM manufacturing index expanded by its fastest pace in 2 years and China’s Aug manufacturing PMI rose to a 16-month high of 51.0. Closes: S&P 500 +0.42%, Dow Jones +0.16%, Nasdaq 100 +0.58%.
Dec 10-year T-notes (ZNZ13 -0.16%) this morning are down -6.5 ticks. Dec 10-year T-note prices on Tuesday closed lower on bearish factors including (1) reduced safe-haven demand as the threat of an immediate U.S. military attack on Syria declined after President Obama said he will seek authorization from Congress before ordering a military strike against Syria, and (2) the Aug ISM manufacturing index that unexpectedly expanded at its fastest pace in 2 years. Closes: TYZ3 -23.00, FVZ3 -11.00.
The dollar index (DXY00 -0.11%) this morning is down -0.121 (-0.15%). EUR/USD (^EURUSD) is up +0.0012 (+0.09%) and USD/JPY (^USDJPY) is down -0.10 (-0.10%). The dollar index on Tuesday climbed to a 6-week high and closed higher after an unexpected increase in the Aug ISM manufacturing index to its best level in 2 years bolstered speculation the Fed will start cutting bond purchases this month. Closes: Dollar index +0.274 (+0.33%), EUR/USD -0.00498 (-0.38%), USD/JPY +1.465 (+1.49%).
Oct WTI crude oil (CLV13 -0.41%) this morning is down -66 cents (-0.61%) and Oct gasoline (RBV13 -0.36%) is down -0.0138 (-0.48%). Oct crude oil and gasoline prices on Tuesday recovered from 1-week lows and settled mixed after Israel launched missiles into the Mediterranean as part of a missile-defense test, which fueled concern about tensions in the Middle East. Another bullish factor was the sign of strength in global manufacturing after Aug manufacturing PMIs rose in China, the U.S. and Europe. Energy prices were undercut by the rise in the dollar index to a 6-week high. Closes: CLV3 +0.89 (+0.83%), RBV3 -0.0300 (-1.04%).

GLOBAL EVENT CALENDAR09/04/2013

US	0700 ET	Weekly MBA mortgage applications, previous -2.5% with purchase sub-index +2.4% and refi sub-index-5.4%.
	0730 ET	Aug Challenger job cuts, July +2.3% y/y.
	0830 ET	July trade balance expected -$38.7 billion, Jun -$34.2 billion.
	1230 ET	San Francisco Fed President John Williams delivers a speech on the economy and monetary policy to community leaders in Portland, OR.
	1400 ET	Fed Beige Book.
	1630 ET	API weekly U.S. oil statistics.
	1700 ET	Aug total vehicle sales expected 15.80 million, July 15.73 million. Aug domestic vehicle sales expected 12.30 million, July 12.20 million.
	2000 ET	Minneapolis Fed President Narayana Kocherlakota participates in a town hall forum at the University of Wisconsin Lacrosse.
GER	0355 ET	Revised German Aug PMI services, pervious 52.4.
EUR	0400 ET	Revised Eurozone Aug PMI composite, previous 51.7.
	0500 ET	Revised Eurozone Q2 GDP, previous +0.3% q/q and -0.7% y/y.
	0500 ET	Eurozone July retail sales expected +0.2% m/m and -0.3% y/y, Jun -0.5% m/m and -0.9% y/y.
UK	0430 ET	UK Aug PMI services expected -0.3 to 59.9, July 60.2.

U.S. STOCK CALENDAR09/04/2013

Company Name	Ticker	Time	Event Description	Period	Estimate
Navistar International Corp	NAV US	Bef-mkt	Q3 2013 Earnings Release	Q3 2013	-1.295
SAIC Inc	SAI US	Bef-mkt	Q2 2014 Earnings Release	Q2 2014	0.212
Dollar General Corp	DG US	Bef-mkt	Q2 2014 Earnings Release	Q2 2014	0.74
SAIC Inc	SAI US	8:00	Q2 2014 Earnings Call	Q2 2014
CR Bard Inc	BCR US	8:30	Business Update Call
Navistar International Corp	NAV US	9:00	Q3 2013 Earnings Call	Q3 2013
Ford Motor Co	F US	10:00	August 2013 Sales and Revenue Call	2013
Biogen Idec Inc	BIIB US	10:00	Biogen Tecfidera EU Scenarios Discussed: Patents, Reimbursement, Compounding
Dollar General Corp	DG US	10:00	Q2 2014 Earnings Call	Q2 2014
Greif Inc	GEF US	Aft-mkt	Q3 2013 Earnings Release	Q3 2013	0.908
Forest City Enterprises Inc	FCE/A US		Q2 2014 Earnings Release	Q2 2014	-0.015
General Motors Co	GM US		August 2013 Sales and Revenue Release	2013

Cedar Fair Barchart's Chart of the Day

Summary:

Cedar Fair LP (FUN) is the Chart of the Day.  The stock has both a 100% Barchart technical buy signal and a Trend Spotter buy signal.  17 advances and a 9.08% gain in the last month looks great.  Analysts look for increased revenue and earnings in the coming years.


Article:

The Chart of the Day is Cedar Fair LP (FUN).  The stock had a steady climb with 17 advances and a 9.08% gain in the last month.  Since the beginning of the year the stock is up 26.46%.  The 6.05% dividend rate is the kicker.  The stock was at the top of the New High list when sorted for frequency.

The Company owns and operates five amusement parks: Cedar Point, Knott's Berry Farm, Dorney Park & Wildwater Kingdom, Valleyfair, and Worlds of Fun/Oceans of Fun. The parks are family-oriented, with recreational facilities for people of all ages, and provide clean and attractive environments with exciting rides and entertainment. They also owns and operates four hotel facilities. Cedar Point also owns and operates the Cedar Point Marina, one of the largest full-service marinas on the Great Lakes.

Barchart's Opinion trading systems are listed below. Please note that the Barchart Opinion indicators are updated live during the session every 10 minutes and can therefore change during the day as the market fluctuates. The indicator numbers shown below therefore may not match what you see live on the Barchart.com web site when you read this report.

Barchart technical indicators:

• 100% Barchart technical buy signals
• Trend Spotter buy signal
• Above its 20, 50 and 100 day moving averages
• 17 new highs and up 9.08% in the last month
• Relative Strength Index 80.68%
• Barchart computes a technical support level at 41.24
• Recently traded at 42.30 with a 50 day moving average of 39.04

Fundamental factors:

• Market Capital $2.35 billion
• P/E 23.34
• Dividend yield 6.05%
• Analysts predict revenue will increase 3.70% this year and another 3.60% next year
• Earning are estimated to grow 30.40% this year, an additional 10.20% next year and continue to increase annually 6.00% for the next 5 years
• Wall Street issued 2 strong buy and 2 buy recommendations
• Financial Strength B

Hold until the stock drops below its 50 day moving average.

Cedar Fair was my Christmas present to you!!

On Monday December 11 in my article Cedar Fair: Add some fun to your portfolio, I told you that there was unexplained price action in this stock and that such price action sometimes meant a favorable press release or acquisition announcement was pending. I advised buying around 9 with a protective stop loss at 8 in case something happened.

Below is today's press release. If you bought at 9 and your shares are acquired from you at 11.50 you have 2.50 per share profit. 2.50/9 = 22.78% profit. Not bad for a 10 day investment.

Merry Christmas - now pay off your credit card with these profits so you won't have to worry about how to pay for all those presents under the tree.

Press release:
Cedar Fair LP, the owner of Kings Island theme park in Mason, will be acquired by Apollo Global Management under a definitive merger agreement announced Wednesday.
Apollo, a private equity firm, will pay $11.50 in cash for each limited partnership unit, for a total of about $2.4 billion, according to a news release. Shares of Cedar Fair (NYSE: FUN) opened at $9.08 Thursday.
The deal is subject to approval by unit-holders, as well as regulatory approvals and other conditions. Pending those approvals, the deal will close by the beginning of second-quarter 2010, Cedar Fair said.
The company can also solicit other proposals from third parties for 40 days, under the terms of the agreement.
At the deal’s completion, Cedar Fair will become a private company, owned by an Apollo affiliate.
“We have considered a wide range of strategic alternatives over the past several years,” said Dick Kinzel, chairman, president and CEO of Cedar Fair, in the release. “After considering these strategic alternatives, we have concluded that the transaction with Apollo is in the best interest of our unit-holders.”
Apollo Global Management, with offices in New York, Los Angeles, London, Singapore, Frankfurt and Mumbai, has more than $51 billion in assets under management.
Cedar Fair posted third-quarter net income of $107.6 million, or $1.92 per share, compared to $91.5 million, or $1.65 per share in the year-ago quarter. Total net revenues fell to $519.9 million from $540.3 million. The company said in November that it would suspend its dividend beginning in 2010 to pay down short-term debt.
Cedar Fair (NYSE: FUN), headquartered in Sandusky, is a publicly traded partnership that owns and operates 11 amusement parks, six outdoor waterparks, one indoor waterpark and five hotels in eight states and Ontario. The company acquired Kings Island in June 2006, as part of its $1.24 billion purchase of Paramount Parks.

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email FinancialTides@gmail.com

Disclosure: I hold no positions in this stock at time of publication

Put some FUN in your portfolio

On Financial Tides every once in a while we see a stock that is hitting new highs like crazy for no apparent reason. Sometimes that movement precedes a big press announcement; sometimes it precedes an acquisition announcement. You can never tell. This week when screening for stocks hitting new highs consistently on BarChart Cedar Fair LP -- FUN came up on the radar. FUN has had price appreciation on 14 of the last 20 trading sessions. The stock was having a difficult time earlier in the year and seemed to bottom out on 11/12 at 6.03 and has steadily move up by all most 50% since then. Something is going on here.

Cedar Fair, L.P. and its affiliated companies own and operate five amusement parks: Cedar Point, Knott's Berry Farm, Dorney Park & Wildwater Kingdom, Valleyfair, and Worlds of Fun/Oceans of Fun. The parks are family-oriented, with recreational facilities for people of all ages, and provide clean and attractive environments with exciting rides and entertainment. The company also owns and operates four hotel facilities. Cedar Point also owns and operates the Cedar Point Marina, one of the largest full-service marinas on the Great Lakes.

Although there is not a major Wall Street brokerage following the stock has 1 buy and 3 hold recommendations with no sells or under performs. Analysts expect the stock to have an increase in both sales and EPS and be profitable in the coming year. Paul Price a contributor to Seeking Alpha has done several recent articles on the stock and I'm linking his article --
Cedar Fair : Growth Opportunities in Amusements for your review.

Over on Wall Street Survivor the Survivor Sentiment is 5/5 with a fundamental rating of 4/5. On Motley Fool the CAPS members think the stock will out perform the market 314 to 72 with the All Stars agreeing 76/23. Of the Wall Street columnist only Cramer disagrees but he hasn't said anything about the stock since all the way back in January.

Recommendation: Although FUN seems to have support based on its fundamentals and is expected to make a profit, I'm adding this stock to my speculative Marketocracy VMSLO portfolio solely on its technical price movement alone. Something is going to happen and I'm hoping for another price kick upward. Buy around 9 but have a protective stop loss around 8 in case nothing happens. Revisit that stop loss on a weekly basis and move it up to protect your gains.

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment here or email FinancialTides@gmail.com.

Disclosure: No positions in this stock at the time of publication