Let Earnings Season Begin... Again!

As I mentioned two days ago, I sense that smaller cap value stocks may be coming out of their funk. Since then, my portfolio is up over 6%... it is a start. You know when stocks trade at a market value lower than their straight cash, the market has gone a little irrational. A big wild card will be oil... I sense a lot of speculation in oil prices, almost a bubble. I hear the arguments that demand is up worldwide, but I don't think that accounts for the 50% rise we've seen in 2008. If oil drops closer to its long term trend line, some stocks (think FTO, HOC and WNR) could really pop. There is also a great amount of political pressure to get prices lowered. I just hope that political pressure leads to somethink intelligent rather than some of the band-aid solutions I am hearing like Gas Holidays and using oil from the Strategic Reserve.

Ok, I'll get off my soapbox.

TPX - announced their earnings this evening after the bell. I was holding my breath as compadre mattress manufacturers had had really awful numbers. The envelope please :(UPDATE - Tempur-Pedic Q2 results beat Street view). Granted the numbers weren't great, sales down single digits. But they reduced debt by $40m, they increased cash by $22m. They gave guidance of between $1.05 and $1.20 for what is a terrible year for consumers. At under $9 a share, that isn't a terrible story. I'll sleep well tonight (ha, ha).

VALU - Quarter in and quarter out, these guys post the worst press releases of earning in the entire market. They can't even be bothered to format it so it looks good. But they are the ultimate valu(e) stock (ha, ha) and they didn't have too bad a story once you got past the formatting (Value Line, Inc. Announces Earnings). They made $2.56 a share for the year and 48 cents a share for the quarter. The interesting part is that they are increasing their dividend from 30 cents a share per quarter, to 40 cents... a whopping 33% increase for the mathematically challenged. That is pushing a 5% yield. It seems a vote of confidence in their forward earnings to increase the dividend as they had a so-so quarter. Of course it helps that they have buckets of cash on their balance sheet and no debt whatsoever.

I did sell my AMGN (thanks Steve, from Magic Diligence) as I was happy with my 30% gain and I have some personal upcoming expenses... as I get ready for a Mediterreanean cruise. The way the market has been going, this cruise may be my last boondoggle for a while.

Ciao!