TheStreet Search RSS Feed: Eric Rosenbaum

Polypore Loses Ground in Making 'Credible' Case

Wed, 22 Feb 2012 17:06:45 EST

NEW YORK (TheStreet) - Don't trust Polypore management in terms of assessing the credibility of stock analysts.

Shares of the battery technology company are tanking after its fourth-quarter results missed Wall Street's consensus profit view and commentary from management indicated its performance in the first quarter is expected to be worse than the just-reported miss.

Polypore CEO Robert Toth said in a press release, "We began to experience some headwinds in the fourth quarter, which will impact near-term results. We would expect first-quarter results to be below fourth quarter 2011 sequentially." ...

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In Hunt for Liquids, E&P Results Misfire

Wed, 22 Feb 2012 11:49:49 EST

NEW YORK (TheStreet) -- Every exploration and production company talks a big game about shifting from natural gas to liquids growth, but it's easier said than done. The latest results from the E&P universe show that company by company targets will be missed and costs will come in above expectations as these E&Ps rely more and more on increased oil production as the narrative with which they sell their stories to the market.

Take the latest results from Newfield Exploration, down 10% on Wednesday after lowering its 2012 estimates significantly and raising costs. On a day when energy was leading the sector higher and during a period of time in which rising crude oil prices have buoyed all E&Ps, results from this company show that the details vary, and the devil inevitably surfaces.

In general, E&P investors are slaves to production growth and when production growth disappoints and costs come in higher than guidance, it's a close to scientific formula for a selloff. ...

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Chinese Solar Message Is Set: Just Say Shipments Better

Wed, 22 Feb 2012 10:56:12 EST

NEW YORK (TheStreet) -- The message that Chinese solar companies need for an earnings season rally seems firmly established: highlight the increased shipments in the fourth quarter and hope that is deemed more important than weak margins -- i.e. a profitless shipment increase -- and impairment charges.

Better shipment guidance has been a rally maker as long as weak margins aren't weaker than already expected. But if shipments are down quarter over quarter, the solar trading yo-yo may send shares down.

Last Friday, Suntech Power was the first Chinese solar company to pre-report earnings, guiding to better shipments in the fourth quarter and margins within its targeted range, a range that means the company isn't making a profit. ...

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The Tortured History of the Transocean Dividend

Tue, 21 Feb 2012 17:02:38 EST

NEW YORK (TheStreet) -- If eliminating the $1 billion annual dividend was the right move for Transocean management team to make, it was a right move that once again highlights the suspect course the company is on.

Transocean said Monday its board won't recommend a dividend payment in 2012. The company is incorporated in Switzerland, where Swiss law requires the dividend to be voted on annually.

With the board stating it does not want to pay a dividend in 2012, shareholders have little hope of mounting a successful proxy challenge by proposing a dividend as a separate issue for Transocean's annual meeting. ...

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In Anadarko Decline, a Possible Oil Rally Tipping Point

Tue, 21 Feb 2012 13:05:41 EST

NEW YORK (TheStreet) -- Shares of Anadarko Petroleum were off by 3% on Tuesday and there was no shortage of potential catalysts for the decline. The best reason though may simply be that the oil rally was good while it lasted.

The company announced before the open that its CEO James Hackett plans to retire and named COO Al Walker as his successor. JPMorgan Chase downgraded Anadarko from a buy to hold as well on Tuesday though the firm's call was unrelated to the management change. JPMorgan says a lawsuit involving the spinoff of a bankrupt company called Tronox could be an overhang on shares.

On the management issue, if it was a surprise announcement, it's not a surprise replacement, and Hackett has always been expected to give up the reins at some point, even if this was a little earlier than expected. As Argus Research analyst Phil Weiss said, Walker has been responsible for some of the keys to the Anadarko turnaround in recent years. "Walker is the heir apparent and has been groomed for it. It doesn't seem like a reason to get rid of the stock," Weiss said. ...

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Weatherford Makes Other Oil-Service Stocks Look Good (Update 1)

Tue, 21 Feb 2012 12:16:34 EST

NEW YORK (TheStreet) -- The oil-service company that can't seem to find an accountant who can keep the beans counted, Weatherford International, gave investors one more reason for frustration on Monday.

Weatherford said concurrent with its fourth-quarter earnings that it still hasn't remedied an accounting situation that it revealed about a year ago, in March 2011, and its previously reported financial results for the 2008 through 2011 period are still subject to restatement.

Even though Weatherford released the earnings on Monday, shares were down by 12% on Tuesday after the Presidents' Day holiday on Monday. ...

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Making Sense of the Latest Solar Stock Trades

Fri, 17 Feb 2012 12:08:54 EST

NEW YORK (TheStreet) -- There was some great news for the solar sector on Thursday and Friday: SunPower and Suntech Power reported better-than-expected results for the fourth quarter of 2011, and First Solar resolved project permitting issues that had taken shares down last week.

It's important to focus on the improvements that SunPower and Suntech were able to demonstrate, which were significant and relate to both the companies' balance sheets and the improved demand in the fourth quarter. Ultimately, though, it's going to be as important to assess whether the companies provided any incrementally positive view about 2012.

How SunPower Beat SunPower reported earnings of 16 cents in the fourth quarter, better than the 5-cent loss Wall Street consensus called for. But keep in mind that the consensus was predicated on SunPower booking revenue from its California Valley Solar Ranch project at $100 million in the quarter. The company booked $186 million in revenue from the project -- which is a high-priced power purchase agreement contract, meaning lucrative -- and that swung earnings by 19 cents, according to Stifel analysts. ...

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Energy Losers: Ultra Petroleum

Thu, 16 Feb 2012 13:51:34 EST

NEW YORK (TheStreet) -- If any investor needed a reminder of how bad things are for natural gas drillers, look no further than the 2012 outlook from Ultra Petroleum.

The natural gas drilling company revised its production growth guidance down from 16% to a range of 4% to 6% for 2012, as historically low natural gas prices make incremental drilling uneconomic. Ultra will spend $650 million on development drilling in 2012, compared with $1.3 billion in 2011. Total spending will be 38% lower at $925 million in 2012.

It isn't a surprise that Ultra is curtailing some production and spending. However, the magnitude of the production growth revision caught investors by surprise. After all, Ultra Petroleum is a company that has shown production growth during the past five years of between 20% and 50% annually. "That's going over a cliff," said Morningstar analyst Mark Hanson. ...

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Energy Stock Favorites of Hedge Fund Managers (Update 1)

Thu, 16 Feb 2012 12:10:44 EST

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(Hedge fund energy stock picks story, updated for multi-quarter energy buying trends) NEW YORK (TheStreet) -- The energy stock buying and selling of the top hedge fund managers in the fourth quarter of 2011 showed heavy selling in oil service names, opportunistic buying in beaten-down value plays, and continued betting on the long-term future of natural gas even as prices remained at a historically low level.

It's important to keep in mind, though, that while seeing what the big hedge fund managers have been buying and selling in any sector is interesting, it's backward-looking information. The activity often reflects short-term trades that may have already been closed out. ...

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MEMC Hints That Solar Remains a Show-Me Story

Wed, 15 Feb 2012 18:19:24 EST

NEW YORK (TheStreet) -- MEMC Electronic Materials isn't the best bellwether for the solar sector, but it's a big turnaround story, and that mirrors what investors are hoping for from the solar sector: A rebound in 2012.

MEMC provided a few points of guidance in its after-market earnings on Wednesday that indicate the turnaround for the company, and for the solar sector, remains difficult to forecast. MEMC guided to a miss of first-quarter earnings consensus and commented that the general solar market outlook lacks visibility.

MEMC is split between a semiconductor, solar wafer and solar project business, and it's going through a massive $1 billion restructuring program related to all three units. ...

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5 Reasons Why Solar Earnings Will Disappoint

Wed, 15 Feb 2012 12:32:59 EST

NEW YORK (TheStreet) -- Solar stocks have been riding high headed into earnings even after a recent selloff. Riding high, though, means outperforming relative to the woeful underperformance last year.

The year-to-date gain in the solar sector has been most pronounced in stocks that deteriorated the most in value last year. In no sector has the "2011's stock market junk is 2012's market gold" been more pronounced than in solar.

There was a specific reason for this rally: German demand in the fourth quarter far exceeded expectations, making what was a terrible oversupply situation and weak pricing in the sector a little better for solar companies. ...

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Buffett Talks Up Exxon ... After Dumping It

Tue, 14 Feb 2012 17:55:08 EST

NEW YORK (TheStreet) -- Warren Buffett, chairman of Berkshire Hathaway, recently talked up Exxon Mobil as a prime example of why an investor should own stocks and not gold. In the fourth quarter, though, Buffett's company was selling every share of Exxon it owned.

Exxon has been a small stake for Berkshire Hathaway relative to the other holdings in its equities portfolio -- only a little more than 420,000 shares, versus an IBM, where Buffett now holds more than 63 million shares, for example. The Berkshire portfolio has always been dominated by the top ten holdings, too. ...

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Solar Stocks With More Bankruptcy Risk Than Energy Conversion

Tue, 14 Feb 2012 13:37:55 EST

NEW YORK (TheStreet) -- Energy Conversion Devices entered chapter 11 bankruptcy on Tuesday, but when it comes to solar stocks the failed U.S. solar company is far from alone in struggling to make ends meet.

In fact, even though TheStreet warned investors that Energy Conversion would be entering bankruptcy it's worth pointing out that it doesn't even top the list of potential bankruptcies in the solar sector based on a popular metric for assessing balance sheet risk.

Energy Conversion scored 1.49 on the Altman Z bankruptcy risk metric based on its last reported quarter. ...

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5 Natural Gas Stock Trades That Look Past Low Prices

Tue, 14 Feb 2012 13:01:43 EST

Updated from 7 a.m. ET to include two additional natural gas plays.

NEW YORK (TheStreet) -- The natural gas stocks are hard to love these days but there are still angles to be played.

Long-term investors point to optimism about the importance of U.S. natural gas supply in a global context in the years ahead, while short-term natural gas pricing weakness is also a way to identify contrarian bets. ...

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We Warned You: Energy Conversion, One More Solar Bankruptcy

Tue, 14 Feb 2012 11:46:54 EST

NEW YORK (TheStreet) -- Energy Conversion Devices, the U.S. solar manufacturer, entered Chapter 11 bankruptcy on Tuesday.

TheStreet warned investors the company would be entering bankruptcy at some point in the future, as a way of scratching our heads at the more than 100% run-up in Energy Conversion shares this year (not that it took much in the way of foresight to see this one coming. Common sense should have prevailed upon anyone with a head on their shoulders to assume bankruptcy was a fait accompli for Energy Conversion).

"Guess that recent rally from $0.30 to $1.50 was all for naught," remarked Morningstar analyst Steven Simko, who maintained all along that Energy Conversion Devices did not have the capital to make the cost reductions that would be required to compete. ...

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