Fund Holdings Earnings Preview for the Week

This continues to be one of the most surreal earnings seasons I can ever remember - stocks with lousy results bid up on the thought that "when oil comes down everything will improve for everything not related to oil" and many stocks with fantastic results smashed down because "those results are backwards looking and as the globe devolves into anarchy who needs commodities?" Yet a world in anarchy of course needs malls, autos, and lots of plane tickets ;)

We are now through the vast majority of the S&P 500 companies - now we generally deal with (mostly) smaller fare and a lot more foreign companies. I will wonder how next earnings season will fare as the dollar strengthens because as we've been pointing out the past few quarters much of the US multinationals "strength" has been export growth and "currency gains". For all those banging the drumbeat of a stronger dollar, one must ask what happens when companies begin to miss because those currency gains disappear into the ether. And the bigger question - while I realize the thesis (which we pointed out last winter) for the eventual dollar rebound is be "everyone else stinks, but we stunk first and hence will rebound first, and relatively speaking our stink is improving" - how does a country whose government sponsored entities (who everyone seems to forget about) hang by a lifeline - and quite possibly will need a massive capital infusion in the coming months - be considered a strong currency? I won't even touch on entitlements because that is SO far past the timeline of trigger happy hedge funds, nor crumbling infrastructure, nor the next round of stimulus etc etc - all that is going to require a lot of printing of dinero. Anyhow - we can't be bothered with details like that.

On to earnings...

Monday
Global infrastructure company Fluor (FLR) - quite possibly one of the best positioned companies in the coming 5 years - with their hands in wind, solar, petrochemical - you name it. But with oil headed down all these projects apparently will get cancelled - although all its peers have reported completely the opposite. But the market, in its all powerful "looking ahead 6 months" is telegraphing a wave of cancellations as the world devolved into the already mentioned Mad Max environment. Fluor just continues to sign contracts worth a billion here, or a billion there - and the stock keeps getting pummeled. The stock broke down below its 200 day moving average last week and hence is thus in the File 13 pile.

LDK Solar (LDK) - complete crap shoot with any of these solar names around earnings. The sector is out of favor is the overriding theme. In the 2 years or so I've been in these stocks this is the longest I can remember absolutely no rally in the group.

Global infrastructure company McDermott (MDR) - see many of the same comments as Fluor but has more risks due to narrower focus. The chart is a complete disaster - I am not sure if its the subprime exposure or the fact it owns so many stores in Americans malls (facetious comment)

Petrobras (PBR) - they are sitting on two of the most important (potentially) oil finds in the world. Not to mention their exposure to sugar cane ethanol. Not to mention their exposure to one of the most exciting economies in the world. But they are within 6 Degrees of oil (Kevin Bacon) so they are a useless stock as oil is headed back to $3. (Mad Max) Another stock below all key moving averages.

Tuesday
Kinross Gold (KGC) - inflation has been defeated and all is well in the world. Who the heck buys gold anyhow? Gold is going back to $150. Or $15.

Wednesday
Solar name Canadian Solar (CSIQ) - the big risk here is last quarter they got a huge currency gain which no one took the time to notice while driving the stock up... but this time around it looks to be reversing as we saw with Yingli Green Energy (YGE) last week. So a disappointment could be in the offing. I might cut this position going into earnings.

Chinese travel name Ctrip.com (CTRP) - the stock has been wayward and listless for a long time. Even on days the market is up strongly - this name has sort of just "stood there". They always seem to perform around earnings season, but it is always a richly valued stock. I wouldn't mind this sort of name "missing" so I can get shares on the cheap.

Chinese contract research organization WuXi PharmaTech (WX) - every peer I follow (domestic / Irish) has been rewarded handsomely by the market. One can only hope WX gets some sprinkle of attention. It's been in a long term downward spiral and we've been very patient with this one - if they disappoint here we might be finally sending this one to the outhouse.

Thursday
Brazilian home builder Gafisa (GFA) - completely perplexing; great valuation, great growth, great country. The problem is the country is associated with natural resources and hence EVERYthing in the country must be sold. That would be like saying every stock in America must be sold due to the banking problems. But this is the current logic. Stock is below all key moving averages...

Friday
N/A

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A lot of retailers in the 2nd half of this week - the results won't matter - we can look into the "future" and in the new world with gas $3.25 and much higher job losses, and credit contraction it's shaping up to be an excellent Christmas season and 1st half 2009. Yes that makes little sense but try telling that to the computers and their buy programs.

On a "note to gamblers" - with corn prices in free fall since corn = oil, maybe a stock like Pacific Ethanol (PEIX) will be the United Airlines (UAUA) of the week - why not. Companies that cannot make money when their input costs are here or 30% lower than here are all the rage. Or maybe NVIDIA (NVDA) - after all they warned a few weeks ago so whatever they say will be taken as "better than expected" - so we can run the stock up 25%.