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Early Movers for Friday Feb. 8, 2013

Markets declined Thursday but ended the day well off their lows as Wall Street continues to have concerns over Europe and disappointing U.S. jobless claims. At the same time, Apple (AAPL) continues to be in the spotlight following yesterday’s comments by Greenlight Capital’s David Einhorn as to what Apple should do with all its cash. I expect markets to be mixed in the coming weeks as earnings season continues.

On the News Front

Mason Hawkins’ Southeastern Asset Management is not too happy with the price computer maker Dell (DELL) is planning to go private at and has told the computer maker that the $24.4 price tag undervalues the company and is “disturbed” by a $13.65 per share offer. CEO Mason Hawkins said in a Sept. 30 filing that the fund believed the company’s shares were worth in the “low $20s” even if Dell’s personal computing business was valued at nothing (source). Southeastern Asset Management and Mason Hawkins own 130 million shares or 7.5% of the company and is Dell’s largest independent shareholder. As of Sept. 30, 2012 DELL represented 5.7% of Southeastern Asset Management’s portfolio. Other Gurus owning shares of Dell include Donald Yacktman, Brian Rogers, Wallace Weitz, Ray Dalio and Michael Price. Following Mason Hawkins position, Wallace Weitz's position in DELL has the most significance as it represents 2.6% of the Weitz Fund portfolio.

Earnings Season

Moody’s (MCO) reported fourth quarter EPS of $0.70 per share or one cent above analysts estimates. Revenues also came in above analysts expectations but shares are facing downward pressure in early trading despite raising its forecast for the coming year. CEO Ray McDaniel is now expecting 2013 EPS between $3.45 and $3.55, exceeding the $3.25 analysts were expecting. Gurus have been both buyers and sellers of the credit rating agency with Markel’s Tom Gayner and Bridgewater Associates Ray Dalio being bullish. Neither’s position is significant.

Shares of business social media website LinkedIn (LNKD) are up significantly as the company reported $.035 per share versus analyst estimates of $0.19 share. The business social media website also raised its revenue forecast for the current quarter to $305 to $310 million, up from earlier estimates of $301 million. George Soros is the only Guru who has recently purchased shares of LinkedIn (LNKD) with 1.175 million shares having a 2.3% impact to the Soros Fund Management portfolio.

Toy maker Hasbro (HAS) reported fourth quarter earnings of $1.20 per share or one cent above analyst estimates. The toy maker warned of a softening retail environment and the economic environment in Europe hurt sales in the region. Both these factors weighed on the bottom line and thus fourth quarter earnings fell 6.3%. The toy maker is planning on cutting 550 jobs this year in response to a lower sales forecast. Gurus have been bullish on Hasbro with a number of them either establishing or adding on to their positions. These Gurus are:

  • John Hussman
  • Tom Gayner
  • James Barrow
  • Joel Greenblatt
  • The Meridian Funds
  • Despite Gurus piling on, none of the Gurus' positions are significant.

    Disclosure: None

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