January 7, 2013 Comments

Markets gave back a little today after the recent gains. However Melcor was up about 2% on decent volume and Toll Brothers was up 2%. Based on the rating above I would not be an enthusiastic¬† buyer of Toll at today’s $34.35 given it was rated only Speculative Buy at $30.77 on December 8, though it is certainly possible that our rating was too conservative. Certainly it’s a bit more speculative at $34.35.

As I have tried to make clear many times the ratings above apply at the date and price indicated (and certainly there are no guarantees). Whether the rating still applies some days, weeks or months later as the price changes and as earnings and other events unfold at the company is unavoidably a matter for your judgment since I don’t/can’t update the ratings any more frequently than I do.

Also, as you can appreciate, each report provides numerous facts, figures, and observations that are ultimately distilled into a rating. What is provided is both the rating AND the report with all the reasons for the rating. Some of you may read the report and conclude that a different rating should apply. Or you may just see some factor in the report (or from your other sources of information and general knowledge) that causes you to avoid a certain stock for whatever reason.

At the end of the day if the stock ratings here have helped you pick winners it was in large measure because you ultimately agreed with or trusted the rating and pulled the trigger on certain trades, knowing that it was at your own risk. Congratulations to all those subscribers who have done well with these stock picks.

The big U.S. banks made some settlements regarding foreclosure and mortgage issues stemming from the financial crisis of several years ago. Their stocks did not seem to react much indicating that the news was about as expected. But in general it should (all else being equal) pave the way for continued gains in Wells Fargo and Bank of America. There was also a  favorable development that delayed a planed increase in the amount of cash they have to keep on reserve. Such cash tends to earn very little or no interest for the banks and so they like to hold minimal reserved of cash on hand. In this case cash does include deposits at the Federal reserve bank (hence the name I guess) which these days does pay 0.25% РI believe it historically may have paid nothing.

The earnings season will kick off this week with Alcoa which somehow manages to get its December 31 year-end numbers out extremely quickly after year-end. In Canada Shaw Communications reports its Q1 results on Wednesday.