CHK 15.1% loss on SEC shelf filing

On Friday, November 28, CHK announced the potential issuance of up to 50 million shares of common stock in order to fund future capital expenditures. The company does not anticipate issuing any shares until 2009. The recent filing is viewed by analysts as a move to enhance flexibility and is not a sign that the company is having liquidity issues.

CHK (27.5% one day loss on Nov. 20)

The Energy Information Administration released weekly Natural Gas storage information for the previous week and inventories were up 16 bcfe. Most analysts were expecting little to no change in inventories and this event had a significant impact on energy companies across the board. The sector severely outpaced the losses inucrred by the broader tape as double digit percentage losses were commonplace for the day. Natural gas prices were also down to the 6.20 level. Highlighting the effect that changes in the price of the commodity have on CHK.

Ensco 19.9% loss-James Fowler

Yesterday ESV fell roughly 20%. The main reason is that oil traded down to a 3 year low, below $50 a barrel. In the current market environment, energy names seem to move with the price of oil and natural gas. I still believe that oil is not going to stay this low for long and as oil begins to trade back up, so will energy names. ESV still has a tremendous amount of backlog and continues to win new contracts. Just recently, ESV won two three-year contracts in the GOM for $367M, at around $167K a day per contract.

I went into the model and did a scenario analysis, and assumed revenues would be flat from 3Q08 through 4Q09, while keeping expenses the same and I still come up with a price target of $69. Nothing has fundamentally changed with ESV and feel it is still a definite hold.

Carnival Cruise Lines 10.49% loss

Carnival today fell 10.49% and is currently Trading at 16.47. This was accompanied by the S&P 500 being down over 6% and its main competitor Royal Carribean down over 17%. Today Royal Carribean discontinued its stock dividend which has followed in the footsteps of Carnival which recently also suspended their dividend. The market being down and the news of Royal Carribean cutting their dividend sent the cruse line companies down but Carnival had the smallest percentage drop among them.

DuPont suffers 9.88% loss

Today DuPont (DD) suffered a 9.88% loss and is currently trading at $24.26. While the broader market was down 5% today, the reasoning behind the near 10% decline in DD was the sudden news that BASF SE, which makes such items as fertilizers, glues and cosmetic ingredients, said it would temporarily close 80 plants worldwide due to slumping demand and cut production at 100 more, including its major U.S. facilities in Louisiana and Texas. This led to a major sell off in chemical companies as a whole, but DuPonts percentage drop was one of the largest among them. Deutsche Bank analyst David Begleiter said the magnitude of the announcement was "unprecedented" and said the fourth quarter will likely be the chemical industry's toughest since the fourth quarter of 2001.

We are going to keep DD as a HOLD for today, and the materials group will be discussing future plans for DD at tomorrows meeting.

SOURCE: http://biz.yahoo.com/ap/081119/chemicals_sector_snap.html?.v=1

GLW-Q4 revised earnings-RM

I just wanted to briefly touch upon GLW's revised earnings this morning. As I stated when making my stock pitch, GLW's main driver is panel makers utilization rates. During Q3 earnings management warned that even though panel makers are at 70% utilization, it is possible it will continue to fall to as much as 50%. This was already priced into the valuation because of the conservative approach I took. The .20 to .28 cent EPS estimate is now expected to at the lower end at the conclusion of the quarter. The 17% fall in share price was completely overblown. As I expected in gained back more than half of the losses by day end. GLW finished off 6.88% on the day.

Illinois Tool Works Inc. (3 months ended Oct. 31)

Operating revenue rose 8.8 percent for the three months ended October 31. This growth was primarily driven by acquisitions and currency translation. Proven strong acquisition performance in the past was part of my thesis for this acquiring this position. I believe there is tremendous value within the industry and ITW will be able to benefit from this. Base revenues did fall into negative territory because of the continued softening within the North American and European end markets. ITW did trim the top end of their guidance to $3.32. Management believes full year diluted EPS could range from $3.24 to $3.32 assuming a total revenue growth of 10 to 11 percent. Below is the segment operating revenue breakdown Y/Y.

*Industrial Packaging: +10.6 %
*Power Systems and Electronics: + 3.4 %
*Transportation: +11.0 %
*Construction Products: - 4.5 %
*Food Equipment: + 6.9 %
*Polymers and Fluids: +52.2 %
*All Other: + 6.0 %