The Day Ahead: Ripping Through the Fluff
Do I have coverage on the aluminum sector? No. In fact, I don't even sip drinks from aluminum cans, and the use of WD-40 no longer is part of my life. (Gosh, I detested spraying that poison on dad's chainsaw at the tender age of eight.) However, I do have a burning passion for identifying management nonsense -- usually a heaping dose of optimism -- and the true messages in any sort of press releases a publicly traded company throws in the direction of eager shareholders.
On Monday evening, pure unbridled insanity arrived on the scene to kick off earnings season. The market sniffed this stuff out with WD-40 (WDFC), sending the stock down after hours, and gave Alcoa (AA) a momentary pass as the CEO painted a picture straight from the boom era of 2006-07, although that couldn't be further from reality. The Alcoa interview really upset me. I know a CEO is always supposed to put on a brave face but, come on, there has to be a way to articulate the items shareholders globally are currently seeing (weakening macro thesis) into a sense of realistic guidance for the near and medium term. If the CEO would just be forthright, perhaps the market could properly re-price the stock and then leave the runway open for a period of beat and raises that would expands the P/E multiple while earnings per share remain depressed....371 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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