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Views:+1: Expected Price Gains for Internet Stocks (GOOG, YHOO, AOL, BIDU, DMD, LNKD, MWW, RATE, TST)

As the internet has developed over the past 15 years or so, a variety of business models have appeared — and some have disappeared. Revenue models are also different, running from advertising to subscription to content provider types. The dominant revenue model is advertising and the leaders there are Yahoo! Inc. (NASDAQ: YHOO) in display advertising and Google Inc. (NASDAQ: GOOG). AOL Inc. (NYSE: AOL) and China’s Baidu Inc. (NASDAQ: BIDU) are other major ad driven sites.

LinkedIn Corp. (NASDAQ: LNKD) and Monster World Wide Inc. (NYSE: MWW) depend on subscriptions for revenue, while Demand Media Inc. (NYSE: DMD), Bankrate, Inc. (NYSE: RATE) and TheStreet, Inc. (NASDAQ: TST) provide original content surrounded by advertising.In addition to these publicly traded stocks the internet space also includes social networking company Facebook, social game company Zynga, and coupon site Groupon. The latter two have filed for IPOs and both are expected to come public as soon as next month.All financial data from Yahoo! Finance, unless noted otherwise.

Google Inc. (NASDAQ: GOOG) has a median target price of $727.50 from 30 brokers. Shortly after noon today, shares are trading today at $587.87, for an implied gain of $139.63, or 24%. Google’s forward P/E is 13.45 and the company does not pay a dividend. The stock’s 52-week trading range is $473.02-642.96, and at today’s price that’s about 24% above its 52-week low, posted earlier this morning, and 9% below the 52-week high. Google reaps nearly $10 billion a quarter in advertising revenues. Only a relatively small portion of that is mobile advertising, but as Google’s best selling Android mobile operating system continues to spread, the mobile ad revenue could continue its triple-digit growth rate for some time to come.

Yahoo! Inc. (NASDAQ: YHOO) has a median target price of $18.00 from 23 brokers. Shortly after noon today, shares are trading today at $16.33, for an implied gain of $1.67, or 10%. Yahoo’s forward P/E is 18.55 and the company does not pay a dividend. The stock’s 52-week trading range is $11.09-$18.84, and at today’s price that’s about 47% above its 52-week low, posted earlier this morning, and 13% below the 52-week high. Yahoo recently fired its CEO and is currently exploring strategic options. Much of the company’s value resides in its nearly 40% share in China’s Alibaba e-commerce site. The stock price is relatively high on the belief that the company will find a buyer willing to pay a premium.

AOL Inc. (NYSE: AOL) has a median target price of $17.00 from 15 brokers. Shortly after noon today, shares are trading today at $14.38, for an implied gain of $2.62, or 18%. AOL’s forward P/E is 84.65 and the company does not pay a dividend. The stock’s 52-week trading range is $10.06-$27.65, and at today’s price that’s about 43% above its 52-week low, posted earlier this morning, and 48% below the 52-week high. AOL recently purchased the Huffington Post properties, which gave the company something of a boost. The high forward P/E speaks volumes about prospects for future earnings. AOL, like Yahoo, is probably over-priced.

Baidu Inc. (NASDAQ: BIDU) has a median target price of $191.00 from 26 brokers. Shortly after noon today, shares are trading today at $127.89, for an implied gain of $63.11, or 49%. Baidu’s forward P/E is 29.11 and the company does not pay a dividend. The stock’s 52-week trading range is $94.33-$165.96, and at today’s price that’s about 36% above its 52-week low, posted earlier this morning, and 23% below the 52-week high. Baidu’s great advantage is that it is the largest and fastest growing internet company in the world’s most populous country. Sheer numbers are on Baidu’s side for now and for several years to come. The forward P/E may indicate an overpriced stock, but its stock price is still nearly $35/share below its target price. There’s plenty of room for this one to run.

Demand Media Inc. (NYSE: DMD) has a median target price of $15.00 from 10 brokers. Shortly after noon today, shares are trading today at $6.47, for an implied gain of $8.53, or 132%. Demand Media’s forward P/E is 16.97 and the company does not pay a dividend. The stock’s 52-week trading range is $5.24-$27.38, and at today’s price that’s about 23% above its 52-week low, posted earlier this morning, and 76% below the 52-week high. Demand Media was hit hard by a change earlier this year to Google’s search algorithm and the company hasn’t recovered. The target price here is too high, and the company continues its arguable accounting practice of capitalizing content creation costs and amortizing them over five years. The effect of that practice is to spread costs over a long period, making the company look more profitable than it may be.

Views +1:Full 360-Degree Preview of Amazon.com Earnings (AMZN, BBY, AAPL, NFLX)

Amazon.com Inc. (NASDAQ: AMZN) is set to report earnings after the close of trading on Tuesday. What makes Amazon so different from many peers in technology, internet and virtual companies is that it is only recently off of its highs and not really by that much. Even after a 2.5% drop so far on Tuesday, the $231.50 area compares to a closing price yesterday of $237.61 and to a 52-week range of $156.77 to $246.71.

Here are the targets. Amazon.com continues to be a thorn in the side of Best Buy Co. Inc. (NYSE: BBY) for consumer electronics. The big question is whether or not it can take away iPad sales from Apple Inc. (NASDAQ: AAPL) with the new souped up Kindle models and whether or not it can suddenly challenge NetFlix, Inc. (NASDAQ: NFLX) now that Reed Hastings seems to be messing up on every turn.

Thomson Reuters has estimates for its third quarter of $0.24 EPS and $10.93 billion in sales. For the current fourth quarter we are already in, those estimates are $0.86 EPS and $18.05 billion in revenues. Keep in mind that the fourth quarter is “the money quarter” as it includes Christmas and the holiday season sales and the estimates compare to the readings a year ago of $0.91 EPS and $12.95 billion in sales.

What is amazing is that Amazon.com still trades at more than 100-times expected 2011 earnings. The company has rapidly been building its cloud efforts and building its infrastructure. This has all come at the expense of margins, and trying to factor in the new Kindle sales will be no easy task.

If you just use the weekly options, then it looks as though options traders are braced for a move of up to about $9.50 to $11 in either direction. If we use the monthly expiration November options, then it seems that options traders are braced for a move of $14.00 or more in either direction.

You can take a look at the chart from stockcharts.com below if you want. The stock is looking tired, but honestly we would have said the exact same thing a month ago right before we saw a false-breakdown of the chart. We would point that the 50-day moving average was tested and held for the most part a month ago. That 50-day moving average is now down at $219.28 and the 200-day moving average is $197.20.

The analyst community has a consensus price target just above $243.50. At some point, Wall Street is going to demand higher margins. When that is can be anyone’s guess. We stopped trying to harp on it because no one seems to care.

JON C. OGG........

Views +1:Valuation, Timing & Margins Catch Up To Amazon.com (AMZN)

Amazon.com Inc. (NASDAQ: AMZN) has turned in earnings for its third quarter, and we will be paying extra attention to its fourth quarter. The seller of everything online reported earnings of $0.14 EPS on sales of $10.88 billion, which compares to the Thomson Reuters targets of $0.24 EPS and $10.93 billion in sales. Operating income was $79 million.

Amazon also guided the fourth quarter to come in at %16.45 to $18.65 billion in sales and it put the range for operating earnings at -$200 million to a profit of $250 million. The Thomson Reuters estimates are $0.86 EPS and $18.05 billion in revenues. As noted in the preview, the fourth quarter is Amazon’s “money quarter” as it includes Christmas and the holiday season sales.

We have been concerned each quarter about Amazon’s margins and its operating margins came in at 0.7%. North American sales are currently about 20% larger than its international sales. Even before the guidance, Amazon traded at more than 100-times expected 2011 earnings. The big outlier was the new Kindle sales.

The news may finally be catching up to Jeff Bezos and friends today. Shares closed down 4.4% at $227.15 versus a recent all-time high of $246.71, but shares are down sharply and just under $194.00 as of about 4:17 PM EST.

We will hold off before tallying up all of the post-conference call judgment. Bezos has had similar quarters before where the reception went from bad to good. We do not believe that can happen forever and we believe that at some point investors will start to demand better margins and higher profits. It is not exactly as if Amazon is an emerging online retailer....

Views +1:FedEx Adds to Seasonal Hiring Boost (FDX, BBY, JCP) Read more: FedEx Adds to Seasonal Hiring Boost (FDX, BBY, JCP)

FedEx Corp. (NYSE: FDX) expects to handle more than 260 million packages during the coming holiday season. That’s a 12% increase from a year ago, and to cope with the flood the company plans to hire 20,000 temporary workers. That’s more than we noted from either Best Buy Co. Inc. (NYSE: BBY) or J.C. Penney Co. (NYSE: JCP) in our recent look at the retailers expected to do the most seasonal hiring this year.

That’s good news for employment, but not altogether a boost for FedEx. The company noted that most of the volume increase this year is coming from its low-profit SmartPost residential service where the US Post Office completes the package delivery. The SmartPost service includes mostly light-weight, unspecified delivery date packages from on-line sales that do not generate a lot of revenue for FedEx.

The company still expects retail sales to rise 2.5%-3% this holiday season. However, if FedEx is right about where its revenues are coming from, local retailers could be be in for a tough holiday shopping season. Large retail chains, though, could get a somewhat bigger boost from an increase in on-line sales................

Views +1:NetFlix Shares Down 24% On Earnings

Wall St. slashed shares of NetFlix (NASDAQ: NFLX) has it missed all projections for revenue, earnings, and subscribers. The firm’s price decisions, which have alienated customers, may have permanently hurt the company. The poor judgement which included raising subscriber rates sharply, comes as powerful competition from Amazon.com (NASDAQ: AMZN), Apple (NASDAQ: AAPL), Hulu, and YouTube enter the market.

Third quarter earnings were up 63% to $1.16, which would have been an impressive improvement for any other company.

Netflix reported 21.45 million streaming subscriptions at the end of the third quarter and 13.9 million DVD subscribers. The company said total U.S. subscriber base by the end of its third quarter was 23.79 million—below expectations of roughly 24 million. Netflix lost 810,000 subscribers between the second and third quarters.

Netflix said it would miss Q4 forecasts as well.............

Views +1: Closing Bell (AAPL, WMT, WFM, MS, BAC, INTC, WMB, HGSI, ABT, OXGN, PWAV, AEM) Read more: 24/7 Wall St. Closing Bell (AAPL, WMT, WFM, MS, BAC, INTC, WMB, HGSI, ABT, OXGN, PWAV, AEM)

Stocks opened down this morning following the earnings report Apple Inc. (NASDAQ: AAPL) after markets closed yesterday. Moody’s downgrade of Spain’s sovereign debt also weighed on the opening. The Consumer Price Index for urban consumers rose by 0.3%, and just 0.1% excluding energy and food costs. Housing starts rose by an unexpected 15% as condos and apartment construction was prompted by more demand for rental units to push markets to a mid-morning gain, but by noon share prices had given a lot of that back on continuing uncertainty about what’s really happening in Europe. The Federal Reserve Beige Book was released at 2 p.m. ET, and its uninspiring reports sent markets sharply lower, from about 25 points up on the Dow to more than 70 points below yesterday’s close.

The unofficial closing bells put the DJIA down nearly 72 points to 11,504.70, the NASDAQ fell more than 53 points (2.01%) to2,604.04, and the S&P 500 fell 1.26% or more than 15 points to 1,209.89.

Today’s top analyst upgrade and downgrade calls were numerous and included Wal-Mart Stores Inc. (NYSE: WMT) and Whole Foods Markets Inc. (NASDAQ: WFM), and about a dozen other companies.

Morgan Stanley (NYSE: MS) reported better than expected earnings for the quarter, following yesterday’s positive report from Bank of America Corp. (NYSE: BAC). Morgan Stanley got a big lift from an accounting gain that lowered the value of its debt by $3.4 billion, thus boosting the bank’s revenue to $9.9 billion. Even without the gain, MS posted EPS of $0.02, There has been a turnaround from the indicated loss in Bank of America Corporation (NYSE: BAC) after its earnings showed that book value managed to actually grow and the stock was up almost 10% at $6.63 late in the session.

As far as the other big earnings report reactions today (prices within 20 minutes of the closing bell): Apple is down more than -5.5%, at $398.78; Morgan Stanley up 0.3%, at $16.68; Intel Corp. (NASDAQ: INTC) is up about 3.5%, at $24.22; Yahoo is up 2.78%, at $15.90.

Several other standouts from today are as follows…

Williams Companies, Inc. (NYSE: WMB) rose again by another 1.7%, to $29.55, after investors are considering it a cheap merger alternative to the El Paso buyout by Kinder Morgan this week.

Human Genome Sciences, Inc. (NASDAQ: HGSI) had another big day on merger speculation up, up nearly 8%, at $13.83, and here is how it ranks with analysts other price targets for biotechs ahead of the biotech earnings floodgates.

Abbot Laboratories (NYSE: ABT) rose 1.62%, to $53.29, following the announcement of the company’s intention to split its branded drug business from its other product lines.

Oxigene, Inc. (NASDAQ: OXGN) got a nice boost of about 12.55%, to $1.59, following good data on the survival benefits of its anti-thyroid cancer drug.

Powerwave Technologies, Inc. (NASDAQ: PWAV) warned of a revenue shortfall of more than 50% for its third quarter. The shares lost nearly -42% of their value, to fall to $0.85, after posting a new 52-week low of $0.68 earlier in the day.

Agnico-Eagle Mines Ltd. (NYSE: AEM) has suspended operations indefinitely at its mine in Val d’Or, Quebec, due to unstable ground and inflows of water. The stock has fallen by -19%, to $46.21.

Stay tuned for Thursday. We have speeches to watch from Lockhart and Kocherlakota on the docket as well as a 30-year TIPS auction. Here are some economic releases due in the morning and throughout the day:

8:30 Unemployment Benefits Claims for last week
8:30 Existing Home Sales
10:00 Conference Board’s Index of Leading Economic Indicators
10:30 Natural Gas Report
4:30 PM Federal Reserve Balance Sheet

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Views +1: Top After-Hours Earnings Stocks on the Move (AXP, BWLD, CRUS, CBST, EBAY, ETFC, RVBD, WDC, WYNN) Read more: Top After-Hours Earnings Stocks on the Move (AXP, BWLD, CRUS, CBST, EBAY, ETFC, RVBD, WDC, WYNN)

24/7 Wall St. is tracking the after-hours earnings reports to see which stocks are on the move and which ones will be the key issues for Thursday morning. The top movers are as follows: American Express Company (NYSE: AXP); Buffalo Wild Wings Inc. (NASDAQ: BWLD); Cirrus Logic Inc. (NASDAQ: CRUS); Cubist Pharmaceuticals, Inc. (NASDAQ: CBST); eBay Inc. (NASDAQ: EBAY); E*TRADE FInancial Corporation (NASDAQ: ETFC); Riverbed Technology, Inc. (NASDAQ: RVBD); Western Digital Corporation (NYSE: WDC); and Wynn Resorts Ltd. (NASDAQ: WYNN).

A brief summary of the news and the after-hours reaction is available on each below.

American Express Company (NYSE: AXP) beat earnings estimates at $1.03 EPS versus $0.95 estimates. Shares were down 1.2% today and shares are currently down another 1.2% at $45.59 in the after-hours session.

Buffalo Wild Wings Inc. (NASDAQ: BWLD) beats earnings at $0.61 EPS versus $0.63 EPS estimate; revenues rose over 30%; it sees meeting a goal of 13% unit growth and 23% net earnings growth for 2011. The dining, beer, and sports destination also sees 2012 with 12% unit growth and net earnings growth of 20% in 2012. Shares fell 0.8% on the day but the stock is up 3.3% at $59.81 in the after-hours session.

Cirrus Logic Inc. (NASDAQ: CRUS) beats earnings but guided next quarter below estimates as it is seeing softness in some areas of business due to global economic issues. Shares were down 5.5% at $17.01 on the regular trading day and shares are down another 12% at $14.73 in after-hours.

Cubist Pharmaceuticals, Inc. (NASDAQ: CBST) beat $200 million in sales for the quarter and shares are up almost 8% at $39.33 after closing down 1.75% today.

eBay Inc. (NASDAQ: EBAY) met its $0.48 EPS target and sees $0.55 to $0.58 EPS versus $0.58 EPS targets in Q4. Shares were down 2% on the day and down another 4.3% at $31.83 in after-hours trading.

E*TRADE FInancial Corporation (NASDAQ: ETFC) is now up after having been down. It appears to have met the $0.16 estimate but revenues were light; shares closed down 2.6% on the day but are back up almost 2% at $9.52 in after-hours. No word on any merger, again.

Riverbed Technology, Inc. (NASDAQ: RVBD) may be getting its mojo back… It beat earnings and guided higher. After falling 2.8% on the day shares are up over 11% at $25.10 in the after-hours and the 52-week range is $12.57 to $44.70.

Western Digital Corporation (NYSE: WDC) was down 9% today on Thai flood concerns and shares are down another 2% at $24.00 in the after-hours session despite $1.01 EPS. The floods could impact they key quarter ahead.

Wynn Resorts Ltd. (NASDAQ: WYNN) was down over 5% on its own today and now the high-end casino operator posted $1.05 EPS versus $1.15 estimates even though revenues were in line and up 29%. Shares are down another 5.2% at $123.48................

Views +1: Moody’s Hammers Spain

The trading day in America began with worry about a possible downgrade of France’s Aaa rating. Word that France and Germany had agreed to a bailout structure for trouble EU nations pushed markets higher through the close.

The see saw now continues as Moody’s has downgraded Spain to A1 from Aa2. The news will cast a shadow on the belief that the financial crisis in Europe may markedly improve late this month.

“Moody’s Investors Service has today downgraded Spain’s government bond ratings to A1 from Aa2. This rating action concludes the review for possible downgrade that Moody’s had initiated for Spain’s rating on 29 July. The ratings carry a negative outlook,” the agency said.

It was easy to predict the reasons for the action since that mirror the reasons for most other downgrades of sovereign paper in the region.

(1) Spain continues to be vulnerable to market stress and event risk. Since placing the ratings under review in late July 2011, no credible resolution of the current sovereign debt crisis has emerged and it will in any event take time for confidence in the area’s political cohesion and growth prospects to be fully restored. In the meantime, Spain’s large sovereign borrowing needs as well as the high external indebtedness of the Spanish banking and corporate sectors render it vulnerable to further funding stress.
(2) The already moderate growth prospects for Spain have been scaled back further in view of (i) the worsening global and European growth outlook and (ii) the difficult funding situation for the banking sector and its impact on the wider economy. Specifically, Moody’s now expects Spain’s real GDP growth in 2012 to be 1% at best, compared with earlier expectations of 1.8%, with risks mainly to the downside. Over the following years, the rating agency continues to expect a very moderate pace of growth of around 1.5% on average per annum.

(3) Lower economic growth in turn will make the achievement of the ambitious fiscal targets even more challenging for Spain. Moody’s expects the budget deficits for the general government sector to be above target both this year and next. In particular, Moody’s continues to have serious concerns regarding the funding situation of the regional governments and their ability to reduce their budget deficits according to targets.........

Views +1:Apple Sets Sales Record: Blackberry’s Waterloo (AAPL, RIMM, SSNLF) Read more: Apple Sets Sales Record: Blackberry’s Waterloo (AAPL, RIMM, SSNLF)

The iPhone 4S topped 4 million sales in its first weekend of availability, according to maker Apple Inc. (NASDAQ: AAPL). On the other end of the continent, Waterloo, Ontario-based Research in Motion Ltd. (NASDAQ: RIMM) announced that it would give customers up to $100 worth of free apps as “an expression of appreciation for their patience” when RIM’s network service was disrupted last week.

The contrast between the fortunes of the two companies has been obvious for some time now, but it still must be more than demoralizing to RIM to suffer its latest indignity at the same time that the company that is beating it to death in the marketplace scores a massive win. Waterloo indeed.

Apple’s shares are not getting a big boost from its weekend sales, perhaps because the Cupertino company has been hit with litigation by Samsung Electronics (OTC: SSNLF) in both Japan and Australia to stop the sales in those countries of the iPhone 4S. Samsung also wants the Japanese court to enjoin Apple from selling the iPhone 4 and the iPad 2 in Japan. Last week Apple won an action against Samsung’s Galaxy Tab 10.1, enjoining sales in Australia. Samsung also won a ruling in the Netherlands late last week, where Apple was also seeking an injunction against sales of the Galaxy Tab 10.1.

Apple and Samsung will eventually work out an agreement. RIM, however, has seen its market share and share price savaged since 2009, mostly due to the explosion in smartphones kicked off by Apple’s iPhone. There is no agreement that RIM can reach with Apple that will make up for the Canadian company’s misjudgments and missteps.

Analyst firm BGC Partners downgraded Apple shares from ‘Buy’ to ‘Hold’ because the stock is near the firm’s target price of $450/share and the belief that Apple will continue to need to see record-breaking sales performance on both iPhones and iPads in order to meet investors expectations. That’s pretty hard to do, even for Apple.

Apple shares are up marginally at $425.24 in mid-morning trading, after posting a new 52-week high this morning of $426.70. RIM’s shares are down -5.3%, at $22.70, in a 52-week range of $19.29-$70.54........

Views +1: Expected Upside for Homebuilders & Home Improvement Companies (NVR, TOL, PHM, HOV, DHI, BZH, HD, LOW) Read more: Expected Upside for Homebuilders & Home Improvement Companies (NVR, TOL, PHM, HOV, DHI, BZH, HD, LOW)

Our look at stock target prices focuses on homebuilders and home improvement stores today. It’s not news that US homebuilders have had a very tough few years. In the past five years, only one of the six builders we’re looking at today has managed a share price gain. The companies began to falter in 2007 and the smallest five-year slide is more than -40%. That may be a new definition of awful.

Worse, there is not much expectation that the market will turn around at least until 2013. More foreclosed homes coming on the market will continue to depress prices, and until inventories of unsold homes are cleared, there simply can’t be a significant recovery. The homebuilders we’re looking at include NVR Corp. (NYSE: NVR), Toll Brothers Inc. (NYSE: TOL), PulteGroup, Inc. (NYSE: PHM), Hovnanian Enterprises, Inc. (NYSE: HOV), D.R. Horton, Inc. (NYSE: DHI), and Beazer Homes USA Inc. (NYSE: BZH).

Home improvement stores have also had to struggle over the past several years. Shares of Home Depot, Inc. (NYSE: HD) and Lowe’s Companies, Inc. (NYSE: LOW) are both lower today than they were five years ago.

Share prices were pegged at about noon today, and all data comes from Yahoo! Finance.

NVR Corp. (NYSE: NVR) has a median target price of $728.00 from 4 brokers. Shares are trading today at $620.99, for an implied gain of $107.01, or 14.7%. NVR’s forward P/E is 17.6 and the company does not pay a dividend. The stock’s 52-week trading range is $554.71-$804.31, and at today’s price that’s about 12% above its 52-week low and 23% below the 52-week high. NVR’s share price has risen about 12% since October 2006, and of all the homebuilders, it is the only one that can point to a gain over that period. The company’s consensus EPS estimate for 2011 has dropped from $28.02 to $26.45. There might be an opportunity here, but it’s a pretty slim one.

Toll Brothers Inc. (NYSE: TOL) has a median target price of $21.50 from 14 brokers. Shares are trading today at $15.29, for an implied gain of $6.21, or 28.9%. Toll Brothers’ forward P/E is 49.35 and the company does not pay a dividend. The stock’s 52-week trading range is $13.16-$22.42, and at today’s price that’s about 16% above its 52-week low and 32% below the 52-week high. Toll Brothers is expected to post EPS of $0.20 for its 2011 fiscal year ending this month — and that’s up from an earlier EPS estimate of just $0.02. The company’s position at the luxury end of the market has been something of a prop to the share price, but the US economy is not minting many new millionaires right now.

PulteGroup, Inc. (NYSE: PHM) has a median target price of $6.50 from 15 brokers. Shares are trading today at $4.14, for an implied gain of $2.36, or 36.3%. PulteGroup’s forward P/E is 32 and the company does not pay a dividend. The stock’s 52-week trading range is $3.29-$8.69, and at today’s price that’s about 26% above its 52-week low and 52% below the 52-week high. PulteGroup was one of the ten worst performing stocks in the recently completed quarter, losing -45% of its value. There is nothing about the homebuilding industry or PulteGroup’s recent performance that justifies the forward P/E ratio of 32. Hope is not a strategy.

Hovnanian Enterprises, Inc. (NYSE: HOV) has a median target price of $1.38 from 8 brokers. Shares are trading today at $1.20, for an implied gain of $0.18, or 13%. Hovnanian’s forward P/E is negative and the company does not pay a dividend. The stock’s 52-week trading range is $0.89-$5.00, and at today’s price that’s about 35% above its 52-week low and 76% below the 52-week high. Hovnanian is asking debt holders to exchange old notes for new ones carrying a lower interest rate and a longer term. The offer is scheduled to end next week. The company’s corporate debt rating is ‘CC’, just two notches above default. Debt holders are unlikely to ride to the company’s rescue.

D.R. Horton, Inc. (NYSE: DHI) has a median target price of $13.00 from 14 brokers. Shares are trading today at $9.62, for an implied gain of $3.38, or 26%. Horton’s forward P/E is 19.3 and the company pays a dividend yield of 1.5%. The stock’s 52-week trading range is $8.03-$13.50, and at today’s price that’s about 59% above its 52-week low and 29% below the 52-week high. Horton is expected to post EPS for the quarter just ended of $0.14, and full-year EPS of $0.20 for the year ended in September. The consensus estimate for 2012 full-year EPS is $0.50. If the market is getting weaker, as many believe, the company has exactly no chance of meeting that 2012 number.

Beazer Homes USA Inc. (NYSE: BZH) has a median target price of $3.00 from 7 brokers. Shares are trading today at $1.81, for an implied gain of $1.19, or 39.7%. Horton’s forward P/E is negative and the company does not pay a dividend. The stock’s 52-week trading range is $1.35-$6.23, and at today’s price that’s about 12% above its 52-week low and 81% below the 52-week high. Beazer’s biggest trouble is that it is a builder of entry-level homes, the sector that is hardest hit by the number of foreclosed properties coming on the market. One thing that could help Beazer a little is that home owners have begun taking their houses off the market because they are unwilling to sell for the current low prices. Inventory is still high, but it was lower in September than in August.

Home Depot, Inc. (NYSE: HD) has a median target price of $40.00 from 22 brokers. Shares are trading today at $34.97, for an implied gain of $5.03, or 12.6%. Home Depot’s forward P/E is 13.14 and the company pays a dividend yield of 2.9%. The stock’s 52-week trading range is $28.13-$39.38, and at today’s price that’s about 24% above its 52-week low and 11% below the 52-week high. Research firm BuildFax reports thats home remodeling projects increased by 29% in August compared with August 2010. The firm attributes the increase to refinancing of existing homes at current low interest rates. With the peak remodeling season behind us for another year, this growth could begin to slow down.

Lowe’s Companies, Inc. (NYSE: LOW) has a median target price of $23.00 from 20 brokers. Shares are trading today at $21.09, for an implied gain of $1.91, or 8.3%. Lowe’s forward P/E is 11.93 and the company pays a dividend yield of 2.7%. The stock’s 52-week trading range is $18.07-$27.45, and at today’s price that’s about 17% above its 52-week low and 23% below the 52-week high. Lowe’s announced this morning that it was closing another 20 stores across the US and expects to take a charge of $0.17-$0.20 against second-quarter EPS. About 1,950 employees will lose their jobs. Lowe’s performance has been weaker than Home Depot’s for a couple of years now, and this year the share price is about flat, compared with Home Depot’s share price gain of 15%..........

Views +1: New Leveraged Gold, Silver, Platinum, Palladium ETF/ETNs, The Wild West (GLD, SLV, PPLT, UGLD, DGLD, USLV, DLSV, LPAL, IPAL, LPLT, IPLT) Read more: New Leveraged Gold, Silver, Platinum, Palladium ETF/ETNs, The Wild West (GLD, SLV, PPLT, UGLD, DGLD, USLV, DLSV, LPAL, IPAL, LPLT, IPLT)

Leveraged ETFs and ETNs are not new to most investors. They are also not new in all cases when it comes to precious metals. You are likely familiar with the SPDR Gold Shares (NYSE: GLD) for gold, iShares Silver Trust (NYSE: SLV) for silver, and the ETFS Physical Platinum Shares (NYSE: PPLT) for platinum. There are also some leveraged metals exchange-traded products out there. Now there is a new round of leveraged exchange-traded products from VelocityShares for investors who want to really reach for exposure on any given days., but there are eight new exchange-traded notes which are leveraged with and against precious metals. These should all be self-explanatory but we will group them by metal rather than by leverage.

VelocityShares 3x Long Gold ETN (NYSE: UGLD) and VelocityShares 3x Inverse Gold ETN (NYSE: DGLD) allow traders to manage gold exposures using a 3x leveraged long and inverse positions linked to the S&P GSCI Gold Index.

VelocityShares 3x Long Silver ETN (NYSE: USLV) and VelocityShares 3x Inverse Silver (NYSE: DLSV) allow traders to manage silver exposures using a 3x leveraged long and inverse positions linked to the S&P GSCI Silver Index.

VelocityShares 2x Long Palladium ETN (NYSE: LPAL) and VelocityShares 2x Inverse Palladium ETN (NYSE: IPAL) allow traders to manage palladium exposures using 2x leveraged long and inverse positions linked to the S&P GSCI Palladium Index.

VelocityShares 2x Long Platinum ETN (NYSE: LPLT) and VelocityShares 2x Inverse Platinum ETN (NYSE: IPLT) allow traders to manage platinum exposures using 2x leveraged long and inverse positions linked to the S&P GSCI Platinum Index.

The name “VelocityShares” should imply that these move fast in any given direction. That is a given. If you see another day where gold or silvers ramps up 5% or more intraday on news, in theory you should see a 15% corresponding move in these new gold and silver ETNs.

There are many caveats and generalities when it comes down to ETF and ETN products that are leveraged like this. All are a bit different from each other. The first caveat is that just about all ETF and ETN products list “tracking error” as a risk. When it comes to leveraged index ETF or ETN products, tracking error is often the norm rather than the exception. Many of these leveraged exchange-traded products are tied to an index using commodities futures, options, and derivatives as well, so don’t expect that you can just ask for delivery of one of the metals if the trade is going your way or against you. The taxation issues in some instances can be different from simply buying and selling stocks for capital gains as well.......

Views +1: IBM Gives Big Mixed Picture: Earnings to Outlook (IBM, DIA, SPY, CVX, MCD) Read more: IBM Gives Big Mixed Picture: Earnings to Outlook (IBM, DIA, SPY, CVX, MCD)

International Business Machines Corporation (NYSE: IBM) has now reported its third quarter earnings report at $3.28 EPS and $26.2 billion in sales. Thomson Reuters was looking for $3.22 EPS and $26.25 billion in sales. You might have expected that this is “good enough” considering the market action from July through October, but investors have to recall that IBM just hit an all-time again last week. Our take is that this could create a large impact in the DJIA via the SPDR Dow Jones Industrial Average (DIA) versus the S&P 500 vis the SPDRs S&P 500 (NYSE: SPY).

IBM has also raised guidance for 2011 to at least $13.35 EPS from at least $13.25 EPS. This is above targets but frankly it is also valuing IBM at a large premium to the bulk of the large technology players today.

Maybe you want to blame services, maybe you want to blame the currency adjustment creating only 3% growth from a year earlier.

Our take: blame the backlog of future services ordered but not yet fulfilled, billed, and counted as revenues. This is perhaps the greatest measure of future revenues over the next 12 to 36 months. In June the figure for backlog was about $144 billion. The September-end figure was down to $137 billion.

Keep in mind that IBM is the single largest weighting of the Dow Jones Industrial Average by a long shot. That price-weighted index from IndexArb.com counts IBM as being more than 12.3% of the entire weighting of the 30 components, which is effectively the same as the next two largest components of Chevron Corporation (NYSE: CVX) and of McDonald’s Corporation (NYSE: MCD).

Why this matters is that a 4% drop can count as close to a 0.5%% implied drop for the DJIA even if every other 29 of the 30 DJIA components were flat. IBM shares closed down 2% at $186.59 today, and the stock is down almost 4% in the after-hours session and under $180.00 versus a 52-week range of $136.70 to $190.53........

Views +1: CROCS Earnings: Now Back To Ugly Shoes (CROX) Read more: CROCS Earnings: Now Back To Ugly Shoes (CROX)

CROCS Inc. (NASDAQ: CROX) is one of the few retail apparel stocks which was up 100% from its 52-week low. It had been a miraculous recovery stock earlier this year. Call it the flame-out momentum apparel stock death of years past that witnessed a massive resurrection. The emblem could have been a Phoenix rather than an alligator if you just look at the lows in January to the highs in July.

That was then, this is now… Wall Street lives by a “what have you done for me lately and what will you do for me tomorrow” creed. That creed is causing major pain in CROCS after the close.

The shoe (and apparel) maker reported that earnings were going to come in at $0.31 to $0.33 EPS on $273 to $275 million in sales. The company had previously offered guidance of $0.40 EPS and $280 million in sales (by and large the consensus estimates.

CROCS went on record by saying that direct channel sales in outlets and kiosks were soft after having been strong in the spring and summer. That in turn drove down margins.

After a big move up and in the “what will you do for me tomorrow” scenario, CROCS has gone back from a hot stock trying to regain some glory to a company that makes ugly gardening and comfort shoes.

The after-hours is just as ugly as those garden shoes. Shares are down a whopping 36% at $16.89 after closing down 1.2% at $26.64. The 52-week trading range is $13.20 to $32.47.......

Views +1: Moody’s May Downgrade France

Moody’s said its opinion of France’s financial situation is fine–for now. France keeps it Aaa rating with a stable outlook.

But, “The deterioration in debt metrics and the potential for further contingent liabilities to emerge are exerting pressure on the stable outlook of the government’s Aaa debt rating. Moody’s notes that the French government now has less room for manoeuvre in terms if stretching its balance sheet than it had in 2008.”

The news, added to speculation that Germany will not support a new and larger EU area bailout fund, is likely to cause panic overnight.........

Views +1: Kinder Morgan To Takeover El Paso For $38 Billion (EP) (EPB) (KMI)

Kinder Morgan (NYSE:KMI) and El Paso Corporation (NYSE:EP) released an agreement for Kinder to acquire the outstanding shares of El Paso in a deal that will create the fourth largest energy company in North America. It will have 80,000 miles of pipelines. The total purchase price which includes all debt at El Paso Corporation and the debt outstanding at El Paso Pipeline Partners, L.P. (NYSE:EPB) is about $38 billion.

“This once in a lifetime transaction is a win-win opportunity for both companies,” said Kinder Morgan Chairman and CEO Richard D. Kinder. “The El Paso assets are primarily regulated interstate natural gas pipelines that produce substantial, stable cash flow and have access to key supply regions and major consuming markets. The natural gas pipeline systems of the two companies are very complementary, as they primarily serve different supply sources and markets in the United States. The transaction is expected to produce immediate shareholder value (upon closing) through strong cash flow accretion and offers significant future growth opportunities.”

The prices is a 47% premium over El Paso’s 20-day average trading price.

Douglas A. McIntyre

Views +1: Another Weekend of Mass Layoffs

Challenger, Gray said planned layoffs announced in September were up more than 200% from a year earlier to 115,000. That figure appears to be on the rise, and the latest layoffs, or corporate plans that presage them, happened this weekend. That is a bad sign for employment statistics announcements for the balance of the year.

Philips Electronics said it will fire 4,500 people. Its third-quarter figures were below its expectations. Its plans to sell its TV division have failed. The prices of consumer electronics such as TV screens, which have become a commodity, have fallen faster than production costs. It may be that no one wants the Philips business because it cannot be made successful.

Kinder Morgan (NYSE: KMI) will buy rival El Paso (NYSE: EP) for $21.1 billion. The companies announced that the merger will allow them to eliminate $350 million per year in expenses. The firms have workforce structures that mirror one another. So count on the merger to result in the loss of thousands of jobs.

There has been some question about whether mass layoffs like those of 2009 will return. That answer is yes, although the force of the new ones may not be as great as those of two years ago. The 2009 employment disaster caused the loss of 500,000 jobs in the U.S. in some months. Since most of those jobs were never replaced, these new firings will dig a deeper joblessness hole. It just will not be dug as fast.

There has been some hopeful news about jobs in the past month. American retailers have added or will add about 400,000 temporary workers for the holidays. That is probably a false positive, though. Retail sales are only expected to rise between 2.5% and 3% this year. If that is true, almost none of the temporary jobs will become full-time ones.

And earnings season for the third quarter has begun. Fourth-quarter forecasts will come along with those reports. Most analysts who follow S&P 500 companies expect EPS results to be poor. That means margins for the final quarter of the year can only be protected by cost cuts.

If there is another surge in layoffs, it will happen in the next few weeks. The American economic recovery, as weak as it was, has run out of fuel..........

Views +1: Media Digest (Oct, 17 - 2011 ) Reuters, WSJ, NYTimes, FT, Bloomberg Read more: Media Digest (10/17/2011) Reuters, WSJ, NYTimes, FT, Bloomberg

Philips Electronics may be unable to shed its TV operation and will fire 4,500. (Reuters)

Kinder Morgan (NYSE: KMI) to buy El Paso (NYSE: EP) for $21 billion and will save $250 million in the merger. (Reuters)

Olympus falls 24% after its CEO is pushed out and certain questionable payments are revealed. (Reuters)

Samsung to seek a broad ban to sales of the Apple’s (NASDAQ: AAPL) iPhone. (Reuters)

EU officials say they will have a plan in place by October 22 to handle the region’s financial crisis. (WSJ)

Anadarko Petroleum (NYSE: APC) to pay BP (NYSE: BP) $4 billion for issues related to Deepwater Horizon. (WSJ)

Walmart (NYSE: WMT) China CEO to leave as the firm faces strict regulation in the People’s Republic. (WSJ)

The UAW’s largest local approves a deal with Ford (NYSE: F). (WSJ)

U.S. postal workers will hire the former Obama car czar Ron Bloom to help them lose as few jobs as possible in a restructuring. (WSJ)

Realtor.com analysts report that the amount of attractive inventory in the home market has fallen. (WSJ)

The IMF says emerging market nations will not help Europe. (WSJ)

Hulu owners may bring in a new investor as their relationship with the premium website company weakens. (WSJ)

Eastman Kodak (NYSE: EK) licenses some of its patents to Imax (NYSE: IMAX). (WSJ)

Carl Icahn buys a large stake in Navistar International (NYSE: NAV). (WSJ)

Mercer finds that young workers are happier that older ones but also are more likely to leave their companies. (WSJ)

A permanent change in how Wall St. operates could hurt Morgan Stanley (NYSE: MS) and Goldman Sachs (NYSE: GS) earnings for a prolonged period. (WSJ)

Amazon.com (NASDAQ: AMZN) begins to sign authors and cut out publishers. (NYT)

The FCC sets a deal for wireless users to get alerts on minute overages that cost them money. (NYT)

Bids to buy EMI from Citigroup (NYSE: C) have fallen short of expectations. (NYT)

Energy bills in the EU could rise for 20 years. (FT)

The G20 give the EU one week to fix its debt crisis. (Bloomberg)

Bankers may face larger losses as government officials look to them to shoulder more of the costs of a Greek bailout. (Bloomberg)

Samsung files new suits to stop sales of the iPhone in Asia. (Bloomberg)...........