Wednesday, September 13, 2006


The WSJ's "Ahead of the Tape" column suggests that now might be the time to own retailers. With gasoline prices in retreat, low-income consumers will have a little more to spend. In its weekly report on gasoline prices yesterday, the EIA reported that a gallon of regular now avgs $2.62 nationally, down 14% from the peak level. And with wholesale gasoline prices down more than a third from their August highs, it looks like prices at the pump will be slipping even more in the weeks to come. B/c there is little cushion between their paychecks and their daily spending needs, high gasoline prices tend to hurt lower-income Americans, and the retailers that cater to them, much more than the well-to-do. ICSC economist Mike Niemira ests that, all else being equal, each 10% rise in gasoline prices reduces Wal-Mart Stores' (WMT) sales by 0.9% vs a 0.4% decline for overall chain-store sales. The gas squeeze was so intense earlier this year that Wal-Mart noted more and more of its sales were clustering around the first and 15th of each month, when its customers' paychecks came in. Now, with gas prices dropping, relief could be on the way for the have-nots.

The WSJ reports that insider stock purchases are piling up at U-Store-It Trust (YSI). President and CEO Dean Jernigan reported last week loading up with a purchase of 195K more shares of the co. Mr. Jernigan's latest transaction comes on top of other sizable stock purchases by him and other co insiders since late May, when shares of U-Store-It reached a 52-w low. "The co is poised to do exceedingly well, I think, in the near term," Mr. Jernigan said. "You know the old saying, 'Action speaks louder than words.' Those are actions to let our shareholders have some comfort that I believe what I'm telling them."

Barron's Online highlights Marsh & McLennan (MMC), saying that bargain hunters should beware. Marsh may not look that expensive on a P/E basis, but it could take a year or more for CEO Michael Cherkasky to take the steps necessary to improve the stock price, including righting the brokerage business, drawing investor cash into Putnam, and building credibility with the Street. "[Cherkasky] didn't give you any comfort that they are getting the job done," said Todd Lowenstein, of HighMark Value Momentum Fund. "We would encourage a breakup. I think Putnam should be spun off."

"Inside Scoop" section reports that Ayasli Children LLC, a trust set up by the children of Hittite Microwaves (HITT) founder Yalcin Ayasli sold 84K shares of the co stock for $3.8m. The selling is the first by the trust since Hittite went public in Jul'05 and follows a string of trading-plan-related selling by the elder Ayasli. Ben Silverman, of, says that the selling is "not all that disconcerting," and that it is important to note that as its founding family, Yalcin Ayasli and his children own the bulk of Hittite's shares.

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