Tuesday, February 5th, After Market Close

The market fell fairly dramatically today due to the ISM number. I think as I've reiterated before, the market will continue to be ultra-sensitive to economic data. In addition, it's good to remember that fed rate cuts will not be there to save the market every time something like this occurs.

Some of my favorite stocks are now back in discussion after the plunge today:

ICE closed at 124.65. As explained previously - even companies marked for a buyout can continue falling if market conditions are bad. We have news out after hours that BHP Billiton is offering 3.4 shares for each share of Rio Tinto. Once again, I think the lack of a cash component in many buyout offers we're seeing is troubling. However, what else do we expect in this liquidity environment?

EJ is now at 17. Btw, they priced a secondary offering at $17 (7 million shares I believe). These shares will be available for trading "on or about february 6th" according to the prospectus. Most of the proceeds will be going to the company for continuing operations, which is a good thing. They will most likely have a blowout quarter, as they preannounced back late last year, but this is expected. For those of you who have had experience with secondaries, one common scenario is that a stock will fall in anticipation of the shares coming public, but in fact finds a bottom via this process and moves higher after the offering is complete. I am a bit disappointed that they had to price the secondary at $17, given that the stock had risen above $30 last year. Many investors find it bearish that they opt for a secondary at a time when their stock price is low, because it might reflect a "need" for the cash. (Why now, do they anticipate the stock to fall further?) Their balance sheet "looks" great after the secondary- they will have $384m in cash, or roughly $4/share. We'll see how this one plays out, but once again I am a long term bull on this one. I don't think the China real estate story is over yet, I think the bad publicity from the troubled US housing market might just be giving us an opportunity here.

MA closed at 206.8 after having risen as high as 222 after earnings. This one will continue to be hammered whenever we have bad economic data, as many investors view MA as highly dependent upon the strength of the economy.