Monday, January 30, 2006

Kraft reports

Kraft reported today and it seemed okay. It definitely wasn't great, but they may be taking steps in the right direction. They will cut 8,000 jobs in attemps to slim down operations (and continue to close facilities). In the near term, this will lead to more restructuring charges. In the long term they are hoping the restructuring plan will slim down operations and lead to more efficiency. More efficient operations will lead to better margins (which they need).
Earnings were up, but they also had one extra week. Backing out this week caused earnings to be up only marginally. The stock is up in after hours and it will be interesting to see how it reacts tomorrow.

A small post on hedge funds
I might post a few random things about hedge funds in the next few posts. One interesting thing about hedge funds is the commissions they pay. We're used to paying whatever our brokerage charges us ($7/trade, etc.), but at hedge funds it depends on the trading firms. We work with a bunch of different traders/firms and they usually charge different commissions. Some charge 5 cents per share (that's usually the max), while others charge 3 cents. You can also put trades in through an automated system and the commission is usually 1 cent per share.
So we might put in a few orders and one of the traders who works for us will give us a call saying "we bought 50,000 shares of XYZ at 20.5678; 3 cent commission".
Another type of trade is the net trade. This is when we're not really charged a commission, but the commission is built into the price (the stock price). We normally use this for foreign trades rather than U.S. trades.

My next post will most likely be on Wednesday since I'll be busy with school tomorrow and possible the doctors (I may have fractured a part of my foot, I'm okay though). Wednesday's post will be a recap of January.


stockdiva said...

Great report on Kraft. By the way, your soda company stock should be doing well, right? I remember that you purchased it in Nov. someone. How much are you up by?

Alpha said...

I'm up about 15.5%, which is pretty good considering it looked like it was going to trade within a range for awhile.
Although I know you're up a lot more than my 15%! Did you ever by NYB?

stockdiva said...

Yes, I did buy NYB. As of today, I'm down by 1.65%. Ugh! It could be a lot worse, right? LOL This does not include the dividends though.

I did buy into MT (Mittel), per my post, to you months ago and it's up by 53.35% Yippee. Or at least I think I mentioned that this was a stock that I was eyeballing on one of my posts.

I can't remember the other's that I told you about, but if you can find my post, I will tell you how they're doing as well.