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THE SMALL-CAP BEAT

A GEISER CAPITAL CORPORATION WEEKLY PUBLICATION

In this Issue Week of July 17,


2009
• ARE INVESTORS ON PROZAC? TOO MUCH IS LIKE NOT
ENOUGH; NOT EXACTLY WHAT THE DOCTOR ORDERED!
• EARNINGS SURPRISES & CHANGING GUIDANCES FROM
SMALL-CAPS
• FROM BROKERS’ DESKS
• STARS & DOGS….AND ACTIONS
• LOOKING AHEAD…

ARE INVESTORS ON PROZAC? TOO MUCH IS LIKE NOT ENOUGH; NOT


EXACTLY WHAT THE DOCTOR ORDERED!
In the last issue of The Small-Cap Beat, we indicated that the last week was going to be decisive,
most likely setting a trend for the remaining of the summer.

Our view is that results to be announced are indeed likely to be much better than currently
expected, but with markets making such a move so quickly and investors expectations moving up
accordingly, markets have now become prone to pull backs on any disappointments and, our
guess, there will be a few. Although improving, the economic environment is still far from being a
day on clear blue sky. After all, summer time may well bring more than its fair share of hectic
trading.

Despite markets trending downward in the prior month suggesting disappointing results to be
announced as the second quarter earnings season was about to kick off, we thought that the
relatively better economic data released over the last few months would somehow reflect on
corporate results, and by simply being not as bad as expected, this would likely bring forth a
market rally. Although our appraisal of results to be released was right on, investors’ assessment
of those same results was simply overwhelming – how could results announced be that totally
unexpected!

Anyhow, bears that had a good handle of markets lately with the bulls taking a few weeks off got
caught their pants down and this likely contributed to the strong upward movement in stock prices
as they ran to cover positions. Market results for the last week were impressive.

WEEKLY WRAP-UP
52 - W Range 52 - W % Chg. Year
Current Chg. % Low High Low High To Date
Russell 2000 519.22 8.0% 342.59 764.38 51.6% -32.1% 4.0%
S&P Small- Cap 276.75 8.0% 181.32 401.07 52.6% -31.0% 3.0%

Geiser Top 20 178.88 10.5% 65.97 283.41 151.7% -31.3% 60.1%

S&P 500 940.38 7.0% 666.79 1313.15 41.0% -28.4% 4.1%


NASDAQ 1886.61 7.4% 1265.52 2473.2 49.1% -23.7% 19.6%
Dow 8743.94 7.3% 6440.02 11933.5 35.8% -26.7% -0.4%
Although earnings announced throughout the week by the bigger ones came in indeed much
better-than-expected, what seems to have sparked the fire was a call by highly regarded analyst
Meredith Whitney, the same one who called last fall financial fiasco, who on Monday suggested
that Goldman Sachs (GS) would be reporting surprisingly positive results the following day…..and
they did!!!. Up until then, the only major company that had reported, Fastenal (FAST), suggested
disappointments coming down the road, but that was pretty much the sole marquee name coming
off below expectations last week. This is well indicated in the table below.

REPORTED EARNINGS FROM THE BIG WORLD


EPSa % Chg. % Cur. Chg % Chg %
Companies Symb EPSa EPSe LY Surpr EPS Price W/W Y/Date
Positive
CSX Corp CSX $0.72 $0.62 $0.89 16.1% -19.1% $37.87 18.2% 18.5%
Goldman Sachs GS $4.93 $3.54 39.3% $156.84 10.6% 87.3%
Johnson & JNJ $1.15 $1.11 $1.18 4.1% 0.7%
Johnson 3.6% -2.5% $59.25
Intel INTC $0.18 $0.08 $0.28 125.0% -35.7% $18.79 17.1% 30.6%
YUM! Brands YUM $0.50 $0.43 $0.45 16.3% 11.1% $33.61 -3.4% 8.6%
Xilinx XLNX $0.21 $0.19 $0.30 10.5% -30.0% $20.26 4.5% 15.5%
Baxter BAX $0.96 $0.94 $0.85 2.1% 12.9% $54.15 2.7% 2.1%
JP Morgan JPM $0.28 $0.04 $0.54 14.1% 18.0%
Chase 600.0% -48.1% $36.89
Novartis AG NVS $0.90 $0.85 $0.99 5.9% -9.1% $42.39 8.1% -11.0%
Google GOOG $5.36 $5.09 $4.63 5.3% 15.8% $430.25 3.8% 39.9%
IBM IBM $2.32 $2.02 $1.98 14.9% 17.2% $115.42 14.5% 38.6%
Bank of BAC $0.33 $0.28 $0.72 8.5%
America 17.9% -54.2% $12.89 -8.1%
Citigroup C $0.49 -$0.37 -$0.49 na na $3.02 16.6% -54.9%
General Electric GE $0.26 $0.23 $0.54 13.0% -51.9% $11.65 8.1% -25.4%
Mattel MAT $0.06 $0.00 $0.03 na 100.0% $17.42 14.7% 8.9%
AVERAGE 66.9% -7.2% 9.5% 11.3%
Negative
Fastenal FAST $0.29 $0.33 $0.51 -12.1% -43.1% $33.09 6.4% -4.1%

Clearly, looking above no one can say that second quarter reports did not begin on strong note.
On average, consensus earnings was beaten by the larger ones that reported last week by
margin of 66% above expectations and, clearly, this elevated investors’ expectations and set a
positive tone for markets.

While reports from the financial sector may be tainted as it is undoubtly difficult to read what is
actually one-time items related to rescue packages put forth by the US administration last fall –
one thing sure is US banks are now making profits and the US financial system is not about to
crumble as some predicted – and while the financial sector kept on making headlines, of more
and lasting significance for many may have been the much better-than-expected results reported
by Intel (INTC). We will see this week when the second quarter reporting season picks up steam
and a number of computer related companies proceed with disclosure of their own results, but
Intel’s results are certainly pointing in the right direction.

With investors’ attention span not necessarily very long, most focussing on headlines and not
automatically on underlying comments, and although there were clear indications by reporting
companies that it is not over until its over, investors preferred to focus on the positive; maybe a
tad too much.
Aside from corporate headlines which were obviously rather positive, economic data released last
week were not particularly helpful, but only simply confirming some improvements, all rather
slowly.

THE ECONOMIC SNAP-SHOT OF THE WEEK


Revised
Date Economic Release For Actual Expected Prior from
Treasury Budget Jun -$94.3B -$77.5B $33.5B
13-Jul
14-Jul Core PPI Jun 0.50% 0.10% -0.10%
PPI Jun 1.80% 0.80% 0.20%
14-Jul
Retail Sales Jun 0.60% 0.50% 0.50%
14-Jul
Retail Sales ex-auto Jun 0.30% 0.50% 0.40% 0.50%
14-Jul
14-Jul Business Inventories May -1.00% -1.00% -1.30% -1.10%

15-Jul Core CPI Jun 0.20% 0.10% 0.10%

15-Jul CPI Jun 0.70% 0.60% 0.10%

15-Jul Capacity Utilization Jun 68.00% 67.90% 68.20% 68.30%

15-Jul Industrial Production Jun -0.40% -0.60% -1.20% -1.10%

16-Jul Initial Claims 07-Nov 522K 565K

17-Jul Building Permits Jun 563K 523K 518K


Housing Starts Jun 582K 530K 562K 532K
17-Jul

Although the PPI and CPI showed marked increases, both coming above expectations, leaving
aside energy prices which were way off, inflation remains well within reasonable target. In fact,
when is such mood, the numbers possibly contributed to lessen investors’ fears of deflation.

The same occurred with retail sales and industrial production whose numbers for June were
released last week. Although retail sales are generally improving, the pace at which it does so is
still rather on the slow side, but is at least better than expectations. The same with industrial
th
production; still declining, but at a slower rate than expected and after a 17 decline in the last 18
months, markets were betting this week on a economic turn around soon to occur.

Potentially of more significance, as usual on Thursdays, the Labor Department announced that
Initial jobless claims had felt for a second straight week by a significant number, all while
continuing claims had themselves plunged by 642,000 to 6.273 M, the largest drop ever in
continuing claims. Is it the labour market improving or just a case of the unemployed exiting the
market out of desperation, we will soon see but investors certainly took it positively this week.
And in fact, stronger data on housing starts and building permits released on Friday were also
pointing toward better times.
.
But with such a market performance last week and investors now expecting more of the same,
this is all an awfully difficult act to follow. With necessarily some question marks over results to be
posted in coming weeks and disappointments bound to occur, this is not a rally to be chassed
desperately, at least not yet. Best case scenario would be for markets to be trading sideways to
enable proper digestion. But, as we all know, this rarely occurs.

EARNING SURPRISES & CHANGING GUIDANCES FROM SMALL-CAPS

Although earnings season was just beginning, there was plenty of action in the small-cap world
last week. While there were some misses, most that reported either came in-line or above
expectations. Generally speaking, earnings declines were more important for small-caps and
surprises were not necessarily as significant important as those that apparently caught off-guard
investors looking at the bigger ones – that is itself a surprise – but price movements on surprising
results tended to be more important than those occurring in the big world.

Some of the results that caught our attention included;

EARNINGS SURPRISES IN THE SMALL-CAP WORLD


EPS
EPS EPS act. % Chg. % Cur. Chg % Chg % MKT
Companies Sym act. exp. LY Surp EPS Price W/W Y/Date Cap

POSITIVE

AAR Corp AIR 0.49 0.46 0.52 6.5% -5.8% $18.11 23.9% -1.6% 704.2M
ADTRAN ADTN 0.30 0.28 0.34 $23.62
7.1% -11.8% 13.3% 60.4% 1.48B
AMR Corp AMR -1.14 -1.28 -1.13 10.9% 0.9% $4.34 4.1% -59.3% 1.21B
Gannett GCI 0.46 0.36 1.01 27.8% -54.5% $4.78 49.8% -38.6% 1.11B
Cypress Semi CY -0.03 -0.09 0.28 - $10.22
66.7% 110.7% 15.1% 128.6% 1.47B
Fairchild Semi FCS -0.03 -0.11 0.17 72.7% -117% $8.57 20.9% 75.3% 1.06B
InSteel
Industries IIIN 0.00 -0.05 0.97 nmf nmf $9.69 27.5% -13.5% 169.8M
Polaris Inds PII 0.53 0.47 0.72 12.8% -26.4% $34.40 9.7% 23.8% 1.12B
Umpqua
Holdings UMPQ 0.07 -0.07 0.17 nmf -58.8% $8.05 6.2% -43.7% 484.7M

Renaissance
Learning RLRN 0.14 0.11 0.12 27.3% 16.7% $9.40 -0.3% 6.3% 274.7M
A.O. Smith AOS 0.79 0.50 1.03 58.0% -23.3% $39.00 22.1% 33.8% 1.18B
AVERAGE 32.2% -39.1% 17.5% 15.6%
NEGATIVE
Texas
Industries TXI -0.12 -0.06 0.92 -100% nmf $31.91 5.8% -7.0% 939.9M
Schawk SGK -0.09 -0.06 0.15 -50.0% nmf $8.06 20.3% -29.2% 201.10
USA Truck USAK -0.11 -0.04 0.21 -175% nmf $13.55 1.3% -1.7% 141.2M
Cytec CYT -0.01 0.01 1.20 nmf nmf $22.55 21.3% 7.0% 1.06B
-
Popular Inc BPOP -0.71 -0.37 0.06 -91.9% nmf $1.13 17.5% -77.9% 318.7M
Marshall &
Ilsley MI -0.74 -0.69 -1.52 -7.2% -51.3% $4.63 3.8% -65.9% 1.23B
AVERAGE
-84.8% 5.8% -29.1%
(a) Excluding non-recurring items; (b) May not be comparable to consensus.

There are a few points to be noted;

• Overall strength showed by markets appeared to be such that it did not particularly affect
stocks of companies posting lower-than-expected results last week. Caution is warranted
on those, investors will likely wake up sooner rather than later.

• There seems to be only a loose correlation between the importance of an earning


surprise and subsequent stock prices movements, at least when looking at short term
data. A surprise is a surprise, its significance having only a marginal on the importance of
the direction set.

• Stock prices movements consistency again appeared not to the triggered by results
coming in above expectations, but more so changing guidances by managements.
CHANGING GUIDANCES IN THE SMALL-CAP WORLD
POSITIVE
Date Company Sym Period Est Guidance Close Chg
% MKT
W/W Cap
Tuesday Morning TUES Q4 -$0.15 $(0.05)-(0.03) $4.00
13 Jul 32.9% $166.3M
13 Jul Int. Intelligence ININ Q2 $0.14 $0.22-0.26 $16.76 31.7% $284.90
16 Jul Cypress Semi CY -$0.01 $0.05-0.07 $10.22 15.1% $1.47B
17 Jul A.O. Smith AOS FY09 $1.95 $2.05-2.25 $39.00 22.1% $1.18B

NEGATIVE
13 Jul Take-Two TTWO Q3 -$0.54 -$1.40 $8.68 -1.8% $696.2M
Q4 $1.15 $0.30-0.40
FY09 $0.07 -$1.75
3Par PAR Q1 $0.01 ($0.01)-0.00 $9.89
-6.3% $607.2M
FY10 $0.16 $0.00-0.10
Polaris Inds PII Q3 $0.95 $0.76-0.86 $34.40
9.7% $1.12B

FROM BROKERS’ DESKS


While investors were in the mood to dance, it seems analysts at brokerage firms forgot to
sharpen their pens. There were few upgrades on small-caps by brokers last week and those
occurring were questionable we shall say. This is well illustrated below.

SELECTED BUYING IDEAS FROM BROKERS


Ratings Exp. Close Chg % MKT
Company Symbol Broker Chg Target Return W/W Cap

Landauer, Inc. LDR Robert W. Neutral »


Baird Outperf $69 2.3% $67.45 16.5% 630.5M

Aruba Networks ARUN Jefferies & Buy $6.50 »


Co $8.50 0.5% $8.46 16.5% 730.7M

Atheros ATHR Lazard Hold »


Communications Capital Mkts Buy $25 14.6% $21.82 14.5% 1.33B

Cinemark CNK Lazard Hold »


Capital Mkts Buy $13 20.5% $10.79 2.1% 1.18B
Strong
LIFE TIME Fitness LTM Feltl & Co. Buy $28 25.6% $22.30 28.6% 897.9M

3Par PAR RBC Capital Outperfor $16 »


Mkts $14 41.6% $9.89 -6.3% 607.2M
Neutral $10 »
3Par PAR Credit Suisse $8 -19.1% $9.89 -6.3% 607.2M
Hold »
Wolverine WWW Argus Buy $26 14.8% $22.65 6.6% 1.12B
Kaufman $11 »
Cypress Semi CY Bros Buy $12 17.4% $10.22 15.1% 1.48B

Cypress Semi CY Credit Suisse Neutral $8.50 »


$10 -2.2% $10.22 15.1% 1.48B
STARS & DOGS……AND ACTIONS
Our publisher, Geiser Capital Corp, maintains for clients a list of 20 small-cap stocks expected to
outperform the Russell 2000. In a nutshell, the Geiser Top 20 is rolling weighted index; that is,
stocks are added when their expected returns are above the expected returns of stocks in the
selection and, inversely, stocks are deleted when expected returns are lower than what is
expected from other opportunities.

If the prior week was very forgettable, the last one was simply outstanding, a touch out of this
world. But hey!, if its given, we’ll take it!

In a week characterized by strong upward pressure on stock prices across all sectors, both the
Russell 2000 and the S&P Small-Cap picked up exactly +8.0% last week, the NASDAQ was not
that far moving up +7.4%, the Dow following closely at 7.3% and the S&P 500 closing rank at
+7.0% for the week. The Geiser Top 20 finished the week up +10.5%, well ahead of all indices,
but a bit disappointing given overall markets’ strength. But then again, how can one be
disappointed after a gain of +10.5% in just a week; that is being plain silly!

After proceeding to some house cleaning in the prior week as some stocks were forced out of the
Geiser Top 20, last week was much quieter trading wise. The only trade was to sell early
Tuesday Take-Two Interactive (TTWO) ($8.68; -1.8%) at $8.40 on the footsteps of disappointing
results and revised guidance by management. TTWO had been purchased a week earlier at
$9.10 for a loss of -7.7%. The spot on Geiser Top 20 was taken by Dana Corp (DAN) ($2.12;
+20.5%) on which we had commented positively in the prior issue of The Small-Cap Beat. DAN
was purchased at $1.80, also on Tuesday.

GEISER TOP 20 – THE TOP 3 HOLDING


Company Sym Cost Price Chg. Chg. % Total MKT
% % vs Holding Cap
W/W Cost
Blyth BTH $32.50 $39.87 18.8% 18.8% 6.6% $354.8M
Nordson NDSN $37.60 $41.51 9.9% 10.7% 5.7% $1.39BM
TriQuint TQNT $3.35 $6.33 21.5% 88.9% 5.7% $932.7M

LOOKING AHEAD…
Investors are expected to have a lot to digest again this coming week as the earnings season
picks up steam. But with such a market performance last week, one surpassing our wildest
dreams, it should prove awfully difficult to keep up the pace. Although most, if not almost all of the
bigger names have beaten expectations last week, and sometimes by more than a fair margin,
out of the bunch of marquee names that will be reporting this week some will necessarily
disappoint, or at least they may not beat expectations as widely as those that reported last week.

The problem, if it is an actual problem but we believe it is, is that investors appears to have
already discounted for those set to report this week and there ever after continuing earnings
surprises on the upside. This week will be a tough act to follow. Indeed, there are only so many
times investors can be surprised by more of the same and still continue to push markets further
higher.

Out of many that will be reporting from the big world this week, those next page should be of
particular interest.
EARNINGS THIS WEEK FROM THE BIG WORLD
Exp.
Chg % Cur. Chg % Chg %
Date Companies Symb EPSe Yr Ago Y/Y Price W/W Y/Date
Halliburton HAL $0.27 $0.68
20-Jul -60.3% $21.38 12.9% 18.7%
Hasbro HAS $0.23 $0.25
-8.0% $25.39 9.5% -11.6%
Sybase SY $0.52 $0.49
6.1% $32.21 4.6% 30.0%
21-Jul Caterpillar CAT $0.22 $1.74 -87.4% $33.99 12.7% -24.6%
Coca-Cola KO $0.89 $1.01 -11.9% $50.32 4.2% 13.3%
DuPont DD $0.53 $1.11 -52.3% $27.57 13.9% 12.5%
Lockheed Martin LMT $1.81 $2.01 -10.0% $81.09 4.1% -2.1%
Apple AAPL $1.16 $1.19 -2.5% $151.75 9.6% 77.8%
Seagate Tech STX -$0.10 $0.44 -122.7% $11.15 11.5% 153.4%
Starbucks SBUX $0.19 $0.16 18.8% $14.44 7.4% 52.6%
Yahoo! YHOO $0.08 $0.10 -20.0% $16.84 12.8% 38.0%
22-Jul Boeing BA $1.21 $1.16 4.3% $41.36 4.3% -1.1%
Morgan Stanley MS -$0.49 $27.99 7.9% 77.5%
PepsiCo PEP $1.00 $1.05 -4.8% $56.66 3.6% 5.2%
Citrix Systems CTXS $0.38 $0.38 0.0% $34.99 8.7% 48.5%
eBay EBAY $0.36 $0.43 -16.3% $18.55 13.8% 32.9%
Qualcomm QCOM $0.52 $0.55 -5.5% $47.40 9.1% 33.4%
23-Jul 3M MMM $0.94 $1.39 -32.4% $62.92 5.2% 11.5%
EMC Corp EMC $0.16 $0.18 -11.1% $13.92 8.7% 33.0%
Ford Motor F -$0.52 -$0.62
-16.1% $6.14 7.3% 168.1%
Kimberly-Clark KMB $0.94 $1.03
-8.7% $54.47 4.9% 5.8%
McDonald's MCD $0.97 $0.94 3.2% $57.84 1.4% -5.4%
UPS UPS $0.49 $0.85 -42.4% $52.17 7.5% -3.6%
Amazon.com AMZN $0.31 $0.37 -16.2% $85.85 10.6% 67.4%
American Express AXP $0.26 $0.56 -53.6% $28.03 20.7% 55.6%
Baidu.com BIDU $1.43 $1.11 28.8% $321.60 13.1% 146.3%
Microsoft MSFT $0.36 $0.46 -21.7% $24.79 10.7% 29.2%
Ingersoll-Rand IR $0.39 $1.03 -62.1% $21.69 9.1% 27.5%
24-Jul LM Ericsson ERIC $0.11 $0.60 -81.7% $10.04 7.7% 31.8%
Schlumberger SLB $0.63 $1.16
-45.7% $56.01 10.9% 33.5%
AVERAGE
$0.51 $0.75 -32.4% 8.9% 38.5%

It is amazing how market mood can turn on a dime. In the prior edition of The Small-Cap Beat, we
indicated that looking at weekly change in prices for stocks then, it appeared that investors were
not expecting much and, anything somewhat above expectations could finally bring a market
rebound, all after trending down for 4 consecutive weeks on low volumes. We admit, markets
moving up +7% to +8% and our Geiser Top 20 at +10.5% in just a week, this is not what we had
exactly bargained for. Too much, too quick for our taste.

As in the big world, small-caps set to report this week may have a hard time fulfilling markets’
expectations.

While we have been a long time proponent of the worst is behind and better days are just ahead
questioning the lack of market direction for the better part of June and early July, this week we
believe investors may be expecting simply too much as to when the economic recovery will occur
and how significant it will be. We are not there yet and between now and then, there will likely be
some setbacks and disappointments.

Although far from exhaustive, small-caps that will reporting this week and on which we will keep
our eyes wide open, the list include:

EARNINGS THIS WEEK IN THE SMALL-CAP WORLD


Exp.
Chg % Cur. Chg % Chg % MKT
Date Companies Symb EPSe Yr Ago Y/Y Price W/W Y/Date Cap
Ceragon CRNT $0.04 $0.13
20-Jul -69.2% $7.38 12.5% 46.1% 256.8M
PetMed Express PETS $0.31 $0.28
20-Jul 10.7% $16.65 15.5% -5.6% 378.3M
20-Jul Sensient SXT $0.51 $0.53 -3.8% $24.05 6.7% 0.5% 1.17B
21-Jul JDA Software JDAS $0.30 $0.29 3.4% $16.01 5.4% 21.9% 501.2M
21-Jul Arbitron ARB $0.10 $0.02 400% $17.55 7.6% 33.3% 464.7M
21-Jul Lexmark LXK $0.60 $0.96 -37.5% $18.61 6.8% -30.8% 1.45B
21-Jul Allegiant Travel ALGT $1.18 $0.13 807% $45.77 12.3% -5.8% 924.9M
Atheros ATHR $0.14 $0.31
Communications
21-Jul -54.8% $21.82 14.5% 52.5% 1.35B
21-Jul Vocus VOCS $0.16 $0.21 -23.8% $18.96 13.3% 4.1% 364.7M
22-Jul iGATE IGTE $0.09 $0.15 -40.0% $6.32 -4.4% 0.3% 342.5M
Navigant NCI $0.20 $0.24
Consult
22-Jul -16.7% $13.73 5.8% -13.5% 685.1M
22-Jul Affymetrix AFFX -$0.19 -$0.04 -375% $5.25 1.5% 75.6% 371.1M
22-Jul Cirrus Logic CRUS -$0.01 $0.06 -116% $4.56 10.4% 70.1% 297.6M
22-Jul Encore Wire WIRE $0.25 $0.06 316% $21.87 8.9% 15.6% 502.9M
Knight KNX $0.15 $0.15
Transportation
22-Jul 0.0% $16.46 1.0% 2.7% 1.37B
22-Jul NETGEAR NTGR -$0.01 $0.41 na $15.35 9.3% 34.5% 528.4M
22-Jul TriQuint Semi TQNT $0.03 $0.07 -57.1% $6.33 21.5% 84.0% 932.7M
Columbus CMCO $0.14 $0.61
McKinnon
23-Jul -77.0% $13.54 16.0% -0.8% 257.9M
23-Jul Jetblue Airways JBLU $0.02 -$0.03 166% $4.61 5.7% -35.1% 1.26B
CEC CEC $0.41 $0.48
23-Jul Entertainment -14.6% $32.86 4.7% 35.5% 756.5M
CyberSource CYBS $0.16 $0.16
23-Jul 0.0% $14.40 0.6% 20.1% 994.8M
Healthways HWAY $0.24 $0.39
23-Jul -38.5% $13.16 5.1% 14.6% 443.4M
23-Jul Nutrisystem NTRI $0.26 $0.71 -63.4% $14.95 8.7% 5.2% 459.1M
Travelzoo TZOO $0.02 -$0.08
23-Jul 125% $12.95 10.7% 132.9% 212.9M
VisionChina VISN $0.10 $0.12
23-Jul Media -16.7% $6.17 14.3% 13.0% 442.6M
24-Jul Lance LNCE $0.31 $0.09 244% $24.06 1.8% 6.4% 768.1M
24-Jul OptionsXpress OXPS $0.26 $0.39 -33.3% $15.25 6.9% 15.0% 882.2M
AVERAGE
$0.21 $0.25 -15.1% 8.3% 21.9%

For those wishing to focus and digest corporate reports set to be released this week, luckily for
them this is the time as less than a handful of economic releases are expected. As indicated
below, the state of current economic activity is not exactly where the action is expected to come
from. But, activity and action there should plenty this week.
LOOKING FORWARD ON THE ECONOMY
Date Economic Release For Expected Prior
Jul-20 Leading Indicators Jun 0.50% 1.20%
Jul-23 Initial Claims Jul-18 NA 522K
Jul-23 Existing Home Sales Jun 4.80M 4.77M
Jul-24 Mich Sentiment-Rev Jul 64.6 64.6

After such performance by markets, anything below much better-than-expected earnings is very
likely to trigger some form of a market pull back and out of the large number that will be reporting
next week, some misses are bound to occur. At this time, the point remaining unanswered is what
will be the catalyst and how significant may be the market pullback. Best case scenario would be
for a market to trade sideways, just to let everyone catch their breath.

On this note, have all a good investing week!

Stephane Solis
Editor
The Small-Cap Beat

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