Sprint is Betting Much More on 4G than Originally Thought

Sprint Nextel Corporation’s (NYSE:S) 4G ambitions may end up costing the company twice as much as Sprint initially thought. That’s music to the ears of AT&T (NYSE:T) and Verizon (NYSE:VZ).

At Sprint’s Strategy Update on Friday, Joe Euteneuer, Sprint CFO said the company’s switch from its current iDEN and WiMaxs networks to CDMA/4G LTE will cost the company $10 billion. Analysts had placed a $4 to $5 billion number on the change and concern is starting to ripple that in addition to Sprint putting all of its eggs in one basket for the Apple (NASDAQ:AAPL) iPhone launch, it’s also doing so for 4G.

Euteneuer tried to calm analysts’ fears by saying the company should save $10 billion to $11 billion through 2017 from the change including a $4 billion savings from the absence of maintaining the iDEN network.

This Fallen Networking Stock Will Bounce Back

Tags: IBM ,IBM Spending $7B More On Share Buybacks

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Networking stocks should be simple. Worldwide network traffic will continue to explode for the foreseeable future, driven by fatter and more ubiquitous bandwidth needs. Thank Apple (Nasdaq: AAPL  ) for introducing media players that fit in your pocket or purse; thank Google (Nasdaq: GOOG  ) and Netflix (Nasdaq: NFLX  ) for burning the fires under traffic-sucking video streams.

So yeah, it should be simple. Demand is guaranteed to stay high and rising; networking stocks should follow suit.

That's the theory. But as you know, theory and practice aren't always the same thing. Networking companies and their stocks do not move on a straight line to the stars, as you might expect.

Reality hit optical networker Infinera (Nasdaq: INFN  ) hard Wednesday. The company reported a pretty acceptable third quarter with a $0.09 adjusted loss per share on sales of $104 million. That was better than expected on both counts, but shares still plunged through the floor, closing the day 10.8% down. You guessed it: The outlook for the fourth quarter came in a bit light next to analyst projections. Look out below!

In related industry news, Alcatel-Lucent (NYSE: ALU  ) also crashed hard on a very drastic analyst note. Jeff! ries cut that stock from buy straight down to sell due to a lack of catalysts and timid network spending from North American backbones in general, AT&T (NYSE: T  ) in particular. Since 65% of Infinera's business comes from North America, comments like that strike directly at the company even if aimed at a competitor. What's bad for the goose is terrible for the gander.

That being said, Infinera does have catalysts lined up for 2012. A new line of high-speed optical cards promises to boost sales significantly, albeit at the cost of lower margins as manufacturing yields usually start out pretty low.

Infinera's largest customer is Level 3 Communications (Nasdaq: LVLT  ) , and recent Level 3 addition Global Crossing is also on the list of significant clients. Hence, I would advise Infinera investors to listen up when the two-headed Level 3 beast reports its own results in a couple of weeks -- how Level 3 plans to invest in its networks makes a huge difference to Infinera.

This stock is an official recommendation of one Foolish newsletter and a real-money holding for three other services, not to mention a perfect five-star CAPS stock. Never mind one silly Fool waxing poetic about Infinera's catalysts -- a veritable army of sharp minds stands ready to back me up on this.

Navigating the networking waters can be tricky. Why not grab a map of the space to help you along? This free report on high-speed networking stocks will be your North Star on the quest for market-stomping returns.

Corn Plummets While Chicken Dances Higher

Tags: C ,FITB ,FNFG ,JPM ,RF ,STI Wells Fargo <SPAN ,WFC ,Wells Fargo Lays Earnings Egg

The?USDA?reported that corn (NYSE:CORN) stockpiles surpassed forecasts by 150 million bushels on Friday, causing fertilizer stocks to drop and chicken producers to pop. ?The surplus stockpile has been attributed to a higher use of wheat in livestock rations, reducing the need for corn. ?The news devastated fertilizer companies Mosaic Co. (NYSE:MOS) and CF Industries Holdings, Inc. (NYSE:CF).

The surprising USDA corn number caused a steep decline in several agriculture (NYSE:RJA) investments. ?December corn futures hit their limit down amount of 40 cents, while soybeans and wheat (NYSE:GRU) futures declined by nearly the same amount. ?Corn prices are now down for the third quarter. Mosaic, the world’s leading producer of phosphate and potash, fell more than 9% on Friday as shares hit a new 52-week low. ?Mosaic shares have already been in a decline recently, as the company reported an earnings miss on Wednesday. ?For the fiscal first quarter, Mosaic reported net income of $1.17 per share, compared to estimates of $1.29 per share. ?Shares are down 35% year-to-date.

The world’s second largest nitrogen fertilizer producer?CF Industries (NYSE:CF)?was also crushed by the USDA report. ?Shares closed more than 12% lower on Friday. ? Shares are now down about 8% year-to-date. ?Other nutrient agricultural companies such as Agrium Inc. (NYSE:AGU) and ! Potash Corp. (NYSE:POT) held up slightly better on the news, but still declined 5.18% and 4.80%, respectively.

China Coverage: Will A China Slowdown Affect Gold?

Investors looking to benefit from the increase in corn supply should consider Sanderson Farms (NASDAQ:SAFM) and Tyson Foods (NYSE:TSN) as both companies closed higher on the news. ?Meat companies stand to benefit from cheaper feed prices, which will reduce the cost of producing chickens, cattle, and hogs. ?”I don’t know if it’s sustainable, but it’s a big deal,” D.A. Davidson & Co. analysts Timothy Ramey, said of the impact on meat producers. Ramey also expressed concerns about the rising middle-class in Asia. ?He explained, “We are developing new middle-class users of meat in China (NYSE:FXI) and the Far East, and that change is not going to reverse itself.” ?The combination of higher demand and lower feed costs is a recipe for success in the meat industry.

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3 Gold Stocks Primed for a Rally

Tags: C ,FITB ,JPM ,WFC ,Wells Fargo Lays Earnings Egg

With Europe swirling the drain and Operation Twist possibly Operation Twisting in the Wind, gold has a lot of headroom here, especially since coming off its highs, says Jack Adamo of Insiders Plus.

The only point of optimism I can see is that the market shrugged off last week’s horrible Initial Unemployment Claims report, and rallied strongly on the news that the US would supply dollars to European banks whose funding through US money-market funds has dried up.

The dominant view is that this will work out to be another “QE” in that all those dollars will recirculate into the US economy, causing more asset inflation in the form of higher stock prices.

Will propping up European banks make the Euro stronger, and the extra dollars make the greenback weaker? If so, this will almost certainly boost US asset prices in the short run, as our Fed goes for a twelfth consecutive year of dosing the world economy with monetary amphetamines.

I noticed that most of the high volume upward moves last week were right in the first few or last few minutes of the trading day. It looks to me like someone is trying to set a positive tone in the mornings and when it doesn’t go well during the day, they prop up the market just prior to the close so that the market finishes in positive territory.

If you have a good charting service, break down the last few days into five-minute intervals and see what I mean.

Gold Looks Good
Gold has pulled back from its recent all-time nominal high. From the action of its long-term chart, I thought it could pull back $300 or possibly even $400 before resuming its r! ise, but I saw something this weekend that makes me think it may not.

The Commitments Of Traders Report that I’ve been following closely for six years now shows characteristics that in the past have presaged a rise in price of at least 10% and usually 15% to 20% over the next few months. The rises have been getting progressively bigger.

I consider this a form of insider information. It shows how the real producers and users of the metal view the market. History tells me they are much smarter than the hot-money big hedge fund traders.

Hence, although gold looks a bit extended here, I’m comfortable with our current holdings. I recommend you have a full allocation in gold stocks like Goldcorp (GG), Sprott Physical Gold Trust (PHYS), or ETFS Gold Trust (SGOL).

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• Capture Price Growth with These 6 Stocks
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RIM: Wells Awaits QNX, Strategy Updates At DevCon

Tags: BAC ,C ,COST ,EBAY ,NFLX ,Recession ,WFC ,These seemingly little charges can really add up

Wells Fargo’s Jennifer Fritzsche this afternoon reiterates a Market Perform rating on shares of Research in Motion’s (RIMM) in advance of the company’s BlackBerry Developer Conference, which kicks off tomorrow and runs through Thursday, in San Francisco.

Fritzsche writes that she doesn’t expect any “material announcements” from the week, but she thinks investors “will be looking for some clarity on the progress of RIMM’s strategy and assurances that the company can still execute despite recent personnel losses and low morale in the face of strong market share gains by the competition.”

She is also hoping co-CEO Mike Lazaridis will talk more about last week’s network outage and give an update on progress with “QNX,” the software that runs RIM’s “PlayBook” tablet computer, which is supposed to receive an update, and which is supposed to come to the BlackBerry platform next year.

RIM shares today are down $1.54, or almost 7%, at $22.43.