Daily Archives: November 14, 2006

Cramer Says Hertz IPO Will Hurt You!

Cramer said the IPO to avoid this week is Hertz (HTZ). He thinks this can burn you. This is where the sellers of the IPo make a lot of money, but the new buyers can be left holding the bag. He thinks it can end up being just like the Seally (ZZ) IPO and he won’t touch it with a pole.He said the first thing is to do no harm. He won’t use the Vonage (VG) or the Burger King (BKC) deal, but he thinks it will be a disappointment. This was sold to a private equity group for $15 Billion and the new sale is 27% being sold. They have increased the debt and knocked down earnings. The $16 Billion of the IPO, but over $900 million of the IPO is funding a special dividend and another $400 million is essentially another dividend. The 3 firms also have 7 of 9 board seats and this is one that you need to avoid.He thinks it won’t go above $20.00 after the IPO any time soon and the downside is just too hard to calculate.Jon C. OggNovember 14, 2006

Posted on: November 14, 2006 – 9:48 pm in Uncategorized

Cramer Very Positive on NYMEX IPO

We already saw Cramer endorese the KBR (KBR) IPO and even that he said Halliburton (HAL) was a cheaper and safer way to go.The huge IPO of the week that Cramer then reviewed was the NYMEX (NMX), the owner of the New York Mercantile Exchange. He said the price was boosted from $48-52 to $54-57 and bumped the shares from 6 million to 6.5 million shares, and it is heavily oversubscribed. Cramer said he thought the company deserves every bit of it. The conventional wisdom is that no one thinks it will go down. He said the sentiment is right. Cramer thinks you should buy a piece of it because this may the most quiet bull market in various sorts of exchanges. He even went over the NYSE (NYX) as still up $5.00 from last week and it can more than double. Cramer said he doesn’t know of any reason why this NYMEX is different. He said the numbers speak for themselves because income rose 150% on a 71% revenue gain, but if it prices in the mid-range it will only have a 30-times earnings multiple. That’s too low for Cramer. He thinks the opening will be higher and he thinks you have to do limit orders. If it opens up $25.00 north of that he would still be a buyer, but if it opens up $15.00 he would buy Twice as much and if it is up only $5.00 then he would think it is a true gift. He said never do market orders and don’t buy in all at once.Because NMX boosted the range today it also impacted InterContinental Exchange (ICE) with it closing up 9% to $96.55.Jon C. OggNovember 14, 2006

Posted on: November 14, 2006 – 9:20 pm in Uncategorized

Cramer Discusses Upcoming IPO’s: KBR from Halliburton

Tonight on Cramer’s MAD MONEY on CNBC, Cramer went over upcoming IPO’s on what to look for and what to avoid. He also said he doesn’t want to get caught short this market.KBR (KBR) Cramer said he has been covering this but it is selling 17%, stock is being sold by Halliburton (HAL). KBR is an engineering and constructuring company that builds plants, but it has a permanent dark cloud of negativity and more so now with the Democrats in charge of Congress. Cramer said it is coming very cheap to market because it may get hammered by new Congress or may lose Iraqi business. He said that is just not the right case. Cramer noted it has a $15 Billion backlog and will be valued at roughly $4 Billion in market cap. He thinks it is at a 20% to other engineering and consulting firms. Cramer said even if bad press continues the numbers will speak for itself. It is oversubscriber. He noted the way to play it was to play pin action in Halliburton (HAL). This has the lowest multiple and could get a valuation expansion in its multiples.He still will review NYMEX (NMX), and Hertz (HTZ) in the coming segments.Jon C. OggNovember 14, 2006

Posted on: November 14, 2006 – 9:05 pm in Uncategorized

Market Wrap (Nov. 14, 2006)

DJIA 12,216.97; Up 85.09 (0.70%)NASDAQ 2,430.18; Up 23.80 (0.99%)S&P500 1,393.14; Up 8.72 (0.63%)10YR-Bond 4.568%; Down 0.037NYSE Volume 2,931,884,000NASD Volume 1,881,414,000Wholesale Inflation measured by the October PPI fell 1.6% because of falling energy prices. Core inflation on an ex-food and energy basis fell 0.9% for October. October retail sales were down 0.2% for October. We were set for yet another day of hitting resistance and selling off, but then Fed Governor Fischer spoke several buy programs came into the market. Fischer said as long as the housing market weakness remains contained to housing there is not much the fed can or should do. Since the markets took this to mean the fed was out of the game, the DJIA and S&P managed to gain to new highs.Both retail giants Target and Wal-Mart rose on earnings: Target (TGT) rose 2.2% to $59.07 after posting EPS at $0.59 vs $0.55e; Wal-Mart (WMT) rose 2.9% to $47.67 after it showed EPS at $0.62 vs. $0.60 estimates.Home Depot (HD) had opened lower after missing EPS estimates ($0.73 vs $0.75e), but managed to rise 4% to $37.91 with the broad market later in the day.Golf Galaxy (GGXY) rose to 17% to $18.44 after Dick’s Sporting Goods (DKS) announced it was acquiring the company. DKS also beat earnings and its shares closed upDR Horton (DHI) rose 9.4% to $24.48 after the homebuilder posted earnings at $0.88 EPS vs $0.70e.BJ’s Wholesale Club (BJ) rose 4% to $29.76 after it beat earnings with $0.32 EPS vs $0.26+ estimates.Agilent (A) gave up much of its recent gains today by falling 5.75% to $32.99 after it missed earnings expectation at $0.46 EPS vs $0.49e.Cyberonics (CYBX) rose 20% to $21.34 after raider Carl Icahn disclosed he had purchased shares in the emerging medical device maker.Intel (INTC) rose over 4% to $21.88 after Caris gave a positive report on the sector.Nice Systems (NICE) rose 6% to $32.58 after it was raised to Buy at B of A and after the NY Transit System awarded it a security pact.Cheniere Energy (LNG) rose 3.4% to $26.01 after Lehman initiation of coverage to an Outperform.Microsoft (MSFT) closed down $0.02 at $29.22 after it formed an Interop Alliance for more interoperability of Windows and other client systems.The InterContinental Exchange (ICE) gained 9% to $96.63 today as the price terms were hiked for its competing NYMEX IPO by 10% for later in the week.Omnivision (OVTI), a BAIT SHOP MEMBER since September, rallied almost 8% to $17.70 on word that it could be acquired today.Pier 1 Imports (PIR), a BAIT SHOP “Watch List” stock, rose 20% to $7.62 after Reuters reported that Jakup Jacobsen may want to acquire the rest of the company after it already purchased operations in the UK.Timberland (TBL), a BAIT SHOP “Watch List” stock, rose 7.6% to $33.36 after the WSJ reported that it could be taken private.Netopia (NTPA) rose 22% to $6.83 after Motorola agreed to acquire the stock for $7.00 cash per share.Stent makers managed to dodge a real bullet as a report claiming that stents did not help reduce the risk of a heart attack: J&J (JNJ) rose 15 to $66.57, Boston Scientific (BSX) rose 0.4% to $15.93, Abbott (ABT) rose 1.15% to $46.18 and stent polymer coating maker SurModics (SRDX) rose 0.45% to $32.00…..although Angiotech (ANPI) fell 2.2% to $8.61.Jon C. OggNovember 14, 2006

Posted on: November 14, 2006 – 7:13 pm in Uncategorized

Which Group of Analysts Will Be Right About Earnings?

By Chad Brand of Peridot CapitalistGlancing over earnings estimates for the duration of this year and 2007, I noticed a very interesting dichotomy. Bottom-up analysts are still quite bullish on corporate profits, forecasting year-over-year growth in each of the four calendar quarters during 2007. Top-down analysts, conversely, are predicting annual declines in earnings beginning in Q3.Which group will be correct? It’s simply too early to know. I would tend to side more with bottom-up analysts in general, merely because they are basing their forecasts on what actual company management teams are saying, as opposed to merely taking a broad macroeconomic view of the world.That said, I am worried that earnings growth will be difficult to maintain. Over the last couple of years a majority of the gain in S&P 500 earnings have come from the energy and materials sectors. As we head into next year, contributions from these groups could be minimal, if not negative. Commodity prices seemed to have peaked for the short term, and although I do think we are in the middle of a secular bull market in the group, there is no reason to think we could not see a breather in the run during 2007.If energy and other commodity stocks find it difficult to grow earnings, other groups would have to see accelerating profit growth to make up the difference and continue to boom in corporate earnings. I can’t really see what areas would be up to the task.What is the implication for stock prices going forward? Depending on what earnings number one uses for the S&P 500, we are currently trading between 15 times (operating) and 16.5 times (GAAP) 2007 earnings estimates. Market bulls suggest that P/E multiples should expand given the outlook for economic and earnings growth. However, if corporate profits begin to see year-over-year declines in the back half of 2007, such multiple expansion is unlikely.With multiples staying flat or declining, and profits peaking, it would be hard to make the case that stock prices have a lot of room to run next year. Perhaps that is why the S&P 500 seems to be having trouble breaking past recent highs in the 1,390 area. As it stands right now, I don’t see the S&P breaking meaningfully above 1,400 in the short term until we have increaased confidence that a more bullish scenario could play out.http://www.peridotcapitalist.com/

Posted on: November 14, 2006 – 6:19 pm in Uncategorized

Buybacks…Some Terrific Insight from Information Arbitrage

From Value DisciplineGretchen Morgenson of the NY Times recently wrote an article on, “Why Buybacks Aren’t Always Good News.” Buybacks, per se, will only create value if the stock is purchased at prices below its intrinsic value. Buybacks should be viewed much as any other capital expenditure, will this expenditure produce value in excess of each dollar spent? Likewise, a company must attend to its operating needs first…will the spending on share buybacks impede the company’s ability to maintain its competitive position?Buybacks completed at too high a price reward the sellers of the stock rather than the loyal shareholders who are left ehind. Buybacks in some cases seem to be in place simply to help support the stock. In some cases, such as Yankee Candle, they are a prelude to mopping up loose stock and essentially wrapping up the show.The simplest test of the effectiveness of share buybacks is to look at the fully diluted share count after a share buyback program has been implemented. Has the share count been reduced, or is the share buyback merely sopping up stock created from employee options?Some really terrific insight into the dynamics of share buybacks was recently posted in Information Arbitrage. This articulate discussion of share buybacks addresses the corporate finance reasons for undertaking such purchases (essentially, buying stock below intrinsic value increase the intrinsic value of what remains) as well as how GAAP handles such purchases. Reduced share count does NOT always equate to higher E.P.S. if its earnings that float your boat.Buybacks should always be examined for their motives and their effect on the ultimate capital structure of the firm. Significant buybacks such as the Dutch auctions that we have witnessed in CBRL may not necessarily create a great deal of value. If the end result is a leveraged mess that is incapable of competing effectively, the CFO has traded the warm blood of equity for the cold reality of debt.Disclaimer: Neither I, my family or clients have a current position in CBRL.http://www.valuediscipline.blogspot.com/

Posted on: November 14, 2006 – 6:17 pm in Uncategorized

Major eCom (ECMV) Holders Nussdorfs Propose Acquisition of Model Reorg, A Company They Control

From 13D TrackerIn an amended 13D filing on eCom Ventures, Inc. (Nasdaq: ECMV), large holder Glenn Nussdorf with his brother Stephen Nussdorf, who together beneficially owned 45.34% of the stock, disclosed a proposal for eCom to buy Model Reorg, Inc. a company they control.The transaction proposed by Model would have the following terms:1. Model would be acquired by the Issuer and would become a wholly owned subsidiary of the Issuer.2. The outstanding common stock of Model would be converted into 6,396,649 shares of common stock of the Issuer.3. Following this conversion, Glenn and Stephen Nussdorf would own an aggregate of 80.90% of Issuer’s outstanding common stock (assuming the conversion of the Subordinated Note held by them, but not assuming the exercise of outstanding options). The projected percentage ownership set forth in the Proposal Letter assumes the exercise of the options, but not the conversion of the Subordinated Note.4. Inter-company amounts due from Model to Quality King Distributors, Inc. (“Quality King”) will be paid in cash to Quality King, or converted into preferred stock or debt of Model prior to the transaction. Any such cash payment by Model may be financed by its issuance of additional debt. Glenn and Stephen Nussdorf own two thirds of Quality King’s equity and their sister, Arlene Nussdorf, owns the balance. If any preferred stock is issued in satisfaction of this inter-company amount, it will be converted into an equal number of shares of the Issuer’s preferred stock having identical terms.5. The Issuer, or one of its subsidiaries, will issue indebtedness to unrelated third parties to provide working capital.6. The transaction will be subject to the satisfaction of certain conditions, two of which will be that the transaction is approved and recommended to the stockholders of the Issuer by an independent committee of the board, and that the transaction is approved by a majority of disinterested stockholders of Issuer.According to a letter sent to eCom Ventures’ Board of Directors, for the fiscal year ended October 31, 2006, the unaudited pro forma revenue of Model (giving effect to the acquisition of Jacavi) is expected to be $371 million.http://www.13dtracker.blogspot.com/

Posted on: November 14, 2006 – 6:12 pm in Uncategorized

Sedna Capital Discloses 5.65% Stake in Selectica (SLTC)

From 13D TrackerIn a 13D filing after the close on Selectica, Inc. (NASDAQ: SLTC), Sedna Capital disclosed a 5.65% (1.73 million shares) stake in the company.Sedna said it currently does not have any plan or proposal which relate to or would result in the action enumerated in the instructions to Item 4, but may formulate such a plan or proposal in the future.http://www.13dtracker.blogspot.com/

Posted on: November 14, 2006 – 5:59 pm in Uncategorized

Cramer

On today’s STOP TRADING segment on CNBC, Jim Cramer reviewed a couple of ideas to make money.On Graco (GGG), Cramer said the CEO is a great a tell. He said if it wasn’t for Home Depot (HD) the stock would be up. The CEO reportedly said the worst drop in housing was behind. Cramer said Home Depot (HD) is its own problem and they are their own worst enemy. Cramer said he thinks Lowe’s (LOW) will be able to climb from here.Cramer said Target (TGT) can go higher as well.He said American Standard (ASD) and Fotrtune Brands (FO) have bottomed.Cramer also said the Big 3 even after meeting with Bush are just a srying situation and Toyota (TM) is the play there.Cramer said to take the profit on Express Scripts (ESRX), so ring the register according to him.Jon C. OggNovember 14, 2006

Posted on: November 14, 2006 – 5:48 pm in Uncategorized

Big 3 Auto CEO’s Meet With President Bush

Stock Tickers: GM, F, DCXThe heads of each of the Big 3 Auto producers held general and prelininary discussions with President Bush today, but said this was very general and the start of what will hopefully lead to ongoing discussions.-Richard Wagoner of GM-Tom LaSorda of Chrysler-Alan Mulally of FordThey discussed currency imbalances as an issue. They specifically noted the Japanese Yen is significantly undervalued, which puts Japanese exporters at an unfair advantage over US auto makers.The Big 3 said they also support renewable energy initiatives and went on to say that they could get half of their fleets to ethanol or dual-fuel compatible by 2012.They also noted that a healthy auto industry was critical for a US economy. The Big 3 are at a competitive disadvantage from currency, regulations, costs, employee costs, and healthcare. The Big 3 also told Bush they were not looking for a bailout, at least that is what Mullaly said.Since the year 2000, there have been something to the order of the Big 3 having 68% of auto sales in the US down to 57% last year, although those figures are paraphrased from earlier and may not be exact. One issue they did not really address about the currency is that some foreign owned auto makers like Toyota (TM) and Honda (HMC) are now making autos here in the US with non-UAW (United Auto Workers) US workers, so that currency issue may not be the real deal.This is going to be just one of several ongoing areas that will run into the future on a US macroeconomic and systematic basis. US auto makers are generally shrinking right now and their market share is likely to follow that trend. There are still questions about the US auto industry as far as if 3 companies are genuinely needed down the road, but that is another controversial discussion for a later date.By the sound of the short media conference after the discussions with President Bush, it seems that was indeed general and nothing solid was produced other than starting some dialogue.Jon C. OggNovember 14, 2006

Posted on: November 14, 2006 – 5:36 pm in Uncategorized

Most Actives Review: As Directionless as the Market

As the market has hit some resistance and having a hard time going higher for the last couple of weeks, the trading volume has stayed with the Horsemen tech stocks and has dried up in the sub-$5.00 tech stocks. There has been very limited moves in the sub-$5.00 area and the volume is still with the large cap tech names.

Ticker Price Change Volume
FNSR $ 3.77 $ 0.08 4,852,598
LVLT $ 5.49 $ 0.03 8,114,464
SIRI $ 4.10 $ (0.01) 20,027,506
SUNW $ 5.39 $ 0.01 22,450,152
PMCS $ 7.78 $ 0.12 3,950,139
CNXT $ 2.26 $ 0.06 12,651,320
CHTR $ 2.53 $ (0.07) 7,378,148
Total 79,424,327
NASDAQ $2,408.34 $ 1.96 1,135,686,000
Ticker Price Change Volume
INTC $ 21.53 $ 0.53 37,019,088
MSFT $ 29.18 $ (0.07) 32,197,842
CSCO $ 26.53 $ (0.15) 26,643,868
AAPL $ 84.64 $ 0.29 14,382,023
ORCL $ 19.01 $ (0.17) 19,081,046
Total 129,323,867

Jon C. OggNovember 14, 2006

Posted on: November 14, 2006 – 5:07 pm in Uncategorized

Salary.com Files for IPO

There was a somewhat interesting IPO filing yesterday, although I am not that convinced that it is a GOOD interesting at this point. Salary.com has made its initial filing for an initial public offering yesterday.The company has listed Thomas Weisel as the lead manager and co-managers are listed as follows: William Blair, Needham, Wachovia, and Pacific Crest.The company’s corporate offerings are for pay optimization and standardization based on job categories and based on regional data including experience and education. It also allows individuals to go in and conduct a pay search based on many criteria to make sure they are adequately paid market rates.The company boasts some 7,000 corporate subscribers that covers some 10,000,000 employees. In its most recent 12 month period the company posted almost $17 million in revenues and had approximated losses of $3 million. There may be some seasonality to the company, so we won’t go out on a limb asking how such deals are able to get done right now.Jon C. OggNovember 14, 2006

Posted on: November 14, 2006 – 4:48 pm in Uncategorized

Microsoft One Step Further on Interoperability (Updated Version)

Please be advised we have deleted the first version of this story of Microsoft releasing a any updates on Mozilla’s Firefox. We have not been able to confirm this and there are still some questions about the validity of the links. If we get any further details we will follow-up, but as for now the only development should be on the Interop Vendor Alliance with Microsoft and many others.Microsoft (MSFT) appears to be living up to its opening of arms to open source and to interoperability today. Microsoft and other companies formed an Interoperability Alliance.Today at Microsoft® TechEd: IT Forum 2006, Microsoft (MSFT) announced the formation of the Interop Vendor Alliance, a global cross-industry group of software and hardware vendors that will work together to identify opportunities for enhancing interoperability with Microsoft systems on behalf of their customers. Founding members of the alliance include Advanced Micro Devices Inc., (AMD), BEA Systems Inc. (BEAS), Business Objects (BOBJ), CA (CA), The Carbon Project, Centeris Corp., Citrix Systems Inc. (CTXS), GXS Inc., IP Commerce Inc., JNBridge LLC, Kernel Networks, Levi, Ray & Shoup Inc., Microsoft, NEC Corp. of America, Network Appliance Inc. (NTAP), Novell Inc. (NOVL), Q4bis, Quest Software Inc. (QSFT), Siemens Enterprise Communications, SOFTWARE AG, SugarCRM Inc., Sun Microsystems Inc. (SUNW), Symphony Services Corp., Xcalia, and XenSource Inc. Thgis comes on the heels of last week’s SuSe Linux accord with Novell.The stated goals are to encourage vendor collaboration to foster interoperability, enable scenario-based testing for interoperability, and to communicate vendor interoperability solutions to customers. More data on tha alliance can be found at the Interop Vendor Alliance at the http://www.interopvendoralliance.org website.Jon C. OggNovember 14, 2006

Posted on: November 14, 2006 – 3:18 pm in Uncategorized

Microsoft One Step Further on Interoperability

Please be advised that we wanted to update this story at NOON EST. We have not been able to find any confirmation of any browser updates from Microsoft for the Mozilla Firefox browser and there are discrepancies on links so we have removed it.Microsoft has formed an Interoperability alliance and data can be found at the http://www.interopvendoralliance.org/ website.Jon C. OggNovember 14, 2006

Posted on: November 14, 2006 – 12:41 pm in Uncategorized

Wal-Mart Reacting Better Than Target on Retailer Earnings

This morning we got to see competing earnings reports from retail giants Wal-mart (WMT) and Target (TGT). In short, WMT is trying to hang on, and TGT is still growing. The same-store-sales (s-s-s) are also forecast to be up.Wal-Marts EPS was 11% higher than Q3 2005 at $2.6 Billion, or $0.63 per share ($0.62 after tax ruling). Revenues were $84.5 Billion. Analysts were expecting $0.59 and $84.5B. The company also guided next quarter EPS $0.88 to $0.92 and Fiscal EPS $.85 to $2.89e. The retail behemoth also put Q4 s-s-s at +1% to +2%, which is only a week after it forecast flat s-s-s in November.Target (TGT) posted earnings a 14% rise to $506 million and $0.59 EPS on revenues of $13.57 Billion. Analysts were looking for $0.55 and $13.58B. Target also maintained estimates November s-s-s +4% to +7%.TGT shares are up 2.5% at $59.25 in pre-market activity; 52-week trading range is $44.70 to $60.34.WMT shares are now up 3.5% at $47.95 in pre-market activity; 52-week trading range $42.31 to $52.15.While Target (TGT) looked better overall and on the surface, Wal-Mart (WMT) was actually better as far as the bar having been lower and its relation to its 52-week highs. That is why WMT is up mor ethan TGT in pre-market activity.Jon C. OggNovember 14, 2006

Posted on: November 14, 2006 – 12:05 pm in Uncategorized

Pre-Market Stock News (Nov. 14, 2006)

(A) Agilent $0.46 EPS vs $0.49e.(ABT) Abbott Labs received FDA approval for expanded indications of Humira.(AEOS) American Eagle Outfitters $0.66 EPS vs $0.65e.(AH) Armor Holdings wins $32 million contract with Philadelphia.(ALXN) Alexio gets FDA priority review status for Soliris.(BJ) BJ’s Wholesale $0.32 EPS vs $0.26e.(BKD) Brookdale Senior Living -$0.34 EPS vs -$0.29e.(BOBE) Bob Evans Farms $0.36 EPS vs $0.39e.(CMED) China MedTech $0.33 EPS vs $0.28e; filed to sell $100M in convertible notes.(DHI) DR Horton $0.88 EPS vs $0.70e; unsure if comparable b/c has items.(DHT) Double Hull Tankers $0.28 EPS vs $0.26e.(DKS) Dick’s Sporting Goods $0.14 EPS vs $0.06e; buying Golf Galaxy.(EGLE) Eagle Bulk Shipping has a 2.5M share secondary.(ESLT) Elbit $0.45 EPS vs $0.42e.(EXFO) EXFO Electro started as Overweight at CIBC.(GGXY) Golf Galaxy is being acquired by Dick’s Sporting Goods.(GI) Giant Foods $3.00 EPS vs $2.65e.](GOOG) Google already closed the YouTube acquisition; total allocation was 3.217 million shares and option/warrants for 442,000+ shares.(HD) Home Depot $0.73 EPS vs $0.75; s-s-s -5.1%; sees FY EPS under target; stock trading down 3%.(HERO) Hercules has a 7.5M share secondary.(HGSI) Human Genome Science announced positive LymphoStat-B in Phase II studies.(IBAS) iBasis R$133.5M vs $132.5M(e); sees annual $510-520M vs $512M(e).(JNJ) J&J filed for up to $10 Billion in debt sales.(LORL) Loral Space filed for $500 million in securities mixed sales.(LWSN) Lawson approved $100M for stock buybacks.(MSFT) Microsoft’s Zune hits shelves today to compete with iPod.(MOVI) Movie Gallery R$583M vs $555M(e).(MXRE) Max Re Capital $0.42 EPS vs $0.32e.(NTPA) Netopia being acquired by Motorola for $7.00 per share.(NTY) NBTY $0.54 EPS vs $0.42e; unssure if comparable.(QTWW) Quantum Fuel registered 10+ million shares for potential sale by holders.(REGN) Regeneron filed to sell 7+ million shares.(REVU) Princeton Review posted a loss instead of a gain.(ROC) Rockwood Holdings $0.29 EPS vs $0.33e.(SNH) Senior Housing filed to sell 5M shares of stock.(SKS) Saks $0.05 EPS vs $0.03e.(SPLS) Staples $0.36 EPS vs $0.36e, guiding toward higher end of range.(TBL) Timberland may be selling itself according to WSJ.(TGT) Target $0.59 EPS vs $0.55e; trading up 2% after maintaining 4-7% s-s-s gains.(TOA) Technical Olympic reported a loss after items.(VOD) Vodafone posts loss for first half on charges in Germany.(WCRX) Warner Chilcott announced it is licensing rights to Schering AG.(WMT) Wal-Mart $0.62 EPS vs $0.60e; said Q4 s-s-s will be +1 to +2%; stock up almost 2%.

Posted on: November 14, 2006 – 11:38 am in Uncategorized

Select Analyst calls (Nov. 14, 2006)

ATHR cut to Buy at First Albany.BBT started as Buy at UBS.BEAS reitr Buy at Citigroup.BNG cut to Neutral at Merrill Lynch.BPFH started as Neutral at Merrill Lynch.BT cut to Peer Perform at Bear Stearns.CVNS cut to Hold at Stifel.DKS reitr Buy at B of A.FFIV started as Buy at B of A.HALL started as Outperform at KBW.HYGS downgraded at ThinkEquity.LNG started as Overweight at Lehman.LQDT cut to Sector Perform at RBC.LUV reitr Buy at Citigroup.LVS cut to Hold at Stifel.MRVL reitr Buy at Jefferies.NICE started as Buy at B of A.OCNW started as Outperform at Thomas Weisel.OPWV started as Hold at Soleil.S cut to Hold at AGEdwards.TLP cut to Mkt Perform at Wachovia.TSS started as Buy at UBS.TSRA cut to Neutral at First Albany.WIND reitr Buy at ThinkEquity.WYNN cut to Hold at Stifel.XRM cut to Neutral at RWBaird.

Posted on: November 14, 2006 – 11:25 am in Uncategorized

Yahoo!’s Semel, Still Crazy After All These Years

Stocks: (TWX)(YHOO)(GOOG)(NWS)(MSFT)Yahoo! CEO Terry Semel says that internet advertising growth is underestimated. Video, social network, and mobile applications will grow faster than traditional banners and text ads.Semel is probably right. His problem is that he is weak in these areas, especially video and social networking where News Corp’s MySpace and Google’s YouTube dominate.Semel has been unwilling to make a big purchase to get himself in the game, and Yahoo!’s video offering is back in the pack with MSN and AOL. They may do well, but the big share of the market is elsewhere.Semel’s comments are actually a negative for Yahoo!. They show that the company is poorly positioned to get a piece of the segments that he claims will grow the most.Maybe he will have better luck if he sells his company to Google. At least he could be part of the emerging online video ad market.Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com. He does not own securities in companies that he writes about.

Posted on: November 14, 2006 – 10:10 am in Uncategorized

Another Intel Trump Card (INTC)(AMD)(GOOG)

Intel has once again moved to take share back from rival AMD. In the process of releasing its new “four brains on a chip” Xeon processor, Intel is bringing out these next generation server chips several months before AMD releases its version.The constant upgrades by both Intel and AMD now come so fast that they present an odd problem for companies like Dell and Hewlett-Packard who sell billions of dollars worth of servers each year to businesses around the world. Buy the new server with the new chip, or wait until an even better one comes out.Of course, server upgrades are based in large part on when companies need a greater number of machines. Companies like Google are constantly expanding their “server farms” as they requires more computing power and storage for the zillions of web pages that need to be searched at served every day.Software also plays a role. Some software is designed to run better on multiple core chips, so many companie upgrade to take advantage of the software/processor connection.If both chip companies continue to release new and better products at the current, dizzying pace, it does open the question of whether the market will at some point say “enough”.Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com. He does not own securities in companies that he writes about.

Posted on: November 14, 2006 – 9:14 am in Uncategorized

The New York Time Company Struggles With Its Jewel

The New York Times Company (NYT) has more than its share of trouble. One of its largest shareholders want to change the voting rights of the company’s shares, probably to throw out the descendants of the founder, the Sulzbergers.The company’s results have been poor, and this has shaved the share price by almost half, from $40 in early 2005 to just under $25 now. The stock has actually come up a bit as other media companies like the Tribune are stripped of their best clothes and left for dead.A look at the NYT 10-Q shows that operating profit in the September period was $20.5 million, down from $39.4 million in the same period a year ago.It is hard to tell whether the company’s newspapers actually make money. The segment called the News Media Group, which is the papers and their online counterparts, had an operating profit of $25.5 million during the last quarter. Revenue for the group is divided into advertising, circulation and “other”. Other revenue for the unit was $58.2 million. “Other” is probably revenue from online operations. NYT has another small internet operation called About.com. During the September quarter, it had revenue of $18.3 million and operating profit of $6.4 million. If the “other” revenue in the news group is indeed online operation and runs at a similar margin to About.com, it would put out roughly $20 million in operating income. That is, almost all the operating profit of the newspaper group.Since the New York Times newspaper contributes most of the revenue for the News Media Group, its financial fate is critical to the company. It finds itself painted into a corner. Over the years, the daily has become a national paper.In doing so, it has given up about 30% of its circulation in the New York City area and has taken on more readers outside the nation’s largest city. To keep these national readers, the Times must maintain a large newsgathering operation in the US and abroad. It is an editorial organization that a barely profitable print operation cannot afford, especially one that is experiencing ongoing circulation losses.The New York Times is now the third largest paper in New York City as measured by circulation in the NY area. The New York Post and The New York Daily News are ahead of it.A retreat to local coverage to cut editorial costs, which is something that is already happening at big dailies in Philadelphia and Los Angeles, may not help the Times. It would put off too many of the newly minted subscribers outside NY.The Times can’t afford its current news budget, and it can’t afford to cut it.Stange business.Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com. He does not own securities in companies that he writes about.

Posted on: November 14, 2006 – 9:01 am in Uncategorized