Daily Archives: November 28, 2006

Scottish Re: Damned Either Way You Vote

Submitted by CrossProfit on stocks Scottish Re (SCT)

An AP article appearing yesterday (

11/27/06

) states as follows;

Under terms of the agreement, MassMutual Capital, a member of the MassMutual Financial Group, and Cerberus will purchase a total of 1 million newly issued convertible preferred shares of Scottish Re. Those shares may be converted, at any time, into 150 million ordinary shares of the company, representing a 68.8 percent ownership in Scottish Re. …Analysts said Scottish Re’s preferred shares skyrocketed while common shares plummeted because the $600 million investment averages out to a $4 per share price for ordinary shares and gives Mass Mutual and Cerberus seniority over those shareholders, while existing preferred shareholders retain their position. …But the deal still needs approval of the holders of 66.7 percent of its outstanding ordinary shares who are entitled to vote at a special meeting.

As a shareholder (thank G-D I’m not), what am I supposed to do? If I vote yes then my shares are worth $4 each, perhaps with a 20% good faith premium brings it to $4.80. Not to mention of course that shareholders would now have only ONE THIRD of any potential future gain. If I vote no then my shares could be worth 0 in less then three months. Proceeds from a bankruptcy would go to the preferred shareholders. Why is management rushing into this deal? Have they exhausted all other credit facility options? If the answer is yes, then the common shareholder is in trouble indeed.

This is a good deal for MassMutual. After the ordinary shares drop to two bucks a piece, investors will be thrilled to accept a $3 buyout offer from MassMutual. In essence this is a fire-sale. Yesterday, someone was trying to accumulate shares, presumably to block the vote. Today the volume was a bit lower. In the past two sessions a total of 23M shares were traded. This is 46% of the float!!!

The question is – is ‘0’ worth it?

Disclosure: Observation only, not an analysis by CrossProfit. Disclosure of further details, regarding SCT agreement with MassMutual Capital and Cerberus, is crucial before posting a new evaluation line. As it stands now, this is a crapshoot.

http://www.crossprofit.com

Posted on: November 28, 2006 – 10:37 pm in Uncategorized

Cramer Says to Capitol One Should Be in Your Wallet

Stock Tickers: MA, COF

Cramer on MAD MONEY also reviewed the credit card sector. 

While he normally goes after MasterCard (MA) as the mechanism, he thinks Capitol One (ONE) is the one you go after as a tool. 

He thinks COF is now a winner as the #4 credit card issuer.  He thinks it is cheap and also well positioned as bank. Cramer also noted that it would be a winner in a weak dollar environment.

Jon C. Ogg
November 28, 2006

Posted on: November 28, 2006 – 7:38 pm in Cramer

Cramer: Allergan Makes Your MAD MONEY Wrinkle Free

Stock Ticker: AGN

On tonight’s MAD MONEY, Cramer said he thinks the market is still a buying opportunity, which he also keyed in on today.  You just have to consider that they could sell off a few days and the market may not just rubber band bounce.  He thinks Allergan (AGN) is a real winner as the cosmetic and beauty play. It has BOTOX and recently sold off from $122 to $117, which may be a gift. He said add 25% of a position at a time so you don’t just get it all at one price in case it still has a bit more room down.

Jon C. Ogg
November 28, 2006

Posted on: November 28, 2006 – 7:34 pm in Cramer

3Com Buys The Rest of Its Huawei Joint Venture Stake; Wall Street is Skeptical

Stock Tickers: COMS, CSCO

by Jon C. Ogg

Well, we knew that private equity firms were interested in the Huawei-3Com router venture known in the sector as "H3C."  We also knew that because of the way the deal was structured that either 3Com (COMS) or Huawei also had the right to buy its partner out starting in Q4 2006.

Today after the close 3Com (COMS) issued a press release saying it was the winner so to speak as it it is acquiring the 49% interest of the joint venture for some $882 million in cash.  The deal is subject to Chinese regulatory approval, but this should go through based on the international trade deals.  3Com initiated a bid on November 15, 2006; 3Com’s last bid was accepted by Huawei on November 27, 2006.  3Com had listed $915.6 million in cash and short-term investments and listed a total of $682 million in total liabilities on its August 31, 2006 balance sheet.

There are the formalities of the praise and thanks being passed between the companies, but this will likely be the end of the wonderful cooperation that has been 3Com’s ONLY saving grace in the coming months.  This was deemed as the one potential savior for 3Com after it has been ailing for most of the last decade.  The non-compete provision here is for a period of 18 months, so if 3Com can’t secure some major in-roads and some serious contract and partnership wins in that time then management will have to take their turn in the barrel again before they get buried by Wall Street.

The street is now going to be very critical of how it analyzes 3Com because this is truly a go-it-alone basis.  Since management has a history of giving away the jewels we now have a finite period of this 18 months after the deal closes.

We would like to wish 3Com a round of "good luck" here, but we also as anaylsts have to caution that the company now will be back 100% entirely on its own.  Some may think that is good that they own the venture that competes as the Cisco (CSCO) knock-off or geared down routers, but the company’s history leaves most wondering if they can be successful if left entirely on their own.  The company is still in the midst of closing offices and consolidating operations (polite term for lay-offs).

It looks like the after-hours traders may be thinking with the same caution as the shares were only up 2% to $4.58 initially, but now shares are down 0.9% at $4.45 in after-hours trading.  That is a general sign of disbelief in a model, particularly if the was supposed to be THE saving grace.  COMS stock is also still well under the $5.70 high over the last 52-weeks.  Unfortunately the just cannot be given the benefit of the doubt.

Here is how the investor letters are probably starting:

Dear 3Com,

You better make this work. Otherwise you will have squandered your last good thing.  You better be right on this.

Sincerely,
Your disgruntled investor base.

You can be certain that the analysts will be out with many calls after tonight’s conference call.

DISCLOSURE:  I know this sounds venomous or personal, but it is meant to be more of a guiding path and message to management there.  I do not own any shares of the company and literally have no dogs in the fight, but all I have to do is consider the history of the company and look at the COMS investor pain evident on the charts.  This company would be given an outright "F-" for a grade if it was a teacher or case study grade.  The company surely won’t like that comment, but they have literally no way of refuting it and would probably agree that they deserve and "F-" on their investor report card.

Posted on: November 28, 2006 – 5:06 pm in Analyst Calls, Internet, Large Cap Stocks, Mergers and Buy Outs, Rumors

Novell Developers Have Second Thoughts On Microsoft Deal

Stocks:  (NOVL)(MSFT)(RHAT)

Some of the key developers at Novell are going public with complaints about the company’s deal with Microsoft. The arrangement calls for co-marketing Windows with the Suse version of the Linux open source OS that Novell offers. Apparently, some of the covenants in the agreement do not give Linux developers enough protection from potential intellectual property claims from Microsoft.

The companies appear to be addressing the rift in their drafting of the final agreement.

But, the two companies may have trouble getting the ship back in the bottle. There is no guarantee that the entire deal is not in trouble.

Open source developers are already challenging the legal terms of the Novell/Microsoft deal. There is a concerns, among others, that the partnership will drive customers away from the more popular version of the Linux OS marketed by Redhat. Redhat has not signed a deal with Microsoft that would prevent it from facing patent litigation by the world’s largest software company.

In all of this, the stocks of Redhat and Novell will be interesting to watch. Redhat’s stock, which traded at $26 in late September was hammered down to $14 when the Microsoft deal with Novell was announced. It has recovered some, to $17. But, a collapse of the Novell arrangement might help it even more.

Novell, on the other hand, ran from under $6 to $6.80 when the deal was announced. It currently trades at about $6.20. Significant changes to the deal or a backing away by MSFT would not be good for Novell.

Not at all.

Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com. He does not own shares in companies that he writes about.

Posted on: November 28, 2006 – 4:28 pm in Large Cap Stocks

US Stock Market Wrap (NOV. 28, 2006)

DJIA    12,136.45; Up 14.74 (0.12%)
NASDAQ    2,412.61; Up 6.69 (0.28%)
S&P500    1,386.72; Up 4.82 (0.35%)
10YR-Bond    4.5090%; Down 0.029%
NYSE Volume    2,586,610,000
NASD Volume    1,936,522,000

Fed chairman Ben Bernanke gave a speech today and still said, "A failure of inflation to moderate as expected would be especially troublesome."  This was after Durable Goods posted a 1.6% drop on an ex-transportation basis.  Homebuilding saw its largest investment drop in 15 years because of high housing inventories.

Palm (PALM) fell almost 8% to $14.15 to make it the party-pooper in tech after issuing an earnings warning yesterday after the close.

Nokia (NOK/ADR) also fell 1% to $20.09 after lowering its margin and growth forecasts slightly for 2007.

Constellation Brands (STZ) also rose 1% to $27.77 after Cramer saaid it would be the winner from red wine sales as it has been able to pass on price hikes.

Harrah’s (HET) rose another 2.5% to $78.46 after CNBC’s David Faber reported a higher bid was being being investigated by Penn (PENN) and a Bain/Cerberus private equity group as a competing bid.

Penn National Gaming (PENN) fell 2.5% to $38.16 after concerns it would over leverage for Harrah’s.

Dollar General (DG) rose another 5% to $16.71 after more talk that LBO firms are looking at the cheap dollar store stock as it had gotten to as low as 7.5 times EBITDA.

Google (GOOG) recaptured  $4.75 of its $20.00 losses yesterday to close up at $489.50 after noting it was going to be making YouTube video available via Verizon (VZ) V-Cast.

Applebee’s (APPB) fell 0.2% to $22.52 after posting NOV s-s-s of -3.1%.

Boeing (BA) closed up 0.6% at $87.94 after it scored another $5 Billion order out of Germany, yet another blow to Airbus.

Stratos Lightwave (STLW) rose 4.8% too $7.34 after posting positive income instead of a loss on an EPS basis.

Cumulus Media (CMLS) fell almost 4% to $10.09 after Citigroup cut its rating to a Sell.

United natural Foods (UNFI) fell 3% to $34.89 after B of A trimmed its rating to Neutral.

Under Armour (UARM) fell 3.4% to $46.65 as Morgan Stanley warned about the name being part of an apparel bubble, but Jim Cramer said this was hogwash.

Cost plus (CPWM) fell 2.2% to $11.12 despite amnnouncing a $52 million property sale.

Jon C. Ogg
November 28, 2006

Posted on: November 28, 2006 – 4:12 pm in Market Close

Cramer on STOP TRADING (DG, UARM)

On today’s STOP TRADING segment on CNBC, Jim Cramer noted that Dollar General (DG) on a fundamental basis:  He said Banc of America noted it is good to Buy with a $20 target, but their call was when it was in the $14’s.  He said it can be bought on fundamentals but he wouldn’t buy it right there just on hopes of a buyout.  He said if there is no deal today then it will fall $0.50.

Cramer noted the selling squawl in the market may last 3 days, but there isn’t anything truly fundamentally wrong with the market.

He noted that Morgan Stanley saying there is a bubble in apparel is wrong.  He said he doesn’t believe Under Armour (UARM) is done and is tempted to say buy now.  He thinks the company still has great momentum.

Jon C. Ogg
November 28, 2006

Posted on: November 28, 2006 – 2:49 pm in Cramer

Evaluating Cramer’s Picks Versus November Short Interest Data

Stock Tickers: HAL, MO, NYX, GS, MA, SHLD, DE, BA, TWX, CMCSA, CSCO, AAPL, GOOG, RIMM, ORCL, PNRA, TRMP, COST

Now that the NASDAQ has its short interest out for November and we can see the short interest data for both NASDAQ and for NYSE shares, it seemed liked a good idea to run a comparison on Cramer’s overall Steady-Eddie picks he has been positive on for some time.  Many of you love to hate him and many of you love him, but the "Cramer Picks" universe did very well while the market was doing well.

Some of these may not have the exact dates lined up on his recommendations, and it is likely that many out there can create data that either refutes or supports this if they tweak the dates or do not take today’s equivalent dollars into consideration.  After all, you can manipulate dates or aspects to make facts support your thesis on just about anything.  The stocks selected here in the attachment are not selected in any particular order and if any names were left off it was either an oversight or because the picks weren’t discussed back in October or have already been omitted by November.

To avoid any data manipulation I kept a few constants:  The October closing date of OCT 13 is the short interest date on the exchanges, and that closing date is a split & dividend adjusted price in today’s dollars.  The November closing date of NOV 15 is the short interest date on the exchanges, and that closing date is a split & dividend adjusted price in today’s dollars.  The same applies to today’s prices, which are based on a snapshot of the market taken at 1:11PM EST today.

The markets did rise from Oct. 13 to Nov. 15, and the markets are all still higher as of this approximate time snapshot.  I didn’t show overall short interest for the exchanges.

From the Oct. short interest period to the Nov. period, only 2 of these 18 steady picks of Cramer’s are actually down.  If you take into consideration the price changes as of today, there are still only 4 of Cramer’s 18 picks down.  Obviously there are many more picks he has made, and there are probably a couple hundred if you take his Radio Show, the "Stop Trading" segment, and the "Lightning Round" all into consideration.  But these are most of the names he has been steadily bullish on for some time now.

Check out the table below to see the data (jpg file):

Download cramer_short_int_chart_nov_06.jpg

Jon C. Ogg
November 28, 2006

If for some reason you cannot read the chart or if it was improperly uploades I will be happy to send you an email snapshot UPON REQUEST of it in a JPG file or in Acrobat.  Both have been saved.

Posted on: November 28, 2006 – 1:54 pm in Cramer

A Chrysler Spin-Off?

Stocks:  (DCX)(F)(GM)

DaimlerChrysler shareholders are so upset with Chrysler’s performance in the US, that many want the unit spun-off. It shows what fools they are in the first place. Of course, Chrysler was a standalone public company for decades before the Germans showed up.

One thing investors think they would get if Chrysler is thrown overboard is a better bond rating. Probably true. The company’s German management could stop flying to Detroit to work on cutting costs and trying to cut down the automakers huge and bloated inventory.

Who would want Chrysler’s labor problems? No one. And its shrinking share of the US market? Another popular selling point.

The fact is that Chrysler probably could not exist withour Daimler. The parent’s balance sheet is the key to keeping Chrysler from becoming another Ford Motor Company.  Of course Ford has had to pledge almost everything it owns to get $18 billion in debt to keep the company moving through its restructuring.

Investors have short memories. Daimler has not traded this high since 2000. At $58, it is barely below its 52-week high.

Chrysler does not have the resources to stand on its own, and Daimler is not going to hand it $25 billion in cash to see it through a restructuring.

Maybe Carlos Ghosn can buy it and merge the company with Nissan and Renault.

Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com. He does not own securities in companies that he write about.

Posted on: November 28, 2006 – 1:16 pm in Uncategorized

What’s Hot On Your Phone , A Victory For Yahoo!

Stocks:  (YHOO)(GOOG)(TWX)

Anything can be measured. At least according to Comscore which has come out with a rating of how websites perform on mobile devices.

Intuition should tell us that e-mail and weather applications would be important to wireless users, and they are.

The most used applications on mobile devices is Yahoo! Mail. It has a 29% reach against all mobile users measured. Next comes the Weather Channel with reach at 22% followed by ESPN at 18%. Sports scores and all.

MSN Hotmail takes a share of over 15%. AOL Mail is at under 14%. Surprising. One would think AOL would be first among mail apps.

Good news for AOL. Its mapping application ,Mapquest, comes in at over 13%.

Search is the killer app on the internet. How about on the phone. Although Google kicks that daylights out of Yahoo ! search on PCs, not so in the mobile world. Google search has a 13% share and Yahoo! is over 11%.

Yahoo! Games has a reach over 9% among all mobile users. And, Yahoo! Weather is at 9%. Yahoo! Driving Directions is over 7%

Yahoo! is roundly criticized for having  too many channels on its internet site. Google is applauded for having one, simple business,

In mobile, Yahoo! appears to be well ahead, of Googe and everyone else.

This round goes to Yahoo!

Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com. He does not own securities in companies that he writes about.

Posted on: November 28, 2006 – 12:21 pm in Uncategorized

Just Who Is Axis Technologies Group (AXTG-OTC)?

Axtg_chart_2 Stock Ticker: AXTG

Investors are always looking for new stock names, with new hypes and new promises that they can gamble with.  Axis Technologies Group (AXTG-OTC) is one of these new names.  If you look at the chart herein you’ll see it has risen more than 300% from its lows in the short time it has been public and its trading volume has been through the roof for an unknown name. 

Until recently there was almost no data out on the company.  The company became an OTC-Pink Sheet listed company at the end of October and the company has been a press release factory ever since.

Axis Technologies, Inc., with headquarters in Lincoln, Nebraska, was founded nearly five years ago to develop a dimming/daylight harvesting fluorescent ballast as an energy-efficient and cost-effective fluorescent dimming ballast.  Its patented control system is installed in each individual ballast creating a dimming/daylight harvesting (DDH) system out of each individual fluorescent fixture that requires no external control system, and reduces labor costs of installing and adjusting dimming systems that are used with conventional systems.

Since listing, it has issued the following press releases (summary) in a non-stop fashion:

NOV 9: Selected for Marion Garrish Community Center in Derry, NH.

NOV 10: Signs New Manufacturers Representatives with NRG Sales, LLC

NOV 13: Kennebunk Schools (ME) Select Ballasts

NOV 13: Beacon Research Started Coverage at Outperform & $3.06 Target (was paid $6,000 by third party to be enrolled in research program)

NOV 13: Harrah’s Casinos to Install Axis Ballast Systems (2 parking garages in NJ)

NOV 14: Becomes Preferred Energy-Efficient Supplier (1 of 10) With San Diego Gas & Electric

NOV 14: University of Maryland Requires Contractors to Utilize Axis Products in $20 Million Project

NOV 15: Major Airports Evaluating Axis Ballasts: Dallas/Ft. Worth (DFW); Harlingen, TX (HRL); Sky Harbor in Phoenix (PHX), McCarren in Las Vegas (LAS) and George Bush in Houston (IAH)

NOV 16: Texas A&M Study Documents Significant Energy Savings at DFW Airport After Axis Product Installation

NOV 16: Axis Products to be Installed in Walgreens Locations (testing)

NOV 17: Axis Adds National Sales Manager for Original Equipment Manufacturers

NOV 17: National Park Service Achieves LEED Gold Status by Installing Axis Ballasts (in Omaha)

NOV 20: Axis Receives Endorsement from Lincoln Electric Co. After Case Study Shows 69% Energy Savings

NOV 20: Speedway Motors Utilizing Axis Dimming/Daylight Harvesting Ballasts (in Lincoln, NE)

NOV 21: The Principia Selects Axis Technologies, Inc. Ballasts (private K-12 campus in St. Louis)

NOV 21: Federal Energy Act Provides Tax Incentive for Energy-Efficient Lighting (meets the criteria for Federal Energy Policy Act 1331 of the Energy Policy Act of 2005 that went in to effect January 1, 2006)

NOV 22: Ballasts Now Being Installed in Zorinsky Federal Building in Omaha, NE

NOV 24: Department of Homeland Security Facility (in Omaha, NE) Achieves LEED Gold Status After Installing Axis Ballasts

NOV 27: Department of Homeland Security Facility Achieves LEED Gold Status After Installing Axis Ballasts (essentially same release as NOV 24)

NOV 27: Axis Technologies Group, Inc. Board of Directors Schedule Meeting to Discuss Forward Split ("due" to the current demand for AXTG shares, limited public float and the current price)

NOV 27: Estimates in Excess of $3 Million in Sales from Overwhelming Market Response

THIS MORNING: Axis Technologies Releases Three Year Revenue Projection as its business plan targets (Year-End):
December 31, 2007         $12,900,000
December 31, 2008         $25,800,000
December 31, 2009         $42,570,000

"Recent developments with large retailers as well as government contractors make us quite confident we will reach our sales goals as projected in our business plan" said Kip Hirschbach, CEO of Axis Technologies Group, Inc. (the quote from the release).

This may truly be a revolutionary energy and labor cost savings mechanism, and maybe it is just another energy saving company.  With OTC stocks like this you just never know.  It seems that while companies operate as a business that some companies also have a side business of being a public relations and press release factory, and that thought may emerge here if the thought hasn’t already taken hold.  Now the public has an idea of what the company is looking for out of itself.  Some of these companies go on and graduate off the OTC and Pink Sheet roster to become great companies, but most do not. 

I won’t try to be a party pooper here and make any predictions about the company after it has already risen some 300%+ from its lows, but investors have seen this many times before.  The company may work out great, and maybe it won’t.  We don’t have any dogs in the fight, but when we see highly unusual activity and unusual patterns from companies it is worth making note of.

You are welcome to look into the company further at the company main URL.  We won’t be digging much further into this and you’ll have to decide for yourself if the company is going to end up being a feast or just another famine from here.

Jon C. Ogg
November 28, 2006

Posted on: November 28, 2006 – 12:15 pm in Small Cap Stocks

Short Sellers Chase Yahoo! Down

Stocks:  (YHOO)(GOOG)(NWS)

You don’t have to be a genius to be short Yahoo!. But short interrest in the company grew 6.4 million shares to 84.3 million. And, the short position has been up six of the last eight months.

Even at $27, shorts are wiling to bet the stock will go lower. It traded at $43 in January, so that is quite a gamble. At least statistically

It hardly helps that one of Yahoo!’s managers came out with a manefesto suggesting that 20% of the companies employees should be fired and that the company had little focus. And, a poor Q3 made matters worse. The perception on Wall St. is that Google’s purchase of YouTube and News Corp’s acquistion of MySpace were smart moves. Even if the two companies have not figured out how to make money from their new jewels.

But, Merrill Lynch recently upgraded the stock. The theory is simple. With the stock down so much from its recent high, the bad news and anticipation of slower growth at Yahoo! are priced into the stock.

Which leaves an interesting riddle. If most of the downside is priced in, what if Yahoo! does something right? Surprises on earnings? Gets strong traffice for its new search marketing platform? Makes an acquisition that Wall St. likes.

Well, a lot of shorts could get burned.

Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com. He does not own securities in companies that he writes about.

Posted on: November 28, 2006 – 11:35 am in Uncategorized

Fifteen Most Overvalued Stocks: AT&T

Stocks:  (T)(BLS)(VZ)(INTC)(MOT)(INTC)(TWX)(CVC)(CMCSA)

Investors would have to go all the way back to 2002 to find a time when AT&T’s price was as high as it today. After peaking at $35 a few days ago, it now stands at $33. This past January, the stock was at $25. Cable companies and telecom stocks have had a good year, so the tide has lifted all boats, but perhaps not deservingly.

AT&T’ merger with BellSought has hit some bumps, but it would appear that it will go though. Whether the Democrats will want to exact a pound of flesh for merger approval has yet to be seen. If the merger works, there are likely to be very good savings on overlapping costs.

But, there is some trouble brewing. As Morningstar astutely points out, AT&T has a tremendous unfunded retirement obligation of $23 billion.

The bigger knock against the stock is VoIP. AT&T still relies heavily on the plain old phone call for most of its revenue. So does BellSouth. VoIP subscriptions are growing at a phenomenal rate at companies like Comcast, Cablevision, and Time Warner Cable. And, that will continue. Skype, a division of Ebay, and Vonage are also after the telephone company’s core business. VoIP is cheaper and has become very reliable.

AT&T largest future problem may be what it is not doing. Verizon has decided to bet much of its future on fiber-to-the-home. The theory is that without an arsenal of voice, TV, and broadband, the cable companies will eventually overwhelm the large regional telephone companies with a suite of services that cannot be duplicated. AT&T may be right to take a slower approach than Verizon is, but, if it is wrong, the consequences could be severe.

WiMax is another enemy for AT&T. Its Cingular cell phone operation is large and healthy. But, Sprint cannot survive as an independent company without a highly successful 4G product and it is throwing its support to WiMax to get these broadband-to-portable phone features in place quickly. It helps that Intel, Samsung, and Motorola are all big WiMax backers.

AT&T is doing well, but it has a lot of dogs biting at it heels. And, one or more may draw blood.

Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com. He does not own securities in companies that he writes about.

Posted on: November 28, 2006 – 11:02 am in Uncategorized

Fannie Mae: Raines’ Pay Settlement

The AAO Weblog is a weblog published by Jack Ciesielski (bio), dealing with accounting issues and news topics related to investment and finance.

A couple of years after Fannie Mae’s financial reporting breakdown appeared (they still haven’t filed 2004 or 2005 financials), at least one milestone is nearly complete: the separation pay package for then-CEO Franklin Raines. He’s settling for $2.6 million.

Still up in the air, from this 8-K:

“• whether Mr. Raines is entitled to additional unpaid base salary of up to approximately $139,000 for the period from December 2004 to June 2005;

I’m sure that Fannie Mae shareholders have an answer of their own as to whether or not Mr. Raines is entitled to any of the above rewards. (Not to be printed here.) The settlement serves as a reminder that the restatement is yet to be complete; it’s slipped off my radar and I’m sure I’m not the only one. It also makes you wonder if they’re coming to a close on at least the 2004 statements.

• whether Mr. Raines’ employment agreement entitles him to awards under our Annual Incentive Plan for 2004 and 2005;

• whether Mr. Raines is entitled to specified share amounts under our Performance Share Plan, or PSP, up to a possible maximum of 561,480 shares;

• whether Mr. Raines is entitled to any shares for any award cycle under the PSP commencing in 2005; and

• whether Mr. Raines’ employment agreement entitles him to any additional stock options.

Final resolution of these issues is expected to be deferred until after the results of our accounting restatement are announced.”

http://www.accountingobserver.com/blog/

Posted on: November 28, 2006 – 9:46 am in Uncategorized

Angiodynamics Offers $220M To Buy RITA Medical

From BioHealth Investor

Shares of RITA Medical Systems (RITA) jumped 3% on higher volume last Friday with no news. This prompted BioHealth Investor to issue a Watch Alert on RITA shares over the weekend.

Then early Tuesday AngioDynamics, Inc (ANGO) made an offer to buyout RITA for $220 million, including the assumption of $3 million of debt.

RITA, a medical device developer and marketer of ablation and other surgical instruments, should complement ANGO’s peripheral vascular device business very well.

http://www.biohealthinvestor.com/

Both companies have had tremendous sales growth over the last three years, but RITA has had problems reducing its yearly net loss. AngioDynamics has seen an increasing bottom line and cash flow on a yearly basis.

With $89 million in cash and only about $3 million in debt AngioDynamics should have no problem affording the price tag since this deal is a cash and stock offer. Company executives believe that the acquisition should be neutral by mid 2007, and to add about $0.05 to its bottom line by 2008.

This deal makes sense. RITA is rescued from its debt and lack of profit growth, and AngioDynamics grabs hold of exciting surgical ablation and other surgical devices. AngioDynamics also adds RITA’s 30 strong sales force to its 50 sales persons, thereby increasing its sales potential by 60%. Both companies’ products do not overlap each other as well.

RITA made BHI’s Watch List last Friday.

Posted on: November 28, 2006 – 9:45 am in Uncategorized

51job (JOBS) CEO Buys 633K Shares

From 13D Tracker

In an amended 13D filing on 51job Inc. (Nasdaq: JOBS) CEO Rick Yan disclosed he raised his stake in the company to 30.1% (17.1 million shares).

633,118 additional Common Shares, in the form of ADS, were purchased by Yan in a series of open market purchases from November 13, 2006 to November 22, 2006 using personal funds totaling $5,077,727.72.

51job provides integrated human resource services in China.

http://www.13dtracker.blogspot.com/

Posted on: November 28, 2006 – 9:42 am in Uncategorized

Second Analyst Cautions on Sirius (SIRI) Numbers

Stock Tickers: SIRI, XMSR

Yesterday Banc of America’s satellite analyst Jonathan Jacoby issued a cautionary statement on Sirius Satellite Radio (SIR) stating that there was a weakening of Sirius compared to 2005 holiday sales and that manufacturing issues would be important this year.  "Recent channel checks with our buying sources continue to indicate a much weaker sales environment than last year for satellite radio," Jacoby said in his firm’s research note where he maintained his Neutral rating. He also maintained his Buy rating on XM Satellite (XMSR).

If you will recall, just yesterday Cramer hogwashed this and said it was too soon to make that call even if it was true.  The problem with what Cramer told you yesterday is that this morning we were sent an alert that Pacific Crest has made some similar comments on Sirius (SIRI).  Pacific Crest also has said that the initial trends are looking better for XM Satellite (XMSR), which also mirrors the Banc of America comments. 

This is a boutique research call so it may not get much coverage today, but it is at least starting to ring of something that could be of substance commenting on the potential of a new subscriber add miss for the dominant holiday quarter.

It should be noted that Stifel Nicolaus put odds at 75% yesterday for a merger between XM & Sirius within 18 months.  If we get anything more solid out of the report or on other issues we’ll follow-up on it.  The stock is down 1/2% on this pre-market, but investors should recall that this is only a $0.02 move to the downside as investors aren’t rifling the shares of SIRI on "cautionary comments" if there is no outright downgrade. 

With such a large universe of analysts covering the name you will probably get quite a bit research either confirming this theory or just refuting it in the coming days.

Jon C. Ogg
November 28, 2006

Posted on: November 28, 2006 – 9:13 am in Analyst Calls

Pre-Market Stock News (Nov. 28, 2006)

(AMWD) American Woodmark $0.57 EPS vs $0.58e.
A(PPB) Applebees said NOV s-s-s were -3.1%.
(BA) Boeing won another multi-billion dollar order valued at $5.7 billion in Germany.
(BRL) Barr Pharma’s Pliva received final FDA approval for Pravastatin.
(CLS) Celestica names new CEO.
(CPWM) Cost Plus announced $52M property sale.
(CYTK) Cytokinetics amended GSK pact.
(DCI) Donaldson $0.43 EPS vs $0.43e.
(FEIC) FEI won an $11+ million order.
(GE) GE won a $500+ million D.O.D. contract.
(GOOG) Google’s YouTube is now going to be available on Verizon’s V-Cast.
(JTX) Jackson Hewitt -$0.46 EPS vs -$0.38e.
(NARA) Nara Bancorp names new CEO.
(NOC) Northrup Grumman won part of $9B Army logistics contract.
(NOK) Nokia said operating margines would be slightly lower.
(NRGN) Neurogen Corp acquired rights to Aplindore from Wyeth fpr Parkinsons.
(PALM) Palm lowered guidance; stock traded down 6%.
(PFE) Pfizer discontinued Asenapine studies for schizophrenia.
(RE) Everest Re named new CFO.
(STLW) Stratos Lightwave reported positive income.
(YHOO) Yahoo!’s president in China has reportedly stepped down.

Cramer said the ones to own if the dollar weakens are: Altria (MO), Procter & Gamble (PG), Du Pont (DD), and Halliburton (HAL). Constellation (STZ) noted as red wine winner by Cramer.

Posted on: November 28, 2006 – 8:26 am in Market Close

Select Analyst Calls (NOV. 28, 2006)

by Jon C. Ogg

AAPL tght raised to $108 at UBS.
ARP added to JPMorgan Focus List.
BIIB started as Mkt Perfor at Piper Jaffray.
BCE started as Outperform at CIBC.
CMLS & CXR cut to Sell at Citigroup.
DE started as Outperform at Credit Suisse.
DTE started as Hold at Citigroup.
GCA started as Buy at Merrill Lynch.
IP started as Outperform at Credit Suisse.
KWK raised to America Buy List at Goldman Sachs.
LMAT started as Outperform at CIBC.
LSCC started as Neutral at Goldman Sachs.
MGLN started as Neutral at Goldman Sachs.
NAHC cut to Hold at Citigroup.
NARA raised to Buy at Oppenheimer.
NEM raised to Overweight at HSBC.
NUVA raised to Outperform at Wachovia.
NYT cut to Sell at Citigroup.
PD cut to Neutral at UBS.
PPL started as BUy at Citigroup.
RG started as Outperform at CIBC.
RL started as Overweight at Morgan Stanley.
RTSX started as Neutral at Goldman Sachs.
SIRF raised to Equal Weight at Morgan Stanley.
TRP raised to Outperform at at Credit Suisse.
UNFI cut to Neutral at B of A.
UNS started as Hold at Citigroup.
VFC started as Overweight at Morgan Stanley.
WEC started as Buy at Citigroup.
WFR started as Buy at Jefferies.

Posted on: November 28, 2006 – 8:18 am in Analyst Calls

Cell Phone Nation: China’s Rural Market

Stocks:  (CHL)(TXN)(NOK)(ERIC)(MOT)

While 60% of the Chinese who live in a major city have cell phone service, this is only true for 12% of the Chinese in rural areas. China Mobile, the country’s big cell provider already has 287 million customers and estimates are that there are 600 million Chinese living outside its cities.

While the opportunity may be good for China Mobile, it may be the market that makes or breaks the news few years for companies like Motorola, Nokia, Ericsson, and Texas Instruments.

Estimates from Samsung and other large cell providers are for 2007 to be a slow growth year for cell unit sales, perhaps under 10% after several years of 20% plus growth. What will get it back on track. India has a great deal of promise, but the Chinese market is still the world’s largest.

Supporting China’s new 3G standard will not be an easy task. It requires building new chipsets.

But, the big mobile players are not at the top of their games, at least in the stock market. Nokia’s stock has recently fallen from $23 to $20  Motorola’s stock is down from $26 to $22. TI has dropped from over $36 to under $30.

While North America and Europe are still attractive markets, they offer no where near the potential of 600 million souls, many who will buy a cellphone over the next several years. This does not include the replacement market in China as current users upgrade

Texas Instruments is already launching lower cost chips for multimedia phones. The target?

China.

Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com. He does not own securities in companies that he writes about.

Posted on: November 28, 2006 – 6:41 am in Uncategorized