Daily Archives: December 6, 2006

The Ten Most Undervalued Stocks: The Washington Post Company (WPO)

A lot of investors don’t like companies with two classes of shares. When a small group contols the board, shareholders sometimes believe that a takeover at a premium is off the table. Certainly stockholders at The New York Times Company have been screaming about this for some time.

The Washington Post Company has two classes of shareholders, but management has done a number of very smart things. The Post trades like a newspaper company. It shares go for 1.8 times sales, almost identical to newspaper chain giant Gannett.

But, The Washington Post is not a newspaper company. It just looks like one on the outside. Its stock has certainly traded like most newspaper stocks. The shares are down from close to $1,000 two years ago to the current price of $727.

Granted, The Post has a paper in the nation’s capital that has virtually no competition, and a profitable broadcast group.

The primary driver of WPO earnings is its online education business, Kaplan. Kaplan’s revenue has tripled since 2002

In the quarter endng October 1, online education revenue was $421 million out of a total of $947 million for the parent company. Operating income from the unit was $38 million compared to $109 million for the parent. The Post’s operating income is about 12% of revenue. At The New York Times Company, that figure is under 3%.

The Washington Post Company has not been a newspaper company for several years. But, the market may not have caught on.

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

Posted on: December 6, 2006 – 8:24 pm in Uncategorized

Cramer Calls Level 3 (LVLT) “The best under $10 stock he knows”

On Cramer’s MAD MONEY show on CNBC, Cramer also said you should buy Level 3 Communications (LVLT).  This isn’t his first pony ride on this stock.  He called it a Triple Buy.

No profits since 2003, just took down another $600M in debt with an option, it lost $138 M last report.  S&P rates its CCC-.  The company just spent more than $3 Billion in cash and stock on buying companies, AND it is losing its best customer.  So why is he positive he asks……..

He thinks it’s a Triple Buy.  Cramer said its is actually a thing of beauty because it is loved in the bond market, and it has accelerating revenue growth.  It is the #1 speculative growth stock for 2007 because it is the perfect call ofr a YouTube, MySpace, and every other hot web traffic.  He thinks they have the best data pipes out there. 

Please recall that Cramer has touted LVLT before (back in September) if you remember he called it the "way to play the YouTube growth after they signed YouTube as a badnwidth customer".

Here Cramer interviewed its CEO James Crowe……….. The CEO said investors should get all sides of the story. Demand is growing and they are in a good position.  On an EBITDA basis and cap-ex basis, they have over $1 Billion in cash and the street thinks they go cash flow positive in next 4 or 5 quarters.  The CEO thinks the demand will grow and they are well positioned.  The 3/4 part of their revenue on their own is growing 6-7% per quarter and all they need to do is continue to execute.

Cramer said this is the best "UNDER $10 STOCK" he knows.

LVLT ran almost 3% to $5.54 on the normal day, and Cramer’s tout tacked on an extra 4.8% to $5.81.  Its 52-week trading range is $2.71 to $6.09.  You can expect this to be one of the top volume stocks on NASDAQ tomorrow.

Jon C. Ogg
December 6, 2006

Posted on: December 6, 2006 – 6:26 pm in Cramer

Cramer Says Heelys IPO Rolls in the Dough

ON tonight’s MAD MONEY, Cramer said that it is important to know your IPO and this one could have you rolling in the dough.

Heelys (HLYS) hits tomorrow, and Cramer said this one may be huge.  This may be a fad, but it is a money maker.  This is pricing between $16 and $18 and that is too low and should get a big premium.  How strong is the fad, what will you pay and where do want to sell it?  Cramer said the accelerated revenue growth and these shoes are all over.  He thinks the roller shoe fits into the individual sports massive growth fad.

He said if it had a CROX, ZUMZ, or UARM that this was a much larger premium.  He thinks you can pay $21 to $23 tomorrow.  If you can buy in low $20’s then you have to sell if it goes to $30 because it is a fad.

By the way, when Cramer does a set-up AHEAD of an IPO it actually makes it very hard to trade for retail.  The people that can get the IPO at the pricing are happy, but this just adds in extra premium.

Jon C. Ogg
December 6, 2006

Posted on: December 6, 2006 – 6:09 pm in Cramer, IPOs

Home Depot (HD) taking $200M Charge Over Options

HOME DEPOT (HD-NYSE) is also in the stock options soup, so now it is even getting into DJIA components.  This is not "just" isolated to high growth tech companies and the practice is obviously finally coming out that there were wholesale effort to take options granting.  Shares of HD are down 1.7% at $39.35, but this may just be another chance to buy dips if you are a Bull.

HD just fessed up and said that excluding related tax consequences, of approximately $200 million in the aggregate.  This will result in an increase to paid-in capital of approximately $200 million and a decrease to retained earnings of the same amount.  If you care and want to read through this, you can link to it here.

If you were a stock broker in the 1990’s to early 2000’s you saw more trickery and guile with deceit that was used where companies were able to reward employees with stock options.  I was a broker overseas for a small part of the 1990’s, and it was always amazing when you would hear a foreign executive of a US company describe how his company issued out options.  It was even funnier hearing how each European country was trying to tax them.

Jon C. Ogg
December 6, 2006

Posted on: December 6, 2006 – 5:05 pm in Uncategorized

US Stock Market Wrap (DEC 6, 2006)

DJIA    12,309.25; Down 22.35 (0.18%)
NASDAQ    2,445.86; Down 6.52 (0.27%)
S&P500    1,412.90; Down 1.86 (0.13%)
10YR-Bond    4.481%     Up 0.039
NYSE Volume    2,638,164,000
NASD Volume    1,857,818,000

Shares of Ford (F) Fell another 4.1% to $7.36 after the company has one massive borrowing plan to the tune of $22 to $23 BILLION.  Convertible arb players drove the stock lower shorting to hedge their note purchases.  Maybe it is a "burrowing plan" instead. Cramer said this one can go to $6.50.

Apple (AAPL) fell 1.6% to $89.83 on WSJ reports of iPods breaking after hard use and the like, but this was a fairly hogwash report as this is already known and has to be expected.

(DOCC) Docucorp gets $10 buyout offer; shares rose to $9.76, up 30%.

(IDCC) Interdigital fell 7% to $30.50 on lowered guidance.

(NOVL) Novell fell 5% to $5.99; EPS beat target but revenues and revenue guidance were soft.

(PLAB) Photronics rose 2.5% to $16.18; earnings posted at $0.21 EPS vs $0.16e.

(PNRA) Panera said s-s-s DEC will be 1.4% instead of 4%; fell 3% to $56.94.

(TBL) Timberland up 3% to $32.73 after Cramer said VFC should acquire it.

(WRSP) WorldSpace selling 3M shares from founders; stock fell 2.6% to $4.79.

(YHOO) Yahoo! restructuring top management; Susan Decker dropping CFO role to move to head of Ad unit and they are canning the COO.  Semel is still CEO for now.  Stock down 2% to $26.86.

Hain Celestial (HAIN) fell 3.7% to $29.80 after its rating was cut to Neutral at UBS.

KBW, Inc. (KBW) rose 0.6% to $28.76 after posting a large y/o/y rise in EPS income, although there are no estimates on teh recent IPO.

Altera (ALTR) widened out its prior 2-5% sequential revenue drop to a new range of a 5-7% drop, but the stock was only down 0.4% to $20.21.  What does that tell you about the stock?

Novellus (NVLS) fell 4.78% to $32.88 after Goldman Sachs cut its rating to a Sell.

General Electric (GE) fell 0.4% too $35.11 but had been positive before end of day selling after Goldman Sachs put it on its Americas Conviction Buy List.

GO America (GOAM) rose 37% to $7.80 after it unveiled a new expansive web service for the Deaf……..I guess they won’t as "Can you hear me now!?"

Halozyme (HTI) shares soared 59% to $4.55 on major licensing pact with Roche.

Biovail (BVF) rose 9.5% to $20.72 after the CFO was leaving and will pay more to shareholders.

Rite-Aid (RAD) rose another 6% to $5.11 on hopes that Eddie lampert may be interested, plus cramer was out on the name.

Jon C. Ogg
December 6, 2006

Posted on: December 6, 2006 – 4:08 pm in Market Close

Cramer Many Many Picks on STOP TRADING

On today’s ‘STOP TRADING’ segment on CNBC, Jim Cramer keyed in a little earlier than normal.

Cramer said YUM BRANDS (YUM) is a cheap stock.  Cramer still thinks Taco Bell is a good chain and will win.  He also said Chipotle (CMG) is on fire.  He thinks Jack-in-the Box (JBX) will do well too (actually the best).

Halliburton (HAL) is still hated by the street but he thinks it will do great.  He said it’s out of whack with the group.

Ford (F) is getting an "F" grade, and he thinks you have to get out.  He thinks they need to declare bankruptcy.  He thinks it will go to $6.50 with convertible arb selling on bond offerings.

On Delphi (DPHIQ) he thinks the common stock may still not work out.

Jon C. Ogg
December 6, 2006

Posted on: December 6, 2006 – 2:39 pm in Cramer

The iPod: Microsoft Is Kidding Itself

Stocks:  (AAPL)(MSFT)

Microsoft will sell one million Zune players between now and June 2007. Apple says it sold 39 million iPods in the year ending September 30. Not apples-to-apples on the time table, but close enough for government work.

But, Microsoft still says it is not jus in the game, but will eventually pull ahead of Apple. Brian Lee of Microsoft said the company "expects to eventually ”be the leader” in the category, especially once Redmond, Wash.-based Microsoft rolls out more models of Zunes and starts selling them internationally."

And, pigs will fly.

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

Posted on: December 6, 2006 – 2:17 pm in Consumer Electronics

GE Prays For A Recession

Reuters has floated an interesting theory based on conversations with institutional investors. GE’s stock, which is down since Jack Welch left and flat this year, might go up if the economy goes south.

It is a fiendish, diabolical and perverse view of the markets. But, it may be true.

In an economy heading south, small companies suffer and investors row the life boats for safety. Goldman Sachs even supports the thinking: "In a moderating growth operating environment," Dray wrote, " … we believe investors will gravitate to GE’s late-cycle exposure, high-margin services mix, emerging markets strength and attractive earnings visibility/consistency."

Reuters admits that a spin-off of the entertainment division NBC Univeral might help. The unit has been a dog.

GE shareholders can hope that their shares will rise when the economy collapses and they are out of work and unable to sell their homes.

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

Posted on: December 6, 2006 – 1:40 pm in Large Cap Stocks

Volatility Gremlins

Volatility Gremlins

Readers have been emailing me about the returns of the models I have presented in the last few posts. Rather than respond to all of them individually, I thought I would just post the year by year returns for the S&P500, the 1-Year MO model, the 1-Month MO model, and a combo of the two models. Recall that no estimates have been subtracted for commissions, fees, or taxes.

(You may have to click on the Table to get it to open in a separate window for better viewing)…

You will notice the effect the higher volatility has on reducing average return to a lower CAGR than a lower volatility with the same return. Ed Easterling [2006] has a good discussion of these “volatility gremlins” in John Mauldin’s Book, “Just One Thing”.

Posted by Mebane Faber

http://worldbeta.blogspot.com/

Posted on: December 6, 2006 – 1:23 pm in Technical Analysis

Chip Mergers, Maybe. Deals, No.

By William Trent, CFA at Stock Market Beat

At first glance it may seem as though we spoke too soon last Thursday when we criticized talk of more semiconductor acquisitions. Just three days later a big one was announced:
Plenty of Deals in the Chips

Consolidation in the semiconductor industry continues apace, with a set of acquisitions in the wireless chip business and another related to storage chips.The biggest deal of the field took place Dec. 4, when LSI Logic (LSI) said it would acquire Agere Systems (AGR), the former semiconductor unit of Lucent Technologies (LU), for $4 billion in stock. The deal is LSI’s bid to boost its presence in the market for chips used in hard drives.

Our article said the reason the deals suggested wouldn’t happen was that the stocks were trading above the 8-10x EBITDA that buyers would likely be willing to pay. Yet the LSI/Agere deal paired two companies with EV/EBITDA ratios (at the time) of more than 14x (Agere) and 12x (LSI) respectively. So were we wrong?

Not exactly. It is one thing for a private equity firm to pay cold hard cash, as was done in the Freescale acquisition. It is quite another for one company to exchange its own overpriced stock for that of another company. You can see it from the action in the two stocks after the deal was announced. LSI, the acquirer, shed $1.44 per share or $575 million in enterprise value. Although Agere gained $1.51 it amounted to just $255 million in enterprise value due to Agere’s lower share count. Net result: the combined enterprise value of the two companies declined by $220 million despite assurances that the deal would create $125 million in annual cost savings beginning in 2008.

Furthermore, we would hazzard a guess that at least some LSI shareholders were hoping to be on the receiving end of a buyout. Instead, the premium paid has left them holding the bag.

Something to think about if you bought a semiconductor stock in hopes it will be acquired.

The author may hold a position in the securities discussed. The author’s current holdings are as follows: Long: FedEx (FDX) put options; Intuit (INTU) put options; Nasdaq 100 (QQQQ) put options; Bookham (BKHM; Ballard Power (BLDP); Syntax Brillian (BRLC); CMGI (CMGI); Genentech (DNA); Ion Media Networks (ION); Lion’s Gate (LGF); Three Five Systems (TFS); Adobe Systems (ADBE) call options; IShares Japan (EWJ); StreetTracks Gold (GLD); Starbucks (SBUX); U.S. Oil Fund (USO); Plantronics (PLT) call options; Short: Ceradyne (CRDN) put options; Lion’s Gate (LGF) call options; Dell (DELL) put options; Plantronics (PLT) put options

http://stockmarketbeat.com/blog1/

Posted on: December 6, 2006 – 1:20 pm in Semiconductor

Yet Another Blow for Airbus

By William Trent, CFA of Stock Market Beat

A month ago, we said the decision by FedEx (FDX) to cancel its orders for the Airbus A380 jumbo jet meant you could stick a fork in it, it was done. That is not to say that it will never be made, just that it is far less likely to earn its manufacturer a reasonable return on the capital invested.
Now, according to BusinessWeek, that seems even more likely. Boeing Scores a Jumbo Coup:

The Lufthansa board is planning to meet Wednesday and approve the purchase of the 20 Boeing jumbo jets, which are valued at $5 billion at list prices, say people familiar with the negotiations. It would make Lufthansa the launch customer for Boeing’s redesigned and upgraded passenger version of the 747-8, now known as the “Intercontinental.” (see BusinessWeek.com, 11/15/05, “Boeing’s Reborn 747″). Boeing officials declined to comment. Lufthansa officials couldn’t be reached.The sale would be a huge coup for Chicago-based Boeing. It would indicate to airlines that there is a credible competitor to the Airbus A380 super-jumbo, thus diluting the profits Airbus had hoped to make on its big jetliner. Since the launch of the A380, Boeing had offered many passenger variations, but no airlines were willing to buy an aircraft that was first built in 1968. Sales of the 747-400 passenger version had virtually dried up, and industry observers were writing its obituary.

“This is as good as it’s going to get,” says Teal Co. aerospace analyst Richard Aboulafia. “Boeing was able to get a European based, dedicated Airbus customer to be the first to endorse its new 747 passenger version. It’s a blow to the Airbus A380.”

We’ve made no secret of our belief that the future of passenger air travel lies in smaller jets flying to smaller cities. The hub and spoke model is outmoded, and large passenger jets are really only well suited for a few major city-pairs. Meanwhile, the freight market that would have helped to defray the costs (because air freight carriers really do need bigger aircraft) seems to remain tightly locked up:

What’s more, chances look even better for Boeing to dominate—if not monopolize—the air-freight market, since there are questions about whether Airbus will even build its freighter version of the A380. Boeing already controls about 90% of the world’s air-freight capacity. Airbus hoped to change that with its A380 freighter. But the program suffered a near-fatal blow recently when Federal Express canceled its order for 10 A380 freighters. Instead, it bought 15 Boeing 777 freighters. “It was huge for us,” said Jim Edgar, Boeing’s director of cargo marketing. “Federal Express is the largest air-cargo carrier in the world. They’re a trend setter, and everybody watches their decision.”

It is truly amazing how quickly Boeing has been able to regain the luster lost after Airbus appeared to win the jumbo jet battle.

The author may hold a position in the securities discussed. The author’s current holdings are as follows: Long: FedEx (FDX) put options; Intuit (INTU) put options; Nasdaq 100 (QQQQ) put options; Bookham (BKHM; Ballard Power (BLDP); Syntax Brillian (BRLC); CMGI (CMGI); Genentech (DNA); Ion Media Networks (ION); Lion’s Gate (LGF); Three Five Systems (TFS); Adobe Systems (ADBE) call options; IShares Japan (EWJ); StreetTracks Gold (GLD); Starbucks (SBUX); U.S. Oil Fund (USO); Plantronics (PLT) call options; Short: Ceradyne (CRDN) put options; Lion’s Gate (LGF) call options; Dell (DELL) put options; Plantronics (PLT) put options;

http://stockmarketbeat.com/blog1/

Posted on: December 6, 2006 – 1:17 pm in Transports

MSFT Can’t Help Novell (MSFT)(NOVL)

The big Microsoft deal to cooperate in marketing of Novell’s Suse Linux open source operating system along side Windows was not enough to save Novell shareholders. Weak guidance got them in the end.

Novell said that its revenue next year could be as low as $950 million. Wall St. wanted a round $1 billion.

Odd that Novell should view its future through such a dim lense. The company’s cooperation with Microsoft should fuel some growth. The deal has hit some bumps with the Linux community, but it should avoid a direct hit.

With its stock below $6, Novell shareholders are not better off than they were before MSFT.

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

Posted on: December 6, 2006 – 1:08 pm in Software

Let’s Hope They Told Pfizer (PFE)

Comscore has released data that say that 33 million people researched presciption medications on the internet in Q3. That is up 18% from the same quarter last year.

More important for Big Pharma, 31% of people found the web information by way of an online marketing campaign. Twenty percent got to the information using a search engine.

The top treatment categories researched were bipolar illness, depression, cholesterol, insomnia and acid reflux. In other words, right in the Big Pharma’s big revenue drugs sweet spot.

Put "biploar" into Google. No drug marketing on the first results page. The search for ‘insomnia" brings up a couple of drugs.

Did someone tell Pfizer?

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

Posted on: December 6, 2006 – 12:56 pm in Pharmaceuticals

Let’s Hope They Told Pfizer (PFE)

Comscore has released data that say that 33 million people researched presciption medications on the internet in Q3. That is up 18% from the same quarter last year.

More important for Big Pharma, 31% of people found the web information by way of an online marketing campaign. Twenty percent got to the information using a search engine.

The top treatment categories researched were bipolar illness, depression, cholesterol, insomnia and acid reflux. In other words, right in the Big Pharma’s big revenue drugs sweet spot.

Put "biploar" into Google. No drug marketing on the first results page. The search for ‘insomnia" brings up a couple of drugs.

Did someone tell Pfizer?

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

Posted on: December 6, 2006 – 12:56 pm in Pharmaceuticals

Cramer Sticks With Tech

Cramer calls it "Tech Alive" and you can watch his clip at their site.

Cramer noted something interesting today, and it is dead right.  At least I think so.  He said something to the tune of "Altera lowered and the stock is up, what does that indicate….."  I was personally very surprised today when I was going back over updates and saw that ALTR shares were UP after the company widened out its prior 2-5% sequential revenue drop to a new range of a 5-7% drop.

This also makes me look at the Goldman Sachs downgrade of Novellus (NVLS) this morning.  NVLS is down 4% on the day becase Goldman took its already-weak rating of a Neutral and took it even lower crummy SELL rating.  I am not saying his call is crummy, but companies sure think it is crummy when they come to work to see that Goldman Sachs issued a SELL rating on them.  Analysts also hate issuing a SELL rating because they are pointing out a real negative as the entire focus.  This downgrade was actually after the stock was at a 52-week high, so it isn’t as though the world is coming to and end there.  The downgrade is attributed due to weakening fundamentals and extended valuation, as well as early-stage weakness in NAND and a thought that M&A speculation surrounding it is not credible.  My opinion is that there isn’t anything new here and if there is still another 5% to 15% room left in upside for select chip leaders, then you probably only have tertiary weakness and other "valuation downgrades" from other brokers.  NVLS already made its mid-quarter comments, so using the same ALTR theory may be the way here.

OK, well I deviated from Cramer so let me get back to him and his cerebral matter.  Cramer said Oracle (ORCL) shouldn’t be down as much as it is and there is very limited downside risk in tech stocks.  He notes you could see investors buying these just because of a perceived "limited downside" even if they don’t think the names are going to instantly rise.

Cramer keyed in on Housing by saying the housing rally is finally spreading to Ingersoll Rand (IR) and Cat (CAT) etc as they haven’t been able to advance, but they are now because builders are seeing 6% mortgage rates again and they can return to stronger regional areas like Texas for new contruction.

Lastly, Cramer thinks all of the brokerage firm stocks (He didn’t name them but brokers like GS, MER, BSC, MS, etc.) estimates from the analysts that cover other brokerage stocks on Wall Street are just too low and you gotta buy the stocks before they go in and start raising estimates across the board.

Jon C. Ogg
December 6, 2006

Posted on: December 6, 2006 – 12:43 pm in Cramer

Cramer Sticks With Tech

Cramer calls it "Tech Alive" and you can watch his clip at their site.

Cramer noted something interesting today, and it is dead right.  At least I think so.  He said something to the tune of "Altera lowered and the stock is up, what does that indicate….."  I was personally very surprised today when I was going back over updates and saw that ALTR shares were UP after the company widened out its prior 2-5% sequential revenue drop to a new range of a 5-7% drop.

This also makes me look at the Goldman Sachs downgrade of Novellus (NVLS) this morning.  NVLS is down 4% on the day becase Goldman took its already-weak rating of a Neutral and took it even lower crummy SELL rating.  I am not saying his call is crummy, but companies sure think it is crummy when they come to work to see that Goldman Sachs issued a SELL rating on them.  Analysts also hate issuing a SELL rating because they are pointing out a real negative as the entire focus.  This downgrade was actually after the stock was at a 52-week high, so it isn’t as though the world is coming to and end there.  The downgrade is attributed due to weakening fundamentals and extended valuation, as well as early-stage weakness in NAND and a thought that M&A speculation surrounding it is not credible.  My opinion is that there isn’t anything new here and if there is still another 5% to 15% room left in upside for select chip leaders, then you probably only have tertiary weakness and other "valuation downgrades" from other brokers.  NVLS already made its mid-quarter comments, so using the same ALTR theory may be the way here.

OK, well I deviated from Cramer so let me get back to him and his cerebral matter.  Cramer said Oracle (ORCL) shouldn’t be down as much as it is and there is very limited downside risk in tech stocks.  He notes you could see investors buying these just because of a perceived "limited downside" even if they don’t think the names are going to instantly rise.

Cramer keyed in on Housing by saying the housing rally is finally spreading to Ingersoll Rand (IR) and Cat (CAT) etc as they haven’t been able to advance, but they are now because builders are seeing 6% mortgage rates again and they can return to stronger regional areas like Texas for new contruction.

Lastly, Cramer thinks all of the brokerage firm stocks (He didn’t name them but brokers like GS, MER, BSC, MS, etc.) estimates from the analysts that cover other brokerage stocks on Wall Street are just too low and you gotta buy the stocks before they go in and start raising estimates across the board.

Jon C. Ogg
December 6, 2006

Posted on: December 6, 2006 – 12:39 pm in Cramer

Watching The IPO Horizon Into Year-End

Get ready for the underwriting floodgates to open next week.  There are many deals that have been in the IPO hopper for weeks or months, and next week is the last week that the IPO markets will be highly receptive to underwriters.  After next week we’ll hit the Christmas, Hanukah, and New Years lull and the IPO markets (and probably the secondary markets) will begin to phase out until after the first of the year.

Some selected deals scheduled for potential pricing next week are as follows:  Affymax (AFFY), Altra Holdings (AIMC), Artest Medical (ARTE), Double-take Software (DBTK), Cal-Dive International (DVR), Claymont Steel, Guidance Software (GUID), Newstar Financial (NEWS), and US BioEnergy (USBE). 

Those are just a part of the full list, and it is likely that some will not make it out of the IPO gate before the year-end.  What is very likely is a large number of IPO’s to the tune of 5 IPO’s in a single day on either Wednesday or Thursday of next week.  But after that the underwriters will be "going dark" until January, at least that has always been the case in at least the last decade.  There may be a couple of deals that get priced after next week, but that’s about it.

Jon C. Ogg
December 6, 2006

Posted on: December 6, 2006 – 12:04 pm in IPOs

Merck Putting Vioxx Behind It (MRK)(PFE)

Vioxx lawsuit could drag on for years, even a decade. But, Merck is looking ahead. It confirmed 2006 guidance and said that 2007 would be in the range Wall St. hopes for.

The company is sending a signal that it will not be run to ground by generics. All of the major drug companies face this issue as their big sellers go "off patent". But, Merck insists that its experimental drugs will get it back to double digit growth by 2010. The company has to hope that it does not run into the kind of problem Pfizer did when fatalities in the test of it new cholesterol drug force the company to pull it.

If the 2007 to 2010 period is not as good as Merck is forecasting, it may be a sign that even the largest of the Big Pharma firms cannot develop new products fast enough to replace old blockbusters.

Tough call.

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

Posted on: December 6, 2006 – 8:45 am in Pharmaceuticals

Yahoo! 2007: Bad Year, New Players

IStocks:  (YHOO)(GOOG)(MSFT)(TWX)

nternet expert Rafat Ali says that 2007 will be a very bad year for Yahoo! His appraisal is that the company has lost its way and may have to acquire companie to continue growing. At the very best, Yahoo! is in for another mediocre year. Of course, the company just sacked much of its top management, but it is hard to see how that will help it.

To listen to the head of ad sales at Yahoo!, Wendy Millard, the new Panama search-based advertising platform is going to fix all of that. It will put Yahoo! back in the game. Google will no longer have a techology lead in advertising targetting. Her position is that Yahoo! is not AOL or MSN. It is bigger and better, good enough, in fact, to compete for TV dollars in the big advertising sandbox.

Perhaps someone would let Yahoo!’s investors know about the big turnaround. Maybe they have missed it.

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

Posted on: December 6, 2006 – 8:30 am in Internet

Pre-Market Stock News (DEC 6, 2006)

(AGIL) Agile Software indicated up 2% after narrower losses, although revenue and actual earnings may have been slightly under estimates.
(ALTR) Altera guidance now shows 5-7% lower instead of 2-5% lower.
(ARQL) Arqule started Phase I trialenrollments for AQR171.
(BSX) Boston Scientific up1% after Cramer said FDA should keep stents on the market tomorrow.
(BVF) Biovail CFO leaving to join another firm.
(CHIC) Charlotte Russe CFO is leaving the company.
(CPRT) CoPart $0.32 EPS vs $0.31e.
(DEIX) Directed Electronics lowered guidance.
(DIVX) DivX is trying to become the video download standard according to IBS article.
(DOCC) Docucorp gets $10 buyout offer.
(EDS) EDS noted as trying to turn itself around in WSJ.
(ELX) Emulex started a $150 million share buyback plan.
(GOOG) Google CHECKOUT feature is dropping fees.
(IDCC) Interdigital down 10% on lowered guidance.
(IDEV) Indevus trading up 5% after it and Sanofi will license out Novexel to new company.
(KBW) KBW earnings rose y-o-y and shares rose 5% after report.
(MEDI) Medimmune reaffirmed 2006 targets but gave EPS guidance out through 2009.
(MDU) MDU reaffirmed 2006 targets but 2007 looks light.
(MET) Metlife puts 2006 EPS at $4.95 to $5.05 vs $5.04e.
(MRK) Merck put 2006 at $2.48-2.52 vs $2.52e; sees 2007 at $2.51-2.59 vs $2.55-2.56 est.
(NOVL) Novell fell about 10% after earnings beat target but revenues and revenue guidance were soft.
(NSTK) Nastech showed positive Phase I inhaled insulin trial results.
(OPTM) Optium trading up almost 10% after beating earnings estimates.
(PII) Polaris boosts share buyback plan.
(PLAB) Photronics $0.21 EPS vs $0.16e.
(PNRA) Panera said s–s-s doe DEC will be 1.4% instead of 4%.
(POWL) Powell $0.25 EPS vs $0.16e.
(RBAK) Redback won second phase of Guangdong Telecom contract in China.
(SEPR) Sepracor showed nedt day effects of Lunesta in driving for insomnia patients showed same results as placebo.
(TBL) Timberland up 3% after Cramer said VFC should acquire it.
(TWTR) Tweeter -$0.66 EPS vs -$0.55e.
(VNO) Voronado has secondary.
(WIND) Wind River down 10% after posting light revenues.
(WRSP) WorldSpace selling 3M shares from founders.
(YHOO) Yahoo! restructuring top management; Susan Decker dropping CFO role to move to head of Ad unit and they are canning the COO.  Semel is still CEO for now.

Posted on: December 6, 2006 – 8:28 am in Pre-Market Activity