Daily Archives: December 14, 2006

Cramer’s e-Commerce Play

Cramer also wanted to look at ways to play Christmas, but it’s too late to play.  You want the behind the scenes stocks.  Out of of these he likes GSI Commerce (GSIC) as the e-commerce nuts and bolts.  He says not to buy it now.  GSIC can outsource the entire web store and design for you.  They serve many large companies.  Cramer said that GSIC is beating Amazon.com (AMZN), and he took another stab at AMZN as a violator of rules because it trades at more than 2 times its growth.  GSIC trades really cheap to to its growth numbers, and criminally undervalued according to Cramer.

Even though he said don’t buy in after hours, the stock still traded up 7% to $18.80, although the 52-week range is $10.67 to $19.00.

Jon C. Ogg
December 14, 2006

Posted on: December 14, 2006 – 6:24 pm in Cramer

Cramer Advises Why You Should Start Looking at J.Crew

On tonight’s MAD MONEY, Cramer continued his theme that the market is heading higher.  He said this was another bear lashing day.  Cramer said there is some enthusiasm that can be attacked. 

He wants to play it heartless, but he wants to discuss J.Crew (JCG) after it spiked from the $43 level.  It closed down under $40 today and now he wants to pull teh trigger and be a buyer for 1/4 to 1/2 of a position and it could trade lower as the lock-up coming on DEC 27 will expire.  He said if it sells off into the lock-up then you can buy the rest, and that is why you can wait.  This is a company that beat estimates in its first quarter and it should continue to outperform.  Cramer also likes Mickey Drexler, the one running it.  Cramer said it is priced aggressively, so you have to wait for pullbacks, but the estimates are too low from Wall Street analysts.

Jon C. Ogg
December 14, 2006

Posted on: December 14, 2006 – 6:10 pm in Cramer

Another Late DELL SEC Filing; Another Reason Why Rollins Should Go

Earlier today I had run an article about Kevin Rollins needing to leave Dell or he should GET LEFT by Dell.  Dell (DELL) tonight announced it was delaying another quarterly filing because of its ongoing SEC investigation.  Below is what was noted, but the fact that they just initially indicated this as a small asterisk before coming clean about the extent of it is just one more reason why Rollins must go.

HERE is a link to the article.

Rollins needs to go on one of those round-the-world cruises and he needs to just stay on the boat indefinitely.  Michael Dell needs to retake the helm, and afterall the company isn’t named ROLLINS INC. is it…..  Not only does this need to happen, but this needs to happen before they go to Davos in early 2007 so Michael Dell can re-establish the supreme leader position there.  Kevin Rollins just doesn’t have the trust of Wall Street and since he took over DELL managed to lose the position of the PC-Leader status.  The street knows Michael Dell and they respect him, so now it really boils down to if he wants to step back in.  He can sell his stock at $15.00 or at $35.00, and the net net result is that he’ll be a self-made billionaire and have more money than he could easily spend in a series of lifetimes.  So he might not want it.

The customer service issues have not gone away, even if they are said to be better.  Rollins may get saved since the stock has recovered roughly 40% from its extreme lows, but the street doesn’t trust him.  His sincerity of saying that things need to improve didn’t really hold much credence after the SEC investigation blunder.  The recent guidance beating the entire negative bias of the street may also act as a safety net for him, but it looks like the street would still rather have Henry Rollins (the singer) in charge instead of Kevin Rollins.  The stock would probably pop at least $1.00 if a headline hit during the market day starting "Michael Dell Takes Back the Helm."

Jon C. Ogg
December 14, 2006

Posted on: December 14, 2006 – 5:19 pm in SEC

Trucker Warning (YRCW) More Ominous Developments

The good old Yellow Roadway, now YRC Worldwide Inc. (YRCW), just guided earnings lower.  This isn’t a garden variety warning based on higher gas costs per mile affecting the trucker.  This is the Economic Slowdown sort of warning, yet one more indication of an economic soft landing.  When you start seeing the basic materials companies AND the companies responsible for shipping and transportation warning, then you have to think about what other related groups are going to warn and what is or is not priced in.

Here is the quote: "As widely reported by industry analysts, the economy has slowed significantly in the fourth quarter, resulting in lower volumes than we anticipated across all of our asset-based business units," stated Bill Zollars, Chairman, President and CEO of YRC Worldwide. "As a result of this economic slowdown, we are adjusting our earnings guidance."

YRCW put Q4 2006 EPS in the range of $0.95 to $1.05 and full year 2006 earnings to be $5.00 to $5.10 per share. The company’s previous guidance was $1.40 to $1.50 per share for the fourth quarter and $5.45 to $5.55 per share for the year.

Shares of competitors are lower in after-hours activity: JBHT down 1.9% at $20.90; SWFT down 0.7% at $28.10; LSTR -0.6% to $39.10; and HTLD -1.8% at $15.00.  Most of these stocks were all up on the day.  There hasn’t been much activity in the bigger air freight companies like Fedex (FDX) or UPS (UPS).  This entire transport group had an implied floor because of Private Equity & Management LBO’s in the group, but that may take a backseat as the deals have’t been closed because offers were too low.  YRCW has a 52-week trading range of $35.27 to $51.54.

Jon C. Ogg
December 14, 2006

Posted on: December 14, 2006 – 4:24 pm in Earnings

US Stock Market Wrap (DEC 14, 2006)

DJIA    12,416.76; Up 99.26 (0.81%)
Nasdaq    2,453.85; Up 21.44 (0.88%)
S&P500    1,425.49; Up 12.28 (0.87%)
10YR-Bond    4.595%; Up 0.018
NYSE Volume    2,624,512,000
NASD Volume    1,858,162,000

The market rallied additionally after the better than expected Empire State Manufacturing Index being released one day early down from 26.7 the month before to a December reading of 23.1.  Watch for CPI tomorrow.

The Oil Service HOLDRs (OIH) rose 1.4% to $150.21 after OPEC cut production by 500,000 barrels/day and after Nat Gas inventories were released.  Valero (VLO) rose 0.75% to $54.95 despite a downgrade to Hold from Deutsche Bank.

Gap Inc. (GPS) rose 3.6% to $20.28 after Womensweardaily.com reported that Eddie Lampert may be interested in acquiring the lagging company.

Ciena (CIEN) rose 11.5% to $27.83 after beating earnings and guiding up for another profitable quarter.

Medimmune (MEDI) fell 0.4% to $32.25 despite shareholders asking the company to seek a buyer.

Charles River (CRL) rose 5% to $44.01 after reaffirming its 2006 financial targets.

United Tech (UTX) fell 3% to $62.06 after its guidance failed to impress the street.

Time Warner (TWX) rose another 1.3% to $21.65 after Cramer said it had more upside than Comcast and after Faber said Icahn wasn’t selling yet.

Netflix (NFLX) fell 2% to $27.76 after Bank of America started the company with a Sell rating.

Forest labs (FRX) fell 0.4% to $51.11 after paying $480 million cash to acquire Cerexafor its antibiotics.

Ford (F) rose 3% to $7.11 after Merrill Lynch raised Ford to a Neutral from a Sell 

F5 Networks (FFIV) rose 3.5% to $76.94 after Cramer said this was a hot way to play bandwidth use growing in 2007.

CostCo (COST) rose 1.8% to $54.10 after posting EPS of $0.51 versus $0.50 estimates.

Southwest Air (LUV) fell 1% to $15.75 after offering $300M in notes.

Jon C. Ogg
December 14, 2006

Posted on: December 14, 2006 – 4:10 pm in Market Close

CEO’s Who Need to Leave: Wal-Mart’s Lee Scott

Wal-Mart’s (WMT) Lee Scott……

Shareholder groups are becoming more and more activist-minded and this trend will continue in 2007.  Private Equity and LBO Groups can only acquire so many companies, and there are only so many candidates that can run behemoths.  The best way to see change is right at the top in many cases and there is a slew of US public companies that would do far better if they could replace current management.  These aren’t in any ranked order, so the first isn’t the worst and the last isn’t the best of the worst.  The problem in stating this is that it is very easy to come in and criticize, yet finding replacements for companies this size is not exactly an easy feat.  Private Equity as a sector has taken all the talented guys, and they haven’t stopped with the age limits that many public companies live by.  There just aren’t too many Lou Gerstner and Jack Welch carbon copies out there.

Wal-Mart’s (WMT) Lee Scott needs to be shown the back door and he needs to go spend a year in meditation under the Dalai Lama.  He was even in more of the same position last year, but this is still the truth about him today.  He has actually tried to convey a funnier and more personable Lee Scott in 2006, but he is tainted and he just has the air of a guy that would not think for even a second about having a conscience over any corporate or personal decisions he made.  If anyone asked who in Corporate America most resembles Darth Vader, it would probably be Lee Scott.  He doesn’t come across as poorly in the media as he used to like an angry and defensive guy without any cares, but if Wal-Mart decided to bring in a "feel good" CEO it would go a long way toward putting some fun back in the company.  The company just needs a face-person that looks happy and conveys a better message. 

Wal-Mart is no longer where people like to go.  They go because prices are cheap, even if the goods are cheap.  The lowering of same-store-sales sure makes one wonder if there is a chance that it will go the same way as Great Atlantic & Pacific Tea where they just have too many stores to effectively run.  The stores are in disarray and the customers themselves are already being called "the Wal-Mart bunch" by people who shop elsewhere.  The stock has lost its mojo and has been dead money as a stock.  All of this can be fixed with a new fresh face that is a feel good front-person.  Even if it is for show only, the company would be liked by the public better with a fresher and nicer face.  This call has NOTHING to do with being the face of outsourcing or anything like that.  In a free market economy Industry will chase cheap labor, always has and always will.  They just need someone that Sam Walton would have liked, now there’s a thought.  Maybe one of those billionaire Walton kids or grandkids could do the job.  This certainly will be a hard position to fill if it becomes vacant, but they should at least be considering this for a new year’s resolution.

Jon C. Ogg
December 14, 2006

This is part of "THE 10 CEO’s THAT NEED TO GO" series coming out today and tomorrow.  Jon Ogg can be reached at jonogg@247wallst.com; he does not hold securities in the companies he covers.

Posted on: December 14, 2006 – 3:45 pm in Management Change

Can AMD Be Believed? (AMD)(INTC)

Not too long ago, AMD said that it would get 40% of the server market, taking a huge chunk of share from Intel Recent IDC and Gartner surveys don’t show that happending.

Now, AMD says it will grow at twice the industry average next year. That means it will have to beat Intel like a red-headed mule. AMD currently has 23% of the computer processor market.

The problem with AMD’s forecast, which sent its shares up almost 12% to $22.50, is that Intel is out with dual-core and quad-core chips which have been reviewed as being every bit as good as AMD’s, if not better. Also, AMD’s gross margins have been falling and could be as low as 50% next year. Onviously price competition is taking its toll.

If AMD is being overly optimistic, there will be hell to pay.

Perhaps the company should talk big once they are a little further into 2007. That way, it might disappoint fewer people.

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

Posted on: December 14, 2006 – 2:57 pm in Semiconductor

Cramer has a new Tech Pick on STOP TRADING

Cramer is calling today a major bear beat down on the STOP TRADING segment on CNBC.  Companies are breaking away from option strikes, and he thinks the bears need to watch out between now and tomorrow.  Cramer doesn’t buy into a huge bond market rally from here, but maybe they’ll be benign.

On F5 (FFIV) he adores it.  He thinks the traffic on the web is worth more than the 26-times next year earnings and it is cheaper than AKAM.  This is actually one he hasn’t noted in a long time.

I/O (IO)…Input/Output he likes and he still likes the entire driller sector.

Jon C. Ogg

Posted on: December 14, 2006 – 2:52 pm in Cramer

CEO’s Who Need to Leave: Paul Pressler of Gap Inc. (GPS)

Paul Pressler of Gap Inc. (GPS)

Shareholder groups are becoming more and more activist groups and this trend will continue in 2007.  Private Equity and LBO Groups can only acquire so many companies, and there are only so many candidates that can run behemoths.  The best way to see change is right at the top in many cases and there is a slew of US public companies that would do far better if they could replace current management.  These aren’t in any ranked order, so the first isn’t the worst and the last isn’t the best of the worst.  The problem in stating this is that it is very easy to come in and criticize, yet finding replacements for companies this size is not exactly an easy feat.  Private Equity as a sector has taken all the talented guys, and they haven’t stopped with the age limits that many public companies live by.  There just aren’t too many Lou Gerstner and Jack Welch carbon copies out there.

Paul Pressler has been given the benefit of the doubt for too long.  The new designers and the cheap looking image really needs a makeover.  The stock has recovered 25% after a lingering stench of a performance, but it is still down well more than 50% from the 1990’s and early 2000 high’s.  He stepped in when things were bad in 2003, yet here the company is still not in any great position and we are a few days shy of it being 2007.  This holiday season the company had good merchandise, but they drove away so much business almost permanently because the kids have the perma-thought that Gap clothes are lame.  It has essentially years of negative same-store-sales, and it isn’t getting better yet.  The company also needs to devise some mechanism of splitting itself up or selling off divisions.  He needs to go, and they really need to bust this pig up.  The only reason the company has recovered this much from its lows is because it is listed as a real potential target from private equity groups seeking a "value purchase."  Last time anyone checked, that isn’t exactly the street giving a ringing endorsement of a CEO.

Jon C. Ogg
December 14, 2006

This is part of "THE 10 CEO’s THAT NEED TO GO" series coming out today and tomorrow.  Jon Ogg can be reached at jonogg@247wallst.com; he does not hold securities in the companies he covers.

Posted on: December 14, 2006 – 2:28 pm in Management Change

Wall St. Say Apple Critics Lie (AAPL)

Forrester Research came out with a study two days ago that said Apple iTune sales were off as much as 65% in the first half of this year. Apple loyalists immediately branded the study a farce.

Now, brokerage Piper Jaffray and research firm ComScore have come out with a study of their own. Their conclusion is that iTune sales are up 84% for the first three quarters of this year compared to the same period in 2005.

Now, both studies can’t be right and Forrester and ComScore are both well-regarded research firms. But, the new ComScore data has some information that helps it case, information that Forrester did not have. Traffic to the iTunes website hit 20.8 million unique visitors in November, up 85% from the same month last year.

Take that Forrester.

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

Posted on: December 14, 2006 – 2:11 pm in Hardware

10 CEO’s Who Need to Leave: Antonio Perez of Eastman Kodak

Shareholder groups are becoming more and more activist groups and this trend will continue in 2007.  Private Equity and LBO Groups can only acquire so many companies, and there are only so many candidates that can run behemoths.  The best way to see change is right at the top in many cases and there is a slew of US public companies that would do far better if they could replace current management.  These aren’t in any ranked order, so the first isn’t the worst and the last isn’t the best of the worst.  The problem in stating this is that it is very easy to come in and criticize, yet finding replacements for companies this size is not exactly an easy feat.  Private Equity as a sector has taken all the talented guys, and they haven’t stopped with the age limits that many public companies live by.  There just aren’t too many Lou Gerstner and Jack Welch carbon copies out there.

Eastman Kodak’s (EK) Antonio Perez has been lightly credited with starting the turnaround that "Ain’t exactly turned….".  This Chairman/CEO is probably too entrenched and too dug in to get the boot here, but by the review of last quarter’s call he seems a bit too meek.  Eastman Kodak hasn’t really been able to recapture the massive losses out of traditional film to digital film and digital printing, and its competition from overseas is still coming.  That isn’t Mr. Perez’s fault per se, but a "new world media guy" may be what the company needs.  The secular exodus away from silver eating film has been ongoing and happened before he got there, but the  waves of layoffs haven’t been swift and sudden and the turnaround is still yet to be seen.  Even though the stock has recovered more than 25% off of 2006 lows it is still thought of as dead money.  The stock seems to have established a floor around $20.00 but shares arew down 66% from the highs back in the 1990’s and have been reliquished to the "value" and "dead money" stocks.  Its estimated EPS of $1.20 target for 2007 really seems to be pricing in a proper turnaround, yet that doesn’t even give it a forward P/E of under 20; and that isn’t good for a company that isn’t growing anymore and just trying to live off of legacy operations.  Mr. Perez actually has a good reputation and has been well thought of before, but even if they didn’t fire him you would wonder why he would be excited to even be there.  The CFO transition was just completed recently, so you never know how the management team will react from here.

Jon C. Ogg
December 14, 2006

This is part of "THE 10 CEO’s THAT NEED TO GO"series coming out today and tomorrow. Jon Ogg can be reached at jonogg@247wallst.com; he does not hold securities in the companies he covers.

Posted on: December 14, 2006 – 2:00 pm in Management Change

Cramer: “This market’s going higher”

Cramer reviewed how stocks are escaping the strike price traps from many stock options: said AIG not going back down to $70 and JNJ not going back down to $65 is a net-good for these names.  We have been trapped by options expiration, but with stocks pulling away from the strike prices it makes him like the market even more.

Cramer likes these in tech: RIMM/AAPL/MRVL/STX/ERTS

He still likes J&J (JNJ), but said Schering Plough (SGP). seems to be up too much for now.

Cramer was still positive on Chevron (CVX) & Exxon (XOM) and he was very curious about why CVX was downgraded.

Citigroup (C) not going down and Bank of America (BAC) not making a bad deal all lend well for the financials and the market.

As he said, "This Market’s Going Higher"…..

Jon C. Ogg
December 14, 2006

Posted on: December 14, 2006 – 12:48 pm in Cramer

Lady’s Razors: P&G Gets Detailed (PG)

P&G says its integration with Gillette is going well. Sometimes it is the little things that show that big things are going well.

The company said it would get back to double digit earnings growth in the fiscal that begins next July. Good news.

Gillette was always stronger with the male market, and most of P&G’s products were aimed at women. Now, the company is introcuding a new lady’s razor, The Venus Breeze, a shaver that needs no shaving cream.

The razor business has been the core of Gillette, but perhaps P&G can give it the woman’s touch.At just shy of $64, the shares trade near their 52-week high. But, attention to small details in product introductions could help that go higher.

The devil is in the details.

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

Posted on: December 14, 2006 – 12:26 pm in Consumer Goods

10 CEO’s Who Need to Leave: Kevin Rollins of Dell

Shareholder groups are becoming more "activist" and this trend will continue in 2007.  Private Equity and LBO Groups can only acquire so many companies, and there are only so many candidates that can run behemoths.  The best way to see change is right at the top in many cases and there is a slew of US public companies that would do far better if they could replace current management.  These aren’t in any ranked order, so the first isn’t the worst and the last isn’t the best of the worst.  The problem in stating this is that it is very easy to come in and criticize, yet finding replacements for companies this size is not exactly an easy feat.  Private Equity as a sector has taken many of the talented leaders, and they haven’t stopped with the age limits that many public companies live by.  There just aren’t too many Lou Gerstner and Jack Welch carbon copies out there.

Kevin Rollins of Dell (DELL):
Rollins needs to go on one of those round-the-world cruises and he needs to just stay on the boat indefinitely.  Michael Dell needs to retake the helm, and afterall the company isn’t named ROLLINS INC. is it…..  Not only does this need to happen, but this needs to happen before they go to Davos in early 2007 so Michael Dell can re-establish the supreme leader position there.  Kevin Rollins just doesn’t have the trust of Wall Street and since he took over DELL managed to lose the position of the PC-Leader status.  The street knows Michael Dell and they respect him, so now it really boils down to if he wants to step back in.  He can sell his stock at $15.00 or at $35.00, and the net net result is that he’ll be a self-made billionaire and have more money than he could easily spend in a series of lifetimes.  So he might not want it. 

The customer service issues have not gone away, even if they are said to be better.  Rollins may get saved since the stock has recovered roughly 40% from its extreme lows, but the street doesn’t trust him.  His sincerity of saying that things need to improve didn’t really hold much credence after the SEC investigation blunder.  The recent guidance beating the entire negative bias of the street may also act as a safety net for him, but it looks like the street would still rather have Henry Rollins (the singer) in charge instead of Kevin Rollins.  The stock would probably pop at least $1.00 if a headline hit during the market day starting "Michael Dell Takes Back the Helm."

Jon C. Ogg
December 14, 2006

This is part of "10 CEO’s THAT NEED TO LEAVE" series coming out today and tomorrow.

Jon Ogg can be reached at jonogg@247wallst.com; he does not hold securities in the companies he covers.

Posted on: December 14, 2006 – 11:39 am in Management Change

Altria Gets Some Competition

Stocks: (MO)(GLH)(

Altria’s Philip Morris is the largest tobacco company in the world. That gives the company a lot of economies of scale, especially in sourcing tobacco and getting shelf space for its cigarettes.

It looks like the Marlboro man is getting some real competition in the merger of Japan Tobacco and UK cigarette company Gallaher.

Philip Morris is unlikely to have an problems with the new tobacco conglomerate in its home market of the US. But a look at the MO 10-K shows that international operations are almost three times as big as the domestic business. International is also growing faster. It brought in $12.7 billion in the last quarter. Operating income for the group was $2.1 billion.

Philip Morris volume was off 2.4% last quarter. Sales fell in key markets like Germany and Spain. Unit sales also dropped in Japan.

A new merged Japan Tobacco/Gallaher is not likely to help any of that.

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

Posted on: December 14, 2006 – 11:33 am in Tobacco

Some Sectors Trading Back in Range; SPY, Energy, Utilities Remain Overbought

As shown in our overbought/oversold charts below, technology, pharmas, and retailers are currently trading towards or at the bottom of their normal range while the S&P 500 ETF (SPY), energy, and utilities remain overbought.

Obos1214

Oboskey_25

http://tickersense.typepad.com/

Posted on: December 14, 2006 – 10:21 am in Technical Analysis

Dilution – Shareholders Worst Nightmare, or Is It?

Submitted by Saul Sterman / CrossProfit on stocks Evergreen Solar (ESLR) and Scottish Re (SCT)

In a previous article we cautioned investors that the dilution in SCT was going to hurt. A colleague wrote in his e-mail; “I have seen the shares of Sirius rise after massive dilution but their capital intensive (or should I say cash burning) business model is different from SCT.”

Q) Is it possible for share dilution to be a good thing?

Dilution is done only when a company needs to raise cash. The litmus test is to know why the company needs the cash and what the cash will actually be used for. In the case of SCT, the dilution is actually selling off 70% of the company so that shareholders will remain with 30% (or less). Otherwise SCT goes belly-up. In essence the cash injection is going to pay for past mistakes.

The future might be brighter, but whatever the future brings the current shareholders now have only a 30% stake or less. If prior to the dilution the shares were valued at $12 each, after the dilution the (old) shareholders full valuation would be $3.60. Others would argue that a $20 figure better reflects SCT value prior to the liquidity problems, in which case $6.00 would be top valuation after the dilution.

A) Dilution for the Future Can Be!

ESLR is a company accumulating losses at over $20M a year and will probably continue to do so well into 2008. Ever since the dot.com bust, investors are wary of companies that state “revenue growth is more important than profits”. Agree. The exception is with infrastructure intensive industries. Imagine, if you will, a new Exxon Mobil startup and how capital intensive that would be. The price to enter the exclusive oil E&P club is exorbitant. The same is now happening in the solar industry. Within a few years, only the

Hitachi

’s and Mitsubishi’s of the world would be able to commit the necessary resources for such an endeavor.

Every time a solar energy company expands or builds a new production facility the new entry level is raised. The secondary offering by Evergreen Solar is earmarked to cover production expansion costs.

Most investors are a bit unnerved with the ESLR business model. A quick check of competitors will show that most are growing while maintaining profitability. The crux of the issue is hidden in the production facility complex. Until recently, ESLR in essence was competing alongside the other solar energy manufacturers and realized early on that Chinese companies had a labor cost advantage. By writing off its old production facility and starting anew with state of the art technology, on the one hand ESLR compounded its entanglement with the investment community, yet on the other hand has embarked on a method that allows it to nimbly produce and adjust to future developments in a country (Germany) where labor costs would normally be an issue.

The Home Team Advantage

Being that the German government will most likely be ESLR’s largest customer in the foreseeable future, the German government now has a vested interest in keeping its home grown supply of solar power intact. Though existing contracts call for a reduction in compensation models over time, if in reality the figures turn out to be unrealistic, I doubt that the German government will begin ordering elsewhere.

Germany

is no different than the

United States

; both would like to regain some degree of energy independence.

Disclosure: At various trading intervals, short SCT and long ESLR. No long term investment position in either. This is the opinion of Saul Sterman (CEO CrossProfit) and is not the consensus of CrossProfit.com.

http://www.crossprofit.com

Posted on: December 14, 2006 – 10:17 am in Shareholder Issues

Ciena, Profitable Again

Ciena Corp (CIEN) is trading up over 7% pre-market at $26.75 on more than 700,000 shares.  The company has beat earnings expectations and guidance in the coming quarter looks in-line to above projections.  The company posted EPS at $0.14 vs $0.12 estimates and guidance was put at $0.19-0.24 EPS versus estimates of about $0.19.  Irs revenues were just above plan at $160M versus $159.99M estimates, and it put revenue growth in the low-single digits.

CIEN has finally been winning more and more telecom business in the fiber to the home initiatives.  The company will be an active issue today, but it likely won’t see the old crazy endless trading since it did a reverse stock split.  As of last month CIEN had 5.2 million shares in the short interest, compared to a new 2.5 million share average daily volume and its 52-week trading range is implied at $18.69 to $39.34, but remember that it is an implied range because of the reverse stock split.

Some of the share increase may be short covering and some is likely a pure relief rally as they finally went profitable.  There were some whisper numbers out for revenues that the street wanted to see better, so we’ll have to see if the street focuses more on the bottom line or if they focus on the overall improvements and market mechanics today.

Jon C. Ogg
December 14, 2006

Posted on: December 14, 2006 – 9:11 am in Earnings

Obagi Medical Disappointing IPO Pricing

Obagi Medical (OMPI) priced its 5.35 million share IPO at $11.00, below the range $13 to $15 range originally indicated.  J.P.Morgan is the lead underwriter with co-managers listed as CIBC, Thomas Weisel, and R.W.Baird.  Obagi makes skincare products for various skin conditions and is based in Long Beach, CA.  The company is profitable.  With so many deals in the year-end order book pipeline from underwriting departments this looks like it may have gotten lost in the shuffle.

Jon C. Ogg
December 14, 2006

Posted on: December 14, 2006 – 8:54 am in IPOs

Pre-Market Stock News (DEC 14, 2006)

by Jon C. Ogg
December 14, 2006

(ARES) Ares Capital has a 2.7M share secondary.
(AVRX) Avalon Pharm announced positive interim results for AVN944 Phase I results.
(BCS) Barclays "takeover" by B of A was denied by B of A according to WSJ; we already knew that.
(BIDU) Baidu.com teams with Microsoft over paid search in China.
(BSC) Bear Stearns $4.00 vs $3.36e.
(C) Citigroup hosts analyst day today.
(CIEN) Ciena trading up 6% after swinging to a profitable quarter.
(CRAY) Cray priced 7.5M share secondary at $10.00.
(DSX) Diana Shipping filed to sell more than $400M in mixed securities.
(F) Ford raised to Neutral at Merrill Lynch.
(GLS) Genesis Lease 27+M share IPO priced at $23.
(HAL) Halliburton called for positive on MAD MONEY after interviewing the CEO.
(HPQ) H-P signed a $300M service collaboration pact with Microsoft.
(IGT) International Game Tech filed to sell $800+M in convertible notes.
(ISCA) International Speedway lowered 2007 targets by up to 2%.
(LEH) Lehman $1.72 vs $1.68e.
(LMT) Lockheed Martin is flying new F-35 plane today.
(MGAM) Multimedia Games $0.00 EPS vs $0.00e.
(MGLN) Magellan Health lowered 2007 guidance.
(MRK) Merck announced another Vioxx case win.
(NEWS) NewStar Financial 12M share IPO priced at $17.
(OMPI) Obagi Medical 5.35M share IPO priced at $11.00.
(OSIP) OSI Pharma in lincense pact to Bristol-Myers.
(PG) P&G reaffirms Q2 targets.
(PIR) Pier One reports wider losses than expected.
(SMSI) Smith Micro Software 4.5M share secondary.
(STST) Argon ST $0.18 EPS vs $0.30e.
(T) AT&T noted more positively than Verizon for value by Cramer on MAD MONEY.
(TMO) Thermo Electron raised 20067 guidance.
(TOO) Teekay Offshore Ptnrs 7M share IPO priced at $21.
(TWX) Time Warner noted as a better choice over Comcast for growth by Cramer.
(UTX) United Technologies reaffirmed 2006 guidance; sets 2007 EPS growth at 10 to 14%; sets 60 million share buyback plan.
(VVC) Vectren lowered guidance.
(WGO) Winnebage $0.25 EPS vs $0.31e.
(WSFG) WSB Financial 2.3M share IPO at $16.50.
(ZMH) Zimmer offered mixed guidance on order losses.

Posted on: December 14, 2006 – 8:30 am in Pre-Market Activity