Daily Archives: January 4, 2007

Cramer’s #1 Growth Pick for 2007

Cramer’s #1 Growth Stock for 2007 is the NYSE (NYX).  He thinks it will blow past estimates and keep flying.  He loves the fact that they are essentially self-regulating and can set whatever terms they want.  They are having layoffs in pursuit of EPS and the people on the NYSE floor are all going be computerized and can have $700 million more in savings.  The more foreign listings coming in are good for the exchange. It has the best growth prospects of the companies he follows.  With the street’s love of technology this one fits the bill.  The floors will close according to him and he even went back to a CNBC clip showing how many of the trading posts that are just empty on the floor now.  The elctonic trading won’t just save money, Cramer thinks it will make money.  He also threw in Goldman Sachs there again as a beneficiary.  When Euronext & NYSE merge he thinks the $275 million in savings will be even more.  He thinks that it will follow the CME rally before they took off.  He also thinks it will become a World Wide Stock Exchange.  This is another name he’s been behind for a couple months now.  In 3 years he thinks it can earn $12 per share and they can go to $240 based on this.  He called for a Triple on NYX shares back on November 9.

Cramer’s #2 Pick tonight is Apple (AAPL).

Cramer’s #3 Pick tonight  is Cisco Systems (CSCO).

Jon C. Ogg
January 4, 2007

Posted on: January 4, 2007 – 6:55 pm in Cramer, Exchange News

Cramer’s #2 Growth Pick for 2007

On tonight’s MAD MONEY Cramer went over his 3 TOP GROWTH PLAYS for 2007.

Cramer’s #2 Growth Stock for 2007 is Apple (AAPL).  Cramer has been positive since the start of MAD MONEY and it’s up 175% in the last 2 years.  He said buying here isn’t chasing it, it’s making a good growth investment.  Apple has what it takes according to Cramer and he thinks they are a winner.  The iPod and iTunes are effectively the defacto standard for the new music listening craze.  He thinks it’s also the reservoir of content and now they ahve vertically integrated the music business and imposed their format on the world.  He also doesn’t think the competition can overcome its dominance.  Cramer says Apple beat the Zune from Microsoft (MSFT) before it even came to market.  On the horizon what can help is the iTV, the $300 set top box that integrates your TV and computer for downloads, also the Apple Phone at some point and it won’t be mediocre (which may be MacWorld next week on Tuesday).  Analysts don’t have these growth drivers into the forward numbers and he thinks the estimates and targets will be raised in waves.  The company is also winning more and more computer business and Cramer noted the market share could go from 2.7% to 3.5% and add 12% to its earnings.  On the options back-dating, Cramer thinks this is a compensation irregularity and recent weakness is a gift because it is only a penny per share in earnings and he is inclined to believe the company this time.

On a call-in he said Google (GOOG) is going to $500 and then to $600.

The #2 GROWTH PICK FOR 2007 was Cisco Systems (CSCO).

If you will recall last night he noted that his top 3 VALUE STOCKPICKS for 2007 as the following (with links through to the fulldescriptions):

1) Altria (MO)

2) Goldman Sachs (GS)

3) Halliburton (HAL)

He also predicted 14,582 for the DJIA by the end of the year.

Tomorrow night he’ll go over the Speculative stock picks for 2007.  There will be two more picks tonight.

Jon C. Ogg
January 4, 2007

Posted on: January 4, 2007 – 6:26 pm in Cramer

Cramer’s #3 Growth Pick for 2007

On tonight’s MAD MONEY Cramer went over his 3 TOP GROWTH PLAYS for 2007.

Cramer loves growth and the street loves growth.  He is doing 3 picks in reverse order:

The #3 Growth stock for 2007 is Cisco Systems (CSCO).  He said it finally came back after a dismal 2 years, and now it is back.  Cramer said Chambers is doing well.  It is up 64% from his $17+ recommendation, but he noted with growth you have to buy high and sell higher.  Even though the street is fully behind the company again, they are underestimating the company and don’t understand the full scope of the story.  The company is now a Brand rather than just the backbone for the web.  Cramer notes that all of the traffic.  The Linksys and Scientific Atlanta buys have really evolved the company and they are now the major component for Triple Play for Cable.

If you will recall last night he noted that his top 3 VALUE STOCK PICKS for 2007 as the following (with links through to the full descriptions):

1) Altria (MO)

2) Goldman Sachs (GS)

3) Halliburton (HAL)

He also predicted 14,582 for the DJIA by the end of the year.

Tomorrow night he’ll go over the Speculative stock picks for 2007.  There will be two more picks tonight.

Jon C. Ogg
January 4, 2007

Posted on: January 4, 2007 – 6:11 pm in Cramer

Openwave’s Further Woes; No Bait Shop Add Yet

Openwave Systems (OPWV) is a name that has been puzzling, and more disappointing than rewarding of late.  Tonight they are trading down almost 5% to around $9.00 after they widened out their loss expectations from -$0.01 to $-0.08 or -$0.09 (and -$0.24 after options) and took revenues down to $83 to $84 million; compared to -$0.01 and $88.75 million estimates.  I was actually looking for break-even or better on EPS with all the hub-ub over mobile search crazes we read about in Q3 and Q4, so this is an agitating warning.  They also lowered estimates on revenues in the coming quarter from almost $92 million down to $85 to $90 million, a further irk.

Going into 2006 they were set to turn into a profitable operator in mobile web search and a myriad of other online and mobile services for major telecom and wireless providers, yet as we get into 2007 they are a struggling player with a few competitors in each of their fields that all have to fight and wait for business from what seems and feels like a shrinking customer base (carriers merging, not end users).  This company would make a key strategic acquisition for any search king that wanted to gobble up a player that is already entrenched into most mobile providers out there, BUT……… Yes, the dreaded "but."  The problem isn’t that they have significant charges, and it isn’t that the field is too mature for a monster to swipe up a tiny company for under $1 Billion.  The valuation and lack of ability to post anything resembling continuous earnings is the issue.

You could literally imagine a Google (GOOG) or a Yahoo! (YHOO) jumping all over this, and there are a dozen other players in new and old media that come to mind.  It makes more sense that Google could hide this on the books better (yes, hide), and Yahoo! has to worry about its real earnings.  Maybe it can happen, but I have never been able to bring myself to officially add it to the BAIT SHOP of takeover candidates.  This $100 million share buyback that it simultaneously announced is merely a stock stabilizing effort that does the company ultimately no good at all, and I would argue they are just going to further erode their balance sheet going into what could be slightly slower times.  It has an $895 million market cap, and as of Sept. 30 it had right at $400 million in cash and short term investments.  Its total liabilities were $390 million. Sure it listed over $900 million in total assets, but more than $200 million of these assets were from Goodwill, Intangibles, and Other; which I am a stickler on and many of the other assets would be hard to instantly monetize.

I have had this on a "WATCH LIST" for the BAIT SHOP for a long time, and while part of me wishes I would have added officially as a BAIT SHOP member back at $7 or $6 it has traded down there for a reason and is hanging lower than in much of 2005 and 2006.  So, here it still sits as a WATCH LIST company, meaning they are a candidate rather than a member.  It would make sense to acquire this company, but the price that this would occur at is a different matter entirely and I just can’t bring myself to add it into the BAIT SHOP yet.  The company has activism activities from the outside pressuring it to do better, but that isn’t enough for me.  So, Openwave will have to remain on the sidelines for now.  Stay tuned.

Jon C. Ogg
January 4, 2007

If you would like to subscribe to our free email updates on some stories that we exclusively create offline for email recipients please send an email to jonogg@247wallst.com and label the email SUBSCRIBE.  This email list has BAIT SHOP notes and other special situation investments such as back-door plays for IPO’s, upcoming spin-offs, and the like.  We value privacy and do not share our email list with any outside or third parties. 

Jon Ogg is a partner in 24/7 Wall St., LLC; he does not own securities in the companies he covers.

Posted on: January 4, 2007 – 5:22 pm in Earnings, Internet, Telecom, Wireless

US Stock Market Wrap (JAN 4, 2007)

DJIA    12,480.69;  Up 6.17 (0.05%)
NASDAQ    2,453.43; Up 30.27 (1.25%)
S&P500    1,418.34; Up 1.74 (0.12%)
10YR-Bond    4.618%; Down 0.046
NYSE Volume    2,938,063,000
NASD Volume    2,079,107,000

Slower factory orders in December pulled the markets down, but lower energy prices helped bolster non-energy shares.  NYSE volume reached almost 3 Billion shares again.

As oil prices gave up more than $2.00 more per barrel down to $55.79, Exxon (XOM) fell almost 2% to $72.72 and Oil Service HOLDRS (OIH) fell 2.5% more to $130.01.

Time Warner (TWX) rose 1.7% to $22.42 after the company unveiled a multi-format DVD disc that can accomodate HD-DVD and Blu-ray DVD formats and after more talk thatthe Time Warner Cable stock could trade as early as next week or the week after.

Microvision (MVIS) rose a sharp 22% to $3.74 on word that it was unveiling a candy-sized projection display for mobile devices at CES this weekend.

Intel (INTC) rose some 4% to $21.17 after Banc of America put estimates toward the higher end for the quarter since they didn’t warn in late December from prior levels.

DiVX (DIVX) rose 6% to $23.24 after unveiling a new streaming platform for the Consumer Electronics Show.

ebay (EBAY) rose more than 4% to $31.59 on new rounds of listing fee hikes, which is odd when you consider how much controversy this has caused in the past.  Maybe the alternative auction platforms just aren’t winning like eBay did.

Altria (MO) rose 1.3% to $87.65 on word that Jim Cramer on MAD MONEY listed it as his #1 Value Stock for 2007.

Six Flags (SIX) rose almost 6% to $5.69 after Jim Cramer interviewed the CEO and said the stock is going higher.

Uranerz (URZ), a thin volume Uranium exploration company, fell 13.5% to $3.72 after making another property rights acquisition yesterday as energy prices slid.

Van der Moolen (VDM) fell 2.3% to $5.95 after more word surfaced that NYSE specialist firm Bear Hunter was only getting valued at $0.30 on the dollar as fears mount of a disappearing NYSE floor.

Cisco Systems (CSCO) rose 2.6% to $28.46 after making another data security acquisition for more than $800 million.  It acquired privately-held IronPort.

BEA Systems (BEAS) rose another 5% to $12.92 after research reports indicated Hewlett Packard could take a shot at buying the company, and that rumor is a re-rumor of one that has been around for about 7 years now (literally).

Research in Motion (RIMM) rose over 7% to $138.57 after a push-to-talk licensing pact with Kodiak Networks.

Jon C. Ogg
January 4, 2007

Posted on: January 4, 2007 – 4:20 pm in Market Close

Preview of the 2007 Consumer Electronics Show (2007)

Stock Tickers: MSFT, CSCO, AAPL, SNE, DELL, HPQ, MOT, SUNW, CBS, TWX, GOOG, IACI, INTC, AMD, ORCL

by Jon C. Ogg

This is the 40th annual International Consumer Electronics Show and is once again being held in Las Vegas.  We decided to give a heads-up on some of the companies that will be there, but honestly this is such a large list of exhibitors and attendees that it is impossible to come anywhere close to listing them all without links.

The pre-opening keynote speech will again from Microsoft’s Chairman, Bill Gates.  The opening Day 1 keynote address will crom from Gary Shapiro, President & CEO of Consumer Electronics Association, and from Ed Zander, CEO & Chairman of Motorola.  The opening evening keynote address will come from Bob Iger, CEO of Walt Disney.  Day will be opened with a keynote address from Michael Dell, Chairman of Dell.  The closing keynote address on Day 2 will come from Leslie Moonves, CEO of CBS Corp.

If you would like a link to the thousands of exhibitors you can get it here.

CNET will be hosting the best of CES on Monday, January 8 and you can get information on this here.

Cisco Systems’s Chairman & CEO John Chambers will deliver an industry insider speech at 11:00AM local time on Tuesday, January 9.

Wednesday, January 10 will be a bit different as this is "GREEN WEDNESDAY" for eco-friendly gadgets, and will mark the launch of MyGreenElectronics.org.

We’ll be following key news developments from public and soon to be public companies there over the weekend and next week, so stay tuned.

There is also a myriad of other press events coming up that will end up having some major alliances and partnerships announced in press releases, or at least that is usually the case. You can access the online link here.

Here is a sample of that for CES this year:

2007 International CES Exhibitor Press Event Schedule 

Download an Excel report containing a comprehensive list of 2007 International CES press events.
Posted on: January 4, 2007 – 3:45 pm in Alternative Energy, Cable Companies, Casinos, Consumer Electronics, Consumer Goods, Hardware, Media, PC Companies, Press Digest, Semiconductor, Software, Technology Companies, Telecom, Wireless

Cramer Thinks the Bull is Alive

On today’s STOP TRADING segment on CNBC at 2:45 PM EST, Cramer noted he thinks Google (GOOG) is going to $500 soon.  An undiscovered bull market is in tech: He likes the technology as an "out of oil and into tech."

He even thinks gold will come down.  He thinks biotech is good here at these levels, and his favorite is Amgen (AMGN).

On tobacco, he was still positive on Altria (MO) over UST (UST) as MO is going to make a bee-line to $120 and is very undervalued.

Jon C. Ogg
January 4, 2006

Posted on: January 4, 2007 – 2:47 pm in Cramer

MetroPCS Files for IPO

Metropcs_logo_1MetroPCS, an alternative cellular provider, has filed to come public via an IPO.  This filing isn’t the first pony ride for MetroPCS trying to come public, because they had filed previously to come public back in 2004.  The new IPO filing is for up to $1.125 Billion in securities.  Underwriters listed in the offering are Bear Stearns, Banc of America Securities, Merrill Lynch, Morgan Stanley.

MetroPCS offers wireless broadband personal communication services on a no long-term contract, flat rate, unlimited usage basis in selected major metropolitan areas.  It was active in last year’s FCC auction with nearly 117 million licenses won and can sell to approximately 140 million per their spectrum licenses, although they had approximately 2.6 million subscribers as of September 30, 2006 (up about 50% from 2005).  Its plans range from $30 to $45 prepaid per month, and claims some 80% are either $40 or $45 per month.  It is planning to expand into makets on the East Coast from Philadelphia to New York, to Boston, plus San Diego, Portland, Seattle and Las Vegas.  The company is also planning to expand its coverage in the geographic boundaries of our existing operations in Dallas/Ft. Worth, Detroit, Los Angeles, San Francisco and Sacramento.

For the 9 months ended September 30, 2006 the company posted $1.093 Billion revenues ($916 million were from subscription and the balance from equipment).  Its operating expenses were $923 million, and after interest and other expenses and taxes and credits the company posted $52 million in net income.  The company entered into a much larger credit facility so that number may change, butthey are essentially filing for an IPO as a profitable interest.  The company is not without issues in the past, but you can expect the interest to be there for the company.  The most direct competitor it faces it Leap Wireless (LEAP-NASDAQ) and it does have overlapping markets with Leap.  Leap has a market cap in excess of $4 Billion and is also profitable.

Jon C. Ogg
January 4, 2007

Posted on: January 4, 2007 – 1:56 pm in IPOs, Wireless

The Smart Money Dumps Generic Drugs

Stocks:  (PFE)(MRK)(TEVA)

Conventional wisdom has been that generic drug companies are going to put Big Pharma out of business. As major drugs come "off patent", the generic guys snap them up and sell them at a discount, picking up all of that market share. Of course, the Wal-Mart $4 generic drug program and the desires of the new Democrats running Congress to drive down healthcare costs were going to help as well,.

Someone forgot to tell Wall St. Merck KGaA, the German chemical and drug company announced that it is dumping its generic business. They hope to get $5 billion to $7 billion for it, but whether that number holds up is anyone’s guess.

If the generic drug business is so great, why is a big firm like Merck getting out? Perhaps for the same reason that standalone generic drug company trades at near it 52-week low, just over $31.

The generic drug companies compete on price, so simply picking up share is not such a great deal if the margins are poor. Lose money on each prescription and make it up on volume.

More important, for all the gum flapping about the death of Big Pharma, Merck’s (the US Merck) stock is up over 30% since a year ago, Pfizer is up almost 10%, and Teva is down almost 30%.

Climbing a wall of worry stuff. Investors are not really betting that Big Pharma will run out of blockbuster drugs in its pipelines despite failures of key drugs like Pfizer’s torcetrapib. And, Big Pharma stocks outperformed biotech shares in 2006, a sign that the market may actually view the old-line companies as having value. (Pfizer does have a yield of 4.5%).

If there is an argument for putting money into generics, it is falling on deaf ears.

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

Posted on: January 4, 2007 – 1:07 pm in Pharmaceuticals

Cramer Confidential Video (Jan 4, 2007)

Cramer discussed the breakdown in the DJIA this morning on his Cramer Confidential.  Cramer said the S&P changes may have caused some futures selling that had to come out of the S&P quickly because of BellSouth.  The defensive stocks did better than the cyclicals and growth names.  Autos were horrible from GM (GM) and Ford (F).  Cramer said he doesn’t think the Fed is really worried about inflation, despite all the media reports that the minutes from the Fed say they are worried.  He thinks there is a secular change going on in retail.  Wal-Mart (WMT) wasn’t great and he still supports Costco (COST).  Cramer has many more features today, including his take on Home Depot (HD) again.  You can watch the rest at the link here if you want to take 13 minutes.

Posted on: January 4, 2007 – 11:33 am in Cramer

Did E-commerce Kill Retail Sales?

Stocks:  (WMT)(TGT)(GPS)(AMZN)

Comscore reports that online retail sales rose 26% from November 1 to December 31, and hit $24.6 billion. Did that hurt same-store sales for big walk-in stores?

Perhaps. With retail sales at places like The Gap, Wal-Mart, and Best Buy being below Wall St. targets it is tempting to posit that the hefty increase in online sales tool some of that business away.

The positive side of the news is that websites like walmart.com and target.com are among the most vistied web destinations on the web. And, that could help make up for some of the disappointment on the same-store front.

With e-commerce up so much, it might be nice to be Amazon as well.

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

Posted on: January 4, 2007 – 11:14 am in Retail

eBay Hikes Fees Again

by Jon C.Ogg

This was actually circulating yesterday evening about some eBay (EBAY-NASDAQ) fee changes, but I just got the email from Bill Cobb with his smiley face on it notifying listers of price hikes.  This must be prioritized based on ebay usage, at least so I surmize since I have "been dark" (not using) the service too much and haven’t sold anything in a long time there.  This doesn’t look like much on the surface, but it sure does irk the eBay user and power seller sphere.  If you don’t believe it then go look up old online comments about the other times eBay has decided to hike prices.  It isn’t exactly like eBay can say they are passing on higher energy, shipping, and raw materials prices. 

A competing service UBid.com (UBHI-NASDAQ/OTC) has just started picking up more on advertising on TV lately, so they probably aren’t too upset that eBay is giving them a gift.   Traders and  investors should know that UBHI is a thin volume OTC stock with an apparent market cap of just under $50 million, so it isn’t a normal trading stock for active traders.  It looks like the volume skips trading days with no volume more often than it trades shares and is deemed a highly illiquid stock, so don’t say you weren’t warned if you start digging around and can’t find much on it.

The new fee structure is at the very end of this article.

The letter ends with "More to come in 2007":

More to come in 2007                  
Lookingahead at the new year, it’s never been more important that eBay delivervalue through our marketing investments, product initiatives, and Trust& Safety strategies. Times have changed from 11 years ago when wewere a small innovative idea on the Internet. Quite frankly, some ofthe problems demanding our attention are more complex. But whatinspires me every morning–and what I hope inspires you, too–is thatthe opportunities for eBay and its Community to succeed by celebrating what makes us unique have never been greater.                  

Laterthis month, I’ll be addressing a group of eBay sellers who will be herein person in the San Jose area, and I’ll be sharing some of our plansand priorities for the coming year. My keynote speech will be availablevia a recorded Webcast for our whole Community (more details will beavailable soon) and we’ll be following the event with moreannouncements on specific initiatives. I think you’ll find we’re takinga surprisingly fresh look at some of the old challenges, and I’mexcited about the road ahead.

                  

On behalf of everyone at eBay, I wish you all a very Happy New Year.

                  

Sincerely,

Bill Cobb                   
President, eBay North America                   

         

            

         

         

         

            

         

            

         

            

         

         
               

Dear $$$$$$,

               

Animportant part of any business strategy is the regular evaluation ofpricing structure. From time to time, we make pricing changes tocorrect unhealthy dynamics in the eBay marketplace, as was the caselast July. Typically, however, we make changes on an annual basis atthe beginning of the year.

Today, I’m here to tell you about fee adjustments for eBay.com and eBay Motors which go into effect on January 30, 2007.               

Let me say that, while we believe these changes are modest, we consider                  anychanges that may impact our sellers with great care. These adjustmentsare the result of careful analysis and we believe they’re the rightthing to do to keep the marketplace strong for our eBay.com and eBayMotors sellers.

Core Listing Fees: Auction-Style & Fixed Price*
         
            
             

             

             

             

            

             

             

             

             

            

             

               

               

               

Fee Type              Item Price              New Fee              Current Fee             
Insertion Fee              Starting Price:                  
$1.00 – $9.99              		$0.40              $0.35             
Final Value Fee                Selling Price:                   
$25.01 – $1000.00                  		 3.25%                3%                   
*Does not impact Store Inventory Listings.

eBay Motors Vehicles Fees
The fees listed above will also apply to Parts & Accessories.
         
            
               

               

               

             

               

               

               

             

               

               

               

             

               

                  

                  

Fee Type                New Fee                Current Fee               
Motorcycles & Powersports                   
Transaction Services Fee                		$40                $30               
Cars & Trucks, Other                   
Vehicles & Trailers                   
Transaction Services Fee                		$50                $40                  
Motors Reserve Fee                   0.1% of reserve price                     
($5 minimum,                     
$10 maximum)                    		$5
Posted on: January 4, 2007 – 10:49 am in Internet

Big Oil’s Dim Future (XOM)(CVX)(COP)

The cat is out of the bag. As oil prices fall below $60, the first of the Big Oil companies came clean by signalling poor result. Conoco said that its quarterly numbers would be poor due to lower crude prices. The company’s stock dropped 3% to $66.25. It is now down substantially from its recent high of $73 set on December 19.

Oil may well be going lower. If so, Conoco could move back toward its 52-week low of just above $55. Exxon, which trades around $73 could move back toward $60, and Chevron from its current price of $70 back toward $54. In other words, all three stocks could move toward 52-week lows if Q4 number come in poorly across the board.

Just a guess, but an educated one.

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

Posted on: January 4, 2007 – 10:35 am in Oil & Gas

Would GE Have Been Better Off With Nardelli As CEO? (GE)(HD)

If you look at the GE and Home Depot charts since Jack Welch left, HD has actually outperformed GE by a bit. That is not taking into account dividends and GE’s Genworth spin-off, but the chart would show that during most of that period from September 2001 onward, Home Depot was well ahead.

It raises an interesting question about Nardelli’s dismissal, since GE is still considered one of the best run companies in the world. Very few people like Nardelli, but, if he stayed at GE as the CEO, maybe that stock would have done a bit better. At least he would have been in his environment.

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

Posted on: January 4, 2007 – 9:27 am in Conglomerates

Retail Sales: The Consumer Cuts Back (WMT)(BBY)(GPS)

Retail sales for December put shareholders in companies like Target and Gap on suicide watch. Target same store figures were up about 4%, the low end of expectations. Gap same store sales fell 8%.

Wal-Mart has already turned in poor numbers for the last month of the year,

Pundits and the press want to blame warm weather and procrastinating consumers. How warm weather keeps people out of stores is hard to figure out.

The answer may be much more simple. With home prices dropping, gas prices still fairly high, and sub-prime debt default rates moving up, the consumer may be running out of gas. Jobless filings also increased in the most recently reported period.

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

Posted on: January 4, 2007 – 9:14 am in Retail

Wal-Mart Sticks By Earnings, Foreign Sales (WMT)

Wal-Mart is sticking with its Q4 earnings projections. Since US sales were poor, it margins must have been spectacular, which is unlikely, or sales overseas in markets like China, were excellent.

Assume the latter.

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

Posted on: January 4, 2007 – 9:04 am in Retail

Cisco Systems Acquires IronPort

Cisco Systems (CSCO) is paying out approximately $830 million in cash and stock to acquire privately-held IronPort Systems Inc.  This is another data security play so to speak, as the company is a provider of messaging security appliances, focusing on enterprise spam and spyware protection.  Cisco says it will be neutral to earnings. IronPort recently acquired another security company called PostX.

More can be found on IronPort at www.ironport.com.

Jon C. Ogg
January 4, 2007

Posted on: January 4, 2007 – 8:30 am in Mergers and Buy Outs

Pre-Market Stock News (JAN 4, 2006)

by Jon C. Ogg

(AAI) Airtran lowered guidance on EPS to  modest loss, but traffic was up 20%.
(ACAS) American Capital Strategies filed to sell 6 million shares.
(AEOS) American Eagle Outfitters s-s-s beat expectations with 13%gains and raised EPS guidance $0.01 to $0.64-0.65 EPS.
(ASGN) ON Assignment pays $200M to acquire Oxford Global Resources.
(BEBE) Bebe Stores s-s-s +4%.
(BLUD) Immucor $0.20 EPS vs $0.18e.
(CACH) Cache lowered guidance.
(CACS) Carrier Access lowered guidance.
(CENT) Central Garden & Pet announced 2-1 split in form of dividend.
(CNW) ConWay lowered guidance.
(COST) Costco beat s-s-s with +9%.
(CYCL) Centinneal Communications reported loss instead of gain.
(ESPD) eSpeed launches new equity trading platform called Aqua.
(GES) Guess s-s-s +9.6%.
(GIII) G-III Apparel filed to sell 4.5M shares of stock.
(GOOG) Google buys part of Chinese file sharing firm and will start mobile search in China via some China Mobile customers.
(GPS) Gap s-s-s down at -4%; lowered guidance.
(GS) Goldman Sachs was Cramer’s #2 Value pick for 2007.
(HAL) Halliburton was Cramer’s #3 Value pick for 2007.
(HOTT) Hott Topic traded down 12% on lowered guidance.
(INHX) Inhibitex signed diagnostic license pact with 3M.
(INTV) Intervoice $0.07 EPS vs $0.05e.
(JCP) JCPenney s-s-s +2.6% vs +2.4%e; sees January gains in low single-digits.
(JOSB) Jos. A. Banks s-s-s +1.4%.
(LTD) Limited s-s-s +4%.
(MO) Altria was Cramer’s #1 Value pick for 2007.
(MTRX) Matric Svc $0.32 EPS vs $0.19e.
(NAPS) Napster added 48K subscribers and said revenues slightly topped estimated at $28M vs $27.6M(e).
(NWY) New York & Co s-s-s +3.2%.
(PFCB) PFCHangs Revenues were $252M vs $250.75M(e).
(PIR) Pier 1 s-s-s -10%.
(PLCE) Childrens Place s-s-s +5%.
(PNRA) Panera posted Q4 revenues $233M vs $231M(e), butthat was a lowered number.
(PSUN) Pacific Sunwear s-s-s -3.2%; Barron’s notes that SAC sees value as it took 5.6% stake..
(RPM) RPM Corp $0.34 EPS vs $0.33e.
(SANM) Sanmina filed its 10-K.
(SHRP) Sharper Image s-s-s down again at -20%.
(SIAL) Sigma Aldrich signed non-exclusive research pact on RNAI with Pfizer.
(STZ) Constellation $0.58 EPS vs $0.60e.
(TRB) TRibune bidding deadline is nearing according to FT article.
(TWX) Time Warner new disc will be unveiled at CES next week.
(URBN) Urban Outfitters s-s-s were down at -5%.
(WMT) Wal-Mart confirmed s-s-s +1.6%.
(ZLC) Zales Q2 sales are under plan.
(ZUMZ) Zumiez s-s-s +11.5%, above 8%e.

Posted on: January 4, 2007 – 8:20 am in Pre-Market Activity

Analyst & Research Notes (JAN 4, 2007)

by Jon C. Ogg

AAPL reitr Outperform at Piper Jaffray.
ABB cut to Neutral at Prudential.
ALLT started as Outperform at RBC.
ASBC raised to Buy at Oppenheimer.
BPO started as Buy at Deutsche Bank.
DASTY raised to Buy at UBs.
DUK cut to Neutral at Merrill Lynch.
FEIC started as Buy at Merrill Lynch.
GENZ raised to Outperform at RWBaird.
HNT raised to Buy at Merrill Lynch.
HTZ started as Buy at Deutsche Bank.
IMCL raised to Neutral at Merrill Lynch.
INTC reitr Buy at B of A.
JBL cut to Equal Weight at Morgan Stanley.
KFT cut to Neutral at B of A.
MBFI cut to Outperform at Piper Jaffray.
MEK started as Outperform at JMP Securities.
MNKD started as Overweight at JPMorgan.
MOVE raised to Neutral at JPMorgan.
NMX cut to Sell at Merrill Lynch.
PEP added to JPMorgan Focus List.
SE started as Outperform at RBC.
SIRF started as Outperform at RBC.
SIMG started as Sector Perform at RBC.
SOLD cut to Underweight at JPMorgan.
SSCC cut to Underweight at Prudential.
SYK raised to Overweight at Wachovia.
WMGI raised to Overweight at Wachovia.
ZMH raised to Overweight at Wachovia.
Wachovia positive on trucking valuations: raised CNW and CVTI to Outperform from Market Perform, and ABFS, HTLD, WERN, XPRSA to Market Perform; reiterates Outperform ratings on JBHT.

Posted on: January 4, 2007 – 8:17 am in Analyst Calls

Costco Sales Up 9%, Did It Lose Money?

Costco’s (COST) same-store sales rose 9% the last five weeks of the year. Net sales rose 14% for the period to $7.24 billion. Analysts had expected less.

Before Wall St. bids the stock up, it should answer the question about what the revenue cost Costco.

Circuit City (CC) was hammered when it announced a loss due to deep discounts. Costco may have had to cut margins to keep up with retailers like Wal-Mart (WMT).

Costco’s last quarter was strong, but it trimmed the high end of its forecasts. Investors should hope it does not have to cut again. Costco’s stock is up only 5% over the last year, so Wall St. is already skeptical.

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

Posted on: January 4, 2007 – 6:49 am in Retail