Daily Archives: January 12, 2007

Cramer Talks MRV Communications

MRV Communications (MRVC) has one division worth potentially the whole value of the company. This is a highly speculative name, and Cramer likes the Optium (OPTM) in the same space.  The company is technically the ugly sister because of two ugly units, but the smallest division is Luminent in optical components that is only 1/4 of the revenues and he thinks this is worth the emntire company.  Cramer thinks the unit may get spun-off from MRVC.  That can be worth more than $570 million its own, and the market cap is $453 million.

MRVC popped more than 10% to $4.09 after he noted it in after-hours trading.  This is a very speculative name that he thinks can double.

Posted on: January 12, 2007 – 6:22 pm in Cramer

Does Cramer Think the Swiss Have Smelly Feet?

Cramer was talking shoes: Says Nike (NKE) still doing well, but K-Swiss (KSWS) is not and it may even be a "value trap" where it looks cheap but isn’t.  The multiples look different each way, butthe comparable metrics that Wall Street uses are opposite from valuations.

Under Armour-UA (ex-UARM) is his favorite in the sports group.

Crocs-CROX thinks they are doing things right.

Heely’s-HLYS not that big of a fan even though he liked the IPO.

Posted on: January 12, 2007 – 6:15 pm in Cramer

US Earnings Calendar (JAN 15-19, 2007)

DATES & ESTIMATES MAY HAVE CHANGED
All dates, times, figures are tentative and estimated only

MON JAN 15
MLK DAY- US MARKETS CLOSED

TUE JAN 16
Ameritrade(AMTD)    $0.22
Forst Labs (FRX)    $0.66
Intel (INTC)                     $0.25
LinearTech (LLTC)    $0.34
New Orient Ed. (EDU)    -$0.01
Wells Fargo (WFC)    $0.64

WED JAN 17
Apple (AAPL)            $0.78
ASML (ASML)            $0.44
JPMorgan (JPM)         $0.95
Lam Research (LRCX)    $1.11
Lennar (LEN)            -$0.75
Mellon (MEL)            $0.57
Northern Trust (NTRS)    $0.77
Southwest Air (LUV)     $0.13
State Street (STT)        $0.28
Washington Mutual (WM)    $0.88

THU JAN 18
Bank of New York (BK)    $0.55
BB&T (BBT)            $0.78
Cal. Micro (CAMD)    $0.05
Capital One (COF)    $1.25
Comerica (CMA)        $1.21
Continental Air (CAL)    -$0.15
Cree (VREE)            $0.06
Fifth Third (FITB)        $0.07
Harley Davidson (HOG)     $0.96
Jefferies (JEF)            $0.34
Merrill Lynch (MER)     $1.89
Novartis (NVS)            EUR
SLM Corp (SLM)                $0.75
Sovereign Banco (SOV)    $0.32
UnitedHealth (UNH)    $0.85
Xilinx (XLNX)                $0.23

FRI JAN 19
Citigroup (C)                    $1.02
General Electric (GE)    $0.64
Motorola (MOT)           $0.25(OLD)
Nuveen (JNC)            $0.60
Region Fin’l (RF)        $0.72
Schlumberger (SLB)    $0.85
SunTrust (STI)            $1.46

DATES AND FIGURES MAY HAVE CHANGED

Posted on: January 12, 2007 – 6:02 pm in Earnings

Cramer Likes H-P & Tech;Still Against Oil

On today’s STOP TRADING segment on CNBC, Jim Cramer noted the weak guidance and the pricing pressure impacting Advanced Micro Devices (AMD).

Earlier this morning he noted this was good for Hewlett-Packard (HPQ) and he said he expects that Intel (INTC) will report a strong quarter next week but may have caution on pricing one quarter out.

He did note HPQ as the winner and he thinks it finishes close to $5 next week.

ON ConocoPhillips (COP) Cramer said save your money.  Walk away for now and then come back in later in the entire group.

Cramer is still positive on Google (GOOG) again and he thinks that the $513 level is coming next week before it’s off to the races.  Cramer still likes tech including Microsfoft (MSFT) as that $30 resistance level was finally able to be overcome.

Jon C. Ogg
January 12, 2007

Posted on: January 12, 2007 – 2:49 pm in Cramer

Market Holiday Coming

As a reminder, Monday, January 15 is a market holiday as most of the US financial markets will be closed to observe Martin Luther King Day.

We should have numerous review and new posts over the weekend and some on Monday as the onslaught of earnings will come flooding out starting on Tuesday.  Keep in mind that these earnings and the forward guidance will be the basis for approximately half of the forward earnings estimates for fiscal 2007.

Have a great 3-day weekend.

Jon C. Ogg & Douglas A. McIntyre

Posted on: January 12, 2007 – 2:33 pm in Exchange

Cramer Talks AMD & SAP

On TheStreet.com’s "Wall Street Confidential," Cramer noted several things. 

Cramer thinks that SAP (SAP) and AMD (AMD) are both challenged.  He thinks the AMD price war has been known and it may hurt Intel’s (INTC) next quarter, but he expects a strong quarter report next week from them.  Cramer thinks that SAP has issues, but he thinks this can take Oracle (ORCL) down further and he wants to avoid that space right now.

Jim also reminded us that next week is options expiration week, and he still sees the bears having more problems.  Cramer likes Apple (AAPL), but says you could wait for that to step back $2 or $3 before stepping in because of the run off a product that is still 2 quarters out.

He notes several more picks on his video if you would like to take a look.

Jon C. Ogg
January 12, 2007

Posted on: January 12, 2007 – 12:46 pm in Cramer

BP CEO Retirement Creates M&A Rumors; Potential Regulatory Problems Exist

Stock Tickers: BP, RDS.A, XOM, COP, CVX, PTR, TOT, SNP

John Browne, the CEO of British Petroleum, or BP Plc, (BP-NYSE/ADR) has announced that he would be retiring at the end of June and would be succeeded by Tony Hayward (head of exploration and production).  In all honesty, this has been in the works since last summer, but the company gave 2008 as the original time frame he would be retiring.  Of course traders and M&A rumor mongers are taking the opportunity to say this could imply a merger between BP and perhaps Royal Dutch Shell (RDS.A-NYSE/ADR).  Rumors of this marriage have been around for quite a while. 

This would make two monster oil and gas powerhouses into a much larger monster powerhouse and that is undeniable.  One problem is that BP is the gem of the U.K. and Shell is the gem of The Netherlands.  The U.S. might not be able to say too much about a merger since it has not blocked a single deal in about 8 years, but there would be major hurdles to a merger of this size.  The E.U. would HAVE to study this for a long time, and they are more strict on mergers than the U.S.  The other group(s) that would be all over this is environmental and corporate/consumer watch groups.  The corporate and consumer watch groups would be screaming bloody murder, calling for bans and boycotts, and probably start lobbying against it here and abroad.  Since these companies also operate globally there are many downstream countries whose oil and gas are being drilled that might have a lot to say about this.  This would take quite a while to close and you can imagine that many of the countries these operate in would also have issues to bring up about this.

So here are the issues, BP has an US-equivalent market cap of some $211 Billion, and Shell’s market cap is harder to calculate because of the recent share buybacks and because of share consolidation but it is also huge.  Many private reports have claimed that all the mergers make energy less and less competitive (and just as many industry-sponsored reports claim the opposite), and if this rumor of a merger were to come to fruition you should just expect another wave of mergers in the US and abroad in the entire energy patch.

ExxonMobil (XOM) has a $417 Billion market cap, Total SA (TOT) has a $307 Billion market cap, PetroChina (PTR) has a $227 Billion market cap, ConocoPhillips (COP) has a $104 Billion market cap, Chevron (CVX) has a $151 Billion market cap, China Petroleum (SNP) has a $72 Billion market cap.

With what everyone has to pay for gas these days it is unlikely that consumers would go for this deal at all.  Anyway, that’s my take on it.   

Jon C. Ogg
January 12, 2007

We maintain a list of usually 100 to 200 companies we think are either sharks or minnows in the M&A world that we refer to as the BAIT SHOP.  We are now sending out one or more updates on the BAIT SHOP per week that might not be part of our normal free web site distribution.  If you would like to subscribe to our free email updates please send an email to jonogg@247wallst.com and label the email SUBSCRIBE or BAIT SHOP and we’ll sign you up.  We value privacy, so we do not share our email lists with any outside 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 12, 2007 – 12:31 pm in Bait Shop, International Markets, Large Cap Stocks, Management Change, Mergers and Buy Outs, Oil & Gas, Regulation

Why The Markets May Fall

Over the last three months, the Dow, the S&P 500, and the Nasdaq are up between 4% and 5%.

But, much of the corporate news is getting worse.

Oil stocks are under pressure. With crude below $55, that may not improve. A lot of the market’s move last year owe to big moves in Exxon (XOM), Conoco (COP), and Chevron (CVX).

Wall St. seems to be concerned about Detroit. GM (GM) had a huge run last year, up more than any other component in the Dow. Ford (F) has not been able to muster much in terms of investor enthusiasm. Investors are troubled that analysts forecasts a drop in overall vehicle sales this year, and the rising Toyota market share.

Big chip companies are under pressure. AMD (AMD) has warned that Q4 will be dirt. This took its stock down 11%. And, if the short-fall was triggered by a price war with Intel (INTC), what does that mean for the larger company’s shares.

With the world’s largest business software company, SAP (SAP) warning on earnings, the markets are concerned that enterprise software sales are slowing. That, in turn, is hurting rival Oracle (ORCL).

Wal-Mart (WMT) can hardly get out of its own way. Ditto for Home Depot (HD). The concern about these companies tends to weigh on retail like an anchor.

And, of course, the cell phone industry, including Texas Instruments (TXN) and Motorola (MOT)  is sinking on concerns that almost all handset sales are poor margin deals.

That pretty much leaves Apple (AAPL) to keep the markets moving up. If they only understood that, the feds would leave him alone.

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

Posted on: January 12, 2007 – 11:48 am in Technical Analysis

Let The Dolans Have Cablevision

The Dolan family is addicted to bidding to take the public company their pater familias founded private again. Cablevision (CVC)

Let them have it. They have bid $30 a share after trying to get it for $27. The offer is almost no premium above where the stock traded recently so the stock was knocked down almost 3% to $28.80.

The fact of the matter is, no one else wants the company. The median analyst price target for the shares works out to only $29 accordig to a First Call poll of 16 analysts.   

Morningstar does not like the company any better. The rating agency has a "fair value" estimate of $25 on the stock. And says investors should consider selling at $30.20. They point to the fact that they company has a lot of debt and took on more to give shareholders a special dividend that totaled $3 billion.

Citigroup, Oppenheimer, and Janco all downgraded the stock late last year.

Good ridance.

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

Posted on: January 12, 2007 – 10:05 am in Cable Companies

The NYSE Sucker Punches Web Portals

Be careful what you ask for. You might get it.

Major web portals like Google (GOOG) and Yahoo! (YHOO) have been aggitating to get the exchanges to part with realtime data for their financial consumer surfers. The retail crowd has lived with delayed quotes for years. Real-time data usually runs about $15 a month if bought through on of the portals or financial sites like MarketWatch.

So, the NYSE (NYX) has told the SEC that it will offer the quotes for $100,000 a month per website. Dow Jones (DJ) said that there may not even be enough demand among its visitors to justify the cost.

If the Nasdaq follows suit, and the pricing model, websites could be paying close to $2.5 million each for the data.

And, that, in all likelihood, is a great deal for the exchanges. It is a very poor deal for the listed companies who want as many investors as possible to have access to the price data about their shares. Perhaps the exchange fees they pay go for something else.

Never give a sucker an even break. And, never wise up a chump.

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

Posted on: January 12, 2007 – 8:41 am in Internet

Pre-Market Stock Notes (JAN 12, 2007)

(AAPL) Apple’s Steve Jobs is being further investigated by Feds over backdated stock options.
(AINV) Apollo Invest 18M share secondary priced at $22.44.
(AMD) AMD indicated down 9% after lowering guidance.
(BBI) Blockbuster positive on Cramer MAD MONEY as still going higher; up 39% since his November call.
(BIDU) Baidu.com noted positively by Cramer on MAD MONEY.
(EXPE) Expedia is losing right to sell some American Air tickets online.
(GWR) Genesee & Wyoming said year over year December carloads were down minimally.
(IHS) IHS trading down 3% after EPS was slightly under plan, but revenues were a tad above.
(INTC) Intel down 1% after AMD lowered numbers.
(JDAS) JDA Software stock fell 3.5% afterlowering guidance.
(LGCY) Legacy Reserves LP priced as the first IPO of 2007.  Its IPO of 6,000,000 units representing limited partner interests priced at $19.00 per unit, in the bottom half of the indicated $18.50 to $20.50 range.
(LMT) Lockheed was noted positively in Business Week from the analayst at Standard & Poor’s.
(LVLT) Level 3 is issuing shares to redeem debt. 
(MUR) Murphy Oil lowered guidance on unsuccessful well charges.
(NAPS) Napster named as exclusive provider of music subscriptions by AOL Music.
(NYX) NYSE is looking at pilot program to provide real time quotes to web sites.
(PNK) Pinnacle 10M share secondary priced at $32.00.
(POOL) SCP Pool lowered guidance.
(RCRC) RC2 Lowered guidance.
(SNE) Sony positive as value and as as break-up play by Cramer on MAD MONEY.
(SRE) Sempra Energy was noted positively in Business Week by A.G.Edwards because of its power and energy assets at a peer-discount; Morningstar positive as well.
(SYNT) Syntel 3.55M share secondary priced at $29.00.
(THRM) Thermage positively in Business Week by Merrill Lynch and C.E. Unterberg Towbin analysts because of its rapid collagen treatments that can be used cosmetically.
(UAHC)  United American Health filed to sell 1.15M shares Of stock.
(ZBRA) Zebra Technologies making $126 million RFID acquisition of WhereNet.

Jon C. Ogg

Posted on: January 12, 2007 – 8:16 am in Pre-Market Activity

Analyst Calls (JAN 12, 2007)

ALD raised to Buy at B of A.
AMD cut to Underweight at Morgan Stanley, cut to Peer Perform at Bear Stearns, cut to Underweight at Prudential, cut to Hold at Citigroup.
AVR started as Neutral at B of A.
AZN raised to Outperform at Bear Stearns.
BBI cut to Neutral at JPMorgan.
BTU started as Buy at Citigroup.
BUD raised to Buy at B of A.
CBS started as Buy at Stifel Nicolaus.
CHKP raised to Outperform at RBC.
COLM raised to Buy at Merrill Lynch.
COP started as Neutral at Credit Suisse.
CXR cut to Underweight at JPMorgan.
FNM & FRE started as Market Perform at KBW.
IFX raised to Buy at Merrill Lynch.
INFY raised to Buy at B of A.
INTU raised to Buy at UBS.
JNC cut to Neutral at Merrill Lynch.
KIM raised to Buy at Deutsche Bank.
KLAC reitr Buy at Citigroup.
LH started as Outperform at Piper Jaffray.
MRVL cut to Neutral at Oppenheimer.
NFLX cut to Neutral at JPMorgan.
NILE cut to Hold at Citigroup.
ORCL cut to Sector Perform at CIBC.
PEIX raised to Neutral at B of A.
PFG raised to Peer Perform at Bear Stearns.
RCCC started as Peer Perform at Bear Stearns.
SAP cut to Neutral at Goldman Sachs, cut to Underperform at JPMorgan, cut to Sector Perform at CIBC, cut to Hold at Jefferies.
SUNW cut to Equal Weight at Morgan Stanley.
TERN Cut to Hold at Jefferies.
XRAY raised to Overweight at Morgan Stanley.

by Jon C. Ogg

Posted on: January 12, 2007 – 8:06 am in Analyst Calls

Fort Apache For Big Pharma

In a sign that large pharma companies may try cooperating instead of competing as generic drug companies come for their business, AstraZeneca (AZN) and Bristol-Myers (BMY) will jointly market two new diabetes drugs.

The move saves both companies a good deal of effort in overlapping sales effort. BMY tends to focus its marketing efforts on physician specialists while AstraZeneca has stength in the general practice doctor field.

The deal also requires AZN to share development costs of the two drugs as the get closer to market. The potential weakness of the alliance is that it will cost AstraZeneca some extra cake, whether the drugs are approved for commercial sale or not.

The deal is no news at this point, but what it signals may be. Detente among the Big Pharma companies who may now see the advantage to jointly bear sales and development costs on drugs. The generic guys want all of their business and as more drugs come "off patent" revenue will flow in their direction.

So, Big Pharma joins hands.

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

Posted on: January 12, 2007 – 7:04 am in Pharmaceuticals

Enterprise Software Companies Get Thrashed

SAP missed Q4 numbers. It stock fell 10%. Revenue was below Wall St. estimates and software license revenue was up only 11%. The firm had earlier guided to 15% to 17%.

Oracle, SAP’s top rival, had its stock beat up in mid-December when its software license business grew 14%, below expectations.

After lagging Oracle’s stock over most of the last year, SAP’s shares have opened up a nice lead over the last month or so. SAP can kiss that lead good-bye.

The broader question to come out of the Orcacle (ORCL) and SAP (SAP) reports is whether there is a global slowing of enterprise software licensing. Microsoft (MSFT) is also in this business, but it is not a large portion of their revenue. At Oracle and SAP, software licenses drive support fees down the road. If licensing is lagging, 2007 could be a long year for the two huge business software rivals.

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

Posted on: January 12, 2007 – 6:43 am in Software

Send The Stents To Europe, They’ll Try Anything

Boston Scientific (BSX) is beginning to market its new drug-coated stent in Europe. After the firestorm of criticism in the US about whether drug-coated stents can cause clotting and heart problems, maybe launching overseas is a good idea.

The stent will also be available in certain parts of Asia and Latin America.

Ironic as it may seem, European researchers have been critical of drug-costed stents. According to the Journal of the American College of Cardiology, Swiss researcher found that these stents inhibited the growth of collateral arteries that supply blood to the heart when major vessels are blocked.

Although BSX reported that its Q4 06 had gone well, the financial information on stent sales was not part of the numbers. Seems to be a mystery. Prudential has an "underweight" rating on the company.The stent issues may keep it their.

For good or evil, BSX’s stock price will rely heavily on its sales of drug-coated stents and any potential liability. No wonder the stock is down 45% over the last year and now trades at only $18.

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

Posted on: January 12, 2007 – 6:29 am in Biotech

Europe Markets 1/12/2007 Unilever, Bayer Up, SAP Down 8%

Stocks:  (BCS)(BP)(BT)(GSK)(PUK)(RTRSY)(UN)(VOD)(BAY)(DCX)(DB)(DT)(SI)(SAP)(ALU)(AXA)(FTE)(V)

Markets in Europe were flat at 6.10 AM New York Time.

The FTSE was flat at 6,230. Barclays was down .2% to 759.5. BP was down .5% at 534.5. BT was down .4% at 317.75. GlaxoSmithKline was up .9% to 1376. Prudential was up .3% to 727. Reuters was up .1% to 452. Unilever was up 1.4% to 1410. Vodafone was up .3% to 149.5.

The DAXX was down .1% to 6,680. Bayer was up 2.5% to 43.02. Daimler was down .3% to 46.91. DeutscheBank was up 1.3% to 104.14. Deutsche Telekom was up .4% to 14.78. Siemens was up .3% to 77.01. SAP was down 7.8% to 38.97.

The CAC 40 was off a fraction to 5,607. Alcatel-Lucent was down 1.1% to 11.73. AXA was up 1.3% to 32.72. France Telecom was up 1% to 22.3. ST Micro was down .8% to 14.64. Vivendi was down .4% to 31.52.

Data from Reuters.

Douglas A. McIntyre

Posted on: January 12, 2007 – 6:12 am in International Markets

iPhone Or No, Jobs Faces The Music

The Feds are not done with Steve Jobs. Someone on the West Coast could become the next Rudy Giuliani or Elliott Spitzer.

The SEC and US Attorney are seeking to question two former Apple employees alledgedly involved in changing dates on an options grant given to Steve Jobs in 2001. It is further alledged that Apple’s (AAPL) general counsel asked for documents to be altered.

It has been said a number of times and a number of place, but it bears repeating. Apple’s board and investors may desparately want Steve Jobs at the company’s helm, but prosecutors don’t give a damn about that.

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

Posted on: January 12, 2007 – 5:44 am in Hardware

Media Digest 1/12/2007 Reuters, WSJ, NYTimes, FT, Barron’s

According to Reuters, Samsung’s Q4 profits fell on dropping prices of flat screen TVs.

Reuters writes that AT&T (T) will phase out the Cingular Wireless brand and rename the unit for the parent company.

Reuters writes that AMD (AMD) has revised its Q4 earnings below previous estimates.

Reuters also reports that if the Apple (AAPL) iPhone is successful it could stretch parts suppliers like Toshiba.

Retuers writes that The New York Times (NYT) will lay off 125 employees at its Boston unit.

The Wall Street Journal reports that the New York Stock Exchange (NYX) may begin to offer real-time stock quotes to consumers over the internet. Websites offering the service would pay $100,000 a month.

The Wall Street Journal also reports that federal authorites are looking into option grants made to Apple (AAPL) CEO Steve Jobs in 2001.

The New York Times reports that US Air’s (LCC) bid for Delta is making the airline industry believe that there are better days ahead.

FT.com reports that Sony’s (SNE) Playstation3 sales figures were well behind the Ninetendo Wii and Microsoft (MSFT) Xbox based on US December sales figures.

Barron’s writes that several large drug companies including Pfizer (PFE), Novartis (NVS), Wyeth (WYE), GlaxoSmithKline (GSK) and Sanofi-Aventis (SNY) have blockbuster drugs coming out in the next year to two that could substantially improve their financial fortunes.

Douglas A. McIntyre

Posted on: January 12, 2007 – 5:35 am in Press Digest

Asia Markets 1/12/20006 Cathay Pacific, China Unicom Up Over 5%

Stocks:  (CN)(CHL)(CHU)(PCW)(HBC)

Markets in Asia rose sharply.

The Nikkei was up 1.3% to 17,057.

The Hang Send rose 1.2% to 19,613. Cathay Pacific rose 5.5% to 20.3. China Mobile moved up 1.9% to 65.95. China Netcom rose 2.9% to 19. China Unicom rose 5.9% to 10.08. HSBC rose .3% to 139.4. PCCW dropped .2% to 4.75.

The KOSPI rose 1.7% to 1,388.

The Straits Times rose 1.3% to 3,009.

The Shanghai Composite fell 3.7% to 2,668.

Data from Reuters.

Douglas A. McIntyre

Posted on: January 12, 2007 – 5:15 am in Uncategorized

Not All Hand Set Firms As Hurtin: Sony-Ericsson

As the share prices of Motorola (MOT) and Nokia (NOK) go down in flames as handset margins shrink, the world’s No. 4 handset company is doing just fine. Sony-Ericsson (SNE)(ERIC) said Q4 earnings would double.It is estimated that the firm will sell 23 million units in the period, up from 16 million in the same quarter a year ago.

Sony-Ericsson has a nice little trick. It sell very few low-cost phones and focuses on handsets with cameras and other expensive gadgets.

To keep at the top of the market share pile, Motorola and Nokia have had to sell cheap phones. Volume over profits and all. Consumers in emerging markets and the less than affluent in emerged markets don’t want to pay big wampum for phones. The two largest handset manufacturers assume that someone has to supply these markets, so it might as well be them.

The cell phone industry is starting to look like the automotive world. Some of the very large companies rely on volume but make very little on each unit.

Perhaps it is better to be BMW or Porsche.

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

Posted on: January 12, 2007 – 4:55 am in Wireless