Monthly Archives: January 2007

Another Blank Check IPO, With A Good Story

Victory Acquisition Corp is filing for an IPO for 25 million units at the normal $10 price per unit.    So they are raising $250 million for the purposes of finding a target to acquire.  We’ll have to look into this one further, because they have Citigroup listed as the lead underwriter with Ladenburg Thalmann and Broadband Capital Management listed in the syndicate.  As with all blank check companies, this is set up to pursue a merger in 1) business services, 2) marketing services, 3) consumer services, OR 4) distribution services.  In other words, they could try to buy anything.

What is interesting is that Eric Watson, chairman and treasurer, and Jonathan Ledecky, president and secretary, each has experience in forming and merging companies. The prospectus says that together they have been involved in the formation of over 25 companies and 400 acquisitions by these companies.

Mr. Watson and his associated interests have a substantial portfolio comprising interests in the fashion retail, financial services, real estate, infrastructure maintenance, sports and entertainment sectors.  Mr. Ledecky had a familiar sounding name, and he was THE or ONE OF the founder(s) of US Office Products, where he was CEO until NOV 1997; and recently has been involved in private equity deals.

Check out (or blank check out) what the company says about its board of directors: Each of Messrs. Watson and Ledecky and Jay H. Nussbaum, Robert B. Hersov, Edward J. Mathias, Richard Y. Roberts and Kerry Kennedy, each of whom is a member of our board of directors, is also an officer and/or director of Endeavor Acquisition Corp., a blank check company formed in July 2005 for the purpose of effecting a merger, capital stock exchange, asset acquisition or other similar business combination with an operating business. Endeavor Acquisition Corp. consummated its initial public offering in December 2005 and raised gross proceeds of approximately $129.3 million at an offering price of $8.00 per unit. In December 2006, Endeavor Acquisition Corp. entered into a definitive agreement for a business combination to acquire American Apparel, Inc. and its affiliated companies. 

Like it or not, this is one to watch just because of the American Apparel tie.

Jon C. Ogg
January 31, 2007

Posted on: January 31, 2007 – 10:19 pm in Consumer Goods, IPOs

2007 TOP PICKS: Cramer Versus Other Pundits

by Jon C. Ogg

Many market pundits made 2007 Stock picks and there are some more we have been compiling, but these are the ones you may have most easily found.  How many websites out there actually track how Cramer does compared to the overall market?  Too many with too subjective of data.  What we decided to do this year was track MANY different 2007 STOCK PICKS that have been published out there.  Now it is true that many 2007 picks were made before the end of the year and that Cramer made his picks in the immediate days after the start of 2007.  But the 2007 list has to be kept consistent and we are tracking these picks as of the adjusted share prices for the close on DEC 29, 2006.  Share prices will be adjusted for dividends and splits as the year goes on, so the yield will already be taken into account.

We are also not doing a comparative analysis based on any groups in their entirety or on the stock moves yet, because no one would ever blindly follow anyone on all of the picks because of parameters and because of logic.  We are also only 1 month into the year and these were picks for ALL 2007 instead of just JANUARY 2007.

Sure, we wanted to see how Cramer did; but we really want to see how everyone did on their 2007 picks.  I also pulled the picks based on name recognition from others, so there would be some recognition out there. Actually 6/9 of Cramer’s TOP 2007 picks are higher year-to-date.  The "Newsletter Advisors" picks (that I picked out for name recognition) are 3/3 UP.  SMART MONEY Magazine’s picks are 9/12 UP.  Fortune Magazine picks are up 6/10.  The William Blair picks from FORBES Magazine so far are up 3/5.  Keep in mind that the NASDAQ is UP roughly 20 points, the S&P 500 is up almost 50 points, and the DJIA is up almost 160 points; so all of the market indices are up for the year.  Keep in mind that this is a huge list, but you can see how each pick has done.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FORBES (William  Blair) 31-Dec 31-Jan Up/Down
Amgen AMGN $68.31 $ 70.37 UP
Gilead GILD $64.93 $ 64.32 DOWN
Paychex PAYX $39.33 $ 40.01 UP
Pepsico PEP $62.55 $ 65.24 UP
Taiwan Semi TSM $10.93 $ 10.91 DOWN
FORTUNE  
AIG AIG $71.66 $ 68.45 DOWN
Altria MO $85.82 $ 87.39 UP
ConocoPhillips COP $71.95 $ 66.41 DOWN
Diamond  Offshore DO $79.94 $ 84.44 UP
General Dynamics GD $74.14 $ 78.15 UP
Joy Global JOYG $48.34 $ 46.47 DOWN
Microsoft MSFT $29.86 $ 30.86 UP
J.P.Morgan JPM $47.96 $ 50.93 UP
RadioShack RSH $16.78 $ 22.10 UP
Southwest Airlines LUV $15.32 $ 15.10 DOWN
SMART MONEY 2007  
Dow Chemical DOW $39.90 $ 41.54 UP
Rohm & Haas ROH $51.12 $ 52.06 UP
Yahoo! YHOO $25.54 $ 28.31 UP
Amazon.com AMZN $39.46 $ 37.67 DOWN
St. Paul Travelers STA $53.69 $ 50.85 DOWN
Hartford  Financial HIG $93.31 $ 94.91 UP
Diageo DEO $79.31 $ 78.73 DOWN
Anheuser-Busch BUD $49.20 $ 50.97 UP
Goldman Sachs GS $199.02 $ 212.16 UP
Lehman LEH $78.12 $ 82.24 UP
China Mobile CHL $43.22 $ 46.15 UP
Coca-Cola Hellenic CCH $39.60 $ 40.27 UP
NEWSLETTER ADVISORS  
Louis Navallier  
Schlumberger SLB $63.16 $ 63.49 UP
Tom Gardner  
Bed Bath & Beyond BBBY $38.10 $ 42.19 UP
Bernie Schaeffer  
UTStarcom UTSI $8.75 $ 8.83 UP
Cramer’s 2007 Picks  
Speculative:  
Level 3  Communications LVLT $5.60 $ 6.20 UP
Rite Aid RAD $5.44 $ 6.16 UP
Savient Pharmaceuticals SVNT $11.21 $ 14.93 UP
Growth:  
New York Stock Exchange NYX $97.20 $ 99.98 UP
Apple AAPL $92.57 $ 85.73 DOWN
Cisco  Systems CSCO $27.33 $ 26.62 DOWN
Value:  
Altria MO $85.82 $ 87.39 UP
Goldman Sachs GS $199.02 $ 212.16 UP
Halliburton HAL $31.05 $ 29.54 DOWN
DJIA 12,463.15 12,621.69 UP
NASDAQ 2,415.29 2,463.93 UP
S&P 500 1418.30 1438.24 UP
Posted on: January 31, 2007 – 6:52 pm in Analyst Calls, Bait Shop, Business Services, Compensation, Cramer, Large Cap Stocks, Press Digest, Research

Cramer on Diet Stocks: NutriSystems (NTRI) is Done; Likes Weight Watchers (WTW)

On CNBC’s MAD MONEY tonight, Cramer first picked Life Time Fitness (LTM) for his way to profit off of weight loss.  But he has others, and some to avoid.

He wants to warn you about cutting down calories.  He discussed NurtiSystems (NTRI) as one that is just as dangerous to own now as it was before it recently got hit.  He said they sell direct to the consumer instead of through retail outlets.  The NTRI model is one he doesn’t like and he thinks it is not a buy because it is done as a stock.  They are a one-hit wonder and their ads are out everywhere.  That means it could be at the end of the trend.  He likes Weight Watchers (WTW). It has a better business model because it is like a profitable A-A.  He has been positive on WTW before.

After Cramer panned it, NTRI fell 0.7% to $43.75 and that is after it fell 15% today.  Its 52-week high is $76.33 and the low is $35.01.  WTW popped over 1% to $54.77 in after-hours.

Jon C. Ogg
January 31, 2007

Posted on: January 31, 2007 – 6:26 pm in Consumer Goods, Cramer

Cramer Gets Fit With Life Time Fitness (LTM)

On tonight’s MAD MONEY show on CNBC, Cramer said he is expecting a rate cut rather than that tightening bias after the MAY FOMC meeting.  He is reviewing ways to make money off of America needing to lose weight.

On weight loss, Cramer said there are ways to profit off of the weight loss fad after the holidays.  He wants to get into the weight loss game before the companies report Q1 results.  You can burn calories or cut down calories.  There are some that earn major bucks and some to avoid.

As far as a health club play, Cramer likes Lifetime Fitness (LTM-NYSE).  Their revenues grew 30% in 2006.  There is a fragmented market in fitness centers.  The over 55 year olds make up over 20% of gym attendance now.  Most clubs don’t work that well for weight loss.  Town Sports Int’l (CLUB) is the second one but LTM beats it on almost all metrics he cares about.  LTM brings in bigger revenues per member and it isn’t expensive.  LTM has a better fitness model with larger clubs and more growth on the map in the South and Mid-west.  An analyst from Prudential recently gave it an Underweight rating, but Cramer thinks it should have been an overweight rating.  Cramer said the call was not right.  LTM rose 0.9% to $54.20 in normal trading but it popped 1.4% to $54.97 after Cramer touted it after-hours.

Jon C. Ogg
January 31, 2007

Posted on: January 31, 2007 – 6:14 pm in Cramer

Dell Back In FULL Control; Rollins is Out!

Dell Inc. (DELL-NASDAQ) announced today that MICHAEL DELL will assume the duties of Chief Executive Officer, effective immediately. Mr. Dell, who will retain his duties as Chairman of the Board, will replace Kevin Rollins.

This is not new news if you have read us in one of our ten CEO’s that needed to go, and media reports have also been pointing to Rollins needing to leave.  It isn’t without bad news, because DELL also said that it expects its fourth quarter Fiscal Year 2007 results to be below the average of First Call estimates for both revenue and earnings per share.

The focus is going to be on Michael taking back control, and it will be on his vision. I don’t really care about the warning, I care that Michael Dell is back in charge.  A warning is not good, but the focus should be that the company is back in the right man’s hands.  That is why we said Michael Dell was one of the most entrenched positions on the street, and he’s just the right guy for the job.

If this one gets beaten up after they re-open it because of the guidance; then it should be just a better long-term opportunity after the dust settles.  CNBC’s Maria Bartoromo just asked a guest how long Michael Dell would have to show he can turn it around, which is fairly ludicrous.  I would bet money on a Michael Dell being the best man for the job any day of the week.

Jon C. Ogg
January 31, 2007

Posted on: January 31, 2007 – 4:44 pm in Corporate Governance, Earnings, Management Change, PC Companies, Technology Companies

Starbucks Serves Hot Ones

Starbucks (SBUX-NASDAQ): $2.4 Billion revenues and EPS $0.26; estimates were $0.26 & $2.35 Billion. SBUX is up 1.6% at $35.50 in after-hours.  Starbucks reaffirmed its fiscal 2007 targets:

Will open at least 2,400 new stores on a global basis in fiscal 2007. In the United States, Starbucks plans to open approximately 1,000 Company-operated locations and 700 licensed locations. In International markets, Starbucks plans to open approximately 300 Company-operated stores and 400 licensed stores;

The Company is targeting total net revenue growth of 20% for the full year and comparable store sales growth remains in the target range of 3% to 7%;

EPS for 2007 targeted in the range of $0.87 – $0.89 for fiscal 2007.

Shares are actually down 12% from the $40.01 recent highs and are very close to the price they started on October 1.

Here is what my partner gave on it back on DEC 12 when the stock was at $36.00.

-Record quarterly retail store openings of 728 stores
-Net revenues of $2.4 billion, an increase of 22 percent
-Comparable store sales growth of six percent
-Net earnings of $205 million, an increase of 18 percent
-Earnings per share of $0.26, compared to $0.22 per share, an increase of 18 percent
-Record quarterly Starbucks Card activations of $287 million, an increase of 30 percent

Posted on: January 31, 2007 – 4:33 pm in Earnings

Google Beats

Google (GOOG) beat Wall St. estimates. EPS was $3.18 compared with expectations of $2.91. Revenue hit $3.21 billion versus a consensus of $3.14 billion. Well, Cramer said it would. It was one of his top picks of 2007.

Investors had set the bar very, very high.

Aggregate paid clicks at Google were up an astonishing 61% from last year.

Oddly enough, it does not seem that Google beat estimates by a large enough margin. Due to Wall St.’s perverse calculus GOOG shares fell after the announcement dropping as much as 3%. By 4.14 PM they were down only 1%.

Now, that makes sense.

Douglas A. McIntyre

Posted on: January 31, 2007 – 4:14 pm in Earnings

JDSU Mixed Signals

JDSU (JDSU-NASDAQ) gave earnings today, but remember that it had already guided higher.

It posted revenues at $366.3M and GAAP net income $0.10 EPS, non-GAAP EPS $0.13 versus $0.10 estimates.  On JAN 18 it raised its previously issued revenue guidance of $332 to $352 million to be within a new range of $360 to $365 million.  Consensus estimates were roughly $342 million.

JDSU expects net revenue for the third quarter of fiscal 2007, ending March 31, 2007, to be in the range of $333 to $353 million; although estimates are $351 million.  So they raised two weeks ago, but guidance looks soft here for the coming quarter at the mid-point of the range.  Maybe they are just trying to be conservative, but after its history traders don’t like giving JDSU the benefit of the doubt.

JDSU closed up almost 3% at $17.21 (versus $13.93 adjusted 52-week lows) and it is now indicated back down to $17.21.

Jon C. Ogg
January 31, 2007

Posted on: January 31, 2007 – 4:12 pm in Earnings, Technology Companies, Telecom

Positive Market Reaction to the Fed

From Ticker Sense

As of 2:55 PM, the 70 basis point gain in the S&P 500 ranks as the third most positive market performance on a Fed day since the tightening cycle began in June 2004.  However, we also looked at the S&P 500 return in the one week following Fed days.  71% of the time the market’s direction in the one week period after the Fed day is the opposite of the direction it takes on the day of the announcement.

Fed_days_2

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Posted on: January 31, 2007 – 3:47 pm in Economy

GOOG Earnings

From Ticker Sense

We realize investors have quite a bit of data to digest today — GDP, oil inventories, Fed decision — but after the close, we also have Google (GOOG) earnings to deal with.  Below is a table of Google’s historical earnings results as well as the one-day price change on the day of the report as well.  On all but two occasions, GOOG has traded up on the day, but the open to close change has a mostly negative bias.

Googearnings

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Posted on: January 31, 2007 – 3:45 pm in Earnings

Cramer Flied Boeing and Ignores the Fed

On STOP TRADING on CNBC today, Cramer said the FED is actually listening to the guidance conference calls of the major companies and seeing the slowdown.  The tape is not lying, and these guys that say the fed will hike must be condo buyers.  Stocks to Cramer are telling the real story, the Fed isn’t.  Cramer noted his 17% gain predicted on the DJIA.

Cramer loves Boeing (BA-NYSE), and the ones saying the cycle is over are giving investors a gift.  The bears are wrong here according to him. He also noted BE Aerospace (BEAV) as a beneficiary there.

Jon C. Ogg
January 31, 2007

Posted on: January 31, 2007 – 2:58 pm in Cramer, Transports

FOMC “Inflation Bias” Seems More of a Neutral Than Hawkish

As expected, NO CHANGE in rates.  Core inflation readings have moderated but risks remain to the upside.  This doesn’t really sound HAWKISH today, and the market was worried the fed would be hawkish in statement.  The economy will expand at a moderate pace.

This is goldilocks and a soft landing.  There is still an inflation bias officially from the fed, but this statement is more of a neutral bias despite the real media reports.  Here is today’s statement.

Here is the statement from the DEC 12, 2006 meeting.

Here is the link for the minutes of the DEC 12, 2006 meeting (released JAN 3, 2007).

There was a ZERO PERCENT chance priced in for any FOMC action today, so don’t think this one was as important as the media was telling you.  In fact, most market moves after the FOMC announcement see several whip-arounds before any real direction is taken.  By printing that, it will probably create an opposite response but that’s life.  The first move has been up on this so we’ll see if it holds.

Here is where the markets were at 2:08 PM EST, 7-minutes ahead of the estimated FED TIME of 2:15 PM EST…

Dow    12,557.92; Up 34.61 (0.28%)
Nasdaq    2,446.32; Down 2.32 (0.09%)
S&P 500    1,429.54; Up 0.72 (0.05%)
10-Yr Bond    4.851%; Down 0.024
NYSE Volume    1,660,301,000
NASD Volume    1,284,646,000

The next meeting is not until March 20-21 and then the next meeting is not until May 9 after that.  There is some new speculation that the Fed was going to be hawkish in the statements, but that’s the market.  Unless this time is truly different, the rate cycle shouldn’t change again to a rising rate environment unless they just want to drive an axe in the chest of goldilocks and ruin the ’soft landing.’

Jon C. Ogg
January 31, 2007

Posted on: January 31, 2007 – 2:20 pm in Economy

Cramer Still Down on Whole Foods and AMD (WFMI, AMD)

Stock Tickers: WFMI, SBUX, CAT, AMD, BJS, SLB

Cramer was discussing 52-week highs and lows earlier today on TheStreet.com’s Wall Street Confidential and he likes buying 52-week high stocks, but everything has to work out.  After watching Whole Foods and Starbucks (WFMI/SBUX) finally at too lofty of levels you saw what happened.  Cramer said he is more drawn to 52-week highs right now than he is 52-week lows in the current market.

He noted that Whole Foods (WFMI-NASDAQ) needs a catalyst and management isn’t doing much and they don’t know they have a really bad division in California.  A change in management would be good, but don’tpull the trigger yet.  He thinks a new COO would help. (As a reminder, Cramer was a lover of WFMI for a long time before they had their first recent blow-up last year)

Caterpillar (CAT-NYSE) has now gone too far and he’s working non-stop on it.  Morgan Stanley has written entirely research from the bearish view, and Cramer thinks the manifesto is wrong.  If you get any sort of uptick or any help in housing it would help CAT.

On Advanced Micro Devices (AMD-NYSE) Cramer said AMD is in huge trouble.  Intel woke up and the cash flows are really bad.  They can’t just bounce back and they overbuilt fabs.

Cramer said BJ Services (BJS-NYSE) showed a bad quarter while Schlumberger (SLB-NYSE) did well, and that may be the fragmenting starting in the energy patch where you now have to pick the winners.

Jon C. Ogg
January 31, 2007

Posted on: January 31, 2007 – 1:39 pm in Cramer

Insights from the GDP Report

By William Trent, CFA of Stock Market Beat

According to the Bureau of Economic Analysis:

Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 3.5 percent in the fourth quarter of 2006, according to advance estimates released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 2.0 percent.

It sounds like a sharp acceleration unless you know how much the seasonal adjustments tend to distort things, as we have pointed out with regard to a variety of economic indicators, including employment, durable goods and GDP. Ah, GDP. Here is how it looks by comparing the fourth quarter to last year’s fourth quarter without adjustment (since the fourth quarter was in the same season both years.)

GDPyearyear.jpg

Like the seasonally adjusted numbers, the unadjusted report shows a decline in Q3 GDP (the bars) and a resurgence in Q4. However, unlike the adjusted numbers neither seems very significant. If the point of seasonal adjustment is to make the data more meaningful, the job isn’t getting done. What the unadjusted data does show, however, is that business spending on equipment and software is slowing down significantly, not withstanding the acceleration in overall GDP for the fourth quarter. Looking at the components of GDP further clarifies this point:

contributions.jpg
Private domestic investment (business spending, primarily) cut a full two percentage points from GDP growth. It is fortunate that other components, particularly net exports, grew so much.

Finally, do the data indicate that concerns over the housing slowdown and its potential impact on consumer spending are unwarranted? Here the picture is mixed. Housing is acting as less of a drag on overall GDP:
residentialcontribution.jpg

ResidentialInvestment.jpg

However, the year/year decline continues to worsen.

The author may hold a position in the securities discussed. The author’s current holdings are as follows: Long: Union Pacific (UNP) put options; Air Products (APD) put options; Nasdaq 100 (QQQQ) put options; Bookham (BKHM; Ballard Power (BLDP); Syntax Brillian (BRLC); CMGI (CMGI); Genentech (DNA); Ion Media Networks (ION); Three Five Systems (TFS); IShares Japan (EWJ); StreetTracks Gold (GLD); Starbucks (SBUX); U.S. Oil Fund (USO); Plantronics (PLT) call options; Short: Starbucks (SBUX) call options; Landstar (LSTR) put options; Plantronics (PLT) put options;

http://stockmarketbeat.com/blog1/

Posted on: January 31, 2007 – 1:19 pm in Economy

CRDN: Ceradyne Makes More Sales We Already Knew About

By William Trent, CFA of Stock Market Beat

The way the defense spending process works, companies selling to the military generally receive a blanket order covering multiple years, but the actual spending must be approved by Congress each year. As a result, companies typically report both the blanket order (which allows investors to anticipate the likely future revenue stream) and the follow-on orders (which allows investors to see that the expected revenue will actually materialize.) With large companies like Lockheed Martin (LMT), the announcements are seldom sufficiently significant to move the market. However, with smaller companies investors must pay careful attention, as is the case with today’s announcement from Ceradyne (CRDN).

Ceradyne, Inc. Receives $113 Million Ceramic Body Armor Order for U.S. Army: Financial News – Yahoo! Finance

Ceradyne, Inc. received a $113 million delivery order for ESAPI (Enhanced Small Arms Protective Inserts) from the U.S. Army, Aberdeen Proving Ground, Maryland. This new delivery order is scheduled to be shipped beginning April 2007 through early September 2007. This delivery order will be shipped against a larger indefinite delivery/indefinite quantity (ID/IQ) contract announced earlier. The Company records as firm orders only delivery orders, such as the above, that have firm scheduled delivery dates.Dave Reed, Ceradyne President North American Operations, commented: “This delivery order is the largest single ESAPI order ever received by Ceradyne.”

The delivery is the follow-on order from a previously announced contract, so the only incremental information is that the order will actually go through as expected. Hopefully the 5% rise in the share price today is due more to investors appreciating Ceradyne’s attractive valuation than to a misunderstanding over whether this is a new order.

It also serves as a good illustration of  PR word-mincing, as this $113 million “largest single ESAPI order ever received by Ceradyne” should not be confused with the $133 million ESBI order they received in December. For the record that, too, was a follow-on order as part of a previously announced contract.

The author may hold a position in the securities discussed. The author’s current holdings are as follows: Long: Union Pacific (UNP) put options; Air Products (APD) put options; Nasdaq 100 (QQQQ) put options; Bookham (BKHM; Ballard Power (BLDP); Syntax Brillian (BRLC); CMGI (CMGI); Genentech (DNA); Ion Media Networks (ION); Three Five Systems (TFS); IShares Japan (EWJ); StreetTracks Gold (GLD); Starbucks (SBUX); U.S. Oil Fund (USO); Plantronics (PLT) call options; Short: Starbucks (SBUX) call options; Landstar (LSTR) put options; Plantronics (PLT) put options

http://stockmarketbeat.com/blog1/

Posted on: January 31, 2007 – 1:17 pm in Uncategorized

CHRW: C.H. Robinson Keeps on Trucking

By William Trent, CFA of Stock Market Beat

We have written many times about why we believe the transportation companies that act more as brokers will perform better than their asset-owning peers.  And yesterday, the juxtaposition between the UPS disappointment and the C.H. Robinson blowout offered a case in point. According to CH Robinson:

Total Transportation gross profits increased 19.5 percent to $246.2 million in the fourth quarter of 2006 from $205.9 million in the fourth quarter of 2005. Our Transportation gross profit margin increased to 18.3 percent in 2006 from 15.7 percent in 2005.

Pretty spectacular given the cautious guidance and reports from both asset-based truckers and non-asset-based peer Landstar (LSTR).

Disclosure: At time of publication, author is short Landstar (LSTR) put options.

The author may hold a position in the securities discussed. The author’s current holdings are as follows: Long: Union Pacific (UNP) put options; Air Products (APD) put options; Nasdaq 100 (QQQQ) put options; Bookham (BKHM; Ballard Power (BLDP); Syntax Brillian (BRLC); CMGI (CMGI); Genentech (DNA); Ion Media Networks (ION); Three Five Systems (TFS); IShares Japan (EWJ); StreetTracks Gold (GLD); Starbucks (SBUX); U.S. Oil Fund (USO); Plantronics (PLT) call options; Short: Starbucks (SBUX) call options; Landstar (LSTR) put options; Plantronics (PLT) put options;

http://stockmarketbeat.com/blog1/

Posted on: January 31, 2007 – 1:15 pm in Uncategorized

MySQL IPO May Be In The Works

There is a lengthy article from Computer Business Review stating that Linux distributor MySQL is prepping for an IPO.  This would be a big win for consumers and for open source if it is able to IPO.  The Swedish-based company would follow Mandrake’s offering on Euronext over 5 years ago and would follow another small Linux player in Norway called Trolltech.  As of now traders have to trade Red Hat (RHT), Novell (NOVL), VA Software (LNUX) or SCO (SCOX); and the latter two are hardly traded for the Linux exposure any longer.  They have somewhere around 10,000 paying customers now, and the article says this translates to close to 10 million installed users.

MySQL is one of the companies we have had on the IPO-radar for some time, and even if this will take until the end of the year it is one to watch ahead of time.

The NY Times DealBook has also covered this today.

Jon C. Ogg
January 31, 2007

Posted on: January 31, 2007 – 12:46 pm in Business Services, IPOs, Press Digest, Small Cap Stocks, Software, Technology Companies

The New SEC: Not The Domineering Type

From AAO Weblog

A few years ago, the SEC used to have “We are the investor’s advocate” plastered in various prominent spots of its website – like the home page, for instance.

No more. The SEC has become kinder and gentler, it seems, with bigger interests than just advocating for investors. I mentioned Commissioner Paul Atkins’ speech last week, the one where he continued to bash Section 404 costs while praising efforts at making Auditing Standard 2 less onerous. I forgot to mention this snippet:

“The SEC is very concerned about maintaining our capital markets as an attractive place for investors to invest. In fact, we are charged by Congress to look after not only investor protection, but also competition and efficiency of the financial marketplace and ease of capital formation. We must ensure the integrity of our markets so that investors have confidence that they will be treated fairly. At the same time, our regulations must not price those very investors out of our markets through burdensome regulations or eat up the fruits of their investments through nonsensical mandates.”

“Charged by Congress to look after not only investor protection but also competition and efficiency of the financial marketplace and ease of capital formation?” Well, yes. And he’s right; it’s in black-and-white in the 1933 Act. But the 1933 Act presents it in a slightly different tone:

“Whenever pursuant to this title the Commission is engaged in rulemaking and is required to consider or determine whether an action is necessary or appropriate in the public interest, the Commission shall also consider, in addition to the protection of investors, whether the action will promote efficiency, competition, and capital formation.” [Emphasis added.]

Notice what comes first: the protection of investors. The rest is secondary. Commissioner Atkins’ statement sounds like he’s channeling the Bloomberg/Schumer report or the Paulson Committee report more than echoing William O. Douglas. This reference to Douglas comes from a 1995 speech by Arthur Levitt:

“One of my predecessors, later Supreme Court Justice, William O. Douglas described our special role in this way: “We’ve got brokers’ advocates; we’ve got exchange advocates; we’ve got investment banker advocates; and we are the INVESTOR’S advocate.”"

Maybe the pendulum hasn’t swung completely the opposite way from the reform era after Enron – but it feels like it’s almost there. I offer this list of “Top Ten Signs the Pendulum Has Swung” compiled by David Katz at CFO.com so you can at least get a good laugh out of the current deregulatory folly.

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

Posted on: January 31, 2007 – 12:29 pm in Accounting

US Air Drops the Delta Bid, As Expected

US Airways (LCC-NYSE) has formally withdrawn its offer to acquire Delta Air Lines Inc. (DALRQ-NASDAQ/OTC). The Unsecured Creditors’ Committee would not meet its demands by the airline’s established deadline of Feb. 1, 2007. US Airways’ offer of $5.0 billion in cash and 89.5 million shares of US Airways stock would have expired on Feb. 1, 2007, unless there was affirmative support from the Official Unsecured Creditors’ Committee.  That didn’t happen and isn’t going to happen. 

Yesterday we noted in the Delata Air $2.5 Billion exit financing that Delta was firing a shot out by using the term ‘STANDALONE’ on six occasions in their press release.  If that didn’t bleed "GO AWAY!" then nothing else does either.

Jon C. Ogg
January 31, 2007

Posted on: January 31, 2007 – 11:58 am in Mergers and Buy Outs, Transports

Boeing’s Fantastic Future

Boeing (BA) did not want to leave anything to doubt. Instead of forecasting the next quarter, or even the next year, the big aerospace company said that it sees two years of rising profits and revenue growth. That is the great thing about having orders in hand for products that take close to forever to build.

Boeing’s 787 has simply caught rival Airbus flat footed. It may take the European firm three of four years to recover.

Long runway.

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

Posted on: January 31, 2007 – 11:48 am in Transports