Daily Archives: February 14, 2007

Cramer MAD MONEY 2/14/2007

Cramer likes companies that make money outside the US

It used to be all BRIC, Brazil, Russia, India and China

Now, it’s ROW. The Rest of the World.

Cramer like three companies.

One huge US company that gets half of its revenue from ROW is Caterpiller (CAT) It also has half of its plants outside the US.

Always a bull market somewhere. Now, it is everywhere but the US.

Their weakness is that rates are too high.

Cramer likes stocks that do business in the rest of the world.

Stocks without international business should get a black mark

Cramer likes cyclical American companies that do business overseas.

They deserve a huge premium.

No.2 on Cramer’s list DuPont (DD). Sixty-five percent of revenue from outside the US. DuPont has a huge agricultural division. The unit is doing well.

There is a new corn OPEC, that the US controls. DuPont is part of that.

Cramer finally likes Qualcomm (QCOM) going to mid $40s.

Cramer wants to ring the register at NutriSystems.

Cramer’s last favorite of stocks that do money in The Rest of the World is United Technologies (UTX). It has 60% of its revenue from outside of the US

Douglas A. McIntyre

Posted on: February 14, 2007 – 8:10 pm in Cramer

Coming Tomorrow

Yahoo! Resurrection

Vista Takes Off

Posted on: February 14, 2007 – 7:44 pm in Uncategorized

Cramer’s STOP TRADING (FEB 14, 2007)

On today’s STOP TRADING segment on CNBC, Jim Cramer was out on Chrysler (DCX) saying that autos can win if they’ll contract and worry about profitability rather than market share.  On First Solar (FSLR) up $10.00 today Cramer said it is one of the legitimate solar plays that makes money.  On Accredited Home Lending (LEND) about it rising after being down huge, shows his longer-term thesis on Fed cutting rates.  He said look at Countrywide (CFC) and KB Home (KBH).  On LEND Cramer said these guys are under book value and he thinks they have some value if the Fed is close to helping.  He thinks CFC is also smartly run.

Jon C. Ogg
February 14, 2007

Posted on: February 14, 2007 – 2:46 pm in Cramer

Bloomberg Projected 3 Year Dividend Growth

From Ticker Sense

Bloomberg recently released a new function that forecasts future dividend amounts for individual stocks using their own proprietary model.  We screened the Russell 1000 for stocks currently yielding over 2% to see what Bloomberg was projecting for them.  Bloomberg also provides a projected 3-year dividend growth rate.  The stocks below are all expected to increase their dividend payments by their next declaration date and all have projected 3-year dividend growth rates above 5%.

Bdvd

http://www.tickersense.typepad.com/

Posted on: February 14, 2007 – 2:34 pm in Dividend

IPO Filing: Insulet Corp, A Personal Diabetes Device

Insulet Corp  has filed to come public via an IPO under the ‘PODD’ ticker on NASDAQ. No terms have been set, but it lists $86.25 million as the proposed amount to be sold as far as filing purposes.  J.P.Morgan and Merrill Lynch are designated as the lead underwriters and Thomas Weisel and Leerink Swann are also listed as co-managers.

This company makes a pain free personal diabetes manager with monitor under the OmniPod (R) brand.  It is a medical device company that develops, manufactures and markets an innovative, discreet and easy-to-use insulin infusion system for people with insulin-dependent diabetes.  Here is what the company says about itself:  Our proprietary OmniPod Insulin Management System, which consists of our OmniPod disposable insulin infusion device and our handheld, wireless Personal Diabetes Manager, is the only commercially-available insulin infusion system of its kind. Conventional insulin pumps require people with insulin-dependent diabetes to learn to use, manage and wear a number of cumbersome components, including up to 42 inches of tubing. In contrast, the OmniPod System features only two discreet, easy-to-use  devices that eliminate the need for a bulky pump, tubing and separate blood glucose meter, provide for virtually pain-free automated cannula insertion, communicate wirelessly and integrate a blood glucose meter. We believe that the OmniPod System’s unique proprietary design offers significant lifestyle benefits to people with insulin-dependent diabetes.

The US FDA approved the OmniPod in January 2005 and they began selling this in October 2005.  It lists that as of December 31, 2006 it has sold to approximately 1,200 people in the US.  As of the 9-months ended September 30, 2006, they had $2.02 million in revenues and had a net loss of $25.3 million.  It plans to use funds to expand its manufacturing capabilities, and it currently manufactures this at a loss on each unit.  It anticipates completing its automated manufacturing line in 2008.

Despite the fact that they are a money loser and will continue lose money, this has the key medical buzzword that investors love to see: DIABETES.  This won’t come without any controversy because of limited success, but it at least is in the right sector.

Jon C. Ogg
February 14, 2007

Posted on: February 14, 2007 – 1:55 pm in IPOs

Reuters Rumor Alert: Will GM Buy Chrysler?

Reuters is reporting the GM (GM) may have been in talks with DaimlerChrysler (DCX) about buying the Chrysler Group. Few deals would make more sense and GM battles Toyota (TM) for the place as the world’s No.1 car company.

GM could also cut significant cost at Chrysler. With its stock up 60% in the last year, GM’s currency also has some value.

Douglas A. McIntyre

Posted on: February 14, 2007 – 12:19 pm in Mergers and Buy Outs

Cramer on Applebee’s & A Fed Rate Cut in MAY

On todays Wall Street Confidential video on TheStreet.com Cramer said that Bernanke’s verbage today is laying the groundwork for what may be a fed cut in May.  On Chrysler: The demand for autos is there and now the companies all want to worry about profits rather than market share.  You want to own these if they are going to all go for profits, but the best is the convertible notes and the debt.  Cramer said Johnson Controls (JCI) is one of the safer auto plays.  He thinks that goes through $100.00.

Cramer said Applebees (APPB) is overvalued.  It is up 14% and at a 23 P/E, so this is the sort of thing that can cause a legal backlash; and APPB isn’t as good as Darden and others to Cramer.  He doesn’t like the APPB sell and he thinks some of the backlash will end up in Congress. 

Cramer said that he disagrees with media about the Fed being a hawk and he thinks that Bernanke is signalling he is looking for an excuse to cut rates right now.  Cramer stressed: THERE WILL BE A CUT IN MAY.….That is why he said Accredited Home Lenders (LEND) and Countrywide (CFC) are going up when conventional wisdom would have you think they would go down on poor results. 

Here is what we noted yesterday ourselves about a potential APPB bid.

Jon C. Ogg
February 14,2007

Posted on: February 14, 2007 – 12:13 pm in Cramer

It’s Not Too Late For Motorola To Buy Nortel

Carl Icahn is upset that Motorola (MOT) is sitting on over $11 billion in cash and getting a 3% yield on it. He wants that dough to be given back to shareholders.

At the same time, the head of Nortel (NT), a former Motorola exec, is telling anyone who will listen that the big network company is turned around. According to the company its accounting issues are behind it, the employee cuts are done, and SEC investigations are a thing of the past.

Nortel’s fourth quarter revenue will be up 9% to $3.26 billion.

Nortel is also investing in WiMax, a technology that Intel (INTC) and Motorola have already embraced.

According to MarketWatch, Nortel CEO Zafirovski reiterated his belief that NT is now stable enough to contemplate a strategic acquisition that would strengthen its core businesses. But, maybe it will be the company that is acquired.

Motorola’s infrastructure business and Nortel are in very similar parts of the telecom supply sector. And, while a turnaround may be well along at Nortel, its stock has been flat for the last year.

Based on Nortel’s general and administrative costs, Motorola could probably take $100 million out of a combined company.

Nortel’s market cap is $13 billion. Perhaps Motorola could put all its cash to good use.

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

Posted on: February 14, 2007 – 11:47 am in Mergers and Buy Outs

Is Halliburton’s Discount Warranted?

By Chad Brand of The Peridot Capitalist

As energy investors are aware, shares of Halliburton (HAL) have been trading near historically low valuations for much of the recent past. I have largely dismissed the discount as being merely a consequence of having a huge amount of U.S. government business due to the Iraq war. Once that is over, or as soon as the Bush Administration was out of office, my thinking went that huge no-bid contracts allowing the company to charge the government anything they wanted would vanish, and Halliburton’s financial performance would lag. Hence, the stock is discounting this reality in the marketplace.

With the Halliburton spin-off of its KBR (KBR) subsidiary, all of the sudden we have the division with much of the Iraq war criticism tied to it trading on its own. After Halliburton disperses its majority stake to shareholders, Halliburton will look a lot more like a leading oil services company, and much less like a company being propped up by the Bush Administration, and more specifically, former CEO Dick Cheney. Interestingly, in 2006 KBR represented 43% of sales for HAL, but only 7% of operating income.

The KBR-free Halliburton would once again be a good comparable for Schlumberger (SLB), the other large services company that, before the war in Iraq, traded very similarly on Wall Street. With such a scenario unfolding, there might not be a good reason to have a such a wide valuation disparity between the two largest energy services firms.

Both stocks have similar dividend yields of around 1% per year. HAL trades at 12.3 times 2007 profit forecasts, versus 16.8 times for Schlumberger. As much as I wanted to come to another conclusion, based on political views of the Iraq war, I must admit that the stock is cheap. A purely long play on HAL, or a paired trade with a short Schlumberger position to play a possible narrowing of the valuation gap, could be attractive.

Full Disclosure: No positions in the companies mentioned

http://www.peridotcapitalist.com/

Posted on: February 14, 2007 – 11:15 am in Oil & Gas

BSC Upgraded at Credit Suisse

From Ticker Sense

Credit Suisse upgraded BSC to Outperform from Neutral and raised their price target on the stock from $172 to $190.  See below for their historical calls on Bear Stearns.

Bscupgrade

http://www.tickersense.typepad.com/

Posted on: February 14, 2007 – 11:14 am in Research

Top Rated Analysts Change Opinions on NDAQ

From Ticker Sense

For people who watch and monitor analyst actions, today we had a relatively rare event occur.  The two analysts (as tracked by Bloomberg) with the best track records on Nasdaq (NDAQ) changed their ratings in opposite directions, but now end up with the same rating.  Prudential upgraded the stock to a hold from underperform, while CIBC downgraded the stock to a hold from outperform.

Ndaq_pru

Ndaq_cibc

http://www.tickersense.typepad.com/

Posted on: February 14, 2007 – 11:11 am in Research

Blank Check IPO Filing: Inter-Atlantic Financial

Another blank check company has also filed to come public via an IPO today.  Inter-Atlantic Financial has filed to sell 7.5 million units at a propsed $60 million capital raise, but the IPO filing shows an aggregate $129+ million.  This is indicated at $8.00 per unit out of Morgan Joseph as the only underwriter.  This obviously has no background of operations, but here are the sectors it has ‘identified’ it wants to operate in: payment processing, transaction processing, financial data and content, banking, insurance, asset management, brokerage, credit card technologies, mobile finance solutions, consumer or commercial finance providers.

The people set to run this operation are actually ex-Smith Barney investment bankers with considerable experience listed on behalf of the founders.  Other founders have various experience listed in the filing as well.

If you wish to read more about this blank check company you can read the SEC Filing here.  The company plans to list on AMEX rather than NASDAQ or NYSE and the ticker has not yet been assigned.

Jon C. Ogg
February 14, 2007

Posted on: February 14, 2007 – 10:11 am in Financial Stocks, IPOs

JMP Securities’ Parent Files for IPO

JMP Group, a boutique investment banking firm and asset manager in San Francisco, has filed to come public via an IPO this morning.  It has listed its own JMP Securities, Merrill Lynch, and Keefe Bruyette & Woods as joint book runners.  It will trade under the ‘JMP’ ticker on NYSE.  Terms and timing are obviously still pending, but the filing says up to $100 million in securities for the filing purposes.

JMP was founded in 1999 by professionals out of the old Montgomery Securities, which is now under Banc of America.  For the 9-months ended Sept. 30, 2006 it had revenues of $63.6 million and net income was almost $2.4 million.  As of the same period it listed its total capitalization at $58.095 million.

As Wall Street has been digesting boutique investment banking firms, it is probably safe to assume that this deal will get without much troubles. One blow up or market tank could alter that theory, but this firm actually has a good reputation and has been involved in IPO’s, PIPE’s, M&A Advisory, Independent Research, Asset Management, Trading, Institutional Coverage, and more.

Jon C. Ogg
February 14, 2007

Posted on: February 14, 2007 – 9:52 am in Financial Stocks, IPOs

CheckFree Pays Too Much For Corillian

CheckFree (CKFR) agreed to buy online bank software provider Corillian (CORI) for $245 million, or $5.15 a share.

Someone must not be thinking clearly. In the most recent quarter CORI did revenue of $16.4 million. Operating profits were $779,000. For the year, revenue was $61 million, and the company lost $1 million. Even if the Q4 net is taken 4x, the bottom line is less than $3.2 million.

Paying such a huge premium is really out of line. Corillian stock is up 45% to $5.

CheckFree shareholders should be alarmed.

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

Posted on: February 14, 2007 – 9:44 am in Mergers and Buy Outs

Ciena: Multiple Upgrades (CIEN)

As The Wall Street Journal pointed out today, being in the optical capacity business these days does not get any better. Video and data needs are driving demand for upgraded infrastructure through the roof. So, Citigroup upgraded Ciena’s stock to "buy" after upgrades yesterday.

Ciena shareholders could use some good news. The stock came close to $40 in March of last year. By November, it was down to $22.

But, the market has revised its thinking as companies like Cisco (CSCO) and Level 3 (LVLT) have come back into vogue. YouTube needs all that bandwidth.

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

Posted on: February 14, 2007 – 9:06 am in Technology Companies

Coke Still Bubbles (KO)

Coke had a good quarter. Revenue rose 7% to $5.93 billion. The WSJ said that investors expected $5.78 billion.

The really impressive growth came from overseas Unit case volume was up 6% outside the US.

And, who would have guessed, it was driven by China, Russia, and India.

Just like almost every other big US corp.

Douglas A. McIntyre

Posted on: February 14, 2007 – 8:48 am in Consumer Goods

The Next Version After Vista: Vienna (MSFT)

Word has been circulating for several days that Microsoft (MSFT) is already well along in work on the OS that will come after Vista.

Steve Ballmer has promised that future Windows versions will not take the five years to develop that Vista did.

Late word from The Inquirer is that Microsoft is trying to downplay speculation about the release date of Vienna. But, the consensus among rumors is that two-and-a-half years is about right.

Douglas A. McIntyre

Posted on: February 14, 2007 – 8:41 am in Software

Full Research Notes (FEB 14, 2007)

ACS raised to Outperform at RBC and raised to Neutral at Credit Suisse.
ADLR started as Outperform at FBR.
AMAT raised to Buy at First Albany.
APPB raised to Buy at Jefferies.
BSCraised to Outperform at Credit Suisse.
BWLD cut to Mkt Perform at Piper Jaffray.
CCI raised to Buy at B of A.
CHH cut to Underperform at Bear Stearns.
CTRP started as Buy at UBS.
EFD cut to Hold at Citigroup.
EMT cut to Sell at Citigroup.
EXTR raised to Buy at WRHambrecht.
FDX raised to Outperform at Morgan Keegan.
FLWS cut to Sell at Goldman Sachs.
GGP raised to Neutral at UBS.
HBC cut to Sell at Goldman Sachs.
HST cut to Hold at Citigroup.
IFSIA started as Outperform at Wachovia.
KBH raised to Outperform at JMP.
LSTR started as Buy at KeyBanc.
MIPS raised to Buy at AGEdwards.
NAFC cut to Equal Weight at Lehman.
NDAQ raised to Neutral at Prudential; Cut to Sector Perform at CIBC.
OMC cut to Hold at Deutsche Bank.
PGNX started as Outperform at FBR.
PLA cut to Neutral at B of A.
SEPR started as Mkt Perform at FBR.
SNTS started as Mkt Perform at FBR.
SOMX started as Outperform at FBR.
TLCV cut to Sector Perform at CIBC.
VCLK started as Sector Perform at CIBC.
VNDA started as Outperform at FBR.
VSE cut to Sell at Goldman Sachs.
WAL started as Buy at Oppenheimer.
XTO raised to Overweight at J.P.Morgan.

Jon C. Ogg
February 14, 2007

Posted on: February 14, 2007 – 8:27 am in Analyst Calls

Pre-Market Stock Notes (FEB 14, 2007)

(ABAX) Abaxis announces distribution agreement with Cardinal Health.
(ALTR) Altera guided Q1 sales slightly lower; but $0.30 EPS vs $0.25e.
(AMAT) Applied Materials now indicated up almost 5% after beating earnings.
(ASML) ASML Holdings said it will continue its stock buyback plan.
(DCX) DaimlerChrysler expected to shed up to 10,000 US jobs today; stock up 4%.
(DVA) DaVita $0.70 EPS vs $0.68e.
(GOLF) Golfsmith wins pact to be official online and tennis pro shop for ESPN.
(GRMN) Garmin $0.75 EPS vs $0.59e; sees 2007 $2.70 vs $2.38e; stock up 13% as this was better than any whispers.
(GSIC) GSI Commerce beat earnings but lowered 2007; stock was up but fell 2%.
(IACI) IAC’s Match.com has reportedly bought the leading match and dating service in China.
(IN) Intermec announces that it will design, build and test a new single process, mobile marking system with the U.S. Coast Guard.
(JAH) Jarden $0.80 EPS vs $0.73e.
(JRN) Journal Communications increased 20% publishing and broadcast revenues.
(LOJN) Lojack names Ron Waters as President/COO.
(KO) Coca Cola $0.52 EPS vs $0.50e.
(MDF) Metro Health Networks lowered guidance.
(NAT) Nordic American Tanker $0.66 EPS vs $0.66e.
(NICE) Nice Systems wins contract in Dallas.
(NOVA) Novamed $0.05 EPS vs $0.06e.
(NVDA) NVIDIA $0.53 EPS vs $0.43e; issued cautionary guidance; stock fell 1% after hours.
(ODP) Office Depot $0.54 EPS vs $0.52e.
(OMTR) Omniture is acquiring a small behavioral targeting company called Touch Clarity.
(ORCL) Oracle increased stake in I-Flex in India from 55% to over 80%.
(PFCB) PFChang’s $0.34 EPS vs $0.26e; guides 2007 $1.45 EPS vs $1.38 consensus.
(STX) Seagate announces co-operation with STMicro (STM) and Quantum SPA to produce hard drive-based mobile devices that will let consumers receive, record and playback digital television signals.
(TRMB) Trimble acquired privately-held INPHO GmbH of Stuttgart, Germany in an all-cash transaction. Financial terms were not disclosed.
(ZBRA) Zebra Tech $0.42 EPS vs $0.41e; guides next quarter down.

Jon C. Ogg
February 14, 2007

Posted on: February 14, 2007 – 8:10 am in Pre-Market Activity

Goldman Sachs Analyst Summary (FEB 14, 2007)

1-800-FLOWERS.Com (FLWS-NASDAQ) cut to Sell at Goldman Sachs.
HSBC (HBC-NYSE/ADR) cut to Sell at Goldman Sachs.
VeraSun Energy (VSE-NYSE) cut to Sell at Goldman Sachs.

Goldman Sachs raised estimates on Applied Materials (AMAT), Atmos Energy (ATO), BearingPoint (BE), Nelnet (NNI), ICON plc (ICLR), & General Growth Properties (GGP), GSI Commerce (GSIC).

Goldman Sachs lowered earnings estimates for HSBC (HBC), Altera (ALTR), Carters (CRI) BlueLinx Holdings (BXC), AngloGold (AU), Weight Watchers (WTW), NASDAQ (NDAQ), FoxHollow (FOXH), Advanced Medical Optics (EYE), Exelixis (EXEL), & Qiagen (QGEN).

Goldman Sachs also trimmed 2007 estimates on ethanol names Pacific Ethanol (PEIX), VeraSun (VSE), & Aventine Renewable (AVR).

Jon C. Ogg
February 14, 2007

Posted on: February 14, 2007 – 7:45 am in Analyst Calls