Daily Archives: March 4, 2007

Wounded Airbus Could Be Trouble For Boeing

Now that the last orders for Airbus’s A-380 jumbo jet cargo version have been canceled, there is a school of thought that the big European airframe company can spend more time and effort on the commercial version of the plane.

Boeing has run the table over the last year with its new Dreamliner being picked by several airlines who need mid-sized jets and its 747-8 taking business that might have gone to the Airbus super-jumbo.

Airbus is about to cut 10,000 jobs across 16 sites throughout Europe and its large investors in Germany and France are undoubtedly angry about having to go to their countrymen with pink slips. Never a good move in the business of politics.

Big companies which are cornered and bruised are often dangerous, especially one like Airbus with a parent, EADS, which has access to public funds.

If Airbus uses its slimmed down resources to pick up production on its mid-sized A-350 and its Q-380 jumbo, the table may not always be turned against it and in favor of rival Boeing (BA).

Boeing recently cut its own C-17 military cargo plane program because of lack of orders and will begin to cut employees in that division of its business.

If Airbus makes a concerted effort on its two product introductions it may be formidable competition for Boeing again.

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

Posted on: March 4, 2007 – 7:18 pm in Transports

Barron’s Digest March 4, 2007

According to Barron’s, the bull market is still doing well. Warren Buffett of Berkshire Hathaway (BRK-A) has been buying Johnson & Johnson (JNJ), Conoco Philips (COP), and US Bancorp (USB). Of the twelve largest companies ranked by market cap, several trade at 12 times earnings or less: ExxonMobil (XOM), Citigroup (C), Bank of America (BAC), Pfizer (PFE), and American International Group (AIG).

Joseph McNay of Essex Investment Management has a few stocks that he favors now. Schlumberger (SLB), Core Labs (CLB), MEMC (WFR), SunPower (SPWR), FEI (FEIC), Harris & Harris (TINY), Gilead Sciences (GILD), Genentech (DNA), Vertex Pharma (VRTX), Focus Media (FMCN), Synchonoss Tech (SNCR), Riverbed Tech (RVBD), Google (GOOG) and Baidu (BIDU).

Barron’s ranked the top online brokers by factors from trading technology to research. The top web-based brokers were TD Ameritrade, optionsXpress, Fidelity, Muriel Siebert, and TradeKing. At the bottom of the list were Just2Trade and Zecco.

Advance Auto (AAP) is working on improving its financial performance after a tough 2006. High gas prices and interest rates hurt the company’s performance. But, analysts believe the stock could move from $37 to the mid-$40s over the upcoming year.

Clear Channel Communications (CCU) may be facing an uphill battle to get its buy-out approved for $26 billion. Several large investors believe that the offer is too low and may fight the deal.

Avalon Bays (AVB) is one of the best one REITs in the country. But the value of the shares is high compared to competition, and any weakness in the industry could drive them down.

Large mid-aged tech companies can help put stability into investor portfolios. Goldman Sachs like Hewlett-Packard (HPQ), Cisco (CSCO), and Apple (AAPL).

Douglas A. McIntyre

Posted on: March 4, 2007 – 7:02 pm in Press Digest

Barron’s Gores Zecco’s Oxe

Zecco finished last in the Barron’s survey of online brokers.

Brokers were ranked on eight criteria from range of offerings to research to customer service and costs. The top brokerages, TD Ameritrade and optionsXpress. received four stars. Zecco got the lowest total–two. Zecco got especially poor ratings for trading technology, research offerings, and portfolio analysis. Given that Zecco’s service is "free" up to twenty trades a month, this should not come as much of a surprise.

Nonetheless, it is not exactly good news for Zecco.

Douglas A. McIntyre

Posted on: March 4, 2007 – 6:32 pm in Brokerage Firms

To Keep US Car Makers In Check, Toyota Moves On India

For the US car makers to do well, they not only have to gain back share in the US. They need to do well in the fastest growing auto markets, particularly China and India. GM had a banner year in China in 2006 and it hope to have that country remain one of its largest markets.

Toyota does not want to be outdone anywhere, so as it whips the American car companies in their own market, it is also planning to quadruple it output in India over the next three years. The big Japanese car company is putting $500 million into the market in the hope of moving its share from India from 5% to 10% by 2010. The car market in India is expected to rise 50% over that time period.

GM’s sales in India grew 81% in February to 3,081 vehicles. Maruti, the country’s largest passenger car manufacturer, saw sales jumping as much as 61.6% in February at 59,095 units.

Although GM and Toyota both lag the local manufacturers, they are clearly prepared to put large sums in for market share. It is now just a question of who gets the edge.

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

Posted on: March 4, 2007 – 6:19 pm in Autos

Best and Worst Performing Stocks Last Week and Year to Date

From Ticker Sense

The tables below highlight the best and worst performing stocks in the Russell 3000 over the past 5 days, the past 3 months, and year to date.

1wk303

3mo303

Ytd303

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

Posted on: March 4, 2007 – 11:45 am in Research

Wall Street Journal Cover Story: One Year Later

By Chad Brand of Peridot Capitalist

Many of you may recall that I was featured on the front page of the Wall Street Journal last year for a story discussing the investment merits of Internet search giant Google (GOOG). In fact, some of you may have even discovered this blog directly as a result of that article. At the time I was writing a lot about the company and fortunately some Wall Street reporters took notice.

Whenever the article gets brought up to me, the most common question I get, perhaps quite predictably, is "Well, who was right?" Here we are one year since that article ran, so let’s reflect on how things have taken shape for the stock since then and see exactly who was right.

To summarize, the article was called "As Google Matures, Investors Take Closer Look at Its Risks." In addition to myself, the other investor interviewed for the story was David Gordon, who also happens to be an avid stock market blogger (The Deipnosophist). Both of us were early investors in Google, but I decided to take my profits and move on to other stocks, whereas David was buying on dips and holding for the long term.

Read More »

Posted on: March 4, 2007 – 11:43 am in Internet

Friday’s Top Biotech & Medical Stocks

From BioHealth Investors

Biotechnology

INSMED INC [INSM] +13.87%
BIODELIVERY SCI INTL [BDSI] +8.86%
FAVRILLE, INC. [FVRL] +5.81%
VERNALIS PLC ADR [VNLS] +5.51%
SGX PHARMACEUTICALS [SGXP] +5.05%

Diagnostic Substances

RG GLBL LIFESTYLS [RGBL.OB] +20.54%
GENE LOGIC INC [GLGC] +10.34%
HEALTHCARE TECH LTD [HCTL] +7.14%
PALATIN TECH INC [PTN] +2.96%
THRESHOLD PHARMACEUT [THLD] +2.05%

Read More »

Posted on: March 4, 2007 – 11:40 am in Biotech

IBD Weekly Top Ranked Medical Stocks

From BioHealth Investor

The following list represents the top ten medical stocks ranked according to Earnings Per Share and Relative Strength by Investor’s Business Daily (3/03/06)

scores out of 100 (last week’s rank, change in score):

1(1) Arrhythmia Research (HRT) EPS=96 RS=99
2(3) Wellcare (WCG) EPS=97 RS=96(+1)
3(2) Rochester Medical (ROCM) EPS=95 RS=98
4(4) Cynosure (CYNO) EPS=96 RS=93(-3)
5(8) LHC Group (LHCG) EPS=98 RS=91(+3)
6(5) Immucor (BLUD) EPS=96(-1) RS=92(-2)
7(6) Emdeon (HLTH) EPS=99 RS=89(+1)
8(9) Mindray Medical (MR) EPS=99 RS=89(+3)
9(-) Medtox Scientific (MTOX) EPS=99 RS=87
10(7) American Bio Eng (AOB) EPS=88 RS=97(-1)

http://www.biohealthinvestor.com/

Posted on: March 4, 2007 – 11:38 am in Biotech

Thermogenesis Ups Production of Cord Blood Stem Cell Processing Bags

by H.S. Ayoub
BioHealth Investor.com

Thermogenesis (KOOL) announced early Friday that the company has increased its manufacturing capacity for the cord blood stem cell disposable bags for use with the AutoXpress system.

The company can now produce as much as 2,000 disposable bag sets per week, or more than 100,000 per year.

In early February, the company released disappointing 2nd quarter numbers. Executives blamed a manufacturing capacity shortfall that caused a large backlog in orders of the disposable bags.

This latest announcement, if in fact is a fix, means that Thermogenesis could see enough days of increased production and sales prior to filing the next quarterly report.

http://www.biohealthinvestor.com/

Posted on: March 4, 2007 – 11:37 am in Biotech

WiFi Wars Hit The Coffee Shop

Starbucks (SBUX) offers T-Mobile service in most of its stores. The price is $6 an hour, which hardly qualifies as cheap. McDonald’s (MCD) also offers WiFi at $2.95 for two hours. So for a two hour stay, the McDonald’s price is 25% of Starbucks.

Now, McDonalds is already trying to take latte and high-end breakfast share from Starbucks. It has more stores and charges less for its coffee. It may not be as chic, but cheap often beats chic, or so they say.

The chairman and founder of Starbucks, Howard Schultz, recently whined in a memo that his stores had lost their distinctive environment. They have become "cookie cutter" as the chain has grown. With 12,000 stores, he seems not to understand that sameness is inevitable. Free WiFi would give his stores something distinctive. Access to broadband that would likely keep customers in the stores longer and give Starbucks more opportunity to sell them something.

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

Posted on: March 4, 2007 – 11:32 am in Wireless

If Boone Pickens Is Right, There May Be A Recession

Boone Pickens told a Forbes conference that the easy-to-drill oil has been found and that production is, therefore, peaking. Based on his analysis, oil is going back to $70 a barrel this year.

US GDP growth has already been revised down from 3.5% for the fourth quarter of 2006 to 2.2%. The personal consumption expenditures price index fell recently, and spending on new home building tumbled by 19.1 percent during the last quarter. That does not leave the US economy holding a strong hand of cards.

Oil at $70 almost certainly means $3.00 gas. High gas prices early last year were blamed for everything from slowing car sales to lighter shopping at big chains like Wal-Mart (WMT) and Home Depot (HD). And, if gas prices rise again, the resulting pressure on the overall economy is likely to be profound.

The markets can hope Mr. Pickens is wrong, but hoping will not make is so. If oil supplies dwindle either oil producers will relax restrictions for a time, or the economy is in for a rough ride in the second half of this year.

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

Posted on: March 4, 2007 – 11:06 am in Economy

Private Equity Eyeballs Chrysler, Again

The Financial Times says that Cerberus Capital Management, Carlyle, Apollo Management and Ripplewood are looking at Chrysler (DCX). And, recently departed VW chief Wolfgang Bernhard may be advising one of them on the transaction. He might be a CEO-in-waiting as Jerome York was for the Kerkorian interests when they were buying into GM (GM).

It is likely that the private equity crowd will have no more success with Chrysler than York & Co. had with GM. The reason is simple. A rich, non-automotive buyer has little ability to consolidate plants, product design, and suppliers. A buyer like GM might and the savings could be significant. A rich private equity buyer would be a darling for the UAW. Crying poverty is tough when the owner(S) have access to billions of dollars. 

Private equity was able to buy into Delphia, the big car parts company spun off from GM. But, it had been put into bankruptcy which gave it a special leverage with the unions. Daimler does not have this opportunity. It would be hard pressed to argue that one of its units was insolvent.

There will be no private equity buyer for Chrysler. That leaves GM and auto companies in Asia, perhaps even China. And, that means that Daimler may not find a deal.

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

Posted on: March 4, 2007 – 10:52 am in Autos

This Week on StockHouse February 26 to March 2

A week on StockHouse in five minutes

With the rise in interest in mineral exploration in Canada’s Arctic (http://www.stockhouse.ca/shfn/article.asp?edtID=19374 ), companies like Sabina Silver (TSX: V.SBB) are getting a second look, said Danny Deadlock in his Micro-cap Monday column.

From silver to uranium, the weekly Resource Report profiled a junior uranium company (http://www.stockhouse.ca/shfn/article.asp?edtID=19373 ) with a promising Quebec property.

An African gold property (http://www.stockhouse.ca/shfn/article.asp?edtID=19379 ) may offer significant value for investors of Lakota Resources (TSX: V.LAK), according to the Micro-cap Spotlight.

How substantial is the nationalization risk (http://www.stockhouse.ca/shfn/article.asp?edtID=19381 ) for investors in resource stocks? StockHouse Publisher and Executive Editor Darin Diehl spoke to the executive director of the Prospectors and Developers Association of Canada on the eve of the PDAC conference in Toronto.

But if metals aren’t your thing, what’s about to become really big? James West offered a few ideas for investors interested in the nascent alternative energy sector (http://www.stockhouse.ca/shfn/article.asp?edtID=19380 ).

If you can’t wait for a mine development or the greening of North America, you could play one of the short term picks (http://www.stockhouse.ca/shfn/article.asp?edtID=19382 ) identified by Harry Boxer in this week’s Weekly Wizards column.

Given this week’s sell-off, some investors might be looking for old fashioned defensive names (http://www.stockhouse.ca/shfn/article.asp?edtID=19386 ). Jon Ogg of 247 Wall Street offered his take on Tuesday’s tumult.

Health stocks are among the traditional defensive plays, because those companies continue to earn revenue even during an economic downturn. But some drug stocks take a drubbing on late stage drug development disappointments. The Bio Check looked into a new study that sheds some light on these Phase III surprises (http://www.stockhouse.ca/shfn/article.asp?edtID=19387).

New blogs (http://www.stockhouse.ca/shfn/article.asp?edtID=19388 ) are launched on StockHouse each week. Editor Keri Korteling profiled three writers who use three different strategies to identify investments.

Corporate shenanigans (http://www.stockhouse.ca/shfn/article.asp?edtID=19389 ) at Shuffle Master (NASDAQ: SHFL) caught the eye of the Securities Sleuth this week.

George Leong, meanwhile, offered a technical analysis post mortem (http://www.stockhouse.ca/shfn/article.asp?edtID=19394 ) for Tuesday’s market wreck.

While Don Vialoux said technical and fundamental factors played into his view that it’s time to sell U.S. homebuilding ETFs (http://www.stockhouse.ca/shfn/article.asp?edtID=19396 ).

In Financially Fit, Nancy Zambell writes about making money in emerging markets. http://www.stockhouse.ca/shfn/editorial.asp?edtID=19400 

While Doug Casey outlines the possibility of excellent junior uranium opportunities in Australia in the Casey Files. http://www.stockhouse.ca/shfn/editorial.asp?edtID=19399 

And, in STANDUP Advice, John De Goey suggests passive products with professional advice is the way to go. http://www.stockhouse.ca/shfn/editorial.asp?edtID=19401   

Posted on: March 4, 2007 – 10:42 am in Research

Citigroup: A Funny Thing Happened On the Way To The Bank

Ah, Citi (C). Maligned by almost every Wall St. analyst. The calls for the CEO’s head. The break-up plans.

But, an odd thing has happened recently. Citi is not longer a big laggard among the national bank stocks. All the bank stocks were scalped in the recent market sell-off, but over the last six months, Citi’s stock is up about 1%. Bank of America (BAC) is down 3%. Wachovia (WB) is flat. And, the legend of Jamie Dimon continues as JP Morgan (JPM) is up almost 6%.

But, with a new CFO coming over from American Express (AXP), which is up only 5% over the last six months, and a stock price that is no longer from hunger, Charles Prince may have bought himself some time. He still has to show that he can cut costs and can ill afford more management musical chairs, but at least the poor man can sleep at night.

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

Posted on: March 4, 2007 – 10:41 am in Banking

Wounded Airbus Could Be Trouble For Boeing

Now that the last orders for Airbus’s A-380 jumbo jet cargo version have been canceled, there is a school of thought that the big European airframe company can spend more time and effort on the commercial version of the plane.

Boeing has run the table over the last year with its new Dreamliner being picked by several airlines who need mid-sized jets and its 747-8 taking business that might have gone to the Airbus super-jumbo.

Airbus is about to cut 10,000 jobs across 16 sites throughout Europe and its large investors in Germany and France are undoubtedly angry about having to go to their countrymen with pink slips. Never a good move in the business of politics.

Big companies which are cornered and bruised are often dangerous, especially one like Airbus with a parent, EADS, which has access to public funds.

If Airbus uses its slimmed down resources to pick up production on its mid-sized A-350 and its Q-380 jumbo, the table may not always be turned against it and in favor of rival Boeing (BA).

Boeing recently cut its own C-17 military cargo plane program because of lack of orders and will begin to cut employees in that division of its business.

If Airbus makes a concerted effort on its two product introductions it may be formidable competition for Boeing again.

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

Posted on: March 4, 2007 – 7:28 am in Transports

Mortage Business Crashes As HSBC Writes Off

Word from the Sunday Telegraph is that HSBC (HBC) will write down $11 billion in mortgages These loans are part of the Household operations that the bank bought.

Fremont General (FMT) has announced that it will exit the sub prime business and sub-prime lender New Century is being investigated by the government and has covenant problems with its own lenders.

The question facing the markets now is whether the problems with mortgages will spread to the middle markets, those loans that are above sub-prime but not loans to home owners with perfect credit. If default rates begin to rise sharply in this sector, large US banks including Citigroup (C) and Bank of American (BAC) could have earnings difficulties.

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

Posted on: March 4, 2007 – 7:08 am in Banking