Daily Archives: April 10, 2007

Cramer Highlights Harsco (HSC)

On tonight’s MAD MONEY on CNBC, Cramer featured his last stock: Harsco (HSC-NYSE).  He said this one is reinventing itself and it is not just an old manufacturing company like he said recently.  They don’t just make dirty equipment anymore.  Now they are now a mini-conglomerate that sells industrial equipment and infrastructure to the rest of the world.  HSC is also in services now for a huge portion of their businesses that they outsource to the metals industry.  As more consolidation occurs, Cramer said the outsourcing will win even more.  They also do industrial-sized contruction materials that is not really exposed to housing.  With a weak dollar and so much business from overseas, this is a winner. 

Jon C. Ogg
April 10, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: April 10, 2007 – 5:50 pm in Uncategorized

Cramer Calls Wyndham a Winner

Cramer also said tonight on CNBC’s MAD MONEY that the old Cendant value is a up a combined 32% higher than its break-up last year.  There is a laggard there, and that is Wyndam Worldwide Corporation (WYN-NYSE) which owns Ramada and timeshares.  Cramer said this is a much better value than it used to be and WYN makes more money than other timeshare companies.  Cramer said even with the housing bust that timeshares aren’t imploding like they would have before.  Cramer thinks this one is the value out of the Cendant break-up.  It trades at 17-times forward earnings and every part of the old Cendant is attractive to a buyer.  Cramer said you can’t call it the same as a Four Seasons value to buy, but it doesn’t deserve a multiple less than half of that buyout.  He thinks it’s too cheap and could be bought.

Jon C. Ogg
April 10, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: April 10, 2007 – 5:22 pm in Cramer

Cramer Sticks With Charter Communications

On tonight’s MAD MONEY on CNBC, Jim Cramer said to stick with Charter Communications (CHTR).  It has been a big underperformer since he recommended it.  He said that Comcast and Insight Media unwound a joint venture and now that Comcast has control in Indiana Illinois is a big deal for it.  Cramer said the value is $4,583.00 in enterprise value per subscriber.  CRamer said the value is 12% lower on an enterprise value per subscriber basis.  The second show was the huge premium that Comcast paid to acquire Patriot in New Jersey on a 50% premium to CHTR enterprise value per subscriber.

Cramer said he is no longer worried about this stock because it is cheap.  The values of subscribers are up because of the Triple Play.  The company is in the circle of a steady debt refinancing.  His 5.4 million subscribers in premium locations may be worth more. 

On a side note, Cramer didn’t mention that even if a buyout offer came out at a 50% premium that many would probably not go along with the buyout.  Sure there is value there, but if it can’t be unlocked it doesn’t matter that much.  The stock closed at $2.84, is up close to $3.00 after-hours, and has a $0.97 to $3.58 trading range for the last 52-weeks.  This one was over $5.00 in 2004 and over $8.00 5-years ago.

This one is also one that management is going to have a hard time trying to fix.

Jon C. Ogg
April 10, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: April 10, 2007 – 5:14 pm in Cable Companies, Cramer

The 52-Week Low Club

Katy Industries (KT) Small conglomerate gets NYSE delisting. Stock goes to $1.55. from 52-week high of $3.60.

Hovnanian (HOV) Home building company. Industry gets worse each day. So does share price. Down to $23.45. The 52-week high was $44.59.

Micron Tech (MU) Still pressure on DRAM memory chip prices. Drops to $11 from 52-week high of $18.65.

Adolor (ADLR) Major drug trial halted. Shares fall to $3.53 from 52-week high of $26.17. Ouch.

Clearwire (CLWR) Recent WiMax IPO down to $18.75 from high of $27.95, as concerns about length of time to sign subscribers mounts.

Conexant (CNXT) Down to $1.45 on downward revision of quarterly expectation. From a 52-week high of $3.90.

RealNetworks (RNWK) Yahoo! (YHOO) and Sandisk (SNDK) coming out with rival music download service. Shares fall to $7.50 from 52-week high of $12.08.

Douglas A. McIntyre

Posted on: April 10, 2007 – 4:19 pm in HI/LOW

Amgen CFO Walks Out; Any More Execs Leaving?

Amgen (AMGN-NASDAQ) is naming a new CFO.  Robert Bradway is replacing Richard Nanula, who is leaving to pursue other opportunities.  Bradway came to Amgen in 2006 and prior to that he was with Morgan Stanley for 18 years out of the investment banking department.  Nanula is going to remain for 90 days in transition.

Based on what has been a steady slide in what used to be one of the best biotech operators out there, this one is probably no shock at all.  There hasn’t been any sort of financial scandal.  All of the problems have been tied to reimbursements down the road and on newly emerging safety questions.  The CFO is the one that signs the financial documents, but the CFO can’t control a forward Congress on reimbursement rates and the CFO sure can’t control the science.

The shares were actually up marginally in after-hours trading before drifting lower.  They are not getting hit as though there is any large concern that larger issues are looming.  Who knows for sure.  It’s hard to imagine that too many CFO’s could blame Nanula for leaving, and even less of a question as to if he even wanted to remain.  With the CFO leaving, it is hard to imagine that others might not be at least sprucing up their resumes.

Jon C. Ogg
April 10, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: April 10, 2007 – 4:02 pm in Biotech, Management Change

Alcoa Claims Best Q1 Ever

Alcoa Inc. (AA-NYSE) just kicked off earnings season.  The company posted $0.77 EPS from operation and $0.75 net-net, but it would have been $0.79 net outside of restructuring charges, with revenues of $7.9 Billion; Consensus estimates were $0.75 EPS and $7.65 Billion revenues.  The company has been the beneficiary of stock rumors of a buyout, an ongoing attempt to turn itself around, a bump in shareholder-friendly activities, and because of the private equity and foreign metal company buying.  All of these helped drive the stock up roughly 25% since the start of the year.  The company added $527 million in cash from operations in the quarter.

Alain Belda, Alcoa Chairman and CEO: "Alcoans have delivered another strong quarter of top and bottom line growth, productivity improvements in cost of goods and overhead, and a dramatic improvement in cash flow from last year’s first quarter. Our focus on higher value-added solutions, such as aerospace products, and productivity programs helped to continue our momentum this quarter.  The momentum we built last year is carrying through in disciplined capital and portfolio management, growth projects coming on-stream, and continued improvement in our strong downstream operations.  Again, we have delivered a strong quarter while also investing in projects that will generate strong returns for years to come."

This looks good on first look, but we’ll have to see what the company offers up for guidance in the conference call before making any forward notes.

Jon C. Ogg
April 10, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: April 10, 2007 – 3:21 pm in Earnings

Cramer’s STOP TRADING (APR 10, 2007)

Stock Tickers: ASD, LOW, FO, KO, MA

On today’s STOP TRADING on CNBC, Cramer said that American Standard (ASD) is a stealth housing play where they are splitting themselves up at the bottom.  Cramer thinks this one is good, but he wants to avoid the other housing stocks and other homebuilders.  As far as remodels, this one will benefit from remodelling as they are big into bathrooms.  Cramer thinks American Standard sells very well at Lowe’s (LOW) and LOW hasn’t gone back to recent stock lows.  He thinks this home weakness is still weighing on Fortune Brands (FO).

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Posted on: April 10, 2007 – 1:50 pm in Cramer

Adolor: Is There Anything Left?

Adolor Corp. (ADLR-NASDAQ) may have just joined the ranks of current and future biotech zombies.  The company suspended its lead new drug candidate for potential treatment of opioid-induced bowel dysfunction.

Safety concerns prompted the halt after increased risk of heart attacks and other cardiovascular events were witnessed.  The company said the data will be further analyzed, but this follows some FDA action requests in November.  Per our closing remarks on November 7, 2006:  Adolor (ADLR) fell another 5.2% to $7.29 the day after the FDA requested more data for its bowel disorder drug.

This one may have been foreseen, but you wouldn’t know it by the stock price today.  Shares are down 58% at $3.59, well under its previous 52-week lows.  The prior 52-week trading range was $6.50 to $26.17.  Ouch!  Its new market cap is only $165 million compared to net current assets (12/31/06) $193.3 million and total liabilities of $47.4 million.  It has had a cash burn rate of roughly $20 million after its partnership study fees.   

Now it has to figure out what to do, and if the company decides to abandon the study after further reviews then it will have to scale down and go into survival mode.  Here is the rest of its pipeline and R&D Structure.

Jon C. Ogg
April 10, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: April 10, 2007 – 1:41 pm in Biotech

Cramer Pans Homebuilders

Stock Tickers: DHI, PHM, CTX, LEN

On today’s WALL STREET CONFIDENTIAL video on TheStreet.com, Cramer noted that DR Horton (DHI-NYSE) is the most leveraged since it bought large property rights and has the least-written down property values of the sector.  For just a trade he said he could see a "Long Centex (CTX) and short DR Horton (DHI)."  Price targets in the group are too high and the group is vulnerable to another leg down.  The book values in Pulte (PHM) and Horton (DHI) need to be written down in these names, so book value comparisons of years prior are not pertinent.  Cramer ended by saying "don’t buy" PHM or DHI and said Not even Lennar (LEN).

Jon C. Ogg
April 10, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: April 10, 2007 – 11:35 am in Cramer, Housing

MU: DRAM Recovery Elusive

By William Trent, CFA of Stock Market Beat

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Posted on: April 10, 2007 – 10:45 am in Technology Companies

StreetInsider.com Unusual 11 Mid-Day Movers 04/10/2007

Adolor Corporation (Nasdaq: ADLR) 57.8% LOWER; The company and GlaxoSmithKline (NYSE: GSK) announced negative preliminary results from Phase 3 Safety study of Alvimopan. Current development program for OBD on-hold while findings from long-term safety study are evaluated. Serious adverse events reported.

Synergetics USA (Nasdaq: SURG) 18.5% HIGHER; Announced that the Company has reached a settlement of all outstanding claims in the patent litigation suits with Iridex Corporation (Nasdaq: IRIX). The parties have entered into a Settlement Agreement and a Manufacture and Supply Agreement to resolve both lawsuits and all claims between the parties.

Memory Pharmaceuticals (Nasdaq: MEMY) 17% HIGHER; Continued momentum in small-cap biotechs.

Medwave Inc. (Nasdaq: MDWV) 16.7% HIGHER; Company has decided to begin a process to explore strategic alternatives to enhance shareholder value, including but not limited to the raising of capital through the sale of securities or assets of the Company, a recapitalization, strategic acquisitions, and the combination, sale or merger of the Company with another entity. (NOTE – Stock trades under $1)

Harris Interactive (Nasdaq: HPOL) 15.8% LOWER; Revised its Q3FY07 sales bookings expectations and lowered its outlook for 2HFY07. The company said sales bookings for the quarter are expected to be around $58 million, versus the approximately $66 million in sales bookings the Company discussed during its Q2FY07 results conference call held on February 2, 2007. Q3 revenue growth will be lower than expected.

United Rentals (NYSE: URI) 14.6% HIGHER; Announced that its board of directors has authorized commencement of a process to explore a broad range of strategic alternatives to maximize shareholder value, including a possible sale of the company. The company has retained UBS Investment Bank and Credit Suisse to act as financial advisors in this process. The company also announced that Wayland R. Hicks, 64, will retire as chief executive officer effective at the annual shareholders’ meeting on June 4, 2007

Renovis Inc. (Nasdaq: RNVS) 13% HIGHER; Pfizer (NYSE: PFE) and Renovis Extend Research Collaboration to Identify Small Molecule VR1 Antagonists

99 Cents Only Stores (NYSE: NDN) 9% HIGHER; Reports total sales of $277.9 million for the fourth quarter of its fiscal year ended March 31, 2007. This represents an increase of 9.4% over total sales of $254.1 million for the same quarter last year. (Q4 revenue consensus is $275.6 million). The Company’s same-store-sales for the fourth quarter ended March 31, 2007 increased 2.9% versus the same quarter last year.

Cascade (NYSE: CAE) 8.8% HIGHER; Reports Q4 EPS of $0.80, 5 cents better than estimates.(0.75) Revenues were $118.9 million vs. $116.68 million consensus.

Seagate Technology (NYSE: STX) 8.6% LOWER; Revenue for the fiscal third quarter is now expected to be approximately $2.8 billion, compared to prior guidance of $2.9-3.0 billion, and GAAP and non-GAAP gross margins did not achieve the company’s expectations. (Consensus is $2.94 billion)

Sturm, Ruger & Co. Inc. (NYSE: RGR) 7.5% LOWER; CL King downgrades RGR from Strong Buy to Neutral.

http://www.streetinsider.com/index.php

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Posted on: April 10, 2007 – 10:41 am in Research

NOV – National Oilwell Varco Inc: Slurping Up Mud Pumping Profits

By CrossProfit

04/10/2007

In 2006 NOV generated $7.02B in revenue.

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Posted on: April 10, 2007 – 10:07 am in Oil & Gas

Siemens Continues To Humiliate GE

They are taking managers out of Siemens (SI) in handcuffs and with raincoats over their heads. The FT says that members of the Siemens supervisory board want chairman Heinrich von Pierer to step down due to "twin scandals engulfing Siemens, involving alleged bribery and the alleged financing of a rival to its main union."

Siemens stock should be dropping.

Over at General Electric (GE), the company is run by the best management team in the world. GE shows up on the Fortune magazine list as the most admired company on the planet. 

GE’s stock should be skyrocketing.

But, the picture is quite different from the way it should be. Over the last six months, shares in Siemens are up over 30% and shares in GE are off 5% under-performing the Dow.

As The Wall Street Journal pointed out, GE’s financial services operations were the big earnings driver last year. But, problems in the sub-prime lending market may put an end to that. It doesn’t matter. GE says Q1 earnings will be up between 8% and 13%.

It is almost as if Wall St. doesn’t believe that GE can do that well.

In the fourth quarter of last year, Siemens had revenue of 19.1 billion euros, up 6% from the prior year period. Income from continuing operations rose 18% to 714 million euros. Nice, but not outstanding.

The difference may be this. Almost all Siemens major units showed improvement. Wall St. must think that this will continue. Wall St. is worried about some units at GE. Plastics, NBC Universal. Financial services. Too many unknowns.

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

Posted on: April 10, 2007 – 9:54 am in Conglomerates

Take-Two Now Compliant, But Problems Persist

Stock Tickers: TTWO
Take-Two Interactive Software, Inc. (TTWO-NASDAQ) announced earlier this morning that The NASDAQ Stock Market notified Take-Two that it has regained compliance with NASDAQ’s listing requirements. As a result, Take-Two’s common stock will continue to be listed on The NASDAQ Global Select Market.

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Posted on: April 10, 2007 – 8:30 am in Video Games

Goldman Sachs Research Summary (APR 10, 2007)

Stock Tickers: CBE, FLWS, TEN, ARA, NHWK, MSFT, STX, VAL, HAL, LCC, ORCL, F, GM
 

Earnings estimates INCREASED: Cooper Industries (CBE), Illinois Tool Works (ITW), 1-800-FLOWERS (FLWS), Tenneco (TEN), Aracruz Celulose S.A. (ARA), Nighthawk Radiology (NHWK).

Earnings estimates DECREASED: Microsoft (MSFT), Seagate Tech (STX), Valspar (VAL), Halliburton (HAL), US Airways Group (LCC).

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Posted on: April 10, 2007 – 8:14 am in Analyst Calls

Full Research Summary (APR 10, 2007)

ADLR cut to Mkt Perform at FBR; cut to Neutral at First Albany..
ADSK raised to Buy at Goldman Sachs.
AMD raised to Neutral at UBS.
AMAT raised to Buy at B of A.
AMTD started as Outperform at BMO Capital.
ASML cut to Mkt Weight at Thomas Weisel.

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Posted on: April 10, 2007 – 7:21 am in Analyst Calls

Pre-Market Stock News (APR 10, 2007)

(AMSC) American Superconductor received an order in China for a wind energy system.
(BCE) BCE may now have a bid from Ontario Teacher’s Pension system.
(BNI) Burlington Northern up marginally the day after Warren Buffett disclosed in filings that he invested in the company.
(C’) Citigroup is now reportedly looking at cutting 26,000 jobs.
(DHI) DR Horton noted Q2 sales were down and cancellation rates were 38%.
(DIVX) DIVX up more than 15% after raising guidance.
(DNDN) Dendreon up yet another 6% pre-market.

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Posted on: April 10, 2007 – 6:55 am in Pre-Market Activity

Earlybird Analyst Calls (APR 10, 2007)

ADLR cut to Mkt Perform at FBR.
ADSK raised to Buy at Goldman Sachs.
AMD raised to Neutral at UBS.
AMAT raised to Buy at B of A.
ASML cut to Mkt Weight at Thomas Weisel.
BHP raised to Neutral at Prudential.

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Posted on: April 10, 2007 – 6:32 am in Analyst Calls

Europe Markets 4/10/2007

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

Markets in Europe were slightly higher.

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Posted on: April 10, 2007 – 5:25 am in International Markets

Yahoo!’s Ad Efficiencies Gain On Google

According to ComScore, Yahoo!’s (YHOO) new Panama ad systems is getting better click through rates for advertisers while Google’s (GOOG) system falters.

The measurement service reports that Yahoo!’s click throughs rose 4% to 12.9% in February, while Google’s fell 6% to 14.4%.

The figures come at a good time for Yahoo!. JMP Securities has just downgraded Yahoo!’s shares saying the effects of Panama fully priced in. With the stock up 25% this year, JMP thinks that there is little news to send the shares higher.

Unless Panama is working better than expected.

Douglas A. McIntyre

Posted on: April 10, 2007 – 4:56 am in Internet