Daily Archives: April 20, 2007

52-Week Low Club (APR 20, 2007)

Ok, so there’s only been one down day on the Dow Jones Industrial Average in umpty ump days.  Some companies aren’t benefitting at all, as there are many in the Hall of Shame in the 52-week Low Club:

Stamps.com (STMP) gave up 16% to hit a new year low after earnings fell last night and taking some downgrades.  It looks like there just aren’t enough barriers to entry and how many personalized stamps are really needed?

Mizuho Financial Group (MFG)…serving Japan might not be that great for them.

Quepasa Corporation (QPSA)….Que paso, Quepasa?

Aptimus Inc. (APTM)…….um, should an ad company that distributed advertisements for direct marketing advertisers through a network of third-party web sites be on its lows?

Inforte Corp (INFT), one of tech and strategy consulting firms whose target is to "improve their customer’s ability to acquire, develop, and retain customers."  Maybe they should hire themselves. 

Mathstar Inc (MATH) continued it slide, maybe being a fabless semiconductor operation isn’t such a good model after all.  At least it isn’t for them.

PDI Corp (PDII)….This one managed to get back above its lows for the year, but it was looking ugly for a while.  The company is launching a "talent acquisitions" business unit.

Jon C. Ogg
April 20, 2007

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

Posted on: April 20, 2007 – 6:31 pm in HI/LOW

Fuel-Tech is Jim Cramer’s #1 Speculative Green Investment (FTEK)

Jim Cramer said tonight on CNBC’s MAD MONEY that Fuel-Tech, Inc. (FTEK-NASDAQ) is the ultimate speculative play on GREEN INVESTING.  This is purely speculative, as it allows power plants to burn coal in a clean manner and to burn less coal for more power.  This one is winning more contracts and will force coal powered plants to go greener.  Cramer even said they are winning deals galore in China now.

This closed at $22.00 today, and its 52-week trading range is $10.07 to $29.68; the stock is up 7% at $23.55 in after-hours.  Its P/E is 78 and trades at 48-times 2007 estimates and 33-times 2008 estimates. 

Jon C. Ogg
April 20, 2007

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

Posted on: April 20, 2007 – 5:23 pm in Alternative Energy, Cramer

Cramer’s Green Investment in Metals & Chemicals

On tonight’s MAD MONEY on CNBC, Jim Cramer said the market is going to end up 17% at the end of the year and we are one-third of the way there.  He is adding another name to his "GREEN INVESTING" strategy: He is picking a specialty metals & chemicals company called OM Group (OMG-NYSE) as one that sells to alternative energy providers.  It controls 13,000 tons of kobalt, used for lithium ion batteries that are for cars and other issues.  They also make chemicals that power plants use to control greenhouse gasses.  The company will have no debt soon and $400 million in cash.  This one closed at $52.46, and its 52-week trading range is $25.57 to $59.75; shares gapped up to $53.40 after Cramer touted this one.

Jon C. Ogg
April 20, 2007

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

Posted on: April 20, 2007 – 5:12 pm in Cramer

Cramer Takes Another Swing at IBM’s Palmisano

Jim Cramer came out swinging in a strong market.  As far as IBM (IBM-NYSE), Cramer said the call about $20.00 downside to IBM shows the board of directors needs to fire Palmisano as CEO because of a leadership problem.  He thinks that Palmisano leaving could be worth $15 per share. 

Cramer also said Apple (AAPL-NASDAQ), and this is the last quarter of earnings without the iPhone being in the numbers.

Jon C. Ogg
April 20, 2007

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

Posted on: April 20, 2007 – 1:48 pm in Cramer

NYSE Short Interest, April, 2007

Short interest for major stocks listed on the NYSE as of April 13 compared to March 15.

Largest Positions

Ford                       200.1 million shares

Motorola                 125.8 million

Halliburton              113.8 million

Qwest                      76.8 mllion

Time Warner             71.0 million

CBS                        55.5 million

Sprint                       53.4 million

Pfizer                       50.3 million

Exxon                      49.8 million

GM                          49.7 million

GE                          43.4 million

EMC                       45.7 million

Disney                    45.6 million

AMD                       45.2 million

Largest Increases

Motorola                    up 103.0 million shares

Halliburton                 up 53.8 million

Vale Rio Doce            up 11.3 million

Wash Mut                  up 10.6 million

Wendy’s                    up 10.6 million

Chesapeake Engy      up 9.9 million

Willis Group               up 9.5 million

IndyMac                    up 9.4 million

Micron Technol          up 8.9 million

Time Warner             up 8.2 million

Countrywide Fin’l       up 8.0 million

Horton                      up 7.5 million

Lowe’s                      up 7.4 million

Largest Decreases

CVS Caremark          down 38.7 million shares

Weyerhaeuser           down 35.9 million

LSI Corp                   down 34.0 million

Domtar Corp             down 33.0 million

Kraft Foods              down 26.4 million

NYSE Euronext        down 9.0 million

CBS                        down 8.4 million

Exxon Mobil             down 8.3 million

DTE                         down 7.3 million

Data from NYSE and WSJ

Douglas A. McIntyre

Posted on: April 20, 2007 – 1:29 pm in Short Interest

Market Comments From TheStockMasters

What a magical day Wall Street is pushing the Dow Jones almost to the 13,000 mark. So if anything, smoke em if you got em and cash out anything you can while the Street is so happy and joyous. Overreaction by the Stock Maria being paranoidMasters, maybe paranoia?
More like realistic and defensive investing so that you aren’t a victim to any panic selling or surprises that may pop-up next week. McDonalds (MCD) and Google (GOOG) are both having great days and they are both stocks we have written about in the past.

Read More »

Posted on: April 20, 2007 – 1:06 pm in Research

NPD Releases Data for March; Number One Console is….Playstation 2?

Industry tracker NPD released console hardware & software totals for the 5-week period ending March 5, 2007 after the close yesterday.  While sales of the next-gen consoles were below industry expectations, there were some known supply issues with the Wii during the month, which dampened sales to about 260,000 for the period, and allowed the hardware winner for the month to be, that’s right, the PS2.  Total hardware figures are as follows:

Nintendo DS    508,000

PlayStation 2    280,000

Wii     259,000

Xbox 360    199,000

PlayStation Portable   180,000

Game Boy Advance   148,000

PlayStation 3    130,000

GameCube    22,000

The handheld DS crushed its estimates, which called for anywhere from 250k to 400k.

With the March numbers in tow, here’s where the U.S. installed base currently stands:

Wii   2.1 million

Xbox 360 5.3 million

PS3  1.2 million

It is very likely that someone got their hands on the NPD data a little early, as evidenced by the chart for Electronic Arts (ERTS) yesterday; as of 1:45 Eastern, shares were set to trade about 2.9 million for the day, a little less than the 3-month average of 3.5 million.  But in the last 2 ½ hours of trading, ERTS shares dropped 3.25% on a huge spike in volume, as over 5.5 million changed hands (and 7.4 million on the day).  No news, just someone who was adamant on getting out of the stock as fast as possible. 

Electronic Arts is known to be weak in their current Wii offering, and really needs the PS3 to start surprising on the upside with its sales figures. 

Another concern for the software publishers with regards to the Wii relates to the upgrade cycle, which some feel will happen to the Wii first.  By all accounts the Wii is a breakthrough iteration in the console landscape, Nintendo may already be working on an improved version to leverage their interface technology.  PS3 and Xbox 360 will likely have some longer legs; one need look no farther than the continuing PS2 success for evidence of this. 

Despite the action in ERTS shares, total software sales were very strong, as NPD reported $574 million for the March period, a 15% rise year-over-year and well ahead of estimates for $510 – $520 million.  Sony’s (SNE) God of War II title for the PS2 was the biggest seller during the period, with 833,000 copies shipped.  There are enough titles for the PS2 being released during the summer to likely keep sales figures strong – and ahead of the PS3, which is in desperate need of a haircut to its $600 price. 

The upside surprise should bode well for retailer Gamestop (GME), which has been running since they upped guidance at the end of March.  GME shares are currently up 1.88% to $33.64 as of 12:00 EST.

Ryan Barnes

April 20, 2007

Ryan Barnes can be reached at ryanbarnes@247wallst.com; he does not own securities in the companies he covers.

Posted on: April 20, 2007 – 11:24 am in Consumer Electronics

24/7 Wall St. Starbucks Store Review in Texas

We’re still doing store reviews testing Peter Lynch’s investment philosophy of looking into products you know and use as potential investments.  This round we are hitting various location of Starbucks (SBUX-NASDAQ) as many use this.  We are also seeing if there are areas that the stores can improve as they embark on an aggressive multi-year growth plan, so we are testing the company out for the 7:30 to 8:30 AM eye-opener times when most workers are on their way into work or trying to wake up.

Location: 5535 Memorial Drive (Houston, TX 77007); 7:48 AM, April 20, 2007

This Starbucks is located in a relatively new strip center, but it is located in a swarm of Memorial Drive traffic situated on the inbound traffic side of the street where thousands of Houstonians drive into downtown as an alternate route that is not the freeway.  It is located on the corner, and it’s a perfect location as far as inbound AM traffic and proximity to Houston’s largest exercise park.

I was a bit surprised, walking in at 7:48 AM local time and there were only 2 people in line ahead of me.  This created a fast “time to order” of only 48 seconds, but before I had left the floodgates of coffee monsters must have opened because in the 10 minutes I was inside the line became about 10 or 11 people deep (so my wait time wasn’t representative).  Everything was well stocked and orderly, but it was surprising that the newspapers were more than 10 feet past the cash register and much of the store merchandise (including CD’s) was also past and too far away from the entry and the line areas to get noticed.  The ambiance here was nice inside and out considering that it was located on a heavily trafficked thoroughfare, and there was actually room for them to add more tables if they wanted to.  This one has plenty of competition with a frozen juice store and a kolache house right there as well.  The store and my namesake were both clean but nothing out of the ordinary and the staff was acceptable. 

Ratings 1-3 (3 being the best): Wait -2; Cleanliness – 2; Toilet – 2; Space – 3; Personnel – 2; Inventory – 2; Ambiance – 2

Jon C. Ogg
April 20, 2007

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

Posted on: April 20, 2007 – 9:40 am in Product Review

QQQ Options Expiration Strike Prices Acting As Magnets

Today is options expiration date, which means it’s a paring off day and a "strike-magnet" day.  If you look at the PowerShares QQQ (QQQQ-NASDAQ) with massive open interest in options that expire today, there are over 1 million contracts in the open interest for the APRIL07 options contracts of the closest Put Options and 450,000 contracts in the open interest of the closest Call Options.  Here is the open interst for each of the closest strikes today:

APRIL07 CALLS
$43.00    133,489
$44.00    166,340
$45.00    158,495
APRIL07 PUTS
$42.00    201,780
$43.00    338,268
$44.00    333,500
$45.00    199,342

Many will pare off against each other and some will roll-out to the May expiration (much lower open interest).  With open interest being this large and with the market gapping up today, it’s pretty difficult to think that the closest strikes aren’t going to act like magnets today more than other option expiration dates.  Unless there is major macro-news that hits, this is the likely outcome for tech stocks today.

Jon C. Ogg
April 20, 2007

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

Posted on: April 20, 2007 – 9:13 am in ETF, Options, Technology Companies

Market Up, Who’s Left Out?

With the broad markets up 1% at 9.58 AM, which companies are left out?

AMD (AMD) Bad earnings yesterday.

Pfizer (PFE) Bad earnings today.

General Electric (GE) Who knows? No one seems to like it.

Citigroup (C) Can buy a rally.

Bank of America (BAC) With news out on banks, a rally will be tough.

Time Warner (TWX) Must be waiting for news. Treading water.

Apple (AAPL) Already very high. No recent news.

Amgen (AMGN) After brief rally, markets still concerned on prospects.

Johnson & Johnson (JNJ) Negative press on future of key products.

Douglas A. McIntyre

Posted on: April 20, 2007 – 8:59 am in Research

Caterpillar Has a Powerful Bark and a Strong Bite

Caterpillar (CAT-NYSE) is trading up in pre-market on what has to be called stellar earnings.  The company’s net is actually down 3% year-over-year, but it outperformed and raised guidance.

The company posted EPS of $1.23 and revenues of $10 Billion, above estimates of $1.09 and $9 Billion.  The guidance isn’t dull either: $5.30 to $5.80 EPS and $42 to $44 Billion, while prior estimates were $5.20 to $5.70 and $41.5 to $43.5 Billion

International sales are helping to offset some slower highway truck engines in the US, so maybe a weak dollar isn’t so bad after all.  Shares are up almost 5% at $71.90 in pre-market trading; the 52-week trading range is $57.98 to $82.03.  This now only has a forward P/E ratio for 2007 of just under 13 at the mid-point of its guidance.  Besides this one looking good all on its own, this will probably have Jim Cramer out pounding the tables on it since he’s been so bullish on the stock.

Jon C. Ogg
April 20, 2007

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

Posted on: April 20, 2007 – 7:32 am in Earnings

Pre-Market Stock News (APR 20, 2007)

(AH) Armor Holdings won $41.7 million in armor orders from the Army.
(AMD) AMD trading up 2.5% despite crummy earnings and sinking margins.
(AVNR) Avanir trading up another 12% pre-market.
(BUD) Anheueser-Busch lost the international “Budweiser” copyright fight to Budvar in Czech Republic over the name.
(CAT) Caterpillar beat earnings and raised guidance.
(CECO) Career Education said the DOJ is declining prosecution and has closed a grand jury investigation.
(COF) Capital One traded down 3% after missing earnings.
(DOX) Amdocs signed a managed services pact with AT&T.
(DPTR) Delta Petroleum priced a 6.2 million share secondary at $20.50.
(FTEK) Fuel Tech won two more orders of Fuel Chem.
(GOOG) Google traded up 4% after beating earnings expectations last night.
(HON) Honeywell $0.66 EPS vs $0.62e.
(HRB) H&R Block sold off its Option One Mortgage unit.
(MCD) McDonald’s met expectations, but that is after they raised guidance last week; will franchise 1600 stores in Latin America and the Caribbean.
(NSTK) Nastech Pharma traded up 5% after Cramer interviewed its CEO.
(PFE) Pfizer $0.68 EPS vs $0.57e, but guidance was lowered; stock down 1%.
(SIRF) SiRF Technology trading down 7% after seeing lower than expected EPS in Q2.
(SLB) Schlumberger $0.96 EPS vs $0.90e.
(SUPG) Supergen sold off some non-core assets to Intas.
(TPGI) Thomas Properties priced 8 million shares at $16.00 per share.
(XRX) Xerox $0.24 EPS vs $0.21e.

Jon C. Ogg
April 20, 2007

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

Posted on: April 20, 2007 – 7:16 am in Pre-Market Activity

Full Research Summary (APR 20, 2007)

ASD raised to Overweight at JPMorgan.
BEN started as Hold at Citigroup.
CB raised to Outperform at FBR.
CBRL cut to Neutral at JPMorgan.
COF cut to Mkt Perform at FBR.
CPKI started as Outperform at Morgan Keegan.
ECA cut to Hold at AGEdwards.
EOG cut to Hold at AGEdwards.
HTLD cut to Hold at Stifel Nicolaus.
HUBG raised to Outperform at Baird.
LUV cut to Neutral at HSBC.
MA started as Hold at AGEdwards.
MAR raised to Outperform at Wachovia.
MNT cut to Underperform at Piper Jaffray.
NFLX raised to Neutral at B of A.
PALM raised to Equal Weight at Lehman.
PKTR raised to Mkt Weight at JMP.
PNRA started as Buy at SunTrust Robinson Humphrey.
PYX raised to Buy at Oppenheimer.
RHI cut to Sell at Stifel Nicolaus.
RNOW cut to Hold at Roth, cut to Buy at First Albany, cut to Hold at Jefferies.
SGP cut to Neutral at HSBC.
SLM cut to Neutral at Goldman Sachs.
SHOE cut to Hold at Roth.
STMP cut to Neutral at First Albany.
SUN cut to Peer Perform at bear Stearns.
STRT raised to Neutral at Baird.
SVU raised to Overweight at HSBC.
TWC started as Neutral at Credit Suisse.
TZOO cut to Buy at First Albany.
VLO cut to Underperform at Bear Stearns.
WPZ cut to Mkt Perform at Wachovia.
ZGEN started as Sell at Citigroup.

Jon C. Ogg
April 20, 2007

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

Posted on: April 20, 2007 – 7:03 am in Analyst Calls

Pfizer Income Drops, Guidance Raises Concerns

Pfizer (PFE) did not have a very good quarter. Net income fell from $4.1 billion in the comparable quarter a year ago to $3.4 billion in the recent quarter.

The company confirmed that it is concerned about generics taking market share, But, the company kept is guidance unchanged.

Douglas A. McIntyre

Posted on: April 20, 2007 – 6:02 am in Pharmaceuticals

GM: China Bites The Hand That Feeds It

For big US companies, China has a gravitational pull like the Sun. It can’t be avoided. The huge market is just too attractive. For firms like GM (GM), McDonald’s (MCD), and Wal-Mart (WMT), who face slow growth in the US, China represents an opportunity to get back on track.

But, the Chinese unions have moved into Wal-Mart and China. And, GM’s joint venture partner, Shanghai Automotive Industry Corp, appears to be using what it has learned from GM to build its own auto empire, which may, in fact, compete with GM. The Chinese car executives make no bones of their plans to use technology from foreign car companies to build their own brands.

But, GM and its partners are the largest sellers of vehicles in China, so the temptation has simply been too great.

It would be nice to think there is some justice in all of this. That the US will block imports of Chinese products using US technology. But, that will not happen. The deal with the devil is cast. It is now a race to make money in China before the locals take it away.

Douglas A. McIntyre

Posted on: April 20, 2007 – 5:49 am in Autos

Europe Markets 4/20/2007

Markets in Europe were up at 6.25 AM New York time.

The FTSE rose .8% to 6,490. Barclays (BCS) was up 2.5% to 756.6. BP (BP) was down .3% to 570. BT (BT) was up .9% to 315.5. GSK (GSK) was up 1.1% to 1497. Reuters (RTRSY) was up .3% to 491.75. Vodafone (VOD) was 1.9% to 143.

The DAXX was up 1.1% to 7,321. DaimlerChrysler (DCX) was up .8% to 59.85. DeutscheBank (DB) was 2.4% to 110.7. Deutsche Telekom (DT) was .3% to 13.27. SAP (SAP) was up 3.1% to 37.22. Siemens (SI) was up 3.8% to 90.04.

The CAC 40 was up 1.3% to 5,904. Alcatel-Lucent (ALU) was down .5% to 9.3. AXA (AXA) up .6% to 33.24. France Telecom (FTE) was up 1.1% to 20.94. ST Micro (STM) was up .9% to 14.95.

Data from Reuters.

Douglas A. McInyre

Posted on: April 20, 2007 – 5:35 am in International Markets

In Shadow Of Oracle SAP Shows Well

Oracle (ORCL) has grown so quickly recently, that there has been some cause for alarm that its European rival, SAP (SAP) might buckle under the pressure. No such luck for Oracle.

SAP announced that in the last quarter, license sales rose 10% to $767 million, in line with expecations. In North America, Oracle’s home turf, SAP license sales were up 11%.

Over the last year, shares in SAP are down over 10%. Oracle’s are up over 30%.

Perhaps that trend will begin to reverse itself.

Douglas A. McIntyre

Posted on: April 20, 2007 – 5:14 am in Software

China Mobile: Undefeated World Champion

China’s Mobile’s (CHL) earnings rose 22% to $2.3 billion. It now has 316 million domestic users, two-thirds of the Chinese market. Future concerns about earnings revolve around the company moving into rural areas where cell phone handsets may not sell for as much per unit.

When the company hits 400 million subscribers, that will be a nice problem to have.

Douglas A. McIntyre

Posted on: April 20, 2007 – 4:36 am in Wireless

Google’s Walk-Off Home Run: The Fight Moves To The Cellphone

The technology editor of MarketWatch made a good point after Google (GOOG) released earnings. "Google’s quarterly results late Thursday show that the race to win that market (internet search ads) is over, in spite of Yahoo’s new search-ad features, known as Project Panama." 

That leaves the only ray of hope for Yahoo! (YHOO) and Micosoft (MSFT) is the cell phone market.

Over one billion cell phones were sold worldwide in 2006. Many of these will never be used for search. Some are too inexpensive to run search technology. Some are in markets where handsets have no broadband connections. Some belong to people who don’t care about using their phones to access search engines. But, that leaves more than one or two phones.

Quoted in The New York Times, the head of Google made it clear where the next battle will be joined: “The biggest growth areas are clearly going to be in the mobile space,” Eric E. Schmidt, chief executive of Google.

While the "search over the phone" market is in its early stages in the US, in China, the world’s largest cellular company, China Mobile (CHL), has already teamed up with Google (GOOG). But, that leaves the huge operators in Europe and the US along with systems in developing countries like South America and India.

Google has two advantages in cell phone search. Its market share on the PC is due to its ability to bring back better search results and marry them more effectively with text ads. That does not change on the phone. And, Google has already shown how daring its is willing to be spending money to get into critical markets. Its YouTube and DoubleClick deals have shown that.

The fight for the cell phone may be in its early stages. The house may be betting on Google. But, Yahoo! and Microsoft are desperate. And, cornered badgers bite.

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

Posted on: April 20, 2007 – 4:23 am in Internet

Media Digest 4/20/2007 Reuters, WSJ, NYTime, FT, Barron’s

According to Reuters, the former CEO of Qwest (Q) was found quity of insider trading.

Reuters writes that a software upgrade caused the outage of the Research In Motion (RIMM) network.

Reuters also writes that Google’s (GOOG) net income topped expectations and the stock rose after hours.

Reuters reports that the Nintendo Wii outsold the Microsoft (MSFT) Xbox 360 and Sony (SNE) Playstation 3 in the US market during March.

Reuters writes that No.4 handset manufacturer SonyEricsson missed profit targets as it sold more inexpensive phones.

The Wall Street Journal reports that AMD (AMD) had a larger than expected $611 million loss.

The Wall Street Journal also reports that the chairman of Siemens (SI) has stepped down amid corruption investigations at the company.

The WSJ writes that GM’s (GM) China partner, Shanghai Automotive Industry Corp, could use the knowledge it has gained in joint ventures to compete with the US company.

The WSJ also writes that the UAW is looking at whether it should make bid for DaimlerChrysler (DCX) Chrysler.

The WSJ reports that Amgen (AMGN) said that its top-selling Aranesp drug didn’t worsen survival chances in a trial of lung-cancer patients

The New York Times reports that Yahoo! (YHOO), Google (GOOG) and Microsoft (MSFT) have begun and effort to get share for their search products on cell phones.

FT writes that Nokia (NOK) sees improvement in the US market in 2008.

Barron’s reports that SiRF Technology Holdings (SIRF) missed earnings estimates and the stock fell after hours.

Douglas A. McIntyre

Posted on: April 20, 2007 – 4:01 am in Press Digest