Daily Archives: April 22, 2007

Exxon Short Interest Drops

On the way to being up 25% over the last year, ExxonMobil (XOM) paused. In mid-December, the stock hit $79. By mid-March, it was below $70. But, that was short-lived. The shares now change hands just below. $80.

Earnings for the big oil companies were a bit off in Q4, primarily due to a drop in the price of oil in the second half of last year. But, oil is back above $63.

Short interest in Exxon dropped from 58.1 million shares in March to 49.8 million shares in April. The shorts appear to have been smart to get out of the way.

There is clearly some sentiment that oil is going to continue to push upward as the summer driving season approaches and demand does not seem to be abating here or in other large markets like China.

Great news for Exxon until the well runs dry.

Douglas A. McIntyre

Posted on: April 22, 2007 – 6:30 pm in Oil & Gas

CBS: Shorts Run For The Hills

On the way to being up 30% over the last year, shares in CBS (CBS) took a break in early March and slipped. But, after a slow week, they pushed back up again. And, the short interest in the company fell, from 63.9 million in March to 55.5 million in April.

After watching News Corp (NWS) and Disney (DIS) make many of the right moves to get programming onto the internet and digital devices, CBS has launched its own interactive operation and seems to be taking the new world seriously. CBS also cut a deal to run some of its video content on Google’s (GOOG) YouTube.

CBS may be late to the digital market, but at least it showed up.

Douglas A. McIntyre

Posted on: April 22, 2007 – 6:15 pm in Media

Washington Mutual: The Shorts Come Marching In

Being in the midst of the sub-prime mortgage crisis has done a lot of harm to a number of lending institutions and some will not make it out alive. Washington Mutual (WM), the big lending operation, will weather the storm, but not without some damage.

The company’s April 17 earnings were ugly. According to The Associated Press: "Kerry Killinger, Washington Mutual’s chairman and chief executive, said the company’s retail banking, card services and commercial groups fared well, while its home loan business — particularly the sub prime segment for consumers with high-risk credit histories — has taken a serious hit."

Investors in mortgage companies simple don’t think it is safe to go back in the water. The short interest in Washington Mutual rose from 29.8 million shares in March to 40.4 million shares in April. But, the shorts may have not made a good bet. After being down as much as 14% this year, the company’s stock price has recovered recently and is only off about 6%.

If the stock moves up more, these shorts could get squeezed.

Douglas A. McIntyre

Posted on: April 22, 2007 – 11:36 am in Financial Stocks

Halliburton Shares Short Increases

Halliburton (HAL) has not had a distinguished year. Over the last twelve months its shares have fallen about 21%. Investors did not seem to be impressed that the company spun off its construction unit, KBR (KBR), and that is improved HAL’s credit rating. And, there was great rending of clothes and gnashing of teeth when the company announced its would move its headquarters from Texas to Dubai. The company’s excuse, which was that much of its business is in the Middle East, did not seem to draw much sympathy.

Well, short sellers do not seem to like Halliburton either. Shares short in the company rose from 60 million in March to 113.8 million in April.

As Morningstar points out, Halliburton has a number of reasons for investors to stay away: the company is increasing capital spending and much of its revenue base is in North America "exposing the firm to volatile natural-gas prices."

The company has certainly done everything it can to drive shareholders away. It recent earnings warning was no comfort. "During the first quarter, the Production Optimization and Fluid Systems Divisions of Halliburton’s Energy Services Group have experienced reduced activity in North America," the company said. "A significant portion of these lower than anticipated results is attributable to decreased drilling and completion activity in Canada and the northern U.S."

Douglas A. McIntyre

Posted on: April 22, 2007 – 11:16 am in Oil & Gas

Motorola: Short Internet Sky-Rockets

The short interest in Motorola (MOT) rose from 22.8 million shares in March to 125.8 million in April. Motorola’s earning, announced this last week, were pathetic, so the increase is not surprise.

Rival handset companies Nokia (NOK) and Sony Ericsson reported substantially stronger results. So, the market is concerned that Motorola’s share of the global handset market is falling. That is made ever worse by two other factors. The first is that the average price for virtually all handsets is dropping as sales in poorer, developing countries begins to rise sharply. In addition. sales of handsets worldwide may rise by less than 10% year-over-year for the first time in memory.

Motorola’s handset sales problems and dual headwinds would seem to make it unlikely that the stock will move up any time soon.

Douglas A. McIntyre

Posted on: April 22, 2007 – 10:55 am in Short Interest

Motorola: An Unnecessary Fear Of Icahn

Motorola (MOT) is encouraging it shareholders to vote against Carl Icahn joining its board of directors. The raider has a 2.9% position in the big handset and telecom equipment company.

Some observers would argue that Mr. Icahn has created value for other shareholders by taking positions in Time Warner (TWX), WCI Communities (WCI), and MedImmune (MEDI). But, Motorola’s argument is that Mr. Icahn is a tech boob who has no idea how Motorola works: “Even Carl Icahn would admit that he is not technologically savvy, or knowledgeable about our businesses,” the company said in an e-mail.

Taking a look at Motorola’s objection about Mr. Icahn shows that it is posturing on the face of it. Among the executives on Motorola’s board are the head of PepsiCo (PEP) and the chief marketing officer of Procter & Gamble (PG). Perhaps they both have PhD.s in mechanical engineering. But, probably not.

Mr. Icahn’s position is clearly that shareholders in the company are taking a bath and they he can help do something about that. Having him on the board would be unpleasant for Motorola’s management, but "the sight of the gallows focuses the mind." MOT stock is down about 22% in the last six months, and there is no excusing that.

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

Posted on: April 22, 2007 – 10:14 am in Wireless

XRX: Xerox Managing Expectations Better Than Operations

From William Trent, CFA of Stock Market Beat

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Posted on: April 22, 2007 – 9:47 am in Hardware

NOK: Nokia Looks Good By Comparison in Lousy Handset Market

From William Trent, CFA of Stock Market Beat

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Posted on: April 22, 2007 – 9:44 am in Wireless

SAP: Strong Sales and Earnings Despite Currency Headwind

From William Trent, CFA of Stock Market Beat

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Posted on: April 22, 2007 – 9:42 am in Software

The Week Ahead (22 April 2007)

From William Trent, CFA of Stock Market Beat

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Posted on: April 22, 2007 – 9:39 am in Research

Friday’s Top Biotech & Medical Stocks

by H.S. Ayoub
BioHealth Investor.com

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Posted on: April 22, 2007 – 9:34 am in Biotech

IBD Weekly Top Ranked Medical Stocks

From BioHealth Investor

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Posted on: April 22, 2007 – 9:32 am in Biotech

Google: Strong Quarter, Still Expensive

From Internet Outsider

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Posted on: April 22, 2007 – 9:30 am in Internet

13Gs – Ziff Asset Shows 8.8% Stake in Beazer (BZH); Citadel Raises Stake in AirTran (AAI) to 5.6%

Slow day so far for 13Ds, but here are a couple of interesting 13G filings (passive investors):

In a 13G filing after the close on Beazer Homes USA Inc. (NYSE: BZH), Ziff Asset Management disclosed an 8.8% stake (3.47 million share) in the homebuilder. Ziff Asset Management is affiliated with Ziff Brothers Investments L.L.C., which is run by the heirs to the Ziff-Davis publishing empire.
In a 13G filing this morning on AirTran Holdings, Inc. (NYSE: AAI), Citadel LP disclosed a 5.6% stake (5,104,092 shares) in the company. This is up from the 767,747 share stake the firm held for the quarter ended December 31, 2006.AirTran is a leading low-fare airline. AirTran has unsuccessfully been trying to buy rival Midwest Air Group (AMEX: MEH). Started by market-guru Kenneth Griffin in his Harvard dorm room in 1987, Citadel has become one of the world’s largest hedge funds

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Posted on: April 22, 2007 – 9:28 am in SEC

Large Griffin Land & Nurseries (GRIF) Holder Gabelli Said Company Should Have Bought Back More Shares

In an amended 13D filing on Griffin Land & Nurseries Inc. (Nasdaq: GRIF), 31.1% holder Gabelli discloses a letter to the CEO. Gabelli notes “the share creep” since 2001, saying he realizes its due to options, but said at a minimum the company should have bought enough shares back to offset the dilution. Gabelli notes that the stock is materially undervalued. Gabelli also said, “I look forward to discussing the notion of harvesting our real estate assets.”

A Copy of the Letter:

Mr. Frederick M. Danziger

President and Chief Executive Officer

Griffin Land & Nurseries, Inc.

One Rockefeller Plaza

New York, NY 10020

Dear Mike:

Trust all is well. I just read your 2006 Annual Report.

Enclosed is a grid that shows “the share creep” since ‘01.

We realize it’s due to options exercised – but at a minimum you should have bought enough shares back to offset the dilution.

More importantly, the value of your enterprise is materially above where your stock is selling so we remain somewhat miffed at the glacial speed of your share repurchase.

On another note, I look forward to discussing the notion of harvesting our real estate assets.

Trust you understand.

Sincerely,

Mario J. Gabelli

http://13dtracker.blogspot.com/

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Posted on: April 22, 2007 – 9:26 am in SEC

This Week on StockHouse April 16 to 20

Markets on both sides of the border were mixed as earnings reports for the first quarter began to flood the newswires.

On StockHouse, users were looking at junior resource companies with interests in gold, nickel and uranium, according to this week’s Top Five (http://www.stockhouse.ca/shfn/article.asp?edtID=19598), a list of what’s hot on StockHouse assembled by Sean Mason and Keri Korteling.

As a follow up to last week’s Casey Uranium Summit, Publisher, Executive Editor Darin Diehl summarized a panel discussion (http://www.stockhouse.ca/shfn/article.asp?edtID=19583 ) about what to look for in a junior uranium company.

And his Publisher’s Notebook column addressed the crucial matter of management experience (http://www.stockhouse.ca/shfn/article.asp?edtID=19587 ) among the multiplicity of uranium companies currently looking for investor support. He interviewed Ted Trueman of Pitchstone Exploration (TSX: V.PXP).

In addition to looking for experienced management, investors want to be sure that uranium miners are working with community leaders on environmental issues. Resource Report’s Melissa Pistilli spoke with Ray Roland, president of Ultra Uranium (TSX: V.ULU) about this issue (http://www.stockhouse.ca/shfn/article.asp?edtID=19585 ).

And Luke Burgess of Pure Metals advised potential investors to watch the insider trades (http://www.stockhouse.ca/shfn/article.asp?edtID=19608 ) to find the really hot uranium companies.

Uranium may be hot, but gold investments are never out of style. The Micro-cap Spotlight shone this week on Megastar Development Corp (TSX: V.MDV), which is readying to begin drilling (http://www.stockhouse.ca/shfn/article.asp?edtID=19588 ) on its new Simkar gold property in Quebec.

And Casey Research editor Chris Gilpin interviewed gold explorer Ron Parratt (http://www.stockhouse.ca/shfn/article.asp?edtID=19590 ) about his induction into the Explorers’ League, managing political risk, and the art of drilling.

The weekly ETF Check by Don Vialoux advised investors that U.S. dollar weakness makes gold ETFs (http://www.stockhouse.ca/shfn/article.asp?edtID=19607 ) very attractive now.

In a series of dispatches, Resourcex writers reported on the new Sprott molybdenum participation stock (http://www.stockhouse.ca/shfn/article.asp?edtID=19591), new acquisitions from Ultra Uranium (TSX: V.ULU) (http://www.stockhouse.ca/shfn/article.asp?edtID=19592), a nickel and cobalt discovery for rare earth metals Great Western Minerals (TSX: V.GWG) (http://www.stockhouse.ca/shfn/article.asp?edtID=19601), an asset management company’s interest in Grenville Gold (TSX: V.GVG) (http://www.stockhouse.ca/shfn/article.asp?edtID=19605), and a whopping 1.5 carat diamond discovered in Wawa, Ontario (http://www.stockhouse.ca/shfn/article.asp?edtID=19606 ).

The weekly Micro-cap Monday column by Danny Deadlock profiled oil and gas services company Dalmac Energy (TSX: V.DAL) http://www.stockhouse.ca/shfn/article.asp?edtID=19582, a thinly-traded company with operations in central Alberta.

You want an expert to help guide your investment choices in emerging markets, and this week’s Weekly Wizard, David Riedel, offered a number of picks to make money in the burgeoning China markets (http://www.stockhouse.ca/shfn/article.asp?edtID=19593).

Does the U.S. current account deficit really matter? Is it serious? Steven Saville said the deficit was the symptom of inflation only. (http://www.stockhouse.ca/shfn/article.asp?edtID=19597 )

BullBoards posters were caught up in the tussle over Clean Power Income Fund (TSX: T.CLE.UN), which reached its end this week after Algonquin Power Income Fund (TSX: T.APF.UN) backed away, leaving Macquarie Power & Infrastructure Income Fund (TSX: T.MFT.UN) as the winning bidder. Sean Mason reported on the wisdom of the Board (http://www.stockhouse.ca/shfn/article.asp?edtID=19599).

The weekly Bio Check waded into the discussion about whether mandatory administration of a new vaccine was the best choice for women’s health (http://www.stockhouse.ca/shfn/article.asp?edtID=19600).

The IPO market remains thin, but 24/7 Wall Street’s Jon Ogg had an update on some new companies coming to market. (http://www.stockhouse.ca/shfn/article.asp?edtID=19603).

Some IPOs come to market as spin-offs. Financially Fit looked at when this kind of special situation (http://www.stockhouse.ca/shfn/article.asp?edtID=19611) makes good investment sense.

Totally Technology talks of taxing problems for one software maker. http://www.stockhouse.ca/shfn/editorial.asp?edtID=19613 

While John J. De Goey believes DSC is wrong in STANDUP Advice. http://www.stockhouse.ca/shfn/editorial.asp?edtID=19612 

Posted on: April 22, 2007 – 9:03 am in Research