Daily Archives: May 7, 2007

Motorola Without Icahn: $14

Carl Icahn seems to believe that he has lost his bid for a seat on the Motorola (MOT) board.

If so, the stock will probably head back to where it was before the RAZR bailed the company out after the last hole it was in. In other words, back where it was in 2002. That year Motorla has its most recent full-year loss with red ink of $1.8 billion on revenue of $26.7 billion.

Management says that Q2 will be be as bad as Q1, but there should be an improvement in the second half. According to MarketWatch, Motorola "shipped 45.4 million handsets in Q1, down 31% from a company record 65.7 million in the final quarter of 2006".

But, that is hard to imagine. For Motorola to have an improvement later this year its handset business would have to recover significantly. With new models delayed until the second half of 2007, and with handset sales worldwide growing at below 10% for the first time in memory the thought that Motorola could stage a recovery this year is almost out of the question.

Motorola at $14 or below, again.

Just watch.

Douglas A. McIntyre

Posted on: May 7, 2007 – 8:05 pm in Uncategorized

WEN – Wendy’s Int. Inc: Acquisition Unlikely For Now

By CrossProfit

05/07/2007

About a month ago, our analyst colleague Mark Basham form Standard & Poor’s reiterated his sell rating primarily because he thought that Wendy’s would have trouble meeting its 3-4% 2007 same-store sales increase. The conclusion was based on the fact that the first quarter comparison was 3.7% however the first quarter should have been much higher as it was the easiest quarter to beat from last year. Once we get into the second half of 2007, WEN is going to have a tougher time beating the 2006 figures. S&P reiterated its $26.00 target price.

As of February 2007, the CrossProfit EOL 01/08 is $31.40. Estimated 2007 EPS is $1.18. Currently shares are trading near the $40.00 mark. Current pricing is based on unconfirmed acquisition rumors.

After reporting Q1 earnings, WEN formed a special committee to explore strategic options. As far as we know, they have not hired anyone though GS might be in the running should it come to this. Forming a special committee is not the same as hiring Goldman Sachs to investigate strategic options.

What really got this rumor going was a report in StreetAccount.com that WEN had received a $50 per share offer and called it "unconfirmed speculation". This is beginning to sound like a New York Post page six item.

First of all the WEN board formed the special committee in response to Q1 sales and earnings. This is more likely to be along the lines of which coffee to introduce and where rather than ‘let’s sell the company’. Second, an investment banker was not hired, which would indicate that WEN is actively looking to be acquired. Third, when an offer has actually been made, the normal response is a confirmation without disclosing the identity of the acquirer. Companies are careful about this in order to avoid potential law suits. WEN issued a standard no comment reply.

Last but not least is the alleged price tag. WEN Directors; if anyone offers $50 a share, grab it immediately.

You can always tell when a rumor is nothing more than a rumor when the price can not possibly be. Had the rumor been for 40, this is still in the realm of nuts yet possible. If a private equity firm buys WEN at 50, they will be sued for negligence by their constituents. The highest analyst worksheet buyout figures are below 40 and the one worksheet that we saw was stretching it a bit. The mid 30’s are a more likely acquisition value. Above current prices, WEN is a short.

Three percent annual growth just doesn’t cut it in the markets these days.

Disclosure: CrossProfit consensus, no conflicts.

http://www.crossprofit.com

Posted on: May 7, 2007 – 7:49 pm in Mergers and Buy Outs

Milk Hurting Starbuck’s

This year the US Ethanol industry will produce over 5 billion gallons and use more than 1.5 billion bushels of corn pushing prices near $4 a bushel. Dairy farmers are seeing the cost of feed jump and are finally able to pass that on to consumers.  After years of flooding international markets with surplus milk products, the European Union, under heavy pressure from within, has curtailed its $59 billion annual subsidy system, at least where dairy is concerned. Combine that with drought conditions in New Zealand and Australia, two big milk-exporting countries, and it makes for tight supplies worldwide, and higher demand for U.S. product. Milk farmers, who collected 12.3% less for their milk in 2006 are fully intent on making that up this year.

"The price this year is not just going to beat the record by a few cents. It’s going to knock it out of the park," said Mike Suever, Senior Vice-President for Milk Procurement at Chelsea, MA based HP Hood. Prices for raw milk are expected to rise at least 25% this year.

Starbucks, who uses an estimated 93 million gallons of milk a year is looking at a $279 million dollar milk bill in 2007. While it may not seem a lot to a billion dollar company, it does equate to 36 cents a share, an increase of about 9 cents or about 10.3% of profits over 2006. This does not include the price increase to be incurred from changing the percentage of hormone free milk from 27% to 37%.  They do charge 50 cents more at some locations for this milk so it must cost considerably more…. no?  When you are predicting 83 to 87 cents a share and 18% growth, the 10% of that in milk costs is huge.

When you ad this to slowing traffic on stores, it is just another headwind for investors and the company

Todd Sullivan

5/7/2007

I hold no position in Starbucks

Posted on: May 7, 2007 – 7:47 pm in Uncategorized

Cramer’s #1 Buybacks=Buyouts Pick (WTW)

Cramer has a new method for predicting takeovers.  Four of the fourteen largest buybacks have either been taken over or have agreed to be taken over in the last few months.  Cramer thinks the other 10 are great buyback targets as well.  Cramer has 3 picks out of these 10.  His #3 pick was United Stationers (USTR-NASDAQ) and his #2 pick was Brinks (BCO-NYSE). He also said that he is only focusing on buyout candidates that he thinks are good all on their own.

The #1 pick from Cramer in buybacks is Weight Watchers (WTW-NYSE).  I hate to tout any ex-picks here but this was one of my buyout picks last summer when the shares were sliding and sliding because of a potential leveraging effect and what would probably a better diet and nutrition plan than others. 

Jon C. Ogg
May 7, 2007

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

Posted on: May 7, 2007 – 5:51 pm in Cramer, Stock Buybacks, , ,

Cramer’s #3 & #2 Buybacks=Buyouts Picks

Cramer has a new method for predicting takeovers.  Four of the fourteen largest buybacks have either been taken over or have agreed to be taken over in the last few months.  Cramer thinks the other 10 are great buyback targets as well.  Cramer has 3 picks out of these 10.  His #1 pick will be after the Lightning Round.  He also said that he is only focusing on buyout candidates that he thinks are good all on their own.

Cigna (CI) is on the list but he’s already highlighted it recently.  Sonic (SONC) and Cracker Barrel (CBRL) would have been on Cramer’s list except that he thinks they are too vulnerable to consumer spending and too vulnerable to higher gasoline prices.

The #3 pick is United Stationers (USTR-NASDAQ) which has bought back 20% of its outstanding shares.  The company should have improving margins and there are only three analysts covering the stock.   

The #2 pick is Brinks (BCO-NYSE) that bought back 21% of its stock.  He thinks the fundamentals are great on this one.  This one is a home security play and a play for securely transporting financial and luxury goods.

What is funny is that since Cramer hates ETF’s so much, he neglected to tell you about PowerShares Buyback Achievers Portfolio (AMEX:PKW).  This is an ETF that actively invests in companies who are buying back shares.  As far as which of these are good and bad, United Stationers is one that has many competitors that go through periods where they look good and bad.  They are ultra-sensitive to economic cycles and business spending.  But Brinks on the other hand is one that is solid.  The stock is up on its 52-week highs, but here is thing: this company already transports massive amounts of luxury goods that the millionaires and billionaires already use.  This one makes sense, and it would have been a perfect play for Berkshire Hathaway earlier if the size was larger than $3 Billion.

Jon C. Ogg
May 7, 2007

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

Posted on: May 7, 2007 – 5:28 pm in Cramer, Mergers and Buy Outs, Shareholder Issues, Stock Buybacks, , , , ,

CVS/Caremark reports tomorrow – Will the merger payoff?

They are the nation’s largest retail pharmacy chain, with approximately 6,200 stores across 38 states. Add Caremark into the mix and you’ve got yourself one mammoth drug related services company that totals to a $55 billion market cap.

CVS/Caremark Corporation (CVS) reports tomorrow and it’s the first time it is doing so since CVS and Caremark have merged. It wasn’t a quiet merger, investors and shareholders on both sides have been screaming foul play by directors Roger L. Headrick and C.A. Lance Piccolo. Anytime you get takeover bids that go for around $27 billion, you get to see the color of all possible human emotions, just like a full rainbow after a rainy afternoon. So will it be all smiles and rainbows after tomorrow’s conference call?

William Blair analyst at Mark Miller is saying CVS will report Q1 earnings of 47 cents per share which is 2 cents ahead of analysts’ consensus estimate. He has a market perform rating on the stock and to get more insight into tomorrow’s call read a great article by Melissa Davis from TheStreet.com

What investors, shareholders and Wall Street want to know is can CVS/Caremark pull of a win for the team tomorrow?

The stakes couldn’t be higher, after all the pain this merger has caused – was it all worth it? Shares of CVS/Caremark are trading just $1 away from its 52-week high at around $36. With all the drama surrounding CVS I would rather wait to make a play until after the dust has settled. What I want to know is now that the two companies have joined forces, can they reduce their operating expenses and most important, what is the plan for the future?

Now that they have become the Wal-Mart (WMT) of the drug world, can this aircraft carrier of drug services make the stock price sail or will it just sink?

Frank Lara Jr.

Frank Lara Jr. can be reached at franklara@247wallst.com; he does not own securities in the companies he covers.

Posted on: May 7, 2007 – 4:38 pm in Earnings

News Corp Keeps Online Explosion Expanding

News Corp’s (NWS) MySpace has just bought Photobucket, the largest online photo website and one of the top 50 websites in the US by traffic. The price? Only $250 million. Comscores says Photobucket has 20 million unique visitors per month.

Given the size of the site, and the fact that it is also a video portal, it is surprising that Yahoo! (YHOO) did not end up with Photobucket. It could have used a win.

Douglas A. McIntyre

Posted on: May 7, 2007 – 4:35 pm in Mergers and Buy Outs

The 52-Week Low Club

The Bombay Company (BBA) Company has a "going concern" letter from its auditors. Also losing money and has hired an outside adviser to help with "liquidity" issues. Down 25% today to $.54. From a 52-week high of $2.94. Home furnishing business must be tough.

Haverty Furniture (HVT) Not to be outdone by Bombay, company has a bad quarter. Stock falls to $12.13 from 52-week high of $17.15.

US Air (LCC) At least it is not a furniture company. High oil prices. Difficulty raising fares. Flat April traffic. Stock down to $34.85 from 52-week high of $63.27.

Spatialight (HDTV) Hit by a steam roller. The company manufactures and sells high-resolution liquid crystal on silicon microdisplays. Just raised money. "Going concern" letter from auditors. Nasdaq delisting notice. A trifecta. Down to $.22 from 52-week high of $3.59.

JDS Uniphase. (JDSU) Poor quarter. Optical equipment company can’t do well, even in a good environment. Down to $13.73 from 52-week high of $27.92.

Douglas A. McIntyre

Posted on: May 7, 2007 – 3:28 pm in HI/LOW

AT&T Flubs It TV Launch

AT&T’s (T) bid to compete in the TV space and push the cable barbarians back into the Stone Age is off to a rocky start. The company announced a couple of small items. First, their expenditure to get the service up and running will be $1.4 billion more than planned. Let’s hope that no one in the accounting department lost his job.

According to The Wall Street Journal, there is at least one other problem: "The company also downgraded by one million the number of homes to which it will offer U-verse to 18 million…"

The new service, called U-verse, is AT&T’s attempt to get into the TV business so it can offer voice, television and broadband in one package. The cable companies are doing that already, and they are taking a ton of voice customers from the phone companies every quarter. In Q1, Comcast (CMCSA) added over 500,000 VoIP subscribers. Time Warner Cable (TWC), Cablevision (CVC), and Charter (CHTR) has equailly impressive voice subscriber additions for the quarter.

They had to come from somewhere.

Douglas A. McIntyre

Posted on: May 7, 2007 – 3:02 pm in Telecom

Memo To Chrysler: Build Better Cars

Chrysler, the US unit of DaimlerChrysler (DCX) is launching an ad campaign to position the brand as fuel-efficient and technically advanced. The company thinks that the Japanese get all of the positive buzz about good mileage and quality vehicles.

Part of the reason for the advertising is that Chrysler thinks that its models like the "300" get all the PR and the parent brand gets nothing.

Who cares? The business is to sell cars. Chevy doesn’t mind if you don’t like their brand if you buy a new Corvette.

Right now, Chrysler’s US sales are driven by the Jeep and Minivans. "DaimlerChrysler described demand for Chrysler Group’s Jeep Wrangler and Jeep Patriot models as ’strong’, with sales of the brand 29 pct higher than in April last year." 

Within the Chrysler brand proper, the company has models like the aging "300" and "PT Cruiser" which has also been around since the flood.

Get some hot new cars. Then pay for the advertising.

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

Posted on: May 7, 2007 – 2:52 pm in Autos

Domino’s Pizza (DPZ): $13.50 dividend pays today but at what price?

It hurts when you walk into the office Monday morning and see that your company stock has fallen 38% over the weekend even if you are receiving a special dividend of $13.50 a share. You could say "it’s a wash" but you have to question, is it really worth the price? Domino’s Pizza Inc. (DPZ) reported quarterly profit fell 68% last Wednesday and that’s just the begininng.

Today (5/7) is Domino’s ex-dividend date so shareholders are getting that wonderful dividend in their brokerage accounts sometime today if not over the weekend. That $13.50 a share dividend was made possible by $1.85 billion in borrowing. Last week Domino’s disappointed Wall Street with a 2.4% drop in revenue to $339.3 million when analysts were expecting a 2.5% rise.

The figure that I liked the least was the 2.9% drop in U.S. same-store sales. Domino’s Pizza international stores saved them which reported sales increasing by 3.8%. But this seems to be a popular trend with U.S. stocks lately – revenue here at home fails to impress but overseas the company is pulling in Euro’s left and right.

The latest take by Wall Street analysts occurred May 3rd, when Friedman Billings reiterated their "outperform" rating on DPZ shares and reduced their price target from $39 to $36.50.

In February, Domino’s announced a plan to refinance its current debt and take out a large low-interest loan backed by its revenue-generating assets. The plan is to return capital to shareholders and make everyone happy.

Domino’s Pizza brought in $435M in revenue last year, not bad for making pizzas but you have to ask yourself – how much larger can they grow? Everyone who ever wanted to open a Domino’s store has done so in the U.S., that fad starting getting old 10 years ago. So you look for growth overseas, pay out a fancy dividend, and hope American’s keep buying your stock and pizza. However we all know the Street only cares about two things – Growth and Guidance. So what more can Domino’s do to make buying their stock worth your time and savings? And how much growth can Domino’s hope to accomplish in the next five or ten years?

The NoidDon’t run out to buy Domino’s because shares look so cheap today at $19.72. Just keep in the mind the big picture. Even if they bring The Noid back, they aren’t going to start selling 10,000,000 more pizzas, it’s just reality.

Frank Lara Jr.

Frank Lara Jr. can be reached at franklara@247wallst.com; he does not own securities in the companies he covers.

Posted on: May 7, 2007 – 2:31 pm in Dividend

Berkshire Hathaway’s “Whale” Acquisition; Who Could It Be?

Stocks to Watch: BRK/A, MRO, TRV, WM, ALL, LEH, CHA, REP, OXY, DOW, VLO, E, MET, BF, DB, SNP

Warren Buffett was noted this weekend as saying he is tempted to find a "Whale" of an acquisition rather than just trying to catch a big fish.  Everyone knows that Buffett has called technology a widget that he wouldn’t buy, so what could this mean?

We screened stocks with some valuations that would entail Berkshire Hathaway (BRK-A) either selling many stakes it holds in public companies or that would require it to raise capital from the markets.  In order to do this we looked at the balance sheet and decided that the company cut off mark would be somewhere in the vicinity of $35 Billion for the company to still have ample cash to operate without stretching or minimizing activities.  We decided to go up to $80 Billion as the ceiling, thinking that Buffett could probably sell the idea and considering that this amount ‘could’ still occur if he stretched it big time.  He has already said that Geography is not a barrier any longer. 
The companies that trade at $35 billion to $80 billion have price to book value ratios of Less than 2.5, Price-to Earnings ratios of 15.0 or less, forward Price to earnings ratios of under 14.0.  There are many other measures such as discounted cash flows and return on equity that we could have run, but we thought we’d see what comes up. 

Companies that did not have ADR’s were screened out, even though this may not be fair.  He has mostly stayed away from energy companies, but his PetroChina (PTR) stake made us leave this in.  He has stayed away from banks, but since he has been aggressive into insurance we decided to keep this in there.

Here are some of the companies that showed up in the screen:
Marathon Oil (MRO), Travelers (TRV), Washington Mutual (WM), Allstate (ALL), Lehman (LEH), China Telecom (CHA), Repsol (REP), Occidental Petroleum (OXY), Dow Chemical (DOW), Valero (VLO), E N I (E), MetLife (MET), BASF (BF), Deutsche Bank (DB), China Petrolem (SNP). 

Here is the problem in evaluating the companies above: If you don’t think Buffett would take on the huge additional risks in insurance or if you think he’d shy away from a bank or brokerage firm, then Buffett would need to go into the chemical companies or into energy and refining.  Even if you scale down the size to say $20 Billion, you have the same type of companies in the mix, except you bring in some metal and commodity names.

What is the biggest problem in having roughly $40 Billion in cash and equivalents?  It’s obviously trying to put the money to work.  Buffett is not under the same pressure as private equity to put his cash to work.  His track record speaks for itself, but you have to wonder about the company down the road and what its strategy will be.  How far will they diversify?  Will they diversify?  When your holding period you evaluate a business on is "Forever" it makes for some interesting problems to have.

Jon C. Ogg
May 7, 2007

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

Posted on: May 7, 2007 – 1:48 pm in Conglomerates, Financial Stocks, Mergers and Buy Outs, , , , , , , , , , , , , , , ,

Financial Blog News From Around The Web

GigaOm makes the point that AT&T (T) will use the Apple (AAPL) iPhone launch to rebrand its wireless service. People still call it Cingular.

One of Microsoft’s (MSFT) biggest online products, Hotmail, is coming out in its version 2.0, according to TechCrunch.

The Wall Street Journal MarketBeat wants to know if Alcoa (AA) is "hunter or prey".

Barron’s Tech Traders writes that perhaps Yahoo! (YHOO) should buy Dow Jones (DJ).

Jeremy Siegel is still a major bull.

StreetInsider looks at today’s big movers.

TheStockMasters wonder why Google’s (GOOG) share price won’t move.

From a financial standpoint, should you buy or rent your next house?

A look at the latest TickerSense Blog Sentiment Poll.

Herb Greenberg points out that rumors like Starbucks (SBUX) going private are all over the internet.

BloggingStocks looks at Texas Instruments (TXN).

From 24/7 Editors.

Posted on: May 7, 2007 – 12:15 pm in Press Digest

Defending Wal-Mart on CNBC (WMT, TGT, BRK/A)

As a guest on CNBC today (link to video), I found myself in an interesting position: coming to the defense of Wal-Mart (WMT-NYSE) shares.  This isn’t exactly a change of heart at all from all of the current problems at Wal-Mart, because this was as it pertains to Target (TGT-NYSE) and the future ahead as far as which is likely a better longer-term investment from here.  The main reason CNBC was covering this was because Warren Buffett of Berkshire Hathaway (BRK/A-NYSE) is more of a believer in Wal-Mart over Target. My longer-term stance is that from a "long-term value investor" standpoint, Wal-Mart offers what looks to be a better valuation and perhaps better downside protection. 

My position is almost all on relative values that basic value investors look at.  My belief really boils down to the following:

METRIC        Wal-Mart    Target
Forward P/E    15.0           16.5
Times Sales    0.57          0.83
4-Year Stock    FLAT        >100%

The honest truth, or at least my opinion of it, is that Target is a much better run franchise and it has a much better image.  It has higher operating margins, it is a better shopping experience, and management is hard to dog.  But since the economic recovery really started coming on in 2003 Target shares are up more than 100% and Wal-Mart has been a dud with close to a zero return.  Target has probably made its giant leapfrogging gains that were easy and now the relative gains will probably be harder to make.

Opposite of me was the esteemed Dana Telsey of  Telsey Advisory Group.  She is one of the star independent analysts out there for retail stores and trends.  She and I actually see what looks to be the same inside each company as of today.  Our difference is how investors will make out on a long-term basis.  Only time will tell the verdict on this.

Wal-Mart needs to decide to stop using some loss leader in Q4 and it can already give up a fraction on this price crushing to the point that margins are dead.  It will be a slower grower ahead and it obviously has image issue that it has to overcome.  If the board of directors there does not recognize this and if the board does recognize that a friendlier face for a Lee Scott replacement then I would come out calling for FAR MORE than just "core leadership."  I have maintained since December that Lee Scott needs to go.

As far as downside or any economic troubles, Wal-Mart is also probably a better spot to be for defensive and value-oriented.  The fact that many Wal-Mart customers ARE Wal-Mart customers is more of a price sensitivity issue.  If the economy goes through a real downturn of size and for a longer-than expected time, there will just be more shoppers that HAVE to go back to Wal-Mart for more of their needs.

This isn’t exactly a ringing endorsement for growth or momentum investors, but for longer-term value players Wal-Mart may be a better spot.  Sometimes personal opinions and feelings and preferences can get in the way of investing for gains. Business is Business.

Jon C. Ogg
May 7, 2007

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

Posted on: May 7, 2007 – 11:21 am in Conglomerates, Media, Retail, , ,

Berkshire A Buy–When Buffett Steps Down.

Since this was "Woodstock For Capitalist’s" weekend in Omaha. A bit about Berkshire (BRK-A) and it’s leader.  No one will will argue or dispute his past success and what he has done for shareholders.  Nor will anyone attempt to belittle the atmosphere and honesty in which he runs the organization and the culture he created. That being said, being a former Berkshire shareholder I would not consider purchasing shares until Buffet steps down.  The reason? $40 billion in cash and no plans to spend it.  Berkshire is, in essence an insurance company that pays no dividends.  It’s results the past two years are due to one factor, no major catastrophes. 
Buffet has the ability to "buffer" shareholders against the eventual catastrophe and it’s impact but refuses to part with his cash.  Insurance industry profits have been at all time highs the past two years and even Buffet himself has acknowledged that this cannot continue.  Berkshire earnings increases over that span have been due solely to insurance profits, not investing gains or increases in it’s other operating segments.  Industry pricing has already come down and we are one active hurricane season away from watching those record profits evaporate.  When they do, Berkshire shares will take a hit with them.
Here is my issue, Buffet has the power to insulate shareholders from this eventuality.  His recent purchase of 10% of Burlington Northern and 15% stake in USG marked the first time this century he has taken a meaningful stake in any company. In the past 6 plus years he has dabbled in shares of Wal-Mart, Home Depot, Lowe’s and others without making any meaningful foray into them.  When Berkshire was experiencing its meteoric rise, it was due to Buffet making huge investments in a handful of companies.  Now the definition of huge changes as your size does.  $100 million to Berkshire in 1975 was significant, but today is 2% than of what Buffet has on hand to invest. That being said, Buffet still has the ability to make portfolio changing investments, he just chooses not to. Berkshire’s investment portfolio today resembles a mutual fund with small positions in over 30 companies that are bought and sold regularly.  In the past Buffet has said "Wait for a fat pitch and then swing for the fences".  Why isn’t he doing that? Considering the investment possibilities Berkshire has, his recent investing record is one of bunts, not big swings.  He has also said in the past "if you would not buy the whole company, why would you buy a single share"?  Using his own logic, I have to ask "Warren, if you are going to invest $160 million in Home Depot, why not $1 billion" The theory still holds, if you would not buy 100 shares why buy one share and if you would buy one share, why not a hundred of them? An investment of 4% of his available cash is not "swinging for the fences"
25% of Berkshire’s current market cap is it’s cash.  Shares trade at a PE of 15 times earnings and given it’s earnings ability and financial stability, that should be higher. The reason it isn’t? People recognize that the $40 billion will be sitting there next quarter and next year and in today’s low interest rate environment, money in the bank does not impress anyone.  Put it to work and Berkshire’s multiple will expand.
Unfortunately, that will not happen until Buffet retires and someone else runs Berkshire’s investments.   
From Todd Sullivan

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Posted on: May 7, 2007 – 10:12 am in Uncategorized

Motorola: Market Voting That Icahn Won’t Win

The market seems to think that Carl Icahn does not have the votes to get onto the Motorola (MOT) board. At least that is what the share price is saying. MOT trades down 1% at $17.90. Icahn has the support of other institutions which own shares including ClearBridge Advisors.

Douglas A. McIntyre

Posted on: May 7, 2007 – 9:00 am in Wireless

TOT: Common Size Analysis of Total SA

By William Trent, CFA of Stock Market Beat

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Posted on: May 7, 2007 – 8:51 am in Uncategorized

Edelman: Pop-Ups Artificially Inflating Internet Traffic Stats

From Internet Outsider

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Posted on: May 7, 2007 – 8:47 am in Internet

New Study Hammer Johnson & Johnson Stents

Johnson & Johnson’s (JNJ) new drug coated stent did not cut it. The experimental drug-coated stent failed to meet its primary goal in a study, according to Reuters. "The CoStar stent is one of several in a next generation of the drug-coated devices that companies and analysts hope will restart growth, which has been slumping amid safety worries."

Boston Scientific (BSX) has watched its fortunes fall apart because of health concerns about the performance of its stents. The open issue has been whether these devices cause dangerous blood clots.

It does not seem to be a problem that anyone has solved.

Douglas A. McIntyre

Posted on: May 7, 2007 – 8:00 am in Medical

BEA Systems Gets Armor Holdings, Cheap

Armor Holdings (AH) which makes tactical wheeled vehicles, security products and vehicle armor systems serving military, law enforcement, and homeland security markets is being bought by BEA Systems for $88 a share, or $4.1 billion. BEA makes defense systems as well. The deal is not much of a premium to the $82 where Armor trades now.

But, up until early May Armor was trading at about $70. The reason for the recent increase seems to be that the company’s business prospects are improving. According to The Associated Press:  Prudential raised its price target on Armor due to "expectations of a new armored vehicle contract" "A joint military program led by the U.S. Marine Corps is seeking to double the size of its new armored vehicle program", the AP added.

Looks like Armor is going way too cheap.

Douglas A. McIntyre

Posted on: May 7, 2007 – 7:48 am in Uncategorized