Daily Archives: June 13, 2007

Cramer’s Top 5 China Stock Picks (CEO, CHL, SSW, FMCN, BIDU, GMR)

Stock Tickers Mentioned: CEO, CHL, SSW, FMCN, BIDU, GMR

On tonight’s MAD MONEY on CNBC, Cramer dedicated the night to China.  He’s not gung ho on Chinese stocks, but he’s willing to review some of them.  As a reminder, Cramer said he doesn’t like investing in China, he doesn’t trust China, and he thinks it is overvalued.  He thinks an imminent 8% to 10% pullback any time because it’s overheated.  After you get that pullback then you can buy the stocks, but he advises not to do so now.

As a reminder Cramer said he wouldn’t cross the river with his charitable trust to incvest there even if they pullback 20% in the market.  But Cramer does have some picks; he has 3 solid steady plays and has 2 speculative stock picks.

THE SOLID & STEADY PLAYS:

CNOOC (CEO)…China’s nationalized oil play, the number 1 offshore, a large player in Indonesia; 67% government owned. Under the production sharing, they get the mandatory rights.  As long as oil stays high this one is a winner he thinks.  ADR’s have a $45 Billion market cap; 3% dividend yield.

China Mobile (CHL)….winner in Chinese wireless market, 68% of the mobile users in China, government owns the majority.  It has been on hold because China Telecom rumors are that they might enter wireless; has 1.9% dividend; $191 Billion market cap.

Seaspan (SSW)…Shipping Vessel operator for overseas freight shipments; 6% dividend; $1.45 Billion market cap.  He likes this better than General Maritime (GMR) now. 

THE SPECULATIVE PLAYS:

Focus Media (FMCN) runs display ads all over China and now going online, which is his first pick. It advertises in cities over 1 million people.

Baidu.com (BIDU) is called the "Google of China" by many, but it is actually beating Google at its own game in China.

As a last reminder, Cramer said this is because YOU the audience keeps asking for China picks and he isn’t a big fan.  He thinks a big pullback is imminent and he wouldn’t buy until after.  He wouldn’t buy these speculative names at all right now, and would only buy these on serious pullbacks.  Consider yourself warned and informed.

Jon C. Ogg
June 13, 2007

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

Posted on: June 13, 2007 – 5:30 pm in China, Cramer, , , , , ,

Sirius-XM Merger Sign-Up Merger Supporters; Where’s The Help? (XMSR, SIRI)

The SIRIUS Satellite Radio (SIRI-NASDAQ) and XM Satellite Radio (XMSR-NASDAQ) merger has so far been unsuccessful and has so far been a painful one for shareholders.  The FCC and Congress have been hampering the deal, and this morning the companies highlighted a group of public supported for the merger.  unfortunately there is not a single group in there that will be able to be a game-changer as far as the regulators are concerned.

Each of the signatories to the advertisement has already filed comments with the Federal Communications Commission (FCC), which opened its public comment period on the merger Friday, June 8, 2007. In their FCC comments, many of the organizations cited satellite radio’s program diversity and the merger’s potential to strengthen or expand such programs and channels as primary reasons for their support for the SIRIUS-XM combination.

- League of Rural Voters
- National Consumers League
- National Black Chamber of Commerce
- Hispanic Federation
- The Latino Coalition
- League of United Latin American Citizens (LULAC)
- New York State Federation of Hispanic Chambers of Commerce
- Women Involved in Farm Economics (WIFE)

These companies are still in the fight and even hired a top lobbying firm to push the merger.  Whether or not it will be successful is still an unknown, although the prevailing thought seems to be less than a 50% chance of the merger closing.  If only they could have signed the Vienna Boys Choir……….

XM Satellite Radio (XMSR) closed down 1.7% at $10.56 and Sirius (SIRI) closed up 0.3% at $2.77 today.  Neither stock move today will be considered a success at all in a strong market with the NASDAQ having closed up 1.3% and the DJIA closing up 1.4%.

Jon C. Ogg
June 13, 2007

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

Posted on: June 13, 2007 – 3:19 pm in Mergers and Buy Outs, Satellite, Wireless, ,

Cramer’s STOP TRADING (June 13, 2007)

On today’s STOP TRADING segment on CNBC, Cramer had several key stock picks:

Cramer said he loved the Burger King interview (BKC) earlier on CNBC because it went from a bad company to a good company.  He thinks it can go higher and it may be a multi-year story.

On oil services, the Oil Service HOLDRs (OIH) is breaking out and Halliburton (HAL) is on its way to $40.00.

Cramer said he has a large gainer between here and Friday going into options expirations date: Deere (DE) and Boeing (BA). 

Boeing is impossible to argue with after you look at the company’s long-term growth opportunity for the next 20-years that itreleased this morning.  I was a little surprised on Burger King because Cramer has not been one of its greater supporters and shares are up more than 100% from the 52-week lows. 

Jon C. Ogg
June 13, 2007

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

Posted on: June 13, 2007 – 1:51 pm in Cramer, , , , ,

Omniture Finds Two Friends: More Money & Cramer (OMTR, AQNT)

Omniture (OMTR-NASDAQ) was up on its own after expanding a securities offering to 8.5 million shares and pricing at $18.15 per share.  The company sold the shares through Morgan Stanley and Credit Suisse as joint book-runners, and JMP Securities, Deutsche Bank, and Montgomery & Co. were co-managers.

This stock was actually higher going into the offering, but they got a new friend today: Jim Cramer.  It doesn’t even really matter what was said in his video after this because he called it the next aQuantive (AQNT).  If that isn’t enough to get a stock going in today’s age then very little else is.

Shares of Omniture (OMTR) are up 6% to $19.25 on 8-times normal volume.  Omniture is an online business optimization company whose platforms include SiteCatalyst and DataWarehouse.

Jon C. Ogg
June 13, 2007

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

Posted on: June 13, 2007 – 1:40 pm in Internet, ,

New Threat for GlaxoSmithKline: Avandia Spammers (GSK)

GlaxoSmithKline (GSK-NYSE) has been under significant pressure of late because of the New England Journal of Medicine showing greatly increased risks of a heart attack for diabetes patients that have taken AVANDIA.  The news slowed AVANDIA sales down to a crawl after the published reports showed greatly increased risks of heart attack and death.  This wasn’t exactly a small drug either, because this was one of the more popular pharmaceuticals used to treat Type II diabetes. 

If things were bad enough for GlaxoSmithKline (GSK), they just got worse.  I went out for about an hour or so on an appointment and upon my return there were two separate emails regarding "AVANDIA LAWSUIT INFO" and after opening one to see if there was already a series of class action suits getting traction.  I was a bit suspicious since I have never had anything to do with AVANDIA nor with anything related to it.  Sure enough, these are both ".net" URL’s where the ".com" version of the site is a domain squatter and the home page is merely an "unsubscribe" page (and if you don’t know who is spamming you, you actually let them know that you are a real email address if you submit a "remove’ email).

Whether this ends being a real attempt for a law firm to drum up AVANDIA cases or not is yet to be known.  The truth is that a class action suit has already been filed on behalf of shareholders, but this is an entirely different matter because the spam emails today are for ‘those who took AVANDIA."  AVANDIA has already been ordered to carry a "black box" warning on its packaging by the FDA.

Even if this never comes to a real case against the company, it is yet one more bit of negative PR.

Jon C. Ogg
June 13, 2007

Posted on: June 13, 2007 – 1:04 pm in Drug companies, Internet, Pharmaceuticals,

Boeing & The Aerospace Group: Set For Life (BA, GE, BEAV, ATI)

If you were born with a solid trust fund or if you won the lottery, you are probably set for the rest of your life.  If not, you will at least hope your name is Boeing (BA-NYSE) or that you do business with it.  The company has given some long-term figures for a 20-year outlook to 2026 and it is staggering.  Boeing has forecast that the worldwide demand over the next 20-years will be some 28,600 new airplanes with a total market value estimated at $2.8 Trillion.  The forecast last year to 2025 was for 27,210 new planes over the similar timeframe, with Russia and a few more markets being included.

There are of course some caveats, and you know pushouts can come at any time.  Asia Pacific is the largest increase and the rest is coming from increased passenger travel (traffic estimated up 5% annually) and increased cargo (traffic estimated up 6.1% annually).  Combined with the retained fleet, these new deliveries will result in a world commercial airplanes fleet of more than 36,400 airplanes by 2026.

On a delivery-dollar basis, the largest market is projected to be the Asia-Pacific region, with 36 percent of the $2.8 trillion total. North America will make up 26 percent of the delivery dollars, and Europe, Russia, and the CIS (Commonwealth of Independent States) will make up a total of 25 percent. Deliveries to airlines in Latin America, the Middle East, and Africa will represent the remaining 13 percent of the delivery dollars between 2007 and 2026.  Here is the breakdown of the estimates, and keep in mind that this is the commercial non-private market only:

3,700 regional jets, below 90 seats;
17,650 single-aisle airplanes, 90-240 seats, dual-class;
6,290 twin-aisle airplanes, 200-400 seats, tri-class;
960 airplanes 747-size or larger, more than 400 seats, tri-class.

Also, the push is not solely on these super-jumbo jets and the focus is going to be on more fuel efficient planes.  The 90 to 400-seat categories will account for almost all of the growth in air travel over the next 20 years. Airlines will continue to accommodate that growth by adding frequencies and nonstop flights — not by flying larger and larger aircraft.  Boeing is focused on offering new airplanes that burn less fuel and spend less time in maintenance.

Some of the go-to aerospace supply companies like Allegheny Technologies (ATI-NYSE) that supply much of the aerospace metals and BEA Aerospace (BEAV-NASDAQ) that make airline interiors and seating have to think this is music to their ears.  General Electric (GE-NYSE) is probably already licking their chops over the engine and service pacts that this will translate into.

Jon C. Ogg
June 13, 2007

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

Posted on: June 13, 2007 – 10:02 am in Aerospace, Airlines, , , ,

The Slaughter House, Q2 Earnings Bleeders: Motorola (MOT) And Sprint (S)

Motorola (MOT) and Sprint (S) are already in trouble. But, recent news would indicate that things are getting worse at both companies That should show up in their Q2 numbers (or warnings).

Motorola is in danger of losing its No.2 spot among global handset companies to Samsung. CIBC projects that MOT will only ship 40 million handsets in Q2, which is less than any quarter in over a year. According to the bank’s reports, sales in Europe and Southeast Asia are particularly weak.

US sales of Motorola’s new RAZR 2 will rely on Qualcomm (QCOM) newer chipsets, and the ITC is keeping those out of the US. MOT’s forecast could be hit by that.

And, the federal government is opening up competition in the cable set-top business which has been owned by Motorola and Cisco (CSCO) unit Scientific Atlanta.

Sprint (S) has not only been under-performing competitors AT&T (T) Wireless and Verizon Wireless in terms of adding new subscribers, Bear Stearns recently wrote that the company’s churn rate and cost savings are falling behind expectations.

If the Apple (AAPL) iPhone is the success that almost everyone thinks it will be, Sprint gets hurt, at least short term, and handset nuts buy the phone from AT&T Wireless. The company is trying to bulk up its subscriber ranks by buying Northern PCS.

Since the beginning of the year, Sprint is up 15%. That’s getting ahead of its supply lines as they say in the Army.

More Slaughterhouse Stocks.

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

Posted on: June 13, 2007 – 9:48 am in Uncategorized

Penny Stock Promoters Gone Wild II

There are enough penny stock advertisers with extraordinary claims that someone could write about them all day.

Another group of favorites:

Taipan Financial News. These guys offer a "backdoor" to plunder China’s IPO markets. Become an overnight millionaire without risking a dime overseas.

Penny Stock Hunter. Get filthy rich off global warming. Every $10 invested in their target stock (which is not mentioned) could bring in $300 by August. Wonder how they can be so accurate?

Daily Wealth. Deep in the heart of Peru, a tiny company has uncovered one of the most exciting precious metal deposits of this century…  Wow! Who would want to miss this opportunity?

Lil Stock Investors. These guys advertising on the Reuters website. Seriously. Most of their picks average 500% in three to six months. These stocks have "untapped" potential.

Douglas A. McIntyre

Posted on: June 13, 2007 – 9:13 am in Uncategorized

The Slaughter House, Q2 Earnings Bleeders: Yahoo! (YHOO) And Amazon (AMZN)

Amazon (AMZN) is not a good company. It is a great one. Bezos has cut marketing and technology costs. He has made a smart move to get into China. The Unbox looks like it will be a successful VOD over IP platform. The company’’s central businesses of selling books, CDs, and DVDs appear to be doing well.

But, these shares are up 85% in the last quarter. Matrix Research, BWS Financial, and Stifel Nicolaus have all downgraded the stock recently. According to First Call, sixteen analysts who cover the company have a median price target of $57.50 on the stock. It trades at over $70, much of which was on forced short covering.

The next quarter would have to be beyond Wall St.’s wildest dreams to keep these shares up.

Yahoo! (YHOO) is still a mess. Speculation about a Microsoft (MSFT) took the shares above $32 in late April, but they have only settled back to their 200 day moving average. Trading at nearly $28, they are well above their 52-week low around $23.

All evidence from Hitwise and ComScore shows the company still losing search share. The buzz around Panama has disappeared. Nothing said at the shareholder meeting encouraged buying. The departure of Terry Semel has not helped that stock as most market observers thought it would. And, the company is already saying Q2 will be rough. If guidance for the second half is as bad as some think it will be, the shares could drop further.

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

Posted on: June 13, 2007 – 8:36 am in Uncategorized, ,

Goldman Sachs Backs Away From Two Steel Stocks (NUE, GNA)

After Nucor Corp. (NUE-NYSE) lowered guidance, Goldman Sachs has decided to withdraw it from the Americas Conviction Buy List.  It notes that the stock appears undervalued to the $71.00 price target and it is keeping its official BUY Rating on the stock, but it says there is no near-term catalyst on the stock.

Gerdau AmeriSteel Corp. (GNA-NYSE) has also been downgraded from a Neutral down to a SELL Rating, and added to Americas Conviction Sell List.  It sees near-term weakness in demand for end products and is overvalued compared to Goldman’s target of $13.00.  2007 estimates were lowered from $1.50 EPS down to $1.45.

Jon C. Ogg
June 13, 2007

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

Posted on: June 13, 2007 – 8:25 am in Analyst Calls, Metals, ,

DivX Signs SanDisk Partnership; Will It Matter? (DIVX, SNDK)

DivX (DIVX-NASDAQ) has announced a licensing agreement allowing SanDisk (SNDK-NASDAQ) to include DivX technology in SanDisk’s Sansa line of video-enabled products.  Future SanDisk video products can now include interoperability with the DivX Stage6 video website and can now provide SanDisk consumers with seamless access to the video content available today in the DivX format.

Shares of DivX are indicated up 2% pre-market on very thin volume, although this may be more on the headline than it will be off the actual news.  The company is so far down since its IPO that any ‘non-bad’ or ‘less-bad’ headline may be a boost.  But in the end, you have to wonder if this will really translate into very much in revenues for DivX.

Jon C. Ogg
June 13, 2007

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

Posted on: June 13, 2007 – 8:05 am in Consumer Electronics, Internet, Software, Technology Companies, Wireless, ,

BWAY Holding Co. IPO: Lower Price & Lower shares (BWY)

BWAY Holding Co. (BWY) priced its 10.04 million share IPO at $15.00 per share, although the indicated range was $16.00 to $18.00 and the share count was originally expected to be 11.5 million shares.  Goldman Sachs and Banc of America were the lead underwriters; co-managers are listed as J.P.Morgan and Deutsche Bank.

BWAY has been in business for more than 100 years and is a manufacturer of rigid metal containers for paint and related products.  Solutions include aerosol cans, round paint-style cans, oblong or F-style cans, a variety of specialty cans, and pails; it also produces steel ammunition boxes for conventional and high-tech armaments, and provide material center services, including metal shearing, coating, and printing.

The company claims $800 million in annual revenues and is profitable. More information can be found at its web site www.bwaycorp.com.

Jon C. Ogg
June 13, 2007

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

Posted on: June 13, 2007 – 7:50 am in IPOs,

Exuberant Enthusiasm In Mexican Market (MXX)

According to The Economist, the GDP growth rate in Mexico for the first quarter of 2007 was 2.7% due to a drop in demand for the country’s products, especially in the US. Mexico’s economy grew at 4.8% last year, so the latest number is quite a come-down.

A look at the IPC (MXX), the local stock composite, certainly does not reflect any slowly in the overall financial position of the country. It is up 90% of the last year. That compares to less than 25% for the S&P 500 (GSPC) over the same period.

Either the economic indicators are wrong or the stock market is. Don’t bet on the market.

Douglas A. McIntyre

Posted on: June 13, 2007 – 7:22 am in Uncategorized

Jakarta (JKSE) Index Gets Mighty Rich

The Jakarta Index (JKSE) is up 70% over the last year. That seems like a big number.

A look at the Indonesian economy indicates that the market there may be getting ahead of itself. The equivalent of GDP in the Southeast Asian country is expected to grow about 5.7% this year. Some estimates put that number even higher. But, a great deal of this strength is based on demand for commodities that Indonesia exports, especially metals, coal, crude palm oil and rubber.

In some ways, this makes the financial strength of the country a one-legged stool. And, those are known to tip over from time to time.

Douglas A. McIntyre

Posted on: June 13, 2007 – 7:04 am in Uncategorized

Shanghai Market Gets Most Of Drop Back In Seven Days

The Shanghai Composite (SSEC) most recent free fall took the index from 4,335 in late May to 3,670 on June 4.

It did not seem to matter much. In overnight trading, the composite closed at 4,176, up 14% in seven trading days. It would be a poor bet to think it will not be over 4,400 soon.

Whether Shanghai is a rigged game because of lax regulation by the government, or it fairly reflects tremendous growth and enthusiasm for the Chinese economy is hard to tell. A look at the movement of the SSEC shows that it has had few meaningful or lasting dips in the last two years. Over that time it is up over 250%.

Odds in Vegas say it’s going higher.

Douglas A. McIntyre

Posted on: June 13, 2007 – 6:54 am in Uncategorized

Pre-Market Stock News (June 13, 2007)

(AOB) American Oriental enters into a letter-of-intent to acquire an established plant based pharmaceutical company named Changchun Xinan Pharmaceutical Group for up to $30 million.
(CEN) Ceridian largest shareholder says the private equity buyout is underpriced.
(EBAY) eBay is still in court over this MercExchange LLC patent over its “Buy It Now” patent.
(F) Ford confirmed that it is reviewing sales of Jaguar and Rover; Goldman Sachs and others hired.
(GWR) Genesee & Wyoming reported a total carload decrease of 0.3%.
(GYI) Getty Images announced it has filed its 10-K for 2006.
(HS) Healthspring lowered guidance.
(LWSN) Lawson Software raised guidance to $0.05 to $0.07 EPS vs $0.04e.
(MAGS) Magal Security announced a new strategic partnership in Brazil for services providers.
(PAY) VeriFone Holdings announced it has been selected as the sole provider of electronic payment systems by the China Postal Savings Bank.
(POR) Portland General Electric announced the pricing of a 21 million share secondary at $26.00; seller is Enron Disputed Claims Reserve.
(SAPE) Sapient $0.07 EPS vs $0.01+e.
(SHLM) A. Schulman lowered guidance.
(SNY) Sanofi-Aventis diet drug all in one pill is being reviewed; already marketed as Acomplia in other countries.
(SSYS) Stratasys will replace LSS on S&P Small Cap 600 Index on June 14.
(TYC) Tyco will take a $500 Million pre-tax and $370 million after tax impairment charge for the sale of its Power Systems business.
(VLCM) Volcom will replace PXR on the S&P Small Cap 600 Index on June 15.

Jon C. Ogg
June 13, 2007

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

Posted on: June 13, 2007 – 6:51 am in Pre-Market Activity, , , , , , , , , , , , , , , , ,

Boston Scientific (BSX): Stent Problems Aren’t Enough

There has been plenty of press about the issues of whether coated stents made by Boston Scientific (BSX) and Johnson & Johnson (JNJ) can cause clotting problems. Several studies show that use of these stents by cardiologists has dropped sharply.

So has BSX stock price. The shares are down 15% over the last year.

But, the stent problems were not enough. A federal court has ruled that some of the product liability claims over heart defibrillators that the company’s Guidant unit made can proceed. "This case concerns the issues of whether, how, and to whom information was shared … about a device with an alleged defect," Judge Frank wrote in his ruling.

For BSX shareholders the bad news is that the company will have to continue to fight a two front war, and that usually does not come out well.

Douglas A. McIntyre

Posted on: June 13, 2007 – 6:22 am in Uncategorized

Earlybird Analyst Calls (June 13, 2007)

AL cut to Peer Perform at Bear Stearns.
ATV started as Outperform at CIBC.
BBI raised to Buy at Citigroup.
BT raised to Outperform at Bear Stearns.
CEVA started as Outperform at CIBC.
CNI cut to Peer Perform at Bear Stearns.
CRA started as Underperform at JMP.
CSAR raised to Neutral at UBS.
DF cut to Neutral at JPMorgan.
ECA started as Outperform at CIBC.
NGLS cut to Mkt Perform at Wachovia.
NOK started as Overweight at JPMorgan.
OPTN cut to Neutral at UBS.
PSD started as Outperform at R.W.Baird.
SAPE raised to Outperform at RBC.
TMX cut to Hold at Citigroup.
VDSI raised to Outperform at FBR.
VRNT raised to Buy at Deutsche Bank.
WCC raised to Buy at UBS.

Jon C. Ogg
June 13, 2007

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

Posted on: June 13, 2007 – 6:18 am in Analyst Calls, , , , , , , , , , , , , , , , , , ,

Europe Markets 6/13/2007

Markets in Europe are off slightly at 7.00 AM New York time.

The FTSE is down .1% to 6,511. Barclays (BCS) is off .3% to 731.5. GSK (GSK) is off .5% to 1309.

The DAXX is down .6% to 7,629. Siemens (SI) is off 1% to 96.48.

The CAC 40 is off .1% to 5,890. France Telecom (FTE) is down .7% to 21.

Data from Reuters

Douglas A. McIntyre

Posted on: June 13, 2007 – 6:00 am in Uncategorized

Is Jones Apparel (JNY) About To Sell Barney’s

The New York Post reports that Jone Apparel (JNY) is about to sell its Barney’s unit to private equity interests for $950 million.

It will be a relief for JNY shareholders. The company’s shares are off almost 15% this year. The company recently cut its financial forecasts for the year. Dumping Barney’s may help.

Douglas A. McIntyre

Posted on: June 13, 2007 – 5:51 am in Uncategorized