Daily Archives: August 16, 2007

Whole Foods (WFMI) Wins In OT

The issue of Whole Foods (WFMI) purchase of Wild Oats (OATS) moved over a huge hurdle today. The FTC has objected to the merger on the basis that the combination would allow the companies to raise prices. A federal judge blocked the agency’s effort to get an injunction against putting the firms together.

According to The Wall Street Journal: John Mackey, chairman and chief executive of Whole Foods, hailed the decision in a statement, saying a combination of the grocery chains "will create long-term value for customers, vendors and shareholders." 

The decision may help embattled Whole Foods CEO Mackey keep his job.

Whole Foods shares hit a 52-week high nine months ago. After reaching $66.25 in October, the stock has been driven down to $41 on mediocre earnings and problems with the merger. After hours, the stock moved up 8%.

Douglas A. McIntyre

Posted on: August 16, 2007 – 7:25 pm in Uncategorized, ,

Cramer’s Bank Winner For After The Meltdown (WB, WFC, BAC)

On tonight’s MAD MONEY on CNBC, Jim Cramer discussed why Wachovia (WB), Wells Fargo (WFC), and Bank of America (BAC) were all up big today; and some even higher than before the mortgage malaise started.  His rationale is simple: the smart lenders that were strict will be rewarded once all this dust settles.  There is a huge difference on these banks and there will be some day when Wells Fargo or another come out and say in a press release that they are taking a huge charge.  Wells Fargo (WFC) is his top pick in the sector and he thinks that Wells Fargo will prosper on its own.  He would even sell Washington Mutual (WM) to go into Wells Fargo (WFC).  He thinks it has the best shot at weathering the storm and now that the little players are getting taken out it will win down the road. He likes Bank of America (BAC) as well in here, but he prefers Wells Fargo (WFC) with its huge share buyback plan still in place.  Cramer was very careful to say to start buying these over the next couple of weeks to a month, not all at once and notjust piling in now.

On a huge recovery day, this Cramer call is easy to feel ok about.  Otherwise we’d probably all be asking about catching falling knives.

Jon C. Ogg
August 16, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he is the publisher of the 24/7 Wall St. Special Situation Investing Newsletter and does not own securities in the companies he covers.

Posted on: August 16, 2007 – 5:15 pm in Banking, Cramer, Financial Stocks, , , , ,

DELL: Fully Reporting Soon After Restatements & Internal Investigation Results (DELL, HPQ)

Dell (NASDAQ:DELL) has decided to do something that is probably not coincidental.  It announced that it has completed its internal investigation and will restate its financials.  Any shot this was to take away some of the momentum or thunder from what would have otherwise been a Hewlett-Packard (NYSE:HPQ) focused day after its solid earnings?  That can’t be a coincidence, not one bit.

As a result of accounting errors and irregularities identified in that investigation and in additional reviews conducted by management, the Audit Committee has determined to restate the company’s financial statements relating to fiscal 2003, 2004, 2005 and 2006 (and interim periods) and the first quarter of fiscal 2007. Dell’s previously issued financial statements for those periods should no longer be relied upon.  Here is the result of the findings in summary:

  • Net revenue for each annual period is expected to be reduced by less than 1 percent of the previously reported revenue for the period.
  • The cumulative change to net income for the restatement period is expected to be a reduction of between $50 million and $150 million and the cumulative change to earnings per share  for the restatement period is expected to be a reduction of $0.02 to $0.07.
  • The largest percentage changes in quarterly net income and EPS are expected to be in the first quarter of fiscal 2003 and the second quarter of fiscal 2004, each with expected reductions of between 10 percent and 13 percent; the fourth quarter of fiscal 2005, with an expected reduction of approximately 7 percent; and the second quarter of fiscal 2005 and the third and fourth quarters of fiscal 2006, each with an expected increase of approximately 5 percent to 7 percent. Net income and EPS for each of the other quarters are expected to change by 5 percent or less.
  • The adjustments are not expected to have a material impact on the current balance sheet.  The adjustments are not expected to have a material impact on cash flows during the restatement period and are not expected to have a significant effect on the reported results of future operations.

If you read on through the company’s release, you’ll see that the company also found intential manipulation to attain certain financial targets.  It also found it did not maintain an effective control environment with adherence to GAAP standards.  CFO Don Carty has also issued several remedies it will take to fix the control issues and to eliminate this ahead.  Lastly, it addresses the ongoing SEC investigation.  The SEC’s investigation is ongoing, and there can be no assurance that there will not be additional issues or matters arising from that investigation.

All that really matters to us is that the wrong doings are not so bad that they will topple Michael Dell.  He came back and everything he telegraphed and that had been indicated before could have led anyone with a half brain or more to conclude that there were some pretty big manipulations inside the company.  As long as Michael Dell is not toppled, then this is the news we have finally all been waiting for.  The company will begin reporting again, and that is all we really care about.  This just fixes the rearview mirror.  The restatements are bad as all restatements are, but they don’t look so crucial that past analysis was anything that will topple it.  It is even possible that some will be given a pair of cuffs instead of a slap on wrist by the SEC, but this still gets the issue mostly behind and should be viewed with some relief as long as it has no effect on Michael.  The doomsday crowd will say this is horrible and they will point to the years of intentional misgivings, but longer-term PC and tech investors will say this is what the market has been waiting for and the company can finally spend all efforts focusing ahead rather than dealing with the past.  You can find Dell’s full release here on their IR site.

Jon C. Ogg
August 16, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he is the publisher of the 24/7 Wall St. Special Situation Investing Newsletter and does not own securities in the companies he covers.

Posted on: August 16, 2007 – 3:54 pm in Annual Report, Earnings, PC Companies, SEC, Shareholder Issues, , ,

Hewlett-Packard Earnings May Save The Day For Tech (HPQ, DELL, AAPL)

Hewlett-Packard (NYSE:HPQ) may have saved the day for technology.  The green machine posted $0.71 Non-GAAP EPS versus $0.66 estimates and $25.4 Billion revenues versus $24.1 Billion estimates.  Its 9% non-GAAP margin was also a tad above plan.  The guidance is the saving grace though that may tame some of the bears. GUIDANCE: $0.80 to $0.81 versus $0.78 estimates and Revenues forecast at $27.0 to $27.2 Billion vs $26.45 Billion estimates. 

This was key and if you review the Apple (NASDAQ:AAPL) situation today where we gave both sides of the argument if we enter a beer and hamburger economy, this should alleviate other current concerns on whether or not tech is a haven.  H-P put Fiscal 2007 non-GAAP diluted EPS in the range of $2.86 to $2.87 and it estimates Fiscal 2007 revenues at $103.0 billion to $103.2 billion, although the next quarter is also fiscal year-end.

Here are the individual metrics:

  • Personal Systems Group (PSG) revenue grew 29% year over year to $8.9 billion, with unit shipments up 33% on a year-over-year basis. These results bring PSG’s year-to-date revenue growth to nearly $5 billion.
  • Imaging and Printing Group (IPG) revenue grew 8% year over year to $6.8 billion. On a year-over-year basis, supplies revenue grew 9%, commercial hardware revenue grew 6% and consumer hardware revenue grew 10%.
  • Enterprise Storage and Servers (ESS) reported revenue of $4.5 billion, up 10% over the prior-year period.
  • HP Services (HPS) revenue increased 8% year over year to $4.2 billion.
  • HP Software revenue grew 74% over the prior-year period to $554 million, led by strong growth from the businesses acquired in HP’s purchase of Mercury Interactive.
  • HP Financial Services reported revenue of $582 million, an increase of 12% year over year.
  • ITS INTERNALS: HP generated $1.9 billion in cash flow from operations. Inventory ended at $8.0 billion, up $728 million sequentially and up $542 million year over year. Accounts receivable increased $268 million sequentially and increased $2.2 billion over the prior-year period to $11.8 billion. Accounts payable increased $168 million sequentially and $978 million over the prior-year period to $11.7 billion. HP’s dividend payment of $0.08 per share in the second quarter resulted in cash usage of $209 million. HP utilized $2.5 billion of cash during the third quarter to repurchase approximately 55 million shares of common stock from the open market. HP exited the quarter with $12.5 billion in gross cash, which includes cash and cash equivalents of $12.5 billion, short-term investments of $40 million, and certain long-term investments of $23 million.

Shares closed down marginally after the huge market recovery today, but shares are up over 2% in after-hours trading.  Apple (NASDAQ:AAPL) shares are up less than 1% in after-hours trading at $117.30 and Dell (NASDAQ:DELL) shares are down 1% in after-hours since releasing its "independent investigation completed with restatements coming" and found that internal wrong doing was uncovered (story pending now).

Jon Ogg can be reached at jonogg@247wallst.com; he is the publisher of the 24/7 Wall St. Special Situation Investing Newsletter and does not own securities in the companies he covers.

Posted on: August 16, 2007 – 3:25 pm in Earnings, PC Companies, , ,

Schwab Up Despite Service Outage (SCHW, AMTD, ETFC, BAC, JPM)

If someone told you that Charles Schwab Corp. (NASDAQ:SCHW) was back in positive territory on the day the market fell 300 points in the DJIA AND on a day that many of its customers could not even access their trading accounts, would you believe it?  Guess what.  That is what happened.

Look at E*Trade (NASDAQ:ETFC).  It fell well over 20% on fears and rumors of all those mortgages they had leading to major charges in the company with the sums being tossed around too large fit to print.  We noted yesterday how its trading numbers rose but its customer internals were weakening on the strength of each account.  TD AMERITRADE (NASDAQ:AMTD) is still down 4% on the day.  Both of these stocks hit new 52-week lows today.

The money center banks are viewed as at least some form of insulation today.  Maybe it is massive short covering.  Maybe it is massive buying with the prevailing thought that they will not die in a severe slowing with a huge credit crunch.  JPMorgan (NYSE:JPM) is now up 5% and Bank of America (NYSE:BAC) is up 3.5%.

Jon C. Ogg
August 16, 2007

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

Posted on: August 16, 2007 – 1:25 pm in Banking, Brokerage Firms, Financial Stocks, , , , ,

Both Sides Of The Market Fears On Apple, H-P & Tech (AAPL, HPQ, DELL, RIMM, PALM, CSCO)

In the latest market malaise, note this isn’t really a crash yet even if it feels like one, Apple (NASDAQ:AAPL) has seen shares slide in a short period of 13 trading days fall from an intraday high of $148.92 down to under $114.00.  That’s roughly 23%. So what gives?  We covered the 30.00+ VIX yesterday looking like an Omen or an inflection point.

The mortgage game tapped out some time ago for Joe Public using the house as an ATM.  The credit market has shut off the low-end completely, and it seems the high-end has to be able to commit enough funds and collateral to not really need the loan in the first place.  So what does this mean for Apple and Joe Public and Mac-lovers?  If we are entering a beer and hamburger economy, then Apple will feel it.  The public will doubtfully go without many of the creature comforts, but that doesn’t mean that the masses will continue to splurge on the ultra-ultra high-end.  And what about Cramer’s "New Four Horsemen of Tech" stock picks?

Will iPods continue to sell?  Yes, but maybe newer buyers will settle for the lower end models or even the Shuffle or Nano.  Will iPhones sell?  This is tough, particularly since the street showed mixed reactions to the sell-throughs.  So maybe the iPhone will be a goal for 2008 and consumers will opt in for the highly subsidized Blackberry phones R-I-M (NASDAQ:RIMM) or Palm (NASDAQ:PALM) discount to wireless carriers.  Will Macs sell?  Well, the Mac mini runs $599 without any screens, Macbooks start at $1099.00, and iMacs started as $1199.00.  Dell (NASDAQ:DELL) and Hewlett-Packard (NYSE:HPQ) are feeling selling pressure too, but Dell’s desktops start under $500.00 and H-P’s desktops also start under $500.00.  Their above low-end notebooks both can be nabbed for just under $700.00 and the basic lower-end items can be nabbed for roughly $500.00.  Apple TV starts at $299.00 and goes up to $399.00 and the company has already admitted that this is still almost a hobby or niche for the time being.

Does this mean that everyone is going to bail on the mighty Apple?  In short, hell no.  Apple is a game changer and has been leading the industry trends.  But many who are in a pinch will be priced out if we are going into a beer and hamburger economy and they may have to settle for the less-premium brands.  This credit crunch is closing out more than we can cover in one short story.  At $114.00+ we are seeing the earnings multiplepremium coming to something more in-line with the market just in case.  Apple  doesn’t need to trade at the same multiple as the general stock market, but at more than double there was plenty of air if you get investors that want to lock in gains that have huge winning positions.

We have H-P’s earnings after the close, and that is going to dictate more than anything we can tell you.  This is both sides of the coin.  Just three weeks ago we were reviewing what would have to unfold for Apple shares to hit $200.00.  That’s how fast sentiment changes.  Maybe the mere mention of this today will mark the other side of the inflection point.  Does it matter that Steve Jobs took some Apple share profits?  It shouldn’t, it’s chump change to him.

My partner just covered the "What Works" in the beer and hamburger economy.  There is also a consolidated list of the stocks that may at least be better insulated if the entire climate goes defensive.  If you see the selling in those 21 old picks of "Cramer’s Wild Bull Economy" today, you’ll see how the global growth trade stocks are being burst as well.

H-P (HPQ) is down today at $44.50, down from a recent high of $49.84.
R-I-M (RIMM) at $191.00-ish is down from recent highs of over $235.00.
Palm (PALM) at $13.90 has been a bad year anyway and they are potentially one of the victims of a leveraged financing package that may be at risk.
Cisco Systems (CSCO) shares are back under $30.00, and that is after that unbelievable strong conference call John Chambers just gave us.

H-P is expected to have a great past quarter, but all eyes and ears are going to be on how well Mark Hurd telegraphs the coming months.  If he says things aren’t as bad as the market is pricing in and the PC-upgrade cycle lives, then technology will probably be back to being a haven for investors again.  The flipside of that is obvious.

We’ll be watching the money center banks closely, because if those financials don’t totally break down then the wheels might not be coming off as fast or as easily as some may fear.

Jon C. Ogg
August 16, 2007

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

Posted on: August 16, 2007 – 1:10 pm in Uncategorized, , , , , ,

GM (GM) Gets Killed, Disney (DIS) Is Fine: The Beer And Hamburger Economy

With the market down 300 point in a day and off more than 10% from its recent highs, Wall St. is looking at some of the most active stocks and scratching its head.

GM (GM) is off 7% today, very near its 52-week low, and trading at $29.50. The theory here is simple. Housing is losing its value. The market is down. People won’t spend $25,000 on a new car. Fair enough. The domestic market could lose several hundred thousand sales compared to industry estimate between now and year–end. Toyota (TM) shareholders know it, too. The stock is down over 7% in the last five trading days.

But, over at Disney (DIS), things are fine. The stock is up almost 1% to nearly $32. But, Disney sells a lot of things almost everyone can afford. TV programming. Movies. Even trips to theme parks. All cost much less than a car. Some are free. Shares in Viacom (VIA) are flat today. Probably for the same reason.

McDonald’s (MCD) is only off a little over 1%. Even when people feel poor they can buy fast food. Anheuser-Busch (BUD) is only over a little over 1% as well. Why not have a beer when the market is bad.

Procter & Gamble (PG) is up today. Soap is cheap.

Douglas A. McIntyre

Posted on: August 16, 2007 – 12:34 pm in Uncategorized, , , , , ,

Sprint (S) Pumps Up Volume On WiMax

Sprint (S) has indicated that it will spend as much as $5 billion on its national WiMax network between now and 2010. It had already told Wall St. it would spend close to $3 billion before the end of next year. The big wireless company is betting that the future of high speed handset connectivity is with WiMax and not the standard 3G products being used by Verizon Wireless and AT&T (T).

Sprint also gambled by telling investors that it would have positive free cash-flow from its WiMax push by 2009 and that the initiative would produce $2 billion to $2.5 billion in revenue by 2010.

Sprint has not made it clear about how it will cover costs to manage two redundant networks, one for its current wireless customers and the other for it new WiMax subscribers. It may be a risky business.

Sprint also said that it was in active talks with Intel (INTC) about building WiMax-enabled PCs. Computers will be able to work on the network along with voice handsets.

Douglas A. McIntyre

Posted on: August 16, 2007 – 11:28 am in Uncategorized, ,

No Buyers For Charter (CHTR)

The market seems to agree with what 24/7 Wall St. wrote lates yesterday. No one will buy debt-laden Charter Communications (CHTR) and even controlling shareholder and billionaire Paul Allen does not have the money to cover the $19 billion in debt. His part of the company’s equity is worth about $500 million.

Charter shares are off almost 10% today to $2.31. The stock traded at $4.93 on July 19.

Charter may have trouble if its operating income slips even slightly. With no buyer in sight, it has to cover debt service out of cash flow, and that may be tough.

Douglas A. McIntyre

Posted on: August 16, 2007 – 11:09 am in Uncategorized,

Can A New Dungeons & Dragons Version Insulate Hasbro From Current Toy Industry Woes? (HAS, MAT)

Mattel’s (NYSE:MAT) recalls are quite well known now.  We know that Chinese toys are being checked and tested and complained about across the board, and rightfully so.  Chinese suppliers have been exposed probably hundreds or thousands of times of cutting corners and using cheap or substandard materials all the way down to poison or contaminated goods.  So right now every toy company and consumer products company is testing their products from China.

This morning Hasbro (NYSE:HAS) announced that in light of Mattel’s woes that it too is intensifying safety checks on its own toys.  How could they be completely immune?  We didn’t exactly give Hasbro the world’s greatest marks on their announcement this morning, but there is another development that might actually help.  Hasbro has a franchise on its books that acts as a gift that keeps on giving: Wizards of the Coast, and the beloved Dungeons & Dragons (R) franchise.  This is the game that all the parents used to worry about their kids playing because of exaggerated and isolated instances of some kids losing their minds, and now all those parents read Harry Potter themselves.  It is still a puzzle as to whom the real joke is on.  But the Dungeons & Dragons franchise is about to get another formal makeover for next year.

Today Wizards of the Coast confirms that the new edition will launch in May 2008.  The new system will include illustrated rulebooks, pre-painted miniatures (test that paint boys), web-based tools, online community forums, faster game play, faster prep time, new character options, faster campaign building tools, online magazine content, and a digital game table for virtual and remote game playing.  There will be some book preview releases late this year and early next year, but the first live demos of 4th Edition will happen at the D&D EXPERIENCE(TM) gaming convention in Washington, D.C., in February 2008. The full scope of 4th Edition books, miniatures, and adventures will be available in the spring and summer of 2008.

This new 4th edition is dubbed the D&D Insider(TM).  Web estimates are far as total dollars spent on the gaming system are impossible to track because new sales often get recycled as used game sales and hand-me-downs.  Some estimates have 15 million game players over the history of the game and some estimates are north of 20 million players since its inception in the 1970’s.  Generally speaking, the game itself and the offshoots for it have been responsible for over $1 Billion in retails sales in the US alone.

Hasbro just expanded a prior share buyback plan by $500 million back in early August, and it is no secret that a crummy market is not helping stocks based on discretionary income.  Hasbro shares are down 1.5% today at $27.18, and the 52-week trading range is $19.13 to $33.49.  Apparently our interpretation of the Transformers(TM)  related sales already being baked into the cake was true and then some.

Jon C. Ogg
August 16, 2007

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

Posted on: August 16, 2007 – 10:41 am in Entertainment, Product Review, , , , , , , , , ,

Gappers: 52-Week Intraday Lows After Open (WMT, HD, MOT, AMGN, CFC, AMD, IP, MOT, USG)

It is always good to remember that just because stocks trade at intraday lows, it doesn’t mean that they are going to stay that way or that they are going to roll over and die.  This VIX ramping over 30 yesterday at the end of the day and staying there is going to end up being an Omen or something that gets the market closer to an inflection point.  That may only be a temporary event, but that is what history has dictated time after time. Time will be the verdict, and fortunately summer trading will be back to normal in just over two weeks.  Maybe just printing this list will be that catalyst, but it still feels like it is too soon to try to be a hero.  Here is the opening list of some key stocks that hit 52-week lows after opening:

Wal-Mart (WMT) sub-$43.00… old low $43.09

Home Depot (HD) $32.96…. old low $33.08

Amgen (AMGN) $49.60… old low $49.71

Countrywide Financial (CFC) $17.27… old low $19.25

Advanced Micro Devices Inc. (AMD)… old low $11.85

International Paper (IP) $31.55… old low $31.77

Motorola (MOT) $15.95… old low $16.01

USG Corp. (USG) $36.15… old low $36.28

Jon C. Ogg
August 16, 2007

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

Posted on: August 16, 2007 – 8:50 am in HI/LOW, , , , , , , ,

IPO Filing: Reliant Technologies, Cosmetic Lasers (PMTI, ELOS, CLZR)

Reliant Technologies, Inc. has filed to come public via an IPO with an undetermined ticker and undetermined exchange.  For filing purposes, it lists that it will sell up to $95 million in common stock. Piper Jaffray and Banc of America are tapped as lead underwriters with Jefferies and RBC Capital listed as co-managers.  This looks like it is that ‘pending IPO in the wings’ that has been hurting other laser operators like Palomar Medical Technologies (NASDAQ:PMTI), Syneron Medical Ltd. (ELOS), and Candela Corp. (CLZR).

The company’s main product is the Fraxel Family, a unique laser and medical device company that designs, develops and markets non-surgical therapies for the treatment of various skin conditions.Fraxel laser systems have created a new class of skin rejuvenation therapy and provide patients with consistent and effective treatments that can be delivered quickly without significant pain or downtime.  Its Fraxel laser systems are used by physicians to treat a broad range of skin conditions that include wrinkles and fine lines, acne and surgical scars, pigmentation, sun damage, uneven tone and texture and melasma. Patients undergo treatments in order to reverse the signs of aging, achieve healthier, younger looking skin and improve their overall appearance.

Following the launch of its first Fraxel laser system in 2004, Reliant’s revenues have grown from $4.5 million in 2004 to $57.5 million in 2006, and to $35.3 million for the first six months of 2007.  Reliant intends to expand the customer base to include general practitioners, gynecologists, ophthalmologists and others. As of June 30, 2007, it has sold approximately 1,200 Fraxel laser systems worldwide.  In addition the Fraxel ‘re:store system’ is targeted to provide treatments for acne and surgical scars, deeper lines and wrinkles and actinic keratoses; and it plans to launch the Fraxel ‘re:pair system’ for more sever conditions in 2008.

Jon C. Ogg
August 16, 2007

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

Posted on: August 16, 2007 – 8:18 am in IPOs, Medical, , , ,

Ebay’s (EBAY) Skype VoIP Service Is Down

Ebay (EBAY) paid a lot of money for Skype. It ought to at least work. This AM the world’s largest VoIP service is off-line as is the home website help page.

Perhaps the outage will help Vonage (VG) and Comcast (CMCSA) to sign up some new subscribers.

Forget the free call for now.

Douglas A. McIntyre

Posted on: August 16, 2007 – 8:08 am in Uncategorized, , ,

Pre-Market Stock News (August 16, 2007)

(AMGN) Amgen announced 12-14% layoffs and lowered guidance for 2007.
(ANX) ADVENTRX Pharma announces fast track designation granted by the FDA for CoFactor for treatment of metastatic colorectal cancer.
(AUXL) Auxilium Pharma receivef FDA clearance to resume clincal trials for XIAFLEX for the treatment of Dupuytren’s contracture.
(BAX) Baxter awarded pandemic advanced supply contract from Deptartment of Health.
(CFC) Countrywide Financial tapped an $11 Billion line of credit.
(CPHD) Cepheid entered into a 5 year agreement with Northrop Grumman for the purchase of anthrax test cartridges.
(CRM) Salesforce.com trading down 1% today after posting $0.03 EPS vs $0.01 est.
(EL) Estee Lauder $0.45 EPS vs $0.50 est.
(FCTR) First Charter to be acquired by Fifth Third Bancorp for $31.00 per share.
(FLO) Flowers Foods $0.24 EPS vs $0.23 est.
(FLR) Fluor won a contract from Toshiba International for engineering, procurement and construction-related services for two nuclear power plants.
(FTD) FTD Group $0.36 EPS vs $0.28 est.
(GGBM) GigaBeam received an order for four WiFiber links from a new partner that is establishing a metro ethernet network in Los Angeles.
(GRMN) Garmin noted as an immune growth stock in a crummy market.
(JCP) J.C.Penney $0.78 EPS vs $0.78 est.; sees Q3 $1.28 EPS vs $1.43 est.
(KFT) Kraft Foods is considering selling off its cereals unit according to WSJ.
(LMS) Lamson & Sessions enters into $27.00 merger and a $0.30 special dividend as it will become part of TNB-Thomas & Betts.
(MCO) Moody’s may be in trouble with Congress over failures to warn over CDO ratings and risk activities.
(MGPI) MGP Ingredients $0.10 EPS vs $0.14 est.
(NAPS) Napster in marketing pact with Maxfield’s MP3 player in Germany.
(NBF) Nova Biosource Fuels will acquire a biodiesel refinery in Iowa with a 10 million gallon per year capacity.
(QCOM) Qualcomm’s ex-CEO noted that the suits could cost the company over $2 Billion in revenues if all the terms stand.
(SPAR) Spartan Motors chassis unit received a $53 million subcontract order from BAE Systems.
(SUNW) Sun Micro in free download of StarOffice suite at the Google Pack site.
(TTWO) Take-Two Interactive has received a Wells Notice from the SEC.
(WFMI) Whole Foods announced it is extending its offer for Wild Oats.
(WW) Watson Wyatt $0.71 EPS vs $0.67 est.

Jon C. Ogg
August 16, 2007

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

Posted on: August 16, 2007 – 7:35 am in Pre-Market Activity, , , , , , , , , , , , , , , , , , , , , , , ,

Bad Analyst Call Of The Day: AMD (AMD) By Credit Suisse

Credit Suisse started AMD (AMD) at ‘underperform" today, with a price target of $13. Perhaps no one bothered to tell the analyst that is down 45% this year and is off almost 2% in the pre-market to $11.74, below its 52-week low.

The analyst should get a larger year-end bonus.

Douglas A. McIntyre

Posted on: August 16, 2007 – 7:26 am in Uncategorized,

Countrywide (CFC) To Open Down 14%

Couuntrywide (CFC) could help drive the market down a lot at the open. The shares are off 14% before the bell, trading at $18.29.

According to Reuters, CFC said "it is drawing down an entire $11.5 billion credit facility to bolster its liquidity, as a shortage of credit weighs on the mortgage industry."

Douglas A. McIntyre

Posted on: August 16, 2007 – 7:16 am in Uncategorized,

Pre-Market Analyst Calls (August 16, 2007)

ADI started as Neutral at Credit Suisse.
AMD started as Underperform at Credit Suisse.
ANN raised to Outperform at Piper Jaffray.
ARMHY started as Outperform at RBC.
CECO raised to Outperform at Bear Stearns.
CBL raised to Overweight at JPMorgan.
CMC raised to Outperform at CIBC.
CMVT started as Neutral at Merriman Curhan Ford.
CNET started as Buy at Stanford Research.
COV started as Outperform at Bear Stearns.
CY started as Neutral at Credit Suisse.
DDE cut to Hold at KeyBanc/McDonald.
DRQ raised to Buy at Jefferies.
EMS raised to Buy at Jefferies.
FCS started as Underperform at Credit Suisse.
FSLR raised to Buy at Lazard.
FWTR started as Buy at Merriman Curhan Ford.
GYI started as Equal Weight at Lehman.
HLIT started as Buy at Jefferies.
IDSY started as Buy at Merriman Curhan Ford.
INTC raised to Outperform at Credit Suisse.
ISIL started as Neutral at Credit Suisse.
KFN raised to Outperform at FBR.
LCCI started as Neutral at Merriman Curhan Ford.
LLTC started as Neutral at Credit Suisse.
MCHP started as Neutral at Credit Suisse.
MCRL started as Underperform at Credit Suisse.
MFA raised to Overweight at JPMorgan.
MXIM started as Outperform at Credit Suisse.
MU started as Outperform at Credit Suisse.
NSM started as Neutral at Credit Suisse.
ONNN started as Neutral at Credit Suisse.
PLT raised to Outperform at Bear Stearns.
PTR raised to Outperform at Bear Stearns.
QI started as Outperform at Credit Suisse.
SHOR started as Overweight at Lehman.
SNP raised to Peer Perform at Bear Stearns.
SOV raised to Buy at Citigroup.
SPSN started as Outperform at Credit Suisse.
TA started as Buy at UBS.
TXN started as Outperform at Credit Suisse.

Jon C. Ogg
August 16, 2007

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

Posted on: August 16, 2007 – 7:06 am in Analyst Calls

Chinese Plot To Kill US Citizens And Pets Expands

Add to the poison pet food, toothpaste, and ten million lead-laden toys a new and dangerous product out of China. Johnson & Johnson (JNJ) has found counterfeit versions of its OneTouch Test Strip according to Bloomberg. The test strips measure blood glucose so that diabetics know what dose of insulin to give themselves.

Of course, if diabetics get bad measurements they can give themselves the wrong dose. Fake medicines are a $32 billion global business, says the World Health Organization.

The FDA reports that one million of these fake tests made it to the US through Canada. JNJ say that “The counterfeiters counterfeited every element from the original box except they put a fake lot number."

Save yourself. Buy American.

Douglas A. McIntyre

Posted on: August 16, 2007 – 6:30 am in Uncategorized,

More Evidence Of US Bandwidth Shortage

According to The Inquirer, ABI Research has issued a report that US cable companies are heading for a crisis because they do not have the bandwidth or switching capacity to handle the increase in video traffic over the web. There is a competing school of thought that says the bandwidth shortage reports are a smoke screen for cable to charge websites like YouTube more money for their services. It is, in essence, a way to break the "net neutrality" rule that says that all users and websites are treated the same.

ARS Technica reports that "local cable provider will soon be faced with a serious bandwidth crunch." One analysis shows that cable companies may have to go to the great expense to lay fiber the same way that Verizon (VZ) and AT&T (T) are to deliver high-speed internet and HDTV.

Is there a looming bandwidth problem for cable. Neither side of the debate has proved that it is right. But, if the size of the cable pipe becomes troublesome, US telecoms will pick up a big marketing advantage.

Douglas A. McIntyre

Posted on: August 16, 2007 – 5:50 am in Cable Companies, ,

The Great Advertising Share Shift: Google (GOOG) Sucks Life Out Of Old Media

From Silicon Alley Insider

Everyone talks about advertising dollars shifting online, but when you’re fighting all day in the trenches it’s tough to get a handle on what this really means.  Here’s what it means:

US advertising revenue at 4 big online media companies–Google (GOOG), Yahoo (YHOO), AOL (TWX), and MSN (MSFT)–grew by $1.3 billion in Q2, or 42%.  …continued here

Posted on: August 16, 2007 – 5:39 am in Uncategorized, , , ,