Daily Archives: September 12, 2007

Cramer’s Running Back Stock Picks (CSCO, AMZN, GOOG, FCX)

Jim Cramer continued his ‘fantasy football draft methodology’ to compile a stock portfolio that can survive through a coming recession.  He wants a stock that can deliver consistent and long-term growth for his four Running Back picks:

  • Cisco Systems (NASDAQ:CSCO) is going to keep delivering and he has broken out of his past quiet-man role.
  • Google (NASDAQ:GOOG) is just getting better and better after being held back a year, and it grew 9% year over year by comScore data. This is one of Cramer’s "New Four Horsemen of Tech" and he thinks it goes higher.
  • Freeport McMoran (NYSE:FCX) is growing from everywhere outside the U.S. that has a lock on the copper market.
  • Amazon.com (NASDAQ:AMZN) is another pick from his "New Four Horsemen of Tech" that just hit a new year high today.

Here are his Tight End picks from last night that have upside with dividend stocks.  Yesterday he also gave his "wide receiver picks" that are the aggressive big scoring stocks.  Monday night he gave his picks that were not defensive, but still the leaders as the quarterback.  But before that he gave his solid Defensive linemen picks that are defensive stock picks

Jon C. Ogg
September 12, 2007

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

Posted on: September 12, 2007 – 5:13 pm in Cramer, , , , , , , , , , ,

Target Targeting Its Own Targets (TGT)

Target Corporation (NYSE:TGT) shares traded up 1.5% to $62.72 in normal trading today, but shares are up another 2% in after-hours trading. 

The red-dot announced today that it is reviewing potential ownership alternatives for its credit card receivables, which is an asset worth what it says is approximately $7 Billion.  Beyond that, it will re-evaluate its use of debt in its capital structure and its pace of share repurchases. The company said it expects to complete these reviews by the end of December.  It is also declaring its regular $0.14 dividend as well.

The review of its credit card receivables will be focused on the economics of possible alternatives and will include an examination of possible differences in growth rates and credit risk exposure between the current direct ownership model and other possible ownership structures, the cost of debt and equity capital to fund receivables, and current and future liquidity considerations.

Goldman Sachs has been engaged to advise the company in this review to see if it or another financial institution should own its credit receivables.  Target also noted that a sale of any, or all, of the company’s credit card receivables this capital structure review will also include an analysis of the appropriate application of proceeds.  That will include current and future share buybacks.  It will also specifically not consider taking any deliberate actions that would jeopardize its current short-term debt ratings and it expects to maintain the necessary credit profile to preserve our long-term debt ratings within the “A” category.

At $64.30 in after-hours, this gets shares to within about 10% of its yearly high.  The company sounds pretty adamant that it is not going to overextend itself over near-term buybacks that might drop its liquidity and it wants to keep its balance sheet quite clean.

Jon C. Ogg
September 12, 2007

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

Posted on: September 12, 2007 – 4:49 pm in Retail, , ,

Syntax-Brillian Shows Why It Delayed Earnings (BRLC)

Syntax-Brillian Corporation (NASDAQ:BRLC) is seeing its shares punished in after-hours trading.  Just yesterday morning it delayed its earnings report by a day and it gave no reason, so this drop after-hours is going to be viewed with even more skepticism after the problems of guidance and its CFO leaving.  The current report might have been fine, but Wall Street isn’t giving this company the benefit of the doubt.  Not at all.

Wayne Pratt, its chief financial officer, will resign effective September 30, 2007 to take a position working with a longstanding colleague at a start-up company located in Tempe, Ariz.

The company posted the following: GAAP EPS $0.11 after basic earnings of $0.12; Revenues $205.3 million; estimates were $0.12 and $198.1 Million. That $205.3 million is up 243% from revenue of $59.8 million in the year-ago quarter. Full year revenue was $697.6 million, up 261% from revenue of $193.0 million for the year ended June 30, 2006.

GAAP net income for the quarter was $8.4 million, compared with a net loss of $5.5 million for the fourth quarter of fiscal 2006. GAAP net income for the year ended June 30, 2007 was $29.8 million compared with a net loss of $18.9 million for the previous year.  Consolidated gross margins of 20.2% for the quarter ended June 30, 2007 represented an 800 basis point improvement from the fourth quarter of fiscal 2006.

You can read on to see the company’s exceptions, but shares closed down 2.5% in regular trading at $6.13 today; and that after a $0.51 drop yesterday from delaying its numbers.  Shares are down roughly 25% after-hours at $4.55.  Its 52-week trading range is $4.45 to $11.70.  Its CEO, Vince Sollitto, has been criticized for stock offerings right after great news, and he is probably getting ready for some criticism again.  We noted the doubt about it before.

Here are the main issues or details in the release:

Read More »

Posted on: September 12, 2007 – 3:56 pm in Earnings, , ,

The 52-Week Low Club

Labranche (LAB) Being a specialist firm trading stocks has gotten to be nasty business. Shares drop to $4.65 from 52-week high of $12.21.

King Pharmaceuticals (KG) Still taking hammer because patent on top drug was found to be invalid. Down to $12.26 from 52-week high of $22.25.

International Rectifier (IRF) CEO on leave due to audit. Shares just keep falling. Drops to $31.37 from 52-week high of $44.36.

Expressjet Holdings (XJT) Oil up. Bad time to be in airline business. Falls to $3.68 from 52-week high of $9.61.

Steven Madden (SHOO) Director steps down. Shares now off to $20.02 from 52-week high of $44.70.

Home Solutions (HSOA) Provider of construction business during real estate recession. Shares off to $2.45 from 52-week high of $8.24.

Caribou Coffee  (CBOU) Like Starbucks (SBUX), only smaller. But, similar drop in stock price. Down to $5.74 from 52-week high of $9.27.

Douglas A. McIntyre

Posted on: September 12, 2007 – 3:12 pm in HI/LOW, , , , , , ,

Wal-Mart’s New Ad Campaign A Yawn (WMT, COST, TGT)

Wal-Mart’s (NYSE:WMT) new ad campaign is starting today.  The company is ditching its "Always Low Prices" in favor of a new slogan:  "Save Money. Live Better."  Wal-Mart probably just got tired of 24/7 Wall St. saying "Always Low Prices Shouldn’t Apply To Wal-Mart Share Prices."

The company now claims that American families save $2,500.00 each year by shopping at Wal-Mart, up from the $2,329.00 figure from 2004.  Until they change their shopping experience, my own family will get its savings at Costco Wholesale (NASDAQ:COST) as the products are far better and the overall experience is exponentially better. 

If you are a Wal-Mart loyalist, don’t worry.  They’ll still have cheap products that look cheap at cheap prices.  The company says in its release that it will still maintain price leadership, $4 prescriptions, and money center services.  If you want to read more you can find it at the http://www.SaveMoneyLiveBetter.com domain.

This new campaign was probably better sounding to board than "Target is eating our lunch," although the ad agencies were probably thinking that.  Shares are down another 0.4% at $42.76 today, less than 2% above 52-week lows.  No one seems impressed.

Jon C. Ogg
September 12, 2007

Posted on: September 12, 2007 – 2:45 pm in Retail, , , ,

Ramifications of $80 Oil: Best of Breed Oil & Energy Stocks

Today was a landmark in oil: $80.00 per barrel was hit briefly.  If you were hoping that the OPEC raised production targets yesterday was going to be a huge help, guess again.  There are still supply near-shortages and perpetual disruptions and this could even be just an admission that OPEC countries were admitting to cheating.  T. Boone Pickens was right: he predicted $80.00 oil before he turns 80, and that isn’t until next May.

Determining exactly who wins in the sector is not a fair task to most companies if they are in the energy patch, because the answer is "almost all of them."  Here is a brief note:

Exxon Mobil (NYSE:XOM) is mostly unhedged and takes current market conditions meaning it runs the course and pays current rates and charges current rates rather than entering as many forward contracts.  As a fully integrated company, it’s the go-to name.  Shares are up 1.5% at $88.20, and that is after more than a $2.00 gain yesterday.

Schlumberger (NYSE:SLB) is the winner for the international oil services sector.  National Oilwell Varco (NYSE:NOV) is far smaller (relative basis, its market cap is over $24 Billion) but it has been able to charge nearly whatever it wants and if production is going up and commodity energy prices remain they will get to charge whatever they want for what may be an indefinite period.  With an embedded license to gouge, it’s hard to argue against the premium.

Valero (NYSE:VLO) is the largest independent refiner with a $37 Billion market cap. The only issue that is there besides outages and interruptions is that higher oil prices ramp its expenses and that mistakenly creates a worry among analysts that their net earnings numbers may be at risk.  If you go look at the earnings history as prices have risen, you’ll see they win despite those fears.

You’d think that solar power players would be the key winners, although the alternative energy ETF’s and First Solar (NASDAQ:FSLR) is down 1% (down almost 20% from year highs) and SunPower Corp. (NASDAQ:SPWR) is up 1% (and only about 10% from highs).

What is even harder to fathom is the higher coming pump prices as many are paying less now than when oil was screaming up previously when it was more than common to see $3.00 this Spring.  Less is a relative term, as my own gas buffet runs over $50.00 to be topped off.

It turns out that owning oil patch and energy companies is going to end up being one of the few hedges to higher energy costs for the public.  When these critical milestones are hit, it is frequent that higher prices ultimately prevail.  It’s obvious that this list has butchered off many names on here, and we left off the names that are in pending mergers.  There are now literally hundreds of plays out there. 

The easiest basket you can get for this is generally these two ETF’s: Oil Services HOLDRs (AMEX:OIH) and Energy Select Sector SPDR (AMEX:XLE).

Jon C. Ogg
September 12, 2007

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

Posted on: September 12, 2007 – 2:16 pm in Oil & Gas, , , , , , , ,

BusinessWeek Online’s Weak Audience Numbers

BusinessWeek is the only major business magazine on a weekly cycle (it does have two double issues). It is larger than Forbes and Fortune and brings in more money. But, the McGraw-Hill (MHP) property is extraordinarily weak online.

24/7 Wall St. was able to get a full thirteen months of visitor and pageview data for the largest financial websites. The information is pulled from comScore’s monthly website measurements and runs through August 2007.

BusinessWeek would seem to have a good print platform for driving web users. The magazine claims a worldwide readership of 4.8 million. The global edition of the magazine has a circulation of 900,000.

But, these figures do not drive much of an online audience. Based on comScore’s numbers, BusinessWeek Online had 1.893 million unique visitors in August 2007. That drove 11 million pageviews. Forbes Properties had 6.081 million unique visitors and 64 million pageviews. Dow Jones had 5.362 million unique visitors and 60 million pageviews.

BusinessWeek Online ranked 21st in pageviews among all financial websites in August, behind sites including TheStreet, Morningstar, Bloomberg, CNBC, Reuters, and Investors.com.

A look at the figures from August 2006 compared to the most recent month shows that BusinessWeek has gone from 27 million pageviews to 11 million.

While there is no way to say for certain why the website does not do better, there are a few things that stand out about BusinessWeek Online. The first is that the major stories are not updated regularly. The more successful financial sites update their major content much more frequently. BusinessWeek almost certainly has the staff to do this, but the only current information on the front page is from The Associated Press.

BusinessWeek Online does not make use of video content on its homepage. The market info charts are almost impossible to read. And, critical navigation for the Investing and Technology sections are below the fold instead of down the right hand side.

With print advertising falling each year, the online editions of major magazines become much more important.

BusinessWeek Online has a lot of ground to make up.

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

Posted on: September 12, 2007 – 1:33 pm in Media,

Avid Tech & Web 2.0: A Savior or Disaster? (AVID, GYI)

In a screen of 52-week lows this morning, a peculiar name hit the list that we haven’t seen under that screen before yesterday. Avid Tech (NASDAQ:AVID) is trading down $0.45 on the day at $28.10, under the $28.38 prior year low.  Shares are now down almost 20% from the August 9 highs over $35.00 and the high over the last 52-weeks is $40.68. 

The real problem is that this isn’t just a 52-week low, it’s a low not seen since 2003.  This is also after its CEO left in July.

What is interesting is that Avid is "THE GO-TO" media and broadcast technology company.  The company sells all the camera, graphic, and broadcast technology that is required for television networks and for high-end Web 2.0 media operations.  All the big boys use their equipment or at least equipment sold by them. 

If you have done any investigation of running Web 2.0 operations like video shows and the like you will know that Avid is considered the Rolls Royce equivalent in digital video and broadcast equipment systems.  The problem is that not everyone can afford Rolls Royce."  The malaise that has hit traditional media companies and the lower ad spending that has started may be contributing to Avid’s woes.  It wouldn’t take a rocket scientist to realize that lower revenues from media companies might delay and slow down some cap-ex spending on more super high-end equipment.

Most of the shoestring budget Web 2.0 companies can’t afford the Avid solutions.  When you look at what people are able to put together with some less than perfect digital cameras and basic edit packages, it is no surprise that the myriad of Web 2.0 companies out there are piece mealing together much cheaper systems.  The cheaper systems definitely are not in the same league as Avid, but a budget of less than $1,000.00 for many dictates that many of these companies and individuals use a band-aid solution that is less than perfect.

Maybe Avid can figure out more ways to tap that lower-end user without watering down its existing high-end base.  Many individuals and small companies in and around the Web 2.0 model operations need better low-end systems and that market is still very fragmented right now.  But Web 2.0 also has a habit of eating many high-end traditional go-to operations. 

Our Special Situation Investing Newsletter subscribers (sample here for the first call in May and exit call early last month) saw this firsthand where we predicted the Web 2.0 and wiki-models would result in a rapid drop in shares of Getty Images (NYSE:GYI).  There is an opportunity for Avid to capture this lower-end market IF it wants to.  But the industry trends are not really trends, they are headwinds.

With this stock hitting new multi-year lows, maybe they are willing to try reaching down to more of a lower-end customer with a goal of making it up in volume.  The company just recently sold its DigiDelivery®, asecure digital file-exchange system developed by Avid’s Digidesignaudio division, to Aspera so maybe they are considering some more changes.

Jon C. Ogg
September 12, 2007

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

Posted on: September 12, 2007 – 11:16 am in HI/LOW, Internet, Media, , , ,

Companies That Management Can’t Fix: Journal Register

Now that results for the first half of the year are out, 24/7 Wall St. is revisiting its feature on companies that management cannot fix. These firms have lost the ability to be turned around no matter who runs them. They become candidates for sale or liquidation, but the odds that they can do much with their current share prices are very low.

All of the publicly traded newspaper chains are in bad shape, but none approaches the Journal Register (JRC). The company has long term debt of over $650 million, most of it from paying for acquisitions. In the last quarter, the company had revenue of $121 million, down from $132 million in the June quarter last year.

To make matters worse, interest payments on the debt run about $10 million a quarter. The company had operating income of $22 million in the last quarter, so the coverage is getting mighty thin.

For some reason, JRC still pays a dividend, which is odd. The company can’t afford it. In the five weeks ending August 5, revenue was $41.5 million, a decrease of 7.7 percent, as compared to $44.9 million for the five weeks ended July 30, 2006. Online revenue for the period was $1.8 million, so there is no chance that this can be of any significant help as print revenue falls. For this period, national advertising fell 26% and classified dropped almost 11%.

What can JRC do? Almost nothing. It has a market cap of $117 million. With its debt, the cost of buying the company would be above $770 million. No sane investor would pay that for a company with an annual operating income run-rate that is below $90 million and falling fast.

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

Posted on: September 12, 2007 – 9:57 am in Media,

SIRIUS & XM: A Bias Toward The Merger Closing (SIRI, XMSR)

We have been steadily reviewing all of the trading in stock and options in shares of both Sirius Satellite Radio (NASDAQ:SIRI) and XM Satellite Radio (NASDAQ:XMSR) to look at the probability of the pending merger successfully closing.

The open interest in the XMSR JAN-08 $15 Calls is over 60,000 contracts alone (equivalent to 6 million shares), and that is the month to watch because the bias of regulators and the outcome should be known by the end of this year.  This is from old volume that has carried over, but the JAN-08 $5 Calls in SIRI still has over 280,000 contracts listed in the open interest (equivalent to 28 million shares).  As far as trading volume in the stocks, this has also been impossible to ignore.  Shares of both stocks are up roughly another 4% today.  SIRI at $3.45 is more than a 15% gain in only two weeks; and XMSR at $14.10 is up over 20% in the same time frame.

Last week may have marked another turning point that tipped the bias toward XM & Sirius being able to overcome the regulatory hurdles to getting this merger approved.  That National Association of Broadcasters has been fighting this with fervor, but the chances of them blocking this merger may be dwindling even after some senators tried to go against this earlier.

This morning on CNBC, Jim Cramer stated "this deal goes thru!" and he thinks that the shares of Sirius go to $6.00 when this closes.  If the deal doesn’t get done, then it will fall to $2.50.  But he also notes that there is still something to Sirius, meaning that it won’t implode if the deal fails.  We noted the financing pact a while back that may have been a harbinger for the same.

Please note that there are still many "IF’s," "MAY’s," "possibilities," and the like.  So it is far from a done deal even if Jim Cramer endorses it.  24/7 Wall St. thinks that the deal should be allowed to go through, because one of these may fail if not and we think that higher prices will immediately come into play for subscribers if the deal is blocked.
This ball is still in the court of the regulators, and they are becoming less predictable than the rubber-stamping regulators of even last year.  It does not seem possible to state a certain outcome here because of the unknowns and the variables, but the bias has tilted back in favor of the merger.

Jon C. Ogg
September 12, 2007

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

Posted on: September 12, 2007 – 9:36 am in Mergers and Buy Outs, Regulation, Satellite, , , , , ,

Baidu Makes A New High

Chinese search company Baidu (BIDU) made a new 52-week high of $231.64. That is not extraordinary in and of itself. But, when the 52-week low of $82.24 is taken into account, it is astonishing.

Baidu has a market cap of $7.8 billion. Revenue in the last quarter was less than $53 million. At its current stock price, Wall St. give the company a value the same as IACI. Maybe Barry Diller should move to Shanghai.

Baidu has only one real problem. Google (GOOG) cannot afford to let the little company keep its large lead in Chinese search market share. China is the world’s second largest market in terms of people online and is likely to pass the US soon.

Google is coming to get Baidu, and there is nothing the tiny firm can do.

Douglas A. McIntyre

Posted on: September 12, 2007 – 9:17 am in China, , ,

VMware (VMW) Price Target Raised To $90

Caris has raised its price target on VMware (VMW), the ultra-hot IPO, to $90. The shares trade at $78 now. Caris has a previous price target of $60, which must have been a bit humiliating.

According to MarketWatch, on August 20, RBC Capital sets $75 price target on VMware. It is hard to say how RBC can get out of that, unless they want to move their target up to $100.

VMW has to stop moving up soon. The pull of gravity is simply too great. The stock traded just above $51 after its IPO and have moved to about $80.

Douglas A. McIntyre

Posted on: September 12, 2007 – 8:59 am in Analyst Calls,

Cardica Trumps Wall St.

Shares in Cardica (CRDC) fell of a cliff yesterday as an A.G. Edwards analyst downgraded the stock on muted enthusiasm for its new surgical product. The fellow must feel a bit embarrassed today.

CRDC shares are up over 20% today on news the company "received a key European approval for its new device for connecting blood vessels during heart bypass surgery," according to The Associated Press.

So there.

Douglas A. McIntyre

Posted on: September 12, 2007 – 8:44 am in Medical,

IPO FILING: Babcock & Brown Air Limited, Aircraft Lease Operator (FLY)

Babcock & Brown Air Limited has filed with the SEC in the US to list shares.  The Bermuda-based company is selling 18,695,650 common shares in the form of American Depositary Shares, or ADSs, and underwriters are getting just over 2.8 million shares in the overallotment option from selling shareholders.  Babcock & Brown has set a range for its ADS’s of $22.00 to $24.00 and it has been approved to trade on the NYSE under the ticker "FLY."

The underwriting syndicate includes Morgan Stanley, Citigroup, Merrill Lynch, Credit Suisse, Jefferies, and J.P. Morgan.  This is a newly organized company formed by Babcock & Brown to acquire and lease commercial jet aircraft and other aviation assets that will be leased under long-term contracts to airlines around the globe. 

It plans to use proceeds to grow its portfolio through acquisitions of aircraft and assets.  The company believes this will increase distributable cash flows, while paying regular quarterly dividends to shareholders.  The new company’s initial portfolio of 47 commercial jet aircraft includes 45 narrow-body passenger aircraft, one wide-body passenger aircraft and one freighter. Boeing aircraft comprises 56% of its fleet and Airbus aircraft comprise the remaining 44% and planes were manufactured between 1989 and 2007 with a weighted average age of 5.7 years. the company says its long-term leases are scheduled to expire between 2007 to 2021.  Its operations are spread among 29 different airlines in 16 countries and its leases have a weighted average remaining lease term of 5.9 years.  Lastly, it will acquire 44 of the aircraft as part of the Initial Portfolio from JET-i Leasing LLC with proceeds from this IPO.

Babcock & Brown hasover 25 years of experience in the aircraft industry as the fifthlargest aircraft leasing company in the world measured by thenumber of owned and managed aircraft in its portfolio. BBAM managesover 240 aircraft valued at over $6 billion and has leased aircraft tomore than 140 airlines worldwide.

If this sounds a lot like Aircastle Limited (NYSE:AYR) or AerCap Holdings N.V. (NYSE:AER), it is because the models are almost identical in major portions of the businesses.

Jon C. Ogg
September 12, 2007

Jon Ogg produces the 24/7 Wall St. SPECIAL SITUATION INVESTING NEWSLETTER; he does not own securities in the companies he covers.

Posted on: September 12, 2007 – 8:28 am in Airlines, IPOs, , ,

New York Times, Another Slow Ad Month In August

There was some good news for The New York Times Company (NYT) in August. Online revenue at its newspapers grew 28.2%. But, its overall audience was 44.2 million unique visitors in the United States according to Nielsen//NetRatings, up approximately 11% from 39.9 million unique visitors in August 2006. So the real increase in revenue per audience rose about 17%, slower than the industry is growing.

Total New Media Group ad reveue fell 4.6% to $121.5 million.Advertising revenues for The New York Times Media Group increased 0.2%. The drop in ad revenue in media was partially offset by and increase at About.com which rose 27% to $7.2 million.

Douglas A. McIntyre

Posted on: September 12, 2007 – 8:17 am in Media,

VMware Stock Options Being Used For Stealth Stock Ownership (VMW, EMC)

VMware’s (NYSE:VMW) stock options trading has been almost as exciting and puzzling as watching the stock in this post-IPO frenzy since EMC Corp. (NYSE:EMC) launched its partial spin-off in last month’s key IPO. In fact, it may even be more exciting.  With such a low float and demand for the shares much higher than available in the shares the stock options are quite obviously being used as a stealth trade to own the stock.  Buying out of the money calls (and maybe even selling out of the money puts- not yet evident in volume) has to be how traders are participating in the VMware gold rush. 

On Monday September 10 there were just under 10,000 contracts traded in the closest September Calls alone ($65 to $80 strike prices). The October Calls were far less active but go out to January 2008: 1,137 of the JAN $100 CALLS traded.  Someone was betting on a $100.00 stock price by January 18, or at least they are betting for a huge rise even if it never goes in the money.

Yesterday’s options were active as well.  Various call strike prices in the month of September saw another 10,0000 contracts trade hands.  There are still big bets going in the $100 strike price calls for October: There were almost 1,200 of these $100 strike contracts traded for October.  The $100 strike price in JAN-08 Calls saw 441 contracts trade and the $100 strike in the APR-08 Calls saw 582 contracts trade hands.

Just last night, Jim Cramer on MAD MONEY listed this one as one of his draft choices for his ‘fantasy football draft methodology’ for picking winning stocks that won’t be dependent upon Bernanke and rate cuts in a recession.  Traders are making big bets here in the form of options.  On a fully leveraged basis, each 10,000 contracts equates to 1 million shares. 

The company just announced its first acquisition this week and it hasn’t been public a month yet.  It also knows it has this "VMware conundrum" that exists in the EMC-VMware share price to valuations because of the incredibly low float.  Virtualization is going to be huge and the company is going to command some major growth ahead in its revenues and position.  Regardless, the company has a lot of growth it needs to do to catch up to its now greater than $25 Billion market cap. 

Shares are up another 2.5% pre-market today at $78.75, and shares traded as high as $82.75 intraday yesterday.  Options are definitely being used as a stealth-ownership trade.

Jon C. Ogg
September 12, 2007

Jon Ogg produces the 24/7 Wall St. SPECIAL SITUATION INVESTING NEWSLETTER; he does not own securities in the companies he covers.

Posted on: September 12, 2007 – 7:52 am in Options, Software, , , , ,

Amgen Set To Run (AMGN, JNJ, BIIB)

Amgen Inc. (NASDAQ:AMGN) is seeing shares trade up another 2% pre-market after yesterday’s decision where an FDA panel rejected a proposal to set a specific target for red blood-cell levels in kidney-failure patients being treated with anti-anemia.  The panel suggested a slightly broader range for hemoglobin values that are used to measure red blood-cell levels.  This should remove part, once again part, of the anemia woes that have been hampering Amgen every day and should even remove a sore on Johnson & Johnson (NYSE:JNJ).

Last week 24/7 Wall St. outlined developments creating an "If, Then" scenario that could take Amgen’s stock significantly higher.  This move will act as the first catalyst in this scenario, and this stock was battered and tattered after it couldn’t catch a break anywhere.  If the Medicare reimbursement help from Congress stays as is, then the road to a partial recovery is set.  We even compared this to a situation that plagued Biogen-Idec (NASDAQ:BIIB) back in 2005.  The circumstances are of course different, but the impact and path surrounding the stock reactions and future paths is just too difficult to not notice.

This follows the March decision out of the FDA to put a black box warning on the label of these erythropoiesis-stimulating agents, or ESAs.  As sales of the three leading drugs in this subset exceeded $10 Billion, these had been seeing a sharp decline in sales as the FDA had been investigating higher doses.  A formal hemoglobin level was not reached by the FDA panel and the verbage is still unclear, but this is still far better than original fears of lower hemoglobin rates.

So far UBS is the only upgrade that was noticed on Amgen (AMGN), although its sell rating was only raised to Neutral.  The August short interest was more than 28 million shares, up from 26.9 million shares in July.  If those shorts haven’t started covering yet, they have to at least be thinking about it.  Amgen is still going to be treated more like a Big Pharma drug company in the future rather than one of the greatest biotechs on the planet, but this is a clear path to recovering some of its huge losses.

Amgen saw shares rise over 5.5% yesterday to $53.88 on the win, and shares are trading north of $55.00 in pre-market trading. 

Jon C. Ogg
September 12, 2007

Jon Ogg produces the 24/7 Wall St. SPECIAL SITUATION INVESTING NEWSLETTER; he does not own securities in the companies he covers.

Posted on: September 12, 2007 – 7:25 am in Biotech, FDA, , , , , , , , ,

Pre-Market Stock News (September 12, 2007)

(AMGN) Amgen trading up another 2% after vote from FDA was not to put additional caps on company.
(BRLC) Syntax-Brillian rescheduled earnings from yesterday’s close to today’s close.
(CATT) Catapult Communications said its order input for the quarter have so far exceeded original expectations.
(CRZO) Carrizo Oil & Gas sold 1.8 million shares in a direct placement.
(CTIC) Cell Therapeutics is launching Phase III study for pixantrone in relapsed non-Hodgkin’s lymphoma.
(DCO) Ducommun won $28 million in contracts from Embraer for fuselage and door skins.
(ENP) Encore Energy Partners LP priced its IPO of 9.0 million units at $21.00 per unit.
(FRZ) Reddy Ice announced the sale of most of its non-ice assets.
(GM) GMAC LLC, GM’s partly owned finance unit, signed a $21.4 Billion asset-backed credit loan facility from Citigroup.
(GOAM) GoAmerica is merging with Hands On Video Relay Services.
(ILMN) Illumina signed its fourth genotyping service agreement with Cancer Research Center in the U.K.
(IW) ImageWare signed a fingerprint ID system pact with Lockheed Martin.
(JOSB) Jos. A. Banks $0.44 EPS vs $0.42 est.
(KWK) Quicksilver Resources is selling its Michigan, Indiana, and Kentucky assets.
(NDAQ) NASDAQ is reportedly not increasing its bid for OMX.
(OHB) Orleans Homebuilders -$0.03 EPS vs -$0.20 est.
(PCOP) Pharmacopeia announced positive results from Phase 1 multiple ascending dose study of PS433540, its lead product candidate.
(RPRX) Repros Therapeutics announces that its investigational new drug application in the treatment of Endometriosis became effective.
(TXN) Texas Instruments traded down 1% after narrowing the range within prior expectations; wireless chips were seeing mixed demand.

Jon C. Ogg
September 12, 2007

Posted on: September 12, 2007 – 7:03 am in Pre-Market Activity

August Business Website Numbers: Small Lead For Yahoo! While BusinessWeek And Motley Fool Fade

August audience figures from comScore show that Yahoo! (YHOO) Finance maintains a lead in unique visitors over rivals AOL Money (TWX) and MSN (MSFT) Money, but that the large pageview advantage that it once had is almost gone.

Yahoo! Finance had almost 13,7 million unique visitors in August, ahead of MSN Money at 11.5 million and AOL Money & Finance at 10.2 million. But, in pageviews, Yahoo! posted 289 million to AOL’s 266 million.

Forbes, with 6.1 million unique visitors and 64 million pageviews stayed well ahead of other online websites for old media companies including BusinessWeek (MHP), Reuters (RTRSY) and Dow Jones (DJ),

Two sites with strong brands continue to lag. BusinessWeek online had only 11 million pageviews. In August of last year, the BW figure was 27 million.

And The Motley Fool had eight million compared to TheStreet (TSCM) at 52 million in August of this year. In August 2006, The Motley Fool has nine million pageview while TheStreet had 20 million.

Another web property that showed a sharp drop from August 2006 was Reuters. Pageviews fell from 22 million to 14 million this year.

Douglas A. McIntyre

Posted on: September 12, 2007 – 6:40 am in Internet, , , , , , ,

Pre-Market Analyst Calls (September 12, 2007)

AAPL started as Mkt Perform at Morgan Keegan.
ALV raised to Buy RWBaird.
AMGN raised to Neutral at UBS.
AUDC raised to Outperform at CIBC.
BBT started as Outperform at Credit Suisse.
CYN started as Outperform at Credit Suisse.
FFIV started as Buy at UBS.
FTO raised to Buy at B of A.
GLUU started as Mkt Perform at Morgan Keegan.
GSF raised to Neutral at JPMorgan.
GSIC raised to Buy at Jefferies.
GTIV raised to Buy at BB&T.
IBA cut to Hold at Citigroup.
IGT raised to Outperform at Wachovia.
MOT started as Mkt Perform at Morgan Keegan.
MOV started as Outperform at CIBC.
MTB started as Neutral at Credit Suisse.
MVSN cut to Hold at Jefferies.
NAPS started as Mkt Perform at Morgan Keegan.
NPSP started as Buy at Oppenheimer.
PRM cut to Hold at Deutsche Bank.
PUB cut to Sell at Citigroup.
RATE started as Sector Perform at CIBC.
RF started as Neutral at Credit Suisse.
RIG raised to Neutral at JPMorgan.
RNWK started as Outperform at Morgan Keegan.
SKX raised to Buy at BB&T.
SUN cut to Neutral at B of A.
TSO raised to Buy at B of A.
UB started as Underperform at Credit Suisse.
USB started as Neutral at Credit Suisse.
VLO started as Neutral at B of A.
VRTU started as Outperform at Bear Stearns.
VRTU started as Overweight at JPMorgan.
WBD cut to Sell at UBS.
WFC started as Neutral at Credit Suisse.
WNR started as Sell at B of A.
WPPGY cut to Hold at Citigroup.
ZION started as Outperform at Credit Suisse.

Jon C. Ogg
September 12, 2007

Posted on: September 12, 2007 – 6:34 am in Analyst Calls