Daily Archives: September 19, 2007

Traders Expect Goldman Sachs To Outshine Bear Stearns (GS, BSC, MER, MS)

On Thursday, September 20, we get the dual reports from Bear Stearns (NYSE:BSC) and from Goldman Sachs (NYSE:GS): 

  • Bear Stearns is expected to post $1.78 EPS on $1.65 Billion in revenues. On Monday shares closed at $115.38 and saw only 3.3% rise to $119.20 on the FOMC day of Tuesday; although shares gave back almost all gains to close at $115.64 on Wednesday.
  • Goldman Sachs is expected to post $4.35 EPS & $9.55 Billion in revenues.  On Monday shares closed at $187.81 and its Tuesday rise was 6.8%, which was actually followed up with a $5.00 rise (or almost 2.5%) on Wednesday.

Lehman Brothers (NYSE:LEH) reported on Tuesday, September 18 and managed to handily beat expectations.  This was of course the morning of the same day the FOMC gave us the 50/50 rate cut, but shares closed up 10% at $64.49 on Tuesday.  On Wednesday shares closed down about 0.5% at $64.11.

Morgan Stanley (NYSE:MS) reported somewhat weaker than expected earnings on Wednesday.  Its shares had risen 5.5% Tuesday on hopes that Lehman’s results would be the same joy and on the FOMC cut; while Wednesday’s day of its own news created a 2.1% drop to $67.03.

It appears as though Wall Street has endorsed Goldman Sachs over Bear Stearns over the pre-earnings expectations if you look how the stocks have traded with the other brokers.  Keep in mind that Bear Stearns is the one that if it ever gets too weak becomes the topic of the takeover rumor mill, although that’s been an on and off rumor mill name for literally 10 years now.

Jon C. Ogg
September 19, 2007

Posted on: September 19, 2007 – 10:09 pm in Brokerage Firms, Earnings, , , , , , , , ,

Baidu.com Up Eight Straight Days, Can It Continue? (BIDU, SINA, SOHU, NTES)

Baidu.com, Inc. (NASDAQ:BIDU) is one of these stocks that is pretty amazing when you look at its trading activity and its volume.  BIDU stock closed up Wednesday another 2.6% at $275.95 on 11.8 million shares, which is another yearly high and more than double average daily volume.  This wouldn’t be a big day on a percentage stock move basis alone unless you look at how it has been trading of late. 

This stock has managed to close up for Eight consecutive days from its last down day on September 2, 2007 when shares closed at $213.64.  Here are the descending closing prices from before Wednesday: $268.79; $252.89; $234.88; $232.47; $230.12; $227.04; $218.10; $213.64. But compare that to dates below and this one looks amazing.  If you compare this to lows in the past months it becomes "exuberant":

  • Lowest close August: $168.89 on August 16, 2007
  • Lowest close July:       $175.04 on July 24, 2007
  • Lowest close June:      $135.64 on June 12, 2007
  • Lowest close May:        $121.35 on May 1, 2007
  • Lowest close April:       $93.523 on April 2, 2007
  • Lowest close 52-Week: $87.28 October 2006

Obviously this one has everything going for it.  It is a hot stock for sure, but it is a hot web search engine stock in the even hotter Chinese market.  The overly obvious is that one incredible quarter is being priced in.  Should we dare we mention the hype from the coming 2008 Olympics?  But what else could be coming besides that?  Obviously a stock splitcomes to mind, but what else?

Read More »

Posted on: September 19, 2007 – 8:16 pm in ADR, China, Internet, , , , , , , , , ,

Cramer Says The Rally Has Just Begun (T, DSL, FED)

On tonight’s MAD MONEY on CNBC, Jim Cramer said it isn’t too late to get in after the post-FOMC rally seen over the last two days.  He thinks this is like the 1990 cuts and the 1998 cut, and this is nothing compared to the market you will see ahead.  The 400 point gain is really not anything because it is going higher and you shouldn’t get scared out of the market.  Same as yesterday, he said don’t listen to the bears and nay-sayers.

Cramer doesn’t think a rate cut is going to bail out the homebuilders entirely, but he still wouldn’t short them now.  He likes the banks, but the theory and the moral hazard is great for many many stock.  If you want a review of Cramer’s fairly recent stock pick lists that he is still positive on many of the stocks, here are some of the stock lists and brief explanations:

Here is his list of TOP 9 PICKS FOR 2007
Here is his "New Four Horsemen of Tech"
Here is his Mortgage Madness Portfolio
Here are his Top China Picks
Here are Warren Buffet Stock Reviews in 10 stocks and then 10 more
Here are his numerous picks from the fantasy football stocks…Running Backs… Tight Ends… Quarterbacks…. Defensive Linemen…

Cramer also gave several other stock picks in his second segment on MAD MONEY.  But he gave his key telecom pick being AT&T (NYSE:T) because of its higher dividend and growth ahead.  He thinks it is savvy and will grow cautiously and it trades at 12-times earnings with an upswing coming.  Being the sole iPhone distributor is only helping and he thinks wireless data revenue is going to be massive.  Cramer also interviewed the CFO, Richard "Rick" Lindner, who said wireless is hitting on all cylinders with margins actually growing.  The CFO also said video is now over 100,000 customers and they have over 1 million satellite.

Other picks that Cramer noted earlier today were Downey Financial Corp. (NYSE:DSL) and FirstFed Financial (NYSE:FED).

Jon C. Ogg
September 19, 2007

Posted on: September 19, 2007 – 5:30 pm in Cramer, , , , , , , ,

IPO FILING: RiskMetrics Group, Inc.

RiskMetrics Group, Inc. has filed today to come public via an Initial public offering.  It lists that it will sell up to $200 million in common stock under an undisclosed ticker and the exchange has not been stated.  Credit Suisse, Goldman Sachs, and Banc of America have been fingered as the underwriters.

RiskMetrics is a provider of risk management and corporate governance products and services to participants in the global financial markets to help clients better understand and manage the risks associated with their financial holdings, provide greater transparency to their internal and external constituencies, satisfy regulatory and reporting requirements and make more informed investment decisions.  It sells solutions across multiple asset classes to asset managers, hedge funds, pension funds, banks, insurance companies, financial advisors and corporations. As of June 30, 2007, it had approximately 3,300 clients located in 50 countries: 74 of the 100 largest investment managers, 31 of the 50 largest mutual fund companies, 34 of the 50 largest hedge funds, each of the 10 largest global investment banks and 17 of the 30 OECD central banks.

RiskMetrics consists of two industry leading businesses: RiskMetrics and ISS.

  • RiskMetrics:  RiskMetrics is a global provider of multi-asset, position-based risk and wealth management solutions.
  • ISS:  ISS is a provider of corporate governance and specialized financial research and analysis services to institutional investors and corporations around the world.  ISS was acquired on January 11, 2007, and it facilitates the voting of proxies by institutional investors and provides in-depth research and analysis to help inform their voting decisions and assess issuer-specific risk.  ISS serves approximately 2,750 clients. On August 1, 2007, ISS acquired CFRA, a leading forensic accounting research firm.

The company sells products and services primarily on an annual subscription basis and generally receives upfront subscription payments from clients.  On a pro forma basis for the year ended December 31, 2006, it generated revenues of $204.5 million, Adjusted EBITDA of $56.9 million and a net loss of $4.8 million.  Revenues for the first 6-months of 2007 were $110.515 million and net income was $745,000.00 after taxes.  Entities affiliated with General Atlantic LLC own 28% of the company.

Jon C. Ogg
September 19, 2007

Posted on: September 19, 2007 – 5:01 pm in IPOs, , ,

BioCryst Botched Flu Results (BCRX)

BioCryst Pharmaceuticals, Inc. (NASDAQ: BCRX) has announced preliminary findings from a Phase II study with intramuscular injection of Peramivir, the Company’s product candidate for the treatment of seasonal and life-threatening influenza.

It states that 344 patients who had a positive rapid antigen test indicating acute influenza illness were randomized to receive intramuscular injections of either placebo or one of two dose levels of peramivir (150mg and 300mg) as a single dose administered within 48 hours of symptom onset. The primary endpoint of the study was the time to alleviation of symptoms in the patients with confirmed influenza infection (n=313).

Here is the problem……..While the results indicate that in the evaluable population of 313 subjects, a single dose of peramivir demonstrated a treatment improvement over placebo, the improvement was not statistically significant. With regard to the primary endpoint of median time to alleviation of symptoms, the improvement over placebo was 22.9 hours with the 150mg dose (p=0.284) and 21.1 hours with the 300mg dose (p=0.152). Based on a preliminary review, the Company believes that due to the introduction of a shorter injection needle in the Phase II trial compared to the Phase I trial, only one-third of subjects received an adequate intramuscular injection.

The company is moving ahead and it sounds like the company is blaming too many patients receiving shots with too short of a needle.  You’ll have to decide on your own if they are telling the truth or not.

The company just completed a private placement back on August 9 of $65.3 million, so this is going to be a likely burn for many of the investors.  This appears to not be its only oar in the water.  Fodosine is in studies for T-Cell Leukemia, CTCL, Chronic Lymphocytic Leukemia, and B-ALL.  It also is studying BCX-4208 for autoimmune disease and transplantation.

In after-hours trading activity, shares are down nearly 40% at $7.17.  On August 9, back when it completed its private placement, shares closed that day at $9.59 and shares had run up to over $12.00 recently before closing at $11.78 today.  Its 52-week trading range is $6.57 to $13.38.

Jon C. Ogg
September 19, 2007

Posted on: September 19, 2007 – 3:52 pm in Biotech, , , , ,

Palm Guidance Better Than It Could Have Been (PALM)

Palm, Inc. (NASDAQ:PALM) has issued guidance and said it expects revenue to be in the range of $359 million to $361 million for its first quarter of fiscal 2008.  Earnings per diluted share are expected to be $(0.01) to $0.00 on a GAAP basis and $0.08 to $0.09 on a non-GAAP basis.  First Call estimates are $0.08 EPS (non-GAAP) and total revenues are estimated at $359.9 million, so this is in-line to a hair above the mid-point expectations.

Smartphone revenue is expected to be in the range of $300 million to $302 million for the quarter, and smartphone sell-through for the quarter is expected to range between 685,000 units to 690,000 units.  Gross margin is expected to be in the range of 36.0 percent to 36.2 percent on a GAAP basis and 36.1 percent to 36.3 percent on a non-GAAP basis.

Cash, cash equivalents and short-term investments balance is expected to be approximately $627 million and Palm is initiating the process of marketing its proposed Senior Secured Loan Facilities in conjunction with its recapitalization transaction, which was approved by shareholders on Sept. 12, 2007.  So it appears that Palm is going to get to shrink itself as it originally attempted, although this may be one of the last transactions of its type until credit and private equity markets get better.

We recently noted how Palm was no longer going to be the exclusive provider of smartphones for Cisco Systems’ mobile workforce, and that was after the company decided to dump it Foleo initiative (which we have now dubbed Faux-leo).

Palm shares are only down about 1% after-hours on this news at $15.62.  The guidance isn’t really great, but it is far better and a lot "less bad" than we would have expected based upon the recent news.  The question that remains is how the guidance for the next two quarters will be.  Palm’s 52-week trading range is $13.41 to $19.50.

Jon C. Ogg
September 19, 2007

Posted on: September 19, 2007 – 3:24 pm in Consumer Electronics, Earnings, Telecom, Wireless, ,

The 52-Week Low Club

Point Therapeutics (POTP) Delisting sends shares even lower. Down to $.03 from 52-week high of $1.79.

Applied Digital Solutions (ADSX) More fall-out from rumors about microchips at sub VeriChip. Down to $.85 from 52-week high of $2.82.

North American Scientific (NASI) Sells of a unit of the business. Shares down to $.75 from 52-week high $1.75.

Douglas A. McIntyre

Posted on: September 19, 2007 – 2:59 pm in HI/LOW, , ,

Transports Ready to Key Off Of FedEx Earnings (FDX, UPS)

On Thursday morning, we’ll have earnings from FedEx Corp. (NYSE:FDX).  First Call pegs estimates at $1.54 EPS on revenues of $9.07 Billion, and the next quarter is expected to show earnings of $1.97 EPS on revenues of $9.45 Billion.

This will be a key stock to watch in Transports as FedEx has become one of the more key transportation stocks.  The most directly tied is UPS (NYSE:UPS).  So far the market managed to shrug off the negative news from Knight Transport (NYSE:KNX) after it warned, at least YRC Worldwide Inc. (NASDAQ:YRCW) are up 1.5% at $29.56.  Our other BAIT SHOP Pick from the Special Situation Investing Newsletter, Old Dominion Freight Line Inc. (NASDAQ:ODFL) shares are down 2% at $26.80 on the day.

Shares of FedEx are down 1.3% with 20 minutes to go to the market close Wednesday at $107.54, still in the lower-half of its 52-week trading range of $99.30 to $121.42.

Jon C. Ogg
September 19, 2007

Posted on: September 19, 2007 – 2:48 pm in Earnings, Transports, , ,

Google Still Search King, Apparently At Microsoft’s Expense (GOOG, MSFT, YHOO, IACI)

Google (NASDAQ:GOOG) picked up its share of US Internet Search compared to the prior August with almost 64% of US searches, according to Hitwise.  Be advised, data from Hitwise often varies greatly from comScore and other web traffic ranking mechanisms.  The Hitwise sample is supposed to be based upon 10 million U.S. Internet users.  Here is a table:

                          AUG-07    JUL-07    AUG-06
Google.com    63.98%    64.35%    59.99%
Yahoo.com     22.87%    22.13%    22.73%
MSN.com        7.98%       8.79%      11.86%
Ask.com          3.49%       3.21%       3.37%

It appears based upon the chart that the big gains year over year are at the expense of Microsoft (NASDAQ:MSFT), who combined with its own Live.com search showed the largest drop year-over-year and showed the largest just month-over-month.  Yahoo! NASDAQ:YHOO) actually got a small pick-up month over month and slightly better compared to August 2006.  Google is still the winner by far, but they gave a marginal amount over the prior month.  As a reminder, this is not on the number of searches.  This pertains to the percentage of total search.

Jon C. Ogg
September 19, 2007

Posted on: September 19, 2007 – 2:39 pm in Internet, , , ,

Yahoo!’s Search Share Moves Up

Yahoo!’s (YHOO) share of the search market ticked up a bit in August. Google’s (GOOG) fell off.

YHOO moved from 22.13% in July to 22.87% last month. Google fell to 63.98% from 64.35% over the same period, according to Hitwise.

Management at Yahoo! may hope that it is th beginning of a trend. But, it’s not.

Douglas A. McIntyre

Posted on: September 19, 2007 – 2:34 pm in Internet, ,

Which Company Is Worth More Overall: Adobe or VMware? (VMW, ADBE, EMC, CTXS, MSFT)

When recent IPO’s in tech stocks reach $20 Billion and $25 Billion in market capitalization rates, it is always interesting to see how this compares to other giants in related sectors.  Surprisingly, depending on which source you use, the market capitalization rates are virtually identical for VMware (NYSE:VMW) and Adobe Systems (NASDAQ:ADBE).

Here is how the quarterly earnings and growth rates stack up against each other:

  • VMware showed its financial filings of its second quarter on Monday (which were already mostly known), and the results were $296.8 million in revenues (up almost 90% over Q2 2006) and earnings rose over 100% to $34.2 million, or $0.10 on an EPS basis.
  • Adobe’s earnings which were not previously known also came out on Monday.  The company posted profits of $205 million, or $0.45 EPS on a non-GAAP basis, on revenues of $851.7 million (up 41% from the same period in 2006).  The company did already acknowledge that its growth rates would slow in 2008 because it acknowledges that some growth rates are sustainable for only so long.

Market Cap Comparisons:

  • Based on a 332.5 million share count on VMware and a $77.50 stock price, we get a $25.768 Billion market cap.  The calculations on the true share count create different market caps around the web: Yahoo! Finance lists $25.78 Billion as the market cap, Google Finance lists the share count at 382.94 million and gives it a $29.68 Billion market cap, MarketWatch lists the shares outstanding as 375.12 million and gives it a $29.07 Billion market cap,  and AOL Money & Finance severely undercounts the shares ate twice the free float so its market cap is only listed as $5.82 Billion.
  • Adobe calculated on Monday that for the coming quarter, its share count will be 588 million to 590 million.  Lets split the difference at 589 million and with a $43.50 stock price we get an implied market cap of $25.6215 Billion.
  • If you want to compare other desktop and server software companies and the market caps, here goes: Citrix (CTXS) $7 Billion; Symantec (SYMC) $17.5 Billion; Intuit (INTU) $9.9 Billion.
  • The actual market caps on an exact basis is not the important part of this.  The most important part is looking at the comparison of how close each market cap is to the other.

The truth is that virtualization the next "next thing" and as a sector virtualization is going to enjoy larger growth rates for some time.  It will arguably even be immune from economic shifts in 2008 as the growth rates are coming regardless of the economy.  Maybe virtualization will grow at 50% instead of 70%, but this is still where things are going.

We still believe that if this VMware stock conundrum didn’t exist because of an incredibly low float that shares would not be where they are today.  This is an extremely valuable company and we won’t refute it or even fight it.  Just understand that this low float manipulates that price moves and we have noted already how investors and traders alike are using the various call options in multiple months and multiple strike prices to play the stock as a stealth trading basis.

Read More »

Posted on: September 19, 2007 – 11:57 am in Software, , , , , , , , , , ,

Catalysts Taking GE to Multi-Year Highs (GE)

General Electric Co. (NYSE:GE) is hitting new recent highs again, although it may be worth noting that these $42.00+ prints are not new highs from 1999 to 2001.  Nonetheless, this marks five-year highs in the stock.

There were some concerns on the street up until yesterday that the company might have some weakness in its consumer exposure in appliances and finance, but CFO Keith Sherin addressed analysts yesterday and maintained prior earnings guidance in his "pretty good economy" explanation.  That has acted as the catalyst along with a FOMC decision to cut Fed Funds and the Discount rate by 50 basis points. 

GE remains one of the few AAA rated debt rating companies out there.  Analysts still have an average price target of $44.00.  Just this morning, Goldman Sachs noted that the company is well positioned to benefit from leadership in infrastructure, across energy, aviation, transportation, oil & gas, water, and financial services.  Goldman Sachs also noted that the exit from Japanese consumer finance is not surprising.  Goldman Sachs does note that it expects investors will be challenged to understand all the accounting nuances "impacting an array of offsetting gains and charges across Q3 reported earnings versus continuing operations."  Goldman Sachs remains with targets for earnings of $2.21 in 2007 and $2.45 in 2008.

Regardless of outside analyst calls, GE is a company that is just hard not to be impressed with.  After a semi-private luncheon with CFO Keith Sherin in July, it was hard to not be impressed with Sherin’s stance that "GE is a growth company" on numerous occasions.  I would have classified it as more of a cyclical or income play because of the conglomerate nature.  But Sherin stated that the company seeks a 20% return on capital across the spectrum and they review all segments with that target in mind.  If that isn’t attainable, then a divestiture of an underperforming operation becomes much more likely.   If you look at what the conglomerate is doing in oil and gas now, you’ll think they plan to get quite large there.  Anyone hearing the entire presentation from management will dismiss any of those old break-up calls.

Any time these giant stock hit new highs, it is never out of the norm to see some profit taking.  With a now $429 Billion market cap, it takes quite a bit of cash inflows to move the stock up.  Nonetheless, it would appear that the floor is now much higher than just a month ago.  It is also worth noting that stocks that exceed old highs tend to do that for more than just one day.

Jon C. Ogg
September 19, 2007

Jon C. Ogg produces the 24/7 Wall St., LLC Special Situation Investing Newsletter; he does not own securities in the companies he covers.

Posted on: September 19, 2007 – 9:38 am in Conglomerates, HI/LOW, , , ,

T. Boone Pickens Still Bullish on Oil, AND on Alternative Energy (CLNE)

T. Boone  Pickens was just a guest on CNBC this morning, but this was after he featured his alternative energy company called Clean Energy Fuels Corp. (NASDAQ:CLNE).  This stock is now up over 10% on the day after he rang the opening bell for NASDAQ.

As far as overall oil and energy, T. Boone Pickens is still very bullish.  He is still not going with formal targets but noted that oil production is now 85M barrels per day and there is a 88M production goal for Q4, "so production is going up."  He also noted that as some fear Oil could go to $100, but he doesn’t think that will happen this year and he thinks that would take a geopolitical event.  T. Boone Pickens created waves and a lot of scurrying when he predicted $80 oil before he’s 80, and that easily came to pass.

Recently we gave an extreme case that some outsiders think could yield oil at $200 per barrel, although keep in mind this is over quite a long time frame.  Goldman Sachs also just lifted its theoretical oil "Super-Spike" band to a higher level of $135 per barrel and even $4.50 per gallon at the pump.  You can also see their comments on individual stocks in the sector here.

Interestingly enough, on the very near term he thinks we should get a pullback here to maybe $78 per barrel.  He still thinks the overall trend is up as demand is up and production is relatively flat.  He noted that there will be less demand in second quarter of 2008, but supply is not going to get better.  As far as where price kills demand, he won’t predict because it hasn’t happened yet at each milestone crossed.

He also noted that America is going green, and his company Clean Energy Fuels Corp. (NASDAQ:CLNE) is a green company that turns compressed and liquefied natural gas to run automobiles and the time has come for this.  He noted that this is domestic, cheap, and clean and that it will happen.

As far as his stance on on gasification of coal, all kinds of alternative energy in coal and natural gas are there with oil at $82.00, but it all depends upon costs.

If you are interested in what goes on the Business World of "Global Warming" or "Climate Change," we now run a daily piece each afternoon on the business developments with public companies titled "The Business Day In Global Warming."  We do not cover this under any political bend.  Every major company out there seems to have some greener initiative, and as far as the Western World is concerned "Green Business Is Now Big Business."

If you would like to set up an RSS feed daily to our ALTERNATIVE ENERGY thread section you can link at the URL here:
http://www.247wallst.com/alternative_energy/index.html

Jon C. Ogg
September 19, 2007

Jon C. Ogg produces the 24/7 Wall St., LLC Special Situation Investing Newsletter; he does not own securities in the companies he covers.

Posted on: September 19, 2007 – 9:08 am in Alternative Energy, Oil & Gas, , , , , , ,

IPO Filing: MAKO Surgical Corp.

MAKO Surgical Corp. has filed to come public in an initial public offering and for nominal filing purposes, it lists that it will sell up to $86.25 million in securities.  MAKO is taking the "MAKO" ticker on NASDAQ.  The lead underwriters are J.P.Morgan and Morgan Stanley, and co-managers are listed as Cowen & Co. and Wachovia.

The company appears to be a revlutionary robotic device maker for less invasive knee surgery.  It markets an advanced robotic solution and implants for minimally invasive orthopedic knee procedures under the name MAKOplasty, frequently to early to mid-stage osteoarthritic knee disease. MAKOplasty is FDA-cleared for its Haptic Guidance System, a interactive haptic robotics platform that utilizes tactile-guided robotics and patient-specific visualization.  Unlike conventional knee replacement surgery, which requires extraction and replacement of the entire joint, MAKOplasty optimizes localized resurfacing of the specific diseased compartment of the joint by using the robotics technology to achieve consistently reproducible precision and optimal implant placement and alignment.

According to Frost &  Sullivan, the total U.S. market for total knee replacement and knee resurfacing procedures was greater than $2.7 billion in 2006, and is expected to grow at approximately 8% per year to more than $4.6 billion by 2013.  MAKO’s total sales in 2006 were $62.57 million and its loss attributable to shareholders was listed as $12.493 million (-$10.8 million from operations), but over 90% of that came at the end of the year after this started to be marketd.  In the first 6-months of 2007, MAKO generated $205.94 million in revenues and net loss for shareholders was listed as  $9.219 million (-$7.9 million from operations).

Jon C. Ogg
September 19, 2007

Posted on: September 19, 2007 – 8:25 am in IPOs, Medical, , , , , ,

McClatchy Numbers Cave

Large newspaper chain McClatchy (MNI), which doubled down on the industry by purchasing Knight-Ridder, had a disaster of an August. The company reported that consolidated advertising revenues in August 2007 decreased 9.2% and total revenues were down 8.4%

Classified revenue at the group fell 17% and revenue in the company’s California newspapers was off over 16%.  Even online ad revenue fell 3% to under $14 million.

At some point one of these newspaper companies is not going to have enough operating income to cover debt service.

Douglas A. McIntyre

Posted on: September 19, 2007 – 8:16 am in Media,

Pre-Market Stock News (September 19, 2007)

(AIR) AAR Corp. $0.36 EPS vs $0.39 est.
(CMO) Capstead Mortgage will sell 8.5M shares of common stock.
(DT) Deutsche Telecom’s T-Mobile won iPhone exclusivity in Germany.
(EPAY) Bottomline Technologies announced a strategic pact with Wipro Technologies of Wipro to provide corporate payments and global cash management solutions to financial institutions.
(ETEL) eTelecare Global (ETEL) is acquiring AOL’s Customer Care & Technical Support subsidiary.
(GIS) General Mills $0.81 EPS vs $0.79 estimate.
(KMX) CarMax $0.29 EPS vs $0.29e; lowered 2008 guidance to $0.92-0.98 vs. prior guidance of $1.03-1.14.
(KWD) Kellwood received a $21 non-binding offer proposal from Sun Capital.
(LEND) Accredited Home Lenders Holding Co. trading up 17% at $11.50 as Lone Star and it agreed on a lowered $11.75 buyout price.
(MS) $1.38 EPS vs $1.54 estimate; will take $940 million or $0.33 per share in writedowns; $480 million in quantitative strategies.
(PAA) Plains All American Pipeline’s subsidiary Plains L.P.G. Services has signed a definitive agreement to acquire the Tirzah L.P.G. storage facility from Suburban Propane and Suburban Pipeline for approximately $55 million.
(RNVS) Renovis to be acquired by Evotec in an all stock transaction valued at approximately US$ 151.8 million.
(TASR) TASER won a U.S. Forest Service purchase order for 700 TASER X26 electronic control devices.
(XMSR/SIRI) XM & Sirius trading down on UBS downgrade, and Wisconsin AG sent letter to US Atty General asking him to block the merger.

Jon C. Ogg
September 19, 2007

Posted on: September 19, 2007 – 7:34 am in Pre-Market Activity, , , , , , , , ,

Satellite Radio Takes A Key Downgrade (SIRI, XMSR)

This morning, both Sirius Satellite Radio (NASDAQ:SIRI) and XM Satellite Radio (NASDAQ:XMSR) are trading lower.  It appears that a key analyst that had been a defender of the keep has decided to cut bait.  UBS has downgraded both companies from its "Buy" rating down to "Neutral."

Back on April 27, UBS raised both ratings to a BUY 2 after Lucas Binder said that Sirius would have better cash flows in 2008 than XM.

Just recently we noted that the bias was tipping toward an approval from regulators, although we also have recently noted after the big run in the stock that the future model will still dependent upon subscriber growth to be a winner based on the price caps.

Shares this morning are trading lower on SIRI by 2% at $3.43 on active volume and XMSR shares are trading down 0.7% at $14.72 on very thin volume.

Jon C. Ogg
September 19, 2007

Jon C. Ogg produces the 24/7 Wall St., LLC Special Situation Investing Newsletter; he does not own securities in the companies he covers.

Posted on: September 19, 2007 – 7:28 am in Analyst Calls, Satellite, , , , , ,

Pre-Market Analyst Calls (September 19, 2007)

ADP added to Goldman Sachs Conviction Buy List.
AOS cut to Underperform at Baird.
ASBC raised to Equal weight at Lehman.
BBX cut to Mkt Perform at KBW.
BHE cut to Neutral at JPMorgan.
CCE cut to Hold at Deutsche Bank.
CCJ cut to Neutral at Merrill Lynch.
CFR cut to Equal Weight at Lehman.
CKFR cut to Hold at Citigroup.
CNET started as Neutral at Oppenheimer.
DIS started as Outperform at Credit Suisse.
EGP started as Buy at Cantor Fitzgerald.
INTX raised to Strong Buy at JMP Securities.
JNPR cut to Neutral at Merrill Lynch.
LCC started as Overweight at Morgan Stanley.
MELI started as Overweight at JPMorgan.
MFA raised to Outperform at Bear Stearns.
MFE cut to Underweight at Morgan Stanley.
PLXS raised to Overweight at JPMorgan.
PRGN started as Buy at UBS.
RHD cut to Neutral at Goldman Sachs.
RT raised to Overweight at JPMorgan.
SIRI cut to Neutral at UBS.
SIVB cut to Underweight at Lehman.
TCBI cut to Equal Weight at Lehman.
TWX started as Neutral at Credit Suisse.
VG cut to Sell at Soleil.
VIA started as Neutral at Credit Suisse.
WRNC raised to Overweight at JPMorgan.
WBS raised to Equal Weight at Lehman.
XMSR cut to Neutral at UBS.
ZINC started as Outperform at FBR.

If you enjoy reading the key upgrades and downgrades on Wall Street, tune in here to 24/7 Wall St. between 7:30 and 8:00 AM EST every day.

Jon C. Ogg
September 19, 2007

Jon C. Ogg produces the 24/7 Wall St., LLC Special Situation Investing Newsletter; he does not own securities in the companies he covers.

Posted on: September 19, 2007 – 7:04 am in Analyst Calls, , , , , , , , , , ,

Will Apple Double iPhone Production In Q4?

According to a report from TheStreet.com, Apple (AAPL) will almost double planned production of its iPhone in the fourth quarter. That would move the number of handsets built to 2.7 million from an earlier target of 1.54 million.

Production might be rising for two reasons. The first is that the company’s $200 per unit cut for the retail price of the phone may have stimulated more demand than expected. The other is that forecasts for Europe, where AAPL has signed partnerships for distribution in the UK and Germany, have pushe up the need for more units.

Douglas A. McIntyre

Posted on: September 19, 2007 – 6:19 am in Consumer Electronics,

Apple And T-Mobile Team For iPhone In Germany

Apple and T-Mobile today announced that T-Mobile, the leading network operator in Germany, will be the exclusive German carrier of Apple’s iPhone when it makes its debut in Germany on November 9.

Douglas A. McIntyre

Posted on: September 19, 2007 – 5:57 am in Wireless,