Daily Archives: October 2, 2007

Constant Contact: Premium Price & IPO Contact! (CTCT)

Constant Contact, Inc. (NASDAQ:CTCT) has announced the pricing of its initial public offering of 6,700,000 shares of its common stock at $16.00 per share, above the $12.00 to $14.00 previous indication. CIBC World Markets and Thomas Weisel Partners acted as joint book-runners for the offering, and William Blair, Cowen & Co., and Needham were co-managers.  The 6,700,000 shares consist of 5,829,839 being sold by the Company and 870,161 being sold by certain stockholders of the company.

For those of you who don’t know Constant Contact, this company is one of the leaders in on-demand email marketing campaigns.  In fiscal 2006, revenue was $27.6 million and its net loss was $7.8 million.  In the six months ended June 30, 2007 revenue was $21.1 million and its net loss was $5.5 million.  Here is a more detailed backgrounder with some of the relevant data from an amended filing.

We are getting ready to release our "Watch List"of small-cap Internet stocks to readers of our "Special Situation Investing Newsletter" in the coming days.  These stocks are not active takeover candidates or active restructuring stocks today, but these are the smaller internet stocks we think could easily become prey under the right circumstances.

Jon C. Ogg
October 2, 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: October 2, 2007 – 6:14 pm in IPOs, Internet, , ,

What $600 Google Looks Like (GOOG, BIDU, YHOO)

Many are undoubtedly looking at Google (NASDAQ:GOOG) almost hitting $600.00 today.  Shares closed barely at a new high closing price $584.39 (old high was $584.35), but intraday today the high GOOG print was $596.81.  We wanted to see how shares have acted at each "$100" interval with so many looking at the $600 mark:

  • At $100 in 2004, shares ran to $200 in NOV-04.  Shares faltered around $200 until April 2005.
  • At $200+ in April 2005, shares ran to $300 by June 2005. Shares used $300 as a magnet until October 2005.
  • At $300+ shares made it to $400 by the end of 2005.
  • At $400+ at the end of 2005 it took the stock until November 2006 for shares to hit the $500 mark.
  • At $500+ at the end of 2006 shares have traded as low as under $450 in early 2007 and in this last major push shares are just today under that $600 mark.
  • This is one of Cramer’s "New Four Horsemen of Tech" and he’s calling for higher.

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Posted on: October 2, 2007 – 5:45 pm in HI/LOW, Internet, , , , , , ,

Metabasis Escapes Biotech Zombiedom (MBRX)

Metabasis Therapeutics (NASDAQ:MBRX) announced after the close today that its MB07133 has been granted orphan medicinal product status for the treatment of hepatocellular carcinoma (primary liver cancer) by the European Commission. This designation would entitle Metabasis with 10 years of marketing exclusivity in the EC if this makes it to approval.  MB07133 is a novel HepDirect® prodrug of cytarabine monophosphate (araCMP) designed to produce the oncolytically active form, cytarabine triphosphate (araCTP), in the liver tumor where it acts to inhibit cell proliferation and cause DNA damage resulting in cell death.

Metabasis had only an $87 million market cap at the close of trading and closed at $2.84.  Shares are up close to 20% after-hours, and its 52-week trading range is $2.65 to $8.64.  As a reminder, this one blew up and imploded back in July into an implosion after the company’s deal with Schering ended after a failed diabetes drug.  Will this help it escape being a biotech zombie?

Jon C. Ogg
October 2, 2007 

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Posted on: October 2, 2007 – 5:34 pm in Biotech, , , ,

China Market Madness: China Natural Resources (CHNR) Up 75%

China Natural Resources (CHNR) hit a new high of $27.90 on new apparent news. That was a 75% increase for day.

China Technology Development (CTDC) was up 45% to a new high of $10.08.

Baidu Com (BIDU), the Chinese search engine company, was up 13% to to a new high of $320.58. At least it got a broker upgrade.

E House China Hldgs (EJ) rose 13% to a new high of $29.38. No news there.

Yingli Green Energy (YGE) hit a new high of $31.15, up 13%. Not any news.

China Telecom (CHA) and China Life (LFC) also managed new highs.

Seems like a pattern.

Douglas A. McIntyre

Posted on: October 2, 2007 – 4:12 pm in China, , , , , , ,

Micron: Half Empty or Half Full (MU)

Micron Technology (NYSE:MU) earnings are out for its quarter-end August 30, 2007:

  • For the fourth quarter of fiscal 2007, the company incurred a net loss of $158 million, or $0.21 per diluted share, on net sales of $1.4 billion. 
  • First Call had consensus at -$0.22 EPS and $1.4 Billion in revenues.

Most of the commentary isn’t exactly a ringing endorsement, but you should be advised that Micron is known for not giving formal targets on many occasions:

  • The company’s fourth quarter and fiscal year 2007 results were heavily influenced by industry supply/demand dynamics that depressed average selling prices for memory products.
  • The company’s net sales for the fourth quarter of fiscal 2007 increased 11 percent compared to the third quarter primarily as a result of higher megabit sales of memory products. Compared to the prior quarter, fourth quarter megabit sales increased approximately 25 percent and 60 percent for DRAM and NAND Flash memory products, respectively, while average selling prices for both DRAM and NAND Flash memory products decreased approximately 15 percent.
  • Sales of NAND Flash include sales from the company’s consolidated NAND Flash manufacturing joint venture with Intel ("IM Flash") to the company’s joint venture partner at long-term negotiated prices approximating cost. The results for the fourth quarter include a charge of $20 million to write down the carrying value of work in process and finished goods inventories of memory products to their estimated fair market values.

POSITIVES:

  • Sales of CMOS image sensors in the fourth quarter of fiscal 2007 increased approximately five percent compared to the third quarter primarily as a result of higher average selling prices reflecting the company’s shift in mix to higher megapixel products.
  • The company’s manufacturing operations achieved noticeable scale improvements in 2007, with wafer production increasing in excess of 20 percent over fiscal 2006. The company’s cost of goods sold per megabit decreased in the fourth quarter of fiscal 2007 compared to the third quarter by approximately 10 percent and 40 percent for DRAM and NAND Flash memory products, respectively.
  • During the fourth quarter of fiscal 2007, the company began executing initiatives to drive greater cost efficiency and revenue growth. The company recorded a restructure charge in the fourth quarter of $19 million comprised primarily of employee severance and related costs resulting from a reduction in the company’s workforce in the quarter. The company continues to pursue opportunities to lower its overhead costs through the utilization of partnerships and other outside relationships.
  • Micron ended the fiscal year with cash and investment balances of $2.6 billion.

Shares of Micron are down 2.5% at $11.49 in after-hours trading, but that is after shares rallied almost 4% at the end of the day on stronger hopes that earnings would impress.  If you want to see how this compares to late morning projections you can see it here on the site.

Jon C. Ogg
October 2, 2007 

Posted on: October 2, 2007 – 3:25 pm in Earnings, ,

The 52-Week Low Club

Aventine Renewable Energy (AVR) Ethanol stocks continue their march South. Down to $9.12 from 52-week high of $26.49.

Verasun Energy  (VSE) Another ethanol company is halting construction of a 110 million-gallon-per-year biorefinery. Down to $9.82 from 52-week high of $26.90.

TranSwitch  (TXCC) Semi company drops guidance. Falls to $1.14 from 52-week high of $2.07.

Douglas A. McIntyre

Posted on: October 2, 2007 – 3:02 pm in HI/LOW, , ,

Baidu (BIDU) Market Cap Now One-Third Of Yahoo!’s

Baidu’s (BIDU) big run-up on the heels of analyst comments took that stock to a market cap well above $11 billion. The company had just over $50 million in revenue last quarter.

Yahoo!’s (YHOO) market cap today was just below $36 billion. It revenue last quarter was just shy of $1.7 billion and its gross profit was over $1 billion.

Las Vegas odds are that Baidu can’t hit $400.

Douglas A. McIntyre

Posted on: October 2, 2007 – 2:47 pm in Internet, ,

The Business Day In Global Warming (SRP, SATC, ETLY, BP, CSIQ, AMAT, FSLR)

Sierra Pacific Resources (NYSE:SRP) announced today that its two Nevada-based utility subsidiaries, Nevada Power Company and Sierra Pacific Power Company, have issued a Request for Proposals for renewable energy resources: solar, wind, geothermal, biomass and other resources eligible for portfolio energy credits under the Nevada renewable portfolio standard.

SatCon Technology Corporation® (NASDAQ: SATC) announced that it has been awarded a $2 million contract by the Air Force Research Laboratory to develop the complete electric power conversion package for a hybrid electric vehicle for special operations applications.

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Posted on: October 2, 2007 – 1:36 pm in Alternative Energy, , , , , , , , , ,

GM(GM) In September

GM (GM) sold a total of 334,974 light vehicles, up 0.3 percent from 334,025 in September 2006.

Sales of light trucks increased 3.6 percent to 203,603 from 196,575.

GM now appears to have a steady wind at its back. August numbers were good as well.

Douglas A. McIntyre

Posted on: October 2, 2007 – 1:28 pm in Autos,

Micron Braced For Losses (MU)

Micron Technology Inc. (NYSE:MU) is set to report earnings after the close today.  First Call has consensus at -$0.22 EPS and $1.4 Billion in revenues.  Next quarter is expected to show a loss of -$0.04 EPS on roughly $1.6 Billion in revenues.

Micron Tech. has been a real technology laggard in a market where so many stocks have performed quite well, particularly if you review the list of last week’s Window Dressing stocks that are up so much.  Shares are at $11.40, barely above the lows of the $10.30 to $18.18 range seen over the last 52-weeks.

Most of the actual recent analyst calls have become more positive and the average buy target appears to be close to $16.00.  Its chart has not been overly revealing and the recent $1.00 gain over the last couple weeks has removed any major oversold read.  Options traders seem to actually be braced for a move of up to $0.74 to $0.88 in either direction, which is insulation for a 6% stock move.  These options might be worth looking at because there are over 55,000 contracts in the open interest in the closest OCT Call Strikes ($11 and $12) and over 39,000 contracts in the open interest of the closest Put contracts.

The company has already cut 5% of its workforce, or has announced the cuts, and has said it is still expanding its IM Flash venture with Intel.  The company also noted lower DRAM prices affecting the quarter and higher production, but the US-DRAM leader did not offer up formal guidance.

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

Posted on: October 2, 2007 – 12:56 pm in Earnings, Semiconductor, , , , ,

Toyota (TM) September Down 4%

Sale of Toyota (TM) vehicles in the US fell 4.4% to 213,043. The figure reflects one fewer selling day in September 2007 compared with the same month a year ago.

The new Tundra full-size pick-up notched a 55% surge Odd. Big pick-up sales were supposed to be down.

Overall, car sales fell 3.5% while light trucks dropped 5.7%.

Douglas A. McIntyre

Posted on: October 2, 2007 – 12:34 pm in Autos,

WPT Enterprises, World Poker Tour, ‘Almost’ A Value Stock (WPTE, LACO)

If you have channel surfed on any Saturday afternoon, you’ve probably seen one version or some variation of "The World Poker Tour."   This is owned by WPT Enterprises Inc. (NASDAQ:WPTE), or at least it is a joint venture according to the http://www.worldpokertour.com/company/ website with CEO Steven Lipscomb and Lakes Entertainment Inc. (NASDAQ:LACO).   

WPT Enterprises is a majority owned subsidiary of Lakes Entertainment.  It has also been hitting the list of 52-week lows for some time now almost daily and April was the last time it saw its stock post gains from the prior month’s close.  Lakes is not at 52-week lows, but at $9.80 it is also in the lower-half of the $8.00 to $13.47 52 trading range over the last 52-weeks.

WPTE is organized into three divisions: WPT Studios, WPT Consumer Products, and WPTCorporate Alliances.  The company came public in August 2004 and traded over $20.00 for some time throughout 2005.  That was at the top of the poker craze.  Shares haven’t seen that since and no one expects them to go back any time soon.  The company loses money and is expected to lose money in this year and next by the tiny group of analysts that cover it.

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Posted on: October 2, 2007 – 11:51 am in Casinos, Cult Stock, Entertainment, HI/LOW, , , , , ,

Porsche Sales Rise 19% In September

For those 24/7 Wall St. readers who make over $200,000 a year, Porsche sales rose 19% in September to 2,641 vehicles. Get one while they still have inventory.

Douglas A. McIntyre

Posted on: October 2, 2007 – 11:24 am in Autos

Ford Takes On Water

Ford’s (F) September vehicle sales dropped 21% in September. But, the have not hit zero yet.

Sales to daily rental companies were down 62 percent, which is part of the company’s program to get away from this business.

Total September sales were 189,863.

Ford, Lincoln and Mercury’s all-new and redesigned crossover utility sales were up 96 percent in September and up 52 percent year-to-date – the largest increase of any major manufacturer say Ford

Cold comfort.

But, the stock rallied anyway, up 3.5% to $8.52.

Douglas A. McIntyre

Posted on: October 2, 2007 – 11:11 am in Autos,

Housing Stocks…Ignoring Poor Housing Data (HXB, PHM, DHI)

The National Association of Realtors monthly Pending Home Sales Index for August came in at 85.5, Month on Month -6.5%, and Year over Year -21.5%.

This is perhaps the worst data on recent record, but it is worth keeping in mind that this data is August and before the FOMC rate cut.  It was also during the worst mortgage month when every single headline was revolving around headlines and story lines saying "billions of dollars lost here" and "billions of dollars lost there" were on every television station (while "Flip That House" versions were still running rampant on TV).

The SPDR Homebuilders ETF (AMEX:XHB) is up almost 5% today at $23.20 and the ETF did maintain its strength after these numbers came out.  Citigroup’s upgrade for a trade yesterday is turning out to be quite a call. The XHB ETF closed Friday at $21.40, almost an 8.4% gain in two days.

Of the largest homebuilders, it looks like a 7% gain in DR Horton (NYSE:DHI) and in Pulte Homes (NYSE:PHM) are leading the pack. 

Jon C. Ogg
October 2, 2007

Posted on: October 2, 2007 – 9:27 am in Housing, , , , ,

Hovnanian (HOV) And Ford (F): A Free Car With Every Home?

Hovnanian (HOV) the big home builder, recently ran a sale on a number of its houses in selected areas across the country. According to The Washington Post "the largest discounts were on the most expensive homes, including a 3-bedroom condominium by the Hudson River in West New York, which has been reduced $240,000, or 22 percent, to $862,000." The program was called "The Deal of the Century". Since we are only seven years into the new century, it could be trumped at some time over the next 93 years.

Experts over at auto research firm Edmunds.com say that Ford (F) sales will be down double digits for September. No amount of cost cutting at the car company can save it if that keeps up.

If Hovnanian really want to move those high-end homes, it may want to offer a Lincoln, Jaguar, or Land Rover as an incentive. Ford seems to have plenty of inventory. Hovnanian could probably get them at a discount.

Douglas A. McIntyre

Posted on: October 2, 2007 – 9:27 am in Housing, ,

The Road To Madness: B of A Sets $400 Price Target On Baidu (BIDU)

Bank of America set a $400 price target on Chinese search engine company Baidu (BIDU), according to Minyanville. JP Morgan started the stock at "overweight". All of this noise has moved that shares up 7% today to $303 dollars and change, a 52-week high.

That puts Baidu shares up more than 200% over the last six months. The company now trades for more than 61 times sales. Over at Google (GOOG) that number is under 14x.

China madness is driving Baidu higher. Last July 25, the company announed revenue had slightly more than doubled to $53 million. Net income rose 147% to $19 million. The numbers are nice, but they demonstrate how small the revenue attached to the search market in China is.

Baidu already has competition from Google. And, it is likely that the US company is willing to spend hundreds of millions of dollars to move into first place in search in the world most populated country. That makes 61 times revenues seem fairly high.

Douglas A. McIntyre

Posted on: October 2, 2007 – 8:59 am in Charts, ,

Diebold’s Revenue Recognition Changes Ahead of Election Year (DBD)

Diebold Inc. (NYSE:DBD) has announced some changes to its revenue recognition practices deemed the "Bill & Hold" basis within its North America segment as part of ongoing discussions with the SEC.  Diebold will discontinue the use of bill and hold as a method of revenue recognition in both its North America and international businesses, and it is in the process of determining which method will used ahead.

What is interesting is that this represented 11% of consolidated revenues in 2006.  The company said that the timing in revenue recognition would impact previously reported cash by operating activities or its net cash position.  But that might not mean that there won’t be restatements to revenues.  Ultimately it will be a wash when smoothed out through time and will likely see this move into "new orders" or "backlog" instead of current revenues, but that 11% is worth noting.  We won’t say exactly how the revenue recognition will change because the company itself hasn’t decided.  Upon completing this review and potential restatement process, Diebold indicates that it will be in a position to provide updated revenue and earnings guidance for the full-year 2007.

Just last week there were reports that the company had disputed voting results in a local California election, and there are reports almost monthly regarding electronic voting reviews.  As we head into the 2008 presidential election you can bet long and hard that Diebold and its electronic voting machines will come under scrutiny and garner more media attention regarding the perils (and benefits) of electronic voting.

But there is an interesting issue surrounding Diebold, despite your political bias and despite your opinion of electronic voting.  Despite all the negative coverage and all of those coming to the defense of e-voting machines, Diebold stock may not perform the way you might guess in election years.  On an adjusted basis:

  • Shares closed out 2005 at $36.69 and closed out 2006 at $45.90.  That represents a 25.1% gain on an adjusted basis.
  • Shares closed out 2003 at $50.35 and closed out 2004 at $52.87, representing roughly a 5% gain on an adjusted basis.

Unfortunately, this stock sits at $45.61 as of Monday’s close and the 52-week trading range is $41.41 to $54.50. 

2008 is probably going to have more and more e-voting, although public challenges to this pose a risk according to the company.  In 2006 the company claimed more than 150,000 touch screen and optical scan units were used in 34 states for electronic voting.   It makes you wonder if the day will ever come that we can merely cast votes at ATM machines.  Diebold would probably like that, particularly as Diebold is a leader in manufacturing and servicing ATM’s as its major operations.

Jon C. Ogg
October 2, 2007

Posted on: October 2, 2007 – 8:11 am in SEC, , , , , , , ,

Stranger Than Fiction Story Of The Day: Chinese Reject US Sardines

The Chinese government has rejected 47 tons of  US sardines according to China’s official Xinhua News Agency. The little fish were shipped through Japan, and, according to the communists were "infected with disease-inducing bacteria," according to The Associated Press.

The report said sample inspections showed the sardines were infected with listeria monocytogens, a bacteria that can lead to vomiting, fever and blood poisoning, the AP added.

The ships bringing in the sardines were loaded with lead-painted toys and are heading back to the US destined for Mattel’s (MAT) headquarters in El Segundo, CA

Douglas A. McIntyre

Posted on: October 2, 2007 – 7:22 am in China,

NYSE Launches New Target Date ETF’s (TDD, TDH, TDN, TDV, TDX)

NYSE Euronext started trading five multi-asset class and multi-target date ETF’s referred to as TDAX Independence ETFs on NYSE Arca.  These ETF’s are designed to track the performance of the Zacks Lifecycle Indexes to draw exposure from three broad asset classes:

  • international equities,
  • domestic equities,
  • and fixed income.

These ETFs will be reconstituted and rebalanced annually, or quarterly when necessary, based on the Zacks methodology.  Here are the ETF’s: 

  • TDAX Independence 2010 ETF (NYSE:TDD)
  • TDAX Independence 2020 ETF (NYSE:TDH)
  • TDAX Independence 2030 ETF (NYSE:TDN)
  • TDAX Independence  2040 ETF (NYSE:TDV)
  • TDAX Independence  In-Target ETF (NYSE:TDX)

Jon C. Ogg
October 2, 2007

Posted on: October 2, 2007 – 7:08 am in ETF, , , , , , ,