Daily Archives: August 12, 2008

The New York Times Company Has A Dividend? (NYT)(GCI)(MNI)

New_york_times_logoCompanies oftentimes use dividends as a reward for patient investors so they can show their appreciation for sticking by them in good times and bad. In the case of the New York Times, the payout is designed to help investors forget about the company’s misery.
            

The Times is a great and sometimes flawed news organization. As a public company, it’s simply pitiful. About the only way the shareholders get any justice from the controlling Sulzberger family is through the dividend. Think of it like beggars getting crumbs off the king’s table. Now, even that pittance of 31 cents a share may be in jeopardy

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No Market For New Intel (INTC) “Atom” Chip

IntelIntel (INTC) says sales of its new "Atom" chips are off to a good start, although it is unclear what that means. The product line was created for a new generation of portable wireless devices which will sit in the crease between smartphones and PCs. The trouble is that such a crease probably does not exist.

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IPO FILING: US Power Generating Company

US Power Generating Company has just filed to come public via an initial public offering.  The wholesale power generation company in New York filed to sell up to $500 million in stock in the IPO, although no share count was offered nor were any price ranges. 

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52-Week Low Club (ALTU, SIL, CEG, COMV, EIX, ZINC, MIR, ZOLT)

Over the last three days it has been thin for 52-week lows, but a good market drop sure brings a reminder to the wall of shame.  Here are some of today’s key 52-week lows.

  • Altus Pharmaceuticals (NASDAQ: ALTU) tanked after Phase III cystic fibrosis tests failed to please on all fronts.
  • Apex Silver Mines (AMEX: SIL) fell nearly 40% after earnings disappointed.  At least they can use those mines for mushroom growth if they don’t find silver.

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Shorts Backing Out of Major Tech (DELL, MSFT, YHOO, AAPL, AMZN, QCOM, GOOG, INTC, CSCO)

If you think the long-gone uptick rule or naked shorting was important for financial stocks, you might wonder what was going on in technology stocks with short sellers.  In the major NASDAQ tech companies, there was a remarkable deterioration of the interest in short selling from just mid-July to late-July.  Below is a list showing the decrease in the short interest with two exceptions at the end:

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Applied Materials Investors Look to SunFab For Growth (AMAT)

Applied_materials_logoApplied Materials Inc. (NASDAQ: AMAT) is set to report earnings after the close.  What is odd is that the company might be given a total pass over this last quarter and perhaps even one quarter out now that so many chip stocks and chip cap-ex stocks have reported.  If you review the analysis and metrics below you’ll likely determine that the news isn’t expected to be great nor is it expected to be horrible.

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Michael Price Hates Citigroup (C), And Wachovia (WB)

Citi_logo_2Famed investor Michael Price, a man who has been beating up on poorly-managed companies for decades, is short Citigroup (C) and Wachovia (WB). He reasons that the worst of the credit crisis is not over yet.

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24/7 Wall St. Day-Trading Alerts (AMR)(VSE)

Ethanol and airlines saw significant moves on heavy volume.

According to VSInvestor.com, TurboChef (OVEN) also had a volume spike.

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Goldman Sachs: Analyst Calls Versus Technical Analysis (GS)

Goldman_sachs_logo_2Goldman Sachs Group Inc. (NYSE: GS) is feeling some pressure on analyst rating actions.  Many traders and investors have thought that Goldman Sachs would remain immune from the entire credit crunch, immune from trading losses, immune from write-downs, immune from private equity and more.  If you read analyst reports of today you will get a general feeling that this may not be the case. 

If you are a pure technician that likes to look at charts only, then you’ll really want to consider the coincidental junctures where fundamental analysis meets or fights with technical analysis.

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Carl Icahn Weighed Down By Investments (IEP, BIIB, MOT, YHOO, FDML)

Icahn_logo_2Icahn Enterprises LP (NYSE: IEP) is perhaps known more for its billionaire owner/founder Carl Icahn more than it is for its staff, team efforts, and even the enterprise’s name.  Icahn’s investment vehicle posted a loss for Q2-2008 as investment losses mounted.  The company lost $98.8 million versus a profit of $64.2 million year over year from Q2-2007.

So far, Icahn’s investments in Biogen-Idec (NASDAQ: BIIB), Motorola (NYSE: MOT), and Yahoo! (NASDAQ: YHOO) are only partly offset by the recent gains (unrealized) in ImClone Systems (NASDAQ: IMCL).  Being an activist investor made Carl Icahn a billionaire. That hasn’t made him immune to making wrong investment activist target picks.

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VeraSun Proves It: Size Matters (VSE, PEIX, AVR)

Verasun_logoVeraSun Energy (NYSE:VSE) reported second quarter 2008 earnings before the market opened today. The company’s revenues soared by 499% to $1.015 billion, compared with $170 million for the same period in 2007. Net earnings also increased to $24 million (EPS of $0.15) from $15 million a year ago. Analysts estimated earnings of $0.02 EPS on revenues of $924 million.

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24/7 Wall St. Most Overpaid CEO Of The Day: DealerTrack (TRAK) CEO Mark O’Neil

Batmobile512DealerTrack (TRAK) made a sharp cut to its financial forecast for the balance of the year. The firm also said its second-quarter profit fell 51 percent to $3.06 million, or $.07 per share, in the quarter ending June 30.

Mark O’Neil, DealerTrack’s CEO is doing just fine. Actually, he is doing remarkably well.

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Top Pre-Market Analyst Downgrades (AEP, DOV, GS, HWCC, ITT, LXK, TYC, UTHR, WYNN)

These are some of the key analyst downgrades or negative calls we are seeing this Tuesday morning:

  • American Electric Power (AEP) Cut to Neutral at JPMorgan.
  • Dover (DOV) Cut to Neutral at JPMorgan.
  • Goldman Sachs (GS) Cut to Hold at Deutsche Bank.
  • Houston Wire & Cable (HWCC) Cut to Neutral at Piper Jaffray.
  • ITT Corp. (ITT) Cut to Underweight at JPMorgan.
  • Lexmark (LXK) Started as Underperform at Credit Suisse.
  • Tyco International (TYC) Cut to Neutral at JPMorgan.
  • United Therapeutics Corp. (UTHR) Started as Sell at Piper Jaffray.
  • Wynn Resorts (WYNN) Cut to Neutral at JPMorgan.

Jon C. Ogg
August 12, 2008

Top Pre-Market Analyst Upgrades (ALK, AMR, AAPL, CAL, DAL, DELL, JPM, LDK, PENN, SCR, SNSS, LCC)

These are some of the top analyst upgrades and positive calls we are seeing this Tuesday morning:

  • Alaska Air (ALK) Raised to Overweight at JPMorgan.
  • AMR Corp. (AMR) Raised to Overweight at JPMorgan.
  • Apple (AAPL) Started as Outperform at Credit Suisse; reiterated Overweight at Lehman.
  • Continental Air (CAL) Raised to Overweight at JPMorgan.
  • Delta Air (DAL) Raised to Overweight at JPMorgan.
  • Dell (DELL) Started as Outperform at Credit Suisse.
  • JPMorgan Chase (JPM) Started as Outperform at Bernstein.
  • LDK Solar (LDK) Raised to Neutral at Piper Jaffray.
  • Penn National Gaming (PENN) Raised to Overweight at JPMorgan.
  • Simcere Pharmaceutical Group. (SCR) Started as Buy at Goldman Sachs.
  • Sunesis Pharmaceuticals Inc. (SNSS) Started as Buy at Piper Jaffray.
  • US Airways (LCC) Raised to Overweight at JPMorgan.

Jon C. Ogg
August 12, 2008

A Third Of US Homes Underwater?

For_sale_signMany Americans own more on their mortgages than their homes are worth. That number seems to be rising fast. Bloomberg writes that "Almost one-third of U.S. homeowners who bought in the last five years now owe more on their mortgages than their properties are worth, according to Zillow.com."

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Breaking Up Whole Foods (WFMI)

Whole_foodsNow that courts have let the FTC have another bite at the Whole Foods (WFMI) merger with Wild Oats, it plans to examine the deal within an inch of its life. If the agency proves that the marriage is indeed anti-competitive, it will be interesting to see how it plans to de-merge the company.

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Citigroup (C) And Bank Of America (BAC) Score A Victory In Parmalat Case — At Expense Of Ripped Off Shareholders

R218533_855025Back in January, the Supreme Court placed stringent limitations on scheme liability — the notion that investment banks and accounting firms that inadvertently helped companies commit accounting fraud could face civil liability for investor losses. In Stoneridge Investment Partners LLC vs. Scientific-Atlanta Inc. et al, the Supremes found that Scientific Atlanta, which is now owned by Cisco Systems (CSCO), could not be held responsible for its deals with Charter Communications that helped that company fraudulently improve the results it reported to investors.

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The Apple (AAPL) iPhone Is Broken

Steve_jobsReports have been increasing that the new Apple (AAPL) 3G iPhone is having trouble connecting to 3G networks and is plagued by dropped calls. Since a number of consumers waiting for the new version so they could use the new super-fast wireless internet, the disappointment with the iPhone is likely to grow.

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Oil Prices: The Trend Is Still Up

Tx00338coilwellgusherodessatexasposWith the price of crude down from over $145 to about $115, all of the talk is that the rising price of oil has been contained by falling demand and a better dollar. Almost every one of the dynamics which took oil prices up are gone now.The cost of things like gas can go back to "normal".

Actually, most of the reasons for higher oil still exist. There has been no increase in production. If consumption has dropped in China and other parts of the developing world that trend is temporary. The growth they will need to be large exporters over the next decade will still require the use of tremendous amounts of crude.

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In UBS (UBS) Break-Up, A Lesson For Merrill Lynch (MER) and Citigroup (C)

DataNo one has really worked out how to wall-off significant risk in one division of a financial services giant from divisions which are "safe" and operating smoothly.

UBS (UBS) skinned its investors alive again by posting a $329 million loss on another $5.1 billion in write-downs. The bank made it clear that these troubles came from its investment bank and that its wealth management business was secure. That has not mattered to worried clients who do business with the healthy part of the company. They want out of any risk the institution might have.

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