Daily Archives: August 20, 2008

The 52-Week Low Club 8/20/2008 (FNM)(FRE)(MNI)(CC)(NVTL)

Sad_clownFannie Mae (FNM) Fear the mortgage firm will fail. Drops to $3.95 from 52-week high of $70.57.

Freddie Mac (FRE) Ditto. Sells down to $2.95 from 52-week high of $67.20.

McClatchy Newspapers (MNI) Newspaper firm turns in bad July ad revenue. Drops to $3.53 from 52-week high of $23.58.

Circuit City (CC) Market does not think retailer can find a buyer. Dips to $1.63 from 52-week high of $11.55.

Novatel Wireless (NVTL) Turns in a bad quarter. Collapses to $6.05 from 52-week high of $27.20.

Douglas A. McIntyre

Posted on: August 20, 2008 – 2:49 pm in HI/LOW, , , , ,

Aladdin & Vector Capital, Another Questionable Deal (ALDN, CREL, CAPA)

Aladdin_logoAladdin Knowledge Systems (NASDAQ: ALDN) has confirmed that it received a confidential and unsolicited proposal from private equity firm Vector Capital to acquire the company.  The company notes that Vector’s proposal includes a potential alternative transaction with Vector’s purchase of Aladdin’s DRM business…. "potentially combined with a repurchase by Aladdin of the shares of Aladdin purchased by Vector Capital, and the sale by SafeNet, Inc., a Vector affiliate, of its authentication business to Aladdin."  What is very interesting is that while this would be a small deal, you can see below how this deal will come under question by many just as fast as it was announced.

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Posted on: August 20, 2008 – 11:54 am in Mergers and Buy Outs, Private Equity, Software, , ,

Oil Services Better Insulated Than Most Energy Sub-Sectors (RIG, DVR, PDS, WFT, NOV, BJS, BHI, BAS, HAL, SLB, SII)

Oil_well_logo_2_2Oil Services are deemed by many market pundits as being more insulated than integrated oils, refiners, and other sub-sectors of the energy sector for oil and gas.  While these frequently move in-line with oil prices and with the sector, they are expected to have much more stable earnings than counterparts elsewhere in the sector.  Many of the oilfield services shares are down nearly 20% or more along with a major drop in oil prices. Transocean’s shares are holding at less than 1% down from 52-week highs, probably on the strength of the company’s bookings.

Transocean Inc. (NYSE: RIG) has given back nearly one-quarter of its value from its highs.  The worst performer among the larger players was CalDive (NYSE:DVR), down 43% from its 52-week high. Precision Drilling Trust (NYSE:PDS) is down about 30%, Weatherford (NYSE:WFT) is off about 27%, and National Oilwell Varco (NYSE:NOV) and BJ Services (NYSE:BJS) are down about 25%. A host of others are off around 20%: Baker Hughes (NYSE:BHI) at 22%; Basic Services (NYSE:BAS) at 21%; Halliburton (NYSE:HAL) at 20%; and Schlumberger (NYSE:SLB) and Smith International (NYSE:SII) are off about 19%.

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Posted on: August 20, 2008 – 11:17 am in Oil & Gas, , , , , , , , , , ,

24/7 Wall St. CEOs Who Should Work For $1 Society: Schwartz Of Sun (JAVA)

R218533_855025CEOs at troubled companies often set their salaries at $1 a year. Lee Iaccoca did it at Chrysler and Steve Jobs did the same at Apple (AAPL). The gesture allows the poor wretches who have been laid off and the impoverished shareholders believe that the commander-in-chief is willing to make a sacrifice

One CEO who should certainly step his pay down to a buck is Jonathan Schwartz, CEO of "dead man walking" hardware company Sun Microsystems (JAVA).

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Posted on: August 20, 2008 – 10:01 am in Management Change, , ,

24/7 Wall St. Day Trading Alerts (NVTL)(STP)(JKHY)

HouseVSInvestor.com posted several day-trading alerts.

Novatel (NVTL) dropped sharply on very heavy volume after posting poor results.

Suntech (STP) and several other solar stocks made big moves on STP results.

Jack Henry & Associates (JKHY) dropped hard on a disappointing earnings report.

Douglas A. McIntyre

Posted on: August 20, 2008 – 9:05 am in Research, , ,

Goldman Sachs (GS) Cuts All Bank Estimates But Its Own (JPM)(MER)(C)(MS)

DataIt is not hard to blame Goldman Sachs (GS) for failing to cut its own earnings estimates for the next quarter and the full year. That kind of action by analysts is verboten. Rating yourself is not allowed.

Goldman did take a pollaxe to its peers, chopping Citigroup (C), Morgan Stanley (MS), JP Morgan Chase (JPM), and Merrill Lynch (MER).

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Posted on: August 20, 2008 – 8:50 am in Research, , , , ,

VeriFone’s Long Journey on the Rehab Trail (PAY)

Verifone_imageWe noticed a huge surge in activity over at Volume Spike this morning in shares of VeriFone Holdings Inc. (NYSE: PAY). You can thank the company finally giving a positive outlook and its cleaned-up accounting mess that has been a gorilla on its neck.  Verifone makes the point-of-sale terminals used to process credit and debit card transactions which you have likely seen at grocery stores or many other retail outlets.  As you read on, you might even determine that the worst is close to being finished.

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Posted on: August 20, 2008 – 8:38 am in Financial Stocks, Retail, SEC, Shareholder Issues, Turnarounds,

Goldman Sachs Cans Department Stores (M, KSS, DDS)

Goldman_sachs_logoGoldman Sachs is out with a negative call this morning that is a downgrade in the department stores section of the retail sector.  The firm believes that gains of some 30% while companies are still warning ahead or are still very cautious has been too much of a share run-up.  The drop in oil prices may also not be sustainable as Goldman Sachs reiterated its oil target of $149 per barrel.  It also blames a lack of sales being the big issue.  Macy’s (NYSE: M) and Kohl’s (NYSE: KSS) were both downgraded to Neutral from Buy.  Macy’s shares are down about 2.3% at $19.85 and Kohl’s is down about 1.8% at $47.95 in pre-market trading.  We have seen no indications nor any trades in Dillard’s (NYSE: DDS).

JON C. OGG
August 20, 2008

Posted on: August 20, 2008 – 8:07 am in Analyst Calls, Retail, , ,

Goldman Sachs (GS): Oil Headed Back Toward $150

Tx00338coilwellgusherodessatexasposGoldman Sachs (GS) says oil will be back at $149 at the end of the year.

The investment bank reiterated its year-end price forecast of $149 a barrel for U.S. crude oil, and said strong fundamentals were a more important factor than a strengthening dollar, according to Reuters.

Douglas A. McIntyre

Posted on: August 20, 2008 – 7:14 am in Oil & Gas,

24/7 Wall St. Most Overpaid CEO Of The Day: Novatel (NVTL) CEO Peter V. Leparulo

95129cNovatel (NVTL) managed to post guidance that was below expectations. Expectations must have already been poor. The company’s stock is off 60% over the last year, and should fall further today.

For the third quarter, Novatel expects a loss of $.03 to breakeven per share, on revenue of $80 million to $85 million. According to Reuters, "Analysts were expecting earnings of 18 cents a share, on revenue of $96.2 million, for the period."

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Posted on: August 20, 2008 – 6:56 am in Management Change,

Early-Bird Analyst Upgrades (DLTR, HTX, KLAC, ORLY, TSRA, AUY)

These are some of the early analyst upgrades or positive calls we are seeing this Wednesday in early pre-market hours:

  • Dollar Tree (DLTR) Raised to Buy at S&P.
  • Hutchinson Telecom (HTX) Raised to Buy at Citigroup.
  • KLA-Tencor (KLAC) Raised to Overweight at HSBC.
  • O’Reilly Automotive (ORLY) Raised to Overweight at JPMorgan.
  • Tessera Technologies (TSRA) Raised to Outperform at FBR.
  • Yamana Gold (AUY) Raised to Outperform at RBC.

JON C. OGG
August 20, 2008

Posted on: August 20, 2008 – 6:39 am in Analyst Calls, , , , , ,

Early-Bird Analyst Downgrades (AAP, ALNY, COMV, DISH, DPS, HAS, NATI, NVTL, STEL)

These are some of the early analyst downgrades or negative calls we are seeing this Wednesday in early pre-market hours:

  • Advance Auto Parts (AAP) Cut to Neutral at JPMorgan.
  • Alnylam Pharma (ALNY) Started as Underperform at Leerink Swann.
  • Comverge (COMV) Cut to Neutral at Broadpoint Capital.
  • DISH Network (DISH) Cut to Market Perform at Bernstein.
  • Dr. Pepper Snapple (DPS) Cut to Neutral at UBS.
  • Hasbro (HAS) Cut to Underperform at BMO Capital.
  • National Instruments (NATI) Cut to Neutral at Credit Suisse.
  • Novatel Wireless (NVTL) Cut to Sell at Piper Jaffray.
  • StellarOne (STEL) Cut to Underperform at Baird.

JON C. OGG
August 20, 2008

Posted on: August 20, 2008 – 6:32 am in Analyst Calls, , , , , , , , ,

Microsoft Expanding Linux Efforts With Novell (MSFT, NOVL)

Novell_logoMicrosoft_logo_2Novell Inc. (NASDAQ: NOVL) got some decent news after Microsoft (NASDAQ: MSFT) expanded its Linux support relationship for interoperability.  If it seems that Microsoft is warming up to Linux and open source, it is at least evidence that the company realizes it has to expand its interoperability in today’s world.  Novell will receive $100 million to provide additional resources, training, and support for companies and organizations using mixed-source IT operations.

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Posted on: August 20, 2008 – 6:16 am in Software, ,

GM (GM): More Incentives Mean More Job Cuts

Gm20jpeg20imageGM (GM) has decided to do two things to stimulate sales. One is to offer aggressive incentives on its new cars. The other is to offer substantial warranties on its used cars. Between the initiatives, GM is likely to move inventory, but the cost may be high enough so the the remedy poisons the patient.

GM’s US sales are running about 20% behind the pace of last year. The company cannot survive that much longer, so priming the customer pump may be its only alternative.

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Posted on: August 20, 2008 – 5:41 am in Autos,

Saving Fannie Mae (FNM) And Freddie Mac (FRE) Shareholders

FedA share of Fannie Mae (FNM) goes for $6. Freddie Mac’s (FRE) shares are at just above $4. The market caps of the two companies combined is only about $9 billion.

The most recent estimate of the balance sheet and earnings problems at the two agencies is that they will have to raise $100 billion. The quasi-governmental operations have $223 billion in bonds maturing on September 30.

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Posted on: August 20, 2008 – 5:25 am in Housing, ,

HP’s (HPQ) Next Quarter Will Not Be Pretty

PcHewlett-Packard’s (HPQ) last quarter was hailed as a testament to superior management and intelligent diversification. Much of the growth came from overseas, but that is supposed to be a hallmark of the new American corporation.

Net revenue rose 10% to $28 billion. Operating profit was up 20% to $2.5 billion. But, some of HP’s core businesses barely grew at all.

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Posted on: August 20, 2008 – 4:56 am in Earnings Warning,

Is Rupert Murdoch Overpaid? Of Course, But Not Really (NWS)

Cammonopoly_wideweb__430x3250News Corp. (NWS) chairman and CEO Rupert Murdoch’s pay fell 14% for 2008 — before you get out the Kleenex, consider that it still totaled $27.5 million.

Given that shares of the stock is off nearly 35% year to date, investors might wonder whether Murdoch is overpaid at that price. Surely they could have gone and last 65 cents on the dollar on their own. And they’re right to wonder about that and, if you think Rupert Murdoch is overpaid, you’ll get no argument from me.

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Posted on: August 20, 2008 – 4:41 am in Corporate Governance,

China’s Economic Stimulus Package Can’t Be Real

China_2The term "China economic stimulus package" has to be an oxymoron.

NBC recently made the point that China’s economy can no longer be driven hard by exports. They have become too expensive as labor costs and commodities have risen. Some industries are actually cutting jobs.

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Posted on: August 20, 2008 – 4:38 am in China

Media Digest 8/20/2008 Reuters, WSJ, NYTimes, FT, Bloomberg

NewspaperAccording to Reuters, US inflation rose as the housing market continued to be troubled.

Reuters reports that Hewlett-Packard (HPQ) beat Wall St. expectations.

Reuters reports that Ebay (EBAY) will drop some of its listings fees.

Reuters reports that Fed officials said they must be ready to curb inflation.

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Posted on: August 20, 2008 – 2:47 am in Press Digest, , , , , , , , ,

Asia Markets 8/20/2008 Shanghai Up Over 7% (LFC)(CN)

ChinaShares in Asia were mixed while the Shanghai Composite rose 7.6% to 2,523.

The Nikkei was down .1% to 12,852. Bridgestone fell 4.2% to 1860 Casia was off 3.7% to 1229.

The Hang Seng rose 1.9% to 20,878. China Life (LFC) fell 1.2% to 37.35. China Netcom (CN) fell 2.1% to 20.90.

Data from Reuters.

Douglas A. McIntyre

Posted on: August 20, 2008 – 2:20 am in International Markets, ,