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The Association of National Advertisers has already indicated to the Justice Department that it is bitter about the planned link-up which would allow Google (GOOG) to sell part of Yahoo!’s (YHOO) search inventory. The ANA argues that since the two companies have about 85% of the US search market between them, they will use their partnership to raise rates. The logic has the benefit of making sense. Firms do not form alliances to lose money.
Daily Archives: September 8, 2008
The Justice Department: Google (GOOG) Looks Like Microsoft (MSFT)
4 Chart Breakout Candidates (NTRS, WMT, AMTD, CHS)
Today was a strange day in the markets because of the Uncle Sam bailouts, but there are many stocks which showed activity on their charts exhibiting breakout or reversal patterns. Whether they continue is something else entirely. We would caution that with the markets also being this strong there are many stocks in our screening universe that looked up much more than they should have been.
Dunkin’ Donuts Kicks Starbucks (SBUX) While It Is Down
Dunkin’ Donuts plans to double its US stores to 15,000 by 2020. The management at the inexpensive coffee shop chain must have a crystal ball or a very good psychic. Not many companies know their plans so far out.
Dunkin’ Donuts appears to think it can join the ranks of all the other companies trying to take business from Starbucks (SBUX). McDonald’s (MCD) has been at the top of that list, and now they won’t be so lonely.
Biodel Trades Down Close To Net Asset Value (BIOD)
If you just read headlines on Biodel Inc. (Nasdaq: BIOD) this morning, you would have thought the news coming out of the company was either good or just neutral. Today was the exact opposite, and was an example of how dangerous it can be in merely glancing over data in biotech and emerging drug companies. Biodel’s pivotal Phase III trials for VIAject met the primary endpoint of non-inferiority and results which demonstrated statistically significant reductions in hypoglycemic events and weight gain in Type 1 and 2 diabetes patients. But there are problems with the data which were confusing.
Michael Dell Buying More Stock (DELL)
There is some more insider buying going on over at Dell Inc. (NASDAQ: DELL). Chairman, CEO, and founder Michael Dell has just last week added to his position in open market stock purchases. In an SEC filing today, he said he purchased 3.5 million shares at an average price of $20.4214 on September 4 and another 1.378 million shares at an average of $20.6705 on September 5. Total it all up and you are right at another $100 million of common stock. Last time Michael Dell bought $100 million, shares rallied. Tonight they are up about 2% in after-hours trading from the $20.17 close.
Jon C. Ogg
September 8, 2008
The 52-Week Low Club 9/8/2008 (FRE)(FNM)(BIOD)(AUTH)(CEGE)
Freddie Mac (FRE) is one sale at $.65. A day-trader’s dream, down from a 52-week high of $65.88.
Fannie Mae (FNM) Almost a better deal. Sells off to $.65 from 52-week high of $68.60.
Biodel (BIOD) Concerns over drug trial. Drops to $4.34 from $25.69.
Authentec (AUTH) Revises guidance. Plunges to $2.40 from 52-week high of $19.81.
Cell Genesys (CEGE) Still hurting a week after drug trial news. Slips to $.67 from 52-week high of $4.67.
Douglas A. McIntyre
Newsflash! Citi and Lehman Downgrade Fannie And Freddie
The Fly on the Wall reported this morning that "Lehman downgraded shares of Fannie Mae (FNM) and Freddie Mac (FRE) to Equal Weight from Overweight after the U.S. government said it will place Fannie and Freddie into a conservatorship. Citigroup also downgraded shares to Sell from Buy following the federal government’s plan to place the GSEs into conservatorship as they believe both Fannie and Freddie will no longer be managed to maximize common shareholder returns."
Well isn’t that wonderful? Lehman and Citi were telling investors to buy shares at $7 last week and now the stock is at $1 — and they’re kind enough to let us know that we should sell now that they aren’t being run for the benefit of shareholders. That kind of hindsight is truly priceless, or at least valueless. Given that Fannie was presumably being run for the benefit of shareholders all the way down from $68 to $1 (and hopefully 0), it may be interesting to see what happens now that shareholders aren’t the top priority.
Midwest Bank Responds to Market Concerns (MBHI)
Midwest Banc Holdings, Inc. (NASDAQ: MBHI) has issued a response to dimish fears about its holdings of Fannie Mae and Freddie Mac. This was in direct response to news surrounding the US government takeover of Freddie Mac and Fannie Mae. The bank announced that under all regulatory guidelines
Midwest Bank & Trust Company it remains well-capitalized.
UAL Confusion Clarification (UAUA)
UAL Corp. (NASDAQ: UAUA) shares were halted after what seemed to be a sudden and massive mystery stock tank to most observers. There were erroneous reports circulating that the legacy airline carrier was going to file for bankruptcy protection which sent shares south this morning. This stock was trading at $12.00 most of the morning and suddenly tanked to under $6.00 before recovering. So far this morning after the halt we have seen reports out of at least two major news sources such as CNBC and Dow Jones. Shares were halted at 11:06:57.
ETF Launch: Japanese REIT ETF (NTRS, JRE)
Northern Trust (NASDAQ: NTRS) has announced the launch today of the first exchange traded fund (ETF) that is dedicated to the Real Estate Investment Trust sector in JAPAN. The underlying stock holding this REIT ETF will be comprised entirely of the components in the Tokyo Stock Exchange REIT Index. NETS(TM) Tokyo Stock Exchange REIT Index Fund (Japan) now trades on the NYSE under the "JRE" stock ticker.
Reporting Oil Reserves: More Information or More Noise? (XOM, CVX, COP)
The SEC has proposed new rules that would permit oil and gas companies to report possible and probable reserves as well as proved reserves when completing their annual 10-K. According to the agency, more information should help investors assign a value to oil and gas company stocks. Ah, if it were that simple. The proposed rules do not require a company to report total reserves, they just permit it. Nor do the rules specify precisely how the estimate of total reserves would be derived. Instead, companies may choose the "deterministic" method (an educated guess prepared by experts) or the "probablistic" method (an educated guess using computer simulation).
Electronic Arts Defines Financial Delays To Harry Potter Game (ERTS, TWX)
Electronic Arts Inc (NASDAQ:ERTS) has confirmed the release of the Harry Potter video game, although this might not be good as you’d think for a "feed me now" attitude on Wall Street. The video game giant and Time Warner Inc.’s (NYSE: TWX) Warner Bros. Interactive Entertainment will issue the game for "Harry Potter and the Half-Blood Prince™" video game next summer. This puts it essentially alongside the Warner Bros.’ film. on J.K. Rowling’s sixth Harry Potter book.
5 Leveraged Financial Winners In Fannie/Freddie Seizure (LEH, AIG, NLY, CIM, WM)
This morning we are seeing a massive gain on the heels of the US government seizure tied to Fannie Mae and Freddie Mac. Those shares are halted and Warren Buffett has just called these virtual call options. What we wanted to see was which actively traded financial stocks are really going to benefit the most from the US stepping up to the plate and guaranteeing the GSE debts and obligations. While the answer to "Who Wins?" is really EVERYONE (except FNM/FRE common holders), there are several stocks that will be key to watch as this could be yet another game saver for them as they are still somewhat leaders and most leveraged compared to their top peers.
Top Pre-Market Analyst Downgrades (AZO, CX, FNM, ISIL, MHK, NVDA, PETM, POR, TSCO, UST)
These are some of the larger impact calls from analysts with downgrades or negative calls we are seeing this Monday morning with more than two hours to the open:
- AutoZone (AZO) Cut to Neutral at Goldman Sachs.
- Cemex (CX) Cut to Hold at Deutsche Bank.
- Fannie Mae (FNM) and Freddie Mac (FRE) Cut to Sell from Buy at Citigroup.
- Intersil (ISIL) Cut to Neutral at UBS.
- Mohawk Industries (MHK) Cut to Underweight at JPMorgan.
- NVIDIA (NVDA) Cut to Sell at UBS.
- PetSmart (PETM) Cut to Neutral at Goldman Sachs.
- Portland General Electric (POR) Cut to Neutral at Goldman Sachs.
- Tractor Supply (TSCO) Cut to Neutral at UBS.
- UST (UST) Cut to Neutral at UBS.
Jon C. Ogg
September 8, 2008
Top Pre-Market Analyst Upgrades (CTRP, GS, LEH, MRVL, NLC, NUVA, PRU, RF, RIG, USG, ZION)
These are some of the top early bird analyst upgrades and positive calls we are seeing this Monday morning with more than two hours to the open:
- Ctrip.com (CTRP) Started as Outperform at Credit Suisse.
- Goldman Sachs (GS) Raised to Buy at Merrill Lynch.
- Lehman Brothers (LEH) Raised to Neutral at Merrill Lynch.
- Marvell Tech (MRVL) Raised to Outperform at Morgan Keegan.
- Nalco Holding (NLC) Raised to Neutral (from Sell) at Goldman Sachs.
- NuVasive (NUVA) Started as Buy at Piper Jaffray.
- Prudential Financial (PRU) Raised to Outperform at FBR.
- Regions Financial (RF) Raised To Market Perform at FBR.
- Transocean (RIG) Raised to Hold from Sell at Deutsche Bank.
- USG (USG) Raised to Neutral at JPMorgan.
- Zions Bancorp (ZION) Raised to Outperform at FBR.
Jon C. Ogg
September 8, 2008
Merrill Lynch’s (MER) Trading Lock Of The Week: Sell Merrill Lynch
Merrill Lynch (MER) came out with a clever bit of research this morning. As financial stocks take a sharp spike up due to the Fannie Mae (FNM) and Freddie Mac (FRE) bail-out news, use the bounce to sell shares in crummy financial firms.
According to MarketWatch, "The broker said traders might want to look for shorter-term "knee-jerk" reactions to the announcements, but rallies in the sector should still be used as opportunities to sell into strength."
Starbucks (SBUX) Endorses McCain
Starbucks (SBUX) will begin offering a one-sheet newspaper that will cover the key issues which will have to be addressed by the candidates for president. The product is called the Good Sheet,
The paper will be produced by "Good, which was founded two years ago, has an editorial emphasis on philanthropy and activism."
Now people can come to the chain and read about energy policy, health care costs, and defense spending.
Why OPEC Should Cut The Supply Of Crude
T. Boone Pickens is trying to pay off OPEC to cut production. That should raise oil prices and help his campaign to move US energy sources to wind and natural gas. Then Pickens can make money on those huge windmill fields that he owns down it Texas.
Even a billionaire like Pickens does not have the cash to change OPEC’s mind. If the cartel has any sense it will cut production to make money on higher oil prices. Who would pass up a cash windfall which is nearly guaranteed?
If OPEC does whittle down supply, it will be a great favor to the average US citizen.
Thwarting The Google (GOOG) Deal With Yahoo! (YHOO)
The Association of National Advertisers, which includes big marketers like GM (GM), Procter & Gamble (PG), and Wal-Mart (WMT), argues that Google (GOOG) should not be allowed to sell advertising for Yahoo! (YHOO)
The ANA’s position has the benefit of being right, even if Microsoft (MSFT) agrees with it.
Replacing All The Bank And Brokerage CEOs Won’t Save The System (C)(MER)(AIG)(FRE)(FNM)(WM)(WB)
Fannie Mae (FNM) and Freddie Mac (FRE) had their CEOs pushed out by the government this weekend. They will get fat pay packages and can go on to live in massive homes and become high-paid consultants. The head of Washington Mutual (WM) was keelhauled yesterday. He was replaced by the head of commercial mortgage broker Meridian Capital Group.
The board and CEO of Wachovia (WB) are about to bring in a new CFO, hoping to get Carlyle Group’s David Zwiener to take the job. He is likely to get a nifty pay package for signing on to a sinking ship.
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Today’s top tickerspy Indexes Platinum and Pall... +6.6% Uranium Stocks +6.4% Modular Building ... +5.7% Manufacturing Equ... +5.7% Discrete Semicond... +5.5% 
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