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Standard & Poor’s debt ratings group is raising a red flag which could cause some added skepticism over the Apollo-backed Hexion Specialty Chemicals’ acquisition of Huntsman Corp. (NYSE: HUN). S&P has lowered the credit ratings on Hexion Specialty Chemicals Inc. over litigation risks and over concerns of how the company will perform during the slower economy. S&P cites the risks from a judge’s ruling and over break-up fees of $325 million.
Daily Archives: November 4, 2008
S&P Throws Wrench In Hexion-Huntsman Deal (HUN)
Durect Files To Raise Cash (DRRX)
Durect Corporation (NASDAQ: DRRX) has just filed for a shelf registration to sell up to $75,000,000.00 worth of securities. This shelf will allow the company to sell any combination of common stock, preferred stock, debt securities, warrants, or units.
Blue Nile Shows Zero Visibility (NILE)
Blue Nile, Inc. (NASDAQ: NILE) has posted its quarterly earnings, and it looks like the results are probably not as bad as many would have guessed. The leading online retailer of diamonds and fine jewelry reported net income of $2.3 million, or $0.15 per share. This is down from $3.0 million, or $0.18, last year. Net sales were $65.4 million, a decrease of 2.9%, from $67.4 million.
The 52-Week Low Club (THC)(HLF)(HNT)(FCSX)
Tenet Healthcare (THC) Misses numbers and forecasts. Down to $2.52 from 52-week high of $6.88.
Herbalife (HLF) Bad outlook equals three-year low. Falls to $17.23 from 52-week high of $51.09.
Health Net (HNT) Nice eight-year low on bad earnings and forecast. The daily double. Sells off to $9.57 from 52-week high of $52.96.
FCStone Group (FCSX) Last quarter hurt by commodities prices. Plunges to $2.90 from 52-week high of $53.25.
Douglas A. McIntyre
Presidential Election Winner: Warren Buffett, Berkshire Hathaway, and Holdings (BRK-A, BRK-B,GS, BNI, WFC, GE)
Depending upon where your local elections are held, it looks like we are the half-way mark for most voting poll times today. What has been a 19- or 20- month ordeal is about to come to an end. If you trust the exit polls, it looks like Barack Obama is winning handily. The popular vote is much closer than the electoral vote count, but the electoral vote count is looking like a blowout victory in favor of Obama.
Most Overpaid CEO Of The Day: Trevor Fetter Of Tenet Healthcare (THC)
Shares in Tenet Healthcare (THC) fell 33% today to $2.72, a 52-week low, down from the period high of $6.88.
Why? Tenet’s adjusted loss of 6 cents per share was worse than the 3-cent loss expected on average by analysts, according to Reuters Estimates. Times may be rough for shareholders, but THC’s CEO Trevor Fetter is getting rich beyond most people’s wildest dreams.
Worst Corporate Press Release Of The Day: Chrysler
Leave it to Chrysler to follow up one of the worst months in its history with a press release about its new gas-guzzling Challenger.
Chrysler’s vehicles sales dropped 35% in October. The car company may go bankrupt, but it makes great sports vehicles that almost no one can buy.
Douglas A. McIntyre
Weak Dollars, Weak Presidencies
By John Tamny of RealClearMarkets
The late Hall of Fame football coach Bill Walsh used to say that the quarterback’s footwork often told the tale of games. If Walsh lacked access to the scoreboard, highlights and game statistics, he could tell which team did well by watching the quarterback’s footwork to the exclusion of everything else.
24/7 Wall St. Stock Volume And Price Alerts (OSIR)(AHII)(CIT)(ADM)(MRVL)
Osiris Therapeutics (OSIR) started the day with a big surge. More details.
Animal Health (AHII) may be one of the worst performing stocks today.
Financial giant CIT (CIT) may have one of its best days in months.
Thor’s RV Sales Follow Credit Off The Cliff (THO, WGO)
Thor Industries, Inc. (NYSE: THO) issued its preliminary sales and backlog guidance, and as the company sells RV’s you could have likely guessed that sales were down sharply. Thor said that for the quarter ended October 31, sales were roughly $439.2 million. This is down a sharp 42% from $763.7 million last year, and significantly under estimates.
Shipping Stocks Try To Find Safe Harbors (SFL, FRO, OSG, NAT, SB, SEA)
It is no secret that shipping stocks have been horrible performers of late. In fact, they have made the dismal performance seen at some trucking companies look like trucking was a blue chip sector.
A recent industry contact told us just how bad the shipping business has gotten. A ship leased in May for a China departure was leased at more than 10-times the day rate that the same ship leased for in mid-October. His comment was that it felt as though China was going to return to farming rather than building infrastructure and manufacturing facilities.
ADM Shows Issues in Corn vs. Crude (ADM, VSE, APC, HOC, PEIX, AVR)
This morning’s earnings report from Archer-Daniels-Midland (NYSE:ADM) offers proof that if a company is going to be in the ethanol business, it had better have a fallback position. ADM blew past analysts’ estimates of $0.69 per share and $15.98 billion in revenue, hitting EPS of $1.63 on revenue of $21.16 billion. Both figures are more than double those for the same period last year.
W&T Offshore: Good Quarter Even With Hurricanes (WTI)
Before the market opened this morning W&T Offshore (NYSE:WTI) reported third quarter EPS of $1.03 on revenue of $290 million. Analysts had been expecting EPS of $0.82 on revenue of $276 million. Backing out an unrealized gain on derivatives, EPS amounted to $0.79 for the quarter, compared with $0.53 for the same period a year ago.
Cliffs Natural Resources: Trouble in Mergertown (CLF, ANR)
The proposed merger between Cliffs Natural Resources (NYSE:CLF) and Alpha Natural Resources (NYSE:ANR) has run over more than a few bumps. Cliffs’ largest shareholder, Harbinger Capital, tried to acquire enough shares to block the deal. The big stumbling block, though, has been the deteriorating share prices of both companies. When the merger was announced in July, it was worth $10 billion. A couple of weeks ago, the value had dropped to $4 billion.
Daily Slaughterhouse: FCStone Group (FCSX)
FCStone Group, Inc. (NASDAQ: FCSX) is getting crushed after its update on liquidity, credit issues, and commodity volatility. The commodity risk management firm now expects to incur up to a $25 million pre-tax bad debt provision in the first quarter of fiscal 2009. You will see why this is now today’s worst performing stock of liquid issues.
Autodesk Not On Auto Pilot (ADSK)
Autodesk, Inc. (NASDAQ: ADSK) came out this morning with an updated guidance, and you can guess that the guidance was lowered like it has been at so many other established technology and software firms. The software maker sees earnings at $0.53 to $0.55 per share and revenue of $604 million to $607 million.
Top Pre-Market Analyst Upgrades (AER, AGU, CF, GVA, MFLX, OMRI, PM, PFG, TRA)
These are some the top pre-market upgrades from analysts we have seen with more than two hours until the market opens this Tuesday morning:
- AerCap (AER) Raised to Buy at Citigroup.
- Agrium (AGU) Raised to Buy at Citigroup.
- CF Industries (CF) Raised to Buy at Citigroup.
- Granite Construction (GVA) Raised to Neutral at Goldman Sachs.
- Multi-Fineline Electronix (MFLX) Raised to Buy at Needham.
- Omrix Biopharma (OMRI) Raised to Buy at UBS.
- Philip Morris International (PM) Raised to Outperform at Credit Suisse.
- Principal Financial (PFG) Raised to Market Perform at FBR.
- Terra Industries (TRA) Raised to Buy at Citigroup.
Jon C. Ogg
November 3, 2008
Dark Star Nouriel Roubini: China Will Fall Apart
Economist Nouriel Roubini has as dark a vision of the economy as any man with an IQ over 140.
His latest prediction is that China will fall apart. Not much of a prediction given that the rest of the world is in a recession worse than the one in 1974.
Intel’s (INTC) New Chip: When Is Enough Enough?
Intel’s (INTC) new Intel Core i7 chip is a miracle of modern science. It is much faster than all of the company’s older multi-core chips. And it uses less energy than some but not all of them. Over time, in volume, it will probably cost less than past products.
The continuing advance of chip capacity does raise the issue of when PC and server users come to the point where the additional computing power does not make much difference.
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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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