05 – December – 2008 – 24/7 Wall St.

Daily Archives: December 5, 2008

24/7 Wall St. Hooks up with Twitter & All Things Digital Couldn’t be Happier

Correction: In error, 24/7 Wall St. sighted Walter Mossberg as the author of the Twitter piece. The article, “Birds of a Feather Twitter Together,” was authored by Katherine Boehret. Our apologies to Ms. Boehret for the oversight. Thanks to Mr. Mossberg for bringing this to our attention.

Yesterday, 24/7 Wall St. announced that it would begin using Twitter to pool all of its news content into one place and encouraged our readers to check it out. At almost the exact same moment, like a sign from the heavens, Katherine Boehret from All Things Digital’s Mossberg Solution announced that Twitter was a new service that needed to be looked at. Ms. Boehret noted that "Twitter does a good job of giving people simplified news about others and the world around them. If you’re often in a rush, Twitter can be a great resource for fast information." She went on to say its easy to use, its real-time, and it makes online news simpler when you’re on the go. The following is yesterday’s announcement and excerpts from Boehret’s piece.

24/7 Wall St.’s Twitter Announcement

As many of our readers know, 24/7 Wall St. writes copy for a number of sites including our own sites and those of our partners. Our own sites include 24/7 Wall St., Voume Spike Investor, and BioHealthInvestor. Some of our partner sites include AOL Money & Finance, Marketwatch, MSN, Stockhouse, BloggingStocks, and Huffington Post.

As a result of the somewhat fractured nature of our editorial process, we frequently don’t have the opportunity to share all of our stories with the regular readers of 24/7 Wall St. We aim to change that.

Posted on: December 5, 2008 – 9:13 pm in Uncategorized

Toyota (TM) Cuts Deeper In North America

While the US car companies struggle to survive and GM (GM) and Chrysler say they may not make it until the end of the year, even mightly Toyota is bleeding.

The Japanese car company will gear down production in the US as its sales continue to fall, many months by 30% or more.

Posted on: December 5, 2008 – 8:01 pm in Autos, GM, TM

Cramer’s Week of Shotgun Merger Proposals (RTP, AA, BHP, FCX, ITW, MTW, NKE, UA, PFE, AGN)

Jim Cramer came on CNBC’s MAD MONEY this week with several ideas for shotgun marriage merger proposals he wanted to throw out there where he was calling for more mergers from the cash rich companies.

Cramer’s Friday evening picks may have gotten some interest last year or even earlier this year, but these involve two companies which have already had their fair share of merger issues and non-events this year on top of the commodity bubble bursting. Cramer believes that Rio Tinto (NYSE: RTP) should buy Alcoa (NYSE: AA) before the antitrust powers are able to actually block mergers. Cramer also thinks BHP Billiton (NYSE: BHP) should go buy Freeport-McMoRan (NYSE: FCX) now that the forced selling has taken the stock down to $16.00 to take over the copper and minerals mining giant.

Posted on: December 5, 2008 – 6:52 pm in Cramer, Mergers and Buy Outs, AA, AGN, BHP, FCX, ITW, MTW, NKE, PFE, RTP, UA

Warren Buffett May Have Constellation Regardless (CEG, BRK-A)

We have had many inquiries this week over this EDF offer for Constellation Energy Group Inc. (NYSE: CEG) now that EDF in France gave a competing bid versus that of Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK-A) unit MidAmerica. There is more than one way this can go, but the data suggests that Warren Buffett and friends are getting the last laugh here.

Posted on: December 5, 2008 – 5:22 pm in Buffett, Mergers and Buy Outs, Nuclear, Utilities, BRK-A, BRK-B, CEG

The 52-Week Low Club (OREX)(RFMD)(BRY)(CLR)(AES)

Sad_clown_2 Orexigen Therapeutics (OREX) Trouble with mid-stage drug trials. Drops to $1.55 from 52- week high of $15.63.

Rf Microdevices (RFMD) Cuts guidance sharply. Falls to $.74 from 52-week high of $6.

Berry Petroleum (BRY) Hit by brokerage downgrade. Sells down to $6.50 from 52-week high of $62.15.

Continental Resources (CLR) Crude oil industry supplier in falling market. Dips to $13.01 from 52-week high of $83.81.

AES (AES) Company being accused of fraud. Down to $5.80 from 52-week high of $22.54.

Douglas A. McIntyre

Posted on: December 5, 2008 – 3:56 pm in HI/LOW, AES, BRY, CLR, OREX, RFMD

Mortgage Bankers Says Delinquencies Rising, Set New Record

The Mortgage Bankers Association released their numbers for delinquencies on home loans at the end of the third quarter.

The group reported that "the delinquency rate for mortgage loans on one-to-four-unit residential properties stood at 6.99 percent of all loans outstanding at the end of the third quarter of 2008, up 58 basis points from the second quarter of 2008, and up 140 basis points from one year ago on a seasonally adjusted basis."

Posted on: December 5, 2008 – 1:33 pm in Housing

Chrysler Hires Bankruptcy Attorneys

Ford1 According to a report in The Wall Street Journal, "Chrysler hired the prominent law firm of Jones Day several weeks ago as bankruptcy counsel, a move that suggests the auto maker is preparing for imminent financial failure should its efforts to persuade Congress for federal rescue funds fall short."

Douglas A. McIntyre

Posted on: December 5, 2008 – 1:25 pm in Autos

New Changewave Survey Shows Economy Going To Heck

Changewave, the research firm, is out with its survey of 3,029 business people.

Some highlights:

"More than half of respondents (51%) project that their company sales will come in Below Plan for the 4th Quarter 2008 – 16-pts worse than the previous quarter. Only 11% say their company sales will come in Above Plan – a 7-pt decrease from previously."

Posted on: December 5, 2008 – 11:52 am in Economy

10 CEOs To Go In 2009: James Tobin of Boston Scientific (BSX)

Generally speaking, we do not like to bring CEOs back from a past "list of CEOs to go." James Tobin of Boston Scientific Corp. (NYSE: BSX) has somehow managed to hang on to his job and continue to destroy shareholder value. This is not just a poor job on his part, but it is becoming a poor job on part of the board of directors who have a fiduciary duty to do what is best for the company. Tobin deserves no reprieve for even more reasons than we outlined before.

Posted on: December 5, 2008 – 11:04 am in Management Change, Medical, BSX, JNJ, MDT

10 CEO’s To Go In 2009: Antonio Perez of Eastman Kodak (EK)

Generally speaking we do not like resurrect candidates for CEOs to go. We first named Antonio Perez of Eastman Kodak Co. (NYSE: EK) in late 2006 as a CEO to go in 2007. It looked like he was going to get the ship off its side and sailing again, but that time looks like it has come and gone. The economy is not going to help the company out at all, but Kodak has contraction issues that go far deeper than the consumer spending habits of America and the world. It really looks like Perez is not going to be able to fix the situation.

Posted on: December 5, 2008 – 10:42 am in Consumer Goods, Management Change, Turnarounds, EK

Cutting CapEx Still Popular (VQ, XOM, CVX)

It’s no longer news when an oil E&P company cuts its capex budget. As oil prices fall, profits are squeezed and companies rein in discretionary spending, of which capex is a principle component. So, it’s no surprise that a small-cap E&P outfit like Venoco (NYSE:VQ) announces a 25% cut in capital spending for the coming fiscal year.

Posted on: December 5, 2008 – 10:39 am in Oil & Gas, CVX, VQ, XOM

Evergreen Energy’s Wishful Thinking Announcement (EEE)

So, your company’s stock is trading at nearly 90% below its 52-week high, and estimates for the current quarter point to a continued loss. What do you do? If you’re Evergreen Energy (NYSE: EEE), you adopt a poison pill.

Posted on: December 5, 2008 – 10:26 am in Alternative Energy, Oil & Gas, EEE

Fitch Ratings Does Not Like the French Bid for Constellation Energy (CEG)

The recent bid by France’s Electricite de France (EDF) for half of the nuclear business of Constellation Energy (NYSE:CEG) caused Fitch Ratings to downgrade the company’s Issuer Default Ratings. The long-term IDR is now ‘BBB’, and the short-term rating is ‘F2′.

Posted on: December 5, 2008 – 10:21 am in Analyst Calls, Mergers and Buy Outs, Nuclear, Utilities, BRK-A, CEG

10 CEOs To Go In 2009: Mary Sammons of Rite Aid (RAD, WAG, CVS)

Reverse stock split or not, Rite Aid Corporation (NYSE: RAD) has been under the gun and its future is far from certain. There was a period in time in 2007 when it looked like the investor boat was going to be turned for the better. But that is in the past and the current climate does not bode well for independent standalone retail companies (even drugstores). Chairman & CEO Mary Sammons was deemed as a good fit and was probably within view of the home stretch of the turnaround finish line. But then the rug was yanked out from under the company’s feet. You might be able to argue that the company pulled the rug out from under its own feet this time, and now the economy weakening rapidly may only act further against it.

Posted on: December 5, 2008 – 10:10 am in Management Change, Retail, Turnarounds, CVS, RAD, WAG

Unemployment’s Road Bump On Way to Over 8%

Today was supposed to be all about the employment and jobs data. The data is out and it isn’t pretty. November’s unemployment rate hit a new recent high of 6.7%. The November non-farm payrolls also dropped to atrocious level of -533,000. And as an infomercial would say, "But wait, Bob… It gets worse!"

Posted on: December 5, 2008 – 8:38 am in Economy

What 20,000 Jobs Lost A Day Means

Big companies lost 30,000 jobs yesterday. Those are the public companies which had to come clean. Who knows how many jobs were lost at smaller companies. Businesses with under 100 people supposedly have over 50% of the employees in America. Their lack of access to credit should make them even more vulnerable to cost cuts.

The government announced the November unemployment figures today. Over 500,000 more people were put out onto the streets during the month and the jobless rate went to 6.7%.

That is only a modest part of the entire employment story.

Posted on: December 5, 2008 – 8:37 am in Economy

Oil At $25, Gas At A Buck?

More people in the oil industry and the services businesses that support it are going to be out of work soon. That is because crude dropped from $147 to under $50. Venezuela could be looking at problems repaying it national debt. So could Iran. Russia’s plans for expanding its economic and military influence could be compromised.

A Merrill Lynch analyst says oil may be going to $25.

Of course, for all the families that were spending hundreds of extra dollars for gas each month last summer, it is good news. Now, they can afford both their car and their mortgage.

Posted on: December 5, 2008 – 8:14 am in Oil & Gas

Amazon (AMZN): No Kindle Under The Tree This Year

Oprah helped get Mr.Obama elected President. At the very least she brought him some remarkable national attention.

The famous talk show host and celebrity may have also given the new Amazon (AMZN) Kindle electronic book reader a huge boost. But, in this case, the results were counter-productive.

Oprah had Amazon CEO and founder Jeff Bezos on her nationally syndicated show to talk about the Kindle. She even went to far as to say that it was one of the greatest devices she had ever seen. That started a run on Kindles and that means there won’t be any on sale for the rest of the year.

Posted on: December 5, 2008 – 7:42 am in Options, AMZN

Top Pre-Market Analyst Upgrades (BKS, HNI, LEAP, LGF, SAFM, SQM, SYNA, VIP)

These are the top pre-market analyst upgrades and positive calls we have seen so far this Friday morning:

Burger King (BKC) Started as Buy at Citigroup.
HNI Corp. (HNI) Raised to Neutral at Goldman Sachs.
Leap Wireless (LEAP) Raised to Buy at Goldman Sachs.
Lionsgate Entertainment (LGF) Started as Overweight at Morgan Stanley.
Sanderson Farms (SAFM) Raised to Overweight at JPMorgan.
Sociedad Quimica (SQM) Started as Overweight at JPMorgan.
Synaptics (SYNA) Started as Overweight at JPMorgan.
Vimpelcom (VIP) Raised to Buy at Citigroup.

Jon C. Ogg
December 5, 2008

Posted on: December 5, 2008 – 7:38 am in Analyst Calls, BKS, HNI, LEAP, LGF, SAFM, SQM, SYNA, VIP

Top Pre-Market Analyst Downgrades (BRY, BBG, BG, CBST, GSX, KNL, WFR, SIRO, TXCO)

These are the top pre-market downgrades from Wall Street analysts this Friday morning:

Berry Petroleum (BRY) Cut to Market Perform at Morgan Keegan.
Bill Barrett (BBG) Cut to Market Perform at Morgan Keegan.
Bunge (BG) Cut to Underperform at Merrill Lynch.
Cubist Pharma (CBST) Cut to Perform at Oppenheimer.
Gasco Energy (GSX) Cut to Market Perform at Morgan Keegan.
Knoll (KNL) Cut to Sell at Goldman Sachs.
MEMC (WFR) Started as Underweight at Morgan Stanley.
Sirona Dental (SIRO) Cut to Neutral at Baird.
TXCO Resources (TXCO) Cut to Market Perform at Morgan Keegan.