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If you can believe it, there is an initial public offering on deck this week. Bristol-Myers Squibb Co. (NYSE: BMY) is set to partially spin off Mead Johnson Nutrition (NYSE: MJN). It looks like it is actually going to come to market as many have hoped.
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Daily Archives: February 9, 2009
Imagine That: An IPO Coming This Week (BMY, MJN)
Starbucks (SBUX) Reward For Cutting Prices: An S&P Downgrade
Starbucks (SBUX) announced today that customers will be able to buy a coffee and breakfast item for $3.95. Can Starbucks afford to do that with its relatively high costs of real estate, workers, and food? Only the management at the company can say for certain.
Perhaps it is a coincidence, but S&P cut Starbucks’ rating after the close. The agency revised its outlook on Starbucks to negative from stable. At the same time, it lowered the company’s short-term rating to ‘A-3′ from ‘A-2′ and removed it from CreditWatch with negative implications.
If the new $3.95 meal plan does not help, Starbucks is going to get cut again.
Douglas A. McIntyre
GE’s Biggest Day of a Lifetime (GE)
General Electric Co. (NYSE: GE) may have moved more today on a percentage basis than in any single day in many investors’ lifetimes.
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The 52-Week Low Club
ViroPharma (VPHM) Drug trial fails. Huge drop to $4.89 from 52-week high of $15.16.
Insight Enterprises (NSIT) Plans to restate earnings. Falls to $2.69 from 52-week high of $19.25.
Popular Inc (BPOP) Concerns bank could fail.
Douglas A. McIntyre
AOL MediaGlow Gets A Good Start (TWX)
AOL’s plan to capture a large part of the online ad market is to organize a number of brands, some of which don’t have the AOL name, into a new umbrella that the company calls MediaGlow.
The knock on the strategy is that AOL’s traffic went up last year, but its ad revenue went down. But, AOL is not alone in that. Barry Diller recently said that display advertising at his properties was hurt last year and was off about 50% in January. The open question for AOL is whether it is well-positioned for when the display market springs back as an economic recovery begins.
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USG Agrees To Warren Buffett Demands (USG, BRK-A, FFH)
USG Corporation (NYSE: USG) had an important vote today that essentially allows Warren Buffett and Berkshire Hathaway Inc. (NYSE: BRK-A) to get much more control of the company.
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Another Bad Year For DRAM in 2009
iSupply, the tech market researcher, noted that memory shipments were much softer than expected in Q4. While that part of the report is a no-brainer, iSupply is looking for 2009 to remain soft.
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A Cisco Debt Offering? (CSCO)
Cisco Systems, Inc. (NASDAQ: CSCO) made an SEC Filing this morning which may leave many scratching their heads. The company filed a prospectus for a sale of debt securities.
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Valero’s Ethanol Dreams Via VeraSun Refineries (VLO, VSE)
Valero Energy Corp. (NYSE:VLO) has submitted a “stalking horse” bid for six properties offered by VeraSun Energy Corp. (formerly NYSE:VSE) as part of VeraSun’s bankruptcy sale. All told the six plants have a capacity to refine about 670 million gallons of ethanol annually. Valero’s bid totals about $280 million, about a third of what it probably cost to build the plants.
It’s pretty hard to believe that Valero actually wants to buy these facilities. We’ll know soon, though. Bids for these and other VeraSun properties are due March 13th.
Paul Ausick
February 9, 2009
Solar Power Maker Not So Bright (ENER, SPWRA, FSLR)
Energy Conversion Devices, Inc. (NASDAQ:ENER) reported its second quarter earnings before the market opened this morning. The company has net income of $14.2 million (EPS of $0.33) on revenue of $103.1 million. Analysts had expected EPS of $0.31 on revenue of $101.82.
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Are Troubled Bank Stocks A Double? (FITB, BAC, C, PNC, STT, BK, WFC, JPM)
It seems that Uncle Sam via Treasury and via Congress is going to give the markets what they want. TARP, TALF, Bad Bank, aggregation, accounting rule exceptions, and the rest. If you were watching many of these huge banks with troubled stocks and troubled operations you might have thought that nationalization was imminent. But the rally that came on the heels of developments on Thursday and Friday took some of these stocks up massively.
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Pershing Square’s Target (TGT) Fund Down Over 89.5%
Pershing Square’s William Ackman set up a hedge soley to invest in Target Corp (NYSE: TGT). As you can imagine, this hedge fund has taken a real beating. In fact, just in January, his Target hedge fund fell an extraordinary 40.1%, bringing the total loss since inception to 89.5%, according to Bloomberg.
Will Starbucks (SBUX) Kill Its Margins
Starbucks (SBUX) will begin offering $3.95 breakfast value meals of coffee and food. One argument against the move is that it will make the coffee chain seem too much like the local low-rent deli.
The more persuasive case against the new initiative is that making money on a $3.95 meal may be hard. Starbucks has fairly high fixed costs which range from real estate to the fancy machines it uses to make its more expensive drinks. If its customers begin to shift to the offering en masse, Starbucks will be up against the problem of foot traffic being flat but yield-per-customer being lower.
Or, the promotion may bring in new people. Starbucks could take a loss on every one of the breakfast packages and make it up on volume.
Douglas A. McIntyre
Barclays Initiates Solar Power Stocks (YGE, SOLF, CSUN, LDK, SOL, TSL)
Barclays Capital initiated coverage of several stocks in the solar energy sector this morning. Most of these ratings are cautious, although there was at least one positive call in the solar sector.
Yingli Green Energy (YGE) was rated overweight. Solarfun Power (SOLF) was started as underweight. China Sunergy (CSUN), LDK Solar (LDK), ReneSola (SOL), and Trina Solar (TSL) were all started as equal weight.
Jon C. Ogg
February 9, 2009
Failed Banks Would Be Preferable to One ‘Bad Bank’
John Tamny RealClearMarkets
In the past week alone, readers of the business press have been treated to a variety of disturbing headlines concerning the federal government’s role in the banking system. Subscribers to the Financial Times were greeted with “Treasury pushes Citi to cancel jet order.”
From the Wall Street Journal readers found out that “On Street, New Reality on Pay Sets In.” With regard to pay, Sen. Claire McCaskill is introducing legislation “that would limit the salary, bonuses and stock options of executives at financial companies getting federal bailout aid to no more than what the president earns.” President Obama has since lent his voice to McCaskill’s echo chamber with a plan to impose a $500,000 salary cap on executives with firms that accepted bailout money.
Top Pre-Market Analyst Upgrades (ADBE, ALXN, BIG, NSR, PFE, WYE)
These are some of the top pre-market analyst upgrades and positive calls we have seen this Monday morning:
Adobe Systems (ADBE) Raised to Outperform at Oppenheimer.
Alexion Pharmaceuticals (ALXN) Started as Outperform at Leerink Swann.
Big Lots (BIG) Raised to Buy at Soleil.
NeuStar (NSR) Raised to Hold at Jefferies.
Pfizer (PFE) Raised to Buy at UBS.
Wyeth (WYE) Raised to Buy at UBS.
Jon C. Ogg
February 9, 2009
Top Pre-Market Analyst Downgrades (BIIB, HIBB, KIM, LEN, NWS, NS, OSG, PGI, RMD, TK)
These are the top pre-market analyst downgrades and negative research calls from Wall Street this Monday morning:
Biogen Idec (BIIB) Cut to Underweight at Barclays.
Hibbett Sports (HIBB) Cut to Underweight at JPMorgan.
Kimco Realty (KIM) Cut To Market Perform at Wachovia.
Lennar (LEN) Cut to Hold at Citigroup.
News Corp. (NWS) saw price targets get cut at ABN AMRO, JPMorgan, and UBS.
NuStar Energy (NS) Cut to Market Perform at Wachovia.
Overseas Shipholding (OSG) Cut to Underperform at Jefferies.
Premier Global Services (PGI) Cut to Perform at Oppenheimer.
ResMed (RMD) Cut to Neutral at JPMorgan.
TK Shipping (TK) Cut to Hold at Jefferies.
Jon C. Ogg
February 9, 2009
Barclays (BCS): A Ray Of Sunshine
Barclays (BCS) proved that not all earnings at global money center banks have to be a disaster. The company beat forecasts and posted a profit for the second half of last year.
Barclays did get a little help because it cut bonuses for many of its employees by 50%. If it can repeat that every year, it may stay in the black for a long time. Read More
Nissan: The Global Car Recession Takes Another Victim
Nissan hit the car industry with news that was worse than expected. It will not only post a very large loss for the year, it will cut 20,000 jobs.
What is more stunning than the $2.9 billion loss for the car company’s fiscal year is that it represents the first operating loss Nissan has had in 14 years, according to Reuters. Read More
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Today’s top tickerspy Indexes Platinum and Pall... +1.8% Canadian Mining S... +1.4% Gold and Silver S... +1.4% Nanotech Stocks +1.3% Japan Stocks and ... +1.2% 
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