Daily Archives: November 3, 2009

GM Screws The Germans, Will Keep Opel

gmThe German government went to a great deal of trouble to finance a bid for Canadian parts firm Magna (NYSE:MGA) and a Russian financial group to buy GM’s Opel and Vauxhall operations. GM has turned around and decided to keep the European companies, perhaps relying on US bailout money and an improving US car market to fund retaining and restructuring the companies.

Germany had offered $6.58 billion in state aid to help close the Magna transaction. It remains to be seen if the same capital will be available to GM.

Douglas A. McIntyre

Posted on: November 3, 2009 – 5:27 pm in Autos,

More E.U. Roadblocks in Sun-Oracle Deal (ORCL, JAVA)

Burning Money PicThere are reports from the Financial Times that were also just noted on CNBC that are almost baffling.  It seems that the European Commission may issue a formal objection to the Oracle Corp. (NASDAQ: ORCL) buyout of Sun Microsystems Inc. (NASDAQ: JAVA).  The reasoning is that Oracle has apparently refused to offer any concessions to European regulators.

While a formal set of objections would not constitute a formal merger blockage, that is the first real step to a formal block.  This is also not set in stone yet and does not mean that either Oracle nor the E.U. will offer concessions.
Read More »

Posted on: November 3, 2009 – 4:44 pm in Law, Mergers and Buy Outs, Regulation, Software, Technology Companies, ,

Kraft’s (KFT) Latest Chess Move: Up Guidance Ahead Of Cadbury Bid

magazinKraft (NYSE:KFT) improved is chances of making a viable bid for Cadbury before the UK government deadline of November 9. The US company beat expectations and raised guidance. Its shares dropped 2% to $27.10, probably because the company’s shareholders feel that they are better off without the integration risks that a Cadbury deal represents.

Revenue declined 5.7% to $9.8 billion. Operating income increased 38.7% from the same quarter last year to $1.42 billion. EPS from continuing operations were $0.55. Read More »

Posted on: November 3, 2009 – 4:38 pm in Earnings,

True Religion: Raised Guidance A Warning (TRLG)

TRLG LogoThe great growth mystery of True Religion Apparel Inc. (NASDAQ: TRLG) might be coming in too light.  After the close of trading, the high-end, or at least high-priced, jean and apparel maker posted earnings of $0.58 EPS on $82.4 million in revenues.  While that is still growth in revenues, this is under the Thomson Reuters estimates of $0.59 EPS and $84.62 million in revenues.  There is “raised guidance” from the company, but there are issues despite revenues being up almost 4% from a year ago.
Read More »

Posted on: November 3, 2009 – 4:23 pm in Apparel, Earnings, Earnings Warning,

52-Week High Club

Burlington Northern Santa Fe Corp (NYSE: BNI) surged close to 30% to a yearly high of $97.59 following news that Warren Buffett’s Berkshire Hathaway (NYSE: BRK.A) will be buying the freight rail operator for $100 per share, which places the value of the company at $44 billion.

The Black & Decker Corporation (NYSE: BDK) rallied close to 30% to a yearly high of $61.79  following news that the tool makers has agreed to be purchased by Stanley Works (NYSE: SWK) in an all stock deal valued at $4.5 billion.

Cognizant Technology Solutions Corp (NASDAQ: CTSH) rose over 8% to a yearly high of $42.40.  The computer services and technology consulting company announced that its 3Q 09 profit rose roughly 21%, beating analyst estimates.  The company also raised its 2009 profit estimate to $1.88 per share from $1.78 per share.

Landry’s Restaurants (NYSE: LNY) rose over 25% to a yearly high of $13.99.  The restaurant, hospitality and entertainment company following rose on news that the company’s chief executive, Timothy J. Fertitta has agreed to purchase the company for $14.75 per share, or $1.2 billion.

Garrett W. McIntyre

Posted on: November 3, 2009 – 4:03 pm in Buffett, Consumer Goods, Earnings, Food, Hardware, Mergers and Buy Outs, Technology Companies, , , , , , ,

Another Win For Apple (AAPL): The Touchscreen

appleIt is getting harder and harder to find any flaws in Apple’s (NASDAQ:AAPL) businesses. The company’s shares trade at $190, very near their all-time high. Analysts expect record results from the company for the calendar fourth quarter as holiday shoppers drive better-than-usual sales of iPods, Macs, and iPhones.

comScore (NASDAQ:SCOR) released data that shows touchscreen smartphone sales up 159% from August 2008 to August 2009 when units sold hit 23.8 million. The growth was much greater than that for the total smartphone category which was up 63% in the US for the same period to 33.8 million units. Read More »

Posted on: November 3, 2009 – 2:43 pm in PC Companies, Wireless, , , , ,

Wednesday Hangs on Key Tech/Media Earnings (CSCO, CMCSA, QCOM, TWX, VG)

Bull and Bear ImageWe have four key earnings for technology and media investors and traders due on Wednesday, and one key cult stock.  The two biggest for tech which can impact all components of their related sub-sectors are Cisco Systems Inc. (NASDAQ: CSCO) and QUALCOMM Inc. (NASDAQ: QCOM).  Then in media and communications will be Comcast Corporation (NASDAQ: CMCSA) and Time Warner Inc. (NYSE: TWX).  Lastly, there is one of Wall Street biggest cult stocks with Vonage Holdings Corp. (NYSE: VG) on deck.  We have provided Thomson Reuters consensus estimates, and, where applicable, key performance measures and added color on each.
Read More »

Posted on: November 3, 2009 – 2:23 pm in Calendar, Cult Stock, Earnings, Media, Technology Companies, Telecom, , , , ,

GM Sales Rise, Fueling Hope Of Car Recovery

gmGM’s sales rose unexpectedly, by 4% in October to 177,603 cars and light trucks. Chevrolet retail sales were especially strong, up 31%. The No.1 US car company said fourth quarter production would be 17% above the third quarter of the year.

GM’s news follows positive news from Ford (NYSE:F) which had a sales increase of almost 3% in October to 132,483. Sales of the third market leader, Toyota (NYSE:TM) were flat at 152,165.

Chrysler’s sales were down, as expected, falling 30% to 65,803.

Taken as a whole, the October data indicates that US car sales have bottomed and that the rest of the quarter may be stronger than expected.

Douglas A. McIntyre

Posted on: November 3, 2009 – 2:02 pm in Autos, ,

As Buffett Dumps Moody’s (BRK-A, MCO)

Burning Money PicWarren Buffett is dumping Moody’s Corp. (NYSE: MCO).  We’ll never know until it is already done whether the Oracle of Omaha wants to jettison it entirely from the holdings of Berkshire Hathaway Inc. (NYSE: BRK-A), but he has already lightened up twice in his stake, most recently this last week.  If you listened to Buffett on a CNBC call this morning after his Burlington Northern Santa Fe (NYSE: BNI), a simple interpretation is that he might just be booting all of his Moody’s position.  Our only criticism over this is that Buffett had enough foresight and knowledge that he could have come to the very same conclusion over a year ago at much higher prices.
Read More »

Posted on: November 3, 2009 – 12:58 pm in Buffett, Insider Activity, Mergers and Buy Outs, ,

Analyst Sees Windows 7 Pricing Data & Penetration Rates (MSFT, DELL, HPQ, YHOO)

Windows 7 LogoAuriga is a boutique research firm that many have not heard of, but this morning the firm has reiterated its BUY rating on Microsoft Corporation (NASDAQ: MSFT) and its $33.50 price target after yesterday’s $27.88 closing bell price.  The reason for today’s call is that the firm obtained detailed Windows 7 pricing in as-sold models from Microsoft for six of the OEM companies from more than 100 PCs.  And the first weeks of data may offer more insight than any official price target on overall market penetration rates. Particularly when you compare the data to other outside and independent research for overall Windows 7 penetration rates.

Read More »

Posted on: November 3, 2009 – 9:52 am in Analyst Calls, PC Companies, Software, , , ,

Apple (AAPL) iPhone Sales In China Only 5,000 During First Weekend

appleChina Unicom (NYSE:CHU) released its earnings yesterday and as part of its comments to investors it said it had only sold 5,000 iPhones since it started offering the handset.

China Unicom posted moderately good earnings. Its first three quarter’s financial statement said the big cellular company had revenue of 114,928 million RMB and 9,338 million RMB in net income.

Unicom Chairman Chang Xiaobing  said more than 1 million 3G subscribers had been signed up and that the launch of Apple’s iPhone would boost revenue in the fourth quarter. The firm did not give any more specific forecasts. Read More »

Posted on: November 3, 2009 – 9:25 am in China, Wireless, ,

Today’s Best Market Rumors (11/3/2009) (CHU)(AAPL)(LGF)

newspaperUpdates throughout the day.

Updated 10.33 AM EST: Royal Bank of Scotland may have to divest its majority interest in the RBS Sempra Commodities joint venture. (The Deal)

Bank of America (NYSE:BAC) may allow its CEO to be located in NYC and not the company’s headquarters in Charlotte (Bloomberg)

Fiat’s deal with Chrysler may end up helping the Italian company more than it does the American one. (Forbes)

Several states hard hit by the real estate downturn are considering suing large mortgage lenders.  (NYTimes)

GM’s board may decide the fate of Opel today.  (AP)

The New York State Pension Fund will put $1 billion into hedge funds  (Crain’s NY)

Studio Summit Entertainment may be a buy-out target for a larger studio like Lions Gate  (NYSE:LGF)  (LATimes)

China Unicom (NYSE:CHU) has only sold 5,000 Apple (NASDAQ:AAPL) iPhones. (Reuters)

Douglas A. McIntyre

Posted on: November 3, 2009 – 8:52 am in Rumors, , , ,

Top 10 Analyst Upgrades, Downgrades, Initiations (ARI, CSIQ, CSX, DDRX, HEV, INTC, NVDA, VCLK, VITC)

These are the top ten analyst upgrades, downgrades, and initiations we have seen from Wall Street research calls this Tuesday morning:

Apollo Commercial Real Estate (NYSE: ARI) Started as Overweight at Barclays; Started as Hold at Citigroup.
Canadian Solar (NASDAQ: CSIQ) Raised to Equal Weight at Barclays.
CSX Corp. (NYSE: CSX) Raised to Buy at Stifel Nicolaus.
Diedrich Coffee (NASDAQ: DDRX) Cut to Hold at Roth Capital.
Ener1 (NASDAQ: HEV) Started as Buy at Deutsche Bank.
Intel Corp. (NASDAQ: INTC) Cut to Equal Weight at Morgan Stanley.
Nvidia (NASDAQ: NVDA) Cut to Underweight at Morgan Stanley.
Valueclick (NASDAQ: VCLK) Raised to Hold at Citigroup.
Vitacost.com (NASDAQ: VITC) Started as Buy at Needham; Started as Buy at Jefferies; Started as Outperform at Oppenheimer.

You can join our open email distribution list to get updates on top analyst upgrades and downgrades, top day trader alerts, IPO’s, secondary offerings, Warren Buffett and other guru activity, M&A and more.

JON C. OGG

Posted on: November 3, 2009 – 8:35 am in Analyst Calls, , , , , , , , ,

Best Buy (BBY) Launches Movie Download Service

Best Buy (NYSE:BBY) wants to join the legion of other firms with branded movie download services, although it is not clear why. A number of media sources say that the program will be announced on November 3rd, and will start operating within a few weeks.

The electronics retailer is turning to Sonic Solutions’ Roxio CinemaNow operation to provide the titles. CinemaNow is one of the original providers of online films and has 20,000 available titles, although the company was never successful. Software embedded in Best Buy’s TVs and other consumer electronics products will enable the service to work.

Read more….

Posted on: November 3, 2009 – 8:15 am in Uncategorized,

GMAC’s Lifeline Is the Economy’s Noose

By John Tamny

The 18th century French writer Voltaire once observed that the State is “a device for taking money out of one set of pockets and putting it into another.” Voltaire elegantly distilled what we’re witnessing right now as Washington seeks to prop up what private investors won’t: the redistribution of limited capital from the productive to the unproductive. “Stimulus” this is not.
 
Though economic logic tells us that GMAC should never have received even one dollar of federal largesse, if the planned handout of an additional $5.6 billion is approved by Treasury, GMAC will be the unworthy recipient of $17 billion of taxpayer funds. The latest GMAC lifeline is being defended as a way to revive carmakers GM and Chrysler, which politicians see as important to the health of the U.S. economy.

Read more…

Posted on: November 3, 2009 – 8:11 am in Uncategorized

Buffett Makes His Whale of an Acquisition (BRK-A, BRK-B, BNI, UNP)

BuffettImage gates foundationWe always knew that Warren Buffett loved the railroad stocks.  We also had for years heard Buffett talk about the prospects of a “whale of a deal” in large acquisitions. And now this morning he is showing just how much.  Berkshire Hathaway Inc. (NYSE: BRK-A) is acquiring Burlington Northern Santa Fe Corporation (NYSE: BNI).  The terms call for $100.00 per share in cash and stock, well above the $76.07 closing bell price yesterday.  Buffett already had a huge stake of 76.77 million shares, so he is buying the 77.4% stake he does not already own.  It turns out that Warren is finally doing his whale of a deal.  The transaction is valued at about $44 billion, if you include $10 billion of outstanding BNI debt.  That makes this the largest transaction in Berkshire Hathaway history.

Read More »

Posted on: November 3, 2009 – 7:45 am in Buffett, Mergers and Buy Outs, Transports, , , ,

Tech M&A King Cisco (CSCO) Pushes Into The Living Room

TVCisco (NASDAQ:CSCO) may control most of the global router and enterprise video conferencing business, but it wants a bigger footprint in home video delivery. Silicon Valley’s biggest M&A machine has snapped up China set-top box company DVN for $44.5 million.

Cisco already has a large set-top business in the US, but the Chinese market has 160 million cable subscribers and that makes it the most promising market for set-top sales in the world. Read More »

Posted on: November 3, 2009 – 6:12 am in Consumer Goods, Mergers and Buy Outs, , ,

India Buys 200 Tons Of Gold And Moves From The Dollar

uncle samThe dollar is still losing its luster as the foreign reserve currency of choice. India has just bought 200 tons of gold from the IMF at $1,045 an ounce which is close to a recent record high of $1,070. The entire transaction is worth almost $7 billion. The move is seen as a way for India’s central bank to move some of its capital away from investments in the dollar.

The IMF may sell another 200 tons of gold in the relatively near future and most experts expect that the buyer will be China, which has foreign currency reserves of $2 trillion and might like to have its own hedge against the value of the American buck. Read More »

Posted on: November 3, 2009 – 5:59 am in Commodities

A Coffee Firm Merger Aimed At Starbucks (SBUX)

hersheyTwo coffee companies which sell their products online and through retailers are merging. They should be able to create a formidable competitor for Starbuck’s  retail business outside its own stores. Diedrich (NASDAQ:DDRX) will be bought by Peet’s NASDAQ:PEET) for $26 a share or $213 million. The consideration is well above Diedrich’s current price of just over $20.

Diedrich sells it single serving products and beans through restaurants, stores, and coffeehouses. Peet’s sells coffee and tea through restaurants and food services establishments and also sells coffee and tea makers. Neither firm has a chain of stores like Starbucks does, but each competes with the Starbucks branded coffees sold in grocery stores and super markets. Read More »

Posted on: November 3, 2009 – 5:40 am in Food, Mergers and Buy Outs, , , ,

The Fed Asks Banks To Read Its Mind

bankBankers from the nation’s 28 largest banks were called to regional Federal Reserve offices across the country today to get a message from the agency. That message was that they should not wait for new guidelines that will align banker pay with risk. They should guess what the guidelines will be and apply them to 2009 pay packages. Bankers have not been very good at being bankers for the last two years and asking them to be clairvoyants as well seems too much. Read More »

Posted on: November 3, 2009 – 4:58 am in Banking, Regulation