The Unusual Suspects (AIG, COST, EW, EMC, GS, INFY, MDT, TIVO)

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This coming week has what seems like a tame or simple cast of characters in The Unusual Suspects.  While there are earnings on deck, most of these are not considered earnings reports.  The stocks we are watching include American International Group Inc. (NYSE: AIG), Costco Wholesale Corporation (NASDAQ: COST), Edwards Lifesciences Corp. (NYSE: EW), EMC Corp. (NYSE: EMC), Goldman Sachs Group Inc. (NYSE: GS), Infosys Technologies Ltd. (NASDAQ: INFY), Medtronic, Inc. (NYSE: MDT), and Tivo Inc. (NASDAQ: TIVO).  We have given a review of each, as well as assigned a potential impact on the event where applicable.

American International Group Inc. (NYSE: AIG) has a couple issues, first being that there won’t be any federal criminal charges and second is a contingency for its AIA sale.  The U.S. Treasury has reportedly drawn up contingency plans to float AIA if Prudential’s $35.5 billion deal somehow doesn’t go through. Joseph Cassano, head of AIG’s Financial Products group blamed for nearly taking down the financial system, won’t face charges as the group’s disclosures outlined many of the risks.

Costco Wholesale Corporation (NASDAQ: COST) reports earnings this coming Thursday and all eyes will be on it as retailers have sold on earnings and as its valuation is at a premium multiple.  The higher-end big box retailer has Thomson Reuters estimates at $0.66 EPS and $17.62 billion in revenue.  For its August fiscal year-end, the estimates are $2.91 EPS and $77.69 billion in revenues.  At $57.44, its 52-week range is $44.37 to $62.12.  This one trades almost at 20-times this year’s normalized earnings expectations.

Edwards Lifesciences Corp. (NYSE: EW) will see its shares go ex-split on May 28, so the nominal share price will be chopped in half to reflect its 2-for-1 stock split.  At $98.40, its 52-week trading range is $60.90 to $105.91.  On this one, Thomson Reuters has the average (mean) estimate as being $102.71.

EMC Corp. (NYSE: EMC) was listed by an analyst in Barron’s over the weekend with a $24 target and $27 possible price, plus its note is still that the core EMC, after the VMware (NYSE: VMW) stake is considered, as being a situation where you buy EMC for about $8.50.  With a $17.96 close, EMC’s 52-week range is $11.51 to $20.00.  If the market is not out of whack again on Monday, EMC could see a 2% hike on this article even though much of the thesis is known.

Goldman Sachs Group Inc. (NYSE: GS) and the ping-pong game with the SEC is still being played if the Friday reports were accurate.  Right before the close, the WSJ reported that Goldman and the SEC are not actually close to a settlement to end its fraud lawsuit against the company.  One thing we have always hung on to is that even if a settlement was announced, it could be blocked by a judge or that oversight would block the settlement just like the BofA-Merrill bonus case.

Infosys Technologies Ltd. (NASDAQ: INFY) is India’s second-largest software exporter (and outsourcing) called speculation after media reports that it was interested in acquiring Logica plc were nothing more than rumor.

Medtronic, Inc. (NYSE: MDT) is still rather active yet has been forgotten about many investors despite the notion that it has continued to grow revenues and is expected to keep growing.  Earnings are due Tuesday and Thomson Reuters has estimates at $0.88 EPS and $4.19 billion in revenues.  This also marks year-end, so the estimates of $3.53 EPS and $16.58 billion for its forward fiscal April-2011 earnings give it a forward P/E of almost 11.5.  At $40.33, the 52-week range is $31.82 to $46.66.

TiVo Inc. (NASDAQ: TIVO) is the most recent casualty of the courts as far as a stock is concerned.  At $9.03, its range of the last year is #6.41 to $18.93.  Its DISH suit being heard on appeal literally has taken out half of its value.  Earnings are due Tuesday afternoon, and it is not the actual earnings report we are concerned about.  While Thomson Reuters has estimates of -$0.16 EPS and $42.84 million in revenues, traders and investors will be asking all about the suit and the fate of the hundreds of millions of dollars now at-risk.

We did not include any of this last week’s dividend hikes in here because their were too many to pick one or two standouts.  We had twelve large companies we covered with dividend hikes, some of which were substantial.  Also available is a full list of earnings previews in a calendar that has stock by stock earnings previews along with other key data on the stocks.

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JON C. OGG

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