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Top 10 Analyst Upgrades, Downgrades, Initiations (ACN, AAI, CFN, FSLR, FNM, FRE, GERN, MRVL, LUV, TLAB)

247wallst — Mon, 19 Oct 2009 11:58:06 +0000

These are ten of the top analyst upgrades, downgrades, and initiations seen early this Monday morning from Wall Street research notes:

Accenture (NYSE: ACN) Cut to Neutral at UBS.
Air Tran Holdings (NYSE: AAI) Raised to Overweight at JPMorgan.
CareFusion (NYSE:CFN) Started as Market Perform at Leerink Swann; Started as Neutral at JPMorgan.
First Solar (NASDAQ: FSLR) Cut To Neutral at Macquarie.
Fannie Mae (NYSE: FNM) Cut to Underperform at KBW.
Freddie Mac (NYSE: FRE) Cut to Underperform at KBW.
Geron Corporation (NASDAQ: GERN) Raised to Buy at Merriman Curhan Ford.
Marvell Tech (NASDAQ: MRVL) Started as Buy at Citigroup.
Southwest Airlines (NYSE: LUV) Cut to Underweight at JPMorgan.
Tellabs (NASDAQ: TLAB) Cut to Neutral at UBS.

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
October 19, 2009

Posted in Analyst Calls Tagged: AAI, ACN, CFN, FNM, FRE, FSLR, GERN, LUV, MRVL, TLAB

Top Analyst Downgrades (AGCO, AIV, AAI, JBLU, TSCO, VLO)

247wallst — Wed, 14 Oct 2009 11:38:54 +0000

These are this Wednesday’s top early-bird analyst downgrades and cautious research calls out of Wall Street:

Agco Corp. (AGCO) Cut to Underweight at JPMorgan.
Apartment Investment & Management Co. (AIV) Cut to Underperform at BofA Merrill Lynch.
Airtran Holdings (AAI) Cut to Underweight at Barclays.
JetBlue (JBLU) Cut to Equal Weight at Barclays.
Tractor Supply Co. (TSCO) Started as Underweight at JPMorgan.
Valero (VLO) Cut to Sell at Soleil.

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

JON C. OGG
October 14, 2009

Posted in Analyst Calls Tagged: AAI, AGCO, AIV, JBLU, TSCO, VLO

Top Day Trader Alerts (C, RPRX, AAI, AVNR, AA, LINE, VICL)

247wallst — Wed, 07 Oct 2009 13:00:03 +0000

These are this Wednesday morning’s top day trader and active trader stocks with price and volume moves. More detailed price and volume analysis has been provided with a link to each stock story over at VSInvestor.com:

Citigroup (NYSE: C) is lower by less than 1% on what seemed like decent news.

Repros Therapeutics Inc. (NASDAQ: RPRX) is up over 100% on huge volume.

AirTran Holdings Inc. (NYSE: AAI) is down over 12% on a secondary offering announcement.

AVANIR Pharmaceuticals, Inc. (NASDAQ: AVNR) is up over 6% on a patent allowance to treat pseudobulbar affect, which the company says there are no treatments on the market yet.

Alcoa Inc. (NYSE: AA) was very active in stock options late yesterday ahead of today’s earnings report. We’d look for a continuation of that today as traders take deleveraged bets after such a large run up in the stock.

Linn Energy LLC (NASDAQ: LINE) is getting hit on high pre-market and also after-hours yesterday after it reported it would sell 6 million units in a secondary offering.

Vical Incorporated (NASDAQ: VICL) is trading up on positive Phase II trial data against CMV disease.

You can join our open email distribution list which goes out several times per week for reminders of the top day trader alerts, analyst upgrades and downgrades, IPO’s, key secondary offerings, guru investor data on Buffett and others, mergers, and more.

Jon C. Ogg

Posted in After-Hours Activity, Pre-Market Activity, Trading Alert Tagged: AA, AAI, AVNR, C, LINE, RPRX, VICL

AirTran Punished for Share Offering (AAI)

247wallst — Tue, 06 Oct 2009 20:49:27 +0000

AirTran Holdings, Inc. (NYSE: AAI) is being punished after the close after it announced a securities sale. The discount air carrier plans to sell $75,000,000 in convertible senior notes due in 2016 in an underwritten registered public offering. Concurrently with the note offering, the company plans to sell 9,000,000 shares of its common stock as well. The company does note that neither offer is contingent upon the other.

Morgan Stanley is the sole bookrunner and Raymond James is co-manager for each offering.AirTran intends to grant the underwriters of the notes offering a 30-day option to purchase an additional $11,250,000 aggregate principal amount of the notes and an additional 1,350,000 shares of common stock to cover over-allotments.

The notes will be convertible into AirTran common stock, at the option of the holders of the notes until the business day prior to the maturity date. AirTran said that it intends to use the net proceeds for general corporate purposes.

AirTran is expected to be profitable on a proforma basis: Thomson Reuters expects $0.11 EPS for its September quarter and $0.08 EPS for the December quarter.

What is interesting is the reaction to the offering. The market cap at the close today was $737.7 million based upon a $6.14 share price. If you add the total up before the overallotment options it comes to roughly $150 million in gross proceeds, although the convertible feature of the notes does add to further dilution ultimately. Still, we show shares down some 13% at $5.31 in the after-hours session. In a bull market that seems like a steep punishment.

Obviously, the concern here is what price the airliner will have to sell the shares to new buyers. With a 52-week trading range of $1.50 to $8.68, some must think a deep discount sale is coming.

JON C. OGG

Posted in Airlines, Secondary Offering Tagged: AAI

Morgan Stanley’s Credit Analyst Lends Weight To Equity Fears (MS, DFS, RGS, KLIC, AAI)

247wallst — Tue, 07 Jul 2009 20:49:08 +0000

An appetite for risky assets that has sent small-cap and emerging market stocks and junk bonds flying since March now is getting more scrutiny from a market heavyweight. Greg Peters, head of credit strategy at Morgan Stanley, (NYSE: MS) is the latest to question the rallying assets of debt-laden companies. In an interview with Bloomberg, he calls the market incredibly dangerous, noting that average debt relative to earnings among high-yield offerings is at an 11-year high. And the strong rally is happening despite rising default rates. How long can any rally last when it’s being driven by the worst assets?

Turning to the equity market, we made a similar argument about the quality of strongly rallying assets last month, using Altman Z-scores, a measure of balance sheet health. As of last month, there were 131 stocks in the S&P 500 with Z-scores in the “distress” zone. If only one fifth of those become insolvent by mid-2011, that’s more than two dozen companies that could potentially wipe out investors. As GM and Lehman Brothers showed, no one wants to be left holding stock in a bankrupt company. The trouble is, those are the Z-scores for supposedly top companies. the Z scores are even worse among the small-cap and emerging market stocks from many of the same companies that are issuing junk bonds.

Even if Z-scores are too pessimistic in forecasting bankruptcies, the news isn’t good. Companies that pull through with weak balance sheets often have to raise funds using secondary or convertible offerings that dilute stock value for existing shareholders. In the past, many companies have announce those types of offerings after a few months of strong gains.

We’re seeing a wave of secondary offerings such as the ones so far this week from Discover Financial Services Inc. (NYSE: DFS), Regis Corp. (NYSE: RGS), Kulicke & Soffa Industries Inc. (Nasdaq: KLIC) and Air Tran Holdings Inc. (NYSE: AAI). It just so happens that every company that just posted a secondary this week has a Z score that’s in the danger zone of potentially going bankrupt, with the exception of Discover. But Discover is an exception because Z scores don’t work with financial companies.

There are times when the worlds of credit and equity move in tandem. With quality in question, this might be one of them. It’s why equity investors to heed what the credit guy is saying.

Mike Tarsala

Posted in Analyst Calls, Bonds, Secondary Offering Tagged: AAI, DFS, KLIC, MS, RGS

52-Week Low Club (ELY, GHS, GE, GM, GFI, MRK, Q, SHLD, JAVA, TSCM, VIA.B, CBS, AMR, AAI, DAL, UAUA)

247wallst — Thu, 12 Jun 2008 14:35:00 +0000

Today’s 52-week low list was full of some of the usual suspects, and you can count airlines as the top group of 52-week lows after that breather in oil prices did not hold. There were also many other stocks that hit 52-week lows today, and we didn’t even bother including any of the usual suspects in financials. Here is a sample of the 200+ we saw today:

Callaway Golf (NYSE: ELY) is seeing the same old same old, fewer golf club and accessories being bought as consumers are strapped and have to actually work rather than play golf.
Gatehouse Media (NYSE: GHS) keeps sliding… is Chapter 11 near?
General Electric Co. (NYSE: GE) is getting farther and farther away from that $33.75 fair value we assigned for the end of 2008.
General Motors (NYSE: GM) is still appearing here, poorer consumers can’t qualify for new cars.
Gold Fields Ltd. (NYSE: GFI) is a surprise with high gold prices.
Merck Co. Inc. (NYSE: MRK)
Qwest Communications (NYSE: Q), wasn’t too long ago they juiced a huge dividend.
Sears Holdings (NASDAQ: SHLD) hit a 52-week low but that didn’t hold.
Sun Microsystems (NASDAQ: JAVA) is learning that the reverse stock split game isn’t a winning formula.
TheStreet.com (NASDAQ: TSCM) as financial subscribers may be less willing to shell out hundreds of dollars if their bullish investments have a hard time being that bullish.
Viacom (NYSE: VIA.B) and CBS Corp. (NYSE: CBS) as Sumner Redstone can’t save a crummy environment.

This list was far longer looking than you would guess by this short review. Here are some of the airlines that hit new 52-week lows:

Airtran Holdings Inc. (NYSE: AAI), AMR Corp. (NYSE: AMR), Delta Air Lines (NYSE: DAL), and UAL Corp. (NASDAQ: UAUA).

Jon C. Ogg
June 12, 2008

The 52-Week Low Club (AAI, HRZ, IAR, LEE, NTGR, PAY, UCBH, VDSI)

247wallst — Fri, 25 Apr 2008 14:41:58 +0000

Despite the recovery we have seen, many stocks are still hitting 52-week lows. Some of the names this Friday were as follows, just keep in mind that not all of these actually closed on their lows:

AirTran Holdings (NYSE: AAI) traded under the $3.13 lows ($12.65 hi, ouch) late in the day. Getting financing done at year lows…
Horizon Lines Inc. (NYSE: HRZ) down almost 20% to under the $12.38 lows from $36.55 year highs, ouch. Container shipping and logistics.
Idearc, Inc. (NYSE: IAR) actually touched its 52-week low of $3.40 down 90% from highs. Who uses Yellow Pages & White Pages any more? At least they’d make for cool flaming catapult artillery.
Lee Enterprises Inc. (NYSE: LEE) is an Iowa-based newspaper company. Farmers too busy growing corn for ethanol to read about how bad ethanol really is. 55 daily newspapers around the country, but real estate ads and advertising slowdown isn’t helping an industry already losing readers. Claims 1.6 million daily and 1.88 million Sunday total circulation. The good news is that shares recovered late in the day after hitting $7.01 (prior range $7.13 to $27.81).
Netgear Inc. (NASDAQ; NTGR) after earnings drop under estimates. $16.55 late in day under the $18.15 to $41.33 52-week range. When I bought my new computer last week with the multi-core processors I didn’t need any new networking equipment either.
Verifone (NYSE: PAY) is turning into the Boulevard of broken dreams. Mark my words, there is value here in "the business" but that means zilch, nothing, and zero as far as whether or not that stock continues to implode.
UCBH Holdings, Inc. (NASDAQ: UCBH) down 11% late in day at $6.34 as loss provisions rise and company slashes its targets; under $6.88 to $20.22 range; operates as the bank holding company for United Commercial Bank based in San Francisco with locations in 6 states and spread around Asia to facilitate international clients and trade.
Vasco Data Security (NASDAQ: VDSI) down a second day after revenues miss targets. Was $9.64 late in day, under the $10.10 to $44.25 52-week trading range. Quadruple ouch.

As a reminder, stocks that appear on the list of 52-week lows often keep hitting 52-week lows. Many problems aren’t only one-day events.

But all tongue in cheek commentary aside, many value managers actually use the 52-week lows list for stock screening candidates as value and turnaround stocks. Just because a stock is on a low, doesn’t mean value cant be found by some.

Jon C. Ogg
April 25, 2008

Jon Ogg is an editor and producer of the "10 Stocks Under $10" weekly newsletter for 247Wallst.com. He can be reached at jonogg@247wallst.com, and he does not own securities in the companies he covers.

AirTran Raises Much Needed Cash (AAI)

247wallst — Fri, 25 Apr 2008 05:54:04 +0000

AirTran Holdings Inc. (NYSE: AAI) has priced $65 million a 5 1/2% convertible Senior Notes due 2015. The company is also given underwriters a 30 day overallotment option for $9.75 million additional in notes. Morgan Stanley was the lead underwriter and Credit Suisse served as co-lead manager. The equivalent conversion price is $3.84 per share.

The airline has concurrently priced 22.3125 million shares of its common stock price of $3.20 per share. Underwriters have been granted more than 3.3 million shares as an overallotment option.

AirTran has a market cap of $294 million and shares closed at $3.20. While the company lost $35 million last quarter, it had over $360 million in cash and equivalents at the end of 2007.

As you can see by their wide trading range of $3.13 to $12,65, they are also not immune from high oil prices and a tightening economy.

You can join our open email distribution list to hear about other special financings, IPO’s, spin-offs, secondary offerings, restructurings, and other special situations.

Jon C. Ogg
April 25, 2008

Fuel Hedges Aren’t Helping Southwest Shares (LUV, AMR, CAL, AAI, JBLU)

247wallst — Tue, 05 Feb 2008 08:39:41 +0000

Southwest Airlines Co. (NYSE: LUV) has not been doing well as a stock. Over the last two years its stock has lost nearly one-third of its value. Even over the last 5-year period, its stock has recently put in new lows. In the past we noted how many of the issues in the sector were out of context relative to other airlines. But in today’s environment the situation looks like it has reversed. If passengers think they are unhappy with major airlines now, wait until they get to deal with all the problems when two majors merge into one structure.

If you believe that oil is the largest wild card for airlines, you’ll scratch your head when you consider that Southwest had the best fuel cost structure of any large airline operator out there. The company decided to enter major counterparty fuel hedge transactions back when oil prices were so low that oil was cheaper than water. That strategy worked as the uncertainty was making the entire sector look at risk of failure and when all of the others had to get a government handout.

If you look at the hedging strategy below you might determine that fuel hedging acts a de-leveraging mechanism that investors don’t prefer. If you compare the hedging structure from this year to last year, you will see some slight differences. Here is the hedge structure noted in their annual report:

2008 over 70% at $51 per barrel;
2009 55% at $51 per barrel;
2010 30% at $63 per barrel;
2011 over 15% at $64 per barrel;
2012 over 15% at $63 per barrel.

If you will take note, this is slightly different than the fuel hedges we noted from the same period last year. If you wanted to draw a parallel it would probably be assumed that as the fuel gets used and as the capacity rises slightly the cost basis ends up being higher because of the current oil/barrel prices. Here were the prices noted in early 2007 for the forward years:

2007 was 95% hedged at $50/barrel;
2008 was 65% hedged at $49/barrel;
2009 was over 50% hedged at $51/barrel;
2010 was over 25% hedged at $63/barrel;
2011 was over is 15% hedged at $64/barrel;
2012 was 15% hedged at $63/barrel.

This is more than surprising when you consider the cost structure of the other airlines. Over the last 5-years Southwest as a stock has underperformed the major airlines that didn’t file for credit protection. It looks like Continental (NYSE: CAL) is up some 200% and AMR (NYSE: AMR) is up much more than that. On the discount side, Airtran (NYSE: AAI) has outperformed as a stock, but JetBlue (NASDAQ: JBLU) lost its way and is down sharply. It is also the belief of Wall Street that as the top 5 or 6 airlines merge into perhaps the top 2 or 3, Southwest will remain an independent carrier in the mix. We had noted how the discount airline wasn’t such a discount to other carriers anymore, yet that may actually be a good thing in today’s airline environment.

Can we determine that Wall Street is discounting the results two years out as the fuel hedges dwindle? That is nonsense. If you have watched housing or financial stocks over the last six months you will know that Wall Street has lost its ability to price in any forward events and that traders are only reacting to each new round of news headlines. It’s almost amazing how the airline with the best cost structure, the smartest in foreseeing fuel price escalation, perhaps the best employee relations in the sector, the safest track record, and one of the best brand loyalties hasn’t translated into a win for investors compared to other airlines. It seems that no good deed goes unpunished.

Jon C. Ogg
February 5, 2008

Pre-Market Earnings Gappers (January 29, 2008)

247wallst — Tue, 29 Jan 2008 08:22:52 +0000

We are right in the thick of earnings season and below is a snapshot of some of the key earnings reports with price changes if available:

Air Tran (NYSE: AAI) -$0.02 EPS vs -$0.02 estimate.
American Electric Power (NYSE: AEP) $0.52 EPS vs $0.50 estimate.
American Express (NYSE: AXP) $0.71 EPS vs $0.71 estimate; stock fell 2% after-hours.
Burlington Northern (NYSE: BNI) $1.46 EPS vs $1.37 estimate.
Cardinal Health (NYSE: CAH) $0.90 EPS vs. $0.87 estimate, lowered guidance.
Chattem (NASDAQ: CHTT) $0.76 EPS vs $0.65 estimate.
Corinthian Colleges (NASDAQ: COCO) $0.11 EPS vs. $0.11 estimate; lending changes and reimbursement changes will lower earnings in second half to make 2008 at lower-end of expectations.
Countrywide Financial (NYSE: CFC) posted earnings; maintained dividend; shares up 1.5% pre-market.
Dow Chemical (NYSE: DOW) $0.84 EPS vs $0.80 estimate;
Eli Lilly (NYSE: LLY) $0.90 EPS vs $0.87 estimate.
EMC (NYSE: EMC) $0.24 EPS vs $0.22 estimate
3M (NYSE: MMM) $1.19 EPS vs $1.17 estimate; $6.2 Billion vs. $6.12B estimate; reiterated 10% EPS growth for 2008.
Accidental Petroleum (NYSE: OXY) $1.74 EPS vs $1.69 estimate; replaced 116% of its 2007 production.
SanDisk (NASDAQ: SNDK) posted non-GAAP EPS of $0.69 vs. $0.64 EPS estimate, but guidance was disappointing; stock down 3%.
Sepracor (NASDAQ: SEPR) trading down 7% after restatements.
Smurfit Stone (NASDAQ: SSCC) traded up 6% after earnings.
T.Rowe Price (NASDAQ: TROW) $0.68 EPS vs $0.63 estimate.
Unisys (NYSE: UIS) $0.04 EPS vs $0.12 estimate; although shares up almost 4%.
VMware (NYSE: VMW) trading down 20% or more after revenue number was light.
Waddell & Reed (NYSE: WDR) $0.42 EPS vs. $0.42 estimate.
Zoran (NASDAQ: ZRAN) traded down 22% after beating earnings but lowering guidance.

Jon C. Ogg
January 29, 2008