Alliance Data Systems Corporation (NYSE: ADS) Cut to Sell at Goldman Sachs.
Banco Santander (Brasil) S.A. (NYSE: BSBR) Raised to Neutral at Credit Suisse.
Big Five Sporting Goods (NASDAQ: BGFV) Maintained Underperform as Bear of the Day at Zacks.
Citigroup Inc. (NYSE: C) Raised to Overweight at Morgan Stanley.
Costco Wholesale Corporation (NASDAQ: COST) Reiterated Buy and raised target to $88 at Argus.
Delek US Holdings Inc. (NYSE: DK) Raised to Neutral at Credit Suisse.
First Solar Inc. (NASDAQ: FSLR) Reiterated Buy with $180 target at Argus.
Interactive Brokers Group (NASDAQ: IBKR) Raised to Outperform as Bull of the Day at Zacks.
JDS Uniphase Corporation (NASDAQ: JDSU) Raised to Buy at Argus.
Johnson & Johnson (NYSE: JNJ) Maintained Neutral at Zacks.
ONEOK Inc. (NYSE: OKE) Raised to Buy at Citigroup.
Oracle Corporation (NYSE: ORCL) Reiterated Outperform and $42 target at Credit Suisse.
Pepsico, Inc. (NYSE: PEP) Raised to Outperform at Credit Suisse.
priceline.com Incorporated (NASDAQ: PCLN) Cut to Neutral at Goldman Sachs; raised estimates and target at BofA/ML.
Spirit AeroSystems Holdings Inc (NYSE: SPR) Cut to Neutral at BofA/ML.
Starbucks Corporation (NASDAQ: SBUX) Reiterated Outperform and $44 target at Credit Suisse.
Visa Inc. (NYSE: V) Reiterated Underperform with $70 target at BofA/ML.

You are invited to join our free daily email distribution list to hear more about analyst upgrades and downgrades, top day trader and active trader alerts, dividend trends, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

Other customers of Epsilon include Walgreen Co. (NYSE: WAG), JP Morgan Chase & Co. (NYSE: JPM), Capital One Financial Corp. (NYSE: COF), Citigroup, Inc. (NYSE: C), U.S. Bancorp (NYSE: USB), the Hilton Hotel chain owned by The Blackstone Group (NYSE: BX), and Kraft Foods Inc. (NYSE: KFT).

Because our son is a second-year college student, we received a letter on Sunday, April 3rd, from the College Board. Here’s part of the text:

“Epsilon has assured us that the only information that may have been obtained was your first and last name and e-mail address. REST ASSURED THAT THIS VENDOR DID NOT HAVE ACCESS TO OTHER MORE SENSITIVE INFORMATION SUCH AS SOCIAL SECURITY NUMBER OR CREDIT CARD DATA.”

The letter goes on to warn us about the possibility of receiving spam emails and urges us “to be cautious when opening links or attachments from unknown third parties.” The letter also states that the College Board never asks a customer to “provide or confirm any information, including credit card numbers, unless you are on a secure College Board site.”

Our son’s college requires us to submit a CSS/Financial Aid Profile every year, which includes a great deal of personal and other financial information. The College Board is trying to assure us that none of this information was accessible by Epsilon and therefore, it has not been compromised.

Maybe. But that is not the same as saying that the information remains safely stowed away on one of the College Board’s servers, locked inside a virtual safe that the Epsilon culprit can never get access to.

And the same is true for other recipients of emails from customers of Epsilon. Email marketers like Alliance/Epsilon and their customers would like everyone to believe that there are impenetrable walls between different pieces of their businesses. In the real world, that is very difficult, and costly, to achieve. It is especially hard to believe in light of the break-in to Epsilon’s own systems. Color me skeptical.

Alliance shares are down about 4% in the first half-hour of trading today, at $82.47, within the company’s 52-week range of $53.15-$87.85.

Paul Ausick

Alliance Data Systems Corporation (NYSE: ADS) Cut to Market Perform at KBW.
Accuray, Inc. (NASDAQ: ARAY) Raised to Outperform as Bull of the Day at Zacks.
CenterPoint Energy, Inc. (NYSE: CNP) Raised to Outperform with $20 target at Credit Suisse.
Everest Re Group, Ltd. (NYSE: RE) named as Bear of the Day at Zacks.
Ford Motor Co. (NYSE: F) Raised to Neutral at Credit Suisse.
Freeport McMoRan Copper & Gold Inc. (NYSE: FCX) Reiterated Buy at Argus.
GameStop Corporation (NYSE: GME) Reiterated Outperform and $28 target at Credit Suisse.
General Dynamics Corporation (NYSE: GD) Reiterated Buy with $86 target at Argus.
Optimer Pharmaceuticals, Inc. (NASDAQ: OPTR) Raised to Buy at BofA/ML.
Potash Corp. of Saskatchewan (NYSE: POT) Reiterated Outperform and raised target to $71 at Credit Suisse.
Research-in-Motion Ltd. (NASDAQ: RIMM) removed from Focus List but Maintained Outperform at Credit Suisse.
Verizon Communications Inc. (NYSE: VZ) Reiterated Buy with $44 target at Argus.

Apple Inc. (NASDAQ: AAPL) has a chart that is either wavering or one which is getting sick.  Here is our detailed chart analysis and fundamental explanation regarding why this may be happening. Elsewhere, Canaccord Genuity raised its target to $480 from $460 on Apple this morning and shares are indicated up marginally pre-market.

You can join our free daily email distribution list to hear more about analyst upgrades and downgrades, top day trader and active trader alerts, dividend trends, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

• ADTRAN (ADTN) Started as Buy at Auriga.
• Alliance Data (ADS) Cut to Neutral at JPMorgan.
• Boeing (BA) Cut to Underperform at Oppenheimer.
• China Life Insurance Co. Ltd. (LFC) Cut to Neutral at Goldman Sachs.
• Deutsche Bank (DB) Raised to Hold from Sell at Citigroup.
• EMC Corp. (EMC) Raised to Overweight at Barclays.
• Freeport-McMoRan Copper & Gold Inc. (FCX) Raised to Outperform at FBR.
• Fuel Systems Solutions (FSYS) Raised to Buy at Janney Montgomery Scott.
• MEMC (WFR) Cut to Underweight at JPMorgan.
• Riverbed Technology (RVBD) Started as Market Perform at FBR.

Jon C. Ogg
June 24, 2009

• Alliance Data (ADS) Started as Buy at B of A.
• AuthenTec (AUTH) Started as Buy at S&P Equity Research.
• Broadcom Corp. (BRCM) Started as Outperform at Credit Suisse.
• Excelon (EXC) Raised to Buy at Jefferies.
• Novellus Systems (NVLS) Raised to Overweight at Morgan Stanley.
• SAIC (SAI) Raised to Outperform at at Wachovia.
• Shanda Interactive (SNDA) Raised to Outperform at Oppenheimer.

Jon C. Ogg
September 4, 2008

• Alliance Data (NYSE: ADS) raised to Overweight at JPMorgan.
• Garmin Ltd. (NASDAQ: GRMN) started as Neutral at JPMorgan.
• Host Hotels & Resorts (NYSE: HST) Cut To Hold From Buy By Deutsche Bank.
• Jefferies Group (NYSE: JEF) Cut to Neutral at Banc of America.
• Medco Health Solutions (NYSE: MHS) raised to Buy at Jefferies.
• National City (NYSE: NCC) raised to Buy at Deutsche Bank; Downgraded to Underperform at Bear Stearns.
• Red Hat (NYSE: RHT) started as Buy at Piper Jaffray.
• Salesforce.com (NYSE: CRM) started as Buy at Piper Jaffray.
• Syntax-Brillian (NASDAQ: BRLC) raised to Outperform at Robert W. Baird.
• Volterra Semi (NASDAQ: VLTR) raised to Buy at Piper Jaffray.

Jon C. Ogg
April 22, 2008

Jon Ogg is a producer of and editor for both the Special Situations newsletter and 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.

• Alliance Data Systems (NYSE: ADS) Raised to Buy From Neutral at Piper Jaffray.
• Capital One (NYSE: COF) Cut to Neutral from Buy at Piper Jaffray; Cut to Underperform from Market Perform at KBW.
• CenturyTel (NYSE: CTL) Raised to Overweight at Morgan Stanley.
• Cisco Systems (NASDAQ: CSCO) Started as Buy at Lazard.
• Cymer (NASDAQ: CYMI) Cut to Neutral at JPMorgan.
• Ford (NYSE: F) and GM (NYSE: GM) losses widened out at JPMorgan.
• Franklin Resources (NYSE: BEN) cut to Underweight at JPMorgan.
• Gap Inc (NYSE: GPS) Cut To Equalweight From Overweight at Lehman Brothers.
• Google (NASDAQ: GOOG) raised to Buy at Jefferies; Merrill Lynch raised price target to $600.
• MKS Instruments (NASDAQ: MKSI) raised to Overweight at JPMorgan.
• Textron (NYSE: TXT) Cut to Neutral from Outperform at Credit Suisse.

Jon C. Ogg
April 18, 2008

Jon Ogg is a producer and editor of the Special Situation newsletter and the "10 Stocks Under $10" weekly newsletter for 247Wallst.com.

ADS stated its issues in a letter picked up by The Wall Street Journal: "The terms of the agreement are very clear. Instead, Blackstone and its affiliates continue to refuse to meet reasonable and customary regulatory requirements as an excuse to avoid completing the transaction," said Robert Minicucci, chairman of the special committee of ADS’s board of directors.

Blackstone says that the Office of the Comptroller of Currency has put conditions on the deal which make it harder and more expensive to complete. The buy-out firm indicated that it would entertain closing the transaction to buy ADS, but at a lower price. Now Blackstone has simply disappeared.

Who can blame Blackstone? The current credit markets make it nearly impossible to close without paying huge interest rates to reflect the risk. A poor private equity market has dropped shares in Blackstone down almost two-thirds since its IPO.

The trouble with all of those excuses is that institutions put money with firms like Blackstone because they have analysts who are smarter than everyone else. People like these could not have missed the potential issue of a government body making the deal more expensive.

Blackstone wants out. It does not want the risk. And, clearly it is willing to take its chances in court.

Douglas A. McIntyre

Reuters writes that Google (GOOG) says it is well positioned for an economic slowdown.

Reuters reports that Paulson defended that government’s role in rescuing Bear Stearns (BSC)

Reuters reports that a big federal bail-out of housing is gaining momenturm.

The Wall Street Journal writes that the federal govenment is likely to try to curb the drop in the economy with  corporate bailouts, fiscal incentives and regulation.

The Administration is proposing easing lending restraints on Fannie Mae (FNM) and Freddie Mac (FRE) as a way to help the housing market.

The WSJ writes that Delta (DAL) and Northwest (NWA) pilot unions cannot come to an agreement, blocking a merger of the airlines.

The Wall Street Journal writes that Abu Dhabi has agreed to a sovereign investment code not to use it fund for political purposes.

The Wall Street Journal writes that Intel (INTC) has a plan to build several more powerful processors.

The Wall Street Journal writes that Alliance Data (ADS) notified Blackstone (BX) that it was in breach of finshing a buy-out deal.

The New York Times writes that Ford (F) is now desparate to get back buyers who defected to Asian and European brands.

The FT reports that the pressure is on the Fed to cut up to 1.25 points.

Bloomberg writes that oil rose again with the recovery in US stocks.

Douglas A. McIntyre

You can see how wide these spreads would be if they magically reappeared.  And NO, these prices won’t come back any time soon.

The freshly failed acquisition of 3Com Corp. (NASDAQ: COMS) by Bain Capital Partners LLC & Huawei was originally $5.30 cash, although the last ditch effort to please CIFIUS via a unit sale would have resulted in a lower price. If that magically came back, you’d be looking at an 82% gain.

The deal for Alliance Data Systems Corp. (NYSE: ADS) from The Blackstone Group, LP (NYSE: BX) may or may not happen, but the original price of the buyout offer was $81.75.  It is nearly impossible to think that price would ever be a buyout price in today’s environment, but that would represent a 54% premium to current prices.

SLM Corp. (NYSE: SLM), or Sallie Mae, was being J.C. Flowers & Co. before that merger was called off.  The company was originally being offered $60 per share and then it was briefly revised lower to $50 per share before being ditched altogether.  If that $50 number magically came back, that would represent a whopping 127% premium.  If that $60 pipe dream ever came back, the gains compared to today would be a whopping 172% gain.

United Rentals (NYSE: URI) buyout from Cerberus was $34.50, but it at least looks like it got its $100 million deal termination fee.  If that premium magically came back, that would be more than an 80% premium compared to today.

Clear Channel Communications Inc. (CCU), Thomas H. Lee Partners LP/Bain Capital Group is not yet a busted deal, although this $39.20 cash price is roughly 25% above today’s share prices.  This one has taken long enough that it seems Methuselah is in charge of this approval and decision process.

For whatever this is worth, investors looking at any of these companies better be looking at each company individually.  It isn’t like there weren’t some problems that either kept these mergers from happening, even if the buyout firms have had to gear down their efforts to more of true private equity firms instead of LBO firms.

Jon C. Ogg
February 21, 2008

On our open email distribution list you can see more detailed merger-arb spreads and other key issues in private equity, M&A, IPO’s, spin-offs and more.