24/7 Wall St. » BE

Top 10 Pre-Market Analyst Calls (BRL, BE, EDS, HPQ, IRM, MHP, MCO, RSH, SNH, SNN, SOV)

247wallst — Tue, 13 May 2008 06:40:21 +0000

These are not the only analyst calls this morning, but these are some of the impact calls we are seeing this Tuesday morning:

Barr Pharma (NYSE: BRL) raised to Outperform from Neutral at Cowen & Co.
Bearingpoint (NYSE: BE) Cut to Hold from Buy at Citigroup
Electronic Data Systems (NYSE: EDS) Cut to Sell from Hold at Citigroup; cut to Market Perform at FBR.
Hewlett-Packard Co. (NYSE: HPQ) was removed from the Goldman Sachs Conviction Buy List, although its BUY rating was maintained.
Iron Mountain (NYSE: IRM) Started as Neutral at Credit Suisse.
McGraw-Hill (NYSE: MHP) and Moody’s (NYSE: MCO) both started as Buy in new coverage at Jefferies.
RadioShack (NYSE: RSH) raised to Market Perform at RBC.
Senior Housing Properties (NYSE: SNH) Cut to Market Perform from Outperform at Raymond James.
Smith & Nephew (NYSE: SNN) Cut to Underweight from Neutral at JPMorgan.
Sovereign Bancorp (NYSE: SOV) Raised to Market Perform at FBR.

Jon C. Ogg
May 13, 2008

H-P Confirms EDS Talks, Who’s Next? (EDS, HPQ, ACN, CSC, ACS, PER, UIS, ACXM, BE)

247wallst — Mon, 12 May 2008 15:17:43 +0000

As traders look to the news covering whether or not Electronic Data Systems Corporation (NYSE: EDS), there was a release from Hewlett-Packard Co. (NYSE: HPQ) that confirmed the two companies were engaged in merger talks but there were no assurances that a deal could be reached. As a result, there are many other tech and IT-sourcing companies to look at that other players may take an interest in. Keep in mind that many of these large tech companies do not want to be involved in being acquired and some of the companies will have stronger takeover provisions. Everyone of these companies are different, yet all are in overlapping areas. Here is a handful of names that could fall under that sort of tie-up if the deal comes to pass:

Accenture Ltd. (NYSE: ACN), although maybe too large;
CA, Inc. (NYSE: CA);
Computer Sciences Corp. (NYSE: CSC);
Affiliated Computer Services, (NYSE: ACS);
Perot Systems Corp. (NYSE: PER);
Unisys Corp. (NYSE: UIS);
Acxiom Corp. (NASDAQ: ACXM);
Bearingpoint, Inc. (NYSE: BE)…..

If we took the mid-point of the pricing at $12.5 Billion we would have a rough share price of $25.00 per share on EDS. At that rough price, you would have a company that analysts expect to be priced at 18.2 times DEC-2008 earnings and 0.55-times revenue estimates.

Any such deal for EDS would likely have to come in the form of a friendly buyout. This company doesn’t protect itself as hard as other companies, but Capital IQ does note the following tools the company has:

Removal of directors only for cause;
Board can change size of members;
Advanced Notice for director nominations;
Move by 50% of shareholders to remove directors;
Board Indemnification;
Blank Check Preferred Stock.

EDS is seemingly involved in more aspects of IT outsourcing and consulting than it isn’t. Because of the rate that IT-workers come and go inside the Indian IT-outsourcing companies and because of laws restricting total foreign ownership in India, we did not include the public Indian-IT operations in this report

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

Jon C. Ogg
May 12, 2008

Top 10 Pre-Market Analyst Calls (ACS, DOX, BBBY, ESRX, HD, LOW, NWA, RFMD, SHLD, UA, ADP, BE, CSC, PAYX, SAPE, HEW)

247wallst — Mon, 14 Jan 2008 07:36:58 +0000

These are not the only key analyst calls that may impact stocks this Monday, but these are the ones that 24/7 Wall St. is focusing on:

Affiliated Computer (ACS) raised to Buy from Neutral at UBS.
Amdocs (DOX) raised to Buy from Neutral at UBS.
Bed Bath & Beyond (BBBY) raised to Outperform from Neutral at Credit Suisse.
Express Scripts (ESRX) downgraded to Neutral from Overweight at JP Morgan.
Home Depot (HD) & Lowe’s (LOW) both raised to Outperform from Neutral at Credit Suisse.
Northwest Airlines (NWA) raised to Outperform from Neutral at Credit Suisse.
RF Micro Device (RFMD)raised to Buy from Hold at Deutsche Bank.
Sears Holdings (SHLD) downgraded to Underperform from Outperform at Credit Suisse.
Under Armour (UA) raised to Buy from Hold at Citigroup.

UBS Downgrades IT and Outsourcing/Business Process sector:

Automatic Data (ADP), BearingPoint (BE), Computer Sciences Corp. (CSC), Paychex (PAYX), and Sapient (SAPE) were all downgraded from BUY to NEUTRAL;
Hewitt Associates (HEW) downgraded from Neutral to Sell.

Jon C. Ogg
January 14, 2008

Turnarounds That Haven’t Turned Around: Bearingpoint (BE)

247wallst — Tue, 18 Dec 2007 10:30:57 +0000

Bearingpoint, Inc. (NYSE:BE) is another provider of IT services whose stock has changed its name to "the good, the bad, and the ugly." It is in the same boat as Unisys which we just covered, although it doesn’t have as long of an operating history as an independent player and Bearingpoint has never really had any great hay-day in the sun. This is the old KPMG Consulting that was spun off from KPMG and named Bearingpoint.

It offers a variety of IT consulting services to large and medium-sized businesses, as well as to government agencies and other enterprises. Harry You was recently replaced as CEO (from 2005) just a couple weeks ago, although Ed Harbach is the replacement and he was already President & COO. This may just be a consolidation of the leadership and some are obviously not going along with the notion that major changes are coming.

But this is a possible turnaround stock now that has never turned around, particularly since it has a quasi-new head. At the Value Investing Congress we noted how one key fund manager noted this still being one of her value picks in the space, although she was frank about the call being a loss so far and that there is a lot more work that has to be done here.

Bearingpoint has a $534 million market cap and it also trades at paltry valuation multiples compared to its more profitable peers for more than obvious reasons. At $2.57 it is only 1% or 2% off of 52-week lows. The 52-week trading range is $2.53 to $8.56, and this traded over $20.00 when it first came public in early 2001. In September 2002 this became a single-digit priced stock and that has been the case for almost the entire time since.

We see its inverted balance sheet when using tangible assets to liabilities as a problem and at some point you have to wonder how solid and strong its government contracts are because of its financial position (although we openly admit that is just conjecture and observation). Analysts are looking for a huge loss this year but looking for a break-even next year with a huge range above and below for next year. So we are treating 2008 as a total wild card and aren’t even using the estimates because of the broad range. Since the company posted a much wider loss than expected last quarter, analysts and investors threw in the towel. Citigroup had this one on a tech buyout candidate list earlier this year, although that may behind it now.

This IT-outsourcing is not a temporary event, it is secular. Unfortunately, this new CEO is going to have to make some tough decisions to get this one back in the black. That is what solid turnaround managers are supposed to do.

This one has been too tough to cover with any great objectivity but it has been routinely screened for special situation newsletters and also for the "10 Stocks Under $10" weekly newsletter.

Jon C. Ogg
December 18, 2007

Join our open email distribution list. Jon Ogg can be reached at jonogg@247wallst.com; he produces the SPECIAL SITUATION newsletter and he does not own securities in the companies he covers.

The 52-Week Low Club

247wallst — Mon, 17 Dec 2007 16:08:47 +0000

Bearingpoint (BE) Still dropping after loss earlier in the month. Down to $2.53 from 52-week $8.56.

General Growth Properties (GGP) REIT stocks are getting killed. Falls to $41.93 from 52-week high of $67.43.

Delta Financial (DFC) Files for bankruptcy. Falls to $.07 from $13.60 at 52-week high.

Peregrine Pharmaceuticals (PPHM) Contract with US government halted. Falls to $.35 from 52-week high of $1.40.

Douglas A. McIntyre

The 52-Week Low Club

247wallst — Mon, 03 Dec 2007 16:00:11 +0000

Verifone (PAY) Company says it will restate results. Down to $23.67 from 52-week high of $50.

Bearingpoint (BE) CEO leaves. Big quarterly loss. Falls to $2.65 from 52-week high of $8.56.

Blockbuster (BBI) No signs that people will ever rent movies from stores again. Drops to $3.39 from 52-week high of $7.30.

ParkerVision (PRFR) Negative piece in Barron’s. Trades off to $7 from 52-week high of $16.

Borland Software (BORL) Not any news, just a dead stock getting deader. Down to $2.97 from 52-week high of $6.22.

Douglas A. McIntyre

The 52-Week Low Club (MOT)(AMD)(S)(C)

247wallst — Tue, 27 Nov 2007 16:01:25 +0000

AMD (AMD) Downgrade. Prospects seen as dim for next few months. Drops to $9.80 from 52-week high of $23.

Motorola (MOT) Verizon Wireless opening its system? No other news. Falls to $14.87 fro 52-week high of $22.55.

Sprint (S) Competitor Verizon Wireless did open its system. Could be competitive advantage over Sprint. Drops to $14.22 from 52-week high of $23.42.

Citigroup (C) New Abu Dhabi investment of $7.5 billion come with an 11% junk level coupon. Shares off to $29.60 from 52-week high of $57.

Arbitron (ARB) Delays launch of its radio ratings system. Down to $34.81 from 52-week of $55.63.

Bearingpoint (BE) Not much news. Stock seems to keep falling. Drops to $3.06 from 52-week high $8.63.

Bare Escentuals (BARE) President resigns. Down to $19.83 from 52-week high of $43.22.

Douglas A. McIntyre

The 52-Week Low Club

247wallst — Fri, 21 Sep 2007 18:03:50 +0000

Advance Amer Cash (AEA) Payday loan company forced to close a number of locations. Down to $10.44 from 52-week high of $19.05.

Expressjet Holdings (XJT) Bad days for airlines. Drops to $3.62 from 52-week high of $9.61.

Bearingpoint (BE) Ongoing financial problems at consulting firm. Down to $4.33 from 52-week high of $9.

Time Warner Cable (TWC) Most cable stocks down due to competition from telecom companies. Falls to $31.14 from 52-week high of $44.

Circuit City (CC) Still falling due to poor financial results. Drops to $8.42 from 52-week high of $29.31.

Pool Corporation (POOL) Swimming pool business following home builders down. Drop to $24.29 from 52-week high of $42.75.

Douglas A. McIntyre

The 52-Week Low Club

247wallst — Tue, 18 Sep 2007 15:11:00 +0000

Enterra Energy (ENT) Second big daily drop after suspending dividend. Down to $1.63 from 52-week high of $10.30.

Bearingpoint (BE) Management consultants. Not doing a very good job of it. Drops to $4.51 from 52-week high of $9.00.

Navigant Consulting (NCI) Financial and regulatory consultancy company to do reorganization, may hit financial statement. Consulting must not be a very good business. Down to $12.55 from 52-week high of $22.63.

Animal Health (AHII) Distributor of animal health products posts earnings and Wall St. is not happy. Falls to $8.78 from 52-week high of $15.74.

Syntax Brillian (BRLC) LCD TV maker still dropping after weak numbers. Down to $3.58 from 52-week high of $11.70.

Knight Capital (NITE) Wall St. unhappy that NITE owns a hedge fund. Shares keep moving down. Hit $11.73 from 52-week high of $21.78.

Douglas A. McIntyre

The 52-Week Low Club

247wallst — Mon, 10 Sep 2007 15:44:34 +0000

Krispy Kreme (KKD) Downgrades, bad numbers. You name it. Drops to $3.24 from 52-week high of $13.94.

BearingPoint (BE) Consulting firm releases numbers late, and they are bad. Drops to $4.80 from 52-week high of $9.

Office Depot (ODP) Still spinning down from bad results. Down to $17.79 from 52-week high of $44.69.

Hovnanian Enterprises (HOV) Another home builder makes another 52-week low at $9.93 down from $38.66.

Legg Mason (LM) Mutual fund company continues its fall. Moves down to $76.80 from $110.17.

DUSA Pharmaceuticals (DUSA) Quaterly results failed to impress. Off to $1.63 from 52-week high of $5.89.

Cognizant Technology (CTSH) No news. Just a bad day. Drops to $67.60 from 52-week high of $95.55.

Douglas A. McIntyre