CoreBrand reviewed the top 100 hardest working brands for the final quarter of 2009.  Their researchers point out that “the food industry moves to the top of the list, reflecting the economy and the general improvement of consumer staples businesses. Hershey’s (HSY), Campbell Soup (CPB), and Kellogg (K) make it into the top 5.” On the other hand “troubled industries like financial services and auto manufacturers have seen dramatic decline.”

Harley-Davidson (HOG) is in the top 10 among the hardest working brands. Before rumors of a buy-out, the motorcycle firm’s stock languished at $25, down from $42 less than two years ago. Harley’s stock trades for a low 1.2 times sales. Also near the top of the list is crippled book retailer Barnes & Noble (BKS), which trades for .3 times sales. Blockbuster (BBI) is in the top 25, with a ratio of .1x sales. The firm said in its 10-K that it is at risk for filing Chapter 11.

Douglas A. McIntyre  douglasamcintyre@247wallst.com

One of the top three international airline carriers, Deutsche Lufthansa, just announced a four-day strike. British Airways appears set to announce the results of a strike ballot in early March and other European unions are restless. Should US investors be concerned about this? Absolutely, especially if you are invested in US airline carriers or businesses that provide services or goods to them.

Everyone needs to remember that we now belong to a global world that is interconnected. This fact is also true of the airline industry. Nowadays carriers share codes and passenger loads. The co-operation among carriers, especially the large ones, benefits the airlines as they can seamlessly offer longer trips at better prices.
Partnerships, co-operation and passenger sharing is now standard practice in the industry. The disruption caused by a top international carrier in central Europe could be immense. Passengers in Central and Northern Europe are already seeing uncertainly, cancellations and calls to check with their airlines. Yet this situation will not be confined to European travelers or airlines.

US carriers are now involved in a number of partnerships, joint ventures and alliances with European carriers (including Lufthansa). These carriers, will see any sustained travel disruption flow through their passenger loads. Just take a look at some of the large airline alliances in place.  The Star Alliance includes many of the top airlines in the world including Continental Airlines (NYSE:CAL), United Airlines (NASDAQGS: UAUA) and US Airways (NYSE:LCC). The recent Atlantic-Plus Plus joint venture arranged for joint capacity, marketing and sales between Lufthansa and carriers such as United, Continental and Air Canada. When it approved Continental’s application to join Atlantic Plus-Plus the US Department of Transportation did so on the basis of increased service and lower fares.

The current combination of worldwide debt, the recession and global competition has left many companies and governments unable to pass on pay increases and benefits on to workers. This makes for restless unions and further economic disruption. Look for tougher times for the airline industry, and include some US carriers on the short list.

Steve Gear

AOL Inc. (NYSE: AOL) Raised to Neutral at Merriman Curhan Ford.
Apple Inc. (NASDAQ: AAPL) Raised to Market Perform at First Global.
Blackrock Inc. (NYSE: BLK) Maintained Buy but removed from Conviction Buy at Goldman Sachs.
Continental Airline (NYSE: CAL) Cut to Neutral at JPMorgan.
Corinthian Colleges (NASDAQ: COCO) Cut to Neutral at at BofA/Merrill Lynch.
Cree Inc. (NASSDAQ: CREE) Cut to Neutral at Merriman Curhan Ford.
Franklin Resources (NYSE: BEN) Raised to Conviction Buy List at Goldman Sachs.
Monster Worldwide (NYSE: MWW) Cut to Sell at Deutsche Bank.
Panera Bread (NASDAQ: PNRA) Cut to Neutral at SunTrust.
Synaptics (NASDAQ: SYNA) Cut to Neutral at JPMorgan.
US Airways (NYSE: LCC) Raised to Overweight at JPMorgan.
Verizon Communications (NYSE: VZ) Cut to Neutral at Credit Suisse.
Visa Inc. (NYSE: V) Raised to Overweight at Barclays.
Western Union Co. (NYSE: WU) Cut to Neutral at BofA/Merrill Lynch.

You are invited to join our free daily email distribution list to hear about top analyst upgrades and downgrades, IPOs and secondary offerings, ongoing day trader and options trader alerts, stock and market rumors, Buffett and guru investor news, M&A and more.

JON C. OGG
FEBRUARY 4, 2010

Reuters:   Oil, near $80, may have strongest gain in a decade.

Reuters:   The government will give GMAC $3.5 billion.

WSJ:   US mortgage companies will be required to give greater disclosures to consumers on the costs of loans.

WSJ:   Chrysler dealers are still fighting being closed.

WSJ:   Fox and Time Warner Cable (NYSE:TWC) are still fighting over fees the channel should be paid by the cable firm

WSJ:   J&J (NYSE:JNJ) had a major setback on use of one of its antibiotics.

WSJ:   The No.2 executive at Continental (NYSE:CAL) will become CEO.

WSJ:   The DJIA is up 20% this year.

WSJ:   The way that jobless numbers are calculated means that unemployment has probably not peaked.

NYT:   Several European nations could still default on debt.

NYT:   Google’s (NASDAQ:GOOG) YouTube is working on technology to bring people videos related to their original searches.

NYT:   The N0.2 executive at McDonald’s (NYSE:MCD) left suddenly.

NYT:   ShopperTrak says sales rose 9% on December 26

FT:   M&A activity was not hurt by the recession.

Bloomberg:   Mortgage bonds rallied, a sign mortgage rates will rise.

Bloomberg:   A senior Chinese office said 2010 will be a crucial year for fighting the economic crisis.

Douglas A. McIntyre

Subject: Vigilante Row Seating

Now that Homeland Security Secretary Janet Napolitano has made it clear that the best hope that airlines have when attacked by terrorists is the courage of private citizens, the international carriers have the opportunity to protect their passengers and planes. Secretary Napolitano said that “the system worked” and it did. Several people on Northwest Flight 253 subdued bomber Umar Farouk Abdulmutallab before he might have blown up the aircraft. Some of the “heros” had to climb over several seats to get to Abdulmutallab, a sign that Northwest could have put these passengers closer to the danger.

Airlines have the opportunity to give vigilantes the same seat preference that exit row passengers get. Passengers in exit rows merely have to be able to open the cabin window to be awarded the best seats on the aircraft. People large enough and strong enough to subdue dangerous passengers should also get premium spots on aisles and next to windows located tactically around the aircraft.

The federal government has made it clear that it does not have the capacity to screen for all suspected terrorists so airlines can either leave the safety of their passengers to luck or give passengers an incentive to patrol commercial aircraft.

Douglas A. McIntyre

Reuters:   Goldman Sachs (NYSE:GS) says “dark pools” help investors.

Reuters:   The US is welcoming the rise of the yuan.

Retuers:   Nelson Peltz’s board seat at Legg Mason (NYSE:LM) may not signal change.

Reuters:   Bill Gross of PIMCO says the end of Federal programs to buy back debt could pressure bond markets.

Reuters:   Baidu (NASDQ:BIDU) was hurt by changes in its ad system and shares fell.

WSJ:   The turnaround at Chrysler will be based on Fiat models.

WSJ:   A new IRS unit will focus on complex financial structures of the wealthy.

WSJ:   Honda’s (NYSE:HMC) earnings beat expectations.

WSJ:   Continental’s (NYSE:CAL) switch to the Star Alliance airline program increases chances it will merge with United (NASDAQ:UAUA).

WSJ:   The House will begin to work out plans for financial firms that are “too big to fail.”

WSJ:   Dodd wants a rate freeze on certain credit card balances.

WSJ:   Canon’s profits fell on low demand.

WSJ:   Nokia (NYSE:NOK) launched a 3G phone in China.

WSJ:   Tech firms are launching large ad campaigns including ones from Cisco (NASDAQ:CSCO), Juniper (NASDAQ:JNPR), and Microsoft (NASDAQ:MSFT) aimed at businesses spending more during the recovery.

WSJ:   An improvement in the economy is boosting the prospects of renewal energy.

WSJ:   Verizon’s (NYSE:VZ) FiOS roll-out slowed.

WSJ:   The head of Michelin said car sales are improving.

WSJ:   Caterpillar (NYSE:CAT) will cut 2,500 people.

NYT:   Greenberg, former head of AIG (NYSE:AIG), is starting a firm that may take some of the battered insurance company’s key talent.

NYT:   The CNN division of Time Warner (NYSE:TWX) is now fourth among major cable news networks.

NYT:   Fisher Automotive will make hybrids in its new plant which was formerly owned by GM.

NYT:   Forbes magazine plans more layoffs.

Bloomberg:   BP’s (NYSE:BP) earnings fell 34%.

Douglas A. McIntyre

24/7 Wall St. asked Corebrand, the brand research and consulting firm, to look at the top 100 brands based their contribution to market capitalizaton. Using this method, the hardest working brand was Hershey (NYSE:HSY), followed  by Coca-Cola (NYSE:KO) and Harley-Davidson (NYSE:HOG)

Corebrand described the process briefly to 24/7 Wall. St.

24/7 Wall St.: Corebard often refers to the brands on this list as the”hardest working brands”. How did you come to that description?

Corebrand: There are a lot of people measuring and examining the “strongest brands” or the “most valuable brands”.  Our opinion is that examining one without the other is somewhat meaningless.  How “strong” a brand is nice to know but not very relevant unless you understand how that strength benefits business.  Similarly, “value” is little more than a measure of corporate size unless you understand the drivers of that value and how to influence it. By examining the strength of the brand and it’s contribution to total market value, we can help companies and their leadership manage that strength and value over time.

24/7 Wall St.: Is there any advantage or disadvantage to having a brand value be a very large percentage of market cap in the present and as an indication of a company’s future performance?

Corebrand: The brand will need to be in balance with the rest of the company’s assets.  A company should strive to have it’s brand strong enough to fend off competitors or changing market conditions but not so strong that it becomes overly dependent on the brand as a single driver of value.  If a company can achieve and maintain its appropriate maximum strength without becoming over-dependent, it will see greater returns in bull markets and retain greater value in bear markets.

The list:

Each year, on a rolling basis, CoreBrand conducts 8,000 telephone interviews among business leaders to measure their perceptions of some of the world’s best corporate brands. Respondents are business decision-makers from the top 20% of U.S. businesses.

This senior business audience (VP level and above) represents the investment community, potential business partners, and business customers across 49 key industries. 400 respondents rate each company per year; 800 companies are measured each year. Our reports are updated on a quarterly basis to reflect any subtle changes.

CoreBrand collects financial performance data and communications investment information to understand the support behind and impact of these brands. These corporate brand strength ratings, as well as a company’s financial data are used in CoreBrand’s statistical model to determine the percentage of market capitalization that is directly derived from the corporate brand. Once that percentage is calculated, a dollar value is assigned to the corporate brand.

The percentage of market capitalization, attributable to the corporate brand. The percentage is then translated into a dollar value, based on the current market capitalization. The analysis is examined over time, to determine if the corporate brand is a growing or declining asset.

Douglas A. McIntyre

AMR Corp. (AMR) Raised to Overweight at Barclays.
Answers Corp. (ANSW) Raised to Buy at Canaccord.
Barrick Gold (ABX) Raised to Overweight at JP Morgan.
Cisco Systems (CSCO) Started as Outperform at Wells Fargo.
Continental Airlines (CAL) Raised to Equal Weight at Barclays.
Computer Sciences (CSC) Raised to Neutral at Goldman Sachs.
EMC Corp. (EMC) Raised to Overweight at Thomas Weisel.
Goldcorp (GG) Raised to Overweight at JP Morgan.
Harley-Davidson (HOG) Raised to Outperform at Wells Fargo.

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

Northwest, probably still working through an integration with its new owner Delta (NYSE:DAL) posted the worst record for arrivals among big carriers with 74% of its flights getting where they were going. Delta did almost as poorly with a figure below 79%.

Looking across the industry at all carriers regardless of size, the on-time champion was Hawaii Air at nearly 80% followed by Alaska Air at 78%. Clearly having a base outside the Continental US is an advantage.

Comair and Atlantic Southeast had the worst records, both posting on-time arrival rates under 70%.

The large carriers with above average performances during August were Continental (NYSE:CAL) and US Air (NYSE:LCC). Posting below average numbers were United (NASDAQ:UAUA), American (NYSE:AMR), and near the bottom of the list JetBlue (NASDAQ:JBLU)

Flights between Philadelphia and Atlanta and a number of flights out of New York’s JFK had delays of nearly an hour.

Douglas A. McIntyre

The UBS issued the upgrades because the carriers have shown that they can raise capital and because ticket prices may have stopped falling. Some of the airlines carry so much debt that bringing in money may be critical to their survivals.

Raising money will cause dilution in one form or another, depending on what paper the financiers take. And, the argument about ticket prices is bogus. Ticket sales may have reached a bottom, but they are not likely to go up again soon. Americans are too tight-fisted to travel now, and the same holds true for many businesses.

Airlines also face the threat of rising fuel prices. Oil may be under $70, but a recent a Goldman Sachs report said that the economy needs to brace for a sharp increase in the price of crude next year.

Most of the airline stocks have tripled from their 52-week lows. They may have risen that far because Chapter 11 filings are less likely this year, but the industry is going to post losses in a number of future quarters. Why investors would want to buy into that is a mystery.

Douglas A. McIntyre