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Top Analyst Downgrades and Stocks to Sell: Dean Foods, Dendreon, Mylan and More

Jon C. Ogg — Fri, 10 May 2013 12:45:11 +0000

Investors frequently see analyst upgrades and Buy ratings from Wall Street research calls, but they often do not get to see the so-called Sell ratings. 24/7 Wall St. reviews many fresh research calls each and every day to find great ideas from value stocks to growth stocks to dividend stocks and we have broken out the negative analyst calls today. These are this Friday’s top analyst downgrades and cautious research notes from Wall Street.

AES Corp. (NYSE: AES) was cut to Neutral from Buy at UBS.

Cablevision Systems Corp. (NYSE: CVC) was cut to Neutral from Buy at Citigroup.

Dean Foods Co. (NYSE: DF) was cut to Equal Weight from Overweight at Stephens.

Dendreon Corp. (NASDAQ: DNDN) was cut to Sell from an already cautious Neutral rating at Citigroup and Canaccord Genuity cut its target to $5 after disappointing sales.

Forest Laboratories Inc. (NYSE: FRX) was started as Underperform at BMO Capital Markets.

Limited Brands Inc. (NYSE: LTD) was cut to Neutral from Buy at Lazard.

Mylan Inc. (NASDAQ: MYL) was started as Underperform at BMO Capital Markets.

Optimer Pharmaceuticals Inc. (NASDAQ: OPTR) was cut to Hold from Buy at Needham.

Rent-A-Center Inc. (NASDAQ: RCII) was cut to Hold at Canaccord Genuity.

Shire PLC (NASDAQ: SHPG) was cut to Neutral from Overweight at J.P. Morgan.

Techne Corp. (NASDAQ: TECH) was named Bear of the Day at Zacks Investment Research.

These are of course not Sell ratings, but here are four analyst stock picks from this week that could double in share price.

Filed under: Active Trader, Analyst Calls Tagged: AES, CVC, DF, DNDN, FRX, LTD, MYL, OPTR, RCII, SHPG, TECH

Closing Bell for Thursday on Wall Street: Lower Opening and Close Despite Jobs Report

Paul Ausick — Thu, 09 May 2013 20:07:43 +0000

U.S. equity markets opened slightly lower this morning after the Bank of England left its key interest rate and asset purchase program unchanged (more coverage here). In Asia, China’s consumer price index rose 2.4% year-over-year and 0.2% in the last month, a bit more than expected on both measures and largely due to food price increases (more coverage here). In the U.S., the number of new claims for jobless benefits fell to a 5-year low and continuing claims fell by 27,000 (more coverage here). The three major indexes all closed the day down slightly, right about where the opened.

The U.S. dollar index is trading up 1.01% today, now at 82.710. The GSCI commodity index is up 0.4% at 632.85. WTI crude oil closed down 0.2%, at $96.39 a barrel. Brent crude trades up 0.1% at $104.41 a barrel. Natural gas is up 0.2% today at about $3.99 per million BTUs, after a larger-than-expected inventory build (more coverage here). Gold settled down 0.4% today at $1,468.60.

The unofficial closing bells put the DJIA down more than 22 points to 15,082.62 (-0.15%), the NASDAQ fell about 4 points (-0.12%) to 3,409.17, and the S&P 500 fell -0.37% or about 6 points to 1,626.67.

There were a several analyst upgrades and downgrades today, including:

Clean Energy Fuels Corp. (NASDAQ: CLNE) cut to ‘underperform’ at Raymond James;
American Water Works Co. Inc. (NYSE: AWK) raised to ‘outperform’ at Wells Fargo;
Fluor Corp. (NYSE: FLR) started as ‘buy’ with a price target of $84 at Deutsche Bank;
Sina Corp. (NASDAQ: SINA) raised to ‘overweight’ at HSBC; and
Tumi Holdings Inc. (NYSE: TUMI) cut to ‘neutral’ at Citigroup.

Earnings reports since markets closed last night resulted in some price moves today, including these as of the last half hour of trading:

Groupon Inc. (NASDAQ: GRPN) is up 11.9% at $6.26 (more coverage here);
Continental Resources Inc. (NYSE: CLR) is down 0.8% at $84.24;
Monster Beverage Corp. (NASDAQ: MNST) is down 7.1% at $52.95 (more coverage here);
Pacific Ethanol Inc. (NASDAQ: PEIX) is down 6.7% at $0.29;
Rackspace Hosting Inc. (NYSE: RAX) is down 24.5% at $39.42;
Transocean Ltd. (NYSE: RIG) is down 0.5% at $54.98;
Agrium Inc. (NYSE: AGU) is up 0.8% at $95.00;
Cablevision Systems Corp. (NYSE: CVC) is up 1.6% at $15.72;
Coeur d’Alene Mines Corp. (NYSE: CDE) is down 5.3% at $14.41; and
Dish Network Corp. (NASDAQ: DISH) is down 2.2% at $38.76 (more coverage here).

Before markets open tomorrow morning we are scheduled to hear earnings reports from magicJack Vocaltec Ltd. (NASDAQ: CALL), Molycorp Inc. (NYSE: MCP), Net 1 UEPS Technologies Inc. (NASDAQ: UEPS), Nvidia Corp. (NASDAQ: NVDA), priceline.com Inc. (NASDAQ: PCLN), TheStreet Inc. (NASDAQ: TST), and Hecla Mining Co. (NYSE: HL).

Some standouts among heavily traded stocks today include:

Affymax Inc. (NASDAQ: AFFY) is up 25.7% at $1.81. The biopharmaceutical firm continues to rise on no news. Be careful though, forward P/E is negative, even after two days of gains in the neighborhood of 20% each.

Tesla Motors Inc. (NASDAQ: TSLA) is up 32.1% at $73.67 after posting a new all-time high of $75.77 earlier today. The all-electric car maker reported a profit for the first quarter, and the bulls cannot be stopped.

Windstream Corp. (NASDAQ: WIN) is down 4% at $8.18. The communications and technology solutions company posted unappealing results and the stock’s massive dividend could be a casualty. More coverage here.

Stay tuned for Friday. Fed Chairman Ben Bernanke and Kansas City Fed President Esther George are giving speeches. We have also noted the following event on the schedule (all times Eastern):

2:00 p.m. – Treasury Budget

Filed under: 24/7 Wall St. Wire, HI/LOW, Market Close Tagged: AFFY, AGU, AWK, CALL, CDE, CLNE, CLR, CVC, DISH, FLR, GRPN, HL, MCP, MNST, NVDA, PCLN, PEIX, RAX, RIG, SINA, TSLA, TST, TUMI, UEPS, WIN

Closing Bell for Wednesday on Wall Street: Markets Open Lower, Stock Prices Rise All Day

Paul Ausick — Wed, 08 May 2013 20:05:50 +0000

U.S. equity markets opened lower this morning on relatively little economic data. In Europe, Germany reported that industrial production rose 1.2%, while a house price index in the U.K.rose 1.1% month-over-month. In Asia, China reported a stronger-than-expected trade surplus of $18.16 billion in April (more coverage here). In the U.S., demand for home mortgages rose, primarily on rising demand for refinancing (more coverage here). Share prices turned higher shortly after trading opened this morning, and indexes remained positive all day, with all three major indexes posting a decent gain by the closing bell.

The U.S. dollar index is trading down 0.43% today, now at 81.897. The GSCI commodity index is down 0.4% at 630.47. WTI crude oil closed up 1.1%, at $96.62 a barrel, following today’s report on inventories (more coverage here). Brent crude trades down 0.2% at $104.21 a barrel, creating the lowest spread between WTI and Brent in recent memory. Natural gas is up 1.4% today at about $3.98 per million BTUs. Gold settled up 1.7% today at $1,473.70.

The unofficial closing bells put the DJIA up more than 48 points to 15,104.97 (0.32%), the NASDAQ rose nearly 17 points (0.49%) to 3,413.27, and the S&P 500 rose 0.41% or nearly 7 points to 1,632.68.

There were a several analyst upgrades and downgrades today, including:

Bed Bath & Beyond Inc. (NASDAQ: BBBY) cut to ‘cautiousl’ at ISI group;
Lululemon Athletica Inc. (NASDAQ: LULU) Raised to ‘buy’ at Sterne Agee;
U.S. Auto Parts Inc. (NASDAQ: PRTS) raised to ‘buy’ at Roth Capital;
Plains All American Pipeline LP (NYSE: PAA) cut to ‘neutral’ at Credit Suisse; and
Comerica Inc. (NYSE: CMA) cut to ‘underperform at Baird.

Earnings reports since markets closed last night resulted in some price moves today, including these as of the last half hour of trading:

American Water Works Co. Inc. (NYSE: AWK) is down 0.9% at $41.61;
Demand Media Inc. (NYSE: DMD) is up 2.9% at $8.83;
Fuel Tech Inc. (NASDAQ: FTEK) is down 10.3% at $3.59;
Kinross Gold Corp. (NYSE: KGC) is up 6.3% at $5.62;
Marathon Oil Corp. (NYSE: MRO) is up 0.9% at $34.65;
SandRidge Energy Inc. (NYSE: SD) is down 3.5% at $5.20;
Zillow Inc. (NYSE: Z) is down 9.9% at $56.70;
AOL Inc. (NYSE: AOL) is down 9.8% at $37.36 (more coverage here);
Enbridge Inc. (NYSE: ENB) is up fractionally at $47.34;
The Wendy’s Co. (NYSE: WEN) is down 5.7% at $5.77; and
Vivus Inc. (NASDAQ: VVUS) is up 10.5% at $13.30.

Before markets open tomorrow morning we are scheduled to hear earnings reports from Groupon Inc. (NASDAQ: GRPN), Continental Resources Inc. (NYSE: CLR), Monster Beverage Corp. (NASDAQ: MNST), Pacific Ethanol Inc. (NASDAQ: PEIX), Rackspace Hosting Inc. (NYSE: RAX), Tesla Motors Inc. (NASDAQ: TSLA), Transocean Ltd. (NYSE: RIG), Agrium Inc. (NYSE: AGU), Cablevision Systems Corp. (NYSE: CVC), Coeur d’Alene Mines Corp. (NYSE: CDE), and Dish Network Corp. (NASDAQ: DISH).

Some standouts among heavily traded stocks today include:

Affymax Inc. (NASDAQ: AFFY) is up 18.9% at $1.37. The biopharmaceutical firm had no news today, but seemed to catch a wave from Amgen Inc. (NASDAQ: AMGN).

Electronic Arts Inc. (NASDAQ: EA) is up 17.3% at $21.59, a new 52-week high. The video game company posted good results and forecast a strong current quarter.

Fusion-io Inc. (NYSE: FIO) is down 19.4% at $14.51. The storage company’s CEO and founder resigned today.

Stay tuned for Thursday. Richmond Fed President Jeffrey Lacker and Philadelphia Fed President Charles Plosser are giving speeches. We have also noted the following events on the schedule (all times Eastern):

8:30 a.m. – New claims for unemployment benefits
10:00 a.m. – Wholesale trade
10:30 a.m. – EIA weekly petroleum status report
1:00 p.m. – 30-year bond auction
4:30 p.m. – Fed balance sheet and money supply

Filed under: 24/7 Wall St. Wire, HI/LOW, Market Close Tagged: AFFY, AGU, AMGN, AOL, AWK, BBBY, CDE, CLR, CMA, CVC, DISH, DMD, EA, ENB, FIO, FTEK, GRPN, KGC, LULU, MNST, MRO, PAA, PARTS, PEIX, RAX, RIG, SD, TSLA, VVUS, WEN, Z

Beware of the Coming Activist Bubble

Jon C. Ogg — Fri, 08 Mar 2013 11:31:36 +0000

You have heard of all sorts of bubbles in the financial world. There are instances like the housing bubble, a bond bubble, the dot-com bubble, the tech bubble, the private equity bubble, and on and on. 24/7 Wall St. wants to introduce the term “activist bubble,” where too many super-wealthy advisors get too unruly in trying to milk out gains from stocks by pressuring companies into unlocking more shareholder value. We might not be in an activist bubble yet, but the trend of activist investing is getting to the point that a prudent investor might have to wonder if we are entering a new phase called the “Activist Investor Bubble.”

Just a few years ago, the common themes were out-of-control finances and out-of-control corporate leadership with no accountability to shareholders (nor to any moral hazards). The pendulum has now swung the other way, and perhaps it is starting to swing too far. Perhaps. Now anyone with access to millions of dollars or billions of dollars can aggressively go after a company for corporate governance issues. This can be over executive compensation, how a company should be capitalized, what forms of stock it should have, what terms it should have for a merger, whether it should split the roles of CEO and chairman, anti-takeover provisions, retirement compensation and on and on.

If you begged us to guess whether activism will grow or contract, we would think that activism will continue. Does that mean that there is not a risk nor that this is a bubble that will not burst and end badly for the public? Those are complicated issues and it may be quite some time before we know the answer. What is so interesting here is that the activist world very recently has targeted what may be hundreds of billions dollars worth of companies.

There are many instances where we cannot help but wonder if an activist bubble is helping to bolster many stocks. For starters, activists can often drive up a stock and create wonderful value. Sometimes they can get out of control, and sometimes they can go out and create absolute value destruction. The saying “there is no free lunch” is one that cannot be ignored, even by activists.

One big activist dilemma is General Electric Co. (NYSE: GE). GE is so large that forcing change is hard to do, but calls have been made over and over to break up the conglomerate’s empire. The problem is that weak units during one part of the business cycle act as cover for the other units when the business cycle changes. An activist might have said that GE needed to not cut its dividend during the recession, but this freed up enough capital that it probably saved quite literally tens of thousands of jobs at GE in the recession. Others have called for new leadership other than Jeff Immelt, while Immelt’s greatest blunders may simply have been that he took over after Jack Welch, when GE was trading close to 30 times earnings, and Immelt’s first day as CEO was quite literally a few days before the September 11, 2001 terrorist attacks.

A few powerful men with many financial backers behind them have gone after some really big companies. Again, this train is moving what is nothing short of hundreds of billions of dollars worth of companies. What you have not seen is why this may be a bubble. There is a serious risk in driving shareholder value in the short-term. Anyone can go in and propose layoffs, a spin-off, a recapitalization, a change in management and the like. The problem is that this effort can gut a company or it can merely be a win during one part of the business cycle.

Many efforts can be taken to unlock shareholder value. Special dividends can be issued. Debt can be taken on to pay a dividend or to buy back shares. Companies can go out and seek strategic alternatives. Companies can make their boards easy to change or they can get rid of any barriers that might lead to takeovers. There are dozens of more things they can do. The question to ask is whether creating short-term value comes at the cost of adding too much long-term risk. These risks are potentially serious issues that investors chasing activists have to consider.

Filed under: Accounting, Activist Investor, Austerity, Banking & Finance, Buffett, Compensation, Consumer Product, Corporate Governance, Dividends & Buybacks, Economy, Editor's Picks, Insider Activity, Labor, Labor & Unions, Large Cap Stocks, Management Change, Mergers & Acquisitions, Mergers and Buy Outs, Personal Finance, Private Equity, Regulation, Stock Buybacks, Technology, Technology Companies, Turnarounds, Value Investing Tagged: AAPL, AOL, BKS, CLX, CVC, CWH, DELL, DIS, featured, FOE, GBL, GDI, GE, GNW, HES, HLF, KSWS, LGF, MSFT, MSI, NAV, NFLX, PG, ROCM, SPW, YHOO

24/7 Wall St. Closing Bell — February 28, 2013: Markets Climb Before Late Day Slide (EBAY, RHT, SKS, FSLR, VMW, CECO, CLR, GRPN, GTAT, JCP, LTD, MNST, RGR, PANL, BKS, CVC, KSS, SHLD, BODY, CTIC, CLNE, DECK, GPS, MCP, PANW, SD, BBY, GRPN, JCP, BSFT)

Paul Ausick — Thu, 28 Feb 2013 21:04:03 +0000

U.S. equity markets opened mixed this morning as the federal budget sequester appears to be set to go into effect tomorrow. Global data releases were also mixed. In Europe, the consumer price index came in at 2%, as expected, but Spain’s fourth-quarter GDP revision was worse than expected. Consumer spending slipped in France and German unemployment ticked up to 6.9%. In Asia, the news was better, with the official announcement of a dovish replacement for Governor of the Bank of Japan and Japanese PMI up month-over-month. In the U.S. the second revision to GDP growth rose less than expected, to just 0.1% (more coverage here).

The U.S. dollar index rose 0.38% today, now at 81.906. The GSCI commodity index is down 0.8% at 650.13, with commodities prices mostly higher today. WTI crude oil closed down 0.8% today, at $92.05 a barrel, losing 5.6% on the month (more coverage here). Brent crude trades down 0.7% at $111.10 a barrel. Natural gas is up about 1.3% today at about $3.48 per million BTUs following the weekly storage report (more coverage here). Gold settled down 1.1% today at $1,578.10 an ounce, down about 5% for the month of February.

The unofficial closing bells put the DJIA down about 21 points to 14,054.25 (-0.15%), the NASDAQ fell about 2 points (-0.07%) to 3,160.19, and the S&P 500 fell -0.09% or more than 1 point to 1,514.56.

There were a several analyst upgrades and downgrades today, including eBay Inc. (NASDAQ: EBAY) started as ‘outperform’ at BMO; Red Hat Inc. (NYSE: RHT) started as ‘overweight’ at Barclays; Saks Inc. (NYSE: SKS) cut to ‘underweight’ at Morgan Stanley; First Solar Inc. (NASDAQ: FSLR) reiterated as ‘hold’ at Argus; and VMware Inc. (NYSE: VMW) started as ‘hold’ at Stifel Nicolaus.

Earnings reports since markets closed last night resulted in several price moves today, including these: Career Education Corp. (NASDAQ: CECO) is down 9% at $3.25; Continental Resources Inc. (NYSE: CLR) is up 4.7% at $87.88; GT Advanced Technologies Inc. (NASDAQ: GTAT) is down 6.5% at $2.87; Limited Brands Inc. (NYSE: LTD) is up 2.7% at $45.72; Monster Beverage Corp. (NASDAQ: MNST) is up 3.3% at $51.27; Sturm Ruger & Co. Inc. (NYSE: RGR) is up 2.6% at $54.89 (more coverage here); Universal Display Corp. (NASDAQ: PANL) is up 13.5% at $31.67; Barnes & Noble Inc. (NYSE: BKS) is up 4.5% at $15.92; Cablevision Systems Corp. (NYSE: CVC) is down 9.1% at $14.06; Kohl’s Corp. (NYSE: KSS) is down 1.1% at $46.10; and Sears Holdings Corp. (NASDAQ: SHLD) is down 6.2% at $44.52 (more coverage here).

After markets close today and before they open tomorrow morning we are scheduled to hear from Body Central Corp. (NASDAQ: BODY), Cell Therapeutics Inc. (NASDAQ: CTIC), Clean Energy Fuels Corp. (NASDAQ: CLNE), Deckers Outdoor Corp. (NASDAQ: DECK), Gap Inc. (NYSE: GPS), Molycorp Inc. (NYSE: MCP), Palo Alto Networks Inc. (NYSE: PANW), and SandRidge Energy Co. (NYSE: SD).

Best Buy Co. Inc. (NYSE: BBY) was scheduled to report after closing today, but announced a delay until tomorrow, ahead of tonight’s deadline to receive an offer from founder Richard Schulze (more coverage here).

Some standouts from today include the following stocks:

Groupon Inc. (NASDAQ: GRPN) is down 24.3% at $4.53. The daily deals web site absolutely cratered on a dismal earnings report last night. More coverage here.

J.C. Penney Co. Inc. (NYSE: JCP) is down 18% at $17.34. The department store operator posted results that were even worse than Groupon’s. More coverage here.

Broadsoft Inc. (NASDAQ: BSFT) is down 30.8% at $21.39. The Internet communications company posted good earnings last night, but guidance was way below expectations.

Stay tuned for Friday. Fed Chairman Ben Bernanke is giving a speech. Automakers will be announcing February car sales throughout the day.We have also noted the following events on the schedule (all times Eastern):

8:30 a.m. – Personal income and outlays
8:58 a.m. – PMI manufacturing index
9:55 a.m. – University of Michigan/Thomson Reuters consumer sentiment index
10:00 a.m. – Institute for Supply Management manufacturing index
10:00 a.m. – Construction spending

Filed under: 24/7 Wall St. Wire, HI/LOW, Market Close Tagged: BBY, BKS, BODY, BSFT, CECO, CLNE, CLR, CTIC, CVC, DECK, EBAY, FSLR, GPS, GRPN, GTAT, JCP, KSS, LTD, MCP, MNST, PANL, PANW, RGR, RHT, SD, SHLD, SKS, VMW

24/7 Wall St. Closing Bell — February 27, 2013: Markets Climb on Mixed Data, News (LNKD, GOOG, VRSN, GTI, NOK, AWK, EIX, PCLN, FSLR, RRC, WFT, DLTR, JOY, SWC, TGT, CECO, CLR, GRPN, GTAT, JCP, LTD, MNST, RGR, PANL, BKS, CVC, KSS, SHLD, FSLR, ZNGA, AH)

Paul Ausick — Wed, 27 Feb 2013 21:04:03 +0000

U.S. equity markets opened higher this morning following markets in Europe and Asia, most of which were also pointed higher. In Asia, equities were mostly higher following yesterday’s buoyant session in the U.S. The exception was Japan’s Nikkei, which finished lower on a strengthening yen. In Europe, Italy sold 5- and 10-year debt at higher yields, but the country sold them all. In the U.S., mortgage loans dipped again (more coverage here) and durable goods orders came in below expectations (more coverage here). The report on pending home sales was sharply higher, though, (more coverage here) and helped push stocks higher in advance of Fed Chairman Ben Bernanke’s second day of Congressional testimony.

The U.S. dollar index fell 0.33% today, now at 81.601. The GSCI commodity index is down 0.8% at 653.56, with commodities prices mostly higher today on the weaker dollar. WTI crude oil closed up 0.1% today, at $92.76 a barrel, following today’s report on inventories (more coverage here). Brent crude trades down 0.7% at $111.95 a barrel. Natural gas is down 1% today at about $3.42 per million BTUs. Gold settled down 1.2% today at $1,595.70 an ounce.

The unofficial closing bells put the DJIA up about 176 points to 14,076.22 (1.27%), the NASDAQ rose more than 32 points (1.04%) to 3,162.27, and the S&P 500 rose 1.28% or about 19 points to 1,516.032.

There were a several analyst upgrades and downgrades today, including LinkedIn Corp. (NYSE: LNKD) started as ‘buy’ with a $195 price target at Wunderlich (more coverage here); Google Inc. (NASDAQ: GOOG) raised to ‘buy’ and price target raised to $920 at BofA/Merrill Lynch; VeriSign Inc. (NASDAQ: VRSN) cut to ‘neutral’ at Credit Suisse; GrafTech International Ltd. (NYSE: GTI) cut to ‘sell’ at Goldman Sachs and cut to ‘neutral’ at J.P. Morgan; and Nokia Corp. (NYSE: NOK) raised to ‘buy’ with a $6 price target at Argus.

Earnings reports since markets closed last night resulted in several price moves today, including these: American Water Works Co. Inc. (NYSE: AWK) is up 0.1% at $39.46; Edison International (NYSE: EIX) is up 2.6% at $47.31; Priceline.com Inc. (NASDAQ: PCLN) is up 3.2% at $700.23; Range Resources Corp. (NYSE: RRC) is up 4% at $74.21 after posting a new 52-week high of $74.65 earlier today; Weatherford International Ltd. (NYSE: WFT) is up 0.6% at $12.01; Dollar Tree Inc. (NASDAQ: DLTR) is up 11.2% at $45.69 (more coverage here); Joy Global Inc. (NYSE: JOY) is up 6.2% at $63.68 (more coverage here); Stillwater Mining Co. (NYSE: SWC) is up 3.3% at $13.30 (more coverage here); and Target Corp. (NYSE: TGT) is down 1.1% at $63.38 (more coverage here).

After markets close today and before they open tomorrow morning we are scheduled to hear from Career Education Corp. (NASDAQ: CECO), Continental Resources Inc. (NYSE: CLR), Groupon Inc. (NASDAQ: GRPN), GT Advanced Technologies Inc. (NASDAQ: GTAT), J.C. Penney Co Inc. (NYSE: JCP), Limited Brands Inc. (NYSE: LTD), Monster Beverage Corp. (NASDAQ: MNST), Sturm Ruger & Co. Inc. (NYSE: RGR), Universal Display Corp. (NASDAQ: PANL), Barnes & Noble Inc. (NYSE: BKS), Cablevision Systems Corp. (NYSE: CVC) (more coverage here), Kohl’s Corp. (NYSE: KSS), and Sears Holdings Corp. (NASDAQ: SHLD).

Some standouts from today include the following stocks:

First Solar Inc. (NASDAQ: FSLR) is down 13.7% at $27.07. The solar panel maker reported weak results last night, and dragged the entire sector down today. More coverage here.

Zynga Inc. (NASDAQ: ZNGA) is up 4.8% at $3.52. The social game maker is getting yet another boost today following approval of legislation permitting online gambling in New Jersey. More coverage here.

Accretive Health Inc. (NYSE: AH) is down 22.1% at $9.44. The healthcare revenue management firm delayed its fourth quarter earnings report, saying it may change the way it recognizes contract revenues.

Stay tuned for Thursday. Fed Governor Sarah Bloom Raskin, Dallas Fed President Richard Fisher, and Chicago Fed President Charles Evans are giving speeches. We have also noted the following events on the schedule (all times Eastern):

8:30 a.m. – GDP
8:30 a.m. – New claims for unemployment benefits
9:45 a.m. – Chicago PMI
9:45 a.m. – Bloomberg consumer comfort index
10:30 a.m. – EIA weekly natural gas storage report
11:00 a.m. – Kansas City Fed manufacturing index
3:00 p.m. – Farm prices
4:30 p.m. – Fed balance sheet and money supply

Filed under: 24/7 Wall St. Wire, HI/LOW, Market Close Tagged: AH, AWK, BKS, CECO, CLR, CVC, DLTR, EIX, FSLR, GOOG, GRPN, GTAT, GTI, JCP, JOY, KSS, LNKD, LTD, MNST, NOK, PANL, PCLN, RGR, RRC, SHLD, SWC, TGT, VRSN, WFT, ZNGA

Pay TV Bundling Challenged

Paul Ausick — Wed, 27 Feb 2013 19:02:58 +0000

In a lawsuit filed late yesterday in New York, Cablevision Systems Corp. (NYSE: CVC) is taking on Viacom Inc. (NASDAQ: VIAB) in a move that challenges the media company’s practice of forcing cable providers to pay for dozens of channels that nobody wants as part of the basic cable offering. Ironically, when a consumer group filed a similar suit just a year ago, Cablevision sided with media companies and successfully beat back an effort to force the media companies to offer what’s known as a la carte programming.

Cablevision made this comment about yesterday’s filing:

The manner in which Viacom sells its programming is illegal, anti-consumer, and wrong. Viacom effectively forces Cablevision’s customers to pay for and receive little-watched channels in order to get the channels they actually want. Viacom’s abuse of its market power is not only illegal, but also prevents Cablevision from delivering the programming that its customers want and that competes with Viacom’s less popular channels.

Viacom may only be a stalking horse for the rest of the media industry that includes big names the Walt Disney Co. (NYSE: DIS) and its Disney channels, ESPN channels, and ABC broadcast network; News Corp. (NASDAQ: NWSA), which owns the Fox broadcast network and other Fox channels; Time Warner Inc. (NYSE: TWX), which owns HBO, the Turner channels, and CNN; CBS Corp. (NYSE: CBS) which owns Showtime as well as its eponymous broadcast network; and Comcast Corp. (NASDAQ: CMCSA) which now controls NBC.

The signal issue here is what’s called ‘tying’, a practice where programmers include that what Cablevision calls “less popular ancillary channels’ along with “must-have networks.” Cablevision cites Viacom’s must-have networks as Nickelodeon, Comedy Central, and MTV, along with 14 of the ancillary channels that are forced on the cable operators.

Combined with other lawsuits and complaints about programmers’ bundling requirements, the current spate of actions against the programmers could result in some relief for consumers, who are currently paying an average of $90 a month for cable or satellite channels that many don’t want and don’t watch.

Filed under: 24/7 Wall St. Wire, Cable Companies, Entertainment, Law, Satellite Tagged: CBS, CMCSA, CVC, DIS, featured, NWSA, TWX, VIA-B

Media Digest (2/27/2013) Reuters, WSJ, NYT, FT, Bloomberg

Douglas A. McIntyre — Wed, 27 Feb 2013 11:47:11 +0000

Italy’s political problems may hurt the chances of the European Central Bank to battle the European Union’s financial problems. (Reuters)

China’s PMI likely fell in February, a possible sign the world’s economy has slowed. (Reuters)

The Tribune Company hires bankers to sell its major dailies. (Reuters)

New Jersey approves online gambling and Atlantic City casinos will be allowed to take bets. (WSJ)

Bernanke says the Fed will buy bonds as long as unemployment stays high. (WSJ)

Builders are building homes that are more expensive to buy than some existing homes, making a two-tiered housing market. (WSJ)

Cablevision Systems Corp. (NYSE: CVC) sues Viacom Inc. (NASDAQ: VIAB) because the entertainment company makes it carry low-rated networks in exchange for access to higher rated ones. (WSJ)

Clearwire Corp. (NASDAQ: CLWR) will take financing from Sprint Nextel Corp. (NYSE: S), which will make a potential buyout of the 4G company by Dish Network Corp. (NASDAQ: DISH) more complex. (WSJ)

Wall St.’s bonus pool reaches $20 billion. (WSJ)

California’s energy infrastructure may weaken as demand challenges supply from traditional sources, wind and solar. (WSJ)

The FAA may allow Boeing Co. (NYSE: BA) to test the 787 in the air to examine problems with its electrical systems. (WSJ)

Taiwan PC maker Asus will increase its assault on the U.S. market. (WSJ)

J.P. Morgan Chase & Co. (NYSE: JPM) will cut 17,000 jobs. (WSJ)

Austerity measures will eliminate a huge number of government jobs. (NYT)

Jim Millstein, who worked in the Treasury Department, has been retained to renegotiate loans of busted LBO Energy Future Holdings. (FT)

China begins to more aggressively regulate its “shadow banks.” (FT)

Nokia Corp. (NYSE: NOK) will try to compete with BlackBerry (NASDAQ: BBRY) now that its assault on Apple Inc. (NASDAQ: AAPL) has failed. (Bloomberg)

Filed under: 24/7 Wall St. Wire, Press Digest Tagged: AAPL, BA, BBRY, CLWR, CVC, DISH, JPM, NOK, S, VIA-B

Google Fiber’s Real Upside for Internet Access and HD TV Efforts

Jon C. Ogg — Wed, 12 Dec 2012 11:23:20 +0000

Google Inc. (NASDAQ: GOOG) dominates Internet search. When comScore (NASDAQ: SCOR) posted its October U.S. search market numbers, Google had a whopping 66.7% of the total market share. What if Google decides that its Kansas City offering called Google Fiber becomes a nationwide ambition? The company could become a major contender in Internet access and HD TV programming and content. The question is whether Google decides to go after more markets than Kansas City, even as the market is just up and running, still only expanding locally.

The high-end service offered is for one low price of $120 per month, which includes all the necessary gear and set-up, and the households can as many as 200 HD channels and Internet that runs at 1 gigabit (Gb) per second. That is close to 100 times faster than today’s average Internet speeds (as of the end of 2011), so fast that a full-length HD movie could be downloaded in about 30 seconds without interruption. In a world where more and more households are streaming and storing content from providers like Netflix Inc. (NASDAQ: NFLX), this could be a huge game changer.

There are approximately 118 million U.S. households. Nielson’s local television research found that there is 114.7 million TV households in its measurement. So basically almost every household in the United States has some form of TV access, through cable, satellite, carrier fiber or off-the-air antenna. Cable companies like Comcast Corp. (NASDAQ: CMCSA) and Time Warner Cable Inc. (NYSE: TWC) dominate cable delivery. Some 84% of U.S. households, or about 92 million homes, have cable. According to the National Cable and Television Association, total cable revenues for 2011 were $95.6 billion dollars. These are combined revenues from cable video, digital video, high-speed Internet and cable phone. While cable delivery dominates satellite TV from DirecTV (NASDAQ: DTV) and Dish Network Corp. (NASDAQ: DISH), the combined revenue for the two companies is still expected to be almost $44 billion in 2012.

With the market offering billions on billions more, Google could really decide to make strides here to go capture more for its shareholders. Build out estimates for the Google Fiber nationwide network are as high as $140 billion dollars. If Google were to capture only a third of the annual revenue from cable and satellite, they could generate more than $46 billion per year.

Both of the major U.S. telephone and wireless carriers are also in the market. AT&T Inc. (NYSE: T) offers its U-verse TV package, which has 6.8 million customers, while Verizon Communications Inc. (NYSE: VZ) offers its FiOS TV, with about 4.4 million customers. Both companies tout their fiber-to-the-premises as a major selling point. The majority of the customers for both carriers have bundled packages that average between $150 and $175 per month. So why would American households switch to Google Fiber? Price and speed, simple enough.

At $120 per month, the Google Fiber package is considerably lower than any of the other providers’ “premium” packages. Younger consumers who tend to stream movies and shows are also avid online gamers, and would undoubtedly be drawn to the incredible Internet speed. Google offers an Internet-only package for $70 per month. The combination of 200 HD channels, incredibly fast Internet and two terabytes of storage capacity all controlled by the Nexus 7 Google tablet, and installation at no charge. That could change the minds of many new customers.

Who stands to lose if Google expands across the United States?

It would seem that all the current players stand to lose market share. Satellite providers may fare somewhat better, as they are often the only provider to rural areas. On the other hand, local or regional cable operators and smaller Internet service providers could suffer as well if this truly became a nationwide effort.

Cablevision Systems Corp. (NYSE: CVC) predominantly serves the Tri-State area of New York, New Jersey, Connecticut and parts of Pennsylvania. Would their lack of a national footprint be a disadvantage despite their impressive corporate portfolio? Could the same be said for Charter Communications Inc. (NASDAQ: CHTR). In and out of bankruptcy over the years and plagued with very poor customer satisfaction ratings, they could also be a Google Fiber victim. AOL Inc. (NYSE: AOL) could be vulnerable, and ditto for EarthLink Inc. (NASDAQ: ELNK).

So, why could Google win here? Simple enough: power and money. Google has the ability to fund such an ambitious nationwide project. With almost $50 billion in cash and the ability to place an enormous debt offering if it chooses to do so. The company could easily fight the established leaders and it has obvious name recognition. You do not search for something on the Internet, you “Google” it. The Google name is ubiquitous. That kind of branding can make a difference in a project so ambitious.

Lee Jackson

Filed under: Cable Companies, Infrastructure, Internet, Media, Technology, Technology Companies, Telecom, Telecom & Wireless, TV Tagged: AOL, CHTR, CMCSA, CVC, DISH, DTV, ELNK, featured, GOOG, NFLX, SCOR, T, TWC, VZ

24/7 Wall St. Closing Bell — November 27, 2012: Markets Falter Again (SHOO, BRCD, YELP, NOV, CVC, ADT, ADI, GMCR, PVH, AEO, ANN, EXPR, TFM, JASO, MOV, LEDS, RAH, CAG, ACAD, MMR)

Paul Ausick — Tue, 27 Nov 2012 21:06:27 +0000

U.S. equity markets opened lower again this morning, even following an agreement on the amount and delivery date of another eurozone bailout package for Greece (more coverage here). The lack of enthusiasm may have had something to do with a dreary economic outlook from the OECD (more coverage here). In Asia, stronger corporate profits in China diminished hopes that the government might apply more economic stimulus, turning good news into bad. In the U.S., orders for durable goods rose sharply (more coverage here), and consumer sentiment also rose to its highest level since February 2008 (more coverage here). Equity prices muddled along slightly above or below the opening line until Senator Harry Reid told reporters that little progress is being made in the debt discussions (more coverage here). That sent stocks sharply lower.

The U.S. dollar index rose today, now up 0.20% at 80.408. The GSCI commodity index is down 0.43% at 646.99, with commodities prices mixed today. WTI crude oil closed down 0.6% today, at $87.18 a barrel. Brent crude trades down about 0.9% at $109.93 a barrel. Natural gas is up 0.9% today at about $3.77 per thousand cubic feet. Gold settled down 0.4% today at $1,742.30 an ounce.

The unofficial closing bells put the DJIA down more than 89 points to 12,878.21 (-0.69%), the NASDAQ fell about 9 points (-0.30%) to 2,967.79, and the S&P 500 fell -0.52% or more than 7 points to 1,398.95.

There were several analyst upgrades and downgrades today, including Steven Madden Ltd. (NASDAQ: SHOO) started as ‘sell’ with a target price of $35 at Goldman Sachs; Brocade Communications Corp. (NASDAQ: BRCD) maintained as ‘hold’ at Argus; Yelp Inc. (NYSE: YELP) raised to ‘buy’ with a target price of $24 at Cantor Fitzgerald; National Oilwell Varco Inc. (NYSE: NOV) cut to ‘equal weight’ at Morgan Stanley; and Cablevision Systems Corp. (NYSE: CVC) cut to ‘hold’ at Canaccord Genuity.

Earnings reports of interest since U.S. markets closed last night have resulted in price moves today, including this one as of the last half hour of trading: ADT Corp. (NYSE: ADT) is up 1.5% at $43.74 after posting a new 52-week high of $45.00 earlier today (more coverage here).

After markets close today and before they open tomorrow morning we are scheduled to hear from Analog Devices Inc. (NASDAQ: ADI), Green Mountain Coffee Roasters Inc. (NASDAQ: GMCR), PVH Corp. (NYSE: PVH), American Eagle Outfitters Inc. (NYSE: AEO), Ann Inc. (NYSE: ANN), Express Inc. (NYSE: EXPR), Fresh Market Inc. (NYSE: TFM), JA Solar Holdings Co. Ltd. (NASDAQ: JASO), Movado Group Inc. (NYSE: MOV), and SemiLEDS Corp. (NASDAQ: LEDS).

Some standouts from today include the following stocks:

Ralcorp Holdings Inc. (NYSE: RAH) is up 26.5% at $88.82. The packaged food company is being acquired by ConAgra Foods Inc. (NYSE: CAG) for $90 a share. More coverage here.

ACADIA Pharmaceuticals Inc. (NASDAQ: ACAD) is up 130% at $5.30 after posting a new 52-week high of $6.54 earlier today. The biopharmaceuticals maker reported good results in a phase III trial of its drug for Parkinson’s disease. More coverage here.

McMoRan Exploration Co. (NYSE: MMR) is down 14.4% at $8.26 after posting a new 52-week low of $7.25 earlier today. The independent oil & gas company continues to get hammered today following a weak flow test report on its largest Gulf of Mexico well.

Stay tuned for Wednesday. Cleveland Fed President Sandra Pianalto and Fed Governor Danial Tarullo are giving speeches. We have also noted the following events on the schedule (all times Eastern):

7:00 a.m. – Mortgage Bankers Association purchase applications
10:00 a.m. – New home sales
10:30 a.m. – EIA weekly petroleum status report
1:00 p.m. – 5-year Treasury note auction
2:00 p.m. – Beige Book

Paul Ausick

Filed under: 24/7 Wall St. Wire, HI/LOW, Market Close Tagged: ACAD, ADI, ADT, AEO, ANN, BRCD, CAG, CVC, EXPR, GMCR, JASO, LEDS, MMR, MOV, NOV, PVH, RAH, SHOO, TFM, Yelp