Alcoa Inc. (NYSE: AA) Reiterated Buy at Argus.
Berkshire Hathaway Inc. (NYSE: BRK-B) named as Bull of the Day with Outperform rating at Zacks.
Carnival Corp. (NYSE: CCL) Reiterated Hold at Argus.
Copart, Inc. (NASDAQ: CPRT) Started as Buy at BofA/ML.
DuPont (NYSE: DD) Reiterated Buy and raised $62 target at BofA/ML.
Exxon Mobil Corporation (NYSE: XOM) Reiterated Buy with $100 target at Argus.
GSI Commerce, Inc. (NASDAQ: GSIC) removed from coverage at BofA/ML.
Hudson City Bancorp, Inc. (NASDAQ: HCBK) Raised to Neutral at BofA/ML.
Marriott International (NYSE: MAR) Raised to Outperform at Wells Fargo.
Owens-Illinois, Inc. (NYSE: OI) Raised to Outperform with $36 target at Credit Suisse.
Quest Diagnostics Inc. (NYSE: DGX) Raised to Outperform with $65 target at Credit Suisse.
The Travelers Companies, Inc. (NYSE: TRV) Cut to Sell at Goldman Sachs.
Teekay Tankers Ltd. (NYSE: TNK) Raised to Buy at BofA/ML.
Universal Technical Institute (NYSE: UTI) Maintained Underperform as Bear of the Day at Zacks.
Walgreen Co. (NYSE: WAG) Raised to Outperform with $36 target at Credit Suisse.
XL Group plc (NYSE: XL) Raised to Buy at Goldman Sachs.  

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JON C. OGG

GSI is offers e-commerce and interactive marketing services to businesses and it is one of the better companies out there in its segment.  The buyout is a cash buyout valued at $29.25 per share, which comes to a value of about $2.4 billion after cash spent and debt assumption. 

eBay is paying roughly a 50% premium in this deal and it is still subject to GSI holder approval.  eBay is going to get to combine GSI with its Marketplaces and PayPal operations and it is probably safe to assume that eBay can almost instantly leverage this business up at a value more than GSI could have all on its own independently.

GSI currently has over 180 customers that are leading retailers and brands which are in 14 merchandise categories and its contracts are generally long-term commerce services relationships.  eBay said that it will divest 100 percent of GSI’s licensed sports merchandise business and 70 percent of ShopRunner and Rue La La and that unit will be run by GSI’s existing CEO and founder.  As part of the divestiture, eBay said that it will loan the new holding company some $467 million and retain a 30 percent stake in Rue La La and ShopRunner; and Michael Rubin will invest additional cash of $31 million in the holding company.

We feel that the benefits and potential gains here may be understated by eBay.  eBay noted that it expects this transaction to show about $60 million in synergies by 2013 and said it sees the deal to be neutral to earnings per share in 2011 and accretive to earnings per share in 2012.  It sees the impact being $0.30 to $0.34 off of 2011 GAAP earnings.  GSI gets a 40-day go-shop provision, but eBay has the right to match any offers.

What eBay sort of skimmed over it that it will almost instantly be able to leverage this platform to many smaller and larger customers inside eBay.  The company will also get additional insight into more online business operations and gain an ability to see more sales forecasting capabilities than it has today.  If PayPal and Marketplaces were not a part of eBay then there may not be as large of a benefit to this acquisition.  It would seem a shoe-in to believe that eBay can instantly turn this process on with many of its existing Tier-1 merchants and auction-running clients.

eBay has a monopoly in many online auction segments for consumers and small to mid-sized businesses.  This acquisition of GSI is just one more step to incremental growth.  The only real surprise we see with this is that the deal was done in cash rather than with stock.

eBay shares have fallen by more 3% to $30.66 in late-morning trading.  GSI Commerce shares are up almost 51% at $29.25 and its 52-week trading range is $17.77 to $31.35.  Thomson Reuters even had a consensus 12-month consensus analyst target of $30.12 for GSI Commerce.  If eBay has to pay up for this deal, we may reconsider our stance.  All in all, eBay seems to be getting a better deal than it is getting credit for.

JON C. OGG

Church & Dwight Co. Inc. (NYSE: CHD) Raised to Outperform at BMO; a safe defensive stock for a bear market.
GSI Commerce Inc. (NASDAQ: GSIC) Started as Buy at Citigroup.
The Men’s Wearhouse, Inc. (NYSE: MW) Raised to Overweight at JPMorgan.
SunPower Corp. (NASDAQ: SPWRA) Raised to Buy at Soleil.
Tesoro Corp. (NYSE: TSO) Raised to Outperform at RBC.
ValueClick, Inc. (NASDAQ: VCLK) Cut to Sell at S&P Equity Research (late Thursday call)

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JON C. OGG

Details are as follows:

American Water Works Co. (NYSE: AWK) is on deck with German-parent RWE selling another 30 million shares via Bank of America Merrill Lynch, Citigroup and Goldman Sachs.  With shares close to $19.00 today, this generates a $570 million estimates take.

Great Lakes Dredge & Dock Corp. (NASDAQ: GLDD) is on deck with some 12.5 million shares being sold through Barclays Capital and Bank of America Merrill Lynch.  This should come to roughly $75 million being raised based on today’s price.

U-Store-It Trust (NYSE: YSI) is set to sell 22 million shares through  Bank of America Merrill Lynch and Wells Fargo and this deal is expected to raise close to $110 million based on today’s price.

Then there are the regional and community banks that we have seen from Dandler O’Neill.  The Bancorp Bank (NASDAQ: TBBK) is on deck to sell roughly $50 million worth of shares through Sandler O’Neill.  Hampton Roads Bancshares Inc. (NASDAQ: HMPR) is expected to sell some 32 million shares through Sandler O’Neill and should raise roughly $140 million based on today’s price.  Seacoast Banking Corp. of Florida (NASDAQ: SBCF) is expected to sell about 28 million shares also through Sandler O’Neill and will bring in close to $70 million based on today’s prices.

Two more banking deals are also on deck that will either come tonight or perhaps next week.  Cadence Financial Corp. (NASDAQ: CADE) is expected to sell 31.5 million shares through FBR Capital Markets in an effort to raise roughly $55 million based upon today’s price.  Be advised, Cadence is extremely think trading volume.  Umpqua Holdings Corp. (NASDAQ: UMPQ) is expected to sell some $175 million in common stock via JPMorgan and others including KBW.

When we tally all of this up, it comes to more than $1.6 billion in secondary offerings just between today and what may come tomorrow.  That cash has to come from somewhere and generally has to stay in the stock for at least a little bit of time.

You can join our open email distribution list if you like to hear about secondary offerings, IPOs, Warren Buffett and other guru activities, mergers, key daily analyst reports, and other top trading and investing issues.

JON C. OGG
AUGUST 13, 2009

GSI Commerce Inc. (NASDAQ: GSIC) is down almost 5% on a juiced up secondary offering.

BioSante Pharmaceuticals, Inc. (NASDAQ: BPAX) is up over 30% on positive Phase III safety data.

Palm Inc. (NASDAQ: PALM) is down over 4% early on an analyst downgrade.

Melco Crown Entertainment Ltd. (NASDAQ: MPEL) is likely to have the most active day of 2009 on its secondary.

Citigroup Inc. (NYSE: C) was up 3% but the most active on NYSE on an internal management review process.

Regions Financial (NYSE: RF) was the biggest winner of the John Paulson added-banks.

JON C. OGG
AUGUST 12, 2009

Genzyme Corp. (NASDAQ: GENZ) is on suicide watch.  The market has forgotten to remind Genzyme that it’s a bull market again.  We said last week that it was on the verge of hitting 52-week lows.  It did…. Here was our BioHealthInvestor.com analysis, and that is what is hurting the stock.  The market is trading Genzyme as though another big shoe is going to drop.

Two rumors were around this week that we took note of in Biotech-Land. Spectrum Pharmaceuticals, Inc. (NASDAQ: SPPI) rose over 6% Friday, but the volume of 2.7 million shares was not indicative of an imminent deal.  Options were active, with 5,285 of the AUG $7.50 CALLS traded vs. open interest of 6,880.  The other one worth noting was Cubist Pharmaceuticals Inc. (NASDAQ: CBST) as it had some loose buyout rumors this last week as well.  The stock is an old favorite of ours for the possibilities of a buyout with its Cubicin and treatments for hospital-borne diseases and infections.

Berkshire Hathaway Inc. (NYSE: BRK-A) NYSE: BRK-B) did very well on earnings, if you use the Buffett calculation of including gains.  Earnings were $3.3 billion or $2,123.00 EPS and revenues were $29.6 billion.  Non-GAAP earnings not including gains were $1,147.00 EPS.  Thomson Reuters had a figure of $1,238.00, but the estimates are operations estimates rather than the gains and losses estimates.  The results included a large derivatives gain as well.

Fred’s Inc. (NASDAQ: FRED) was a Barron’s winner.  The weekly financial bible gave it a very positive article with some noting that it could go from $12 to $16 and one noting that it trades at roughly half the multiple of peers.

GSI Commerce Inc. (NASDAQ: GSIC) is likely to have a 10 million share secondary offering this week. Approximately 81% of the shares being sold are by backer Softbank and by its affiliated holders and insiders.  In short, its 24+ million share float is about to get a lot larger and it will be of little to no benefit to GSI itself.  Amazingly enough, shares held up all week and closed out at $18.44 (just under teh $18.75 high of the last 52-weeks).

We doubt anything is imminent here on this front, but we want everyone to consider the notion that Leap Wireless (NASDAQ: LEAP) and MetroPCS (NYSE: PCS) could reconsider a merger after that failed merger from 2007.  This is on the heels of a Sprint and Virgin deal, and this merger might come from need rather than greed.  Both companies had very poor showings after earnings this last week.

A tiny company called Opexa Therapeutics, Inc. (NASDAQ: OPXA) signed a stem cell technology sale agreement with Novartis A G (NYSE: NVS) that could ultimately be ten-times larger than the company itself.  This one closed up over 300% higher, that is three-hundred…. on the deal.  It is still just a $2.03 stock, but this one just got on the map as over 7.9 million shares traded hands.

Earnings season is winding down and we have a few key stocks left:

• Applied Materials Inc. (NASDAQ: AMAT) is due with earnings on Tuesday with estimates around -$0.08 EPS and $955 million in revenues.
• Also on the same day we get earnings from cult stock Dendreon Corp. (NASDAQ: DNDN).  The Dendreon earnings themselves won’t matter, it is the increased cash expenses and if we get any new status on its FDA path to the approval of PROVENGE for a last line of defense against prostate cancer.
• Wal-Mart Stores Inc. (NYSE: WMT) is also on deck on Thursday with estimates of $0.86 EPS and $103.1 billion in revenues.

Another house keeping issue for Uncle Sam…. the FOMC has a two day meeting on August 11 and August 12 with a decision on rates at roughly 2:15 PM EST on the 12th.  With a current 0.00% to 0.25% target range, there is effective a zero-percent chance of a rate hike according to Fed Fund Futures.  But the same Fed Fund Futures look for a minimum of 0.25% in December and those Fed Fund Futures get pretty close to calling for an almost certainty of 0.50% Fed Funds by Feb. 2010.

Lastly, we’d make an alert to our readers that on Monday we will be running a huge story at BioHealthInvestor.com on the recent heating up of the drug wars.  The diabetes drug war that is.  There have been a ton of fresh developments just in the last week and this goes much deeper than our original “next $170 billion opportunity in blockbuster drugs” we did for eight of the top diseases and conditions affecting America.  This one is solely around the diabetes and obesity treatments coming down the pipe.

JON C. OGG
August 8, 2009

ASML (ASML) Cut to Neutral at B of A Merrill Lynch.
GSI Commerce (GSIC) Cut to Hold at Jefferies.
Level 3 Communications (LVLT) Cut to Underweight at JPMorgan.
NYSE Euronext (NYX) Cut to Hold at Citigroup.
Pacer International (PACR) Cut to Underperform at Baird.
Petrobras (PBR) Cut to Hold at Citigroup.
Portugal Telecom (PT) Cut to Underweight at Morgan Stanley.
Qiagen (QGEN) Cut to Neutral at Credit Suisse.
SAP (SAP) Cut to Underperform at FBR.
Textainer (TGH) Cut to Market Perform at Wachovia.

JON OGG

February 12, 2009

• Apollo Investment Corporation (NASDAQ: AINV) Cut to Sell at Stifel Nicolaus; shares are down over 5% on the call.
• AT&T (NYSE: T) Cut to Market Perform at Bernstein; shares down over 2%.
• GSI Commerce (NASDAQ: GSIC) Cut to Hold at Stifel Nicolaus.
• McAfee (NYSE: MFE) Cut to Neutral at Credit Suisse.
• Novellus (NASDAQ: NVLS) Cut to Underperform at Credit Suisse.
• Senior Housing (NYSE: SNH) Cut to Neutral at UBS; shares indicated down 2%.
• Tessoro (NYSE: TSO) Cut to Sell at Soleil.
• Texas Roadhouse (NASDAQ: TXRH) Cut to Neutral at Credit Suisse.
• Verizon Communications (NYSE: VZ) Cut to Underperform at Bernstein; shares down almost 3%.

Here are the top 10 pre-market analyst upgrades and downgrades:

• ALTR, AMZN, BCE, BIIB, LEAP, PDLI, CLUB, VAR, AUY

Jon C. Ogg
January 5, 2009

• American International Group (NYSE: AIG) Cut To Equal-weight at Morgan Stanley.
• AstraZeneca (NYSE: AZN) raised to Neutral from Sell at UBS.
• Glu Mobile (NASDAQ: GLUU) cut to Sell from Hold at Deutsche Bank.
• GSI Commerce (NASDAQ: GSIC) raised to Buy at Jefferies.
• Hologic (NASDAQ: HOLX) Started as Overweight at Morgan Stanley.
• Humana (NYSE: HUM) raised to Neutral from Sell at UBS.
• JA Solar (NASDAQ: JASO) Raised to Overweight at Lehman.
• Leap Wireless (NASDAQ: LEAP) Raised to Market Perform at Wachovia.
• Monsanto (NYSE: MON) raised to Buy at Banc of America.
• Wimm-Bill-Dann Foods (NYSE: WBD) Raised to Outperform at Credit Suisse,

Jon C. Ogg
March 13, 2008

• Allied Waste (AW) downgraded to Neutral at JPMorgan.
• Camden Property (CPT) downgraded to Peer Perform at Bear Stearns; downgraded to Underweight at JPMorgan.
• eSpeed (ESPD) raised to Buy from Neutral at Goldman Sachs.
• Electronics for Imaging (EFII) downgraded to Market Perform at BMO Capital and downgraded to Underperform at Collins Stewart.
• General Electric (GE) lowered price targets to $38 from $42 at Goldman Sachs, although it maintained a Buy rating.
• GSI Commerce (GSIC) raised to Outperform at Bear Stearns.
• Ingersoll Rand (IR) raised to Overweight at Lehman.
• Macrovision (MVSN) raised to Buy at Jefferies.
• SAIC (SAI) raised to Overweight at JPMorgan.
• UPS (UPS) raised to Outperform at Bear Stearns.

Jon C. Ogg
January 10, 2008