The coming week’s must see events for traders and investors alike in stocks is as follows: AnnTaylor Stores Corp. (NYSE: ANN), Audiovox Corporation (NASDAQ: VOXX), The Beckman Coulter Inc. (NYSE: BEC), Bristol-Myers Squibb Company (NYSE: BMY), Suncor Energy Inc. (NYSE: SU), Canadian Natural Resources Limited (NYSE: CNQ), DineEquity, Inc. (NYSE: DIN), Goldman Sachs Group Inc. (NYSE: GS), Market Vectors Egypt Index ETF (NYSE: EGPT), Internet Capital Group Inc. (NASDAQ: ICGE), OpenText Corporation (NASDAQ: OTEX), JDS Uniphase Corporation (NASDAQ: JDSU), Kinder Morgan Energy Partners LP (NYSE: KMP), Kinder Morgan Management LLC (NYSE: KMR), KV Pharmaceutical Co. (NYSE: KV-A), Lululemon Athletica Inc. (NASDAQ: LULU), Micron Technology, Inc. (NASDAQ: MU), NASDAQ OMX Group Inc. (NASDAQ: NDAQ), Orexigen Therapeutics, Inc. (NASDAQ: OREX), Questcor Pharmaceuticals, Inc. (NASDAQ: QCOR), and finally SIRIUS XM Radio Inc. (NASDAQ: SIRI).

We have outlined the issue underway or the event upcoming, offered color on each, and added in trading data on the shares if applicable.  Again, these are the non earnings events. A detailed earnings calendar with previews is available here.

AnnTaylor Stores Corp. (NYSE: ANN) was up 3.2% at $23.75 on Friday on 150% of normal volume with some 3.75 million shares traded.  What is interesting is that its options volume was off the chart and it was all one-sided call options trading.  It is possible that these were hedged calls, but the volume looked extreme for a sector that is inundated with consolidation.

Audiovox Corporation (NASDAQ: VOXX) turned in an impressive gain in the after-hours session after news that it will acquire Klipsch Group Inc. for $166 million.  Klipsch is a high-performance audio solutions company serving the residential, professional and personal listening markets.  Trading volume in Audiovox was 11,430 shares but the after-hours trading showed a gain of 7.8% to $8.30 versus a 52-week range of $6.17 to $9.74.  Here is where this gets interesting: Audiovox had a market cap at the close of trading of only $177 million.

The Beckman Coulter Inc. (NYSE: BEC) buyout process is nearing an end and we could have more details over its merger this coming week.  We argued before that the premium price should have been close to full value already.  Speculators will run shares higher and everyone hopes that private equity firms will over-pay.

Bristol-Myers Squibb Company (NYSE: BMY) has an FDA panlel review on FEB. 9 where BMS is seeking initial approval for ipilimumab (Imclone’s Erbitux) for patients who have previously received treatment for melanoma. Recent data showed that survival rates were indeed higher and this could be another blockbuster opportunity for the firm if ultimately approved.  We have a formal approval decision date tentatively set for March 26.  The market cap is roughly $44 billion here.

Canada and oil sands for safe defensive oil… Barron’s highlighted Suncor Energy Inc. (NYSE: SU) and Canadian Natural Resources Limited (NYSE: CNQ) and others this weekend.  These are being touted as larger Canadian oil sands project companies that offer safer oil without political tensions and growth ahead.

DineEquity, Inc. (NYSE: DIN) could have Goldman Sachs Group Inc. (NYSE: GS) as a partner.  Reports late Friday showed that Goldman’s private equity arm is close to buying Applebees’ largest franchise holder.  Who would have known that mediocre chain food restaurants would have such an appeal to billionaires.

The markets are hostage to the ratings agencies now.  Here is what happens when you look at "VALUE INVESTING" in technology:

Alliance Data (ADS), Answers (ANSW), ATMI Inc. (ATMI), BigBand Networks (BBND), British Sky ADR’s (BSY), CA inc. (CA), CBS Corp. (CBS), Century Tel (CTL), Cincinatti Bell (CBB)…

Cisco Systems (CSCO) is a new entrant, this was surprising but those teen prices were in 2006.

Cogent (COGT), Cohu Inc. (COHU), Computer Science (CSC), Compuware (CPWR), DireTV (DTV),
Echostar (DISH).. unsure because of reorg…, Emulex (ELX), Epicor Software (EPIC), General Electric (GE), Getty Images (GYI), Gluu Mobile (GLUU), Hungarian Telecom (HTC), Internet Capital Group (ICGE), Interactive Intelligence (ININ), J2 Global (JCOM), ML Internet HOLDRs (HHH), ML Telecom HOLDRs (TTH), PlanetOut (LGBT), Liberty Media (LINTA), Loral Space (LORL), Live Nation (LYV), Sourcefire (FIRE), Flextronics (FLEX), Monster Worldwide (MNST)….

Motorola (MOT), Martha Stewart (MSO), Mattson Tech (MTSN), Network Appliance (NTAP), Orbitz Worldwide (OWW), Plantronics (PLT), Powershares Dynamic Media (PBS), Qwest Communications (Q), RCN Corp. (RCNI), RF Micro Devices (RFMD), Riverbed Tech (RVBD), Savvis (SVVS), Sprint Nextel (S), SiRF Tech (SIRF), Stamps.com (STMP), Time Warner (TWX), Trimble Navigation (TRMB), Veeco Inst. (VECO), Vishay (VSH), Voltera Semiconductor (VLTR), Xinhua Finance Media (XFML) ,

Yahoo! (YHOO) ouch.

This is almost enough to make many people cry.  The VIX is trading at 27.34 and is up 2.96 points but we aren’t even at 30 yet meaning that massive critical oversold and true panic levels haven’t yet been reached.

Jon C. Ogg
January 17, 2008

Late last week, 24/7 Wall St. got the chance to interview Peter J. Boni, President & CEO of Safeguard Scientifics, Inc. (SFE-NYSE).  Mr. Boni has been President & CEO of the company for roughly 22 months, and it may be worth noting that at the end of August 2005 the shares of Safeguard have risen from $1.62 at the end of that time to its current price of $2.68.  I did get a chance to discuss many issues with the company, and the first and foremost issue is worth noting:

Part of our interest in interviewing Safeguard was because of the recent interest in CMGI Inc. (CMGI-NASDAQ) and other incubators.  QUESTION: So without taking away from your own company in a comparison, what is the difference and do you have plans to transform into more of an operating company that also has an incubator?  If not, is this something you would consider?

For starters, we did not spend too much time discussing the merits of other incubators and other holding company investment vehicles.  But Mr. Boni did want to be clear about the incubator term being very much in the past when the investment climate was in the tech bubble days; and now they are operating solely as a holding company with gains on investments being the primary goal for each investment.  Safeguard has a 50-year history and has been a public company for close to 20 years.  The focus is entirely on investment opportunities in information technology and in life sciences.  Without being able to predict returns, the “Goals” were fairly clear: look for opportunities that are in the 3X to 5X returns that come from a liquidity event, with a longer-term outlook, staying diversified, and by looking at opportunity stages that are between the first round stage and the private equity stage.  The company also has a managerial structure that compensates managers based on the company’s market capitalization of the company, and the long-term vision is to try to make the company a $1 Billion company in the coming years. 

Outside of the differences and similarities, we did have numerous questions for the operations and holdings.  Some questions of course could not be answered because they would be too ‘prediction-oriented,’ but you will see in the comments later that many of the areas were covered.

ADDITIONAL QUESTIONS: What sort of investment activities are you currently focusing on, and does the company have any plans to raise cash or leverage the balance sheet any more?  What is the current value carried on the books of the cash and the public company shares you own? How much more value do you ‘guestimate’ as the private companies?  Would the company consider any special or one-time dividends or other shareholder friendly initiatives? What do you think the company can do to garner more research following from traditional boutique brokerage firms?  What do you identify as your largest opportunities and what are your longer-term goals?

The company previously had 40 portfolio companies that it scaled downto 10, and currently has 16 portfolio companies with shares ofClarient, Inc. (CLRT-NASDAQ) being the one current public holding.  Theother 15 investment holdings are mixed between InformationTechnology and in Life Sciences, although there is quite a bit ofconvergence between the two areas.  Four of these are majority held andtwelve of these are minority investments. In these arenas Safeguardreally tries to limit extra risks where the applications and goals arenot really known.

CONTINUE ON PAGE 2…..

Since the company liquidated holdings to scale its focus it hasreturned roughly $200 million to the company and has turned around andplaced roughly $100 million in Nine investments over the last Fivequarters.  It also has a go-to market strategy where it relies onoutbound deal sourcing, but some of the deal sourcing comes directlyfrom entrepreneurs.  Since the competition for deals is fierce, ittries to focus where entrepreneurs are under-supported compared toover-supported in many areas in the country.

The company’s earnings are based upon actual holding values and uponrealizing gains, so the degree of profitability varies from period toperiod.  On this metric, Safeguard was profitable in Q4 2005 and wascumulatively profitable for 2006.  The company obviously could not giveguidance for 2007 because it would be too predictive of marketconditions and liquidity events.  The current structure and currentholdings do not require additional funding based on today’s knowledge.

What was most interesting, and not an angle that I had really thoughtof ahead of this session, was that Mr. Boni feels that the company is avalue company for the arena they are in.  The reason for this is thatout of today’s market capitalization rate, its cash and its publiclytraded shares in Clarient (CLRT-NASDAQ) account for roughly 80% of theentire market capitalization.  In a break-up analysis, this wouldtheoretically leave the remaining 20% of the market cap being accountedfor as the other 15 current holdings, its future operations, itsphysical assets, and the approximate $394 million in net operatinglosses carry forward.

As far as the goals the company’s investment target is a holding andinvestment outlook of three to five years and opportunities that canpotentially give a 3X to 5X return.  Safeguard wants to grow to morethan $1 Billion in market cap from today’s levels.  They are not aregulated investment company and can offset gains, so unless some ofthe portfolio companies generate drastically excessive returns it wouldseem to be a long time before paying taxes on the gains.

On a dividend or shareholder enhancement front, the company wouldconsider a return of capital or shareholder value creation but by andlarge that would only occur if Safeguard ever became overly flush withcapital.  For the time being and in the current climate, Mr. Boni feelsthat Safeguard has plenty of opportunities where they can keepinvesting in there 3X to 5X potential return opportunities.  That beingsaid, a value investor here would still be investing in Safeguard forreturns via capital gains rather than via dividends.

The company is also actively attending conferences to get in front ofinvestors and investment opportunities.  In May alone, the company madepresentations at several broker conferences: Cowen & Co.; Friedman,Billings, Ramsey; and JMP Securities. It used to have virtually noanalyst coverage and now has five boutiques following it (list is fromwebsite): Susquehanna International Group, LLC; Monness, Crespi, Hardt& Co., Inc.; Henley & Company, LLC; CJS Securities; Boenning& Scattergood. 

When Mr. Boni came into the Safeguard, the shareholder make-up wassomewhere around 75% retail and 25% institutions, but now theshareholder mix is closer to a 50/50 mix between retail andinstitutions.  Some of the top institutions that have added positionsare T. Rowe Price, Gruber & McBaine Capital, Dimensional, FirstManhattan, and Putnam.

The final goal is opportunity with diversity in the InformationTechnology and the Life Sciences arena.  It also will continue on itscurrent focus with no single investment being too large of an eventrisk, so that it maintains a portfolio balance.   

It is also worth noting that since the company made its Maypresentations, Safeguard has appointed a new CFO.  It appointed RaymondLand, who has 15 years as a public company CFO in the life sciencesarena, and more than 30 years of total experience in financial andgeneral management experience.

POST INTERVIEW CONJECTURE

It is quite rare that you get a CEO that is willing to state goals outof an established company that would imply a 200% return if the goalsare achieved.  Butthat was my take on what Safeguard wants to reach.The initial interest here was from the recent trading activity over thelast 6 months that has been seen in CMGI Inc. (CMGI-NASDAQ).  The goodnews here is that Safeguard has no intentions of trying to change intoa “me too” competitor. 

Sure, these companies will continue to be grouped together along withInternet Capital Group (ICGE-NASDAQ0 for some time to come.  But whenyou sit down and speak to officers of a company the differences becomequite clear.  True value investors will perhaps refrain from investingin many $324 million market capitalization rate stocks, but on acomparable basis there really is a current value play in the stock.The caveat to the value is that much of this value is tied to themarket price of the Calrient Inc. (CLRT-NASDAQ) share price because itowns such a large piece of it.

Investors looking for any set or exact earnings per share would seem tobe looking in the wrong area because the nature of Safeguard’s earningscomes from sales and capital gains from its investments.  But thoseinvestors that are willing to look at incubator stocks and holdingcompany or investment vehicle stocks appear would seem to have found anice mix in Safeguard: a high net asset value relative to a stockprice, and aggressive management that wants to see exponential growthopportunities.

Jon C. Ogg
June 25, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

After a 66% run from the quarter before and going into earnings, it actually makes sense that the stock has pulled back.  The sharp drop immediately after the news seemed a bit harsh, but the after-event trading activity has confirmed the action.  It is always hard to sell someone who sees a drop in their shares that"this is good and orderly" because a drop is a drop, but that looks tobe the case.  What may have added fuel to the fire is that this marks the third consecutive day where the Dow Jones Industrial Average has seen triple digit declines.  We all know how strong the market has been right before that.

Forbes gave all the positive summary of its own, and you can go through our notes over conference call.  Now that company is continuing to press its ModusLink image and brand, things are slowly getting better even after two large customer losses over the last two quarters.  The hidden call option is the @Ventures IV investment fund dedicated to clean energy and renewable energy.  The company has made some interesting investments in the sector and these may have significantly higher values down the road if alternative energy continues to gather steam like it has.  Here was our full preview discussing what was expected ahead of earnings.

In the last two days, Internet Capital Group (ICGE) is down mostly today by 3.7% and Safeguard Scientifics (SFE) is down almost 6%.

Jon C. Ogg
June 7, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Here was our full earnings preview from last week and nothing much has changed, although there a couple more add-on pieces.  WR Hambrecht, the only street analyst with estimates has a $0.02 EPS target on revenues of $259.5 million. This quarter will still have much of the H-P business in it, but we only really know what the company is targeting for year-end: up to $1.10 Billion in revenues, 12% to 14% gross margin, 7% SG&A, and 5% to 7% operating margins.

Last week the company’s @Ventures unit made a $3 million investment into Powerit Holdings Inc. as the leader in a $7.1 million Series A financing.  Powerit Holding’s US subsidiary, Powerit Solutions, provides energy demand response and demand control solutions for industrial and commercial companies. These easy-to-integrate, proprietary solutions enable major cost savings on electricity bills with no impact to productivity or quality, as demonstrated with hundreds of installations of the technology to date.

There is also some ongoing talk of a reverse stock split, but honestly betting on splits in the modern world has become as much of a coin toss as the real impact to shareholders.  We’ll have an answer as to how the company did here momentarily.  With an hour to go to earnings, CMGI is up 1% at $2.52 on the day.  Inthe last trading week shares traded as low as $2.35 and as high as$2.60.

If this does very well and gets more street attention, then the two stocks to watch for copy cat strategies are Internet Capital Group (ICGE-NASDAQ) and Safeguard Scientifics (SFE-NYSE).  Neither company has been rekindled in the same manner or to the same degree as CMGI, and traders and companies alike look for opportunities that worked well for one company that could be applied to another.

Jon C. Ogg
June 5, 2007

Jon ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

The past is the past, and the future is up to the company.  The new and improved ‘operating company’ of CMGI is really a supply chain management outfit called ModusLink, plus it still has its @Ventures incubator arm.  @Ventures’ incubator investments are split between Internet and digital company stakes and alternative energy stakes, and lately it has been focusing on and funding more on the alternative energy sector.  Enough on that.

With the stock up 66% and with this one being up 66% since last earnings and with this re-developing one of the largest cult followings out there, how does one predict an earnings outcome on such a transformed company that is grossly under-followed by analysts?

Since its last earnings report, CMGI has either made or been the beneficiary of almost all good developments: it was given a ‘Buy’ rating by boutique WR Hambrecht (with a $2.50 target, where the stock is now, and out of a $2.47 to $2.97 range suggestion), was given a ‘Buy’ rating from TheStreet.com internal ratings, institutions actually bought shares, it named a new CFO, it has invested more into clean/alternative energy including ‘Earthanol,’ it acquired full ownership of its Japan-based joint venture, brought in a solid CFO from IDC, was named as one of the CNBC Challenge most widely picked stocks almost daily, named a new leader for its alternative and clean power investing, and named a new head of sales and marketing out of Lenovo.

What we know is that when it issued it last earnings CMGI came clean and disclosed that they were losing Hewlett-Packard (HPQ-NYSE) as a client that represented in the vicinity of $100 million annual revenue and $3 million in operating income.  This quarter will still have much of the H-P business in it, but we only really know what the company is targeting for year-end: up to $1.10 Billion in revenues, 12% to 14% gross margin, 7% SG&A, and 5% to 7% operating margins.  While the market was busy tanking after the first mini-tank in Shanghai, this one pulled back briefly after earnings and came roaring back when almost everything else was falling. 

So this quarter is really going to be a mixed bag and very difficult to hang your hat on any one metric.  The WR Hambrecht analyst, assuming nothing has changed, has a $0.02 EPS target on revenues of $259.5 million.  Investors should be strongly cautious on depending upon one or even a couple of targets as this can lead to what may be good hits and bad misses on the surface when in fact the company itself may be taking the exact opposite stance on the same bit of news.  The full-year guidance and "progress with our new team" communique is most likely where the cult following of investors will take its cue from.

It would be easy to predict that with a 66% gain since its last report that ‘profit taking’ would be the most likely excuse.  But it would also be foolish to make such a prediction in a cult stock with such a core small-cap trader following like CMGI.  Whatever the prediction is, it would be difficult to believe that shares just stay static after the earnings on Tuesday.  Based on this coming earnings in a corny analogy, some may think the @Ventures incubator took on one of two new sectors: rockets or parachutes.

If it looks like CMGI went into the rocket business if it beats earnings, then you can probably expect that much more attention will also finally be directed toward the other two key incubators Internet Capital Group (ICGE-NASDAQ) and Safeguard Scientifics (SFE-NYSE).  Neither company has been rekindled in the same manner or to the same degree as CMGI, and you could easily see either company go on a rapid mission that would make them look like a blank-check that found a target plus still retain an incubator group.  We’ll know after next Tuesday.

Jon C. Ogg
May 31, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

The short sellers are lining up their bets against CMGI (CMGI-NASDAQ).  To add fuel to the fire, the shorts are also lining up bets against the other two ‘incubators’: Internet Capital Group (ICGE-NASDAQ) and Safeguard Scientifics (SFE-NYSE).  CMGI earnings are coming out soon, it will be interesting to see if these short bets are right or wrong.  CMGI shares are up almost 75% year to date and we don’t need to remind anyone of the internet bubble day prices in the stock.  The company has been transforming itself into ModusLink as its operating unit, and its @Ventures unit is still alive as an Internet incubator and has been increasing its investments in alternative energy.

Stock (Ticker)                  MAY         APRIL    Change    FLOAT%   
CMGI (CMGI)                 27.35M    22.48M    19.8%        5.9%
Internet Cap. (ICGE)    4.81M       4.64M       3.7%        13.7%
Safeguard Sci. (SFE)   6.62M       5.98M      10.69%     5.5%

Jon C. Ogg
May 25, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.