The US House-Senate budget reduction committee, or the ‘super committee’, that is charged with recommending $1.5 trillion in budget cuts over the next 10 years has just another 10 days to deliver its recommendations before automatic cuts of $1.2 trillion kick in. If the committee fails to agree on cuts, the automatic cuts fall equally among defense spending and a variety of programs that are together lumped under the heading discretionary spending.The discretionary spending cuts would likely come from federal programs that aid the poor, education, and the elderly.

No specific cuts have been identified in the legislation that created the super committee, but to achieve $600 billion in cuts over ten years is sure to cause some pain to a variety of constituencies. That amount is increased by the $350 billion in cuts already approved by Congress over the next ten years. Trying to discern where a publicly traded company might get hurt by impending cuts is, at this point, pretty much guesswork.

On the defense end, cuts are far more likely to have an effect on publicly traded companies that have significant federal defense contracts for everything from fighter planes to software. The following chart shows the top ten defense contractors in 2011, together with the total amount of their contracts, as derived from 2010 contract levels:

Privately held DynCorp International Inc. falls just above H-P, at $2.4 billion. Excluding DynCorp, the top ten contractors are slated to post sales of $47.6 billion in federal contracts in 2011. The top ten in 2010 posted sales of $68.2 billion. So far in 2011, a total of more than $196 billion in defense contracts have been awarded. The total in 2010 reached $247 billion, and that number is almost surely out of reach for this year.

Cuts to defense spending have already begun, as the US winds down its presence in Iraq and prepares to do the same in Afghanistan. Not including the wars in Iraq and Afghanistan, the Pentagon budget for 2011 reached nearly $550 billion.

Agrium Inc. (NYSE: AGU) Raised to Neutral at Goldman Sachs.
Clean Harbors, Inc. (NYSE: CLH) Raised to Overweight at JPMorgan.
ConocoPhillips (NYSE: COP) maintained Buy but cut target to $85 at Argus.
Dendreon Corporation (NASDAQ: DNDN) Cut to Neutral at Roth.
FedEx Corporation (NYSE: FDX) Cut to Neutral at BofA/ML.
Intrepid Potash, Inc. (NYSE: IPI) Cut to Sell at Goldman Sachs.
KBR, Inc. (NYSE: KBR) listed as the value stock of the day at Zacks.
McDermott International (NYSE: MDR) called Bear of the Day at Zacks.
NetSuite Inc. (NYSE: N) Started as Outperform at Credit Suisse.
NII Holdings Inc. (NASDAQ: NIHD) Cut to Equal-Weight at Morgan Stanley.
Oracle Corporation (NASDAQ: ORCL) Raised to Conviction Buy List at Goldman Sachs.
The Mosaic Co. (NYSE: MOS) Raised to Buy at Goldman Sachs.
SuccessFactors, Inc. (NASDAQ: SFSF) Removed from U.S. Focus List at Credit Suisse.
Texas Instruments Inc. (NYSE: TXN) Maintained Buy but target to $35 at Argus.
Valero Energy Corporation (NYSE: VLO) named Bull of the Day at Zacks.
VimpelCom Ltd. (NYSE: VIP) Raised to Overweight at HSBC.
Zions Bancorp. (NASDAQ: ZION) Cut to Underperform at Stern Agee; Maintained Outperform at Credit Suisse.

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We would normally group these alphabetically, but not today.  We grouped these in order of size and then we used an alphabetic order when it came to the same size of a buyback announcement.  The first group is the billions of dollars.

We then grouped the stocks by size again from the under $1 billion down to $500 million, and then we grouped the buybacks of under $500 million down to $200 million.  Usually we would cut the list off at buybacks of the $100 million and higher but the list was already too big so we cut the Buyback Kings off at $200 million for August.  Lastly, we have a chart at the very end tallying it all up…. Some $28.7 billion for just the $200 million and higher in new or expanded buyback announcements.  There were literally dozens of other buybacks that were closer to the $100 million mark and many more that were less than that.

The $1 billion and higher alone which were announced in August were as follows: Lowe’s Companies, Inc. (NYSE: LOW); CVS Caremark Corporation (NYSE: CVS); Celgene Corporation (NASDAQ: CELG); Covidien plc (NYSE: COV); Intuit Inc. (NASDAQ: INTU); Discovery Communications, Inc. (NASDAQ: DISCA); Harris Corporation (NYSE: HRS); and Lockheed Martin Corporation (NYSE: LMT).

Arcos Dorados Holdings Inc. (NYSE: ARCO) Started as Overweight at Morgan Stanley; started as Buy at Citi; Started as Neutral at JPMorgan.
Campbell Soup Company (NYSE: CPB) Raised to Neutral at Credit Suisse.
Carrizo Oil & Gas Inc. (NASDAQ: CRZO) Raised to Outperform at Wells Fargo.
Chimera Investment Corporation (NYSE: CIM) Cut to Hold at Jefferies.
Community Health Systems. Inc. (NYSE: CYH) Reinstated as Outperform with $35 target at Credit Suisse.
East West Bancorp, Inc. (NASDAQ: EWBC) Cut to Neutral with $21 target at Credit Suisse.
Energy Conversion Devices, Inc. (NASDAQ: ENER) Cut estimates and target to $1.50 at Credit Suisse.
Ferrellgas Partners (NYSE: FGP) Maintained Underperform as Bear of the Day at Zacks.
Hewlett-Packard Co. (NYSE: HPQ) Cut to Equal-Weight at Morgan Stanley.
Humana, Inc. (NYSE: HUM) Maintained Outperform as Bull of the Day at Zacks.
KBR INc. (NYSE: KBR) Added to Goldman Sachs Conviction Buy List.
Mosaic Co. (NYSE: MOS) Reinstated as Outperform with $85 target at Credit Suisse.
Mylan Laboratories Inc. (NASDAQ: MYL) Raised to Buy with $29 target at Argus.
Pan American Silver Corporation (NASDAQ: PAAS) Maintained Strong Buy as Value at Zacks.
Salesforce.com (NYSE: CRM) Raised to Overweight at Morgan Stanley.
Tenet Healthcare Corporation (NYSE: THC) Reinstated as Outperform with $7.50 target at Credit Suisse; Started as Neutral at BofA/ML.
Zipcar, Inc. (NASDAQ: ZIP) Started as Outperform with $30 target at Oppenheimer; Started as Neutral at Goldman Sachs.

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JON C. OGG

24/7 Wall Street has decided to take a look at the biggest companies which will lead in the rebuilding of America’s ailing infrastructure.  A recent report from Infrastructurereportcard.org gave the United States a grade of a “D” and said that the 5-year investment need was $2.2 trillion. What the real tally is may not matter, but America has to rebuild.

In October, Amtrak rolled out a $100+ billion plan to rebuild its network.  President Obama is expected to call for a transportation infrastructure plan in the coming weeks. Finding all of the nation’s infrastructure winners is too long and too daunting of a task. General Electric and many of the nation’s largest diversified companies are all beneficiaries, and some of the key winners are likely to be foreign entities which employ thousands of workers in America.

The companies featured are the ones behind the design, testing, manufacturing, consulting, engineering, and construction of major projects.  We wanted players that will rebuild the water systems, roads, highways, bridges, airports, rail, levees, waterways, utilities, and buildings around the major infrastructure projects ahead.

These are the companies that 24/7 all Street is most focused on for the American infrastructure revival.

1. AECOM Technology Corporation (NYSE: ACM) offers architecture and engineering design services.   Target markets are transportation, environmental, energy, and it serves projects in key infrastructure areas like highways, airports, bridges, wastewater facilities and power transmission and distribution.  AECOM has a market value of about $3.5 billion and it is expected to have 2011 revenues of close to $8.4 billion. It as 50,000 employees.

2. Chicago Bridge & Iron (NYSE: CBI) is technically Dutch now but is a key infrastructure player with 16,000 employees worldwide that executes more than 600 projects a year with a focus in oil & gas infrastructure, steel plate structures in storage and containment and plant manufacturing.  The company has a market value of more than $3.3 billion and it recently forecast that 2011 revenues are expected to reach $4.3 billion to $4.7 billion.  If America is going to get serious on its energy infrastructure ahead, CB&I stands to greatly win.

3. Emerson Electric Co. (NYSE: EMR) might sound like an electric utility but it is in engineering and project management services for many industries and many government agencies.  It manufactures major equipment for utilities and industry, power and telecom, heating and air-conditioning, network power, climate technologies, and more.  It also has well over 100,000 employees.  The company has a market value of roughly $44 billion and it just recently gave a forecast of 14% to 17% growth to $24 to $24.5 billion in 2011 revenues.

SHARE REPURCHASES

Bunge Ltd. (NYSE: BG) is trying to say all is well in soy beans because it approved a stock buyback plan for up to $700 million in common shares.  With a $7.3 billion market cap, this is about a 10% share buyback now that its common stock has lost one-third of its value from the $74.04 high of the last year.

Forest Laboratories Inc. (NYSE: FRX) has a bit of an unusual buyback, because it signed an agreement with Morgan Stanley (NYSE: MS) to repurchase up to $500 million in shares as part of an accelerated buyback plan that is part of an existing larger 50 million share buyback.  The larger plan is more than 15% of the outstanding shares.  With shares still under $25.00, this is still down about 25% from the $33.10 high of the last 52-weeks.

Intermec Inc. (NYSE: IN) won’t sound like much on the surface as it is only a repurchase plan of up to $75 million.  The difference here is that the market cap is a mere $645 million now that shares have fallen by almost 20% from the yearly high.  Despite earnings issues before, Intermec has over $200 million in cash and securities on the books and it has little debt.

KBR Inc. (NYSE: KBR) may be less exciting than others as it will repurchase up to 10 million shares.  Without a specific schedule, the company said that it plans to keep the number of shares outstanding around the 150 million share level.  The stock’s 11% gain today to $22.10 has it at the higher-end of the $16.29 to $24.73 range of the last year.

Monsanto Co. (NYSE: MON) has authorized a $1 billion share buyback program that will begin in July after it completes its existing $800 million plan.  Also thrown in was some reassurance on its guidance for the year ahead of ‘mid-teens’ earnings growth, which is probably good for investors to know considering that its shares have nearly come down by half from the $87.40 high of the last 52-weeks.

Viacom Inc. (NYSE: VIA) is a Sumner Redstone special of more to come… or more to resume.  Viacom approved a regular quarterly cash dividend of $0.15 per share, which comes to about 1.6% for a dividend yield.  More importantly, Viacom also authorized a resumption of its share buyback plan and it increased the amount to $4 billion for its B-shares after having suspended its buybacks during the recession to conserve on its cash.

Wal-Mart Stores Inc. (NYSE: WMT) was the largest sounding buyback on the surface last week at some $15 billion.

DIVIDEND HIKES

Caterpillar Inc. (NYSE: CAT) boosted its dividend by almost 5% to $0.44 per quarter from $0.42.  Despite the woes of the recession, it never did slash its payout after it hiked the dividend in early 2008.  Thomson Reuters has estimates of $3.15 EPS for 2010 and $4.65 EPS in 2011, so a $1.76 annual dividend should be easy to maintain.  The dividend yield here is now about 3%.

FedEx Corporation (NYSE: FDX) has also boosted its dividend payments this week by $0.01 to $0.12 per quarter.  Unfortunately, this is still a very low yield because after looking at the $78-handle on the stock it is only a yield of about 0.62%.  With Thomson Reuters earnings estimates of $3.74 EPS in 2010 and $5.06 EPS, this is a rather low payout considering its payout will be $0.48 per share per year.  Perhaps after sector labor issues are resolved it can revisit this low payout.  Rival UPS has a dividend yield of close to 3%.

Target Corp. (NYSE: TGT) was the big dividend gainer.  The retail giant hiked its payout by almost half up to $0.25 per quarter from as the cash generation easily exceeds its reinvestment demands.  The yield before was only 1.3%, but the new yield now is going to be about 1.9%.

You can join our free daily email distribution list to hear more about dividend trends, analyst upgrades and downgrades, top day trader and active trader alerts, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

The company expects to continue providing engineering, procurement,construction, and project management to offshore drilling projectsaround the world. The business group president acknowledged that theoil business is in a funk right now, but "our clients will continue tohave the need to go to more remote and harsh environments to access oil& gas."

He’s got that right. Drilling, if it ever happens, off the north coastof Alaska or Russia is an expensive and time-consuming process. Thereare very few companies with expertise in getting those projectscompleted. Interestingly, the most experienced are probablyStatoilHydro (NYSE:STO) and Exxon Mobil (NYSE:XOM). Statoil for itsNorth Sea projects, and Exxon for the Sakhalin-1 project off the eastcoast of Russia.

But companies like Fluor or Jacobs Engineering (NYSE:JEC) or FosterWheeler (NASDAQ:FWLT) or KBR Inc. (NYSE:KBR) could compete for theengineering part of these projects independently of the big oilcompanies. These guys work for a fixed rate; the oil companiestypically want a piece of the action. One of the reasons every oilcompany wants the US to open the north coast of Alaska and the outercontinental shelf of the lower 48 is because the US is one of the lastplaces in the world where a big oil company can negotiate a productionsharing deal just like in the good old days. And unless its the automakers, no company yearns for the good old days more than a big oilcompany.

But Russia, for example, is perfectly happy to have a company likeFluor come in and do the design, engineering, and construction work andthen leave. Welcome to Russia; now go home.

The other danger in designing these harsh-climate projects is that theproject cost will outpace the price of oil. That’s happening already insome places. But in the long run, and nearly everything in the oilbusiness is long run, crude prices will rise and these projects willpay off for Fluor.

Fluor’s share price has fallen about 56% from its 52-week high. But thecompany, with third quarter revenues of $5.67 billion, has virtually nolong-term debt. Competitors Foster Wheeler and Jacobs are off 52-weekhighs by 73% and 59%, respectively.

Paul Ausick
December 4, 2008

KBR has no real long-term debt. Zero. Zip. Nada. That’s pretty unusualfor a company that makes about $10 billion a year in revenue. How dothey do that in today’s environment? Cash flow from operations totaled$1 million (that’s right, just $1 million), while the company paid $498million in cash for acquisitions and $27 million in cash for capitalexpenditures. KBR also spent $196 million in cash in a stock buyback.All told, the company burned $751 million in cash during the thirdquarter, and has $1.11 billion left in the bank.

KBR’s stock closed yesterday at $14.07, more than 68% off its 52-week high.  Shares are also indicated up about 2% pre-market.

Paul Ausick
October 31, 2008

KBR (KBR) Rough earnings numbers. Down to $22.94 from 52-week high of $45.24.

The Manitowoc Company (MTW) Sells a unit and that could hurt earnings. Sell off to $23 from 52-week high of $51.49.

Gold Fields (GFI) Downgraded by UBS. Dips to $9.42 from 52-week high of $19.92.

Titanium Metals (TIE) No news. Moves down to $9.80 from 52-week high of $26.50.

Charlotte Russe (CHIC) CFO leaves. Stock downgraded. Falls to $9.90 from 52-week high of $20.61.

Paetec Holding  (PAET) Downgraded by Citi and Wachovia. Plunges to $2.45 from 52-week high of $13.72.

Sirius Satellite (SIRI) prospects of merged satellite radio company don’t look good. Falls to $1.29 from 52-week high of $3.94.

Ciena (CIEN) No news. Falls to $18.65 from 52-week high of $49.55.

Douglas A. McIntyre

• American Axle (AXL) & Johnson Controls (JCI) both downgraded to Equal Weight at Lehman.
• Bankrate (RATE) raised to Buy at Merriman Curhan Ford.
• Cbeyond (CBEY) raised to Outperform at Wachovia.
• Discovery (DISCA) raised to Outperform at Wachovia.
• E*Trade (ETFC) downgraded to Sell from Neutral at B of A.
• Fannie Mae (FNM) estimates cut sharply at Goldman Sachs.
• KBR (KBR) raised to Buy at UBS.
• Research in Motion (RIMM) downgraded to Market Perform at Morgan Keegan.
• UAL (UAUA) downgraded to Equal Weight at Lehman.
• Vanguard Natural Resources (VNR) started as Buy at Jefferies.

Jon C. Ogg
December 3, 2007