ABB Ltd. (NYSE: ABB) Raised to Outperform at Credit Suisse; Raised to Buy at Deutsche Bank.
Bank of America Corp. (NYSE: BAC) Maintained Underperform as Bear of the Day at Zacks.
The Bank of New York Mellon Corporation (NYSE: BK) Cut to Equal Weight at Morgan Stanley.
Barrick Gold Corporation (NYSE: ABX) Raised to Buy at Stifel Nicolaus.
Chevron Corp. (NYSE: CVX) Started as Buy at Jefferies.
The Children’s Place Retail Stores, Inc. (NASDAQ: PLCE) Cut to Neutral at JPMorgan.
Coca-Cola Femsa (NYSE: KOF) Raised to Buy at BofA/ML.
ConocoPhillips (NYSE: COP) Cut to Hold at Deutsche Bank; Raised to Buy at S&P Equity Research.
eBay Inc. (NASDAQ: EBAY) Raised to Buy at Stifel Nicolaus.
Evergreen Solar Inc. (NASDAQ: ESLR) Cut to Sell at Wunderlich.
EI DuPont de Nemours & Co. (NYSE: DD) Maintained Outperform as Bull of the Day at Zacks.
Hess Corporation (NYSE: HES) Raised to Outperform at Credit Suisse.
Intel Corporation (NASDAQ: INTC) Maintained as Strong Buy and Value at Zacks.
Itron, Inc. (NASDAQ: ITRI) Cut to Sell at Wunderlich.
Juniper Networks Inc. (NYSE: JNPR) Reiterated Buy and $49 target at Argus.
LM Ericsson Telephone Co. (NASDAQ: ERIC) Raised to Buy at Deutsche Bank.
National Oilwell Varco, Inc. (NYSE: NOV) Raised to Buy at Citigroup.
Patterson-UTI Energy Inc. (NASDAQ: PTEN) Raised to Neutral at Goldman Sachs.
Urban Outfitters Inc. (NASDAQ: URBN) Cut to Market Perform at William Blair.
Yum! Brands Inc. (NYSE: YUM) Reiterated Buy and Raised target to $62 at Argus.

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JON C. OGG

Amylin Pharmaceuticals,  Inc. (NASDAQ: AMLN) Cut to Hold at Citigroup; Cut to Hold at Deutsche Bank; Cut to Underperform at BofA/Merrill Lynch.
Bank of America Corporation (NYSE: BAC) Cut to Hold at Stifel Nicolaus.
Coca-Cola Femsa S.A.B. (NYSE: KOF) Cut to Sell at Deutsche Bank.
Eli Lilly & Co. (NYSE: LLY) Cut to Hold at Citigroup.
Juniper Networks Inc. (NASDAQ: JNPR) Raised to Outperform at Oppenheimer.
Mosaic Co. (NYSE: MOS) Raised to Buy at Citigroup.
NII Holdings (NASDAQ: NIHD) Raised to Buy at Goldman Sachs.
Strayer Education Inc. (NASDAQ: STRA) Raised to Equal-Weight at Morgan Stanley.
Western Digital Corp. (NYSE: WDC) Reiterated Strong Buy at Needham.

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JON C. OGG

Gabelli said that for the period ending April 30, the Focus Five outperformed the S&P 500, and is now +184.47% since inception (Jan. 31, 2006) vs. -2.18% for the S&P.

HSN Inc. (NASDAQ: HSNI) is listed as Strong Comps + Takeout… “The second-largest multichannel commerce network in the US had 2009 sales of $2.8 billion with EBITDA of $194 million. We believe multichannel retail is in the early stages of renewed secular sales growth, and that HSN’s experienced management team should be able to improve EBITDA margins substantially.Focus on the Liberty Media standstill agreement, which limits its ownership to 32% and expires in August 2010. We believe there are strategic advantages in a combination of HSNI and QVC. At ~7x 2011P EBITDA $257 million, we view shares as attractive based on current market dynamics and the potential for improved profitability and multiple expansion.”

Mead Johnson Nutrition Company (NYSE: MJN) is listed as Strong EM Growth… “The pediatric nutrition market category is expected to increase from $23 billion to over $30 billion by 2014.  MJN has leading share in the U.S. as well as many emerging markets, and currently operates in 139 cities in China.  Focus on MJN’s growth in emerging markets, most notably China, which grew by 25% in Q409.  We continue to view MJN as an attractive target for strategic acquirers who are looking to increase their exposure to fast-growing, healthy product categories.

TD AMERITRADE Holding Corporation (NASDAQ: AMTD) is listed as Financial Leverage… “As a leader in the online brokerage industry, AMTD is well positioned to participate from industry growth and consolidation. AMTD has increased client assets at a 7% annual rate, including $62 billion in net new assets.  As a holder of a large float of customer assets ($52.3 billion in spread-based balances), we believe the first 100 bps change in the Fed Funds rate could improve annual earnings by about $0.28/shr.”

TiVo Inc. (NASDAQ: TIVO) is listed as En Banc = Endgame… “We believe TIVO’s intellectual property to pause / rewind / play live TV makes them a likely takeover target to a variety of potential acquirers, including technology companies Cisco, Microsoft or Apple and distributors such as DISH or DTV.  TIVO trades at a significant discount to our 2011 PMV of $22 based on DISH and other operators entering contracts of $1.50+ per sub per month creating high margin recurring revenue.  We expect DISH’s en banc review to be rejected.”

Weatherford International Ltd. (NYSE: WFT) is listed as Performance Back on Track… “A unique global footprint positions WFT to capitalize on growing exploration and production in key markets such as Russia and Iraq.  Weatherford’s expanded product offering in the $13B directional drilling services market provides revenue growth opportunities and makes it an attractive acquisition target for a larger energy services company.  Focus on sequential quarterly earnings improvement as WFT is more levered to a recovery in international oil directed drilling activity and a restoration of institutional investor confidence following renewed quarterly guidance.  WFT trades at a compelling valuation 16.5x 2011 EPS of $1.10, 8x EBITDA, and a discount to our PMV of $22.”

Those removed from the FOCUS FIVE list are Cablevision Systems (NYSE: CVC), Coca-Cola FEMSA (NYSE: KOF), Constellation Brands (NYSE: STZ), Mastercard, Inc. (NYSE: MA) and ITT Educational Services (NYSE: ESI).

JON C. OGG

Sponsor: 26 Cheap Stocks to Sell – Cheap stocks have been on a tear recently, but nine out of ten stocks are circling the drain!

AFLAC (NYSE: AFL) Raised to Neutral from Sell at UBS.
America Movil (NYSE: AMX) Raised to Buy at Citigroup.
Corning (NYSE: GLW) Raised to Buy at UBS.
Coca-Cola Femsa (NYSE: KOF) Raised to Buy at BofA/Merrill Lynch.
General Mills (NYSE: GIS) Raised to Overweight at Morgan Stanley
Hartford Financial (NYSE: HIG) Started as Buy at UBS.
Tiffany (NYSE: TIF) Started as Buy at Citigroup
TJX Companies (NYSE: TJX) Raised to Conviction Buy List (was Buy) at Goldman Sachs.

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JON C. OGG
OCTOBER 6, 2009

Assured Guaranty (AGO) Cut to Neutral at UBS.
Canadian Pacific Railway (CP) Cut to Neutral at UBS.
Coca-Cola Femsa (KOF) Cut to Sell at UBS.
Genzyme (GENZ) Cut to Neutral at Baird.
Shaw Group (NYSE: SHAW) Cut to Neutral at JPMorgan.

JON C. OGG

Interestingly enough, this could have traders (and investment bankers) looking toward Coca-Cola Bottling Co. Consolidated (NASDAQ: COKE), Coca-Cola Enterprises Inc. (NYSE: CCE), Coca-Cola FEMSA S.A.B de CV (NYSE: KOF), and Coca-Cola Hellenic Bottling Company S.A. (NYSE: CCH)… all of which are tied to The Coca-Cola Company (NYSE: KO).

Under the agreements, Pepsi Bottling Group, Inc. (PBG) holders will have the option to receive either $36.50 in cash or 0.6432 shares of PepsiCo common stock.  That value was $36.50 based on PepsiCo’s closing share price of $56.75 on July 31, 2009.  That is subject to proration such that the aggregate consideration to be paid to PBG shareholders shall be 50% cash and 50% PepsiCo common stock.

In a similar deal, PepsiAmericas (PAS) shareholders will have the option to receive either $28.50 in cash or 0.5022 shares of PepsiCo common stock.  That had a value of $28.50 based on PepsiCo closing share price of $56.75 on July 31, 2009.  It is also subject to proration such that the aggregate consideration to be paid to PAS shareholders shall be 50% cash and 50% PepsiCo common stock.

This is not a small deal at all, particularly considering that these mergers are for the stakes not already owned.  The total value of the shares that PepsiCo is acquiring comes to roughly $7.8 billion.  Based on the recommendations of the Special Committee of PBG and the Transactions Committee of PAS, the boards of directors of both companies have approved the merger transactions.

Pepsi gave the end game numbers here.  It sees annual pre-tax synergies of $300 million by 2012 and expects these mergers to be accretive to PepsiCo’s earnings by about $0.15 on earnings per share when synergies are fully realized in 2012.

We have yet to see much action in the rival play here in an investor Pepsi vs. Coke taste challenge.  Coca-Cola Bottling Co. Consolidated (NASDAQ: COKE), Coca-Cola Enterprises Inc. (NYSE: CCE), Coca-Cola FEMSA S.A.B de CV (NYSE: KOF), and Coca-Cola Hellenic Bottling Company S.A. (NYSE: CCH) are all tied to The Coca-Cola Company (NYSE: KO).  Our sources have noted that there is not the same appetite to make this sort of transaction that Pepsi has embarked upon, although that was back in April and May and anything could have changed by then.

JON C. OGG
AUGUST 4, 2009

Abercombie & Fitch (ANF) Raised to Buy at SunTrust Robinson Humphrey.
Coca-Cola FEMSA (KOF) Raised to Hold at Deutsche Bank.
Hertz (HTZ) Raised to Outperform at Wachovia.
Hewitt (HEW) Raised to Neutral at JPMorgan.
ING (ING) Raised to Buy at Goldman Sachs.
Lincoln National (LNC) Raised to Outperform at Credit Suisse.
Verizon (VZ) Started as Buy at Pali Research.

JON C. OGG

Coca-Cola Bottling Co. Consolidated (COKE), Coca-Cola Enterprises Inc. (NYSE: CCE), Coca-Cola FEMSA S.A.B de CV (NYSE: KOF), and Coca-Cola Hellenic Bottling Company S.A. (NYSE: CCH) are all affiliated companies.

Pepsico (NYSE: PEP) shares are down over 4% at $50.02 today.  A $6 billion buyout compares to a new market cap of almost $78 billion.  The Coca-Cola Company (KO) is down 2.4% with the broad market today and in sympathy with Pepsi.  It would be a kid’s game to only hang your hat on the 17% that Pepsi is offering to see if Coke would do the same, but this is somewhat uncharted and has to start at least somewhere.  We wanted to take a look at what an implied 17% gain would like for Coke’s affiliated entities.

Coca-Cola Bottling Co. Consolidated (NASDAQ: COKE) is based in Charlotte, NC and is into the production, marketing, and distribution of carbonated nonalcoholic beverages primarily of Coca-Cola.  Operations are throughout the Central East Coast and parts of the Southeast. Its shares are up 1% at $54.28 and its market cap is just shy of $500 million.

Coca-Cola Enterprises Inc. (NYSE: CCE) is also based in Atlanta, GA and is in the manufacturing, distribution, and marketing of nonalcoholic beverages and offers its products principally under the Coca-Cola classic, Sprite, Dasani, POWERade, Coca-Cola, Diet Coke/Coca-Cola light, Fanta, Coca-Cola Zero, and Capri-Sun brand names.  It sells through wholesalers and retailers primarily in North America, the U.K. and Europe.  Its shares are up 3% at $15.39 and its market cap is $7.5 billion.

Coca-Cola FEMSA S.A.B de CV (NYSE: KOF) is based in Mexico, City which is a bottler of Coca-Cola trademark beverages in Latin America.  If you have forgotten, this is one of the rather large Bill Gates holdings.  FEMSA’s market cap is $6.73 billion and its shares are down 3.5% at $36.47 today.

Coca-Cola Hellenic Bottling Company S.A. (NYSE: CCH) is based in Athens, Greece and it produces, distributes, and sells non-alcoholic beverages under a franchise of the Coca-Cola name serving approximately 550 million people in 28 countries throughout Europe, Eastern Europe, and Russia.  Hellenic’s stock is off almost 4% at $15.32 today and its market cap is $5.6 billion.

Pepsi has said that this will become accretive to earnings and will streamline its operations.  It is very possible that the same could come true for Coca-Cola.  The problem is that this would come with a much larger price tag.  Just like Pepsico, it also holds interests.  That means that it would not all be entirely add-on capital to the market caps with a 17% premium in simple math.  But if you tally up the US-equivalent of the stated market caps of the Coca-Cola bottling and distributing its goods comes to a whopping sum in excess of $21 billion.  That is before backing out the company’s interest, but that is also before lumping in a premium to the share prices.

Coca-Cola’s market cap is just north of $102 billion.  That would put the entire tab at a much higher price nominally.  Both Pepsi and Coca-Cola are still closer to their 52-week lows than they are to their respective highs.  Both should easily have access to the capital markets, particularly if the deals can be financed as a streamlining of operation or for more efficiency.  It looks like it is just a lot cheaper for Pepsi to do this over what it would cost Coca-Cola.

Stay tuned.

Jon C. Ogg
April 20, 2009

• AUTONATION (NYSE: AN)                                5,263,588
• BERKSHIRE HATHAWAY (NYSE: BRK-A)         4,050
• CANADIAN NATL RY (NYSE: CNI)                     33,859,544
• COCA COLA FEMSA S A B (NYSE: KOF)         857,128
• FISHER COMMUNICATIONS (NASDAQ: FSCI)  455,700
• FOMENTO ECONOMICO (NYSE: FMX)             20,966,795
• GAMCO INVESTORS (NYSE: GBL)                  90,845
• GRUPO TELEVISA SA (NYSE: TV)                  19,680,400
• OTTER TAIL (NASDAQ: OTTR)                         2,556,499
• PATRIOT COAL (NYSE: PCX)                          2,408,653
• PLANETOUT (NASDAQ: LGBT)                        521,739
• PNM RESOURCES (NYSE: PNM)                    7,019,550
• REPUBLIC SERVICES (NYSE: RSG)               34,873,836
• SIX FLAGS (NYSE: SIX)                                   10,210,600
• STRATEGIC HOTELS & RESORT (NYSE: BEE) 4,190,000

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Jon C. Ogg
November 14, 2008

• AT&T (NYSE: T) downgraded to Neutral from Outperform at Credit Suisse.
• Chesapeake Energy (NYSE: CHK) started as Buy at Jefferies.
• Coca-Cola FEMSA (NYSE: KOF) downgraded to Hold from Buy at Citigroup.
• Comcast (NASDAQ: CMCSA) downgraded to Neutral from Outperform at Credit Suisse.
• KeyCorp. (NYSE: KEY) downgraded to Underperform from Sector Perform at RBC Capital.
• Limelight Networks (NASDAQ: LLNW) downgraded to Market Perform from Outperform at Oppenheimer.
• Lukoil (NASDAQ: LUKOY) raised to Buy from Hold at Citigroup.
• Meritage Homes (NYSE: MTH) raised to Buy from Neutral at UBS.
• PPG Industries (NYSE: PPG) downgraded to Hold from Buy at Citigroup.
• Verizon (NYSE: VZ) downgraded to Neutral from Outperform at Credit Suisse.

Jon C. Ogg
February 20, 2008