After the first 45 minutes of trading this morning, Vringo is up more than 46% at $1.70. Volume is nearly 20x the daily average of about 65,000 shares traded. The social media software maker is apparently basking in the glow of the coming IPO of Facebook. See our coverage here.

FriendFinders is up more than 30% at $1.38. Volume is already about 4x the daily average of about 213,000 shares traded. The adult social media company is likely also being bought up on the prospective Facebook IPO.

RadioShack is down more than -28% at $7.35 after posting a new 52-week low of $7.15 earlier. Volume is already 9x the daily average of about 2.6 million shares traded. The electronics retailer pre-announced quarterly earnings this morning and the outlook for gross margins is killing the stock. See more coverage here.

Meritage is down more than -8% at $24.96. Volume has already nearly equaled the daily average of about 456,000 shares traded. The homebuilding company reported a larger quarterly loss this morning.

Parexel is up more than 14% at $23.35. Volume is already more than double the daily average of about 421,000 shares traded. The pharmaceutical maker guided next quarter earnings above consensus estimates.

Paul Ausick

Beazer Homes USA, Inc. (NYSE: BZH) Cut to Underperform at Credit Suisse.
BHP Billiton Limited (NYSE: BHP) Started as Buy at Goldman Sachs.
Carnival Corporation (NYSE: CCL) Cut to Neutral at JPMorgan.
FedEx Corporation (NYSE: FDX) Cut to Hold at Jefferies.
General Growth Properties (NYSE: GGP) Raised to Buy at Stifel Nicolaus.
Intel Corporation (NASDAQ: INTC) Cut to Neutral at JPMorgan.
Linear Technology Corporation (NASDAQ: LLTC) Cut to Underweight at JPMorgan.
Logitech International SA (NASDAQ: LOGI) Cut to Underweight at JPMorgan.
Meritage Homes Corporation (NYSE: MTH) Cut to Underperform at Credit Suisse.
Panera Bread Co. (NASDAQ: PNRA) Raised to Overweight at Morgan Stanley.
Potash Corp. of Saskatchewan (NYSE: POT) Raised to Sector Outperform at CIBC.
Ryland Group Inc. (NYSE: RYL) Cut to Underperform at Credit Suisse.
Steel Dynamics Inc. (NASDAQ: STLD) Started as Buy at Deutsche Bank.
Stifel Financial Corporation (NYSE: SF) Raised to Buy with $37 target at Goldman Sachs.
Tesla Motors, Inc. (NASDAQ: TSLA) Raised to Buy at Wunderlich.
U.S. Bancorp (NYSE: USB) Cut to Neutral at Citigroup.
Wynn Resorts Ltd. (NASDAQ: WYNN) Raised to Positive at Susquehanna.

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JON C. OGG

Since the beginning of the year, though, some solid movement is pointing to what could be a better-than-expected 2011. Meritage Homes Corp. (NYSE: MTH) has given a boost to privately held PVT Solar’s solar PV system that claims to convert more than 50% of sunlight to energy by using the heat generated as well as the light itself. Canadian Solar Inc. (NASDAQ: CSIQ) has signed up to supply solar modules to SunEdison, a division of MEMC Electronic Materials Inc. (NYSE: WFR), for a 70 megawatt solar PV plant in Italy. JinkoSolar Holding Co., Ltd. (NYSE: JKS) has registered about $91 million in one-year bonds and issued about half that amount. The company plans to use the about 83% of the proceeds as working capital and the rest to repay higher-interest loans.

Globally, solar PV installations are expected to total around 16,000 megawatts for 2010, rising to about 22,200 megawatts in 2011, according to iSuppli.  In the US, solar PV installation is expected to double from about 1,000 megawatts in 2010 to 2,100 megawatts in 2010. Germany and Italy will continue to lead in solar PV installation

Of the 9,000 megawatts installed in 2010, about 72% of the solar PV modules were manufactured in China, yet China probably installed fewer than 500 megawatts of solar PV in 2010. China’s solar PV companies are quite optimistic regarding new installations in the country, but it could be another year or two before China really hits its stride.

In 2011, China’s production capacity could reach 35,000 megawatts, far above the 22,000 megawatts of forecast new installations.  Even if these projections are slightly off, oversupply of solar PV will drive down prices in 2011.

To try to maintain margins, Chinese producers could be beginning to look downstream at project development. Earlier this month, LDK Solar Co. Ltd. (NYSE: LDK) bought a 70% stake in a project development company, marking the first entry by a Chinese company in the project business. US solar PV makers First Solar Inc. (NASDAQ: FSLR), SunPower Corp. (NASDAQ: SPWRA), and MEMC have already bought into this area and it is expected to help them maintain growth in the face of module oversupply.

The new year will reward those solar PV makers that have acted to guarantee a market for their products. Those that rely on producing more modules could have a tougher time.

Paul Ausick

Dow Jones was expecting roughly 4.6 million units annualized versus a Bloomberg consensus estimate of 4.65 million units.  It is very rare to catch a month where numbers are off versus estimates by that much.

The drop was almost twice as bad as economists expectations.  Common sense would dictate that investors would be selling homebuilders.  Homebuilders sell new homes rather than existing homes.  But you rarely have a crummy market for new homes without the same happening in existing homes, even if there is often a month or two lag in the comparisons of each.

Supply at the current sales rate also grew from an already high June reading of 8.9 months to 12.5 months in July.  That is the highest reading in years.  The silver lining here is the housing prices.  Prices were only down by 0.2% with the median price at $182,600.

Realtors and some still-hopeful bulls are sticking to the notion that the sales were hampered after the end of the home-buyer tax credits.  That acted to steal from later months to keep things going in the front months.

Keep in mind that NEW HOME SALES are due on Wednesday and consensus estimates are 340,000.  Chances are that this ‘guestimate’ figure has come down significantly after the existing home sales were such a disappointment.

The SPDR S&P Homebuilders (NYSE: XHB) has been fighting between positive and negative all day.  The current count is that shares of the ETF are down 0.2% at $14.02.

The counter-headline move here is a rather simple case.  Investors are assuming that the after-effect of the housing tax credit will not last forever.  There is also probably a notion that this number was so bad that it may mark a bottom or be close enough to the bottom that tip-toeing back in is the best bet today.  These stocks are just about all so close to 52-week lows that many investors are thinking these stocks don’t likely have much room to fall.  There is also this recent research report calling for consolidation among many of the stocks in the homebuilder sector.

If the number of new home sales somehow manages to be this far from expectations like this morning’s data, then analysts are going to start rethinking their numbers for the rest of the year.

JON C. OGG

Ryland Group Inc. (NYSE: RYL), Meritage Homes Corporation (NYSE: MTH) and Beazer Homes USA Inc. (NYSE: BZH) are believed to be the most likely targets under the Citi research.  The market caps of the potential targets are as follows: Beazer Homes is $285 million, Meritage Homes is $548 million, and Ryland is $725 million.

DR Horton Inc. (NYSE: DHI), KB Home (NYSE: KBH), MDC and PulteGroup, Inc. (NYSE: PHM) are believed to be the most likely acquirers per Citi.  The market caps are as follows: DR Horton is $3.3 billion, KB’s is $808 million, and Pulte is $3.17 billion.  Lennar Corp. (NYSE: LEN) was deemed as a wild card in the group.

The 5 reasons summarized were as follows:

• (1) new home sales have dropped to levels almost none of the management teams anticipated and have demonstrated
• no recovery so far
• (2) in sharp contrast to the 1Q10 earnings calls, on the 2Q10 calls managements sounded rather discouraged about the industry’s near-term growth prospects
• (3) most managements are now focusing more on gaining market share
• (4) the broader economic outlook, particularly the prospects for job creation, has deteriorated markedly
• (5) size confers an advantage.

What is interesting is that Citi does not believe there are really any public talks happening between firms at this time.  The belief is that there are likely some talks happening privately among management inside some of these companies.

Housing starts in July were released earlier this week as being up 1.7% on a seasonally adjusted annual rate of 546,000, while single-family housing starts fell by over 4% to 432,000 annualized.  This was after a deep revision downward for June and it appears that July’s drop in building permits for single-family housing was the lowest level in more than a year.

What is interesting about this speculation is that Citi just lowered its target on Beazer to $6 from $7 earlier this month and Wells Fargo also lowered its expectations and said Beazer will likely underperform peers after Beazer said its orders were down 33%.  Hedge fund manager John Paulson recently added to his stake in the company.

This call also builds o top of last week’s upgrade from Deutsche Bank on D.R. Horton, Ryland, and Meritage to Buy from Hold based upon the thesis that the housing market is nearing a natural bottom.

If consolidation does come, the hidden winner is likely to be the SPDR S&P Homebuilders (NYSE: XHB).  Its shares are up 0.35% at $14.54, but its 52-week trading range is $13.50 to $20.00.

As with any ‘reports of M&A activity,’ we treat these effectively as rumor until proven otherwise.

JON C. OGG

Achillion Pharmaceuticals Inc. (NASDAQ: ACHN) Started as Buy at Roth Capital.
Cintas Corp. (NASDAQ: CTAS) Cut to Neutral at JPMorgan.
Exxon Mobil Corp. (NYSE: XOM) Cut to Hold at Soleil.
Gold Fields (NYSE: GFI) Started as Buy at Goldman Sachs.
Harmony Gold (NYSE: HMY) Raised to Buy at Goldman Sachs.
Meritage Homes Corp. (NYSE: MTH) Started as Buy at Citigroup.
Micron Technology (NYSE: MU) Reiterated Buy, Target raised to $11 rfom $10 at Auriga.
Netflix Inc. (NASDAQ: NFLX) Started as Positive at Susquehanna.
Potash Corp. (NYSE: POT) Cut to Reduce at TD.
Randgold Resources (NASDAQ: GOLD) Cut to Neutral at Goldman Sachs.

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JON C. OGG

DR Horton Inc. (DHI)….. $3.5B; +5.8% at $10.78
Toll Brothers Inc. (TOL). $3.1B; +4.5% at $18.86
NVR Inc. (NVR)……….. $2.6B; +4% at $6.86
MDC Holdings Inc. (MDC).. $1.5B; +4.5% at $30.95
Lennar Corp. (LEN)……. $1.2B; +11% at $7.98
KB Home (KBH)………… $1.1B; +6% at $14.30
Ryland Group Inc. (RYL).. $728.8M; +6% at $16.80
Meritage Homes Corp(MTH). $401.3M; +7.3% at $12.99
Hovnanian (HOV)………. $125.0M; +11% at $1.72
M/I Homes, Inc. (MHO)…. $121.7M; +2.2% at $8.72
Standard Pacific (SPF)… $100.6M; +11% at $1.00

Oddly enough, the SPDR S&P Homebuilders (NYSE: XHB) ETF is only up almost 4% at $11.37.  The other ETF, the iShares Dow Jones US Home Construction (NYSE: ITB) is up 3.5% at $9.25.  This is a slightly different ETF, but the PowerShares Dynamic Building & Construct (NYSE: PKB) is up 1.3% at $9.65 on very thin volume.

JON C. OGG

• Centex (NYSE: CTX), DR Horton (NYSE: DHI), and KB Home (NYSE: KBH) were all started with "Outperform" ratings.
• MDC Holdings (NYSE: MDC) and NVR (NYSE: NVR) were both started as Neutral.
• Hovnanian (NYSE: HOV) and Meritage Homes (NYSE: MTH) were started as "Underperform."

We’ll follow up if we see any of the other calls in the sector out of Credit Suisse.
Jon C. Ogg
June 24, 2008

The proceeds to the homebuilder from the $82 million offering will be used for working capital and general corporate purposes. Citi is the sole book-running manager granted 60,000 in over-allotments. The offering is expected to close April 23.

Shares are down over 2% today from $20.89 to $20.38. The 52-week range is $7.04 to $38.72.

You can join our open email distribution list to hear about other IPO’s, secondary offerings, buybacks, special financings, restructurings and more.

Rachel Lopez
April 18, 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