ARM Holdings PLC (NASDAQ: ARMH) Started as Overweight at Piper Jaffray.
AvalonBay Communities, Inc. (NYSE: AVB) Raised to Outperform at Credit Suisse.
Gannett Co., Inc. (NYSE: GCI) Started as Equalweight at Barclays.
Deckers Outdoor Corporation (NASDAQ: DECK) Cut to Neutral at Credit Suisse; Maintained Buy with $105 target at Canaccord Genuity.
First Solar, Inc. (NASDAQ: FSLR) Cut to Neutral at Susquehanna.
Forest Oil Corporation (NYSE: FST) Cut to Hold at Canaccord Genuity.
Monster Beverage Corporation (NASDAQ: MNST) Reiterated Conviction Buy List and raised estimates by Goldman Sachs.
Marriott International, Inc. (NYSE: MAR) Raised to Conviction Buy List at Goldman Sachs.
Nabors Industries Ltd. (NYSE: NBR) Raised to Buy with $30 target at Argus.
PolyOne Corporation (NYSE: POL) named as Value Stock of the Day at Zacks.
Red Robin Gourmet Burgers (NASDAQ: RRGB) named as Bull of the Day at Zacks.
Sunoco, Inc. (NYSE: SUN) Cut to Underperform as Bear of the Day at Zacks.
Salesforce.com (NYSE: CRM) Maintained Neutral but raised target to $145 on Credit Suisse; Raised to Buy at ThinkEquity; Reiterated Buy and raised target to $170 at Canaccord Genuity.
Target Corporation (NYSE: TGT) Raised to Buy at Jefferies.
Trina Solar Limited (NYSE: TSL) Cut to Market Perform at Wells Fargo; Cut to Negative at Susquehanna.

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JON C. OGG

Greek leaders face a deal for settling sovereign debt matters as workers strike. (Reuters)

Toyota (NYSE: TM) posts good third-quarter profits and says the U.S. will be a difficult market. (Reuters)

Boeing (NYSE: BA) may have trouble with its 787 deliveries after flaws were found in the body of the aircraft. (Reuters)

Verizon (NYSE: VZ) and Redbox set a deal to compete with Netflix (NASDAQ: NFLX). (Reuters)

Amazon.com (NASDAQ: AMZN) may open a physical store in Seattle. (Reuters)

House Republicans move to reopen debate on the Keystone XL pipeline. (Reuters)

Problems with regulators have made the Medco (NYSE: MHS) merger with Express Scripts (NASDAQ: ESRX) less likely. (Reuters)

The U.S. will create programs to help the troubled money market industry. (WSJ)

Barclays (NYSE: BCS), Credit Suisse (NYSE: CS), Morgan Stanley (NYSE: MS), Goldman Sachs (NYSE: GS) and Royal Bank of Scotland (NYSE: RBS) will bid as the New York Fed auctions risky bonds it got as part of its AIG (NYSE: AIG) bailout. (WSJ)

Greece will cut 15,000 public sector jobs. (WSJ)

Motorola Mobility (NYSE: MMI) wants a 2.25% royalty on Apple (NASDAQ: AAPL) iPhone sales based on IP claims. (WSJ)

Walt Disney (NYSE: DIS) and Univision are in talks to create a 24-hour news channel. (WSJ)

India cuts its growth forecast to 6.9%. (WSJ)

Eugene Isenberg of Nabor Industries (NYSE: NBR) gives up a $100 million retirement payout. (WSJ)

The Obama budget will have $3 trillion in cuts over 10 years and $1.5 trillion in new taxes — mostly on the rich. (WSJ)

Japan wants to enter a large Asia-Pacific trade agreement, but the U.S. may object. (WSJ)

Satellite makers say that U.S. regulations make it difficult for them to compete overseas. (WSJ)

Republic Airways (NASDAQ: RJET) is about to sell Frontier. (WSJ)

New LeadershipIQ research breaks companies into four groups based on management style and systems to create results. (WSJ)

Walmart (NYSE: WMT) promotes a manager to be the new CEO of its China operations. (WSJ)

Some large European banks will not take European Central Bank loans because they fear it will make them appear weak. (WSJ)

BP (NYSE: BP) raises its dividend. (FT)

An escrow fund may be set to help Greece instead of all aid money going to the nation directly. (FT)

Farmers to plant the largest corn crop since 1984. (Bloomberg)

Walmart will lower fat, sodium and sugar in some foods. (Bloomberg)

Douglas A. McIntyre

Applied Materials Inc. (NASDAQ: AMAT) Started as Hold at Deutsche Bank.
Becton Dickinson & Co. (NYSE: BDX) Reiterated Buy with $87 target at Argus.
E. I. du Pont de Nemours and Company (NYSE: DD) Started as Neutral at UBS.
Genesco Inc. (NYSE: GCO) named as Value stock of the day at Zacks.
Hewlett-Packard Co. (NYSE: HPQ) Raised to Outperform at RBC.
Hibbett Sporting Goods (NASDAQ: HIBB) named as Bull of the Day at Zacks.
Ingram Micro, Inc. (NYSE: IM) named as Bear of the Day at Zacks.
Kodiak Oil & Gas Corp. (NYSE: KOG) Reiterated Outperform and raised target to $11 at Credit Suisse.
Nabors Industries Ltd. (NYSE: NBR) Cut to Hold at Jefferies.
Netflix, Inc. (NASDAQ: NFLX) maintained Sell but cut target to $57 at Canaccord Genuity.
Newpark Resources (NYSE: NR) Started as Hold at Canaccord Genuity.
QUALCOMM Incorporated (NASDAQ: QCOM) Started as Outperform at Scotia.
Research In Motion Limited (NASDAQ: RIMM) Raised to Market Perform at Bernstein.
Spectrum Brands Inc (NYSE: SPB) Started as Outperform at Credit Suisse.

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The SPDR S&P 500 (NYSE: SPY) rose by 10.9%. but the gain from trough to peak was far more.  We have offered some color on each and shown how much implied upside is there to the Thomson Reuters consensus analyst price target as well.  These gainers are listed lowest to highest on a percentage basis for the month.

Denbury Resources Inc. (NYSE: DNR) rose by 36.5% as shares rose from $11.50 to $15.70. Analysts have a consensus price target of $24.40. The company acquires and develops oil and gas properties in the Gulf Coast states.  The company announced a $500 million share buyback during October, but it also announced that its President & COO has left the company.

Valero Energy Corporation (NYSE: VLO) saw a 38.4% gain as the stock rose from $17.78 at the end of September to $24.60 at the end of October.  Analysts have a consensus price target of $31.50.  Valero was the subject of buyout speculation and its shares have not really sold off after word came that one rumored acquirer was not looking o acquire it.

National Oilwell Varco Inc. (NYSE: NOV) saw a 39.3% rise from $51.22 at the end of September to $71.33 at October’s end.  Analysts have a consensus price target of $89.75. If the offshore oil market is going to be opened back up, having a an offshore rig manufacturing business is going to be robust again.

Joy Global, Inc. (NASDAQ: JOYG) saw a gain of 39.8% from $62.38 on September 30 up to $87.20 at the end of October.  Analysts have a consensus price target of $102.00.

Juniper Networks, Inc. NYSE: JNPR) rose by 41.8% in October $24.47 versus $17.26.  The turnaround in networking is being seen in the stock. Analysts have a consensus price target of $25.03. Juniper has risen off of lows just as many other networking equipment players have seen.

Goodyear Tire & Rubber Co. (NYSE: GT) rolled on and on for a 42.3% gain as shares went from $10.09 at the end of September to $14.36 at the end of October.  Analysts have a consensus price target of $18.69.  Goodyear is back to profits and shares are actually still very cheap at about 7-times a blended forward P/E for 2011 and 2012 estimates.

El Paso Corp. (NYSE: EP) saw a 43.1% gain for the month but we would not that this is due mostly to the acquisition of the company.

F5 Networks, Inc. (NASDAQ: FFIV) had a very large run as the network equipment player bounced hard off its lows.  A move from $71.05 at the end of September to $103.95 was up 46.3%. Analysts have a consensus price target of $106.67.

Nabors Industries Ltd. (NYSE: NBR) was one of the top performers for October as the shares rose from $12.26 to $18.33, generating a 49.5% gain. The $100 million payout for the CEO exit is under criticism, but the oil and gas driller did beat earnings and has reorganized its management structure.  Analysts have a consensus price target of $27.33.

Harman International Industries Inc. (NYSE: HAR) saw a rise of 51.5% as the stock rose from $28.53 on a dividend-adjusted basis up to $43.16. Analysts have a consensus price target of $47.25.  In late October came word of higher 2012 guidance as well as a buyback of up to $200 million in its stock over the next year.

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JON C. OGG

Natural gas prices at the Henry Hub have been rising, coming within a hair’s breadth of $5.00/million BTUs, a level last seen in August 2010. The low prices have slowed the growth in onshore drilling for natural gas in the US, at the same time that it is encouraging some utilities to look at natural gas as a fuel for baseload power generation.

The abundant supplies of US natural gas available throughout the drilling technique known as hydraulic fracturing, or ‘fracking’ or ‘fracing’, has swept the industry, leading to massive amounts of new gas discoveries and production, as well as to lower prices. The industry needs prices to rise to around $7-$8/million BTUs in order for it to make a decent profit, but with prices stuck below $5, that day appears to be well into the future.

Investing in natural gas purely as a commodity play is best left to experienced traders. There are, of course, other ways. Four funds we’ll look at here are United States Natural Gas Fund (NYSE: UNG), First Trust ISE-Revere Natural Gas Index Fund (NYSE: FCG), SPDR S&P Oil & Gas Exploration and Production (NYSE: XOP), and PowerShares Dynamic Oil & Gas Services Fund (NYSE: PXJ).

United States Natural Gas Fund (NYSE: UNG) invests in near-month natural gas NYMEX futures contracts. In the past 52-weeks, the fund has lost more than -25% of its NAV, but with $1.9 billion in assets it is the largest natural gas fund available. Because it invests only in near-month contracts, UNG must roll-over its contracts every month, in effect selling its about-to-expire position and purchasing new contracts for the following month. In a contango market, where future-month contract prices exceed near-month contract prices, such a strategy loses money every month. Thus, even when natural gas prices rise, UNG can lose money because the future contract price will rise at least as quickly as the current price.

Why own such a thing? Primarily as a hedge against inflation and almost no correlation with equity prices. Pretty small beer, all things considered. UNG is trading at $11.93 at about mid-day, within a 52-week range of $10.02-$17.68.

The First Trust ISE-Revere Natural Gas Index Fund (NYSE: FCG) tries to replicate the ISE-Revere Natural Gas Index by investing at least 90% of its funds in the common stock of that index’s companies. The fund’s top five holdings are Stone Energy Corp. (NYSE: SGY), Petrohawk Energy Corp. (NYSE: HK), Cabot Oil & Gas Corp. (NYSE: COG), Southwestern Energy Co. (NYSE: SWN), and SandRidge Energy, Inc. (NYSE: SD). These five comprise 18.95% of the fund’s holdings. The fund’s assets total $586 million and it is trading today at $21.19, within a 52-week range of $14.39-$23.75. In the past year, the fund has gained more than 30%.

The SPDR S&P Oil & Gas Exploration and Production (NYSE: XOP) invests in equities  of companies that explore for and produce oil and natural gas. The fund’s top five holdings are Cabot, W&T Offshore, Inc. (NYSE: WTI), Petrohawk, EQT Corp. (NYSE: EQT), and Southwestern Energy. The fund’s assets total $908 million. The fund is trading at $56.55 today, within a 52-week range of $37.44-$65.76. Over the past year, the fund has gained about 42%.

The PowerShares Dynamic Oil & Gas Services Fund (NYSE: PXJ) tracks an equity index called the Dynamic Oil Services Intellidex. It invests at least 80% in common stock of oil and gas services companies, and may invest up to 90% of its assets in the Intellidex index companies. Its five largest holdings are Baker Hughes Inc. (NYSE: BHI), Nabors Industries, Ltd. (NYSE: NBR), Halliburton Co. (NYSE: HAL), FMC Technologies, Inc. (NYSE: FTI), and Diamond Offshore Drilling, Inc. (NYSE: DO). The fund’s assets total about $247 million and it is trading today at $23.35, in a 52-week range of $13.98-$26.84. The fund has gained about 66% in the past year.

A reasonable conclusion from this quick survey is that investing in natural gas producers pays off nicely, but the real gains have come in the services sector. Holding natural gas futures has very limited appeal, but plenty of investors do it.

Growth in the services sector is likely to continue as drilling picks up both onshore in the US and offshore in the US Gulf of Mexico. As for the producers, Cabot, Stone, and Petrohawk are all involved in natural gas plays that produce significant amounts of liquids. And that’s where the money is, not in gas. Gas may become worth more over the next year or so, but the price differential between liquids and gas is never likely to close again.

Paul Ausick

Analog Devices Inc. (NYSE: ADI) Started as Neutral at Sterne Agee.
ASML Holding (NASDAQ: ASML) Cut to Hold at S&P Equity Research.
Baidu Inc. (NASDAQ: BIDU) Maintained Buy but Target raised To $115 from $93 at Citigroup.
Humana Inc. (NYSE: HUM) Started as Positive at Susquehanna.
Iron Mountain Inc. (NYSE: IRM) Cut to Market Perform at Wells Fargo.
Itron Inc. (NASDAQ: ITRI) Raised to Hold from Sell at Stifel Nicolaus.
Nabors Industries (NYSE: NBR) Started as Perform at Oppenheimer.
Patterson-UTI Energy (NASDAQ: PTEN) Started as Perform at Oppenheimer.
Petroleo Brasileiro (NYSE: PBR), or Petrobras, Cut to Equal-Weight at Barclays.
SandRidge Energy, Inc. (NYSE: SD) Started as Hold at KeyBanc.
Tesoro Corporation (NYSE: TSO) Cut to Underperform at Raymond James.
Texas Instruments Inc. (NYSE: TXN) Started as Neutral at Sterne Agee.
Viacom, Inc. (NYSE: VIA) Raised to Buy at Janney; Started as buy with $44 target at Nomura.
Walt Disney Co. (NYSE: DIS) Started as Buy with $40.50 Target at Nomura.

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JON C. OGG

The appreciation of the options is an impressive amount. Some of the CEOs deserve the rewards more than others. Each compensation number is the difference between the value of the grant when it was received and its value at the end of May 2010.

The CEOs who received these grants, along with their dollar value as of May 24, 2010 are:

Mel Karmazin of Sirius XM Radio (NASDAQ: SIRI), whose 120 million options were worth $69.6 million;

Allan Mulally of Ford Motor (NYSE: F), whose 5 million options were worth $45.2 million;

Larry Ellison, founder and CEO of Oracle (NASDAQ: ORCL), whose 7 million options were worth $10.9 million;

Howard Schultz, founder and CEO of Starbucks (NASDAQ: SBUX), whose grant of 2.7 million options was worth $44.6 million;

Anthony Ryan of MoneyGram International (NYSE: MGI), whose 8 million options were worth $7.4 million;

Trevor Fetter of Tenet Heathcare (NYSE: THC), whose 5.5 million options were worth $24.2 million;

Kenneth Campbell the head of Standard Pacific (NYSE: SPF), who made $1.7 from 3 million options;

Eugene Isenberg of Nabor Industries (NYSE: NBR), who received 3 million options that were worth $21.6 million,

Stephen Berkowitz of Move, Inc (NASDAQ: MOVE),  whose 3 million options were worth $1.1 million,

and Dan Hesse of Sprint-Nextel (NYSE: S), who made $3.5 million from 3 million options.

To start, CEOs who made almost nothing from their grants should not be criticized. Neither should their board be for granting them options. These CEOs include the heads of Standard Pacific and Move, Inc.

Dan Hesse of Sprint-Nextel made only $3.5 million in appreciation on his grant. Sprint is in poor shape, and if its new 4G Wimax initiative does not work the company’s future is in doubt. Hesse may have caused some of the company’s problems, but he also inherited a number of them.

There should be a debate over whether extremely wealthy founders like Howard Schultz of Starbucks or Larry Ellison of Oracle should be given grants at all. Their huge ownership of stock in their companies is performance incentive enough. Nevertheless, each made very significant amounts on the value of the grants they received last year. In the case of Schultz, he has done a great deal to improve the coffee company’s prospects.

Mel Karmazin of XM Sirius also deserves his award, considering his company was at death’ s door when he joined. Karmazin arranged financing that salvaged the firm’s prospects. The stock has a 52-week low of $.40 and now trades at $.96, but was below $.10 when it appeared that bankruptcy was imminent.

Tenet Healthcare also did relatively well, but Fetter’s $24 million benefit might be excessive. The stock has outperformed the market, though, up 28% over a period when the DJIA is up only 12%.

It would be very hard for anyone on Wall Street to argue against the award received by Alan Mulally. Ford was in deep trouble when he joined, due in part to mismanagement and in part because of the economy. He kept the firm out of Chapter 11 while its rivals GM and Chrysler filed for bankruptcy. Ford’s financial results have been unusually strong over the last year.

Isenberg of Nabor is the one CEO who does not deserve his significant options profit. The company’s stock is up only 8% in the last year and has underperformed the DJIA.

Douglas A. McIntyre

The third company is Apple (NASDAQ:AAPL). The members of the board of the world’s premier consumer electronics and computer company made an average of $127,000 a meeting, according to Reuters.

Apple has a blue chip board that includes some members who do not know much about business and governance, especially Al Gore.

The Apple board has a special function that is unlike that of any other board of a large US company. The board does not run the company and probably gives management almost no guidance. Apple is and has been a “one man” operation under Steve Jobs since the initial success of the iPod in 2001.  Apple’s stock has gone from under $8 to over $200 since then. Jobs is credited with creating the iPod, the iPhone, the newest versions of the Mac. He is credited with building the market programs that sell the products and the overall brand, one of the world’s most valuable, that is the result of all that work.

The Apple board has done little other than dodge nettlesome issues. The first was the question of stock options backdating. Apple’s CFO lost his job over the issue. Jobs was left unmolested. Then there was the problem of Jobs’ health. He has a form of cancer which can be seriously debilitating if not fatal. Jobs has even had his liver replaced. The board might have pushed for an early disclosure of the cancer diagnosis. It did not.

Apple’s board members get more than $100,000 a year for hiding information and protecting Jobs. At least that is what the public record shows.

Douglas A. McIntyre

Stephen Schwarzman, head of financial firm Blackstone (BX), made over $702 million in 2008 based on data from The Corporate Library.

Schwarzman made almost all of the money on the vesting of shares in Blackstone which he received when the company went public. Blackstone stock is down over 40% during the last two years, but the CEO does not appear to be paying for that.

The most stunning name on the top ten compensation list of 2008 is Michael Jeffries of Abercrombie & Fitch (ANF). Its sales have been falling in double digits for month. Jeffries made $72 million, 86% of that from the exercising of options and vesting of restricted stock. ANF shares are down 55% over the last two years.

Larry Ellison, the founder of Oracle (ORCL) was No.2 on the list with total compensation of $557 million. His board has a strong defense for his pay package. Oracle’s shares are up over 15% during the last two years while the DJIA has dropped almost 30%.

The boom in energy prices, which largely ended last year, helped line the pockets of eight of the top ten CEOs who all run petroleum or coal companies.

Ray Irani of Occidental  (OYX) made $224 million. John Hess of Hess (HES) made $160 million. Mark Watford of Ultra Petroleum (UPL) made $117 million. Aubrey McClendon of Chesapeake Energy (CHK) made $114 million. Bob Simpson of XTO (XTO) made $104 million. Mark Papa of EOG Resources (EOG) made $90 million, and Eugene Isenberg of Nabors (NBR) made $79 million.

With the collapse in energy prices, the oil chiefs are not likely to make the list release a year from now.

Douglas A. McIntyre

Transocean (NYSE: RIG) was one of the few real upgrades as shares were raised to Buy from Neutral.  Patterson-UTI (NASDAQ: PTEN) and Halliburton (NYSE: HAL) were cut to Neutral, while Oil States International (NYSE: OIS) was cut to Sell.  Nabors Industries (NYSE: NBR) was cut to Sell from Neutral.  Diamond Offshore (NYSE: DO) and FMC Technologies (NYSE: FTI) were both upgraded, but only to Neutral from Sell.

Westar Energy (NYSE: WR) and NRG Energy (NYSE: NRG) were both raised to Buy, while NV Energy (NYSE: NVE) was cut to Neutral.

Jon C. Ogg
June 25, 2009