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Daily M&A: AT&T/T-Mobile Will Force Other Mergers (T, Q, CTL, VZ, VOD, S, PCS, LEAP, USM)

Administrator — Mon, 21 Mar 2011 16:01:54 +0000

It’s 12:00 PM and that means it is time for “The M&A Daily.” This weekend’s AT&T Inc. (NYSE: T) $39 billion buyout of Deutsche Telekom’s T-Mobile is going to have some severe ramifications in the world of telecom and wireless communications here in the U.S. The deal is on the back of Qwest Communications International Inc. (NYSE: Q) merging with CenturyLink, Inc. (NYSE: CTL), which has been approved with conditions.

This merger will probably help to lock in a near duopoly between AT&T and Verizon Communications Inc. (NYSE: VZ). It should be no surprise that some will wonder if this will force an unlocking of the Vodafone PLC (NYSE: VOD) deal with Verizon as well.

We wanted to consider a couple of other possibilities for the wireless sector. First, this leaves Sprint Nextel Corporation (NYSE: S) in a no-win position. Deutsche Telekom was recently rumored to be in some sort of deal with Sprint, but what is more important was that the two weaker wireless players have been rumored to be in a potential deal for longer than you could believe. Sprint Nextel shares are down 14% at $4.33.

Leap Wireless International Inc. (NASDAQ: LEAP) is up almost 13% at $13.70 with a $1.08 billion market cap and MetroPCS Communications, Inc. (NYSE: PCS) is up 5.5% at $15.75 with a $5.6 billion market cap. There was a failed merger between the two pre-paid wireless carriers before. This leaves them with little choice but to go in and merge now if they want to remain relevant and to remain competitive on costs.

Perhaps the most overlooked and/or easiest to forget about is the thinly traded United States Cellular Corp. (NYSE: USM), more commonly known as US Cellular. With shares up 5% at $48.60, its market cap is $4.15 billion. The company has been rumored to be a M&A target in the past but so far nothing has ever happened.

It may seem odd to many that Verizon is up with AT&T. The logic behind it is simple: fewer competitors will translate to price stability and pricing power to be enjoyed by both. Verizon shares are up 2.4% at $36.71, more than the AT&T gain of 1.2% to $28.28 so far on Monday.

By now you know the drill with Wall Street’s mantra for greed begets more greed: Big mergers beget more mergers!

JON C. OGG

Filed under: Conglomerates, Mergers and Buy Outs, Telecom, WiMAX, Wireless Tagged: CTL, LEAP, PCS, Q, S, T, USM, VOD, VZ

Top Analyst Upgrades & Downgrades (AA, AMZN, AEP, ADSK, AAPL, BKS, BA, KO, HBAN, NFLX, GOOG, PEP, PCLN, Q, SONC, YHOO)

Administrator — Wed, 05 Jan 2011 13:11:36 +0000

These are some of this Wednesday’s key analyst upgrades, downgrades, and initiations seen in Wall Street research calls.

Alcoa, Inc. (NYSE: AA) Cut to Hold at Citigroup.
Amazon.com Inc. (NASDAQ: AMZN) Started as Buy at Canaccord Genuity.
American Electric Power Company (NYSE: AEP) Cut to Neutral at JPMorgan.
Autodesk, Inc. (NASDAQ: ADSK) Raised to Buy at Goldman Sachs.
Apple Inc. (NASDAQ: AAPL) Started as Outperform ($405 target) at Wedbush.
Barnes & Noble, Inc. (NYSE: BKS) Raised to Neutral with $16 target at Credit Suisse.
The Boeing Company (NYSE: BA) Cut to Hold at Argus.
The Coca-Cola Company (NYSE: KO) Started as Equal-Weight at Morgan Stanley.
Huntington Bancshares Inc. (NASDAQ: HBAN) Cut to Hold at Jefferies.
Netflix, Inc. (NASDAQ: NFLX) Started as Buy at Canaccord Genuity.
Google Inc. (NASDAQ: GOOG) Started as Buy at Canaccord Genuity.
Pepsico, Inc. (NYSE: PEP) Started as Overweight at Morgan Stanley.
priceline.com Incorporated (NASDAQ: PCLN) Started as Buy at Canaccord Genuity.
Qwest Communications International Inc. (NYSE: Q) Cut to Sell at Argus.
Sonic Corp. (NASDAQ: SONC) Raised to Hold at Stifel Nicolaus.
Yahoo! Inc. (NASDAQ: YHOO) Started as Hold at Canaccord Genuity.

In case you were out last week, the top five analyst calls full summary is available here (AMZN, APC, AAPL, GOOG, VVTV). Yesterday’s full analyst slate is here and covers AAPL, AMGN, OFC, EXPE, KEM, MOS, POT, SVU, TROW, UHS, WFMI, WYNN, ALTR, ATML, NVDA, SNDK, and TXN.

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

Filed under: Analyst Calls Tagged: AA, AAPL, ADSK, AEP, AMZN, BA, BKS, GOOG, HBAN, KO, NFLX, PCLN, PEP, Q, SONC, YHOO

Top Analyst Upgrades and Downgrades (AMGN, T, BCSI, BP, CMCSA, COP, EMC, XOM, IGT, NTAP, Q, S, TSO, TSL, VZ, VMW)

Administrator — Tue, 14 Dec 2010 13:17:13 +0000

These are some of this Tuesday’s key analyst upgrades, downgrades, and initiations seen in Wall Street research calls.

Amgen Inc. (NASDAQ: AMGN) Raised to Overweight at Piper Jaffray.
AT&T Inc. (NYSE: T) Started as Buy at Nomura.
Blue Coat Systems Inc. (NASDAQ: BCSI) Started as Buy at UBS.
BP plc (NYSE: BP) Started as Hold at Jefferies.
Comcast Corporation (NASDAQ: CMCSA) Started as Buy at Nomura.
ConocoPhillips (NYSE: COP) Started as Buy at Jefferies.
EMC Corp. (NYSE: EMC) Started as Buy at Janney.
Exxon Mobil Corp. (NYSE: XOM) Started as Hold at Jefferies.
International Game Technology (NYSE: IGT) Started as Overweight at Morgan Stanley.
NetApp, Inc. (NASDAQ: NTAP) Started as Neutral at Janney.
Qwest Communications International Inc. (NYSE: Q) Started as Buy at Nomura.
Sprint Nextel Corp. (NYSE: S) Started as Neutral at Nomura.
Tesoro Corporation (NYSE: TSO) Cut to Neutral at BofA/ML.
Trina Solar Ltd. (NYSE: TSL) Raised to Buy at S&P Equity Research (late-Monday call)
Verizon Communication Inc. (NYSE: VZ) Started as Neutral at Nomura.
VMware, Inc. (NYSE: VMW) Started as Neutral at Janney.

JON C. OGG

Filed under: Analyst Calls Tagged: AMGN, BCSI, BP, CMCSA, COP, EMC, IGT, NTAP, Q, S, T, TSL, TSO, VMW, VZ, XOM

Short Sellers Move Into Financials, Out Of Tech

247wallst — Wed, 10 Nov 2010 11:18:52 +0000

Short sellers moved into the shares of large financial firms, perhaps sensing the effects of new regulation and an exit from proprietary trading businesses.

The short interest in Citigroup (NYSE: C) rose 4.8% to 423.8 million, the largest short position in any stock. Shares short in Wells Fargo (NYSE: WFC) rose 21% to 53.2 million. The short interest in Ambac, which recently went bankrupt rose 14% to 59.2 million. Share short in Bank of NY rose 27% to 21.1 million. Shares short in Synovus Financial were up 9% to 106.9 million. Shares short in KeyCorp rose 9% to 34.6 million

Short interest in tech shares fell almost universally. Shares sold short in Microsoft (NASDAQ: MSFT) fell 9% to 70.5 million. The short interest in Intel (NASDAQ: INTC) fell 8% to 53.3 million. Shares short in Dell (NASDAQ: DELL) were down 8% to 47.9 million. Shares short in Cisco (NASDAQ: CSCO) were off 6% to 49.6 million

The most shorted stocks on the NYSE were Citigroup, Ford (NYSE F), and Qwest (NYSE: Q). The most shorted stocks on the NASDAQ were Sirius XM Radio (NASDAQ: SIRI), Level 3 (NASDAQ: LVLT) and Mylan (NASDAQ: MYL)

Data from NYSE and NASDAQ

Douglas A. McIntyre

Filed under: Short Interest Tagged: C, CSCO, DELL, F, INTC, LVLT, MYL, Q, SIRI, WFC

Today’s Top Stock Movers & Shakers (BP, CADX, FSIN, GRMN, OPEN, Q, SONS, TGB, WYNN)

Administrator — Wed, 03 Nov 2010 12:59:37 +0000

Active traders and day traders have many stocks to choose from this Wednesday morning. We are tracking news and moves in shares of BP plc (NYSE: BP), Cadence Pharmaceuticals Inc. (NASDAQ: CADX), Fushi Copperweld, Inc. (NASDAQ: FSIN), Garmin Ltd. (NASDAQ: GRMN), OpenTable, Inc. (NASDAQ: OPEN), Qwest Communications International Inc. (NYSE: Q), Sonus Networks, Inc. (NASDAQ: SONS), Taseko Mines Ltd. (AMEX: TGB), and Wynn Resorts Ltd. (NASDAQ: WYNN)

BP plc (NYSE: BP) is up after Goldman Sachs raised it to BUY. Shares are up 3.2% at $42.74. What is most important about this morning is that this is the highest price in the stock after the backlash of the Deepwater Horizon disaster in the Gulf of Mexico.

Cadence Pharmaceuticals Inc. (NASDAQ: CADX) is down despite its Ofirmev winning FDA approval in fevers and pain treatment. Shares are down 10.6% at $8.02.

Fushi Copperweld, Inc. (NASDAQ: FSIN) is going private with an offer of $11.50 per share; shares are up 24% at $11.29.

Garmin Ltd. (NASDAQ: GRMN) is getting hit as secular trends against it showed up in its earnings report; Garmin shares are down 8.2% at $30.30.

OpenTable, Inc. (NASDAQ: OPEN) is soaring after beating earnings and if this holds it will mark a new high… The shares are up 15.7% at $71.06 versus a 52-week trading range of $24.20 to $70.45.

Qwest Communications International Inc. (NYSE: Q) is up after beating profit expectations and noting that its CenturyLink merger will still close. Shares are up 2.4% at $6.83.

Sonus Networks, Inc. (NASDAQ: SONS) said that its latest quarter posted a loss as revenue fell; shares were down 12% earlier but now shares are down ‘only’ 7.5% at $2.96 in active pre-market trading.

Taseko Mines Ltd. (AMEX: TGB) is not a routine name covered, but Canada blocked one of its mining projects; shares are down a whopping 31% at $4.47 on over 1 million shares in the pre-market.

Wynn Resorts Ltd. (NASDAQ: WYNN) is down after earnings met expectations. The $8 special dividend may be holding the shares up more, but shares are down 3.35% at $108.80 in active pre-market trading.

JON C. OGG

Filed under: Pre-Market Activity, Trading Alert Tagged: BP, CADX, FSIN, GRMN, OPEN, Q, SONS, TGB, WYNN

Top Analyst Upgrades And Downgrades (POT)(Q)(BHP)

247wallst — Fri, 17 Sep 2010 12:43:42 +0000

ASML Holding (NASDAQ: ASML) cut from “buy” to “neutral” by Goldman Sachs.

BHP Billiton (NYSE: BHP), in the midst of a takeover bid for Potash (NYSE: POT) was downgraded by HSBC to “neutral”

Goldman Sachs upgraded Quest (NYSE: Q) to “buy”.

MercadoLibre (NASDAQ: MELI) was chopped to “hold” by Stifel.

JP Morgan increased its price target on TJX (NYSE: TJX) to $44.

Douglas A. McIntyre

Filed under: Analyst Calls Tagged: BHP, MELI, POT, Q, TJX

Market Recovery: The Return of M&A in Tech and Telecom (ADCT, TEL, HPQ, ORCL, CIEN, Q, CTL, BRCD, CBB, CVLT, DELL, JDSU, LEAP, PCS, WFR, NOVL, PGI, RSH, TLAB, TDC, OVTI, SYNA)

Administrator — Wed, 14 Jul 2010 19:10:13 +0000

The latest and M&A deal in the world of technology and communications came to ADC Telecommunications Inc. (NASDAQ: ADCT) this week, where Tyco Electronics, Ltd. (NYSE: TEL) is paying $12.75 per share in cash for a net price of roughly $1.25 billion. After you have seen small and mid-sized deals come from Hewlett-Packard Co. (NYSE: HPQ) for 3Com and Palm, Oracle Corp. (NASDAQ: ORCL) for Sun and for Phase Forward, deals from Ciena Corp. (NASDAQ: CIEN) for Nortel’s metro ethernet operations, and even the proposed Qwest Communications International Inc. (NYSE: Q) merger with CenturyTel Inc. (NYSE: CTL), you have to wonder if more and more mergers are coming down the pipe now that the market has stabilized. We wanted to consider some of the routine go-to stocks that keep coming up through time as technology, communications, and telecom merger candidates.

Some names under consideration that have either been rumored to be in deals or which could potentially be in future M&A deals are Brocade Communications Systems, Inc. (NASDAQ: BRCD), Cincinnati Bell Inc. (NYSE: CBB), CommVault Systems, Inc. (NASDAQ: CVLT), Dell Inc. (NASDAQ: DELL), JDS Uniphase Corporation (NASDAQ: JDSU), Leap Wireless International Inc. (NASDAQ: LEAP), MetroPCS Communications Inc. (NYSE: PCS), MEMC Electronic Materials Inc. (NYSE: WFR), Novell Inc. (NASDAQ: NOVL), Premiere Global Services, Inc. (NYSE: PGI), RadioShack Corp. (NYSE: RSH), Tellabs Inc. (NASDAQ: TLAB), Teradata Corporation (NYSE: TDC), OmniVision Technologies Inc. (NASDAQ: OVTI), and Synaptics Inc. (NASDAQ: SYNA).

For starters, most of the companies listed as targets here are possible bolt-on mergers rather than super-mergers. Closing a mega-deal by the end of the year that has not been announced is going to be tough, and that likely means that the capital gains and the effects of the old Bush tax rates on capital gains will be either gone or muted in 2011. Businesses today are willing to spend cash for companies that can be easily integrated or that open up new and untapped markets for them. As far as a giant taking on another giant and then having to make divestitures and many layoffs, those deals are far less attractive for companies right now. Then there is the notion of a tougher regulatory approval environment for large mergers that has to be considered.

The list of companies we have provided falls into at least two of three distinct categories. The first category is that the company has been either a target or acquirer and a deal fell through. The second category is that the company has either been rumored to be in a merger or it is a company that is one we have viewed as a shoe-in target for the right acquirer. Lastly, there is the bolt-on deal or at a minimum a tool-box deal to make these easy for a buyer to gobble up.

We have compiled a list of predators and prey here for your review in the technology, telecom, and communications sectors. This list is displayed alphabetically to avoid any ranking issues or any more pointed issues over size and the real chances of a deal coming into play.

One name which used to come up routinely is Brocade Communications Systems, Inc. (NASDAQ: BRCD). This was one of our picks for stocks which could still double, and the buyout thesis for a low-cost provider in networking and storage was a part of why we thought the stock could double. The short-term moves are not working in favor of holders, so it would seem no deal is imminent even if shares are at $5.15.

Cincinnati Bell Inc. (NYSE: CBB) is one of the last of the “anything remotely tied to the Bells” stocks, although it has always been its own boss. It is the main telecom player for Cincinnati and its nearby areas located in Ohio, Indiana and Kentucky, making this a potential bolt-on acquisition for a larger telecom player. It has almost the same exact operational area as its license back to the end of the 1800′s with a 25 mile radius around Cincinnati. The small $615 million market cap would make this a line-item for a buyer, but it is worth noting that both AT&T and Verizon are going to have a harder and harder time under regulatory review in making acquisitions. With shares at $3.06, the 52-week trading range is $2.50 to $3.74.

CommVault Systems, Inc. (NASDAQ: CVLT) is on sale due to its disappointing guidance this week. The 21% drop to $18.50 would not likely make any lower-premium buyout more likely to be approved as the 52-week range is $15.60 to $24.51. That recent high is an all-time high though and a Goldman Sachs strategist had this as a potential buyout candidate earlier this year. Its Simpana platform aims to help enterprises manage data growth while cutting costs and adding security via cloud integration, deduplication, recovery, efficiency, virtualization, remote and branch office integration, and more. Valuations are an issue, although the 21% drop leaves a market cap at just about $800 million.

Filed under: Analyst Calls, Cult Stock, Editor's Picks, Industry, Internet, Mergers and Buy Outs, Private Equity, Rumors, Semiconductor, Semiconductors, Software, Technology, Technology Companies, Telecom, Wireless Tagged: ADCT, BRCD, CBB, CIEN, CTL, CVLT, DELL, HPQ, JDSU, LEAP, NOVL, ORCL, OVTI, PCS, PGI, Q, RSH, SYNA, TDC, TEL, TLAB, WFR

Media Digest 5/6/2010 Reuters, WSJ, NYTimes, FT, Bloomberg

247wallst — Thu, 06 May 2010 07:19:07 +0000

MarketWatch: Asia shares were off by 2%.

Reuters: Riots against austerity measures continued n Greece.

Reuters: US regulators want to increase supervision of broadband.

Reuters: The Fed’s Rosengren says rates must stay low.

Reuters: Greece’s problems offset good economic news in the market.

Reuters: Facebook privacy problems exposed some private data.

Reuters: Sprint (NYSE: SYMC) will unveil an text-centric handset.

WSJ: Many experts believe the US productivity cannot keep improving.

WSJ: Federal officials plan to use telephone regulations to regulate broadband.

WSJ: The SEC is looking into how Berkshire Hathaway (NYSE: BRK.B) informed other Burlington Northern shareholders about it takeover of the train line.

WSJ: The Senate will try to give regulators more power to break up banks.

WSJ: Bankers expect at least one private equity deal to top $10 billion soon.

WSJ: Lucent-Alcatel (NYSE: ALU) had another huge loss.

WSJ: Low yield bonds from emerging markets are drawing buyers.

WSJ: Goldman Sachs Group’s (NYSE:GS) Blankfein defended he firm’s ethics.

WSJ: Yahoo! (NASDAQ: YHOO) will launch a new ad campaign

WSJ: CEOs polled by the Business Council and Conference Board are more optimistic about the future.

WSJ: Freddie Mac (NYSE: FRE) asked the government for another $10.6 billion .

WSJ: Symantec (NASDAQ: SYMC) made a profit.

WSJ: The Fed is making stronger arguments to combat plans for more government oversight.

WSJ: Novartis (NYSE: NVS) is trying to get nations that canceled H1N1 vaccines to pay.

WSJ: Investigators in India are looking at Hewlett=Packard (NYSE: HPQ) tax payments.

WSJ: The Washington Post Company (NYSE: WPO) will sell Newsweek.

WSJ: CenturyTel and Qwest (NYSE: Q) are losing more wireless subscribers.

WSJ: Skype will offer paid video chats.

WSJ: Mortgage issues may hurt H&R Block.

WSJ: Pushing Greece out of the Eurozone may disrupt the euro too much to allow it.

WSJ: New broadband rules are a potential victory for Google (NASDAQ: GOOG)

WSJ: The head of Bear Stearns blamed market rumors for the firm’s collapse.

FT: Moody’s (NYSE: MCO) changed its outlook on BP plc (NYSE: BP) to negative.

FT: Prudential UK has delayed its $21 billion rights offering.

Bloomberg: Rajat Gupta, the Goldman Sachs Group Inc. director, had a long relationship with Galleon Group LLC founder Raj Rajaratnam

Bloomberg: BP plc may burn off some of the Gulf oil.

Douglas A. McIntyre

Filed under: Press Digest Tagged: ALU, BP, BRK-B, FRE, GOOG, HPQ, MCO, NVS, Q, SYMC, YHOO

Short Sellers Exit Citi, Feed On Ford

247wallst — Tue, 27 Apr 2010 09:13:34 +0000

Short-sellers walked away from Citigroup (NYSE: C),dropping their position by 20% in the period that ended May 15. They could not have anticipated that the Treasury would sell a huge amount of its holding in the bank, pushing Citi’s share price down. Share sold short in Citi fell to 41.5.5 million, still making it the largest short position on the NYSE.

During the same period, short sellers upped their position in Ford Motor Company (NYSE: F) by 42% to 258.5 million. It may be that the concerns about Ford’s debt position are causing experts to believe that its share price will fall

Telecom stocks were hit hard by short sellers, and that was a winning bet. The short position in Nokia (NYSEL NOK) rose 18% to 90.5 million. Low margins drove the stock down 13% the day it announced earnings. The short interest n Verizon (NYSE: VZ) moved up 15% to 55.8 million. The large telecom posted a disappointing rise in its cellular customer base. The short interest in Qwest (NYSE: Q) was up by 4% to 127.4 ahead of its merger plans with CenturyTel were announced.

In general, short sellers moved against financial shares. The short interest in Bank of American (NYSE: BAC), Regions Financial (NYSE: RF), and Ambac (NYSE: ABK) all rose. Short sellers also moves into retailers. The short interest in Walmart (NYSE: WMT) was up 12% to 24.6 million. Shares short in Lowe’s also rose sharply.

Short sellers were mixed on tech raising their position in Dell (NASDAQ: DELL) by 13% to 59 million and upping their positions in Micron (NADAQ: MU) and Microsoft (NASDAQ: MSFT). Shares pulled out of Intel (NASDAQ: INTC), Oracle (NASDAQ: ORCL), and RF Micro (NASDAQ: RFMD)

Source: NYSE and NASDAQ.

Douglas A. McIntyre

Sponsor: 5 best investments for 2010 – The next nine months represent a bold new era for investors.

Filed under: General, Short Interest Tagged: ABK, BAC, C, DELL, F, INTC, LOW, MSFT, MU, NOL, ORCL, Q, RF, VZ, WMT

Top 10 Analyst Upgrades and Downgrades (CVX, COP, XOM, NUE, PLD, Q, VZ, WDC, YGE)

Administrator — Fri, 23 Apr 2010 12:06:38 +0000

These are ten of the top analyst calls in upgrades, downgrades, and initiations from Wall Street research calls this Friday morning:

Chevron Corp. (NYSE: CVX) Started as Top Pick at RBC.
ConocoPhillips (NYSE: COP) Started as Outperform at RBC.
ExxonMobil Corp. (NYSE: XOM) Started as Sector Perform at RBC.
Nucor Corp. (NYSE: NUE) Raised to Sector Perform at CIBC.
ProLogis (NYSE: PLD) Cut to Underweight at JPMorgan.
Qwest Communications International (NYSE: Q) Raised to Neutral from Sell at Goldman Sachs.
Suntech Power Holdings Co. Ltd. (NYSE: STP) Raised To Perform at Oppenheimer.
Verizon Communications Inc. (NYSE: VZ) Cut to Neutral at Goldman Sachs.
Western Digital Corp. (NYSE: WDC) Raised to Outperform at Baird; Raised to BUy at Stifel Nicolaus.
Yingli Green Energy Holding Co. Ltd. (NYSE: YGE) Raised to Outperform at Oppenheimer.

JON C. OGG

Filed under: Analyst Calls Tagged: COP, CVX, NUE, PLD, Q, VZ, WDC, XOM, YGE