Markets opened slightly lower this morning and spent the morning trying to decide on a direction. The Reuters/University of Michigan Consumer Sentiment Index rose more than expected, but even that was not enough to charge up investors. In the early afternoon, advances were leading declines on the NYSE, while the status was just the reverse on NASDAQ. Both oil and gold prices were slightly lower after rising sharply yesterday. So far this month, markets are up a solid 13%.

The unofficial closing bells put the DJIA up nearly more than 21 points to 12,230.35 (0.18%), the NASDAQ fell about -1.5 points (-0.05%) to2,737.15, and the S&P 500 rose 0.03% or about 0.47 points to 1,285.06.

There were several analyst upgrades and downgrades today, including a raise for Advanced Micro Devices Inc. (NYSE: AMD) to ‘outperform’ at Wells Fargo. First Solar, Inc. (NASDAQ: FSLR) was maintained at ‘buy’ but the target price was cut to $90 at Argus; Potash Corp. of Saskatchewan Inc. (NYSE: POT) cut to ‘sector perform’ at Scotia; Pan American Silver Corp. (NASDAQ: PAAS) cut to ‘sector perform’ at CIBC; Sprint Nextel Corp. (NYSE: S) raised to ‘outperform’ at Macquarie; and Occidental Petroleum Corp. (NYSE: OXY) raised to ‘outperform’ with a new target price of $135 at Credit Suisse.

Here are today’s big post-earnings news reactions with prices during the last half-hour of trading: Chevron Corp. (NYSE: CVX) is up 0.3%, at $109.99, two pennies short of a new 52-week high; Coinstar, Inc. (NASDAQ: CSTR) is down about -7.6%, at $48.91; Merck (NYSE: MRK) is up 2.3%, at $35.10; Baidu, Inc. (NASDAQ: BIDU) is up 4.33% (our coverage here), at $144.38; Weyerhaeuser Co. (NYSE: WY) is up 1.6%, at $18.23; and The Interpublic Group of Companies, Inc. (NYSE: IPG) is up 11.6%, at $9.94 (our coverage here).

Several other standouts from today follow …

Stillwater Mining Co. (NYSE: SWC) is up more than 27%, at $12.65. The company beat earnings estimates this morning, and has reiterated its production estimates for platinum and palladium for 2011. Stillwater recycled 133,500 ounces of platinum, palladium, and rhodium in the third quarter, up 70% from the same period a year ago.

Align Technology, Inc. (NASDAQ: ALGN) is up more than 34%, at $23.94. The company posted solid earnings for the third quarter and announced a $150 million stock buyback program. Align manufactures and sells Invisalign teeth straightening products.

Stamps.com Inc. (NASDAQ: STMP) is up more than 25%, at $32.48 — a new 52-week high — following an outstanding earnings report. Stamps.com raised its non-GAAP EPS estimate for the second time this year, to $1.20-$1.40. The company originally estimated non-GAAP EPS of $0.85-$1.05.

Computer Programs and Systems Inc. (NASDAQ: CPSI) are down more than -28%, at $51.10. The company missed both revenue and EPS estimates for the quarter, and the fourth-quarter outlook is also weak. The company’s $1.44/share dividend takes some of the sting out of the poor results.

Spansion Inc. (NYSE: CODE) is down more than -25%, at $10.46, after posting a new 52-week lower earlier today of $9.17. The company released a weaker fourth-quarter forecast and announced the closure of its plant in Kuala Lumpur as part of its effort to cut costs.

Digital River Inc. (NASDAQ: DRIV) is down more than -19%, at $18.52. The company’s third-quarter earnings were short of expectations and the fourth-quarter forecast was lowered.

Stay tuned for Monday.  We have noted the following events (all times Eastern):

9:45 a.m. — Chicago Purchasing Managers Index
3:00 p.m. — USDA farm prices

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The reason that Stamps.com is winning is because the closure of more and more locations should drive more and more users and clients its way.  By enabling people to print electronic stamps directly onto envelopes or labels using their PC and printer, the company will get a cut as fewer and fewer people using mail will drive a distance to get stamps.  Its PhotoStamps also allows consumers to turn digital photos or images into valid U.S. postage with many of the same insurance offerings and packing options that the Postal Service offers in its locations.

Fewer locations of the POst Office and fewer processing facilities also will be a win for both United Parcel Service, Inc. (NYSE: UPS) and FedEx Corporation (NYSE: FDX).  Just don’t look at their stocks to try to figure how much they might win from it because those stocks are down since the Post Office woes came to light again last week.

Stamps.com claims to offer far cheaper alternatives than traditional postal meters without long-term contracts. For a rough savings guess I went to Stamps.com calculating tool to check on annual savings and used the following scenario: 10 pieces of mail per day on average with only a $0.48 average piece of mail without any percentages in mail confirmation or with insurance.  The cost calculated was $436 per year.  If 25% required delivery confirmation and also with package insurance, then their projected savings comes to $820 per year.

What is more impressive than the 10.6% gain to $24.75 and the new 52-week high of $25.24 earlier today is that the stock was trading under $21.00 just four days ago.

JON C. OGG

Today the stock is up 5% at $15.10 with about 20 minutes to the close, and its 52-week trading range is (was) $8.47 to $15.00.  Interestingly enough, it has only traded about 122,000 shares and its average daily volume is about 150,000 shares.  This now has a $292 million market cap.  It’s liquidity as of last quarter was more than $90 million in cash, equivalents, and long-term investments, while it has essentially no long-term debt.

This is one is extremely thin on coverage with First Call noting 3 estimates and a consensus of $0.63 EPS on $87 million in revenues for 2008.  So there is nothing in the remedial analysis that screams total bargain basement nor anything that screams grossly over-valued here.  There have been no major analyst calls.  Back in April this was trading under $11.00.

Could this be genuinely as simple as people not using gas to go to the post office?  Of course not.  There may still be some excitement about last month’s approval to protect its "tax net operating losses."  It also has a provision that any holder acquiring more than 5% of the shares outstanding has to first obtain a waiver from the company’s board of directors and those holders who already hold more than 5% cannot make any additional purchases of Stamps.com stock without a waiver.

Here was the description of that move:
Stamps.com currently has approximately $250M in Federal NOLs and $150M in State NOLs, with a potential value of up to $95M in tax savings over the next 15 years. The value of these NOLs could be significantly impaired unless the Company avoids potential transfers of its stock that could trigger such an “ownership change” under Section 382.

We had looked at this one for our Special Situations newsletter before, but we had to pass on it because the stock options to hedge the stock were too illiquid on the surface.

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

Jon C. Ogg
June 4, 2008