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Top Analyst Upgrades & Downgrades (AKS, ALU, AWK, APA, AF, AZK, DRI, HBAN, PHG, LTD, PIR, Rl, RL, UL, URBN, VIP, WBMD, WCC)

Administrator — Wed, 11 Jan 2012 13:07:18 +0000

These are some of the top analyst upgrades, downgrades, and initiations seen from Wall Street brokerage and research firms this Wednesday morning.

AK Steel Holding Corp. (NYSE: AKS) Raised to Outperform with $12 target at Credit Suisse.
Alcatel-Lucent, S.A. (NYSE: ALU) Raised to Buy at Deutsche Bank.
American Water Works Company, Inc. (NYSE: AWK) Raised to Buy at Ladenburg Thalmann.
Apache Corporation (NYSE: APA) Started as Buy at Stifel Nicolaus.
Astoria Financial Corporation (NYSE: AF) Cut to UNderweight at JPMorgan.
Aurizon Mines Ltd. (NYSE: AZK) named as Value Stock of the Day at Zacks.
Darden Restaurants, Inc. (NYSE: DRI) Maintained Underperform as Bear of the Day at Zacks.
Huntington Bancshares Inc. (NASDAQ: HBAN) Cut to Hold at Stifel Nicolaus.
Koninklijke Philips Electronics NV (NYSE: PHG) Cut to Sell at Citigroup.
Lazard Ltd. (NYSE: LTD) Cut to Neutral at Citigroup.
Pier 1 Imports Inc. (NYSE: PIR) Started as Hold at Argus.
Ralph Lauren Corporation (NYSE: RL) Cut to Market Perform at Wells Fargo.
Unilever PLC (NYSE: UL) Cut to Underperform at BofA/ML.
Urban Outfitters Inc. (NASDAQ: URBN) Cut to Sell at Citigroup.
VimpelCom Ltd. (NYSE: VIP) Raised to Neutral at Goldman Sachs.
WebMD Health Corporation (NASDAQ: WBMD) Cut to Market Perform at Wells Fargo.
WESCO International (NYSE: WCC) Raised to Outperform as Bull of the Day at Zacks.

If you enjoyed the Top Analyst Calls, you can sign up in the box below to join our morning email list to receive news directly in your inbox each morning. We include major analyst upgrades and downgrades, IPOs, M&A, special situation developments, observations on Warren Buffett and key market gurus, as well as special exclusive feature stories.

JON C. OGG

Filed under: Analyst Calls Tagged: AF, AKS, ALU, APA, AWK, AZK, DRI, HBAN, LTD, PHG, PIR, RL, UL, URBN, VIP, WBMD, WCC

M&A Surprise: Carl Icahn Offers Sneaky Acquisition For Clorox (CLX, IEP, JEF, PG, UL, CL, KMB)

Administrator — Fri, 15 Jul 2011 10:59:56 +0000

13D filings are often full of surprises, and this morning is no exception. Carl Icahn has an amended filing this morning regarding his 9.4% stake in Clorox Corporation (NYSE: CLX). Icahn not only sees a much higher value being possible. He is offering to acquire the consumer products company for $76.50 per share.

The filing shows that Icahn sent a letter to the Clorox board yesterday offering to acquire the rest of Clorox for all-cash at $76.50 per share. The total consideration comes to $12.6 billion. Icahn notes that this is a 21% premium to the December 20, 2010 date when Icahn first invested, but the reality is that this represents only about a 10% premium to the $68.43 close on Thursday.

Icahn says that the deal will be satisfied through $4.8 billion of equity contributions from Icahn Enterprises LP (NYSE: IEP) and its affiliates consisting of 12.5 million shares of Clorox common stock, as well as by $3.8 billion in cash on hand, and $7.8 billion in financing arranged by Jefferies & Company, Inc. (NYSE: JEF). Icahn even offered a $100 million fee for the company to accept the deal if he (and Jefferies) fails to raise the funding.

Icahn has also noted that he will accept a “go-shop” provision for Clorox to pursue superior offers. On a further note, Icahn has said that Clorox is failing to live up to expectations this year and next. Icahn also noted, “it seems clear to us that there are potentially multiple substantially larger strategic bidders with robust balance sheets who are in a position to make a bid that reflects significant inherent synergies.”

Icahn even went out and named potential strategic acquirers who could generate more synergies than he could as a financial buyer. The filing points to Procter & Gamble (NYSE: PG), Unilever plc (NYSE: UL), Colgate Palmolive Company (NYSE: CL), Kimberly-Clark Corporation (NYSE: KMB), and even noted companies like Reckitt Benckiser and Henkel AG.

Icahn even goes on to note that this company’s acquisition by a strategic buyer at $100 per share would offer an accretive financial deal for any of the large strategic buyers.

What is obvious here is that Carl Icahn has two angles. He is going to drive up the value of his holdings in Clorox now, and the second outcome will either be that he will either buy with the hope of reselling the company later or will force another buyer to come in at a higher price. Clorox has a 52-week trading range of $60.56 to $72.43 and its dividend yield is 3.5% before the effects of this merger.

Icahn can win either way here. This will juice his shares even higher today on paper, but if he can force another one of the consumer products giants off the sidelines then Icahn wins even more and doesn’t have to raise the capital.

Icahn’s full SEC filing is here.

JON C. OGG

Filed under: Activist Investor, Consumer Goods, Corporate Governance, Mergers and Buy Outs, Private Equity, Shareholder Issues Tagged: CL, CLX, IEP, JEF, KMB, PG, UL

New Bond Mutual Fund Theme: A China Bond Fund For U.S. Investors

Administrator — Thu, 30 Jun 2011 16:20:24 +0000

U.S. investors are now getting a Renminbi (Yuan) and bond fund to invest in via an open-ended mutual fund structure. An announcement has been made by Guinness Atkinson Asset Management that it is launching the Guinness Atkinson Renminbi Yuan & Bond Fund (GARBX). The firm calls it the first open-end mutual fund structure that can offer U.S. investors direct access into the offshore Renminbi-denominated bond market. Specifically, this open-end mutual fund will invest directly in bonds that are Renminbi-denominated bonds.

The announcement notes that Edmund Harriss is the fund manager and he is said to be a veteran China fund manager. He has managed the Guinness Atkinson China & Hong Kong Fund (ICHKX) since 1998. The co-manager is listed as Tim Guinness. The gafunds.com website shows that the target investments will include bonds and debt instruments from the Chinese government, corporate issuers within China, and multinational corporations. The management team’s site shows that it funds are considered no-load funds. The gross expense ratio is listed as 0.90% and no net expense fee is yet available because it has not had long enough to evaluate turnover, commissions and more.

What is interesting is that this will offer bond fund investors a direct link to be able to buy into China’s bond market and to participate in the projected upside of the Yuan or Renminbi in the future. The current dollar-peg that has been so controversial has been said to artificially keep China’s currency valued much lower than if the nation were to instantly unravel that pegged trading band. U.S. interest rates are extremely low and China is often called “The top creditor to the U.S.”

Oddly enough, the management company considers this an emerging market bond fund. If China truly is the banker to the United States and if China is expected to lead the world in the size of its economy at some point around 2020, how long does it have to be an emerging market? Maybe that makes the United States a de-merging economy.

Guinness Atkinson Renminbi Yuan & Bond Fund’s investment strategy will evaluate global macroeconomic issues and will use fundamental credit analysis to model screens in the credit analysis. The fund will also use an active approach with flexibility in executing buy and sell decisions as market conditions change.

What is also interesting is that the fund noted that Caterpillar Inc. (NYSE: CAT), McDonald’s Corporation (NYSE: MCD), and also Unilever plc (NYSE: UL) have all issued bonds in RMB. The fund merely used those as examples and the documents did not indicate that the fund will include those issues.

The Renminbi Yuan & Bond Fund (GARBX) fund’s prospectus is here. Guinness Atkinson Asset Management, as of March 31, 2011, had approximately $600 million in total assets under management.

Some of the firm’s other funds listed are as follows:

Asia Focus Fund (IASMX)
Asia Pacific Dividend Fund (GAADX)
China & Hong Kong Fund (ICHKX)
Global Innovators Fund (IWIRX).

JON C. OGG

Filed under: Bonds, China, Corporate Governance, Emerging Markets, International Markets, Mutual Funds Tagged: CAT, GAADX, GARBX, IASMX, ICHKX, IWIRX, MCD, UL

Commodities Watch: Zinc Could Be China’s New Copper; Cocoa Rises on Short-Covering; Corn, Wheat Sink (TCK, XSRAY, AAUKY, NIB, KFT, UL, ADM, GIS, K, CORN, DBA)

Administrator — Thu, 28 Apr 2011 17:50:42 +0000

Today’s commodities news starts off with bursting warehouses full of zinc, an unexpected rise in cocoa futures, and an equally unexpected fall in corn and wheat prices.

The stockpile of zinc at the bonded warehouses of the London Metal Exchange is at its highest point since 1995, at over 800,000 metric tons. Like its stockpiles, the price of zinc is also relatively high, currently over $2,300/metric ton. Demand is expected to rise by 5.5% in 2011 while supply is expected to rise just 2.2%.

One longer term supply issue is that about 1 million tons of zinc will drop from supply by 2014 as several currently operating mines close down. Leading zinc producers include Teck Resources Ltd. (NYSE: TCK), Xstrata plc (OTC: XSRAY), and Anglo American plc (OTC: AAUKY) among others.

China, both the world’s largest producer and largest consumer of zinc, could be sitting on up to 1.5 million metric tons of refined zinc, which argues for lower imports of the base metal into China. But that’s not what appears to be happening.

Zinc imports have risen in China and the likely reason is that zinc is about to join copper as an alternative financing vehicle. Copper has served as collateral for loans in China for some time now, and it appears that the rising demand for zinc answers the same need. The ability to use base metals as loan collateral depends on a liquid domestic market for the metals. Lead could be next, as the Shanghai Futures Exchange has recently launched a lead futures contract.

Chinese authorities are cracking down on copper arbitrage, but holders are now re-exporting copper. Net imports of copper fell by -31% in the first quarter of 2011, while copper exports rose to a five-year high. As the government staunches the use of copper as collateral, zinc is very likely taking its place, with lead waiting for its turn.

As the political turmoil lessened in Ivory Coast, most traders expected the price of cocoa to fall once exports from the world’s largest producer resumed. Exports have now re-started, if only slowly, but cocoa prices not only remain high but continue to rise.

Part of the problem is that country’s banks have not yet re-opened, and cash-strapped cocoa farmers are smuggling their crops to neighboring Ghana. Another part of the problem is that prices are so low in the interior of the country that farmers only sell when they are desperate for cash.

But the main reason for still-rising cocoa prices is short covering. During the political unrest in Ivory Coast many traders went short anticipating that the end of the fighting would send cocoa prices plunging. Because that didn’t happen, the shorts had to cover, sending the market higher. At about mid-day today, cocoa is trading up $111/metric ton, at $3,279. The shorts are probably looking at prices at $2,500/metric ton or lower.

Stocks with exposure to cocoa prices include the iPath DJ-UBS Cocoa Total Return Sub-Index ETN (NYSE: NIB) which is up more than 3% today at $46.49, within its 52-week range of $37.40-$53.59. Kraft Foods Inc. (NYSE: KFT) posted a new 52-week high today of $33.77, and Unilever plc (NYSE: UL) came with pennies, rising to $32.55 within a 52-week range of $25.74-$32.75.

Finally, corn prices have fallen -$0.30/bushel so far today and wheat futures have fallen a nearly equal amount as traders start to wonder what will happen if the market gets flooded with supply. Russia is expected to resume wheat exports, perhaps in July, and Ukraine has already raised its export quota on corn. Some rain in the wheat-growing regions of China mean that Chinese imports may lag as well.

Stocks with exposure to grains include Archer Daniels Midland Co. (NYSE: ADM) which is down fractionally today, General Mills, Inc. (NYSE: GIS) which is up fractionally after coming within range of a new 52-week high, and Kellog Co. (NYSE: K) which did post a new 52-week high today of $56.84. The Teucrium Corn Fund (NYSE: CORN) is down more than -5%, to $44.15, within a 52-week range of $23.79-$48.77, and the PowerShares DB Agriculture Fund (NYSE: DBA) is down about -1.5%, at $33.61, within a 52-week range of $22.85-$35.58.

Paul Ausick

Filed under: Agriculture, Commodities Tagged: AAUKY, ADM, CORN, DBA, GIS, K, KFT, NIB, TCK, UL, XSRAY

Five Second Place Companies That Are Number One For Investors

247wallst — Tue, 19 Oct 2010 08:40:12 +0000

One of the few bits of investing conventional wisdom that nearly everyone accepts is that people should always look out for number one. The problem with following that advice is investors may miss out on some compelling values from upstart companies eager to take away the leadership position from the incumbent.

Figuring out when to look out for number one is never easy. Among the questions investors need to ask is what the top dog is doing to stay ahead of the pack? Is it buying growth through acquisitions or sacrificing margins to gain revenue? There is no talent required to buy growth or give away the store.

24/7 Wall St. has decided to examine six “duopolies” where there is a clear indication of who is number one and who is number two. We reviewed a number of factors including EPS growth, price-to-earnings ratio and stock price performance. Our analysis is below.

Apple Inc. (AAPL) vs Research in Motion (RIMM) — Comparing these two tech bellwethers is almost like choosing between a Porsche (Apple) and a Buick (RIM). Apple’s devices are studies in elegance while RIM’s are testaments practicality. Of course, Apple was first to market with the iPad, which sold 2 million in less than 60 days. RIM’s tablet, the Playbook, came out last month, and has received some positive reviews. The Canadian company’s BlackBerry continues to be the cell phone of choice for business. When it comes to the stocks, there is no comparison. Apple, whose shares have soared more than 50 percent this year, trades at a price-to-earnings ratio of 20.99. Research In Motion trades at a p/e ratio of 9.33. Its shares are down more than 28 percent. Yesterday, Apple reported a 70 percent jump in fourth quarter results, beating analysts’ forecasts. Shares fell because iPad sales were disappointing and the company’s guidance was disappointing.

Verdict: RIMM. Despite Apple’s sell-off, the valuation of Research In Motion is too compelling. Sales at the Canadian company are expected to grow more than 32 percent this year.

Wal-Mart (WMT) vs. Target (TGT) – In the latest chapter of the retail wars, victory has gone to Target Corp. Shares of the number two retail chain have bested Wal-Mart, gaining 11 percent this year, versus 0.73 percent for the larger rival. Both stocks are trading near their 52-week highs. Wal-Mart is slightly cheaper with forward p/e ratio of 12.79 versus a comparable figure of 13.16 for Target. The Minnesota company’s one year EPS growth is forecasted at 18 percent versus 9.6 percent growth for Wal-Mart.

Verdict: Target. When the economy rebounds, scared shoppers who fled Target for Wal-Mart will return. Always go with growth.

Procter & Gamble (PG) vs. Unilever (UL) — Wall Street has clearly taken a shine to Procter & Gamble compared to its European rival, sending its shares up 4.57 percent versus a decline of 8.92 percent for Unilever. The parent of Ben & Jerry’s, however, may be a better buy. It trades at a ratio of 21.35 versus 17.97 for P&G. Growth prospects are better at the European company as well. Analysts expect revenue to grow 9.7 percent this year versus 3.3 percent at the American company.

Verdict: Unliver. The tide is turning in Unilever’s favor.

General Electric (GE) vs. United Technologies (UTX) — United Technologies Corp. is the Connecticut conglomerate Wall Street likes. The maker of Otis elevators and Sikorsky helicopters lacks the flashy businesses of its neighbor, such as finance and entertainment. Analysts expect the company’s revenue to increase this year and for GE’s to fall. On a p/e basis, United Technologies is valued at 16.87. versus 15.16 for GE. The valuation reflects the concern that many things can go wrong for GE such as the Comcast (CMCSA) deal, while many things can go right for United Technologies.

Verdict: UTX.

Google (GOOG) vs. Yahoo! (YHOO) — If these were widget companies of equal stature, Google would still be the better stock. Google trades at a p/e of 25 versus Yahoo at 26. The search engine company is expected to increase revenue by 21 percent this year versus a decline of about 1 percent for Yahoo!. Shares of Google have barely budged this year while Yahoo! is off more than 5 percent. Google is growing, albeit at a slower pace than in earlier years. Yahoo! continues to rely on cost cutting to bolster its bottom line.

Verdict: Google.

Walt Disney (DIS) Vs. News Corp (NWS) — The House of Mouse has squeaked a 7.69 percent gain this year, compared with the 0.57 percent increase by the House of Murdoch. This underscores News Corp’s long-standing suspicion that the company is not run for the benefit of anyone not related to the CEO. New York-based News Corp trades at a trailing p/e ratio of 14.52, cheaper than the 16.74 level of Disney. On a forward p/e basis, the picture is the same with News Corp at a ratio of 12.72 and Disney at a ratio of 15.25 Analysts expect EPS at the parent of the ABC TV network to jump 14.8% this year while News Corp., which owns Fox News Channel, is due to rise 20%.

Verdict: News Corp . The World Series ratings should be solid and viewers will continue to check out “American Idol” even without Simon Cowell. Plus, having Republicans gain control of Congress will benefit Fox News Channel.

–Jonathan Berr (Berr owns a small stake in Disney).

Filed under: Cult Stock, Earnings Warning, Retail, Software Tagged: AAPL, DIS, GE, GOOG, NWS, PG, RIM, TGT, UL, UTX, WMT, YHOO

Top Pre-Market Analyst Upgrades (AXL, ARCC, FSLR, F, GOOG, HOG, JBL, LEA, MYL, RYAAY, UL)

247wallst — Wed, 21 Jan 2009 07:43:18 +0000

These are some of the top upgrades and positive calls we have seen from analysts on Wall Street this Wednesday morning:

American Axle (AXL) Raised to Hold from Sell at Deutsche Bank.
Ares Capital Corporation (ARCC) Raised to Neutral from Underweight at JPMorgan.
First Solar (FSLR) Started as Buy at Merriman Curhan Ford.
Ford (F) Raised to Hold from Sell at Deutsche Bank.
Google (GOOG) Started as Outperform at JMP Securities.
Harley Davidson (HOG) Raised to Hold from Sell at Citigroup.
Jabil Circuit (JBL) Raised to Hold from Sell at Citigroup.
Lear (LEA) Raised to Hold from Sell at Deutsche Bank.
Mylan Labs (MYL) Started as Buy at Citigroup.
Ryanair (RYAAY) Raised to Buy from Neutral at UBS.
Unilever (UL) Raised to Buy from Hold at Citigroup.

Jon C. Ogg
January 21, 2009

Posted in Analyst Calls Tagged: ARCC, AXL, F, FSLR, GOOG, HOG, JBL, LEA, MYL, RYAAY, UL

Top Pre-Market Analyst Upgrades (EQIX, HLS, ITRI, MPEL, RTP, RTIX, UL, WSM)

247wallst — Wed, 26 Nov 2008 07:37:50 +0000

These are the few upgrades and positive research calls we have seen from Wall Street analysts this Wednesday morning:

Equinix (EQIX) Started as Overweight at JPMorgan.
Healthsouth (HLS) Raised to Buy at Jefferies.
Itron (ITRI) Raised to Buy at UBS.
Melco Crown PBL (MPEL) Raised to Buy but target cut at Goldman Sachs.
Rio Tinto (RTP) Raised to Buy at Canaccord.
RTI Biologics (RTIX) Started as Buy at Canaccord.
Unilever (UL) Started as Buy at Jefferies.
William Sonoma (WSM) Raised to Neutral from Sell at UBS.

Jon C. Ogg
November 26, 2008

Posted in Analyst Calls Tagged: EQIX, HLS, ITRI, MPEL, RTIX, RTP, UL, WSM

Top 10 Pre-Market Analyst Calls (AIG, ANDE, BHI, PNM, SLB, SII, TWX, UL, WFT, WINN)

247wallst — Tue, 12 Feb 2008 07:27:30 +0000

These are the top ten analyst calls that 247WallSt.com is focusing on in pre-market trading this Tuesday morning:

AIG (NYSE: AIG) downgraded to Equal Weight at Lehman.
Andersons (NASDAQ: ANDE) downgraded to Neutral from Buy at Banc of America.
Baker Hughes (NYSE: BHI) downgraded to Neutral from Buy at UBS.
PNM Resources (NYSE: PNM) downgraded to Equal Weight at Lehman and also downgraded to Hold from Buy at Citigroup.
Schlumberger (NYSE: SLB) raised to Outperform at Bear Stearns.
Smith International (NYSE: SII) downgraded to Neutral from Buy at UBS.
Time Warner (NYSE: TWX) raised to Buy from Neutral at UBS.
Unilever (NYSE: UL) downgraded to Hold from Buy at Citigroup.
Weatherford (NYSE: WFT) raised to Buy from Neutral at UBS.
Winn Dixie (NASDAQ: WINN) downgraded to Market Perform at FBR.

Jon C. Ogg
February 12, 2008

Europe Markets 7/11/2007

247wallst — Wed, 11 Jul 2007 05:10:56 +0000

Markets in Europe were falling at 6.10 AM New York time.

The FTSE was off .3% to 6,612. BP (BP) was down .7% to 607.5. Unilever (UL) was up 3.3% to 1701.

The DAXX was down 1.1% to 7,874. DaimlerChrysler (DCX) was down 1.9% to 67.14. DeutscheBank (DB) was down 1.5% to 104.59. Siemens (SI) was down 1.5% to 106.83.

The CAC 40 was off .6% to 5,986. Alcatel-Lucent (ALU) was down 1.5% to 10.18. Vinci was up 3.1% to 56.13.

Data from Reuters.

Douglas A. McIntyre