The Unusual Suspects (AIG, AZN, BRK-A, BRK-B, MCO, C, GNMK, IEP, LGF, SI, STP, PHYS, SNF, EWP, TEF)

We have an unusual cast of characters in this week’s version of THE UNUSUAL SUSPECTS for the week ahead, with almost none being tied to earnings.  Some of the key stocks to watch with events ahead this coming week are American International Group, Inc. (NYSE: AIG), AstraZeneca plc (NYSE: AZN), Berkshire Hathaway Inc. (NYSE: BRK-A, BRK-B), Moody’s Corp. (NYSE: MCO), Citigroup, Inc. (NYSE: C), GenMark Diagnostics, Inc. (NASDAQ: GNMK), Icahn Enterprises, L.P. (NYSE: IEP), Lions Gate Entertainment (NYSE: LGF), Siemens AG (NYSE: SI), Suntech Power Holdings Co. Ltd. (NYSE: STP), and Sprott Physical Gold Trust (NYSE: PHYS).  For the action that came out of the Spain downgrade this Friday, we are looking at Ibero-America Fund, Inc (NYSE: SNF), iShares MSCI Spain Index (NYSE: EWP), and Telefonica SA (NYSE: TEF) for opportunities.

We have added in color, expected moves or expected outcomes, historical data, and other information on each where applicable.

American International Group, Inc. (NYSE: AIG) is reportedly going to either have to accept less from Prudential plc for the key Asian unit AIA, OR is it going to get an IPO of the unit.  The $35+ billion sale has been in limbo since U.K. regulators threw up capital requirement concerns and a rights offering and capital raise might not be enough to addresses their worries.  The U.S. Treasury has reportedly also been working on plans of its own for the unit if the deal falls apart (or if the renegotiated sale price comes in too low.  We should get a better picture this week, and it may be worth noting that the near-3% drop to $35.38 on Friday really only compares to a close of $35.96 a week earlier and the trading range of the week was $32.11 as a low and $37.00 as a high.

AstraZeneca plc (NYSE: AZN) has a FDA panel review of it An FDA panel considers MedImmune subsidiary’s respiratory-tract treatment on Wednesday May 2, 2010.  AstraZeneca’s market cap is over $60 billion and its 2009 sales were over $32.8 billion, so any big moves here on one drug review would be suspect.

Berkshire Hathaway Inc. (NYSE: BRK-A, BRK-B) is an unusual suspect to watch this coming with its ties to Moody’s Corp. (NYSE: MCO) as the single largest holder.  Even though Warren Buffett has lightened up in his stake considerably, he will be under subpoena this coming week.  Buffett will have to testify in front of the Financial Crisis Inquiry Commission at a hearing on the role that the credit ratings agencies played in the financial crisis.

Citigroup, Inc. (NYSE: C) is rallying as analysts keep upgrading the stock.  This was one of our “Stocks Which Could Double”, which we released this month.  At that time, the shares were $3.73, but then the market correction took it only as low as $3.53 and its shares closed at $3.96 on Friday after a $4.02 close on Thursday.  This is still a long ways from doubling in the next 12 to 24 months, but this stock was raised this last week by Oppeneheimer (Meredith Whitney’s replacement), Goldman Sachs raised it, and Raymond James raised it a week earlier.

GenMark Diagnostics, Inc. (NASDAQ: GNMK) appears to have been one crappy IPO.  The provider of automated, multiplex molecular diagnostic testing systems priced its IPO of 4,600,000 shares at a price of $6.00 per share. Shares closed down at $5.40 and this appears to have been down as much as 14% at $4.56 in the after-hours session on Friday.  Maybe this one should have been called SkidMark Diagnostics.  What sort of idiots trade an IPO debut at 3:00 EST on a Friday?  People with skid marks.

Icahn Enterprises, L.P. (NYSE: IEP) is the way to invest in and with Carl Icahn according to Barron’s.  The publication noted, “The average Joe can invest with a pro via Icahn Enterprises, the diversified holding company run by legendary Carl Icahn. Even better, the shares trade at a big discount to asset value.  This is going to be active on Monday as many investors do not even know about the units.  At $34.33, its market cap is about $2.9 billion and its 52-week range is $26.80 to $51.65.  We’d expect a big jump here because the average volume is only about 18,000 units per day and the last time it traded over 100,000 units in a single day was September 9, 2009.  Expected move: An open of 3% higher or a tad more, call it $35.50.

Speaking of Carl Icahn, Lions Gate Entertainment (NYSE: LGF) is expected to post a loss of -$0.25 EPS on Tuesday, June 1, after the closing bell.  Carl Icahn lost his proxy fight here but actually won on the ]pmoney-making… At $6.80 now, its shares have a 52-week range of $4.81 to $7.29.  On March 1 the company announced its first share tender of $6.00 when shares were at $5.45, and that tender was then lifted.  Despite the rejection, Icahn has close to a $1.40 per share profit depending upon his real dollar-cost averaging.

Siemens AG (NYSE: SI) is a cheap ADR to get into Europe according to Barron’s.  The cover story  is “10 Great Stocks” and it listed many picks, but noted Siemens as competing with G.E. and having industrial and software products which are “used from China to the U.S. and all points between.”  With ADRs at $89.53 and trading at about 11-times next year’s earnings estimates, the 52-week range is %63.37 to $103.10.  The implied market cap here is over $77 billion.

Suntech Power Holdings Co. Ltd. (NYSE: STP) reports earnings on Thursday morning and is one of the most active of the few companies reporting earnings next week.  Estimates are $0.14 EPS on $559.89 million according to Thomson Reuters, which compares to a year ago of $0.01 EPS on $315.66 million in revenues.  With shares at $10.10, the 52-week range for the ADRs of the Chinese photovoltaic products maker is $9.05 to $21.38.  With earnings estimates of $0.72 EPS for 2010 and $0.92 EPS in 2011, the forward earnings multiples are only 14 for 2010 and just under 11 for 2011.

Sprott Physical Gold Trust (NYSE: PHYS) is a trust that invests in and holds substantially all of its assets in physical gold bullion, and it had a secondary offering that whacked the trust this week.  After the 3,240,000 Units of the overallotment were exercised, Sprotts’ gross proceeds were $279,450,000 for 24,840,000 Units offered at $11.25 per Unit.  The 52-week range is $9.48 to $13.07, but this one fell from $12.46 to $11.40 on the offering, to close out the week at $11.53.  Maybe this is punishment for buying new gold at the top, but that is very odd to see a drop this much for a trust secondary.

SPAIN: “Viva Ethpaanya”…. Fitch took the whole market south on a quiet pre-holiday day with a downgrade of Spain to AA+ from AAA.  This took a bite out of the markets, although honestly you need to ask yourself one big question here: “Did you EVER think of Spain as ‘AAA’ at all this year?”  No you did not, or should not have if you see the notes from other ratings agencies with far muted GDP, inflexible workforces, A nation like California full of property bubbles, and on.  The Ibero-America Fund, Inc (NYSE: SNF) closed down only 2.6% at $5.24 on a whopping 28,000 shares with a 52-week range of $4.85 to $8.07.    The iShares MSCI Spain Index (NYSE: EWP) closed down only 0.77% at $33.58 on over 1 million shares against a 52-week range of $31.50 to $52.67.  And the easiest way to play Spain for a stock or ADR  may be the telecom play as the one that won’t go away as Telefonica SA (NYSE: TEF), which closed down 1.5% at $57.37 versus a 52-week range of $54.45 to $89.62.

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JON C. OGG