The Unusual Suspects for the Week Ahead (BKS, BRCD, CSKI, CIEN, FNFG, NAL, GENZ, SNY, LULU, ID, NFLX, NE, PBR, RTN, SKS, TTWO, THQI, CALL)

Saks Incorporated (NYSE: SKS) is the latest of the retailers that is rumored to be an acquisition target for private equity.  There are three issues here that we have concerns about.  First is that this rumor has come up over and over in the past and Carlos Slim would need to be a part of the deal.  Second, Neiman Marcus was bought by private equity and the results have been very mixed and frankly the luxury experience is just no longer the same. Third, a downgrade from JPMorgan this week highlighted that it is a prudent exit point as the $8 to $9 range seems more likely than an $11 figure thrown out this last week.  The $8.11 close compared to an intraday high of $8.85 but this was still up 21% this last week.

Take-Two Interactive Software Inc. (NASDAQ: TTWO) was a screamer with a 7.35% gain to $9.50 on Friday versus a $7.00 to $12.57 range over the last year.  This stock may not be fixed, but it is highlighting the video game sector.  Most importantly, this features THQ Inc. (NASDAQ: THQI) and our call over at as another of the “stocks which could double.” Stay tuned this week as we feature THQI with a full outlook for its long-awaited turnaround.

VocalTec Communications Ltd. (NASDAQ: CALL) is one that we want to revisit.  This was a cast member on Aug.21 of the Unusual Suspects and we noted after a $38 close: “We can’t call for a short sale but those who are sitting on big gains should at least consider taking the cost basis out of the trade here so that you can still have upside and you leave assured returns in the name.” Our call was helped by the notion of Google’s Gmail Call feature and then on talk that Cisco may try to acquire Skype.  While shares closed up 3% on Friday, the price is all the way back down to $26.75 and that broke a 10-straight-day drop and volume has petered out.  Calling a bottom or calling a buy on a small-cap after we already gave a set-up after the merger for a 150% gain is tough to do, but those who want in now have another shot.  This is far from riskless, but VocalTec is now the owner of the magicJack cheap internet telephony player.

Vonage Holdings Corporation (NYSE: VG) was sort of in the same boat as VocalTec as far as its risks to the business over Gmail’s call application and if Skype were to be acquired by Cisco.  While Vonage shares closed down 1.75% at $2.24 on Friday, it still closed up 10.3% from the Friday before and Friday was the only down-day it saw this week.  If this new competition was such a large ongoing threat, Vonage would have followed VocalTec lower.

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