Periodicals Wrap-Up for Monday, May 12th
WALL STREET JOURNAL: The Wall Street Journal reported that a spokesperson for New Corp. (NWS) said the company has dropped out of the bidding for Tribune’s (TRB) Newsday. This leaves Cablevision (CVC) as the apparent winner of the auction…According to people familiar with the matter, the Wall Street Journal reported that American International Group’s (AIG) airplane-leasing unit is considering a split from the company. The people said International Lease Finance Corp have grown “increasingly concerned” the company will be hurt by AIG’s financial troubles…FINANCIAL TIMES: Royal Dutch Shell (RDS.A) and Spain’s Repsol (REP) are pulling out of one of Iran’s biggest gas projects, the $10B-plus development of phase 13 of South Pars, the world’s largest gas field, the Financial Times reported…BLOOMBERG: Bloomberg reported that HSBC Holdings (HBC) set aside a smaller-than-forecast $3.2B for bad loans in the U.S. The bank also said its Q1 profit was higher than Q107..
RIMM introduces the BlackBerry Bold Smartphone
For customers seeking a smartphone that makes a bold statement, Research In Motion introduced the admirable BlackBerry Bold(TM) smartphone. Crafted from premium materials, inside and out, that radiate elegance with a dramatic presence, the BlackBerry Bold is designed to give business professionals and power users unprecedented functionality and performance in an intuitive BlackBerry smartphone. It is the first BlackBerry smartphone to support tri-band HSDPA high-speed networks around the world and comes with integrated GPS and Wi-Fi, as well as a rich set of multimedia capabilities. From its lustrous black exterior, satin chrome finished frame and stylish leather-like backplate, to its stunning display, sophisticated user interface and newly designed full-QWERTY(i) keyboard, the BlackBerry Bold smartphone is a symbol of accomplishment and aspiration.
RIMM: Take money off the table, expectations high@PACS
PacCrest says the Blackberry Bold announcement is already in the numbers. They would take some money off table as sub additions are tracking in-line and expectations are getting high. PacCrest long-term views RIMM as a top pick and reiterates their Outperform.
JASO reports Q1 EPS 14c vs. consensus of 10c
Reports Q1 revenue $160M vs. consensus of $146.6M. JASO sees FY08 EPS $1.03B-$1.14B vs. consensus of $984.4M.
LEAP: Build-out brings risk and potential, maintain Hold@STFG
After Leap generated higher than expected net adds in Q1 and announced build-out guidance for coverage of 36M POPs by mid-2009, Stanford believes the build could lead to subscriber growth, but they think Leap’s build-out plans also increase its execution risk.
Semiconductor Equipment: Fundamentals bottoming but no near-term drivers@PACS
PacCrest expects bookings weakness to remain weak through Sept Quarter. Memory pricing remains low which should affect capacity expansion and cap spending. PacCrest prefer stocks with strong product cycles such as ASML, VSEA and LRCX. They are cautious on CYMI as they view it as overvalued, and that KLAC is likely to fail to meet the high investor expectations, and gross margins could be worse. PacCrest is neutral on AMAT, NVLS and ACLS.
DECK target raised to $154 from $146, maintain Outperform@RBCM RBC raised their estimates to reflect the continued strength in the company’s brands and would continue to buyers of the stock.
ECA announces plans to split company into two
The Board of Directors of EnCana Corporation has unanimously approved a proposal to split EnCana into two highly focused energy companies - one a natural gas company with an outstanding portfolio of early life, North American, natural gas resource plays and the other a fully integrated oil company with industry-leading in-situ oilsands properties and top-performing refineries, as well as an underlying foundation of reliable oil and gas resource plays. This transaction is designed to enhance long-term value for EnCana shareholders by creating two highly sustainable, independent entities, each with an ability to pursue and achieve greater success by employing operational strategies best suited to its unique assets and business plans. ECA upgraded to Strong Buy from Outperform@RAJA
Apple in deals to sell the iPhone in Asia-WSJ
Apple (AAPL) has made deals with four companies in four Asian countries to sell the iPhone, according to the Wall Street Journal. Singapore Telecommunications, Bharti Airtel Ltd. in India, Globe Telecom in the Philippines and SingTel subsidiary Optus in Australia will begin selling the iPhone later this year.
MER CFO says 20% return on equity is achievable-Bloomberg
The company’s CFO said its wealth management business will boost ROE and that the company is working to reduce ‘illiquid assets.’
FDX volatility Up into lower Q4 view on fuel costs & weak economy FDX lowered Q4 EPS guidance to $1.45-$1.50 verses consensus of $1.69. FDX is recently trading at $87.40 in pre-market trading, below a close of $90.37. Morgan Keegan downgraded FDX to Market Perform from Outperform. Morgan Keegan say’s “the uncertainty inherent in both fuel and the economy limit any potential earnings upside.” FDX June option implied volatility of 34 is above its 26-week avearge of 31 according to Track Data, suggesting larger risk.
C: Nothing new at analyst’s day,expect estimates to be pressured@OPCO
Oppenheimer reports that Citigroup reiterated that it was selling or running off portfolios and focusing on expense reduction. Oppenheimer believes that earnings estimates will continue to be under pressure, and they fear that Citigroup may not be able to be repaired. Oppenheimer maintained their Underperform rating on the stock.
AAPL: Target to $250 from $180 on estimate rollout to FY09@BMOC BMO Capital rates shares Outperform
Rule change in South Korea helps sale of BlackBerry-WSJ
Until recently the South Korean government favored domestic cell phones Samsung Electronic and LG Electronics. No more, reports the Wall Street Journal, as the government has made an exception, allowing SK Telecom Co. (SKM) to sell Research in Motion’s (RIMM) BlackBerry devices there starting in June. Apple (AAPL) may need a similar exception to sell its iPhone.
IMCL downgraded to Underweight from Equal Weight@MSCO
Morgan Stanley downgraded IMCL and lowered estimates as they believe Erbitux FLEX trial data expected at the June ASCO will not live up to expectations. Target $38.
RRC upgraded to Buy from Add@LYON
Calyon raised its 2008 WTI oil forecast to $111.40/bbl from $98.95/bbl and long-term forecast to $$101.50/bbl from $75 and 2008 natural gas forecast to $9.25/MMBtu from $8.80 and long-term forecast to $9/MMbtu from $7.50/MMbtu.
NFX upgraded to Buy from Add@LYON
Calyon raised its 2008 WTI oil forecast to $111.40/bbl from $98.95/bbl and long-term forecast to $$101.50/bbl from $75 and 2008 natural gas forecast to $9.25/MMBtu from $8.80 and long-term forecast to $9/MMbtu from $7.50/MMbtu.
MTL acquires coal processing equipment
Its Yakutugol OAO coal mining subsidiary has acquired new equipment for its Neryungri Coal Processing Plant in line with its capital expenditure program.
MBI CEO says company has ample liquidity. MBI reports Q1 EPS ($3.01) ex-items vs. consensus of (19c)
CLF target raised to $230 from $170, reiterate Buy@DBAB
Deutsche Bank raised their estimates to reflect higher benchmark coal prices.
Actionable.
Biotechnology: Continue to advise selective investment@LEHM
Lehman expects GILD and CELG to hold up better than DNA in 2008. The firm believes topline growth, earnings visibility, and momentum favor mid-caps CEPH, CVTX, ONXX, and UTHR.
CF removed from Top Picks Live List, maintain Buy@SBSH
Citigroup removed the stock for their Top Picks Live List following the latest USDA report that suggests global grain inventories are expected to remain low but build in 2009. However, CF remains the firm’s best idea in agricultural chemicals.
U.S. equity futures point to a higher open as the dollar strengthens
U.S. equity futures are pointing to a slightly higher open. Oil prices have fallen slightly from its record high as the dollars advanced against foreign currencies. Traders currently have net long positions in the dollar for the second week in a row after 123 straight weeks of net short positions. The dollar’s advance seems to have eased concerns about inflation. A weak dollar can exacerbate price increases, especially since hard commodities like oil become more attractive to investors seeking a hedge against inflation.
AAPL: Checks show iPhone availability remains limited@PIPR
Piper points out that iPhones are unavailable at the online Apple Store in the US and the UK and they checked with 11 US retail stores and 6 had iPhones in stock. They continue to believe the limited availability indicates that the release of a 3G iPhone is imminent and expect an announcement in mid June. Piper remains comfortable with their 1.7M iPhone estimate fir the June quarter, assuming a June 3G launch. Shares remain Buy rated.
HOC reports Q1 EPS 17c vs. consensus of 15c
Reports Q1 revenue $1.48B vs. consensus of $1.35B.
Oil Services: Would use any weakness to increase sector exposure@BOFA
Banc of America sees the best risk-reward profiles in the diversified service companies, namely Schlumberger (SLB) and Halliburton (HAL). They also believe FMC Technologies (FTI) is well positioned in Brazil.
JASO reports Q1 EPS 14c vs. consensus of 10c
Reports Q1 revenue $160M vs. consensus of $146.6M. JASO sees FY08 EPS $1.03B-$1.14B vs. consensus of $984.4M
Weekly additions to the Investors Business Daily-100
The following are additions to the Investors Business Daily- 100 list for the week of May 9: GMX Resources (GMXR), Swift Energy Co (SFY), Syniverse Holdings Inc (SVR), Metalico Inc (MEA), Whiting Petroleum Corp. (WLL), Cimarex Energy (XEC), McDermott International (MDR), Vimpel-Communications (VIP), Millicon Intl. Cellular SA (MICC), NewMarket Corporation (NEU) , Anadarko Petroleum (APC), Cameron Intl. Corp. (CAM), W & T Offshore Inc. (WTI), Mindray Medical Intl. (MR), Dawson Geophysical Co. (DWSN), NVE Corp. (NVEC), NetLogic Microsystems (NETL).
Weekly subtractions from the Investor’s Business Daily-100
The following are subtractions from the Investors Business Daily-100 list for the week of May 9: Sandridge Energy (SD), Moldflow Corp. (MFLO), Banco Itau Holding SA (ITU), Petrohawk Energy (HK), Credicorp Ltd. (BAP), Banco Bradesco SA (BBD), Gorman-Rupp Co. (GRC), Open Text Corp. (OTEX), Forest Oil Corp. (FST), Empresa Nacional El Chile SA (EOC), Darwin Professional Underwriters Inc. (DR), Itron Inc. (ITRI), Amphenol Corp. (APH), Exlservice Holdings (EXLS), Teledyne Technologies (TDY), Deere & Co. (DE), Deckers Outdoor Corp. (DECK).
-MELI: Would buy on any weakness from Q1 results@AMTR
Am Tech expects MELI to report in-line Q1 results and thinks the stock could sell-off given the intra-quarter rally. However, they believe Q2 is tracking ahead of estimates and recommend buying on any dip. Shares remain Buy rated.
Fast Money- First Moves- Jeff says buy UPS on the dip on FDX. Guy likes TSO. Karen likes VLO June 45 calls. Pete likes HPQ ahead of earnings. Adami Owns (C), (GS), (INTC), (MSFT), (AGU), (BTU), (NUE); Najarian Owns (AAPL), (BKC), (TSO), (XLF); Najarian Owns (AA) Calls, (BID) Calls, (BUD) Calls, (C) Calls, (MSFT) Calls, (YHOO) Calls; Macke Owns (ATVI), (MSFT), (INTC); Finerman Owns (GS); Finerman’s Firm And Finerman Own (KALU), (HD); Finerman’s Firm Owns SPX Index Puts; Finerman’s Firm And Finerman Own (C) And (C) Leaps; Finerman’s Firm Owns (MSFT), (TSO), (VLO), (PLCE); Finerman’s Firm Owns (YHOO) And (YHOO) Call Spreads; Finerman’s Firm Is Short (IYR), (IJR), (MDY), (IWM), (SPY).
Watching the the dollar today (UUP) and oil prices. Energy and the 4 Horsemen (GOOG, RIMM, AMZN, AAPL), BIDU, shippers- EXM, DRYS, GNK, FRO. ANR, WLT and the met coal plays, ECA, solars and their reaction to JASO earnings and in anticipation of more solar earnings this week. CLF, MTL, MT and steel will also be a focus this week. Watch the financials for clues for market direction and the dollar. Keep an eye on the market tide.
Hello to the Mukilteo Mavens an investment club from my hometown in WA. Welcome!!!
Stay positive, pick plays with a high probability of success. Great trading and good luck.
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