Premarket Analysis for 5/19- Upgrades/Downgrades, Gappers, Actionable Calls
Periodicals Wrap-Up for Monday, May 19th
WALL STREET JOURNAL: General Motors (GM) plants that were idled during the American Axle (AXL) strike are set to resume production mow that the strike has been settled, the Wall Street Journal reported…TELEGRAPH: The Telegraph reported that Halliburton (HAL) is expected to determine this week whether it will make a GBP1.8B counter bid for its British competitor, Expro International (EXPRF)….The Telegraph also reported that U.K.-based Imperial Tobacco (ITY) could conduct a GBP5B rights issue this week. The company has suggested that it needs the funds in order to retain its investment-grade credit rating following its acquisition of Altadis…BLOOMBERG: Regulatory filings show that banks, such as Citigroup (C) are failing to acknowledge at $35B of additional writedowns in their income statements…
GNK extends time charter for Genco Prosperity
Genco Shipping & Trading has reached an agreement to extend the time charter for the Genco Prosperity, a 1997-built Handymax with Pacific Basin Chartering Ltd. for an additional 35 to 37.5 months at a rate of $37,000 per day, less a 5% third party brokerage commission.
AMZN coverage transferred with a Buy from Neutral@GSCO
Goldman upgraded shares of AMZN and added them to its Conviction Buy List based on strong revenue growth prospects and expectations for its investor base to widen as investors believe revenue expansion is sustainable. Target $98.
RIMM: Checks show May sell-through tracking above April@PACS
PacCrest’s checks indicate that RIMM’s sell through in May is tracking above April and the CDMA Curve ramp is in line with their current forecasts. However, they continue to believe Street estimates are aggressive and remain on the sidelines in the near-term despite keeping an Outperform rating.
UNP upgraded to Buy from Hold@STFL
Stifel believes management’s plans to generate growth and margin expansion will drive share appreciation. Target $182.
EXM reports Q1 EPS $1.93 vs. consensus of $1.79
Reports Q1 revenue $69.8M vs. consensus of $61.83M.
SPWR downgraded to Underperform from Sector Perform@PACS
Pacific Crest downgraded shares on valuation as they believe the Street is too optimistic with regard to a favorable U.S. ITC extension this year. Pacific Crest expects the legislation to fail and sees downside to $60 in SPWR shares. :
GRMN downgraded to Hold from Buy@NEED
MSFT: Joint venture with YHOO would be seen as a positive@TWPT
Thomas Weisel believes a joint venture with Yahoo (YHOO) would be viewed more positively than a takeover deal, since a joint venture would entail reduced expenses and a lower risk. Thomas Weisel reiterated their Buy rating on Microsoft, as they believe its valuation is attractive.
YHOO upgraded to Buy from Hold@NEED
Needham upgraded shares with a $31 target.
Biotech: Would put new money into GILD and DNA at these levels@JPMS
Following a west coast biotech trip, JP Morgan tells investors they would put new money in Genentech (DNA) and Gilead Sciences (GILD) at current levels as well as Exelixis (EXEL) for investors with a longer term time frame.
YHOO: Believe Microsoft wants to bid for YHOO’s search business@AMTR
Am Tech recommends buying Yahoo below $30.
SNDK: NAND supply constrains could lead to upside@THNK
ThinkPanmure believes that supply constraints from Hynix and favorable FX could provide upside to license revenues in the quarter and to Q3 guidance. They reiterate a Buy rating and $43 target on SNDK shares.
AKAM downgraded to Hold from Buy@SBSH
Citigroup downgraded shares on valuation as they find the risk/reward less compelling at current levels. Target price remains $42.
STP: Expect in line Qtr; Don’t expect raised guidance@COWN
Cowen expects an in-line to slightly better Q1 and does not expect guidance to be raised until 2H08. The firm’s Q1 estimates are 27c/$375M. Shares are Outperform rated.
U.S. Semiconductors sector upgraded to Attractive from Neutral@GSCO
Goldman upgraded the U.S. Semiconductor Sector to Attractive from Neutral. The firm believes semi fundamentals are poised to improve in 2H08 and that valuations are reasonable.
HK target raised to $38 from $27, maintain Buy@JEFF
Jefferies’ new target reflects the company’s Haynesville Shale activity and they raised their Q2 estimate to 20c from 16c to reflect higher prices. Shares remain Buy rated.
CF initiated with a Neutral, target $180@GSCO TRA initiated with a Sell@GSCO
TOO upgraded to Outperform from Market Perform@WCHV
Wachovia upgraded TOO based on valuation and increased distribution growth outlook following the acquisition of an additional 25% ownership interest in Teekay Offshore Operating, L.P.
Canadian iPhone users may enjoy cheap browsing-Electronista
The Canadian iPhone is on track to debut in June, and could offer the cheapest data plan of any carrier so far. Rogers Wireless, a subsidiary of Rogers Communications (RCI), may include Apple’s (AAPL) iPhone in its $7 on-device browsing plan, which allows users unlimited access to the Web through the carrier’s official browser.
SAC Capital reports a 5.5% stake in Orient-Express-OEH
SAC Capital has certain concerns with respect to the company’s dual share class and corporate governance structure, including the super voting rights of the company’s Class B shares and the legality of such structure. SAC believes that the existing structure creates an unnecessary and significant valuation discount for the Issuer’s shares.
PWRD reports Q1 EPS 38c vs. consensus of 35c
Reports Q1 revenue $43.2M vs. consensus of $39.39M.
TXN upgraded to Buy from Hold@SBSH
Citigroup upgraded shares and added TXN to their Top Picks Live list to reflect increased optimism in the company’s handset revenue potential. They expect a wireless ramp in the second half of 2008 and raised their estimates above consensus and target to $39 from $31.
BUCY downgraded to Hold from Buy@KEYB
KeyBanc downgraded BUCY based on valuation. Note that the firm also downgraded JOYG to Hold.
JOYG downgraded to Hold from Buy@KEYB
KeyBanc downgraded JOYG based on valuation. Note that the firm also downgraded BUCY to Hold.
SAC Capital reports a 6.3% Passive stake in Barrier Therapeutics-BTRX
Weekly additions to the Investors Business Daily-100
The following are additions to the Investors Business Daily- 100 list for the week of May 16: Georesources Inc. (GEOI), Excel Maritime (EXM), Lumber Liquidators (LL), Baxter Energy Trust (BTE), Diana Shipping Inc (DSX), Hill International (HIL), Western Digital (WDC), Nexen Inc. (NXY), Suncor Energy (SU), Petroleo Bras SA (PBR), Canadian Natural resources (CNQ), Systemax Inc. (SYX), Core Laboratories NV (CLB)
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 16: CTRIP.com (CTRP), Gencorp Industries (GENC), Gerdau SA (GGB), McDermott Intl. (MDR), China Mobile (CHL), Urban Outfitters (URBN), Anadarko Petroleum (APC), Compass Minerals Intl. (CMP), Robbins & Myers (RBN), Mechel OAO (MTL), Mindray Medical Intl. (MR), Natus Medical (BABY), Netlogic Microsystems (NETL)
Fast Money position update- Pete likes PDE, Karen likes GLNG, Guy likes C, Jeff likes MSFT. Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Pete Najarian Owns (AAPL), (BKC), (TSO), (XLF), (HPQ); Pete Najarian Owns (AA) Calls, (C) Calls, (MSFT) Calls; Macke Owns (MSFT), (ATVI), (DIS), (WMT), (INTC); Finerman Owns (GS); Finerman’s Firm Owns (JCP), (MO), (MSFT), (NYX), (PLCE), (TSO), (VLO); Finerman’s Firm Owns SPX Index Puts; Finerman’s Firm Owns (C) And (C) Leaps, Finerman Owns (C); Finerman’s Firm Owns (HD) And (HD) Puts, Finerman Owns (HD); Finerman’s Firm Owns (YHOO) 1X2 Call Spreads; Finerman’s Firm Is Short (IYR), (IJR), (MDY), (IWM), (SPY); Finerman’s Firm And Finerman Own Shares Of Hong Kong Stock Exchange; Finerman’s Firm Owns (GLNG).
Oil prices are gapping up again this morning so i’ll be watching the energy sector with closer interest. CNX, NOV, RIG, WLT, CLF, X, OII, ATW, FCX, MT, TCK, SNG, APC, DVN (breakout), CCJ, HES, PDE, ACI, UPL, UNG, USO, shippers- DRYS, GNK, EXM, SBLK, ESEA; AMZN on the GS upgrade, solars- FSLR, SOLF and the OIH components.
Brokers got downgraded today and are gapping down so it will be a focus area to watch to see its relation to the market and its influence. Focus on your game plan and pick plays with a high probability of success. Remember to run technicals through supply and demand (support and resistance zones and pivot lines). Great luck to you and great trading. A cup of Kona for your start!
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