Periodicals Wrap-Up for Wednesday, May 21st
WALL STREET JOURNAL: Barnes & Noble (BKS) is considering a bid for rival bookseller Borders (BGP), the Wall Street Journal reported, a move which would allow Barnes & Noble to improve profits and reduce costs. Antitrust issues could prevent a deal…The Wall Street Journal also reported that Carl Icahn’s effort to remove Yahoo’s (YHOO) board has picked up new supporters, including T. Boone Pickens, who acquired a 0.75% stake. Some Yahoo shareholders believe it is still too early to predict whether Icahn will be able to carry July 3’s shareholder vote…FINANCIAL TIMES: A Financial Times investigation discovered that Moody’s (MCO) incorrectly awarded top ratings to billions of dollars to debt products due to an error in its computer models. Moody’s said it is in the process of “conducting a thorough review” of the rating of the constant proportion debt obligations, which should have been up to four notches lower…NEW YORK TIMES: According to the people briefed on the matter, the New York Times reported that the buyout of Penn National Gaming (PENN) by Fortress Investment Group and Centerbridge Parters may involve revised terms. The sources said the negotiations may “delay or even imperil” the deal…
GOOG: Domestic growth is dropping, slowdown going beyond the U.S.@STFG
After comScore reported that U.S. searches for April grew 46%, in-line with Q1 growth, Stanford believes Google’s domestic revenue growth could stay flat for the next two quarters. The firm also noted that Internet usage slows in the summer and they believe regulators could be concerned about a deal between Google and Yahoo (YHOO). The firm reiterated their Hold rating on Google.
SNDK coverage resumed with a Sector Perform@PACS
Pacific Crest believes the valuation is too high following the recent strength as product margins are trending down.
BHI volatility Flat into $130 oil & PBR announcement BHI, an oilfield service company closed at $87.03. Crude oil futures are recently up .88% to $130.12 according to Bloomberg. PBR, a Brazilian oil conglomerate, announced its intent to hire 40 drilling ships and semi-submersible drilling platforms to operate in deep and ultra-deep waters. BHI over all option implied volatility of 36 is near its 26-week average according to Track Data, suggesting non-directional risk.
STP: Believe company can beat expectations soon@THNK
ThinkPanmure does not expect Suntech to beat expectations by a large margin when it reports its Q1 results, but the firm believes the company can beat estimates by a wide margin after the next couple of quarters, in light of demand strength, increasing polysilicon supply, and its promising Pluto technology. The firm reiterated their Buy rating on the stock.
GOOG: comScore data shows market share gains in April@PIPR
Piper notes the comScore data shows GOOG owning 61.6% U.S. search market share in April, which is up from 59.8% in March. The firm also found GOOG’s U.S. query volume growth steady at 30% y/y. Piper is slightly surprised by the magnitude of the share gain in April and maintains a Buy rating on the stock.
Solarfun Power-SOLF volatility at 127; Q1 08 revenue Up 529% from Q4 07 SOLF is recently up $3.71 to $28.95 in pre-open trading. SOLF reported Q1 EPS of 32c verses consensus estimates of 16c. SOLF reported Q1 net revenue of $171 million, an increase of 529% from the fourth quarter of 2007. SOLF is a manufactures PV cells and PV modules. SOLF June option implied volatility of 127 is above its 26-week average of 98 according to Track Data, suggesting larger price risk. SOLF raises FY08 guidance to 160MW-180MW shipments from 160MW
The company said ASP visibility in Q2 and Q3 is good but incentive changes in Spain and Germany could lead to less visibility on ASP’s beginning in Q4.
NOV downgraded to Add from Buy@LYON
Calyon downgraded NOV based on valuation. Target to $88 from $81.
NE downgraded to Add from Buy@LYON
Calyon downgraded NE based on valuation. Target to $73 from $64 SII downgraded to Add from Buy@LYON
Calyon downgraded SII based on valuation. Target $87.
FSLR downgraded to Underperform from Market Perform@FBRC
Friedman Billings downgraded FSLR citing margin risk concerns as the company aggressively pursues utility-scale projects in the US. The firm said risks are not reflected in share valuation near $300 and could be a source of disappointment but could also lead to downside EPS risk. Target to $200 from $115.
TNP reports Q1 EPS $1.70 vs. consensus of 86c
Reports Q1 revenue $136.7M vs. consensus of $127.36M.
CLR target raised to $69 on well results@BPSG
Broadpoint raised CLR’s target price to $69 to reflect the positive Three Forks/Sanish well results and maintain a Buy rating on the stock.
NFLX: Risks remain, would be sellers after analyst day next week@PACS
PacCrest believes some CE customer wins will be announced at the analyst day. However, they maintain a Sector Perform rating as PacCrest sees risk to the model and says NFLX is facing content and quality hurdles.
Fast Money position recap- First Moves- Guy likes PEG, Pete likes EXM, Joe likes shorting HES, Jeff likes SPY with a 139 stop.
Adami owns (NUE), (BTU),(MSFT),(INTC),(C ), (GS), (AGU); Najarian Owns (AAPL), (NOK), (DRYS), (HPQ), (XLF) Puts; Macke Owns (INTC), (HAS), (DIS), (WMT), (MSFT); Terranova Owns (SUN), (FXC), (GS), Crude; Terranova Is Short (HES), (WYNN).
Good Morning! Watching energy stocks (OIH, USO plays, UNG plays, esp. coal plays) and shippers today. Watching the solars after SOLF numbers. Let’s see if we get a market cycle to the upside today but the XLF has been weak lately and that could weigh it down. There has been some speculative plays on XLF puts so I’ll be watching for XLF weakness which could weaken the market further or limit upside movement in the markets.
Stay positive, keep balanced, have focus and patience, pick plays with a high probability of success. Run technicals through support and resistance areas. Great luck and great trading.
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