Submitted By Optiondragon
From Briefing.com
Periodicals Wrap-Up for Monday, August 4th
WALL STREET JOURNAL: After months of looking at its options for the parts of AOL, the Wall Street Journal reported that Time Warner (TWX) is reportedly ready to separate its dial up access business from the ad and content side, and will next decide if it will sell all or parts of AOL…The Wall Street Journal also reported that the Securities and Exchange Commission is expected to soon introduce proposals that will put U.S. companies on track to adopt international accounting standards, which some believe may “sow the kind of confusion” that allows hedge funds to flourish. Additionally, the SEC will also discuss issues related to U.S. and international accounting systems and the subprime-mortgage squeeze…FINANCIAL TIMES: The Financial Times reported that Royal Dutch Shell (RDS.A) is negotiating an asset swap with Sibir Energy. Under the proposed deal, Shell would trade its 50% stake in eastern Siberia’s Salym fields for a large equity stake in Sibir, which focuses on Russian energy opportunities and is currently an equal partner with Shell in the Salym venture…BLOOMBERG: Citigroup (C) is said to be shutting down Tribeca Convertible LP, a $400M convertible arbitrage fund that has been damaged by investor redemptions, inside sources said. The sources added that the move is the final step in terminating the investment bank’s $2B Tribeca Global Investments group, Bloomberg reported…
Weekly additions to the Investors Business Daily-100
The following are additions to the Investors Business Daily-100 list for the week of August 1: Potash Corp Saskatchewan (POT), Mosaic (MOS), Massey Energy Company(MEE), Metalicio Inc (MEA), CAI International (CAP), National Oilwell Varco (NOV), Natural Gas Services Group (NGS), DXP Enterprises (DXPE), Agrium (AGU), Lumber Liquidators (LL) Priceline.com (PCLN), Hess Corp.(HES), Companhia Siderurgic (SID), Circor Internationall (CIR), United Therapeutics Corp (UTHR) FMC Corp (FMC), SPX Corp (SPW), Occidental Petroleum (OXY), United State Steel Corp(X), NCI Inc.(NCIT), Stepan Co (SCL), Atwood Oceanics (ATW) VSE Corp (VSEC) Emcor Group (EME), Websense Inc (WBSN), Monsanto Co. (MON), National Presto (NPK).
Weekly subtractions from the Investor’s Business Daily-100
The following are subtractions from the Investors Business Daily-100 list for the week of August 1 : Continental Resources (CLR), Intuitive Surgical (ISRG), New Oriental Education & Technology (EDU), FMC Technologies (FTI), Plexus Corp (PLXS), Western Digital Corp (WDC), Altra Holdings (AIMC), Newmaket Corportation (NEU), True Religion Apparel (TRLG), Graftech International (GTI), Swift Energy Co. (SFY), ITT Educational Services (ESI), Atheros communications (ATHR), Netlogic Microsystems (NETL), Amphenol Corp. (APH), Parametric Tech. (PMTC), Tyler Technologies (TYL), Volterra Semiconductor (VLTR), Stifel Financial Corp. (SF), Techne Corp (TECH), Balchem Corp (BCPC), Strayer Education (STRA), Lufkin Industries (LUFK), Encore Acquisition (EAC), Gulfmark Offshore (GLF), Covanta Holding (CVA), Cummins (CMI).
Japan may say that it is in a recession-FT
The Japanese government may have to state that the country has technically entered a recession, several economists said. The declaration could have to be made following a series of data disclosed by the government last week, including an announcement that industrial production had slowed for a second straight quarter. However, this downturn will probably be much less severe than previous recessions endured by Japan in 1998 and 2001, according to the Financial Times.
Goldman Sachs to acquire 10 poultry farms for $300M-South China Morning Post
According to a report, Goldman Sachs (GS) has acquired full control of more than 10 poultry farms on the Chinese mainland for as much as $300M.
Hedge funds face troubles-WSJ
Even hedge funds have their performance limits as the financial crisis is expected to have severely affected their overall performance in July, according to the Wall Street Journal, with some funds managers down about 20% year to date. “It [July] was a comeuppance month” for hedge funds, says Jay Krieger of Fundamental LP, an investor in hedge funds.
SEC’s adoption of international accounting rules may benefit hedge funds-WSJ
It may not have intended to do so but the SEC’s move to use international accounting standards may arouse enough confusion to help hedge funds, according to the Wall Street Journal’s “Heard 0n the Street”. A global accounting system is the goal but until it happens–there’s no specific date to change over–U.S. companies meeting certain requirements may choose which system to use for a few years making comparison difficult and problematic for typical investors but beneficial to hedge funds.
Arcelor Mittal’s aggressive plans in Indonesia are halted-FT
Indonesia’s state-owned Krakatau Steel, said it will not talk to ArcelorMittal (MT) until at least next year. Fazwar Bujang, Krakatau’s president director said that his management team would field proposals from other steel companies before committing to the $3B joint venture with ArcelorMittal.
Arcelor Mittal gets less out of China-FT
Lakshmi Mittal, CEO of ArcelorMittal (MT), said that the company has to settle for a stake of just under 30% in China Oriental although the original expectation was for more than 70%. He also stated that the Chinese Government was still not happy with a foreign steelmaker controlling a leading steel producer since the government considers the industry as a strategic sector.
Apple iPhone to sell in Russia next year-Kommersant
Rumors are swirling that Apple’s (AAPL) popular iPhone device will go on sale in Russia in 2009. Analysts predict sales will begin in February or March, though Apple has not commented directly on the news. Russian cell phone giants VimpelCom (VIP), MTS and MegaFon have confirmed they are negotiating iPhone supplies with Apple, but also did not comment on any details.
iPhone “nano” to launch in December-Daily Mail
The Daily Mail reports that Apple (AAPL) will launch the iPhone “nano” “in time for Christmas”. An industry source, which said “this will be a big one,” said the product will be launched by Telefonica’s (TEF) O2 in the UK. An expert suggests the “nano” version will have a touch wheel on the back and display on the front of the phone.
Royal Bank of Scotland to announce record loss this week- The Daily Telegraph
Royal Bank of Scotland (RBS) is set to announce interim earnings on Friday and it is predicted they will reveal a pre-tax loss of at least GBP1B but some analysts say the bank could face a much larger loss in the range of GBP1.7B.
Amazon sold 240k Kindles-TechCrunch
According to TechCrunch, a source at Amazon (AMZN) said that 240,000 units of the Kindle have been shipped since November which is relatively in-line with Wall Street estimates.
U.S. equities still point to a lower open
Stocks continue to point to a lower open. The first economic numbers for the week are the personal income and personal spending numbers for June, and they showed that personal income rose 0.1% versus an expected decline of -0.2%, and the personal spending number showed an increase of 0.6% versus an expected increase of 0.4%. The numbers had a muted effect on the futures market as they barely moved from their previous levels. :
Flowserve-FLS: 2Q EPS beat estimates significantly; maintain Market Perform@FBRC
FBRC expects the company’s energy, power and process businesses to continue generating strong business trends along with good will persisting over the next several quarters. Sales and order growth are solid as is margin expansion. The firm increased their 2008/09 EPS and sales estimates and target price is raised to $135 from $124.
DE downgraded to Neutral from Buy@GSCO
Goldman downgraded DE citing relative valuation, note that PH was upgraded to Buy, and potentially lower farmer income forecasts.
CNX upgraded to Outperform from Neutral@FBCO
Credit Suisse upgraded CNX based on valuation and pricing power. Target to $100 from $94.
SINA Corp-SINA August volatility Elevated into EPS & Outlook
SINA, a Chinese online media company, is scheduled to report Q2 EPS on August 6. SINA August option implied volatility is at 78; September is at 55. SINA average option implied volatility over the last 26-weeks is 58 according to Track Data, suggesting larger August price movement.
Southern Peru Copper-PCU upgraded to Overweight from Neutral@HSBC
HSBC upgraded PCU based on valuation.
McDonald’s dollar menu pressures profits-WSJ
Back in 2003 McDonald’s (MCD) began its dollar menu to help drive sales, but these days it’s hurting the profitability at its restaurants, reports the Wall Street Journal. Now the company is looking to modify its menu with changes expected in 2009, including beefing up items in the $1.30 to $2 range. Because of increased costs the most visible problem is what to do about the $1 double cheeseburger.
Nintendo’s Iwata looks for new growth-WSJ
Satoru Iwata, president of Nintendo (NTDOY), has seen his company enjoy years of solid growth. Now he faces the task of figuring out where the next wave of growth will come from, according to the Wall Street Journal’s “Boss Talk”. Among his views:”We’re still an entertainment company first and foremost, but the definition of videogames has changed. If we keep our view of what a videogame constitutes as broad as possible, then naturally we’re going to be doing things that people might say aren’t games…Our sales may have grown beyond expectations, but there are still a lot of people who have never played videogames. I think there are still many new kinds of games that we can offer to pique the interest of people whom we haven’t managed to attract yet. After we complete our mission in developed countries, then we’ll have to start thinking about how to make our products appealing in developing countries. We’ll have a whole new dimension of issues to tackle like pricing, quantity availability and regional adaptation…”
Intercontinental Exchange-ICE reports Q2 EPS $1.19 vs. consensus of $1.19
Reports Q2 revenue $197.2M vs. consensus of $195.84M.
Intercontinental Exchange-ICE announces $500M stock buyback program
China Medical-CMED reports Q1 EPS 57c vs. consensus of 43c
Reports Q1 revenue $33.1M vs. consensus of $31.45M.
China Medical-CMED sees FY08 EPS $2.93-$3.02 vs. consensus of $2.51
Sees FY08 revenue $173.5M-$179.3M vs. consensus of $181.49M.
Savient Pharmaceuticals-SVNT downgraded to Hold from Buy@JEFF
Jefferies downgraded shares on valuation as they believe a potential acquisition premium is already priced in at current levels. The firm lowered their target to $25 from $30.
SINA Corporation-SINA: Believe upside to consensus is highly likely@PALI
Pali believes SINA is highly likely to beat consensus Q2 estimates due to the Olympic Games and associated events as well as its wireless-value-added-services (WVAS) business. The firm reiterates a Buy rating and $75 target on the stock.
Rails: All Aboard! - now may be the time to buy - Barron’s
With gas prices high, both passenger and freight trains are finding new life. One notable investor, Warren Buffett, has already “hopped on board the train”. Over the past 18 months, his Berkshire Hathaway (BRK.A) has built up an 18% equity stake in the Burlington Northern Santa Fe (BNI), the 2nd largest of the publicly traded U.S. freight railroads, along with smaller but substantial holdings in a number of other lines. BNI is up 26% since the start of the year; and Union Pacific (UNP) the No.1 freight line, is up 32%. But given the growth prospects of these and other leading railways, the group still looks reasonably priced. Handling close to 90% of the nation’s freight rail traffic are: CSX (CSX) and Norfolk Southern (NSC), Canadian National (CNI), Canadian Pacific (CP) and Kansas City Southern (KSU). The shares of many freight lines look attractively priced considering their double digit growth prospects. John Larkin, a transport analyst with Stifel Nicolaus and other bulls on the street, see some freight stocks climbing 10% to 15% over the next year, and much higher over the long haul. On the passenger side of the business, there are no U.S. railways with publicly traded stocks, but investors can find some intriguing passenger plays among equipment makers like Canada’s Bombardier (BBD.B), which makes locomotives, passenger cars and more, and Pennsylvania-based Wabtec (WAB), which makes brake systems for railroad and mass-transit markets.
Jim Cramer’s “Mad Money”
On the one-year anniversary of his now infamous “they know nothing” rant about the Fed and its chairman Ben Bernanke, Cramer reflected on his much publicized plea for help. was meant to avoid exactly what’s happened over the past 12 months. He said the staggering losses in the financial sector could have all been avoided had the Fed only listened and cut rates aggressively. financial stocks have fared only slightly better over the past year than the now defunct Bear Stears, which fell 91.5% from its $118 high after being salvaged by JP Morgan Chase (JPM), include Freddie Mac (FRE) down 86%, Merrill Lynch (MER) down 63%, Washington Mutual (WM) down 85%, Lehman Brothers (LEH) down 69%, and Citigroup (C) and Wachovia (WB) both down 59%. Next, Cramer once again welcomed Chesapeake Energy (CHK) co-founder, chair/CEO Aubrey McClendon to discuss his recent trip to Washington, DC and the future of the oil and energy industries. McClendon said his talks with members of Congress focused around moving more of U.S. transportation to cleaner burning natural gas in efforts to both help the environment and rely less on higher-priced, foreign oil. Natural gas has the potential to solve both America’s energy and environmental needs, said McClendon. Cramer again offered his support and recommendation of both McClendon and Chesapeake Energy. For “Speculation Friday” Cramer recommended Fuel Systems (FSYS) as another way to play what he’s deemed “the year of natural gas.” The company makes fuel systems technology that allows forklifts and other industrial and commercial vehicles to run on natural gas. In addition to Fuel Systems, Cramer mentioned Canadian-based Westport Innovations, which is set to launch an IPO on the Nasdaq in the coming months, as well as Clean Energy (CLNE), as two more natural gas stocks to consider. LIGHTNING ROUND (Bullish) APA; GHM; ETR; EXC; ED; PDE. (Bearish) KEY; HHS.
Fast Money position recap- First Moves: Jeff says sell XLF, Karen likes RIG long, Tim likes ERJ.
Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Macke Owns (COST), (MSFT), (EMC), (WMT); Finerman Owns (GS); Finerman’s Firm Owns (MSFT), (SUN), (TSO), (VLO), (RIG); Finerman’s Firm And Finerman Own (C) Leaps; Finerman’s Firm Is Short (XLF), (BBT), (COF), (IYR), (IJR), (MDY), (SPY), (IWM); Seymour Owns (AAPL), (CSCO), (F), (INTC), (MER), (MSFT); Seygem Asset Management Is Short (FXI), (VIP).
(Important note on how to use this upgrade/downgrade list with analyst comments and news….you must parse out the factual data (Factual data is the most important) from the opinionated data and always take all analyst comments with a grain of salt. Do not follow blindly with their recommendations. Remember that technicals are the most powerful force in short term direction for stock prices due to the law of supply and demand.)
The market is smack dab in the middle of its recent trading range and I don’t really think it will move much before the Fed meeting tomorrow. Watching for weakness in shippers due to overseas weak action on shippers and a drop in the Baltic Dry Index. Watching my Optiondragon Leading Indicator Basket (LIB) for market direction. LIB= dollar (UUP)+ price of oil (inverse related USO)+ XLF + GS(brokers) + FNM. Pick plays with a high probability of success, have focus and patience, run technicals through supply and demand. Great Luck and HappyTrading!
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