Gold will finish another year in positive ground, as gold prices today soared on the ongoing story of the weak U.S. dollar and other weak world currencies.
With quantitative easing in the U.S. ramping up again heading into 2011, that will continue to pressure the dollar and when banks really start lending again, will result in major inflation.
The sovereign debt crisis in Europe continues to weigh on the global economy, which has actually helped the U.S. dollar as the euro falls every time focus from the financial press zeros in on the extraordinary threat looming there.
Silver also continues to move up in percentage against gold, as investors migrate there as an alternative investment to gold as gold prices continue to rise.
This will be the tenth straight annual gain for gold, and that string shouldn't end over the next couple of years, and definitely won't in 2011.
Gold futures for February delivery rose to $1,418.60 an ounce on the Comex in New York as of 12:07 PM EST. Spot gold climbed to $1,418.70, up $14.60.
Silver futures for March delivery increased by 37.7 cents, or 1.2 percent, to $30.89 an ounce. Spot silver was trading at $30.90, up 0.44.
Gold and Silver Companies today:
Barrick Gold (NYSE:ABX) was trading at $53.22, up $0.62, or 1.18 percent, as of 12:42 PM EST.
Goldcorp (NYSE:GG) was at $45.89, up $0.61, or 1.35 percent.
Newmont Mining (NYSE:NEM) was at $61.57, gaining $0.49, or 0.80 percent.
Eldorado Gold (NYSE:EGO) was up to $18.67, rising by $0.13, or 0.70 percent.
Gammon Gold (NYSE:GRS) was trading at $8.23, up $0.27, or 3.39 percent.
Silver Companies
Silver Wheaton (NYSE:SLW) was trading at $39.13, up $1.26, or 3.33 percent.
Mag Silver (AMEX:MVG) was at $12.45, up $0.07, or 0.57 percent.
Hecla Mining (NYSE:HL) was at $11.35, gaining $0.22, or 1.98 percent.
Pan American Silver (Nasdaq:PAAS) rose to $41.57, increasing by $0.58, or 1.41 percent.
Silver Standard Resources (Nasdaq:SSRI) was at $28.24, up $0.21, or 0.75 percent.
Friday, December 31, 2010
Las Vegas Sands (NYSE:LVS), Wynn (Nasdaq:WYNN) Up on UBS (NYSE:UBS) Comments on Macau
UBS (NYSE:UBS) reports on record revenue from the Macau gaming market has shares of Las Vegas Sands (NYSE:LVS) and Wynn (Nasdaq:WYNN) soaring today.
For the month of December, UBS sees sales coming in at at a range of $2.31-$2.37 billion. That is close to record sales set in October.
For full year, UBS estimates revenue to have grown by 63 percent to 67 percent year-over-year.
UBS estimates revenue in the fourth quarter to be up over 50 percent over last year, and 15 percent over the previous quarter.
Their top picks in the area are Galaxy and Wynn Macau.
UBS maintains a "Neutral" rating on Las Vegas Sands, which was trading at $45.79, up $1.41, or 3.18 percent, as of 12:27 PM EST. UBS has a price target of $55 on the Sands.
They reiterate their "Buy" rating on Wynn Resorts, which was trading at $103.21, up $1.50, or 1.47 percent, as of 12:27 PM EST. UBS has a price target of $133 on Wynn Resorts.
For the month of December, UBS sees sales coming in at at a range of $2.31-$2.37 billion. That is close to record sales set in October.
For full year, UBS estimates revenue to have grown by 63 percent to 67 percent year-over-year.
UBS estimates revenue in the fourth quarter to be up over 50 percent over last year, and 15 percent over the previous quarter.
Their top picks in the area are Galaxy and Wynn Macau.
UBS maintains a "Neutral" rating on Las Vegas Sands, which was trading at $45.79, up $1.41, or 3.18 percent, as of 12:27 PM EST. UBS has a price target of $55 on the Sands.
They reiterate their "Buy" rating on Wynn Resorts, which was trading at $103.21, up $1.50, or 1.47 percent, as of 12:27 PM EST. UBS has a price target of $133 on Wynn Resorts.
Apple (NASDAQ:AAPL) To Remain King of Tablets, Google (NASDAQ:GOOG), Samsung, Heating Things Up
Heading into 2011, there's no doubt Apple (NASDAQ:AAPL) will remain king of the tablet market, with pretty much every analyst seeing them selling an extraordinary number of units next year.
The overall tablet market is expected to triple, with Google Inc.'s (NASDAQ:GOOG) Android a major competing platform and
and Samsung's Galaxy Tab considered the first major competitor to the iPad.
Justified or not, Research in Motion's (NASDAQ:RIMM) Playbook isn't generating a lot of excitement, and is expected to sell under 2 million units in 2011.
The latest projections, this time from Caris & Co. analyst Robert Cihra, sees Apple selling 36 million iPads next year. The Galaxy Tab is projected to sell about 8 million units.
Cihra adds that half the tablets sold will probably cannibalize PC sales, while netbooks should drop by about 7 percent in 2011.
He sees Apple holding about 67 percent of tablet market share next year.
It probably won't be until 2012 when competitors start to nibble away at Apple's tablet share, as more entries flood the market.
The overall tablet market is expected to triple, with Google Inc.'s (NASDAQ:GOOG) Android a major competing platform and
and Samsung's Galaxy Tab considered the first major competitor to the iPad.
Justified or not, Research in Motion's (NASDAQ:RIMM) Playbook isn't generating a lot of excitement, and is expected to sell under 2 million units in 2011.
The latest projections, this time from Caris & Co. analyst Robert Cihra, sees Apple selling 36 million iPads next year. The Galaxy Tab is projected to sell about 8 million units.
Cihra adds that half the tablets sold will probably cannibalize PC sales, while netbooks should drop by about 7 percent in 2011.
He sees Apple holding about 67 percent of tablet market share next year.
It probably won't be until 2012 when competitors start to nibble away at Apple's tablet share, as more entries flood the market.
IMAX (Nasdaq: IMAX) Soars on Sony (NYSE:SNE) Takeover Rumors
The Daily Mail in the UK has been the source of several major rumors lately, and the latest is the assertion IMAX (Nasdaq:IMAX) may be taken over by Sony (NYSE:SNE).
All of this is built upon speculation rather than sources, as the Daily Mail said "whispers" on the Street generated the story.
But when you dig into the matter, it's highly unlikely the bid would be made based on antitrust rules which don't allow theater chains to be owned by movie studios.
Technically in some cases it may work out though, as IMAX does license its theaters, meaning they may not be considered a chain.
Other challenges to the deal would be whether or not other studios would allow their content to go to an Sony-owned IMAX.
It will be surprising if the rumors turn out to be true, but even if they are, it would be an uphill climb to make the deal happen.
Sony was trading at $35.74, up $0.17, or 0.48 percent, as of 11:58 AM EST. IMAX was trading at $30.90, gaining $4.04, or 15.04 percent.
All of this is built upon speculation rather than sources, as the Daily Mail said "whispers" on the Street generated the story.
But when you dig into the matter, it's highly unlikely the bid would be made based on antitrust rules which don't allow theater chains to be owned by movie studios.
Technically in some cases it may work out though, as IMAX does license its theaters, meaning they may not be considered a chain.
Other challenges to the deal would be whether or not other studios would allow their content to go to an Sony-owned IMAX.
It will be surprising if the rumors turn out to be true, but even if they are, it would be an uphill climb to make the deal happen.
Sony was trading at $35.74, up $0.17, or 0.48 percent, as of 11:58 AM EST. IMAX was trading at $30.90, gaining $4.04, or 15.04 percent.
BJ's (NYSE:BJ) Still Moving Up on Jo-Ann Stores (NYSE:JAS) Bid, Rumors
Expectations there could be a competing bid form Leonard Green for
BJ's Wholesale Club (NYSE:BJ) after Jo-Ann Stores (NYSE:JAS) bid, continues to push the share price of BJ's up, as they've gained over 9 percent in the last couple of trading sessions.
BJ's was trading at about $42 a share in November on initial rumors someone was interested in acquiring them, and have continued to gradually move up after the Jo-Ann bid.
Analysts watching the story believe if there is another bid it would come in at about $55 a share.
BJ's closed Thursday at $48.55, gaining $0.93, or 1.95 percent. Jo-Ann closed at $60.18, down $0.04, or 0.07 percent.
BJ's Wholesale Club (NYSE:BJ) after Jo-Ann Stores (NYSE:JAS) bid, continues to push the share price of BJ's up, as they've gained over 9 percent in the last couple of trading sessions.
BJ's was trading at about $42 a share in November on initial rumors someone was interested in acquiring them, and have continued to gradually move up after the Jo-Ann bid.
Analysts watching the story believe if there is another bid it would come in at about $55 a share.
BJ's closed Thursday at $48.55, gaining $0.93, or 1.95 percent. Jo-Ann closed at $60.18, down $0.04, or 0.07 percent.
Wells Fargo (NYSE:WFC) Upbeat on Intel (NASDAQ:INTC)
Most of the market isn't too impressed with Intel (NASDAQ:INTC), but Wells Fargo (NYSE:WFC), while not bullish on them, does see them holding their own heading into 2011.
Other analysts see Intel's EPS dropping, while Wells' analyst David Wong believes it as going to be more flat, coming in at about $2 a share.
Wong noted the soon release of Sandy Bridge processors for PC and Servers as a catalyst, and also its Oaktrail processors, which will be placed in Microsoft (NASDAQ:MSFT) Windows and further on for devices running Google's (NASDAQ:GOOG) Android.
In the future they also have their Atom chip and Meego OS which they've been working with Nokia (NYSE:NOK) on.
Wells maintains their "Top Pick" on Intel, which closed Thursday at $21.02, up $0.08, or 0.38 percent. Wong has a valuation range of $24 to $30 on the chip company.
Other analysts see Intel's EPS dropping, while Wells' analyst David Wong believes it as going to be more flat, coming in at about $2 a share.
Wong noted the soon release of Sandy Bridge processors for PC and Servers as a catalyst, and also its Oaktrail processors, which will be placed in Microsoft (NASDAQ:MSFT) Windows and further on for devices running Google's (NASDAQ:GOOG) Android.
In the future they also have their Atom chip and Meego OS which they've been working with Nokia (NYSE:NOK) on.
Wells maintains their "Top Pick" on Intel, which closed Thursday at $21.02, up $0.08, or 0.38 percent. Wong has a valuation range of $24 to $30 on the chip company.
Douglas Dynamics (NYSE:PLOW) Benefiting from Recent Snow
The enormous amount of snow in the Northeast and Midwest of the United States has been a boon for Douglas Dynamics (NYSE:PLOW), which has resulted in increased order for the company, which develops snow and ice control equipment for small trucks in the North American market.
Oppenheimer said the boost in sales won't have an impact on the full year 2010 earnings of the company, but will help Douglas Dynamics in 2011.
They raised their EPS estimates on Douglas Dynamics for full year 2011 from $1.05 to $1.10, and for full year 2012 from $1.10 to $1.15.
Oppenheimer reiterates an "Outperform" rating on Douglas, which closed Thursday at $15.62, up $0.13, or 0.84 percent. They their price target on them from $17 to $18.
A recent boost in their dividend to 20 cents also points to confidence in their future.
Oppenheimer said the boost in sales won't have an impact on the full year 2010 earnings of the company, but will help Douglas Dynamics in 2011.
They raised their EPS estimates on Douglas Dynamics for full year 2011 from $1.05 to $1.10, and for full year 2012 from $1.10 to $1.15.
Oppenheimer reiterates an "Outperform" rating on Douglas, which closed Thursday at $15.62, up $0.13, or 0.84 percent. They their price target on them from $17 to $18.
A recent boost in their dividend to 20 cents also points to confidence in their future.
IPC The Hospitalist Company (NASDAQ:IPCM) Shares Should Appreciate in 2011
The market has overall liked IPC The Hospitalist Company (NASDAQ:IPCM) over the last several months, and their acquisition of Hospital Inpatient Management Services (HIMS) has added another feather in their cap.
Dougherty noted, "IPCM announced that it has acquired Midwest Hospital Specialists PA, Midwest Hospital Care LLC, and Peterson Management Co. (PMC), collectively known as Hospital Inpatient Management Services (HIMS)...We continue to expect IPCM shares to appreciate solidly going forward. As a result of this acquisition, continued strong execution of their core business and our revised outlook for 2011, we are raising our price target..."
Dougherty & Co keeps their "Buy" rating on IPC The Hospitalist Company, which closed Thursday at $39.58, gaining $0.87, or 2.25 percent. They raised their price target on IPC from $42 to $45.
Dougherty noted, "IPCM announced that it has acquired Midwest Hospital Specialists PA, Midwest Hospital Care LLC, and Peterson Management Co. (PMC), collectively known as Hospital Inpatient Management Services (HIMS)...We continue to expect IPCM shares to appreciate solidly going forward. As a result of this acquisition, continued strong execution of their core business and our revised outlook for 2011, we are raising our price target..."
Dougherty & Co keeps their "Buy" rating on IPC The Hospitalist Company, which closed Thursday at $39.58, gaining $0.87, or 2.25 percent. They raised their price target on IPC from $42 to $45.
JPMorgan (NYSE:JPM) Chased by Deutsche Bank (NYSE:DB) for NO. 1 in Bond Underwriting
JPMorgan's (NYSE:JPM) dominance in bond underwriting is being challenged by Deutsche Bank AG (NYSE:DB), which has steadily climbed in the rankings to end in the No. 2 spot globally.
JPMorgan took over the perennial bond underwriting champion Citigroup (NYSE:C) when they faltered in the banking crisis.
For 2010, JPMorgan underwrote $212 billion in bonds while Deutsche underwrote $176 billion. JPMorgan accounted for 6.7 percent of the global bond underwriting market while Deustche accounted for 5.5 percent.
Behind the top two was Bank of America (NYSE:BAC), which underwrote $173 billion in bonds, a 5.4 percent share of the global market.
JPMorgan and Deutsche Bank believe the corporate bond market will soar in 2011, especially after clarification of new bank capital rules happens.
Deutsche Bank closed Thursday at $51.73, down $0.36, or 0.69 percent. JPMorgan closed at $42.23, down $0.13, or 0.31 percent.
JPMorgan took over the perennial bond underwriting champion Citigroup (NYSE:C) when they faltered in the banking crisis.
For 2010, JPMorgan underwrote $212 billion in bonds while Deutsche underwrote $176 billion. JPMorgan accounted for 6.7 percent of the global bond underwriting market while Deustche accounted for 5.5 percent.
Behind the top two was Bank of America (NYSE:BAC), which underwrote $173 billion in bonds, a 5.4 percent share of the global market.
JPMorgan and Deutsche Bank believe the corporate bond market will soar in 2011, especially after clarification of new bank capital rules happens.
Deutsche Bank closed Thursday at $51.73, down $0.36, or 0.69 percent. JPMorgan closed at $42.23, down $0.13, or 0.31 percent.
Global Payments (NYSE:GPN) Has Room for Improvement
Susquehanna says they like some of the things happening with Global Payments (NYSE:GPN), but also feel they have a lot of room for improvement, and could to well if they execute.
They said the company shares have risen on "the launch of Chinese RMB processing, a winning merchant acquiring with la Caixa Spain, and select M&A among peers."
The full year 2011 EPS estimate on the company stands at $2.75.
Susquehanna reiterates a "Positive Rating" on Global Payments, which closed Thursday at $46.64, up $0.43, or 0.93 percent. They raised their price target on them from $47 to $55.
They said the company shares have risen on "the launch of Chinese RMB processing, a winning merchant acquiring with la Caixa Spain, and select M&A among peers."
The full year 2011 EPS estimate on the company stands at $2.75.
Susquehanna reiterates a "Positive Rating" on Global Payments, which closed Thursday at $46.64, up $0.43, or 0.93 percent. They raised their price target on them from $47 to $55.
Vision China Media (Nasdaq:VISN), Corinthian (Nasdaq:COCO), MBIA (NYSE:MBI), Anadarko (NYSE:APC) Among Top Movers Thursday
Vision China Media (Nasdaq:VISN), Corinthian Colleges Inc. (Nasdaq:COCO), MBIA (NYSE:MBI) and Anadarko Petroleum Corp. (NYSE:APC) were among the top movers Thursday.
Vision China Media soared on the news they were selling 15.3 million common shares to Hong Kong-based Focus Media Holding Ltd. for $61 million.
Corinthian Colleges Inc. got a 9.3 percent boost, probably a rebound from the 62 percent plunge they've went through in 2010 on fears over the effects of possible government regulation.
MBIA jumped 15 percent on news JPMorgan (NYSE:JPM) and Barclays (NYSE:BCS) withdrew from a lawsuit which challenged the restructuring plan of the company which separated their structured finance businesses from its municipal bond business. There are still over a dozen financial institutions suing them, although some seem to think this could result in others withdrawing as well.
For Anadarko Petroleum Corp., they jumped because of the unsubstantiated rumor BHP Billiton (NYSE:BHP) had made a $90 a share offer for the company, although the story from the Daily Mail didn't identify their sources.
Corinthian Colleges Inc. closed Thursday at $5.18, gaining $0.44, or 9.28 percent. Anadarko Petroleum Corp. closed at $75.59, gaining $4.86, or 6.87 percent. MBIA ended the session at $11.87, up $1.51, or 14.58 percent. Vision China Media closed trading at $4.67, up $0.80, or 20.67 percent.
Vision China Media soared on the news they were selling 15.3 million common shares to Hong Kong-based Focus Media Holding Ltd. for $61 million.
Corinthian Colleges Inc. got a 9.3 percent boost, probably a rebound from the 62 percent plunge they've went through in 2010 on fears over the effects of possible government regulation.
MBIA jumped 15 percent on news JPMorgan (NYSE:JPM) and Barclays (NYSE:BCS) withdrew from a lawsuit which challenged the restructuring plan of the company which separated their structured finance businesses from its municipal bond business. There are still over a dozen financial institutions suing them, although some seem to think this could result in others withdrawing as well.
For Anadarko Petroleum Corp., they jumped because of the unsubstantiated rumor BHP Billiton (NYSE:BHP) had made a $90 a share offer for the company, although the story from the Daily Mail didn't identify their sources.
Corinthian Colleges Inc. closed Thursday at $5.18, gaining $0.44, or 9.28 percent. Anadarko Petroleum Corp. closed at $75.59, gaining $4.86, or 6.87 percent. MBIA ended the session at $11.87, up $1.51, or 14.58 percent. Vision China Media closed trading at $4.67, up $0.80, or 20.67 percent.
PNM Resources' (NYSE:PNM) Shares Expensive Says Jefferies (NYSE:JEF)
Based on the electric rate filing of PNM Resources (NYSE:PNM) in New Mexico, Jefferies (NYSE:JEF) says the share price of the company is expensive at this time.
Jefferies explained saying the earning exposure connected to the filing is behind their reasoning.
Concerning the negotiations with the NMPRC staff and the Attorney General, PNM believes they may be able to reach a settlement by January 20, 2011, as they've gone back to the table.
EPS estimates for the full year 2010 were raised from $0.90 to $0.95.
Jefferies maintains an "Overweight" rating on PNM Resources, which closed Thursday at $13.21, the same as the prior close.
Jefferies explained saying the earning exposure connected to the filing is behind their reasoning.
Concerning the negotiations with the NMPRC staff and the Attorney General, PNM believes they may be able to reach a settlement by January 20, 2011, as they've gone back to the table.
EPS estimates for the full year 2010 were raised from $0.90 to $0.95.
Jefferies maintains an "Overweight" rating on PNM Resources, which closed Thursday at $13.21, the same as the prior close.
Citigroup (NYSE:C), Home Depot (NYSE:HD), Limited (NYSE:LTD), Oppose Credit Card Plan
The usual unitended consequences of government interference in the market place has emerged with the signing into law of the Credit Card Act. Companies like Citigroup (NYSE:C), Home Depot (NYSE:HD) and Limited Brands (NYSE:LTD), among others, oppose the regulation which was recently amended.
Originally meant to protect college students, it now will have a significant impact on stay-at-home moms.
The problem centers around the requirement that credit-card issuers can only make a decision based on the independent income of the borrower, instead of the overall household income.
Citigroup opposed the measure because it issues store cards to Home Depot and other retail outlets, and would have a significant impact on their revenue.
Citigroup's deputy general counsel Carl Howard said, "The proposed amendments regarding use of household income are not warranted, will harm consumers, and should not be adopted."
The initiative was actually added to the original regulation after it was put in place.
The Federal Reserve is soliciting comments on the issue until Monday, January 3.
Originally meant to protect college students, it now will have a significant impact on stay-at-home moms.
The problem centers around the requirement that credit-card issuers can only make a decision based on the independent income of the borrower, instead of the overall household income.
Citigroup opposed the measure because it issues store cards to Home Depot and other retail outlets, and would have a significant impact on their revenue.
Citigroup's deputy general counsel Carl Howard said, "The proposed amendments regarding use of household income are not warranted, will harm consumers, and should not be adopted."
The initiative was actually added to the original regulation after it was put in place.
The Federal Reserve is soliciting comments on the issue until Monday, January 3.
Public Service Enterprise (NYSE:PEG) EPS Estimates Raised on Better Results
With the cold weather helping to generate better results for Public Service Enterprise Group Inc. (NYSE:PEG), Jefferies (NYSE:JEF) has increased their fourth quarter and fully year 2010 EPS estimates on the utility.
For the fourth quarter they raised their estimates from $0.55 to $0.65, and for full year 2010 from $3.10 to $3.20.
Public Service Enterprise hasn't provided guidance for full year 2011 and full year 2012, so Jefferies maintains their current EPS estimates on them for those years at this time.
For full year 2013, they initiated an EPS estimate on them of $3.15.
Public Services Enterprise closed Thursday at $31.39, gaining $0.03, or 0.11 percent. Jefferies has a price target of $37.50 on the utility.
For the fourth quarter they raised their estimates from $0.55 to $0.65, and for full year 2010 from $3.10 to $3.20.
Public Service Enterprise hasn't provided guidance for full year 2011 and full year 2012, so Jefferies maintains their current EPS estimates on them for those years at this time.
For full year 2013, they initiated an EPS estimate on them of $3.15.
Public Services Enterprise closed Thursday at $31.39, gaining $0.03, or 0.11 percent. Jefferies has a price target of $37.50 on the utility.
Does UBS Have GM (NYSE:GM) Right? Bearish Outlook
It seems almost everyone has joined the bullish outlook on General Motors (NYSE:GM), even though there is very little within the company or the overall economy to justify so much optimism.
UBS (NYSE:UBS) appears to have a much more realistic outlook on GM, who they say has very little in terms of catalysts in the near term.
Part of the problem is the bias many of the companies have toward GM because they helped underwrite the IPO. The fact that they gave such a bullish outlook the day they were released to do it is suspect at minimum.
UBS noted these factors in their GM outlook: 1) cautious Q4 guidance; 2) a weak North American product launch schedule; 3) full-pension re-measurement at year end; 4) aggressive breakeven targets in Europe; and 5) slowing growth in China cause us to believe GM lacks near-term catalysts required to move the stock.
UBS has basically said that GM will miss EPS in their first report after going public again, and more than likely the share price will get hammered because of the unjustified optimism. That could in fact be the time to take a serious look at the company.
UBS maintains a "Neutral" rating on GM, which closed Thursday at $36.82, up $0.80, or 2.22 percent. UBS has a price target on GM of $37 a share.
UBS (NYSE:UBS) appears to have a much more realistic outlook on GM, who they say has very little in terms of catalysts in the near term.
Part of the problem is the bias many of the companies have toward GM because they helped underwrite the IPO. The fact that they gave such a bullish outlook the day they were released to do it is suspect at minimum.
UBS noted these factors in their GM outlook: 1) cautious Q4 guidance; 2) a weak North American product launch schedule; 3) full-pension re-measurement at year end; 4) aggressive breakeven targets in Europe; and 5) slowing growth in China cause us to believe GM lacks near-term catalysts required to move the stock.
UBS has basically said that GM will miss EPS in their first report after going public again, and more than likely the share price will get hammered because of the unjustified optimism. That could in fact be the time to take a serious look at the company.
UBS maintains a "Neutral" rating on GM, which closed Thursday at $36.82, up $0.80, or 2.22 percent. UBS has a price target on GM of $37 a share.
ADTRAN (NASDAQ:ADTN) Driven by New Product Categories
After several years of flat sales, GARP Research says ADTRAN (NASDAQ:ADTN) has turned things around in 2010, and are poised to grow as three new product categories shore up the company and its mature products.
GARP said, "After four years of flat sales, 2010 marks an exciting inflection point for ADTRAN. Three new product categories, Broadband Access, Optical Access, and Internetworking, are now meaningfully offsetting a secular decline in the firm’s mature products which represented nearly half its sales in 2009, down from 70% in 2005. We think the US is on the cusp of a multi-year infrastructure upgrade, which will phase out voice-based platforms designed two decades ago and usher in new Ethernet enabled equipment optimized to carry data and video traffic. ADTRAN’s TA5000 multi-service broadband access platform sits at the forefront of this trend.
"ADTRAN typically prices its products at substantial discounts to its large peers—up to 30% in some cases. Remarkably, this has not hurt profitability and its 20%+operating margin is about twice its rivals and rising. Despite this fundamental momentum and a commendable run in 2010, ADTN trades at under 16x our 2011 EPS estimate, and under 12x our 2013 estimate ex. $5.75/sh net cash."
GARP Research maintains a "Buy" rating on ADTRAN, which closed Thursday at $36.38, up $0.17, or 0.47 percent.
GARP said, "After four years of flat sales, 2010 marks an exciting inflection point for ADTRAN. Three new product categories, Broadband Access, Optical Access, and Internetworking, are now meaningfully offsetting a secular decline in the firm’s mature products which represented nearly half its sales in 2009, down from 70% in 2005. We think the US is on the cusp of a multi-year infrastructure upgrade, which will phase out voice-based platforms designed two decades ago and usher in new Ethernet enabled equipment optimized to carry data and video traffic. ADTRAN’s TA5000 multi-service broadband access platform sits at the forefront of this trend.
"ADTRAN typically prices its products at substantial discounts to its large peers—up to 30% in some cases. Remarkably, this has not hurt profitability and its 20%+operating margin is about twice its rivals and rising. Despite this fundamental momentum and a commendable run in 2010, ADTN trades at under 16x our 2011 EPS estimate, and under 12x our 2013 estimate ex. $5.75/sh net cash."
GARP Research maintains a "Buy" rating on ADTRAN, which closed Thursday at $36.38, up $0.17, or 0.47 percent.
Thursday, December 30, 2010
Bank of America's (NYSE:BAC) Lehman Order Amended by Judge
In an amendment of a Bank of America (NYSE:BAC) order to pay $590 million to Lehman Brothers, from U.S. Bankruptcy Judge James Peck, he said the judgement he made now isn't final.
Peck said “the judgment is hereby deemed not to be a final judgment.”
The $590 million judgement was to pay compensation for deposits taken by Bank of America.
Peck said the taking of the $500 million in deposits violated bankruptcy law. The extra $90 million was interest added to the amount.
Bank of America appealed the ruling, saying it “has established a substantial possibility of success on appeal,” citing banking law. They withdrew the appeal recently, while reserving the right to reinstate it at a later time.
Bank of America was trading at $13.29, down $0.02, or 0.15 percent, as of 2:45 PM EST.
Peck said “the judgment is hereby deemed not to be a final judgment.”
The $590 million judgement was to pay compensation for deposits taken by Bank of America.
Peck said the taking of the $500 million in deposits violated bankruptcy law. The extra $90 million was interest added to the amount.
Bank of America appealed the ruling, saying it “has established a substantial possibility of success on appeal,” citing banking law. They withdrew the appeal recently, while reserving the right to reinstate it at a later time.
Bank of America was trading at $13.29, down $0.02, or 0.15 percent, as of 2:45 PM EST.
Ford Motor (NYSE:F) Recalling More Vehicles
The American auto industry seems to be shooting itself in the foot as numerous recalls continue to weigh on them at a time when they had an opportunity to make some inroads in market share with their competitors. Ford (NYSE:F) again has to recall vehicles.
Included in this recall are approximately 15,000 vehicles, which include 2011 Louisville-made F-250, F-350, F-450 and F-550 models.
Other models being recalled are 2011 Lincoln MKX cross-over vehicles and F-150 trucks.
The problem stems from body control modules from a supplier that could result in an internal electrical short which could start a fire.
The U.S. National Highway Traffic Safety Administration said owners of the vehicles will be officially notified beginning on January 10.
Ford will replace the module at no cost to the owners.
Included in this recall are approximately 15,000 vehicles, which include 2011 Louisville-made F-250, F-350, F-450 and F-550 models.
Other models being recalled are 2011 Lincoln MKX cross-over vehicles and F-150 trucks.
The problem stems from body control modules from a supplier that could result in an internal electrical short which could start a fire.
The U.S. National Highway Traffic Safety Administration said owners of the vehicles will be officially notified beginning on January 10.
Ford will replace the module at no cost to the owners.
Anadarko Petroleum (NYSE:APC) Up on BHP (NYSE:BHP) Bid
Anadarko Petroleum (NYSE:APC) has reportedly received a $90 bid from BHP Billiton (NYSE:BHP), pushing the share price of the company up on the day, rising by over 6 percent.
The Daily Mail reported the bid, although they didn't reveal the source of the story.
BHP has been under pressure from shareholders for some time to generate growth through acquisition, as organic growth, while steady and consistent, isn't moving the share price as they want, although BHP has made a nice move since June of 2010, when they dropped to an annual low.
The size of BHP keeps it from being able to buy smaller companies in order to move their numbers.
Anadarko is a good choice for BHP, although uncertainty about their liability in the BP (NYSE:BP) oil spill still weighs on the company, which has a 25 percent stake in the oil well involved.
BHP was trading at $92.77, down $0.03, or 0.03 percent, as of 1:55 PM EST. Anadarko was trading at $75.49, up $4.76, or 6.73 percent.
The Daily Mail reported the bid, although they didn't reveal the source of the story.
BHP has been under pressure from shareholders for some time to generate growth through acquisition, as organic growth, while steady and consistent, isn't moving the share price as they want, although BHP has made a nice move since June of 2010, when they dropped to an annual low.
The size of BHP keeps it from being able to buy smaller companies in order to move their numbers.
Anadarko is a good choice for BHP, although uncertainty about their liability in the BP (NYSE:BP) oil spill still weighs on the company, which has a 25 percent stake in the oil well involved.
BHP was trading at $92.77, down $0.03, or 0.03 percent, as of 1:55 PM EST. Anadarko was trading at $75.49, up $4.76, or 6.73 percent.
Pfizer's (NYSE:PFE) Acquisition of Synbiotics a Good One?
Yesterday Pfizer (NYSE:PFE) announced they had acquired Synbiotics, a move by them into the veterinary immunodiagnostics business.
Over the last three quarters, the animal-health division of Pfizer has generated about 5 percent of revenue for the company; not a small amount, as if were measured as a drug, it would only be behind Lipitor as a revenue generator.
It appears this is a move to build a foundation toward building out more diagnostic products for animals.
In the short term this won't do too much, as the overall animal-health industry is growing at about a 4 percent rate.
What it does over the long term though is provide a revenue stream base in one segment of the company that can be counted on to be predictable.
Drugs for humans are volatile and uncertain, and last only as long as the patents. Drug pipelines are also unpredictable, as numerous failed clinical trials have revealed.
This is a good move by Pfizer which should pay long term dividends to the company and its shareholders, although Merck (NYSE:MRK) and Sanofi-Aventis (NYSE:SNY) have also seen the need for more stability in some of their segments, and are moving toward animal-health as well.
Pfizer was trading at $17.53, down $0.07, or 0.40 percent, as of 1:38 PM EST.
Over the last three quarters, the animal-health division of Pfizer has generated about 5 percent of revenue for the company; not a small amount, as if were measured as a drug, it would only be behind Lipitor as a revenue generator.
It appears this is a move to build a foundation toward building out more diagnostic products for animals.
In the short term this won't do too much, as the overall animal-health industry is growing at about a 4 percent rate.
What it does over the long term though is provide a revenue stream base in one segment of the company that can be counted on to be predictable.
Drugs for humans are volatile and uncertain, and last only as long as the patents. Drug pipelines are also unpredictable, as numerous failed clinical trials have revealed.
This is a good move by Pfizer which should pay long term dividends to the company and its shareholders, although Merck (NYSE:MRK) and Sanofi-Aventis (NYSE:SNY) have also seen the need for more stability in some of their segments, and are moving toward animal-health as well.
Pfizer was trading at $17.53, down $0.07, or 0.40 percent, as of 1:38 PM EST.
Hewlett-Packard (NYSE:HPQ), IBM (NYSE:IBM), Amazon.com (NASDAQ:AMZN), EMC (NYSE:EMC), Cisco Systems (NASDAQ:CSCO) Ending Year with Whimper
Not unexpectedly, tech stocks like Hewlett-Packard (NYSE:HPQ), IBM (NYSE:IBM), Amazon.com (NASDAQ:AMZN), EMC (NYSE:EMC), Cisco Systems (NASDAQ:CSCO) are ending the year with a whimper, as many traders have already closed their books and are looking ahead to the New Year.
Most aren't even considering economic news of any sort in their trading at this time, as they're not trading, as the volumes in the stocks listed above, and most other stocks as well, confirm.
Competing news data released on manufacturing in China and the United States pretty much cancelled each other out, as China was lower than expected and the U.S. numbers were better than expected, although China would have to be considered the most important because of the size of their manufacturing base.
The question for the tech industry is whether it can even come close to the double-digit performance it had this year, and many macro-economic factors continue to appear weak and challenging going forward.
There is also the fact that many companies had pent up tech needs as things got a little better in the second half of 2010, which they may have largely spent on, suggesting a possible tech slowdown in 2011.
Cisco Systems was trading at $20.24, down $0.02, or 0.07 percent, as of 1:12 PM EST. EMC was trading at $22.89, down $0.05, or 0.20 percent. IBM was at $146.50, down $0.02, or 0.01 percent. Hewlett-Packard was at $42.34, up $0.02, or 0.05 percent. Amazon.com was trading at $182.92, down $0.45, or 0.25 percent.
Most aren't even considering economic news of any sort in their trading at this time, as they're not trading, as the volumes in the stocks listed above, and most other stocks as well, confirm.
Competing news data released on manufacturing in China and the United States pretty much cancelled each other out, as China was lower than expected and the U.S. numbers were better than expected, although China would have to be considered the most important because of the size of their manufacturing base.
The question for the tech industry is whether it can even come close to the double-digit performance it had this year, and many macro-economic factors continue to appear weak and challenging going forward.
There is also the fact that many companies had pent up tech needs as things got a little better in the second half of 2010, which they may have largely spent on, suggesting a possible tech slowdown in 2011.
Cisco Systems was trading at $20.24, down $0.02, or 0.07 percent, as of 1:12 PM EST. EMC was trading at $22.89, down $0.05, or 0.20 percent. IBM was at $146.50, down $0.02, or 0.01 percent. Hewlett-Packard was at $42.34, up $0.02, or 0.05 percent. Amazon.com was trading at $182.92, down $0.45, or 0.25 percent.
Research In Motion (Nasdaq:RIMM) Denies Battery Claim
Recently a Kaufman analyst reported the battery life of their Playbook only lasted up to 4 hours, an assertion Research In Motion (Nasdaq:RIMM) has come out and denied.
RIM said testing would have been performed on a pre-beta unit, which didn't include the power management device installed and would have ended with different results.
“Any testing of battery life to date by anyone outside of RIM would have been performed using pre-beta units that were built without power management implemented,” RIM said in a statement. “RIM is on track with its schedule to optimize the BlackBerry PlayBook’s battery life and looks forward to providing customers with a professional grade tablet that offers superior performance with comparable battery life.”
We'll see if that has changed any of the story that claimed the release of Playbook would have to be pushed back in order to improve the battery. If it wasn't a problem than release should be close to being on schedule.
Research In Motion was trading at $57.94, down $0.23, or 0.40 percent.
RIM said testing would have been performed on a pre-beta unit, which didn't include the power management device installed and would have ended with different results.
“Any testing of battery life to date by anyone outside of RIM would have been performed using pre-beta units that were built without power management implemented,” RIM said in a statement. “RIM is on track with its schedule to optimize the BlackBerry PlayBook’s battery life and looks forward to providing customers with a professional grade tablet that offers superior performance with comparable battery life.”
We'll see if that has changed any of the story that claimed the release of Playbook would have to be pushed back in order to improve the battery. If it wasn't a problem than release should be close to being on schedule.
Research In Motion was trading at $57.94, down $0.23, or 0.40 percent.
XOMA (NASDAQ:XOMA) Gets Bullish Outlook after Share Sales
Wedbush is extremely bullish on XOMA (NASDAQ:XOMA), seeing an upside of 135 percent after they raised about $28.8 million via an At Market (ATM) Issuance.
The sale has been going on since October, but Wedbush said they believe the majority of the sales has come over the last several days when the stock trading in a range of $4.50 and $7.50. The average selling price is estimated at $4.41 a share.
Much of recent investor awareness of the company and its acceleration have come from first quarter 2011 clinical catalysts. The company is up over 100 percent since December 21st.
Along with cash at the end of the year reaching about $36 to $38 million, XOMA also seems to be doing a better job of managing expenses, as the prior burn rate of $15 million a quarter appears to be down to $12 to $14 million.
The major catalyst is the release of top-line three month HbA1c data from the Phase 2a study of XOMA-052 in Type 2 diabetes, which should happen in the early part of January.
After that, the data from the Phase 2b trial should be another catalyst, which will come in the latter part of the first quarter.
Wedbush also said the cash raised should help XOMA negotiate a partnership for XOMA-052
A possible partnership for XOMA-052 and licensing deals are considered the important, probable catalysts of 2011 for XOMA.
Wedbush keeps their "Outperform" rating on XOMA, which was trading at $5.68, gaining $0.58, or 11.37 percent, as of 12:19 PM EST. Wedbush has a price target of $12 on XOMA.
The sale has been going on since October, but Wedbush said they believe the majority of the sales has come over the last several days when the stock trading in a range of $4.50 and $7.50. The average selling price is estimated at $4.41 a share.
Much of recent investor awareness of the company and its acceleration have come from first quarter 2011 clinical catalysts. The company is up over 100 percent since December 21st.
Along with cash at the end of the year reaching about $36 to $38 million, XOMA also seems to be doing a better job of managing expenses, as the prior burn rate of $15 million a quarter appears to be down to $12 to $14 million.
The major catalyst is the release of top-line three month HbA1c data from the Phase 2a study of XOMA-052 in Type 2 diabetes, which should happen in the early part of January.
After that, the data from the Phase 2b trial should be another catalyst, which will come in the latter part of the first quarter.
Wedbush also said the cash raised should help XOMA negotiate a partnership for XOMA-052
A possible partnership for XOMA-052 and licensing deals are considered the important, probable catalysts of 2011 for XOMA.
Wedbush keeps their "Outperform" rating on XOMA, which was trading at $5.68, gaining $0.58, or 11.37 percent, as of 12:19 PM EST. Wedbush has a price target of $12 on XOMA.
National-Oilwell Varco (NYSE:NOV) EPS Estimates, PT Raised on Rig Orders
National-Oilwell Varco (NYSE:NOV) had its price target and EPS estimates raised by Global Hunter Securities on increased rig orders.
Global noted, "We are increasing our price target to $90 and our 2011 and 2012 EPS estimates to $4.47 and $5.20, respectively, up from $3.67 and $4.40. There has been a recent influx of offshore rig orders (24 this quarter alone, which does not include options and the four drillships Ocean Rig, a subsidiary of DryShips Inc. (Nasdaq:DRYS), recently announced expectations to construct), and subsequent discussions with offshore drilling contractors suggests more rig orders will be placed.
"We are now forecasting orders of $1.5 billion this quarter, $5.1 billion in 2011 and $4.0 billion in 2012, which compares to our prior estimate of $600 million, $4.1 billion and $3.6 billion, respectively."
Global Hunter Securities maintains a "Buy" rating on National-Oilwell Varco, which was trading at $66.24, down $0.07, or 0.11 percent, as of 12:02 PM EST. Global raised their price target on them from $68 to $90.
Global noted, "We are increasing our price target to $90 and our 2011 and 2012 EPS estimates to $4.47 and $5.20, respectively, up from $3.67 and $4.40. There has been a recent influx of offshore rig orders (24 this quarter alone, which does not include options and the four drillships Ocean Rig, a subsidiary of DryShips Inc. (Nasdaq:DRYS), recently announced expectations to construct), and subsequent discussions with offshore drilling contractors suggests more rig orders will be placed.
"We are now forecasting orders of $1.5 billion this quarter, $5.1 billion in 2011 and $4.0 billion in 2012, which compares to our prior estimate of $600 million, $4.1 billion and $3.6 billion, respectively."
Global Hunter Securities maintains a "Buy" rating on National-Oilwell Varco, which was trading at $66.24, down $0.07, or 0.11 percent, as of 12:02 PM EST. Global raised their price target on them from $68 to $90.
Netflix (Nasdaq:NFLX), Priceline.com (Nasdaq:PCLN), Coinstar (Nasdaq:CSTR) Top 2011 Online Content Picks of Piper Jaffray
Piper Jaffray released the names of their Top 2011 Online Content Picks, with Netflix (Nasdaq:NFLX), Priceline.com (Nasdaq:PCLN) and Coinstar (Nasdaq:CSTR) their top three.
Piper maintains an "Overweight" rating on Netflix (Nasdaq:NFLX), which was trading at $179.95, down $0.32, or 0.18 percent, as of 11:54 AM EST. They have a price target of $217 on Netflix.
They also have an "Overweight" rating on Priceline.com, which was trading at $404.05, down $1.65, or 0.41 percent. Piper has a price target of $471 on them.
Piper reiterates an "Overweight" on Coinstar, which was trading at $56.05, falling $0.28, or 0.50 percent. They have a price target on them of $74.
Piper maintains an "Overweight" rating on Netflix (Nasdaq:NFLX), which was trading at $179.95, down $0.32, or 0.18 percent, as of 11:54 AM EST. They have a price target of $217 on Netflix.
They also have an "Overweight" rating on Priceline.com, which was trading at $404.05, down $1.65, or 0.41 percent. Piper has a price target of $471 on them.
Piper reiterates an "Overweight" on Coinstar, which was trading at $56.05, falling $0.28, or 0.50 percent. They have a price target on them of $74.
Goldman (NYSE:GS), Morgan Stanley (NYSE:MS) EPS Estimates Lowered by Credit Suisse (NYSE:CS)
Continual volatility in the market and soft fixed income sales were cited by Credit Suisse (NYSE:CS) as the reasons they've lowered their EPS estimates on Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS).
Credit Suisse said Goldman would be affected by the soft fixed income sales and Morgan Stanley with the volatile market.
For Goldman, they lowered their full year 2010 EPS on them from $14.45 to $13.08. That's 41 cents below the $13.49 the Street is looking for.
Morgan Stanley's EPS estimate for the fourth quarter was dropped from 60 cents to 20 cents. For full year 2010, it was lowered from $2.56 to $2.18.
Goldman Sachs was trading at $167.37, down $0.26, or 0.16 percent, as of 11:46 AM EST. Credit Suisse has an "Outperform" rating on Goldman, and a price target of $190.
Morgan Stanley was trading at $27.34, up $0.06, or 0.22 percent. Credit Suisse has an "Outperform" rating on Morgan as well, with a price target of $35.
Credit Suisse said Goldman would be affected by the soft fixed income sales and Morgan Stanley with the volatile market.
For Goldman, they lowered their full year 2010 EPS on them from $14.45 to $13.08. That's 41 cents below the $13.49 the Street is looking for.
Morgan Stanley's EPS estimate for the fourth quarter was dropped from 60 cents to 20 cents. For full year 2010, it was lowered from $2.56 to $2.18.
Goldman Sachs was trading at $167.37, down $0.26, or 0.16 percent, as of 11:46 AM EST. Credit Suisse has an "Outperform" rating on Goldman, and a price target of $190.
Morgan Stanley was trading at $27.34, up $0.06, or 0.22 percent. Credit Suisse has an "Outperform" rating on Morgan as well, with a price target of $35.
MasTec's (NYSE:MTZ) EPS Lowered After Earn-Out Payment
MasTec (NYSE:MTZ) had their EPS estimates lowered after the earn-out payment which diluted the shares.
FBR said, "The company guides and reports GAAP EPS, which is what we provide to FirstCall. Our GAAP EPS estimate for 2010 is unchanged at $0.99, but we are lowering our 2011 estimate to $1.14 (from $1.17) to reflect the dilution of the shares issued for this earn-out payment. However, investors should also note that cash EPS 'after earn-out liabilities' (which are not reflected on the balance sheet, but due upon achievement of certain hurdles) is estimated to be $1.08 in 2010 and $0.93 in 2011. The decline YOY is a function of a $0.22 greater earn-out liability payment in 2010 before this recent agreement."
FBR Capital reiterates an "Outperform" rating on MasTec, which closed Wednesday at $14.54, down $0.14, or 0.95 percent. FBR has a price target of $19 on MasTec.
FBR said, "The company guides and reports GAAP EPS, which is what we provide to FirstCall. Our GAAP EPS estimate for 2010 is unchanged at $0.99, but we are lowering our 2011 estimate to $1.14 (from $1.17) to reflect the dilution of the shares issued for this earn-out payment. However, investors should also note that cash EPS 'after earn-out liabilities' (which are not reflected on the balance sheet, but due upon achievement of certain hurdles) is estimated to be $1.08 in 2010 and $0.93 in 2011. The decline YOY is a function of a $0.22 greater earn-out liability payment in 2010 before this recent agreement."
FBR Capital reiterates an "Outperform" rating on MasTec, which closed Wednesday at $14.54, down $0.14, or 0.95 percent. FBR has a price target of $19 on MasTec.
Amazon's (NASDAQ:AMZN) Kindle Equals Apple's (NASDAQ:AAPL) iPad Sales
Amazon.com (NASDAQ:AMZN) and its popular Kindle e-reader, has been able to match sales with Apple's (NASDAQ:AAPL) iPad in December, with estimated totals for 2010 coming in at 5.4 million Kindle units sold.
Some attempt to attribute this to Apple cutting back on iPad production in order to prepare for the release of its iPad 2.
But the Apple brand, for those who are fans, probably wouldn't be abandoned as easily as it sounds.
It appears rather that Amazon.com has carved out a powerful niche that is able to hold its own against Apple.
Even so, the idea that Kindle will be a large mass market product probably isn't going to be a reality, as numerous digital reading devices and tablets come to market.
Apple's iPad has yet to experience serious competition in its space either, but it's only a matter of time before a legitimate competitor emerges, although Apple does have a head start on them.
Some attempt to attribute this to Apple cutting back on iPad production in order to prepare for the release of its iPad 2.
But the Apple brand, for those who are fans, probably wouldn't be abandoned as easily as it sounds.
It appears rather that Amazon.com has carved out a powerful niche that is able to hold its own against Apple.
Even so, the idea that Kindle will be a large mass market product probably isn't going to be a reality, as numerous digital reading devices and tablets come to market.
Apple's iPad has yet to experience serious competition in its space either, but it's only a matter of time before a legitimate competitor emerges, although Apple does have a head start on them.
Riverbed Technology's (NASDAQ:RVBD) Competition Weakening, Outlook Better
Based on fundamentals and what appears to be weakening competition, Riverbed Technology (NASDAQ:RVBD) is set for some solid growth in 2011.
Wedbush says, "...prospects for solid growth and improving fundamentals appear favorable due to healthy demand in its core WAN optimization market, an increasingly benign competitive environment, and traction from new products late in 2011."
They raised their Q410 and FY11 EPS and revenue estimates in response to the positive outlook.
Wedbush reiterates their "Outperform" rating on Riverbed Technology, which closed Wednesday at $35.38, up $1.21, or 3.54 percent. They raised their price target on Riverbed from $34 to $40.
Wedbush says, "...prospects for solid growth and improving fundamentals appear favorable due to healthy demand in its core WAN optimization market, an increasingly benign competitive environment, and traction from new products late in 2011."
They raised their Q410 and FY11 EPS and revenue estimates in response to the positive outlook.
Wedbush reiterates their "Outperform" rating on Riverbed Technology, which closed Wednesday at $35.38, up $1.21, or 3.54 percent. They raised their price target on Riverbed from $34 to $40.
Cogo's (NASDAQ:COGO) Acquisition of MDC Businesses Expand Industrial Exposure
Cogo Group's (NASDAQ:COGO) acquisition of some of MDC Tech's businesses has propelled them to a stronger position in the industrial sector, which should improve its margins going forward.
Ticonderoga said, "This morning, Cogo announced the acquisition of certain businesses of MDC Tech Inc. and inline with the company's outlook for an industrial-related deal to be unveiled by the end of 2010. Essentially, MDC is a technology solutions and engineering services company with most of its operations in China. Given the success of the Mega Smart deal, investors should embrace Cogo's bolt-on acquisition strategy and MDC furthers the company's push into the industrial market that enjoys faster growth and richer margins. When considering the MDC deal, we estimate Cogo's industrial exposure could rise to approximately 25% of sales by 4Q11 versus 18% in 3Q10. Trading at less than 8x (ex-cash) our CY11 pro forma EPS estimate, Cogo still represents an attractive value in our view."
Ticonderoga maintains a "Buy" rating on Cogo Group, which closed Wednesday at $9.22, gaining $0.49, or 5.61 percent. Ticonderoga raised their price target on them to $12.50.
Ticonderoga said, "This morning, Cogo announced the acquisition of certain businesses of MDC Tech Inc. and inline with the company's outlook for an industrial-related deal to be unveiled by the end of 2010. Essentially, MDC is a technology solutions and engineering services company with most of its operations in China. Given the success of the Mega Smart deal, investors should embrace Cogo's bolt-on acquisition strategy and MDC furthers the company's push into the industrial market that enjoys faster growth and richer margins. When considering the MDC deal, we estimate Cogo's industrial exposure could rise to approximately 25% of sales by 4Q11 versus 18% in 3Q10. Trading at less than 8x (ex-cash) our CY11 pro forma EPS estimate, Cogo still represents an attractive value in our view."
Ticonderoga maintains a "Buy" rating on Cogo Group, which closed Wednesday at $9.22, gaining $0.49, or 5.61 percent. Ticonderoga raised their price target on them to $12.50.
Foot Locker (NYSE:FL) Driven by Positive Basketball Commentary, Stronger Margins
Trends are favoring the footwear segment, and Foot Locker (NYSE:FL) is positioned strongly to take advantage of that, as well as generating better margins through fewer large promotions.
Wedbush said, "FL is well positioned to capitalize on renewed interest in the category. In addition, positive basketball commentary from FINL's Q3 results also points to an improving trend in the category."
They maintain their "Outperform" rating on Foot Locker, which closed Wednesday at $19.76, up $0.34, or 1.75 percent. Wedbush raised their price target on them to $23.
Wedbush said, "FL is well positioned to capitalize on renewed interest in the category. In addition, positive basketball commentary from FINL's Q3 results also points to an improving trend in the category."
They maintain their "Outperform" rating on Foot Locker, which closed Wednesday at $19.76, up $0.34, or 1.75 percent. Wedbush raised their price target on them to $23.
Amarin Corporation (NASDAQ:AMRN) Prime Takeover Candidate After ANCHOR Data
With ANCHOR data in the early part of 2011 expected to be positive for Amarin Corporation (NASDAQ:AMRN), they are soon after expected to be a top candidate to be acquired.
Wedbush analyst Duane Nash says the recent positive data from the Phase III MARINE trial "strongly de-risks the ANCHOR study, as patients in MARINE did not exhibit a rise in LDL cholesterol, an outcome critical for success in ANCHOR."
He added, "relatively low regulatory risk, established market pathway and a growing need for large pharmaceutical companies to augment their cardiovascular drug portfolios to offset the upcoming influx of generic statin (cholesterol lowering) drugs."
Wedbush maintains their "Outperform" rating on Amarin, which closed Wednesday at $8.49, up $0.64, or 8.15 percent. Amarin raised their price target on them from $7 to $10.
Wedbush analyst Duane Nash says the recent positive data from the Phase III MARINE trial "strongly de-risks the ANCHOR study, as patients in MARINE did not exhibit a rise in LDL cholesterol, an outcome critical for success in ANCHOR."
He added, "relatively low regulatory risk, established market pathway and a growing need for large pharmaceutical companies to augment their cardiovascular drug portfolios to offset the upcoming influx of generic statin (cholesterol lowering) drugs."
Wedbush maintains their "Outperform" rating on Amarin, which closed Wednesday at $8.49, up $0.64, or 8.15 percent. Amarin raised their price target on them from $7 to $10.
Heartware International (NASDAQ:HTWR) Fills PMA for Approval of HVAD
Heartware International (NASDAQ:HTWR), which was on a tear throughout 2010 from their highly successful HVAD device.
Wedbush noted, "HeartWare enjoyed a very successful 2010 as the company’s HVAD device quickly became viewed as the favorite LVAD among surgeons and investors alike. The company then validated this perspective by releasing overwhelmingly positive data from its pivotal US trial in Bridge-to-Transplant in November."
Heartware International also announced they've filled a PMA for approval of the HVAD in Brindge-to-Transplant. Approval in the U.S. is expected to come sometime in the fourth quarter of 2011.
Wedbush maintains their "Outperform" rating on Heartware International, which closed Wednesday at $88.66, gaining $1.16, or 1.33 percent. They raised their price target on them from $80 to $100.
Wedbush noted, "HeartWare enjoyed a very successful 2010 as the company’s HVAD device quickly became viewed as the favorite LVAD among surgeons and investors alike. The company then validated this perspective by releasing overwhelmingly positive data from its pivotal US trial in Bridge-to-Transplant in November."
Heartware International also announced they've filled a PMA for approval of the HVAD in Brindge-to-Transplant. Approval in the U.S. is expected to come sometime in the fourth quarter of 2011.
Wedbush maintains their "Outperform" rating on Heartware International, which closed Wednesday at $88.66, gaining $1.16, or 1.33 percent. They raised their price target on them from $80 to $100.
JPMorgan (NYSE:JPM) Sued Over Polaroid, Petters Deal
JPMorgan (NYSE:JPM) has had a lawsuit filed against them by the trustee for Petters Group Worldwide LLC, which claims the giant bank should have known when they sold to Thomas J. Petters that the money had come from a ponzi scheme.
At the time, JPMorgan was the majority owner of Polaroid.
Petters, who was convicted of the scheme and sentenced to 50 years in jail, allegedly acquired the shares of Polaroid with proceeds from the scheme.
“The windfall that JPMorgan would earn on the transaction gave JPMorgan an incentive to ignore red flags that would have revealed the massive Ponzi scheme,” the suit claims.
The suit says JPMorgan received over $240 million on the sale of Polaroid.
JPMorgan closed Wednesday at $42.36, down $0.25, or 0.59 percent.
At the time, JPMorgan was the majority owner of Polaroid.
Petters, who was convicted of the scheme and sentenced to 50 years in jail, allegedly acquired the shares of Polaroid with proceeds from the scheme.
“The windfall that JPMorgan would earn on the transaction gave JPMorgan an incentive to ignore red flags that would have revealed the massive Ponzi scheme,” the suit claims.
The suit says JPMorgan received over $240 million on the sale of Polaroid.
JPMorgan closed Wednesday at $42.36, down $0.25, or 0.59 percent.
Goldman (NYSE:GS) Prefers Ball (NYSE:BLL), Crown (NYSE:CCK) Over Graham (NYSE:GRM)
Goldman (NYSE:GS) recently met with executives from Graham Packaging (NYSE:GRM), and said for a long-term investment, the company looks compelling, although in the packaging sector they prefer Ball (NYSE:BLL) and Crown (NYSE:CCK) on a risk/reward basis.
Goldman reiterated their "Neutral" rating on Graham Packaging, which closed Wednesday at $13.42, up $0.03, or 0.22 percent. Goldman raised their price target on them to $14.
Ball Corporation closed at $69.31, down $0.17, or 0.24 percent. Crown Holdings closed at $33.72, down $0.01, or 0.03 percent.
Goldman reiterated their "Neutral" rating on Graham Packaging, which closed Wednesday at $13.42, up $0.03, or 0.22 percent. Goldman raised their price target on them to $14.
Ball Corporation closed at $69.31, down $0.17, or 0.24 percent. Crown Holdings closed at $33.72, down $0.01, or 0.03 percent.
Altra Holdings (NASDAQ:AIMC) Growth Consistent and Steady
Jefferies (NYSE:JEF) has core sales growth of Altra Holdings (NASDAQ:AIMC) projected to come in at $18 percent in the fourth quarter of 2010 and 9 percent in 2011, saying they see them continuing to grow at a steady pace going forward.
with expectations that M&A will accelerate in 2011, Altra could make an investment somewhere about $150 million, which change the size and dynamics of the company.
If that were to happen, Altra would reach their leverage limit of 3x. It would also grow the company by about 30 percent.
Also noted by Jefferies is the pipeline of Altra is growing while its still in early-mid part of their life cycles of their end markets.
Jefferies maintains a "Buy" rating on Altra Holdings, which closed Wednesday at $20.30, down $0.07, or 0.34 percent.
with expectations that M&A will accelerate in 2011, Altra could make an investment somewhere about $150 million, which change the size and dynamics of the company.
If that were to happen, Altra would reach their leverage limit of 3x. It would also grow the company by about 30 percent.
Also noted by Jefferies is the pipeline of Altra is growing while its still in early-mid part of their life cycles of their end markets.
Jefferies maintains a "Buy" rating on Altra Holdings, which closed Wednesday at $20.30, down $0.07, or 0.34 percent.
Wells Fargo (NYSE:WFC) Raises Key Energy Services (NYSE:KEG) Valuation Range
Wells Fargo (NYSE:WFC) said they like the strategy being employed by Key Energy Services (NYSE:KEG) to transform the company, especially their initial focus on "heavy duty, workover rigs, and large-diameter, coiled tubing units."
Wells said, "We like KEG's transformation strategy and initial focus on heavy duty, workover rigs, and large-diameter, coiled tubing units. Legacy U.S. rigs should benefit from a 10%+ rise in flowing oil wells over the next 18 months. Finally, it's pushing into new foreign markets, like Colombia and MENA. But, it's pricing in credit for much of this and, before considering higher multiples, we'd prefer to see more results."
Wells Fargo maintains a "Market Perform" rating on Key Energy Services, which closed Wednesday at $13.17, gaining $0.25, or 1.93 percent.
They raised their valuation range on Key Energy from $10.75-$11.25 to $13-$13.75.
Wells said, "We like KEG's transformation strategy and initial focus on heavy duty, workover rigs, and large-diameter, coiled tubing units. Legacy U.S. rigs should benefit from a 10%+ rise in flowing oil wells over the next 18 months. Finally, it's pushing into new foreign markets, like Colombia and MENA. But, it's pricing in credit for much of this and, before considering higher multiples, we'd prefer to see more results."
Wells Fargo maintains a "Market Perform" rating on Key Energy Services, which closed Wednesday at $13.17, gaining $0.25, or 1.93 percent.
They raised their valuation range on Key Energy from $10.75-$11.25 to $13-$13.75.
FMC Technologies (NYSE:FTI) Poised for Another $1 Billion Quarter Says Pritchard
Pritchard Capital made a major upward change in the price target of FMC Technologies (NYSE:FTI), based on a solid EPS estimate.
Pritchard said, "We are raising our price target for FTI to $108 based on our 2012 EPS estimate of $4.32...In part, our confidence in that number stems from another $1 billion order quarter in Q4."
Pritchard Capital maintains a "Buy" on FMC Technologies, which closed Wednesday at $88.46, gaining $1.82, or 2.10 percent. They raised their price target on FMC from $80 to $108.
Pritchard said, "We are raising our price target for FTI to $108 based on our 2012 EPS estimate of $4.32...In part, our confidence in that number stems from another $1 billion order quarter in Q4."
Pritchard Capital maintains a "Buy" on FMC Technologies, which closed Wednesday at $88.46, gaining $1.82, or 2.10 percent. They raised their price target on FMC from $80 to $108.
Sony (NYSE:SNE) Ready to Launch PlayStation Smartphone
Sony (NYSE:SNE) may launch its long-awaited PlayStation Portable smartphone in the spring of 2011, according to a report in the English edition of the Japanese newspaper Asahi Shimbun.
The assumption is the smartphone will be modeled on Sony's handheld PSP Go game console, made by Sony Ericsson Mobile Communications and use Google's Android operating system to run it.
Sony is introducing the new model in order to compete with against entrenched smartphone devices such as developed by Nokia (NYSE:NOK), Apple (Nasdaq:AAPL) and RIM (Nasdaq:RIMM).
Because it is based on a portable game console and empowers the user to participate in advanced gaming, it may be considered a must-have device and thought of as a gaming piece with the ability to talk to someone, rather than a smartphone you can use with a gaming system.
That could differentiate the smartphone in the minds of consumers, and possibly jumpstart their ailing console business.
Sony closed Wednesday at $35.87, up $0.03, or 0.08 percent.
The assumption is the smartphone will be modeled on Sony's handheld PSP Go game console, made by Sony Ericsson Mobile Communications and use Google's Android operating system to run it.
Sony is introducing the new model in order to compete with against entrenched smartphone devices such as developed by Nokia (NYSE:NOK), Apple (Nasdaq:AAPL) and RIM (Nasdaq:RIMM).
Because it is based on a portable game console and empowers the user to participate in advanced gaming, it may be considered a must-have device and thought of as a gaming piece with the ability to talk to someone, rather than a smartphone you can use with a gaming system.
That could differentiate the smartphone in the minds of consumers, and possibly jumpstart their ailing console business.
Sony closed Wednesday at $35.87, up $0.03, or 0.08 percent.
Fairchild Semicondutor's (NYSE:FCS) Street EPS Estimates Too Low Says FBR
While FBR sees Fairchild Semicondutor's (NYSE:FCS) performance in the fourth and first quarters pretty much in line with Street estimates, they believe EPS estimates for 2011 are too low.
FBR says, "Recent checks suggest Fairchild's 4Q revenues and 1Q revenue guidance will track largely in line with Street estimates, with some 4Q strength in handset industrial and automotive shipments, and with sluggishness in computing and consumer shipments. For 2011, however, we think the Street's EPS estimate of $1.36 is too low, with actual earnings power more likely at $1.50–$1.60 given our more constructive view on gross margins and operating expense spending. We believe the discretes subsector is an attractive area to invest within semiconductors given structural pricing and margin improvements (partially spurred by Fairchild's stricter pricing discipline), still-falling fab capacity (in contrast to ramping analog capacity), substantial investor skepticism, and attractive valuation metrics."
FBR Capital maintains an "Outperform" rating on Fairchild Semiconductor, which closed Wednesday at $15.68, even with the last close. FBR raised their price target on Fairchild from $20 to $22.
FBR says, "Recent checks suggest Fairchild's 4Q revenues and 1Q revenue guidance will track largely in line with Street estimates, with some 4Q strength in handset industrial and automotive shipments, and with sluggishness in computing and consumer shipments. For 2011, however, we think the Street's EPS estimate of $1.36 is too low, with actual earnings power more likely at $1.50–$1.60 given our more constructive view on gross margins and operating expense spending. We believe the discretes subsector is an attractive area to invest within semiconductors given structural pricing and margin improvements (partially spurred by Fairchild's stricter pricing discipline), still-falling fab capacity (in contrast to ramping analog capacity), substantial investor skepticism, and attractive valuation metrics."
FBR Capital maintains an "Outperform" rating on Fairchild Semiconductor, which closed Wednesday at $15.68, even with the last close. FBR raised their price target on Fairchild from $20 to $22.
Silver Wheaton (NYSE:SLW), Silvercorp (NYSE:SVM), Endeavour (NYSE:EXK), iShares Silver (NYSE:SLV), Pan American (Nasdaq:PAAS) Shine with Silver Prices
Silver Wheaton (NYSE:SLW), Silvercorp (NYSE:SVM), Endeavour (NYSE:EXK), iShares Silver (NYSE:SLV) and Pan American (Nasdaq:PAAS) are all shining, as they continue to attract the attention of investors looking to grow their capital and protect it at the same time.
As gold prices rise, silver is increasingly considered an alternative to gold's safe haven status.
All the companies listed above are near their 52-week highs, although Silver Wheaton has pulled back a little lately.
While investors must be aware of the volatility associated with silver, they also must understand the reason the price has went up, and it should continue to do so into 2011.
The same reasons silver has been pushing up hard is the same reason gold have been doing the same. Silver has the additional value of industrial use, but being viewed as an investment metal at this time is what's driving the overall price of the metal and the silver companies and trusts.
Pan American Silver closed Wednesday at $41.51, gaining $0.64, or 1.57 percent. Silver Wheaton closed at $38.56, up by $0.26, or 0.68 percent. Silvercorp Metals rose to $12.89, increasing $0.13, or 1.02 percent. Endeavor Silver ended the session at $7.27, up $0.08, or 1.11 percent. iShares Silver Trust closed at $29.87, up $0.34, or 1.15 percent.
Silver remains over $30 an ounce.
As gold prices rise, silver is increasingly considered an alternative to gold's safe haven status.
All the companies listed above are near their 52-week highs, although Silver Wheaton has pulled back a little lately.
While investors must be aware of the volatility associated with silver, they also must understand the reason the price has went up, and it should continue to do so into 2011.
The same reasons silver has been pushing up hard is the same reason gold have been doing the same. Silver has the additional value of industrial use, but being viewed as an investment metal at this time is what's driving the overall price of the metal and the silver companies and trusts.
Pan American Silver closed Wednesday at $41.51, gaining $0.64, or 1.57 percent. Silver Wheaton closed at $38.56, up by $0.26, or 0.68 percent. Silvercorp Metals rose to $12.89, increasing $0.13, or 1.02 percent. Endeavor Silver ended the session at $7.27, up $0.08, or 1.11 percent. iShares Silver Trust closed at $29.87, up $0.34, or 1.15 percent.
Silver remains over $30 an ounce.
ON Semiconductor (NASDAQ:ONNN) Revenue, EPS Tracking as High End of Guidance
Citing recent checks, FBR Capital said revenue and EPS for ON Semiconductor (NASDAQ:ONNN) is tracking on the high end of guidance, with EPS probably surpassing it.
FBR said, "Recent checks suggest 4Q revenues are tracking toward the upper end of guidance, with EPS likely one or two pennies better than consensus. For 1Q, we think ON's organic revenues can decline less than seasonally typical, likely by 2%–4% QOQ, but with EPS possibly better than the Street expects. While some investors have fretted about the Sanyo acquisition, we expect this deal to close in the next week or so, and think earnings can ramp faster than previously."
FBR Capital maintains an "Outperform" rating on ON Semiconductor, which closed Wednesday at $9.92, up $0.29, or 3.01 percent. FBR raised their price target on them from $12 to $13.
FBR said, "Recent checks suggest 4Q revenues are tracking toward the upper end of guidance, with EPS likely one or two pennies better than consensus. For 1Q, we think ON's organic revenues can decline less than seasonally typical, likely by 2%–4% QOQ, but with EPS possibly better than the Street expects. While some investors have fretted about the Sanyo acquisition, we expect this deal to close in the next week or so, and think earnings can ramp faster than previously."
FBR Capital maintains an "Outperform" rating on ON Semiconductor, which closed Wednesday at $9.92, up $0.29, or 3.01 percent. FBR raised their price target on them from $12 to $13.
Ford (NYSE:F) Empowers Parents to Block Sirius XM (Nasdaq:SIRI) Programming, Control Speed
Through new upgrades to their MyKey technology, Ford Motor (NYSE:F) has empowered parents to block explicit satellite radio programming on Sirius XM (Nasdaq:SIRI), and have also added the ability to set the speed levels on a vehicle.
With the upgrade, Ford users can now set the limit on the speed of a vehicle from 65 up 80 mph. The former MyKey system only allowed limits at 80 mph, while alerting drivers at intervals of 45, 55, and 65 mph.
For Sirius Satellite Radio, parents can now block any channel they don't want their children listening to.
Director of Ford Electrical and Electronic Systems Engineering, Graydon Reitz, said, "Ford wants to give parents peace of mind that their kids are following practical household rules in the car."
Sirius closed Wednesday at $1.65, up $0.02, or 1.23 percent. Ford closed at $16.74, up 0.01, or 0.06 percent.
With the upgrade, Ford users can now set the limit on the speed of a vehicle from 65 up 80 mph. The former MyKey system only allowed limits at 80 mph, while alerting drivers at intervals of 45, 55, and 65 mph.
For Sirius Satellite Radio, parents can now block any channel they don't want their children listening to.
Director of Ford Electrical and Electronic Systems Engineering, Graydon Reitz, said, "Ford wants to give parents peace of mind that their kids are following practical household rules in the car."
Sirius closed Wednesday at $1.65, up $0.02, or 1.23 percent. Ford closed at $16.74, up 0.01, or 0.06 percent.
JPMorgan (NYSE:JPM), Barclays (NYSE:BCS) Withdraw Lawsuit Against MBIA (NYSE:MBI)
Shares of MBIA (NYSE:MBI) got a big boost when JPMorgan (NYSE:JPM) and Barclays (NYSE:BCS) announced they're dropping their lawsuit against them concerning splitting its insurance unit in two.
While that's good news, and depending on whether it spreads to other banks like Bank of America (NYSE:BAC) and UBS (NYSE:UBS), among numerous others, it'll probably only provide a temporary boost for its share price, although it could hold if assumptions are made this is the beginning of the case against MBIA faltering.
The lawsuit centers around the splitting of the company resulting in the probability of getting paid on structured-finance policies being lessened. MBIA split their municipal bond insurance business from its structured-finance guarantees, which initiated the lawsuits against them.
MBIA closed Wednesday at $10.36, gaining $0.84, or 8.82 percent.
While that's good news, and depending on whether it spreads to other banks like Bank of America (NYSE:BAC) and UBS (NYSE:UBS), among numerous others, it'll probably only provide a temporary boost for its share price, although it could hold if assumptions are made this is the beginning of the case against MBIA faltering.
The lawsuit centers around the splitting of the company resulting in the probability of getting paid on structured-finance policies being lessened. MBIA split their municipal bond insurance business from its structured-finance guarantees, which initiated the lawsuits against them.
MBIA closed Wednesday at $10.36, gaining $0.84, or 8.82 percent.
Molycorp (NYSE:MCP), Rare Element Resources (AMEX:REE), China Shen Zhou Mining (AMEX:SHZ), Avalon Rare Metals (AMEX:AVL) Continue to Ride Rare Earth Speculative Frenzy
Molycorp (NYSE:MCP), Rare Element Resources (AMEX:REE), China Shen Zhou Mining & Resources (AMEX:SHZ) and Avalon Rare Metals (AMEX:AVL) share prices have been soaring, and options traders have been feeding on the companies as well.
And apparently some have even grouped in Qiao Xing Universal Resources (Nasdaq:XING) with the rest, having a tenuous connection, at best, to rare earths, as their primary metals are molybdenum and copper.
Rare Element Resources had 18,000 calls and 9,150 puts traded on them Wednesday.
Qiao Xing Universal Resources attracted about 8,000 calls and 300 puts. January and June calls were the most actives, with over 3,000 traded in each and three quarters trading at the ask.
All of this started when China released a statement saying they were going to cut rare earth quotas by 35 percent, causing the feeding frenzy to begin.
Fear and emotion is driving all this, but the reality is the sector seems to be ready to supply the majority of the demand going forward, and in a couple of years supply could outpace demand, even with China's move.
But riding emotion is the name of the game for speculators and traders, and they're making a killing, whether or not the fears and worries are based on reality.
Avalon Rare Metals closed Wednesday at $6.54, up $0.11, or 1.71 percent. Qiao Xing Universal Resources soared to $2.71, gaining $0.86, or 46.49 percent. Rare Element Resources ended the session at $14.79, up $1.85, or 14.30 percent. China Shen Zhou Mining & Resources exploded to $9.29, up $3.79, or 68.91 percent. Molycorp closed at $49.30, up $3.12, or 6.76 percent.
And apparently some have even grouped in Qiao Xing Universal Resources (Nasdaq:XING) with the rest, having a tenuous connection, at best, to rare earths, as their primary metals are molybdenum and copper.
Rare Element Resources had 18,000 calls and 9,150 puts traded on them Wednesday.
Qiao Xing Universal Resources attracted about 8,000 calls and 300 puts. January and June calls were the most actives, with over 3,000 traded in each and three quarters trading at the ask.
All of this started when China released a statement saying they were going to cut rare earth quotas by 35 percent, causing the feeding frenzy to begin.
Fear and emotion is driving all this, but the reality is the sector seems to be ready to supply the majority of the demand going forward, and in a couple of years supply could outpace demand, even with China's move.
But riding emotion is the name of the game for speculators and traders, and they're making a killing, whether or not the fears and worries are based on reality.
Avalon Rare Metals closed Wednesday at $6.54, up $0.11, or 1.71 percent. Qiao Xing Universal Resources soared to $2.71, gaining $0.86, or 46.49 percent. Rare Element Resources ended the session at $14.79, up $1.85, or 14.30 percent. China Shen Zhou Mining & Resources exploded to $9.29, up $3.79, or 68.91 percent. Molycorp closed at $49.30, up $3.12, or 6.76 percent.
IPC The Hospitalist Company's (NASDAQ:IPCM) HIMS Acquisition Pure Upside in 2011
Saying the size and timing of the acquisition of HIMS by IPC The Hospitalist Company (NASDAQ:IPCM) positions them for "pure" upside for their EPS estimate, Kaufman raised it, while added they've secured growth in 2011 from a range of 25 percent to 30 percent.
Kaufman noted, "We now look for 2011E EPS growth of 27%. Similar to the SCOC transaction (announced on 12/1/10), based on the size and the timing so late in 2010, the HIMS acquisition represents virtually "pure" upside to our 2011E EPS expectation, where we pre-layered $20M in acquisition spend throughout the year that we still expect to occur. As a result, we are raising our 2011E EPS by $0.05 to $1.83. In our view, IPC has secured its 2011 growth in the 25%-30% range with the flurry of acquisition activity in 4Q10, and while we think it is prudent to maintain a PEG discount based on the DOJ investigation, we are comfortable with a multiple in line with its current earnings growth rate (i.e., 2010 in the 23%-24% range)."
Kaufman Bros. maintains a "Buy" rating on IPC The Hospitalist Company, which closed Wednesday at $38.65, gaining $0.45, or 1.18 percent. Kaufman raised their price target on them from $36 to $43.
Kaufman noted, "We now look for 2011E EPS growth of 27%. Similar to the SCOC transaction (announced on 12/1/10), based on the size and the timing so late in 2010, the HIMS acquisition represents virtually "pure" upside to our 2011E EPS expectation, where we pre-layered $20M in acquisition spend throughout the year that we still expect to occur. As a result, we are raising our 2011E EPS by $0.05 to $1.83. In our view, IPC has secured its 2011 growth in the 25%-30% range with the flurry of acquisition activity in 4Q10, and while we think it is prudent to maintain a PEG discount based on the DOJ investigation, we are comfortable with a multiple in line with its current earnings growth rate (i.e., 2010 in the 23%-24% range)."
Kaufman Bros. maintains a "Buy" rating on IPC The Hospitalist Company, which closed Wednesday at $38.65, gaining $0.45, or 1.18 percent. Kaufman raised their price target on them from $36 to $43.
BP (NYSE:BP) Investor Suit Lead Plaintiffs from Ohio, New York Pension Funds
U.S. District Judge Keith P. Ellison, who is presiding over the BP (NYSE:BP) investor lawsuit, named Ohio State Attorney General Richard Cordray and New York State Comptroller Thomas DiNapoli as lead plaintiffs in the litigation.
They each head up the public employee pension fund of the state they reside in.
Parameters of the lawsuit is for those who invested in American depositary receipts (ADRs) or common stock of BP from from June 2005 to June 2010 and suffered losses from the oil spill in the Gulf of Mexico.
In a different class, Ellison named four individual investors as lead plaintiffs, with the parameters being those who acquired common shares of BP or ADRs from from March 2009 to April 20 of 2010.
One difference in the two classes is the Ohio and New York funds say they suffered major losses when they purchased ADRs in the weeks following the explosion on the doomed oil rig.
They claim BP deliberately understated the flow of oil released from the oil well. But you have to wonder what those over these funds were doing when putting pension money into that type of scenario.
They each head up the public employee pension fund of the state they reside in.
Parameters of the lawsuit is for those who invested in American depositary receipts (ADRs) or common stock of BP from from June 2005 to June 2010 and suffered losses from the oil spill in the Gulf of Mexico.
In a different class, Ellison named four individual investors as lead plaintiffs, with the parameters being those who acquired common shares of BP or ADRs from from March 2009 to April 20 of 2010.
One difference in the two classes is the Ohio and New York funds say they suffered major losses when they purchased ADRs in the weeks following the explosion on the doomed oil rig.
They claim BP deliberately understated the flow of oil released from the oil well. But you have to wonder what those over these funds were doing when putting pension money into that type of scenario.
Wednesday, December 29, 2010
Molycorp (NYSE:MCP), Rare Element, (AMEX:REE), Shen Zhou Mining & Resources (AMEX:SHZ) Soar on China's Rare Earths Policy
Shares of companies with exposure to rare earths continue to soar on the news China will continue to cut back on exports in the sector. Traders have focused on non-Chinese companies like Molycorp (NYSE:MCP) and Rare Element Resources Ltd., (AMEX:REE), but Chinese companies like Shen Zhou Mining & Resources (AMEX:SHZ) have also partaken in the surge.
The reason for Molycorp and Rare Element Resources share prices soaring are expectations they'll ramp up production and increase revenue and profits.
For Shen Zhou Mining & Resources, its more the guidance they've given for 2011, which estimates revenue to increase by 164 percent for the year, reaching about $38 million. Net income is projected to come in at $11 million.
Shen Zhou is also seeking to expand its product offerings beyond nonferrous metal, as they're looking to acquire assets in other segments.
Nonferrous metals and fluorite are expected to experience strong organic growth in 2011, according to Shen Zhou's CEO.
Rare Element was trading at $14.58, gaining $1.64, or 12.67 percent, as of 2:50 PM EST. Molycorp was trading at 49.50, up $3.32, or 7.19 percent. Shen Zhou Mining & Resources soared to $8.05, up $2.55, or 46.36 percent.
The reason for Molycorp and Rare Element Resources share prices soaring are expectations they'll ramp up production and increase revenue and profits.
For Shen Zhou Mining & Resources, its more the guidance they've given for 2011, which estimates revenue to increase by 164 percent for the year, reaching about $38 million. Net income is projected to come in at $11 million.
Shen Zhou is also seeking to expand its product offerings beyond nonferrous metal, as they're looking to acquire assets in other segments.
Nonferrous metals and fluorite are expected to experience strong organic growth in 2011, according to Shen Zhou's CEO.
Rare Element was trading at $14.58, gaining $1.64, or 12.67 percent, as of 2:50 PM EST. Molycorp was trading at 49.50, up $3.32, or 7.19 percent. Shen Zhou Mining & Resources soared to $8.05, up $2.55, or 46.36 percent.
Aluminum Corp. of China (NYSE:ACH) to Sell Debt Securities
The largest producer of aluminum in China, Aluminum Corp. of China (NYSE:ACH), announced they're going to sell debt securites, with the board of the company already giving their approval.
They'll sell the debt securities on the interbank market in the country.
In a statement to the Shanghai stock exchange, Chalco stated the outstanding debt instruments, which includes 22 billion yuan ($3.32 billion) of short-term paper and medium-term bills already sold, won’t go beyond 47 billion yuan after the new sales are completed.
The company is raising capital to invest in overseas assets to ramp up production, including iron-ore and copper assets, which continue to be in strong demand.
Excess capacity in the aluminum industry has resulted in Standard & Poor’s given them a “negative outlook,” although they did affirm the BBB+ foreign currency long-term credit rating of Chalco in November.
Aluminum Corp. of China was trading at $22.75, up $0.34, or 1.52 percent, as of 2:11 PM EST.
They'll sell the debt securities on the interbank market in the country.
In a statement to the Shanghai stock exchange, Chalco stated the outstanding debt instruments, which includes 22 billion yuan ($3.32 billion) of short-term paper and medium-term bills already sold, won’t go beyond 47 billion yuan after the new sales are completed.
The company is raising capital to invest in overseas assets to ramp up production, including iron-ore and copper assets, which continue to be in strong demand.
Excess capacity in the aluminum industry has resulted in Standard & Poor’s given them a “negative outlook,” although they did affirm the BBB+ foreign currency long-term credit rating of Chalco in November.
Aluminum Corp. of China was trading at $22.75, up $0.34, or 1.52 percent, as of 2:11 PM EST.
BP (NYSE:BP) Will Survive and Thrive Says Citigroup (NYSE:C)
The majority of costs from BP's (NYSE:BP) disaster in the Gulf of Mexico have been analyzed, and in general have been brought to a place where it is believed BP will have no trouble suriviving the ordeal, but should thrive, according to Citigroup (NYSE:C).
The remaining and always unknown factor is how juries will respond to the cases before them, which could punish the company more than current estimates, and will remain unpredictable until they're completed.
But the years it'll take to work through those will allow BP to expand and build up its capital base to the point they'll be able to handle whatever comes their way, and they already have sold about $21 billion in assets toward that end.
The obvious example cited by Citigroup was concerning the oil spill of Exxon (NYSE:XOM), which was a public relations disaster at the time, and as far as damaging wildlife was far worse than the BP oil spill.
Exxon has not only survived, but have thrived, and are among the leaders in the oil sector today, and one of the largest companies in the world, with a market cap of over $371 billion.
BP will continue on as the issue fades, and should come back strong, as they've already began to do, but it'll take some years for it to work out.
BP was trading at $44.06, down $0.05, or 0.12 percent. They have a market cap of $138 billion.
The remaining and always unknown factor is how juries will respond to the cases before them, which could punish the company more than current estimates, and will remain unpredictable until they're completed.
But the years it'll take to work through those will allow BP to expand and build up its capital base to the point they'll be able to handle whatever comes their way, and they already have sold about $21 billion in assets toward that end.
The obvious example cited by Citigroup was concerning the oil spill of Exxon (NYSE:XOM), which was a public relations disaster at the time, and as far as damaging wildlife was far worse than the BP oil spill.
Exxon has not only survived, but have thrived, and are among the leaders in the oil sector today, and one of the largest companies in the world, with a market cap of over $371 billion.
BP will continue on as the issue fades, and should come back strong, as they've already began to do, but it'll take some years for it to work out.
BP was trading at $44.06, down $0.05, or 0.12 percent. They have a market cap of $138 billion.
Bank of America (NYSE:BAC) Says Treasuries of All Maturities Lose 2.7 Percent in December
A Bank of America (NYSE:BAC) index released by the company shows that Treasurys of all maturities fell 2.7 percent in December so far.
Year-to-date yields have moved up by 2.79 percent since November 30, the largest boost since July 2003.
Concerning two-year yields, they pushed up the most since December 2009, rising from 0.49 percent.
30-year Treasury bond yields also rose to their highest levels since January 2009, the fourth straight month they increased.
So far in 2010 bonds have risen 4.94 percent.
Corporate bonds on average dropped 2.1 percent in December, but are up 8.2 percent for 2010.
Year-to-date yields have moved up by 2.79 percent since November 30, the largest boost since July 2003.
Concerning two-year yields, they pushed up the most since December 2009, rising from 0.49 percent.
30-year Treasury bond yields also rose to their highest levels since January 2009, the fourth straight month they increased.
So far in 2010 bonds have risen 4.94 percent.
Corporate bonds on average dropped 2.1 percent in December, but are up 8.2 percent for 2010.
Paul Allen Relaunches Patent Lawsuit Against Google (Nasdaq:GOOG), Apple (Nasdaq:AAPL), Facebook
After having the original lawsuit against Google (Nasdaq:GOOG), Apple (Nasdaq:AAPL) and Facebook dismissed, Paul Allen, the co-founder of Microsoft (Nasdaq:MSFT) with Bill Gates, has refiled the patent lawsuit against the companies.
The complaint centers around patents held by Allen's company Interval Licensing, which Allen says holds four patents dealing with data on the Internet and how its sorted through and offered to users.
He says those patents are being infringed upon by the companies, and is seeking a ban on all the products allegedly using the technology, as well as compensation for damages in relationship to their use.
Google was trading at $601.15, gaining $2.23, or 0.37 percent, as of 1:43 PM EST. Apple was at $325.74, up $0.27, or 0.08 percent. Facebook is privately held.
The complaint centers around patents held by Allen's company Interval Licensing, which Allen says holds four patents dealing with data on the Internet and how its sorted through and offered to users.
He says those patents are being infringed upon by the companies, and is seeking a ban on all the products allegedly using the technology, as well as compensation for damages in relationship to their use.
Google was trading at $601.15, gaining $2.23, or 0.37 percent, as of 1:43 PM EST. Apple was at $325.74, up $0.27, or 0.08 percent. Facebook is privately held.
Johnson Controls (NYSE:JCI), TRW (NYSE:TRW), Magna (NYSE:MGA), Superior Industries (NYSE:SUP) Top Auto Parts Picks for S&P
With the auto industry expected to improve and grow next year, those manufacturing auto parts like Johnson Controls (NYSE:JCI), TRW (NYSE:TRW), Magna International (NYSE:MGA) and Superior Industries International (NYSE:SUP) are expected to continue to grow at a quick pace.
Standard & Poor’s equity analyst Ephraim Levy said, “Emerging markets are becoming more attractive to parts manufacturers due to lower labor costs for manufacturing and engineering and/or due to growing demand in local and regional markets.”
As of December 23, Levy notes that auto parts and equipment companies are up 55 percent so far in 2010, and many of those companies should continue to do well in 2011.
Superior Industries International was trading at $21.59, down $0.05, or 0.23 percent, as of 1:23 PM EST. Magna International was at $52.36, gaining $0.52, or 1.00 percent. TRW Automotive was trading at $52.60, up $1.03, or 2.00 percent. Johnson Controls was at $38.44, up $0.45, or 1.18 percent.
Standard & Poor’s equity analyst Ephraim Levy said, “Emerging markets are becoming more attractive to parts manufacturers due to lower labor costs for manufacturing and engineering and/or due to growing demand in local and regional markets.”
As of December 23, Levy notes that auto parts and equipment companies are up 55 percent so far in 2010, and many of those companies should continue to do well in 2011.
Superior Industries International was trading at $21.59, down $0.05, or 0.23 percent, as of 1:23 PM EST. Magna International was at $52.36, gaining $0.52, or 1.00 percent. TRW Automotive was trading at $52.60, up $1.03, or 2.00 percent. Johnson Controls was at $38.44, up $0.45, or 1.18 percent.
General Motors (NYSE:GM) Going Beyond Bull to Mania?
ConvergEx Group has become the latest to jump on the General Motors (NYSE:GM) bandwagon, initiating coverage on them with a "Buy" rating.
While there has been some positive changes in the auto sector, you would think there has been some major turnaround in the economy and surging job creation in the U.S., the way some of these analysts are gushing over GM.
Nicholas Colas, ConvergEx Group chief market strategist, said, "Near term catalysts include the Detroit Auto Show in January, customarily a period of positive news flow for the industry, as well as good December vehicle sales, and potential upside to Q4 earnings."
This is a stock that is being hyped, and should be approached far more conservatively than is being done by analysts at this time.
GM was trading at $36.05, gaining $0.73, or 2.07 percent, as of 1:22 PM EST. ConvergEx Group has a price target of $43 on them.
While there has been some positive changes in the auto sector, you would think there has been some major turnaround in the economy and surging job creation in the U.S., the way some of these analysts are gushing over GM.
Nicholas Colas, ConvergEx Group chief market strategist, said, "Near term catalysts include the Detroit Auto Show in January, customarily a period of positive news flow for the industry, as well as good December vehicle sales, and potential upside to Q4 earnings."
This is a stock that is being hyped, and should be approached far more conservatively than is being done by analysts at this time.
GM was trading at $36.05, gaining $0.73, or 2.07 percent, as of 1:22 PM EST. ConvergEx Group has a price target of $43 on them.
Pfizer Animal Health (NYSE:PFE) Acquires Synbiotics Corporation (OTC:SYNB.PK)
Pfizer Animal Health (NYSE:PFE) said in a press release today they're acquiring Synbiotics Corporation (OTC:SYNB.PK), "a privately held, Kansas City-based leader in the development, manufacture and marketing of immunodiagnostic tests for companion and food production animals."
Juan Ramon Alaix, president, Pfizer Animal Health, said, "Our acquisition of Synbiotics, with its best-in-class product portfolio, promising research and development pipeline, and manufacturing capability, will bring Pfizer Animal Health closer to its goal of becoming a comprehensive solutions provider to the animal health industry. By integrating animal health diagnostics with our innovative portfolio of vaccines and medicines, we can do more to help veterinarians deliver optimal care for livestock and companion animals and provide the right medicine to the right animal at the right time."
Alaix added that Pfizer Animal Health will now be able to expand into "products for diagnostic reference laboratories and reproductive services for canine breeders," while enhancing their current offerings to veterinarians at point of care in the clinic and on the farm.
"Pfizer Animal Health is the ideal partner for Synbiotics," said Paul Hays, Chief Executive Officer of Synbiotics Corporation. "Pfizer Animal Health's global reach, commercial operations, and expertise in regulatory and marketing functions will expand customer access to such leading products as WITNESS® and ASSURE® for companion animals, the SERELISA® franchise for livestock animals, and PROFLOK for poultry into new markets -- especially in emerging markets. Marrying Synbiotics' R&D expertise in diagnostics with the strength of Pfizer veterinary R&D also is expected to help accelerate our diagnostic development program."
SYNBIOTICS soared on the news, rising to $0.29, gaining $0.20, or 222.22 percent. Pfizer was trading at $17.60, up $0.01, or 0.03 percent, as of 1:03 PM EST.
Juan Ramon Alaix, president, Pfizer Animal Health, said, "Our acquisition of Synbiotics, with its best-in-class product portfolio, promising research and development pipeline, and manufacturing capability, will bring Pfizer Animal Health closer to its goal of becoming a comprehensive solutions provider to the animal health industry. By integrating animal health diagnostics with our innovative portfolio of vaccines and medicines, we can do more to help veterinarians deliver optimal care for livestock and companion animals and provide the right medicine to the right animal at the right time."
Alaix added that Pfizer Animal Health will now be able to expand into "products for diagnostic reference laboratories and reproductive services for canine breeders," while enhancing their current offerings to veterinarians at point of care in the clinic and on the farm.
"Pfizer Animal Health is the ideal partner for Synbiotics," said Paul Hays, Chief Executive Officer of Synbiotics Corporation. "Pfizer Animal Health's global reach, commercial operations, and expertise in regulatory and marketing functions will expand customer access to such leading products as WITNESS® and ASSURE® for companion animals, the SERELISA® franchise for livestock animals, and PROFLOK for poultry into new markets -- especially in emerging markets. Marrying Synbiotics' R&D expertise in diagnostics with the strength of Pfizer veterinary R&D also is expected to help accelerate our diagnostic development program."
SYNBIOTICS soared on the news, rising to $0.29, gaining $0.20, or 222.22 percent. Pfizer was trading at $17.60, up $0.01, or 0.03 percent, as of 1:03 PM EST.
Motorola's (NYSE:MOT) to Give Apple's (NASDAQ:AAPL) iPad its First Real Fight?
With virtually no significant competitors for Apple (NASDAQ:AAPL) concerning its iPad, the soon-to-be-released tablet from Motorola (NYSE:MOT) could be the first such entry in the segment to do so.
Global Equities analyst Trip Chowdhry said he thinks the new tablet from Motorola will run at quicker speeds because of the probability it'll be on the Long Term Evolution wireless network or the Verizon (NYSE:VZ) 4G.
The new tablet will be powered by Google's (NASDAQ:GOOG) Android 3.0.
Chowdhry also said he thinks the tablet will include NVIDIA Corp.'s (NASDAQ:NVDA) Tegra 2 chip, which should be a plus for the company.
He commented, “If you’re looking at Apple’s high-end devices, they all run off of Nvidia parts. I think the accomplishment that Nvidia has in the graphics area could provide a kind of crispness associated with the best user experiences."
Motorola was trading at $9.02, up $0.06, or 0.61 percent, as of 12:50 PM EST. Apple was at $325.87, gaining $0.40, or 0.12 percent.
Global Equities analyst Trip Chowdhry said he thinks the new tablet from Motorola will run at quicker speeds because of the probability it'll be on the Long Term Evolution wireless network or the Verizon (NYSE:VZ) 4G.
The new tablet will be powered by Google's (NASDAQ:GOOG) Android 3.0.
Chowdhry also said he thinks the tablet will include NVIDIA Corp.'s (NASDAQ:NVDA) Tegra 2 chip, which should be a plus for the company.
He commented, “If you’re looking at Apple’s high-end devices, they all run off of Nvidia parts. I think the accomplishment that Nvidia has in the graphics area could provide a kind of crispness associated with the best user experiences."
Motorola was trading at $9.02, up $0.06, or 0.61 percent, as of 12:50 PM EST. Apple was at $325.87, gaining $0.40, or 0.12 percent.
Raymond James (NYSE:RJF) One of FBR's Favorites
FBR Capital (Nasdaq:FBCM) says Raymond James (NYSE:RJF) continue to be one of their "favored names," citing retail, credit, and higher interest rates as some of their catalysts.
FBR said, "We reiterate our rating and continue to view RJF as one of our favored names. RJF's earnings continue to be highly levered to better retail investor activity levels, a gradual improvement in the company's bank credit performance and associated provisioning, as well as higher interest rates, if and when that occurs. We also favor retail oriented capital market companies over more institutionally focused businesses given what we view as a more favorable revenue model under upcoming Basel III capital rules. Given that retail brokerage tends to be a relatively less capital intensive business than some of the more balance sheet driven institutional businesses, we would expect retail brokerages to be attractive targets for larger financial firms looking to augment their business models with more capital friendly revenue streams."
FBR Capital reiterates an "Outperform/Top Pick" on Raymond James, which was trading at $33.11, down $0.48, or 1.43 percent, as of 12:34 PM EST.
FBR said, "We reiterate our rating and continue to view RJF as one of our favored names. RJF's earnings continue to be highly levered to better retail investor activity levels, a gradual improvement in the company's bank credit performance and associated provisioning, as well as higher interest rates, if and when that occurs. We also favor retail oriented capital market companies over more institutionally focused businesses given what we view as a more favorable revenue model under upcoming Basel III capital rules. Given that retail brokerage tends to be a relatively less capital intensive business than some of the more balance sheet driven institutional businesses, we would expect retail brokerages to be attractive targets for larger financial firms looking to augment their business models with more capital friendly revenue streams."
FBR Capital reiterates an "Outperform/Top Pick" on Raymond James, which was trading at $33.11, down $0.48, or 1.43 percent, as of 12:34 PM EST.
Morgan Stanley's (NYSE:MS) Q4 Estimates Slashed by Mike Mayo
Credit Agricole's analyst Mike Mayo has his scalpel out today, excising EPS estimates for some in the banking industry, including Morgan Stanley (NYSE:MS).
EPS estimates for the fourth quarter were cut from 61 cents to 40 cents, a 34 percent drop. The Street is looking for 41 cents at this time.
Mayo also cut Goldman (NYSE:GS), but he was more positive on them, maintaining a "Buy" rating, although significantly cutting their Q4 estimates as well.
Credit Agricole has an "Underperform" rating on Morgan Stanley, which was trading at $27.35, down $0.31, or 1.12 percent, as of 12:26 PM EST. They have a price target of $27 on them.
EPS estimates for the fourth quarter were cut from 61 cents to 40 cents, a 34 percent drop. The Street is looking for 41 cents at this time.
Mayo also cut Goldman (NYSE:GS), but he was more positive on them, maintaining a "Buy" rating, although significantly cutting their Q4 estimates as well.
Credit Agricole has an "Underperform" rating on Morgan Stanley, which was trading at $27.35, down $0.31, or 1.12 percent, as of 12:26 PM EST. They have a price target of $27 on them.
Netflix (NASDAQ:NFLX) Crushing Apple's (NASDAQ:AAPL) iTunes Rental Service
According to Gleacher & Co. analyst Brian Marshall, Netflix Inc.'s (NASDAQ:NFLX) service is about 10 times larger than Apple's (NASDAQ:AAPL) iTunes rental service at this time.
Apple reportedly sells about 475,000 rentals a day while Netflix sells over 5 million rentals daily.
As far as what Apple is renting, about 150,000 a day are movies, and 400,000 are TV episodes. Close to 90 percent sell for 99 cents each, says Marshall.
If Apple is able to grow their rental service close to the pace Netflix has, they would surpass $1 billion over a five-year period, bringing an additional $300,000 to the bottom line of the company.
Apple was trading at $325.60, up $0.13, or 0.04 percent, as of 12:20 PM EST. Netflix was trading at $181.87, down $1.80, or 0.98 percent.
Apple reportedly sells about 475,000 rentals a day while Netflix sells over 5 million rentals daily.
As far as what Apple is renting, about 150,000 a day are movies, and 400,000 are TV episodes. Close to 90 percent sell for 99 cents each, says Marshall.
If Apple is able to grow their rental service close to the pace Netflix has, they would surpass $1 billion over a five-year period, bringing an additional $300,000 to the bottom line of the company.
Apple was trading at $325.60, up $0.13, or 0.04 percent, as of 12:20 PM EST. Netflix was trading at $181.87, down $1.80, or 0.98 percent.
Volterra Semiconductor (Nasdaq:VLTR), Cirrus Logic (Nasdaq:CRUS) Top Picks of Needham in Analog
Needham & Company, commenting on the analog sector heading into 2011, has chosen Volterra Semiconductor (Nasdaq:VLTR) and Cirrus Logic (Nasdaq:CRUS) as their top picks.
They said, "In writing our 2010 review we could not be more pleased with the upward turn of the analog group's share prices in September given the volatility in group sentiment through the course of the year. The material valuation disconnect between semi stocks (and most hardware tech) and the rest of the market's industry verticals was noticeable and we were pleased this gap started to close towards year-end. Additionally, the mid-Q4 reports and earnings out of the industry have been relatively upbeat compared to expectations. For instance, Texas Instruments (NYSE:TXN) tightened its range within prior guidance and expects 1H 2011 to experience normal seasonality as the recent inventory correction winds down. This prompted us to move our cash adjusted target P/E multiples from 2011 to 2012 and as a result, believe that most of our analog coverage universe will offer upside in share price valuation in 2011. We look forward to a more normal growth year for analog semis of about 7% in aggregate across the industry, with typical seasonality and multiple incremental, secular growth drivers ranging from LED lighting to automotive infotainment. We highlight Volterra Semiconductor and Cirrus Logic as the two best names to own in our universe coverage."
"Our 2011 Key Themes: We anticipate that the silicon supply chain for LED general lighting will become more active with momentous investor enthusiasm. We also expect the tablet buzz to die down while other markets such as automotive infotainment take a front seat as a secular driver for analog silicon content."
"Our Two Best Picks: We believe that Volterra Semiconductor will have both the incremental notebook and server opportunities in the first and second half of 2011, respectively, as well as strong 2012 growth to prompt interest from investors. We also believe that Cirrus Logic will offer earnings momentum due to its major customer in portable audio, however it will also demonstrate signs of product diversity in the second half of 2011, garnering incremental investor interest."
Volterra Semiconductor was trading at $23.20, up $0.02, or 0.09 percent, as of 11:59 AM EST. Cirrus Logic was at $15.99, down $0.01, or 0.06 percent.
They said, "In writing our 2010 review we could not be more pleased with the upward turn of the analog group's share prices in September given the volatility in group sentiment through the course of the year. The material valuation disconnect between semi stocks (and most hardware tech) and the rest of the market's industry verticals was noticeable and we were pleased this gap started to close towards year-end. Additionally, the mid-Q4 reports and earnings out of the industry have been relatively upbeat compared to expectations. For instance, Texas Instruments (NYSE:TXN) tightened its range within prior guidance and expects 1H 2011 to experience normal seasonality as the recent inventory correction winds down. This prompted us to move our cash adjusted target P/E multiples from 2011 to 2012 and as a result, believe that most of our analog coverage universe will offer upside in share price valuation in 2011. We look forward to a more normal growth year for analog semis of about 7% in aggregate across the industry, with typical seasonality and multiple incremental, secular growth drivers ranging from LED lighting to automotive infotainment. We highlight Volterra Semiconductor and Cirrus Logic as the two best names to own in our universe coverage."
"Our 2011 Key Themes: We anticipate that the silicon supply chain for LED general lighting will become more active with momentous investor enthusiasm. We also expect the tablet buzz to die down while other markets such as automotive infotainment take a front seat as a secular driver for analog silicon content."
"Our Two Best Picks: We believe that Volterra Semiconductor will have both the incremental notebook and server opportunities in the first and second half of 2011, respectively, as well as strong 2012 growth to prompt interest from investors. We also believe that Cirrus Logic will offer earnings momentum due to its major customer in portable audio, however it will also demonstrate signs of product diversity in the second half of 2011, garnering incremental investor interest."
Volterra Semiconductor was trading at $23.20, up $0.02, or 0.09 percent, as of 11:59 AM EST. Cirrus Logic was at $15.99, down $0.01, or 0.06 percent.
Goldman's (NYSE:GS) EPS Estimate Slashed by Mike Mayo
Goldman Sachs (NYSE:GS) had its EPS estimate cut deeply by Credit Agricole analyst Mike Mayo after saying he sees FICC trading results falling far short of expectations.
For the fourth quarter, he cuts his EPS estimate from $4.20 to $3.75. The Street is looking for $4.11 in the fourth quarter.
Mayo also cut his full year 2010 EPS estimate from $13.55 to $13.10. The Stree has a full year 2010 EPS target of $13.49 on them.
Mayo reiterates his "Buy" rating on Goldman, which was trading at $168.40, falling $0.79, or 0.47 percent, as of 12:02 PM EST. He has a price target of $200 on them.
For the fourth quarter, he cuts his EPS estimate from $4.20 to $3.75. The Street is looking for $4.11 in the fourth quarter.
Mayo also cut his full year 2010 EPS estimate from $13.55 to $13.10. The Stree has a full year 2010 EPS target of $13.49 on them.
Mayo reiterates his "Buy" rating on Goldman, which was trading at $168.40, falling $0.79, or 0.47 percent, as of 12:02 PM EST. He has a price target of $200 on them.
Monsanto (NYSE:MON) PT Raised on Glyphosates in China
Monsanto had their price target raised by Piper Jaffray today, based on their 20 percent increase in the price of glyphosates in China.
Piper Jaffray analyst Mike Cox noted that the company could see their EPS raised from 15 cents to 30 cents as a result of the price increase.
Cox maintains his "Overweight" rating on Monsanto, which was trading at $68.71, gaining $1.60, or 2.38 percent, as of 11:54 AM EST. He raised his price target on the company from $74 to $75.
Piper Jaffray analyst Mike Cox noted that the company could see their EPS raised from 15 cents to 30 cents as a result of the price increase.
Cox maintains his "Overweight" rating on Monsanto, which was trading at $68.71, gaining $1.60, or 2.38 percent, as of 11:54 AM EST. He raised his price target on the company from $74 to $75.
Occidental Petroleum (NYSE:OXY) Still Has Room to Grow
After the acquisition in the North Dakota Bakken it wasn't clear whether or not Occidental Petroleum (NYSE:OXY) was close to reaching its growth limit based on the numbers there.
Susquehanna said there's about 5,500 boepd of production now in Bakken, but may have reserves of 250 million barrels.
They said, "OXY’s new 180,000 acres in the Bakken from a private seller have 5,500 boepd of production now, but OXY thinks it may have a 250 million barrel reserves exposure. That would support replacement of around 8% of OXY’s reserves with high-margin domestic oil. OXY hopes to grow Williston Basin production to around 30,000 boepd over the next five years."
Susquehanna has changed their EPS/EBITDA estimates for full year 2010 and full year 2011 from from $5.43/$11,216 and $6.74/$13,188 to $5.58/$11,419 and $6.62/$12,894.
They have maintained their "Positive" rating on Occidental Petroleum, which was trading at $99.14, up $1.44, or 1.47 percent, as of 11:44 AM EST. Susquehanna raised their price target on them from $98 to $117.
Susquehanna said there's about 5,500 boepd of production now in Bakken, but may have reserves of 250 million barrels.
They said, "OXY’s new 180,000 acres in the Bakken from a private seller have 5,500 boepd of production now, but OXY thinks it may have a 250 million barrel reserves exposure. That would support replacement of around 8% of OXY’s reserves with high-margin domestic oil. OXY hopes to grow Williston Basin production to around 30,000 boepd over the next five years."
Susquehanna has changed their EPS/EBITDA estimates for full year 2010 and full year 2011 from from $5.43/$11,216 and $6.74/$13,188 to $5.58/$11,419 and $6.62/$12,894.
They have maintained their "Positive" rating on Occidental Petroleum, which was trading at $99.14, up $1.44, or 1.47 percent, as of 11:44 AM EST. Susquehanna raised their price target on them from $98 to $117.
BP (NYSE:BP), ExxonMobil (NYSE:XOM), Shell (NYSE:RDS-A), Chevron (NYSE:CVX) Spending Over $100 Billion on Oil Exploration in 2011
Talking on the amount companies were going to spend on oil exploration in 2011, Barclays (NYSE:BCS) said 402 companies are expected to spend almost $500 billion in 2011, an increase of 11 percent over 2010. Of that, oil giants BP (NYSE:BP), ExxonMobil (NYSE:XOM), Royal Dutch Shell (NYSE:RDS-A), Chevron (NYSE:CVX) will account for $108.6 billion of it.
The exploration spend will also include looking for natural gas deposits.
The largest oil exploration spender of 2011 will be Petroleo Brasiliero SA (NYSE:PBR), which has a budget of $28.2 billion set aside.
Huge oil deposits have been discovered in the deep waters off the Brazil coast, generating the huge budget put together by the company.
This isn't the full picture yet though, as Barclays said some larger companies haven't revealed their exploration budgets for next year yet.
Petroleo Brasiliero SA closed Tuesday at $35.66, gaining $0.90, or 2.59 percent. BP closed at $44.11, up $0.14, or 0.32 percent. Chevron closed at $91.19, up $1.09, or 1.19 percent. Exxon ended the session at $73.42, up $0.41, or 0.56 percent. Royal Dutch Shell closed at $66.29, up $0.21, or 0.32 percent.
The exploration spend will also include looking for natural gas deposits.
The largest oil exploration spender of 2011 will be Petroleo Brasiliero SA (NYSE:PBR), which has a budget of $28.2 billion set aside.
Huge oil deposits have been discovered in the deep waters off the Brazil coast, generating the huge budget put together by the company.
This isn't the full picture yet though, as Barclays said some larger companies haven't revealed their exploration budgets for next year yet.
Petroleo Brasiliero SA closed Tuesday at $35.66, gaining $0.90, or 2.59 percent. BP closed at $44.11, up $0.14, or 0.32 percent. Chevron closed at $91.19, up $1.09, or 1.19 percent. Exxon ended the session at $73.42, up $0.41, or 0.56 percent. Royal Dutch Shell closed at $66.29, up $0.21, or 0.32 percent.
Sell Intrepid Potash (NYSE:IPI) Says Stifel Nicolaus
Stifel Nicolaus recommends investors to sell Intrepid Potash (NYSE:IPI), saying the company is overvalued at this time.
Intrepid is trading at over 78x the EPS estimate of the company for 2010. That's about 105 percent above the PE of its peers in the agriculture sector.
They're also about 62 percent over the average EV/EBITDA multiple for the Ag sector.
Stifel maintains their "Sell" rating on Intrepid, which closed Tuesday at $35.03, down $1.24, or 3.42 percent.
Intrepid is trading at over 78x the EPS estimate of the company for 2010. That's about 105 percent above the PE of its peers in the agriculture sector.
They're also about 62 percent over the average EV/EBITDA multiple for the Ag sector.
Stifel maintains their "Sell" rating on Intrepid, which closed Tuesday at $35.03, down $1.24, or 3.42 percent.
RIM's (Nasdaq:RIMM) Playbook Not Impressive to Kaufman
With news circulating that RIM's Playbook is not only being challenged by low battery life, but more importantly, improving it has brought the company the possibility of releasing the Playbook after Apple (NASDAQ:AAPL) releases their second-generation iPad, which could be a disaster.
Even if everything had gone right, it's still questionable, according to Kaufman analyst Shaw Wu on whether anyone other than Apple via their iPad will generate significant tablet sales.
Wu stated, “We are not convinced tablets outside of the iPad will see high volume success.”
As far as battery life, the iPad can last as long at 10 hours, and Samsung Galaxy Tab powered by Google's (NASDAQ:GOOG) Android can last up to 6 hours.
Wu doesn't see RIM able to sell more than 700,000 units of the Playbook next year.
Kaufman maintains a "Hold" rating on RIM, which closed Tuesday at $58.02, down $0.45, or 0.77 percent. Kaufman has a price target of $60 on them.
Even if everything had gone right, it's still questionable, according to Kaufman analyst Shaw Wu on whether anyone other than Apple via their iPad will generate significant tablet sales.
Wu stated, “We are not convinced tablets outside of the iPad will see high volume success.”
As far as battery life, the iPad can last as long at 10 hours, and Samsung Galaxy Tab powered by Google's (NASDAQ:GOOG) Android can last up to 6 hours.
Wu doesn't see RIM able to sell more than 700,000 units of the Playbook next year.
Kaufman maintains a "Hold" rating on RIM, which closed Tuesday at $58.02, down $0.45, or 0.77 percent. Kaufman has a price target of $60 on them.
Progressive (NYSE:PGR) Ratings Affirmed by A.M. Best
Saying Progressive Corporation (NYSE:PGR) has a sustainable competitive advantage, strong capitalization and a solid operating performance, A.M. Best Co. affirmed several ratings at the company.
A.M. Best Co. said they've affirmed the financial strength rating (FSR) of A+ (Superior) and issuer credit ratings (ICR) of “aa” of the Progressive Agency Pool, Progressive Direct Pool and Progressive Commercial Auto Group (collectively known as Progressive) and their respective members. A.M. Best also has affirmed the FSR of A (Excellent) and ICR of “a+” of subsidiary National Continental Insurance Company. Additionally, A.M. Best has affirmed the ICR of “a” and all debt ratings of the parent holding company, The Progressive Corporation. The outlook for all ratings is stable.
A.M. Best did note that Progressive was behind their peers in the area of underwriting leverage, which was higher than the average.
Progressive closed at $19.65, losing $0.12, or 0.61 percent.
A.M. Best Co. said they've affirmed the financial strength rating (FSR) of A+ (Superior) and issuer credit ratings (ICR) of “aa” of the Progressive Agency Pool, Progressive Direct Pool and Progressive Commercial Auto Group (collectively known as Progressive) and their respective members. A.M. Best also has affirmed the FSR of A (Excellent) and ICR of “a+” of subsidiary National Continental Insurance Company. Additionally, A.M. Best has affirmed the ICR of “a” and all debt ratings of the parent holding company, The Progressive Corporation. The outlook for all ratings is stable.
A.M. Best did note that Progressive was behind their peers in the area of underwriting leverage, which was higher than the average.
Progressive closed at $19.65, losing $0.12, or 0.61 percent.
Rambus (NASDAQ:RMBS) Undervalued says Capstone Investments
Capstone Investments says they see Rambus Inc. (NASDAQ:RMBS) as not being adequetely rewarded for their legal catalysts and momentum related to their licensing initiatives.
Capstone said, "We believe RMBS demonstrated its ability to license semi market leaders during FY10. As we enter FY11, we potentially expect several key legal decisions during 1H11. YTD RMBS shares have traded off 15-20%. We don't believe potential value from licensees, or potential legal damages are currently reflected in recent share price...For our new FY11 revenue estimate equals - $239M compared to - $225M."
Capstone Investments maintains a "Strong Buy" rating on Rambus Inc., which closed Tuesday at $19.94. Capstone has a price target of $45 on them.
Capstone said, "We believe RMBS demonstrated its ability to license semi market leaders during FY10. As we enter FY11, we potentially expect several key legal decisions during 1H11. YTD RMBS shares have traded off 15-20%. We don't believe potential value from licensees, or potential legal damages are currently reflected in recent share price...For our new FY11 revenue estimate equals - $239M compared to - $225M."
Capstone Investments maintains a "Strong Buy" rating on Rambus Inc., which closed Tuesday at $19.94. Capstone has a price target of $45 on them.
MannKind's (NASDAQ:MNKD) Afrezza FDA Delay a Neutral Event
MannKind (NASDAQ:MNKD) would have liked to have had the FDA give them a positive decision concerning Afrezza, but Wells Fargo (NYSE:WFC), while acknowledging it could cause problems if the delay is for a long period of time, considers it a neutral event over the short term.
Wells said, "We maintain our rating on the potential for Afrezza. Though a positive decision would have been preferred, we think a short delay by the FDA is better than a complete response letter (CRL) and should be viewed as a generally neutral outcome. Additional approval delays could become problematic but we think MNKD should be able to fund operations through 2011 with cash and credit currently available."
Wells Fargo maintains an "Outperform" rating on MannKind, which closed Tuesday at $8.23, gaining $0.26, or 3.26 percent. Wells has a price target range of $11 to $13 on them.
Wells said, "We maintain our rating on the potential for Afrezza. Though a positive decision would have been preferred, we think a short delay by the FDA is better than a complete response letter (CRL) and should be viewed as a generally neutral outcome. Additional approval delays could become problematic but we think MNKD should be able to fund operations through 2011 with cash and credit currently available."
Wells Fargo maintains an "Outperform" rating on MannKind, which closed Tuesday at $8.23, gaining $0.26, or 3.26 percent. Wells has a price target range of $11 to $13 on them.
A Look at AVEO (Nasdaq:AVEO), ZIOPHARM (NASDAQ:ZIOP), Exelixis (Nasdaq:EXEL), Allos (NASDAQ:ALTH), Synta (NASDAQ:SNTA) and Immunogen (Nasdaq:IMGN)
AVEO Pharmaceuticals (Nasdaq:AVEO), ZIOPHARM Oncology (NASDAQ:ZIOP), Exelixis (Nasdaq:EXEL), Allos Therapeutics(NASDAQ:ALTH), Synta Pharmaceuticals (NASDAQ:SNTA) and Immunogen (Nasdaq:IMGN) were commented on by Canaccord Genuity, as they took a look at the Biotech small cap sector.
Canaccord's take on the companies:
"AVEO Pharmaceuticals (BUY) Investment recommendation: We maintain our BUY rating going into top-line results from the Phase III TIVO-1 trial evaluating tivozanib for treatment of renal cell carcinoma."
"ZIOPHARM Oncology (BUY) Investment recommendation: On the potential of a diversified clinical oncology pipeline, we remain long-term buyers of ZIOP shares.
"Synta Pharmaceuticals (HOLD) Investment recommendation: We maintain our HOLD rating based on lack of meaningful clinical data supporting the potential of STA-9090 for treatment of oncologic indications.
"Immunogen (Buy-rated) Investment recommendation: Although approaching our DCF-based $10 price target, we continue to remain positively inclined on IMGN shares given perceived potential of Roche’s trastuzumab-DM1 (T-DM1) in metastatic breast cancer (MBC).
"Exelixis (HOLD-rated) Investment recommendation: On our view that share value more than fully reflects the risk/reward for potential of XL184 in metastatic prostate cancer, we maintain our HOLD rating.
"Allos Therapeutics (HOLD) Investment recommendation: We maintain our HOLD rating on ALTH given our view that shares adequately reflect potential of Folotyn in the peripheral T cell lymphoma (PTCL) treatment market.
Aveo closed Tuesday at $14.61, down $0.06, or 0.41 percent. Ziopharm closed at $4.71, down $0.12, or 2.48 percent. Exelixis closed up at $8.85, gaining $0.07, or 0.80 percent. Allos closed at $4.62, up $0.01, or 0.22 percent. Synta closed at $6.37, up $0.04, or 0.63 percent. Immunogen ended the session at $9.70, down $0.02, or 0.21 percent.
Canaccord's take on the companies:
"AVEO Pharmaceuticals (BUY) Investment recommendation: We maintain our BUY rating going into top-line results from the Phase III TIVO-1 trial evaluating tivozanib for treatment of renal cell carcinoma."
"ZIOPHARM Oncology (BUY) Investment recommendation: On the potential of a diversified clinical oncology pipeline, we remain long-term buyers of ZIOP shares.
"Synta Pharmaceuticals (HOLD) Investment recommendation: We maintain our HOLD rating based on lack of meaningful clinical data supporting the potential of STA-9090 for treatment of oncologic indications.
"Immunogen (Buy-rated) Investment recommendation: Although approaching our DCF-based $10 price target, we continue to remain positively inclined on IMGN shares given perceived potential of Roche’s trastuzumab-DM1 (T-DM1) in metastatic breast cancer (MBC).
"Exelixis (HOLD-rated) Investment recommendation: On our view that share value more than fully reflects the risk/reward for potential of XL184 in metastatic prostate cancer, we maintain our HOLD rating.
"Allos Therapeutics (HOLD) Investment recommendation: We maintain our HOLD rating on ALTH given our view that shares adequately reflect potential of Folotyn in the peripheral T cell lymphoma (PTCL) treatment market.
Aveo closed Tuesday at $14.61, down $0.06, or 0.41 percent. Ziopharm closed at $4.71, down $0.12, or 2.48 percent. Exelixis closed up at $8.85, gaining $0.07, or 0.80 percent. Allos closed at $4.62, up $0.01, or 0.22 percent. Synta closed at $6.37, up $0.04, or 0.63 percent. Immunogen ended the session at $9.70, down $0.02, or 0.21 percent.
OPNET Technologies (NASDAQ:OPNT) Continues Momentum
OPNET Technologies (NASDAQ:OPNT) has been named as "Top Pick" in the Applications Performance Management (APM) market by Noble Financial, citing its AppDNA product.
AppDNA will aid companies in managing their virtualized applications. The product is expected to be released sometime within the next year and a half.
Noble sees them emerging as one of the leaders in the sector, and believe momentum will continue on with the company.
EPS estimates by Noble for full year 2011 and full year 2012 are $0.59 and $0.79.
Noble maintains a "Buy" rating on OPNET Technologies, which closed Tuesday at $26.50, down $0.38, or 1.41 percent. Noble has a price target of $33 on them.
AppDNA will aid companies in managing their virtualized applications. The product is expected to be released sometime within the next year and a half.
Noble sees them emerging as one of the leaders in the sector, and believe momentum will continue on with the company.
EPS estimates by Noble for full year 2011 and full year 2012 are $0.59 and $0.79.
Noble maintains a "Buy" rating on OPNET Technologies, which closed Tuesday at $26.50, down $0.38, or 1.41 percent. Noble has a price target of $33 on them.
General Motors (NYSE:GM) May Be Forced to Recall Saturn Ion
Not long after General Motors (NYSE:GM) had had to recall about 1.3 million 2005-10 Chevrolet Cobalt and 2007-10 Pontiac G5 vehicles concerning shoddy power-steering systems, they let the National Highway Traffic Safety Administration (NHTSA) know that complaints were growing concerning the power-steering in its Saturn Ion.
The agency says there have been three injuries coming from eleven crashes over the failure of the power-steering in Saturn Ions.
At the time it appeared the problem wasn't that severe, and the Ion was excluded from the recall. Now that the number of complaints have risen to 638 and warranty claims surged to 1,444, the NHTSA is thinking about forcing General Motors to recall the Saturn Ion as well.
The Ions in question were built from 2004-2007, numbering about 384,000 overall.
General Motors claims there's no need for a recall and the failure of power-steering in the car shouldn't stop the car from being able to be controlled if it fails.
The agency says there have been three injuries coming from eleven crashes over the failure of the power-steering in Saturn Ions.
At the time it appeared the problem wasn't that severe, and the Ion was excluded from the recall. Now that the number of complaints have risen to 638 and warranty claims surged to 1,444, the NHTSA is thinking about forcing General Motors to recall the Saturn Ion as well.
The Ions in question were built from 2004-2007, numbering about 384,000 overall.
General Motors claims there's no need for a recall and the failure of power-steering in the car shouldn't stop the car from being able to be controlled if it fails.
ICU Medical (NASDAQ:ICUI) Faces Weak Flu Season, Gross Margin Pressures
ICU Medical (NASDAQ:ICUI) had its EPS estimates lowered by Soleil Securities, citing a weak flu season and pressures on gross margins.
Soleil said, "Bottom-Line: We're adjusting 4Q:10 estimates for ICU-Medical (ICUI-Buy) on: 1) Short-term gross margin pressure from a new manufacturing facility. 2) A weak flu season, which might negatively impact product sales...We've lowered our 4Q:10E sales to $71.5MM (previous $72.5MM) on lower consumable sales. We've lowered our 4Q:10E EPS to $0.55 (previous $0.58)--$0.01 from lower sales and $0.02 on lower gross margins. Introducing CY12 sales/EPS of $328.2MM/$2.45."
Soleil Securities maintains a "Buy" rating on ICU Medical, which closed Tuesday at $36.75, down $0.15, or 0.41 percent. Soleil lowered their price target on the company from $43 to $42.
Soleil said, "Bottom-Line: We're adjusting 4Q:10 estimates for ICU-Medical (ICUI-Buy) on: 1) Short-term gross margin pressure from a new manufacturing facility. 2) A weak flu season, which might negatively impact product sales...We've lowered our 4Q:10E sales to $71.5MM (previous $72.5MM) on lower consumable sales. We've lowered our 4Q:10E EPS to $0.55 (previous $0.58)--$0.01 from lower sales and $0.02 on lower gross margins. Introducing CY12 sales/EPS of $328.2MM/$2.45."
Soleil Securities maintains a "Buy" rating on ICU Medical, which closed Tuesday at $36.75, down $0.15, or 0.41 percent. Soleil lowered their price target on the company from $43 to $42.
Companies Takes Sides in Microsoft (Nasdaq:MSFT), i4i Patent Lawsuit
Microsoft (Nasdaq:MSFT) views its legal battle with i4i as one related to the stifling of innovation, while i4i views it as presumption of validity concerning patents.
Consequently, both companies have supporters, with Microsoft receiving backing from Wal-Mart (NYSE:WMT), Apple (Nasdaq:AAPL) and Google (Nasdaq:GOOG), while i4i has has backing from patent-reliant companies such as Monsanto (NYSE:MON), Amgen (Nasdaq:AMGN), Genentech (NYSE:DNA), DuPont (NYSE:DD).
Obviously all the companies above deal in patents, but it's more the companies choosing between innovation versus patents as far as the highest importance that's at issue, which is determining who they're backing.
The group of companies backing i4i sent a letter to the Department of Justice saying this, "We are greatly concerned that a reversal of the lower court's decision in this case could seriously weaken the presumption of validity that attaches to millions of patents in force in the United States today, thereby undermining long-standing investment-backed reliance interests that are critical for domestic job creation and economic growth, and for U.S. technological leadership internationally."
Microsoft spokesman Kevin Kutz responded to the above letter, saying, "This case is certainly about protecting innovation. Innovation is harmed by bad patents. When bad patents can't be challenged effectively, that's when innovation is significantly at risk."
Microsoft has appealed to the U.S. Supreme Court, which will hear the case in the early part of 2011.
Microsoft closed Tuesday at $28.01, down $0.06, or 0.21 percent.
Consequently, both companies have supporters, with Microsoft receiving backing from Wal-Mart (NYSE:WMT), Apple (Nasdaq:AAPL) and Google (Nasdaq:GOOG), while i4i has has backing from patent-reliant companies such as Monsanto (NYSE:MON), Amgen (Nasdaq:AMGN), Genentech (NYSE:DNA), DuPont (NYSE:DD).
Obviously all the companies above deal in patents, but it's more the companies choosing between innovation versus patents as far as the highest importance that's at issue, which is determining who they're backing.
The group of companies backing i4i sent a letter to the Department of Justice saying this, "We are greatly concerned that a reversal of the lower court's decision in this case could seriously weaken the presumption of validity that attaches to millions of patents in force in the United States today, thereby undermining long-standing investment-backed reliance interests that are critical for domestic job creation and economic growth, and for U.S. technological leadership internationally."
Microsoft spokesman Kevin Kutz responded to the above letter, saying, "This case is certainly about protecting innovation. Innovation is harmed by bad patents. When bad patents can't be challenged effectively, that's when innovation is significantly at risk."
Microsoft has appealed to the U.S. Supreme Court, which will hear the case in the early part of 2011.
Microsoft closed Tuesday at $28.01, down $0.06, or 0.21 percent.
Endo Pharmaceuticals' (NASDAQ:ENDP) Fortesta, Opana ER, Should Stabilize Company
Endo Pharmaceuticals (NASDAQ:ENDP) should be driven strongly on the approval of Fortesta and Opana ER, bringing stability to the overall business, according to Duncan Williams.
They said, "We remain bullish on the two pending catalysts for Fortesta (testosterone replacement) and 'crush-proof' Opana ER (pain). We believe that approval of these products should provide reassurance regarding management's execution and the stability of the overall business. We have also updated our model for the Qualitest acquisition, the latest IMS data, and the updated guidance. Our 2010 estimates are meaningfully above Consensus."
Duncan Williams maintains a "Strong Buy" on Endo Pharmaceuticals Holdings Inc., which closed Tuesday at $35.21, down $0.29, or 0.82 percent. Duncan has a price target of $46 on them.
They said, "We remain bullish on the two pending catalysts for Fortesta (testosterone replacement) and 'crush-proof' Opana ER (pain). We believe that approval of these products should provide reassurance regarding management's execution and the stability of the overall business. We have also updated our model for the Qualitest acquisition, the latest IMS data, and the updated guidance. Our 2010 estimates are meaningfully above Consensus."
Duncan Williams maintains a "Strong Buy" on Endo Pharmaceuticals Holdings Inc., which closed Tuesday at $35.21, down $0.29, or 0.82 percent. Duncan has a price target of $46 on them.
Bank of America's (NYSE:BAC) Headaches Growing from Countrywide Acquisition
It's a surety that Bank of America (NYSE:BAC) had an idea there would be some headaches related to their acquisition of Countrywide Financial, but the recent lawsuit by Allstate (NYSE:ALL) for $700 million against the banking giant for alleged lowering of mortgage standards, which resulted in loans facts being left out of the process, that would have shown the poor quality of the mortgage-backed securities they were purchasing.
Bank of America had nothing to do with originating loans, but via their acquisition of Countrywide in 2008 are now responsible and liable for them if they incur any damages.
BofA responded to the allegations in a statement saying, "We are still reviewing the complaint, but this unfortunately appears to be a situation where a sophisticated investor is looking for someone to blame for a downturn in the economy and losses on an investment it made."
Allstate acquired the mortgage-backed securities from March 2005 to June 2007.
Bank of America closed Tuesday at $13.34, up $0.07, or 0.53 percent. Allstate closed at $32.00, down $0.09, or 0.28 percent.
Bank of America had nothing to do with originating loans, but via their acquisition of Countrywide in 2008 are now responsible and liable for them if they incur any damages.
BofA responded to the allegations in a statement saying, "We are still reviewing the complaint, but this unfortunately appears to be a situation where a sophisticated investor is looking for someone to blame for a downturn in the economy and losses on an investment it made."
Allstate acquired the mortgage-backed securities from March 2005 to June 2007.
Bank of America closed Tuesday at $13.34, up $0.07, or 0.53 percent. Allstate closed at $32.00, down $0.09, or 0.28 percent.
Chemed (NYSE:CHE) Authorizes Stock Repurchase of $70 Million
With the announcement by Chemed (NYSE:CHE) that they're going to increase their stock repurchase plan by another $70 million, Deutsche Bank (NYSE:DB) sees numbers for 2011 moving up incrementally for the company.
Deutsche said, "CHE authorized an additional $70M for stock repurchase which will be funded through a combination of cash and debt. As of September 30, 2010 the company had $45.4M outstanding under the current plan. Assuming the total $115.5 allotment is utilized this could result in an additional 3-5% accretion to our 2011 estimates or $2-3 to our price target. Our model assumes 975k share are repurchased in 2011. The additional allotment leaves an additional 664k (2.9% of existing shares) available for repurchase assuming a 10% premium to the existing share price. Recall in our Q3 earnings note, we sensed that CHE's capital deployment strategy could become more aggressive with buyback and it would seem that the company is moving in this direction."
Deutsche Bank maintains a "Hold" rating on Chemed, which closed Tuesday at $64.66, up $0.62, or 0.97 percent.
Deutsche said, "CHE authorized an additional $70M for stock repurchase which will be funded through a combination of cash and debt. As of September 30, 2010 the company had $45.4M outstanding under the current plan. Assuming the total $115.5 allotment is utilized this could result in an additional 3-5% accretion to our 2011 estimates or $2-3 to our price target. Our model assumes 975k share are repurchased in 2011. The additional allotment leaves an additional 664k (2.9% of existing shares) available for repurchase assuming a 10% premium to the existing share price. Recall in our Q3 earnings note, we sensed that CHE's capital deployment strategy could become more aggressive with buyback and it would seem that the company is moving in this direction."
Deutsche Bank maintains a "Hold" rating on Chemed, which closed Tuesday at $64.66, up $0.62, or 0.97 percent.
Hecla Mining (NYSE:HL), Silver Wheaton (NYSE:SLW), Coeur d'Alene Mines (NYSE:CDE), Silvercorp Metals (NYSE:SVM) On a Tear Tuesday
Mining stocks were soaring on Tuesday, with miners like Hecla Mining (NYSE:HL), Silver Wheaton (NYSE:SLW), Coeur d'Alene Mines (NYSE:CDE) and Silvercorp Metals (NYSE:SVM) making solid gains, even though they weren't even among the best-performing of the miners.
That seems to testify to the pent-up concern over the weak economy and failed attempts by the Federal Reserve to just throw more money at the problem, making it worst and the recession last longer.
The U.S. dollar also continues to fall in value on the continual printing of money by the Fed, pushing up the share price of miners and commodities in general.
Silvercorp Metals closed Tuesday at $12.78, gaining $0.44, or 3.57 percent. Coeur d'Alene Mines closed at $27.33, up $0.97, or 3.68 percent. Hecla Mining soared to $11.24, up by $0.58, or 5.44 percent. Silver Wheaton ended the session at $38.30, rising by $1.73, or 4.73 percent.
That seems to testify to the pent-up concern over the weak economy and failed attempts by the Federal Reserve to just throw more money at the problem, making it worst and the recession last longer.
The U.S. dollar also continues to fall in value on the continual printing of money by the Fed, pushing up the share price of miners and commodities in general.
Silvercorp Metals closed Tuesday at $12.78, gaining $0.44, or 3.57 percent. Coeur d'Alene Mines closed at $27.33, up $0.97, or 3.68 percent. Hecla Mining soared to $11.24, up by $0.58, or 5.44 percent. Silver Wheaton ended the session at $38.30, rising by $1.73, or 4.73 percent.
Terremark Worldwide's (NASDAQ:TMRK) Momemtum to Continue Through 2012
With the business model of Terremark Worldwide (NASDAQ:TMRK) offering clarity into probable future revenue and earnings, Kaufman sees them growing by 20 percent in fiscal year 2011, and 25 percent in fiscal year 2012.
Kaufman said, "Terremark's business model provides good visibility into future quarters with high recurring revenue. The company continues to demonstrate business momentum and we believe can continue to attract new customers with its mix of colocation, managed hosting and cloud. Despite a soft economic environment the company is poised to grow its top line roughly 20% this fiscal year and we expect growth to accelerate to nearly 25% top-line growth in fiscal 2012 with EBITDA growth of over 37% along with margin expansion. The opportunity provided by the company's relationship with Verizon and the federal government provide a material opportunity to drive additional business momentum."
Kaufman Bros. maintains a "Buy" on Terremark Worldwide, which closed Tuesday at $12.78, down $0.26, or 1.99 percent. Kaufman raised their price target on them from $11 to $15.
Kaufman said, "Terremark's business model provides good visibility into future quarters with high recurring revenue. The company continues to demonstrate business momentum and we believe can continue to attract new customers with its mix of colocation, managed hosting and cloud. Despite a soft economic environment the company is poised to grow its top line roughly 20% this fiscal year and we expect growth to accelerate to nearly 25% top-line growth in fiscal 2012 with EBITDA growth of over 37% along with margin expansion. The opportunity provided by the company's relationship with Verizon and the federal government provide a material opportunity to drive additional business momentum."
Kaufman Bros. maintains a "Buy" on Terremark Worldwide, which closed Tuesday at $12.78, down $0.26, or 1.99 percent. Kaufman raised their price target on them from $11 to $15.
First Majestic Silver (NYSE:AG), U.S. Gold (NYSE:UXG), Jaguar Mining (NYSE:JAG), Thompson Creek Metals (NYSE:TC) Among Tuesday's Top Performers
Of the top performers on Tuesday, five of the top ten, as measured by percentages on the NYSE, were miners, including First Majestic Silver (NYSE:AG), U.S. Gold (NYSE:UXG), Jaguar Mining (NYSE:JAG) and Thompson Creek Metals (NYSE:TC).
First Majestic Silver and U.S. Gold were No.1 and No. 2 respectively among all stocks on the exchange.
Much of this was centered around the fall in value of the U.S. dollar and gold and silver's safe haven status as well as being increasingly considered as an alternative currency if the U.S. dollar were to completely collapse.
First Majestic Silver closed Tuesday at $13.60, gaining $1.51, or 12.49 percent. U.S. Gold ended at $7.96, up $0.67, or 9.19 percent.
Jaguar Mining, which was the No. 4 gainer on Tuesday, based on percentages, closed at $7.18, up $0.50, or 7.49 percent. In 9th place Tuesday was Thompson Creek Metals, closing at $13.94, gaining $13.94, up $0.72, or 5.45 percent.
Other than Jaguar Mining, all the companies were above their 3-month daily trading volume.
First Majestic Silver and U.S. Gold were No.1 and No. 2 respectively among all stocks on the exchange.
Much of this was centered around the fall in value of the U.S. dollar and gold and silver's safe haven status as well as being increasingly considered as an alternative currency if the U.S. dollar were to completely collapse.
First Majestic Silver closed Tuesday at $13.60, gaining $1.51, or 12.49 percent. U.S. Gold ended at $7.96, up $0.67, or 9.19 percent.
Jaguar Mining, which was the No. 4 gainer on Tuesday, based on percentages, closed at $7.18, up $0.50, or 7.49 percent. In 9th place Tuesday was Thompson Creek Metals, closing at $13.94, gaining $13.94, up $0.72, or 5.45 percent.
Other than Jaguar Mining, all the companies were above their 3-month daily trading volume.
Tuesday, December 28, 2010
Apple (NASDAQ:AAPL) Sued Over Transmitting Personal Info Via Apps
Apple (NASDAQ:AAPL) has been sued over allegedly allowing applications downloaded to iPhones and iPads to transmit personal information of users to third party advertising networks.
The lawsuits, filed by two different groups, are now seeking class action.
“Some apps are also selling additional information to ad networks, including users’ location, age, gender, income, ethnicity, sexual orientation and political views,” the lawsuit asserted.
Apple claims applications in its Apps Store are all reviewed and it forbids personal data to be transmitted without users' permission.
The lawsuits, filed by two different groups, are now seeking class action.
“Some apps are also selling additional information to ad networks, including users’ location, age, gender, income, ethnicity, sexual orientation and political views,” the lawsuit asserted.
Apple claims applications in its Apps Store are all reviewed and it forbids personal data to be transmitted without users' permission.
Rare Element Resources (AMEX:REE) Shares, China Rare Earths, Molycorp (NYSE:MCP)
News that China was going to cut back on rare earth exports by 11 percent caused the share price of Rare Element Resources (AMEX:REE) to soar, and now the news that Molycorp (NYSE:MCP) won't be starting to work its Mountain Pass mine, as rumors have been insinuating, could push up the share price of Rare Element Resources even more.
The flagship project of Rare Element is located at Bear Lodge, in northeast Wyoming, which they have a 100 percent interest in.
Along with rare-earth elements, they also mine gold.
With China wanting to manage their rare earths more closely and attempt to control the prices to suit them better, that leaves any company outside of China in a strong position as demand for rare earths continue to grow.
Rare Element Resources is one of those positioned to take strong advantage of these realities.
Rare Element Resources was trading at $13.34, up $1.61, or 13.73 percent, as of 2:21 PM EST.
The flagship project of Rare Element is located at Bear Lodge, in northeast Wyoming, which they have a 100 percent interest in.
Along with rare-earth elements, they also mine gold.
With China wanting to manage their rare earths more closely and attempt to control the prices to suit them better, that leaves any company outside of China in a strong position as demand for rare earths continue to grow.
Rare Element Resources is one of those positioned to take strong advantage of these realities.
Rare Element Resources was trading at $13.34, up $1.61, or 13.73 percent, as of 2:21 PM EST.
Molycorp (NYSE:MCP) Not Ready with Mountain Pass Mine
Earlier this week rumors that Molycorp (NYSE:MCP) was going to start actively producing at Mountain Pass mine were circulating, but have been found out to be untrue, as officials from the company said it won't be until the latter part of 2011 at earliest before they start mining, and possibly not until 2012.
CNBC’s (NYSE:GE) Brian Shactman cited Molycorp representatives, saying that “although they’ve started the process of pre-stripping they are many months away from getting the ore out of the ground."
Even though China announced today they're starting to cut back on rare earth exports, this news will weigh on Molycorp, and probably be more of a negative impact than the positive of increasing demand outside of China, which represents 97 percent of the rare earths market at this time.
CNBC’s (NYSE:GE) Brian Shactman cited Molycorp representatives, saying that “although they’ve started the process of pre-stripping they are many months away from getting the ore out of the ground."
Even though China announced today they're starting to cut back on rare earth exports, this news will weigh on Molycorp, and probably be more of a negative impact than the positive of increasing demand outside of China, which represents 97 percent of the rare earths market at this time.
Options Traders Continue Molycorp (NYSE:MCP) Love
Options traders continue their recently started love affair with Molycorp (NYSE:MCP), apparently on the news China had ideas of cutting back on exporting various rare-earth minerals.
Interest in the company is on puts and calls, and trading today is already at 3 times the usual 3-month daily volume.
It's not that Molycorp is in China and would be affected in the way of not being able to export, because they're not, it's the idea there could be an extraordinary short-term shortage that is driving the interest in the company.
So far in 2010, the share price of the company has skyrocketed by over 240 percent, and it looks like it still has room to run, even though there is increasing caution on the sustainability of the upward share price movement.
Molycorp was trading at $48.90, down $0.54, or 1.09 percent, as of 1:48 PM EST.
Interest in the company is on puts and calls, and trading today is already at 3 times the usual 3-month daily volume.
It's not that Molycorp is in China and would be affected in the way of not being able to export, because they're not, it's the idea there could be an extraordinary short-term shortage that is driving the interest in the company.
So far in 2010, the share price of the company has skyrocketed by over 240 percent, and it looks like it still has room to run, even though there is increasing caution on the sustainability of the upward share price movement.
Molycorp was trading at $48.90, down $0.54, or 1.09 percent, as of 1:48 PM EST.
Silver Wheaton (NYSE:SLW), Hecla Mining (NYSE:HL), Gammon Gold (NYSE:GRS) Gain as Dollar Drops, Gold, Silver Rise
Mining stocks finally had something to give them a much-needed boost, after most have been struggling since December 6. That has changed today as Silver Wheaton Corp (NYSE:SLW), Hecla Mining Co (NYSE:HL) and Gammon Gold Inc (NYSE:GRS), among numerous others, have enjoyed a resurgence as the U.S. dollar resumed its downward spiral and gold and silver prices pushed up.
Gold on the New York Mercantile Exchange increased by 1.71% to $1406.6 an ounce in trading, while spot gold has held over $1,400 an ounce after gaining over $20.
The usual sell-off after noon didn't come about today, as fundamentals seem to have held gold and silver prices in place.
Silver Wheaton was trading at $38.28, gaining $1.71, or 4.68 percent, as of 1:13 PM EST. Hecla Mining soared to $11.20, up $0.54, or 5.07 percent. Gammon Gold increased to $7.99, up $0.32, or 4.17 percent.
Gold on the New York Mercantile Exchange increased by 1.71% to $1406.6 an ounce in trading, while spot gold has held over $1,400 an ounce after gaining over $20.
The usual sell-off after noon didn't come about today, as fundamentals seem to have held gold and silver prices in place.
Silver Wheaton was trading at $38.28, gaining $1.71, or 4.68 percent, as of 1:13 PM EST. Hecla Mining soared to $11.20, up $0.54, or 5.07 percent. Gammon Gold increased to $7.99, up $0.32, or 4.17 percent.
Goldman Sachs (NYSE:GS), JPMorgan (NYSE:JPM), UBS (NYSE:UBS) Initiate Coverage on LPL Financial (Nasdaq:LPLA)
In the midst of the intense interest in the IPO of General Motors (NYSE:GM), LPL Financial (Nasdaq:LPLA) has in many ways fallen through the cracks, although that appears to be changing, as Goldman Sachs (NYSE:GS), JPMorgan (NYSE:JPM) and UBS (NYSE:UBS) has all initiated coverage on them today, as well as Keefe, Bruyette & Woods.
Goldman was the most upbeat about the company, starting them off with a "Buy" rating. JPMorgan and UBS began with a "Neutral" rating, and Keefe, Bruyette & Woods started them at "Market Perform."
UBS AG analyst Alex Kramm commented, “We view LPL as a pure play on the growth in the independent financial advisor space, one of the fastest growing areas in the financial services industry.
“The independent advisor space has benefited from a secular trend of retail investors increasingly seeking financial advice and advisors breaking away from large wirehouses to become independent.”
LPL Investment Holdings Inc. was trading at $35.81, gaining $0.81, or 2.31 percent, as of 12:56 PM EST.
Goldman was the most upbeat about the company, starting them off with a "Buy" rating. JPMorgan and UBS began with a "Neutral" rating, and Keefe, Bruyette & Woods started them at "Market Perform."
UBS AG analyst Alex Kramm commented, “We view LPL as a pure play on the growth in the independent financial advisor space, one of the fastest growing areas in the financial services industry.
“The independent advisor space has benefited from a secular trend of retail investors increasingly seeking financial advice and advisors breaking away from large wirehouses to become independent.”
LPL Investment Holdings Inc. was trading at $35.81, gaining $0.81, or 2.31 percent, as of 12:56 PM EST.
Bank of America (NYSE:BAC), Citigroup (NYSE:C) Start GM (NYSE:GM) Off with "Buy" Rating
GM (NYSE:GM) received a ton of coverage today, as Bank of America (NYSE:BAC) and Citigroup (NYSE:C) led the way, starting the automaker off with a "Buy" rating.
All of the attention came on the same day because it was the first day banks involved with the IPO were allowed to give reports on the company.
RBC Capital and Credit Suisse (NYSE:CS) started GM off with an "Outperform," and JPMorgan (NYSE:JPM), Morgan Stanley (NYSE:MS), and Barclays Capital launched coverage with an "Overweight" on them.
As far as price targets went, there was a range of $42 to $50, including all those initiating coverage, although Soleil Securities wasn't as optimistic as the others, having a price target of $38 on GM, as well as starting them off with a "Hold" rating.
GM was trading at $35.49, gaining $0.89, or 2.57 percent, as of 12:41 PM EST.
All of the attention came on the same day because it was the first day banks involved with the IPO were allowed to give reports on the company.
RBC Capital and Credit Suisse (NYSE:CS) started GM off with an "Outperform," and JPMorgan (NYSE:JPM), Morgan Stanley (NYSE:MS), and Barclays Capital launched coverage with an "Overweight" on them.
As far as price targets went, there was a range of $42 to $50, including all those initiating coverage, although Soleil Securities wasn't as optimistic as the others, having a price target of $38 on GM, as well as starting them off with a "Hold" rating.
GM was trading at $35.49, gaining $0.89, or 2.57 percent, as of 12:41 PM EST.
Barrick (NYSE:ABX), Goldcorp (NYSE:GG), Newmont Mining (NYSE:NEM) Push Up as Gold Prices Break $1,400 Again
Since December 6th gold mining companies have been on a downward trend, as investors took profits and focused on what appears to be a decent Christmas season for retailers. Major gold miners like Barrick Gold (NYSE:ABX), Goldcorp (NYSE:GG) and Newmont Mining (NYSE:NEM) all started their drop on the 6th of December, and today have finally made a nice rebound as gold prices soared past $1,400 an ounce, pulling the share prices up with it.
Most of this is connected to the fall in value of the U.S. dollar again, but also, as mentioned, decent Christmas retail sales, which may have brought to the remembrance of investors the very real threat of inflation, and probably lowering the perceived risk of deflation.
As of 12:13 PM EST, gold prices continue to hold, and the usual sell-off after a rise in price earlier in the trading session hasn't emerged yet, and as far as spot gold stands at $1,405.20 an ounce, up by $21.10 on the day.
Gold for February delivery surged $18.30 to $1,400.70 an ounce at the Comex division of the New York Mercantile Exchange earlier in the day.
Goldcorp was trading at $45.36, up $0.88, or 1.98 percent, as of 12:14 PM EST.Newmont Mining was at $61.68, up $1.59, or 2.65 percent. Barrick Gold was trading at $53.03, up $1.43, or 2.77 percent.
Most of this is connected to the fall in value of the U.S. dollar again, but also, as mentioned, decent Christmas retail sales, which may have brought to the remembrance of investors the very real threat of inflation, and probably lowering the perceived risk of deflation.
As of 12:13 PM EST, gold prices continue to hold, and the usual sell-off after a rise in price earlier in the trading session hasn't emerged yet, and as far as spot gold stands at $1,405.20 an ounce, up by $21.10 on the day.
Gold for February delivery surged $18.30 to $1,400.70 an ounce at the Comex division of the New York Mercantile Exchange earlier in the day.
Goldcorp was trading at $45.36, up $0.88, or 1.98 percent, as of 12:14 PM EST.Newmont Mining was at $61.68, up $1.59, or 2.65 percent. Barrick Gold was trading at $53.03, up $1.43, or 2.77 percent.
Gold Prices Today Roar Back, Pushing Past $1,400
It's been a while since gold has made a move, but with the drop of the U.S. dollar today reminding investors of the precarious situation the economy is in and misguided policies of the Federal Reserve being the major culprit, gold prices today have soared past the $1,400 an ounce mark.
Strong Christmas sales also could be part of the story, as it appears there may have been less need to discount, which would have helped prices, but also reminding investors of the inflation beast waiting out there.
As of 12:00 PM EST, spot gold was up $20.90, reaching $14.05 an ounce. We'll see if there is the typical sell-off after noon as traders take some quick profits.
Gold for February delivery soared $18.30 to $1,400.70 an ounce at the Comex division of the New York Mercantile Exchange.
Strong Christmas sales also could be part of the story, as it appears there may have been less need to discount, which would have helped prices, but also reminding investors of the inflation beast waiting out there.
As of 12:00 PM EST, spot gold was up $20.90, reaching $14.05 an ounce. We'll see if there is the typical sell-off after noon as traders take some quick profits.
Gold for February delivery soared $18.30 to $1,400.70 an ounce at the Comex division of the New York Mercantile Exchange.
Investment Technology Group (NYSE:ITG) Margins to Improve in 2011
Margins for Investment Technology Group (NYSE:ITG) look like they'll improve in 2011, says Goldman Sachs (NYSE:GS), as higher pricing power could help them overcome weaker international markets.
Margins in the third quarter were due to softer U.S. equity volume.
Goldman raised their EPS estimates by $0.01 for each of the following: 4Q10, 2010, 2011, and 2012 to $0.20, $0.96, $1.21, and $1.36.
Goldman reiterates their "Neutral" rating on Investment Technology Group, which closed Monday at $16.61, up $0.04, or 0.24 percent. They raised their price target on them to $17.
Margins in the third quarter were due to softer U.S. equity volume.
Goldman raised their EPS estimates by $0.01 for each of the following: 4Q10, 2010, 2011, and 2012 to $0.20, $0.96, $1.21, and $1.36.
Goldman reiterates their "Neutral" rating on Investment Technology Group, which closed Monday at $16.61, up $0.04, or 0.24 percent. They raised their price target on them to $17.
Will Mosaic (NYSE:MOS) Catch Up with Peers?
Comparing Mosaic's (NYSE:MOS) performance with their peers in a year where most of them took off because of fertilizer demand, prices and resultant margins, the question is why Mosaic only moved up 19 percent when the rest of them outperformed.
Gleacher says, "Amidst a year of fertilizer revival, MOS has significantly underperformed its peers, with the stock up 19% compared to 46% for CF Industries (NYSE:CF), 38% for Agrium (NYSE:AGU), 32% for Potash (NYSE:POT) 24% for Intrepid Potash (NYSE:IPI) (The S&P is up 13%). We suspect the uncertainty regarding the South Fort Meade phosphate mine litigation in Florida played a big role in the underperformance. However, with strength in earnings momentum expected to resume in the quarters ahead as rising potash and phosphate prices flow through the financial results, we expect the relative underperformance to disappear.
"...MOS should benefit from the recent rise in potash and phosphate prices and we have increased our FY2011 EPS to $4.13 from $4.00 and FY2012 EPS to $5.15 from $5.00."
Gleacher & Co. reiterates a "Buy" rating on Mosaic, which was trading at $71.98, up $0.50, or 0.70 percent, as of 11:52 AM EST. Gleacher has a price target on them of $80.
Gleacher says, "Amidst a year of fertilizer revival, MOS has significantly underperformed its peers, with the stock up 19% compared to 46% for CF Industries (NYSE:CF), 38% for Agrium (NYSE:AGU), 32% for Potash (NYSE:POT) 24% for Intrepid Potash (NYSE:IPI) (The S&P is up 13%). We suspect the uncertainty regarding the South Fort Meade phosphate mine litigation in Florida played a big role in the underperformance. However, with strength in earnings momentum expected to resume in the quarters ahead as rising potash and phosphate prices flow through the financial results, we expect the relative underperformance to disappear.
"...MOS should benefit from the recent rise in potash and phosphate prices and we have increased our FY2011 EPS to $4.13 from $4.00 and FY2012 EPS to $5.15 from $5.00."
Gleacher & Co. reiterates a "Buy" rating on Mosaic, which was trading at $71.98, up $0.50, or 0.70 percent, as of 11:52 AM EST. Gleacher has a price target on them of $80.
DryShips (NASDAQ:DRYS) EPS Estimates Changed on Tanker Business Entry
News that DryShips (NASDAQ:DRYS) has entered the crude tanker shipping market has Jefferies and others changing their EPS estimates on the company.
Dryships announced they're acquiring twelve ships built from scratch, with six of them being Aframaxes and six being Suesmaxes.
The ships are expected to be delivered from 2011 to 2013, costing the company $770 million. They've paid $120 million of that at this time.
Not too long ago Dryships sold off about 22 percent of their interest in Ocean Rig, helping to offset the acquisition.
They are either going to IPO their tanker assets in 2011 or spin them off.
Jefferies raised their full year 2010 EPS estimate on Dryships by $0.01 to $1.08, and have changed their full year 2011 EPS/EBITDA estimates from $1.02/$755.8 to $0.94/$767.8.
Jefferies maintains their "Hold" rating on DryShips, which was trading at $5.54, down $0.01, or 0.18 percent, as of 11:23 AM EST.
Dryships announced they're acquiring twelve ships built from scratch, with six of them being Aframaxes and six being Suesmaxes.
The ships are expected to be delivered from 2011 to 2013, costing the company $770 million. They've paid $120 million of that at this time.
Not too long ago Dryships sold off about 22 percent of their interest in Ocean Rig, helping to offset the acquisition.
They are either going to IPO their tanker assets in 2011 or spin them off.
Jefferies raised their full year 2010 EPS estimate on Dryships by $0.01 to $1.08, and have changed their full year 2011 EPS/EBITDA estimates from $1.02/$755.8 to $0.94/$767.8.
Jefferies maintains their "Hold" rating on DryShips, which was trading at $5.54, down $0.01, or 0.18 percent, as of 11:23 AM EST.
BGC Partners (NASDAQ:BGCP) 4th Quarter Their Last Good One for Awhile?
BGC Partners (NASDAQ:BGCP) should enjoy a decent fourth quarter, but going forward it appears they're going to struggle because of the falling value of the U.S. dollar and regulatory impacts, according to Goldman Sachs (NYSE:GS).
On the positive side, there should be increased volume for them and the probable migration to electronic trading sometime soon, which should help them immensely.
As with some of the other exchange firms, BCG will struggle if the U.S. dollar continues to decline in value, which appears to be the case in 2011.
There could be pockets of the dollar strengthening, but that will probably only happen when the occasional story out of the EU emerges on the sovereign debt crisis, which always pushes the value of the euro down and the value of the U.S. dollar up.
Goldman maintains their "Neutral" rating on BGC, which closed Monday at $8.50, gaining $0.01, or 0.12 percent. They lowered their price target on them to $8.25.
On the positive side, there should be increased volume for them and the probable migration to electronic trading sometime soon, which should help them immensely.
As with some of the other exchange firms, BCG will struggle if the U.S. dollar continues to decline in value, which appears to be the case in 2011.
There could be pockets of the dollar strengthening, but that will probably only happen when the occasional story out of the EU emerges on the sovereign debt crisis, which always pushes the value of the euro down and the value of the U.S. dollar up.
Goldman maintains their "Neutral" rating on BGC, which closed Monday at $8.50, gaining $0.01, or 0.12 percent. They lowered their price target on them to $8.25.
Nasdaq OMX (NASDAQ:NDAQ) Will Benefit From Weak Dollar Says Goldman (NYSE:GS)
The weakness of the U.S. dollar is considered one of the more important factors in the performance of exchange stock in 2011, and in the case of Nasdaq OMX Group (NASDAQ:NDAQ) it is considered a positive element, according to Goldman Sachs (NYSE:GS).
Goldman said, "we expect continued USD depreciation vs. major European currencies to benefit 4Q10 earnings for exchanges with greater international exposure."
They generate about 30 percent of their revenue internationally.
Determined by its historic multiple, Goldman also sees Nasdaq OMX Group as extremely attractive in comparison to its peers.
Goldman maintains a "Buy" rating on Nasdaq OMX Group, which closed Monday at $23.94, up $0.12, or 0.50 percent. They raised their price target on them from $24 to $28.
Goldman said, "we expect continued USD depreciation vs. major European currencies to benefit 4Q10 earnings for exchanges with greater international exposure."
They generate about 30 percent of their revenue internationally.
Determined by its historic multiple, Goldman also sees Nasdaq OMX Group as extremely attractive in comparison to its peers.
Goldman maintains a "Buy" rating on Nasdaq OMX Group, which closed Monday at $23.94, up $0.12, or 0.50 percent. They raised their price target on them from $24 to $28.
Goldman Raises Estimates and Price Target on Intercontinental Exchange (ICE)
Goldman Sachs (NYSE:GS) commented on several exchanges, with most of them expected to increase in volume, some with margins, and all being affected - for better and worse - by their exposure to currencies. In the case of Intercontinental Exchange (NYSE:ICE), they don't see the U.S. dollar helping them in any way.
Goldman does see them improving in the fourth quarter, citing volume trends for them increasing.
Goldman raised their EPS estimates for 4Q10, 2010, 2011, and 2012 from $1.35, $5.65, $6.25, and $6.90 to $1.40, $5.69, $6.30, and $6.95.
In the near term Goldman sees Intercontinental Exchange increasing their energy volume and clearing revenues, although margins appear to be under pressure. There is also the probability of regulations negatively affecting them.
Goldman reiterates their "Neutral" rating on Intercontinental Exchange, which closed Monday at $120.86, up $0.86, or 0.72 percent. They raised their price target on them to $130.
Goldman does see them improving in the fourth quarter, citing volume trends for them increasing.
Goldman raised their EPS estimates for 4Q10, 2010, 2011, and 2012 from $1.35, $5.65, $6.25, and $6.90 to $1.40, $5.69, $6.30, and $6.95.
In the near term Goldman sees Intercontinental Exchange increasing their energy volume and clearing revenues, although margins appear to be under pressure. There is also the probability of regulations negatively affecting them.
Goldman reiterates their "Neutral" rating on Intercontinental Exchange, which closed Monday at $120.86, up $0.86, or 0.72 percent. They raised their price target on them to $130.
Huntington Bancshares (Nasdaq:HBAN) Still Attracting Investors
Huntington Bancshares (Nasdaq:HBAN) has done little since May 2010 as far as share price goes, but the recent paying back of $1.4 billion in TARP funds has drawn the attention of investors and traders to the company, and they've started to push the stock up.
While shares of the company are up almost 90 percent over the last 12 months, most of that rise was over in the early part of April, and the stock has languished since then, until November.
Even so, analysts believe there is plenty of upside to the company, and are pushing the stock pretty hard lately.
A growing number of investors and analysts see the stock as a good candidate to be taken over, and that, probably more than anything else, appears to be driving the interest.
Huntington closed Monday at $6.96, up $0.08, or 1.16 percent.
While shares of the company are up almost 90 percent over the last 12 months, most of that rise was over in the early part of April, and the stock has languished since then, until November.
Even so, analysts believe there is plenty of upside to the company, and are pushing the stock pretty hard lately.
A growing number of investors and analysts see the stock as a good candidate to be taken over, and that, probably more than anything else, appears to be driving the interest.
Huntington closed Monday at $6.96, up $0.08, or 1.16 percent.
City Holding (NASDAQ:CHCO) Downgraded on Fair Value
Citing the regional bank being fairly value and reaching their price target, Standpoint Research downgraded City Holding (NASDAQ:CHCO) from "Buy" to "Hold."
Standpoint says, "West Virginia/Kentucky/Ohio regional bank CHCO has jumped 27% since our February 9, 2010 recommendation. The shares have out-performed the S&P-500 (and the XLF) by 1000 bps for us and are now fairly valued at a two-year high, 1.8X book value and 15X estimates for next year. We expect the shares to track the market going forward. It should be noted that good news from this company could trigger a short squeeze in this very illiquid name that would send the stock price towards the all-time high of $47 from Q3, 2008. CHCO has hit our price target ($38); we can no longer leave our highest recommendation attached to this name."
City Holding closed Monday at $37.50, gaining $0.03, or 0.08 percent.
Standpoint says, "West Virginia/Kentucky/Ohio regional bank CHCO has jumped 27% since our February 9, 2010 recommendation. The shares have out-performed the S&P-500 (and the XLF) by 1000 bps for us and are now fairly valued at a two-year high, 1.8X book value and 15X estimates for next year. We expect the shares to track the market going forward. It should be noted that good news from this company could trigger a short squeeze in this very illiquid name that would send the stock price towards the all-time high of $47 from Q3, 2008. CHCO has hit our price target ($38); we can no longer leave our highest recommendation attached to this name."
City Holding closed Monday at $37.50, gaining $0.03, or 0.08 percent.
Kemet (NYSE:KEM) Margins Improve on Tantalum, Ceramic Segments
With their Tantalum and Ceramic margins operating at the highest levels in a decade, Deutsche Bank (NYSE:DB) launched coverage on Kemet (NYSE:KEM) with a "Buy" rating.
Deutsche said, "The company is a turnaround story, with the Tantalum and Ceramic segments now operating at 10-year high margins, and more improvements to come in the F&E segment. Despite a strong position in tantalum capacitors and improving operating margins, KEM trades at a discount to peers AVX and Vishay. We see this as an opportunity. Negative risks to our Buy rating include capacity increases by competitors, substitution of tantalum by other dielectrics, increases in raw material costs, and the inability to realize benefits from the F&E restructuring program."
Kemet closed Monday at $13.50, gaining $0.54, or 4.17 percent. Deutsche has a price target of $16 on them.
Deutsche said, "The company is a turnaround story, with the Tantalum and Ceramic segments now operating at 10-year high margins, and more improvements to come in the F&E segment. Despite a strong position in tantalum capacitors and improving operating margins, KEM trades at a discount to peers AVX and Vishay. We see this as an opportunity. Negative risks to our Buy rating include capacity increases by competitors, substitution of tantalum by other dielectrics, increases in raw material costs, and the inability to realize benefits from the F&E restructuring program."
Kemet closed Monday at $13.50, gaining $0.54, or 4.17 percent. Deutsche has a price target of $16 on them.
Navistar International's (NYSE:NAV) Truck Orders Should Raise Valuation
New truck orders for Navistar International (NYSE:NAV) should be a significant catalyst for the company and drive up the valuation.
Barrington said, "We believe that NAV’s stock should continue to trend higher along with the improving U.S. economy and expected 2011 truck recovery. The 2011 truck data from ACT Research for new truck orders should be the catalyst for a higher NAV valuation as investors expect the company to leverage higher truck volumes. The visibility created from recent military truck orders should help to support NAV’s cash flow until we get evidence of NAV’s 2011 truck and engine profits."
Barrington Research reiterates an "Outperform" on Navistar International (NYSE:NAV), which closed Monday at $58.19, gaining $0.64, or 1.11 percent. They raised their price target on them from $65 to $75.
Barrington said, "We believe that NAV’s stock should continue to trend higher along with the improving U.S. economy and expected 2011 truck recovery. The 2011 truck data from ACT Research for new truck orders should be the catalyst for a higher NAV valuation as investors expect the company to leverage higher truck volumes. The visibility created from recent military truck orders should help to support NAV’s cash flow until we get evidence of NAV’s 2011 truck and engine profits."
Barrington Research reiterates an "Outperform" on Navistar International (NYSE:NAV), which closed Monday at $58.19, gaining $0.64, or 1.11 percent. They raised their price target on them from $65 to $75.
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