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"Fast Money" for Wednesday


Wednesday’s Picks
Pete Najarian said that Crocs (CROX) $30.61 was looking attractive again after losing more than half its value since that ugly sell-off in November.

Guy Adami called Merck (MRK) $48.01 a “compelling” trade after its earnings Wednesday.

Tuesday’s Results
Guy Adami recommends the NYSE Euronext (NYX) $78.04 Close $79.68 GAIN

Karen Finerman prefers Goldman Sachs (GS) $196.25 Close $195.05 LOSS

Pete Najarian likes Nasdaq (NDAQ) $44.07 Close $45.49 GAIN

2008 Records:
Brian Schaeffer= 0-1
Carter Worth= 0-1
Jon Najarian= 3-1
Jeff Macke= 6-4
Tim Seymore= 2-1
Guy Adami= 5-7
Pete Najarian= 4-5
Karen Finerman= 5-5

2007 Results (Since 6/21):
Guy Adami= 58-46 = 56%
Jeff Macke= 60-40 = 60%
Pete Najarian= 49-41 = 54%
Karen Finerman= 40-30 = 57%

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52 Week Low’s 1/29


(TVHU) Media & Entmt Holding …
(TOMO) Tomotherapy Inc
(TKPU) Polaris Acquisition Corp
(STKL ) Sunopta Inc
(RLH ) Red Lion Hotels Corp
(RCRC) Rc2 Corp
(IKN ) Ikon Office Solutions Inc
(IIIU ) Information Services …
(ICUI ) ICU Medical Inc
(HMG ) HMG/Courtland Propert …
(HLDU ) Secure Amer Acquisiti …
(CZFC ) Citizens First Corp
(CPI ) Capital Properties, Inc
(CPBC ) Community Partners Ba …
(CCU ) Clear Channel Communi …
(AVRX) Avalon Pharmaceutical …
(AMLN ) Amylin Pharmaceutical …

Disclosure (“none” means no position):

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Wal-Mart Beats Retailers for a Piece of the Stimulus Pie

Wal-Mart (WMT) got the jump on retailers like Target (TGT) during the holiday season by starting deep discounts in October. Now it has beaten them again for a piece of the upcoming stimulus plan.

Wal-Mart announced Tuesday that it will cut prices between 10 to 30% this week on groceries, electronics and other home-related products in an effort to “help with added savings throughout the year, focusing especially on what people want, when they need it,”.

The initial cuts come during the build up to the Super Bowl and will focus on game related items. How big is the Super Bowl pie? Try $9.5 billion. This will be a blow to retailers like Costco (COST) and BJ’s (BJ).

“We will have more of these during the busier shopping periods of the year like Valentine’s Day and Easter,” Wal-Mart spokeswoman Melissa O’Brien said.

Here is the genius of the plan. Wal-Mart said “it will offer no interest for 18 months on purchases of $250 or more with a Wal-Mart Credit Card. Now, folks can add and those who are looking at $300 per person can go to Wal-Mart and get a jump spending that money. Wal-Mart will be smart and keep most folks limits below $500 so that the bills can easily be paid when the checks come in.

Not only will Wal-Mart enable folks spend those checks and get a great value for them, they will front them the cash to do so.

Brilliant…

Disclosure (“none” means no position): Long Wal-Mart, None

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Tuesday’s Links

McCain, Bloggystyle, HC, Apple

– The reason you cannot vote for McCain, he MUST get this stuff

– Adam’s latest effort

– Funny how she calls a truce only when the barbs get turned on her.

– When a stock is at lofty levels and questions get raised, it gets whacked..

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Recent Fed Auction Show Rates Drifting Much Lower

12 days ago I documented the results of the first two auction of the Fed. In the latest auction, rates fell almost a full point.

On January 28, 2008, the Federal Reserve conducted an auction of $30 billion in 28-day credit through its Term Auction Facility. Following are the results of the auction:

Stop-out rate: 3.123 %

Total propositions submitted: $37.452 billion
Total propositions accepted: $30.000 billion
Bid/cover ratio: 1.25

Number of bidders: 52

The simple analysis of the results means that banks like Citigroup (C), Bank of America (BAC), Well Fargo (WFC) and Wachovia (WB) are getting access to capital well below what they can then turn around and lend it.

Disclosure (“none” means no position):Long Wachovia and Citigroup, None

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Sherwin Williams Continues to Defy Investors

Sooner or later investor are going to catch on to the fact that Sherwin Williams (SHW) is not a “housing stock”

First the results:
— Consolidated net sales increased 2.5% in the year to a record $8.01 billion
— Diluted net income per common share increased 12.2% in the year to a record $4.70 per share including a goodwill impairment charge of approximately $.08 per share
— Earnings before interest, taxes, depreciation and amortization increased $100.7 million in the year to a record $1.148 billion
— Net operating cash increased $58.7 million in the year to a record $874.5 million
— Seven acquisitions completed during 2007 increased consolidated net sales 1.4% in the year and 2.9% in the quarter.
— The Global Group’s segment profit improved 23.2% in the year and 34.1% in the quarter
— The Company purchased 3,000,000 shares of its common stock in the quarter and 13,200,000 shares in the year.
— The Company had remaining authorization at December 31, 2007 to purchase 27,000,000 shares (out of 124 million outstanding).

CEO Chris Connor said, “In the first quarter of 2008, we anticipate achieving a low-to-mid single digit percentage increase in consolidated net sales versus the first quarter of 2007. At that anticipated sales level, we estimate diluted net income per common share in the first quarter of 2008 will be in the range of $.72 to $.80 per share compared to $.83 per share earned in the first quarter of 2007. For the full year 2008, we expect to achieve a low-to-mid single digit percentage increase in consolidated net sales over 2007. With annual sales at that level, we anticipate diluted net income per common share for 2008 will be in the range of $5.00 to $5.15 per share compared to $4.70 per share earned in 2007.”

Simply put, at the low end of the earnings range, Sherwin will trade at a PE in 2008 of 11 and will grow EPS 6.3% to 9.5% and sport a 2.2% yield.

Connor and company made some brilliantly timed acquisitions that were immediately accredive in 2007 to earnings due to the prices paid for them. Sherwin sits on plenty of cash for either additional purchases or to finish to share repurchases. Sherwin has averaged about $200 million a year in share repurchases recently and given its cash from operations, that will be easily attainable in 2008 without the addition of debt.

Can you imagine what this company will do when housing does turn?

Disclosure (“none” means no position): Long Sherwin

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Leucadia Now Owns 19.4% of AmeriCredit

In an SEC filing this morning, Leucadia (LUK) disclosed its ownership stake in AmeriCredit (ACF).

From the filing:
As of the close of business on the date of this Schedule 13D (1/29), the
Reporting Persons may be deemed to beneficially own collectively an aggregate of
22,159,300 shares of Common Stock, representing approximately 19.4% of the
shares of Common Stock presently outstanding. All percentages in this Item 5 are
based on 114,162,314 shares of Common Stock outstanding as of October 31, 2007,
as set forth in the Company’s Quarterly Report on Form 10-Q for the quarterly
period ended September 30, 2007.

Disclosure (“none” means no position): None

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Dow Earnings: Vanilla

Dow Chemical (DOW)reported earning this mornings and the results were as expected.

— Sales for Q4 set a new Company record, rising 16
percent from the same period last year to $14.2 billion.
— Earnings for the quarter were $0.49 per share. Excluding certain items,
earnings for the quarter were $0.84 per share. Earnings in the fourth
quarter of 2006 were $1.00 per share. Excluding certain items,
earnings for that quarter were $0.98 per share (see supplemental table
at the end of the release for a description of these items).
— Compared with the same quarter of 2006, price increased 12 percent,
with gains in all operating segments and geographic areas.
— Volume was up 4 percent compared with the fourth quarter of last year,
with improvements in all operating segments and in every geographic
area outside of North America. Asia Pacific recorded volume gains of 10
percent, and Europe 6 percent.
— Purchased feedstock and energy costs climbed $1.7 billion compared with
the fourth quarter of last year, the largest year-over-year increase in
the Company’s history.
— Equity earnings increased 21 percent year-over-year, totaling $294
million for the quarter.

2007 Full-Year Highlights
— 2007 sales increased 9 percent compared with 2006, setting a new record
for the Company of $53.5 billion.
— Dow reported full-year earnings of $2.99 per share. Excluding certain
items, earnings for the year were $3.76 per share. Earnings for 2006
were $3.82 per share. Excluding certain items, earnings for 2006 were
$4.25 per share (see supplemental table at the end of the release for a
description of these items).
— Equity earnings rose 17 percent compared with 2006, to $1.1 billion,
exceeding $1 billion for the first time in the Company’s history.

CEO Andrew Liveris said, “This was a good quarter … a quarter in which our entire organization responded with speed and discipline to an unprecedented run-up in feedstock and energy costs, raising price to mitigate much of the $1.7 billion year over year increase. And our focus on price did not come at the expense of volume. Volume gains were reported in all operating segments, a testament to our price/volume management capabilities.”

2007 is in the books and 2008 is what we need to focus on now. I had a number of questions yesterday and hopefully on the call at 10 am today they will be answered.

All things considered, with the explosion of oil prices in 2008, management did an outstanding job not letting costs destroy the year. Liveris called 2007 a “transformational year” and as so far as the structure of the company goes, it was. 2008 needs to be the “transformational year” for putting the plan into action and delivering on the bottom line.

Disclosure (“none” means no position): Long Dow

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Sears.com Emphasis a Logical One

for anyone following my retail online tracing posts here, this move by Sears Holdings (SHLD) makes perfect sense.

Sears.com tapped an ex-Microsoft (MSFT) executive to the head of Sears’ newly formed online division. The division will be one of the 5 announced as part of the retailer’s recent realignment. James Barr, a 12-year Microsoft executive and general manager of MSN Shopping and Marketplaces, will take over the online unit effective Feb. 2 as a senior vice president of Sears Holdings.

Barr joins former Walmart.com (WMT) executive, Neil Day, the newly-named Chief Technology Officer for the Sears.com group.

The Sears.com and kmart.com combination ranked just behind both Walmart.com and target.com (TGT) during this recent holiday season. They consistently outdid rivals like JC Penny (JCP), Kohls (KSS) and Macy’s (M). This is a area that Sears is seeing results and to place an emphasis here as they are freeing up their brands to chase results on their own makes perfect sense.

The addition of a walmart.com executive has to encourage investors as the Wal-Mart site has dominated the landscape the for quite some time.

Disclosure (“none” means no position):Long Sears, None

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Harley Davidson’s Earnings Call: 2008 OK

Here are some of the more notable elements of Harley Davidson’s (HOG) conference call.

International shipments:

* 22,114 units were up 20.5% compared to the same quarter last year.
* International shipments grew to 27.2% of total worldwide fourth quarter shipment volume compared to 19.8% in the fourth quarter of 2006.
* International shipments for the full year grew to 26.9% of the mix, up from 21.8% in 2006
* Europe was once again strong with a year-over-year sales increase of 10.9%, Japan was up 4.5%, Canada was up 45.9%, or 605 units, primarily due to better product availability during the quarter. The remaining 45 or so countries where motorcycles are sold were up a collective 28.6% for the quarter.

From the Q % A:
James Hardiman – FTN Midwest
Okay, and then my second question, I was wondering if you could just flesh out a little bit more sort of how you’ve been able to remain so strong internationally, and I guess especially in the Canadian market, and where you expect that to go if — you know, when you look at some of the economies of some of the countries that you do business in, are they correlated to the U.S. market? Sort of what you are seeing internationally and whether or not we can expect that to continue?

James L. Ziemer
I’ll answer that question — on retail sales outside the U.S., we are strong in all the markets outside the U.S. without exception when you look at it on a total year basis, whether it be Canada or Europe or Australia or Japan, and the markets of Latin America.

That’s driven by many different things. Their economies are doing well. Certainly the weak dollar has contributed to some of that but as we continue to build a distribution network and we acquire some of our independent distributors over the last five, six years, I mean, we are doing things and rationalizing the dealer networks in many of the countries we sell into. We’ve acquired in the last year the Australian distributors. We have just recently acquired the distributorship in Mexico, so we continue to take on that strategy so that as we own the distribution network, we can operate that for the long-term health of the business and sell customers the experience that helps make us strong and differentiates us from our competition.

Q & A 2008 Outlook:
Ed Aaron – RBC Capital Markets

A couple of questions; first, you said recently that your guidance for ’08 sort of operated under the assumption that 2008 economic environment would be similar to 2007, but you didn’t change your guidance. Is that still your assumption or are you now planning for a weaker economy in the U.S. but feel better about your international business?

Thomas E. Bergmann
Just to add on, I think Jim’s got it. There is no doubt we think 2008 is going to be a challenging year for us and for the industry. And you know, when we put the guidance out, things — probably the indications have gotten a little, have deteriorated a little further, so it’s going to be a challenging year.

But as Jim said, our guidance was built around a cautious approach to the year and we are going to look at the environment very closely and watch it and we’ll make the appropriate changes if we need to at any point in time.

But the good thing is the international business, as you mentioned, continues to do very well and we are continuing to be very pleased with the progress we are making in the markets and it continues to deliver strong results and we see that continuing in 2008.

In response to another question:
Thomas E. Bergmann
Clearly there’s a lot that goes into the bottom line of delivering our EPS guidance and that’s really management’s challenge this year, is to work through the challenging economy here in the U.S., continue to grow our international business, allocate capital smartly, and the share repurchase activities or other business initiatives to drive growth. And we’re prepared to do that. It’s going to be a challenging year but at this point in time, with all the activities around the 105th and international, we’re at this point in time comfortable with the guidance.

Bottom line? HOG expects the US to be anemic again in 2008 but international operations to continue their upward surge. I have confidence in the 4% to 7% EPS growth estimates and that means shares will trade below 10 times 2008 earnings and continue to yield over 3% at this levels. For a company like HOG, that is a steal.

Disclosure (“none” means no position): Long HOG

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Tuesday’s Upgrades and Downgrades


UPGRADES
NuVasive (NUVA)= SMH Capital Short » Neutral
Dime Community (DCOM)= FTN Midwest Neutral » Buy
Pantry (PTRY)= William Blair Mkt Perform » Outperform
WNS (WNS)= Janney Mntgmy Scott Neutral » Buy
Zoran (ZRAN)= Canaccord Adams Sell » Hold
Bill Barrett (BBG)= Deutsche Securities Hold » Buy
First Charter Corp. (FCTR)= FTN Midwest Neutral » Buy
DaVita (DVA)= Piper Jaffray Sell » Neutral
Whiting Petroleum (WLL)= RBC Capital Mkts Underperform » Sector Perform
UAL Corp. (UAUA )=Soleil Hold » Buy
EnergySolutions (ES0= JP Morgan Neutral » Overweight
Canon (CAJ)= Lehman Brothers Equal-weight » Overweight
Exterran Holdings (EXH)= Citigroup Hold » Buy
Tidewater (TDW)= JP Morgan Neutral » Overweight
Western Refining (WNR)= Credit Suisse Underperform » Neutral
Tesoro (TSO)= Credit Suisse Neutral » Outperform
Holly (HOC)= Credit Suisse Underperform » Neutral
Caterpillar (CAT)= Bear Stearns Peer Perform » Outperform
Eastman Chem (EMN)= UBS Neutral » Buy
Kimberly-Clark (KMB)= Lehman Brothers Equal-weight » Overweight
General Mills (GIS)= Citigroup Hold » Buy
Kellogg (K )= Citigroup Hold » Buy
Merck (MRK)= UBS Neutral » Buy
Plantronics (PLT)= JP Morgan Underweight » Neutral
Gentex (GNTX )= UBS Sell » Neutral
Weatherford (WFT)= Friedman Billings Mkt Perform » Outperform
Medarex (MEDX)= Jefferies & Co Hold » Buy
Cytec (CYT)= Jefferies & Co Hold » Buy
ICF International (ICFI)= Jefferies & Co Hold » Buy
South Fincl Group (TSFG)= Keefe Bruyette Underperform » Mkt Perform

DOWNGRADES
RC2 (RCRC)= Wedbush Morgan Buy » Hold
Old Second Bancorp Inc. (OSBC)= Sandler O’Neill Hold » Sell
H.B. Fuller ( FUL)= KeyBanc Capital Mkts Aggressive Buy » Buy
Raven Industries (RAVN)= Piper Jaffray Neutral » Sell
Allied Irish Banks, plc. (AIB)= UBS Neutral » Sell
Bank of Ireland (IRE)= UBS Buy » Neutral
Molina Healthcare (MOH)= Deutsche Securities Hold » Sell
Noble Corp (NE)= JP Morgan Overweight » Neutral
Shire Pharm (SHPGY)= Bernstein Mkt Perform » Underperform
Walgreen (WAG )= Citigroup Hold » Sell
Fed Investors (FII+ Keefe Bruyette Outperform » Mkt Perform

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"Fast Money" for Tuesday


Tuesday’s Picks
Guy Adami recommends the NYSE Euronext (NYX) $78.04

Karen Finerman prefers Goldman Sachs (GS) $196.25

Pete Najarian likes Nasdaq (NDAQ) $44.07

Monday’s Results
Tim Seymour recommends buying Sasol (SSL) $43.11 Close $44.90 GAIN

Guy Adami prefers United Technologies (UTX) $72.75 Close $73.73 GAIN

Karen Finerman likes Golar (GLNG) $17.57 Close $19.38 GAIN

Pete Najarian thinks investors should trade alongside Warren Buffet and buy Burlington Northern (BNI) $81.80 Close $83.14 GAIN

2008 Records:
Brian Schaeffer= 0-1
Carter Worth= 0-1
Jon Najarian= 3-1
Jeff Macke= 6-4
Tim Seymore= 2-1
Guy Adami= 4-7
Pete Najarian= 3-5
Karen Finerman= 5-4

2007 Results (Since 6/21):
Guy Adami= 58-46 = 56%
Jeff Macke= 60-40 = 60%
Pete Najarian= 49-41 = 54%
Karen Finerman= 40-30 = 57%

Disclosure (“none” means no position):

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52 Week Low’s 1/28


(YDNT) Young Innovations Inc
(XPRT ) Lecg Corp
(VTO ) Vitro, Sociedad Anonima
(VNDA) Vanda Pharmaceuticals Inc
(TPTX ) Torreypines Therapeut …
(THOR ) Thoratec Corp
(TGAL ) Tegal Corp
(SYNP ) Synplicity Inc
(LNCR ) Lincare Holdings Inc
(LIMC ) Limco Piedmont Inc
(IKN ) Ikon Office Solutions Inc
(ICOP ) Icop Digital Inc
(CEBK ) Central Bancorp Inc Mass
(BHO ) B+H Ocean Carriers Ltd.
(AXGU) Atlas Acquisition Hld …
(ADS ) Alliance Data Systems …

Disclosure (“none” means no position):

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Target to Blogger: Piss Off…

Target (TGT) may have really stepped in it with this one.

The following article appeared in the NY Times today:

“That was the message the cheap-chic retailer seemed to convey in an abrupt e-mail message to ShapingYouth.org, a blog about the impact of marketing on children. Early this month, the blog’s founder, Amy Jussel, called Target, complaining about a new advertising campaign that depicted a woman splayed across a big target pattern — the retailer’s emblem — with the bull’s-eye at her crotch.

“Targeting crotches with a bull’s-eye is not the message we should be putting out there,” she said in an e-mail interview.

Target offered an e-mail response:

“Unfortunately we are unable to respond to your inquiry because Target does not participate with nontraditional media outlets,” a public relations person wrote to ShapingYouth.

“This practice,” the public relations person added, “is in place to allow us to focus on publications that reach our core guest,” as Target refers to its shoppers.

Word of the exchange quickly spread and the blogosphere did not appreciate the slight. “Target doesn’t participate in new media channels?” asked the Web site for the Word of Mouth Marketing Association. Target “dismisses bloggers” commented the blog for Parents for Ethical Marketing. “Ahem! So bloggers don’t count!” Ms. Jussel chimed in on ShapingYouth.

Could Target, the ever-hip, contemporary retailer, really have such a low opinion of blogs, the ever-hip, contemporary media channel?

Yes, at least for now. “We do not work with bloggers currently,” said a company spokeswoman, Amy von Walter, who agreed to speak with this traditional media outlet.

“But we have made exceptions,” Ms. von Walter said. “And we are reviewing the policy and may adjust it.”

Target’s policy is to focus limited resources on the big media outlets, like television stations and newspapers, which reach large numbers of shoppers. With a small public relations team, she said “we want to make sure we are making an educated decision and we live up to any promises we make, in terms of service.”

So what about the offending ad? Ms. von Walter said the ad — part of a marketing campaign that appeared in sales circulars and a large billboard in Manhattan’s Times Square — depicts a fully-clothed woman making a snow angel. Other ads featured a man skating over the bull’s-eye, she said.

Ms. Jussel, who described herself as a faithful Target shopper, was not impressed. “Any customer deserves a response to a concern, so I found this to be a shortsighted, ill-conceived judgment call,” she said.

Target does not plan to change its ads. “

Now, personally I feel the Target ad is a bit bland compared to any underwear ad out there but that is just me. The larger issue here is Target being so out of touch with its “core audience”. Perhaps this is the reason sales are suffering so? Q4 and December’s numbers especially were very disappointing and clothing sales, the surest sign of a retailers “hipness” were anemic.

Word lately has had Target scrambling for a new direction in clothing and cutting ties with Isaac Mizrahi, whose design were featured constantly it seemed on Oprah and lead women to the stores in droves.

The big issue hear is not the blogger getting blown off, is there any one of us who hasn’t? The massive issue is Target not recognizing the scope and influence of blogs. It is stunning.

There are several companies I write about who have not returned a call of an email and then there are others who call me back almost immediately. If nothing else, the ones who call back can be assured what I write is accurate and do have the chance to give their opinion.

Target really “screwed the pooch” this time

Disclosure (“none” means no position):None

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Monday’s Links

More iPhone “fuzzy math”, Apple Value, Soros, IRS checks

– Just how many iPhones have been sold in Europe?

– Price always follows value.

– No George, you have it wrong now..

Efile folks, Efile

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