Category: Articles

UPGRADES

Jo-Ann Stores JAS KeyBanc Capital Mkts Hold » Buy
Ventana Medical VMSI Caris & Company Average » Above Average
Cousins Prop CUZ Wachovia Mkt Perform » Outperform
Maxygen MAXY Stanford Research Hold » Buy
SL Green Rlty SLG KeyBanc Capital Mkts Hold » Buy
Ariba ARBA Cowen & Co Underperform » Outperform
Motorola MOT RBC Capital Mkts Sector Perform » Outperform
Susser SUSS JP Morgan Neutral » Overweight
EMC Corp EMC Citigroup Hold » Buy
Optium OPTM Jefferies & Co Hold » Buy

DOWNGRADES

Mattson MTSN CIBC Wrld Mkts Sector Perform » Sector Underperform
Cubic CUB BB&T Capital Mkts Hold » Underweight
Dime Community DCOM Stifel Nicolaus Hold » Sell
F5 Networks FFIV Nollenberger Capital Buy » Neutral
Foundry Ntwks FDRY Nollenberger Capital Buy » Neutral
Kyphon KYPH Piper Jaffray Outperform » Market Perform
LDK Solar LDK CIBC Wrld Mkts Sector Outperform » Sector Perform
Sirtris Pharma SIRT JP Morgan Overweight » Neutral
Rockwell Automation ROK JP Morgan Overweight » Neutral
Red Hat RHT Credit Suisse Outperform » Neutral
Reliance Steel RS UBS Buy » Neutral

TUESDAY’S PICKS

Jeff Macke expects a pull back and recommends Short Dow30 ProShares (DOG). open $58.03

Guy Adami said buy Pfizer (PFE). Open $24.42

Karen Finerman preferred NYMEX (NMX).Open $125.10

Pete Najarian liked ValueClick (VCLK). Open $22.00

MONDAY’S RESULTS

Jeff Macke recommended selling General Motors (GM). Open $34.94 Close $34.74 Gain $.20

Karen Finerman liked NYSE Euronext (NYX). Open $76.05 Close $77.81 Gain $1.76

Pete Najarian preferred BJ Services (BJS). Open $27.81 Close $27.67 Loss $.15

Since my tracking began on 6/21 (1-1 means one up pick and one down pick and no results from my vacation weeks)

Guy Adami= 25-17 Gain $41.04
Eric Bolling= 10-11 Loss $14.01
John Najarian= 13-3 Gain $15.54
Jeff Macke= 30-22 Gain $9.96
Pete Najarian= 18-16 Gain $24.89
Tim Seymore= 3-2 Loss $.49
Karen Finerman= 10-5 Gain $4.11
Stacey Briere-Gilbert= 2-0 Gain $1.61

Lobbyists, UN, Killing gays ok at Columbia, Oil

– Not every time an industry lobbies congress does it work.

– Another UN scandal, who would have thought? Please detect the heavy sarcasm

– You can kill gays for being gay and get invited to Columbia University, ask them to keep quiet about it, and you get banned

– Another take similar to mine on the state of oil short term

More than two years after the acquisition that formed Sprint Nextel (S), the now nation’s third-largest wireless provider(down from #2) is about 80 percent done with integrating the two sides together, the company’s CEO Gary Forsee said last week. Let’s just ignore the fact that almost 3 year to complete the merger is just way too long.

“We have a big opportunity in front of us,” said Forsee in the meeting with analysts. He said the company should see profit margins improve as it begins next year to pare down its two wireless networks to one.

Sprint bought Nextel in August 2005 and has struggled with merging the two systems. Technical problems and a required swap of frequencies used by Nextel’s press to talk network hurt call quality and customer service fiascos lead hundreds of thousands of customers to drop the service.

This year, the company began finally selling hybrid phones that work on both the Nextel network and Sprint’s regular CDMA network, and it expects to have 2 million of the devices operating by the end of the year. Next year they will begin switching Nextel customers over to the CDMA network with a new press-to-talk system called QChat, which will go into widespread testing in Q4.

“We believe there’s a lot of growth opportunity in push-to-talk,” he said.

Sprint says having all their customers on one network will save money on operational costs and reduce investment in new cell sites and other support infrastructure.

All this is good and well but what Sprint needs to address is the fact its current customers are just not very happy. Sprint will make more than a dime a share when the network is combined and the cost savings alone will make for an improvement in results but they have yet to stop the exodus of customers to other providers. It is not the network issue(s) making them do it, it is the treatment they get when they call Sprint that is making them flee. Sprint’s firing of customers was a PR fiasco and likely gave more than a few potential customers serious pause about joining Sprint. There are plenty of providers out there for people to choose from, having an adversarial relationship with them is not the way to grow. this is the reason they have fallen far behind rivals AT&T (T) and Verizon (VZ).

Until that issue is fixed, any upside and real improvement for Sprint will be put off indefinitely.

Another day of digestion of Goldman Sachs (GS) blowout quarter sheds some light.

When the world was running around talking of the “subprime meltdown” and the “freezing of credit markets” Goldman quietly looked at the situation and placed their bets accordingly. Rather than dumping positions or just sitting tight and riding out the storm and taking huge losses like Morgan Stanley (MS), Lehman (LEH) and Bear Sterns (BSC), Goldman jumped on, rode the wave down and collected the profits.

The question for shareholders of these companies might not be “why is Goldman so good” but “what the heck were you guys doing?”

Now, the media has pumped up Goldman’s move as “stunning”, “bold” and “breathtaking” and implied they bet the farm on this. The reality is just the opposite. One of the metrics investment banks use to estimate the market risk on a their balance sheet is called Value at Risk, or VaR. This indicator for Goldman moved up only 5% in Q3 vs Q2. If Goldman was placing huge bets in volatile markets like the short trade in mortgages, VaR would have been expected to move up by much more. Since it didn’t, we must conclude that these bets were neither “bold” or “breathtaking”, just simply “savvy”.

Now the latest report out is that Goldman has $69 billion in short term debt it must rollover in relatively soon and the new debt it takes on will invariably be more expensive, hurting earnings. Here is the thing though, if the analyst who wrote this knows this, and now we know it, is there a chance in hell Goldman doesn’t? Also, if we know this now do we really think Goldman has not been aware of it for a whole lot longer? Based on their history, do we really think they have not already taken steps to offset that increase? Me either…

This is one group of people I am not willing to bet against.

MONDAY’S PICKS

Jeff Macke recommended selling General Motors (GM). Open $34.94

Karen Finerman liked NYSE Euronext (NYX). Open $76.05

Pete Najarian preferred BJ Services (BJS). Open $27.81

FRIDAY’S PICKS

Jeff Macke recommended Activision (ATVI). Open $20.96 Close $20.93 Loss $.03

Guy Adami said Oracle (ORCL) is a raging buy. Open $21.04 Close $21.97 Gain $.93

Pete Najarian preferred Sohu.com (SOHU). Open $38.76 Close $40.01 Gain $1.25

Since my tracking began on 6/21 (1-1 means one up pick and one down pick and no results from my vacation weeks)

Guy Adami= 25-17 Gain $41.04
Eric Bolling= 10-11 Loss $14.01
John Najarian= 13-3 Gain $15.54
Jeff Macke= 29-22 Gain $9.76
Pete Najarian= 18-15 Gain $25.04
Tim Seymore= 3-2 Loss $.49
Karen Finerman= 9-5 Gain $3.25
Stacey Briere-Gilbert= 2-0 Gain $1.61

Thank You Sir, May I Have Another!!! Kevin Bacon, Animal house

“Mattel (MAT) takes full responsibility for these recalls and apologizes personally to you, the Chinese people, and all of our customers who received the toys,” said Mattel executive Tom Debrowski. Oh do you?

I would personally love to see the “design flaw” that said “cover toys with deadly levels of lead paint”. When I first heard it I thought it was a sarcastic joke. How much pressure are the Chinese putting on Mattel to cause them to publicly cane themselves? How high were the lead levels? Tests had found that lead levels in paint in recalled toys were as high as 110,000 parts per million, or nearly 200 times higher than the accepted safety ceiling of 600 parts per million. Now, it has been pointed out that only 13% of the 21 million toys were recalled due to lead paint but, the question must be asked, why did Mattel apologize for that?

This has to be without a doubt one of the most pathetic acts a corporation has ever done in the name of the almighty dollar. China, getting sick of being bashed most likely told Mattel to apologize or get your toys somewhere else. Rather than pay a few bucks more for a Elmo doll from Thailand, Mattel promptly caved.

It is nice to see that the apology they gave the producers of the toxic toys the same sincerity they gave us consumers whose children may have played with and been damaged by them. Sweet huh? This act really does mitigate the effects of any previous ones, doesn’t it. This is like a beaten spouse saying “I deserved it, dinner is a 5pm not 5:15”. Pathetic

At least to date the other company effected, RC2 (RCRC) has yet to ask forgiveness from the Chinese for the lead coated Thomas the Tank Engine toys they sent them earlier this summer.

Mattel, world’s largest toy maker has been in China for 25 years and about 65 percent of its products are made in China. This summer it recalled 21 million toys made in China for various reason.

If you do not believe my reasoning for the apology take a look at this exchange.

Chinese product safety chief Li Changjiang publicly reminded Debrowski that “a large part of your annual profit … comes from your factories in China. He then added, “I really hope that Mattel can learn lessons and gain experience from these incidents,” adding that Mattel should “improve their control measures.”

Or, grow some stones…

Texas Instruments (TXN)= 25%

Buckle Inc. (BKE)= 25%

Corn Products (CPO)= 22%

Premier West Bancorp (PRWT)= 20%

Kamen Corp. (KAMN)= 12%

Genworth Financial (GNW)= 11%

“There is only one reason insiders buy shares, they feel the price is going up”, Peter Lynch.

Zymogenetics (ZGEN)= $5,622,000

Halozyme Therapeutics (HALO)= $3,749,000

Barnes and Noble (BKS)= $3,295,000

General Growth Properties (GGP)= $2,888,000

World Acceptance Corp. (WRLD)= $1,544,000

A small list today.

TWC Time Warner Cable Inc 31.83
TRBN Trubion Pharmaceutica l 11.30
SVN Sun-Times Media Group Inc 2.56
KFY Korn Ferry Intl 16.35
JBSS John B Sanfilippo & Sons 7.92
FFHS First Franklin Corp 12.93
FFFD North Central Bancsha re 38.00
POOL Pool Corporation 24.85
PLCE Childrens Place Retail S 25.02
PEIX Pacific Ethanol Inc 9.80