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Wednesday’s Upgrades and Downgrades

UPGRADES

Comverse Tech CMVT Canaccord Adams Hold » Buy
Cognos COGN BMO Capital Markets Market Perform » Outperform
Imclone IMCL Bear Stearns Peer Perform » Outperform
American Railcar Industries ARII Longbow Sell » Neutral
Ruby Tuesday RT KeyBanc Capital Mkts Underweight » Hold
Alnylam Pharmaceuticals ALNY Cantor Fitzgerald Hold » Buy
Western Digital WDC Bear Stearns Peer Perform » Outperform
Thornburg Mortg TMA UBS Neutral » Buy

DOWNGRADES

United Retail URGI Merriman Curhan Ford Buy » Neutral
Omnicare OCR Matrix Research Buy » Hold
Smart Modular Tech SMOD Needham & Co Buy » Hold
RAIT Invtmt Trust RAS RBC Capital Mkts Outperform » Underperform
Smart Modular Tech SMOD JMP Securities Strong Buy » Mkt Outperform
VASCO Data Security VDSI Friedman Billings Outperform » Mkt Perform

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"FAST MONEY" FOR WEDNESDAY

Macke did a real nice piece on Dicks…

WEDNESDAY PICKS

Jeff Macke recommended buying Dick’s Sporting Goods (DKS) Open $66.80, and Under Armour (UA). Open $62.17

Guy Adami preferred GlaxoSmithKline (GSK). Open $54.01

Karen Finerman thought American Standard (ASD) is good. open $35.20

TUESDAY’S RESULTS

Jeff Macke said short the Retail HOLDRS (RTH). Open $96.45 Close $98.40 Gain $.05

Guy Adami recommended buying NYMEX (NMX). Open $129.02 Close $127.63 Loss $1.39

Karen Finerman preferred ConocoPhillips (COP). Open $82.19 Close $83.53 Gain $1.34

Pete Najarian liked Dendreon (DNDN). Open $8.13 Close $8.04 Loss $.09

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= 21-14 Gain $38.85
Eric Bolling= 10-11 Loss $14.01
John Najarian= 13-3 Gain $15.54
Jeff Macke= 24-19 Gain $4.64
Pete Najarian= 15-12 Gain $23.43
Tim Seymore= 3-2 Loss $.49
Karen Finerman= 6-3 Gain $3.40
Stacey Briere-Gilbert= 2-0 Gain $1.61
Constance Hunter= 1-0 Gain $1.84

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Tuesday’s 52 Week Lows

NYT New York Times Company 20.33
NP Neenah Paper Inc 32.64
NAHC National Atlantic Hld … 9.00
KG King Pharmaceuticals Inc 13.25
KFY Korn Ferry Intl 17.57
ITIC Investors Title Company 37.92
MTEX Mannatech Inc 6.43
MRLN Marlin Business Svcs Corp 15.89
CTX Centex Corporation 26.00
CRFT Craftmade Internation 13.00
AVR Aventine Renewable Energy 12.73
AVID Avid Technology Inc 28.58
ASFN Atlantic Southern Fin 24.84

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Tuesday’s Links to Visit

– Just go away please

– This must mean our guidance counselors were correct

– Not everyone lost money on subprime, some folks made a killing

– I just love it when one of my favorite sites mentions me

Read this

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Dell Customer Service: Nicer Than Sprint. Just As Incompetant

Just when I thought I could not get any more frustrated with a customer service department, than Sprint’s (S), Dell (DELL) steps into the batters box. We ordered a new computer for the office and needed it ASAP. Since Dell only does ground delivery (no big deal) we said we would pay the $119 to get it overnighted to us. Then, since we moved the office last year, changed both the billing and the shipping address. Easy right? Don’t be foolish…….

We get the confirmation email for the order and realize that the shipping info was not changed. So we do the 10 minute wait on hold to make the change and think we are all set, BUT, Dell has other plans for us.

Our follow up shipping email promptly comes and the address is still wrong and good news, the damn thing has shipped to the wrong address!! So I call DHL, who I do have to say was very good and they make the address change on their end and inform me that they cannot deliver to another address unless Dell tells them to. Back to where I began.

It should be noted that it has now taken more of my time to get the correct ship to address taken care of that it did to order (and pay for) the computer. It also bears mentioning that we still have not figured out what shipping type was used yet (overnight vs. ground). So after another 20 minutes I am told it will be a few more days until I get the computer and the offer me a $100 COUPON for my troubles which is nice but still leaves me short on what I originally paid for the overnight shipping I am apparently not getting! This is when I informed the lady what she could do with her coupon and said I expect “more than less than what I paid for overnight shipping for a computer that will not get here for two more days”. Maybe they can pay us for the Admin person who I will just ask to sit around with her thumb up her ass for two more days? I am still on hold so we’ll see…

So the nice lady comes back and informs me that the computers are at DHL and if I want them today “I can go pick them up”. WHAT!!!!! “If they are at the local DHL, why the hell can’t they deliver them to me, it is what they do you know?” I reply. She nicely says that she sent them an email for the address change and it take 24 for 48 hours for them to reply. I just gave her their phone number and requested she call them to make the change (like I did). She says ok. Back on hold.

Now I am searching through my drawer looking for anything sharp I can jab into my eye. The reason? I have to be dreaming. This cannot be happening. I have spent to better part of an hour dealing with this now. “You can go pick it up?” Holy Christ, I thought she was joking at first! If I was smart I would have taped this and made a YouTube video, I could have been on Letterman next week. Never fear, I am sure I will have to call them again and boy will I be ready then.

It’s been 3 more minutes and still waiting for her to get back. I am starting to cry now, if I had just left when she told me to “go get it” I would be on my way. Of course she could not tell me for sure if it actually at DHL or on a truck (just that “they have it”) so my guess is I would have got there and been told “it is out for delivery”. At least this way some poor DHL person will not get assaulted today.

She just checked back “to see if I was still there”. “Yup” I replied. She sounded disappointed. Back to sleep. She is like my snooze alarm, every 3 minutes. The timer on my phone says I have been on it for 53:06 now. Running out of things to type….

Waiting… waiting…Back to let me know DHL has her on hold. Yea… how does it feel miss customer service!!! Nice job DHL. Mess with the bull, get the horns bucko. This lady is very nice but I am starting to hate her. It is raining outside. My kids are making themselves lunch, they are 4, I’m screwed but I have to see this through.

So she comes back and tells me that not only can I not get it today but that it will not come for 24 to 48 hours . “Until DHL gets our form with the address change” what are they using pony express? Ever heard of email? But the good news, I can still get a $100 coupon. WTF!!! Supervisor time!!!

Back on hold 64:54 into the call (this does not include the DHL time). Seething now. Have been on hold longer than the 3 minute checks she does, I think they are hoping I give up. No way, this is war.

She came to tell the “supervisor has arrived”, back on hold. . Thanks, go ruin someone else’s day. 73:22 into call. The supervisor has stepped up to the plate to offer me the additional $9 for shipping but the only way I can get it tomorrow now is if I go get it. Asshole… I explain that my almost 2 hours dealing with this rather than working has a cost associated with it and that there will be a cost involved with picking up the computer.

After more wrangling he offers me another $100 coupon that I have to use in 90 days or it expires. I politely ask him to turn around and shove this one up his ass. 95:07 into call and back on hold. He comes back and I tell him to send me a laser printer or kill the whole order, back on hold. OKay they say they will do it and will let me know tomorrow an order number. We’ll See final time , not including DHL? 112:46.

I have had a few Dell interactions before and all have been the same way, usually me hanging up the phone after a mind numbing conversation with someone who cannot help me, leaving me wishing I had just decided to nail my testicles to my chair as it would have been less painful. Not this time, I was in it to the bitter end. As I sat there about to fall asleep on hold, I was trying to remember if I ever had this problem when I had my Compaq Pesario and I couldn’t. Why? It worked perfectly all the time… Next time I will try HP (HPQ) out, they just can’t be any worse. Can they ?

I still have to give Dell the nod over Sprint, at least their customer service people speak and understand English and are nice, I always worry the Sprint one’s will be waiting for me outside one morning ….

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Dow Chemical’s "White Paper": A Preview

At the last earnings call Dow (DOW) spent quite a bit of time on results from its “JV Strategy” and then promised a white paper on it to give more detail to investors. Well, the time for it is nearly here..

Currently Dow is involved in about 80 joint ventures (JV’s) around the globe. A dozen of them account for 90% of the “equity earning” they produce. The upcoming paper that should be released electronically is expected to be ready by the end of September. It will be updated annually to reflect results for the prior year and give guidance for the upcoming one. I get the impression it will be release separately from the annual report but this may change. About a page will be dedicated to each of the dozen dominant JV’s and will answer questions like:

1- Why enter the specific JV and who are the partners
2- Principle products produced, volumes, markets
3- Equity Earnings
4- Future guidance

Notables:

1- The current JV strategy is “self funding” meaning that funds from operations fund startup costs and produce profits back to Dow.

2- The upcoming massive Kuwait 2 project is being funded by results from Kuwait 1 meaning there is no balance sheet impairment or current cash being used.

Neither myself nor does Dow expects the JV strategy to become the dominant earnings driver for Dow, but it will become very significant and it’s growth over the next 3-5 years should be spectacular as many of the recently announced ventures come online. The performance chemical unit, which is helping Dow relinquish itself from the cyclical businesses that have dominated it’s past will be the meat of Dow’s earnings (at least for the foreseeable future). That is clearly by design and in accordance with Liveris’s strategy to provide more predictability to Dow.

All in all I cannot wait to read it and will post on it very soon after it’s release. One has to suspect that the reason Dow is doing this is that it sees value in the JV’s that are not being fully realized by investors into Dow’s valuation. By providing clarity and guidance in the JV’s, they will enable large investor’s to have more confidence on Dow’s earnings profile.

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iPhone Sales Behind Schedule

Apple (APPL) announced that it has sold 1 million iPhones. One problem, in order to sell the 10 million phones they want to by the end of 2008, they needed to make this announcement a month ago…

One million iPhones in 74 days works out to far less than 5 million iPhones per year. Apple sold 270,000 of them in the first two days it was on sale (way below the 500,000 estimates we were hearing at the time) as those who quite jobs to sleep outside for it gobbled them up. My calculator tells me it then took 72 more days to sell the other 730,000 phones. Another few clicks of my trusty calcuator tells me that the iPhone is currently on a 3.6 million unit annual rate, which would produce a total of 5.8 million by the end of 2008, woefully short of the 10,000,000 low ball “goal” Jobs set for the product.

Yes I know that they are selling into Europe and Asia next year but the iPhone already faces competition there and one has to anticipate the excitement for it overseas will not be near as great as it was here. I do not see another 270,000 two day total in either areas. That being said, it is now crystal clear as to the reason for the recent price drop now, even Apple is admitting through its actions they overpriced the phone and it just was not selling (ever heard that one before?)

Yes I also know that the holiday season is coming up and Apple will see a surge but I also realize they will see a sharp drop in the beginning of next year (it all levels out).

What will be interesting to watch now is how many people, given the events of the last week delay an iPhone purchase waiting for the “next generation” or another price drop, putting Apple further behind the pace it needs to be at.

Is $299 for the 8GB phone far away? We have gone from $599 to $399 in 2 and a half months. From day one I have thought this is where we would end up (FYI, the remaining 4GB phones can be had for $299 “while they last”)..

Wait…

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Tuesday’s Upgrades and Downgrades



UPGRADES

OPNET OPNT Collins Stewart Market Perform » Buy
Goodrich Petroleum GDP BMO Capital Markets Market Perform » Outperform
Amylin Pharms AMLN Lazard Capital Hold » Buy
MarkWest Energy MWE Wachovia Mkt Perform » Outperform
Euronet EEFT AG Edwards Hold » Buy
Lamar Advertising LAMR CL King Accumulate » Strong Buy
Mylan Labs MYL Credit Suisse Underperform » Outperform
Isle of Capri ISLE Morgan Joseph Hold » Buy
LandAmerica Fin LFG Keefe Bruyette Mkt Perform » Outperform
Amerigroup AGP Credit Suisse Underperform » Outperform


DOWNGRADES

Tortoise Energy TYY Ferris Baker Watts Buy » Neutral
Tortoise Energy Infrastructure TYG Ferris Baker Watts Buy » Neutral
Medarex MEDX Susquehanna Financial Positive » Neutral
Qualcomm QCOM Am Tech/JSA Research Buy » Neutral
Cardica CRDC AG Edwards Buy » Sell
Seagate Tech STX Matrix Research Hold » Sell
Blue Coat BCSI Stifel Nicolaus Buy » Hold
Noble Corp NE Jefferies & Co Buy » Hold

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Never Forget

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"Fast Money" for Tuesday

TUESDAY’S PICKS

Jeff Macke said short the Retail HOLDRS (RTH). Open $96.45

Guy Adami recommended buying NYMEX (NMX). Open $129.02

Karen Finerman preferred ConocoPhillips (COP). Open $82.19

Pete Najarian liked Dendreon (DNDN). Open $8.13

MONDAY’S RESULTS

Jeff Macke said The New York Times (NYT) is a raging sell. OPEN $21.26 CLOSE $20.72 GAIN $.54

For the 2nd day in a row, Guy Adami recommended the Short Dow30 ProShares (DOG). OPEN $60.67 CLOSE $60.67 WASH…

Pete Najarian liked Oilsands Quest (BQI). OPEN $4.92 CLOSE $4.94 GAIN $.02

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= 21-13 Gain $40.24
Eric Bolling= 10-11 Loss $14.01
John Najarian= 13-3 Gain $15.54
Jeff Macke= 23-19 Gain $4.59
Pete Najarian= 15-11 Gain $23.52
Tim Seymore= 3-2 Loss $.49
Karen Finerman= 5-3 Gain $2.06
Stacey Briere-Gilbert= 2-0 Gain $1.61
Constance Hunter= 1-0 Gain $1.84

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Monday’s 52 Week Lows

Here is the list, again assume homebuilders…

WOS Wolseley Plc 19.13
WGO Winnebago Industries, Inc 24.45
UNFI United Natural Foods Inc 24.82
TUES Tuesday Morning Corp 9.87
TLB The Talbots, Inc 18.54
THRD TF Financial Corp 25.82
RT Ruby Tuesday, Inc. 20.82
QSII Quality Systems Inc 33.89
PSS Collective Brands Inc 21.24
PPS Post Properties, Inc 37.20
POOL Pool Corporation 29.85
OPLK Oplink Communications Inc 12.59
ODSY Odyssey Healthcare Inc 9.41
ODP Office Depot, Inc 18.84
OCR Omnicare, Inc 30.07
HOG Harley-Davidson, Inc 48.01
INSP Infospace Inc 12.92
IMN Imation Corp 27.10
FFDF FFD Financial Corporation 14.00
FBN Furniture Brands Inte 10.56
DDS Dillard Department St … 19.91
CWTR Coldwater Creek Inc 11.15
BC Brunswick Corporation 22.57
AVR Aventine Renewable Energy 12.87

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OPEC Needs an Economics Refresher

The head of OPEC says that the oil supply is just fine. It is refining that is the problem. That would put the reason for higher oil prices squarely on the doorstep of the oil companies like Exxon (XOM), BP (BP), Chevron (CVX) and others. Right? Uh no..

Let’s just sit back and think about it. Let’s say what they claim is true and that the supply of oil is sufficient for the current demand. Why would oil companies drive up the price they have to pay for their product? What does the refining capacity of oil have to do with the price of a barrel of crude?

Now, if we are talking about the finished products like gasoline and heating oil, then I would agree that those prices are artificially high because we do not have adequate refining capacity. If anything, the lack of capacity should lead to a log jam effect of crude oil which, according to the laws of supply and demand, would cause the price of oil to drop. The jam would be caused by increasing demand and production being forced through the same refining funnel, the oil would have to back up into the cup of the funnel as it waited to be refined. If what the OPEC head said was true, this would undoubtedly happen, yet, the oil price just keeps marching higher and right now we have no additional wars or natural disasters on anyone minds. Hmmm.

It is kind of like egg producers saying that the price of eggs are high because not enough diner cooks make scrambled eggs it, no it is high because the demand is straining supply.

Just like oil… Econ 100..

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Monday’s Notable Links

– One of the all-time greatest investors talks investing and “sub-prime” (video)

– A cheap way to get out of your cell phone contract

– You know what? as much as I like their product, this makes sense

– What stocks does Buffett own that are buying back shares?

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What Was Schultz Thinking?

Just when I think Starbucks (SBUX) could not be any further off the mark than they are now, they prove me wrong.. sorry shareholders (again).

In Mexico, CEO Howard Schultz said “At the very top of the market where Starbucks plays, I do not believe that others will have access to the quality of coffee that we are buying because we have secured those sources,” Schultz said.

What Schultz did not say was that Starbucks’ size of 13,000 thousand plus locations prevent them from sourcing their beans from smaller, artisan growers capable of growing the highest quality coffee beans. Instead, they require a “best of the biggest” approach, where they deal solely with growers who can supply coffee beans in large enough quantities to meet their huge distribution needs.

Let’s put that obvious one aside. Let’s deal with the “super premium” comment. Has anyone ever seen an ad where McDonald’s (MCD) or Dunkin Donuts claimed “super premium”? Me either. What they do offer is “very good coffee and very good prices”. They call it “gourmet” but that could just mean “doesn’t suck” and based on the money pouring into both companies from coffee sales, any alleged shortage is not affecting them. Let’s assume they are buying the same beans (I will play along Howard). If you are a coffee grower and are approached by Starbucks and McDonalds, which dwarfs Starbucks in size, and both want to buy your beans, are you going to put all your eggs in just one basket? If you are, would it be the smaller guy?

Schultz, it seems, has fired a shot over the bow of, well, Starbucks since only they seem to think they require all the “super premium” beans. There may be a slew of small European cafe’s affected by this alleged shortage, but McDonald’s and Dunkin Donuts will not be. Also, whether Schultz or anyone else at Starbucks wants to admit it and clearly they do not, this IS their competition and it IS where their former customers are getting their coffee now.

“Starbucks is not an advertiser. If other companies are going to advertise and promote specialty coffee, Starbucks is going to benefit in the long term,” Schultz continued. Well, maybe he ought to be because they clearly are not in the short term. He needs his company’s products to be defined by something other than their high price which his “competition” has managed to do to them. Starbucks allowed their brand to become equatable to Mcdonalds (MCD) and Dunkin Donuts, now they need to spend money to change that or the comparisons will not end and they cannot compete on value with either of them. Just when I think things may begin to change…. nope

I can’t wait for the next one.

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What Is Verizon Up To?

Rumors abounded before the iPhone launch that Verizon (VZ) was developing an “iPhone killer” and was the reason they turned down Apple’s (AAPL) overtures. Now, there are more rumors that the possibly upcoming GPhone from Google (GOOG) was shopped to Verizon and it also turned it down.

It all begs the question? What does Verizon have in the wings? Based on it’s history, any product from Google is going to be incredibly affordable (unlike the iPhone) and be easily adaptable to existing formats and outside programmers. Now, if that is true and they are going to several providers to shop it (again based on rumors) one must think that Verizon feels it has something very special in the works to turn down both phones.

Now that Apple finally got with the program and made the iPhone somewhat more affordable, sales will pick up. AT&T (T) stands to be the big winner as they will feel little of the pain of the price cut. Verizon needs to have an answer and will be under even more pressure if a Google phone does come to fruition. Perhaps they are working on it with Blackberry maker Research In Motion (RIMM)?

Personally, I love my Blackberry and have no interest in a $400 iPhone. I would be shocked if a GPhone was not priced at a fraction of that price and I would be tempted to take a gander at it if for no other reason I am sure it would be a great product, like everything else Google does. This is not to say the iPhone is not a great product, it is just way too much money.

Verizon needs to have a answer to this and soon or they risk falling behind in a big way in the smart phone race which, is the future of our telephonic communications.