ValuePlays

UPGRADES

Danaher DHR William Blair Mkt Perform » Outperform
Motorola MOT Cowen & Co Neutral » Outperform
Oceanfreight OCNF Oppenheimer Neutral » Buy
Nokia NOK Cowen & Co Neutral » Outperform
Audiocodes AUDC Cantor Fitzgerald Hold » Buy
General Mills GIS Credit Suisse Neutral » Outperform
Buckeye Partners BPL Deutsche Securities Hold » Buy

DOWNGRADES

Topps TOPP Wedbush Morgan Buy » Hold
FMC Tech FTI CapitalOne southcoast Buy » Hold
SY BANCORP SYBT FTN Midwest Buy » Neutral
BioCryst Pharm BCRX Caris & Company Above Average » Average
Signature Bank SBNY Oppenheimer Buy » Neutral
VASCO Data Security VDSI RBC Capital Mkts Sector Perform » Underperform
China Medical Tech CMED Brean Murray Buy » Hold
Analogic ALOG Brean Murray Buy » Hold
VeraSun Energy VSE Friedman Billings Outperform » Mkt Perform
Pacific Ethanol PEIX Friedman Billings Mkt Perform » Underperform
Aventine Renewable Energy AVR Friedman Billings Outperform » Underperform

FRIDAY’S PICKS

Jeff Macke recommended Activision (ATVI). Open $20.96

Guy Adami said Oracle (ORCL) is a raging buy. Open $21.04

Karen Finerman liked BEA Systems (BEAS). Open $13.54

Pete Najarian preferred Sohu.com (SOHU). Open $38.76

Thursday’s Picks

Jeff Macke liked Oracle (ORCL).Open $20.84 Close $21.04 Gain $.20

Karen Finerman recommended Limited Brands (LTD).Open $23.47 Close $22.33 Loss $1.14

Pete Najarian preferred Titanium Metals (TIE). Open $32.22 Close $33.54 Gain $1.32

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= 24-17 Gain $40.11
Eric Bolling= 10-11 Loss $14.01
John Najarian= 13-3 Gain $15.54
Jeff Macke= 29-21 Gain $9.79
Pete Najarian= 17-15 Gain $23.79
Tim Seymore= 3-2 Loss $.49
Karen Finerman= 9-5 Gain $3.25
Stacey Briere-Gilbert= 2-0 Gain $1.61

Iphlop?, Immature Parents, “Made in the USA”, Talking Bulls

– Here is a take on the iPhone that does an excellent job of raising many of the issues I have espoused here.

– If parents are too immature to deal with their differences, how can we expect children to be? Maturity unfortunately does not come with age.

– Save your kids life, buy “Made IN The USA” toys

– This is funny and very true

WOW, this quarter by Goldman (GS) has to go down as one of its most impressive quarters considering both the environment it operated under and the results of it’s peers.

With Morgan Stanley (MS), Lehman (LEH) and Bear Sterns (BSC) all posting lowered results, Goldman not only beat last years $3.26 but sprinted past it at $6.13 which is about a full $2 more than estimates.

Here is the breakdown:

* Investment Banking produced record quarterly net revenues of $2.15 billion, driven by results in Financial Advisory which were 64% higher than the previous record.
* Goldman Sachs ranked first in worldwide announced mergers and acquisitions for the calendar year-to-date.
* Fixed Income, Currency and Commodities (FICC) generated record quarterly net revenues of $4.89 billion, reflecting strength across most businesses.
* Equities generated record quarterly net revenues of $3.13 billion, including record commissions.
* Asset Management generated record management and other fees of $1.15 billion. Assets under management increased 27% from a year ago to a record $796 billion, with net inflows of $50 billion during the quarter.
* Securities Services achieved record quarterly net revenues of $762 million, reflecting continued strength in the prime brokerage business.

Lloyd C. Blankfein, Chairman and Chief Executive Officer said, “Given the difficult environment of the third quarter, many of our businesses were challenged,”.

Challenged? I would love to see what he considered an “easy” quarter. These results blew everyone away and with Goldman some $20 off it’s all time high and trading at a single digit PE ratio, expect a sharp run up in shares today.

In my earnings preview post I expected two key factors to enable Goldman to beat estimates, trading and international operation. Revenue in the trading and principal investments division soared 70% to $8.23 billion. The segment was led by its bond, currencies and commodities business, where net revenue climbed 71% to a record $4.89 billion amid “significantly” higher revenue in the currencies and interest-rate segments.

Did Goldman suffer mortgage write down like the other brokerage houses did? Sure, but unlike the others, these write downs “where more than offset by gains in short mortgage positions”. Duh…apparently they were the only ones who thought of this..

Much was mockingly said about Goldman and their reputation as being the “smartest guys in the room” after they injected $3 billion into one of their funds recently.

This quarter ought to make those same folks eat their words…

Just before T. Boone spoke on CNBC yesterday I made some comments on oil and was please to see he agreed.

He is still very bullish on oil noting that oil production is now 85 million barrels a day and there is a 88 million production goal for Q4, “so production is going up.” He also noted that as some fear oil could go to $100, but he doesn’t think that will happen this year and he thinks that would take a “cataclysmic” event.

He did say that in the very near term he thinks we should get a pullback here to maybe $78 a barrel but long term the trend is up as demand is up and production is flat. He said demand in second quarter of 2008 will fall, but he did not expect supply to increase. If the global economy stays “as robust” as it is now, he said $90 a barrel could be seen next year (10% higher than now). This essentially mirrors the sentiment I wrote about yesterday and does cement my decision to hold my USO position but to not expect much more out of in the short term.

One of his favorite stocks? Suncor (SU)

The interview can be seen here.

Tuesday’s Fed rate cut and explosion upward in both the Dow and S&P has been dissected already more than it really need to be. It all goes back to what Bernanke has been saying all long. Inflation was worry number one, when that was contained, the rest follows.

The inflation gauge, the consumer price index came out (CPI) and it fell for the second straight month after being essentially flat for the summer. Conclusion? Inflation, at least for now at 2% is in a comfortable zone for the Fed. since that has been accomplished, despite skyrocketing oil prices, Bernanke and Co. turned their attention to economic growth.

Now, has this information been release yesterday, the 1/2 point cut would have made much more sense and perhaps we could have avoided to 7,000 posts on it (here included). It did make for good reading though.

It is becoming more apparent with every move Bernanke does or does not make that he is going to lead the Fed is a relatively transparent manner. If growth slows and inflation remains high,rates do not move, if it growth slows and inflation falls, rate cut time. Simple. I think part of the problem is that people are still trying to view Bernanke through Greenspan’s Vaseline covered glasses that obscured everything people thought they understood in his proclamations. A more transparent Fed is a better this for us all, if for no other reason it will not be the dominant news story consistently. A relatively predictable Fed is far more desirable that one that keeps people guessing all the time. Greenspan enjoyed the mystery of the game, Bernanke seems to have no use for it. Good.

Bernanke really is making this simple for us, as soon as we just sit back and listen and stop trying to interpret.

UPGRADES

Pennsylvania Commerce Bancorp COBH Janney Mntgmy Scott Neutral » Buy
LandAmerica Fin LFG Ferris Baker Watts Neutral » Buy
Xenoport XNPT Punk, Ziegel & Co Accumulate » Buy
MFA Mortgage MFA Bear Stearns Peer Perform » Outperform
Robbins & Myers RBN Robert W. Baird Neutral » Outperform
Intersections INTX JMP Securities Mkt Outperform » Strong Buy
Plexus PLXS JP Morgan Neutral » Overweight
Webster Financial WBS Lehman Brothers Underweight » Equal-weight
Assoc Banc-Corp ASBC Lehman Brothers Underweight » Equal-weight
Pacific Capital Bancorp PCBC Lehman Brothers Underweight » Equal-weight
Ruby Tuesday RT JP Morgan Neutral » Overweight

DOWNGRADES

Micrus Endovascular MEND Punk, Ziegel & Co Buy » Mkt Perform
Suncor Energy SU CIBC Wrld Mkts Sector Outperform » Sector Perform
Blue Nile NILE William Blair Outperform » Mkt Perform
Alnylam Pharmaceuticals ALNY Caris & Company Above Average » Average
Zions Bancorp ZION Sun Trust Rbsn Humphrey Buy » Neutral
Furniture Brands FBN Morgan Keegan Mkt Perform » Underperform
Hancock Holding HBHC Stifel Nicolaus Buy » Hold
Silicom Limited SILC WR Hambrecht Buy » Hold
Vonage VG Soleil Hold » Sell
Tongjitang Chinese Medic TCM Brean Murray Buy » Hold
Coca-Cola Ent CCE Deutsche Securities Buy » Hold
Illumina ILMN GARP Research Buy » Neutral
Benchmark Elec BHE JP Morgan Overweight » Neutral
SVB Financial Group SIVB Lehman Brothers Equal-weight » Underweight
Texas Capital TCBI Lehman Brothers Overweight » Equal-weight
Cullen/Frost Bnkrs CFR Lehman Brothers Overweight » Equal-weight
CheckFree CKFR Citigroup Buy » Hold
XM Satellite XMSR UBS Buy » Neutral
Sirius Satellite SIRI UBS Buy » Neutral

This is really just too hard to believe.

At 7:10 on Fed decision day CNBC’s Jim Cramer have an interview and said a 50 point Fed rate cut would “be catstrophic” and signal “things are much worse than they have lead us to believe” See the full interview here

Then, after the 50 point cut later that day Cramer was on CNBC the same day acting like a 17 year old virgin in a whore house with a suitcase of cash. Watch this video here. To quote him “This is what we wanted”. “It is good, these guys get it”, he continued.

What? What is it Jim? “Catastrophic? or “just want we wanted” or did we want a catastrophe?

He has lost all credibility after this one. He has been famous before for his flip flops and has been called out on them but was alway able to explain it away by saying “things have changed since then”. The question now has to be, what the hell changed this time in the 7 hours between this interview, the Fed action and your exuberant “Stop Trading” segment? Answer? Nothing………

We just cannot take him serious anymore as person we should listen to for advice. As a freakishly spastic TV persona that my kids laugh at he has value, but as someone who’s advice we should heed, not anymore…

This is the problem when you stop trying to be an honest analyst and enter into the entertaining character mode, you cross the line from saying what you may really believe into doing stunts for ratings like his famous “they know nothing” rant about the Fed.

PS Jim, We were laughing at you, not with you on that one. I give it 6 months before he is on the next “WWF Smackdown”with Vince McMahon, the only difference between the two is their topics covered.

After a week of complaining, when the problem finally gets solved, I ought to give the recognition for it.

After reading my blog posts at Dell’s(DELL) HQ in Texas, I was contacted by a “Dell Customer Advocate”. After several emails back and forth as she tried to locate my order (I was giving her our current address and Dell had apparently still not changed this) she found the order. She also managed to find the printer I was promised by the Customer Service Manager who “promised” to get in touch with me the day after we talked (the day of first blog post)to give me the details and as of today, has not bothered despite having my home and cell and office numbers and email. Maybe he is trying to get me at my mom’s house? I’ll be there next 4th of July, talk to you then Mr. Supervisor. The nice part was that unlike the computer, the printer was actually delivered to our office and we did not have to “go pick it up” at the shipper.

So, when all is said and done the Customer Service Advocate, Marie did the job it took a team of folks and 4-5 hours to do on the phone in about an hour’s work. Thank you, I have to give a commendation where it is due. Thank you for your help.

On another note, I was contacted today by a second advocate who read the blog posts also and offered to help. Hmmm.

Here is the thing. I said this in a previous post but I think its importance bears its repeating. If I did not have a megaphone to voice my displeasure, I have to wonder how this would have ended. Without the fear of of a couple hundred thousand people reading about my “experience”, would there have been the rush to make it right? I have to wonder since the urgency did not seem to be there prior to the posts hitting. I just don’t know and hate to assume the worst but the evidence is what it is. At least it is solved now.

I do know this, do not take things like this lying down. If you let them get away with it, the impetus to improve and avoid these situation is gone. Don’t take it and be sure to give credit where it is due, it means just as much.

This is what happens today when you do not have the international exposure you need

Morgan Stanley (MS) posted 17% drop in fiscal third-quarter net income, weaker than expected. Morgan reported net income of $1.54 billion, or $1.44 a share vs. $1.85 billion, or $1.75 a share, a year earlier. On a continuing operations measure, the company reported third-quarter earnings of $1.38 a share, versus $1.50 a year before.

Why? The firm had write downs that reduced earnings by 33 cents a share. The losses consisted of its institutional securities unit having sales and trading losses of $877 million related to loans it made to companies making acquisitions, the oft mentioned “bridge loans”. They said the losses were the result of its writing down the value of loans on its books by a total of $940 million saying that the “losses of approximately $940 million (were) due to the marking-to-market of loans as well as closed and pipeline commitments.”

Now, it should be pointed out that Morgan did have a record quarter for revenues as they increase 13% to just shy of $8 billion. However, Morgan’s earning profile is clearly to levered toward the US M&A markets which are currently hitting the brakes. Unlike Lehman (LEH) and Goldman (GS) who reports tomorrow, not enough of their earnings are coming from international activity.

In 2006’s letter to shareholders CEO John Mack said one of his goals was “Leveraging our global franchise to build out key growth areas, including businesses where we already have strong leadership positions, such as commodities and prime brokerage, as well as other areas where we have started to close the gap with our peers, such as leveraged finance, residential mortgages and equity derivatives.

This effort for growth look like it resulted in a lack of discipline that lead to the almost $1 billion in write downs in these very areas.

Goldman reports tomorrow, expect write down in the fixed income securities like the other brokers have reported to date. Also expect international activity and trading activities to offset that and surprise more than a few folks.

As the price of a barrel of crude marches higher each day it makes headlines, but is not really effecting our day to day lives all that much. In fact where oil to approach the 1980 recession levels, its price would need to rise another 25% to $100 a barrel (adjusted for inflation).

Now, do not get me wrong, the 41% gain we are sitting on in our US Oil (USO) investment since January is great, but I do not see another 25% coming soon. Gas prices have come down and heating oil prices are not much higher than last year at this time when oil was in the high $60’s and low $70’s. Why?

The price of crude is being influenced by traders, not necessarily supply and demand. Currently, that sentiment is towards the upside. When that sentiment changes, coupled with the demand reduction that is inevitable when the US economy slows, prices ought to fall, and fast. It has been another benign (non existent)hurricane season and for now, middle east tensions have subsided. Yes, I know there is a war going on but, isn’t there always? It will take more that a few gunshots over there to make a difference.

Demand from China and India is surging and this is a long term story, but, not 41% in 8 months. The Us ethanol industry lead by ADM (ADM), Bill Gates backed Pacific Ethanol (PEIX) and Verasun (VSE) will produce an additional 1 billion gallons of the stuff this year and that is cutting into demand for gasoline. Which is why despite oil prices surging, the price you pay at the pump has been stagnant or dropping. Further, as people have paid more for food, and other items and fear an economic slowdown, they have chosen closer vacation and are driving rather than paying for plane tickets. no matter what you may think, 250 people packing up and driving on vacation uses a fraction of the oil it takes to make enough jet fuel for the same number of people to get into a plane and fly there.

Now, Boone Pickens will be on CNBC soon and he will tell us the price is going up. Well, Boone is an oil man and high prices are very good for him. I am sure they will go up over time, it is inevitable barring a cellulostic ethanol breakthrough in the next few months that triples our ethanol yield overnight from 7 billion to 21 billion gallons making E85 an immediately viable option. This scenario will happen but it time frame is a few years, not months away.

Am I selling out of my USO position? No, but I do not see much upside from here for a while. Why not sell then? After 8 months I will pay short term capital gains taxes and lose 28% of that gain. Is oil stays flat and I sell in 4 months, that drops to 15% so I can gain 13% even if the price does nothing. Neat…

Long term oil is going up, it just is not the huge story it is made out to be now..