ValuePlays

Last December, CITI (C) CEO Charles Prince admitted his frustration with the lack of movement in the bank’s share price and defended his strategy of organic growth and targeted international acquisitions. Public dissatisfaction from shareholders including the bank’s largest investor, Saudi Arabia’s Prince Alwaleed bin Talal, to improve the bank’s performance had many speculating Prince would soon be “free to pursue other opportunities”.

In July, Citi created unit to search the market for potential targets after striking several deals in Europe and elsewhere in recent months to reduce its dependence on the US consumer business.

In the past year Citi acquired UK internet bank Egg and investment manager Quilter, as well as a 20% stake in Turkey’s Akbank. Outside the UK, Citi acquired Old Lane, the US hedge fund run by former Morgan Stanley banker Vikram Pandit, and Nikko Cordial, the Japanese brokerage.

Now word comes that Lewis Kaden, former vice-chairman and chief administrative officer at Citi, has been given a new role to “work closely” with Prince on strategic opportunities as the bank steps up its focus in this area. Kaden joined Citi in 2005 from law firm Davis Polk & Wardwell, where he was a partner whose practice included corporate governance and mergers and acquisitions.

Rumors are that Citi is working on larger international deals and the Kaden move only gives more validity to them. This would be the time to get deals done. Valuations of financial firms of all types have been decimated the past month and a half and valuations are ripe for deals in all sectors of the industry as witnessed by Bank of America’s (BAC) investment in Countrywide (CFC).

Citi’s share price has been stagnant for over a year now and Prince needs to do something soon or he will be “free” so to speak. He is on borrowed time.

Lost in the chatter about the recent Wal-Mart (WMT) announcement that August sales results exceeded its forecast as well as those of most analysts was that they now aim to spend less than the $15.5 billion it put aside for this year’s capital spending on building and expanding stores.

In June, Wal-Mart cut the capex forecast to $15.5 billion from $17 billion as it slashed by about 1/3 the number of stores it expects to add this year. Investors had pressured Wal-Mart to cut back on its relentless expansion in favor of bolstering the performance of its existing stores, buying back stock and increasing the dividend.

There is the albeit very brief backround. Why is this interesting? Recent rumors have had Wal-Mart possibly shopping for acquisitions in the US. By further cutting the current capex plans, this may be a move to retain cash for an upcoming purchase of another retailer either in the food or clothing arena. Last month I posted a few thoughts on the subject.

Also, Wal-Mart has committed to a $15 billion share repurchase program and the last quarter completed roughly $1 billion of that neither thrilling or disappointing investors. With the stock at near decade lows, the company may be cutting spending in order to purchase shares by the truckload at these prices to “thrill” the same investors at the next earnings release.

Now, what would we rather have? For me the best scenario here would be further cutting of the capex plans and a bunch more of the repurchase plans. There are few targets out there that Wal-Mart could not easily swallow should they desire, the question is will they? I am inclined to think not. If I had to bet (and being a recent shareholder I guess I am), I would wager that Wal-Mart is buying every share it can get it’s hands on at these prices and to be honest, I am fine with that. After the last earnings release I lamented that Wal-Mart had the cash to buy more shares and did not, turning what could have been a great release into a bit of a disappointment.

My guess is they will not make the same mistake twice…

Ok, I am a sucker I admit it. I thought Dell (DELL) finally got it together, what a chump.

When we left off yesterday, Dell was going to tell DHL they could actually deliver the computer they had to me. Easy, right? Nope. If you are not familiar with the saga to date, begin here.

DHL, who has been excellent by the way called us this afternoon and said that Dell still has not sent them the authorization to deliver the computers. This is after the sales rep, a supervisor, and two customer service reps promised they would. so guess what we did today. PICKED IT UP OURSELVES!!!!

Not only that, the supervisor also promised me an email regarding the printer they were sending me to make up for this fiasco. Does anyone want to make a guess whether or not I received the email? Anyone?

You got it, nothing!! What is the problem Dell? I am only asking you to do what you promised me to do. Why is that so difficult? I just do not understand. Can anyone else explain it to me? Is this just the way it is done? I doubt it…

I have to contrast this to DHL in this scenario that has called us constantly and kept us in the loop in this situation. Here is the kicker, even they have been asking Dell to send them an email to give them the written authorization they need to deliver. Nothing…

Is there any good news in all of this? I guess we finally got the computer? I am trying to make lemonade out of lemons here gang.

Hewlett Packard (HPQ) should by happy though, they got a new customer…

UPGRADES

Flow FLOW Northland Securities Market Perform » Outperform
EMC Corp EMC Caris & Company Above Average » Buy
Dionex DNEX Matrix Research Sell » Hold
Synovus SNV Bernstein Mkt Perform » Outperform
Adolor ADLR Brean Murray Sell » Hold
Cognizant Tech CTSH Bernstein Mkt Perform » Outperform
GSI Commerce GSIC Jefferies & Co Hold » Buy
Skechers USA SKX BB&T Capital Mkts Hold » Buy
Gentiva Health Svcs GTIV BB&T Capital Mkts Hold » Buy

DOWNGRADES

Investors Bancorp ISBC Janney Mntgmy Scott Buy » Neutral
Smith Intl SII CapitalOne southcoast Buy » Hold
Macrovision MVSN Jefferies & Co Buy » Hold
Industrias Bachoco SA IBA Citigroup Buy » Hold
Agnico-Eagle Mines AEM UBS Buy » Neutral
Wimm-Bill-Dann Foods WBD UBS Buy » Sell

THURSDAY’S PICKS

Jeff Macke recommended Short Dow30 ProShares (DOG) as a bet against The Dow. Open $59.92

Guy Adami likes Zimmer Holdings (ZMH). Open $81.02

Karen Finerman prefers Johnson & Johnson (JNJ). Open $62.51

Pete Najarian says St. Jude Medical (STJ) is a buy. Open $46.83

WEDNESDAY RESULTS

Jeff Macke recommended buying Dick’s Sporting Goods (DKS) (Open $66.80,Close $67.74 Gain $1.94) and Under Armour (UA). Open $62.17 Close $63.83 Gain $1.66

Guy Adami preferred GlaxoSmithKline (GSK). Open $54.01 Close $53.72 Loss $.29

Karen Finerman thought American Standard (ASD) is good. Open $35.20 Close $35.74 Gain $.54

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= 21-15 Gain $38.54
Eric Bolling= 10-11 Loss $14.01
John Najarian= 13-3 Gain $15.54
Jeff Macke= 26-19 Gain $8.24
Pete Najarian= 15-12 Gain $23.43
Tim Seymore= 3-2 Loss $.49
Karen Finerman= 7-3 Gain $3.94
Stacey Briere-Gilbert= 2-0 Gain $1.61

SHOO Steven Madden Ltd 20.09
SEH Spartech Corporation 17.88
SEED Origin Agritech Limited 7.10
RYL The Ryland Group, Inc 24.71
RVI Retail Ventures Inc 10.16
RT Ruby Tuesday, Inc. (G … 20.51
RSTO Restoration Hardware … 2.87
PLCE Childrens Pl Retail S … 25.55
PGR The Progressive Corpo … 19.40
PFCB P F Changs China Bist … 31.47
PEIX Pacific Ethanol Inc 11.10
OCR Omnicare, Inc 29.75
MWA Mueller Wtr Prods Inc 11.77
KG King Pharmaceuticals Inc 12.35
KFY Korn Ferry Intl 17.24
CENT Central Garden & Pet Co 10.57
CBOU Caribou Coffee Inc 5.78
ARII American Railcar Inds Inc 21.45

– This is true and banks ought to be first on your list

– Do not pay this too much attention. People selling everything to cover other areas, Lampert is buying more, all that matters

– I agree, I just think the current market pessimism may give you a much better price, $40ish

– Bueller, Bueller, and the only person making sense out there currently about subprime

So will Bernanke cut The Fed Fund Rate .25 or .50? Maybe… neither?

Bernanke has shown that unlike his predecessor, Alan Greenspan, he is not going to bail out those in business who make poor decisions. While this may cause a bit of pain now and make for some splashy headlines, once people finally get this, in the long run we will all be better off. Greenspan’s antics (and enormous miscalculations) cause excessive risk to enter the system. This risk now has us where we are today. Hoping the Fed steps in to help lenders who made loans to people who could not pay them back, to home owners who bought homes they could not afford, and for home builders who built more homes that they could sell just will not happen.

Here is the thing. Every party, no matter how good it is or how bad you want it to continue, eventually ends. They all do, it is just a fact. The housing party is ending and like all parties, those who are the last to arrive wish they got there much earlier. Too bad.

When money is virtually free (Greenspan had rates to 1%), people will do very dumb things with it. Bernanke is under no obligation or “moral” dictate to bail these folks out. None. Despite what Democrats trying to win publicity points in congress may say, he has to this point correctly refused. He has no desire to bail out the Countrywide’s (CFC), Washington Mutual’s (WM) of the world who made billions in bad loans. He will, however, provide liquidity to the system so that the Citi’s (C), Bank of America’s (BAC) or Wells Fargo’s (WFC) can keep the wheels greased though and isn’t that what his job is?

What will he do then? I for one think he may actually do nothing at all. If he does give the street a bone, it will only be 1/4 point. Now, it should be noted that based on the bond market’s recent activity currently the effective Fed Funds Rate has been below 5% for some time now. So even is Bernanke does do a 1/4 point drop, it’s reality is meaningless. Bernanke should be given credit for essentially making the meetings rate decision meaningless and creating an situation where the market is setting the rate. Obviously the Fed will guide the markets by capping it but when you have the effective rate below the actual rate, what are people clamoring for a cut for?

What is more important that the Fed’s actions next week is what they say. Bernanke has been very transparent as to his goals to this point has stuck to them despite the market trying to read something else into them. What he says his priority is should determine the market’s reaction to the meeting. That, and only that will determine the Fed’s next move, if any.

Talk about counting your chickens before they hatch. I should have learned by now. Dell (DELL) does it to me again.

When we left off yesterday, Dell was going to notify DHL to send the packages to my correct address and credit me the shipping i paid for but did not get. Now, in order to appreciate what comes next, please read yesterday’s post on this here.

I am going about my day playing catch up after they robbed me of 2 hours of it when I get a call at 4:30 pm that DHL is still waiting for Dell to allow them to release the package. I notify them to just forget it and at this point I will just goi pick it up. “No, you can’t” is the reply. What? It seems Dell put a “hold” on the order and it cannot move until they send another email releasing it. I do not blame DHL, they are doing what they legally have to do, I blame you know who!!

Now, another hour on the phone. This time it takes that long because I have to relate the entire days conversations to yet another person who does the 3 minute hold boogie with me while they “look at the file” and then he swears he emailed DHL. Now that the DHL person and I on a first name basis, I call her 20 minutes later and she at that point had not heard from Dell. She says (I actually believe her) she will call me tomorrow “if there is an issue”, talk to you tomorrow Sara…

Now, all this started with the sales process. I gave the new address to both the salesperson and the “payment specialist”. During the course of the day my wife emailes the salesperson for help and get this response..

From: Brett_Engle@Dell.com [mailto:Brett_Engle@Dell.com]
Sent: Tuesday, September 11, 2007 5:23 PM
To: nicoles@VVVVVV.VVV
Subject: RE: Dell Order Has Been Canceled for Dell Purchase ID: XXXXXXXXXX

I have submitted to have the shipping address changed so you can pick it up. I transferred the call to a payment specialist who placed the order so I guess I won’t take credit for this mistake.

Hey, Bud. Way to take the bull by the horns and step up to help a customer!! Notice how he says we “can go pick it up”. It is nice to see Dell tells it’s folks to go the extra mile. Hey Brett, is it coming in pieces so “I can put it together”?

We emailed a reply and simply asked why we had to go pick it up, why can’t DHL deliver it to us?

Our reply from Brett at Dell?

From: Brett_Engle@Dell.com [HYPERLINK mailto:Brett_Engle@Dell.com mailto:Brett_Engle@Dell.com]
Sent: Tuesday, September 11, 2007 5:48 PM
Subject: Read: Dell Order Has Been Canceled for Dell Purchase ID: XXXXXX

Your message

To: Engle, Brett
Cc: ‘Todd Sullivan’
Subject: RE: Dell Order Has Been Canceled for Dell Purchase ID: XXXXXXXXx

Sent: Tue, 11 Sep 2007 16:40:37 -0500

was read on Tue, 11 Sep 2007 16:48:03 -0500

Nothing. Nothing at all. Just a read receipt. I guess they are waiting for DHL to come through for them? Go DELL!!!

I am surprised but think I am a bit of a sucker for being so. If Micheal Dell wants to fix his broken company, stop thinking about ways to sell cheaper products through Wal-Mart (WMT) and maybe keep the ones you have? Stuff like this not only makes you lose people but is a great story to tell at dinner, the bar, a ballgame, hockey practice, everywhere and makes your company look real lousy.

Another thing. I have a family member who works for a large customer of Dell’s who read my in initial post and said to me “just call us next time, we could have had it fixed immediately”. Here is the thing though. Dell ought to treat us all the same. Right? I should not have to go “above someone’s head” to get their own admitted mistake fixed, should I?

Some people will get treated this way and keep it to themselves, others, like me, have a megaphone to tell everyone. You never know who is on the other end of that phone folks….

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

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

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

– 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

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 ….