ValuePlays

Let’s see who is buying during the carnage

1- Equity One (EQY)= $15,200,000

2- General Growth Properties (GGP)= $7,760,000

3- Biocryst Pharmaceuticals (BCRX)= $6,485,000

4- Resource Capital (RSO)= $6,020,000

5- NuStar Group Holdings (NSH) =$ 5,656,000

Here are this mornings analyst calls

UPGRADES

Sempra Energy SRE Deutsche Securities Hold » Buy
EarthLink ELNK CIBC Wrld Mkts Sector Underperform » Sector Perform
Innophos Holdings IPHS Bear Stearns Peer Perform » Outperform
Overseas Shipholding OSG Credit Suisse Neutral » Outperform
Textron TXT Credit Suisse Neutral » Outperform
Compass Minerals Intl CMP JP Morgan Neutral » Overweight
Sealed Air SEE Banc
of America Sec Neutral » Buy
Pactiv Corp PTV Banc of America Sec Neutral » Buy
CryptoLogic CRYP CIBC Wrld Mkts Sector Underperform » Sector Perform
CIT Group CIT CIBC Wrld Mkts Sector Perform » Sector Outperform
Energizer ENR Sun Trust Rbsn Humphrey Neutral » Buy

DOWNGRADES

Century Casinos CNTY Roth Capital Buy » Hold
Sirenza Micro SMDI CIBC Wrld Mkts Sector Outperform » Sector Perform
DR Horton DHI JP Morgan Overweight » Neutral
AMB Property AMB Citigroup Hold » Sell
ProLogis PLD Citigroup Hold » Sell
Hawaiian Electric HE Lehman Brothers Equal-weight » Underweight
Ruddick Corp RDK Friedman Billings Outperform » Mkt Perform

Here are today’s picks and Friday’s results

Monday’s Picks

Jeff Macke liked Callaway Golf (ELY). Open $17.72

Pete Najarian preferred Ivanhoe Mines (IVN). Open $12.46

Guy Adami said Hilton (HLT) is a buy. Open $43.91

Tim Seymour recommended US Steel (X). $86.66

Friday’s Results

Jeff Macke liked Berkshire Hathaway (BRK) for Warren Buffet. Open $3,643

(a note: this pick will be treated as a $36.43 stock, otherwise any move in it will skew the tracking for Macke way off either up or down) Close $3,625 Loss $.18.

Pete Najarian recommended buying stock in NASDAQ (NDAQ). Open $32.56 Close $31.18 Loss $1.38

Guy Adami thought GlaxoSmithKline (GSK) is a buy. Open $52.45 Close $52.06 Loss $.39

Eric Bolling preferred Hewlett Packard (HPQ). $47.02 Close $47.21 Loss $.19

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

Adami= 12-11 Gain $23.77
Bolling= 9-10 Loss $15.29
John Najarian= 13-3 Gain $15.54
Macke= 19-13 Gain $6.90
Pete Najarian= 7-7 Gain $16.33
Seymore= 2-1 Gain $1.09
Finerman= 2-2 Gain $.88
Gilbert= 1-0 Gain $.29

Here is the latest update on lead paint proceeding affecting Sherwin Williams (SHW) and NL Industires (NL)

From Jane Genova’s Law and More

This post is derived from LexisNexis Mealey’s Litigation Report on Lead, Volume 16, Issue # 10, August 2007. Since so many lead-litigation issues, including the ones associated to Chinese imports of children’s toys and trinkets, are emerging, I am going to focus this post only on the public nuisance class action ones. I will post on the other important issues later.

Documents associated with this litigation are available from LexisNexis Legal News, or by directly contacting James Cordrey, Legal Editor, James.cordrey@lexisnexis.com, 610-205-1125.

On behalf of readers, I want to thank Mr. Cordrey of LexisNexis for doing such a comprehensive job of tracking developments in lead litigation and providing these updates.

CALIFORNIA:

No surprise, it appears that the landmark April 4th contingency ruling by Judge Jack Komar in County of Santa Clara, et al. v Atlantic Richfield Co., et al. No. 1-00-CV-788657, Calif. Super, Santa Clara Co. isn’t going to go down without a fight from the plaintiff.

On June 29th, the California Association of Counties filed an amicus brief in the suit that had been filed against the former lead paint/pigment industry players by a number of CA counties. In that brief they contended that public nuisance actions provide a important function in maintaining the public health.

Specifically, the argument presented by the organizations is:

“Given the importance of public nuisance actions to address both large- and small-scale harms to the public, this court should reverse the trial court’s ruling, which would have the practical impact of significantly limiting or eliminating all together the ability of cities and counties to bring public nuisance actions.”

In addition, they contend that Judge Komar’s decision to abolish contingency fee agreements does not consider the unique aspects of People ex rel. Clancy v. Superior Court [1985] 39 Cal. 3d 740, 743 Shepardize. In that case, Clancy was disqualified based on the egregious, case-specific facts. As a result, the group concludes, the disqualification is not required under case law merely because financial assistance to the government has made the litigation economically feasible.

The economic argument being used is one of “realities” regarding resources. Specifically, the brief contends:

“Regardless of the number of public lawyers available to a public entity, it would be virtually impossible for any city or county in this state to match the resources at the disposal of Atlantic Richfield’s counsel and its 625 lawyers”

WISCONSIN:

Another no surprise is that the plaintiff in City of Milwaukee v. NL Industries Inc. No 01-CV-3066, Wis Cir., Milwaukee Co, filed a memo on July 12. That memo supported a motion to change the June 22 special verdict which found the NL Industries do not intentionally cause a public nuisance. The key argument is that the record lacks evidence to support that verdict.

Specifically, the city of Milwaukee contends that errors in they jury instructions warrant changing the verdict. It asks that NL Industries be found to have:

“intentionally caused the public nuisance in this case because NL knew, or was substantially certain, that its sales of – and conduct in – promoting lead paint and pigment were harming children and causing a public health threat.”

OHIO:

On August 1, the Ohio Supreme Court ruled that Governor Ted Strickland’s veto of a bill prohibiting public nuisance lawsuits against the former lead paint/pigment industry parties was invalid. That was because the 10-day waiting period under which the governor was permitted to take action had passed. State ex rel. The Ohio General Assembly, et al. v. Jennifer Brunner No. 07-0209, Ohio Sup.

The legal team representing Jennifer Brunner has 90 days from that decision to request a stay. If that stay is granted, then there could be a petition for a referendum to put the issue to voters

Half a year has gone by and Wal-Mart (WMT) released results yesterday.

26 week sales results at Wal-Mart stores are up 5.5%, Sam’s Clubs are up 7.1% and the International operations are up 16.2%. Total sales results are up 8% vs. 2006. Not bad at all.

At Wal-Mart stores grocery sales were once again stronger than general merchandise sales. Perishables led the increase in grocery, with solid performance in dairy and bakery, as well as pharmacy. Electronics continued to show solitore sales gains over last year, with strength in TVs, computers, digital cameras and video games.

At Sam’s Clubs sales have been driven by continued momentum with small business owners. Sales were driven by increases in average ticket. In addition to small business categories, other strengths included electronics, fresh food and grocery. As the month of August gets under way, the clubs are completing the transition from summer outdoor goods to a furniture gallery and back-to-college in many markets. A fall merchandise transition will begin in September.

Here is a small but very notable paragraph from the release “In comparable Wal-Mart stores, traffic was negative for the month. However, the trend improved for the third consecutive reporting period. The Central and West geographic regions of the Wal-Mart stores were strongest for the period.” Why is it so meaningful? It means people are beginning to go back to Wal-Mart to shop and that is very good news for shareholders. With all the unwarranted negative publicity they have endured the past three years, Wal-Mart became a dirty word. It would seem now that it is beginning to wear off and when push come to shove, people’s pocket book rules. Now that the image of Wal-Mart is slowly beginning to stand for “great prices on quality” rather than just “cheap”, this trend should continue.

Wal-Mart is also doing it’s usual masterful job with costs as “Fuel sales impacted the Sam’s Club sales figures for the four-week period ending August 3, 2007 by negative a 0.2 percentage point. Fuel sales had no impact on the total U.S. comparable store sales figures for the four-week period ending August 3, 2007.”

Late Thursday and early Friday analyst calls

UPGRADES

LSI Logic LSI Wedbush Morgan Sell » Hold
Omrix Biopharma OMRI Oppenheimer Neutral » Buy
Kinder Morgan Mgmt KMR Sanders Morris Harris Neutral » Buy
Kinder Morgan Prtnrs KMP Sanders Morris Harris Neutral » Buy
Deluxe DLX Longbow Sell » Neutral
Cincinnati Fincl CINF AG Edwards Hold » Buy
Automatic Data ADP AG Edwards Hold » Buy
Verint Systems VRNT Morgan Keegan Mkt Perform » Outperform
Emmis Comms EMMS Bear Stearns Underperform » Peer Perform
Novacea NOVC Bear Stearns Peer Perform » Outperform
Quebecor World IQW RBC Capital Mkts Underperform » Sector Perform
Frontier Oil FTO Caris & Company Average » Above Average
Occulogix OCCX Caris & Company Below Average » Average
Alon USA Energy ALJ Caris & Company Above Average » Buy
Forest Labs FRX FTN Midwest Sell » Neutral
Noven Pharma NOVN Oppenheimer Neutral » Buy
Transocean RIG Matrix Research Buy » Strong Buy

DOWNGRADES

Argon ST STST BB&T Capital Mkts Buy » Hold
Xenoport XNPT Lazard Capital Buy » Hold
Intermec IN Bear Stearns Peer Perform » Underperform
Amer States Water AWR AG Edwards Buy » Hold
California Water CWT AG Edwards Buy » Hold
Aqua America WTR AG Edwards Buy » Hold
Universal Display PANL Maxim Group Buy » Hold
Wrigley WWY Davenport Buy » Neutral
Geo Group GEO Avondale Partners Mkt Outperform » Mkt Perform
Citi Trends CTRN Avondale Partners Mkt Outperform » Mkt Perform
AmeriCredit ACF Friedman Billings Outperform » Mkt Perform

Here are Friday’s picks and to date records.

Jeff Macke liked Berkshire Hathaway (BRK) for Warren Buffet. Open $3,643

(a note: this pick will be treated as a $36.43 stock, otherwise any move in it will skew the tracking for Macke way off either up or down)

Pete Najarian recommended buying stock in NASDAQ (NDAQ). Open $32.56

Guy Adami thought GlaxoSmithKline (GSK) is a buy. Open $52.45

Eric Bolling preferred Hewlett Packard (HPQ). $47.02

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

Adami= 12-10 Gain $24.16
Bolling= 9-9 Loss $15.08
John Najarian= 13-3 Gain $15.54
Macke= 19-12 Gain $7.08
Pete Najarian= 7-6 Gain $17.71
Seymore= 2-1 Gain $1.09
Finerman= 2-2 Gain $.88
Gilbert= 1-0 Gain $.29

Blood on the street today… Time to buy!!

WWE World Wrestling Entmt Inc
WON Westwood One Inc
UWN Nevada Gold & Casinos Inc
TZOO Travelzoo Inc
TWC Time Warner Cable Inc
TDA Telephone & Data Sys Inc
TBL The Timberland Company
SHOO Steven Madden Ltd
SGA Saga Communications, Inc
PZZA Papa John’s International
OGE Oklahoma Gas and Elec
NAPS Napster Inc
MKV Markel Corp
KEM KEMET Corp
INTU Intuit Inc
INSP Infospace Inc
GPS The Gap, Inc
DTG Dollar Thrifty Automo
BKS Barnes & Noble, Inc

What is Google (GOOG) thinking?

Google announced they are going to start allowing people cited in news stories to respond and have their response posted to the news story. What? How many people are they going to have to hire to make sure the “responder” is actually the person cited in the article? How much time will lapse between the news story and the time the response hits? With our lives at a story a minute pace, if the response is not posted fast, the story become old news and the service almost irrelevant. Will they be editing the posts for vulgarity or other “unwanted content” and if they are, how many more people will be needed to do that?

Will Google be held liable if a fake responder gets by them and trashes someone and creates another whole story or disastrous events unfold due to the fake response? I guess the question to be asked is, “what good for Google can come out of this?”

They already have message boards for people who like to engage in the online back and forth so there won’t be the additional page views generated to justify the tremendous costs this will entail.

Maybe they are trying to save Whole Foods (WFMI) CEO Mackey some time?

Earlier this week I asked the question, “Is Home Depot’s Buyback At Risk?”. Well, Home Depot (HD) today said it is in talks with the three private equity firms that agreed to buy its supply unit and the subject will not please shareholders. The discussions will lead to a lower price than the previously announced $10.325 billion. The nation’s largest home-improvement retailer is talking to Bain Capital, the Carlyle Group and Clayton Dubilier and Rice about “material changes to the terms and financing of the transaction.”

In an anticipated (at least at Valueplays) kick in the chops for shareholders, citing the current market for financing, The Depot said that it would cut the price it will pay for its $250 million share tender offer to between $37 and $42 a share. When the buyback was first announced last month, they said they would pay between $39 and $44 a share. The offer was extended to Aug. 31 at 5 p.m. Why are they doing this? Easy, a lower price will lead to fewer shares being tendered. The fewer shares tendered, the lower total cost of the offer.

None of this should be a surprise, hopefully. The Depot has been misfiring for a while now and there is no reason this unprecedented buyback should be any different. If anything it should teach us a lesson about the ambiguous open ended share buyback announcements that do not commit management to anything but do make for a neat little headline. In short, they are meaningless.

Here is the worst part. This was to be the “cash” portion of the share buyback program. Home Depot has not even broached the “debt” part. Let’s not forget, a large portion of this buyback was to be funded by debt and if they can’t get the cash part due to current conditions, anyone want to bet the debt part will not happen anytime soon?

Like almost everything else they have done recently, the huge share repurchase announcement by Home Depot will end up making them look bad.

When I first read this last night I thought “great idea”. After talking to some parents and kids going to college this fall this morning, I am thinking “really great idea”. Wal-Mart (WMT) really nailed this one.

Here is the skinny. Wal-Mart has teamed op with Facebook to allow college student to team up online to design and stock their room. Now, the initial impulse may be “why would college kids shop at Wal-Mart? They may not, but who does the most back to school shopping? Mom and Dad and they love the idea of saving some bucks at Wal-Mart and having the goods delivered by Wal-Mart to the school (dads really like this idea). Let’s be honest here, does junior really care where most of the staple items in their room come from? No, after all a microwave is a microwave.

The kids can go online a figure out who will buy the computer printer, microwave, TV, DVD player, futon etc. and then go the Walmart.com and purchase the items. In one swoop they save mom and dad a shopping trip, stop the inevitable multiple items in a room problem that always happens and help dad in reducing stuff to pack in the car for the move. Brilliant.

This was just announced so the results this year may be limited but this will gain traction big time in the future. This may be the reason Wal-Mart is one of the few retailers with positive same store sales results this summer?

The parents I spoke to though it was a wonderful idea and the kids thought it was very “cool” because they will eliminate the anxiety of “missing” something they will really need in their room and the Wal-Mart site gives them ideas they may not have thought of..

Kudos to whoever came up with this one..

Having said they plan to “aggressively pursue” a “very fragmented” China and India paint and coating market for opportunities to expand, it appears Sherwin Williams (SHW) may be close to announcing another acquisition.

Already planning to build a production facility in India, it appears further acquisitions, namely that of a Bangalore-based company, are progressing. When asked recently whether the company is in talks with Surfa Coats Bangalore Ltd, Sanjiv Batra, CEO, Sherwin Williams India replied “It is all in the air and there is no plan of acquisition of any kind at present.” He then gave the standard denial, “I am not privy to any such plan where we could be engaged in acquisitions.”

But he then continued, “But we are very much on the consolidation mode and the company is thinking on an India-specific business model. We are in the process of engaging external agencies to undertake a marketing survey to do a due diligence of the Indian market. Specific customer tastes and preferences, types of products, price bands and distribution channels will be decided.” Uh huh… so it is the old “I do not know but we are” double talk..

Sherwin Williams now has the Nitco exterior paints portfolio in India but has yet to bring in its huge range of interior decoratives to the country. “We cannot have a business model based on imports and hence may think of a suitable manufacturing facility over the next few months. Moreover, Sherwin would be keen to bring in its expertise state-of-the-art plant and processes in India”, he added. Translation: A factory will be built soon.

How much growth is there in the Indian market? Consider the per capita consumption of paint in India is just 1.2 kg per person against 7-8 kg in Malaysia and around 4 kg in China.

India is a massive market for Sherwin and they seem to be racing to dominate it. The Nitco purchase gave then a toehold there and they have both illustrated buy the statements and their actions to date they plan on doing much more.

Look for something to be announced before Columbus Day..