ValuePlays

Here are the notable dividend hikes for the week:

1- Neuberger Berman Real Estate(NRO)= 53%

2- Best Buy (BBY)= 30%

3- Felcor Lodging Trust (FCH)= 20%

4- Village Supermarket (VLGEA)= 16%

5- Peoples Financial Corp (PFBX)= 16%

Here are today’s analyst calls

UPGRADES:

NetLogic NETL UBS =Buy

Fluor FLR JP Morgan =Overweight

Research In Motion RIMM JMP Securities =Market Outperform

Santarus SNTS Friedman Billings= Outperform

Fannie Mae FNM Citigroup= Buy

Research In Motion RIMM RBC Capital Mkts=Top Pick

DOWNGRADES:

PMI Group PMI UBS= Neutral

MGIC Investment MTG UBS =Neutral

American Home Mortgage AHM Friedman Billings =Underperform

TIM Participacoes TSU= Market Perform

Chordiant Software CHRD JMP Securities= Mkt Outperform

Komag KOMG Robert W. Baird =Neutral

Komag KOMG Deutsche Securities =Hold

Palm PALM Deutsche Securities= Sell

Here are today’s picks and results to date:

Today’s Picks

Macke- Ford (F) Open $9.49

Najarian- Immersion Corp (IMMR)Open $14.37

Adami- Dell (DELL). Open $28.45

Bolling- Chevron (CVX). Open $84.14

Yesterday’s Results:

Macke liked Petsmart Inc (PETM)= Open $32.59 Close $32.41 Loss $.18 and Guitar Center (GTRC)= Open $59.98 Close $59.81 Loss $.18

Najarian liked Dendreon Corp (DNDN)=Open $7.17 Close $7.29 Gain $.12

Adami- Research In Motion = (RIMM)= Open $163.45 Close $193.99 Gain $30.54

Bolling picked USEC Inc (USU)= Open $21.80 Close $21.89 Gain $.09

Records:

Since my tracking began on 6/21 (1-1 means one up pick and one down pick)

Adami= 2-4 Gain $29.14
Bolling= 3-3 Loss $1.63
Najarian= 4-2 Gain $1.62
Macke= 5-4 Gain $6.30
Seymore= 1-0 Gain $.35
Finerman= 0-1 Loss $.18

Reaearch in Motion (RIMM) just reported and it’s results have pushed the stock up 13%.

1.2 million new people activated a blackberry last quarter and RIMM shipped 2.4 million units. Earnings that had been estimated at the high end, $1.06 a share actually came in at $1.17 a share, a 74% jump over last year. The company also announced a 3 for 1 stock split effective August 20.

Revenue were estimated at $1.06 billion and came in at $1.082 billion vs $613 million last year. It look like initial result do not that many people holding off a new phone purchase for Apple’s (AAPL) iPhone.

“We are starting fiscal 2008 with strong operating performance, including record revenue, earnings and subscriber results,” said Jim Balsillie, Co-CEO at RIM. “After completing our first billion dollar quarter, we are now preparing to ship the 20 millionth BlackBerry handset this summer. This growth is a testament to our strong portfolio of products and services and our successful channel expansion. We look forward to the remainder of the year in which we anticipate continued growth within both North American and international markets.”

A good product, priced reasonably and available on all carriers. A novel little idea.

I previewed Monsanto’s (MON) earnings Monday saying “I would be shocked to see anything but a meet or a beat” and today they reported and delivered.

From the release:
“Key drivers for the quarter were increased corn seed and traits revenues in the United States, as well as higher sales of Roundup and other glyphosate-based herbicides in the North America and Europe-Africa regions.”

Good News For Corn Prices:
“Currently, reports from the U.S. Department of Agriculture (USDA) note that the majority of corn, cotton and soybean varieties are facing good crop growing conditions with the vast majority of these crops already having emerged. Monsanto continues to see strong customer demand for its branded corn seed products in the U.S. corn seed market. The company is also seeing strong customer demand for its branded corn seed products in key countries in Europe particularly in Italy, France and Germany.” This should help ethanol producers like ADM (ADM), Pacific Ethanol (PEIX) and Verasun (VSE)whose shares have been held back by the specter of high corn prices and worries about the crop conditions.

During the quarter Monsanto saw increased U.S. corn seed and traits revenue as strong customer demand for its branded corn seed products contributed to a sixth consecutive year of market share gains in the U.S. corn seed market. The increase could be as large as 4 or 5 percentage points, which would be the largest historical one-year gain for Monsanto in the corn seed market.

It seems the only thing that could dampen momentum at Monsanto would be an ethanol breakthrough that diminished to thirst for corn.

More on that tomorrow…..

The talking heads have spent the entire morning pontificating about what the Fed will after their meeting. Want to know?

Inflation and Interest Rates:
“The incoming data have supported the view that the current stance of policy is likely to foster sustainable economic growth and a gradual ebbing of core inflation. However, in the statement accompanying last month’s policy decision, the FOMC again indicated that its predominant policy concern is the risk that inflation will fail to ease as expected and that it is prepared to take action to address inflation risks if developments warrant”.

Economy:
“The U.S. economy seems likely to expand at a moderate pace this year and next, with growth strengthening somewhat as the drag from housing diminishes. The central tendency of those forecasts–which are based on the information available at that time and on the assumption of appropriate monetary policy–is for real GDP to increase about 2-1/2 to 3 percent in 2007…”

Housing:
“We have not seen major spillovers from housing onto other sectors of the economy,”

Business:
“The business sector remains in excellent financial condition, with strong growth in profits, liquid balance sheets, and corporate leverage near historical lows. Last year, those factors helped to support continued advances in business capital expenditures.”

How can I be so sure? Easy. He has been saying the same thing since February. The absolute worst thing that could come out of this meeting is a rate cut. That would mean the risk of a recession is now outweighing the risk of inflation and this scenario is bad new for everyone.

No matter what is said I am sure CNBC’s Steve Leesman will spent three hours debating the significance of the words “should” vs “will” or “more likely” vs “likely” in the statement. These folks fail to understand Greespan has left the building and the deciphering his statements required is no longer necessary. What the Bernanke Fed says it what it means, no guesswork necessary.

Now, the market and it’s participants have not fully accepted this yet and it will jump around as the statement comes out and people try to extrapolate some hidden meaning that just is not there. Watch for the Dow Jones, S&P 500 and Nasdaq to jump around. Don’t worry, sooner or later they will figure it out.

The day before the private equity monster Blackstone’s (BX) IPO I wrote “If there was a huge upside to these folks I do not think they would be cashing out and subjecting themselves to all the increased scrutiny a public company goes through.

I will stay away..

Shares, after hitting $37.98 immediately after they began trading have slowly receded and now sit at $29.92 for a 21% decrease in 4 trading days. Do I have a crystal ball? No. This one was easy, when billionaires decide to sell us common folks “a taste” it is usually only because they see more up side in selling it to us that keeping it for themselves.

Carl Ican, in an interview on CNBC yesterday said when asked about private equity “easy money and cheap deals are going away and this will severely impact earnings at private equity”. When you add the specter of a tax increase from 15% to 35% on these entities, it is no wonder they are racing to cash in before we all realize they are due to earn much less in the immediate future. This probably also explains why the other private equity IPO, Fortress Investment Group (FIG) which began trading at $31, now sits at $23.25, a 25% loss.

In 1999 and 2000, everywhere you went the talk was about the Nasdaq, tech stocks and the internet. The level of people who made a living “day trading” from their bedrooms skyrocketed. Shares of companies like Yahoo! (YHOO), Dell (DELL), EMC (EMC)and Cisco (CSCO) all were household names that traded with valuations in the stratosphere. When your mailman, paperboy and the 16 year old kid bagging your groceries are talking about the next tech IPO and how it should double the first day, you need to take a step back. When they are throwing around terms like “click through”‘, “routers”, EBITDA and have no idea what those mean, be very afraid. Not long after the market began a two and a half year slide that the Nasdaq has still not recovered from.

In late 2003 people had finally had it with the stock market and accounting shenanigans and began flooding the real estate market with money. Stock valuations, despite an improving economy and growing earnings hit low levels not seen in a long time. The same mailman, paperboy and grocery bagger were all now talking about how stocks are a losing game and that the market was “rigged”. This of course signaled the bottom of the market and stock have climbed steadily ever since.

In early 2006, the number of real state agents in the US hit an all time high. Filled with sugar plum visions of real estate riches, potential agent flooded the market to get in on the action. This of course signaled the top of the market and real estate values (and the number of active agents) have plummeted since.

So where are we at today? Housing. It has to be near a bottom. I cannot pick up a newspaper, watch TV or go anywhere with hearing about the “awful” real estate market. Yesterday I was in BJ’s (BJ) and listening to a conversation between a 70 year old women who I was behind in line and the kid at the checkout. They of course were chatting about housing as he rang up her groceries and throwing around terms like “subprime mortgage meltdown” and “foreclosure rate”. When it was my turn to check out, I asked “what is a subprime mortgage”? The reply came with a look that could only imply I was quite possibly to dumbest person on the face of the earth. He said “it’s a mortgage that is not prime”.

Right…. smells like a bottom to me

Is it today? Tommorrow? Next month? Who knows, but it is near. How to play it? Home builders are a tough one. Valuing individual companies gets into a lot of guesswork based on the value of their landholding and the demographics of the region in which they do business. Also, they may make a sale today that gets canceled in three months that causes an earnings outlook revision. If investing here I would look at the iShares Dow Jones US Home Construction ETF (ITB) that began trading in May 2006 (another sign of the top) and is currently down 35% since it started. The index is a free-float adjusted market capitalization-weighted index. It measures the performance of the home construction sector of the United States equity market and includes companies that are constructors of residential homes, including manufacturers of mobile and pre-fabricated homes.

It will give you exposure to the whole housing market and avoid the individual companies potential pitfalls.

Here is today’s analyst action

UPGRADES:

Sterling Bancorp (STL)= Ferris Baker Watts to Neutral

Cost Plus (CPWM)= Morgan Keegan to Mkt Perform

EXFO (EXFO)= BMO Capital Markets to Outperform

Telus (TU)= BMO Capital Markets to Outperform

Zoran (ZRAN)= Longbow to Buy

West Marine (WMAR)= Morgan Joseph to Buy

JB Hunt Trans (JBHT)= KeyBanc Capital Mkts / McDonald to Buy

DOWNGRADES:

Cowen Group (COWN)= Keefe Bruyette to Mkt Perform

WW Grainger (GWW)= Matrix Research to Buy

Here are today’s picks and yesterday’s and to date results. This is a one horse race with Macke running away with it. I have been asked what this has to do with “value investing”. The answer? Nothing. It is the antitheses of it. If these guy are some of the best “traders” and have timely access to information most of us do not, yet fail to beat the market most days (or only once a week in Adami’s case), how can we really expect to do any better? While I applaud them sticking their neck’s out and making picks, I think the exercise is very beneficial to us in only proving that active trading is a crap shoot at best. I will continue to track the results just to see how this plays out.

Thursday’s Picks

Macke liked Petsmart Inc (PETM)=32.59 and Guitar Center (GTRC)= $59.98

Najarian liked Dendreon Corp (DNDN)= $7.17

Adami- Research In Motion = (RIMM)= $163.45

Bolling picked USEC Inc (USU)= $21.80

Wednesday’s Results:

Bolling- Google (GOOG)= Open $530.26 close $526.29 Loss $3.97

Adami- EMC (EMC)= Open $17.52 close $17.93 Gain $.41

Najarian- Under Armour (UA)= Open $45.80 Close $46.63 Gain $.83

Macke- NIKE (NKE)= Open $53.82 Close $58.29 Gain $4.47

Records:

Since my tracking began on 6/21 (1-1 means one up pick and one down pick)

Adami= 1-4 Loss $1.40
Bolling= 2-3 Loss $1.72
Najarian= 3-2 Gain $1.50
Macke= 5-2 Gain $6.65
Seymore= 1-0 Gain $.35
Finerman= 0-1 Loss $.18

Macke is hands down destroying the others.

Last week I lamented about Home Depot’s buyback begging for “details boys… details”

Execs at Home Depot (HD) should read Best Buy’s (BBY) announcement today. In announcing a $5.5 billion share repurchase, Best Buy said it has used a portion of this new share repurchase program immediately to execute an accelerated share repurchase program, with Goldman Sachs(GS) as counterparty, for the buyback of $3 billion of stock no later than February 2008. The company expects to fund the $3 billion ASR program through cash, short-term investments and interim borrowing.

The remaining $2.5 billion available under the new share buyback program is
expected to be used subject to business results, market conditions and board
approval.

Now, let’s ignore the the last $2.5 billion because there is no time frame when and if it will ever be accomplished. What we do know is that $3 billion dollars worth of stock will be gone in 8 months. At todays prices that means about 65 million shares or about 13% of the outstanding shares. We can now count on this giving 2008 (year ending March 2008)EPS a boost of 37 cents a share (13%) over 2007. This number assumes earning in 2008 equal to 2007. Any growth Best Buy delivers in excess of 2007 is just icing on the cake for investors.

In the most recent earnings announcement CEO Brad Anderson said “In addition, as seen in the first quarter, we anticipate continuing our increased share repurchase activity.”

Guess he meant what he said. for Home Depot investors, I hope CEO Frank Blake is paying attention.

Here are this mornings analyst calls.

UPGRADES:

Millennium Pharm (MLNM)= Mkt Perform

Sourcefire (FIRE)= Buy

PAREXEL (PRXL)= Peer Perform

Bruker BioSciences (BRKR)= Peer Perform

Kohl’s (KSS)= Outperform

DOWNGRADES:

Sunoco (SUN)= Hold

Valero Energy (VLO)= Sell

Tesoro Petroleum (TSO)= Sell

Ventana Medical (VMSI)= Peer Perform