Submitted By Optiondragon
From Briefing.com
Periodicals Wrap-Up for Tuesday, July 22nd
WALL STREET JOURNAL: The books of Fannie Mae (FNM) and Freddie Mac (FRE) are being examined by the Federal Reserve and the Office of the Comptroller of the Currency to review their financial condition, according to the Wall Street Journal…The Wall Street Journal also reported that the Chevy Volt, an electric car from General Motors (GM), is slated to roll out in two years and it received a major boost from 36 utilities that operate in 40 states who agreed to work together to make the plug-in vehicle possible. Among the utilities are American Electric Power (AEP), Consolidated Edison (ED), Duke Energy (DUK), and Edison International (EIX)…FINANCIAL TIMES: Struggling mortgage lender Paragon is reportedly in talks with Blackstone (BX) about a potential takeover by Blackstone, the Financial Times reported…NEW YORK TIMES: The New York Times reported that TiVo (TIVO) will today introduce a “product purchase” feature in partnership with Amazon.com (AMZN). Under TiVo’s plan, the television remote control will be turned into a tool for buying products that are advertised and promoted on talk shows and commercials…
Blackstone is in talks about buying a mortgage company-FT
Blackstone (BX) is negotiating a possible takeover of troubled mortgage lender Paragon (PGMT). The talks are an indication that private equity firms are still interested in buying mortgage companies.
Good news for the market and for the mortgage business, let’s hope PE firms pull the trigger. That would boost the market.
Woodward Governor-WGOV still has major growth opportunities@GABE
After Woodward reported better than expected results for its Q3, Gabelli believes the company can grow because it can attract customers who must operate their aircraft engine or industrial and power generation equipment cleaner cheaper and more reliably. The firm maintained their Buy rating.
Apple-AAPL lowering estimates and target, maintain Buy@GSCO
Goldman lowered AAPL estimates citing lower gross margins but said they believe management’s guidance will prove conservative. Target to $200 from $220. The firm notes that all 3 major product initiatives are working and maintains their Buy rating.
Apple-AAPL: Quarter suggests product momentum is intact@PIPR
Piper maintains a Buy rating despite saying the margin guidance was a “shock” as they believe the Street will likely look past margin guidance and focus on product transitions by the end of the September quarter.
XTO Energy-XTO reports Q2 EPS $1.13 vs. consensus of $1.05
Reports Q2 revenue $1.94B vs. consensus $1.85B.
XTO Energy-XTO acquires additional $1.3B in properties
XTO Energy Inc. announced that it has entered into definitive agreements with multiple parties to purchase producing properties located in its Eastern and San Juan Regions and acreage positions in the Marcellus, Fayetteville, Barnett, and Haynesville shales, for a total of about $1.3 billion, of which $1 billion closed during the second quarter. From the producing properties, XTO Energy’s internal engineers estimate proved reserves to be 185 billion cubic feet of natural gas equivalent of which approximately 60% are proved developed. Starting July 1, these acquisitions add 20 million cubic feet of natural gas equivalent per day to the Company’s production base. In the high potential shale plays, the Company added more than 280,000 net undeveloped acres to its inventory for future development, primarily in the Marcellus and Fayetteville.
U.S. equity futures still point to a lower open
The futures markets, while pointing to a lower open this morning, have moved up based on comments from Treasury Secretary Paulson who is speaking now in New York. Paulson is asking the public for patience with the housing and market woes as the U.S. is “on [the] right path” to end the market disruptions. Gold futures rose 1% this morning as investors seek a safe haven from worries in the financial sector and the economy. Gold for August delivery gained $9.30 to $973 an ounce on the New York Mercantile Exchange. The DJIA is down -77 points to 11,388, the Nasdaq is down -30 points to 1,797, and the S&P is down -9.3 points to 1,252.
Genentech-DNA: Expect deal to go through at premium to $89/share@RBCM
RBC believes an acquisition price in the $95-$100/share range is reasonable and maintains an Outperform rating on DNA shares.
Apple-AAPL: Recommend building core positions on the weakness@THNK
ThinkPanmure believes lowering expectations bodes well for the stock longer term and maintains a Buy rating. The firm lowered their target to $200 from $225.
Apple-AAPL: See good buying opportunity, reiterate Outperform@JMPS
After Apple reported results for its Q3 that JMP Securities views as solid, the firm increased their market share estimates but reduced their gross margin estimates. JMP Securities thinks the company’s lower than expected guidance creates a good buying opportunity.
Sohu.com-SOHU: Expect Q2 results to beat consensus by wide margin@PALI
Pali Research thinks SOHU will handily top Q2 consensus estimates due to strong performance of its brand advertising and game TLBB. They also believe both segments could drive strong Q3 results and raised their 2008 estimate to $3.24 from $3.07. Shares remain Buy rated.
Intrepid Potash-IPI initiated with an Outperform, target $80@BMOC
Ctrip.com-CTRP upgraded to Positive from Neutral@SUSQ
Susquehanna upgraded CTRP based on valuation. Target $50.
Freeport McMoRan-FCX reports Q2 EPS $2.25 vs. consensus of $2.43
Reports Q2 revenue $5.44B vs. consensus $5.26B.
Freeport McMoRan-FCX increases dividend to $2
Freeport-McMoRan Copper & Gold announced that its Board of Directors has authorized an increase in its annual common stock dividend from $1.75 per share to $2.00 per share. The dividend will be payable quarterly ($0.50 per share) beginning with the November 2008 dividend payment.
FCX expands share repurchase program
FCX announced today that its Board of Directors approved an increase in its open market share purchase program to 30 million shares from the prior authorization of 20 million shares. The timing of future purchases is dependent upon many factors including the company’s operating results, its cash flow and financial position, its future expansion plans, copper prices, the market price of the common shares and general economic and market conditions.
Apple-AAPL: Would be buyers on the weakness@OPCO
After Apple reported results for its Q3 that Oppenheimer views as solid but gave gross margin guidance for its 2009 that Oppenheimer views as disappointing, the firm notes that Macs continue to increase their market share, and the firm expects Apple to sell 4.9M iPhones in its Q4.
Hess Corp-HES: See attractive entry point at current levels@JPMS
JP Morgan believes the current share price factors in little upside from the company’s exploration activity over the next 12 months. The firm reiterates an Overweight rating on the stock.
ImClone-IMCL: Expect in-line Q2 results, positive Erbitux data@STFG
Stanford believes that positive Erbitux survival data in the next few months will support label expansion and market penetration by the company. the firm reiterated their Buy rating.
Apple-AAPL target lowered to $180 from $190, reiterate Buy@BOFA
Banc of America was disappointed by AAPL’s margin guidance but would be buyers on the weakness as management is likely being conservative.
Solar: Believe Spain is tracking to worst case scenario@SBSH
Citigroup points out Spain’s Ministry of Industry sent a draft of the PV Decree to National Energy Commission with the terms unchanged from the Ministry’s initial proposal in July, a call for a feed-in-tariff for ground-mount and rooftop with an annual installation cap of 300MW. Citigroup believes this is not a “huge negative surprise” but points out solar stocks have rallied in recent days partially around hope of a 500MW.
Agnico-Eagle-AEM upgraded to Buy from Hold@TDSI
TD Newcrest upgraded AEM based on higher metals forecast.
American Express-AXP downgraded to Perform from Outperform@OPCO
Oppenheimer downgraded AXP citing the weakening consumer credit environment.
Cognizant-CTSH: Cautious on shares ahead of earnings@SBSH
Citigroup believes the potential for lower guidance when CTSH reports poses a negative near-term catalyst. They lowered their target to $42 from $52 but maintain a Buy rating.
Apple-AAPL volatility Elevated into lower Outlook & Steve Jobs
AAPL is recently down $17.19 to $149.10 in pre-open trading. AAPL expects Q4 EPS of $1.00 versus consensus of $1.24. Deutsche Bank say’s “Regarding Steve’s health, mgmt said ‘he has no plans to leave Apple and his health is a private matter’. While the topic is delicate, we believe the absence of a straightforward denial of health issues will increase speculation of worst case scenario.” AAPL August option implied volatility of 56 is above its 26-week average of 49 according to Track Data, suggesting larger price movement.
Apple-AAPL: View the pullback as a buying opportunity@SBSH
Citigroup believes AAPL’s reported “stellar” Q2 results, and attributes the weakness to conservative guidance and management’s refusal to comment on Steve Jobs’ health. They view the weakness as a buying opportunity and reiterate a Buy rating.
Biogen Idec-BIIB reports Q2 EPS 91c vs. consensus of 85c
Reports Q2 revenue $993.4M vs. consensus of $962.61M.
Biogen Idec-BIIB raises FY08 EPS view to above $3.50 vs. consensus of $3.40
Quest Diagnostics-DGX reports Q2 EPS 83c vs. consensus of 78c
Reports Q2 revenue $1.84B vs. consensus of $1.84B.
Apple-AAPL: View the sell-off as a buying opportunity@SOLE
Soleil believes AAPL’s guidance creates a buying opportunity and maintains a Buy rating with a $200 target.
Regions Financial-RF reports Q2 EPS 30c vs. consensus of 42c
Regions Financial-RF lowers quarterly dividend to 10c from 38c
Gilead Sciences-GILD removed from Conviction Buy List; maintain Buy@GSCO
Note that AMLN was added to the list.
Amylin Pharma-AMLN added to Conviction Buy List; maintain Buy@GSCO
Note that GILD was removed from the list.
CME Group-CME reports Q2 EPS $3.93 vs. consensus of $3.86
Reports Q2 revenue $563.2M vs. consensus of $568.74M.
ELN /WYE hosts a joint conference call at 7pm on 7/29
Elan and Wyeth will host a joint conference call to discuss the results from the Phase 2 Clinical Trial of bapineuzumab at 7pm on 7/29
Genzyme-GENZ: Remain buyers despite recent rally@JEFF
Jefferies remains a buyer of GENZ shares given the company’s second half of 2008 outlook and reasonable valuation. Jefferies raised their target to $90 from $84.
Monsanto-MON: Weakness on corn price concerns overdone@GSCO
Goldman said recent weakness in MON due to weaker corn prices is overdone. The analyst believes MON has been more aggressive on 2009 pricing and has raised its price target to $162 from $155. Shares are Buy rated.
American Express-AXP: Down on Earnings Miss and Weak Guidance
The shares have traded down more that (-10%) in the pre-market after the company missed earnings expectations by a wide mark and lowered forward guidance. The stock had recently broken out of its daily downtrend along with the rest of the financials last week. That breakout is now history and at current pre-market price the stock will open back down into the prior downtrend and at the lower end of that trend. Support levels to watch as potential downside objectives are at $36.60, $35.44, $34.91, $34.29, $33.75, $33.21, $32.71, $32.19, $31.71, $31.17, $30.67. Resistance based on current pre-market price is at $37.17, $37.85.
Jim Cramer’s “Mad Money”
Jim Cramer credited SEC Chairman Christopher Cox with single-handedly saving the entire financial sector, with last week’s announcement that short-sellers must borrow stock before being allowed to execute their trade. The financial stocks are being driven up by short covering, and are being kept up by good earnings. He encouraged Cox to extend the enforcement of the rules to all stocks. Cramer identified four banks that he said will still be standing after the dust settles from the recent turmoil in the financial sector. These “fortress” banks, as he called the, will survive to see 2009 and have the incredible opportunity to buy failing banks at bargain prices. Cramer said that Wells Fargo (WFC), US Bancorp (USB), Bank of America (BAC) and JP Morgan Chase (JPM) all reported quarterly results that showed they will survive. These banks, he said, have worked through the bad loans and are now successfully raising capital, putting them in a position to capitalize on everyone else’s mistakes. Cramer would be a buyer of only US Bancorp right now, as it’s the only one that’s fallen far enough to make him comfortable. He would be a buyer of the other three only on weakness. Cramer named three positives taking the bank stocks higher. First, all four banks reported better-than-expected earnings. Second, Congress has finally begun moving on a housing bill to offer relief to homeowners and banks alike. Lastly, the federal government is considering lifting antitrust rules, making it easier for larger banks to begin buying up the smaller, failing ones. Next, Cramer said Roche’s bid to acquire Genentech (DNA) confirms his thesis that biotech stocks are right for this market. With the U.S. dollar so weak, he said, it makes sense for European companies and others to acquire U.S.-based companies. Cramer said Forest Labs (FRX) might appear be a tempting way to play the drug stocks, but advised against buying shares. He also advised against building a position in either ImClone (IMCL) or Genzyme (GENZ). Cramer instead recommended shares of generic drug maker Watson (WPI) as the next possible takeover target. He likes WPI for its 60 new drug applications pending at the FDA, and recommended buying shares on any weakness in the sector. LIGHTNING ROUND: (Bullish) WIN; VZ; CTL; MMM; NXY. (Bearish) OSK; AAPL; OTTR
Fast money position recap: Macke Owns (WMT), (HAS), (ATVID), (GS), (DIS); Najarian Owns (AMLN), (TSO); Najarian Owns (AAPL) And (AAPL) Puts; Najarian Owns (FHN) Puts; Najarian Owns (MRK) Calls, (YHOO) Calls, (CSCO) Calls; Finerman Owns (GS); Finerman’s Firm And Finerman Own (C) And (C) Leaps; Finerman’s Firm And Finerman Own (PDE); Finerman’s Firm Owns (GE), (MRK), (MSFT), (PPH), (PFE), (SUN), (TSO), (VLO), (AXP); Finerman’s Firm Is Short (IYR), (IJR), (MDY), (SPY)
Terranova Owns (RIMM), (GOOG), (YHOO), (INTC), (VLO), (IYT), (CME), (BNI), (FCX), (XLF), (SU); Terranova Is Long Crude Oil Sept. $154 Call; Terranova Is Short Crude Oil Sept. $130 Call; Terranova Is Short Crude Oil Sept. $130 Put
Keeping nimble again today and looking for short term trades. Market showing weakness from all the bad earnings reports, let’s see how the market holds up. Pick plays with a high probability of success, have focus and patience, plan the trade and trade the plan, Great Luck and HappyTrading!
