Monday Morning, July 16th
SITE NEWS
New IceMD Recording: Back Pain;
Dow Stock News
Vodafone Group (VOD) is considering a $160 billion bid for Verizon Communications (VZ), its partner in the mobile group Verizon Wireless, according to a report on the FT Alphaville Web site. Vodafone hasn't approached Verizon with such an offer and there's no certainty it will pursue the idea, the report said. If it did pursue such a plan, Vodafone would spin off Verizon's fixed line interests to a private-equity consortium, the report said. Vodafone shares slipped 1% in London. - MarketWatch
INTC - price target raised to $31 at Smith Barney
International Business Machines Corp., (IBM) the Armonk, N.Y., tech giant, agreed to pay C$27 a share, or C$170 million (US$161 million) for DataMirror Corp., (DMCX) the companies said. DataMirror, Markham, Ontario, provides technology that identifies and captures data that has been added, updated or deleted and enables delivery of the changed data in real time to processes, applications and databases. The systems ensure that "continuous, accurate and trusted information is available for decision-making," the companies said in a statement. DataMirror's Canadian shares closed Friday at C$22.50, indicating IBM is paying a 20% premium for the shares. Subject to regulatory clearances and shareholder approval, the companies expect to close the deal in the third quarter. - MarketWatch
GE General Electric UBS Price Targret Raised Buy $45 to $47
Ice Man Stocks
Breakouts the Ice Man may consider trading:
ITRI - 80
ROS - 60
STR - 56.20
CNX - 50.25
EDU - 59.70
PII - 56
JKHY - 27
WGOV - 59
MFW - 70
Regular Trades the Ice Man may consider:
MIR - 43.25 * Best Bet
REGN - 18.70
SPSN - 12
TIE - 34.50
Depressed stocks the Ice Man may buy:
RBN - 57.15 Gap
Dollar Man Ideas:
VIMC - 7.11 Bid
CHCI - 2.80
TMEN - 1.75
Media Commentators
Cramer's Comments:
Bullish: KO, INTC, UTX, FCX, HON, JCI, CAT, SLB, MER, WFC, JPM, BAC, C, TEX, GEOY
Ice Cold Commentators
Break Man Video Summary:
Break out buy watch list for short term gains July 16 includes: URI, HD, KO, ESI, AIR, AGU, NXG ,LIFC.
Several candidates for break out or pullback plays for at least short term gains by buying the break out on good volume and selling at least some on the first day. http://stocktiger.com
Swing Man Market Recap:
It was a record-breaking week for stocks, the Nasdaq/NDX posted new bull market highs (not all time highs), however the S&P 500, Dow, NYSE, and TRAN index all posted new all time highs!
Large cap old economy stocks lead, and the small cap laded Russell 2000 lagged behind, which has been a reoccurring theme lately. The SOX was one of the best performing sectors once again and this is a trend that has been occurring now for the past few weeks. Retail was the one weak sector, however the numbers are somewhat deceiving because while Retail was weak early in the week, it was strong the sector half of the week. Brokers and Financials are lagging somewhat, which is a minor concern.
Commodities once again had a great week, especially the stocks which outperformed more than 2:1 on average vs their respective commodity counterparts. Crude oil made new highs to $74 a barrel last week, however the stocks are lagging. Also we are approaching the timeframe of the year where crude oil begins to top out , therefore seasonality pressures could soon start to kick in soon. Precious metals had a good week, but gold outperformed relative to the stocks and I’m not that impressed with the rally considering the big drop in the US Dollar.
Regarding the general market, the indexes have broken out of their recent consolidation patterns to the upside, which is bullish and an uptrend will probably continue. However keep in mind that this is not the time of the year where one usually gets big moves, therefore I still think this uptrend probably has limited upside.
Remember we are in earnings season and thus individual stocks are prone to gap ups or gap downs on a daily basis.
However, the COT data came out on Friday and the Commercial Traders once again increased their LONG position, while the Speculators (you and I i.e. dumb money) increased their shorts. The fact that the public continues to try and pick tops tells me that there is probably more upside in the market. Once the public finally capitulates and finally goes bullish, the top will finally be in.
The public (speculators) continues to short the market and is trying to pick a top, while the Commercial traders continue to bet long. When the speculators cover their shorts and stop trying to pick the top, then the market will probably hit a major top.
The market indexes all look bullish on their respective daily charts as they have all broken out of their consolidation patterns to the upside. The Dow recently broke out of a horizontal rectangle pattern, which is bullish. The height of the pattern (about 440 points) gives us an objective price target of 14100. However, don't be surprised to see a the MACD form a lower i.e. divergent high in that price range.
News and Events Digest
Barrons Highlights:
Clean Technology Firms highlighted: SPWR, EPG, FTEK, CPTC
Knocked India Internet companies including SIFY and REDF. Also, an Indian Paper said REDF could be a likely takeover for large internet companies.
Breaking News
Deutschebank expects 41 percent average earings increase - Managed Care Group, remains positive on WLP, AET, CI, HNT and UNH into earnings results;
After two delays and much wrangling, Lear Corp. shareholders will vote Monday on a $2.8 billion buyout offer led by billionaire investor Carl Icahn.
Icahn's American Real Estate Partners LP has slightly sweetened the offer, now worth $37.25 a share, but some analysts expect the meeting in Wilmington, Del., to be contentious. - AP
The U.S. Marine Corps Friday awarded a $518.5 million contract to a division of Armor Holdings Inc. to build 1,170 armored vehicles for American soldiers in Iraq. - AP
Acacia Research Corporation (ACTG) said that its Financial Systems Innovation unit has signed a retroactive license deal with Lowe's Home Centers Inc. The deal concerns certain patent rights that apply to credit card fraud protection technology. - MarketWatch
Favorable comments on Mid Atlantic Power companies including PPL, EXC, PEG, CEG, and MIR
Media Summary:
According to Reuters, the group lead by RBS has raised its bid for ABN Amro (ABN) by increasing the cash component of the offer.
Reuters writes that Ford (F) is now cosidering selling its Volvo unit.
Reuters reports that the Dubai stock market is making a bid for OMX that will compete with Nasday (NDAQ).
Philips Electronics (PHG) increased earnings by 22% according to Reuters.
The Wall Street Journal reports that one of the members of the founding family that controls Dow Jone (DJ) is trying to block its sale to Rupert Murdoch.
The Wall Street Journal writes that China is about to pass Germany as the world's third largest economy.
The New York Times writes that Sony (SNE) will launch a new website for aspiring film markets.
The FT says that the head of Cisco (CSCO) believes that Web 2.0 will lead to a period of productivity that has not been seen since the internet boom.
M&A Activity:
IHOP sealed a deal to buy Applebee's International, the largest U.S. casual-dining chain, for $2.2 billion. - WSJ
Con-way Inc. (CNW) said Monday it'll pay $750 million to acquire Contract Freighters Inc., a privately held North American truckload carrier based in Joplin, Mo. The deal is expected to close in the third quarter. - MarketWatch
ReAble Therapeutics, a company controlled by The Blackstone Group (BX), has agreed to buy DJO Incorporated for $1.6 billion, or $50.25 a share in cash. DJO closed Friday at $42.10 a share. DJO and ReAble provide complementary products in orthopedic rehabilitation and pain management, and, when combined, will offer a broad go-to-market approach through multiple sales channels, the firms said. If DJO gets a better offer within the next 50 calendar days, it would have to pay a $18.7 million break-up fee to ReAble. - MarketWatch
McKesson Corp. (MCK) agreed to acquire Awarix Inc., a health care technology provider, for an undisclosed amount. Awarix offers an enterprise patient care visibility system, designed to provide real-time feedback for better management of capacity and patient throughput, McKesson said. McKesson, a San Francisco drug distributor, expects the acquisition to close by the end of July. - MarketWatch
IPO Central:
IPOs on Schedule for week of 7/16/07
Airvana (AIRV). The company provides network infrastructure products to provide mobile broadband services. The company is selling 8.3M shares at the initial range between $8-$10. The company announced Revenues for the last 12 months of $170M and Net Income of $74M. The Lead Manager is Morgan Stanley and Lehman is Co. Manager. Airvana (AIRV) is headquartered in Chelmsford, MA and their website is www.airvana.com.
Dice Holdings (DHX). The company operates career websites for technology and financial services professionals. The company is selling 16.7M shares at the initial range between $11-$13. The company announced Revenues for the last 12 months of $87M and Net Income of $7M. The Lead Managers are Credit Suisse and Morgan Stanley. Dice Holdings (DHX) is headquartered in New York, NY and their website is about.dice.com.
Encore Bancshares (EBTX). The company is a bank holding company and wealth management organization that manages offices in Texas and Florida. The company is selling 2M shares at the initial range between $20-$22. The company announced Revenues for the last 12 months of $111M and Net Income of $7M. The Lead Manager is Keefe Bruyette Woods and Sandler O‘Neill is Co. Manager. Encore Bancshares (EBTX) is headquartered in Houston, TX and their website is www.encorebank.com.
hhgregg (HGG). The company sells video products and home appliances via 79 retail stores under the hhgree and Fine Lines names in 8 states. The company is selling 9.4M shares at the initial range between $15-$17. The company announced Revenues for the last 12 months of $1,059M and Net Income of $21M. The Lead Managers are Credit Suisse and Lehman Brothers. hhgregg (HGG) is headquartered in Indianapolis, IN and their website is www.hhgregg.com.
ImaRx Therapeutics (IMRX). The company is developing novel therapies for vascular disorders associated with blood clots. The company is selling 3M shares at the initial range between $6.50-$7.50. The company announced Revenues for the last 12 months of $2M and Net Income of $0M. The Lead Manager is Credit Suisse and I-Bankers Securities are Co- Manager.. ImaRx Therapeutics (IMRX) is headquartered in Tucson, AZ and their website is www.imarx.com.
Economic Data:
8:30 NY Empire State Index
Upgrades and Downgrades by Sector:
Aerospace
KAMN Kaman Stifel Nicolaus Price Targret Raised Buy $34 to $39
Beverages
PBG Pepsi Bottling Stifel Nicolaus Price Targret Raised Buy $37 to $40
STZ Constellation Brands Matrix Research Downgraded from Buy to Hold
Biotech
GILD Gilead Sciences Stifel Nicolaus Price Targret Raised Buy $44 to $47
RGDX Response Genetics Caris & Company Initiated at Buy $7.50
Broadcasting
CETV Central European Media Morgan Joseph Price Targret Raised Buy $110 to $114
SJR Shaw Comms RBC Capital Mkts Price Targret Raised Outperform $51 to $55
Chemicals
ROC Rockwood Holdings UBS Price Targret Raised Buy $38 to $43
Computer Hardware
SNDK SanDisk CIBC Wrld Mkts Upgraded from Sector Perform to Sector Outperform $65
AAPL Apple Soleil Price Targret Raised Buy $125 to $175
IMMR TWPT Downgraded to Underweight $14
SNDK SanDisk UBS Downgraded from Buy to Neutral
Computer Services
UEPS Net 1 UEPS Techs Robert W. Baird Upgraded from Neutral to Outperform $31 to $33
ADBL Audible JMP Securities Initiated at Mkt Outperform $12.50
TZOO Travelzoo First Albany Downgraded from Buy to Neutral
Computer Software
OPWV Openwave CIBC Wrld Mkts Upgraded from Sector Underperform to Sector Perform
Construction
JEC Jacobs Morgan Joseph Downgraded from Buy to Hold
TKP Technip UBS Downgraded from Neutral to Reduce
Educational Services
COCO Corinthian Colleges JP Morgan Initiated at Overweight
DV DeVRY JP Morgan Initiated at Overweight
STRA Strayer Education JP Morgan Initiated at Overweight
Entertainment
TWX Time Warner Pali Research Upgraded from Neutral to Buy $25
Gaming Operations
IGT Intl Game Tech CIBC Wrld Mkts Cut Price Target Sector Outperform $56 to $55
Health-Beauty Prod
PYX Playtex Products CIBC Wrld Mkts Downgraded from Sector Outperform to Sector Perform
Healthcare
NVO Novo-Nordisk A/S JP Morgan Downgraded from Overweight to Neutral
Homebuilders
KBH KB Home Matrix Research Downgraded from Sell to Strong Sell
Insurance
UNH UnitedHealth AG Edwards Upgraded from Hold to Buy $61
WCG WellCare Group Jefferies & Co Upgraded from Underperform to Hold $76 to $93
AET Aetna AG Edwards Downgraded from Buy to Hold
Major Pharmaceutical
SGP Schering-Plough JP Morgan Upgraded from Underweight to Neutral
Mfg - Footwear
HLYS Heelys Robert W. Baird Initiated at Outperform $47
Mining Non-Ferr Metal
RTP Smith Barney Downgraded from Buy to Hold
Oil and Gas
HES Hess Deutsche Securities Upgraded from Hold to Buy
PCZ Petro-Canada Deutsche Securities Upgraded from Hold to Buy
BHI Baker Hughes Calyon Securities Downgraded from Add to Neutral $92 to $90
RDS.A Royal Dutch Shell HSBC Securities Downgraded from Neutral to Underweight
RDS.B Royal Dutch Shell B HSBC Securities Downgraded from Neutral to Underweight
WTI W&T Offshore Lehman Brothers Downgraded from Overweight to Equal-weight
Publishing
SCHL Scholastic Corp Stifel Nicolaus Downgraded from Buy to Hold
Retail Trade
NILE Blue Nile Citigroup Upgraded from Hold to Buy
RSTO Restoration Hrdwr Caris & Company Upgraded from Average to Buy $6.50
DDS Dillard's UBS Price Targret Raised Neutral $37 to $40
RSH Bank of America Downgraded to Sell
AMZN Amazon.com BWS Financial Downgraded from Hold to Sell $65
FCFS First Cash Roth Capital Downgraded from Buy to Hold $27 to $23
Security Systems
NSSC Napco Security Systems Roth Capital Price Targret Raised Buy $6.25 to $8
Semiconductors
ATHR Atheros Communications Lehman Brothers Upgraded from Equal-weight to Overweight
MRVL Marvell UBS Upgraded from Neutral to Buy
ISIL Intersil Jefferies & Co Price Targret Raised Buy $34 to $38
ISIL Jeffries Best Bet going into Earnings $38
Solar Energy
FSLR First Solar Banc of America Sec Price Targret Raised Buy $115 to $140
Telecommunications
CMVT Comverse Tech Oppenheimer Upgraded from Neutral to Buy $27
MOT Motorola Deutsche Securities Upgraded from Hold to Buy $18 to $21
PSO Pearson Plc Bear Stearns Upgraded from Underperform to Peer Perform
Transportation
ABFS Arkansas Best JP Morgan Upgraded from Underweight to Neutral
ODFL Old Dominion JP Morgan Upgraded from Neutral to Overweight
GNK Genco Shipping & Trading Cantor Fitzgerald Price Targret Raised Buy $42 to $56
GBX Greenbrier Comp Matrix Research Downgraded from Hold to Sell
Utilities
MMCE MMC Energy Merriman Curhan Ford Initiated at Buy
TRP TransCanada Pipelines Citigroup Downgraded from Buy to Hold
ETP Energy Transfer RBC Capital Mkts Cut Price Target Outperform $64 to $63