Monday Morning, September 17th
SITE NEWS
New IceMD Recording:
Antibiotics - Why take ‘em all, Why not Stop in the middle?
Dow Stock News
The Wall Street Journal writes that Europe's second highest court denied Microsoft's (MSFT) appeal in an antitrust case brought by the EU and upheld at $613 million fine.
Europe's top competition regulator said on Monday she wanted to see a significant drop in the market share of Microsoft (MSFT) after the U.S. software giant lost an appeal against an EU antitrust ruling. - Reuters
The Taiwan fund arm of AIG (AIG), the world's biggest insurer, plans to raise up to T$5 billion ($152 million) for a new fund targeting Taiwan stocks, an executive said on Monday. - Reuters
According to Reuters, GM (GM) and the UAW have broken off talks and will resume them late Monday.
The Wall Street Journal writes that Boeing (BA) has assured its customers that its 787 will be delivered on time.
Altria to benefit from company split: Altria stock could rally to $87 in 12 to 18 months from the current $67 based on share buybacks and costs cutting, Barron's said.
KO Coca-Cola Stifel Nicolaus Price Target Raised Buy $58 to $64
Ice Man Stocks
For a printable version of the Ice Man's picks, click here.
Breakouts the Ice Man may consider trading:
SYNA - 45
CREE - 30.50
KNDL - 41
GME - 52
SNCR - 40
Regular Trades the Ice Man may consider:
INSP - 13.30
AKAM - 31.40
GOOG - has 548.49 upside Gap
ISLE - 19.50
NFX - 46.80
Q - 9.16
RVSN - 19
UTIL (Index) - 500
FISV - 48
KALU - 70.05
QSFT - 15
IIVI - 31.70
RSH - 24
Depressed stocks the Ice Man may buy:
IMCL - 36 - 38
Dollar Man Ideas:
MECA - 2.83
LUM - 2.05
FMT - 5.15
HL - 8.02
IMH - 1.85
Media Commentators
Cramer's Comments:
Buy the stock if the CEO leaves: C, BRLC, ALU
Bullish if there is a ½ point cut: KO, PEP, K, GIS, WB, MS, GS
Fantasy Starting lineup: XOM. MHS, EPD, RIMM, FCX
Ice Cold Commentators
Break Man Video Summary:
Break out buy (or short sell) watch list for short term gains September 17 includes: AMZN, CPTC, LFC, CAH, FCH, KO, CBH, AMX, NILE, WWY, KWK.
Several candidates for break out or short sell plays for at least short term gains by buying the break out (or selling the break down) on good volume and closing at least some on the first day.
Swing Man Market Recap:
Week in Review: Solid Week for the Bulls...Market Eyes our Upcoming Fed Meeting and Brokerage Reports...
Early in the week the market moved down to test our important 1450 Support area on the SP 500 and after an intraday breach recovered that level and by the close of the week we moved back up to test the top of our recent range on the SP 500 tagging 1490ish. On balance most indices have been range bound and have been chopping back and forth but during the week we moved up between 1-3% on the major indices. Next week looks to be a pivotal one with the Federal Reserve due to meet and make a decision on Interest Rates on Tuesday afternoon and we'll also be hit by a number of major brokerage earnings reports. While we expect volatility to be tame going into Tuesday afternoon we expect that the combination of these two events holds some potential to finally move us out of our current range on many indices.
Friday´s action looked favorable to us for a few reasons. Looking at the Nasdaq chart, our early Gap down found good buy support on a backtest of the combination of 20/50 MA's and Trendline supports on the low. From there we continued mostly higher into the close with the Nasdaq closing about 25 points off its morning low. Both the Nasdaq as well as other indices including the SP 500 look like they are starting to form Handles off their bases and shakeout moves such as what we saw on Friday morning are typical in this type of pattern. Moving onto the SP 500 you can see our very tight Triangle/Base that has formed on that Index. On Friday we also moved down to backtest the 50 MA but it was also respected which is what we like to see in this type of setup. 1490 remains our key upside pivot in this pattern. Most major indices on a daily timeframe look to be forming Handles off bases. Shakeout moves (likely both pre and post Fed) are common with this type of setup but in time we suspect that we will make the breakout move back to/near recent highs.
Moving onto Sentiment, per the Investors Intelligence Survey the Bull/Bear Spread eased somewhat moving to a 17% spread of Bulls/Bears. This while still tilted towards the bearish side the trend is now moving back more towards a neutral stance. The Commercials remain quite long but did pare back on some of their positions. The 21 Day P/C remains at an elevated 1.07 reading.
Good Trading.
News and Events Digest
Breaking News
Newfield Exploration Co. (NFX) has agreed to sell its United Kingdom-based North Sea units to Centrica PLC (CAN:LN) the owner of British Gas, for $486.4 million. The deal is expected to close in the fourth quarter. Newfield, a Houston oil and gas exploration company, said the sale includes an 85% interest in its Grove Field, an 80% interest in undeveloped Seven Seas discovery and an interest in about 200,000 net acres in the Southern Gas Basin. - MarketWatch
Shares of Australia's Oil Search Ltd (OSH.AX) jumped nearly 11 percent after a report that Chinese oil giant PetroChina (PTR) may make a US$5 billion takeover bid to secure more gas reserves. - Reuters
French-American business software maker Business Objects (BOBJ) climbed 5.5% in early Paris trading after Le Figaro reported that the firm has hired Goldman Sachs to find a buyer. SAP (SAP) was seen as one of five possible suitors. Oracle (ORCL) and IBM (IBM) previously had been seen as possible bidders. - MarketWatch
Cognizant Technology Solutions Corp. (CTSH), a provider of information technology and outsourcing services, said Monday its board of directors approved a $100 million stock buyback program. Cognizant Technology Solutions Corp. (CTSH), a provider of information technology and outsourcing services, said Monday its board of directors approved a two-for-one stock split. The split is expected to occur around Oct. 16 for shareholders of record as of Oct. 1. Each shareholder will receive one additional share for each share already held. - AP
Celera (CRA), part of Applera Corp., said Monday that it will collaborate with Merck & Co. Inc. (MRK) to research biomarker and pharmacogenomic tests for cancer patients. The company did not disclose the amount of the payment it will receive, but the collaboration is expected to be completed by the end of the company's 2008 fiscal year. - MarketWatch
International Flavors & Fragrances Inc. (IFF) agreed to a $450 million accelerated stock repurchase program with Morgan Stanley (MS). The New York-based company said Monday it plans to repurchase 10% of its shares outstanding, with about 8 million shares to be delivered Sept. 28. Additional shares may be delivered by the 2008 second quarter, based on the volume-weighted average price of its stock during the accelerated buyback period. International Flavors is buying back the stock under a $750 million repurchase authorization approved by its board on July 24. The company's shares closed Friday up 32 cents at $48.67. It has about 89.3 million shares outstanding. - MarketWatch
Department-store operator Gottschalks Inc. said Monday it will buy back up to 2 million shares over the next year. Gottschalks will finance the purchase of the shares through cash and borrowings on its credit agreement with GE Financing. - AP
TASER International Inc (TASR) said on Monday it received a follow-up order from the French Ministry of the Interior for 1,249 of its electronic control devices and related systems. The company did not specify the value of the order. - Reuters
Nokia (NOK) and Enpocket today announced that they have entered into a definitive agreement for Nokia to acquire Enpocket (http://www.enpocket.com). Enpocket is a global leader in mobile advertising; providing technology and services that allow brands to plan, create, execute, measure and optimize mobile advertising campaigns around the world. By acquiring Enpocket, Nokia will accelerate the scaling of its mobile advertising business, leveraging Enpocket's platform and strong partnerships with advertisers, publishers and operators. In addition to key assets, through this transaction Nokia is gaining a team with strong expertise in global mobile advertising across disciplines.
Media Summary:
The Wall Street Journal writes that Qatar's investment arm is close to buying Nasdaq's (NDAQ) 30% interest in the London Stock Exchange.
Barron's writes that shares of Nokia (NOK) may be undervalued.
The Wall Street Journal writes that CBS (CBS) is adding shows to its Fall line-up that should attract younger viewers.
The Wall Street Journal writes that Yahoo! (YHOO) is starting its own social network.
The Wall Street Journal reports that Baidu (BIDU) is starting a video advertising service.
The New York Times writes that at 25, USA Today faces readers leaving it for the internet.
M&A Activity:
Paetec is to buy McLeod for $492 million, creating one of the largest rivals to AT&T and Verizon in business telephony. - WSJ
ITT Corp. (ITT), the White Plains, N.Y., provider of products and services in fluid technology, defense and other fields, definitively agreed to pay $56 a share for EDO Corp. (EDO), the New York defense-technology and engineering company. In a joint statement, the companies valued the deal at $1.7 billion, including EDO's $120 million of net debt and conversion of certain notes. The deal price is an 8.7% premium to EDO's closing price on Friday of $51.51. The deal should be neutral to ITT's earnings in 2008 and add to profit thereafter, the companies said. Subject to conditions including a vote of EDO's holders, the companies hope to close the deal early in 2008. Lazard and UBS are advising ITT while Citigroup is advisisng EDO. - MarketWatch
Compton Petroleum Corp. (CMZ) agreed to acquire Win Energy Corp. (CA:WNR) for $24 million, combining the two Calgary energy-exploration and production companies. In a statement, the companies said Compton would pay C$0.37 a share for Win, shares of which closed Friday at C$0.28. - MarketWatch
Deutsche Telekom AG (DT) said Monday its T-Mobile unit in the U.S. has agreed to buy SunCom Wireless Holdings (TPC) for $2.4 billion, including debt, in a deal that will expand its customer base in the southeastern U.S. and Puerto Rico. - MarketWatch
Idearc Inc. (IAR) home to Superpages.com® and publisher of the Verizon® Yellow Pages, has signed a definitive agreement to acquire Switchboard.com and other online directory assets from InfoSpace Inc. (INSP) for $225 million.
China Technology Development Group Corporation (Nasdaq: CTDC; "CTDC" or the "Company") today announced the proposed acquisition of all solar energy assets and business of Shenzhen Soyin Electrical Appliance Industrial Co., Ltd.
("Soyin"). The Company expects to contribute US$5.8 million (RMB43, 800,000) in cash consideration to a new joint venture, Shenzhen Shengguang New Energy Technology Co., Ltd. (the "JV Company"), pursuant to the joint venture agreement signed by the Company and Soyin on September 14, 2007. The Company will be the largest shareholder of the JV Company, holding a 49% ownership interest. All of Soyin's existing solar energy business will be solely operated by the JV Company upon completion of its establishment. In addition, the board of directors of the JV Company will consist of five directors and three of them will be appointed by the Company.
IPO Central:
IPOs on schedule for week 9/17/07:
athenahealth (ATHN). The company provides on-demand revenue cycle software for physician practices. The company is selling 6.3M shares at the initial range between $14-$16. The company announced Revenues for the last 12 months of $76M and Net Income of $(-9)M. The Lead Managers are Goldman and Merrill. athenahealth (ATHN) is headquartered in Watertown, MA and their website is www.athenahealth.com.
ZARS Pharma (ZARS). The company is developing topically administered drugs for pain management. The company is selling 5M shares at the initial range between $14-$16. The company announced Revenues for the last 12 months of $10M and Net Income of $(-7)M. The Lead Managers are Goldman and Merrill. ZARS Pharma (ZARS) is headquartered in Watertown, MA and their website is www.zars.com.
Economic Data:
8:30 NY Empire State Index
Upgrades and Downgrades by Sector:
Airlines - Passenger
RYAAY Ryanair Hldgs UBS Downgraded from Buy to Neutral
Biotech
BCRX BioCryst Pharm Caris & Company Price Target Raised Above Average $10 to $13
IOMI Iomai Rodman & Renshaw Initiated at Mkt Outperform $4.25
MRX Medicis Roth Capital Cut Price Target Buy $46 to $41
NABI NABI Biopharma Dawson James Cut Price Target Strong Buy $12 to $9
Business Services
HIRE HireRight CIBC Wrld Mkts Initiated at Sector Outperform
CVG Convergys Friedman Billings Cut Price Target Mkt Perform $24 to $22
ICTG ICT Group Friedman Billings Cut Price Target Underperform $15 to $13
TTEC TeleTech Friedman Billings Cut Price Target Outperform $46 to $38
Chemicals-Ethanol
AVR Aventine Renewable Energy Soleil Downgraded from Buy to Hold
Computer Hardware
BRCD Brocade Citigroup Upgraded from Hold to Buy
FFIV F5 Networks CIBC Wrld Mkts Price Target Raised Sector Outperform $42.50 to $46
SYKE Sykes Enterprises Friedman Billings Cut Price Target Outperform $25 to $23
Finance Companies
HCD Highland Distressed Opportunities Wachovia Resumed Coverage Mkt Perform
BKCC BlackRock Kelso Wachovia Initiated at Outperform
Foods
CAG Merrill Lynch Upgraded to Buy $30
FDP Fresh Del Monte BB&T Capital Mkts Upgraded from Hold to Buy $33
Healthcare
FRX Forest Labs Friedman Billings Cut Price Target Outperform $64 to $52
Healthcare Equipment
MASI Masimo Piper Jaffray Initiated at Outperform
MASI Masimo Deutsche Securities Initiated at Buy $30
Healthcare Facilities
SUNH Sun Healthcare UBS Upgraded from Neutral to Buy
Insurance
MMC Marsh McLennan Citigroup Downgraded from Buy to Hold
PGR Progressive Calyon Securities Cut Price Target Add $28 to $26
Internet Services
BIDU RBCM Price Target Raised $333
Mining Non-Ferr Metal
USU USEC Inc. Friedman Billings Cut Price Target Outperform $29 to $18
Motion Pictures
NFLX TWPT Upgraded to Overweight
Motor Vehicles
F Ford Motor Bear Stearns Upgraded from Peer Perform to Outperform
DAI Daimler AG Bear Stearns Initiated at Outperform
DAI Bear Stears Initiated at Buy
Oil and Gas
APA Goldman Sachs added to Conviction Buy List
KWK Quicksilver Resrcs UBS Resumed Coverage Buy $69
FTI FMC Tech Friedman Billings Price Target Raised Outperform $56 to $77
KGS Quicksilver Gas AG Edwards Initiated at Buy $26
Paper and Packaging
TIN Temple-Inland UBS Upgraded from Neutral to Buy
Personal Services
NVT Navteq CIBC Wrld Mkts Price Target Raised Sector Outperform $64 to $76
Real Estate
MPG Maguire Properties Stifel Nicolaus Downgraded from Hold to Sell
REITs
LXP Lexington Stifel Nicolaus Upgraded from Hold to Buy $22
REITs - China
EJ E-House China CIBC Wrld Mkts Initiated at Sector Outperform $25
Restaurants
APPB Applebee's Oppenheimer Downgraded from Neutral to Sell
Retail Trade
BEBE bebe stores Wachovia Upgraded from Mkt Perform to Outperform
TWB Tween Brands Susquehanna Financial Upgraded from Neutral to Positive
Semiconductors
AMD Advanced Micro JP Morgan Upgraded from Underweight to Neutral
STTS STATS ChipPAC Friedman Billings Coverage Dropped
Telecommunications
CHL China Mobile HSBC Securities Upgraded from Neutral to Overweight
EQIX Equinix Needham & Co Upgraded from Hold to Buy $115
NOK Nokia HSBC Securities Upgraded from Neutral to Overweight
GRMN Garmin CIBC Wrld Mkts Price Target Raised Sector Outperform $100 to $120
ALU Alcatel-Lucent UBS Downgraded from Buy to Neutral
Tobacco
BTI British Amrcn Tobacco Lehman Brothers Downgraded from Equal-weight to Underweight
Transportation
CSX CSX Corp UBS Upgraded from Neutral to Buy