Wednesday Morning, August 15th
SITE NEWS
New IceMD Recording:
What is GERD (acid reflux)?
Dow Stock News
JPM JP Morgan Chase Punk, Ziegel & Co Cut Price Target Mkt Perform $54 to $48
Ice Man Stocks
Regular Trades the Ice Man may consider:
CAT 68.70
LFL 68.60
GRMN 80 - 81
UNP 104
Depressed stocks the Ice Man may buy:
AET 45 Gap
UA 55.25 Gap
SPWR 68 Gap
BHI 82 Gap
MSI 13.75 Gap
CMG 88.40 Gap
CSX 41 Gap
RIO 37.50 Gap
TASR 12.85 Gap
CME 541
ICE 133
SHLD 118
MA 115
HOKU 7
GWW 79.70
FCSX 42.35
COMPX 24.25
Dividends:
CVX 8-15 .58
GMR 8-15 .50
Support:
STQ 4.83
SPY below 142.50 going down
HGX below 168.40 going down
CYC 9.98
NDX 18.45
Short Side:
PCAR breaking 80 goes quickly to 79;
Media Commentators
Cramer's Comments:
Bullish: KFT, PG, GIS, PEP, CAG, THS, BGS, TRV, TRN
Ice Cold Commentators
Break Man Video Summary:
Break out buy (or short sell) watch list for short term gains August 15 includes: PLT, DRYS, OMTR, LLTC, POOL, RTI, ABAT, APTD.
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. http://stocktiger.com
CNBC Fast Money Review
1. 2007 Gains Almost Gone
The headline: S&P 500 Drops 2% Today, Cutting 2007 Gain to Below 1%
Najarian: "The numbers are looking very ugly right now." The ripple effects of the mortgage crisis are hitting the financials, including the Financial Select Sector SPDR (XLF), and that is what is leading the market lower.
Adami: Dow 12,700, his predicted bottom for the market.
Karen Finerman: Likes to sell puts on days of volatility. Thinks more volatility is coming.
2. WHALE WATCHING
The headline: Buffett´s Berkshire Hathaway Boosts Stakes in Wellpoint, UnitedHealth, Bank of America and more. A regulatory filing that came out after the close shows that, as of June 30, Berkshire has been buying, NKE, BAC, WLP, UNH, BNI and DJ while selling NSC, UNP, HRB, WU and PIR. Also, Eddie Lampert has reportedly boosted his stake in C to 25 million shares – an addition of 10 million shares – as of June 30.
Adami: He´s making a big bet with the healthcare stocks WLP and UNH, There´s a lot of risk in them, but they should “obviously be on your radar screen’ now.
Macke: NKE stands out amongst Buffett´s new holdings because it´s a consumer apparel name and is right in the middle of “all that is supposed to be wrong.’ Bullish on NKE.
Finerman: These holdings are as of June 30 – which was a “lifetime ago’ with regard to the financials.
Najarian: Patience is paying off for Lampert. He might be a little early but he´s still “on target on the right stock.’
Macke: isn´t so sure. The financials are “deeply troubled’ and he doubts Lampert´s boosted position will do anything to help C.
3. The Top 3
1. Trading Wal-Mart's Wake
WMT fell sharply Tuesday (the most in 5 years) after cutting its forecast. The big box giant dragged down retail shares and the broader market. Is the world´s largest retailer still a good proxy for the whole industry? What can you buy in the collateral damage of WMT´s destructive wake?
Macke: Wal-Mart is down, in part, because it just isn´t very good. Other retailers are taking share from WMT, which is hurting Wal-Mart but doesn´t have to hurt investors. Likes TGT and COST.
Adami: Likes Costco as a management trade.
Najarian: Likes Target
Karen Finerman: Bullish on Target
2. Search For A Bottom In Yahoo
For the first time ever, YHOO, the runner-up to GOOG in about every category, has bested its larger rival in a consumer satisfaction report. The new president, Susan Decker, made the largest purchase of Yahoo stock by an insider in more than four years – nearly 47 million shares worth. With its stock at multiyear lows, could Yahoo be nearing a bottom?
Adami: If you´re looking for a reason to get into YHOO, this might be it.
Najarian: Decker “stepping up’ was a big move, All Terry Semel did was sell the stock so this should inject some confidence for investors.Thinks the consumer sentiment survey was “huge.’
Macke: Thinks YHOO is still dead
3. The Next Shoe To Drop
CFC, the number one mortgage lender, continues to slide. TMA plunged after it delayed its dividend. It seems like anything with the word ‘mortgage´ in it is under fire. But is the meltdown spreading?
Najarian: Says it is not over, notices a lot of put buying “across the board’ including heavy put buying in names like IMB and ETFC, a name that many had thought was safe. It turns out that E*Trade has $28 billion in mortgage loans that could become an issue.
Macke: Bottom line is that assets that were considered liquid are drying up quickly, “All bets are off.’
4. NASDAQ – A SAFE HAVEN
The headline: Options Players Pricing NASDAQ Stocks As If They Were Safer Than The S&P 500.
Najarian: The NASDAQ 100 is far less volatile than the S&P 500. That tells you where the real risk is right now. It´s in energy, financials and the mortgages, which make up much of the S&P. At least for now, the safe haven is in tech – and the NASDAQ
5. AFTER HOURS ACTION: Applied Materials
The headline: AMAT, Barometer of Chip Demand, Drops On Lower Quarterly Profit.
Najarian: AMAT is having problems, but it shouldn´t be an indicator for all chip stocks.
Macke: The idea of all tech as a shelter from the storm is “overdone.’ The chip stocks are shaky, would rather own the big bellwethers like CSCO, INTC and MSFT.
6. The Final Trade: Your First Move For Wednesday
Macke: Recommends covering if you´re short HD.
Najarian: Short CFC.
Adami: For the second day in a row, thinks investors should bet against the Dow by buying the Short Dow30 Proshares (DOG).
News and Events Digest
Breaking News
U.S. billionaire investor Carl Icahn reported on Tuesday that his fund has taken significant stakes in aluminum companies Alcan (AL) and Alcoa (AA), which previously held discussions to merge. Icahn Management reported in a filing with the U.S. Securities and Exchange Commission its holdings as of June 30, which included a 3.52 million share stake in Alcoa and a 1.18 million share stake in Alcan. - CNBC
Billionaire investor Warren Buffett bought a major stake Bank of America and added a significant investment in Dow Jones as well, a regulatory filing shows.
Buffett's Berkshire Hathaway (BRK) said it owned 8.7 million shares of Bank of America, the second-largest U.S. bank, valued at $425.3 million.
ATK - positive article in the IBD
Media Summary:
According to Reuters, Nestle increased its share buyback to $21 billion after reporting a strong first half.
Reuters writes that SAP (SAP) and Dell (DELL) will create products that help retailers run their businesses.
Reuters reports that Applied Materials (AMAT) reported weak number fro Q2.
The Wall Street Journal reports that credit ratings agencies including S&P gave securities built on questionable loans high ratings.
DirecTV (DTV) will announce a program to provide high-speed internet over power lines, according to WSJ.
The WSJ writes that Yahoo! (YHOO) is basing much of its recovery on serving display ads to people based on their behavior.
The WSJ writes that Eli Lilly (LLY) is betting its recover on a heart drug that thins the blood.
The FT reports that, based on a current survey, CEO confidence is at a five year low.
M&A Activity:
AirTran Holdings Tuesday raised its offer to buy Midwest Air Group by 3 percent, to about $445 million, in a last-ditch bid to win control of the rival airline.
Midwest's (MEH) shares closed down 4 cents at $13.96 on the American Stock Exchange on Tuesday. In after-hours trading, the stock gained $1.04 at $15. - CNBC
Citrix Systems Inc. (CTXS) signed a definitive agreement to buy privately held XenSource Inc., a Palo Alto, Calif., virtual infrastructure company, for $500 million in cash and stock. The Fort Lauderdale, Fla., application delivery infrastructure company said the deal is expected to close in the fourth quarter. The deal is expected to add $1 million in revenue and $3 million in expense in 2007, and $50 million in revenue and $60 million to $70 million in costs in 2008. The company said the deal will also result in an $8 million to $10 million write-off charge on in-process research and development. Citrix had 2006 revenue of $1.13 billion. - MarketWatch
IPO Central:
3Par Inc. late Tuesday filed to raise up to $100 million in an initial public offering with underwriters Goldman Sachs, Credit Suisse and UBS Investment Bank. The Fremont, Calif. tech firm said it'll trade either on the Nasdaq or the NYSE with no symbol yet designated. Goldman Sachs (GS) and Credit Suisse (CS) are underwriting the deal.
Recent stock split announcements:
On August 9, Life Partners Holdings, Inc. (Nasdaq:LPHI) announced that its board of directors approved a 5:4 stock split. Details are pending.
On August 9, NVIDIA Corporation (Nasdaq:NVDA) announced that its board of directors approved a 3:2 stock split to be distributed on or about September 10, 2007.
Companies that have previously announced stock splits which become effective in the next several trading days.
Ex-Date Split Symbol Company
8/20 3:1 SHEN Shenandoah Telecommunications
8/21 2:1 FFIV F5 Networks, Inc.
8/21 3:1 RIMM Research in Motion
Economic Data:
8:30 CPI
8:30 NY Empire State Index
9:00 Net Foreign Purchases
9:15 Industrial Production
9:15 Capacity Utilization
10:30 Crude Inventories
Upgrades and Downgrades by Sector:
Alternative - Biodiesel
NBF Nova Biosource Fuels Merriman Curhan Ford Initiated at Buy
Audio-Video Equipmnt
LPL LG. Philips LCD Bear Stearns Downgraded from Outperform to Peer Perform
HAR Harman RBC Capital Mkts Cut Price Target Sector Perform $125 to $120
Beverages
JMBA Jamba Merriman Curhan Ford Initiated at Buy
PEP Goldman Sachs Downgraded to Neutral
Biotech
AMLN Amylin Pharms Friedman Billings Price Target Raised Outperform $52 to $62
RPBC Redpoint Bio Brean Murray Initiated at Buy $4
A Agilent Needham & Co Cut Price Target Buy $42 to $40
CORT Corcept Therapeutics Merriman Curhan Ford Coverage Dropped
Business Services
TSS Total System Calyon Securities Upgraded from Neutral to Add $32
Chemicals-Methanol
MEOH Methanex CIBC Wrld Mkts Upgraded from Sector Underperform to Sector Perform
Computer Hardware
BBOX Black Box Stifel Nicolaus Price Target Raised Buy $58 to $59
CEN Ceridian UBS Downgraded from Buy to Neutral
Computer Software
PER Perot Systems Stifel Nicolaus Upgraded from Hold to Buy $20
VMW VMware Caris & Company Initiated at Above Average $60
Education
CPLA Capella Education Citigroup Initiated at Buy $60
UTI Universal Technical Institute Sun Trust Rbsn Humphrey Upgraded from Neutral to Buy $23
Finance Companies
MA MasterCard AG Edwards Upgraded from Hold to Buy $165
KFN KKR Financial Friedman Billings Downgraded from Outperform to Mkt Perform $37 to $10
KFN KKR Financial Lehman Brothers Downgraded from Overweight to Equal-weight
UBS UBS AG Credit Suisse Downgraded from Outperform to Neutral
Gaming Operations
PENN Penn Natl Gaming Nollenberger Capital Upgraded from Neutral to Buy $67
Gold and Silver Mining
BMD Birch Mountain RBC Capital Mkts Cut Price Target Underperform $4 to $3
Healthcare
AEZS AEterna Zentaris RBC Capital Mkts Upgraded from Sector Perform to Outperform
LH Laboratory Corp Credit Suisse Initiated at Outperform $89
DGX Quest Diagnostics Matrix Research Downgraded from Buy to Hold
Insurance
DFG Delphi Fin(b;) Friedman Billings Resumed Coverage Outperform $48
AXA AXA Credit Suisse Downgraded from Outperform to Neutral
MLAN Midland Co KeyBanc Capital Mkts / McDonald Downgraded from Buy to Hold
Jewelry
FOSL Fossil Piper Jaffray Upgraded from Market Perform to Outperform
Major Pharmaceutical
ACL Bank of America Reiterated at Buy
Mfg-Industrial Goods
KOP Koppers Holdings Matrix Research Upgraded from Buy to Strong Buy
Oil and Gas
GDP Goodrich Petroleum Sun Trust Rbsn Humphrey Upgraded from Reduce to Neutral $32
GSF GlobalSantaFe Bernstein Upgraded from Underperform to Mkt Perform
MDR McDermott Citigroup Initiated at Buy $112
RDC Rowan Cos Bernstein Downgraded from Mkt Perform to Underperform
Personal Services
SHOR Shoretel JMP Securities Initiated at Mkt Outperform $17
Real Estate
ABR Arbor Realty Trust Lehman Brothers Downgraded from Overweight to Equal-weight
NRF Northstar Realty Lehman Brothers Downgraded from Overweight to Equal-weight
REITs
NCT Newcastle Investment Lehman Brothers Downgraded from Overweight to Equal-weight
TMA Thornburg Mortg AG Edwards Downgraded from Hold to Sell
TMA Thornburg Mortg Citigroup Downgraded from Hold to Sell
AVB AvalonBay RBC Capital Mkts Cut Price Target Top Pick $165 to $143
PSA Public Storage RBC Capital Mkts Cut Price Target Outperform $98 to $82
Savings & Loan
WFSL Wash. Federal Friedman Billings Upgraded from Mkt Perform to Outperform $22 to $28
Semiconductors
TSRA Tessera Tech Matrix Research Upgraded from Hold to Buy
AMAT Applied Materials Stifel Nicolaus Price Target Raised Buy $25 to $27
AMAT Applied Materials RBC Capital Mkts Price Target Raised Outperform $22 to $23
Solar Cells - China
JASO TWPT Initiated at Overweight $42
Technology
ARUN Aruba Networks Stifel Nicolaus Initiated at Buy $25
Telecommunications
JDSU JDS Uniphase BMO Capital Markets Upgraded from Underperform to Market Perform
TSU TIM Participacoes JP Morgan Upgraded from Neutral to Overweight
PAET PAETEC Holding Wachovia Initiated at Outperform
ORBC Orbcomm Cowen & Co Downgraded from Outperform to Neutral
ORBC Orbcomm UBS Cut Price Target Buy $20 to $13
Transportation
ODFL Old Dominion Robert W. Baird Initiated at Outperform $36
Water Treatment
BWTR Basin Water Roth Capital Price Target Raised Hold $7.50 to $9