MOST NOTEWORTHY: Monogram Biosciences, Interpublic Group and Blue Coat Systems were today's noteworthy initiations:
JMP Securities said Monogram Biosciences (NASDAQ: MGRM) has a broad platform enabling it to develop multiple personalized medicine product offerings and has significant growth prospects from its HIV diagnostic business and its diagnostic test in oncology. Shares were initiated with an Outperform rating and $3.50 target.
Jefferies assumed Interpublic Group (NYSE: IPG) with a Buy rating and $11 target. The firm believes the current valuation does not reflect the company's turnaround, which they believe is gaining traction.
Friedman Billings initiated Blue Coat Systems (NASDAQ: BCSI) with a Market Perform rating and $18 target. The firm prefers to wait on the sidelines given the near-term headwinds from a difficult spending environment in North America and integration risks from the Packeteer acquisition.
OTHER INITIATIONS:
American Capital (NASDAQ: AGNC) was initiated at Merrill with a Buy rating and at RBC Capital with an Outperform rating and $32 target.
UBS assumed Quality Systems (NASDAQ: QSII) with a Buy rating and $39 target.
HSBC initiated Daimler AG (NYSE: DAI) with an Overweight rating.
Sometimes it takes a sledgehammer to the head to get a company to change direction.
Fuel costs are soaring, profits are dwindling and companies are desperate. Yet, nimble as they would like to be, U.S. auto manufacturers have been unable to provide any significant benefit to consumers in terms of meaningful fuel efficiency. Up until last year, SUV sales were still the dominant component of sales for the Big 3. It wasn't until the pain of a significant drop in SUV sales was realized and reports showed U.S. auto sales to be the lowest since 1993 that our old friend Mr. Hammer was able to wake up a sleeping (or it it dying?) U.S. auto industry.
Now Ford (NYSE: F) is trumpeting a dramatic increase in demand for its economical Ford Focus and boosting output by 30%. But I think the change is too little too late.
The truth is that U.S. vehicle sales are expected to drop by 15 million units in 2008. An increase of 30% of the Ford Focus would still mean a paltry benefit as these lower cost models also have a lower profit margin for Ford. So, as consumers buy more lower margin cars, Ford makes less money.
Reports that Britney Spears was in a minor accident over the weekend with her Mercedes is another in a long line of mishaps for the pop star. Why this qualifies as news is beyond me, and it's my feeling that Britney should just be left alone. The media have succeeded in driving her into a virtual nervous breakdown, for what? To sell a few more papers, or attract a few more viewers. Should the media be in the business of ruining people?
According to the AP report: "Spears was in stop-and-go traffic when her car struck a 2006 Nissan in front of her that had stopped. The Nissan then pushed forward into another vehicle. No damage was noted to any of the vehicles."
The one winner in this latest Spears' episode may be Daimler AG (NYSE:DAI), maker of the famed Mercedes. As with most automakers the company has been struggling, and sales have been sagging. There is no question that they could use the free PR. After all, Britney drives the car, and it escaped the crash without a dent.
Despite recent troubles, investors looking for a contrarian play may want to take a look at Daimler. Their new strategy of trying to gain market share in Russia and in China to help offset US weakness, seems to be a smart move. With a growing upper middle class in both of these countries, the need to own a Mercedes will be strong, as it will be perceived as a status symbol.
Maybe the media can start focusing on global wealth creation, and leave Britney alone.
Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 4/14/08.
February was a tough month in the world of auto sales for both foreign and domestic car manufacturers. Ford Motor (NYSE: F), General Motors Corporation (NYSE: GM) and Toyota Motor Corp. (NYSE: TM) all saw their sales figures shrink during another tough month.
For Ford, it was a really tough month, with the struggling auto maker showing a drop of 7% during the month. Toyota was slightly better, and only witnessed a 3% drop in the month. Toyota was hit hard in its luxury car division, with sales of its highly popular Lexus LS 460 sedan dropping by a startling 25%. Overall, Toyota saw its car sales drop by 4%, with truck sales coming in flat.
For Ford, not only were investors treated to the weak sales figures, but the company also announced that it was going to be cutting back on its shifts in three of its factories, as well as lowering its 2008 production estimates by a pretty hefty 10%. Looking at its individual vehicles lines, Ford saw a 9% drop in its car sales and a 5% shrinkage of truck sales. The drop in demand is leading to the cut backs at its factories, and the factories that will be affected will be plants in Chicago, Louisville, Ky., and Cleveland.
Five Chinese manufacturers are fielding display automobiles at the 2008 North American Auto Show. Amid a flurry of drab Chinese displays, misspelled promotional materials and one unscheduled auto tour through an ongoing press conference, China is presenting vehicles in the hope that the American auto-buying public will take them for real. I wonder how they feel about this at General Motors (NYSE: GM), Ford Motors (NYSE: F), Toyota (NYSE: TM), and Chrysler.
This influx of Chinese auto manufacturers represents a 400% increase in their presence at the auto show over just two years ago. Should the big auto makers be scared yet? This blogger hardly thinks so, yet the above picture is the Geely-Beauty Leopard, an automobile of Chinese manufacture which has been marketed quite successfully in Europe since 2002.
To me, General Motors Corp. (NYSE: GM) is beginning to take on the persona of Rocky Balboa, the consummate tough guy who is winning against all odds. Forget for a moment who sells more autos and just look at all the smart work it has taken to get GM this far in the struggle to effectively manufacture and market automobiles. Take a contrasting look at the last few week's announcements from America's auto manufacturing block. Take a look at the news about Ford (NYSE: F) and Chrysler in contrast to what you hear about GM. It is my opinion that of those three, GM is the only company which has a realistic grasp on what it must do to survive and regrow.
General Motors posted 2007 second-quarter adjusted net income, excluding special items, of $1.4 billion, or $2.48 per diluted share, compared to $1.1 billion, or $2.03 per diluted share, in the year-ago quarter. However, bear in mind that while GM increased its market share over 9% outside of North America, it's global market share was down 0.4%, meaning that there was a decline in the number of vehicles sold at home. Current analyst consensus is a quiet hold on GM. I would take that position also, but overall I expect GM shares to move steadily upward as company outlook improves.
A bill representing the "mother of all tax reforms" is set to be revealed Thursday, according to House Ways and Means Chairman Charles Rangel. But Mother is going to have to be patient. No one expects Congress to deal with a tax overhaul this year - especially one estimated to cost $1 trillion. Individuals and businesses will see some tax breaks, and some will foot the bill more than others.
Home builders are slashing prices, yet a severe tightening of credit by mortgage lenders is keeping many buyers out of the market. Still others are taking a wait and see approach to home buying. The result: too many homes, too few buyers and the worst housing glut since the 1980s.
When you are a victim of a natural disaster, such as the devastating fires in Southern California, there are four things to do in order to receive aid: complete the application, have your property inspected, fill out the form for a Small Business Administration loan and search for other assistance, including grants. Follow this step-by-step guide to help put your life, home and family back together.
All the money in the world can't convince these wealthy dynasties to get along. Rich, dysfunctional families are back in vogue on prime-time television with new shows like Cane and Dirty Sexy Money. But these fictional families have nothing on the real-life tales of feuding billionaire clans, wracked by generational schisms, sibling rivalries, jealousy and greed. Forbes recaps some of the most riveting billionaire family sagas of the past decade.
The United Auto Workers went on strike against Chrysler this morning, according to the AP. The strike involves 48,000 workers at Chrysler's American factories.
There has been some speculation that Chrysler's new owner, Cerberus Capital Management, may be not be willing to make a deal with the union, at least not any time soon. Union officials are reportedly preparing for what could be a long strike.
Today Daimler drops Chrysler from its name as it officially splits after a bad $40 billion merger in 1998. A few days ago eBay conceded they overpaid for Skype. And years after the catastrophic merger of Time Warner and AOL, Time Warner is still trying to make the deal work. How is it that such deals come together in the first place?
Some homeowners dispute the adage that good fences make good neighbors. Lots of shared space in cohousing developments, they say, makes better communities.
New York and New Jersey residents pay more in these taxes than anyone else in the country. The hardest hit? Homeowners in western New Jersey's Hunterdon County. Last year, the median yearly property tax bill amounted to a whopping $7,999 here, according to the Tax Foundation. Loudon County, VA has the highest property taxes in the south, Lake County, IL in the midwest and Marin County, CA in the west. See where the highest property taxes in your part of the country is.
Mark Cuban: Web 1.0's Richie Rich Wants Some R-E-S-P-E-C-T
Seven years into his effort to disrupt the sports and entertainment industries, Web 1.0's Richie Rich is learning some hard lessons. The 49-year-old billionaire owner of the Dallas Mavericks is now prancing around on 'Daning With the Stars'. For Cuban, it is not enough to be rich. He wants to be famous and influential, much as he might argue otherwise.
This Christmas, Neiman Marcus catalog shoppers can give their loved ones an underwater dream machine for $1.44 million or a dragon topiary for $30,000 among other things.
There are stirrings that buyouts are making a comeback. Look at private equity firm, Cerberus Capital. Today, the firm has announced that it will shell out roughly $2 billion for the North American paper operations of Stora Enso (the company will retain a 19.9% equity stake).
The deal is fairly strategic as Cerberus already owns NewPage, which is a coated paper producer. As a result, Cerberus will merge the Stora operations with NewPage. Yes, having scale can be a huge benefit in the private equity world – in terms of financing and synergies.
However, the paper business is tough. With the declines in newspapers and magazines, it's certainly hard to find growth.
But Cerberus usually is contrarian. Hey, it bought Chrysler, right?
After hitting a previous one-year high of $96.12 in July, the stock dipped in August, but is making its way back toward previous highs, topping its 52-week best today. DAI opened this morning at $95.93. So far today the stock has hit a low of $95.72 and a high of $96.27. As of 10:45, DAI is trading at $95.94, up $2.11 (2.2%). The chart for DAI looks bullish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.
For a bullish hedged play on this stock, I would consider a January bull-put credit spread below the $75 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 5.3% return in just 4 months as long as DAI is above $75 at January expiration. XM would have to fall by more than 21% before we would start to lose money.
DAI hasn't been below $75 since March and has shown support around $90 recently. This trade could be risky if the company's earnings (due out 10/25) disappoint, but even if that happens, this position could be protected by the strong support the stock formed around $80 over the past five months..
MOST NOTEWORTHY: Quicksilver Gas Services, Hireright, DaimlerChrysler and Masimo were today's noteworthy initiations:
AG Edwards initiated Quicksilver Gas Services (NYSE: KGS) with a Buy rating and $26 target as the firm believes the company's distribution growth has high visibility, based on its current asset base and the possibility of third-party acquisitions. UBS initiated shares with a Buy rating and $34 target.
Hireright (NASDAQ: HIRE) was initiated with a Market Perform rating and $13 target at Piper Jaffray, as the firm believes the company's distribution growth has high visibility, based on its current asset base and the possibility of third-party acquisitions. CIBC is positive on Hireright's extensive solution set and strategic alliances and initiated shares with a Sector Outperformer rating.
DaimlerChrysler (NYSE: DAI) was started at Bear Stearns with an Outperform rating. Following the Chrysler transaction, Bear expects Daimler to raise its margin guidance now that the company can focus on its truck platform.
Masimo Corporation (NASDAQ: MASI) was initiated with an Outperform rating at Piper Jaffray, as the firm believes the company's "best in class" technology will drive continued pulse oximetry share gains. Cowen initiated shares with a Neutral rating on valuation and Deutsche Bank started shares with a Buy rating and $30 target..
Chrysler (NYSE: DAI) joined Ford (NYSE: F) and General Motors (NYSE: GM) today when it proposed to divest its non-core assets. It is looking at divesting Chrysler Transport, which manages deliveries of supplies to Chrysler plants, and its Mopar unit, which makes high-performance and specialty auto parts, people familiar with the matter told the Wall Street Journal (subscription required).
Obviously, the United Auto Workers oppose the divestitures. It is unclear if the divestiture of the assets will be part of the final agreement between the UAW and the newly independent Chrysler.
In addition to the potential non-core asset sales, the company already has a restructuring plan that calls for 13,000 jobs cuts and a return to profitability next year.
The UAW's talks with Chrysler have also revolved around the auto maker receiving a concession on health care costs, similar to what Ford and GM received back in 2005. Chrysler also wants to outsource non-core employees to a third party, similar to the agreements Ford currently has with UAW locals at individual plants.
The UAW now faces a battle at each of the three major Detroit automakers. The contract between the UAW and Chrysler expires on September 14.
Cerberus assumed 80% ownership of Chrysler from DaimlerChrysler (NYSE: DAI) on August 3. Cerberus is now engaged in contract talks with the United Auto Workers as it looks for ways to cut costs. The union is reportedly opposed to the sales for fear of job losses; the units employ roughly 1,300 unionized workers. Chrysler's four-year contract with the UAW expires on September 14.
Analysts are saying that the sale of the units would allow Cerberus to focus on Chrysler's core business of making cars and trucks, and help raise much-needed cash. But Mopar is hardly a peripheral unit. Chrysler has been using the term to refer to its parts since the 1920s, and Mopar has long been virtually synonymous with the automaker. This is especially true when it comes to high performance cars, including the famous muscle cars of the 1960s and 1970s -- the Barracuda, the Super Bee, the Road Runner -- that Chrysler is trying to revive. So you have to wonder if this is a good move in the long run. Let's hope that Chrysler doesn't lose what makes it unique and desirable to car lovers as it works to return to profitability.
Richest & Poorest States in the Nation Maryland is now the wealthiest state in the union, as measured by median household income, according to the latest stats from the Census Bureau. The typical Maryland household earned $65,144 in 2006, propelling it past New Jersey, which came in second with earnings of $64,470. Connecticut, Hawaii and Massachuetts round out the top five richest. Mississippi, West Virginia and Arkansas are the poorest states in the U.S. http://money.cnn.com/2007/08/28/real_estate/wealthiest_states/index.htm CEOs Make More in One Day Than You Do in One Year The average CEO of a large U.S. company made roughly $10.8 million last year, or 364 times that of average U.S. full-time and part-time workers, who made $29,544, according to an analysis released Wednesday by the liberal Institute for Policy Studies and United for a Fair Economy. CEO-to-worker pay appears to narrow - Aug. 29, 2007 Home Prices See Steepest Drop in 20 Years U.S. home prices fell 3.2% in the second quarter, the steepest rate of decline since Standard & Poor's began its nationwide housing index. 15 of the 20 cities in the S&P/Case-Shiller monthly survey saw home prices drop from a year ago. Home prices: Steepest drop in 20 years; no recovery soon - USATODAY.com From Cheap Stand-In to Shelf Star
Savvier marketing and better-tasting products are driving up sales of private-label food products. From Costco's Kirkland products to Target's Archer Farms, store brands are now a $50 billion business. From Cheap Stand-In to Shelf Star - WSJ.com Bottled Water Is Draining Your Bank Account You don't often think of bottled water along the same lines as smoking, drinking alcohol or gambling. But when it comes to wasting money, it's just as bad a habit. Try tap water and save some $1,000 a year -- and drink water that's just as good. Bottled Water Is Draining Your Bank Account - Make the Most of Student Discounts College-student status is the key to saving on computers, travel and more. Making the Most of Student Discounts | SmartMoney.com
Head Overseas for 5-Star Care at Motel 6 Prices A growing number of patients head overseas for more-serious procedures, such as hip replacements, heart bypasses and kidney transplants. Why travel halfway around the world for a medical procedure? Because you could pay a fraction of what you'd pay in the U.S. Adventures in Medical Travel - Kiplinger.com Return to Dress Code Marketing students at Illinois State University's College of Business face a choice -- business casual attire for class or a zero for the day. It is the only public undergraduate business school in the country to implement a dress code for students. Return of the Dress Code
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MOST NOTEWORTHY: Monogram Biosciences, Interpublic Group and Blue Coat Systems were today's noteworthy initiations:
Sometimes it takes a sledgehammer to the head to get a company to change direction.
Five Chinese manufacturers are fielding display automobiles at the 2008 North American Auto Show. Amid a flurry of drab Chinese displays, misspelled promotional materials and one unscheduled auto tour through an ongoing press conference, China is presenting vehicles in the hope that the American auto-buying public will take them for real. I wonder how they feel about this at 
To me, 
The United Auto Workers went on strike against Chrysler this morning, according to the 
There are stirrings that buyouts are making a comeback. Look at 
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Analysts are saying that the sale of the units would allow Cerberus to focus on Chrysler's core business of making cars and trucks, and help raise much-needed cash. But Mopar is hardly a peripheral unit. Chrysler has been using the term to refer to its parts since the 1920s, and Mopar has long been virtually synonymous with the automaker. This is especially true when it comes to high performance cars, including the famous muscle cars of the 1960s and 1970s -- the 
Starbucks: The next McDonald's
Wal-Mart's launch of $20 slimming jeans will be a huge success
Why I spent some of my stimulus check on GE
