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From Briefing.com
Periodicals Wrap-Up for Thursday, November 20th
WALL STREET JOURNAL: General Growth Properties (GGP), weighed down by $27B of debt, hired law firm Sidley Austin to be its bankruptcy counsel,the Wall Street Journal reported. While a Chapter 11 filing is not imminent the move is seen as defensive…BARRON’S: Barron’s Online conducted a screen of over 1,000 companies with more than $250 million in cash and equivalents, and came up with a list of five trading at less than two times the net cash on their balance sheets. Cash-rich stocks for tough times: Ashland (ASH), Chico’s FAS (CHS), Exar (EXAR), Form Factor (FORM), Sycamore Networks (SCMR). In selecting these five stocks, Barron’s Online measured the market cap of the companies against their net cash position. All of the stocks they picked had the virtue of keeping costs under control and maintaining little or no debt, both virtues in times of slowing growth and tight capital markets. And all the stocks are down between 30% and 90% in the last 12 months, meaning they’ve already taken a hit for the declining state of their business…NEW YORK TIMES: The New York Times reported that, according to nuclear experts, Iran has now produced nearly enough nuclear material to make a single atom bomb. The experts cautioned that Iran would have to take additional steps to make a bomb, however, including breaching its international agreements and additional purification to put it into a warhead design, which experts are unsure Iran has achieved…The New York Times also reported that Rick Wagoner, Alan Mulally and Robert Nardelli, the CEOs of General Motors (GM), Ford (F) and Chrysler, respectively, left Washington empty-handed after public hearings and negotiations for a financial lifeline appeared to come to naught…
Asian Markets Wrap-Up for Thursday, November 20
Asian stocks declined, after Japan reported that its exports fell sharply. JAPAN: The Nikkei 225 sank 6.89%, to 7,703.04, with insurers and exporters leading the decline. Insurer Tokio Marine (TKOMY) tumbled 15% after it reduced its earnings forecast. T & D Holdings, a life insurance company, also slashed its earnings outlook and the shares dove 14%. Isuzu (ISUZY) retreated 17% and Mazda (MZDAF) decreased 10%. Nintendo (NTDOY) lost 7.9% and Nippon Electric Glass Co., which makes glass for flat panel TVs, dropped 14%. CHINA: The CSI 300 Index declined 1.1% to 1,932.43, led by energy companies. Coal mining company Shenhua Energy (CSUAY) lost 3.9% and China Coal Energy (CCOZF) dropped 3.2%. PetroChina (PTR), an oil company, fell 2.7%. Developers rallied, on a report that Disney’s (DIS) plan to build a theme park in Shanghai would stimulate the city’s economy. Lujiazui (SLUJF) and Waigaoqiao, two property developers in the area, both jumped by the daily limit of 10%. AROUND ASIA: South Korea’s KRX 100 dipped 6.52%, while Taiwan’s Taiex slumped 4.53% and Indonesia’s Jakarta Composite slipped 2.15%…Japan’s exports dropped 7.7% in October, compared with October 2007.
Iran has enough nuclear fuel for one atomic bomb, experts say-NY Times
Iran has enough nuclear fuel to manufacture a single atom bomb, according to experts who analyzed a recent report about Iran’s energy program by the International Atomic Energy Agency. However, the experts added that Iran would have to purify the fuel further and put it into a warhead before creating a nuclear weapon. Western officials are unsure if the Islamic Republic has those capabilities.
U.S. consumers batten down the hatches-WSJ
Momentum for a fiscal stimulus program is gaining, according to the Wall Street Journal’s “Heard on the Street”. As the CPI falls a key component is the core index, affecting shopping for clothes, leisure expenses, and vehicles. And, the U.S. consumer, 70% of the domestic economy, is holding spending to their regular income, as borrowing falls at a pace last seen in the early 1990s. What will bring back shoppers? It may be fiscal stimulus programs.
U.S. equity futures again point to a lower opening
Stock futures are pointing to a lower open after another late day sell off yesterday. Fears of recession and the Big Three auto executives testifying on Capitol Hill for a bailout package unnerved investors. Global markets, following the U.S. lead, were lower overnight. Crude oil is now below $53 on the slowing global economy. One bright spot is the vote of confidence of Saudi Prince Alwaleed who announced he would increase his stake in Citigroup to 5% from just below 4%.
RIM’s BlackBerry Storm competes with Apple, Google-WSJ
The Wall Street Journal’s Walter S. Mossberg reviews Rim’s (RIMM) new BlackBerry Storm and concludes that it’s “a very capable handheld computer that will appeal to BlackBerry users who have been pining for a touch-controlled device with a larger screen. And it offers yet another good option for anyone who is looking to buy one of the new, more powerful, pocket computers.”
U.S. equity futures still point to a lower open
Stock futures turned slightly higher after the announcement that Prince Alwaleed of Saudi Arabia would increase his stake in Citigroup (C) to 5%, but then fell back again. There also was news from Europe that the Swiss central bank cut its interest rates by a full point. That erased most of the declines in the European indices and helped shore up the U.S. futures market. Investors received jobless data which showed that initial jobless claims were 542,000 versus an expected report of 505,000 claims.
Analysts Upgrade Summary for Thursday, November 20th
MOST NOTEWORTHY: BASF AG (BASFY), Hot Topic (HOTT) and L-1 Identity (ID) were today’s noteworthy upgrades: Societe General upgraded BASF AG to Buy from Hold. The firm believes the bad news is out and that BASF has a strong market position. Pali Capital upgraded Hot Topic to Buy from Neutral based on the ongoing merchandise catalyst, the opportunity to reclaim the mainstream kid and closing underperforming stores, which create the most favorable conditions in the last 5+ years. Stanford upgraded L-1 Identity to Buy from Hold on valuation, and the firm sees little risk to the company from the Obama Administration…OTHER UPGRADES: Gymboree (GYMB) and Windstream (WIN) were raised to Overweight from Neutral at JP Morgan. Doral Financial (DRL) was upgraded at B. Riley to Buy from Neutral. Alumina (AWC) was upgraded to Buy from Neutral at UBS.
Analysts Downgrade Summary for Thursday, November 20th
MOST NOTEWORTHY: Targanta (TARG), BASF AG (BASFY) and Amedisys (AMED) were today’s noteworthy downgrades: Credit Suisse downgraded Targanta to Underperform from Outperform following the FDA Panel’s rejection of Oritavancin. Citigroup downgraded BASF AG to Sell from Hold and sees no reason to own the stock following the company’s profit warning. Shares were also downgraded at WestLB to Hold from Add. Deutsche Bank downgraded shares of Amedisys to Hold from Buy and lowered its target to $53 from $75 on concerns over the company’s deteriorating A/R aging trends…OTHER DOWNGRADES: VeriFone Holdings (PAY) and Navios Maritime (NMM) were lowered to Neutral from Overweight at JP Morgan. NTT DoCoMo (DCM) was downgraded at Citigroup to Hold from Buy.
Analysts Initiation Summary for Thursday, November 20th
MOST NOTEWORTHY: Cepheid (CPHD), Gen-Probe (GPRO) and Harbin Electric (HRBN) were today’s noteworthy initiations: Needham expects shares of Cepheid to be driven by continued market penetration in the hospital acquired infection market, new test introductions, GeneXpert Infinity sales, and molecular diagnostics growth from sales outside of traditional molecular testing areas. Shares were initiated with a Buy rating and $21 target. Needham also initiated Gen-Probe with a Hold rating and expects market share gains for the company when PANTHER is approved in 2010/2011. William Blair believes Harbin Electric is an “interesting” opportunity for exposure to rapid growth in infrastructure within the People’s Republic of China. The firm started shares with a Market Perform rating…OTHER INITIATIONS: Boston Scientific (BSX) was initiated with a Buy rating and $11 target at UBS. NutriSystem (NTRI) was initiated with a Neutral rating at Janney Montgomery. Ener1 (HEV) was assumed at JMP Securities with an Outperform rating and $9 target.
Jim Cramer’s “Mad Money”
Cramer told “Mad Money” viewers Wednesday night that every day the possibility of the next Great Depression is on the line and investors need to start taking notice. Cramer said, “This market is in critical condition,” he said, “and the solution is to save as many patients as you can.” Cramer said the two main “patients” in this market are the banks and the automakers, and both need help right away. Cramer said, that while the Treasury and Federal Reserve, are willing to save the banks, they are much more reluctant to save the automakers. Cramer said, that if the government lets the automakers fail, it will signal a death blow to the markets and the economy. Then, Cramer said there’s only one tech stock investors should trust, and it’s Hewlett-Packard (HPQ). With companies like Cisco (CSCO), Corning (GLW) and Nokia (NOK) all reporting disappointing numbers and offering slowing sales forecasts, Cramer said there must be a reason HP is bucking buck the trend, and he’s found three of them. First, HP has great management, and is aggressively cutting costs and taking market share. Second, it is reaping the synergies from its acquisition of EDS. Thirdly, HP’s competitors are falling apart at the seams – with Dell (DELL) continuing to struggle under a poor long-term growth plan and other issues. Cramer called HP one of the safest and most defensive names in tech today. OUTRAGE OF THE DAY: Cramer again took aim at AIG (AIG). He said it’s time for a big investigation to find out where the billions of dollars invested in the company actually went. MAD MAIL: Shaw Group (SGR) Cramer said he’s not concerned with the debt obligations and still recommends the company. Cramer is still recommending Terra Nitrogen (TNH) and Archer Daniels Midland (ADM) over fertilizer company Potash (POT). LIGHTNING ROUND: (Bullish) SLW; BP; CVX; MRO; KMP; ETP; NUE. (Bearish) CLR; VLO; SPH; KDN; LTD; AKS.
Fast Money position recap- Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Macke Owns (SDS), (UUP), (DIS), (MCD), (WMT), (MSFT); Macke Is Short (YHOO), (TM); Najarian Owns (IYR) Puts; Najarian Owns (MER) Put Spread; Najarian Owns (CVX) Put Spread; Finerman’s Firm Owns (OIH) Puts; Finerman’s Firm Owns (MSFT), (SUN); Finerman’s Firm Is Short (USO), (IYR), (IJR), (MDY), (SPY), (IWM), (RTH), (BBT), (VNO), (COF).
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