Month: November 2007

Tilson is someone whose opinions are worth listening to. He speaks to the Citigroup’s (C) Chairman’s “tarnished” reputation.

 Subscribe in a reader

There was an interesting disclosure in Archer Daniels Midland’s (ADM) conference call. CEO Patricia Woertz addressed two important issues.

Ann Gurkin – Davenport

“Just wanted to spend a little time on getting an update on your work and, besides ethanol, other renewable fuels, switch grass. Maybe are you closer to doing anything in sugar in South America, Can we just get an update there?”

Pat Woertz

“Sure. We’ve talked about diversifying our feedstocks, which would include more palm, sugar, potential biomass to be run not only for first but sort of second-generation biofuels. Mike Pacheco, who is our new Chief Technology Officer, spent a little bit of time in about five slides or so, which you might want to look up on our website, but talked a little bit about.

So to speak, first of all our advantage in the dry mill ethanol world, which, of course, we’re completing two plants adjacent to our wet mills facility. But then kind of spent time on the nearer term focus on commercializing technology, again in a wide range; food, feed, industrial bioproducts and then biofuels.

And when it comes to the biofuels piece, we kind of walked through the spectrum of not only technology conversion, but also feedstocks and also end products, and are attempting at this point.

And I would say by February of next year, we will have a very limited list, or a very highly focus list, I should say, of the kind of opportunities for both conversion feedstock and end products.

A good example is our ConocoPhillips project that we announced, which is looking at biomass to biocrude, so this would be a type of crude oil that could be run in the traditional refineries yet made from biomass at very cost effective prices.

So that’s an example something where we actually have that one up and running. There’s a couple of other collaborative researches we’ve announced, one with the Colorado Consortium, one with Purdue University, et cetera.

So a lot going on but more clarification and I would say fine-tuning of that by early next year.”

Ken Zaslow – BMO Capital Markets

“Would you think about buying ethanol assets rather than building and at what price? And how do you think about it, just because it seems like a lot of these capacity buildups are slowing down a little bit and it seems like there may be opportunity to come in and buy some assets a little bit cheaper than maybe build it?”

Pat Woertz

“Yes, I’ll take that one, Ken. We’re actively engaged in this market all the time, and we know where every plant location is. We kind of have a sense of what locations might be interesting to us. But it would have to be a real value and scale and fit with our network, but it’s not to say we aren’t looking and aware.”

ADM is clearly on the hunt both for acquisition and JV’s to expand its businesses in biofuels. The beginning of next year will be very exciting as Woertz plans to make additional announcements. the best part is they are doing it in a very disciplined manner and not running around buying everything in sight. This is good because ethanol assets will be on the market and a disciplined buyer will be able to take great advantage of the situation.

Aside from that investors ought to mark their calenders for February, something is coming…

 Subscribe in a reader

Thursday’s Picks

Tim Seymour liked Gold Fields (GFI). Open $18.10

Guy Adami recommended shorting the Dow with Short Dow30 ProShares (DOG). Open $59.46

Karen Finerman liked her financials trade; long Goldman (GS) Open $214.18 and short Lehman (LEH). Open $55.96

Pete Najarian liked Evergreen Solar (ESLR). Open $13.65

Wednesday’s Results

Jeff Macke is a buyer of Intel (INTC). Open $27.49 Close $26.90 LOSS

Guy Adami recommended Ford (F).Open $8.63 Close $8.24 LOSS

Karen Finerman would short Lehman Brothers (LEH).Open $59.37 Close $55.96 GAIN

Pete Najarian would short MBIA (MBI). Open $35.65 Close $33.57 GAIN

Since my tracking began on 6/21 (1-1 means one up pick and one down pick and no results from my vacation weeks). The percentage is the percentage of successful picks

Guy Adami= 42-25 = 63%
John Najarian= 13-4 = 76%
Jeff Macke= 47-33 = 58%
Pete Najarian= 30-30 = 50%
Tim Seymore= 4-3 = 57%
Karen Finerman= 26-14 = 63%
Stacey Briere-Gilbert= 3-0 = 100
Ned Riley= 1-0 = 100%
Carter Worth= 0-1 = 0%

 Subscribe in a reader

Locked Phones, Festival, Krispy Kreme

– Apple (AAPL) cannot makenup its mind and had re-locked iPhones

– Here is the latest Festival of Stocks

– The Master’s have nailed it to this point, why doubt them now?

 Subscribe in a reader

While Wachovia (WB) passed on the opportunity to acquire Merrill Lynch (MER), they are in effect acquiring some of its most valuable assets.

Wachovia has been hiring some of Merrill’s most accomplished brokers and traders. since those folks have a large amount of their pay packages in Merrill stock, let’s just say they have taken a significant pay cut with Merrill’s stock down 32% YTD.

Wachovia is offering upfront bonuses to the people they want and reports are that they are getting them in mass.

Wachovia passed on acquiring Merrill’s problems last month, they have jumped at getting the assets that matter, its people.

 Subscribe in a reader

Sprint (S) took the first step to tuning around its annually depressing subscriber numbers, it will sell Google’s (GOOG) Gphone.

It looks like sprint ands T-Mobile (T) will be the first two carriers to handle to new phone. The best part of the phone it that it will not be made by Google. Why is that good? We will be getting phones in all shapes and sizes and price ranges that will carry the software. That means that all types of people are now potential buyers of the product.

For Sprint this means that all it customers are now potential customers and of those that are not, all customers in all demographics could make the switch, not just those who will fork over $599 for the device like when Apple (AAPL) rolled out the iPhone (it now sells for $399).

So, is Sprint a buy? No, not yet. We still need more info. When is the rollout? What is Sprint going to do to fix its customer service issue which are the main reason subscribers have left. If they cannot fix these, any gains they get from the Gphone will be short lived as subscribers will leave for the other carriers that have the phone.

 Subscribe in a reader

UPGRADES
Cephalon CEPH AmTech Research Neutral » Buy
Mindray Medical MR Credit Suisse Neutral » Outperform
Millennium Pharm MLNM Cowen & Co Neutral » Outperform
Gevity GVHR Roth Capital Sell » Hold
Sun Microsystems JAVA Citigroup Sell » Buy
Comstock CRK KeyBanc Capital Mkts Hold » Buy
Research In Motion RIMM Credit Suisse Neutral » Outperform
OdysseyRe ORH Citigroup Sell » Hold
Allos Therapeutics ALTH JMP Securities Mkt Outperform » Strong Buy
CA Inc CA Lehman Brothers Underweight » Equal-weight
Autodesk ADSK Lehman Brothers Equal-weight » Overweight
Portugal Telecom PT UBS Neutral » Buy
American Eagle AEO Citigroup Sell » Hold
MasterCard MA Deutsche Securities Hold » Buy

DOWNGRADES
Universal American UHCO Keefe Bruyette Outperform » Mkt Perform
Sterling Bancorp STL Keefe Bruyette Outperform » Mkt Perform
ACADIA Pharmaceuticals ACAD Brean Murray Hold » Sell
Symantec SYMC Lehman Brothers Overweight » Equal-weight
CompuCredit CCRT JMP Securities Mkt Outperform » Mkt Perform
Cognos COGN CIBC Wrld Mkts Sector Outperform » Sector Perform
Entergy ETR Jefferies & Co Buy » Hold
PepsiAmericas PAS JP Morgan Neutral » Underweight
Quiksilver ZQK Caris & Company Buy » Average
Restoration Hrdwr RSTO Caris & Company Buy » Average
Citigroup C Banc of America Sec Buy » Neutral

 Subscribe in a reader

Wednesday’s Picks

Jeff Macke is a buyer of Intel (INTC). Open $27.49

Guy Adami recommended Ford (F).Open $8.63

Karen Finerman would short Lehman Brothers (LEH).Open $59.37

Pete Najarian would short MBIA (MBI). Open $35.65

Tuesday’s Results

Jeff Macke recommended buying Cisco (CSCO) at the open and selling it by the closing bell. Open $33.08 Close $34.08 GAIN

Guy Adami liked Time Warner (TWX). Open $17.81 Close $18.33 GAIN

Karen Finerman said “Long Goldman (GS) Open $218.39 Close $222.50 GAIN and short Lehman (LEH).Open $58.54 Close $59.37 LOSS

Pete Najarian recommended buying MBIA (MBI) puts. Open $33.23 Close $35.65 LOSS

Since my tracking began on 6/21 (1-1 means one up pick and one down pick and no results from my vacation weeks). The percentage is the percentage of successful picks

Guy Adami= 42-24 = 65%
John Najarian= 13-4 = 76%
Jeff Macke= 47-32 = 56%
Pete Najarian= 30-29 = 51%
Tim Seymore= 4-3 = 57%
Karen Finerman= 25-14 = 61%
Stacey Briere-Gilbert= 3-0 = 100
Ned Riley= 1-0 = 100%
Carter Worth= 0-1 = 0%

 Subscribe in a reader

“Acting smart”, Bloggystyle, “Bad Kid”, Glenn Beck

– Explain to me why acting intelligent and educated is a bad thing?

– Here it is, the best weekly blog aggregation out there..

– The next time you parent piss and moan about you as a kid, show them this

– He gets more money that Brian Williams because he is just BETTER……..

 Subscribe in a reader

Archer Daniels Midland (ADM) released record Q1 results an the news for shareholders was indeed good.

ADM has been hit this year like the rest of the ethanol sector as investors apparently forgot about its other segments. Profits came in at 71 cents a share vs 61 cents last year and 59 cents expectations.

Results:
*Net sales and other operating income increased 36% to $12.8 billion. Increased selling prices resulting from sharp rises in commodity prices accounted for approximately 75% of the increase while higher sales volumes, principally vegetable oil and wheat, accounted for the remaining 25% increase.
*Net earnings increased $38 million due.
*Oilseeds Processing operating profit increased $39 million to $209 million from $170 million last year due principally to strong global demand for protein meal and oil. Worldwide crush volumes increased 2.4% to 7.2 million metric tons.
*Crushing and origination results increased $27 million due principally to better crush margins in North America and improved origination results in South America partially offset by a reduction in crush margins in Europe.
*Value added refining, packaging and biodiesel results increased $13 million principally from improved refining volumes and margins
*Corn Processing operating profit decreased $36 million to $253 million from $289 million last year due principally to lower ethanol sales prices and volumes and higher net corn costs which were partially offset by favorable risk management results.
*Sweeteners and Starches operating profit increased $45 million to $164 million on higher average sweetener and starch selling prices partially offset by higher net corn costs
*Agricultural Services results increased $114 million to $229 million due principally to improved global merchandising and handling results as volatile commodity market conditions, large North American crops and global wheat shortages provided profit opportunities.
* Shares outstanding decreased 2%

In short, ADM is a global commodity play. Not just ethanol or biodiesel like Verasun (VSE) and Pacific Ethanol (PEIX), not just sweeteners, not just food processing, they are all of the above. If corn prices crimp ethanol profits, they can move that into sweeteners and make money there. As wheat prices rise, ADM make money there. As more people require more food, ADM is there the provide the processing for it and profit from it.

The best part? ADM will increase it ethanol production 50% and double it biodiesel production in the next 18 months. The ethanol expansion alone will add 25% to earnings at today’s depressed selling and record high corn prices. All this assumes no acquisitions of which ADM has been vocal about seeking out.

Trading at just 10 times this years and 12 times next years earnings ADM is THE company perfectly positioned to capitalize on the world predominate trends, commodities, biofiels and food.

ADM makes money from all three. sooner or later folks will figure this out.

 Subscribe in a reader