Author: ToddSullivan

Leucadia (LUK) purchased an additional 1.6 million shares of Jefferies (JEF) on Tuesday, Wednesday and Thursday bringing the total held by the conglomerate to 43.995 million shares

Disclosure (“none” means no position):none

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Wilbur Ross paid $250 million today for 10.65 million share of Assured Guarantee (AGO) to complete a previously agreed to private transaction. It works out to about $23.47 a share an approximate 8% discount to today’s $25.39 closing price

Ross now controls 12.1 million shares.

Details:
1. WLR Recovery Fund IV, L.P. (“Fund IV”), WLR Recovery Fund III, L.P. (“Fund III”), WLR IV Parallel ESC, L.P. (“Parallel Fund”) and WLR/GS Master Co-Investment, L.P. (“WLR/GS Fund”) purchased 10,651,896 shares of common stock in connection with the Issuer’s private placement pursuant to an Investment Agreement dated as of February 28, 2008, between Assured Guaranty Ltd. (“AGO”) and Fund IV (the “Investment Agreement”) for cash consideration of $250,000,000 (the “Initial Investment”). WL Ross & Co. LLC (“WLR”), the investment manager of Fund IV, is entitled to allocate purchase obligations under the Investment Agreement (and any associated rights) among the other investment funds it manages. On May 6, 2008, Fund IV, Fund III and Parallel Fund transferred 768,002 shares of AGO common stock to its affiliate, WLR AGO Co-Invest, L.P. (“Co-Invest Fund”). (Continued Footnote 2)
2. Fund IV is the beneficial owner of 1,379,400 shares of common stock acquired prior to the execution of the Investment Agreement and can be deemed to share voting and dispositive power of an additional 135,100 shares that are owned by Fund III and Parallel Fund, affiliates of Fund IV. (Continued Footnote 3)
3. Co-Invest Fund is the beneficial owner of 768,002 shares of common stock acquired from its affiliates, Fund IV, Fund III and Parallel Fund, in a stock transfer on May 6, 2008. Co-Invest Fund can be deemed to share voting and dispositive power of 1,514,500 shares that were acquired by Fund III, Fund IV and Parallel Fund prior to the execution of the Investment Agreement. (Continued Footnote 4)
4. WLR Recovery Associates IV LLC is the general partner and WL Ross & Co. LLC is the investment manager of Fund IV and Co-Invest Fund. WL Ross Group, L.P. is the managing member of WLR Recovery Associates IV LLC. El Vedado, LLC is the general partner of WL Ross Group, L.P. Wilbur L. Ross, Jr. is the managing member of El Vedado, LLC. Accordingly, Wilbur L. Ross, Jr., El Vedado, LLC, WL Ross Group, L.P., WLR Recovery Associates IV LLC and WL Ross & Co. LLC can be deemed to share voting and dispositive power over the shares to be held by Fund IV and Co-Invest Fund. (Continued Footnote 5)
5. Fund III is the beneficial owner of 130,300 shares of common stock acquired prior to the execution of the Investment Agreement and can be deemed to share voting and dispositive power of an additional 1,384,200 shares that are owned by Fund IV and Parallel Fund, affiliates of Fund III, acquired prior to the execution of the Investment Agreement. (Continued Footnote 6)
6. WLR Recovery Associates III LLC is the general partner and WL Ross & Co. LLC is the investment manager of Fund III. WL Ross Group, L.P. is the managing member of WLR Recovery Associates III LLC. El Vedado, LLC is the general partner of WL Ross Group, L.P. Wilbur L. Ross, Jr. is the managing member of El Vedado, LLC. Accordingly, Wilbur L. Ross, Jr., El Vedado, LLC, WL Ross Group, L.P., WLR Recovery Associates III LLC and WL Ross & Co. LLC can be deemed to share voting and dispositive power over the shares to be held directly by Fund III. (Continued Footnote 7)
7. Parallel Fund is the beneficial owner of 4,800 shares of common stock acquired prior to the execution of the Investment Agreement and can be deemed to share voting and dispositive power of an additional 1,509,700 shares that are owned by Fund III and Fund IV, affiliates of Parallel Fund, acquired prior to the execution of the Investment Agreement. (Continued Footnote 8)
8. INVESCO WLR IV Associates LLC is the general partner of Parallel Fund. INVESCO Private Capital, Inc. is the managing member of INVESCO WLR IV Associates LLC. INVESCO WLR IV Associates LLC and WLR Recovery Associates IV LLC have entered into a parallel investment agreement whereby Parallel Fund will invest on a pro rata basis in the same investments as Fund IV. Accordingly, INVESCO WLR IV Associates LLC, INVESCO Private Capital, Inc. WLR Recovery Associates IV LLC, WL Ross Group, L.P. El Vedado, LLC, WL Ross & Co. LLC and Wilbur L. Ross, Jr. can be deemed to share beneficial ownership over the shares to be held directly by Parallel Fund. (Continued Footnote 9)
9. WLR/GS Fund can be deemed to share voting and dispositive power of 1,514,500 shares that were acquired by Fund III, Fund IV and Parallel Fund, affiliates of WLR/GS Fund, prior to the execution of the Investment Agreement. (Continued Footnote 10)
10. WLR Master Co-Investment GP, LLC is the general partner and WL Ross & Co. LLC is the investment manager of WLR/GS Fund. WL Ross Group, L.P. is the managing member of WLR Master Co-Investment GP, LLC. El Vedado, LLC is the general partner of WL Ross Group, L.P. Wilbur L. Ross, Jr. is the managing member of El Vedado, LLC. Accordingly, Wilbur L. Ross, Jr., El Vedado, LLC, WL Ross Group, L.P., WLR Master Co-Investment GP, LLC and WL Ross & Co. LLC can be deemed to share voting and dispositive power over the shares to be held by WLR/GS Fund. ( Continued Footnote 11)
11. Shares are directly owned by Fund IV, Fund III, Parallel Fund, WLR/GS Fund and Co-Invest Fund. (Continued Footnote 12)
12. Shares directly owned by WLR Recovery Fund IV, L.P., WLR Recovery Fund III, L.P., WLR/GS Master Co-Investment, L.P., WLR IV Parallel ESC, L.P. and WLR AGO Co-Invest, L.P.
Remarks:
Disclosure (“none” means no position):none

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Friday’s Picks
Guy Adami likes Cisco (CSCO) $25.7 as a buy.

Karen Finerman prefers getting long JP Morgan (JPM) $46.05

Pete Najarian suggests picking up shares of Nike (NKE) $64.8

Jeff Macke thinks it time to take profits in Activision (ATVI) $27.7

Thursday’s Results
Jeff Macke recommends trimming any position in the United States Oil Fund (USO) $99.8 Close $100.66 GAIN

Guy Adami prefers to bet against the Dow by getting long Short Dow30 ProShares (DOG) $60.71 Close $60.49 LOSS

Karen Finerman suggests Yahoo (YHOO) $25.64 for 3 days only. Close $26.22 GAIN

Pete Najarian thinks the United States Natural Gas Fund (UNG) $54.25 is a buy. Close $54.0 LOSS

2008 Records:
Brian Schaeffer= 0-1
Carter Worth= 1-1
Jon Najarian= 4-3
Jeff Macke= 35-28-1
Tim Seymore= 16-13
Guy Adami= 36-31
Pete Najarian= 34-30
Karen Finerman= 30-29-1
Joe Terrenova= 1-1

2007 Results (Since 6/21):
Guy Adami= 58-46 = 56%
Jeff Macke= 60-40 = 60%
Pete Najarian= 49-41 = 54%

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In October I wrote a post about Direct TV (DTV) and said “at $26 shares are fairly priced…should they dip to $20 again, you have a great buying opportunity”. Well, in Jan. 2008 they did just that and are up 35% since then.

After recent results, shares have even more upside. Back in October the jist of my post was that the scope of HD offerings from Direct TV vs cable would bring in scores of new customers. Since then, the company has dropped the price of the HD DVR it sells from $399 t $199 tempting even me to get it.

Then this week they announced they added 275,000 net U.S. subscribers, well above analyst expectations of about 180,000, and increased its domestic subscriber base by 5.2% to 17.1 million.

They also announced a $2.5 billion dollar share repurchase plan (8% of market cap).

There are other potential earnings drivers down the road such as a plan for video-on-demand and and internet over power line that are testing. Conveniences of programming your DVR by cell phone or computer also give customers a wide array of features.

Shares could be bought on the next dip and held for the long term..

Disclosure (“none” means no position):Customer only, None

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Like I said a month ago, “get used to it.”

Net Sales Growth, April.
Wal-Mart Stores 6.5%
Sam’s Club 10.4%
International 18.4%
Total Company 9.8%

4 Week Comp Sales:
Wal-Mart 2.6%
Sam’s Club 6.6%
Total Company 3.2%

Sales Strength:
* Flat-panel TVs, with additional strong performance in April for video games and gaming systems.
* Food, dry grocery and consumables
* Allergy season helped drive sales of prescription and over-the-counter medications.
* Apparel sales continued to recover, despite cold weather, with strengths in basics and consumables.

Guidance:
“We estimate U.S. comparable store sales, excluding fuel, for the May four-week period to be between flat and two percent,” said Tom Schoewe, executive vice president and chief financial officer,

Like I have said before, ignore the guidance as a “news event”. It has been the same for over a year now month after month. If it ever changes then you have something.

Now, Wal-Mart is know as the bargain place to shop. In past slowdowns this has helped the chains customers. What has hurt is that Wal-Mart was not necessarily a “nice place” to shop. When customers felt more secure financially, they abandoned the stores for alternatives like Target (TGT). Wal-Mart is rectifying that. Those who live near a store that has been remodeled know what I am talking about. The shopping experience is leaps and bound better than what is was prior.

The current slowdown will draw more people to the stores and unlike post recoveries, the changes in them will keep them.

Disclosure (“none” means no position):Long WMT, None

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The Owens Corning (OC) earnings call gave investors even more reason to be optimistic that the earnings release did.

2008 Stated Goals Being Met:
* Will reduce our costs by $100 million. That program is fully implemented.
* Composites operating margins would approach double digits for 2008. They were 9.6% in the first quarter.
* Achieve $30 million in acquisition synergies. That’s on track.
* Continue to manage a strong balance sheet. Finished the quarter with net debt of slightly more than $2 billion, a good result.
* Remain confident in guidance of annual adjusted EBIT of $240 million for 2008.

Results:
* Composite Solutions business grew more than 80% representing about half of Owens Corning’s total sales
* Are close to expanding composites presence in Russia and also in China. You’ll hear more about those opportunities in the future.
* If you went down to your local, retail big box, Home-Depot (HD) or Lowe’s (LOW) and buy insulation there, you can probably reinsulate your attic for $200 or $300 worth of material.
* Some of the pricing actions for the late first quarter and second quarter are beginning to show up and they are starting to see some positive pricing in their books. This is the same theme stated in the Sherwin Williams (SHW) call.

Like Sherwin, Owens has diversified its earnings profile from one dependent on US housing to one with an international profile. While the decimation of the US housing market has hurt earnings, the evisceration of them that would have taken place without management’s moves has been avoided.

While housing still hurts, Sherwin has continued to grow earnings in spite of it and Owens (about a year behind SHW in diversifying) suffered only an 8% decline. As housing both stabilizes and then turns, we can expect significant upside for both.

Disclosure (“none” means no position):Long OC, SHW, None

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Workers, The Market, Disney, BK

– No recession here

– Or here

– Or here

– Or here

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Workers, The Market, Disney, BK

– No recession here

– Or here

– Or here

– Or here

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Visit the ValuePlays Bookstore for Great Investing Books

This work is licensed under a Creative Commons Attribution 2.5 License.

Thursday’s Picks
Jeff Macke recommends trimming any position in the United States Oil Fund (USO) $99.8

Guy Adami prefers to bet against the Dow by getting long Short Dow30 ProShares (DOG0 $60.71

Karen Finerman suggests Yahoo (YHOO0 $25.64 for 3 days only.

Pete Najarian thinks the United States Natural Gas Fund (UNG) $54.25 is a buy.

Wednesday’s Results
Jeff Macke recommends the Financial Select Sector SPDR (XLF) $27.52 Close $26.53 LOSS

Guy Adami prefers Merck (MRK) $38.84 Close $39.01 GAIN

Pete Najarian suggests Apple (AAPL) $186.66 Close $182.59 LOSS

Karen Finerman thinks Kaiser Aluminum (KALU) $70.87 is a buy ahead of earnings. Close $73.94 GAIN

2008 Records:
Brian Schaeffer= 0-1
Carter Worth= 1-1
Jon Najarian= 4-3
Jeff Macke= 34-28-1
Tim Seymore= 16-13
Guy Adami= 36-30
Pete Najarian= 34-29
Karen Finerman= 29-29-1
Joe Terrenova= 1-1

2007 Results (Since 6/21):
Guy Adami= 58-46 = 56%
Jeff Macke= 60-40 = 60%
Pete Najarian= 49-41 = 54%

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Jane Genova has poster the details on how to tune in the RISC webcast of oral arguments in the the State v Sherwin Williams (SHW) and NL Industries (NL).

Follow this link:

Disclosure (“none” means no position):Long SHW, none

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