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Author: ToddSullivan

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Wednesday's Upgrades and Downgrades

Post author By ToddSullivan
Post date April 16, 2008

Upgrades
Smithfield Foods (SFD)- BB&T Capital Mkts Hold » Buy
Eaton (ETN)- Oppenheimer Underperform » Perform
Freeport-McMoRan (FCX)- HSBC Securities Neutral » Overweight
Arcelor Mittal (MT)- Citigroup Hold » Buy
RehabCare (RHB)- Stifel Nicolaus Hold » Buy
Massey Energy (MEE)- JP Morgan Neutral » Overweight

Downgrades
Aqua America (WTR)- Hilliard Lyons Buy » Long-term Buy
Crocs (CROX)- Wedbush Morgan Strong Buy » Hold
Crocs (CROX)- DA Davidson Buy » Neutral
Radiant Systems (RADS)- Wedbush Morgan Buy » Hold
Manitowoc (MTW)- Sterne Agee Buy » Hold
Pride Intl (PDE)- Deutsche Securities Buy » Hold
CoBiz (COBZ)- Keefe Bruyette Outperform » Mkt Perform
Hercules Offshore (HERO)- Deutsche Securities Buy » Hold
Manitowoc (MTW)- Banc of America Sec Buy » Neutral
Affymetrix (AFFX)- Cowen & Co Outperform » Neutral
Affymetrix (AFFX)- Leerink Swann Outperform » Mkt Perform
Novatel Wireless (NVTL)- Morgan Joseph Buy » Hold
Telefonos de Mex (TMX)- JP Morgan Neutral » Underweight
Conexant (CNXT)- Oppenheimer Outperform » Perform
Novatel Wireless (NVTL)- Oppenheimer Outperform » Perform
Affymetrix (AFFX)- Bear Stearns Outperform » Underperform
VCG Holding (VCGH)- Merriman Curhan Ford Buy » Neutral
Blockbuster (BBI)- JP Morgan Overweight » Neutral
Emulex (ELX)- Citigroup Buy » Sell
EMC Corp (EMC)- Citigroup Buy » Hold
Noble Corp (NE)- Deutsche Securities Buy » Hold
Rowan Cos (RDC)- Deutsche Securities Buy » Hold
Diamond Offshore (DO)- Deutsche Securities Buy » Hold
Ensco (ESV)- Deutsche Securities Buy » Sell
Transocean (RIG)- Deutsche Securities Hold » Sell
Bill Barrett (BBG)- Lehman Brothers Overweight » Equal-weight
Concho Resources (CXO)- Lehman Brothers Overweight » Equal-weight

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"Fast Money" for Wednesday

Post author By ToddSullivan
Post date April 15, 2008

Wednesday’s Picks
Guy Adami likes Apple (AAPL)s $148.38

Karen Finerman recommends Domtar (UFS) $6.64

Pete Najarian prefers Noble Corp. (NE) $54.26

Jeff Macke thinks IBM (IBM) $117.17 is a sell.

Tuesday’s Results
Jeff Macke likes Citigroup (C) $22.51 Close $22.80 GAIN

Karen Finerman prefers Microsoft (MSFT) $28.06 Close $28.25 GAIN

Pete Najarian recommends Halliburton (HAL) $44.08 Close $44.53 GAIN

Guy Adami thinks Wachovia (WB) $25.55 is a buy with an extraordinarily tight stop. Close $25.42 LOSS

2008 Records:
Brian Schaeffer= 0-1
Carter Worth= 0-1
Jon Najarian= 4-3
Jeff Macke= 28-20-1
Tim Seymore= 15-10
Guy Adami= 26-25
Pete Najarian= 28-22
Karen Finerman= 21-24-1
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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Sears (SHLD) One-Ups Wal-Mart (WMT) For Stimulus Checks

Post author By ToddSullivan
Post date April 15, 2008

The race for your rebate check is on for retailers and it looks as though Sears may have taken the lead from Wal-Mart for now.

Back in January, Wal-Mart WMT) announced their plan to help consumers spend their upcoming rebate checks from the government.

Today Sears Holdings (SHLD) announced its plan and it is better for the consumer.

Sears will:
“When customers bring their stimulus checks to a Sears or Kmart cash register, they can convert the amount of the check into gift cards, plus receive a bonus gift card worth an additional 10 percent. To be eligible, the amount of gift cards purchased must be equal to the full value of the stimulus check. The gift cards can be redeemed at any Sears, Kmart or Lands’ End retail stores or online at sears.com or landsend.com. The promotion is scheduled to last from May 14 to July 19, 2008.”

“Even with a weak economic outlook, a recent survey conducted by Sears suggests that Americans still want to make small changes in their homes. While nearly all respondents agreed that in the current economy it is more important than ever to get the best value for your money, three out of five people said that despite financial concerns, they are still investing in small home improvements that can make a difference.”

“Beginning May 1, customers can learn more about this offer in stores, as well as in Sears Holdings’ circulars, online, targeted emails and direct mail pieces. The gift cards and bonus cards have no expiration and no fees.”

Like Wal-Mart’s plan the card can be used for groceries at Kmart and with the additional of Sears, the spectrum of quality lawn and garden tools and clothing is multiples of Wal-Mart’s offerings.

Let’s not forget the 10% kicker for consumers also. The significance of that cannot be understated. I will get $2100 back in my check, if needed a new washer or dryer, my total Sears card would be for $2310, bonus included. That is a nice chunk of change and would lead me there to get them without question.

Wal-Mart got the jump on retailers in January but Sears today took that and raised the bar a notch. One has to wonder why the silence from Target (TGT), JC Penny (JCP) and other retailers as the date approaches. Even though they were first out of the gate, it is possible that Wal-Mart was just a little too early with their announcement as the checks will not begin to roll off the presses for another month.

I also do not think Wal-Mart will not have some sort of answer….they will.

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

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McCain’s Economic Plan (video)

Post author By ToddSullivan
Post date April 15, 2008

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McCain's Economic Plan (video)

Post author By ToddSullivan
Post date April 15, 2008

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Recession Conversation (video)

Post author By ToddSullivan
Post date April 15, 2008

This is a very interesting conversation about the current economy.

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Howard Schultz is Delusional

Post author By ToddSullivan
Post date April 15, 2008
2 Comments on Howard Schultz is Delusional

Starbucks (SBUX) Chairman and now CEO did an interview with Business Week and a read of it shows a stunning lack of grasp of reality.

The “A” are Schultz answers
Q: So people have been spending less on $4 lattes?

A:No question about it. Our research suggests they’re not going anywhere else; they’re just coming to us less frequently. So we have to do everything we can to demonstrate to our customers that Starbucks is an affordable luxury.

OK. So, if they are not going anywhere else and just not coming to you Howard, how can we explain the increasing traffic counts at McDonalds for breakfast and coffee each quarter? Is McDonalds cloning existing customers? I can give you the names of a few dozen who have made the switch.

Are former Starbucks customers just not drinking coffee anymore?

Q:Earlier you said to me, the media has made such a huge deal about all of Starbucks’ competition. So tell us straight out what the story is here. Have you been hurt by the premium coffee sold at McDonald’s (MCD) or by Dunkin’ Donuts getting more aggressive?

A:First off, I don’t think there’s premium coffee being sold at those fast-food places. Second, this is not about the competition. Our customers are not buying a hamburger and fries and then going to get espresso. That’s not the case. What is the case is that there’s a downturn in the economy. As a result, people are coming in less often than they did a year ago. But we control our own destiny. And what we strongly believe is if we take care of our customers, produce the kind of product that is distinctive, and exceed their expectations, we’re going to be in great shape. But we’re going to couple that with relentless innovation that you’ll begin to see in the marketplace in the months ahead.

Wow…. “It’s not about the competition”…….That is stunningly reminiscent to a quote from former CEO Jim Donald just over a year ago when the stock was trading near all-time highs.

Sorry Howard but despite what you think, you do not exist in a consumer category of one.
While your customers are not “getting burgers and fries” with their coffee as you so condescendingly pontificate, they are going there for COFFEE. Based on results for the past year, they are doing so in droves.

When you started Starbucks you were a pioneer in the industry. Now, it is crowded with competition. It just cannot be denied.

I am sure there is a small segment of the population that can tell the difference between coffee roasts just like there is one that can do so with wine. If we admit that we also have to admit the overwhelming majority of the population cannot. This is ok if you have 1,000 restaurants nationally that cater to an elite crowd but when you have 14,000, it is the tastes and preferences of the majority that control your destiny. Schultz has not realized this or refuses to admit it.

Let’s be honest here. If I buy a vente caramel macchiado or a hazelnut latte, by the time the milk, syrup and caramel are poured over the espresso, if there really anyone who can tell if it is “super premium”, “premium” or just “really good” espresso beans? I doubt it and would really question anyone who said they could. Again, there may be a select few who can, but they will not support a 14,000 store chain.

That being true, then we now have a generic aspect to the product. If the product becomes generic, then price rules.

Schultz’s refusal to admit he has competition is very bad news for shareholders. It means that there won’t be any moves from the company to address to the apparent non-existing competition anytime soon. Too bad….

Here is the whole interview.
Disclosure (“none” means no position):Long MCD, none

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Tags mcd, sbux

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Pershing Updates Borders (BGP) Stake

Post author By ToddSullivan
Post date April 15, 2008

Bill Ackman files a 13-D/A regarding his holdings in borders (BGP).

From the 13D/A filed yesterday:

“As of April 9, 2008, as reflected in this Amendment No. 7, the Reporting Persons are reporting beneficial ownership on an aggregate basis of 20,147,880 shares of Common Stock (approximately 28.8% of the outstanding shares). This includes warrants covering 9,550,000 shares of Common Stock (as further described below in Item 4). The Reporting Persons own cash settled, total return equity swaps covering 4,805,463 notional shares of Common Stock (as previously disclosed). The notional shares that underlie such swaps are not included in the totals set forth in the charts earlier in the Schedule 13D. The aggregate economic exposure of the Reporting Persons to shares of Common Stock, including the aggregate shares of Common Stock beneficially owned by the Reporting Persons plus the aggregate notional shares underlying such swaps, represents approximately 35.6% of the sum of the outstanding shares of Common Stock and the shares of Common Stock underlying such warrants.”

Disclosure (“none” means no position):Long BGP

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Tuesday’s Links

Post author By ToddSullivan
Post date April 15, 2008

Loyal reader, More Blockbuster and Circuit City

– Jeff has decided to try his hand at blogging. Check him out here

– More doubters

– And more

– And finally

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Tuesday's Links

Post author By ToddSullivan
Post date April 15, 2008

Loyal reader, More Blockbuster and Circuit City

– Jeff has decided to try his hand at blogging. Check him out here

– More doubters

– And more

– And finally

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Tuesday’s Upgrades and Downgrades

Post author By ToddSullivan
Post date April 15, 2008

Upgrades
Boeing (BA)- AmTech Research Sell » Neutral
Hasbro (HAS)- Needham & Co Hold » Buy
Gol Intelligent Airlines (GOL)- Deutsche Securities Hold » Buy
WD-40 Company (WDFC)- JP Morgan Underweight » Neutral
Pinnacle Airlines (PNCL)- JP Morgan Underweight » Overweight
Eaton Vance (EV)- JP Morgan Underweight » Neutral
PETsMART (PETM)- Banc of America Sec Neutral » Buy
Marsh McLennan (MMC)- Keefe Bruyette Mkt Perform » Outperform

Downgrades
Cybex (CYBI)- Dougherty & Company Buy » Neutral
Brown-Forman (BF.B)- HSBC Securities Overweight » Neutral
Perini (PCR)- BMO Capital Markets Outperform » Market Perform
News Corp (NWS)- Bernstein Outperform » Mkt Perform
Cymer (CYMI)- Credit Suisse Neutral » Underperform
Fastenal (FAST)- Piper Jaffray Buy » Neutral
ABB Ltd (ABB)- Lehman Brothers Overweight » Equal-weight
TriZetto Group ( TZIX)- Jefferies & Co Buy » Hold
General Electric (GE)- Oppenheimer Outperform » Perform
General Electric (GE)- Bear Stearns Outperform » Peer Perform
First Financial (FFBC)- Keefe Bruyette Mkt Perform » Underperform
SPX Corp (SPW)- Deutsche Securities Buy » Hold
ActivIdentity (ACTI)- Soleil Buy » Hold

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Tuesday's Upgrades and Downgrades

Post author By ToddSullivan
Post date April 15, 2008

Upgrades
Boeing (BA)- AmTech Research Sell » Neutral
Hasbro (HAS)- Needham & Co Hold » Buy
Gol Intelligent Airlines (GOL)- Deutsche Securities Hold » Buy
WD-40 Company (WDFC)- JP Morgan Underweight » Neutral
Pinnacle Airlines (PNCL)- JP Morgan Underweight » Overweight
Eaton Vance (EV)- JP Morgan Underweight » Neutral
PETsMART (PETM)- Banc of America Sec Neutral » Buy
Marsh McLennan (MMC)- Keefe Bruyette Mkt Perform » Outperform

Downgrades
Cybex (CYBI)- Dougherty & Company Buy » Neutral
Brown-Forman (BF.B)- HSBC Securities Overweight » Neutral
Perini (PCR)- BMO Capital Markets Outperform » Market Perform
News Corp (NWS)- Bernstein Outperform » Mkt Perform
Cymer (CYMI)- Credit Suisse Neutral » Underperform
Fastenal (FAST)- Piper Jaffray Buy » Neutral
ABB Ltd (ABB)- Lehman Brothers Overweight » Equal-weight
TriZetto Group ( TZIX)- Jefferies & Co Buy » Hold
General Electric (GE)- Oppenheimer Outperform » Perform
General Electric (GE)- Bear Stearns Outperform » Peer Perform
First Financial (FFBC)- Keefe Bruyette Mkt Perform » Underperform
SPX Corp (SPW)- Deutsche Securities Buy » Hold
ActivIdentity (ACTI)- Soleil Buy » Hold

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Borders 10-K notes

Some information from the just-released Borders (BGP) 10-K.

* Achieved average sales per square foot of $228 and average sales per superstore of $5.6 million.
* International superstores, which operate under the Borders name, achieved average sales per square foot of $381 and average sales per superstore of $8.3 million in 2007.
* Waldenbooks Specialty Retail operates stores under the Waldenbooks, Borders Express and Borders Outlet names, as well as Borders-branded airport stores. Average sales per square foot were $277 and average sales per store were $1.1 million for 2007
* Borders leases all of its stores. Borders store leases generally have an average initial term of 15 to 20 years with multiple three- to five-year renewal options. At February 2, 2008, the average unexpired term under Borders existing store leases in the United States was 9.8 years prior to the exercise of any options. The expiration of Borders leases for stores open at February 2, 2008 are as follows:
* Waldenbooks Specialty Retail store leases generally have an initial term of five to 10 years, and in certain cases posses renewal terms of one to three years. At present, the average unexpired term under Waldenbooks Specialty Retail existing store leases is approximately 1.7 years.
* Borders has $92.2 million remaining on a share repurchase authorization but cannot repurchase them if borrowings under credit agreement exceed 90%.
* Borders Rewards has grown to over 25 million members.

Again, nothing earth shattering which is a nice disclosure sign.

Disclosure (“none” means no position):Long BGP

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"Fast Money" for Tuesday

Post author By ToddSullivan
Post date April 14, 2008

Tuesday’s Picks
Jeff Macke likes Citigroup (C) $22.51

Karen Finerman prefers Microsoft (MSFT) $28.06

Pete Najarian recommends Halliburton (HAL) $44.08

Guy Adami thinks Wachovia (WB) $25.55 is a buy with an extraordinarily tight stop.

Monday’s Results
Jeff Macke recommends making a list of names you like and buying the dips. He’s looking at Intel (INTC)$21.24 and Wal-Mart (WMT) $54.8 Close $55.15 GAIN

Guy Adami prefers Apple (AAPL) $147.14 around $145. Close $147.78 GAIN

Tim Seymour thinks the UltraShort MSCI Emerging Markets ProShares (EEV) $75.55 is a buy as a bet against the emerging markets. Close $75.85 GAIN

Jon Najarian recommends shorting eBay (EBAY) $30.98 Close $31.37 LOSS

2008 Records:
Brian Schaeffer= 0-1
Carter Worth= 0-1
Jon Najarian= 4-3
Jeff Macke= 27-20-1
Tim Seymore= 15-10
Guy Adami= 26-24
Pete Najarian= 27-22
Karen Finerman= 20-24-1
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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Lampert Ups Autozone (AZO) Stake

Post author By ToddSullivan
Post date April 14, 2008

In a just released SEC filing Sears Holdings (SHLD) Chairman Eddie Lampert disclosed through his RBS and ESL hedge funds he has increased his AutoZone (AZO) holdings to 22.669 million shares. This is up from 22.2 million just last week. The purchases were made 4/9 and 4/10 at about $116 a share.

Lampert now holds 36% of the total outstanding

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

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