Author: ToddSullivan

(XRIT)- X-Rite Incorporated
(WZEN )- Webzen Inc
(WPL )- W.P. Stewart & Co. Ltd.
(WMK )- Weis Markets, Inc
(WGOV )- Woodward Governor Company
(SLE )- Sara Lee Corporation
(SABA )- Saba Software Inc
(RODM)- Rodman & Renshaw Cap …
(RBS )- Royal Bk Scotland Gro …
(HLX )- Helix Energy Solution …
(GTN )- Gray Television Inc
(GCI )- Gannett Co., Inc
(FCS )- Fairchild Semiconduct
(CTAS )- Cintas Corporation
(COWN )- Cowen Group Inc
(CLMS )- Calamos Asset Mgmt Inc
(CCZ )- Comcast Holdings Corp

Disclosure (“none” means no position):

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In an SEC filing moments ago, Leucadia (LUK) disclosed it ups its stale in Amercredit (ACF) to 25%.

From the filing:

“As of the close of business on February 14, 2008, the Reporting Persons may be deemed to beneficially own collectively an aggregate of 28,661,440 shares of Common Stock, representing approximately 25.0% of the shares of Common Stock presently outstanding. All percentages in this Item 5 are based on 114,599,921 shares of Common Stock outstanding as of January 31, 2008, as set forth in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2007. The Leucadia Reporting Persons and the Ramius Reporting Persons each expressly disclaims beneficial ownership for all purposes of the Common Stock held by the other Reporting Person. The foregoing does not include any shares that are subject to the exchange-traded put options reported in Item 6 of the Original Schedule.”

Leucadia purchased an additional 3,073,664 shares at $13 each on Feb. 13th and 14th.

Disclosure (“none” means no position):None

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I first posted on this here on Sept. 19th. This is a great video, I lack the ability to do this. you have to watch this video..

Disclosure (“none” means no position):Laugh at Cramer

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The Stock Master’s have new picks available at Wall St. Newsletters. Please check them out.

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Gphone, HD, Fear, Stranger than fiction, Bush v. Gore or Clinton V Obama?

– Here is the early buzz on Google’s (GOOG) phone..

– It looks like we have a winner in the battle

– Always buy fear..

– It is true, if you saw it in a movie, you would scoff…

– It will be great to watch Democrats argue this again against themselves..

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Wachovia’s (WB) Chief Risk Officer Donald Truslow said Wednesday mortgages still contribute “significant profits” and will continue to even if losses from bad loans quadruple from current levels.

Lower interest rates are reducing payment increases on ARM’s, which will reduce delinquencies and charge offs, Truslow said. He expects losses in the portfolio to rise this year but he expects lower charges than industry peers, he said.

Much of the current doubts about the bank stem from its Golden West acquisition.

Golden West’s principle business was making “option adjustablerate mortgages” that let borrowers make lower mortgage payments from month to month, deferring interest payments until future years. Two-thirds of Wachovia’s Option ARM borrowers paid the least amount possible in December, little changed from past practice, Truslow said.

Wachovia said Option ARM loans that were more than 90 days late as of Dec. 31 rose to $ 2. 8 billion from $ 675 million a year earlier. The sum was about 2. 3 percent of the $120 billion portfolio. Even at these levels, Golden West is producing significant operating income for the bank.

How significant can this be? In the recent earnings call Truslow said “Most of the builds in the allowance for the Pick-a-Pay product is for the loans in those markets (markets that experienced the most rapid home price appreciation), where the estimated current loan to values have risen or are expected to rise above 95%, were originated over the last three years and are exhibiting a higher likelihood of the fall. So, when you carve out this pool of loans that constitutes about $8 billion of the $120 billion Pick-a-Pay portfolio. After the build in the allowance balances, the resulting reserves loosely allocated for the Pick-a-Pay portfolio total about 56 basis points or a little more than three times the largest historical loss rate that Ken mentioned earlier in the portfolio.”

What did Ken (CEO Kent Thompson)say that Truslow mentioned? “…we have said since the Golden West acquisition, we looked at the Golden West experience of the early 1990s. At that time, California had 10% unemployment and 20% house price depreciation, and charge-offs peaked in 1994 at 20 basis points. Based on our portfolio today, that 20-basis point peak would translate to about $250 million in charge-offs. Our expectations for the this year are that charge-offs will exceed that historical peak. But even if charge-offs reach three or four times that peak, our Pick-a-Pay portfolio will generate very meaningful bottom-line profits in 2008.”

Essentially even if the current housing market is far worse than 1990 and it very well may be, the Golden West deal with still produce significant profits and lets look at it, the loans at risk constitute 6.6% of a total portfolio.

Investors seem to think this amount is far greater. With more rate cuts coming from the Fed, “problem” loans will diminish and others will not materialize.

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

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Wal-Mart de Mexico SAB, (WMMVY) Mexico’s largest retailer and a division of the US Wal-Mart (WMT), said Tuesday it plans to open 205 new stores and restaurants this year, a 12.6% increase.

The plans include developing the “Mi Bodega Express” format, chief executive Eduardo Solorzano said. The format will be more of a neighborhood store than a convenience market and said the results of two such existing stores have been encouraging.

The 2008 expansion plan also includes 17 Wal-Mart Supercenters, 79 Bodega Aurrera stores and 30 VIPs restaurants. Currently Walmex has 1,023 stores and restaurants.

Results in Mexico have been good with the stock of Walmex up 40% the past two years and earnings have grown 32% over that same time period.

This is where Wal-Mart needs to be using its capital, internationally. International sales are growing 20% annually and unlike the US, both the room and expand and customers hunger for the product is vast…

Disclosure (“none” means no position): Long Wal-Mart, none

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Upgrades
Nucor (NUE)- Longbow Neutral » Buy
Chesapeake Energy (CHK)- Wachovia Mkt Perform » Outperform
Unitrin (UTR)- Morgan Keegan Mkt Perform » Outperform
Cameco (CCJ)- RBC Capital Mkts Sector Perform » Outperform
ValueClick (VCLK)- Oppenheimer Perform » Outperform
The Medicines Co (MDCO)- Citigroup Hold » Buy
WGL Holdings (WGL)- UBS Sell » Neutral
Baidu.com (BIDU)- RBC Capital Mkts Sector Perform » Outperform
Safeway (SWY)- UBS Sell » Neutral
Genesee & Wyoming (GWR)- Bear Stearns Peer Perform » Outperform
ValueClick (VCLK)- Robert W. Baird Neutral » Outperform

Downgrades
LivePerson (LPSN)- Northland Securities Outperform » Market Perform
Cooper Cos (COO)- FTN Midwest Buy » Neutral
Oriental Fincl Grp (OFG)- Sterne Agee Buy » Hold
Goldman Sachs (GS)- Sandler O’Neill Buy » Hold
Merrill Lynch (MER)- Sandler O’Neill Buy » Hold
Union Drilling (UDRL)- BMO Capital Markets Outperform » Market Perform
Ingram Micro (IM )- Needham & Co Strong Buy » Buy
Synnex (SNX)- Needham & Co Buy » Hold
Tech Data (TECD)- Needham & Co Strong Buy » Buy
Sonic Solutions (SNIC)- Kaufman Bros Hold » Sell
Dreamworks Animation (DWA)- BMO Capital Markets Outperform » Market Perform
EOG Resources (EOG)- Wachovia Outperform » Mkt Perform
Nautilus Grp (NLS)- BB&T Capital Mkts Buy » Hold
Allscripts (MDRX)- Deutsche Securities Buy » Hold
BE Aerospace (BEAV)- UBS Buy » Neutral
CompuCredit (CCRT)- Credit Suisse Outperform » Neutral
UBS AG (UBS)- Deutsche Securities Buy » Hold
Network Appliance (NTAP)- Citigroup Buy » Hold
The Knot (KNOT)- JP Morgan Overweight » Neut

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Friday’s picks
Jeff Macke recommends shorting the Dow with Shrt Dow30 Proshares $63.21 (DOG).

Guy Adami says “If XTO Energy $55.00 (XTO) secondary prices tonight (Thurs), buy it tomorrow (Friday).”

Karen Finerman prefers Kaiser Aluminum $67.43 (KALU).

Pete Najarian thinks Burlington Northern $89.09 (BNI) is a buy.

Thursday’s Results
Jeff Macke likes Cypress Semiconductor (CY) $23.70 Close $23.82 GAIN

Guy Adami prefers Merck (MRK) $47.57 Close $46.90 LOSS

Karen Finerman recommends BJ Services (BJS) $24.48 as a natural gas play Close $24.78 GAIN

Pete Najarian says short Lehman (LEH) $55.31 Close $54.39 GAIN

2008 Records:
Brian Schaeffer= 0-1
Carter Worth= 0-1
Jon Najarian= 4-1
Jeff Macke= 10-8
Tim Seymore= 2-4
Guy Adami= 10-12
Pete Najarian= 11-8
Karen Finerman= 10-9-1

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

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Here is the significant portion of Bernanke’s testimony on the Hill today

“In part as the result of the developments in financial markets, the outlook for the economy has worsened in recent months, and the downside risks to growth have increased. To date, the largest economic effects of the financial turmoil appear to have been on the housing market, which, as you know, has deteriorated significantly over the past two years or so. The virtual shutdown of the subprime mortgage market and a widening of spreads on jumbo mortgage loans have further reduced the demand for housing, while foreclosures are adding to the already-elevated inventory of unsold homes. Further cuts in homebuilding and in related activities are likely.

Conditions in the labor market have also softened. Payroll employment, after increasing about 95,000 per month on average in the fourth quarter, declined by an estimated 17,000 jobs in January. Employment in the construction and manufacturing sectors has continued to fall, while the pace of job gains in the services industries has slowed. The softer labor market, together with factors including higher energy prices, lower equity prices, and declining home values, seem likely to weigh on consumer spending in the near term. On the other hand, growth in U.S. exports should continue to provide some offset to the softening in domestic demand, and the recently approved fiscal package should help to support household and business spending during the second half of this year and into the first part of next year.

On the inflation front, a key development over the past year has been the steep run-up in the price of oil. Last year, food prices also increased exceptionally rapidly by recent standards, and the foreign exchange value of the dollar weakened. All told, over the four quarters of 2007, the price index for personal consumption expenditures (PCE) increased 3.4 percent, up from 1.9 percent during 2006. Excluding the prices of food and energy, PCE price inflation ran at a 2.1 percent rate in 2007, down a bit from 2006. To date, inflation expectations appear to have remained reasonably well anchored, but any tendency of inflation expectations to become unmoored or for the Fed’s inflation-fighting credibility to be eroded could greatly complicate the task of sustaining price stability and reduce the central bank’s policy flexibility to counter shortfalls in growth in the future. Accordingly, in the months ahead we will be closely monitoring inflation expectations and the inflation situation more generally.”

Simple translation? More rates cuts coming and more good news for banks like Citigroup (C), Wachovia (WB), Bank of America (BAC), Wells Fargo (WFC) and USB (USB).

The full test can be found here:

Disclosure (“none” means no position):Long Citi and Wachovia

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