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Leucadia Now Owns 19.4% of AmeriCredit

In an SEC filing this morning, Leucadia (LUK) disclosed its ownership stake in AmeriCredit (ACF).

From the filing:
As of the close of business on the date of this Schedule 13D (1/29), the
Reporting Persons may be deemed to beneficially own collectively an aggregate of
22,159,300 shares of Common Stock, representing approximately 19.4% of the
shares of Common Stock presently outstanding. All percentages in this Item 5 are
based on 114,162,314 shares of Common Stock outstanding as of October 31, 2007,
as set forth in the Company’s Quarterly Report on Form 10-Q for the quarterly
period ended September 30, 2007.

Disclosure (“none” means no position): None

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Dow Earnings: Vanilla

Dow Chemical (DOW)reported earning this mornings and the results were as expected.

— Sales for Q4 set a new Company record, rising 16
percent from the same period last year to $14.2 billion.
— Earnings for the quarter were $0.49 per share. Excluding certain items,
earnings for the quarter were $0.84 per share. Earnings in the fourth
quarter of 2006 were $1.00 per share. Excluding certain items,
earnings for that quarter were $0.98 per share (see supplemental table
at the end of the release for a description of these items).
— Compared with the same quarter of 2006, price increased 12 percent,
with gains in all operating segments and geographic areas.
— Volume was up 4 percent compared with the fourth quarter of last year,
with improvements in all operating segments and in every geographic
area outside of North America. Asia Pacific recorded volume gains of 10
percent, and Europe 6 percent.
— Purchased feedstock and energy costs climbed $1.7 billion compared with
the fourth quarter of last year, the largest year-over-year increase in
the Company’s history.
— Equity earnings increased 21 percent year-over-year, totaling $294
million for the quarter.

2007 Full-Year Highlights
— 2007 sales increased 9 percent compared with 2006, setting a new record
for the Company of $53.5 billion.
— Dow reported full-year earnings of $2.99 per share. Excluding certain
items, earnings for the year were $3.76 per share. Earnings for 2006
were $3.82 per share. Excluding certain items, earnings for 2006 were
$4.25 per share (see supplemental table at the end of the release for a
description of these items).
— Equity earnings rose 17 percent compared with 2006, to $1.1 billion,
exceeding $1 billion for the first time in the Company’s history.

CEO Andrew Liveris said, “This was a good quarter … a quarter in which our entire organization responded with speed and discipline to an unprecedented run-up in feedstock and energy costs, raising price to mitigate much of the $1.7 billion year over year increase. And our focus on price did not come at the expense of volume. Volume gains were reported in all operating segments, a testament to our price/volume management capabilities.”

2007 is in the books and 2008 is what we need to focus on now. I had a number of questions yesterday and hopefully on the call at 10 am today they will be answered.

All things considered, with the explosion of oil prices in 2008, management did an outstanding job not letting costs destroy the year. Liveris called 2007 a “transformational year” and as so far as the structure of the company goes, it was. 2008 needs to be the “transformational year” for putting the plan into action and delivering on the bottom line.

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

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Sears.com Emphasis a Logical One

for anyone following my retail online tracing posts here, this move by Sears Holdings (SHLD) makes perfect sense.

Sears.com tapped an ex-Microsoft (MSFT) executive to the head of Sears’ newly formed online division. The division will be one of the 5 announced as part of the retailer’s recent realignment. James Barr, a 12-year Microsoft executive and general manager of MSN Shopping and Marketplaces, will take over the online unit effective Feb. 2 as a senior vice president of Sears Holdings.

Barr joins former Walmart.com (WMT) executive, Neil Day, the newly-named Chief Technology Officer for the Sears.com group.

The Sears.com and kmart.com combination ranked just behind both Walmart.com and target.com (TGT) during this recent holiday season. They consistently outdid rivals like JC Penny (JCP), Kohls (KSS) and Macy’s (M). This is a area that Sears is seeing results and to place an emphasis here as they are freeing up their brands to chase results on their own makes perfect sense.

The addition of a walmart.com executive has to encourage investors as the Wal-Mart site has dominated the landscape the for quite some time.

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

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Harley Davidson’s Earnings Call: 2008 OK

Here are some of the more notable elements of Harley Davidson’s (HOG) conference call.

International shipments:

* 22,114 units were up 20.5% compared to the same quarter last year.
* International shipments grew to 27.2% of total worldwide fourth quarter shipment volume compared to 19.8% in the fourth quarter of 2006.
* International shipments for the full year grew to 26.9% of the mix, up from 21.8% in 2006
* Europe was once again strong with a year-over-year sales increase of 10.9%, Japan was up 4.5%, Canada was up 45.9%, or 605 units, primarily due to better product availability during the quarter. The remaining 45 or so countries where motorcycles are sold were up a collective 28.6% for the quarter.

From the Q % A:
James Hardiman – FTN Midwest
Okay, and then my second question, I was wondering if you could just flesh out a little bit more sort of how you’ve been able to remain so strong internationally, and I guess especially in the Canadian market, and where you expect that to go if — you know, when you look at some of the economies of some of the countries that you do business in, are they correlated to the U.S. market? Sort of what you are seeing internationally and whether or not we can expect that to continue?

James L. Ziemer
I’ll answer that question — on retail sales outside the U.S., we are strong in all the markets outside the U.S. without exception when you look at it on a total year basis, whether it be Canada or Europe or Australia or Japan, and the markets of Latin America.

That’s driven by many different things. Their economies are doing well. Certainly the weak dollar has contributed to some of that but as we continue to build a distribution network and we acquire some of our independent distributors over the last five, six years, I mean, we are doing things and rationalizing the dealer networks in many of the countries we sell into. We’ve acquired in the last year the Australian distributors. We have just recently acquired the distributorship in Mexico, so we continue to take on that strategy so that as we own the distribution network, we can operate that for the long-term health of the business and sell customers the experience that helps make us strong and differentiates us from our competition.

Q & A 2008 Outlook:
Ed Aaron – RBC Capital Markets

A couple of questions; first, you said recently that your guidance for ’08 sort of operated under the assumption that 2008 economic environment would be similar to 2007, but you didn’t change your guidance. Is that still your assumption or are you now planning for a weaker economy in the U.S. but feel better about your international business?

Thomas E. Bergmann
Just to add on, I think Jim’s got it. There is no doubt we think 2008 is going to be a challenging year for us and for the industry. And you know, when we put the guidance out, things — probably the indications have gotten a little, have deteriorated a little further, so it’s going to be a challenging year.

But as Jim said, our guidance was built around a cautious approach to the year and we are going to look at the environment very closely and watch it and we’ll make the appropriate changes if we need to at any point in time.

But the good thing is the international business, as you mentioned, continues to do very well and we are continuing to be very pleased with the progress we are making in the markets and it continues to deliver strong results and we see that continuing in 2008.

In response to another question:
Thomas E. Bergmann
Clearly there’s a lot that goes into the bottom line of delivering our EPS guidance and that’s really management’s challenge this year, is to work through the challenging economy here in the U.S., continue to grow our international business, allocate capital smartly, and the share repurchase activities or other business initiatives to drive growth. And we’re prepared to do that. It’s going to be a challenging year but at this point in time, with all the activities around the 105th and international, we’re at this point in time comfortable with the guidance.

Bottom line? HOG expects the US to be anemic again in 2008 but international operations to continue their upward surge. I have confidence in the 4% to 7% EPS growth estimates and that means shares will trade below 10 times 2008 earnings and continue to yield over 3% at this levels. For a company like HOG, that is a steal.

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

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Tuesday’s Upgrades and Downgrades


UPGRADES
NuVasive (NUVA)= SMH Capital Short » Neutral
Dime Community (DCOM)= FTN Midwest Neutral » Buy
Pantry (PTRY)= William Blair Mkt Perform » Outperform
WNS (WNS)= Janney Mntgmy Scott Neutral » Buy
Zoran (ZRAN)= Canaccord Adams Sell » Hold
Bill Barrett (BBG)= Deutsche Securities Hold » Buy
First Charter Corp. (FCTR)= FTN Midwest Neutral » Buy
DaVita (DVA)= Piper Jaffray Sell » Neutral
Whiting Petroleum (WLL)= RBC Capital Mkts Underperform » Sector Perform
UAL Corp. (UAUA )=Soleil Hold » Buy
EnergySolutions (ES0= JP Morgan Neutral » Overweight
Canon (CAJ)= Lehman Brothers Equal-weight » Overweight
Exterran Holdings (EXH)= Citigroup Hold » Buy
Tidewater (TDW)= JP Morgan Neutral » Overweight
Western Refining (WNR)= Credit Suisse Underperform » Neutral
Tesoro (TSO)= Credit Suisse Neutral » Outperform
Holly (HOC)= Credit Suisse Underperform » Neutral
Caterpillar (CAT)= Bear Stearns Peer Perform » Outperform
Eastman Chem (EMN)= UBS Neutral » Buy
Kimberly-Clark (KMB)= Lehman Brothers Equal-weight » Overweight
General Mills (GIS)= Citigroup Hold » Buy
Kellogg (K )= Citigroup Hold » Buy
Merck (MRK)= UBS Neutral » Buy
Plantronics (PLT)= JP Morgan Underweight » Neutral
Gentex (GNTX )= UBS Sell » Neutral
Weatherford (WFT)= Friedman Billings Mkt Perform » Outperform
Medarex (MEDX)= Jefferies & Co Hold » Buy
Cytec (CYT)= Jefferies & Co Hold » Buy
ICF International (ICFI)= Jefferies & Co Hold » Buy
South Fincl Group (TSFG)= Keefe Bruyette Underperform » Mkt Perform

DOWNGRADES
RC2 (RCRC)= Wedbush Morgan Buy » Hold
Old Second Bancorp Inc. (OSBC)= Sandler O’Neill Hold » Sell
H.B. Fuller ( FUL)= KeyBanc Capital Mkts Aggressive Buy » Buy
Raven Industries (RAVN)= Piper Jaffray Neutral » Sell
Allied Irish Banks, plc. (AIB)= UBS Neutral » Sell
Bank of Ireland (IRE)= UBS Buy » Neutral
Molina Healthcare (MOH)= Deutsche Securities Hold » Sell
Noble Corp (NE)= JP Morgan Overweight » Neutral
Shire Pharm (SHPGY)= Bernstein Mkt Perform » Underperform
Walgreen (WAG )= Citigroup Hold » Sell
Fed Investors (FII+ Keefe Bruyette Outperform » Mkt Perform

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"Fast Money" for Tuesday


Tuesday’s Picks
Guy Adami recommends the NYSE Euronext (NYX) $78.04

Karen Finerman prefers Goldman Sachs (GS) $196.25

Pete Najarian likes Nasdaq (NDAQ) $44.07

Monday’s Results
Tim Seymour recommends buying Sasol (SSL) $43.11 Close $44.90 GAIN

Guy Adami prefers United Technologies (UTX) $72.75 Close $73.73 GAIN

Karen Finerman likes Golar (GLNG) $17.57 Close $19.38 GAIN

Pete Najarian thinks investors should trade alongside Warren Buffet and buy Burlington Northern (BNI) $81.80 Close $83.14 GAIN

2008 Records:
Brian Schaeffer= 0-1
Carter Worth= 0-1
Jon Najarian= 3-1
Jeff Macke= 6-4
Tim Seymore= 2-1
Guy Adami= 4-7
Pete Najarian= 3-5
Karen Finerman= 5-4

2007 Results (Since 6/21):
Guy Adami= 58-46 = 56%
Jeff Macke= 60-40 = 60%
Pete Najarian= 49-41 = 54%
Karen Finerman= 40-30 = 57%

Disclosure (“none” means no position):

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52 Week Low’s 1/28


(YDNT) Young Innovations Inc
(XPRT ) Lecg Corp
(VTO ) Vitro, Sociedad Anonima
(VNDA) Vanda Pharmaceuticals Inc
(TPTX ) Torreypines Therapeut …
(THOR ) Thoratec Corp
(TGAL ) Tegal Corp
(SYNP ) Synplicity Inc
(LNCR ) Lincare Holdings Inc
(LIMC ) Limco Piedmont Inc
(IKN ) Ikon Office Solutions Inc
(ICOP ) Icop Digital Inc
(CEBK ) Central Bancorp Inc Mass
(BHO ) B+H Ocean Carriers Ltd.
(AXGU) Atlas Acquisition Hld …
(ADS ) Alliance Data Systems …

Disclosure (“none” means no position):

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Target to Blogger: Piss Off…

Target (TGT) may have really stepped in it with this one.

The following article appeared in the NY Times today:

“That was the message the cheap-chic retailer seemed to convey in an abrupt e-mail message to ShapingYouth.org, a blog about the impact of marketing on children. Early this month, the blog’s founder, Amy Jussel, called Target, complaining about a new advertising campaign that depicted a woman splayed across a big target pattern — the retailer’s emblem — with the bull’s-eye at her crotch.

“Targeting crotches with a bull’s-eye is not the message we should be putting out there,” she said in an e-mail interview.

Target offered an e-mail response:

“Unfortunately we are unable to respond to your inquiry because Target does not participate with nontraditional media outlets,” a public relations person wrote to ShapingYouth.

“This practice,” the public relations person added, “is in place to allow us to focus on publications that reach our core guest,” as Target refers to its shoppers.

Word of the exchange quickly spread and the blogosphere did not appreciate the slight. “Target doesn’t participate in new media channels?” asked the Web site for the Word of Mouth Marketing Association. Target “dismisses bloggers” commented the blog for Parents for Ethical Marketing. “Ahem! So bloggers don’t count!” Ms. Jussel chimed in on ShapingYouth.

Could Target, the ever-hip, contemporary retailer, really have such a low opinion of blogs, the ever-hip, contemporary media channel?

Yes, at least for now. “We do not work with bloggers currently,” said a company spokeswoman, Amy von Walter, who agreed to speak with this traditional media outlet.

“But we have made exceptions,” Ms. von Walter said. “And we are reviewing the policy and may adjust it.”

Target’s policy is to focus limited resources on the big media outlets, like television stations and newspapers, which reach large numbers of shoppers. With a small public relations team, she said “we want to make sure we are making an educated decision and we live up to any promises we make, in terms of service.”

So what about the offending ad? Ms. von Walter said the ad — part of a marketing campaign that appeared in sales circulars and a large billboard in Manhattan’s Times Square — depicts a fully-clothed woman making a snow angel. Other ads featured a man skating over the bull’s-eye, she said.

Ms. Jussel, who described herself as a faithful Target shopper, was not impressed. “Any customer deserves a response to a concern, so I found this to be a shortsighted, ill-conceived judgment call,” she said.

Target does not plan to change its ads. “

Now, personally I feel the Target ad is a bit bland compared to any underwear ad out there but that is just me. The larger issue here is Target being so out of touch with its “core audience”. Perhaps this is the reason sales are suffering so? Q4 and December’s numbers especially were very disappointing and clothing sales, the surest sign of a retailers “hipness” were anemic.

Word lately has had Target scrambling for a new direction in clothing and cutting ties with Isaac Mizrahi, whose design were featured constantly it seemed on Oprah and lead women to the stores in droves.

The big issue hear is not the blogger getting blown off, is there any one of us who hasn’t? The massive issue is Target not recognizing the scope and influence of blogs. It is stunning.

There are several companies I write about who have not returned a call of an email and then there are others who call me back almost immediately. If nothing else, the ones who call back can be assured what I write is accurate and do have the chance to give their opinion.

Target really “screwed the pooch” this time

Disclosure (“none” means no position):None

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Monday’s Links

More iPhone “fuzzy math”, Apple Value, Soros, IRS checks

– Just how many iPhones have been sold in Europe?

– Price always follows value.

– No George, you have it wrong now..

Efile folks, Efile

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Dow Chemical Earnings: What Matters

Believe it or not, Dow Chemicals (DOW) EPS tomorrow has become secondary.

We know eps will be weak, here is what we really want to know..

There are several questions that need to be answered:
1- What were equity earnings? These are the earnings from Dow’s various JV’s across the globe. Are they still growing?
2- The dividend. Now it is $1.68 a share for a 4.6% yield. Is it going up?
3- $9 billion. That is the amount Dow is getting from Kuwait for 50% of its commodity business. What is going to happen to it?
4- 2008. What is the outlook? We know the US will be weak but international growth will be strong. How will the JV with Kuwait affect earnings in 2008?
5- What else is in the works? Dow will be sitting on almost $12 billion after the Kuwait transaction, that means a major deal is possible. Could we have a stunning share repurchase of almost 20% of the outstanding shares? That would still leave plenty to do big time deals.
6- How much farther is Dow going to push into the AG business with its seeds division? Will they become an acquirer (DuPont (DD)?) with all their new-found wealth?

Liveris was very coy on CNBC last week when he instructed Becky Quick to “be sure you ask me about our strategy” when she inquired about Dow’s businesses. Liveris typically plays it close to the vest and this was an uncharacteristic statement from him.

This would lead me to believe plans are in the works and whatever it is, it is big…

Ought to be interesting tomorrow..

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

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McDonalds: Another Oustanding Quarter

McDonalds has just enjoyed its 58th consecutive quarter of same store sales growth.

With Starbucks (SBUX) set to report dismal results this week, perhaps execs at the troubled coffee chain can finally admit they missed this one? By the way, going to an 8oz. $1 coffee is not the answer. If you claim to be upscale and want people to think of you that way, going low-scale in price is not the answer. Better service and larger less merchandise crowded locations are.

Back to Mickey-Dees:
— Global comparable sales increased 6.7%, on top of a 6.3% increase in
2006
— Growth in consolidated Company-operated and franchised restaurant
margins for the eighth consecutive quarter
— Consolidated operating income increased 22% (15% in constant
currencies)
— Earnings per share were $1.06, including $0.33 per share of income tax
benefits. Currency translation benefited earnings by $0.04 per share
— The Company repurchased over $1.3 billion of its stock

Full year 2007 highlights included:
— Revenues reached a record high of $22.8 billion on global comparable
sales of 6.8%
— Company-operated and franchised margins rose by 110 basis points and 80
basis points, respectively
— The Company returned $5.7 billion to shareholders through shares
repurchased and dividends paid

CEO Jim Skinner announced a change to the dividend structure. “Separately, given the substantial increase to the Company’s dividend over the last several years, McDonald’s Board of Directors has decided that beginning in 2008, dividends declared will be paid on a quarterly basis. On January 24, 2008, McDonald’s Board of Directors declared a dividend for the first quarter of 2008 of $0.375 per share payable on March 17, 2008 to shareholders of record on March 3, 2008. The Board of Directors will continue to review the Company’s dividend rate annually each fall.”

McDonalds also plans to return $17 billion to shareholders from 2007 to 2009 through both dividends and share repurchases.

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

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Harley Davidson: Bought

Harley Davidson (HOG) reported results Friday and they were as expected, anemic. The guidance for 2008, was, too be honest a bit more rosy than I would have expected.

Here is the nitty gritty:

Fourth-quarter net income fell 26% to $186.1 million, or 78 cents a share, from $252.4 million, or 97 cents a share. Analysts expected earnings of 82 cents a share. Revenue fell 7.7% to $1.39 billion from $1.5 billion a year ago.

For 2008, the company said it expects “moderate” revenue growth and earnings per share growth of 4% to 7%, compared to 2007. The company said for the first quarter of 2008, it expects to ship between 68,000 and 72,000 Harley-Davidson motorcycles, compared to 67,761 units in the first quarter of 2007, and for the year overall it plans to ship fewer motorcycles than it expects dealers to sell.

Financial Services Segment
Harley-Davidson Financial Services (HDFS) reported fourth quarter operating income of $38.6 million, a decrease of $9.1 million or 19.1 percent compared to the year ago quarter. The decrease is primarily due to a $6.4 million write-down of retained securitization interests. HDFS full year operating income was $212.2 million, a 0.7 percent increase over last year’s $210.7 million.

Stock Repurchase
The Company repurchased 3.2 million shares of its common stock at a cost of $153.3 million during the fourth quarter of 2007. For the full year 2007, they repurchased 20.4 million shares at a total cost of $1.15 billion. On December 31, 2007, the Company had 238.5 million shares of common stock outstanding.

As of December 31, 2007, there are 23.1 million shares remaining on board-approved share repurchase authorizations. An additional board-approved share repurchase authorization is in place to offset option exercises. This is roughly 10% of outstanding shares.

Cash Flow
Cash and marketable securities totaled $405.3 million as of December 31, 2007. Cash flow from operations was $798.1 million, and capital expenditures were $242.1 million during the full year of 2007. In 2008, capital expenditures are expected to be between $240 and $260 million.

With the US market clearly going to be in the doldrums for at least the first half of 2008, HOG must be seeing very positive trends in international markets.

The stock was down after the news in a flat market. Trading at near 5 year lows and yielding over 3%, there is not much more downside to shares from here.

Time to buy for those who have been waiting. Now, the market has been trading in some wild swings lately and looks on Friday morning to be approaching its first winning week this year so expect a wild ride (inference intended). That being said, we have been waiting since shares approached $70 to buy Harley and the time is now.

We bought on Friday at $38.05 a share

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

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Circuit City a Target?

Shares Circuit City (CC) surged over 20% last week on news that Hollywood Entertainment Corp founder Mark Wattles acquired a 6.5% stake.

According to a filing with the SEC, Wattles acquired the stake in Circuit City for “investment purposes and may buy additional shares, encourage the company to enter a merger, or nominate candidates for the board.”

Wattles, who owns 32 stores of the Ultimate Electronics Stores chain and his affiliated companies acquired 11 million shares of Circuit City after they met with management, the filing said. This comes on the heals of the Classic Fund Management Aktiengesellschaft, a Liechtenstein-based asset management company, disclosing it holds a 5.7 percent passive stake in Circuit City.

Wattles filed for a “blank check IPO” in December and wanted to raise up to $200 million “to focus on potential acquisition targets in the consumer products and retail industry.”

Is Circuit City a good takeover target? Yes, but only if current management is set free to “pursue other opportunities”. I have repeatedly written about management’s missteps and until it is clear they are gone, any speculation on the chain’s recovery because of who owns shares is a total gamble. I have said before CC has a great brand, good stores in great locations but they are just abysmally run.

Different people owning shares will not change that.

Disclosure (“none” means no position): None

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"Fast Money" for Monday


Monday’s Picks
Tim Seymour recommends buying Sasol (SSL) $43.11

Guy Adami prefers United Technologies (UTX) $72.75

Karen Finerman likes Golar (GLNG) $17.57

Pete Najarian thinks investors should trade alongside Warren Buffet and buy Burlington Northern (BNI) $81.8

Friday’s Results
Tim Seymour likes refiners such as Tesoro (TSO) $39.81 Close $39.29 LOSS

Guy Adami prefers Cisco Systems (CSCO) $25.11 Close $24.22 LOSS

Karen Finerman says get long Goldman Sachs (GS) $199.20 Close $191.37 LOSS

Pete Najarian thinks ConocoPhillips (COP) $74.47 Close $74.13 LOSS

2008 Records:
Brian Schaeffer= 0-1
Carter Worth= 0-1
Jon Najarian= 3-1
Jeff Macke= 6-4
Tim Seymore= 2-1
Guy Adami= 4-7
Pete Najarian= 3-5
Karen Finerman= 5-4

2007 Results (Since 6/21):
Guy Adami= 58-46 = 56%
Jeff Macke= 60-40 = 60%
Pete Najarian= 49-41 = 54%
Karen Finerman= 40-30 = 57%

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This Week’s Insider Purchases


Goodrich Petroleum Corp (GDP)= $2,244,000
Lions Gate Entertainment Corp (LGF) = $ 1,685,000
Smithfield Foods Inc (SFD)= $ 1,500,000
Arbinet Thexchange Inc (ARBX) = $1,400,000
Biofield Corp (BZET)= $1,299,000
Monsanto Co New (MON) = $ 1,029,000
Ruby Tuesday Inc (RT)= $ 1,026,000

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