Author: ToddSullivan

UPGRADES

Arris ARRS CIBC Wrld Mkts Sector Perform » Sector Outperform
Five Star Quality Care FVE RBC Capital Mkts Sector Perform » Outperform
Sonus Networks SONS Piper Jaffray Market Perform » Outperform
Lincare LNCR Jefferies & Co Hold » Buy
Gentiva Health Svcs GTIV Jefferies & Co Hold » Buy
Ternium S.A. TX Deutsche Securities Hold » Buy
U.S. Steel X Deutsche Securities Hold » Buy
Comp Siderurgica SID Deutsche Securities Hold » Buy
Royal KPN KPN Bear Stearns Peer Perform » Outperform

DOWNGRADES

Business Objects BOBJ Wedbush Morgan Buy » Hold
Level 3 LVLT Cowen & Co Outperform » Neutral
Cablevision CVC Citigroup Hold » Sell
Wells Fargo WFC Stifel Nicolaus Buy » Hold
TETRA Tech TTI Stifel Nicolaus Buy » Hold
Shuffle Master SHFL Morgan Joseph Hold » Sell
Quintana Maritime QMAR Oppenheimer Neutral » Sell
ValueClick VCLK Oppenheimer Buy » Neutral
Seacoast Banking SBCF Oppenheimer Buy » Neutral
LM Ericsson ERIC Lehman Brothers Overweight » Equal-weight
Robbins & Myers RBN Friedman Billings Outperform » Mkt Perform
TIBCO Software TIBX Bear Stearns Peer Perform » Underperform
BMC Software BMC Bear Stearns Peer Perform » Underperform
Autodesk ADSK UBS Buy » Neutral
Cognos COGN Friedman Billings Outperform » Mkt Perform
PACCAR PCAR Wachovia Mkt Perform » Underperform

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THURSDAY’S PICKS

Jeff Macke recommended eBay (EBAY). Open $40.60

Guy Adami said the play is shorting Exxon Mobil (XOM). Open $94.80

Karen Finerman takes the other side of Adami’s trade and recommended ConocoPhillips (COP). Open $87.46

Pete Najarian liked Evergreen Solar (ESLR). Open $9.44

WEDNESDAY’S RESULTS

Jeff Macke liked Microsoft (MSFT). Open $30.32 Close $31.08 GAIN

Guy Adami said Intel (INTC) above is a buy. Open $25.48 Close $26.72 GAIN

Karen Finerman preferred Kraft (KFT). Open $33.61 Close $33.73 GAIN

Pete Najarian thought EchoStar (DISH) is a buy. Open $51.08 Close $49.45 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= 32-20 = 62%
Eric Bolling= 10-11 = 48%
John Najarian= 13-4 = 76%
Jeff Macke= 38-28 = 54%
Pete Najarian= 25-23 = 52%
Tim Seymore= 4-3 = 57%
Karen Finerman= 16-11 = 58%
Stacey Briere-Gilbert= 3-0 = 100
Ned Riley= 1-0 = 100%
Carter Worth= 0-1 = 0%

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TM Toyota Motor Corp 107.35
TIBB Tib Finl Corp 10.34
THC Tenet Healthcare Corp … 3.09
SPF Standard Pacific Corp 3.93
SOV Sovereign Bancorp Inc 15.74
SMRT Stein Mart Inc 7.21
RAD Rite Aid Corporation 4.05
PPCO Penwest Pharmaceutica … 7.42
ODFL Old Dominion Freight … 23.79
NYT New York Times Company 18.42
NVR NVR Inc 419.86
FMP Feldman Mall Pptys Inc 5.58
FBMI Firstbank Corp Mich 16.27
FBC Flagstar Bancorp Inc 8.58
ERIC Ericsson L M Tel Co 30.50
BHS Brookfield Homes Corp 16.75
BDCO Blue Dolphin Energy Co 2.62
BBND Bigband Networks Inc 5.76
CMRG Casual Male Retail Gr … 7.85
CMA Comerica Incorporated 48.82
CLDN Celadon Group Inc 9.94
CHS Chico’s FAS Inc 13.69

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With everything being said about Citigroup (C) both here and everywhere else the last few weeks, something struck me as funny today (not funny hah,hah)

Robert Rubin, who sits on the Citi board has made about $100 million doing that the last few years and has been roundly regarded as “integral” to operations. But, here is the thing. After the most recent quarter which is rapidly becoming a Citi-implosion only and not a “banking sector issue” I have only one observation.

If Rubin is so “integral” to results, then this becomes the scenario. Either Prince is listening to Rubin and getting such bad advice he is running both his job and the bank into the ground OR he is ignoring Rubin’s council in which case, why are we paying Rubin $100 million and if Prince is ignoring him and the bank is faltering, why does he still have a job?

These are the only possible scenario’s out there. Rubin and Prince have been the very public faces of the bank and it’s moves so the credit and or blame lies there. Either way, if Bank of America (BAC) grows earnings when they are release tomorrow morning expect (rightfully) investors to become very impatient. Prince had a pass on this quarter because we thought all the banks would suffer but it turns out it is looking more and more like only Citi will.

Citi will close near or at 2 year low today. Unacceptable.

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Apparently I’m not the only one disenchanted with Six Flags (SIX).

Daniel Snyder’s Red Zone, which until recently owned 11% of the troubled theme park operator announced in an SEC filing that it is distributing 100% of its shares to investors so they may do with them as they wish. Translation? Investors have grown tired of watching the $49 million dollar investment dwindle to $35 million with no hopes of it turning around anytime soon want to cash out.

Shares, currently sitting at $3.22 are over 50% off their 52 week high levels set in early June. Six flags has blamed the weather, rising expenses and just about everything else except the Iraq War for it misfortunes when the reality of the situation is that when compared to the other them parks around the nation, Sic flags is by far the worst value proposition for a family. That being said, this is the reason attendance has been static at three year low levels this summer despite managements efforts to cram more rides into static spaces.

I said it in August and was reviled by Six Flags fans and I can only guess shareholders that shares are dead money with no chance of a rebound anytime in the near future. When the largest shareholders closest to the operations start cashing out for losses, I can only surmise they feel the same way. I guess you could even take it a step further and figure they actually feel they is more downside risk that anything else and I think they would be right.

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Tilson, Social Security, Citi

– Here is another great article by Whitney Tilson about the “activist investor”.

– Social Security and entitlements, what they will do to gov’t spending.

– The Stockmasters take a look at Citi (C).

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What remains to be seen is how these results compare to those of its peers over the next few days. Both Burlington Northern (BNI) and Norfolk Southern (NSC) report next week.

CSX (CSX) recorded net income of $407 million, or 91 cents a share, compared with $328 million, or 71 cents a share, a year earlier. Results include 24 cents from discontinued operations. Year earlier EPS included a 17 cent gain from insurance settlements and the resolution of certain tax issues.

Freight volume fell 4% for the quarter, due to decreased demand for building products. Largest declines were in shipments of forest products, down 13%, and food and consumer goods, down 15%. Revenue per unit rose 8%, led by phosphates and fertilizers where it rose 27% because of “pricing and changes in the traffic mix.” Total revenue climbed 3% to $2.5 billion.

Excluding a 24 cent per share gain for one time items, CSX earned 67 cents per share for the quarter, compared with 54 cents in the same quarter of 2006 after excluding 17 cents per share in items. The 67 cents came in above the EPS of 62 cents that Wall Street analysts had expected.

This is going to get real interesting when one considers yesterday’s event and the TCI letter that became public. Will management wave these results in the air and tell them to essentially “piss off”? Will they take a “despite these record result, we are considering the proposals of the letter” tact? This has the potential to become very ugly very fast. If it does, do not worry. TCI will get the support it needs from shareholders and in the long run, based on its track record, we will be rewarded for our support.

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As a happy shareholder of CSX (CSX), I am both upset and encouraged by the recent letter sent by the Children’s Investment Fund to management.

In the letter, the Fund call for:

* Separate Chairman and CEO roles. TCI believes, and it is widely recognized, that this is best practice in corporate governance. TCI is concerned that Chairman and CEO Michael Ward’s interests are not aligned with those of CSX shareholders.
* Refresh Board with new independent directors. The CSX Board has many longstanding directors and virtually no railroad management experience, which leaves the Board effectively unable to challenge management and provide appropriate oversight. CSX’s Board should be refreshed with new independent directors with the experience and courage to do so.
* Allow shareholders to call special meetings. The Board should amend CSX’s bylaws to allow shareholders to call special meetings, a shareholder proposal that was approved overwhelmingly by shareholders at CSX’s last annual meeting.
* Align management compensation with shareholder interests. Michael Ward has been the highest compensated CEO in the rail industry over the past two years, despite CSX being operationally outperformed by its peers. TCI urges the Board to align management compensation with shareholder interests. This includes tying long-term compensation to returns on capital rather than to the operating ratio, which can be easily manipulated.
* Present plan to improve operations. CSX is last or near last among the five major North American railroads on virtually every important operational and financial metric. CSX must present to shareholders a detailed operating plan with specific long-term operational and cost targets to address this under-performance. The existing operating ratio targets can be achieved with no operational improvements.
* Justify 2007-2010 capital spending plan. TCI believes shareholder value is created through sustainable investment in maintenance, infrastructure and training. TCI is concerned that management’s current illogical and undisciplined capital spending plan puts at risk CSX’s ability to invest long-term because it undermines shareholder confidence and therefore access to capital.
* Improve relations with labor, shippers and shareholders. TCI believes the Board and management have taken an unnecessarily adversarial approach to these key constituencies, resulting in strained relations instead of collaborative solutions. TCI believes the interests of the major stakeholders are largely aligned, and success is best achieved through open and constructive relations with them.

In August I wrote about my purchase (my son’s actually) of CSX shares and the tremendous results we have enjoyed. After reading the TCI letter, it would appear those results are more a function of dramatically improving business conditions rather than management acumen.

That does make the letter a good news bad new scenario. It is bad news because the company could be run much better. It is good news because it means that even after an almost 100% gain in the stock, when management gets its act together (or there is a change) there is still plenty of improvement still to be had. That, is very good news indeed.

CSX management has spent the better part of the past year patting itself on the back for what can only be described as a railroad renaissance chiefly being enabled by the biofuel boom in the US. Looking at the illustrations and getting further into the details if TCI’s plans, it is obvious that CSX holders should be doing much better.

I back the TCI proposal 100% and call on management to adopt the letters initiatives. Their ignoring of TCI to date is unacceptable and they seem to have forgotten who owns the company. TCI is a larger shareholder than any single member of management and that single fact determines that what they have to say requires at least the common courtesy of being heard and not dismissed.

Management seems to have forgotten who they work for.

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UPGRADES

Citrix Systems CTXS RBC Capital Mkts Sector Perform » Outperform
Viacom VIA.B JP Morgan Neutral » Overweight
Agilent A JP Morgan Neutral » Overweight
Broadcom BRCM Citigroup Hold » Buy
Eaton ETN Friedman Billings Mkt Perform » Outperform

DOWNGRADES

Electronic Arts ERTS Broadpoint Capital Buy » Neutral
Vistaprint VPRT Stifel Nicolaus Buy » Hold
Overstock.com OSTK Stifel Nicolaus Hold » Sell
Amazon.com AMZN Stifel Nicolaus Hold » Sell
Biogen Idec BIIB BWS Financial Hold » Sell
POZEN POZN Broadpoint Capital Neutral » Underperform
Knight Transportation KNX BB&T Capital Mkts Buy » Hold
Biogen Idec BIIB Piper Jaffray Market Perform » Underperform
THQ Inc THQI UBS Buy » Neutral
Syngenta SYT Lehman Brothers Overweight » Equal-weight
Tektronix TEK JP Morgan Overweight » Neutral
SRA Intl SRX Citigroup Buy » Hold
General Motors GM Bear Stearns Peer Perform » Underperform
Navigators Group NAVG Friedman Billings Outperform » Mkt Perform
Tektronix TEK McAdams,Wright,Ragen Buy » Sell
HCR Manor Care HCR Friedman Billings Outperform » Mkt Perform

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WEDNESDAY’S PICKS

Jeff Macke liked Microsoft (MSFT). Open $30.32

Guy Adami said Intel (INTC) above is a buy. Open $25.48

Karen Finerman preferred Kraft (KFT). Open $33.61

Pete Najarian thought EchoStar (DISH) is a buy. Open $51.08

TUESDAY’S RESULTS

Jeff Macke liked NRG Energy (NRG). Open $44.95 Close $45.39 GAIN

Guy Adami recommended shorting the Dow with Short Dow30 ProShares (DOG). Open $56.62 Close $56.91 GAIN

Karen Finerman preferred Flowserve (FLS). Open $78.07 Close $79.05 GAIN

Pete Najarian said Cypress Semiconductor (CY) is a buy . Open $30.98 Close $31.36 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= 31-20 = 61%
Eric Bolling= 10-11 = 48%
John Najarian= 13-4 = 76%
Jeff Macke= 37-28 = 53%
Pete Najarian= 25-22 = 54%
Tim Seymore= 4-3 = 57%
Karen Finerman= 15-11 = 57%
Stacey Briere-Gilbert= 3-0 = 100
Ned Riley= 1-0 = 100%
Carter Worth= 0-1 = 0%

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WSO Watsco, Inc 42.54
WPL W.P. Stewart & Co. Ltd. 8.34
WAG Walgreen Co. 38.45
VM Virgin Mobile Usa Inc 13.32
TLB The Talbots, Inc 16.34
SVBI Severn Bancorp Annap … 12.13
STLY Stanley Furniture Company 13.83
STI SunTrust Banks, Inc 72.64
STBK Sterling Banks Inc 7.02
SOV Sovereign Bancorp Inc 16.17
RAD Rite Aid Corporation 4.17
QI Qimonda Ag 10.47
PSS Collective Brands Inc 18.92
PFCB P F Changs China Bist … 28.58
PCS Metropcs Communicatio … 23.00
OXM Oxford Industries, Inc 24.21
NYT New York Times Company 19.10
NCC National City Corporation 24.25
MWY Midway Games Inc 3.42
MSSR Mccormick & Schmicks … 17.31
MFB Maidenform Brands Inc 14.56
KEY KeyCorp (New) 31.03
JWN Nordstrom Inc 40.85
JCP Penney (J.C.) Company … 59.68
JBX Jack In The Box Inc 32.02
HWBK Hawthorn Bancshares Inc 29.05
DPZ Dominos Pizza Inc 14.68
DITC Ditech Networks Inc 4.69
CZFC Citizens First Corp 11.92
CPKI California Pizza Kitc … 17.11

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Children of Single Parent, Buybacks, Google, Bloggystyle

– It makes perfect sense but I did not know it was a fact.

– This is rapidly becoming one of the more interesting sites for me out there. Here are some thoughts on share repurchases.

– All companies that dominate a tech markets eventually lose that dominance. This may be the first crack in the armor of Google.

– Here is Adam’s weekly blog effort

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So I tune in to see what the folks over there have going on today and there is a riveting interview with “Kinky Friedman” on immigration.

Kinky, for those who do not know him is a friend on Don Imus, ran a failed attempt for Texas Governor and has authored a tongue and cheek book on politics. What he has to add when it come to business is just beyond me. Apparently it was beyond Kinky also as he did not even broach the subject, he rambled on incoherently about immigration.

I just can’t figure out where these guys are going with this. What are they? A business network or a political one that dabbles in business? Right now, they are the latter..

Too bad..

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