Best line? “There is a difference between buying a house and buying a house on fire”, Dimon.
Disclosure (“none” means no position):None
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Category: Articles
Best line? “There is a difference between buying a house and buying a house on fire”, Dimon.
Disclosure (“none” means no position):None
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Bits and Pieces From the Week Away
Some tidbits…
– Starbucks finally decided to close some locations, 600 of them. Back in Feb. I said about the then announced plans, “100 US store closing just are not even the beginning of what is necessary”. Sorry folks….600…still not enough.
– Blockbuster (BBI) realized Circuit City (CC) sucks and 1 + 1 does not equal 3.
– Now that lead paint litigation is dying, Sherwin Williams (SHW) must look even more attractive to potential buyers.
– Berkshire Hathaway posted its worst first half in 18 years….has Buffett “lost it”? (please note sarcasm….)
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Shapiro Defends Six Flags (SIX)
Six Flags’ (SIX) Mark Shapiro has taken to the airwaves..
Here is a nut shell is Six Flags problem. In New England Shapiro competes against Lake Compounce, Story Land and Canobie Lake for family’s dollars. In a tightened spending environment, Six Flags by far is the lowest value for a dollar. With Six Flags, if you want to park within a mile or two of the park, the honor will cost you $25. For the other three, I can park by the front door for free. Once inside, the cost differentials continue. Even with his new ticket pricing he mentions in the video, he is far more expensive than the competition.
Shapiro can blame gas and the economy all he wants but the bottom line is Six Flags has been struggling with attendance for years. At least this excuse is better that last year when they blamed God. Yea, I know, Q1 attendance was up from last year but it was only because Easter came early this year.
Shapiro is upbeat in the appearance but one has to wonder, “when will the customer satisfaction surveys mentioned in every single release by the company actually going to show up as a profit?” Even a dramatic improvement such as a far lower loss would be good. Ideas? Anyone?
Last month I wondered if Six Flags was soon to be bankrupts. Now we have its debt ratings being lowered, a death at a park ans a director dumping shares.
Here is another opinion on the subject from Chicago.
One can now by three shares for less than the cost of a soda at the park….the soda is still a better deal
Disclosure (“none” means no position):None
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Tuesday’s Links
Thank you, Thank you, Conspiracy, Gumshoe
– Thanks for the mention
– Thanks for reading
– Wondered when this stuff would come up
– This is great
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Tuesday's Links
Thank you, Thank you, Conspiracy, Gumshoe
– Thanks for the mention
– Thanks for reading
– Wondered when this stuff would come up
– This is great
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Is the Dow Chemical (DOW) Rumor True?
So the latest Dow Chemical (DOW) rumor has yet another JV with Saudi Aramco. Could it be true? You betcha….
Let’s go back to last years announcement of the JV to build factories at Ras Tanura on Saudi Arabia’s Persian Gulf coast. The plants are going to have the capacity to produce as much as 8 million tons of chemicals and plastics a year, using raw materials from nearby oil and natural gas plants at a cost of 1/10th the current market rate for oil gas.
Now it is being reported that Saudi Aramco and Dow plan to build a $26 billion petrochemicals complex in Saudi Arabia to take advantage of the world’s biggest oil reserves and meet rising demand for plastics. Aramco and Dow aim to raise about $18 billion from loans and bonds starting next year to finance the project, said a banker, who declined to be identified because the plan is private. Royal Bank of Scotland (RBS) and Riyad Bank will help raise 70 percent of the project’s cost, said Abdulaziz al-Judaimi, Aramco’s vice president for new business, declining to provide an amount.
So, should we believe it?
If you remember my recent interview with CEO Andrew Liveris I asked if the most prudent use of the upcoming proceeds from the Kuwait sale wasn’t “more petrochemical JV’s, share repurchases and dividend increases”. His answer? A succinct, “Yes”.
Now, the final amounts of the project may differ from $26 billion but the deal is in the works. Liveris has made no bones about his desire to expand his petrochemical business. Here is the important point. Dow is the company of choice for nations rich in raw materials to do business with. Saudi Arabia, Kuwait, Singapore, China, Brazil and Russia are all working with Dow on various projects and what is even better for Dow shareholders is that the scale of the projects is growing exponentially larger and the cash outlays on the part of Dow to finance the deals is negligible.
Once active, the JV’s are self financing and Dow simply receives and equity payment for its interest. Nice..
Looks for details in the next 30 days. Whatever the final number, it will be big
Disclosure (“none” means no position):Long Dow
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Tuesday’s Upgrades and Downgrades
Upgrades
Flowserve (FLS)- BMO Capital Markets Market Perform » Outperform
Bankrate (RATE)- Merriman Curhan Ford Neutral » Buy
Commercial Metals (CMC)- Davenport Neutral » Buy
Marten Transport (MRTN)- BB&T Capital Mkts Hold » Buy
Beneficial Mutual Bancorp (BNCL)- Boenning & Scattergood Market Perform » Market Outperform
Celadon Group (CLDN)- BB&T Capital Mkts Hold » Buy
First Commonwealth (FCF)- Janney Mntgmy Scott Sell » Neutral
Energy Conversion (ENER)- Broadpoint Capital Neutral » Buy
Penn Natl Gaming (PENN)- Sterne Agee Hold » Buy
EMC Corp (EMC)- RBC Capital Mkts Sector Perform » Outperform
Fastenal (FAST)- BB&T Capital Mkts Hold » Buy
Southwest Bancorp (OKSB)- Stifel Nicolaus Hold » Buy
Dyncorp Intl (DCP)- Stifel Nicolaus Hold » Buy
CF Industries (CF)- Credit Suisse Neutral » Outperform
Temple-Inland (TIN)- Credit Suisse Neutral » Outperform
Smurfit-Stone (SSCC)- Credit Suisse Neutral » Outperform
Saia (SAIA)- BB&T Capital Mkts Hold » Buy
Con-way (CNW)- BB&T Capital Mkts Hold » Buy
Juniper Networks (JNPR)- Piper Jaffray Neutral » Buy
Ameristar Casinos (ASCA)- JP Morgan Underweight » Neutral
Kindred Healthcare (KND)- Friedman Billings Mkt Perform » Outperform
Broadcom (BRCM)- Piper Jaffray Neutral » Buy
Suncor Energy (SU)- Friedman Billings Mkt Perform » Outperform
J. Crew (JCG)- Citigroup Sell » Hold
ARM Holdings (ARMH)- UBS Neutral » Buy
BT Group PLC (BT)- UBS Sell » Neutral
Suncor Energy (SU)- JP Morgan Neutral » Overweight
Network Appliance (NTAP)- Robert W. Baird Neutral » Outperform
Convergys (CVG)- Oppenheimer Perform » Outperform
Popular Inc (BPOP)- Keefe Bruyette Underperform » Mkt Perform
First Bancorp (FBP)- Keefe Bruyette Underperform » Mkt Perform
Downgrades
Ultratech (UTEK)- DA Davidson Buy » Neutral
MiddleBrook Pharma (MBRK)- Pacific Growth Equities Buy » Neutral
MiddleBrook Pharma (MBRK)- Pacific Crest Buy » Neutral
Time Warner (TWX)- Lehman Brothers Overweight » Equal-Weight
Vulcan Materials (VMC)- Longbow Buy » Neutral
United Thera (UTHR)- Stanford Research Buy » Hold $101
Marshall & Ilsley (MI)- Morgan Keegan Outperform » Mkt Perform
Noven Pharma (NOVN)- Jefferies & Co Hold » Underperform $11 » $9
Omnicom (OMC)- Bernstein Outperform » Mkt Perform
Airgas (ARG)- BB&T Capital Mkts Buy » Hold
CBS Corp (CBS)- Lehman Brothers Equal-Weight » Underweight
News Corp (NWS)- Lehman Brothers Overweight » Equal-Weight
Walt Disney (DIS)- Lehman Brothers Equal-Weight » Underweight
Orthofix (OFIX)- Wachovia Outperform » Mkt Perform
Calpine (CPN)- Lehman Brothers Overweight » Equal-Weight
Acme Packet (APKT)- Piper Jaffray Buy » Neutral
Acme Packet (APKT)- JP Morgan Overweight » Underweight
Agnico-Eagle Mines (AEM)- UBS Buy » Neutral
Qimonda (QI)- UBS Buy » Neutral
Merck (MRK)- UBS Buy » Neutral
Marshall & Ilsley (MI)- JP Morgan Neutral » Underweight
AstraZeneca (AZN)- Deutsche Securities Buy » Hold
Zions Bancorp (ZION)- Robert W. Baird Outperform » Neutral
Pacific Rim Mining (PMU)- BMO Capital Markets Market Perform » Underperform
On2 Technologies (ONT)- Merriman Curhan Ford Buy » Neutral
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Tuesday's Upgrades and Downgrades
Upgrades
Flowserve (FLS)- BMO Capital Markets Market Perform » Outperform
Bankrate (RATE)- Merriman Curhan Ford Neutral » Buy
Commercial Metals (CMC)- Davenport Neutral » Buy
Marten Transport (MRTN)- BB&T Capital Mkts Hold » Buy
Beneficial Mutual Bancorp (BNCL)- Boenning & Scattergood Market Perform » Market Outperform
Celadon Group (CLDN)- BB&T Capital Mkts Hold » Buy
First Commonwealth (FCF)- Janney Mntgmy Scott Sell » Neutral
Energy Conversion (ENER)- Broadpoint Capital Neutral » Buy
Penn Natl Gaming (PENN)- Sterne Agee Hold » Buy
EMC Corp (EMC)- RBC Capital Mkts Sector Perform » Outperform
Fastenal (FAST)- BB&T Capital Mkts Hold » Buy
Southwest Bancorp (OKSB)- Stifel Nicolaus Hold » Buy
Dyncorp Intl (DCP)- Stifel Nicolaus Hold » Buy
CF Industries (CF)- Credit Suisse Neutral » Outperform
Temple-Inland (TIN)- Credit Suisse Neutral » Outperform
Smurfit-Stone (SSCC)- Credit Suisse Neutral » Outperform
Saia (SAIA)- BB&T Capital Mkts Hold » Buy
Con-way (CNW)- BB&T Capital Mkts Hold » Buy
Juniper Networks (JNPR)- Piper Jaffray Neutral » Buy
Ameristar Casinos (ASCA)- JP Morgan Underweight » Neutral
Kindred Healthcare (KND)- Friedman Billings Mkt Perform » Outperform
Broadcom (BRCM)- Piper Jaffray Neutral » Buy
Suncor Energy (SU)- Friedman Billings Mkt Perform » Outperform
J. Crew (JCG)- Citigroup Sell » Hold
ARM Holdings (ARMH)- UBS Neutral » Buy
BT Group PLC (BT)- UBS Sell » Neutral
Suncor Energy (SU)- JP Morgan Neutral » Overweight
Network Appliance (NTAP)- Robert W. Baird Neutral » Outperform
Convergys (CVG)- Oppenheimer Perform » Outperform
Popular Inc (BPOP)- Keefe Bruyette Underperform » Mkt Perform
First Bancorp (FBP)- Keefe Bruyette Underperform » Mkt Perform
Downgrades
Ultratech (UTEK)- DA Davidson Buy » Neutral
MiddleBrook Pharma (MBRK)- Pacific Growth Equities Buy » Neutral
MiddleBrook Pharma (MBRK)- Pacific Crest Buy » Neutral
Time Warner (TWX)- Lehman Brothers Overweight » Equal-Weight
Vulcan Materials (VMC)- Longbow Buy » Neutral
United Thera (UTHR)- Stanford Research Buy » Hold $101
Marshall & Ilsley (MI)- Morgan Keegan Outperform » Mkt Perform
Noven Pharma (NOVN)- Jefferies & Co Hold » Underperform $11 » $9
Omnicom (OMC)- Bernstein Outperform » Mkt Perform
Airgas (ARG)- BB&T Capital Mkts Buy » Hold
CBS Corp (CBS)- Lehman Brothers Equal-Weight » Underweight
News Corp (NWS)- Lehman Brothers Overweight » Equal-Weight
Walt Disney (DIS)- Lehman Brothers Equal-Weight » Underweight
Orthofix (OFIX)- Wachovia Outperform » Mkt Perform
Calpine (CPN)- Lehman Brothers Overweight » Equal-Weight
Acme Packet (APKT)- Piper Jaffray Buy » Neutral
Acme Packet (APKT)- JP Morgan Overweight » Underweight
Agnico-Eagle Mines (AEM)- UBS Buy » Neutral
Qimonda (QI)- UBS Buy » Neutral
Merck (MRK)- UBS Buy » Neutral
Marshall & Ilsley (MI)- JP Morgan Neutral » Underweight
AstraZeneca (AZN)- Deutsche Securities Buy » Hold
Zions Bancorp (ZION)- Robert W. Baird Outperform » Neutral
Pacific Rim Mining (PMU)- BMO Capital Markets Market Perform » Underperform
On2 Technologies (ONT)- Merriman Curhan Ford Buy » Neutral
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BIll Miller (video)
Bill Miller talks about Citibroup (C), Feddie Mac (FRE), Bear Sterns (BSC), Fannie Mae(FNM), Countrywide (CFC).
He made an interesting comment about this current market being similar to the early 80s to mid 90s,where he made a 50 fold return on FNM which at the time was carrying bad loans.
Disclosure (“none” means no position):Long C, none
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Sherwin Williams Wins in RI SC
“In a unanimous opinion [4-0], the Rhode Island Supreme Court overturned the lead paint judgment against defendants Sherwin-Williams (SHW), NL Industries (NL) and Millennium Holdings. In addition, it upheld the judgment in favor of Atlantic Richfield, vacated the contempt citations against RI Attorney General Patrick Lynch, and recognized the validity of contingency agreements between the AG and outside counsel.”
Read decision:
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Disclosure (“none” means no position):Long SHW
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More Berkowitz
Bruce talks about Leucadia (LUK), Americredit (ACF), AIG (AIG) and the banks. Also, he goes into Sears Holdings (SHLD)
Berkowitz has the correct look at Sears, not just a retailer but a collection of successful entities that when monetized (it is happening), will provide returns.
Disclosure (“none” means no position):Long SHLD, None
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Bruce Berlowitz on Wealth Track
Berkowitz has sold 1/2 of its energy holdings and is moving into health care…
Disclosure (“none” means no position):None
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Khosla on Biofuels
Vinod is putting his millions behinds his words…
With ethanol plays like Versasun (VSE), Pacific Ethanol (PEIX) and Archer Daniel’s Midland (ADM) off highs, those investors might want to watch.
Disclosure (“none” means no position):Long ADM
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Commodities
Some thoughts from the lake…..Dennis Gartman talks about commodities..
Gartman talks about oil (USO) and the demand destruction of it undergoing. He also talks about corn, wheat and the lost acreage of them due to the recent flooding.
One would think that food prices are going higher due to worldwide demand and weather and oil may crash short term. We sold our oil position a little while ago.
Oil is due for a rapid correction followed by a slow drift up. I think the easy money here has been made though.
Disclosure (“none” means no position):None
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