Category: Articles

Events are happening in India with Wal-Mart (WMT) that folks seem to be not noticing and if you are buying shares to accumulate, that is good because once the scope of this is recognized, shares may never look back.

Bharti Enterprises and Wal-Mart are confident their Indian joint venture is supported in the country and say it will help usher in the future of Indian retail. “I think it’s a big change for India, the move from mom-and-pop to organized retail,” said Raj Jain, head of Wal-Mart’s India operations. “I think most people understand that it is a necessary evolution which has to go through for everybody to benefit from and for the economy.

Bharti Chairman Sunil Bharti Mittal echoed those comments. “Farmers want this, the customers want a better experience and to save money. They want it — which means the country wants it.”

The joint venture called Bharti Wal-Mart Private Limited, is scheduled to open its first store by the end of next year. It will sell groceries, consumer appliances and fruits and vegetables to retailers and small businesses.

The question is, what is the potential? Consider that large retail companies make up only 3% of India’s $350 billion retail market. India allows foreign single-brand retailers to hold up to 51 percent in local joint ventures, while multiple-brand retailers like Wal-Mart are limited to cash-and-carry and franchise deals.

Wal-Mart is in good company and has strong support internationally as suppliers ranging from Unilever (UL) and Procter & Gamble Co (PG) who “know the game”, to small local suppliers that make only one product are eager to work with the joint venture, Mittal said.

In essence, Wal-Mart is positioning itself to be the portal for goods going into the country. Once the JV is operating, the economies of scale Wal-Mart and distribution abilities can and will employ will instantly transform them into the preferred retailer for the nation. International sales for Wal-Mart are growing 16% this year and this partnership will cause that to explode.

It is a year out which is why is not getting much notice now. The thing is, if you wait until it does, you will be paying much more for a share of that growth than you are now.

UPGRADES

Tempur-Pedic TPX Stifel Nicolaus Hold » Buy
Celanese CE BB&T Capital Mkts Hold » Buy
Pixelworks PXLW Jefferies & Co Underperform » Hold
American Eagle AEO Wachovia Mkt Perform » Outperform
Office Depot ODP JP Morgan Neutral » Overweight
CIT Group CIT Credit Suisse Neutral » Outperform
CVS Corp CVS JP Morgan Neutral » Overweight

DOWNGRADES

Vonage VG Stanford Research Hold » Sell
Tesoro Petroleum TSO Credit Suisse Outperform » Neutral
Resources Connect RECN Stifel Nicolaus Buy » Hold
Health Care Ppty HCP UBS Buy » Neutral
Resources Connect RECN Robert W. Baird Outperform » Neutral
Alon USA Energy ALJ Credit Suisse Outperform » Neutral
CNOOC Ltd CEO Bear Stearns Peer Perform » Underperform
Resources Connect RECN Bear Stearns Outperform » Peer Perform
Agrium AGU CIBC Wrld Mkts Sector Outperform » Sector Perform
Statoil ASA STO JP Morgan Overweight » Neutral
Resources Connect RECN JMP Securities Mkt Outperform » Mkt Perform
Resources Connect RECN Piper Jaffray Outperform » Market Perform
Health Care Ppty HCP Friedman Billings Outperform » Mkt Perform
Under Armour UA UBS Buy » Neutral
VeriSign VRSN Credit Suisse Outperform » Neutral
Walgreen WAG JP Morgan Overweight » Neutral
Staples SPLS JP Morgan Neutral » Underweight

I have changed the tracking to a simple “Success %” rather than the dollar amount since the different prices in stocks makes a simple dollar result meaningless.

Thursday’s Picks

Jeff Macke said sell Bear Stearns (BSC). Open $123

Guy Adami liked NYSE Euronext (NYX). Open $78.60

Karen Finerman thought BEA Systems (BEAS) is a buy. Open $13.33

Pete Najarian preferred Isis Pharmaceuticals (ISIS). Open $15.10

Wednesday’s Picks

Jeff Macke liked eBay (EBAY). Open $39.07 Close $39.18

Guy Adami recommended USEC Corp (USU). Open $10.36 Close $10.95

Karen Finerman preferred Comverse Technology (CMVT.PK). Open $20.41 Close $20.22

Pete Najarian said buy Digital River (DRIV). Open $44.73 Close $44.55

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= 26-18 = 59%
Eric Bolling= 10-11 = 48%
John Najarian= 13-3 = 81%
Jeff Macke= 31-23 = 57%
Pete Najarian= 19-17 = 52%
Tim Seymore= 3-2 = 60%
Karen Finerman= 11-6 = 64%
Stacey Briere-Gilbert= 2-0 = 100%

Target (TGT) announced today that it is recalling 350,000 toy lawn and garden tools and chairs due to lead paint. Unlike Mattel (MAT), they did not immediately issue the Chinese an apology.

Details are not forthcoming yet (no word on the Target website as of 3pm) but in what is shaping up to become an election year issue, is there a toy that says “Made In China” you would buy for your kid? Ironically, I was in a Target last week and witnessed mothers in the baby section (actually I was eavesdropping). They were talking and looking at toys and for these three moms, the decision to buy or not was simple. If it said “Made In China”, it went back on the shelf. “Why risk it” was the consensus among them. Sooner or later a toy maker is going to make a killing bringing out the “Made In the USA” logo and running it in commercials. At this point people would easily pay a few bucks more for the products than say, burying their child?

Additionally, RC2 Corp. (RCRC) announced they are recalling an additional 200,000 Thomas the Tank Engine toys. No word yet as to whether an apology to China is coming or not.

Mattel is sure to issue an apology for both of them………….cowards

Here is the necessary information

Thomas : click here

Target: These were actually made in Taiwan

More Charges, “Adult” kids, No need for reform?, Cheap Ethanol play

– How about they stand on their own feet when they say “I am an adult”

– Good, he cannot go away for long enough

– Why do we keep letting these clowns be in charge of our retirement?

– Ethanol companies are so cheap now, these guys have to be right

Usually when you keep getting hints of something, there ends up being a certain level of truth to them. That what is going on with Arhcer Daniel’s Midland (ADM).

Earlier this summer ADM made waves when in Brazil they announced they were “actively” seeking investment in the country’s ethanol industry. Already producing bio-diesel there, a deal for ethanol would cement ADM’s place as the worlds largest producer of the fuel.

A month ago ADM underwent a management reorganization that more aligned its structure in the mold of an oil company much like CEO Patricia Woertz’s previous employer Chevron (CVX). How does the oil industry grow? Mergers and acquisitions.

Now we have Cosan (CZZ) Brazil’s major ethanol producer saying “will start taking its first international steps, with possible investments in ethanol plants in the Caribbean, Mexico or even in the United States in the coming years”. Why does this little tidbit matter, ADM is a minority shareholder in Cosan. Cosan’s financial vice president, Paulo Diniz, said “it’s impossible to be a global player in Brazil. You have to be present in the world’s largest ethanol market, the United States,”. He continued, “there’s no company which is really a global renewable energy player, and at present, Cosan’s condition to move into this position is unique,”.

Cosan’s seemingly “unlimited” capital raising capacity opens the possibility for acquisitions of “big companies,” Diniz said. He added that the company could raise in the coming years up to $15 billion through subsequent stock offerings. “With our current structure we can even dream of big steps (large company acquisitions),”.

HMMM.

We have the largest US player wanting to get into Brazil’s market and the largest Brazilian player wanting in the US market and there is already a equity relationship between the two. What is to stop a merger of equals creating an ethanol powerhouse on a global scale?

Uh, Nothing???

UPGRADES

Hexcel HXL Wedbush Morgan Hold » Buy
Mattson MTSN Am Tech/JSA Research Sell » Neutral
ADTRAN ADTN Brean Murray Sell » Hold
Polycom PLCM Kaufman Bros Hold » Buy
Aaron Rents RNT Morgan Keegan Mkt Perform » Outperform
Gol Intelligent Airlines GOL JP Morgan Underweight » Neutral
Sonic Solutions SNIC JP Morgan Neutral » Overweight
1-800-FLOWERS FLWS CIBC Wrld Mkts Sector Perform » Sector Outperform
Westwood One WON Deutsche Securities Hold » Buy
Briggs & Stratton BGG Robert W. Baird Underperform » Neutral

DOWNGRADES

Sonus Pharm SNUS Punk, Ziegel & Co Buy » Mkt Perform
C-COR.net CCBL Ferris Baker Watts Buy » Neutral
Panacos Pharma PANC Caris & Company Above Average » Average
American Commercial Lines ACLI Cantor Fitzgerald Buy » Hold
Corn Products CPO BB&T Capital Mkts Buy » Hold
Arris ARRS Friedman Billings Outperform » Mkt Perform
Kellogg K Bear Stearns Outperform » Peer Perform
Dean Foods DF Bear Stearns Outperform » Peer Perform
Marsh McLennan MMC JP Morgan Overweight » Neutral
C-COR.net CCBL Friedman Billings Outperform » Mkt Perform
Michael Baker BKR Oppenheimer Buy » Neutral
Cadbury Schweppes CSG Bear Stearns Peer Perform » Underperform

Wednesday’s Picks

Jeff Macke liked eBay (EBAY). Open $39.07

Guy Adami recommended USEC Corp (USU). Open $10.36

Karen Finerman preferred Comverse Technology (CMVT.PK). Open $20.41

Pete Najarian said buy Digital River (DRIV). Open $44.73

TUESDAY’S PICKS

Jeff Macke expects a pull back and recommends Short Dow30 ProShares (DOG). Open $58.03 Close $57.25 Loss $.78

Guy Adami said buy Pfizer (PFE). Open $24.42 Close $24.24 Loss $.18

Karen Finerman preferred NYMEX (NMX).Open $125.10 Close $125.70 Gain $.60

Pete Najarian liked ValueClick (VCLK). Open $22.00 Close $24.85 Gain $2.85

Since my tracking began on 6/21 (1-1 means one up pick and one down pick and no results from my vacation weeks)

Guy Adami= 25-18 Gain $40.86
Eric Bolling= 10-11 Loss $14.01
John Najarian= 13-3 Gain $15.54
Jeff Macke= 30-23 Gain $9.18
Pete Najarian= 19-16 Gain $27.74
Tim Seymore= 3-2 Loss $.49
Karen Finerman= 11-5 Gain $4.71
Stacey Briere-Gilbert= 2-0 Gain $1.61

Leaders, Sub-Prime, UN Scandal?, The MoveOn 25

– The top ten companies for producing leaders

– Remember those “rip off” sub-prime mortgages that are just terrible? If done right, they are actually the best for you

– Another thanks for the mention I just became aware of.-

– Hillary Clinton sides with Moveon.org over the US Military, only 1 of 25 Senators (all Democrats) to do so.

Did you ever read something that just did not jive with what you were witnessing?

Yesterday, Lowe’s (LOW), the second-largest home improvement chain after Home Depot (HD), said it now expected profit for the year ending in February to be at the low end or below a forecast of $1.97 to $2.01 a share it gave in August. Currently, analysts expect a profit of $1.99 a share equal to last year. The result of that warning was a 3% haircut for shares after hours yesterday and continued weakness this morning with share opening down 5%. A bit of an overreaction to a company essentially reaffirming estimates albeit at the low end?

They cited “drier” than normal conditions in much of the country that were keeping people from purchasing lawn and garden accessories. Makes sense. Except, I live in the Northeast and we have had probably 3 rainy days since July 4th and are currently under “drought” watering conditions. Yet, despite this, the local Lowe’s I was at this weekend was just a busy as usual. Now obviously you cannot extrapolate the entire chain from one location but that location in experiencing the very conditions they gave for the potential shortfall. Odd. This warning is also odd in that earlier this year Lowe’s told us they were seeing “improving” conditions in many areas. Just does not add up.

They also backed expectations of average growth of 12 percent to 15 percent in profit per share each year from 2008 through 2010, while total sales rise 8 percent to 11 percent a year during that time.

What to think? Lowe’s is giving us the worst case scenario. What is most likely to happen is a meet or more likely beat of these lowered expectations. Between the two chains (HD & LOW) Lowe’s is by far the better run and better situated to capitalize on any improvement. Having spent the last three years stealing market share from home depot every quarter, Lowe’s will see result catapult when things settle.

This may be a tremendous time to buy shres…