Ambac, JP Morgan, Graham, Steve & Barry
– Perhaps the next time Dimon gets involved with a proposed buyout, he’ll make sure the CEO and Chairman know about it?
– I think it would be worth it
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Ambac, JP Morgan, Graham, Steve & Barry
– Perhaps the next time Dimon gets involved with a proposed buyout, he’ll make sure the CEO and Chairman know about it?
– I think it would be worth it
Visit the ValuePlays Bookstore for Great Investing Books
Thanks to John for the email alerting me to this. It is a slide show on Ackman’s plan for Freddie Mac (FRE) and Fannie Mae (FNM)
Disclosure (“none” means no position):None
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Thanks to John for the email alerting me to this. It is a slide show on Ackman’s plan for Freddie Mac (FRE) and Fannie Mae (FNM)
Disclosure (“none” means no position):None
Visit the ValuePlays Bookstore for Great Investing Books
Upgrades
F5 Networks (FFIV)- Wedbush Morgan Hold » Buy
IntercontinentalExchange (ICE)- BMO Capital Markets Market Perform » Outperform
CSG Systems (CSGS)- Brean Murray Hold » Buy
Acergy (ACGY)- Lehman Brothers Underweight » Equal-Weight
Schering-Plough (SGP)- Lehman Brothers Equal-Weight » Overweight
Bankrate (RATE)- Roth Capital Hold » Buy
Nike (NKE)- Susquehanna Financial Neutral » Positive
CSG Systems (CSGS)- Citigroup Hold » Buy
Lennar (LEN)- UBS Sell » Neutral
eHealth (EHTH)- Oppenheimer Underperform » Perform
Downgrades
LaSalle Hotel (LHO)- RBC Capital Mkts Top Pick » Outperform
Continental Resources (CLR)- Broadpoint Capital Buy » Neutral
Cogent Communications (CCOI)- Friedman Billings Mkt Perform » Underperform
Memsic (MEMS)- Jefferies & Co Buy » Hold
LHC Group (LHCG)- BB&T Capital Mkts Buy » Hold
Sunstone Hotel (SHO)- RBC Capital Mkts Outperform » Sector Perform
Groupe Danone (GDNNY)- Citigroup Buy » Hold
Vail Resorts (MTN)- Banc of America Sec Buy » Neutral
American Intl (AIG)- Wachovia Outperform » Mkt Perform
Third Wave (TWTI)- Deutsche Securities Buy » Hold
Kimberly-Clark (KMB)- Wachovia Outperform » Mkt Perform
Wachovia (WB)- Oppenheimer Perform » Underperform
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Upgrades
F5 Networks (FFIV)- Wedbush Morgan Hold » Buy
IntercontinentalExchange (ICE)- BMO Capital Markets Market Perform » Outperform
CSG Systems (CSGS)- Brean Murray Hold » Buy
Acergy (ACGY)- Lehman Brothers Underweight » Equal-Weight
Schering-Plough (SGP)- Lehman Brothers Equal-Weight » Overweight
Bankrate (RATE)- Roth Capital Hold » Buy
Nike (NKE)- Susquehanna Financial Neutral » Positive
CSG Systems (CSGS)- Citigroup Hold » Buy
Lennar (LEN)- UBS Sell » Neutral
eHealth (EHTH)- Oppenheimer Underperform » Perform
Downgrades
LaSalle Hotel (LHO)- RBC Capital Mkts Top Pick » Outperform
Continental Resources (CLR)- Broadpoint Capital Buy » Neutral
Cogent Communications (CCOI)- Friedman Billings Mkt Perform » Underperform
Memsic (MEMS)- Jefferies & Co Buy » Hold
LHC Group (LHCG)- BB&T Capital Mkts Buy » Hold
Sunstone Hotel (SHO)- RBC Capital Mkts Outperform » Sector Perform
Groupe Danone (GDNNY)- Citigroup Buy » Hold
Vail Resorts (MTN)- Banc of America Sec Buy » Neutral
American Intl (AIG)- Wachovia Outperform » Mkt Perform
Third Wave (TWTI)- Deutsche Securities Buy » Hold
Kimberly-Clark (KMB)- Wachovia Outperform » Mkt Perform
Wachovia (WB)- Oppenheimer Perform » Underperform
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Ackman is short the junior debt and equity of both, but not the senior debt.
First watch Rep. Paul Ryan from the Ways and Means and listen to his concerns regarding Fannie (FNM) and Freddie (FRE).
Now listen to Ackman’s plan:
Part 1:
Part 2:
Ackman’s plan is brilliant as it restores the institutions financially so they can help the housing market, punishes equity holders for investing in a company with equity of 140 to 1, save senior debt that has the implicit guarantee and uses most likely, no tax payer funds.
If you do not get it, listen to the plan again. It is very simple and covers all the bases as far as the current objections to any government involvement in them.
With all the hand wringing out there over both entities, this solution is by far the best proposed. Now, the skeptics will say “Ackman just wants to make money”. So what? Let him is he saves us all a whole lot more losses. Besides, if he comes up with the plan, why shouldn’t he profit?
Disclosure (“none” means no position):None
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Rates are going up…This is the highest interest rate for the auction yet.
On July 14, 2008, the Federal Reserve conducted an auction of $75 billion in 28-day credit through its Term Auction Facility. Following are the results of the auction:
Stop-out rate: 2.300%
Total propositions submitted: $93.344 billion
Total propositions accepted: $75.000 billion
Bid/cover ratio: 1.24
Number of bidders: 82
Bids at the stop-out rate were prorated at 10.77% and resulting awards were rounded to the nearest $10,000 (except that all awards below $10,000 are rounded up to $10,000).
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16 months ago I said in a post comparing McDonald’s (MCD) and Starbucks (SBUX), “Of course there are the “coffee connoisseurs,” they will never go to McDonald’s and I am not talking about them, I am speaking of the great ambivalent masses in the middle. When all things are equal, price and convenience always win.”
Listen to the CEO of Dunkin Brands Monday morning:
Starbucks like to think of itself as the “Tiffany’s” (TIF) of coffee. Okay, I’ll go with it. Here is the issue. Tiffany’s does not have 14,000 locations. You cannot be the high priced option in a commodity business and have that many locations and survive a downturn without being severely bruised and battered.
Starbucks is responding by closing 600 location. Mark my words here….there will be more. Dunkin is getting the trade down business and even their CEO sounded cautious. If I were a Starbucks shareholder, based on this interview, July 29th would be a very nervous day for me. Q3 earnings come out and I would be highly shocked if Starbucks managed to come close to the 15 cents (down from 19 last year) analysts expect without some nifty tricks.
In what seems an eternity ago when shares sat at $37 I said they were due for a fall. When they got to $25 I said they were due for more downside and said the same at $21. Now at $14 and change, a price not seen since Sept. 2003, have they bottomed? Not by a long shot. Starbucks still trades at 17 times this year’s expected earnings. That expectation, I think is too high in which case the earnings multiple is actually larger).
Starbucks is going to struggle for the next year or two because other than closing a few locations, they have not made any fundamental changes that will make them more appealing to cash strapped customers. Unless they find a way to enable customers to feel a value proposition from going there, store trafic will continue to decline.
By the time it is all over, we ought to see shares trading at $10 each.
Disclosure (“none” means no position):Long MCD, None
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16 months ago I said in a post comparing McDonald’s (MCD) and Starbucks (SBUX), “Of course there are the “coffee connoisseurs,” they will never go to McDonald’s and I am not talking about them, I am speaking of the great ambivalent masses in the middle. When all things are equal, price and convenience always win.”
Listen to the CEO of Dunkin Brands Monday morning:
Starbucks like to think of itself as the “Tiffany’s” (TIF) of coffee. Okay, I’ll go with it. Here is the issue. Tiffany’s does not have 14,000 locations. You cannot be the high priced option in a commodity business and have that many locations and survive a downturn without being severely bruised and battered.
Starbucks is responding by closing 600 location. Mark my words here….there will be more. Dunkin is getting the trade down business and even their CEO sounded cautious. If I were a Starbucks shareholder, based on this interview, July 29th would be a very nervous day for me. Q3 earnings come out and I would be highly shocked if Starbucks managed to come close to the 15 cents (down from 19 last year) analysts expect without some nifty tricks.
In what seems an eternity ago when shares sat at $37 I said they were due for a fall. When they got to $25 I said they were due for more downside and said the same at $21. Now at $14 and change, a price not seen since Sept. 2003, have they bottomed? Not by a long shot. Starbucks still trades at 17 times this year’s expected earnings. That expectation, I think is too high in which case the earnings multiple is actually larger).
Starbucks is going to struggle for the next year or two because other than closing a few locations, they have not made any fundamental changes that will make them more appealing to cash strapped customers. Unless they find a way to enable customers to feel a value proposition from going there, store trafic will continue to decline.
By the time it is all over, we ought to see shares trading at $10 each.
Disclosure (“none” means no position):Long MCD, None
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Congress, Sad, Mercer, Energy
– Oh please……..
– Snow was a good guy and ignored the bomb throwing so prevalent today.
– A hell of a guy
– This guy just may be right
Visit the ValuePlays Bookstore for Great Investing Books
Congress, Sad, Mercer, Energy
– Oh please……..
– Snow was a good guy and ignored the bomb throwing so prevalent today.
– A hell of a guy
– This guy just may be right
Visit the ValuePlays Bookstore for Great Investing Books
Is there a bank out there now who has not hired Goldman Sachs (GS) as an adviser?
Wachovia(WB) recently disclosed that it hired Goldman as an adviser to help is get out from it’s huge portfolio of troubled loans. They join Royal Bank of Scotland(RBS) Washington Mutual (WM), National City (NCC) and State Street(STT) who turned to Goldman for advice and to raise money as conditions and loans portfolios have deteriorated.
Now news is out that Lehman (LEH) may be looking for a partner. anyone want to bet Goldman is involved somehow Will Fannie (FNM) and Freddie (FRE) turn to Goldman as their fortunes continue to sour? Goldman helped Freddie Mac raise $6 billion in preferred capital last year.
It is getting to the point where you have Goldman, JP Morgan (JPM) and Wells Fargo (WFC) as the cream of the crop in financials since they seem to be involved in everything when it comes to bailing or helping people out or in the case of Wells Fargo, not in the news at all and the rest of the financials mulling around looking for a handle to grab.
Goldman’s earnings call at the end of the month ought to be an interesting one. If anyone knows what is sitting out there on banks books, it will be them. What they say will bear listening to.
Disclosure (“none” means no position):Long GS,WB,WFC, None
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Upgrades
Gymboree (GYMB)- Wedbush Morgan Buy » Strong Buy
Pinnacle Finl (PNFP)- Janney Mntgmy Scott Neutral » Buy
Key Energy (KEG)- Banc of America Sec Neutral » Buy
RadNet (RDNT)- Stanford Research Hold » Buy
Zumiez (ZUMZ)- Piper Jaffray Neutral » Buy
Fedrl Rlty Inv Trst (FRT)- Robert W. Baird Neutral » Outperform
Groupe Danone DA (UBS)- Sell » Neutral
Shanda Interactive (SNDA)- Citigroup Hold » Buy
Ciena (CIEN)- JMP Securities Mkt Underperform » Mkt Perform
Intersil (ISIL)- RBC Capital Mkts Sector Perform » Outperform
Owens Corning (OC)- Morgan Keegan Mkt Perform » Outperform
Natl Oilwell Varco (NOV)- Banc of America Sec Neutral » Buy
Kinetic Concepts (KCI)- JP Morgan Underweight » Neutral
Gladstone Commercial (GOOD)- Robert W. Baird Neutral » Outperform
Fastenal (FAST)- Robert W. Baird Neutral » Outperform
Genzyme (GENZ)- Citigroup Hold » Buy
Macy’s (M)- JP Morgan Underweight » Neutral
Dean Foods (DF)- JP Morgan Neutral » Overweight
Domtar (UFS)- RBC Capital Mkts Sector Perform » Outperform
Louisiana-Pacific (LPX)- RBC Capital Mkts Underperform » Sector Perform
Downgrades
The Bancorp (TBBK)- Sterne Agee Buy » Hold
Natus Medical (BABY)- Avondale Mkt Outperform » Mkt Perform
Superior Services (SUPR)- Janney Mntgmy Scott Buy » Neutral
Rohm and Haas (ROH)- Longbow Buy » Neutral
UAL Corp (UAL)- Credit Suisse Outperform » Neutral
Continental Air (CAL)- Credit Suisse Outperform » Neutral
Air Tran Holdings (AAI)- Credit Suisse Outperform » Neutral
Alaska Air (ALK)- Credit Suisse Neutral » Underperform
Hercules (HPC)- Deutsche Securities Buy » Hold
ThomsonReuters (TRIN)- UBS Neutral » Sell
Pearson Plc (PSO)- Deutsche Securities Hold » Sell
Wachovia (WB)- UBS Buy » Neutral
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Upgrades
Gymboree (GYMB)- Wedbush Morgan Buy » Strong Buy
Pinnacle Finl (PNFP)- Janney Mntgmy Scott Neutral » Buy
Key Energy (KEG)- Banc of America Sec Neutral » Buy
RadNet (RDNT)- Stanford Research Hold » Buy
Zumiez (ZUMZ)- Piper Jaffray Neutral » Buy
Fedrl Rlty Inv Trst (FRT)- Robert W. Baird Neutral » Outperform
Groupe Danone DA (UBS)- Sell » Neutral
Shanda Interactive (SNDA)- Citigroup Hold » Buy
Ciena (CIEN)- JMP Securities Mkt Underperform » Mkt Perform
Intersil (ISIL)- RBC Capital Mkts Sector Perform » Outperform
Owens Corning (OC)- Morgan Keegan Mkt Perform » Outperform
Natl Oilwell Varco (NOV)- Banc of America Sec Neutral » Buy
Kinetic Concepts (KCI)- JP Morgan Underweight » Neutral
Gladstone Commercial (GOOD)- Robert W. Baird Neutral » Outperform
Fastenal (FAST)- Robert W. Baird Neutral » Outperform
Genzyme (GENZ)- Citigroup Hold » Buy
Macy’s (M)- JP Morgan Underweight » Neutral
Dean Foods (DF)- JP Morgan Neutral » Overweight
Domtar (UFS)- RBC Capital Mkts Sector Perform » Outperform
Louisiana-Pacific (LPX)- RBC Capital Mkts Underperform » Sector Perform
Downgrades
The Bancorp (TBBK)- Sterne Agee Buy » Hold
Natus Medical (BABY)- Avondale Mkt Outperform » Mkt Perform
Superior Services (SUPR)- Janney Mntgmy Scott Buy » Neutral
Rohm and Haas (ROH)- Longbow Buy » Neutral
UAL Corp (UAL)- Credit Suisse Outperform » Neutral
Continental Air (CAL)- Credit Suisse Outperform » Neutral
Air Tran Holdings (AAI)- Credit Suisse Outperform » Neutral
Alaska Air (ALK)- Credit Suisse Neutral » Underperform
Hercules (HPC)- Deutsche Securities Buy » Hold
ThomsonReuters (TRIN)- UBS Neutral » Sell
Pearson Plc (PSO)- Deutsche Securities Hold » Sell
Wachovia (WB)- UBS Buy » Neutral
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