ValuePlays

UPGRADES
Donnelley & Sons (RRD)= CL King Neutral » Strong Buy
Quidel (QDEL)= Pacific Growth Equities Neutral » Buy
Sunpower (SPWR)= Pacific Growth Equities Neutral » Buy
First Solar (FSLR)= Pacific Growth Equities Neutral » Buy
Blue Nile (NILE)= AmTech Research Sell » Neutral
PNM Resources (PNM )= Lehman Brothers Equal-weight » Overweight
VistaCare (VSTA)= Deutsche Securities Sell » Hold
Temple-Inland (TIN)= Citigroup Hold » Buy
Sunpower (SPWR)= Wedbush Morgan Buy » Strong Buy
PNM Resources (PNM)= RBC Capital Mkts Underperform » Sector Perform
Penn Natl Gaming (PENN)= Jefferies & Co Hold » Buy
Mattel (MAT)= Needham & Co Hold » Strong Buy
Cbeyond Comms (CBEY)= Needham & Co Hold » Buy
New Oriental Education & Technology (EDU)= Piper Jaffray Neutral » Buy
Clorox (CLX)= BMO Capital Markets Market Perform » Outperform
Silver Wheaton (SLW)= RBC Capital Mkts Underperform » Sector Perform
FormFactor (FORM)= JP Morgan Underweight » Neutral
Vertex Pharm (VRTX)= Banc of America Sec Neutral » Buy
Boston Scientific (BSX)= Banc of America Sec Neutral » Buy
Supervalu (SVU)= Banc of America Sec Sell » Neutral
FMC Corp (FMC)= Banc of America Sec Neutral » Buy
Affiliated Computer (ACS)= Credit Suisse Neutral » Outperform
Kindred Healthcare (KND )= Lehman Brothers Equal-weight » Overweight
Diageo plc (DEO )= Lehman Brothers Equal-weight » Overweight
Estee Lauder (EL)= UBS Sell » Neutral
Tellabs TLAB (UBS)= Neutral » Buy
Roper Inds (ROP)= Friedman Billings Mkt Perform » Outperform
ADC Telecom (ADCT)= Morgan Keegan Mkt Perform » Outperform

DOWNGRADES
SMSC (SMSC)= Canaccord Adams Buy » Hold
PFF Bancorp (PFB)= B. Riley & Co Neutral » Sell
Quiksilver (ZQK )= B. Riley & Co Buy » Neutral
Boeing (BA )= AmTech Research Buy » Sell
Cabela’s (CAB)= Piper Jaffray Buy » Neutral
Owens-Illinois (OI)= Deutsche Securities Buy » Hold
Consolidated Comms Illinois (CNSL)= Citigroup Hold » Sell
Prudential Plc (PUK)= Bear Stearns Outperform » Peer Perform
ING Group (ING)= Bear Stearns Peer Perform » Underperform
Regal Entertainment (RGC)= Wedbush Morgan Buy » Hold
CIBC (CM)= Citigroup Buy » Hold
LifeCore Biomed (LCBM)= JMP Securities Mkt Outperform » Mkt Perform
Petro-Canada (PCZ)= Credit Suisse Outperform » Neutral
Packeteer (PKTR)= Jefferies & Co Buy » Hold
F5 Networks (FFIV)= Jefferies & Co Buy » Hold
Deutsche Telekom (DT)= JP Morgan Neutral » Underweight
Vodafone PLC (VOD)= Lehman Brothers Overweight » Equal-weight
Aruba Networks (ARUN)= Jefferies & Co Buy » Hold
Autodesk (ADSK)= Jefferies & Co Buy

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Thursday’s Picks
Jeff Macke says buy Pfizer (PFE) = $23.40

Guy Adami likes Johnson & Johnson (JNJ)= $68.31

Karen Finerman recommends shorting Lehman (LEH)= $58.06

Pete Najarian thinks Tibco (TIBX) = $7.50 is a buy.

Wednesday’s Results

None

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

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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The DeBeers Diamond Group is in the middle of settling a class action lawsuit. That means if you purchased diamond jewelry between January 1994 and March 2006, you could be in for some free cash.

The lawsuit claims that DeBeers monopolized the supply of diamonds, and fixed and controlled the price of diamonds. To settle the suit, DeBeers is paying consumers back $136 million.

If you spent more than $160 on a piece of diamond jewelry between January 1 1994 and March 31 2006, you should file a claim. If you spent less than $160, the refund you could receive from DeBeers would be less than $10.

See Story at WSYR.com

To file a claim, click here:

To file a claim online, click here:

Disclosure: Wife likes diamonds….

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It seems the Japanese are courting any US financial institution in need of funds.

While their timing is more than a bit off given recent investments in Citigroup (C) and Merrill Lynch (MER) by Eastern Investors, the news does bode well for the thesis that more and more investors are seeing value in the sector.

Mitsubishi UFJ (MTU), Mitsui Sumitomo Financial Group (SMFJY) and Mizuho Financial (MFG) have pooled together $10 billion have declared they are “open to negotiation” with any struggling Wall Street bank in need of a cash infusion.

This is in a way even more encouraging news that the recent rush of investment primarily by Middle Eastern investors. The reason is the historic extreme financial conservatism of the Japanese banking sector.

Merrill Lynch did secure a $6.6 billion cash injection from a consortium that included Mizuho, together with the Kuwait Investment Authority and the Korean Investment Corporation. How conservative has the Japanese sector been? The deal represents the first time since 1989 that a Japanese financial house has taken a substantial stake American or European bank.

Disclosure: Long Citi, None in others

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Blogger in court, Foodies, Bloggers and companies, Financials

– This is fascinating and bears watching.

– Now a site for folks who love food. Think of it as “Facebook” for food.

– Here is the problem. If companies responded to bloggers when they are contacted by them, a lot of this would be eliminated. Since they do not generally, they deal with us in the blogsphere….

– Another yes vote for the financial sector..

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OK kids, I finally have a position in Apple (AAPL)

I sold 4 July 2008 $280 calls (APVGW) for $258 each this morning.

Simply put, as long as the stock price of Apple is below $280, 70% higher than it is now on July 19th , I pocket the money. Should it go above, I will be out the difference between $280 and wherever it sits.

Why?

* With the rollouts of the iTouch and the iPhone, in the last twelve months shares of Apple are up 74%. There is nothing on the horizon product wise that will provide the boost the company received last year. There was no “one more thing” moment at MacWorld.
* The US economy is clearly slowing down. Citigroup’s (C) and JPMorgan’s (JPM) results the past two days illustrate a clear deterioration of consumer credit cards. That will lead to a contraction in consumer purchases.
* The latest results for Europe, the iPhone’s recent launch area. Its economy is slowing also. Sales there have been moderate at best.
* Google’s (GOOG) phone. The only folks probably more loyal to a products than Apple’s are Google’s
* Research in Motion’s (RIMM) competing product. Until this point, Apple has had a product of one (touch screen), not anymore.
* Intel (INTC): Surprised with a disappointing quarter. May be a tech slowdown in the works.

Now none of this means Apple will not post fantastic results on Jan. 22. It does mean that there are significant headwinds that did not exist last year and up until this point in 2008. Trading at over 40 times earnings after the recent 15% fall in the stock price, 2008 will prove to be much tougher than 2007.

Now, Apple fanatics out there. I did not say Apple will lose money or see earnings decline so lets just pull out the paddles and zap ourselves into a calmer state. One would be hard pressed to think the stock will match the last 12 months performance in the next 6 though given the macro environment.

Disclosure: I guess this makes me short Apple at $280, Long Citi, None in others

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I save the rehash of Citigroup’s (C) quarter. We expected it to be awful, and Citi delivered.

The dividend cut to $.32 a quarter for a still fat 4.5% yield. $18 billion in write-downs, a $9.8 billion loss ans $14 billion in change in preferred stock sold to investors. That finishes my Q4 review.

So, where do investors go from here? Is there light at the end of the tunnel? YUP

The terms of the convertible preferred issuance are $12.5 billion, a 7% dividend, a 20% conversion premium and are non-callable for seven years. The firm will also sell $2 billion in common stock to all shareholders. Time to be announced.International Businesses:

Citi is booming here. International consumer cards net income more than doubled,up 68%. International growth drove an 85% increase in net income at the Private Bank and a 7% increase at Smith Barney.

Europe, Asia, Latin America, Africa and Middle East consumer divisions all experienced high double digit net income growth. Latin America and Asian Markets & Banking divisions net income grew at mid double digit rates.

Now, admittedly saying “except for those write-downs it would have been a great quarter” is more than a bit like saying “other than the assassination, how was the theater Mrs. Lincoln?”

Much of the planned head count reductions are going to come from asset sales. Both of these things are exactly what need to be done. The dividend did not need to be cut and I think returning it will be a priority down the road.

Part of the problem is that Pandit will not make anyone forget Sandy Weill or Jack Welch. Charisma is not in his DNA. That does not mean he cannot get the job done. Turning Citi is a job unlike any other.

Wall St. wanted blood Tuesday and did not get it. Because of that, the stock is selling off. Personally, with an operation the size of Citi, coming out and saying “this is the finalized plan” a couple months after being on the job would have been irresponsible. It just is not possible to do a detailed job in that time frame. Had he done it that way, he would have been relying heavily on the opinion and advice of others, not a good idea at this point.

Pandit needs to take decisive action and has Q1 to do it. He should not just fire away to make jittery investors happy.

Disclosure: Long Citi

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Interesting thoughts on Countrywide (CFC).

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Wednesday’s Picks

None

Tuesday’s Results:
Jeff Macke says sell Netflix (NFLX) $22.77 Close $22.05 GAIN

Guy Adami recommends buying EMC Corp (EMC) $16.80 Close $16.68 LOSS

Karen Finerman prefers Corning (GLW) $23.25 Close $23.24 LOSS

Pete Najarian likes Bunge (BG) $133.0 Close $127.21 LOSS

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

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:

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