CARTOON OF THE WEEK
BR
EAKING STOCK ALERTS
Goodyear Tire & Rubber Co. (GT-$12.23) said it is curbing production at its Union City, Tenn. tire plant because of weak industry demand and would record a $60 million charge in the third-quarter related to the downsizing. The company is moving to a five-day, three-shift operation from a continuous operating schedule on July 6.
Manulife Financial Corp. (MFC-$20.57), Canada's largest insurance company, said it has received an enforcement notice from regulators over what the company reportedly told investors about the risks of its guaranteed fund business, according to an AP report.
OceanFirst Financial (OCFC-$11.59) registered to sell from time to time up to $80 million stock or debt. The savings and loan holding company said it intends to use the net proceeds for repurchase of its preferred stock and warrant issued to the U.S. Department of Treasury under the Troubled Asset Relief Program Capital Purchase Program.
Oracle Corp. (ORCL-$20.66) is expected to post profit and sales declines when it reports results after the close of trading on Tuesday for its fiscal fourth-quarter, typically the business software giant's strongest period of the year.
Standard & Poor's Rating Service revised its outlook on the credit rating on trucking company Paccar (PCAR-$31.42) to negative saying "continued deterioration of commercial-vehicle demand in North America and Europe could hinder Paccar's efforts to improve profitability."
Analysts surveyed by Thomson Reuters expect drugstore operator Walgreen Co. (WAG-$31.43) to earn 56 cents per share on improving store performance when it reports its fiscal third-quarter results on Monday.
HEADLINE NEWS
Is AT& T playing gatekeeper to the wireless web?
Trimtabs president Charles Biderman is advising all his professional clients to turn entirely bearish on U.S. stocks – in part because individual investors are shoveling their money into equities.
Car dealers and auto makers are laying plans to try to capitalize on the “cash for clunkers” provision in the war-funding bill passed by Congress.
The Chevy Volt is a year away from showrooms, but GM execs and their government overseers see the plug-in hybrid as key to the automaker's hopes for revival after it exits bankruptcy.
CNBC looks at the ten hottest commodities of the first-half of 2009.
David Nelms, chief executive officer of Discover Financial Services, says credit card reforms will mean higher interest rates, more fees, and fewer perquisites for holders.
What to avoid on eBay—and what’s still worth shopping for on the venerable auction site.
Hank Greenberg on the stand: Is the ex–AIG chief lying?
Healthcare, not bailouts, could bankrupt America.
Investors are kicking themselves for failing to spot the twin bubbles in the stock and housing markets when the laws of economic gravity for both became spectacularly unhinged. Now, America should be on red alert for another bubble that's destined to pop – outrageously overpriced government bonds. Are higher interest rates coming?
Although no evidence has emerged to date that she even knew about her husband’s crimes, Ruth Madoff has been pilloried and turned into a pariah. Is she the loneliest woman in New York City?
Six things to know about the bankruptcy filing at Six Flags, one of the world’s largest amusement-park chains.
After taking a bath on stock buybacks in prior years, companies don't want to spend money to snap up their shares at sharply lower prices.
QUOTE CHECK
Matrixx Initiatives (MTXX-$5.55) has confirmed that it received a warning letter from the Food and Drug Administration about several of its 19 existing Zicam products, specifically Zicam Cold Remedy Nasal Gel and Zicam Cold Remedy Swabs. The warning letter cited consumer reports that the use of these products could cause a temporary or permanent loss of smell, known as anosmia. Although the company will comply with the FDA request, management will seek a meeting with the FDA to defend the scientific data demonstrating the products’ safety.
"Matrixx Initiatives stands behind the science of its products and its belief that there is no causal link between its Zicam Cold Remedy intranasal gel products and anosmia," said William J. Hemelt, Matrixx Initiatives' acting president in a press release. "It is well understood in the medical and scientific communities that the most common cause of anosmia is the common cold, which Zicam Cold Remedy intranasal gel products are taken to treat. Given the enormous number of doses sold and colds treated, there is no reason to believe the number of complaints of anosmia received is more than the number that would be expected in the general population.”
Management says, “no reliable scientific evidence exists that supports the claim that Zicam causes anosmia and that no plaintiff has ever won a product liability case against the company.” Still, that has not stopped folks from trying, with hundreds of lawsuits having been filed against the company since 2003. As part of the overall attempt to wind-down product liability litigation connected with Zicam, the company did settle approximately 500 of these lawsuits in recent years—at a cost of about $12 million. In addition, the company has spent almost $17.9 million on litigation expenses in just the last four years.
The fact remains that Matrixx could catch a deadly cold of its own through this activist intervention by the FDA, for homeopathic cold-remedies accounted for 73 percent of its $111.6 million in sales last year.
WALL STREET Buyout File
Ezra Dabah, the largest shareholder in Children's Place Retail Stores (PLCE-$25.82) continued his proxy fight with the clothing retailer on whose board he sits, issuing a letter urging shareholders to vote for his slate of directors.
Broadband interconnection services provider FiberNet Telecom Group Inc (FTGX-$12.63) may face some opposition in its plans to be taken over by regional telecom services provider Zayo Group LLC for $11.45 a share in cash. Carlson Capital, L.P., a hedge fund with a 10.1% ownership stake, issued a letter to the board opining that the standing offer does not fairly compensate the company’s shareholders.
Catalysts for an upswing in the price of Spectrum Pharmaceuticals (SPPI-$6.03) could be the approval of two cancer drugs coming before the FDA in the next 120 days, according to Justin Hall of BioMed Reports.
Standard & Poor analyst Tuna N. Amobi is impressed with the turnaround plans at digital video recording pioneer TiVo Inc. (TIVO-$11.05) but figures its technology and cash hoard make it an attractive takeover target. Bernstein Research analyst Craig Moffett says one long shot possibility is that DirecTV (DTV-$23.68) could buy the company for its DVR patents.
Israeli-based Teva Pharmaceutical (TEVA-$47.27) chief executive Shlomo Yanai told Bloomberg News his company is ready for another major buyout and might look beyond generics. Potential targets cited by analysts include King Pharmaceuticals (KG-$9.83), Shire Plc (SHPGY-$40.86), and Endo Pharmaceuticals (ENDP-$17.73).
After AOL, is Time Warner’s (TWX-$25.15) next deal to sell itself?
INVESTMENT IDEAS
Apple (APPL-$139.48) has been a player in the wireless market for only two years, since its first iPhone went on sale in late June of 2007. According to data from IDC, data from IDC, Apple now accounts for more than 19 percent of the U.S. smartphone market – putting the company second only to Research In Motion /quotes/comstock/15*!rimm/quotes/nls/rimm (RIMM-$72.78), the maker of the popular BlackBerry smartphone line, which has nearly 49 percent of the domestic market. In a bid to grab a bigger chunk of the market, Apple is launching its 3GS iPhone. In the coming years, however, Apple will face more competition in the smart-phone market.
In a report to clients, Rochdale Securities analyst Richard Bove issued a price target of $4 a share for Citigroup /quotes/comstock/13*!c/quotes/nls/c (C-$3.17), and estimated its stock to be worth $12 a share when earnings "normalize," he wrote.
A recent 18 percent decline in the share price of pump and valve maker Colfax Corp. (CFX-$7.88) plus its long-term prospects led Janney Montgomery Scott analyst Ryan C. MacLeanan to upgrade the company's shares.
Apache (APA-$75.34) trades at a discount to its energy exploration peers, writes Gene Marcial of BusinessWeek, and is poised to be among the first out of the gate when the economic recovery gains traction.
UBS analyst Stephen Chin raised its stock-investment rating on SunPower Corp. (SPWRA-$28.49) to buy from neutral, adding that the the solar-electric systems maker has the greatest sales exposure in the growing U.S. solar market.
EDITED BY DAVID J. PHILLIPS
Information has been obtained from sources believed to be reliable, but its accuracy or completeness is not guaranteed. Investor-Advantage is not a registered investment advisor and therefore cannot give individual investment advice. The opinions expressed herein are subject to change without notice. Neither the information nor any opinion expressed herein constitutes a solicitation by us of the purchase or sale of any securities. Investor-Advantage, its affiliates, and/or their officers and employers may from time to time acquire, hold, or sell a position in the securities mentioned herein. Upon receipt of queries, specific information in this regard will be furnished.
