Kevin Shult
Flushing, New York - http://www.bloggingstocks.com/bloggers/kevin-shult
Kevin Shult has been involved in finance for over seven years. As an independent retail broker in New York City, he kept his clients afloat during one of the worst market recessions in history. In late-2004, Kevin headed for the calmer waters of financial journalism, to work for the online news site Theflyonthewall.com. Kevin continues to keep his finger on the market teaching Business and Economics to some of the brightest young minds in New York.
Posted Aug 23rd 2007 10:24AM by Kevin Shult (RSS feed)
Filed under: Before the Bell, Analyst Reports, Analyst Upgrades and Downgrades, Good news, , United Parcel'B' (UPS), Toll Brothers (TOL), Tyson Foods'A' (TSN), Stocks to Buy
MOST NOTEWORTHY: Countrywide Financial (CFC), Toll Brothers (TOL), United Parcel Service (UPS) and OSI Pharma (OSIP) were today's noteworthy upgrades:
- Both Friedman Billings and Wachovia upgraded Countrywide Financial (NYSE: CFC) to Market Perform from Underperform following the $2 billion investment by the Bank of America (BAC).
- JMP Securities upgraded Toll Brothers (NYSE: TOL) to Market Perform from Underperform and believes the worst news on housing is reflected and that fears over a disappearing jumbo loan market are overblown.
- Wachovia raised OSI Pharma (NASDAQ: OSIP) to Market Perform from Underperform on valuation...
OTHER UPGRADES:
Analyst summaries provided by TheFlyOnTheWall.com (subscription required).Posted Aug 22nd 2007 5:03PM by Kevin Shult (RSS feed)
Filed under: International Markets, Industry, Competitive Strategy, General Motors (GM), Marketing and Advertising, China
In a recent survey jointly conducted by
The British Council and a China daily, 84% of young Chinese want to purchase a car (despite the fact that 80% of them are concerned with global warning).
General Motors Corporation (NYSE:
GM) hopes to capitalize on that 84%. Shanghai General Motors' joint venture with Shanghai Automotive have announced the creation of interest-free car loans, as they fight for additional market share in the competitive Chinese market. In the first six months of 2007, General Motor brands have lagged in China behind the sales increases for passenger vehicles. Sales for Shanghai GM were up 12%, while overall car sales in China climbed 26%.
The "Buick Elite Wealth-Management Program," as its called, will try to lure buyers into financing in a nation where many prefer to buy cars with cash. GM officials
said they were unaware of the initiative before it was announced to the Chinese media, the
Wall Street Journal reported.
Posted Aug 22nd 2007 4:15PM by Kevin Shult (RSS feed)
Filed under: Deals, Rumors, Management, Industry, Competitive Strategy, Delta Air Lines (DAL)
Delta Air Lines (NYSE:
DAL) named Richard Anderson, the former head of
Northwest Airlines (NYSE:
NWA), its new CEO yesterday. The move follows Delta's 19 ½ month reorganization under bankruptcy protection.
Seth Tobias of Circle T Partners
told Bloomberg, "This could spur the possibility of further consolidation in the industry." The Board's Chairman, Daniel A. Carp, said that Anderson "possesses the right blend of seasoned leadership, strategic skills, international experience and airline knowledge the company needs to navigate the industry's challenges and capitalize on its opportunities."
Bear Stearns agreed with Tobias and Carp this morning. They said Anderson could reshape the U.S. airline industry, claiming that he and the current Northwest CEO, Douglas Steenland, are able to understand each other. Bear Stearns believes a merger between to two would create over $5 billion in incremental equity value.
Despite all the speculation, Anderson said he had no plans for a merger with Northwest on CNBC this morning. He did, however, predict there will be future consolidation within the industry, but failed to name names in the comment.
Anderson told reporters on a conference call that Delta is in a "position of strength" after leaving bankruptcy. The airliner that emerged from bankruptcy only months ago is certainly stronger than it was last year, but the company still faces significant headwinds, including the possibility of a slowdown, growing fuel costs and competition with the growing number of discount airlines. While the idea of Delta acquiring Northwest may sound like a logical move, the thought of taking over an airliner that has a disgruntled union, crew shortages, a
horrible reputation and a $3.57 billion market cap is just too much to swallow.
Posted Aug 22nd 2007 10:50AM by Kevin Shult (RSS feed)
Filed under: Before the Bell, Analyst Reports, Federal Natl Mtge (FNM), Analyst Initiations, Stocks to Buy, Stocks to Sell
MOST NOTEWORTHY: Riverbed Technology (RVBD), Silicon Storage (SSTI), Regal Entertainment (RGC), Fannie Mae (FNM) and Freddy Mac (FRE) were today's more noteworthy initiations:
- CIBC initiated shares of Riverbed Technology (NASDAQ: RVBD) with a Sector Performer rating, citing valuation. The firm believes the mobile opportunity is a wild card, and cites increased Cisco Systems (CSCO) risk.
- Silicon Storage (NASDAQ: SSTI) as announced several new products in late 2006 and 1H07 with shipments expected to start in 2H07 along with significant revenues in 2008; Barrington initiated shares with a Market Perform rating.
- Ferris Baker Watts initiated Regal Entertainment (NYSE: RGC) with a Neutral rating, seeing annual top-line growth only in the low- to mid-single digits.
- Fox-Pitt Kelton believes both Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) are finally set to emerge from restatement issues with new accounting procedures and operating systems in place, initiating both companies with an Outperform rating...
OTHER INITIATIONS:
- Needham initiated Tennant (NYSE: TNC) with a Buy rating.
- CIBC started Centene (NYSE: CNC) with a Sector Performer rating.
- Deutsche initiated Thomson (NYSE: TOC) with a Buy rating.
Analyst summaries provided by TheFlyOnTheWall.com (subscription required). Posted Aug 22nd 2007 10:40AM by Kevin Shult (RSS feed)
Filed under: Before the Bell, Analyst Reports, Analyst Upgrades and Downgrades, Bad News, Estee Lauder (EL), Family Dollar Stores (FDO), Stocks to Sell
MOST NOTEWORTHY: American Capital (ACAS), Doral Financial (DRL), E-Trade Financial (ETFC) and Family Dollar (FDO) were today's noteworthy downgrade:
- Jefferies downgraded shares of American Capital (NASDAQ: ACAS) to Hold from Buy citing the slowing M&A market and risk characteristics of the company.
- Soleil downgraded Doral Financial (NYSE: DRL) to Sell from Hold, on the belief that the recent reverse stock split will increase short-selling activity and discourage speculative buying.
- E-Trade Financial (NASDAQ: ETFC) was cut to Neutral from Buy at UBS, citing deteriorating trends in the credit/mortgage markets, lack of near-term catalysts; the firm does not see an M&A deal occurring near-term.
- Goldman downgraded Family Dollar (NYSE: FDO) to Neutral from Buy, citing weakness in the low-end consumer and increased pressure from Wal-Mart (WMT)...
OTHER DOWNGRADES:
- Wachovia downgraded Tween Brands (NYSE: TWB) to Market Perform from Outperform.
- Estee Lauder (NYSE: EL) was downgraded to Neutral from Outperform at Credit Suisse.
- Deutsche Bank cut Pearson (NYSE: PSO) to Hold from Buy.
Analyst summaries provided by
TheFlyOnTheWall.com (subscription required
Posted Aug 22nd 2007 10:25AM by Kevin Shult (RSS feed)
Filed under: Before the Bell, Analyst Reports, Analyst Upgrades and Downgrades, Good news, Campbell Soup (CPB), Lowe's Cos (LOW), US Airways Group (LCC), , Stocks to Buy
MOST NOTEWORTHY: Lowe's (LOW), Cooper Tire & Rubber (CTB), Campbell Soup (CPB), Reuters Group (RTRSY) and Netease.com (NTES) were today's noteworthy upgrades:
- JP Morgan upgraded Lowe's (NYSE: LOW) to Overweight from Neutral based on improved risk/return and conservative near-term estimates. UBS upgraded Lowe's to Buy from sell on valuation.
- Cooper Tire & Rubber (NYSE: CTB) was upgraded to Buy from Sell, as the firm thinks Copper is benefiting from surging demand for tires in Asia and considers the recent weakness a buying opportunity.
- UBS upgraded shares of Campbell Soup (NYSE: CPB) to Buy from Neutral, citing expected growth acceleration, productivity savings, and attractive valuation.
- Deutsche Bank is positive on the Thomson (TOC)-Reuters combination and expected synergies, upgrading Reuters Group (NASDAQ: RTRSY) to Buy from Hold.
- Netease.com (NASDAQ: NTES) was upgraded to Positive from Neutral at Susquehanna based on valuation and checks that indicate better than expected performance of Westward Journey Online III...
OTHER UPGRADES:
- Banc of America upgraded Glu Mobile (NASDAQ: GLUU) to Buy from Neutral.
Analyst summaries provided by TheFlyOnTheWall.com (subscription required). Posted Aug 21st 2007 4:25PM by Kevin Shult (RSS feed)
Filed under: Deals, Consumer Experience
Midwest Air Group (NYSE:
MEH)
agreed last week to be acquired by
TPG Capital, and CEO Tim Hoeksema relieved investors concerned about its independence by proclaiming, "The cookies stay." The move closed the door on
AirTran's (NYSE:
AAI) two-year hostile takeover attempt, but reports have now emerged that could allow
Northwest (NYSE:
NWA), the "passive investor" in the acquisition, to actually own Midwest outright one day.
TPG partner Richard Schifter is quoted by
The Associated Press saying "The equity firm may want to cash out of the deal some day, and Minneapolis-based Northwest could become the sole owner." Schifter told the
Kansas City Business Journal that
a potential acquisition of Midwest by Northwest would be "several years out and isn't anything we expect in the near future."
The potential for Northwest to acquire Midwest one day has definitely ruffled some feathers in the region. The
Milwaukee Journal Sentinel said
in an editorial that TPG's recent conference call with reporters was "not encouraging" and that questions remain, including if Midwest could survive in the business. The
Journal also questioned how "passive" Northwest's relationship with Midwest will be in the future, especially with its "spotty service record."
TPG Capital has a history of working with airlines. Since the main purpose for
private-equity companies is to make a profit on their investments, it is only logical to think that Northwest could one day own Midwest outright. It's also possible that TPG could sell the company to AirTran years down the tarmac. Either way, the cookies are safe, for now.
Posted Aug 21st 2007 3:40PM by Kevin Shult (RSS feed)
Filed under: Forecasts, Bad News, Consumer Experience, Carnival Corp (CCL), Mexico
Hurricane Dean's presence in the Western Caribbean has forced over a dozen cruise ships to quickly change their itinerary towards the eastern side of the Caribbean this week. The storm, currently moving as a Class Three hurricane through the Yucatan peninsula, has affected
Carnival Corp. (NYSE:
CCL) the most.
According to the company's site, as of Sunday, August 18th, the itineraries of over
ten Carnival ships have been altered, forcing them to dock in Eastern ports-of-call or cancel a part of their stay. CruiseCritic.com has reported that
a dozen of Carnival's ships were impacted from Dean. The company could not be reached for comment. Only
three Royal Caribbean Cruises Ltd (NYSE:
RCL) ships needed to steer clear of the storm.
Despite many weather stations calling Jamaica "Ground Zero" all weekend, the island nation received a glancing blow on Sunday. Gene Sloan of
USAToday's "The Cruise Log" reported today that Royal Caribbean will be the first to test Jamaica's waters on Wednesday, as originally scheduled. Carnival's spokesman Vance Gulliksen told Sloan their line expects to resume calls in Jamaica next week and plans to return to the Caymans as early as later this week, but is "awaiting final confirmation."
The major question is the impact of Dean on Cozumel and other Mexican ports on the Yucatan Coast. Check out CruiseCritic.com's
Hurricane Zone for an updated list of the damage reports.
Posted Aug 21st 2007 10:42AM by Kevin Shult (RSS feed)
Filed under: Before the Bell, Analyst Reports, Bed Bath and Beyond (BBBY), Analyst Initiations, Akamai Technologies (AKAM), Stocks to Buy, Stocks to Sell
MOST NOTEWORTHY: VMware (VMW), Bed, Bath & Beyond (BBBY), Williams-Sonoma (WSM), Landstar System (LSTR) and Acadia Pharmaceuticals (ACAD) were the noteworthy initiations:
- Robert W. Baird initiated coverage on VMware (NYSE: VMW) with a Neutral rating citing valuation.
- Citigroup started Bed Bath & Beyond (NASDAQ: BBBY) with a Hold rating, and cited the increasing competitive environment, slowing square footage growth and the weak housing market.
- Citigroup started Williams-Sonoma (NYSE: WSM) with a Sell rating and said the company has an inventory glut that could lead to markdown risk, there is raw material price inflation, and the weak housing market remains a material risk.
- Wachovia is cautious on Landstar System's (NASDAQ: LSTR) near-term growth rates and difficult end markets, starting shares with a Market Perform rating.
- Deutsche is positive on the potential of Acadia Pharmaceutical's (NASDAQ: ACAD) ACP-103 in schizophrenia, starting shares with a Buy rating...
OTHER INITIATIONS:
- Raymond James initiated Akamai (NASDAQ: AKAM) with an Outperform and resumed coverage of McAfee (NYSE: MFE) with an Outperform rating.
Analyst summaries provided by TheFlyOnTheWall.com (subscription required). Posted Aug 21st 2007 10:33AM by Kevin Shult (RSS feed)
Filed under: Before the Bell, Analyst Reports, Analyst Upgrades and Downgrades, Bad News, AutoNation Inc (AN), Toll Brothers (TOL), Stocks to Sell
MOST NOTEWORTHY: Toll Brothers (TOL), COTT Corp (COT), Tim Hortons (THI) and Linktone (LTON) were today's noteworthy downgrades:
- Banc of America downgraded shares of Toll Brothers (NYSE: TOL) to Sell from Neutral, citing expected deterioration in luxury sales due to mortgage distress in the marketplace.
- COTT Corp (NYSE: COT) was cut to Hold from Buy at Stifel, citing the difficult macro environment and continued profit declines.
- Tim Hortons (NYSE: THI) was downgraded to Neutral from Buy at Goldman, citing valuation, and notes that fundamentals remain favorable.
- Montgomery cut Linktone (NASDAQ: LTON) to Hold from Buy, citing the sudden decline in its wireless VAS revenues following Q2 results...
OTHER DOWNGRADES:
Analyst summaries provided by TheFlyOnTheWall.com (subscription required). Posted Aug 21st 2007 10:26AM by Kevin Shult (RSS feed)
Filed under: Before the Bell, Analyst Reports, Analyst Upgrades and Downgrades, Good news, McDonald's (MCD), Darden Restaurants (DRI), , Stocks to Buy
MOST NOTEWORTHY: McDonald's (MCD), Micron Tech (MU), ManPower (MAN), ASML Holding (ASML) and Wm. Wrigley Jr Co (WWY) were today's notable upgrades:
- McDonald's (NYSE: MCD) is creating shareholder value by selling 1600 under-performing restaurants and using the money for share buyback programs and dividends and was upgraded to Buy from Hold at Matrix.
- AG Edwards upgraded Micron (NYSE: MU) to Buy from Hold on the belief notebook unit growth could stay in the 25-30% YoY range over the next two quarters, while desktop growth could pick up from the 4% attained in the June quarter. Up from a low of close to $5 in February, NAND spot prices are in the $8-$9 range for an 8Gb chip over the last few weeks.
- ManPower (NYSE: MAN) was upgraded to Strong Buy from Hold at Matrix based on the growing demand for search services in Europe, Africa and North America.
- Friedman Billings upgraded shares of ASML Holding (NASDAQ: ASML) to Outperform from Market Perform and added them to their Top Picks list based on recent checks that indicate a sustainable recovery in lithography tool bookings beyond Q3.
- Bear upgraded shares of Wrigley (NYSE: WWY) to Peer Perform from Underperform citing the better-then-expected response to competitor Cadbury (CSG), UK momentum in developing markets, and likely strong performance by new gum, "5."
OTHER UPGRADES:
Analyst summaries provided by TheFlyOnTheWall.com (subscription required). Posted Aug 20th 2007 4:45PM by Kevin Shult (RSS feed)
Filed under: Bad News, Industry, Magazines, Daimler (DAI), Ford Motor (F), General Motors (GM), Toyota Motor Corp. (TM)
BusinessWeek put together a list of the
most recalled new cars in 2007. What is surprising is that four out of the top five vehicles were imports, and not domestic cars.
Chrysler's (NYSE:
DAI) Jeep Liberty, with 149,605 recalls, was the only domestic in the top 5. Chrysler had three other significant recalls, including the new Dodge Nitro, Jeep Wrangler and Chrysler Sebring.
General Motors (NYSE:
GM) had two vehicles recalled, while
Ford's (NYSE:
F) lone recall was from its Expedition line, and only totaled 10,000 SUVs.
Toyota's (NYSE:
TM) Sequoia hit No. 2 on the recall list, with 533,000 vehicles recalled. This is a surprising improvement from l
ast year, where Toyota recalled nearly 700,000 vehicles.
The new
Volkswagen (OTC:
VLKAY) Beetle took No. 1 on the recall list; triggered by the potential for a brake light switch to malfunction in over 1 million vehicles if it was installed incorrectly.
Take a look at
BusinessWeek's slide show
here.
Posted Aug 20th 2007 4:15PM by Kevin Shult (RSS feed)
Filed under: Time Warner (TWX), Sony Corp ADR (SNE), Film
Sony Corp's (NYSE:
SNE) "Superbad" ruled the weekend box office, raking in $31.2 million to become the No. 1 movie, according to estimates on Sunday. The teen comedy knocked off last weekend's top flick, New Line Cinema's "Rush Hour 3" to second place, and forced
Warner Brother's (NYSE:
TWX) "The Invasion," which stars veteran actress Nicole Kidman and the latest "James Bond," Daniel Craig, to open at No. 5.
Creating box-office hits seems to be a pattern for Judd Apatow, who has also directed "Knocked Up" and "The 40-Year-Old Virgin". In Apatow teamed up with Seth Rogen who coincidentally also starred in "Knocked Up", "The 40-Year-Old Virgin" and several other Apatow films. The pair has worked together for over a decade.
Sony had modest expectations for "Superbad" to earn somewhere in the $25 million range, despite having a production budget of $20 million. The $31 million dollar opening weekend was similar to Knocked Up, which opened with $30.7 million and went on to hit $100 million in sales.
Paul Derarabedian, president of box-office tracker Media By Numbers, believes that Apatow is a brand now, specializing in movies that appeal to older audiences who follow whatever he does, according to the
Associated Press. Apatow is currently working on
6 films, including one with Will Ferrell and Adam Sandler, and two with long-time partner Seth Rogen. Unfortunately for Sony, they entertainment giant will not be involved in any of Apatow's next six films.
Posted Aug 20th 2007 10:28AM by Kevin Shult (RSS feed)
Filed under: Before the Bell, Analyst Reports, Dell (DELL), Analyst Initiations, Stocks to Buy, Stocks to Sell
MOST NOTEWORTHY: Ocean Power Tech (OPTT), Dell (DELL) and VMware (VMW) were today's noteworthy initiations:
- WR Hambrecht believes Dell's (NASDAQ: DELL) renewed focus on the consumer will help the company gain back share, starting shares with a Buy rating.
- Cowen initiated VMware (NYSE: VMW) with a Neutral based on valuation...
OTHER INITIATIONS:
Analyst summaries provided by TheFlyOnTheWall.com (subscription required). Posted Aug 20th 2007 10:23AM by Kevin Shult (RSS feed)
Filed under: Before the Bell, Analyst Reports, Analyst Upgrades and Downgrades, Bad News, , McGraw-Hill Companies (MHP), USG Corp (USG), Stocks to Sell
MOST NOTEWORTHY: McGraw-Hill (MHP), Stein Mart (SMRT), USG Corp (USG) and Seacoast Banking (SBCF) were today's noteworthy downgrades:
- JP Morgan downgraded shares of McGraw-Hill (NYSE: MHP) to Neutral from Overweight based on expectations for a decline in credit market issuance activity.
- Stein Mart (NASDAQ: SMRT) was cut to Sell from Neutral at Merrill, citing macroeconomic concerns and the impact on margins and comps.
- Matrix cut USG (NYSE: USG) to Sell from Buy and removed them from the Focus List, Matrix cited the 55% cut in excess cash per share over the past year, which makes shares expensive on a performance-adjusted basis.
- Stifel views Seacoast Banking (NASDAQ: SBCF) as overvalued, downgrading shares to Sell from Hold, given earnings growth headwinds from credit quality and net interest margin compression...
OTHER DOWNGRADES:
Analyst summaries provided by TheFlyOnTheWall.com (subscription required).
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