Analyst Upgrades

• Wells Fargo upgraded Norfolk Southern (NSC) to outperform from market perform following the company's Q1 results.
• RBC Capital transferred coverage on Gildan Activewear (GIL) with an outperform from sector perform. The firm is positive on Gildan's low-cost producer strategy and free cash flow generation. The firm raised its target to $35 from $26.
• Wunderlich upgraded Delphi Financial (DFG) to buy from hold following the company's Q1 results and raised its target for shares to $31 from $29.
• Aflac (AFL) was upgraded to buy from neutral at Sterne Agee.
• Time Warner (TWX) was upgraded to outperform from neutral at Cowen.
• Pride International (PDE) was upgraded to outperform from neutral at Credit Suisse.

Continue reading Analyst Calls: NSC, GIL, DFG, F, DVA, PFWD, PGN, TDS, PSSI ...

Analyst Calls: NSC, GIL, DFG, F, DVA, PFWD, PGN, TDS, PSSI ... originally appeared on BloggingStocks on Wed, 28 Apr 2010 10:30:00 EST. Please see our terms for use of feeds.

Activist investor Carl Icahn is reportedly interested in taking another run at Delphi Corp. after a federal judge ordered the bankrupt auto parts supplier to open the sale of its assets to potential bidders, in addition to the previous offer from private-equity firm Platinum Equity.

Icahn's auto-parts company, Federal-Mogul Corp. (NASDAQ: FDML), had held discussions with Delphi, but the Presidential Task Force on the Auto Industry, which was set up by the Obama administration to oversee the restructuring of the U.S. auto industry, preferred the Platinum Equity deal.

Continue reading Carl Icahn gets a second chance to acquire Delphi

Carl Icahn gets a second chance to acquire Delphi originally appeared on BloggingStocks on Sun, 14 Jun 2009 15:10:00 EST. Please see our terms for use of feeds.

Continue reading Plenty of GM news: Sale of Saturn, management shakeup, Delphi buyout

Plenty of GM news: Sale of Saturn, management shakeup, Delphi buyout originally appeared on BloggingStocks on Fri, 05 Jun 2009 09:20:00 EST. Please see our terms for use of feeds.

General Motors (NYSE: GM) is proposing it put up several more billion dollars to help auto parts company Delphi out of Chapter 11. At one point the firm was part of GM but was spun out to the public in a deal that shareholders must have come to regret.

With the car business operating under pressure from falling vehicle sales, parts suppliers are being squeezed to drop prices. This has made the Delphi situation worse.

According to Reuters, "Under the deal, which met quick opposition from Delphi creditors, GM would provide Delphi with a total of $10.6 billion in support, including the assumption of $3.4 billion in pension obligations for Delphi's factory workers."

GM is trapped. It needs the flow of products from Delphi to keep its plants running. It has contract obligations to Delphi's pension funds. But, GM is already running short of cash and may have to bring in more money next year, especially if auto sales worsen.

GM is now begging Congress for $50 billion in loan guarantees to upgrade plants for the Big Three. The idea is to finance a changeover to operations that would build more fuel-efficient cars.

But, GM may need the loans just to stay in business.

Douglas A. McIntyre is an editor at 247wallst.com.

General Motors may give Delphi billions of dollars it does not have originally appeared on BloggingStocks on Sat, 13 Sep 2008 16:10:00 EST. Please see our terms for use of feeds.

Delphi was once the mighty parts operation at GM (NYSE: GM). It got to go out on its own with an IPO, and it has been trouble ever since. Because of contract obligations GM had with its former division, it has poured hundreds of millions of dollars into Delphi.

Delphi has been operating under Chapter 11 and trying, without success, to return to its role as an independent company. Now the collapse of the car business is likely to cause a liquidation of the entire firm.

According to The Wall Street Journal, "Delphi's bankruptcy financing expires at year end, and there are indications that its current lenders may balk at renewing it." Analysts might find it easy to say that Delphi is a microcosm of the car industry and that car companies are heading in a similar direction. That is not true. Delphi has operated under Chapter 11 for some time.

On the other hand, "G.M.'s vice chairman, Robert A. Lutz, said the car companies need money to retool their plants but probably cannot raise enough capital on their own because of the tight credit markets," according to The New York Times. That may be the first time that a top industry executive has indicated the industry may simply run out of cash.

The U.S. auto industry has not caught up to Delphi yet, but it is running toward the same place awfully fast.

Douglas A. McIntyre is an editor at 247wallst.com.

The end for auto parts company Delphi? originally appeared on BloggingStocks on Fri, 29 Aug 2008 10:20:00 EST. Please see our terms for use of feeds.

General Motors lends another $300 million to Delphi originally appeared on BloggingStocks on Mon, 11 Aug 2008 11:26:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• The market for private mortgage insurance has narrowed and is tougher to obtain, further pressuring home buyers and affecting the market, the Wall Street Journal reported. "Clearly, the pendulum had swung a little too far in terms of flexibility in underwriting," said Len Sweeney, the chief risk officer at AIG United Guaranty, a part of American International Group Inc (NYSE: AIG).
• In a agreement with Viacom Inc (NYSE: VIA), Google Inc (NASDAQ: GOOG) said it will remove visitor data from YouTube before it fulfills a judge's order to send data to Viacom, as a part of a larger copyright lawsuit, the Wall Street Journal reported.

• As part of its effort to emerge from bankruptcy protection, the Detroit News reported that Delphi Corp (OTC: DPHIQ) announced plans to sell its brake business. Delphi has retained W.Y. Campbell and Co to help sell the unit, which has around 1,000 employees worldwide.
• The New York Post learned that Dick Fuld, the CEO of Lehman Brothers Holdings Inc (NYSE: LEH), is seriously considering ways to take the company private. The Post said that talks centering on the privatization of Lehman have "gotten very serious consideration," according to sources, although details on how a maneuver may work remain unclear.

Newspaper wrap-up: Lehman CEO may look to take company private originally appeared on BloggingStocks on Tue, 15 Jul 2008 08:00:00 EST. Please see our terms for use of feeds.

Steve Miller's book The Turnaround Kid: What I Learned Rescuing America's Most Troubled Companies has generated considerable controversy. The Wall Street Journal (subscription required) discusses the brouhaha in some detail. I don't know enough about the situation at Delphi to have an opinion, so I'm reviewing this as a book, controversy aside.

Miller has built his reputation as a "firefighter" brought in to fix serious problems at deeply troubled companies. He got his start as the CFO at Chrysler where he signed ten thousand documents in one sitting for the loan guarantees that brought the company back from the brink. His career later took him to Olympia & York Developments Ltd., Bethlehem Steel, Morrison-Knudson, Federal-Mogul, Waste Management, and Delphi, where he currently serves as chairman.

His accounts of these struggles are interesting, but the most compelling reading comes when Miller talks about the more prominent people his career has brought him into contact with. This description of Carl Icahn alone is worth the price of admission:

Icahn was uniquely creative in his demands. He was impatient with the board's decision and would bully us to do things his way ... In face to face meetings he gave everyone whiplash. One moment he'd bellow, "That's the stupidest goddamn thing I ever heard heard," and the next he'd put his arm around you. He's effective, I think, because people become so traumatized that they wind up suffering from Stockholm syndrome and will do anything to please him.

His description of Lee Iacocca's decline caused by ego also serves as an interesting cautionary tale.

If you enjoy reading about business history, you'll like this book. And here's the best part: it's a book about management that's generally devoid of cliches and trite platitudes.

Book review: The Turnaround Kid originally appeared on BloggingStocks on Sun, 27 Apr 2008 11:10:00 EST. Please see our terms for use of feeds.

One of the nicest things about going into bankruptcy is coming back out. Unless, of course, no one will give you the money to start anew. Delphi, the large auto parts company, had $6.1 billion lined up to start business as a company out of Chapter 11, but the credit crunch is making that exit very difficult to fund.

JP Morgan (NYSE: JPM) and Citigroup (NYSE: C) were leading the group to supply Delphi with capital. But they cannot lay-off some of the loans because hedge funds and other institutions don't want the risky paper. GM (NYSE: GM), Delphi's former parent might put up some of the money, but the car company may need its cash for making up loses at its North American operations.

The banks are not required to put up the money. According to The Wall Street Journal, "J.P. Morgan and Citigroup are bound only on a 'best-efforts basis' to arrange the loan." In other words, they can dump the deal.

Raising money for a car parts company in the worst auto recession in two decade would be hard anyway. Perhaps Delphi should just stay in bankruptcy for a couple more years. The company might be better off.

Douglas A. McIntyre is an editor at 247wallst.com.

Delphi may not get money to exit Chapter 11 originally appeared on BloggingStocks on Wed, 13 Feb 2008 09:50:00 EST. Please see our terms for use of feeds.

With its stock trading at around 16 cents per share in the midst of bankruptcy proceedings, the executives running Delphi Corp. (OTC: DPHIQ) decided it was time to pay themselves a bonus.

The New York Times' Gretchen Morgenson summed it up this way: "Even as it asked workers, creditors, and owners to accept big losses, Delphi requested a lush executive pay package that included $87 million in cash bonuses to be paid to top managers upon the company's exit from bankruptcy. It was a wonderful example of unshared sacrifice that has become deplorably common in corporate America."

Thankfully, those of who support cutting back on the outrageous sums paid to managers have a new hero: federal bankruptcy judge Robert D. Drain refused to OK the reorganization plan unless the pay package for the executives was cut back to $16.5 million.

It's hard to imagine that the company's top executives thought they should take home such a huge package while creditors and workers got stiffed. Somehow they'll have to survive on $16.5 million.

Judge stands up to excessive pay at Delphi originally appeared on BloggingStocks on Sun, 27 Jan 2008 15:10:00 EST. Please see our terms for use of feeds.

Continue reading General Motors (GM) amends Delphi reoranization plan

General Motors (GM) amends Delphi reoranization plan originally appeared on BloggingStocks on Thu, 15 Nov 2007 12:59:00 EST. Please see our terms for use of feeds.

General Motors (GM) cheers as Delphi announces bankruptcy emergence plan originally appeared on BloggingStocks on Mon, 10 Sep 2007 15:29:00 EST. Please see our terms for use of feeds.

• SPX Corp (NYSE: SPW), a North Carolina auto manufacturer that once earned 90% of its revenue from auto-related businesses, now earns less than 3% from auto-related businesses after multiple divestitures and acquisitions. SPX Corp is now an infrastructure-related products and service manufacturer for the global power market.

• Pittsburgh-based glass and coatings manufacturer PPG Industries Inc (NYSE: PPG) has put its windshield business up for sale. The company instead will rely on its high-tech coatings business and optical & specialty material segments that offer long-term growth potential.

Continue reading Auto parts manufacturers retrench

Auto parts manufacturers retrench originally appeared on BloggingStocks on Mon, 30 Jul 2007 16:51:00 EST. Please see our terms for use of feeds.

MOST NOTEWORTHY:

• Wachovia upgraded Lee Enterprises (NYSE: LEE) to Market Perform from Underperform on valuation.

• RBC Capital raised Pep Boys (NYSE: PBY) to Sector Perform from Underperform citing upside potential from its real estate monetization strategy.

• Cumulus Media (NASDAQ: CMLS) was upgraded to Hold from Sell at Citigroup based on the proposed buyout offer.

• VeraSun Energy (NYSE: VSE) was upgraded to Hold from Sell at Soleil based on the acquisition of three 110mgy ethanol projects from ASAlliance.

• Gabelli upgraded Acuity Brands (NYSE: AYI) to Hold from Sell following the company's announcement that it will pursue a tax-free spin-off of its specialty products business...

• Keefe Bruyette upgraded Delphi Financial Group (NYSE: DFG) to Outperform from Market Perform.

• RightNow Technologies (NASDAQ: RNOW) was upgraded to Outperform from Neutral at Credit Suisse.

• Pacific upgraded Secure Computing (NASDAQ: SCUR) to Outperform from Sector Perform.

• Lehman raised Xcel Energy (NYSE: XEL) to Equal Weight from Underweight.

• Stanford upgraded Amylin Pharmaceuticals (NASDAQ: AMLN) to Buy from Hold.

Analyst upgrades 7-24-07: CMLS, DFG, PBY and RNOW originally appeared on BloggingStocks on Tue, 24 Jul 2007 10:52:00 EST. Please see our terms for use of feeds.

American union continues to bleed China red originally appeared on BloggingStocks on Thu, 28 Jun 2007 14:30:00 EST. Please see our terms for use of feeds.

Bond spreads are tightest in nine years originally appeared on BloggingStocks on Mon, 18 Jun 2007 10:56:00 EST. Please see our terms for use of feeds.

General Motors (NYSE: GM) released three pieces of news in the last 24 hours. The first two are probably benign. The 49% of GMAC that the big car company owns will be pledged for a revolving line of credit of $4.1 billion. The company could need the money if the car markets turn down further.

GM also said that its liability for labor costs in the Delphi deal with the UAW and other unions as the parts company comes out of bankruptcy should be $7 billion. The UAW and Delphi both believe that the figure is accurate and it is not far off earlier estimates. While GM investors would rather not have the company on the hook for any of this, its resolution would let the car company put another problem behind it.

GM's third piece of news could be more problematic. The SEC will be looking into the company's accounting -- again. The new probe covers how the company handled financial statements about foreign exchange transactions and commodities purchases. According to the SEC filing, at issue are figures "for Derivative Instruments and Hedging Activities." While the investigation is not likely to change the company's cash position, it could lead to another restatement of one or more quarters, if the SEC determines that GM's calculations were inaccurate.

GM's shares opened down a little more than 1% at $31.05.

Douglas A. McIntyre is a partner at 24/7 Wall St.

The SEC calls on GM originally appeared on BloggingStocks on Thu, 24 May 2007 11:48:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• The Wall Street Journal had news on EW Scripps (NYSE: SSP), Dell Inc (NASDAQ: DELL), Wal-Mart Stores Inc. (NYSE: WMT) and Congress.

• E.W. Scripps is considering splitting off its newspaper operations. It owns papers in 18 markets, which account for about 30% of company revenues.
• The head of Dell's commercial business group will retire in March and the unit will be divided into two separate businesses.
• Wal-Mart said the number of workers enrolled in its health plan increased slightly this year.
• The House of Representatives passed a $2.10 increase in the federal minimum wage, to take place over the next two years in three 70 cent increments.

• The Financial Times reported that Cerberus is considering a $36B offer for Equity Office Properties (NYSE: EOP).

• The Detroit Free Press reported that Valeo (OTC: VLEEY) will not rule out buying Visteon Corp. (VC) or parts of Delphi Corp. (OTC: DPHIQ).
• Website GameDaily.com wrote that Viacom Inc's (NYSE: VIA) MTV Networks is in talks to acquire 1Up.com from Ziff Davis Media.
• The Investor's Business Daily's "New America" column wrote that Visa's plans to go public should take some of MasterCard Inc.'s (NYSE: MA) advantage in the stock market.

Newspaper wrap-up 1-11-07: Federal minimum wage raised originally appeared on BloggingStocks on Thu, 11 Jan 2007 09:44:00 EST. Please see our terms for use of feeds.

In light of the global competition and difficulties of the U.S. automakers and unions, who would want a piece of the auto parts market? Well, private equity investors of course, as well as hedge funds see opportunity in this market.

Actually, the U.S. bankruptcy system may be the ally, as it can help wipe-away the legacy problems. After all, this has happened in the airline and steel industries, right?

Well, things are heating-up for the auto parts companies. In fact, Delphi Corp. is in the midst of a bidding war (the company is currently under Chapter 11 bankruptcy).

There was a $3.4 billion deal for the company with private equity investors like Appaloosa Management and Cerberus Capital Management.

Well, this week, a hedge fund jumped into the fray. Highland Capital is offering $4.7 billion. What's more, Highland does have some leverage since it is the second largest shareholder of Delphi (owning close to 9% of the company). It also has ownership in a slug of Delphi's debt.

It's certainly a bold move. By all accounts, it looks like the U.S. automakers will slash production in 2007 - which will put further pressure on the parts companies.

Although, Highland may be doing this more for negotiation purposes. That is, it is trying to get more from Cerberus-Appaloosa.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates DealProfiles.com.

Bankruptcy crashers -- A competing plan for Delphi originally appeared on BloggingStocks on Thu, 21 Dec 2006 14:08:00 EST. Please see our terms for use of feeds.

Almost every single day day of last week I said the same in the morning, that futures point to a positive start. Yet it seemed the market just couldn't get a break and was hit with one economic news after another that kept bulls at bay. Once again this morning futures are positive, pointing to a higher start for stocks, and hopefully finally ending a six-day losing streak. It would be interesting to see how the market reacts a day before the midterm elections.

Part of this early positive sentiment, undoubtedly has to do with oil prices. This morning, oil prices slipped to below $59 a barrell. This is due partly due to the belief OPEC would have a hard time fulfilling its announcement to cut production and partly because the threats to disrupt production in Nigeria and the U.S. never came to pass. At the same time, OPEC President Edmund Daukoru also said this morning that there is oversupply and warned of further production cuts.

Today there are no economic data due, and this week in general will have little from the economic front. On Thursday, trade balance will be reported and that would be the major report to note. However, a number of Federal Reserve will be speaking today and the market could very well react to that.

In Corporate news:

Some companies due to report today: Anadarko Petroleum Corp. (NYSE:APC) - estimated $1.35 earnings per share, El Paso Corp. (NYSE:EP) - estimated $0.16 earnings per share, RealNetworks Inc. (NASDAQ:RNWK) - estimated $0.22 earnings per share, and XM Satellite Radio Holdings, Inc. (NASDAQ:XMSR) - estimated -$0.46 earnings per share.

Google Inc. (NASDAQ:GOOG) yesterday announced that it will test expansion of its business into offline media and will now be helping customers buy advertisements in 50 U.S. newspapers. More than 100 advertiser were invited to join the three-month test of a Print Ads service that places ads in daily papers such as the New York Times Co. (NYSE:NYT), Gannett Co. (NYSE:GCI) and the Washington Post.

Ryanair Holdings Plc (NASDAQ:RYAAY), Europe's largest low-cost airline, posted a 24% gain in quarterly profit and lifted its 2007 guidance. Shares rose more than 3% in London.

The Wall Street Journal reported this morning that General Motors Corp.'s (NYSE:GM) Rick Wagoner said that a deal between $6 billion to $7.5 billion could be reached soon with Delphi Corp. (OTC:DPHIQ) over GM's contribution on labor costs at auto-parts maker. Wagoner is touring China where GM also displayed the company's hydrogen fuel cell-powered Sequel.

Again, according to the Wall Street Journal the U.S. Justice Department, informally probing anti-competitive behavior in the private equity sector, has requested information from Merrill Lynch's (NYSE:MER) private equity arm.

ImClone Systems Inc. (NASDAQ:IMCL) and Bristol-Myers Squibb Co. (NYSE:BMY) reported mixed results from a pair of Phase III trials of Erbitux, the cancer drug.

In the radio market, in attempt to to defend its eroding market share from satellite radio and iPods, U.S. radio operators said sales of its high-definition radios will expand to Circuit City Stores, Inc. (NYSE:CC), and stations are set to air some 75,000 ads a week pushing HD Digital radio.

Before the bell 11-6-06: Set for a positive start originally appeared on BloggingStocks on Mon, 06 Nov 2006 07:55:00 EST. Please see our terms for use of feeds.