MOST NOTEWORTHY: Invesco, Kimberly Clark and Crawford & Company were today's noteworthy initiations:
Jefferies finds Invesco (NYSE: IVZ) compelling given the company's focus on expense control, strong cash flow characteristics, and attractive valuation. Shares were assumed with a Buy rating and $33 target.
Caris started Kimberly Clark (NYSE: KMB) with a Below Average rating and $58 target. The firm believes consensus estimates may be too high given the high cost of commodities.
Suntrust started Crawford & Company (NYSE: CRDB) with a Buy rating and $8 target, and believes the company is at the "front end" of a turnaround in operations.
OTHER INITIATIONS:
Bernstein initiated Energizer Holdings (NYSE: ENR) with an Outperform rating and $100 target.
BMO Capital assumed Range Resources (NYSE: RRC) with an Outperform rating and $85 target.
Intrepid Potash (NYSE: IPI) was started with a Sell rating and $40 target at Soleil.
This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.
When it comes to multi-bladed disposable razors, how many blades is enough? In the long-standing rivalry between the two biggest brands of disposable razors, the current answer seems to be five. For now.
The Gillette company, which in 2005 became part of Procter & Gamble (NYSE: PG), invented the safety razor in 1895, as well as the first razor marketed to women in 1916. They started the current arms race in multi-bladed disposable razors by introducing a twin-blade razor in 1971, and then the triple-bladed Mach 3 in 1998. Schick responded with the four-blade Quattro in 2003, then in 2005, Gillette introduced the five-blade Fusion. Of course, each of these models includes a version for women, and versions with various bells and whistles.
St. Louis-based Energizer Holdings (NYSE: ENR), a U.S. manufacturer of batteries, purchased the Schick brand of razors from Pfizer (NYSE: PFE) in 2003. Outside the North America and Australia, the same products are sold under the Wilkinson Sword brand. Either way, Schick remains a distant second to Gillette in global sales, though some analysts saw patent infringement lawsuits filed against Schick by Gillette as evidence that Gillette recognized a potential threat. Combined, these two brands account for nearly all razor sales in America.
Kimberly-Clark (NYSE: KMB) reported for the first quarter today. Net sales increased almost 10% to $4.8 billion. Adjusted earnings per share increased 5% to $1.08. That's a rather small jump, granted, but you know something, it was enough to keep the stock in the green (at the time of this writing, at least) instead of in the red on a day when the major market averages -- and just about all of the stocks in my personal portfolios -- are bathing in the evil crimson color of doom. And according to Briefing.com, Kimberly-Clark played the beat-the-expectations game and won by the proverbial penny! Shareholders should be pleased.
A non-pleasing item to be found in the release centers on cash from operations -- it decreased by about $100 million to $426 million due to changes in working capital. That doesn't concern me so much right now, though, since Kimberly-Clark will probably do well over the coming years in terms of cash generation. The company, by the way, has been repurchasing stock, so management seems pleased with the shares as a potential investment idea.
Kimberly-Clark, which is a consumer-products business in the league of entities such as Procter & Gamble (NYSE: PG), Energizer (NYSE: ENR), Colgate-Palmolive (NYSE: CL), and Unilever (NYSE: UL), could be a value right now based on its P/E ratio and dividend yield. Out of the stocks mentioned here, I like P&G the best, but I do respect Kimberly-Clark -- in fact, it was mentioned recently in an article by Steven Halpern that centered on an analyst's picks for quality and yield.
Disclosure: I don't own shares in any of the companies mentioned; positions can change at any time.
Research in Motion Ltd. (NASDAQ: RIMM) shares are soaring over 8.7% in premarket trading after the Waterloo, Ont-based company raised its outlook for fourth-quarter subscriber additions by about 15-20%, citing the popularity of smartphones throughout the holiday selling season. The total BlackBerry subscriber account base is expected to be about 14 million at the end of the quarter. Still, RIM reiterated it expects quarterly earnings per share of 66 cents to 70 cents on revenue of $1.80 billion to $1.87 billion. Analysts were expecting profit of 69 cents per share on revenue of $1.85 billion, before the subscriber outlook was raised.
Other than Citigroup upgrading Cisco, it also upgraded Energizer (NYSE: ENR) from Hold to Buy. ENR shares are up 2.5% in premarket trading.
Garmin (NASDAQ: GRMN) was upgraded from Neutral to Outperform at Baird. Lehman Brothers, which has an Equal Weight on Garmin, lowered the target price from $115 to $89. GRMN shares are up some 2.5% in premarket trading.
Target (NYSE: TGT) was downgraded from Hold to Sell at Citigroup, as was BP (NYSE: BP).
MOST NOTEWORTHY: RadiSys, Diageo plc, Vitesse, Big 5 Sporting Goods and Coca-Cola Enterprises were today's noteworthy upgrades:
Jefferies upgraded shares of RadiSys (NASDAQ: RSYS) to Buy from Hold following the Q3 upside to reflect the large ramp of new business expected in 2008.
Lehman raised its rating on Diageo plc (NYSE: DEO) to Equal Weight from Underweight and has increased confidence that the group can increase margins.
CIBC upgraded shares of Vitesse (NASDAQ: VTSS) to Sector Performer from Sector Underperformer following the company's business update, as they believe progress is being made on numerous fronts.
Nollenberger upgraded shares of Big 5 Sporting Goods (NASDAQ: BGFV) to Buy from Neutral following the better-than-expected Q3 results and improved full-year outlook, as they believe visibility has improved significantly.
Citigroup upgraded Coca-Cola Enterprises (NYSE: CCE) to Buy from Hold on valuation as they believe the stock is undervalued given Glaceau's expansion to European markets. The broker recommends taking profits in Pepsi Bottling Group (NYSE: PBG) and swapping into CCE.
MOST NOTEWORTHY: Teva Pharma, Novavax, Corinthian Colleges, Fair Isaac and Tenneco were today's noteworthy upgrades:
Friedman Billings upgraded Teva Pharmaceutical (NASDAQ: TEVA) to Outperform from Market Perform following Teva's better-than-expected Q3 report and guidance.
Oppenheimer upgraded shares of Novavax (NASDAQ: NVAX) to Buy from Neutral based on positive expectations for Ph I/IIa pandemic influenza data, the start of clinical trials for seasonal influenza, and expected announcement of a vaccine product candidate in Q4.
Corinthian Colleges (NASDAQ: COCO) was upgraded to Buy from Neutral at Merrill following its better-than-expected Q1 report and guidance.
Citigroup upgraded of Fair Isaac (NYSE: FIC) to Buy from Hold shares to reflect the company's strong Q4 results and improved outlook.
Tenneco (NYSE: TEN) was raised to Outperform from Market Perform at Wachovia based on valuation and revenue opportunities in commercial truck market.
OTHER UPGRADES:
Energizer Holdings (NYSE: ENR) was upgraded at Bear Stearns to Peer Perform from Underperform.
Energizer (NYSE: ENR) is a defensive stock that may end up posting growth stock-quality results in the immediate years ahead.
Again, Energizer is not a defensive play, strictly speaking, as one could argue that batteries are a discretionary purchase -- an option consumers can cut back on during tougher economic times.
Still, powerful cultural and secular trends belie the above thesis. Think: MP3 players, iPods, iPhones, the text messaging generation, cameras, and remotes for almost everything. The net result: More portable energy use, globally, in the years ahead, which means more revenue for Energizer.
Energizer has revenue streams in the alkaline, carbon, zinc, miniature and specialty battery lines, with an impressive +35% U.S. market share. The company sells batteries in more than 150 countries, a more-than-decent defense against U.S. economic doldrums. ENR's shares fell $1.15 to $110.86 in Wednesday afternoon trading.
The qualifiers? Intensifying competition, and a high concentration of sales, 18%, to its largest customer, Wal-Mart (NYSE: WMT). But so long as teenagers and downloads exist, and Apple (NYSE: AAPL)'s Steve Jobs is thinking of something new/portable/cool, these two negatives can be overlooked.
Technically, Energizer's chart is strong. With a P/E of 23 ENR is not cheap, but projected near-20% annual EPS gains account for that.
Stock Analysis: Energizer is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than one year should be rewarded from ENR's shares.
When I saw the headlinesEnergizer (NYSE: ENR) buys Playtex (NYSE: PYX), I immediately thought that the late night talk shows are going to have fun with this one. I could see Saturday Night Live writers really putting together an interesting skit involving a very moody bunny. But back to the news...
Energizer made an offer to buy Playtex, and shares of Playtex rose $2.79 (15.9%) to close at $17.97. But then I was curious to look at the option trading on Playtex. Insider trading has been running rampant recently and it is very easy to spot in the options market.
If you look at the option volume on the August 15 Calls (PYX HC) there is an interesting history. There were no options traded for three weeks, then on Tuesday, 51 traded. That is not unusual. Then on Wednesday, there were 5,488 options traded for a high price of $1.00 a piece. That is unusual. Today there were 4,649 options traded for a more than $2.95 a piece. This is just too good of timing to be coincidental. I mean I believe in good luck as much as the next guy, but this certainly appears that someone managed to beat the Friday the 13th curse today.
Now there is a small chance that when the Playtex president DeFeo canceled his speaking engagement on Wednesday, some observers got wind of something as the shares jumped mid-day; but it appears someone got wind that the buyout was coming and decided to make a little bet.
That bet proved to be profitable as $548,800 invested turned into $1,618,960 over the course of three days. Tripling your money over the course of three days is not a bad investment and the way the SEC has been laxly enforcing stuff recently, maybe they will get away with it.
Disclosure note: Mr. Kersten owns and or controls a diversified portfolio of long and short positions that may include holdings in companies he writes about.
Energizer (NYSE: ENR), the battery and razor company, is buying Playtex (NYSE: PYX), the sunscreen and feminine care product company, for a bit less than $1.2 billion plus debt. The purchase price is about 18% above where Playtex was trading.
Reuters quotes the head of Energizer as saying: "We see Playtex as an exceptionally great fit with Energizer, with similar customers and distribution channels in the U.S. and Canada, and the opportunity for geographic expansion."
M&A transactions are obviously on the rise, but what a battery company would want a feminine care products operation seems a bit hard to explain. Distribution channel duplication may save some money, but it would seem to end there.
Playtex also looks expensive. The company is at a 52-week high, almost $16 up from well under $10 last July. And Energizer is paying a substantial premium. Perhaps it can afford to -- its shares are up 90% over the last year.
No matter how investors look at the merger, it is an odd combination.
Microsoft (NASDAQ: MSFT) July straddle in line with previous levels prior to EPS. MSFT is expected to report EPS of $0.31 according to Thomson Financial on July 19. MSFT announced a $1.15 billion charge last week related to an Xbox design flaw. MSFT July straddle is priced at $1.14. MSFT August option implied volatility of 23 is near its 26-week average according to Track Data, suggesting non-directional risk.
Playtex (NYSE: PYX) options active prior to ENR paying $18.30 per share cash. PYX agreed to be sold to Energizer (NYSE: ENR) for $18.30 a share in cash plus the assumption of PYX debt. The total enterprise value is $1.9 billion. PYX option volume was heavy prior to the announcement of ENR buying PYX. A total of 7,299 PYX contracts traded on 7/11, 4,208 contracts traded on 7/12; above its approximate one month average of 245 contracts a day. PYX overall option implied volatility of 37 was near its 26-week average of 35 according to Track Data, suggesting non-directional risk.
Daily Option Update is provided by Stock Options Specialist Paul Foster of theflyonthewall.com.
On tonight's MAD MONEY on CNBC, Jim Cramer noted a couple of stocks that were heading north of Par ($100) to $120. He claims that the empirical evidence over the last year supports that S&P components that see their stocks rise over $100 tend to go to $120.
Cramer's first stock was ConocoPhillips (NYSE :COP) on the might of the multi-billion dollar buyback that is a "buy-high and sell-higher" trade. It has gone through $80.00 and could go through $100.00. The second stock was Energizer Holdings (NYSE: ENR) that is close to $100.00 and headed to $120.00. Cramer's main reason for this is the new and coming $29.99 battery extension pact that adds 46 hours of play-time before the iPod lithium ion battery croaks. You can read further if you wish to see the rationale and his two picks from last night with the strategy.
OK, well this is an interesting theory. And a true bull market strategy. Granted, he did say it's the easy-money strategy. But still this rings of an overly bull market strategy. This isn't as bad as chasing a stock merely because of a stock split or thinking a stock is on sale because it pays a huge dividend. But it sure seems like a "Bull Only" stock strategy. That's my take on it anyway. Both of the picks are fine, and my criticism of the critique of this strategy would have been much different if the thesis for the end result was more on the real merits rather than on the "Par to $120" strategy.
Jon Ogg is a partner at 24/7 Wall St.; he does not own securities in the companies he covers.
Stock screeners are tools that let investors filter through a large number of stocks according to chosen criteria. It is important to remember that a stock screener is just a tool and every investment should be analyzed on its own merits to make sure it fits with your personal portfolio and risk characteristics. My weekly column finds interesting investment opportunities with the help of our Stock Screener.
Since two of the stocks I covered in the Stock Screener section had such wild movements in such a short time, I've decided to quickly take a look at all the stocks I've covered here, see what major news recently affected them and how they reacted. All returns are as of May 2nd close.
Since then, TSL returned over 24% and STP returned 5.8%. The main catalyst in the solar energy stock was a court ruling that could pave the way to more regulations and have a positive impact on alternative energy stocks.
MOST NOTEWORTHY: Energizer Holdings, Inc (ENR), Gilead Sciences, Inc (GILD), Intel Corp (INTC) and Advanced Micro Devices (AMD) were some of today's more noteworthy upgrades:
Prudential upgraded Energizer Holdings Inc (NYSE: ENR) to Neutral from Underweight. The firm said Energizer has been overly focused on the negative potential of cost inflation without fully appreciating the positive mix shift being generated by faster growth of high-margin specialty products and new products that indicate innovation and a competitive edge.
Gilead Sciences (NASDAQ: GILD) was upgraded to Outperform from Market Perform at Leerink Swann following Gilead's strong quarter.
FTN Midwest upgraded shares of Advanced Micro Devices Inc (NYSE: AMD) and Intel (NASDAQ: INTC) to Buy from Neutral as the firm believes they are seeing the beginnings of a truce with between the two companies which could lead to higher ASPs.
OTHER UPGRADES:
CNOOC Ltd (NYSE: CEO) was upgraded to Overweight from Neutral at JP Morgan to reflect the company's prospects for production growth.
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MOST NOTEWORTHY: Invesco, Kimberly Clark and Crawford & Company were today's noteworthy initiations:
This post is part of our 
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Stock screeners are tools that let investors filter through a large number of stocks according to chosen criteria. It is important to remember that a stock screener is just a tool and every investment should be analyzed on its own merits to make sure it fits with your personal portfolio and risk characteristics. My weekly column finds interesting investment opportunities with the help of our 
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