Analyst Upgrades

• Brinker (EAT) to buy from neutral at UBS.
• Starbucks (SBUX) to overweight from equal weight at Morgan Stanley.
• Paccar (PCAR) to overweight from neutral at JPMorgan.
• CA Technologies (CA) to outperform from perform at Oppenheimer.
• PPL Corp. (PPL) to overweight from equal weight at Barclays.
• ConocoPhillips (COP) to hold from sell at Citigroup.
• First Defiance (FDEF) to outperform from market perform at Keefe Bruyette.
• MasTec (MTZ) to outperform from neutral at Credit Suisse.
• Amdocs (DOX) to neutral from underperform at BofA/Merrill.

Continue reading Analyst Calls: CA, COP, DOX, EAT, FIG, JNS, MTN, NLSN, PCAR, SBUX, SLW ...

Analyst Calls: CA, COP, DOX, EAT, FIG, JNS, MTN, NLSN, PCAR, SBUX, SLW ... originally appeared on BloggingStocks on Mon, 07 Mar 2011 12:00:00 EST. Please see our terms for use of feeds.

Continue reading One Stock to Play the Financial Industry's Comeback

One Stock to Play the Financial Industry's Comeback originally appeared on BloggingStocks on Thu, 15 Jul 2010 09:30:00 EST. Please see our terms for use of feeds.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Barnes & Noble Inc. (NYSE: BKS) swung to a Q3 loss as same-store sales fell, and it lowered its outlook.
• Corning Inc. (NYSE: GLW) forecast lower profits due to weaker glass sales but has a strong cash position.
• Fortress Investment Group (NYSE: FIG) swung to a Q3 loss as investors requested redemptions.
• Gap Inc. (NYSE: GPS) profit beat estimates despite the decline in sales, and it reaffirmed its outlook.
• HJ Heinz Co. (NYSE: HNZ) strong Q2 results topped expectations but didn't impress the market.
• Intuit Inc. (NASDAQ: INTU) reported solid results and offered modest growth for the next quarter.
• Limited Brands Inc. (NYSE: LTD) Q3 profits and same-store sales fell and it lowered its guidance.
• Macy's Inc. (NYSE: M) fell short of Q3 expectations and said it would reduce capital expenditures in 2009.
• Medtronic Inc. (NYSE: MDT) fell short of Q2 expectations and lowered its full-year guidance.
• PepsiCo Inc. (NYSE: PEP) reaffirmed its previously announced full-year earnings guidance.
• Salesforce.com Inc. (NYSE: CRM) said Q3 earnings and revenue grew sharply, beating expectations.
• Target Corp. (NYSE: TGT) posted weak Q3 numbers and discontinued its share buyback activity.
• Walt Disney Co. (NYSE: DIS) was downgraded on the belief that consensus estimates may be too high.

Continue reading Earnings highlights: Target, Heinz, Barnes & Noble, Pepsi, Disney and others

Earnings highlights: Target, Heinz, Barnes & Noble, Pepsi, Disney and others originally appeared on BloggingStocks on Sat, 22 Nov 2008 11:40:00 EST. Please see our terms for use of feeds.

Analyst upgrades:

• PepsiCo (NYSE: PEP) was upgraded to Buy from Hold at Deutsche Bank.
• Fortress (NYSE: FIG) was upgraded at Citigroup to Hold from Sell.
• Prudential (NYSE: PUK) was lifted to Overweight from Neutral at JP Morgan.
• Keefe Bruyette upgraded Franklin Resources (NYSE: BEN) to Outperform from Market Perform and added shares to their Best Ideas List on valuation as they see an attractive risk/reward at current levels.
• UBS upgraded ASML Holding (NASDAQ: ASML) to Buy from Neutral on valuation as they believe the company remains a market leader.
• Oppenheimer raised Seattle Genetics (NASDAQ: SGEN) to Outperform from Perform on valuation following the recent weakness as they expect positive clinical news flow beginning in December.

• UBS downgraded U.S. Steel (NYSE: X) to Sell from Buy and lowered its target to $30 from $60 citing deteriorating U.S. conditions and concerns about the company's high fixed costs in a falling steel price environment.
• Royal Dutch Shell (NYSE: RDS.A) was downgraded to Underperform from Neutral at Credit Suisse.
  
• China Unicom (NYSE: CHU) was lowered to Underweight from Neutral at JP Morgan.

Continue reading Analyst calls: PEP, FIG, PUK, BEN, ASML, X, RDS.A, CHU, SVR ...

Analyst calls: PEP, FIG, PUK, BEN, ASML, X, RDS.A, CHU, SVR ... originally appeared on BloggingStocks on Mon, 27 Oct 2008 10:13:00 EST. Please see our terms for use of feeds.

Continue reading Cramer on BloggingStocks: Merrill starts process of CDO dumping

Cramer on BloggingStocks: Merrill starts process of CDO dumping originally appeared on BloggingStocks on Wed, 30 Jul 2008 09:09:00 EST. Please see our terms for use of feeds.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• AAR Corp. (NYSE: AIR) posted record third-quarter earnings and revenue.
• Adobe Systems Inc. (NASDAQ: ADBE) posted better-than-estimated first-quarter results and raised its outlook.
• CKE Restaurants Inc. (NYSE: CKR) posted third-quarter results that missed estimates.
• ConAgra Foods Inc. (NYSE: CAG) third-quarter profit surged as strong sales offset commodity prices.
• Darden Restaurants Inc. (NYSE: DRI) beat third-quarter expectations and offered guidance.
• FactSet Research Systems Inc. (NYSE: FDS) second-quarter results beat estimates and it raised its outlook.
• Fortress Investment Group (NYSE: FIG) remained upbeat despite a fourth-quarter loss.
• Guess Inc. (NYSE: GES) record fourth-quarter results beat Wall Street expectations.
• Inter Parfums Inc. (NASDAQ: IPAR) posted better-than-estimated fourth-quarter results and raised its outlook.
• Jabil Circuit Inc. (NYSE: JBL) beat second-quarter expectations but lowered its guidance.
• JC Penney Co. Inc. (NYSE: JCP) lowered its first-quarter outlook on weaker-than-expected sales.
• KB Home (NYSE: KBH) swung to a larger-than-expected first-quarter loss on write-downs.
• Lennar Corp. (NYSE: LEN) posted a smaller-than-expected first-quarter loss.
• Monsanto Co. (NYSE: MON) raised its second-quarter and full-year guidance.
• Oracle Corp. (NASDAQ: ORCL) merely met earnings expectations, sending shares lower.
• Tiffany & Co. (NYSE: TIF) posted better-than-estimated fourth-quarter results and raised its outlook.
• Usana Health Sciences Inc. (NASDAQ: USNA) posted lower-than-expected first-quarter results.
• Walgreen Co. (NYSE: WAG) posted solid second-quarter results, including same-store sales growth.

Also, auction-rate securities issues may hurt some tech company results. Analysts keep cutting earings estimates for the big banks, but some are eyeing Yum! Brands (NYSE: YUM) earnings prospects as it expands in China, as well as Archer Daniels Midland (NYSE: ADM) on soaring demand for commodities.

Upcoming results to watch for include Best Buy (NYSE: BBY), Monsanto (NYSE: MON), and Research in Motion (NASDAQ: RIMM).

Visit AOL Money & Finance for more earnings coverage.

Earnings highlights: Adobe, ConAgra, Lennar, Oracle, Tiffany, Darden and others originally appeared on BloggingStocks on Sat, 29 Mar 2008 15:40:00 EST. Please see our terms for use of feeds.

We now own Newcastle Investment Corp. (NYSE: NCT), a CMBS lender and REIT paying about a 26% yield in several portfolios. It does not own real estate, instead it holds loans on nonresidential properties.

NCT is on record to fully fund its dividend and anticipates one billion dollars in loans to be paid off in the coming year. It is one of my 8 for 2008. See original full story: Chasing Value: Newcastle's 22% yield will reward patience.

The stock has lost two thirds of its value from its 52-week high and closed at $11.08 yesterday down further from my initial buy-in. The stock is down because of investors fears about the real estate values supporting the loans and the resemblance to residential mortgage brokers and lenders that have collapsed or suffered great losses. Neither of these issues are of concern to me. I am active in the commercial real estate markets and we have not seen appreciable reductions in the value of existing commercial and industrial property.

Continue reading Chasing Value: Newcastle managed by Fortress, a few more thoughts

Chasing Value: Newcastle managed by Fortress, a few more thoughts originally appeared on BloggingStocks on Fri, 15 Feb 2008 14:30:00 EST. Please see our terms for use of feeds.

Last Wednesday, the mega hedge fund Och-Ziff went public. But investors were jittery and the stock has already dropped 12.5% since its debut.

Well, it may drop even more -- that is, according to a piece in Barron's [a paid service]. In fact, the author, Andrew Bary, calls the company's investment performance an example of "mediocrity."

The current market value of Och-Ziff is about $10.8 billion, which means it is trading at about 18 times earnings. So, on its face, this seems reasonable, right?

Well, you need to make some adjustments. First of all, there is the favorable tax treatment (which may undergo some changes in Congress).

Next, Och-Ziff relies primarily on hefty fees for its investment performance. But, what if the firm has a down year? It could be a big hit to the bottom line.

Continue reading Barron's slams hedge fund Och-Ziff

Barron's slams hedge fund Och-Ziff originally appeared on BloggingStocks on Sat, 17 Nov 2007 16:40:00 EST. Please see our terms for use of feeds.

Alternative investment asset manager Fortress Investment Group's (NYSE: FIG) decision to shutter its subprime mortgage division, Nationstar Mortgage, generated only a mild reaction from traders and analysts alike. Nationstar, a leading U.S. subprime lender, has sustained substantial losses due to rising defaults and foreclosures.

Nationstar said any approved mortgage applications in its pipeline would be honored. Nationstar will also continue to service the $10 billion in subprime loans in its portfolio.

Wall Street took Fortress's subprime decision in stride: Wall Street appreciates all the candor and data it can get regarding the status of subprime loans and operations, and Fortress's announcement will help analysts compose a more-complete report on Fortress, one reason the Street did not punish FIG's shares this week. On Friday, FIG's shares closed down 26 cents to $21.32.

Moreover, Wall Street's clamor for "the more data, the better" regarding the subprime sector is not without justification. Late payments and defaults on subprime mortgages are already four times the historical U.S. average, and many analysts expect that percentage to rise in the quarters ahead: about $350 billion in subprime home loans will shift to higher interest rates, with initial rate increases boosting costs by 30% or more, according to research by Credit Suisse (NYSE: CS).

Nationstar, formerly Centex Home Equity, was bought in 2006 by Fortress, a manager of private-equity and hedge funds, for about $554 million. It had been owned by Dallas-based Centex (NYSE: CTX), the fourth-biggest U.S. homebuilder.

Fortress Investment Group (FIG) shutters its subprime operations originally appeared on BloggingStocks on Sat, 29 Sep 2007 11:40:00 EST. Please see our terms for use of feeds.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements.

Fortress (FIG) tries for some IPO magic originally appeared on BloggingStocks on Fri, 14 Sep 2007 16:32:00 EST. Please see our terms for use of feeds.

David Rubenstein, who is the co-founder of private equity firm The Carlyle Group, has been buying and selling companies since 1987. Now his firm has 30 offices around the globe, as well as $71 billion under management.

Interestingly enough, back in the 1970s, he served in a variety of political seats -- such as the Deputy Assistant to the President for Domestic Policy (under the Carter Administration). He has also practiced law for several prestigious law firms.

So what are his thoughts on the recent turmoil in the private equity world? Well, he gave an interview for the Wall Street Journal [a paid publication]. Basically, his opinions are in-line with those of other top dealmakers, such as from the Blackstone Group (NYSE: BX) and Fortress (NYSE: FIG). That is, we won't see mega deals (because financing has vaporized).

Also, sellers will need to get more realistic on valuations, which is never easy. In fact, many just may rather wait to do deals. In other words, private equity firms will need to work much harder to get strong returns -- and it will require more patience (Rubenstein thinks this could take a couple years).

By the way, Rubenstein has a new book that will hit the shelves soon: Beyond Wall Street: The Rise of Private Equity and the Future of Investing. It should be a good read.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements.

Carlyle's David Rubenstein talks it up originally appeared on BloggingStocks on Sat, 25 Aug 2007 15:40:00 EST. Please see our terms for use of feeds.

The LBO crack up originally appeared on BloggingStocks on Fri, 24 Aug 2007 14:55:00 EST. Please see our terms for use of feeds.

Everything's big in Texas. Look at the state's Teacher Retirement System (TRS). In all, it has about $112 billion in assets.

Interestingly enough, the pension fund wants to devote about a third of its assets to alternatives, such as hedge funds and private equity funds. This is according to a story in the Wall Street Journal [a paid service].

Yes, when you take a look a the SEC filings of the Blackstone Group (NYSE: BX), Fortress (NYSE: FIG), and KKR, you will see that alternative investment can post strong returns.

Despite this, the TRS strategy is certainly gutsy. Keep in mind that alternative investments can be fairly illiquid. What if it gets tougher to do IPOs or get sound exits on these investments?

Or, what if there is a meltdown, as seen with the subprime hedge funds at Bear Stearns (NYSE: BSC)?

Even the pros can make big blunders. And it could be bad news for pensioners.

On the other hand, TRS's move is certainly good news for the private equity world. Simply put, there's likely to be many more assets under management -- and that means lots of juicy fees.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Teacher Retirement System doubles down on private equity originally appeared on BloggingStocks on Sun, 15 Jul 2007 11:10:00 EST. Please see our terms for use of feeds.

MOST NOTEWORTHY:

• Genesis Energy (AMEX: GEL) was initiated with a Buy rating and $40 target at Stanford, as the firm believes the company's affiliation with Denbury Resources and pending acquisition of petroleum products, terminals, and transportation businesses from the Davison family will drive rapid growth.

• EnerNoc Inc (NASDAQ: ENOC) was initiated with a Hold rating and $42 target at Jefferies, due to valuation. EnerNoc was also initiated at Morgan Stanley with an Equal Weight rating and $40 target.

• Stifel expects Comcast (OTC: CMCSA) to benefit from higher penetration levels of DVR and HDTV set-top boxes over the next several years and initiated shares with a Buy rating and $34 target.

• Select asset managers were initiated at Credit Suisse:

• AllianceBernstein (NYSE: AB), Affiliated Managers (NYSE: AMG), Fortress Investment (NYSE: FIG), Invesco (NYSE: IVZ), Franklin Resources (NYSE: BEN) and T Rowe Price (NASDAQ: TROW) were initiated with Outperform ratings.

• Blackrock (NYSE: BLK), Calamos Asset Mgmt (NADAQ: CLMS), Eaton Vance Corp (NYSE: EV), Federated Investors (NYSE: FII), Janus Capital (NYSE: JNS), Legg Mason Inc (NYSE: LM) and Waddell & Reed (NYSE: WDR) were initiated with Neutral ratings.

• Deutsche Bank initiated Ryland Group (NYSE: RYL) with a Buy rating and $52 target, as well as Pulte Homes (NYSE: PHM) and Meritage Homes Corp (NYSE: MTH) with Hold ratings and a $23 target and $29 target, respectively.

Analyst initiations 6-27-07: BEN, BLK, CMCSA, PHM and RYL originally appeared on BloggingStocks on Wed, 27 Jun 2007 10:55:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• Vonage Holdings Corp (NYSE: VG) said bankruptcy is one of the potential risks from its continuing patent litigation with phone giant Verizon Communications Inc (NYSE: VZ), reported the Wall Street Journal.
• Blackstone Group is selling Extended Stay Hotels to Lightstone Group for $8B, which beat offers from Fortress Investment Group (NYSE: FIG) and Goldman Sachs Group Inc (NYSE: GS), according to the Wall Street Journal.
• The Wall Street Journal reported that other financial firms such as Countrywide Financial Corporation (NYSE: CFC), CIT Group Inc (NYSE: CIT), iStar Financial (NYSE: SFI), and KeyCorp (NYSE: KEY) may be in play after the sale of Sallie Mae (NYSE: SLM).

• The Telegraph reported that General Electric Company (NYSE: GE) is looking to sell a natural gas power plant in the UK for an estimated GBP450M-GBP500M, with potential buyers including E.ON AG ADS (NYSE: EON) and Scottish Power ADS (NYSE: SPI).
• The New York Post has learned that Heather Pech, a senior Jones Apparel Group Inc (NYSE: JNY) executive that headed the Nine West retail chain, has left the company.

• WNBC.com reported that Research in Motion Limited's (NASDAQ: RIMM) Blackberry service is suffering a massive system failure since last night.

Newspaper wrap-up 4-18-07: Blackberry service suffers meltdown originally appeared on BloggingStocks on Wed, 18 Apr 2007 09:15:00 EST. Please see our terms for use of feeds.

If the market is efficient, private equity's people are worth much more than Google Inc.'s (NASDAQ: GOOG) people. And at $52 million an employee, I think private equity is selling out at the top.

Blackstone Group's IPO has affected me twice. The first time I was on my way to a CNBC studio to talk about investment opportunities in the mortgage market when the producer called to cancel my segment so David Faber could announce Blackstone Group's IPO. Then, last week, my car was turned around again when CNBC canceled my segment on whether Blackstone was overvalued -- I unknowingly violated CNBC's policy against appearing on the network twice in the same day and I had already appeared once that day.

I think that if private equity firms -- like Blackstone -- are selling, I don't want to be a buyer. The decision-makers at these firms are shrewd traders. So if they are trying to get out now, I'd guess they think things are heading down from here (I favor Apollo Management's solution to sell a 10% stake to private investors [registration required] for $1.5 billion).

Continue reading Are Blackstone's people worth four times Google's?

Are Blackstone's people worth four times Google's? originally appeared on BloggingStocks on Thu, 05 Apr 2007 14:17:00 EST. Please see our terms for use of feeds.

Somehow, the thinking is that buying shares in Fortress (NYSE:FIG) is just like investing in a hedge fund or a private equity fund.

Well, this is not the case. Instead, you are participating in the fees generated by the portfolio managers of Fortress.

Now, these fees can be quite lucrative -- taking 20% to 25% of the profits on the portfolios. But, then again, if the Fortress investment pros slip, it could mean a big drop in the fee income.

And there's another issue to consider: Investors in hedge funds and private equity funds may be trying to find ways to lower these fees.

Bloomberg.com has a piece on this very fact, including the very interesting point that the chief investment officer of the California Public Employees Retirement System (which has $225 billion in assets) thinks the fee structure is out-of-whack.

His reasoning: If a hedge fund or private equity fund generates risk-adjusted returns close to the S&P 500, then why pay the premium?

Actually, in 2006, you probably would have done better putting your money in these index funds (which, of course, have minimal fees).

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Fortress: It's not investing in hedge funds originally appeared on BloggingStocks on Fri, 09 Feb 2007 14:30:00 EST. Please see our terms for use of feeds.

Is Sears the next Berkshire Hathaway? originally appeared on BloggingStocks on Fri, 09 Feb 2007 13:57:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• The Financial Times (subscription required) reported that General Electric Company (NYSE: GE) is expected to buy a 95% stake in Idex Aquaservices.

• The Economic Times reported that Verizon Communications (NYSE: VZ) has formed a partnership with India's Videocom.
• According to the U.K. Times, Nelson Peltz is in the running for Ford Motor Company's (NYSE: F) Aston Martin.
• The Business-Standard wrote that Goldman Sachs Group (NYSE: GS) plans to buy a stake in India's MCX.
• The New York Times reported that he SEC is investigating whether Wall Street brokers are leaking information about big trades to favored clients to get more business.
• Also in the New York Times, Wal-Mart Stores Inc (NYSE: WMT) has signed a deal with all six major Hollywood studios to sell digital movies and TV shows on its web site.
• The Investor's Business Daily's "New Issue America" column highlighted Fortress Investment Group, which is expected to go public on February 9 with an offering price of between $16.50 and $18.50.

Newspaper wrap-up 2-6-07: Wal-Mart going digital originally appeared on BloggingStocks on Tue, 06 Feb 2007 09:17:00 EST. Please see our terms for use of feeds.

Fortress, a hedge fund with about $26 billion in assets, filed the necessary papers for an IPO. It was not a major surprise, but it does allow us to get an inside look at the hedge fund world.

First of all, the prospectus states: "Our funds have produced consistently superior investment returns." From 2003 to 2005, pre-tax distributable earnings have gone from $54.8 million to $240.1. That's an astounding 109% compounded annual growth rate.

Fortress is a fairly small organization, with roughly 250 investment pros. Offices are in New York, with affiliate offices in Dallas, San Diego, Toronto, London, Rome, Frankfurt and Sydney.

Why go public? After all, by being a public company, Fortress will need to abide by strict regulations. Isn't that something hedge funds are trying to avoid?

Well, apparently the benefits of being public outweigh the disadvantages. Fortress will gain a source of permanent capital, since the firm will not have to pay back its investors. Also, it may be easier to raise large amounts of money using a public entity (because of the liquidity).

What's more, being public can help attract talent, such as by offering equity incentives like stock options.

Something else: Big companies, like Morgan Stanley, are buying hedge funds.

Thus, by being public, Fortress can use its stock to buy-up hedge funds, as well.

The IPO should hit the markets within the next couple months. If it is a success, it's likely we'll see a flood of other hedge funds hit the public markets.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Financial Statemet. He also has a blog at www.taulli.com.

Mega hedge fund files to go public originally appeared on BloggingStocks on Thu, 09 Nov 2006 13:14:00 EST. Please see our terms for use of feeds.