MOST NOTEWORTHY: SuccessFactors, Taleo and Penn National were today's noteworthy initiations:
Oppenheimer initiated SuccessFactors Inc (NASDAQ: SFSF) with an Outperform rating and $15 target. The firm believes the company's double-digit revenue growth will continue as its differentiated HCM solutions gain broad-based adoption. Deutsche Bank believes the company has a strong opportunity to build a highly profitable business as it broadens its footprint, and started shares with a Buy rating and $15 target.
Deutsche Bank also reinstated coverage of Taleo Corporation (NASDAQ: TLEO) with a Buy rating and $35 target. The firm believes the Vurv acquisition will create significant accretion in 2009 and that investors should take advantage of the recent share weakness.
Oppenheimer assumed coverage of Penn National Gaming Inc (NASDAQ: PENN) with an Outperform rating and believes the termination of Penn's acquisition by Fortress Investment and Centerbridge will be catalysts for the stock, as they think it provides the company with financial flexibility. In addition, the firm believes Penn's management team has historically made prudent capital decisions.
Stocks futures fell early Wednesday, ahead of the weekly crude oil inventories figures as oil persists at high level and ahead of earnings from Morgan Stanley and FedEx as many hope to see clearer signs the credit crunch crisis has peaked and its effects begin to ease.
On Tuesday, U.S. stocks fell sharply despite solid earnings from Goldman Sachs. Goldman, though, suggested more is to come in terms of the credit crisis. In addition, several economic figures on inflation, housing and industrial production further damped the sentiment on Wall Street. The Dow industrials fell 108 points, or 0.89%, the S&P 500 dropped 9 points, or 0.68%, and the Nasdaq Composite lost 17 points, or 0.69%.
Not much is on the economic docket today. At 10:30 a.m. EDT, the government will report its weekly figures on fuel supplies. Oil prices edged above $134 in electronic trading ahead of that report and the meeting in Jeddah Sunday of oil producing and consuming nations. So far, it seems the promised increased production from the Saudis has not helped to lower the price of oil as it is weighed against increased global demand.
History is repeating itself. After facing generic competition in the United States to its second-biggest product in 2006, Sanofi-Aventis is now dealing with a similar threat in Europe. Competition concerns came after Switzerland's Schweizerhall Holding AG announced it would launch a copy of the Plavix blood thinner that could be bought for a lower price. Schweizerhall said it expects German regulators to approve its generic version of Plavix, called clopidogrel.
Sanofi-Aventis's fears about generic competition are justified as the company had to fight against a similar situation less than a year ago. Back in 2006, Bristol-Myers Squibb Co. (NYSE: BMY), which develops the product with Sanofi, saw a big plunge in its sales after Canadian generics company Apotex Inc. launched a cut-price copy of the drug.
Activision (NASDAQ: ATVI) late Thursday reported a fourth-quarter profit that handily beat expectations as video games sales nearly doubled with strong demand for Guitar Hero 3 and Call of Duty 4 games. ATVI shares are up over 4.5% in premarket trading.
Bristol-Myers Squibb (NYSE: BMY) and Sanofi-Aventis (NYSE: SNY) are about to face a generic threat from Swiss drug firm, Schweizerhall Holding, that said it's going to soon launch a generic version in Germany of Plavix blood-thinning drug.
Clear Channel (NYSE: CCU) reported its profit soared to $799.7 million or $1.61 per share in the first quarter while revenues rose 4% to $1.56 billion. The results beat expectation even when taken excluding one-time items that have earnings rising 70% to $161.4 million or 32 cents a share.
Once thought to be extremely safe, action rate securities have proved difficult to sell in this credit crisis. Tech companies are big holders of them and are taking charges left and right, including MetroPCS Communications Inc (NYSE: PCS), Palm Inc (NASDAQ: PALM) and Earthlink Inc (NASDAQ: ELNK), according to the Wall Street Journal.
NYSE Euronext Inc (NYSE: NYX) will look to increase its stakes in India's National Stock Exchange and the country's Multi Commodity Exchange, the Business Standard reported, once foreign ownership rules are eased. NYSE Euronext also intends to partner with the two Indian exchanges in order to help them develop their business.
WEB SITES:
Business Week reported that Brian Marckx of Zacks Investment Research said Bristol Myers Squibb Company (NYSE: BMY) may be an attractive takeover candidate for a larger pharma such as Pfizer Inc (NYSE: PFE) or France's Sanofi-Aventis SA (NYSE: SNY), both of which have been partners with Bristol on some of its products.
For parents out there, this recall, at this time, appears to be more proactive than anything else. According to Merck, the company decided to recall approximately 1.2 million doses of the popular childhood vaccine after it discovered that the equipment used to make the vaccine had been contaminated with bacteria.
For those of you who are not familiar with the Hib vaccine, it is used to vaccinate children against meningitis, pneumonia and other serious illnesses.
PDUFA date for Sanofi-Aventis SA's (NYSE: SNY) Taxotere for induction therapy of locally advanced head and neck cancer prior to chemoradiotherapy and surgery
Yum Brands (NYSE: YUM) reported 17% growth in third-quarter profit, despite a mere 1% growth in U.S. profits. Profits in its China division grew 28% and international division profits were up 21%. Overall, net income rose to $270 million, or 50 cents per share beating expected earnings of per share of 45 cents. Yum shares climbed $1.94, or 5.7%, to close at $36.29 yesterday ahead of the results and continued to gain in after-hours trading.
After crossing the $600 threshold in yesterday's session, Google Inc. (NASDAQ: GOOG) continue to climb in premarket trading. The search giant will likely continue doing what it does best and that is to monetize its assets. Google is scheduled to announce tomorrow that it will begin showing YouTube videos on thousands of other Web sites, hoping to profit from ads attached to the clips. The ads accompanying the YouTube clips will appear as a graphic straddling the video or as a link along the bottom.
Deutsche Bank downgradedCoca-Cola Co. (NYSE: KO) to Hold from Buy, citing valuation after shares have appreciated 22% since March. PepsiCo (NYSE: PEP) received a similar downgrade from Buy to Hold at the broker. KO shares are down half a percent in premarket trading.
Ford Motor Co. (NYSE: F) reported its sales in China for the first three quarters of the year and the growth has been considerable at 30%. Sales of Ford brand vehicles, grew 27%, sales of Changan Ford Mazda, the three-way tie-up among Ford, Japan's Mazda Motor Corp and Changan Automobile Co Ltd, were up 59% and sales of the hot-selling mid-sized Focus sedan, rose 69%. Premium brands sales were up 72%. Ford has also announced it and Mazda Motor Corp will build a second, $500 million plant in Thailand to produce 100,000 cars a year to meet the region's growing demand for small cars.
Yahoo Inc (NASDAQ: YHOO) will buy 10% of a share sale by Alibaba.com Ltd, China's biggest e-commerce firm, as it steps up a battle with Google and Baidu (NASDAQ: BIDU) in the world's second-biggest Internet market. Yahoo already has a 40% stake in the Chinese firm's parent, Alibaba Group.
MarketWatch reports on continued speculation that Pfizer Inc. (NYSE: PFE) is eyeing the purchase of a stake in Sanofi-Aventis (NYSE: SNY) or even a full takeover. Sanofi-Aventis shares rose 1.8% in premarket action.
Well, that didn't take long. Hackers have cracked the new update Apple Inc. (NASDAQ: AAPL) has implemented in the iPhone and iPod Touch. Third party applications access and other hacks have been reported. And the shares continue to climb, after another record close when AAPL shares gained 4% yesterday, they continue the gains this morning, up 1.2% in premarket action.
As they resigned from their executive positions in Skype, co-founders agreed that eBay (NASDAQ: EBAY) had indeed overpaid for the internet telecom group.
MOST NOTEWORTHY: Sanofi-Aventis, Lifecell, Mylan Labs, Panera Bread and Norsk Hydro were today's noteworthy upgrades:
Societe Generale upgraded shares of Sanofi-Aventis (NYSE: SNY) to Buy from Hold as they believe pipeline maturation over the next 12 months can drive the stock higher.
Piper upgraded shares of Lifecell (NASDAQ: LIFC) to Outperform from Market Perform after their recent survey indicated that AlloDerm remains the leading biologic hernia mesh on the market and competition is making little headway.
JP Morgan upgraded Mylan Labs (NYSE: MYL), Panera Bread (NASDAQ: PNRA) and Norsk Hydro (NYSE: NHY) to Overweight from Neutral. The firm upgraded Mylan based on its position in the global generics market and above-average growth; Panera was upgraded on valuation, as they believe the recent operating risk is now behind the company; Norsk Hydro was upgraded, as they believe the value of the company's aluminum assets are higher than the current share price suggests.
OTHER UPGRADES:
HSBC upgraded Ride Aid (NYSE: RAD) to Neutral from Underweight.
Deutsche Bank believes new product leverage can bring upside to consensus operating margin expectations at Microsoft Corporation (NASDAQ: MSFT) and they view shares as attractively valued given its growth profile. The firm started shares with a Buy rating and $33 target.
Keybanc initiated shares of Salesforce.com (NYSE: CRM) with a Hold rating and sees slowing growth rates for revenue and net subscriber additions throughout the remainder of FY08 and beyond and thinks investor expectations are too high.
Keybanc also started shares of Taleo Corporation (NASDAQ: TLEO) with a Buy rating and $27 target, as it is well-positioned to gain market share in the Human Capital Management space.
Thomas Weisel believes McAfee Inc (NYSE: MFE) will benefit from PC market growth, enhanced awareness of the company's brand, and its renewed focus on product development for the midmarket corporate segment, and started shares with a Market Weight rating and $37 target.
OTHER INITIATIONS:
Lululemon Athletica (NASDAQ: LULU) was started at William Blair with an Outperform rating and at UBS with a Neutral rating and $37 target.
Merrill Lynch initiated shares of Zoltek Companies Inc (NASDAQ: ZOLT) with a Buy rating and $50 target.
MOST NOTEWORTHY: Sanofi-Aventis (SNY), Dell (DELL), Warner Music Group (WMG), KeyCorp (KEY) and SanDisk Corp (SNDK) were today's noteworthy upgrades:
HSBC upgraded shares of Sanofi-Aventis (NYSE: SNY) to Overweight from Neutral to reflect the company's new drug pipeline investments.
ThinkEquity raised Dell (NASDAQ: DELL) to buy from Sell based on expectations for a better-than-expected July quarter due to strong consumer business demand.
Pali Research upgraded Warner Music Group (NYSE: WMG) to Neutral from Sell on valuation with the stock down 40% year-to-date.
Merrill upgraded KeyCorp (NYSE: KEY) to Neutral from Sell following better-than-expected Q2 results.
JP Morgan upgraded SanDisk (NASDAQ: SNDK) to Overweight from Neutral citing increased demand for NAND applications and supply constraints...
OTHER UPGRADES:
Bernstein upgraded Campbell Soup (NYSE: CPB) to Outperform from Market Perform.
Boston Properties (NYSE: BXP) was raised to Hold from Underweight at Keefe Bruyette.
Matrix upgraded Acuity Brands (NYSE: AYI) to Strong Buy from Buy.
Bernstein raised Regions Financial (NYSE: RF) to Market Perform from Underperform.
A press release [PDF] out this morning confirmed positive Phase III results of Novo Nordisk's (NYSE: NVO) potential blockbuster drug, Liraglutide, which is an analogue of the naturally-occurring hormone GLP-1 in development by Novo for the treatment of type 2 diabetes. The clinical results of the first of five late-stage studies showed that Liraglutide provided significantly better glucose control and led to significantly more weight loss than patients who used Sanofi-Aventis SA's (NYSE: SNY) Lantus.
Novo CEO Lars Rebien Sorensen said the company is looking to apply for regulatory approval of the drug in the U.S. and Europe in the middle of next year, and hopes to receive approval by mid-2009.
This data is excellent news for Novo, who has been trying to gain market share against competitors for some time in the attractive U.S. diabetes market. Unfortunately, the data is also a negative for rivals Amylin Pharmaceuticals Inc (NASDAQ: AMLN), Eli Lilly and Company (NYSE: LLY) and Pfizer Inc (NYSE: PFE), who all have diabetes drugs on the market - Byetta and the inhalable insulin Exubera, respectively.
Shares of Novo were up nearly 4.5% this morning on the Liraglutide data, which some analysts called "a positive surprise."
Gilead Sciences Inc. (NASDAQ: GILD) opened at $81.24. So far today the stock has hit a low of $80.48 and a high of $82.17. As of 10:45, GILD is trading at 81.85, up 1.21 (1.5%).
The stock made a strong push in early spring to reach the low 80's and a one year high of 84.47 in May. The US Government has recently been ramping up efforts to fight against any future potential flu pandemic, including awarding multi-million dollar contracts to Sanofi-Aventis (NYSE: SNY) and MedImmune (NASDAQ: MEDI) to increase their capacity to produce flu vaccines. GILD, maker of Tamiflu, could stand to benefit from such efforts as well. Recent technical indicators for GILD have been bullish but deteriorating, while S&P gives the stock a 4 STARS (out of 5) buy rating.
For a bullish hedged play on this stock, I would consider an August bull-put credit spread below the $70 range. GILD hasn't been below $70 since January and has shown support around $78 recently. This trade could be risky if the FDA finds trouble with one of GILD's drugs, but even if that happens, this position could be protected by the support around $70 combined with its 200 day moving average, which is currently at $71 and rising.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls a position in GILD or MEDI. He does control a bullish hedged position in SNY.
Bristol Myers Squibb Co. (NYSE: BMY) opened at $29.21. So far today the stock has hit a low of $29.21 and a high of $29.96. As of 10:35, BMY is trading at $29.93, up $0.19 (0.6%).
The stock has been climbing gently over the past 10 months, reaching a one-year high of $30.55 earlier this month. Jim Cramer believes that this stock could really shoot up because struggling rival Sanofi-Aventis (NYSE: SNY) may be forced to buy BMY to make numbers. People are talking about a bid in the range of $33, but Cramer expects something closer to $40. Recent technical indicators for BMY have been bullish but deteriorating, while S&P gives the stock a 4 STARS (out of 5) buy rating.
For a bullish hedged play on this stock, I would consider a September bull-put credit spread below the $25 range. BMY hasn't been below $25 since December and has shown support around $28 recently. This trade could be risky if the FDA find trouble with one of BMY's drugs, but even if that happens, this position could find support around its 200 day moving average, which is currently at $27 and rising.
Brent Archer is an options analyst and writer at Investors Observer. DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in BMY. He does control a bullish hedged position on SNY.
.gif){kind=logo}
MOST NOTEWORTHY: SuccessFactors, Taleo and Penn National were today's noteworthy initiations:
Stocks futures fell early Wednesday, ahead of the weekly crude oil inventories figures as oil persists at high level and ahead of earnings from Morgan Stanley and FedEx as many hope to see clearer signs the credit crunch crisis has peaked and its effects begin to ease.
Shares of French drug maker 
.gif){kind=logo}
Drug maker .gif){kind=logo}
.gif){kind=logo}
.gif){kind=logo}
Anheuser-Busch (BUD) sues InBev, what's next?
Wal-Mart might help your portfolio during the recession
IndyMac (IMB) turns to stone
