Sara Lee (SLE) has rejected an offer from a group of private-equity firms that includes Bain Capital, Apollo Management and TPG Capital, the New York Post reports. Overall option implied volatility of 20 is below its 26-week average of 24, according to Track Data, suggesting decreasing price movement.

PepsiCo (PEP) is expected to report Q4 EPS on February 10. Overall option implied volatility of 17 is near its 26-week average, according to Track Data, suggesting nondirectional near-term price movement.

Options Update is by Stock Specialist Paul Foster of theflyonthewall.com.

Options Update: Sara Lee Volatility Low on Uncertainty of Buyout Discussions originally appeared on BloggingStocks on Thu, 27 Jan 2011 09:00:00 EST. Please see our terms for use of feeds.

Continue reading Closing Bell: A Good September Start (AAPL, BCSI, BKC, JPM, SLRY, RDC, APOL)

Closing Bell: A Good September Start (AAPL, BCSI, BKC, JPM, SLRY, RDC, APOL) originally appeared on BloggingStocks on Wed, 01 Sep 2010 16:00:00 EST. Please see our terms for use of feeds.

Continue reading Closing Bell: Another Down To The Wire Day (PAR, DELL, DYN, STRA, APOL)

Closing Bell: Another Down To The Wire Day (PAR, DELL, DYN, STRA, APOL) originally appeared on BloggingStocks on Mon, 16 Aug 2010 16:00:00 EST. Please see our terms for use of feeds.

Options Update: Apollo Group Volatility Increases; Shares Near 44-Month Low originally appeared on BloggingStocks on Fri, 13 Aug 2010 16:40:00 EST. Please see our terms for use of feeds.

In the middle of 2007, the private equity industry started to crumble as the credit crunch shocked the U.S. financial system. Since then, it's been particularly tough for dealmakers.

Yet, according to a cover story in BusinessWeek, the good days may be here again. In fact, private equity may even help the economy get out of its funk.

And, there is historical precedent. Back in the early 1990s, private equity funds were a key source of restructuring and capital infusions. Interestingly enough, some of the players included the Blackstone Group (NYSE: BX), Carlyle and Apollo (yes, these are now some of the largest funds in the world).

But there's a big difference: Private equity funds now have about $1 trillion in capital to put to work.

Continue reading Will private equity save the world?

Will private equity save the world? originally appeared on BloggingStocks on Wed, 13 May 2009 12:30:00 EST. Please see our terms for use of feeds.

Back in the mid 1970s, Paul Allen cofounded Microsoft (NASDAQ: MSFT). Since then, he has bought many nice toys (such as luxury yachts and sports teams), as well as made investments in a variety of companies. Unfortunately, his investment record has been spotty (perhaps he should have focused on the toys instead?)

Now, it looks like Allen will take the biggest loss of his investment career; that is, in Charter Communications (NASDAQ: CHTR). In all, he has committed $7 billion to the firm.

Continue reading Paul Allen's cable nightmare: Apollo gets its claws into Charter

Paul Allen's cable nightmare: Apollo gets its claws into Charter originally appeared on BloggingStocks on Sat, 21 Mar 2009 13:40:00 EST. Please see our terms for use of feeds.

It would be hard to find a large American company doing as well at Apollo (NASDAQ: APOL), the online education company best known for its University of Phoenix division, the biggest business of its kind in the U.S. The firm's ads are everywhere.

In the last quarter, Apollo made $307 million in operating income on revenue of $971 million -- an amazing margin. Both numbers were up sharply from the same period in the previous year.

Continue reading Apollo (APOL) and online education are recesssion proof

Apollo (APOL) and online education are recesssion proof originally appeared on BloggingStocks on Fri, 20 Feb 2009 09:15:00 EST. Please see our terms for use of feeds.

This post was written by Minyanville contributor Smita Sadana.

Apollo Group (Nasdaq: APOL) was enjoying a bump in price after reporting earnings that were well above estimates, based in increased enrollments. Of course, one can argue that people would go back to school for skill enhancement in these tough recessionary times.

However, two days after that stunning gain, APOL is off 4.9% to $82.55, on a cautious research note from Citron Research, who argue that "this growth is a one time bump."

While I do not endorse any such research or base my trading primarily on it, I am taking note of the negative reaction on double the average volume.

The stock can certainly come in a little and reduce the distance from its 200-day moving average, which is 38% at the current levels. While not at an extreme, it is unusual in this market to find stocks which are trading so far out.

I'm seeing various levels of support on the APOL chart and they range from $75 to $79.

Cautious research note crimps Apollo (APOL) flight originally appeared on BloggingStocks on Tue, 13 Jan 2009 15:40:00 EST. Please see our terms for use of feeds.

I don't like to toot my horn much, as there are plenty of loud mouths in this industry ready to tell you how great they are. I prefer to let my work do the talking, and lately that work has been screaming.

I'll make an exception to the rule today. Here goes: Following my suggestions can significantly improve your performance in the market.

Case in point is my list of Top 10 Stocks for 2009. With a week of trading under our belt, the S&P 500 is down approximately 1%. The aggregate return of an equally weighted portfolio consisting of the 10 stocks on the list is nearly 9%.

Included on the list are big gainers Chicago Bridge & Iron (NYSE: CBI), up 25% year to date, and Transocean (NYSE: RIG), up 15% year to date.

Now, a week does not make a year, but keep in mind that as goes January, so goes the rest of the year. I expect these stocks to continue outperforming by a wide margin for the remainder of the year.

Continue reading Online Educator Apollo gonna keep on shining

Online Educator Apollo gonna keep on shining originally appeared on BloggingStocks on Sun, 11 Jan 2009 14:40:00 EST. Please see our terms for use of feeds.

Were you wondering which sector of the U.S. economy would be next to take a dive from the year-old credit crunch? Well look no further, because Barron's [subscription required] reports that private equity firms like Apollo Global Management, Kohlberg Kravis Roberts, and Blackstone Group (NYSE: BX) are hurting gators thanks to too much borrowed money and the weak financial performance of the companies they bought. And business is way down, Barron's reports that through mid-August, the 2008 total deal volume "stood at $67 billion, versus more than $400 billion in the corresponding 2007 period."

This does not come as a surprise to me. In February 2007, I appeared on CNBC arguing that private equity had peaked. And I began to question its long-term viability back in August 2006 when Barron's Alan Abelson quoted my thoughts on the matter. The basic problem is that when debt is cheap, private equity booms and when it starts selling itself to the public, investors should hold onto their wallets for dear life. People who own private equity firms tap their superior knowledge of the coming downturn to convince the public to bail them out by buying their stock.

Barron's cites -- as evidence of trouble in private equity land -- examples of the declining value of the publicly traded debt in companies that private equity took private at too-high prices with too much borrowed money. It writes that bonds of "many companies taken private in the past two years have plunged to 50 cents on the dollar or less, signaling that investors fear they won't be fully repaid. Many companies that were the subjects of buyouts a year or two ago are so grossly over-leveraged that they're struggling simply to pay interest. If they were to default, debt investors would be stung, but equity investors would be even worse off; the value of their holdings would be deeply impaired or wiped out."

Continue reading Barron's: Private equity is next shoe to drop

Barron's: Private equity is next shoe to drop originally appeared on BloggingStocks on Sat, 30 Aug 2008 10:08:00 EST. Please see our terms for use of feeds.

Huntsman (NYSE: HUN), a chemical company, controlled by private equity investor David Matlin and Jon Huntsman, rejected Apollo Managements attempt to back out of merger a $28 cash merger agreement.

HUN is recently trading at $13.10 in pre-open trading, below its close of $20.86.

HUN overall option implied volatility of 82 was above its 26-week average of 48 according to Track Data, suggesting larger price risk.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Option Update: Huntsman volatility up; rejects Apollo attempt to back out of merger originally appeared on BloggingStocks on Thu, 19 Jun 2008 08:38:00 EST. Please see our terms for use of feeds.

Citigroup (NYSE: C) has a set of loans to music firm EMI. It had hoped to sell them as part of a $12 billion package of debt that it is unloading to several private equity firms including using Apollo and TPG. But, things at EMI have gotten so bad that buyers want the debt held out of the mix.

According to The Wall Street Journal (subscription required), "The fact that EMI's debt was pulled from the proposed sale suggests it would have attracted prices well below the upper-80s range the other loans command." The total value of the loan to EMI, made by Citi and several other banks, was $4.9 billion.

For Citi, the news has no silver lining. It will probably have to write-down a large portion of its piece of the debt in its first quarter. One of the lessons form the General Electric (NYSE: GE) earnings catastrophe is that March was a terrible month in the credit markets and many financial companies did not see it coming. Earnings for Citi and other banks and brokerages could be worse that expected, as they were at GE's financial groups.

No one should be surprised of Cit has to raise more money.

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

Citigroup can't sell EMI loans originally appeared on BloggingStocks on Sat, 12 Apr 2008 13:40:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• According to people familiar with the matter, the Wall Street Journal reported that home-furnishings retailer Linens 'n Things, acquired by Apollo Management in 2006 and caught by a shrinking housing market and increasing debt load, is expected to file for Chapter 11 bankruptcy-court protection by Tuesday.

• The Detroit News reported that Delta Air Lines Inc (NYSE: DAL) pilots have agreed to a contract revision that clears the way for Delta and Northwest Airlines Corporation (NYSE: NWA) to announce a merger next week, according to sources close the matter.
• The United Auto Workers union notified General Motors Corporation (NYSE: GM) of its deadline to strike three factories in Michigan if the two are unable to agree on local labor pacts, the Detroit News reported.
• The Business Standard reported that Toyota Motor Corporation (NYSE: TM) is planning to invest Rs 1,400 crore in Toyota Kirloskar Motor, its India subsidiary to set up its second plant in the country.

Newspaper wrap-up: Delta pilots agree to changes, clears way for merger originally appeared on BloggingStocks on Fri, 11 Apr 2008 09:15:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• In an effort to increase sales in the Middle East, the Wall Street Journal reported that Dell Inc (NASDAQ: DELL) is in talks with a government-owned vehicle in Dubai called Tecom about establishing a joint venture.
• The Wall Street Journal also reported that Washington Mutual Incorporated (NYSE: WM), which obtained a $7B capital infusion from TPG and other investors, had reportedly been working on the TPG deal while negotiating with JP Morgan Chase & Co (NYSE: JPM), which made a preliminary takeover bid of about $7B, people familiar with the deal said.
• Citigroup Incorporated (NYSE: C) is close to reaching a deal to sell $12B in leveraged loans at a discount to a group of leading private equity firms, the Financial Times reported. Although details of the deal were still being worked out, inside sources said Apollo Management, The Blackstone Group LP (NYSE: BX) and TPG would buy the loan portfolio at a discount that could come in at about 90 cents on the dollar.

• The UK Times reported that The Boeing Company (NYSE: BA) is today expected to announce that its 787 Dreamliner has been delayed by 18 months, a setback which will affect all airlines that have ordered the 787, including British Airways Plc (OTC: BAIRY) and Virgin Atlantic.

Newspaper wrap-up: Citigroup closing in on deal to sell $12B of its leveraged loans originally appeared on BloggingStocks on Wed, 09 Apr 2008 08:00:00 EST. Please see our terms for use of feeds.

With the severe credit crunch, the private equity world has come to a screeching halt. Sure, there is some dealmaking - but nothing like it was just a year ago.

So, what are the private equity folks doing? Well, they are raising billions of dollars. This is according to a piece in the FT.com (subscription required).

Although, the typical investors in private equity funds - such as pension funds - are actually losing their appetites. There are concerns about lower returns as well as larger concentrations of portfolio risk. Just look at the recent write-downs at KKR.

Yet, the top-tier private equity firms are still having little trouble raising money. TPG plans to snag $15 billion and Apollo should also get the same amount. And, as for Bain and Blackstone(NYSE: BX), it looks like they'll get $20 billion apiece.

OK, so where is the big money coming from? Yep, it's the sovereign wealth funds. With bulging coffers - especially from oil - the money needs to go somewhere. And, with lower valuations and distressed companies, it could be spot-on timing for those with a long-term perspective.

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

Private equity: still partying like it was 2007 originally appeared on BloggingStocks on Mon, 03 Mar 2008 16:03:00 EST. Please see our terms for use of feeds.

For the private equity space, it's been a mixed bag this week. The good news is that the $17.1 billion acquisition of Harrah's Entertainment got done (the largest casino deal in history). The buyers included TPG and Apollo Global Management LP.

But there was some bad news too -- it looks like Blackstone (NYSE: BX)'s proposed buyout of Alliance Data Systems (NYSE: ADS) is on the rocks.

So, in this environment, it's understandable that Wall Street is jittery with buyout deals. Just look at the pending buyout of Clear Channel Communications (NYSE: CCU).

Continue reading Clear Channel buyout -- even more more static

Clear Channel buyout -- even more more static originally appeared on BloggingStocks on Tue, 29 Jan 2008 13:11:00 EST. Please see our terms for use of feeds.

Here are a few highlights of this past week's earnings coverage from BloggingStocks:

• Acuity Brands Inc. (NYSE: AYI) missed estimates due to restructuring after the spin-off of Zep Inc.
• Alcoa Inc. (NYSE: AA) easily beat earnings estimates, due to the impeding sale of some businesses.
• American Express Co. (NYSE: AXP) warned that it would take a charge against fourth quarter earnings.
• Apollo Group (NASDAQ: APOL) posted a solid quarter on student enrollment and retention.
• AZZ Inc. (NYSE: AZZ) beat earnings expectations and offered revised guidance.
• Capital One Financial Corp. (NYSE: COF) lowered its fourth quarter and full year earnings forecast.
• Constellation Brands Inc. (NYSE: STZ) third quarter profit rose on growth in the domestic wine business.
• EI DuPont de Nemours & Co. (NYSE: DD) lifted its outlook on strength in agriculture and nutrition business.
• Family Dollar Stores (NYSE: FDO) earnings were in line with estimates, despite lower same-store sales.
• Great Atlantic & Pacific Tea Co. (NYSE: GAP) posted a strong quarter, helped by the sale of Metro Inc.

Continue reading Earnings highlights: Alcoa, KB Home, Capital One, Family Dollar, and others

Earnings highlights: Alcoa, KB Home, Capital One, Family Dollar, and others originally appeared on BloggingStocks on Sat, 12 Jan 2008 14:40:00 EST. Please see our terms for use of feeds.

• Baird upgraded shares of Apollo Group (NASDAQ: APOL) to Outperform from Neutral based on positive enrollment and revenue trends, margin improvement, and a strategic international announcement.
  
• CIBC upped its rating on Zoran Corporation (NASDAQ: ZRAN) to Sector Outperformer from Sector Performer following strong Q3 results and guidance.
  
• Jefferies upgraded shares of AmSurg Corp (NASDAQ: AMSG) to Buy from Hold as they believe the new CEO is preparing to drive earnings growth through acquisitions.
  
• ThinkEquity continues to expect Apple (NASDAQ: AAPL) to outpace the industry in growth. The firm upgraded shares to Buy from Accumulate.
  
• Barrington upgraded shares of Tribune Company (NYSE: TRB) to Market Perform from Underperform on valuation, as they believe the current price significantly discounts the risks of the going private transaction getting done.

• Citigroup upgraded Jarden Corporation (NYSE: JAH) and Teradyne (NYSE: TER) to Buy from Hold.
  
• Lehman upgraded SunPower Corporation (NASDAQ: SPWR) to Overweight from Equal Weight.
  
• HSBC upgraded ArcelorMittal (NYSE: MT) to Overweight from Underweight.
  
• WestLB raised Roche Holding (OTC: RHHBY) to Add from Hold.

Analyst upgrades: APOL, ZRAN, AMSG, AAPL and TRB originally appeared on BloggingStocks on Tue, 23 Oct 2007 11:20:00 EST. Please see our terms for use of feeds.

The Wall Street Journal reports that KKR may pull its IPO [subscription required]. The reason? It's getting harder for KKR and its peers to get banks to offer cheap money for their deals. This chilling in the credit environment has caused the stock price of competitor, Blackstone Group (NYSE: BX) to tank and made it tougher for Apollo Management to extract money from investors.

At the risk of breaking my arm, I am going to pat myself on the back. That's because last Friday I posted here that I thought KKR should pull its IPO. And yesterday, Reuters picked up on this idea, quoting from my original post. This morning, the Journal published its article on the topic as well. It may be too early to say that private equity is on the down slope for this cycle -- I was certainly too early last August when I outlined some reasons why private equity may have peaked.

I think the deteriorating credit environment for private equity will be bad for stocks. In particular, it will hurt banks that cater to private equity firms. It will also take away a floor [subscription] that was keeping stocks from falling as there always existed the chance of being taken over by KKR and/or its peers. Today the markets may rebound initially -- Tokyo's Nikkei lost 2.4% -- but if credit dries up for private equity deals, look out below.

Peter Cohan is president of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter.

KKR may pull IPO originally appeared on BloggingStocks on Fri, 27 Jul 2007 09:30:00 EST. Please see our terms for use of feeds.

Competition lines up against Goldman originally appeared on BloggingStocks on Mon, 23 Jul 2007 00:04:00 EST. Please see our terms for use of feeds.