Continue reading Closing Bell: It ain't just financial stocks (UPS, FDX, ATVI, GE, GOOG, MCD)

Closing Bell: It ain't just financial stocks (UPS, FDX, ATVI, GE, GOOG, MCD) originally appeared on BloggingStocks on Fri, 08 May 2009 16:00:00 EST. Please see our terms for use of feeds.

With the massive decline in equities, it would seem that M&A would be robust - as solid buyers find compelling deals. But, if you look at the history of M&A, recessionary environments tend to result in lower activity.

And yes, according to analysis from Bernstein Research, it looks like 2009 will remain a slow time for M&A. If anything, there won't be a comeback until 2010.

No doubt, this is bad news for deal shops like Goldman Sachs (NYSE: GS) and Greenhill (NYSE: GHL). Then again, the investment banking industry is undergoing lots of change right now (as top-tier firms becoming bank holding companies).

Essentially, Bernstein forecasts that M&A activity will be off by a quarter next year. If this happens, then the fall-off will be 45% from 2007 to 2010.

Sounds bad, huh? Well, this is actually normal stuff in the feast-or-famine M&A game.

Why? For the most part, companies do not want to take major risks during slow economic times. After all, how long will the recession last? If it continues for several more years, then making a commitment on a major deal could be harmful.

However, Bernstein still sees some positives. For example, counter-cyclical industries, such as healthcare, should still see strength in M&A. Oh, and expect distressed deals (where sellers have no choice but to sell out) as well as activity in the financial sector (as the federal government pumps up the sector with fresh cash).

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Streetsmart Guide to Short Selling: Techniques the Pros Use to Profit in Any Market. He is also the founder of BizEquity, a valuation website.

M&A looking grim for 2009 originally appeared on BloggingStocks on Tue, 09 Dec 2008 10:25:00 EST. Please see our terms for use of feeds.

Jeffrey Lindsay at Bernstein Research has some "tough love advice" for Jerry Yang at Yahoo! Inc. (NASDAQ: YHOO) Lindsay covers most of the large internet stocks and his work is followed closely in the financial press.

In a recent report, analyst Lindsay offers Yahoo! a game plan. First, Yahoo! should outsource search to Google (NASDAQ: GOOG). The company has considered that and decided against it. But, Google's search process is more efficient than Yahoo!'s, which yields higher ad revenue.

With the search function moved outside the company, Yahoo! could cut 25% of its staff.

The combined benefit of these two actions would add $1.2 billion in additional operating income a year, according to Lindsay. Yahoo!'s operating income in the last quarter was $185 million, so the improvement in the company's financial fortunes would be tremendous.

Although suggestions of radical changes at Yahoo! have been floating around since long before Yang moved up the CEO job a few months ago, no one has put an exact number on it the way that Lindsay has. If his calculations are even close to being correct, the suggestions are nearly irresistible.

Continue reading Analyst offers 'tough love advice' for Yahoo! (YHOO)

Analyst offers 'tough love advice' for Yahoo! (YHOO) originally appeared on BloggingStocks on Sun, 16 Sep 2007 15:40:00 EST. Please see our terms for use of feeds.