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Bank of England cuts rates and buys bonds

In a startling move, the Bank of England cut interest rates to .5% and announced plans to buy 75 billion pounds of gilts (the British equivalent of the U.S. Treasury bond). Gilt prices rose sharply, especially longer term maturities.

This had the effect of changing the slope of the yield curve (longer term maturities gained ground over shorter term ones). The Bank of England initiated these moves in an effort to bring down medium- and long-term rates.

Continue reading Bank of England cuts rates and buys bonds

Earnings highlights: Dell, Sears, Tiffany, Talbots, Smithfield, TiVo, Rio Tinto and others

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

Upcoming quarterly reports include Guess (NYSE: GES), Collective Brands (NYSE: PSS), H&R Block, (NYSE: HRB), Staples (NASDAQ: SPLS), Ciena (NASDAQ: CIEN), Toll Brothers (NYSE: TOL); and National Semiconductor (NASDAQ: NSM).

Visit AOL Money & Finance for more earnings coverage.

Analyst calls: CRM, COT, EOG, MRVL, MNST, COMV, V

Analyst upgrades:
  • Citigroup upgraded shares of Salesforce.com (NYSE: CRM) to Buy from Hold on valuation following the recent weakness and expects positive seasonality in the second half of 2008.
  • Gilat Satellite (NASDAQ: GILT) was upgraded to Outperform from Market Perform at William Blair on valuation.
  • Cott Corp (NYSE: COT) was raised at UBS to Neutral from Sell.
  • EOG Resources (NYSE: EOG) was upgraded to Market Perform from Underperform at Bernstein.
  • Integra LifeSciencues (NASDAQ: IART) was raised to Buy from Hold at Argus.
Analyst downgrades:
  • Jefferies downgraded shares of Marvell Tech (NASDAQ: MRVL) to Hold from Buy on HDD inventory concerns and share loss at Research in Motion (NASDAQ: RIMM) after checks indicated MRVL likely lost the design for the RIM Javelin to Freescale. The firm lowered their target to $15 from $22.
  • Oppenheimer downgraded Integrated Device (NASDAQ: IDTI) to Perform from Outperform as they believe the upcoming Intel (NASDAQ: INTC) server memory transition will pressure shares for several quarters.
  • Broadpoint downgraded shares of Healthaways (NASDAQ: HWAY) to Neutral from Buy as they see few near-term catalysts.

Continue reading Analyst calls: CRM, COT, EOG, MRVL, MNST, COMV, V

Closing Bell: Stocks tank on a supposed quiet day; AIG sinks, FRE jumps

Trading today was an obvious broad-based sell off in the equity markets. But looking for a main theme or a major culprit was not so easy as we are in the quietest non-Christmas week of the year. Existing home sales did post a modest rise, but the prices paid were worse and dropping still.

Below are today's unofficial closing bell levels:
DJIA 11,386.25 (-241.81)
NASDAQ 2,365.59 (-49.12)
S&P 500 1,266.85 (-25.35)
52-WEEK LOWS
Top Analyst Calls

American International Group (NYSE: AIG) was a disaster today following Fitch putting the insurance giant on review for possible downgrades to the bond ratings. Shares closed down over 5% at $18.78 on active volume at 45 million shares.

Gilat Satellite Networks Ltd. (NASDAQ: GILT) was the big loser in merger-land today. The company missed earnings estimates and also was notified that the proposed buyer was not going to honor the $11.40 price. Shares closed down over 7% at $8.01, but that was much better than the lows and indications of the day.

As politicians and Obama talked up the need for mortgage GSE's (with an undefined structure), shares of Freddie Mac (NYSE: FRE) rose 17% to $3.29.

In a down market it feels good to get one M&A right

Readers of IsraelNewsletter.com know that one of the Israeli firms we follow is Gilat Satellite (NASDAQ: GILT). In fact, my colleague Aaron Katzman and I have featured Gilat here on BloggingStocks and gave a synopsis of what we felt was the long case for Gilat.

We've speculated for months that Gilat was about to be acquired for a premium over its current stock price. The Israeli communications provider has been very active from a sales point of view, landing deals with the U.S. Postal Service, building a network for Verizon (NYSE: VZ) and expanding its global distribution. It had turned down offers earlier last year. Prominent hedge fund, York Capital, owned a big chunk of Gilat's debt, which it converted into stock last year, making it a 30% holder. Pretty bullish signal for Gilat.

Well, the firm announced that it is to be acquired by a group of investors for $11.40/share recently. I'm blogging this less as giving us a pat on the back (though, it does feel good to get one right) but to point out an interesting part of the deal.

The deal isn't supposed to close for another six months or so. Interestingly, in a squirmy market, this stock is trading almost 7% down from its acquisition price. A 6% return for six months, or an annualized 12%, isn't a bad return if you think the deal is going to go through. I won't handicap this deal, but the consortium appears serious about its offer and its ability to get the deal done. In a bad market, it's very possible that a deal like this falls through. We saw a similar thing occur with ECI Telecom, an Israeli buyout last year, that traded almost 10% below its purchase price leading right up to the deal.

Worth taking a look and doing the research.

Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.

Newspaper wrap-up: Citigroup investors view troubling 2007 results

MAJOR PAPERS:
OTHER PAPERS:
  • Ford Motor Company (NYSE: F), in an effort to urge thousands of workers to take buyouts, is pushing hard with its selling tactics, including adding incentives, job fairs and marketing DVDs and brochures, the New York Times reported.
  • Globes reported that Gilat Satellite Networks Ltd (NASDAQ: GILT) has signed two $10M contracts in Africa, which involve both services and the supply of equipment.

Earnings highlights: Wal-mart, Crocs, Garmin, Safeway, Newmont and others

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

Also, Jim Cramer sees Hewlett-Packard as a market bellwether, and Ted Allrich looks at some other bellwether stocks. Sheldon Liber gets a sense of deja vu from Exxon Mobil's (NYSE: XOM) big profits and its tussle with Chavez.

Upcoming results to watch for include Nordstom Inc. (NYSE: JWN), Macy's Inc. (NYSE: M), Washington Post Co. (NYSE: WPO), Dell Inc. (NASDAQ: DELL), Sprint-Nextel Corp. (NYSE: S), and Sears Holdings Corp. (NASDAQ: SHLD).

Visit AOL Money & Finance for more earnings coverage.

The long case for Gilat Satellite Networks

The following excerpt originally appeared as part of the Israel Opportunity Investor, a monthly newsletter I publish for paid subscribers.

Gilat Satellite Networks Ltd. (Nasdaq: GILT) provides Internet Protocol [IP] based digital satellite communication and networking products and services. The Company designs, produces, and markets very small aperture terminals (VSATs), two-way satellite ground stations with dish antennae smaller than 3 meters, and related network equipment. Gilat has customers in over 85 countries. Its products are primarily sold to communication service providers and operators that use VSATs to serve enterprise, government, and residential users. The company also provides services directly to end users in various market segments in the United States and Latin America. The Company competes with Hughes Network Systems, Viasat, Inc. (NASDAQ: VSAT), iDirect, AT&T, Inc. (NYSE: T), Verizon Communications (NYSE: VZ) and Qwest Communications International Inc. (NYSE: Q).

Investment Thesis

Gilat focuses on niche markets within emerging markets and the government sector, with a lot of opportunity for new deal flow in markets like Africa, Latin America, and Eastern Europe. A recent win with the US. Postal Service could be a good springboard to more deals of the sort. In the deal, Gilat's wholly-owned subsidiary, Spacenet Inc., is working with Verizon Business to deploy a custom satellite network for the Postal Service. The satellite network will provide high performance broadbandcommunications for over 5,000 Postal Service sites in the continental United States, Hawaii, Alaska, and Puerto Rico.

Continue reading The long case for Gilat Satellite Networks

Newspaper wrap-up: FTC rejects requests to investigate Intel

MAJOR PAPERS:
  • CtW Investment Group sent a letter to Countrywide Financial Corporation's (NYSE: CFC) Board of Directors "urging" for the resignation of CEO Angel Mozilo, reported the Wall Street Journal (subscription required).
  • According to antitrust attorneys, a possible merger with a Big Pharma company may result in Biogen Idec (NASDAQ: BIIB) having to divest some overlapping assets or licensing deals in order for the deal to get approval from the Federal Trade Commission, reported the Financial Times "MergerMarket" blog.
  • The Financial Times reported that Gilat Satellite Networks (NASDAQ: GILT) is working with UBS to evaluate "several strategic and private equity buyers" in buying Gilat, which could get over $500M in a sale, according to people familiar with the matter. Bids for the company are due by the end of the week, said the sources.
OTHER PAPERS:
  • The New York Times reported that Chinese investment bank Citic Securities is planning to invest $1B in Bear Stearns Companies (NYSE: BSC), according to sources.
  • The New York Times reported that the head of the Federal Trade Commission, or FTC, has rejected numerous requests to open an investigation into Intel Corporation (NASDAQ: INTC) for anticompetitive conduct, according to inside sources.
  • The Guardian reported that world oil production peaked last year, and production will fall by half as soon as 2030, according to a report by Germany-based organization Energy Watch Group.

Symbol Lookup
IndexesChangePrice
DJIA-89.2312,801.23
NASDAQ-23.352,903.88
S&P 500-9.311,342.64

Last updated: February 10, 2012: 11:15 PM

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