Oppenheimer downgraded shares of Chelsea Therapeutics (NASDAQ:CHTP) to Perform from Outperform after their survey suggested physicians believe currently available generic treatments are adequate in neurogenic orthostatic hypotension, which could impact the company's lead drug Droxidopa.
Clearwire (NASDAQ:CLWR) was cut to Sell from Hold at Citigroup on valuation, as they estimate fair value at $13.
OTHER DOWNGRADES:
Goldman downgraded Kellogg (NYSE:K) to Neutral from Buy and Hershey Foods (NYSE:HSY) to Sell from Neutral.
MOST NOTEWORTHY: U.S. Auto Parts, DealerTrack and AspenBio Pharma were today's noteworthy downgrades:
Piper downgraded shares of U.S. Auto Parts (NASDAQ: PRTS) to Neutral from Buy following the company's Q4 results.
JMP Securities cut DealerTrack (NASDAQ: TRAK) to Market Perform from Strong Buy as they believe future market share losses to RouteOne are more significant than previously believed.
Oppenheimer has concerns that most of AspenBio Pharma's (NASDAQ: APPY) market value is tied to the AppyScore test for appendicitis, while available clinical data may not be sufficient to drive adoption. The firm lowered APPY to Perform from Outperform.
OTHER DOWNGRADES:
Wachovia cut Reddy Ice (NYSE: FRZ) to Market Perform from Outperform.
Deutsche Bank lowered its rating on Valspar (NYSE: VAL) and Airgas (NYSE: ARG) to Hold from Buy.
MOST NOTEWORTHY: Orbitz Worldwide (OWW), Agilent (A), National Instruments (NATI) and Ametek (AME) were today's noteworthy initiations:
Orbitz Worldwide (NYSE: OWW) was initiated by a host of firms today:
Thomas Weisel and Morgan Stanley started Orbitz with an Overweight rating.
Pacific Crest and Piper Jaffray started shares with Overweight ratings, and $18 and $16 targets, respectively.
Stifel initiated Orbitz with a Buy rating and $16 target, while JP Morgan started shares with a Neutral rating.
Citigroup finds the valuation of Agilent (NYSE: A) attractive at current levels and started shares with a Buy rating, They expect a recovery in the company's Electronic Measurement business to drive shares to $43.
Citigroup initiated National Instruments (NASDAQ: NATI) with a Hold rating and $40 target, saying that shares could suffer if PMI decelerates in 3Q07 or negatively inflects in 1Q08.
Ametek (NYSE: AME) is is CIBC's top pick in the mid-cap Industrial Diversified area, due to the company's attractive asset portfolio and growth opportunities. CIBC initiated Ametek with a Sector Outperformer rating and $45 target...
OTHER INITIATIONS:
Jefferies initiated WNS Holdings (NYSE: WNS) with a Hold rating.
Five Orbitz insiders bought close to $600,000 worth of Orbitz Worldwide Inc's (NYSE: OWW) stock between $9.55 to $10.10 last week. This is another sign that better days could be ahead for the online travel business.
Expedia Inc (NASDAQ: EXPE) earlier this summer announced plans to repurchase 42% of its stock through a tender offer, before the collapse of the high-yield market caused the company to reduce its share buyback.
Collapsed share buyback or not, the executives at the top online travel companies are becoming increasingly bullish. Barry Diller, Expedia's chairman, said in the most recent earnings call that this is a business that can handle leverage, suggesting pricing in this industry is improving. Additionally, Priceline.com Inc (NASDAQ: PCLN) also reported very strong results.
After having a severe industry downturn in 2006, the industry is beginning a nice upcycle. The trend is your friend in the online travel business.
Five insiders bought $592.7K in Orbitz Worldwide Inc's (NYSE: OWW) stock at per-share prices ranging from $9.55 to $10.10, reported Barron's Online's (subscription required) "Inside Scoop" column.
The Financial Times (subscription required) reported that General Electric Company (NYSE: GE) is believed to be considering the sale of Lake, its Japanese consumer finance subsidiary.
According to security company Symantec Corporation's (NASDAQ: SYMC) blog, there is a new Trojan called "infostealer.monstres" which is attacking online recruitment site Monster.com (NASDAQ: MNST).
MOST NOTEWORTHY: CACI Int'l (CAI), Abercrombie & Fitch (ANF), Kohl's (KSS) and the software sector were today's most noteworthy upgrades:
JP Morgan upgraded CACI Int'l (NASDAQ: CAI) to Overweight from Underweight, considering the company an attractive, defensive stock and a "safe haven" based on the government exposure.
Friedman Billings upgraded Abercrombie & Fitch (NYSE: ANF) to Outperform from Market Perform citing ongoing cost-cutting and MG&A lines.
Deutsche Bank upgraded Kohl's (NYSE: KSS) to Buy from Neutral citing valuation and successful execution of its marketing, merchandising and store expansion plans.
Bear Stearns upgraded the software sector to Market Weight from Underweight on valuation...
OTHER UPGRADES:
UBS upgraded Home Depot (NYSE: HD) to Neutral from Sell.
JP Morgan raised Blockbuster (NYSE: BBI) to Overweight from Neutral.
FTN Midwest upgraded to Seagate (NYSE: STX) to Buy from Neutral.
MOST NOTEWORTHY: Old Dominion Freight (ODFL), Jamba (JMBA), AMD (AMD), Orbitz Worldwide (OWW) and Quest Diagnostics (DGX) were today's notable initiations:
Baird is positive on Old Dominion's (NASDAQ: ODFL) growth opportunities, valuation, 2008 improving truck fundamentals, and a potentially seasonally stronger Q4, starting shares with an Overweight rating and $36 target.
Merriman initiated Jamba (NASDAQ: JMBA) with a Buy rating, as the company aggressively expands its store base beyond California.
BMO Capital believes AMD (NYSE: AMD) may lose the Intel platform integrated graphics market, and sizeable Intel platform discrete graphics market share. The firm initiated AMD shares with an Underperform rating and $10 target.
Soleil has concerns regarding Orbitz Worldwide's (NYSE: OWW) decelerating growth and poorer business mix vs. competitors and started shares with a Hold rating and $13 target.
Credit Suisse initiated Quest Diagnostics (NYSE: DGX) with a Neutral rating and $61 target, citing the recent UnitedHealth (UNH) contract loss, slowing growth, and valuation for its Neutral rating...
For internet company IPOs, the results were mixed this week. The online career site, Dice Holdings (NYSE: DHX), saw its share price increase about 4.2% (with the IPO priced at the top of its range). But there was also the meager performance of Orbitz Worldwide (NYSE: OWW), whose shares fell 3.3% on its debut. Despite this, we are still seeing filings from Net companies.
The latest filing: Internet Brands. In fact, back in 2000, the company filed for an IPO -- but it was too late (as the dot-coms turned into dot-bombs). But much has happened since then -- and the company looks a lot different. Through aggressive M&A, Internet Brands now has more than 40 principal websites -- focused on consumer categories. Examples include: CarsDirect.com, Wikitravel.org, FlyerTalk.com, ApartmentRatings.com, and DoItYourself.com.
As of June, the network attracted about 24.5 million unique visitors. This is up 161% from the same period a year ago. The business model is primarily driven by advertising. Last year, Internet Brands posted about $84.8 million in revenues. However, there is fierce competition. Just some of rivals include Google Inc. (NASDAQ: GOOG), Yahoo! Inc. (NASDAQ: YHOO), and Microsoft Corp. (NASDAQ: MSFT).
The lead underwriter on the IPO is Credit Suisse (NYSE: CS).
There's been lots of dealmaking with online travel portal, Orbitz Worldwide Inc. (NYSE: OWW). Back in 2003, the company went public, and then a year later sold out to Cendant. Cendant then meshed its online travel properties into a new unit, called Travelport, which was then sold to the Blackstone Group (NYSE: BX).
And the dealmaking continued this week as Orbtiz raised a cool $510 million in an IPO. Unfortunately, investors were not impressed. The IPO was priced at $15, which was below its $16-$18 range. The stock then fell 3.3% on its first day of trading.
But the IPO proceeds won't go to Orbtiz. Rather, the cash will flow back to the parent company, Travelport (in a special dividend). In other words, the IPO is really a cash-out -- not a way to help build Orbitz.
True, Orbitz has some nice brands – such as CheapTickets.com and eBookers.com. But the fact is that the online travel space is highly competitive, with players like Expedia Inc. (NASDAQ: EXPE) and Priceline.com Inc. (NASDAQ: PCLN).
Another big issue: the company has never posted net income. So, I can understand why Wall Street has some concerns.
Online travel is a commodity business where people's sole loyalty comes from whoever gives them the lowest price. While in theory that's great for consumers, that's lousy for investors. The travel sites are big advertisers because they need to convince people that they are different from one another and that they can offer better bargains then each other and the service providers.
The public is bombarded with a confusing array of advertising about where they can get the best travel deals on the Web. Both Orbitz and Expedia offer $50 travel coupons to people who find better prices online within 24 hours of booking a trip on their sites. Airlines make the same promise as do hotels and car rental companies.
If all of these claims are accurate, why should anyone even bother using Expedia or Orbitz?
I realize travel providers need Expedia and Orbtiz because they can't sell all of their excess inventory themselves.
But is that a good enough reason to invest in either company?
As Blackstone goes through the convoluted process of its own IPO, the firm is also prepping a portfolio company for the public markets: Orbitz.
Back in 2003, Orbitz actually took a flier as a public company – and then sold out to Cendant in 2004. Cendant then wrapped the company into other units and formed Travelport. Then last year, Cendant sold Travelport to Blackstone.
One thing's for sure: the investment banks must have racked up lots of juicy fees.
Orbitz got its start in 1999. The founders included American Airlines, Continental Airlines, Delta Air Lines, Northwest Airlines and United Air Lines. Yes, the idea was to tap into the emerging online market for ticketing.
Now, Orbitz has an array of strong properties like CheapTickets, ebookers, HotelClub, RatesToGo and the Away Network. In all, there is a base of about 48 million registered users.
In 2006, Orbitz generated $752 million in net revenue and $117 million in adjusted EBITDA.
You can find the prospectus at the SEC website. Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.
Last year, the private equity firm The Blackstone Group was very busy in the travel sector, spending billions on assets such as CheapTickets, Orbitz, Gullivers Travel Associates and the Galileo's global distribution system (GDS).
Well, according to a report from the NY Times, it looks like Orbitz has hired an investment bank, UBS.
Basically, Blackstone thinks it can get a nice payday from an IPO.
No doubt, private equity firms are supposed to help improve the operations of its targets. However, what can it really do in six months?
Then again, as we have seen, equity markets can move quickly – and it looks like the IPO markets are heating-up again. Good timing can solve lots of problems for big-time investors.
But it will take several months to put a filing together. An IPO is not likely until May or so.
Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.
The goal for Blackstone/TCV: build a much larger travel distribution company.
Well, it has wasted little time. This week, the company purchased Worldspan for $1.4 billion. The company is a dominant player in the GDS space.
All in all, the deal makes a lot of sense. There should be big cost savings – as well as top-line growth opportunities (in terms of cross-selling). The combined company will have roughly $3.5 billion in revenues.
But it is still risky. After all, airlines are trying to avoid – or cut pricing – with GDSs. Of course, the Internet is a threat. What's more, there will be serious challenges in terms of integration of the complex organizations of Travelport and Worldspan (ie, both have different technology platforms).
But there were two key winners: Citigroup Venture Capital Equity Partners and Ontario Teachers' Pension Plan. These firms purchased Worldspan in 2003. And, because of the Travelport deal, they generated a tidy 250% return.
Tom Taulli is the author of various books, including the Complete M&A Handbook and operates DealProfiles.com.
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MOST NOTEWORTHY: Airlines, Chelsea Therapeutics and Clearwire were today's noteworthy downgrades:.gif){kind=logo}
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For internet company IPOs, the results were mixed this week. The online career site, 
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