America loves an underdog. And for all its 33 years, American Motors Corporation (AMC) was clearly an underdog.
The American automobile company was formed on January 14, 1954, by the merger of the Nash-Kelvinator Corporation and the Hudson Motor Car Company, in an effort to challenge the "Big Three" automakers -- General Motors Corp. (NYSE: GM), Ford Motor Co. (NYSE: F), and Chrysler. At the time, it was the largest corporate merger in U.S. history, and the new carmaker became the steward of the popular Hudson Hornet and Nash Rambler lines.
After chairman George Romney retired from AMC in 1962 to run for governor of Michigan, the company struggled to come up with a way to compete with such popular "pony cars" such as the Ford Mustang. Sticking with its strengths in fuel economy, AMC introduced the Gremlin in 1970, its most popular car since the Rambler. The AMC Pacer followed in 1975. The Pacer was wider than Gremlin and featured fishbowl windows designed to eliminate blind spots. Unfortunately, it also had a bigger engine, which ran counter to trends during energy crisis of the mid 1970s. Some blame the Pacer's failure to catch on as the reason for the ultimate demise of the company.
MOST NOTEWORTHY: Pacer Int'l (PACR), ComScore (SCOR), Riverbed Technology (RVBD) and CBS Corp (CBS) were today's noteworthy initiations:
William Blair believes Pacer Int'l (NASDAQ: PACR) is in a favorable industry, with growth-specific opportunities and short-term concerns and started shares with a Market Perform rating.
William Blair starting ComScore (NASDAQ: SCOR) with an Outperform rating, believing the online marketing research sector will have 20%+ growth over the next 3-5 years.
Nollenberger believes Riverbed (NASDAQ: RVBD) is positioned to gain market share and is a technology and product leader, starting shares with a Buy rating and $55 target. BMO
Capital initiated CBS Corp (NYSE: CBS) with an Outperform and expects the stock is $1.74/share for 2007 and $2.03 in 2008 with upside should there be a levered buyback...
OTHER INITIATIONS:
Life Time Fitness (NYSE: LTM) was started with a Buy rating and $67 target at ThinkEquity.
Citigroup started Petrobras (NYSE: PBR) with a Buy rating.
SMH Capital initiated Energen (NYSE: EGN) with a Buy.
MOST NOTEWORTHY: Amazon.com, Inc (AMZN), WellCare Health Plans, Inc (WCG) and agricultural chemical stocks were today's more noteworthy downgrades:
BWS Financial downgraded Amazon.com Inc (NASDAQ: AMZN) to Hold from Buy citing valuation.
Jefferies cut WellCare Health Plans Inc (NYSE: WCG) to Underperform from Hold and lowered their target to $69 from $80 as the firm believes higher-than-expected medical costs in Georgia will put significant pressure on earnings.
Citigroup downgraded Agrium Inc (NYSE: AGU), CF Industries Holdings, Inc (NYSE: CF), Potash Corp (NYSE: POT) and Terra Industries Inc (NYSE: TRA) to Hold from Buy given the year-to-date share appreciation, as their analysis suggests near-term positive earnings revisions are near a peak and should slow going forward. Citigroup remains positive on the fertilizer industry over the long-term.
OTHER DOWNGRADES:
Keefe Bruyette downgraded Federated Investors, Inc (NYSE: FII) to Market Perform from Outperform citing the potential impact from Bank of New York Co (BK)/ Mellon Financial Corp (MEL) transactions.
Jefferies cut Amerigroup Corp (NYSE: AGP) to Underperform from Hold with a $25 target.
MOST NOTEWORTHY: Weyerhaeuser Co (WY), Jackson Hewitt Tax Service Inc (JTX), Hewlett-Packard Co (HPQ) and Coldwater Creek Inc (CWTR) were some of today's more noteworthy upgrades:
UBS upgraded shares of Weyerhaeuser Co (NYSE: WY) to Neutral from Reduce citing the stock's recent weakness.
Morgan Stanley upgraded shares of Jackson Hewitt Tax Service (NYSE: JTX) to Equal Weight from Underweight on valuation as the firm believes yesterday's sell-off was overdone.
Hewlett-Packard Co (NYSE: HPQ) was upgraded to buy from Neutral at American Technology on valuation.
Coldwater Creek (NASDAQ: CWTR) was upgraded to Buy from Neutral at Bank of America based on the company's favorable risk/reward.
OTHER UPGRADES:
BB&T upgraded shares of Pacer International, Inc (NASDAQ: PACR) to Buy from Hold citing the company's operational changes and new $100M shares' repurchase.
Goldman upgraded Spherion Corp (NYSE: SFN) to Neutral from Sell.
SkyWest, Inc (NASDAQ: SKYW) was upgraded to Neutral from Underweight at Prudential.
Bear Stearns upgraded shares of Sonic Corp (NASDAQ: SONC) to Outperform from Peer Perform on expectations of an acceleration in partner drive-in same store sales and system wide unit expansion.
Citigroup upgraded Corinthian Colleges, Inc (NASDAQ: COCO) to Buy from Hold after a company visit as the firm believes expectations are finally low enough and recent initiatives are taking hold. Further, Citigroup believes takeover speculation will limit downside as their analysis suggests an LBO could work.
MOST NOTEWORTHY: Cadbury Schweppes ADS (CSG) and Buckeye Partners (BPL) were today's most notable rating changes.
Wachovia started Cadbury Schweppes ADS (NYSE: CSG) with an Outperform rating. They said Cadbury's long-term global confectionery opportunities are among the best in the industry and the recent buyout of its U.S. Dr. Pepper/Seven-Up bottling unit provides high-leverage cash flow.
Buckeye Partners Ltd (NYSE: BPL) was initiated with an Underperform rating and a $48 target at RBC based on valuation.
OTHER INITIATIONS:
Stanford initiated AudioCodes Ltd (NASDAQ: AUDC) with a Buy rating and $15 target. The firm believes AudioCodes is an inexpensive play on the migration to packet networks.
Stifel initiated William Partners LP (NYSE: WPZ) with a Buy rating and $46.50 target.
AG Edwards started BioMarin Pharmaceutical inc (NASDAQ: BMRN) with a Buy rating and $25 target.
Pacer International Inc (NASDAQ: PACR) was initiated with a Hold rating at Stifel.
Morgan Stanley started Lyondell Chemical Company (NYSE: LYO) with an Overweight rating and $38 target.
Buckingham initiated Chattem Inc (NASDAQ: CHTT) with an Accumulate rating and $64 target, citing high margins, cash flow and reduced debt.
MOST NOTEWORTHY: HSBC Holdings Plc (HBC), Suncor Energy Inc (SU) and Apple Inc (AAPL) topped today's list of downgrades:
HSBC Holdings Plc (NYSE: HBC) was downgraded to Underweight from Neutral at JP Morgan, as the firm believes the loan loss from the U.S. mortgage business may be 20% worse than expected. They recommend investors to short HBC shares and use any rally to add short positions.
Suncor Energy Inc (NYSE: SU) was downgraded to Underperform from Market Perform at Freidman Billings, citing fair valuation, higher capital costs and downside potential from crude oil prices.
Apple Inc (NASDAQ: AAPL) was removed from Goldman Sachs' Conviction Buy List.
OTHER DOWNGRADES:
Roche Holdings (OTC: RHHBY) was downgraded to Neutral from Buy at UBS.
Pacer Int'l Inc (NASDAQ: PACR) was downgraded to Neutral from Outperform with a $33 target at Baird after the company's disappointing fourth-quarter report.
Baird downgraded Host Hotels & Resorts (NYSE: HST) to Neutral from Outperform on valuation.
Sina Corp (NASDAQ: SINA) was downgraded to Market Perform from Outperform at Piper Jaffray due to valuation after the company's solid quarter.
JP Morgan downgraded AK Steel Holding Corp (NYSE: AKS) to Neutral from Overweight as they believe an acquisition of the company is not likely imminent given recent insider selling.
Raymond James downgraded Time Warner Telecom Inc (NASDAQ: TWTC) to Outperform from Strong Buy.
Oppenheimer downgraded FMC Corp (NYSE: FMC) to Neutral from Buy.
AG Edwards downgraded Simon Property Group Inc (NYSE: SPG) to Hold from Buy on valuation.
This post is part of a series on some of the most memorable companies that have disappeared.
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