Tuesday, July 24, 2007
Newsletter for July 23, 2007

Weekly Market Overview

U.S. markets started the week with a bang after a series of mergers and acquisitions pushed financial, oil-drilling and equipment-rentals higher while strong earnings announcements from Merck and others helped out the general indexes. Acquisition activity is what has been driving the markets for the past six months and dealflow shows no sign of slowing amid low costs of debt, eager investors and series of public hedge funds. Meanwhile, credit markets were a lot more passive after last weeks volatility. Investors should look towards a broad trend upwards with an eye out for any meaningful corrections - after all, there is plenty of justification for one these days!

Top 10 Stocks to Watch this Week

Fundamental Analysis

  1. Brinks Company (BCO) – The Brink’s Company remains on our watchlist since both MMI and Pirate Capital still hold significant stakes in the company. The company recently announced higher than expected earnings along with a dividend increase. We are still waiting to hear about the activist situation.
  2. Ceridian Corporation (CEN) – Bill Ackman’s activist play also continues to hold appeal with us since the breakup could unlock substantial value. We have not seen an announcement of an official date, but as of March 13th, Pershing Square is still engaged in a proxy contest with the company’s board of directors. Recently, Pershing Square lost its battle to obtain questionable letters, but vowed to continue pursuing its objectives. However, news came out today stating that one potential buyer of Ceridian was able to obtain $3.5 billion in debt financing, which is great news for shareholders holding out for a buyout. Meanwhile, shareholders recently won a lawsuit against the company that may level the competitive bidding landscape, paving the way for an increased bid.
  3. Hexcel Corporation (HXL) – OSS Capital demanded today that the company engage an investment bank to explore strategic alternatives. The company’s shares are worth $14 per share above the current market price if priced at its peers’ levels. All we are waiting on is the support of the board of directors! Meanwhile, the company has received several analyst upgrades and sits near its 52-week high.
  4. Applebees International (APPB) – Breeden Capital Management first approached Applebees several months ago suggesting that the company put itself up for sale. Three weeks ago, the company announced that it had received several takeover offers and would review the bids before taking final offers. Recently, the company also agreed to yield two board seats to activist investor Breeden Partners. The company finally announced a sale today at $2.1 billion - a 4% premium to Friday's close and a substantial increase from when we first mentioned the stock.
  5. Universal Power Group (UPG) – 3V Capital Management announced last week that they weren’t pleased with the company’s valuation. They recommended several changes that they hope would enhance shareholder value. We are still waiting on more details and a response from the company, but this was definitely a stock worth following!

Technical Analysis

  1. Haliburton Co. (HAL) - Intermediate term bullish upside breakout.
  2. Imax Corp. (IMAX) - Intermediate term bullish symmetrical triangle.
  3. Progenics Pharmaceuticals (PGNX) - Intermediate term bullish tripple bottom.
  4. Delta Petroleum Corp. (DPTR) - Intermediate term bullish bottom triangle.
  5. Adolor Corp. (ADLR) - Intermediate term bullish diamond bottom.
Stock of the Week : WABCO (WBC)

American Standard Companies Inc. (NYSE:ASD) announced last week that its spin-off of WABCO Holdings Inc. (NYSE:WBC) is set to take place on July 31st. Under the terms of the deal, shareholders are American Standard on record July 12th will receive one share of WBC for every three shares of ASD that they own. Investors and shareholders should watch this spin-off as it presents several opportunities to profit! (Read More)

Tip of the Week : How to Profit from Activism

Shareholder activism is becoming an increasingly large part of the investment equation. Many hedge funds are actively engaging management in efforts to unlock shareholder value, but are these efforts actually helping or hurting investors? This article will take a look at the past, present and future of shareholder activism. (Read More)

Final Words

The market remains optimistic despite questionable yields and other economic data. While this is good news for investors in the short term, be sure to use caution and only invest prudently.

7/24/2007 2:05:30 AM UTC  #     |  Trackback
 Tuesday, July 17, 2007
Newsletter for July 16, 2007

Weekly Market Overview

U.S. markets started the week on a positive note yet again following strength in blue chips. The Dow stands at the apex of yet another record - 14,000 - amid continued strength in dealflows. Broader indexes fell, however, ahead of key earnings releases later in the week. Some are betting that the economy will begin to slow after retail reports last week indicated some initial weakness in consumer spending. Whether or not a slowdown materializes remains to be seen; however, investors should be careful this week amid such record gains.

Top 10 Stocks to Watch this Week

Fundamental Analysis

  1. Brinks Company (BCO) – The Brink’s Company remains on our watchlist since both MMI and Pirate Capital still hold significant stakes in the company. The company recently announced higher than expected earnings along with a dividend increase. We are still waiting to hear about the activist situation.
  2. Ceridian Corporation (CEN) – Bill Ackman’s activist play also continues to hold appeal with us since the breakup could unlock substantial value. We have not seen an announcement of an official date, but as of March 13th, Pershing Square is still engaged in a proxy contest with the company’s board of directors. Recently, Pershing Square lost its battle to obtain questionable letters, but vowed to continue pursuing its objectives. However, news came out today stating that one potential buyer of Ceridian was able to obtain $3.5 billion in debt financing, which is great news for shareholders holding out for a buyout. Meanwhile, shareholders recently won a lawsuit against the company that may level the competitive bidding landscape, paving the way for an increased bid.
  3. Hexcel Corporation (HXL) – OSS Capital demanded today that the company engage an investment bank to explore strategic alternatives. The company’s shares are worth $14 per share above the current market price if priced at its peers’ levels. All we are waiting on is the support of the board of directors! Meanwhile, the company has received several analyst upgrades and sits near its 52-week high.
  4. Applebees International (APPB) – Breeden Capital Management first approached Applebees several months ago suggesting that the company put itself up for sale. Three weeks ago, the company announced that it had received several takeover offers and would review the bids before taking final offers. Recently, the company also agreed to yield two board seats to activist investor Breeden Partners. The company finally announced a sale today at $2.1 billion - a 4% premium to Friday's close and a substantial increase from when we first mentioned the stock.
  5. Universal Power Group (UPG) – 3V Capital Management announced last week that they weren’t pleased with the company’s valuation. They recommended several changes that they hope would enhance shareholder value. We are still waiting on more details and a response from the company, but this was definitely a stock worth following!

Technical Analysis

Stock of the Week : Target Corporation (TGT)

Target Corporation (NYSE:TGT) appears to be a big hit with Bill Ackman after his Pershing Square Capital Management disclosed a 9.6 percent stake in the company, confirming rumors that surfaced late last week. Investors are hoping that the famed activist investor can help unlock value in the retail giant that has been experiencing a lower valuation than many feel deserved the company. (Read More)

Tip of the Week : The New Debt - Equity Linked Notes

The Dow Jones Industrial Average and NASDAQ have both hit new highs amid a buying frenzy by retail and professional investors alike – who wants to buy debt securities these days? Well, high net worth individuals are quickly turning their attention to a sexy new debt instrument that aims to redefine the debt landscape... (Read More)

Final Words

The market remains optimistic despite questionable yields and other economic data. While this is good news for investors in the short term, be sure to use caution and only invest prudently.

7/17/2007 4:50:33 AM UTC  #     |  Trackback
 Tuesday, July 03, 2007
Newsletter for July 2, 2007

Weekly Market Overview

U.S. markets started the week on a positive note following a surge in M&A activity along with unexpected growth in the nation's manufacturing sector. The move higher comes despite continuing concerns over high energy prices and recent terrorist attacks in the UK. Trading was light, however, ahead of Wednesday's Independence Day celebration that will close the stock markets for a day. Finally, the treasury yield increased again sparking rumors that we could see another rate cut by the Fed soon.

Top 10 Stocks to Watch this Week

Fundamental Analysis

  1. Brinks Company (BCO) – The Brink’s Company remains on our watchlist since both MMI and Pirate Capital still hold significant stakes in the company. The company recently announced higher than expected earnings along with a dividend increase. We are still waiting to hear about the activist situation.
  2. Ceridian Corporation (CEN) – Bill Ackman’s activist play also continues to hold appeal with us since the breakup could unlock substantial value. We have not seen an announcement of an official date, but as of March 13th, Pershing Square is still engaged in a proxy contest with the company’s board of directors. Recently, Pershing Square lost its battle to obtain questionable letters, but vowed to continue pursuing its objectives. However, news came out today stating that one potential buyer of Ceridian was able to obtain $3.5 billion in debt financing, which is great news for shareholders holding out for a buyout.
  3. Hexcel Corporation (HXL) – OSS Capital demanded today that the company engage an investment bank to explore strategic alternatives. The company’s shares are worth $14 per share above the current market price if priced at its peers’ levels. All we are waiting on is the support of the board of directors! Meanwhile, the company has received several analyst upgrades and sits near its 52-week high.
  4. Applebees International (APPB) – Breeden Capital Management first approached Applebees several months ago suggesting that the company put itself up for sale. Three weeks ago, the company announced that it had received several takeover offers and would review the bids before taking final offers. Recently, the company also agreed to yield two board seats to activist investor Breeden Partners. Shares spiked on June 14th after the company reportedly saw a $2 billion bid; however, we are still waiting to hear any official announcement or of any competitive bids.
  5. Universal Power Group (UPG) – 3V Capital Management announced last week that they weren’t pleased with the company’s valuation. They recommended several changes that they hope would enhance shareholder value. We are still waiting on more details and a response from the company, but this was definitely a stock worth following!

Technical Analysis

Stock of the Week : Kraft Foods (KFT)

Griffon Corporation (NYSE:GFF) rejected a proposal by the Clinton Group last month to lead a public recapitalization of the company and now the activist hedge fund is fighting back. Shareholders are hoping that the hedge fund will be able to successfully convince management to institute at least some of their measures in order to unlock shareholder value. If they are successful in obtaining a recapitalization, it could unlock signficant value for shareholders. (Read More)

Tip of the Week : How to Profit from Activism

Shareholder activism is becoming an increasingly large part of the investment equation. Many hedge funds are actively engaging management in efforts to unlock shareholder value, but are these efforts actually helping or hurting investors? This article will take a look at the past, present and future of shareholder activism. Read More...

Final Words

The market remains optimistic despite questionable yields and other economic data. While this is good news for investors in the short term, be sure to use caution and only invest prudently.

7/3/2007 1:30:15 AM UTC  #     |  Trackback
 Monday, June 25, 2007
Newsletter for June 25, 2007

Weekly Market Overview

U.S. markets started the week lower after concerns surfaced about the impact of the distressed subprime mortgage market and of higher interest rates on financial terms. Mortgage concerns peaked after two hedge funds owned by Bear Stearns crashed last week adding to speculation that other investment banks may face similar fates. Concerns about hedge fund rates also hit the market as many wonder how long the private equity and hedge fund buying sprees can continue.

Top 10 Stocks to Watch this Week

Fundamental Analysis

  1. Brinks Company (BCO) – The Brink’s Company remains on our watchlist since both MMI and Pirate Capital still hold significant stakes in the company. The company recently announced higher than expected earnings along with a dividend increase. We are still waiting to hear about the activist situation.
  2. Ceridian Corporation (CEN) – Bill Ackman’s activist play also continues to hold appeal with us since the breakup could unlock substantial value. We have not seen an announcement of an official date, but as of March 13th, Pershing Square is still engaged in a proxy contest with the company’s board of directors. Recently, Pershing Square lost its battle to obtain questionable letters, but vowed to continue pursuing its objectives. However, news came out today stating that one potential buyer of Ceridian was able to obtain $3.5 billion in debt financing, which is great news for shareholders holding out for a buyout.
  3. Hexcel Corporation (HXL) – OSS Capital demanded today that the company engage an investment bank to explore strategic alternatives. The company’s shares are worth $14 per share above the current market price if priced at its peers’ levels. All we are waiting on is the support of the board of directors! Meanwhile, the company has received several analyst upgrades and sits near its 52-week high.
  4. Applebees International (APPB) – Breeden Capital Management first approached Applebees several months ago suggesting that the company put itself up for sale. Three weeks ago, the company announced that it had received several takeover offers and would review the bids before taking final offers. Recently, the company also agreed to yield two board seats to activist investor Breeden Partners. Shares spiked on June 14th after the company reportedly saw a $2 billion bid; however, we are still waiting to hear any official announcement or of any competitive bids.
  5. Universal Power Group (UPG) – 3V Capital Management announced last week that they weren’t pleased with the company’s valuation. They recommended several changes that they hope would enhance shareholder value. We are still waiting on more details and a response from the company, but this was definitely a stock worth following!

Technical Analysis

  1. Ford (F) - Long-term bullish continuation diamond.
  2. Sirius Satellite Radio (SIRI) - Intermediate-term bullish double bottom.
  3. Smith Micro Software (SMSI) - Intermediate-term continuation wedge.
  4. SiRF Technologies (SIRF) - Intermediate-term bullish continuation wedge.
  5. MoSys Inc. (MOSY) - Intermediate-term bullish symmetrical continuation triangle.

Stock of the Week : Kraft Foods (KFT)

Kraft Foods (NYSE:KFT) shares moved up last week on news that billionaire investor Nelson Peltz took a 3 percent stake in the company. Shareholders and analysts had long been speculating that an activist investor could get involved with the company and force it to institute a massive share buyback, revive its first tier brands and sell or spin-off its second tier brands. If this materializes, it could mean significant share appreciation for shareholders.

Tip of the Week : Insider Transaction Forms

Shareholder activism is becoming an increasingly large part of the investment equation. Many hedge funds are actively engaging management in efforts to unlock shareholder value, but are these efforts actually helping or hurting investors? This article will take a look at the past, present and future of shareholder activism. Read More...

Final Words

The market remains optimistic despite questionable yields and other economic data. While this is good news for investors in the short term, be sure to use caution and only invest prudently.

6/25/2007 11:29:44 PM UTC  #     |  Trackback
 Monday, June 18, 2007
Newsletter for June 18, 2007

Weekly Market Overview

U.S. markets started the week higher amid speculation that Alcoa could become the next blockbuster takeover target. Some investors are beginning to question, however, whether the higher yields will slow down potential M&A as debt becomes increasingly expensive for private equity firms. There is also increasing talk of a bubble in the corporate bond market - particularly speculative grade bonds - which is treading close to Treasury yield levels. Overall, investors seem relatively unconcerned, however, which suggests that we may continue to see strong performance in the short term for U.S. stocks.

Top 10 Stocks to Watch this Week

Fundamental Analysis

  1. Brinks Company (BCO) – The Brink’s Company remains on our watchlist since both MMI and Pirate Capital still hold significant stakes in the company. The company recently announced higher than expected earnings along with a dividend increase. We are still waiting to hear about the activist situation.
  2. Ceridian Corporation (CEN) – Bill Ackman’s activist play also continues to hold appeal with us since the breakup could unlock substantial value. We have not seen an announcement of an official date, but as of March 13th, Pershing Square is still engaged in a proxy contest with the company’s board of directors. Recently, Pershing Square lost its battle to obtain questionable letters, but vowed to continue pursuing its objectives. However, news came out today stating that one potential buyer of Ceridian was able to obtain $3.5 billion in debt financing, which is great news for shareholders holding out for a buyout.
  3. Hexcel Corporation (HXL) – OSS Capital demanded today that the company engage an investment bank to explore strategic alternatives. The company’s shares are worth $14 per share above the current market price if priced at its peers’ levels. All we are waiting on is the support of the board of directors! Meanwhile, the company has received several analyst upgrades and sits near its 52-week high.
  4. Applebees International (APPB) – Breeden Capital Management first approached Applebees several months ago suggesting that the company put itself up for sale. Three weeks ago, the company announced that it had received several takeover offers and would review the bids before taking final offers. Recently, the company also agreed to yield two board seats to activist investor Breeden Partners. Shares spiked on June 14th after the company reportedly saw a $2 billion bid; however, we are still waiting to hear any official announcement or of any competitive bids.
  5. Universal Power Group (UPG) – 3V Capital Management announced last week that they weren’t pleased with the company’s valuation. They recommended several changes that they hope would enhance shareholder value. We are still waiting on more details and a response from the company, but this was definitely a stock worth following!

Technical Analysis

  1. Cisco Systems (CSCO) - Long-term bullish continuation diamond.
  2. Unisys Corporation (UIS) - Intermediate-term bullish symmetrical continuation triangle.
  3. Goldcorp Inc. (GG) - Intermediate-term bullish diamond bottom.
  4. Windstream Corporation (WIN) - Long-term bullish continuation diamond.
  5. Infineon Corporation (IFX) - Long-term bullish continuation diamond.

Stock of the Week : North Pittsburg Systems (NPSI)

North Pittsburg Systems (NDAQ:NPSI) shares moved up $0.68, or 3.49%, to $20.14 late Friday after Bulldog Investors disclosed a 7% stake in the company and again urged the company to put itself up for sale. The activist hedge fund argued that given CT Communication's recent buyout price, the company could fetch between $28.50 and $31 per share in the event of a sale. Meanwhile, shareholders are concerned about the declining stock price and Bulldog Investors said they would not think twice before launching a proxy battle.

Tip of the Week : Insider Transaction Forms

Insider transactions can provide great insight into a company’s financial and operational condition. After all, insiders do know the company best! All company officers, members of the board and affiliates of the company are required to report their transactions to the Securities and Exchange Commission in Forms 3, 4 and 5. By analyzing these forms, investors can paint a clearer picture of how well the company is doing and where it is headed. Let’s take a look at how…   Read More

Final Words

The market remains optimistic despite questionable yields and other economic data. While this is good news for investors in the short term, be sure to use caution and only invest prudently.

6/18/2007 3:27:56 PM UTC  #     |  Trackback
 Monday, June 11, 2007
Newsletter for June 11, 2007

Weekly Market Overview

U.S. markets began the week mixed as investors continue to watch rising global interest rates and signs from the Federal Reserve. Investors will have very little in the way of corporate earnings and economic reports until later this week when key inflation measures wil help determine whether bonds will rise and pressure stocks further. Meanwhile, M&A deals have shown continued strength as Airtrans boosted their bid for Midwest and Dow Jones is rumored to be close to seeing some counter bids. These deals should help boost stocks through the week as investors continue to tread cautiously in this uncertain market.

Top 10 Stocks to Watch this Week

Fundamental Analysis

  1. Brinks Company (BCO) – The Brink’s Company remains on our watchlist since both MMI and Pirate Capital still hold significant stakes in the company. The company recently announced higher than expected earnings along with a dividend increase. We are still waiting to hear about the activist situation.
  2. Ceridian Corporation (CEN) – Bill Ackman’s activist play also continues to hold appeal with us since the breakup could unlock substantial value. We have not seen an announcement of an official date, but as of March 13th, Pershing Square is still engaged in a proxy contest with the company’s board of directors. Recently, Pershing Square lost its battle to obtain questionable letters, but vowed to continue pursuing its objectives. Meanwhile, the company has promoted its CFO to CEO, so the company finally has some direction from a financial-minded officer.
  3. Hexcel Corporation (HXL) – OSS Capital demanded today that the company engage an investment bank to explore strategic alternatives. The company’s shares are worth $14 per share above the current market price if priced at its peers’ levels. All we are waiting on is the support of the board of directors! Meanwhile, the company has received several analyst upgrades and sits near its 52-week high.
  4. Applebees International (APPB) – Breeden Capital Management first approached Applebees several months ago suggesting that the company put itself up for sale. Three weeks ago, the company announced that it had received several takeover offers and would review the bids before taking final offers. Recently, the company also agreed to yield two board seats to activist investor Breeden Partners. Shares spiked yesterday on talks of a possible deal...
  5. Universal Power Group (UPG) – 3V Capital Management announced last week that they weren’t pleased with the company’s valuation. They recommended several changes that they hope would enhance shareholder value. We are still waiting on more details and a response from the company, but this was definitely a stock worth following!

Technical Analysis

  1. Planktos Corp. (PLKT) - Medium-term bullish breakout.
  2. CF Industry Holdings (CF) - Medium-term ascending triangle breakout.
  3. KMG Chemicals Inc. (KMGB) - Medium-term bullish breakout.
  4. Lakes Entertainment Inc. (LACO) - Short-term bullish crossover.
  5. Mastercard (MA) - Short-term trading range breakout watch.

Stock of the Week : Northwest Airlines (NWA)

Northwest Airlines (NYSE:NWA) emerged from bankruptcy in late May after more than 20 months under protection. The domestic carrier is the last of the major airlines to emerge from bankruptcy protection and many analysts believe it is now in a strong competitive position relative to other carriers. The company managed to reduce its cost structure by $2.4 billion annually, solve its pension problems, properly size its fleet and reduce its debt load by over $4 billion during its many months of bankruptcy protection. The carrier's operating statistics reported to the Department of Transportation are also promising: The company reduced its operating costs by nearly 11%, increased its yield (fare per mile) by 7% and increased its revenue per available seat mile by nearly 10%. Combined, these factors make NWA a stock worth watching!

Tip of the Week : Tar Sands - The Other Oil

Many people who hear the word “oil” immediately think of crude oil – the stuff that is extracted by giant drilling wells in the desert or ocean. In fact, the vast majority of all oil is crude obtained from the deserts of Saudi Arabia and giant rigs in the Pacific Ocean. There is, however, a growing industry in Canada, Venezuela and the U.S. centered on an alternative known as tar sands.  Read More

Final Words

The market remains optimistic despite questionable economic indicators and rising energy prices. Investors will be carefully watching the economic figures coming out during the next few weeks in order to get a better idea of what the Federal Reserve is up to and whether or not we can expect a pullback in the near future.

6/11/2007 9:15:54 PM UTC  #     |  Trackback
 Monday, June 04, 2007
Newsletter for June 4, 2007
Weekly Market Overview

U.S. markets began the week higher despite high oil prices and bond yields. Many attribute these continuing gains to further buyout speculation among many major companies. The speculation was confirmed in a few instances today after a private equity firm purchased a 25% stake in Palm and Flextronics was purchased by Solectron. Combined these deals and continued optimism pushed the S&P500 to its fourth consecutive record high. Other big stories included an argument in Barron's favoring a breakup of GE, which pushed shares up more than 1%. Many are beginning to question how long this really can really last...

Top 10 Stocks to Watch this Week

Fundamental Analysis
  1. Brinks Company (BCO) – The Brink’s Company remains on our watchlist since both MMI and Pirate Capital still hold significant stakes in the company. The company recently announced higher than expected earnings along with a dividend increase. We are still waiting to hear about the activist situation.
  2. Ceridian Corporation (CEN) – Bill Ackman’s activist play also continues to hold appeal with us since the breakup could unlock substantial value. We have not seen an announcement of an official date, but as of March 13th, Pershing Square is still engaged in a proxy contest with the company’s board of directors. Recently, Pershing Square lost its battle to obtain questionable letters, but vowed to continue pursuing its objectives. Meanwhile, the company has promoted its CFO to CEO, so the company finally has some direction from a financial-minded officer.
  3. Hexcel Corporation (HXL) – OSS Capital demanded today that the company engage an investment bank to explore strategic alternatives. The company’s shares are worth $14 per share above the current market price if priced at its peers’ levels. All we are waiting on is the support of the board of directors! Meanwhile, the company has received several analyst upgrades and sits near its 52-week high.
  4. Applebees International (APPB) – Breeden Capital Management first approached Applebees several months ago suggesting that the company put itself up for sale. Three weeks ago, the company announced that it had received several takeover offers and would review the bids before taking final offers. Recently, the company also agreed to yield two board seats to activist investor Breeden Partners. Shares spiked yesterday on talks of a possible deal...
  5. Universal Power Group (UPG) – 3V Capital Management announced last week that they weren’t pleased with the company’s valuation. They recommended several changes that they hope would enhance shareholder value. We are still waiting on more details and a response from the company, but this was definitely a stock worth following!
Technical Analysis
  1. Boston Scientific Corporation (BSX) - Intermediate-term bullish bottom triangle.
  2. Eastman Kodak Co. (EK) - Long-term bullish continuation diamond.
  3. Tibco Software Inc. (TIBX) - Long-term bullish continuation diamond.
  4. Western Digital Corp. (WDC) - Intermediate-term bullish head and shoulders bottom.
  5. Novavax Inc. (NVAX) - Long-term bullish symmetrical continuation triangle.

Stock of the Week : Griffon Corporation (GFF)

Griffon Corporation (NYSE:GFF) shares moved up more than 6% last week after Clinton Group disclosed an 8.5% stake in the company and suggested that the company undergo a recapitalization. The proposal would tender 50% of Griffon's outstanding shares at a price of $25 per share, but has yet to receive a meaningful response from the company. The activist hedge fund said that it believes the company could be worth as much as $34 in the event of a sale - something they have been pushing for for some time. If the hedge fund decides to take its fight public via a proxy battle, we could see a substantial increase in the share price over the near term. This makes GFF a stock worth watching!

Tip of the Week : Evaluating M&A Targets

Many of the best opportunities in today's market are companies being targeted for mergers and acquisitions. These stocks catch the fancy of investors due to their overnight movements of 25% or more. However, in a media environment that comes up with ten new rumors a day, it can be hard to identify reliable opportunities that will actually pay off. Read More

Final Words

The market remains optimistic despite questionable economic indicators and rising energy prices. Investors will be carefully watching the economic figures coming out this week to determine if this rally may finally be coming to an end.

6/4/2007 11:50:15 PM UTC  #     |  Trackback
 Wednesday, May 30, 2007
Newsletter for May 29, 2007
Weekly Market Overview

U.S. markets were mixed early this week after Monday's holiday after declines overseas put pressure on many indexes. The Fed is due to release its latest meeting minutes this afternoon, which could cue traders in to any upcoming changes to the interest rate policy. The latest ADP employment reports came in lower than expected while nonfarm payrolls are due out on Friday. Whether the market can continue its record run remains to be seen; investors will be carefully watching the economic figures coming out this week to determine if this rally may finally be coming to an end.

Top 10 Stocks to Watch this Week

Fundamental Analysis
  1. Brinks Company (BCO) – The Brink’s Company remains on our watchlist since both MMI and Pirate Capital still hold significant stakes in the company. The company recently announced higher than expected earnings along with a dividend increase. We are still waiting to hear about the activist situation.
  2. Ceridian Corporation (CEN) – Bill Ackman’s activist play also continues to hold appeal with us since the breakup could unlock substantial value. We have not seen an announcement of an official date, but as of March 13th, Pershing Square is still engaged in a proxy contest with the company’s board of directors. Recently, Pershing Square lost its battle to obtain questionable letters, but vowed to continue pursuing its objectives. Meanwhile, the company has promoted its CFO to CEO, so the company finally has some direction from a financial-minded officer.
  3. Hexcel Corporation (HXL) – OSS Capital demanded today that the company engage an investment bank to explore strategic alternatives. The company’s shares are worth $14 per share above the current market price if priced at its peers’ levels. All we are waiting on is the support of the board of directors! Meanwhile, the company has received several analyst upgrades and sits near its 52-week high.
  4. Applebees International (APPB) – Breeden Capital Management first approached Applebees several months ago suggesting that the company put itself up for sale. Two weeks ago, the company announced that it had received several takeover offers and would review the bids before taking final offers. Recently, the company also agreed to yield two board seats to activist investor Breeden Partners. Shares spiked yesterday on talks of a possible deal...
  5. Universal Power Group (UPG) – 3V Capital Management announced last week that they weren’t pleased with the company’s valuation. They recommended several changes that they hope would enhance shareholder value. We are still waiting on more details and a response from the company, but this was definitely a stock worth following!
Technical Analysis
  1. Archstone-Smith Trust (ASN) - Intermediate term bullish double bottom
  2. Cemex S.A. B de C.V. (CX) - Intermediate term bullish ascending continuation triangle
  3. Foundry Networks (FDRY) - Long-term bullish continuation diamond
  4. Big Lots (BIG) - Intermediate term bullish symmetrical continuation triangle
  5. H.J. Heinz Company (HNZ) - Long-term bullish continuation diamond

Stock of the Week : Packeteer Inc. (PKTR)

Packeteer Inc. shares moved last week after Elliott Associates disclosed a 6.3% stake in the company and communicated their belief that the board of directors should be directing their attention to a prompt sale of the company. The activist hedge fund reasoned that the company had failed to adequately perform and therefore should be sold in order to unlock value for shareholders. In particular, Elliott Associates noted that the company possesses a leading technology in one of the fastest growing segments of the networking market but has been unable to capitalize on this advantage.

Tip of the Week : How to Value Retailers

Consumer spending is perhaps the most vital aspect of our economy and no industry feels its effects more than the retail industry. Retail is the second largest industry in the United States both in the number of stores and employees. It collectively generates approximately $3.8 trillion in sales annually ($4.2 trillion including food sales), which works out to approximately $11,993 per capita. Not only do people spend a significant portion of their income on retail products, but 11.6% of the U.S. population is also employed by retail establishments. In fact, retail trade accounts for about 12.4% of all business establishments in the United States, with the largest obviously being Wal-Mart. So, just how can these companies be evaluated? The answer lies in something called Comps... Read More

Final Words

The market remains optimistic despite questionable economic indicators and rising energy prices. Investors will be carefully watching the economic figures coming out this week to determine if this rally may finally be coming to an end.

5/30/2007 2:36:06 PM UTC  #     |  Trackback