Filed under: International markets, Consumer experience, Competitive strategy, Top Picks 2007, Harley-Davidson (HOG), Bargain stocks, Chasing Value, Headline news, Stocks to Buy

This week’s Barron’s examined Harley-Davidson (NYSE: HOG) as a value play. Having written multiple posts enumerating many of the same points over the last couple of months, it seems that there is not much left to be said, except to simply lay out the Harley Bulls vs. Bears points.

The Bull story is that Harley-Davidson remains a world-class brand name, selling at a discount to its historic P/E and the average of the market. It has a high 40% return on equity, a clean balance sheet, excellent management, double-digit growth in foreign markets, and will maintain its profit margins through its carefully managed (now reduced) production cycles. It also has relatively predictable income from the sale of replacement parts, licensed products and its finance company.

The Bears think the Bulls are full of it, and that Harley’s past its prime just like the Baby Boomers that continue to be the lifeblood of the company. The average buyer is a 46-year-old white male, and that market can not sustain Harley going forward. They also argue that, costing an average of $14,000, these bikes are the wrong product in a market where consumer discretionary spending is waning as talk of a possible recession lingers on.

Continue reading Chasing Value: Barron’s likes Harley-Davidson too

Permalink | Email this | Comments

Share This

Filed under: Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Private equity, Verizon Communications (VZ)

One of the top IPOs for 2007 is comScore (NASDAQ: SCOR), which is up more than 71%. The firm provides sophisticated measurement tools for online advertising, and has clients like Verizon (NYSE: VZ), Google (NASDAQ: GOOG), Yahoo! (NASDAQ: YHOO), and Microsoft (NASDAQ: MSFT).

However, today comScore announced that it is canceling its follow-on equity offering. Why? According to the company’s press release, there is “unwillingness of management and other selling shareholders to sell under current capital market conditions.”

Actually, we are seeing other signs of weakness for equity offerings. For example, CreditCards.com and Paradigm (which is a software company) have withdrawn their IPOs.

Most likely, these companies will go to private investors for funding. In fact, this may be an opportunity for private equity firms looking for deals.

Also, keep in mind that the IPO market has only a few weeks left — because of the Christmas holiday. In other words, don’t expect much action until next year.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

Permalink | Email this | Comments

Share This

Filed under: Marketing and advertising, Trump Entertainment Resorts (TRMP)

Ladies and gentlemen, I am officially declaring an end to the comeback of Donald Trump. The signs have been there for awhile: rampant overexposure, a feud with Rosie O’Donnell, declining ratings on “The Apprentice,” a falling stock price on Trump Entertainment Resorts (NASDAQ: TRMP), a terrible book with the clown of personal finance, Robert Kiyosaki, and an appearance on World Wrestling Entertainment (NYSE: WWE).

But now it’s all over. I stumbled upon Donald Trump’s much-hyped cologne “Trump: The Fragrance” at Marshalls — but it wasn’t just at TJMaxx (NYSE: TJX). It was on clearance at Marshalls: $8 a bottle, way, way below its suggested retail price of $48.

I was going to get it for my dad as a gag gift (the one person I know who can stand Trump less than I can), but decided to save the money. When I told my dad about it, his reaction is a pretty good indicator of why the cologne was obviously a huge flop. Here’s what he said:

If I want to smell like Donald Trump, I’ll save the $8 and go roll around in dog crap.

Amen dad.

Permalink | Email this | Comments

Share This

Filed under: Google (GOOG), Scandals

Chalk this up as another piece of evidence that Google (NASDAQ:GOOG) and the internet have become shining beacons for justice.

According to the Associated Press, Donna Campbell of Miami was shocked to discover, when she Googled her husband Arnim Ramdass, that he was part of a group of co-workers that won a $19 million lottery jackpot months before. The group chose a lump sum payout, from which Arnim had received $600,000 before taxes.

Campbell became suspicious when Ramdass had their phone disconnected and refused to turn on the television. When the lightbulb in Campbell’s head finally flickered on, she queried the internet about her husband.

When she confronted Ramdass about the money, he made a lame excuse that he’d bought the ticket for his daughter by a former wife. Shortly thereafter, he disappeared, just ahead of Campbell’s lawsuit to recover her portion of the winnings.

If I was Ramdass, I’d give myself up. He can’t hide from Google forever.

Read | Permalink | Email this | Comments

Share This

Filed under: Management, Employees, Citigroup Inc. (C)

Citigroup Inc. (NYSE: C), which has already ousted its CEO because of the subprime tsunami, now reportedly is planning to slash as many as 45,000 jobs, according to CNBC’s Charles Gasparino.

“In some cases, the layoffs have already begun, with managers being told by their supervisors that they have to eliminate whole departments,” he wrote on CNBC’s Web site.

Usually, investors cheer this sort of thing but these aren’t usual times. Shares of the beleaguered bank, down 46% for the year, were down $1.59, or 5%, to $30.12 in early afternoon trading, indicating that investors probably expected big job cuts to come.

These layoffs are on top of the 17,000 announced in April.

There’s no doubt that this holiday season won’t be very merry for people who work for the big financial services firms. Former CEO Chuck Prince, though, won’t have any worries thanks to the $68 million golden parachute he received for destroying $64 billion in market value.

Read | Permalink | Email this | Comments

Share This

Filed under: Earnings reports, Analyst upgrades and downgrades, Technical Analysis, Stocks to Buy

Chicago Bridge & Iron Company (NYSE: CBI) is an engineering, procurement and construction firm. Projects include hydrocarbon processing plants, liquefied natural gas terminals and peak shaving plants, offshore structures, pipelines, bulk liquid terminals, and water storage and treatment facilities. The company serves the oil and gas, petrochemical and chemical, power, water and waste water, and metals and mining industries.

CB&I pleased investors late last month, when it reported Q3 EPS of 61 cents and revenues of $1.17 billion. Analysts had been expecting 46 cents and $1.11 billion. Management also guided FY07 EPS to $1.60-$1.75, versus consensus of $1.63. The CEO was positive about the impending acquisition of ABB’s (NYSE: ABB) oil and gas production unit, Lummus Global. The transaction, which was completed last week, was expected to significantly enhance the firm’s market position. BMO Capital Markets and Credit Suisse subsequently recommended the stock with an “outperform” rating. CBI shares popped on the earnings news and have since been consolidating the gain in a bullish “pennant” consolidation pattern. Stocks frequently exit pennants moving in the same direction they were traveling on entry. In this case, that would be to the upside.

Continue reading Chicago Bridge & Iron Company (CBI) shares in bullish “pennant” pattern

Permalink | Email this | Comments

Share This

Filed under: Good news, Products and services, Ford Motor (F)

Although Ford Motor Co. (NYSE: F) has not really been lighting up the sales board in recent quarters, CEO Alan Mulally seems to be on track to get the automotive giant profitable sometime in 2009. He may not have to worry about one specialized area within the Detroit auto giant, however. Can you guess which division that may be?

Try recreational vehicles. Ford’s market share has increased in the motor home segment this year while its automotive market share has shrunk in several popular consumer vehicle segments. Although Ford doesn’t brand motor homes under its own name, it makes more motor home chassis than any other U.S. company. Using chassis designed and built here in the U.S., Ford’s no slouch when it comes to this niche automotive market. Ford makes the base chassis, which RV manufacturers then customize with a plethora of options (and weight) to market to customers.

Therein lies Ford’s continuing market opportunity in this arena. The baby boomer generation is beginning to retire at rates that won’t see slowdowns for over a decade. Are these folks going to buy RVs and tour the U.S. (and Mexico and Canada) at rates similar to the previous generation? The law of averages says that market will increase (hence the term “boomers) simply due to the large number of Americans (60+ million) in this age classification. Could Ford’s savior partially be . . . motor homes? That’s a stretch, but the company needs home runs any way it can get them. This is one of them.

Read | Permalink | Email this | Comments

Share This

Filed under: Analyst reports, Deals, Good news, Options, Technical Analysis, Oil

Transocean Inc. (NYSE: RIG) shares are trading higher today after a Credit Suisse analyst reiterated his rating of RIG at Outperform following the regulatory approval of its $18 billion acquisition of Global Santa Fe (NYSE: GSF). If you think that the company won’t fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on RIG.

After hitting a one-year low of $72.47 in January, the stock hit a one-year high of $131.00 earlier this month. RIG opened this morning at $128.49. So far today the stock has hit a low of $127.60 and a high of $131.51. As of 12:05, RIG is trading at $130.97, up $4.69 (3.7%). The chart for RIG looks bullish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bullish hedged play on this stock, I would consider a January bull-put credit spread below the $110 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn’t do what you think but still leverage nice returns. For this particular trade, we will make a 7.5% return in just 2 months as long as RIG is above $110 at January expiration. RIG would have to fall by more than 15% before we would start to lose money. Learn more about this type of trade here.

RIG hasn’t been below $110 by more than a few cents since September, and has shown support around $115 recently. This trade could be risky if the price of oil drops off, but even if that happens, this stock could be protected by strong support RIG found around $110 over the past three months.

Brent Archer is an options analyst and writer at Investors Observer. DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in RIG.

Permalink | Email this | Comments

Share This

Filed under: Industry, Black Friday

According to retail tracking experts ShopperTrak RCT Corp., this year’s holiday shopping season, which officially began this past Friday, was off to a “very strong” start. To those economists and retail pundits that were buckled in for a bumpy ride to kick off the holiday shopping season, this is probably a big sign of relief. Yes, you can put those Pepto Bismol bottles down now, folks.

Although one report doesn’t make a whole season better, the report from ShopperTrak estimated Black Friday sales this year up 8.3% over last year, with sales this past Friday alone totaling $10.3 billion from retail outlets across the U.S. ShopperTrak thought, as do I, that even in the face of rising energy prices and credit tightness due to risky loan defaults and mortgage resets, it takes a lot more than that for consumers to curb holiday spending.

The long haul now takes over, as estimates and details will pour in week by week through the Christmas holiday until it’s very clear that the success from last week’s Black Friday holiday spending kickoff will last all the way through December. Although today is Cyber Monday (when everyone begins shopping online at work), even online retailers saw excellent activity this past Friday. Visitors directed from www.shopping.com to its merchants increased 61% from 2006 levels, and eBay (NASDAQ: EBAY) even said that customers are picking up their computer mice more than their car keys. That makes for a nice quote more than it gives us meaningful data. We’ll see if it stacks up after results come in from today’s online shopping activity.

Read | Permalink | Email this | Comments

Share This

Filed under: International markets, Rumors, Products and services, Consumer experience, Middle East, Oil

After getting off to a strong start earlier in the session, oil prices have traded lower in mid-day action on a growing assumption that OPEC will elect to raise its output quota during next week’s meeting. It should come as no surprise really that we are starting to hear some OPEC rumors considering that oil prices have ballooned by over 40% since August and have been testing even inflation-adjusted all time highs in its pursuit of the $100 mark.

As fellow BloggingStocks writer Joseph Lazzaro pointed out earlier this morning, prices had risen as high as $99.11 this morning in reaction to lower temperatures, but that has all changed as traders have instead focused on news from over the weekend indicating that the thirteen nation oil cartel OPEC may be considering production increases next week.

The main cause for the rising belief in OPEC adjustments comes from a statement this weekend by Iranian Oil Minister Iranian Gholam Hossein Nozari, who stated that his country would be willing to consider lifting its quota. According to Nozari, “if statistics and data indicate there is a need to produce more oil, we have the capacity to increase the output and supply more oil for the market.” However, he made it clear that he did not believe that the world was currently facing a shortage of the precious crude.

Continue reading OPEC rumors push oil prices lower

Permalink | Email this | Comments

Share This