Filed under: Analyst initiations

MOST NOTEWORTHY: DealerTrack, Healthcare Realty Trust and the employment services sector were today’s noteworthy initiations:

• Suntrust believes DealerTrack (NASDAQ:TRAK) is in the stages of significantly increasing penetration of dealers, finance companies, and aftermarket providers with its leading suite of transaction and subscription based solutions. The firm started shares with a Buy rating and $61 target.
• Jefferies resumed coverage of Healthcare Realty Trust (NYSE:HR) with a Buy rating and $28 target, as they believe the company is well-positioned to benefit from the superior long-term growth trends for outpatient services.
• Credit Suisse initiated the employment services sector with a Market Weight rating, citing economic uncertainty and downside EPS risk. The firm initiated Manpower (NYSE:MAN) with an Outperform rating and $73 target and HireRight (NASDAQ:HIRE) with a Neutral rating and $13 target.

OTHER INITIATIONS:

• CVS Caremark (NYSE:CVS) was initiated with a Market Perform rating and $45 target at BMO Capital.
• JP Morgan initiated Plug Power (NASDAQ:PLUG) with an Underweight rating and California Pizza (CPKI) with a Neutral rating.

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Filed under: Analyst upgrades and downgrades

MOST NOTEWORTHY: Credit Suisse, UBS, Deutsche Bank and Indevus were today’s noteworthy downgrades:

• Bear Stearns downgraded shares of Credit Suisse (NYSE:CS) to Underperform from Peer Perform to reflect the weak financial markets and concerns around the company’s subprime exposure.
• UBS (NYSE:UBS) was downgraded at the firm to Peer Perform from Outperform, as they expected UBS to take further write-downs due to its exposure to subprime mortgages.
• Bear also lowered its rating on Deutsche Bank (NYSE:DB) to Underperform from Peer Perform on concerns the deteriorating market conditions in 2008 will pressure fixed income revenue.
• JMP Securities downgraded Indevus (NASDAQ:IDEV) to Market Outperform from Strong Buy. They said ongoing Nebido dosing ranging studies may result in delays and they see lack of near-term upside due to the new accounting treatment of the new Allergan (NYSE:AGN) agreement.

OTHER DOWNGRADES:

• Goldman downgraded Commercial Metals (NYSE:CMC) to Neutral from Buy.
• Friedman Billings lowered MGI Pharma (NASDAQ:MOGN) to Market Perform from Outperform.
• Banc of America downgraded Mohawk Industries (NYSE:MHK) to Sell from Neutral.

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Filed under: Good news, Products and services, Sony Corp ADR (SNE)

According to November sales figures just released, the Nintendo Co. Ltd. (OTC: NTDOY) Wii gaming console was outsold in Japan by the much pricier PlayStation 3 game console made by Sony Corp. (NYSE: SNE). The exact opposite has been happening in the U.S. market for the entire year of 2007, but it did take Sony until the later part of the year to surpass Wii sales. Will it last in Japan?

This research comes from market research firm Enterbrain, which said that the PlayStation 3 outsold the Wii in the last three weeks of November. What this indicates is that Sony’s new push into a lower-priced entry for the PlayStation 3 may in fact be helping it bring in sales.

Pricing moves seem to always do this when it comes to consumer electronics. In October, Sony cut the PlayStation 3 price and then followed up that welcomed move with a new bundle in November that brought the price down to under $400. With the holiday season in full swing, this was timed perfectly, although even the newer PlayStation 3 price is way ahead of the $250 price of the Wii.

While the Nintendo Wii sold over 150,000 consoles in November, the PlayStation 3 has totaled over 183,000 unit sales so far. In third place was the Microsoft Xbox 360, which has sold over 35,000 consoles in Japan through the end of November.

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Filed under: Analyst upgrades and downgrades

MOST NOTEWORTHY: AbitibiBowater, Zumiez and VeraSun Energy were today’s noteworthy upgrades:

• RBC Capital upgraded AbitibiBowater (NYSE:ABH) to Outperform from Sector Perform and said capacity reductions were double what they expected.
• Susquehanna upgraded Zumiez (NASDAQ:ZUMZ) to Positive from Neutral based on solid underlying business trends.
• Soleil raised its rating on VeraSun Energy (NYSE:VSE) to Hold from Sell, as they are positive on the merger with US BioEnergy (NASDAQ:USBE).

OTHER UPGRADES:

• Goldman upgraded the U.S. steel sector to Attractive from Neutral and upgraded Olympic Steel (NASDAQ:ZEUS) to Buy from Neutral.
• The firm also added Nucor (NYSE:NUE) to its Conviction Buy List.
• Varian Semi (NASDAQ:VSEA) was raised to Overweight from Market Weight at Thomas Weisel.

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Filed under: Earnings reports, Newsletters, Stocks to Buy

In referring to his recommended position in Cepheid (NASDAQ: CPHD), industry-leading biotech expert Michael Shulman jests, “To use a highly technical financial term: WooHoo! What a great quarter capped by a justifiably upbeat conference call.”

Here, the editor of The ChangeWave Biotech Investor takes a look at the company, noting “I’ve been pounding the table for CPHD — and this great quarter justifies my optimism.”

“Cepheid develops and markets a diagnostic testing system called the GeneXpert that’s a hardware platform for genetic tests of diseases that can be identified by their genetic code.

“”There are several specific tests for this platform including MRSA, the killer staph infection that is typically found in hospitals, but is also spreading to other venues.

“In its latest quarrter, the company reported that revenues were $36.3 million, up 53% from Q3 2006. Total product sales were $34 million, up 50% and clinical product sales were $20.7 million, up 258%.

In its latest quarrter, the company reported that revenues were $36.3 million, up 53% from Q3 2006. Total product sales were $34 million, up 50% and clinical product sales were $20.7 million, up 258%.

“The GeneXpert system sales exploded! By the end of the quarter 1,376 GeneXpert System modules were installed in hospitals in the United States — including 77 in VA hospitals, up by 51 modules in Q3 and representing a 79% share of the VA market.

Continue reading Cepheid (CPHD): Biotech targets ‘killer staph’

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Filed under: Other issues, Good news, Bad news, Economic data, Politics, Presidential elections

It seems that there is a lot of concern over the economy, the credit crunch, the falling US dollar, rising oil prices and unemployment. How much worse can things get? A lot.

The fact of the matter is that unemployment in this country is super fantastic, but if you have been watching the news recently, I doubt you know that fact. Let’s look at the unemployment numbers I downloaded from the US Bureau of Labor Statistics.

Continue reading Unemployment! How high can it get?

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Filed under: Good news, Russia, Middle East, Venezuela, Mexico, Canada, Commodities, Oil

Oil fell below $90 per barrel for the first time in a month Friday, after Enbridge Inc. reopened the biggest pipeline to the U.S. from Canada, Bloomberg News reported.

Crude declined $1.67 to $89.34. Heating oil fell about 4 cents to $2.53, and unleaded gasoline declined 3 cents to $2.23.

Independent Energy Trader Jim Dietz told Bloggingtocks Friday that the Canada pipeline accident was a momentary event that only temporarily deflected the oil market away from an ongoing oil price pullback.

“With OPEC’s likely production increase, sentiment has shifted to a continued pull-back for oil. If we close below $90 per barrel today, that would be bearish for oil, short-term, but good news for just about everybody else, I guess,” Dietz said.

Saudi Arabia, OPEC’s biggest producer, indicated it will increase production by 500,000 barrels of spare capacity in December to ensure that consumers are adequately supplied, Oil Minister Ali al-Naimi said in Singapore on Nov. 28, Reuters reported.

Safety cushion

Dietz said oil demand remains strong, but OPEC’s effort, led by Saudi Arabia, increases the oil market’s safety cushion, or the difference between global oil supply and demand.

“Traders are confident now that there will be enough oil for the [Northern Hemisphere] winter,” Dietz said. “The Saudi’s decision makes an enormous difference in this market. There’s even a chance that some crude supplies could begin to build in certain areas, which would be a change for this market.”

The 10 OPEC countries subject to quotas will supply 27.5 million barrels a day this month, according to the U.S. Energy Information Agency. OPEC’s official production target is 27.25 million barrels per day.

Continue reading Oil falls below $90 after Canada pipeline re-opens

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Filed under: Industry, Dell (DELL)

A few weeks ago, I surmised that Dell is too silent regarding what it has in store for the computer reseller and system integrator market it intends to enter soon. The company has been rather quiet on that front in recent times as it entered the consumer retail market and planned other sales strategies beyond direct selling to get back in the race with competitor Hewlett-Packard Company (NYSE: HPQ). On December 5, Dell, Inc. (NASDAQ: DELL) will unleash its reseller channel industry plans after much anticipation.

After more than a decade of competing against the reseller channel, Dell now intends to partner with that segment to get more of its wares in front of more customers. Sounds like a tough proposition, right? Former competitors warming up to a new brand and product line is probably not going to be easy. The price will have to be right, the incentives better than the competition and other things will need a carefully executed strategy if Dell thinks it can just move in and displace competitors. Many channel resellers probably look forward to having another brand to offer customers, as price competition will ultimately help them. But make no mistake - it won’t be some easy deal for Dell.

Trade publication Computer Reseller News (CRN) suggested 10 steps that Dell should take to ensure its new channel program doesn’t begin on the wrong foot. Dell’s VP of commercial channels, Greg Davis, then responded to the point-by-point steps with vigorous (and somewhat defensive) language, which says right off that Dell is not being a wimp when it comes to its critics. That is a good sign.

Continue reading Dell answers critics about future channel strategy

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Filed under: Private equity

One of the pioneers of private equity is The Carlyle Group. The firm has minted billions and is a major force in finance, managing about $76 billion.

But lately things have cooled off. For example, Carlyle’s Blue Wave hedge fund is down 9.3% for the year (this is according to a piece on Bloomberg.com). The problem was exposure to pesky mortgage investments.

So it should be no surprise that Carlyle’s co-founder, David Rubenstein, is kind of glum. He recently commiserated for the folks at the American Enterprise Institute (there was also coverage in TheDeal.com, which is a paid publication).

Rubenstein thinks that private equity may be facing some tough times, and looks at the parallels of the conglomerates of the 1960s.

It’s a pretty apt analogy. After all, as private equity firms get bigger and bigger, they look like bloated entities of disparate business units. In other words, might there be lots of complications in managing all this?

I think so.

Besides, the other big issue is finding liquidity for these private companies. Keep in mind that the IPO market has yet to recover from its boom days of the 1990s. And, M&A appears to be tailing off. Oh, and with the credit crunch, how will private equity funds get financing for deals?

So far, there aren’t many clear answers. Or, at least Rubenstein isn’t giving us any ideas so far.

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.

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Filed under: Products and services, Consumer experience, Apple Inc (AAPL), AT and T (T), Research in Motion (RIMM), iPhone

This post is part of AOL Money & Finance’s Best & Worst of 2007. Be sure to cast your vote for the hottest gadget of the year.

2007 was definitely the year of the gadget. Every year, personal electronics get sleeker, attain more cutting-edge technology and functionality, and make their way into the the pockets and homes of millions of consumers. So, let’s decide on which one was the biggest hitter this year, shall we?

First up, the Apple iPhone. Arguable the largest and most anticipated cell phone launch in history was in the news constantly form its January announcement until its June launch with partner AT&T Inc. (NYSE: T). Apple Inc. (NASDAQ: APPL) shined again as a marketing machine and hyped the iPhone as much as it could while tech blogs and the news media seemed to have a lust for the device months before it ever hit a single hand. What the iPhone lacked in features it made up for in style and user experience. The device sold more than a million units in the first three months it was sold, and has helped Apple maintain its aura as the coolest tech company on the planet this year.

Next, we have the Nintendo Wii. This $250 gaming system is the size of a large hardback book but has great graphics and a whole new way to play games. It’s not nearly as cutting edge as the Sony PlayStation 3 or Microsoft Xbox 360, but that’s not what it’s about. The Wii was meant for everyone (not just gamers), and the way it makes players physically interact with games has been hailed as brilliant. Consumers think so too, as the Wii has outsold the Xbox 360 almost every single month in 2007, and is way ahead of the more expensive PlayStation 3 in unit sales as well.

Continue reading Best & Worst of 2007: Hottest gadget of the year

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