Filed under: Google (GOOG), Apple Inc (AAPL), Citigroup Inc. (C), New York Times’A’ (NYT), Sony Corp ADR (SNE), Bear Stearns Cos (BSC), Blackstone Group L.P (BX)

An interesting article over at TheStreet.com reports that commercial real estate investment firm, Blumberg Capital Partners, is readying to launch an investment firm, backed by Middle Eastern investors, to invest in U.S. media companies.

TheStreet.com reports that “the fund would target newspapers, as well as Hollywood movie studios, online media outfits, broadcast news, and possibly radio businesses.” According to CEO Philip Blumberg, it appears that the fund would raise about $500 million and with the use of leverage, have purchasing power of three times that amount.

I’ve noticed recently that even indefatigable Jim Cramer has wondered out loud (as he frequently does) why foreign investors haven’t stepped up to the plate to start picking up cheap U.S. companies propelled by high oil prices, a weak dollar, and U.S. companies trading at relatively multi-year cheapness.

We’ve seen Abu Dhabi recently inject $7.5 billion of capital into Citigroup (NYSE: C), make a 5% investment into Sony (NYSE: SNE), and make a similarly-large investment in the Carlyle Group.

While some in Congress have started to fret about large foreign investors putting money into the U.S. (in fact, there are restrictions on certain types of purchases by foreigners), I think this is just an efficient flow of capital going to where it can be put well to work. Certain U.S. companies have been down (particularly media stocks) and this provides an opportunity for foreigners.

I think a good question to be asked is whether there is significant value to be found at these levels in companies like The New York Times Co. (NYSE: NYT) or radio stocks or other broadcast media. In times of economic struggle, advertising dependent broadcasters are not where you’d want to have your money for the short term. P2P file sharing and Apple’s (NASDAQ: AAPL) iTunes have made huge dents in the music industry. It’s this author’s opinion that Google (NASDAQ: GOOG) is poised to manage all things advertising and is a major threat (and eventual partner) to any business that runs an advertising sales team.

Do I think that the media industry has changed? I certainly do, and radio stocks are not coming back, at least not in their current iteration. Victor Miller, Bear Stearn’s (NYSE: BSC) Hank Aaron of radio stocks, had a recent research report out on the state of the radio industry for 2008, and it was as bleak as I’ve ever read him.

That said, the industry is not going away and there are some great brands and history in some of these institutions that in the right hands, could be very lucrative. Question is why a real estate investor like Blumberg is the guy to make this happen.

Where are our own value investors, like Blackstone (NYSE: BX) or the Carlyle Group? It seems that they’re waiting for things to get cheaper and buying things overseas. Kinda ironic.

Zack Miller is the Managing Editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund. Author owns a long-term position in GOOG stock.

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Filed under: Kroger Co (KR), Stocks to Buy

On the Periodic Table of Elements, the symbols Kr, Ne, He stand for krypton, neon, and helium, three of the so-called noble gases. Noble gases are chemically stable, and can be easily overlooked because they are colorless and odorless. They have boiling and melting points that are close together, meaning that they have a very narrow range of temperatures at which they are liquid. And noble gases have industrial applications in lighting, welding, and lasers.

On the New York Stock Exchange, KR, NE, and HE stand for Kroger, Noble, and Hawaiian Electric Industries. Do these companies exhibit similar characteristics of stability, a tendency to be overlooked, and scarce liquidity? Well, no analogy is perfect, especially one as arbitrary as this. But here’s a look at these stocks nonetheless.

Cincinnati-based Kroger Co. (NYSE: KR) is the largest traditional grocery chain in the U.S. (though Wal-Mart is the largest seller of groceries). Kroger has more than 2,400 supermarkets under several different names, as well as more than 750 convenience stores.

Continue reading Three ‘noble’ stocks: Kroger (KR), Noble (NE), and Hawaiian Electric (HE)

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Filed under: Earnings reports, Forecasts, Dell (DELL), Hewlett-Packard (HPQ)

Even after weak guidance and a 13% sell-off on Friday, Wall Street analysts still look for a rebound in Dell Inc. (NASDAQ: DELL) shares. That is, if you look at their ratings and price targets.

Thomson tracks 30 analysts who cover the stock and their average rating is a “buy” or a 2.43 on a scale of 1 to 5. Perhaps more stunning is that the price target that broker researchers have on the shares is over $33. The stock trades at $24.54.

Coverage on big cap stocks is notable for the fact that analysts do not like to put “sell” ratings on companies. For one thing, it may deny them access to company management. But, Dell is a bit of a special case.

With a fuzzy forecast of modest sales in the next quarter and Hewlett-Packard (NYSE: HPQ) taking global PC market share, it is hard to see how Dell can do much better, at least until the middle of next year. The company also has said that it may have more restructuring costs and that component costs are no longer falling fast.

Wall Street has it wrong on Dell.

Douglas A. McIntyre is an editor at 247wallst.com.

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Filed under: Consumer experience, McDonald’s (MCD)

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

America might as well change its tagline to “The Land of the Free and the Home of the Fast Food.” Are we really “brave” any more? Our collective culinary adventures seem to start and end at chipotle peppers. Chipotle, that smokey hot chile whose provenance is deeply American and whose name is synonymous with a whole type of cuisine; in fact, one of the hottest restaurants in the country is named for the spicy stuff.

But it is not Chipotle that is making the splashiest headlines this year; no, it’s the oldest and favorite-est of them all, McDonald’s. McDonald’s (NYSE: MCD). Just take a look at the company’s stock over the past year… three years… five years… the charts read like an American Investment Dream success story. The returns, respectively: 41%, 89.6%, 213.4% seem mystical. Is this the same company whose menu items were flopping and service was embarassing, only a few years ago?

It’s not. The new McDonald’s is the one whose coffee has been deemed better than Starbucks’, and who is rolling out lattes and iced coffees to its outlets nationwide next quarter. With the promise of breakfast all day, a third-pounder burger, and a big push into the market of Starbucks-style loiterers (what with wi-fi and better seating planned), McDonald’s just keeps getting hotter and hotter.

Continue reading Best & Worst of 2007: Hottest chain restaurant

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Filed under: Google (GOOG), Apple Inc (AAPL), Citigroup Inc. (C), New York Times’A’ (NYT), Sony Corp ADR (SNE), Bear Stearns Cos (BSC), Blackstone Group L.P (BX)

An interesting article over at TheStreet.com reports that commercial real estate investment firm, Blumberg Capital Partners, is readying to launch an investment firm, backed by Middle Eastern investors, to invest in U.S. media companies.

TheStreet.com reports that “the fund would target newspapers, as well as Hollywood movie studios, online media outfits, broadcast news, and possibly radio businesses.” According to CEO Philip Blumberg, it appears that the fund would raise about $500 million and with the use of leverage, have purchasing power of three times that amount.

I’ve noticed recently that even indefatigable Jim Cramer has wondered out loud (as he frequently does) why foreign investors haven’t stepped up to the plate to start picking up cheap U.S. companies propelled by high oil prices, a weak dollar, and U.S. companies trading at relatively multi-year cheapness.

We’ve seen Abu Dhabi recently inject $7.5 billion of capital into Citigroup (NYSE: C), make a 5% investment into Sony (NYSE: SNE), and make a similarly-large investment in the Carlyle Group.

Continue reading After investing in Citigroup, Middle Eastern investors on prowl for more

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Filed under: Consumer experience, Competitive strategy, Wal-Mart (WMT), Marketing and advertising, Target Corp. (TGT)

You don’t have to be a fashionista to know that French fashion has a reputation for being uppity and tres expensive. They don’t call it haute couture for nothing.

But according to the Wall Street Journal, “With the euro reaching new records against the dollar, U.S. shoppers are finding European designer labels even more expensive than in past years. But a young crop of French designers is now trying to prove that style doesn’t have to be so costly.”

Unlike the traditional fashion houses selling $1,000 bags, less expensive French labels are outsourcing manufacturing to keep costs down — a big no-no in traditional fashion circles, where local production is considered key to retaining cachet. Some are also taking the hit on the euro’s rise, rather than passing the expense on to American consumers.

Paul & Joe is even — gasp — designing a collection for Target (NYSE: TGT).

Will Wal-Mart (NYSE: WMT) be able to capitalize on the trend toward more affordable French fashions, as it struggles with its efforts to sell more upscale clothing? Doubtful. If outsourcing production in France hurts cachet, designing clothes for Wal-Mart, the international symbol of corporate avarice and apathy toward people, would be fashion suicide.

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Filed under: Rumors, Consumer experience, Entrepreneurs

This post is part of AOL Money & Finance’s Best & Worst of 2007. Be sure to cast your vote for the celebrity most likely to lose it all.

I read somewhere that when actress Shirley MacLaine finally got her break in Hollywood, the first thing she bought was a four-unit apartment building. That way, she reasoned, when the gravy train stopped, as she believed could happen, she and her mother would have a place to live, plus units to rent out. That was smart planning. And as it turned out, she needn’t have worried.

You don’t see a lot of that kind of thinking among the celebrity set today.

Think multi-millionaire celebs can’t lose it all? Ask O.J. Simpson about his fortune these days. Here are four celebrities in danger of losing it all, thanks to their ongoing shenanigans and lack of planning for a less sparkly, less-in-demand future.

Britney Spears. Her trainwreck lifestyle keeps making the headlines, but it’s clear Brit’s star-machine is on the downturn. Although she is reputed to be worth some $100 million, according to Forbes, which placed her in the number 12 slot of its 20 Richest Women in Entertainment list earlier this year, a lot of that is made through endorsement deals. Her music still sells, but not like it once did. It’s all about diminishing returns. The more Brit’s white trash lifestyle is played out in the tabloids, the fewer endorsement deals she will see. She made headlines recently again for purportedly going through her monthly take-home, a staggering $740,000, without saving a dime. I suppose that’s easy to do when you’re having to support an ex-husband and your own $100,000-a-month clothing habit. Now, a reasonable person might see the writing on the wall: With your star on the descent, best to sock something away for that fast approaching rainy day. Then again, a reasonable person wouldn’t have worn this get-up for a comeback concert.

Amy Winehouse. You do have to wonder sometimes. Where do people with absolutely no talent get to where they are? Are they sleeping with the right people? Is their daddy someone powerful? Does the force of their conviction blind people to the reality of their complete lack of talent? I’m thinking Courtney Love fits into this category. But have you seen this singer? Her first hit was “I don’t want to go to rehab…” which sums up the rest of her career. Her voice has been compared to blue’s great Sarah Vaughn’s.

She has since cancelled all dates. Just as well. Any number of chronic inebriants down on Skid Row could probably manage a better show.

Lindsay Lohan. Beautiful and talented, and yet she can’t seem to hire a decent driver or keep the coke out of her nose.

Lately she’s rumored to be running out of cash, so much so that she allegedly shopped staged photos of her family Thanksgiving to tabloids — her six-figure starting price quickly fell to a mere $20K, however.

Michael Vick: Funny thing about sports super stars making multi-millions; some of them start thinking they’re a Master of the Universe.

Share the reasons for your pick of the celebrity most likely to lose it all in the comments, or let us know about any contenders we overlooked. Also be sure to see the rest of AOL Money & Finance’s Best & Worst of 2007.

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Call me Captain Obvious but here’s the news in case you missed it…

Straight from the OFHEO (Office of Federal Housing Enterprise Oversight) Press Release Issued on Tuesday, November 27th:

“Director James B. Lockhart…announced the maximum 2008 conforming loan limit for single-family mortgages purchased by Fannie Mae and Freddie Mac (the Enterprises) will remain at the 2007 level of $417,000 for one-unit properties for most of the U.S. Higher limits apply to Alaska, Hawaii, Guam and the U.S. Virgin Islands as well as to properties with more than one unit.”

I guess Californians won’t be getting that “break” they were looking for and neither will all those other non-conforming markets. But not to worry, all isn’t lost!

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Driving around this weekend, I was listening to a local real estate radio show that I’m sure many of you have heard. One of the calls again demonstrates that we are nowhere near the bottom of this housing bonanza. The call went as follows and I do paraphrase:

Host: “How can we help you?”

Caller: “My boyfriend had an offer recently. He has good credit. He has a 778 score. Someone told him he can make $30,000 in one month. All he needs to do is let them use his score.”

Host: “This doesn’t sound right. I’m starting to think there is something else here.”

Caller: “They also said if he used it on 3 homes he would get $90,000. What do you think?”

Host: “Let me ask you. Do you think this deal is okay?”

Caller: “I don’t know [hesitant voice]”

Host: “Don’t do it. This smells of fraud.”

You may know this scheme since it’s played out countless times. We’ve touched upon it a few times here on various articles. What occurs here is the person with good credit is used as a front for the offer to go through. Normally the persons putting this together are committing outright fraud and does this by offering a very lucrative sum, secures financing and the home usually sells because of the price offered to the seller. In a market that is tanking like now, buyers are hard to come by so some sellers are willing to look the other way to unload the home even if they smell an aroma of suspicion. Of course the persons putting this together are in bed with a shady agent, appraiser, and broker (they normally work in teams) and split the proceeds. The intention is never to live in the house. They put it back on the market and of course at the inflated price it never sells which they already expect. The home forecloses. Rinse and repeat. Some people with good credit like the caller’s boyfriend actually think this is an excellent way to get easy money until they realize a few months later that they now have a foreclosure on their record. There is no free lunch. But don’t take my word for it, take a look at these Real Housing Professionals of Genius over in San Diego:

“This scam stretched from December 2003 to June 2005, according to the government’s documents. As part of their guilty plea filed Nov. 13, the defendants admitted they frequented swap meets to find potential clients. They advertised on Spanish-language radio stations and in Spanish-language publications. They billed themselves as problem-solvers for the region’s Latinos. Experts say Latinos, especially immigrants, face unique challenges in obtaining financing because they often have thinner credit histories than do other segments of the population.”

These entrepreneurs went to swap meets to find additional pray. Talk about mass marketing. I’m not sure how many people are looking for $500,000 homes at swap meets. Normally these people are bargain hunting and trying to save a few bucks here and there so taking on a half million dollar mortgage probably doesn’t make sense for them but that’s just me. Now tell me, do you think the intention of these criminal agents and brokers were to help their fellow brothers and sisters to own a home? Of course not. Now they are looking at jail time courtesy of the FBI. Feliz Navidad!

NINJA Loans and Chuck Norris

It must be an odd week. Chuck Norris is now backing a Republican candidate, promoting his book, a line of vitamins, and his show Walker Texas Ranger is syndicated on cable television. I wonder what he would have to say about the housing industry? It looks like Mr. Norris has future political aspirations. He is a very likable guy and who can argue with a person that will roundhouse you to the head if you disrespect him? If Chuck Norris was enforcing the industry, he would certainly terminate all NINJA loans. If you haven’t heard of this, it is basically no income, no job, no assets. In other words, the large portion of loans given out to California buyers. Thankfully NINJA loans are now going the way of the shogun.

Lakewood Revisited

It is always nice to go back in time and see how Real Homes of Genius are doing. You’ll be surprised at what is going on out there. We initially listed this fabulous 816 square foot home in July at a “great” price of $400,000. Here is the link to the home. Looking at the sales history we see the following:

Sale History

08/31/2006: $500,000

03/17/2006: $489,000

Okay, so first we realize at the current short sale price, the seller is facing a $100,000 downgrade. I actually don’t think using a hyper inflated bubble price is a good reference point but there it is. After all, we can say, “wow, you can buy Pets.com for $3” after being massively overpriced and it still would not be a good deal. So 5 months later what is the status of this home? Take a look at this:

Price Reduced: 04/24/07 — $499,900 to $485,000
Price Reduced: 05/27/07 — $485,000 to $470,000
Price Reduced: 07/11/07 — $470,000 to $450,000
Price Reduced: 07/18/07 — $450,000 to $400,000

But wait, you’ll love this:

Price Increased: 08/09/07 — $400,000 to $430,000

Bwahaha! This home has been on the market since April and instead of lowering the price they increase it? No wonder why no one is biting since August. Just a word of advice, increasing the price to create an artificial perception of “desire” is not going to sell a home. These guru techniques only worked during stage 1, 2 and 3 of the housing bubble. The issue at hand is we are now living in a housing market where all the professionals are accustomed to easy money and having loans and buyers come to them. There are ethical and good professionals that realize housing markets ebb and flow. They also realize that it takes work and professionalism to survive in the industry. Sustainability is always the key in many things in life. Any truthful housing professional would tell you that this was a once in a lifetime housing market. Hope everyone has fond memories of what just occurred over the past seven years because you will never see it again.

There is some irony to the current situation. Lenders are trying to sell properties that they now have through REOs yet they are unable to lend money to prospective buyers without going back to NINJA loans, the same loans that caused the foreclosure in the first place. Instead of calling this “housing woes” or “mortgage crisis” why doesn’t the media talk about “returning to normalcy” or “bubble correction?” Have you noticed how little people address the main issue? The main problem is housing is incredibly overpriced and has created enormous dependency for jobs, spending, and other industries that directly depend on a perpetually booming housing market. Just take a look at the number of license growth by the Department of Real Estate here in California. Make no mistake about it, the booming market has created a saturation of jobs in these fields. This happens regularly in bubble economies. Think of the 2 million technology jobs that were lost due to the tech bust. Technology isn’t gone and good companies are still here with us such as Google, Yahoo!, and Ebay for the long-term. But those computer consultants that were making $50,000 a year with no degree are no longer in demand. Engineers with specific training and computer scientists are still in demand. Consulting is still booming. It is the nature of economics. When you realize how much fraud is going on in housing and we are now starting to see stories on a daily basis, you will understand the magnitude of this housing craze.

All of this is connected. Case and point. Sears announced dismal earning this past week. You can criticize the company for not doing enough to revamp and brand itself in a very competitive market. Yet when you look at the details you’ll notice that a large part of their revenue and business came from home accessory sales, tools, and items that are associated with housing. Housing slows down and so does retail. Take a look at Home Depot and Lowes. People cut back on their spending and you see sales decline. Now that the Black Friday rush is done, we realize that people spent less per shopping trip and most were aggressively going after rock bottom sales. Then we see consumer confidence slipping at a time of the year when it needs to be high. What this further means is that less financing is going on. Which we now hear that Citi will be laying off a large portion of their work force and over 190+ lending and mortgage operations are now imploded. These people will be looking for jobs. Yet the fields that are in demand such as engineering, accounting, nursing, healthcare, and energy require specific training and education. It will take time to retrain the workforce. At the same time education costs are increasing at a higher rate than inflation which will make it hard for many to be retrained. Those that do choose to go back to school will face higher loan rates and money will be diverted from discretionary spending to education spending.

At a time when inventory is rising and credit is tighter (of course we are at historically low rates) this will only add pressure to the housing market. That is why after looking at the data the housing bailout rate freeze plan is really a quick gimmick for the four lenders involved. Many subprime borrowers already have higher rates that range from 6 to 12 percent and many go into foreclosure much before the loan ever resets. Of course past data will not show this and here is why. A subprime borrowers purchases a home that they cannot afford. After a year they face financial problems. They realize they can sell their home and even make a little cash. What is recorded? A higher price, a sale, and subprime delinquency rates stay low giving investors a false sense of perception that subprime loans aren’t that risky. Now fast forward to 2007. Many subprime borrowers are subprime because they’ve mismanaged their credit or have lower income. There are reasons for lending guidelines and standards. It isn’t fair putting someone in a home they cannot afford. As you can see there are multiple variables interacting here but all of this is connected. Housing has become too intertwined with the economy and will lead us into a recession. The only question is how deep will it go?

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