Filed under: Gannett Co (GCI)

Like the rest of the newspaper operators in the US, Gannett Co., Inc. (NYSE: GCI) has had a steep drop in its stock price. Basically, to stabilize things, the company needs to find new growth opportunities.

And, of course, this is likely to come from the Net. So this week, Gannett announced a strategic investment in Cozi, which is a scheduler for families (the amount was not disclosed).

In the deal, Gannet will leverage Cozi’s service across its large distribution platform, which includes 85 daily newspapers, 23 television stations and hundreds of websites.

Cozi is a neat service. For example, you can track shopping and to-do lists, family chores and so on. There is also calendar and photo sharing. Launched in late 2006, Cozi now has more than 600,000 registered users.

All in all, this looks like a smart deal for Gannett. Basically, the company can enhance its relationship with its customers. At the same time, Cozi could be a vehicle for local and classified ads, which are under pressure. Moreover, there is likely to be a boost in membership as Gannett has coverage of about 20 million households.

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 MergerBook.com.

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Home builders continue to dial back the production of new homes, with new housing starts reaching a 17-year low in May.  Further, the data points to future declines in starts as the market continues to correct.

From Calculated Risk:

Building permits decreased:

Privately-owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 969,000.
This is 1.3 percent below the revised April rate of 982,000 and is 36.3 percent below the revised May 2007 estimate
of 1,522,000.

Single-family authorizations in May were at a rate of 623,000; this is 4.0 percent below the April figure of 649,000.

The declines in permits suggest further declines in starts next month.

On housing starts:

Privately-owned housing starts in May were at a seasonally adjusted annual rate of 975,000. This is 3.3 percent below the
revised April estimate of 1,008,000 and is 32.1 percent below the revised May 2007 rate of 1,436,000.

Single-family housing starts in May were at a rate of 674,000; this is 1.0 percent (±9.9%)* below the April figure of 681,000.

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Source [blownmortgage]

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Home builders continue to dial back the production of new homes, with new housing starts reaching a 17-year low in May.  Further, the data points to future declines in starts as the market continues to correct.

From Calculated Risk:

Building permits decreased:

Privately-owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 969,000.
This is 1.3 percent below the revised April rate of 982,000 and is 36.3 percent below the revised May 2007 estimate
of 1,522,000.

Single-family authorizations in May were at a rate of 623,000; this is 4.0 percent below the April figure of 649,000.

The declines in permits suggest further declines in starts next month.

On housing starts:

Privately-owned housing starts in May were at a seasonally adjusted annual rate of 975,000. This is 3.3 percent below the
revised April estimate of 1,008,000 and is 32.1 percent below the revised May 2007 rate of 1,436,000.

Single-family housing starts in May were at a rate of 674,000; this is 1.0 percent (±9.9%)* below the April figure of 681,000.

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Source [blownmortgage]

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Filed under: Bad news, Motorola (MOT)

Motorola Inc. (NYSE: MOT) just can’t seem to find a sliver of good news to hang on to these days. The cellphone manufacturer based outside of Chicago saw its shares hit a five-year low this week as the outlook for its cellphone division continues to worsen. The company is in the midst of preparing to spin off the division to rid itself of that baggage. It’s a sad state when that “baggage” is what defines Motorola.

Motorola contract manufacturer FoxConn had some cautious words to say this week as well, which probably helped propel Motorola’s shares downward to $7.61, a level not seen since May 2003. After losing $194 million in the first quarter alone, it’s just bewildering to see how such a great company completely lost its way, financially speaking.

It’s not getting any better. The company’s product launches have been described as a “half-baked mess” and it can’t seem to find a knack for the cellphone handset design that it made so famous years ago with the RAZR. Motorola certainly isn’t a one-hit wonder, but in the brutal cellphone market you need a hit every year to stay at the top of your game. Korean giant Samsung Electronics passed Motorola by in 2007 to become the world’s second-largest cellphone manufacturer by having a whole host of cellphone designs available to almost every wireless carrier in the world. That’s just for starters, but for Motorola, it seems to be an impossible goal at the moment.

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Filed under: Deals, Competitive strategy, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO)

Microsoft (NASDAQ: MSFT) is losing the online ad battle to Google (NASDAQ: GOOG) so why not get into the TV advertising business?

According to The Wall Street Journal, Redmond will buy “Navic Systems Inc., an eight-year-old company that helps advertisers place ads on television programs.”

Whatever Microsoft paid is too much. Small M&A deals are not going to do anything to help the world’s largest software company, especially if they are in slow growing part of the advertising market like TV. Navic may be good at targeting messages to consumers using demographic data and user information from set-top boxes, but over time, TV will have a smaller and smaller piece of the total marketing pie.

Microsoft appears to have lost its battle to buy Yahoo! (NASDAQ: YHOO), but the online ad business is still the only part of the industry that is still growing in double digits. The company needs to put its acquisition money there and stop fooling around with old media.

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

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Once again, for the umpteenth month in a row bottom fishing housing pundits were blown right out of the water. You need to realize that this is the first summer in many years that we are dealing with a very limited plate of mortgage products. Even last year before the August credit market […]
Related Posts:
■Short Sale Report Volume 4: 16,646 Short Sales in Southern California.
■San Diego Down 4.5 percent YOY - or $42,000 from Peak.
■Riding in the Short Bus of Housing: Southern California Short Sale Numbers. 1 in 10 Homes is a Distress Sale.
■C.A.R. says 2007 will see a -2% Drop in California. Does This Feel like a 2% Yearly Drop?
■Home Sales: Worst Drop in 18 Years. Enjoy your Day!

Once again, for the umpteenth month in a row bottom fishing housing pundits were blown right out of the water. You need to realize that this is the first summer in many years that we are dealing with a very limited plate of mortgage products. Even last year before the August credit market pyrotechnic parade, many lenders were trying to squeeze in a few toxic mortgage products before the door entirely closed. This spring and upcoming summer we can already see that it is going to be brutal not only because $500 billion in option arm mortgages are set to start recasting, but the consumer is ultimately tapped out.This tapping out is coming at the behest of the great debt chokehold of this decade. Borrowing has gotten more stringent and this has put the breaks to our economy. If anything, the credit crack has been taken away from the consumer and it is now going into a full fledged withdrawal. The housing numbers for Southern California were released today and the results were once again horrific. Let us take a look:

*Source: DataQuick

Does that look like a bottom to you? Southern California now has a median home price of $370,000 which makes all that preposterous push for $729,000+ mortgages rather pointless unless you are trying to bailout Ed McMahon. Even the elite Orange County is now at $485,000. Sure is a far cry from the $642,000 median price that was reached in August of 2007. Yet this decline is already set in stone. We already know the California housing market across the board is in the dumps. But how are sales looking for the most populated county of all, Los Angeles?

Keep in mind that bounce we are seeing is your typical spring and summer bounce. You can see that each previous year during this time, sales always jump up. Yet this summer we aren’t seeing the typical pizzazz accustomed to the Southern California market. If we have a few more months like this given the onslaught of option arms facing us, this will be a round two that will be absolutely worse than what we have seen with the current round of housing distress.

You also have to remember that many of the current sales are distressed properties being sold. We have a lot of bottom chasers hopping into the market thinking this is the absolute bottom. They will quickly realize that they over paid given that housing is still heading lower. How do we know this? Let us take a brief look at the current inventory for Southern California:

Total SoCal Inventory: 143,218

Total Sales for May 2008: 16,917

Total Months of Inventory: 11.8 months
Yet this number is flat out under representing the amount of inventory out there because many REOs are not placed in the MLS. Also, many notice of defaults are still technically owned by the current owner but they have no desire to keep the mortgage current. Take a look at the current data for California:

May 2008:

NODs: 41,965

NTS: 9,728

REOs: 20,237

Total for California: 71,930

Source: RealtyTrac

What is incredible about these numbers is that inventory from the MLS is steadily decreasing yet sales haven’t jumped up that drastically (see above chart). Yet we look at NODs and REOs and they are through the roof. So we can deduce the following:

-People that don’t need to sell right now are pulling their properties off the market hoping for a brighter day thus reducing elective inventory.

-Many REOs are not making it to the MLS thus making the numbers look artificially low.

-NODs are sky rocketing and many of these are simply zombie properties waiting to become REOs.

That is where we stand. The massive price declines in Southern California are simply reflecting the reality of the situation. My feeling is the option arm debacle will impact California beyond what anyone can currently imagine. Keep in mind that 60 percent of the $500 billion time bomb is here in the state. If numbers are this bad without hitting the option arm stride, can you only imagine once that happens?

A 50 percent decline which only a few years seemed out of a tin foil hat manual is seeming more and more possible. After all, the state is down 30 percent on a year over year basis and we have yet to face the biggest mortgage risk. Why in the world would prices stabilize given the above data?  Does anyone really think this is the bottom?

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Related Posts:
■Short Sale Report Volume 4: 16,646 Short Sales in Southern California.
■San Diego Down 4.5 percent YOY - or $42,000 from Peak.
■Riding in the Short Bus of Housing: Southern California Short Sale Numbers. 1 in 10 Homes is a Distress Sale.
■C.A.R. says 2007 will see a -2% Drop in California. Does This Feel like a 2% Yearly Drop?
■Home Sales: Worst Drop in 18 Years. Enjoy your Day!

Via [DrHousingBubble]

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Filed under: Earnings reports, Wal-Mart (WMT), Best Buy (BBY), Circuit City Stores (CC), Technical Analysis, Stocks to Buy

hhgregg (NYSE: HGG) is a specialty retailer of consumer electronics, home appliances and related services. The firm operates 97 southeastern and midwestern U.S. stores, under the names hhgregg and Fine Lines. It also operates a retail Web site. Offerings include notebook computers, televisions, DVD recorders, refrigerators, ranges, dishwashers, freezers, washers, dryers and Serta mattresses. Competitors include Best Buy (NYSE: BBY), Circuit City Stores (NYSE: CC) and Wal-Mart (NYSE: WMT).

The company pleased investors earlier in the month, when it reported solid Q4 results and offered FY09 EPS guidance in-line with the consensus Street view. Management attributed success to increased sales of higher-priced video and major appliance products. Plans call for opening 15 to 17 stores, during the new fiscal year.

Continue reading hhgregg (HGG): Share price cycles in bullish ‘pennant’ pattern

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Filed under: Deals, Private equity, Blackstone Group L.P (BX)

Apria Healthcare Group Inc. (NYSE: AHG), a home healthcare services company, has seen its shares plunge from $31.57 to $15.31 over the past year. But as of today, things got much brighter, as the shares spiked 26% to $20.

The Blackstone Group (NYSE: BX) has agreed to buy the company for $1.6 billion. Debt financing will come from Bank of America (NYSE: BAC), Wachovia (NYSE: WB) and Barclays Capital (NYSE: BCS).

Apria operates about 550 respiratory and infusion therapy facilities across the US and serves more than two million patients per year. For the latest quarter, Apria posted a 35.1% increase in revenues to $528 million (there was a nice boost from the Coram acquisition). Net income was $20.8 million.

However, Apria has had to deal with Medicare payment reductions. Although, as for Blackstone, this is something it can cope with since it will hold onto the company for a while and can restructure the Apria platform.

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 MergerBook.com.

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Filed under: Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Short stories, Define investing

Judging from previous articles like this, can you guess what I’m going to write about? By now I think you should know my core beliefs-while everyone and their mother is covering the wheeling and dealings of hugely important corporations hence efficient stocks like Google Inc (NASDAQ: GOOG), Yahoo Inc (NASDAQ: YHOO) and Microsoft Corp (NASDAQ: MSFT), my blog’s readers and I are having much more fun profiting from trading mostly short selling…well actually all short selling-smaller infinitely more inefficiently priced companies like GRO, PTEK and STXX, all of which were “pumped up” by various temporary catalysts.

For Agria Corp (NYSE: GRO), it was message board hype, PokerTek Inc (NASDAQ: PTEK) had a combination of message board hype, rumors and press coverage and South Texas Oil Co (NASDAQ: STXX) got a stock promoter mention, and now that those temporary catalysts have come and gone, all three have reversed hard off their highs. And mind you, while many pumps are accomplished on the infinitely ore sketchy OTCBB and Pink Sheet exchanges, all three of these companies are trades on more reputable markets like the NYSE and NASDAQ. And yes, I profited solidly on all three, increasing my yearly gain to around 40%.

Now I’m looking at stocks like Source Interlink (NASDAQ: SORC) as a potential short, which is up on insider buying, a catalyst I don’t respect, but since there’s not enough space for me to cover all the details of exactly what I look for here–it’s about chart patterns, price action and volume. Today, I am doing a special Friday the 13th marathon episode of my LiveStock show. To the untrained eye, I know these small stocks seem scary, but maybe after this journey, I can help you better understand them.

Timothy Sykes writes the blog timothysykes.com, is a former hedge fund manager, star of the TV show Wall Street Warriors and author of the book, An American Hedge Fund: How I Made $2 Million as a Stock Operator & Created a Hedge Fund

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