Jim Cramer Blog

Stocks followed Monday's strong move higher with a somewhat more cautious rally today, though all three major indexes closed in the green. Better-than-expected housing starts numbers accounted for some of the positive bias, while the Federal Reserve's policy meeting, which got underway today and will result in a decision tomorrow afternoon, added a note of uncertainty to the day's trading.
With recent data pointing to a potential economic slowdown exacerbated by softness in the housing market but offset by inflation numbers above the Fed's typical comfort zone, investors are keen to get a glimpse into the Fed's thinking with regard to interest rates. The Fed is almost certain to hold rates steady tomorrow, but the accompanying statement will be parsed with an eye for a shift in posture on future policy.
In corporate news, embattled smartphone maker Palm (Nasdaq: PALM - News) was the subject of buyout speculation. Though once a leader in the smartphone space, the company has fallen behind rivals like Research in Motion (Nasdaq: RIMM - News) and engaged Morgan Stanley to pursue strategic options. Reports indicate that Nokia (NYSE: NOK - News) is presently the top bidder, but Motorola (NYSE: MOT - News) as well as private equity firms are also interested.
In other M&A news, IT firm Affiliated Computer Services (NYSE: ACS - News) surged 17% after receiving a $5.93 billion bid from an investment group led by the company's founder and chairman. Meanwhile, jewelry retailer Claire's Stores (NYSE: CLE - News) confirmed an agreement to be acquired by private equity firm Apollo Management for $33 per share. Apollo was reportedly the only remaining buyer after other bidders dropped out of an auction for the retailer.
Accredited Home Lenders Holding (Nasdaq: LEND - News) continued to recover from its recent drubbing, as the subprime lender advanced 20% on news that the company had received a commitment for a $200 million loan from Farallon Capital Management. The funding will give the company more time to track down longer-term funding after a recent credit crunch due to mounting subprime mortgage defaults and late payments.
In tech news, memory chip firm Rambus (Nasdaq: RMBS - News) moved 6% higher after the Federal Trade Commission put off restrictions preventing the company from collecting certain royalties. The FTC had planned to limit Rambus' royalty payments after the agency ruled last year that the company had deceived a standards-setting committee. Meanwhile, flash memory maker SanDisk (Nasdaq: SNDK - News) gained 5% and network equipment maker Juniper Networks (Nasdaq: JNPR - News) jumped 4% after each received analyst upgrades.
By the BullMarket.com Staff

Labels: ACS, CLE, JNPR, LEND, MOT, NOK, PALM, RIMM, RMBS, SNDK

Word on the Street is that seller of costume jewelry and accessories Claire's Stores (CLE) could soon be the subject of a buyout, and that's caused shares in the Pembroke Pines, Florida-based company to rise over 3% this morning.
We noted that Claire's, which has hired Goldman, Sachs & Co. as a financial adviser to explore strategic alternatives, fits the bill as the type of entity that might attract private equity interest. Historically, CLE has had strong cash flow and a straightforward business plan. It has no debt and an older management that may be willing to give up control of the company.
On Nov. 16 the company reported third quarter earnings of $0.39 per share, $0.01 better than the Reuters Estimates consensus of $0.38. Revenues rose 6.2% year over year to $347.6 million versus the $347.5 million company preannouncement.
Street chatter about a possible deal escalated Monday after a Brean Murray Carret & Co. analyst upgraded the company's shares to "Hold" from "Sell" on a valuation-related premise, in addition to the buyout speculation.
At about 18.2x trailing 12-month earnings, the stock is trading under the industry average of about 20.3x and roughly in line with the stock's nine-year average of about 17.8x. Given its solid financial condition and some recent efforts to increase shareholder value, Claire's is a name that should be attractive to investors.
--Christine Marie Nielsen, Briefing.com

Labels: Claire's Stores Inc., CLE