Jim Cramer Blog

Stocks started the week on a positive note with all three major indexes posting gains of close to 1%. The move follows a down week last week as economic data indicated that, despite signs pointing to a slowing economy, inflation was not being held in check. Tomorrow, the Federal Reserve Open Market Committee begins its next policy meeting. While a rate change isn't expected when the meeting wraps up on Wednesday, investors are hoping the FOMC's policy statement will shed some light on which way it is leaning when it comes to adjusting interest rates later this year.
While economic data and policy statements are on the radar, both were absent today, leaving investors to find direction from a wave of M&A activity. U.S. investors also took a cue from a strong move higher in overseas markets, where recent weakness had helped contribute to uneasiness in the U.S. market. Concerns about the subprime mortgage crisis, meanwhile, remained on the sidelines for today at least, even as the National Association of Home Builders said its index of sales activity for new single-family housing fell to 36 from a reading of 39 in February, which itself was revised down from 40.
Leading the merger headlines were Barclays (NYSE: BCS - News) and ABN AMRO (NYSE: ABN - News) on reports that the two European banks could combine in a deal worth as much as $80 billion. ABN AMRO later confirmed that it is in exclusive talks with Barclays. Community Health Systems (NYSE: CYH - News), meanwhile, topped a private equity bid with a $5.1 billion offer for Triad Hospitals (NYSE: TRI - News) in a deal that would create the country's largest publicly traded hospital operator.
The mergers extended to the oil patch as well, where shallow-water driller Hercules Offshore (Nasdaq: HERO - News) announced its plans to buy oil and natural gas driller TODCO (NYSE: THE - News) for about $2.4 billion. The deal would create the world's fourth-largest fleet of shallow-water rigs. Based on Friday's closing prices, Hercules' offer represents a 28% premium. Elsewhere, utility and telecom infrastructure contractor Quanta Services (NYSE: PWR - News) made a $1.3 billion offer for InfraSource Services (NYSE: IFS - News), a 17% premium. The deal expands Quanta's reach both in terms of geography and services offered.
Today's M&A activity also included a pair of firms announcing plans to be taken private. ServiceMaster (NYSE: SVM - News), parent of Terminix pest control and a provider of housecleaning and landscaping services, was the target of a $4.5 billion bid led by private equity firm Clayton, Dubilier & Rice. Finally, shipping firm EGL (Nasdaq: EAGL - News) announced it has agreed to a management-led buyout worth $1.7 billion. The $38 per share bid eclipsed a prior offer by $2 per share. The stock ended up 6%.
The day's big loser was biotech AtheroGenics (Nasdaq: AGIX - News), which plunged -61% on news that its experimental pill to treat atherosclerosis -- a buildup of fat, cholesterol, and other substances in the inner lining of arteries -- failed to meet its target in a late-stage trial. AtheroGenics had partnered with AstraZeneca (NYSE: AZN - News) on the trial, but Zeneca will now have the opportunity to break off the partnership.
By the BullMarket.com Staff

Labels: ABN, AGIX, AZN, BCS, CYH, EAGL, HERO, IFS, PWR, SVM, THE, TRI

Advanced Micro Devices (NYSE:AMD - News) said it's "unlikely" to meet its outlook for revenue of between $1.6 billion and $1.7 billion for the first quarter. The current average estimate of analysts polled by Thomson Financial is for revenue of $1.66 billion for the March period. The Sunnyvale, Calif., chip maker made the announcement ahead of a presentation by Hector Ruiz, its chairman and chief executive officer, at a conference sponsored by Morgan Stanley.
Barnes & Noble Inc. (NYSE:BKS - News) gave an outlook for fiscal 2007 that's well below the current Wall Street consensus estimate.
First Bancorp of Puerto Rico (NYSE:FBP - News) agreed in principle to pay $74.25 million to settle all claims in a shareholder class-action lawsuit filed in 2005. The financial holding company said Monday its 2005 financial statements included an accrual of $74.25 million for the settlement. The settlement is subject to final approval by a federal court in Puerto Rico. In December 2005, First Bancorp said it faced several lawsuits alleging securities violations and claims that it artificially inflated the company's earnings and made material misrepresentations and omissions regarding financial conditions.
Fremont General (NYSE:FMT - News) said it plans to sell its subprime real-estate lending business.
Home Solutions of America (NasdaqGM:HSOA - News) shares fell after the Dallas-based provider of rebuilding and remodeling services said it now expects to report fourth-quarter net earnings of 5 cents to 7 cents a share. The company also cuts its full-year 2006 earnings forecast to a range of 43 cents to 46 cents a share from its earlier forecast of 56 cents to 60 cents a share. In addition, Home Solutions said President and Chief Operating Officer Rick O'Brien will resign effective April 15 to pursue other opportunities. O'Brien's operating responsibilities will be assumed by two new division managers, Brian Marshall and Mike Lane.
InfraSource Services Inc. (NYSE:IFS - News) said its fourth-quarter net profit rose 31% to $7.6 million, or 19 cents a share, as revenue increased 12% to $247.9 million. The company, which provides contracting services to the infrastructure industry, said its improved performance was driven by growth in the division that services infrastructure in the electricity sector. Analysts polled by Thomson Financial had expected earnings of 17 cents a share on revenue of $246 million. The company said backlog at the end of the quarter was $902 million, or around 13% higher than at the end of the third quarter.
Lawson Products Inc. (NasdaqGS:LAWS - News) reported fourth-quarter net earnings of $1.34 million, or 16 cents a share, down from $9.58 million, or $1.06 a share, during the year-ago period. Adjusted operating income was $4.9 million compared with $6.8 million last year. The results include a full quarter of the operations of Rutland Tool & Supply Co., which was acquired in December 2005, the company said. The Des Plaines, Il.-based company posted revenue of $126.2 million, up 9% from $115.6 million. Lawson is a provider of products, systems and services to industrial maintenance, repair and replacement markets.
Memory Pharmaceuticals (NasdaqGM:MEMY - News) said a Phase 2a study of its MEM-1003 drug showed it didn't prove effective for the treatment of bipolar mania. The company said the target symptoms and the nature of the assessment of the ongoing Phase 2a study in Alzheimer's disease are very different.
OM Group Inc. (NYSE:OMG - News) said fourth-quarter net income rose to $56.8 million, or $1.93 a share, from $11.6 million, or 40 cents a share. On a continuing operations basis, the Cleveland-based company posted a loss of 58 cents a share. Net sales rose to $172.1 million from $151.5 million.
Palm Inc. (NasdaqGS:PALM - News) has reportedly hired Morgan Stanley to evaluate options including a sale, an investment by private-equity firms or its own purchase, The Wall Street Journal reported Monday, citing people familiar with the matter. Palm rallied nearly 11% on Friday on speculation that Nokia may buy it.
Research In Motion (NasdaqGS:RIMM - News) said it anticipates a $250 million reduction on previous earnings from erroneously reported stock-option grants when it makes a restatement. The maker of the BlackBerry phone said a special committee determined that all options granted prior to February 27, 2002, were accounted for incorrectly due to not applying variable accounting, and 321 grants -- or 63% of the total awarded -- were incorrect between Feb. 28, 2002 and Aug. 2006. The special committee didn't find intentional misconduct on the part of any director or officer, but said hindsight was used to select grant dates with favorable pricing. Co-CEO Jim Balsillie has voluntarily stepped down as chairman, and Dennis Kavelman will be moving from his position as CFO to become the chief operating officer of administration and operations. Directors and officers will return any benefit from mispriced options, and Co-CEOs Balsillie and Mike Lazaridis will contribute up to C$10 million to defray the costs of the probe.
SL Green Realty Corp. (NYSE:SLG - News) said it's agreed to acquire two properties in Manhattan for a total of $73 million from a group of private investors. The properties are located at 331 Madison Ave. and 48 East 43rd Street.
Sunrise Senior Living Inc. (NYSE:SRZ - News) said it has expanded the scope of its previously established special independent committee of the board, to include the review of facts and circumstances relating to the historical accounting treatment of certain categories of transactions in the pending restatement. The McLean, Va.-based provider of senior living services said it has also directed the committee to develop recommendations regarding any necessary remedial measures.
The South Financial Group (NasdaqGS:TSFG - News) named James Gordon as its new chief financial officer, the company said early Monday. Gordon, who takes over March 15, comes to South from HORNE LLP where he worked as the firm's assurance partner for SEC and financial institutions services since 2004. He replaces Timothy Schools, who will resign to "pursue other opportunities" but stay around until April 30th to assist with the transition.
Universal American Financial Corp. (NasdaqGS:UHCO - News) said it's rejecting a management-led proposal to buy the Rye Brook, N.Y. firm for $18.15 a share. A special committee of the board said the offer is "inadequate and not in the best interests of the company and its stockholders."
XM Satellite Radio Inc. (NasdaqGS:XMSR - News) and Sirius Satellite Radio Inc. (NasdaqGS:SIRI - News), currently seeking approval for a proposed $13.6 billion merger, pledged again Friday that existing XM and Sirius radios would not become obsolete if the deal is completed.
Published By MarketWatch

Labels: AMD, BKS, FBP, FMT, HSOA, IFS, LAWS, MEMY, OMG, PALM, RIMM, SIRI, SLG, SRZ, TSFG, UHCO, XMSR

Palm (NasdaqGS:PALM - News) is rumored to be in acquisition discussions to be bought-out by Nokia (NYSE:NOK - News), so watch for new developments and movement catalysts. PALM's PowerRating is 4, and NOK's PowerRating is 7.
InfraSource Services (NYSE:IFS - News) is expected to report $0.17 EPS on Monday morning before the bell. IFS's PowerRating is 7.
Watch for OM Group (NYSE:OMG - News) to announce $1.88 EPS on Monday before the market opens. OMG's PowerRating is 7.
Thor Industries (NYSE:THO - News) reports earnings Monday during market trading hours; watch for $0.41 EPS. THO's PowerRating is 5.
ADC Telecommunications (NasdaqGS:ADCT - News) and Esterline Technologies (NYSE:ESL - News) report on Monday after the market closes, so watch for heightened volume and price action before the bell. ADCT's PowerRating is 7, and ESL's PowerRating is 6.
PowerRatings are courtesy of PowerRatings.net

Labels: ADCT, ESL, Hot Stocks, IFS, NOK, OMG, PALM, THO

Palm (NasdaqGS:PALM - News) is rumored to be in acquisition discussions to be bought-out by Nokia (NYSE:NOK - News), so watch for new developments and movement catalysts. PALM's PowerRating is 4, and NOK's PowerRating is 7.
InfraSource Services (NYSE:IFS - News) is expected to report $0.17 EPS on Monday morning before the bell. IFS's PowerRating is 7.
Watch for OM Group (NYSE:OMG - News) to announce $1.88 EPS on Monday before the market opens. OMG's PowerRating is 7.
Thor Industries (NYSE:THO - News) reports earnings Monday during market trading hours; watch for $0.41 EPS. THO's PowerRating is 5.
ADC Telecommunications (NasdaqGS:ADCT - News) and Esterline Technologies (NYSE:ESL - News) report on Monday after the market closes, so watch for heightened volume and price action before the bell. ADCT's PowerRating is 7, and ESL's PowerRating is 6.
PowerRatings are courtesy of PowerRatings.net

Labels: ADCT, ESL, Hot Stocks, IFS, NOK, OMG, PALM, THO

AMR Corp. (NYSE:AMR - News) shares rose after Citigroup lifted its price target on the stock to $46 from $34 as part of a larger bullish call on the airline industry. The firm also boosted targets for JetBlue (NASDAQ:JBLU - News) and Southwest Airlines (NYSE:LUV - News).
Bio-Reference Laboratories (NASDAQ:BRLI - News) was upgraded to buy from hold at Jefferies & Co. The firm also boosted its price target on the stock to $30 from $26.
CDC Corp. (NASDAQ:CHINA - News) said it expects fourth-quarter software license revenue to rise approximately 37% to $13.8 million to $14.2 million from $10.2 million a year earlier. The Chinese business software company expects to report earnings estimates for the quarter ending December by early-February, with analysts surveyed by Thomson First Call forecasting earnings of 7 cents a share, on average.
Dendreon (NASDAQ:DNDN - News) shares rose after the Food and Drug Administration has granted priority review status to the company's prostate cancer drug candidate Provenge, meaning that the agency should make a decision on whether to approve the product within six months of receiving the company's market application. Dendreon said Tuesday it expects the FDA to render its decision by May 15. A biotechnology product, Provenge is for the treatment of asymptomatic, metastatic, hormone refractory prostate cancer.
ElkCorp (NYSE:ELK - News) disclosed an amendment to its previously disclosed merger agreement with private equity firm The Carlyle Group. The revised deal calls for Carlyle to commence a tender offer to acquire all outstanding ElkCorp common shares for $40.50 each in cash on or before Thursday. The agreement, which values ElkCorp at about $1.05 billion, including the assumption of $173 million in debt, represents an increase of $2.50 per share from the $38 offer called for in the parties' original Dec. 18 agreement. ElkCorp's board is recommending that shareholders tender their stock to the Carlyle offer and reject a $40 per share cash tender offer from Building Materials Corp. of America.
Pharmacy benefits manager Express Scripts Inc. (NASDAQ:ESRX - News) said it launched its exchange offer for all outstanding shares of larger rival Caremark Rx Inc. (NYSE:CMX - News) . Under the terms of the deal, St. Louis-based Express Scripts is offering to pay Caremark shareholders $29.25 in cash and 0.426 shares of Express Scripts for each share of Caremark held. Based on closing stock prices on Jan. 12, Express Scripts said its offer has a value of $56.87 per share, or about $25 billion, and gives Caremark stockholders a 7% premium to the current value of the rival offer from drugstore operator CVS Corp. (NYSE:CVS - News). The offer from Express Scripts and withdrawal rights are scheduled to expire at midnight Eastern Standard Time on Feb. 13, subject to extension.
FairPoint Communications (NYSE:FRP - News) shares jumped after the company reached a deal with Verizon Communications (NYSE:VZ - News) to combine certain assets in less populated areas of New England. The agreement calls for Verizon to spin off certain operations in Maine, Vermont and New Hampshire and merge them with FairPoint. Verizon investors will receive 1 share of FairPoint for every 55 shares of Verizon held.
FedEx (NYSE:FDX - News) was upgraded to overweight from neutral at J.P. Morgan, citing valuation.
Genesis HealthCare Corp. (NASDAQ:GHCI - News) agreed to be acquired for $63 a share in cash by a joint venture between affiliates of Formation Capital LLC and JER Partners. The deal is valued at $1.7 billion, including the assumption of $450 million in debt, Genesis said. The company said the $63-a-share offer represents a 31% premium over its average share closing price over the past 30 days. The deal to take the company private must still be approved by shareholders. Kennett Square, Pa.-based Genesis provides healthcare and support services to the elderly.
GMH Communities Trust (NYSE:GCT - News) was upgraded to neutral from sell at Banc of America Securities on valuation.
HealthExtras (NASDAQ:HLEX - News) was upgraded to outperform from market perform at Raymond James.
Highway Holdings (NASDAQ:HIHO - News) said it's received two initial original equipment manufacturer orders from U.S. based customers. Financial terms weren't disclosed.
Infrasource Services (NYSE:IFS - News) lifted its outlook for the fourth quarter, saying it saw higher than expected revenue from the successful completion of several projects, increased customer demand for greater volumes of work and favorable weather. The Media, Pa., utility transmission network construction services provider now sees earnings of 15 to 17 cents a share for the fourth quarter on revenue of between $240 million and $250 million. Its previous outlook was for a profit of 11 to 13 cents a share on revenue ranging from $200 million and $210 million in the period.
Interpool Inc. (NYSE:IPX - News) said its board has received a $24 per share acquisition proposal from a group led by Martin Tuchman, its chief executive officer and chairman. Princeton, N.J.-based Interpool, a maker of transportation equipment, said the group includes other significant investors and an investment fund affiliated with Fortis Merchant Banking. Interpool said its board has formed a special committee to review and evaluate the proposal.
Masco (NYSE:MAS - News) was upgraded to buy from neutral at UBS.
Mercer International (NASDAQ:MERC - News) was upgraded to outperform from sector perform at RBC Capital Markets. The firm also lifted its price target on the stock to $14 from $12, citing a higher outlook for pulp prices.
Mills Corp. (NYSE:MLS - News) shares rose after current stockholder Farallon Partners said in a filing with the Securities and Exchange Commission that they've submitted a term sheet to Mills' financial advisors for a proposed acquisition of an additional $499 million worth of shares at a price of $20 each.

Labels: AMR, BRLI, CHINA, CMX, CVS, DNDN, ESRX, FDX, GCT, GHCI, HIHO, HLEX, IFS, IPX, JBLU, LUV, MAS, MERC, MLS, VZ