Jim Cramer Blog

Stocks were slammed today, as a late-afternoon sell-off was fueled by continued worries surrounding the financial and mortgage sectors. The Dow lost -237 points to close at 12,743 for the day. Meanwhile, the Nasdaq and S&P each closed down more than -2% to finish at 2,541 and 1,407, respectively. Light, sweet crude prices were down in trading with oil closing at $97.70 per barrel for January delivery. Treasury prices were higher on the day, while gold prices rose to close at $826.50 an ounce. The dollar fell against the euro, but remained relatively unchanged versus the yen.

In corporate news, Europe's largest bank HSBC Holdings (NYSE: HBC - News) announced today that it will bail out two of its bank-managed funds by transferring approximately $45 billion of the structured investment vehicles' assets onto its balance sheet. HSBC also said it will inject $35 billion into the company-managed funds in order to prevent liquidation of their assets. Shares of HSBC were down -2.6% at the bell.
Shares of SunPower Corp. (Nasdaq: SPWR - News) traded higher today, prodded by speculation that Congress may look to pass an energy bill favoring renewable resources before Christmas. The solar-panel maker's stock rose more than 5% during trading before pulling back to close up 1.9% on the day. Shares of SunPower's majority shareholder, Cypress Semiconductor (NYSE: CY - News) also climbed higher on the news and posted a small gain for the session.
On the M&A front, Royal Philips Electronics (NYSE: PHG - News) said that it will acquire light fixture company Genlyte Group (Nasdaq: GLYT - News) in a deal valued at $2.7 billion. According to details, Philips will pay $95.50 per share for Genlyte, representing a 52% premium over the company's closing price on Friday. Shares of Genlyte soared in trading and closed 50.7% higher on the day. Meanwhile, Philips' stock was off -1.9% at the bell.
Elsewhere, Sears Holdings (Nasdaq: SHLD - News) said it is prepared to make a cash tender offer of $6.75 per share to acquire Restoration Hardware (Nasdaq: RSTO - News), according to a SEC filing. Sears' bid trumps a previous offer of $267 million, or $6.70 per share, for the home-furnishings retailer made by an affiliate of private equity firm Catterton Partners. Restoration Hardware's stock was up slightly on the day, while shares of Sears closed down -4.3%.

By the BullMarket.com Staff

Labels: CY, GLYT, HBC, PHG, RSTO, SHLD, SPWR

Eurovision Stock Contest: Philips Electronics N.V. (NYSE: PHG - News)
Cramer is dedicating a segment this week to European stocks because they are hot right now and, unlike American stocks, are resistant to the rising interest rates in their respective countries. He would not choose an ETF, since they do not contain best-of-breed companies, but are filled with "Eurotrash" he said. Monday's pick is PHG which Cramer says worth 20% more than its current price. In addition, this manufacturer of high-tech gear has a 20% upside, although Cramer warns investors not to pay too much for the stock.
Ride the Wild Bull: Woodward Governor Co. (NasdaqGS: WGOV - News)
Cramer says few have heard of WGOV until now, and the company is getting attention because it has doubled in the past two years. He adds the aerospace cycle is going to be long, and stocks in wild bull markets can double twice. Cramer adds WGOVis also in a double sweet spot because it has one foot in the aerospace sector and one in energy, and it resembles Honeywell and Johnson Controls combined.
Going to Pieces: American Standard (NYSE: ASD - News)
Cramer says he doesn't care about ASD's earnings report on Wednesday, and is interested in ASD because it is getting ready to spin off Wabco, its vehicle systems business, followed by its kitchen and bath business. ASD will then become Trane, a heating, ventilation and air-conditioning company. Cramer thinks its possible a private equity company will swallow ASD whole before the spin-offs, and notes Deutsche Bank has said ASD is worth $70 in spite of its $61 price tag. Cramer predicts the stock will rise $4 in the short-term, and would buy half before ASD reports on Wednesday and half on a decline.
CEO Interview: Bruce Williamson, Dynegy (NYSE: DYN - News)
Bruce Williamson discussed the difficulty of building power plants and how supply is static while demand is increasing. DYN's current power plants will benefit from "rising value and rising economic performance." Cramer said Williamson is a moneymaker and DYN should be valued not just in the short term, but based on all of its plants. "You'll get a much higher price," Cramer said.
Published by SeekingAlpha

Labels: ASD, DYN, Jim Cramer, Mad Money, PHG, WGOV

Gol Linhas Aereas Inteligentes (NYSE: GOL - News)
"Monopolistic, anti-competitive behavior is now in style in Brazil!" declared Cramer, who is bullish on GOL, a Brazilian airline which is acquiring its long-time competitor, Varig, after it went "belly up." At less than $100 million in cash, Varig was a bargain, and Cramer thinks the acquisition should send GOL up 30% in a straight line to $40. While Wednesday's 10% increase would otherwise inspire caution, Cramer does not think investors should wait for GOL to pull back, but would go ahead and buy; "We're in 'never-look-back-ville'!"

Benefit of the Doubt: Polo Ralph Lauren (NYSE: RL - News) COO Roger Farah, and Saks' (NYSE: SKS - News) Steve Sadove and Ron Frasch
Next on Cramer's list of executives who deserve the benefit of the doubt is RL's COO Roger Farah. While CEO Ralph Lauren is a "visionary" Cramer credits Farah for breathing new life in the brand "which had been spread out, truncated, over-licensed and diluted... and he turned it back into a powerhouse." Cramer likes RL because it is "the ultimate high-end play" and should have 12% to 15% growth. He also praised the company for purchasing the rest of Polo.com. However, market players turned on Farah after RL's fantastic quarter because they suspected him of guiding down estimates. In spite of Farah's assurances, the stock is still down, although it has recovered somewhat, and Cramer would stay with RL. He also likes SKS CEO Steve Sadove because he "keeps the money coming in" and its vice chairman and chief merchant Ron Frasch who is a"merchandizing genius," according to Cramer.

Sell Block: Syntax-Brillian Corp. (NasdaqGM: BRLC), AT&T (NYSE: T - News), Verizon (NYSE: VZ - News), BP (NYSE: BP - News), Exxon Mobil (NYSE: XOM - News), Transocean (NYSE: RIG - News), Movado (NYSE: MOV - News), BigBand Networks (NasdaqGM: BBND), Sourcefire (NasdaqGM: FIRE), Glu Mobile (NasdaqGM: GLUU), Aruba Networks (NasdaqGM: ARUN), Clearwire (NasdaqGS: CLWR), ETelecare (NasdaqGM: ETEL)
No matter how much he likes BRLC's story, he would sell the stock after CEO Vincent Solitto touted his company on Mad Money but failed to mention that he raised $15.5 million through a side deal which involved issuing shares at a special price "To me, it was galling... it was disspiriting," said Cramer; "Syntax-Brillian?... I don't like your style." Cramer would trade some T for VZ because VZ is less expensive and has a higher yield. He also suggested selling BP and picking up XOM "if you absolutely have to own an integrated" or RIG. He mentioned MOV has a good entry point at $28.74. Cramer gave an update on IPOs, saying he still likes BBND which he would buy it on any weakness, but suggests schnitzeling out of (selling the profits from) FIRE. He still doesn't like GLUU or ARUN. Cramer says CLWR is "on sale" now that it is settled into the $20-$21 range. Finally, Cramer would take profits from ETEL on any strength, since it has increased substantially.
CEO Interview: Scott Huennekens, Volcano (NasdaqGM: VOLC) with General Electric (NYSE: GE - News), Koninklijke Philips Electronics (NYSE: PHG - News)
Cramer asked Scott Huennekens to explain VOLC's agreements with GE and PHG; "GE has rights to one version of our product that it can integrate into its cath lab, and earlier this week we announced the deal with Philips for another version। So as we move forward, GE is going to have exclusivity to the advanced functionality version of the product, and the lower functionality version will also be incorporated onto Philips and other larger manufacturer systems," Huennekens said. He envisions every cath lab with an Ivus machine in it as the need to visualize arteries through less invasive approaches increases. Cramer gave VOLC a triple buy.
Published By SeekingAlpha

Labels: BP, CLWR, ETEL, GE, GLUU, GOL, Jim Cramer, Mad Money, MOV, PHG, RIG, RL, SKS, VOLC, VZ, XOM

Summary: Activist investor Carl Icahn recently disclosed a 1.4% stake in Motorola Inc. (NYSE: MOT - News) and set out to force the company to buy back its shares at what he sees as cheap prices. Combined with recent buyouts of Freescale Semiconductor Inc. (NYSE: FSL - News) and Philips Electronics (NYSE: PHG - News), astute investors are eyeing telecom and chip companies with similar cash reserves, which may soon find themselves under the radar of impatient shareholders or buyout firms. Zhiping Zhao of CreditSights: "Both events represent... pressure from shareholders for these companies to return excess cash, as well as optimize capital structure and create shareholder value." Cash represents 19.1% of semiconductor companies' market cap, vs. only 6.1% and 4.9% for consumer and industrial companies -- and chip/telecom equipment companies have little or no debt. He thinks companies like Analog Devices Inc. (NYSE: ADI - News), Linear Technology Corp. (NasdaqGS: LLTC), Maxim Integrated Products Inc. (NasdaqGS: MXIM), Altera Corp. (NasdaqGM: ALTR) Xilinx Inc. (NasdaqGS: XLNX), and Infineon Technologies (NYSE: IFX - News) are potential buyout targets. Companies that could face shareholder pressure to optimize balance sheets and unlock value include Ericsson (NasdaqGS: ERIC), Nokia Corp. (NYSE: NOK - News), Sycamore Networks Inc. (NasdaqGM: SCMR) and Tellabs Inc. (NasdaqGS: TLAB).
Published by SeekingAlpha

Labels: ADI, ALTR, ERIC, FSL, IFX, LLTC, MOT, MXIM, NOK, PHG, SCMR, TLAB, XLNX

PetMed Express (NASDAQ:PETS - News) fiscal third-quarter earnings rose 3.1%, boosted by growth in retail new-order sales and retail reorder sales. The Pompano Beach, Fla., pet pharmacy had third-quarter earnings of $2.75 million, or 11 cents a share, compared with $2.67 million, or 11 cents, a year earlier. PetMed said sales for the quarter ended Dec. 31 rose 21% to $31.4 million from $25.9 million a year ago. Analysts surveyed by Thomson Financial expected, on average, earnings of 15 cents a share on revenue of $34 million.
Philips Electronics NV (NYSE:PHG - News) said fourth-quarter net profit more than doubled to 680 million euros ($882 million) from 332 million euros a year earlier, easily topping analysts' expectations for profit of 396 million euros. Revenue slipped to 8.13 billion euros from 8.19 billion, falling short of analysts' expectations for sales of 8.32 billion euros. Comparable sales rose 2%. Philips proposed to raise its annual dividend to 0.60 euros from 0.44 euros. The company also said it will raise its dividend pay-out ratio to a range of 40% to 50% from a previous range of 25% to 35% of continuing net income. Looking ahead, Philips said it's confident it can achieve its 2007 target of EBITA growth of at least 7.5% on sales growth of 5% to 6%.
Sears (NASDAQ:SHLD - News) said Craig Monaghan, chief financial officer since September, will leave at the end of this month.
Semtech Corp. (NASDAQ:SMTC - News) was downgraded to underweight from equal-weight at Morgan Stanley.
Sify Ltd. (NASDAQ:SIFY - News) shares slumped after the India-based provider of Internet, network and e-commerce services reported third-quarter net earnings of $940,000, or breakeven per American Depositary receipt. In the same quarter last year, the company posted a net loss of $240,000, or breakeven per ADR. Sify reported revenue of $31.5 million, up 16% from $27.2 million last year.
Star Scientific (NASDAQ:STSI - News) shares dropped after the company said it plans to appeal a summary judgment against it in its patent infringement lawsuit against RJ Reynolds Tobacco Co. The company filed its suit in 2001, alleging that R.J. Reynolds had violated the company's process to reduce the level of nitrosamines - a carcinogenic toxin in tobacco. R.J. Reynolds is a unit of Reynolds American (NYSE:RAI - News).
Sunpower Corp. (NASDAQ:SPWR - News) was downgraded to market perform from outperform at Piper Jaffray.
Take-Two Interactive said it's received a delisting notice from the Nasdaq Stock Market, citing the company's failure to file its Form 10-K for the fiscal year ended Oct. 31 with the Securities and Exchange Commission. The company said it will present its plans to regain compliance to the Nasdaq Listing Qualifications Panel by Jan. 25.
Tecumseh Products Co. (NASDAQ:TECUA - News) named James Bonsall interim president and chief operating officer, a new position. In addition to his new role, Bonsall will continue as president of the company's engine and power train group and as managing director of AlixPartners.
Titan International (NYSE:TWI - News) said it may post a negative gross-profit margin for the fourth quarter and affirmed its sales forecast for all of 2007. The pressure on margin stems from Titan's effort to add off-the-road-tire capacity at its Freeport, Ill., and Des Moines, Iowa, tire facilities. That effort stems in turn from capacity constraints at its Bryan, Ohio, tire plant, Titan said in a statement. The company said that for 2006, its farm-tire business will be down at least $75 million from 2005. Titan still expects to report 2007 sales of $800 million to $825 million. Demand in January and February is "strong," Titan said. Titan also registered an offer with the Securities and Exchange Commission under which holders of its $81.2 million of 5.25% senior convertible notes due 2009 could convert the debt to common shares at an increased rate.
Tween Brands (NYSE:TWB - News) said Chief Operating Officer William May Jr. has resigned, effective today. The New Albany, Ohio-based retailer said it has named Kenneth Stevens as president and COO, effective Jan. 29. Additionally, the company said it plans to record a one-time after-tax charge of 2 cents to 3 cents a share during the fourth quarter for costs associated with May's separation agreement.
Westell Technologies (NASDAQ:WSTL - News) was downgraded to neutral from outperform at Cowen & Co. The firm cited a deteriorating outlook for the company's fundamentals.
Published By MarketWatch

Labels: PETS, PHG, RAI, SHLD, SIFY, SMTC, SPWR, STSI, TECUA, TWB, TWI, WSTL

Technology conglomerate Royal Philips Electronics NV said Monday its fourth-quarter net profit more than doubled due to one-time gains and lower tax costs, even as sales slipped due to weakness at its consumer electronics division.
Philips, which also makes high-end medical equipment, light bulbs and household appliances, posted a net profit of 680 million euros ($882 million), up from 332 million euros a year earlier, when it paid a one-time tax charge of 240 million euros on shares it holds in Taiwan-based chipmaker TSMC Ltd.
The earnings included an additional one-time gain of 129 million euros ($167 million) from the sale of its semiconductor division, which was bought by a consortium of private investors led by Kohlberg Kravis Roberts & Co. in August. Total proceeds from the sale were 4.3 billion euros ($5.58 billion), with the rest booked in the third quarter.

Labels: Koninklijke Philips Electronics NV, PHG