Barron's Digest June 26, 2006 Issue
Stocks: (ERICY)(NOK)(LU)(MOT)(NT)(SI)(PLA)(NOOF)(SLE)(K)(GIS)(FNF)(FNT)(FIS)
(PFE)(MRK)(TEVA)(RDY)(RSTO)(GOOG)(JBLU)(GRMN)(AAPL)(KBH)(PHM)
The Nokia joint venture with Siemens to combine their telco infrastructure operations could boost Nokia's stock. It will create the No. 2 entity in the field behind Ericsson, but ahead of the Lucent/Alcatel merged company. The Nokia/Siemens venture will have revenue in excess of $30 billion. The deal will also change the competition among suppliers of 3G equipment and may force Motorola and Nortel, who have less market share, to consider a combination.
Playboy's stock, which is trading at $9, may be getting attractive. The company's high overhead could be reduced to increase earnings and certain assets like the company's mansion and photo collection are carried below their full value on the balance sheet. Bank of America Secutities has a $13 price target on the company and says it could be a leverage buyout candidate. Playboy does face competition from companies that offer more hard-core content like New Frontier, and this could cut into Playboy's share of cable programming.
Barron's view of Sara Lee is negative. The company is spinning of its clothing assets into an entity that will operate under the name Hanesbrands. But, the company's food brands lag behind products from companies like Kellogg and Kraft Foods. The Hansebrand spin-off should raise $2 billion for the company. Part of this will be distributed to shareholders, but the stock price of Sara Lee already relects this. However, the turnaround of the food business will be difficult because of high debt and lackluster line of products.
Fidelity National, which is in the mortgage title and data processing business will divide itself into two companies so that Wall Street can follow the businesses more easily. Fidelity National Financial will have the mortgage title assets. Fidelity National Information will have the data-processing operations. And, the fomer holding company's stack in Fidelity National Title will be distributed tax-free to the shareholders in FNF. Fidelity Information will be viewed by many investors as a tech growth stock, while Fidelity National Financial is more for value investors. The stock of Fidelity Financial is up 6-fold between 1999 and 2005. While the mortgage business is no longer growing as fast as it has for the last several years, the new structure should make the companies more easy for investors to understand.
The U.S. patent on Merck's Zocor has expired leaving $4.4 billion at risk for competition from generics. But, the option for consumers and doctors to use the generics may also affect Pfizer's competiting drug, Lipitor, which has annual sales of $12.2 billion. The availability of generics should help mail-order pharmacies like Express Script and Caremark RX. And, a few companies will be the only manufacturers of the generics for the next six months: Teva, Ranbaxy, and Dr. Reddy's. Pfizer's stock price probably already takes into account the competition for Lipitor, and the company is working on a drug that improves levels of good cholesterol in the blood, so there may be an upside to the stock's price.
Restoration Hardware, the home furnishings retailer, has seen shares purchased the by the CEO and fund Glenhill Capital recently. Glenhill now owns over 13% of the company's shares. The fund is betting the Restoration's revenues will rise sharply over the near-term.
The head of equity research at Majectic Research was interviewed by Barron's. His picks are Google, which he believes will have higher revenue growth than expected, JetBlue, which in improving yield management, and Garmin, which is in the growing GPS business. His pans include KB Homes and Pulte because of the housing slowdown, and Apple due to weak iPod sales.
(PFE)(MRK)(TEVA)(RDY)(RSTO)(GOOG)(JBLU)(GRMN)(AAPL)(KBH)(PHM)
The Nokia joint venture with Siemens to combine their telco infrastructure operations could boost Nokia's stock. It will create the No. 2 entity in the field behind Ericsson, but ahead of the Lucent/Alcatel merged company. The Nokia/Siemens venture will have revenue in excess of $30 billion. The deal will also change the competition among suppliers of 3G equipment and may force Motorola and Nortel, who have less market share, to consider a combination.
Playboy's stock, which is trading at $9, may be getting attractive. The company's high overhead could be reduced to increase earnings and certain assets like the company's mansion and photo collection are carried below their full value on the balance sheet. Bank of America Secutities has a $13 price target on the company and says it could be a leverage buyout candidate. Playboy does face competition from companies that offer more hard-core content like New Frontier, and this could cut into Playboy's share of cable programming.
Barron's view of Sara Lee is negative. The company is spinning of its clothing assets into an entity that will operate under the name Hanesbrands. But, the company's food brands lag behind products from companies like Kellogg and Kraft Foods. The Hansebrand spin-off should raise $2 billion for the company. Part of this will be distributed to shareholders, but the stock price of Sara Lee already relects this. However, the turnaround of the food business will be difficult because of high debt and lackluster line of products.
Fidelity National, which is in the mortgage title and data processing business will divide itself into two companies so that Wall Street can follow the businesses more easily. Fidelity National Financial will have the mortgage title assets. Fidelity National Information will have the data-processing operations. And, the fomer holding company's stack in Fidelity National Title will be distributed tax-free to the shareholders in FNF. Fidelity Information will be viewed by many investors as a tech growth stock, while Fidelity National Financial is more for value investors. The stock of Fidelity Financial is up 6-fold between 1999 and 2005. While the mortgage business is no longer growing as fast as it has for the last several years, the new structure should make the companies more easy for investors to understand.
The U.S. patent on Merck's Zocor has expired leaving $4.4 billion at risk for competition from generics. But, the option for consumers and doctors to use the generics may also affect Pfizer's competiting drug, Lipitor, which has annual sales of $12.2 billion. The availability of generics should help mail-order pharmacies like Express Script and Caremark RX. And, a few companies will be the only manufacturers of the generics for the next six months: Teva, Ranbaxy, and Dr. Reddy's. Pfizer's stock price probably already takes into account the competition for Lipitor, and the company is working on a drug that improves levels of good cholesterol in the blood, so there may be an upside to the stock's price.
Restoration Hardware, the home furnishings retailer, has seen shares purchased the by the CEO and fund Glenhill Capital recently. Glenhill now owns over 13% of the company's shares. The fund is betting the Restoration's revenues will rise sharply over the near-term.
The head of equity research at Majectic Research was interviewed by Barron's. His picks are Google, which he believes will have higher revenue growth than expected, JetBlue, which in improving yield management, and Garmin, which is in the growing GPS business. His pans include KB Homes and Pulte because of the housing slowdown, and Apple due to weak iPod sales.
posted by douglas mcintyre at 4:54 PM
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