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Monday, September 11, 2006

Barron's Digest September 11. 2006 Issue


Veritas, the leader in internet security for PCs, has had a negative reputation on Wall St. since its 2004 purchase of Veritas. However, since then, the company has made all of its projections. The company's Norton antivirus software still has the largest share of market. The stock hit a 52-week low in July, but the stock has moved up some to $18.51. The company, which continues to grow, may be a buy-out target for a company like Hewlett-Packard.

Ford has to do several things to get back on the right track. First, it needs to improve its middle management ranks. The company needs to make more vehicles that can be sold without big incentive. The Mustang is a good example. Ford may have to hire a global styling chief to accomplish this. The company also has far too many divisions. It needs to sell or consolidate some of these. Even though manufacturing capacity has been cut 21% for the next quarter, the company has to admit that it still has too much and needs to cut more. Even if Ford plans to sell its financial arm, it should move slowly. The unit is a large profit generator.

Black & Decker has been dragged down on fears that the housing slowdown will hurt it. But, the company has strong cash flow and is repurchasing its shares. It is still the world's largest tool-maker. According to Merrill Lynch Black & Decker sales are tied more to GDP than housing. And, much of the company's manufacturing has been moved to China and Mexico to save money.

Barron's published its list of most repected companies. The top five are Johnson & Johnson, General Electric, Procter&Gamble, Toyota, and Berkshire Hathaway. The bottom five are Credit Agricole, UnitedHealth, China Mobile, Electricite de France, and Time Warner.

Neurochem is a development stage company working on a drug for Alzheimer's. When the company announced recently that trials had not been conclusive the stock dropped to $9.23 and short interest in the company increase. But, the largest shareholder bought stock and squeezed the shorts, driving the price to $15.70.

Apple may introduce a cellular product that is also a music player, the iPhone. If the company can get 2% of the 1 billion cellphones sold each year at $200 a phone it could add $2 billion to Apple's annual revenue.

Douglas A. McIntyre

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