Sunday, December 02, 2007

Weekend Stock Alerts: December 2, 2007

Vivendi SA said Sunday that it plans to acquire a controlling stake in Activision Inc. (ATVI-$22.15), the maker of the "Guitar Hero'' music simulation franchise, for $9.8 billion and combine the company with Vivendi Games in a deal that would create a rival to Electronic Arts Inc. as the world's largest video game publisher.
Eye care product company Alcon (ACL-$139.14) received Food and Drug Administration (FDA) approval to market TRIESENCE, an injectable corticosteriod, for use in eye surgery.

Amgen Inc. (AMGN-$55.25) announced
interim results from the independent investigator-sponsored "PREPARE" study, an open-label Phase 3 study of its anemia drug Aranesp in 733 neoadjuvant breast cancer patients (compared to a standard preoperative chemotherapy regimen). In this analysis, there was no significant difference between the Aranesp and control groups (i.e. Aranesp did not enhance the effect of chemotherapy prior to surgery).

The Icelandic investment company FL Group said it
cut its stake in AMR Corp. (AMR-$21.18) to 1.1% from 9.1%, citing a lack of progress by the owner of American Airlines in boosting shareholder value.

After taking a brief October dip in advance of Leopards release, Apple's (APPL-$182.22) share of the operating system market grew 3.34% in November to hit a record 6.81%, according to the results of a
Net Applications survey issued yesterday.

Brink's Co. (BCO-$53.98) is in the process of re-examining its strategic alternatives to boost shareholders' value and has retained Monitor Group to oversee the process. The company also confirmed that it has
received notice that MMI Investments LP intends to nominate four candidates for election to the board of directors at Brink's upcoming annual meeting. MMI holds about 4.06 million shares, or 8.4%, of the business and security services providers' outstanding shares. MMI, a limited partnership, had said previously that its nominees would explore all "strategic and financial opportunities available."

China Mobile Ltd. (CHL-$91.66), the world's largest wireless-phone operator by subscribers, said it is
still in discussions to offer Apple's iPhone handset, denying a report in China’s Southern Daily newspaper that talks between the two companies have ended.

After the closing bell on Friday, Citigroup Inc. (C-$33.30) said it had
reduced the assets of structured investment vehicles (SIVs) the bank sponsors. Assets in the SIVs the company advises have declined to $66 billion as of Nov. 30 from $83 billion at the end of September, a bank spokesman said in an e-mailed statement.

A research note from Jeff Mintz of Wedbush Morgan Securities suggests the
consensus estimates for DSW Inc’s. (DSW-$22.49) 2008 earnings may be too negative. The footwear retailer will report third quarter at approximately 7:00 AM Eastern time on Wednesday, December 5, 2007.

Despite the proclamation by E*Trade Financial (ETFC-$4.60) that its
$2.55 billion deal with Citadel Investment Group should ease fears about its financial health, it appears few are listening. Shares in the online brokerage closed down almost 5% in price. Three analysts cut their earnings estimates on Friday, citing the high costs and dilutive terms of the bailout deal.

Thin-film solar equipment maker First Solar Inc (FSLR-$237.15)
acquired Turner Renewable Energy LLC, a developer of commercial solar power projects, for about $34.3 million in stock and cash.

Even after its recent price spike, the stock of mortgage giant Freddie Mac (FRE-$35.07) sells at less than six times investment manager Rick Pzena’s estimate of "normal earnings." That, to him, is
a bargain for the patient investor.

Guess? Inc. (GES-$46.93) is slated to release its
quarterly earnings report after the close on Tuesday, December 4. Currently, analysts at Zacks are predicting third-quarter revenue to dock at 57 cents per share for the retailer of women’s apparel and related accessories.

Limited Brands (LTD-$20.08) insiders are treating themselves to an early Christmas present in the form of $20.6 million in company stock purchases. A vote of confidence in the future of the Victoria's Secret and Bath & Body Works parent?

Liz Claiborne (LIZ-$25.09) has received at least two final round bids for nine apparel brands - including Ellen Tracy and Dana Buchman - but the outcome of the auction was in doubt on Friday, after a handful of
potential suitors dropped out, according to Fortune magazine.

In a client note, Credit Suisse analyst Kelly Flynn started coverage of business and professional stocks and said more flexible labor costs should drive long-term growth for temporary staffing and permanent placement. Flynn started Manpower Inc. (MAN-$61.10)
at "Outperform," citing the benefit of the employment services provider’s European footprint.

Analysts concur that the opportunity for e-commerce growth in Latin America is still in its early stages. Is MercadoLibre (MELI-$42.41)
the next eBay?

PeopleSupport Inc (PSPT-$14.05) received an
unsolicited letter from IPVG Corp and AO Capital Partners proposing to acquire the business-process outsourcer for $15.00 per share, a 6.76% premium over the company's Friday closing price. PSPT has a week to respond to the offer.

Phillips-Van Heusen Corp. (PVH-$42.42) is expected to post its third-quarter earnings in-line with the consensus estimate of $1.03 a share on Tuesday, December 3, 2007, after the market closes. Analyst Robert S. Drbul of Lehman Brothers told clients, however, that he believes the apparel company will likely announce a
conservative guidance for 2008 in view of the retail challenges and uncertain economic conditions. The EPS estimate for 2008 has been reduced from $3.70 to $3.60.

Safeway Inc. (SWY-$34.80), the third-biggest U.S. grocery chain, agreed to a four-year contract with a union representing more than 25,000 northern California employees, averting a threatened strike.

Tenet Healthcare (THC-$5.51) is absolutely loathed by analysts on Wall Street. The current ratings consist of 10 holds, five sells and five strong sells. Not a single analyst that covers THC thinks it is a buy. But "Mad Money" Jim Cramer does. Tenet is under
new management with a COO that is actually a doctor, a move that could spell a turnaround at the hospital operator.

For his ‘Speculation Friday’ pick, Cramer told viewers on "Mad Money" to
get acquainted with Thompson Creek Metals (TC-$19.90), a miner of molybdenum -- a critical element used in the production of steel. The price of molybdenum is up 27% on the year, but demand, coupled with the fact that there are no major mines coming online for at least the next two years, puts TC right in the sweet spot to reap the rewards, according to Cramer.

U.S. intelligence agencies are
looking to scuttle the proposed $2.2 billion cash buyout, or $5.30 per share, of 3Com Corp. (COMS-$4.31) by Bain Capital, which was announced in September 2007, because of concerns about the role of Chinese minority investor Huawei Technologies, according to published reports Friday.

The Federal Communications Commission
approved the transfer of broadcasting licenses from Tribune Co. (TRB-$31.04), publisher of the Los Angeles Times and Newsday, to Sam Zell, The Tribune Employee Stock Ownership Plan, and EGI-TRB LLC, the Commission and the company said Friday. The Commission also approved the extension of cross-ownership waivers in markets where the company owns both a television station and a newspaper. Tribune expects its going-private process to be completed by the end of the year.

Standard & Poor raised its opinion on shares of US Airways Group (LCC-$20.73) to BUY from HOLD: "While we remain worried about the impact of high oil prices on LCC and the overall airline industry, we think the company's shares have overcorrected on this issue. We think unit revenues are likely to remain strong in 2008, given what we see as rational industry capacity levels. Also, we expect non-fuel unit costs to remain well controlled and think jet fuel costs could have easier comparisons in the second quarter and fourth quarter of 2008. We are cutting our 2008 EPS estimate to $4.25 from $5.00 on oil, but keeping our 12-month target price of $32, 7.5 times that estimate, well below peers."

Windstream Corp. (WIN-$12.95), a provider of voice, broadband and entertainment services,
completed the split-off of its directory publishing business, Windstream Yellow Pages, in a tax-free transaction to affiliates of Welsh, Carson, Anderson & Stowe, a private equity investment firm.

Woodward Governor Co. (WGOV-$68.54), which makes energy control systems and components for aircrafts and industrial engines and turbines, said late Friday its board of directors
will recommend a two-for-one split of the company's stock to shareholders at the upcoming annual meeting on Jan. 23 as well as an increase in the authorized shares.

A Department of Justice decision on the pending merger between XM Satellite Radio (XMSR-$15.60) and Sirius Satellite Radio (SIRI-$3.83) could come as early as Monday, Bear Stearns analyst Robert Peck asserted in a
research note. According to Peck, if the deal receives federal regulatory approval, shares of XM could hit $20.00 while shares of Sirius could rise as high as $4.50.

Editor David J. Phillips does not own a financial interest in any of the stocks mentioned in this posting. The 10Q Detective has a Full Disclosure Policy.

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