Sunday, December 09, 2007

Weekend Stock Alerts: December 9, 2007

Ambac Financial Group (ABK-$26.84) and MBIA (MBI-$30.00) are the two biggest companies in the bond insurance business. Their stocks have come down from highs of $96 and $73, respectively, earlier in 2007. That has made them both value plays and income plays, as their dividend yields have risen pleasantly, to 3.1% and 4.5 percent. These stocks should recover smartly once the market figures out that their problems are exaggerated, according to Richard Lehmann, editor of the Forbes/Lehmann Income Securities Investor.

After the closing bell on Friday, American Mortgage Acceptance Co. (AMC-$4.25) provided
an update to investors on the adverse impact that credit market conditions continue to have on the REIT. The company said that it is withdrawing its previous adjusted funds from operations forecast of $0.95-$1.00 per share for the fiscal year 2007. In addition, to meet these margin calls and increase liquidity for future cash needs, the board of trustees has decided not to declare the regular dividend paid to the company's common shareholders in the fourth quarter.

At the American Society of Hematology meeting in Atlanta, Amgen Inc (AMGN-$52.10) said on Saturday that a
late-stage trial of its experimental drug AMG 531 (romiplostim) showed it boosted and sustained platelet counts in adults with chronic immune thrombocytopenic purpura, a bleeding disorder.

At the 49th annual American Society of Hematology Meeting, Celgene Corp. (CELG-$57.36) announced that results from the Southwest Oncology Group Phase III randomized, controlled trial (SWOG) showed that REVLIMID (lenalidomide) Plus Dexamethasone achieved superior progression-free survival in newly diagnosed multiple myeloma patients.

There are reports the Board of Citibank (C-$34.31) is meeting early in the week to discuss CEO candidates, and the Wall Street Journal says that inside candidate Vikram Pandit may be named to the job.

Zacks senior Chinese markets analyst Paul Cheung, CFA is reiterating his Buy recommendation on shares of Internet content provider CDC Corp. (CHINA-$5.98). Its stock is trading at a lower valuation than its peers and CDC is well positioned to leverage the
growth opportunities in small-to-medium business enterprise software market and China's online game market, according to Cheung.

Ford Motor Co (F-$7.06) said it
issued more than 62 million shares of common stock to an institutional investor in exchange for $442 million in debt to improve its balance sheet.

H&R Block (HRB-$20.02) is expected to report a fiscal
second-quarter loss after the closing bell rings on Monday. Analysts polled by Thomson Financial forecast the tax preparer to report a loss of 35 cents per share for the fiscal second quarter, which ended in October. Analysts expect revenue to shrink 18 percent to $463 million.

Hemispherx Biopharma (HEB-$1.29) received notice of an
incomplete new drug application from the U.S. Food and Drug Administration (FDA). Specifically, the Company announced that its NDA submission for Ampligen in Chronic Fatigue Syndrome (CFS), after preliminary review, had been determined to be insufficiently complete to permit a substantive review. The FDA cited eleven deficiencies in the Clinical Section and three in the Pre-Clinical Section.

JPMorgan Chase & Co. (JPM-$46.08), the third-largest U.S. bank, avoided most of the losses suffered by other investment banks and its growth could now "really accelerate," weekly financial publication Barron's reported on Sunday.

In an
amended 13D filing on Lifetime Brands, Inc. (LCUT-$14.43), Jove Partners disclosed a 7.8% stake (975,000 shares) in the company. In a letter to the operator of cutlery and kitchenware outlets, Jove Partners endorsed recent management initiatives to increase cash generation and shareholder value, such as the announced closing of marginal and unprofitable retail operations.

The possibility of U.S. Postal Service
surcharges on DVD mailers caused Citigroup analyst Tony Wible to reiterate his "sell" rating on online video rental company Netflix Inc (NFLX-$23.57), which ships over 1.6 million DVDs per day.

Osiris Therapeutics Inc (OSIR-$12.33) was granted
fast track status by the FDA for Prochymal, a stem cell therapy for acute graft-versus-host-disease, a reaction of donated stem cells against the patient's tissue.

It would be easy to hang up on PALM (PALM-$5.74) right now, but you just might want to hold the phone. Barron's columnist Mark Veverka says despite the Street's disappointment, shares in the TREO maker may be worth holding, as a recent cash infusion "may launch Palm into the smart-phone big leagues."

Patni Computer Systems Limited (PTI-$17.70), a pioneer in the growing
Indian IT industry, is currently trading at a 43% discount to its five-year average, a 50% discount to peers and 55% discount to the S&P 500 based on forward price-to-earnings and long-term growth projections, according to Thomson Financial. "Any stability in the rupee or stronger-than-expected sequential revenue growth in [calendar year] '08 could be a trigger for the stock," Morgan Stanley analyst Vipin Khare said in a recent research note.

UBS AG (UBS-$50.48), one of the banks most exposed to US subprime securities, will on Tuesday provide an update about its position at a special day for investors in London amid growing speculation about further hefty writedowns.

WCI Communities Inc. (WCI-$4.05) said the
limited waiver of performance previously granted by its banks has been extended to Jan. 7, 2008.

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

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