Sunday, February 24, 2008

Trading Alerts: Monday, February 25, 2008

Telecom carrier Alaska Communications Systems Group Inc (ALSK-$12.71) found errors in its reported depreciation expenses for 2006 and 2007 and will have to restate its finances as a result.

Allco Finance Group Ltd. (AFG-$1.15) plunged more than 60 percent in Sydney trading after the Australian asset manager said lenders may force repayment of A$1.15 billion ($1 billion) of debt in the next three months.

A $3.0 billion
rescue for bond insurer Ambac Financial Group Inc (ABK-$10.71) may be announced on Monday or Tuesday, a person familiar with the matter said on Friday.

Michael Baker Corp. (BKR-$36.10), a provider of engineering and maintenance services, said Friday it will
restate its financial results for the first three quarters of 2007 because of non-cash errors at its energy business segment.

BlueScope Steel Ltd. (BSL-$11.93), Australia's largest steel maker, forecast improved earnings this half after underlying first-half profit beat analyst estimates

reversing intra-day losses on Friday, the stock of Boston Private Financial Holdings Inc. (BPFH-$15.08) plunged more than 8 percent in aftermarket trading, adding to recent price losses. Shares in the asset management and advisory firm are selling for their cheapest price in almost five years. On Thursday, the investment manager said loan quality deteriorated, and it needed to squirrel away more money to prepare for unpaid loans.

News from Cell Genesys, Inc (CEGE-$$2.62) this week doesn't do much to boost prospects for its GVAX prostate cancer vaccine, according to Adam Feuerstein of

When effective cost and inventory controls are finally put in place, clothing retailer Citi Trends, Inc (CTRN-$15.30) will be
positioned to deliver explosive earnings growth, says Zacks analyst Rob Plaza, CFA.

Clear Channel Communications (CCU-$32.38) has entered talks with Providence Equity Partners to negotiate a
new agreement on a stalled deal to sell its television stations to the private equity firm, news reports said Saturday.

Donaldson Co (DCI-$41.76) will issue a post-market earnings announcement on Monday. The provider of air and liquid filtration systems is likely to announce second-quarter earnings of 42 cents a share. Citing international strength, DCI
beat expectations last quarter. And, in a good sign, the Board recently increased the dividend by one cent to 11 cents per share, payable each quarter.

Electronic Arts (ERTS-$49.74) announced a hostile $2.0 billion, or $26.00 a share in cash, bid for gaming rival Take-Two Interactive (TTWO-$17.36), publisher of the Grand Theft Auto franchise.

Eli Lilly and Co (LLY-$50.51) on Friday said an
advisory panel to European regulators has recommended that Alimta (pemetrexed disodium) be approved for the new use as a first-line treatment for advanced lung cancer. A chemotherapy agent, Alimta is currently marketed to treat cancer caused by exposure to asbestos and second-line treatment of lung cancer. Standard & Poor also reiterated its "Buy" opinion on the shares of the drugmaker, keeping its target price of $62.00 a share.

Going against the recommendation of its advisory panel, the Food and Drug Administration judged the effectiveness of Avastin (bevacizumab) based on measurements of tumor growth, not patient survival, and granted
“accelerated approval” to the vascular endothelial growth factor made by Genentech, Inc (DNA-$71.60) as a treatment in metastatic breast cancer.

Zacks Equity Research’s "Buy" recommendation on Halliburton Co (HAL-$36.10) remains unchanged, and the research firm continues to view the energy play as a
core oilfield service holding. A price objective of $44 is based on 2008 P/E and EV/EBITDA multiples of 14.8x and 9x, respectively, still below its large-cap peers.

The Board of Humana Inc. (HUM-$68.87)
authorized the repurchase of up to $150 million of the health insurer’s shares.

Cowen and Co. analyst Eric Schmidt
ugraded Imclone Inc (IMCL-$42.02) to "Outperform" from "Neutral", citing the likelihood that data from an ongoing study of its colon cancer drug, Erbitux, will be viewed as positive and relevant for approval by the Food and Drug Administration for lung cancer. Schmidt believes, too, IMCL shares are 25% undervalued on probability-adjusted basis.

Following the close of the market on Monday, LDK Solar Co. (LDK-$31.05) is expected to report fourth-quarter earnings of 41 cents a share on sales of $181.94 million, on average. On February 5, the manufacturer of multicrystalline solar wafers
rained on its 1Q:08 guidance, citing delays in shipments to customers and from suppliers due to severe weather conditions in China.

Home-improvement retailer Lowe's Co.s (LOW-$23.59)
reports earnings for its fiscal fourth-quarter on Monday after the close of trading. Jefferies & Co. analyst Daniel Binder said in a note to investors that he expects same-store sales to be down at least 4 percent during the quarter, and believes there is a risk of the housing market getting worse. Analysts polled by Thomson Financial predict a profit of 25 cents per share on revenue of $10.63 billion, on average.

Merck’s (MRK-$46.07) much-heralded human papillomavirus (HPV) vaccine, Gardasil, is seeing physician skepticism regarding its wide-scale use, as doubts of long-term safety and efficacy linger,
PharmaWire has found. Recent reports have linked deaths and rare serious adverse events to the vaccine, doctors said.

Nordstrom, Inc. (JWN-$36.00) is expected to pull-down fourth-quarter earnings of 90 cents a share, according to analysts polled by FactSet Research. On February 15, Buckingham Research analyst, Barbara Wyckoff,
downgraded the upscale fashion specialty retailer from 'Strong Buy' to 'Accumulate', given uncertainty about consumer spending in the first half along with higher pre-opening expenses for 8 new stores.

Orient-Express Hotels (OEH-$54.26) will release its fourth-quarter numbers after the market closes on Monday. Analysts polled by FactSet Research estimate the luxury hotel and restaurant owner will report earnings of 20 cents a share. More important to investors, however, is what will be the next move coming from Manhattan-based activist shareholder D.E. Shaw, who recently
acquired a 5.7% stake in the luxury travel company.

International media conglomerate Reed Elsevier plc (RUK-$49.45), a London-based educational publisher and the owner of the Lexis Nexis information service, could reap as much as a billion pounds (almost US$2 billion) on the
divestment of its Business Information unit which includes including the publications Variety and New Scientist.

Shanda Interactive Entertainment (SNDA-$29.82), a China-based interactive entertainment media company, should post earnings of 45 cents a share in the fourth quarter, on average, on revenue of $93.48 million, according to analysts polled by Thomson Financial. In a
note to investors, Citigroup said it is maintaining its target price of $35.00 a share.

Tesco Corp (TESO-$20.70), a manufacturer of technology-based solutions for the upstream energy industry, is likely to report earnings of 22 cents a share in the fourth quarter, with sales of $119.20 million. Investors will be looking for any sequential improvement in [promised reductions] in manufacturing costs (of rental units) and the continued transition of the composition of the order base to the newer Top Drive motor units.

While the stock of Wet Seal, Inc (WTSLA-$2.87) is down over 50% in the last 12 months, Zacks Equity Research analyst, Rob Plaza, thinks it is premature to bottom-fish. Plaza believes it is
too early in this down cycle to get bullish on WTSLA shares. He rates the stock a "Hold" with a target price of $2.50, which assumes the stock will perform in-line with the overall market for the next six months.

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