Sunday, April 13, 2008

Trading Alerts: Monday, April 14, 2008

Acorda Therapeutics, Inc (ACOR-$19.20), developing therapies for spinal cord injury, multiple sclerosis and related nervous system disorders, will host an analyst and investor breakfast on April 14, 2007, at the American Academy of Neurology annual meeting. The Company, along with its scientific collaborators, will present highlights from its pre-clinical programs on neuregulins—a class of naturally occurring protein growth factors that have multiple effects on the nervous system and potential therapeutic applications in neurological conditions, such as remyelination.
  • We believe, however, the market is waiting for the confirmatory results on the safety and efficacy of Fampridine-SR, currently in a Phase 3 clinical trial (from MS-F204) to improve walking ability in people with MS. (Data is expected second quarter 2008.)

Contrary to market rumors, AirTran Holdings, Inc (AAI-$4.13) reassured its stakeholders late on Friday that the holding company for low-cost carrier AirTran Airways had "ample balance-sheet strength to support its operations."

Specialty chemicals maker Albemarle Corp (ALB-$34.93) said late Friday it
plans to acquire Sorbent Technologies Corp (SORB-$3.65), a provider of mercury emissions control technology, for about $20 million in cash, or about $5.75 a share.

AMR Corp (AMR-$9.48), the parent company of American Airlines, said on Saturday it
received clearance from federal aviation officials to return all of its grounded fleet of MD-80 jets to service.

During the Q&A session of "Lighting Round" on Friday evening, Mad Money host, Jim Cramer, told an inquiring caller "to sell" Boston Scientific Corp (BSX-$12.88), citing the medical device maker’s debt-load (52.4% of total shareholder equity).

  • Our concern with Mr. Cramer’s quick call, however, is that the stock is already trading well-below its two-year high of $19.00 a share, and already discounts S&P's June 2007 bond rating cut one ranking to 'BBB-minus' (just one step above junk status). Fundamental concerns are warranted, but Cramer ought to have told the caller instead to watch for additional asset sales in coming months.

Look for a Monday morning pop in shares of Canadian Natural Resources (CNQ-$76.65), an oil & gas play recommended Friday evening by Mad Money host, Jim Cramer. The stock has been held back because of delays in its $8.9 billion oil-sands project in Alberta, called Horizon. Nonetheless, now that the company says it's on schedule, Cramer believes "the sky could be the limit!"

The 10Q Detective also disagrees with Cramer's "Lightning Round" view of Chicago Bridge & Iron Company NV (CBI-$44.07), when he dismissed the construction and engineering company as an "infrastructure stock with [too] much exposure to municipalities."

  • True—rising energy prices could hamper an economic recovery in the U.S., but CBI has exposure to the global infrastructure boom (and is expanding its worldwide hydrocarbon, water, and natural gas projects), with a backlog of $7.7 billion in contracts, as of December 31, 2007. More than 65 percent of new business orders were generated outside the U.S., too! The ROE for CBI is 26 percent, which is double the industry’s average of 13 percent. Of course, cancellation or delays in completion of major construction projects could disrupt this growth story.

ImmunoGen, Inc (IMGN-$3.62) will post abstracts on pre-clinical findings and other research involving its proprietary TAP technology at the Annual Meeting of the American Association for Cancer Research (AACR), on Monday, April 14.

Standard & Poor's Ratings Services
revised its CreditWatch implications on the 'BB-' corporate credit rating of Lam Research Corp (LRCX-$41.00) to CreditWatch positive, indicating it may hike the chip equipment maker's bond rating.

NutriSystem Inc (NTRI-$18.21), a provider of weight-loss management products and services,
will be added to the S&P SmallCap 600 after the close of trading on Tuesday, April 15, 2008.

Citing an increase in new orders, antenna manufacturer Phazar Corp. (ANTP-$6.79) said that earnings for the
third-quarter rose to $334.3 thousand or $0.14 per share, compared to $7.8 thousand or breakeven per share in the preceding year quarter.

Sallie Mae Corp (SLM-$17.85), the nation's largest student lender, said Friday it would
stop offering lower-cost consolidation loans to college graduates, saying the federally backed business had become unprofitable.

Chip maker Simtek Corp (SMTK-$2.55)
rejected an unsolicited proposal by Cypress Semiconductor Corp (CY-$26.29) to buy the company, saying the $2.20 cash bid was not in its shareholders' best interests because the offer undervalued the company.

Believing that the recent surge in natural gas prices would likely result in
margin compression for ethanol producers going forward, analyst Chris L Shaw of UBS cut his EPS estimates for VeraSun Energy Corp (VSE-$7.02). After dropping 47 cents, or 6.3 percent, during regular hours, shares lost an additional 3 percent in after-market trading.

Standard & Poor's Ratings Service
raised its ratings outlook on broadband services provider Windstream Corp (WIN-$11.79), citing the company's ability to offset a revenue decline in its voice business.

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.

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