Trader Alerts: Monday, February 11, 2008

Albany International Corp. (AIN-$35.74), a New York-based producer of paper machine clothing and doors, reported a 28% rise in fourth-quarter profit to $0.27 a share, while net sales rose more than 14 percent to $291.72 million.

Allergan Inc (AGN -$63.30) late Friday responded to a Food and Drug Administration communication about an ongoing safety review of its Botox wrinkle reducer and Botox Cosmetic, based on reports of serious reactions in certain patients.

S&P analyst, P. Seligman, said, "Should the safety review lead to a black box warning, we think unapproved usage could slow. Meanwhile, we think the news could alarm prospective patients and hurt Botox sales for both FDA approved and unapproved use." Seligman reiterated a prior January 2008 'Sell' Rating, but kept a $53 a share target price.

Given the solid growth in its base business, a unique regulatory environment and government funding, American Ecology Group (ECOL-$23.11) is still largely protected from the economic cycle, said analyst Jamie Sullivan of RBC Capital Markets. The target price has been raised for the radioactive and hazardous waste services company from $25 to $26 a share.

Bear Stearns Cos. (BSC-$80.35), the U.S. securities firm that posted its first-ever loss last quarter on mortgage writedowns, shorted more than $1 billion of trades that profit if subprime home loans and bonds continue to deteriorate. Given the investment bank’s track record—RUN!
Citigroup Inc. disclosed a 5.7 percent passive stake, or shared voting power over about 2.3 million shares, in the homebuilder Beazer Homes (BZH-$7.74).

Higher demand for liquefied natural gas in Asia helped BG Group plc (BRGYY-$113.75) beat analysts' forecasts with a 36 per cent increase in fourth-quarter profits. Analysts at JP Morgan reiterated their "overweight" rating on the U.K gas producer, while raising their share-net guidance for the company.

Bradford & Bingley plc (LON:BB-$243.00) is considered likely to make writedowns in its Treasury portfolio that could hit 2007 profits when the specialist mortgage lender kicks off the banking results season next week.

Insurer and broker Brown & Brown Inc. (BRO-$22.57) said its fourth-quarter profit fell 12 percent, missing Wall Street share-net forecasts by 7 cents, as policy renewals declined and new business growth failed to offset the effect of lower prices.

Dallas-based Builders FirstSource Inc. (BLDR-$7.34), a building products supplier and manufacturer, expects to report a net loss of 55 cents to 60 cents on revenue of about $300 million for the fourth-quarter when it releases its results on February 21, 2007.

Time Warner Cable Inc (TWC-$24.10) may try to buy Cablevision Systems Corp. (CVC-$25.01) for as much as $40 a share, fund manager Michael J. Chren said last week in an interview on CNBC.

Century Aluminum Company (CENX-$54.60), the second largest primary aluminum producer in the United States, is benefiting from tight aluminum supply/demand and rising prices. However, high customer concentration exposes CENX to risk of attrition and a global economic slowdown to a lower realized price. Zacks’ target price is $53, which is 9.5x their FY' 08 EPS estimate.

Shares of CNET Networks Inc (CNET-$8.29), currently battling dissident shareholders who want to expand its board, soared almost 8 percent on Friday, on speculation that Google Inc might be interested in acquiring a stake in the media concern.

Deutsche Bank called comScore's (SCOR-$22.92) share price 16.5% sell-off in trading on Friday due to "lower guidance" unwarranted and said it would be a buyer of stock in the Internet audience measurement service provider on this weakness.

Dot Hill Systems Corp (HILL-$3.96) narrowed its loss estimates for the fourth quarter said it now expects to post a loss of 11 cents to 14 cents a share, before items, on revenue of $51 million to $52 million. On January 7, the data storage maker said it was expecting a loss of 10 cents to 15 cents a share for the quarter.

On Friday’s Mad Money, Jim Cramer warned that the stock of packaged bakery foods maker Flower Foods (FLO-$24.37) is now a 'Sell' after spiking more than 13 percent (on an earnings beat in the face of rising wheat costs). "The good news is baked into FLO," said Cramer, "and the buyback it just announced is too risky for this environment."

Jim Cramer highlighted ADR shares of Brazilian homebuilder Gafisa SA ($30.85) on Friday’s Mad Money as a play on a "money lending revolution" in the Latin American country.

Zacks believes drugmaker GlaxoSmithKline (GSK-$42.16) offers one of the stronger late-stage pipelines in big pharma. And, with issues surrounding the diabertes drug, Avandia, already baked into the stock price, the shares are fairly valued. The research firm believes, however, there’s some potential upside in the stock if Avandia sales begin to show a rebound.

Ingenico offered to buy Hypercom Corp (HYC-$3.95) for $6.25 per share, a 59 percent premium to the stock's closing price Friday. The French company launched the $332 million bid in a letter to Hypercom's board dated Tuesday, the electronic payments processor said.

JPMorgan added IntercontinentalExchange Inc (ICE-$127.80) to its 'Focus List', with a $180 a share, 12-month price target, noting that the trading exchange’s shares are an extremely good value at current levels and represent an attractive buying position.

International Speedway Inc (ISCA-$41.80), the leading host of Nascar races, has spun out of control on Wall Street. Its shares have plunged more than 22% since last summer, as investors fret that the weak economy will keep the sport's blue-collar fan base at home. The company is in much better shape for a downturn than you might expect, according to a report in Barron’s on Sunday.

With the Street's overall pessimism regarding LCA-Vision Inc (LCAV-$17.23), an operator of laser vision correction centers under the LasikPlus brand, ahead of its upcoming earnings report on Monday, the bar has been set fairly low. This could work out to the company's favor, according to Schaeffers’ Research.

Punk Ziegel & Co. analyst, Richard Bove, said Lehman Brothers Holdings Inc (LEH-$60.04)—while sidestepping many of the bond-market problems hobbling competitors—should benefit from a predicted boom in home refinancing as long-term mortgage rates decline.

Given the high level of earnings visibility going forward, Zacks see no justification for National-Oilwell Varco’s (NOV-$57.27) recent price weakness, and reiterates its 'Buy' recommendation on the oil service company. Demand remains robust, driven by deepwater offshore and international land. The research firm is keeping its 2008 EPS estimate unchanged and introducing a 2009 estimate at $5.25 a share.

Asset manager Och-Ziff Capital Management Group LLC reported a 5.9 percent stake in scrap-metal recycler Metal Management Inc (MM-$52.26), in a filing with the Securities and Exchange Commission. In September, the Chicago-based company agreed to be acquired by Australia's Sims Group Ltd.

Given previously announced internal forecasts, Qiagen NV (QGEN-$20.47), a provider of ready-to-use molecular diagnostic detection kits, should post full year share-net of $0.61-$0.62 on revenue guidance of $614-$635 million on Tuesday morning.

Qiagen's new product offerings, including its HPV testing (alternative to traditional cytology—the ''Pap smear") and hepatitis B detection test, are potential breakthrough procedures—but lack wider protocol acceptance—according to Zacks senior life sciences industry analyst, Grant Zeng, CFA. As such, Zeng "believes that Qiagen shares offer only limited upside at the current price," and maintains a 'Hold' rating with a target price of $24 a share.

U.S. Global Investors, Inc (GROW-$17.45), a boutique registered investment advisory firm specializing in natural resources and emerging markets, reported that revenue and fund assets under management posted double-digit increases and earnings increased slightly in the quarter ended December 31, 2007, compared to the same three months in 2006.

Roche Holding AG (RHHBY-$87.95) said Friday it has acquired 70.5% of shares in Ventana Medical Systems Inc (VMSI-$89.45), enough to complete its sweetened $3 billion-plus deal, worth about $89.50 a share, for the U.S.-based maker of drug testing equipment without the approval of its remaining shareholders.

If true, why has Roche extended the expiration of its offering period out to Friday, February 15? Dissident board members want $95 per share, though settling for $93 a share could be an option, according to the Financial Times.

World Wrestling Entertainment (WWE-$15.32) is slated to report quarterly earnings before the market's open on Tuesday. More specifically, WWE is forecast to report earnings per share of 17 cents, with the Street predicting revenue of $115.01 million. With rising price action and a thumbs-up from analysts, why are investors so pessimistic on pro wrestling?

After six years as its chief executive, Thomas Gutierrez resigned as an officer and director of Xerium Technologies Inc. (XRM-$4.95), which makes textile belts and machine covers for paper manufacturers. The Board named Stephen R. Light as its new president and chief executive, effective Monday.

Yahoo Inc's (YHOO-$29.20) will reject Microsoft Corp’s (MSFT-$28.56) takeover bid after concluding the unsolicited $44.6 billion offer undervalues the slumping Internet pioneer, a person familiar with the situation said Saturday. Analysts estimate Microsoft could raise its Yahoo offer to as much as $35 per share.

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.