Sunday, May 18, 2008

Trading Alerts: Monday, May 19, 2008

Negotiators for union mechanics and bag handlers at American Airlines (AMR-$9.17) have rejected a contract proposal from the nation's largest air carrier that called for lump-sum payments instead of wage increases.

Moody's Investors Service
assigned its 'Aa3' rating to junior subordinated debentures to be issues by American International Group, Inc (AIG-$39.34) but placed the rating on review for possible downgrade.

Subsidiaries of Allstate Corp (ALL-$50.07) can
resume selling new car insurance and other policies in Florida after the insurer turned over documents showing how it sets homeowners rates, the state said Friday.

After recently trashing the stock of Berkshire Hathaway Inc (BERK.A-$1,244.00) just six months ago in December, Barron's is now
making a case for its purchase with an article entitled "Cheap Stock?"

Analysts polled by Thomson Reuters expect Campbell Soup Co (CPB-$35.95) to
post a profit for the fiscal third-quarter of 44 cents per share on revenue of $1.9 billion, on average. Campbell expects profit to rise 5 percent to 7 percent for fiscal 2008. Investors will be watching to see whether the soup and snacks maker can meet its goal as costs continue to rise.

Fitch Ratings
upgraded the issuer default rating and senior unsecured notes of Devon Energy Corp (DVN-$121.38) to BBB+ from BBB. The rating hike reflects the robust credit profile and a debt reduction expected in 2008 for the oil & gas company.

German cosmetics and detergents group Henkel AG expects an agreement
on the sale of its 25 percent stake in cleaning and sanitizing provider Ecolab Inc (ECL-$46.70) this year.

Electronic Arts' (ERTS-$46.90) hostile bid for Grand Theft Auto producer Take-Two Interactive (TTWO-$27.10)
expired at midnight on Friday.

General Electric Co (GE-$32.13) plans
to sell or spin off the business that for a century has put appliances in American homes, a decision that could presage further asset sales, analysts said.

U.S. mobile navigation device company Garmin Ltd (GRMN-$50.02) is
the mystery bidder behind a takeover approach for Britain's Raymarine Plc, according to the Sunday Telegraph. At a time of intense consolidation in the burgeoning market for satellite and mobile navigational technology, sources close to the deal said that Raymarine, a supplier of electrical products to leisure boats, would be an ideal fit.

Homebuilder Hovnanian Enterprises Inc (HOV-$9.45) plans
to sell as much as $600 million of notes to repay bank debt.

Ixys Corp (IXYS-$7.61) late Friday
offered to acquire electronic chipmaker Zilog Inc (ZILG-$4.14) in a cash and stock deal valued at $4.50 a share, or about $17.0 million. The power semiconductor company requested a response by May 27.

Analysts polled by Thomson Reuters expect Lowe's Co (LOW-$24.89) to post a profit for its first-quarter of 40 cents per share on revenue of $12.37 billion, on average. Analysts are looking for any
up tick in big-ticket item sales that might signal the beginning of a recovery at the home improvement retailer.

For speculation Friday, "Mad Money" host Jim Cramer turned to his favorite form of alternative energy, wind power, recommending MasTec Inc (MTZ-$10.07) as a stock investors need to own. Cramer said MasTec mainly builds infrastructure for the telco and energy industries, but it also has a
budding wind power business that's gaining momentum.

Medarex Inc (MEDX-$8.31) said it plans to unveil new data June 2 at ASCO on its drug Ipilimumab and its use in the treatment of melanoma.
Survival data is of key interest to researchers and Wall Street.

Rich Nottenburg, chief strategy and technology officer of Motorola Inc (MOT-$10.07), has become the
latest senior staff member to exit since activist investor Carl Icahn strengthened his influence over the cell phone maker, a spokeswoman said on Friday.

Perfect World Co., Ltd (PWRD-$31.30) will release results for the first-quarter ended March 31, 2008, before the market opens on Monday. Analysts polled by Thomson Reuters expect the three-dimensional (3-D) online game developer to post a profit of 35 cents per share on revenue of $39.39 million, on average. Wall Street recently raised share-net and revenue estimates due to
higher-than-anticipated growth from the launch of new games and 'meaningful' increases in the number of active paying customers for online games that follow its item-based revenue model.

Starbucks Corp (SBUX-$17.05) shares rose 6 percent in trading Friday after billionaire investor Nelson Peltz disclosed that his investment fund
bought a stake in the specialty coffee retailer. Other stakeholders, however, have sold. Goldman Sachs Asset Management revealed it had dumped 12.4 million shares as of March 31, while Morgan Stanley Hedge Fund Partners said it sold 4.9 million shares. And, last month the 10Q Detective cautioned readers that turning weakening fundamentals around at the coffee purveyor would be much harder than brewing up a fresh batch of Pikes Place Roast.

Yahoo! Inc (YHOO-$27.66) is
seeking to conceal large portions of a shareholder lawsuit alleging the Internet company's board improperly thwarted Microsoft's $47.5 billion takeover offer, raising shareholder questions over the motives for the secrecy.

Zimmer Holdings Inc (ZMH-$70.11), one of the world’s biggest makers of orthopedic implants, is
reviewing its royalty contracts with hundreds of US surgeons in a move that could increase the company’s bill for clearing up a legal case last year to more than $450 million. Zimmer and other orthopedic companies agreed in 2007 to a multimillion-dollar settlement with the U.S. Justice Department concerning product marketing, including allegations that the companies paid orthopedic surgeons exorbitant amounts to be consultants and to use their products exclusively.

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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