BloggingStocks

Sanofi-Aventis (SNY) plunges on Plavix threat in Europe

Eliza Popescu — 2008-05-09T13:12:00+00:00

Filed under: Bad news, Products and services, Launches, Consumer experience, Competitive strategy, Bristol-Myers Squibb (BMY)

Shares of French drug maker Sanofi-Aventis (NYSE: SNY) have been tumbling more than 5% in morning trading on news that a Swiss drug maker said it expects to receive approval to sell a generic version of Sanofi's anti-clotting agent Plavix.

History is repeating itself. After facing generic competition in the United States to its second-biggest product in 2006, Sanofi-Aventis is now dealing with a similar threat in Europe. Competition concerns came after Switzerland's Schweizerhall Holding AG announced it would launch a copy of the Plavix blood thinner that could be bought for a lower price. Schweizerhall said it expects German regulators to approve its generic version of Plavix, called clopidogrel.

Sanofi-Aventis's fears about generic competition are justified as the company had to fight against a similar situation less than a year ago. Back in 2006, Bristol-Myers Squibb Co. (NYSE: BMY), which develops the product with Sanofi, saw a big plunge in its sales after Canadian generics company Apotex Inc. launched a cut-price copy of the drug.

Commenting on the news, analysts at Merrill Lynch expressed their worries about the company's earnings per share, which may be hurt by generic competition to the Plavix drug in Europe. In addition, they believe that Schweizerhall will launch the drug despite valid patents in Europe.

Sanofi responded to the threat of a possible generic competitor in Europe by promising to "vigorously defend intellectual property rights, including patent protection, in Germany." An unnamed analyst also stated that German authorities will be closely watched for any indication that clopidrogel infringes Sanofi's patent.

Eliza Popescu is a financial writer for the online investment advisory service Investor's Observer.

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Before the bell: ATVI, BMY, SNY, CCU, AAPL, KO, MCD ...

Melly Alazraki — 2008-05-09T08:19:00+00:00

Filed under: Before the bell, Earnings reports, Apple Inc (AAPL), Coca-Cola (KO), McDonald's (MCD), Bristol-Myers Squibb (BMY), Clear Channel Commun (CCU), Activision Inc (ATVI)

Before the bell: AIG, Citi pressure stock futures lower

Activision (NASDAQ: ATVI) late Thursday reported a fourth-quarter profit that handily beat expectations as video games sales nearly doubled with strong demand for Guitar Hero 3 and Call of Duty 4 games. ATVI shares are up over 4.5% in premarket trading.

Bristol-Myers Squibb (NYSE: BMY) and Sanofi-Aventis (NYSE: SNY) are about to face a generic threat from Swiss drug firm, Schweizerhall Holding, that said it's going to soon launch a generic version in Germany of Plavix blood-thinning drug.

Clear Channel (NYSE: CCU) reported its profit soared to $799.7 million or $1.61 per share in the first quarter while revenues rose 4% to $1.56 billion. The results beat expectation even when taken excluding one-time items that have earnings rising 70% to $161.4 million or 32 cents a share.

Apple Canada Inc. is offering $45 credits to Canadian residents who own a new first-, second- or third-generation iPod purchased before June 24, 2004 following two class-action suit regarding the rechargeable battery in the iPod.
Coca-Cola Co (NYSE: KO) expects U.S. sales of its carbonated soft drinks to fall slightly this year but rise in 2009, according to CEO Neville Isdell. Isdell, who spoke Thursday at the Executives' Club of Chicago, also said the Coca-Cola brand was not in a continuous decline, with Coke Zero and other new products helping it to improve market share.

McDonald's Corp (NYSE: MCD) also reported same-store (restaurant) sales Thursday along with the other major retailers, saying sales rose 5% globally in April, helped by strong sales in China, Australia and Russia. While the U.S. remained relatively weak with a 2% growth, Europe sales grew by 6.3% and the Asia/Pacific, Middle East and Africa division posted growth of 7.8%.

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Merck (MRK) cutting more jobs -- no good news in sight for now

Melly Alazraki — 2008-05-06T08:30:00+00:00

Filed under: Industry, Pfizer (PFE), Employees, Johnson and Johnson (JNJ), Bristol-Myers Squibb (BMY), Merck and Co (MRK)

Merck & Co. (NYSE: MRK) said it will eliminate 1,200 U.S. sales jobs, about 15% of the drugmaker's sales force. This comes after last week the FDA rejected its experimental cholesterol pill Cordaptive.

The third-largest U.S. drugmaker has cut 8,100 jobs globally since the beginning of its restructuring plan, Plan to Win, in late 2005. But as Cordaptive, which was supposed to offset some of the losses Merck is expecting from generics coming into the market, fell through, the cost cutting side of the plan took on an added urgency.

Cordaptive and generics aren't Merck's only problem. The FDA also recently suggested its other cholesterol pills, Zetia and Vytorin, aren't any better than an older, cheaper treatment. Merck said it expects to lose as much as 61% of sales for these drugs.

So none of this comes as no surprise really; not in light of Merck's problems, and not in light of the industry's. Other drugmakers, including Pfizer Inc. (NYSE: PFE), Bristol-Myers Squibb Co. (NYSE: BMY), Wyeth (NYSE: WYE) and Johnson & Johnson (NYSE: JNJ) have announced job cuts as they face more competition from generic substitutions. Merck is also planning some plant closures.

Merck's shares lost nearly 33% of their value year-to-date, as it was partly down with the overall market and partly due to the string of bad news that seemed to have hit most hard recently. It is trading not far from its 52-week low.

While Merck is saying it will still fight the FDA decision on Cordaptive and try to convince doctors about Vytorin, the actions it is taking seem reactive, not proactive. Without much to offer in its arsenal of upcoming possibilities, Merck, at least for now, seems to have lost the potential for meaningful growth.

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Bristol-Myers Squibb's recent deals -- prelude to a much bigger deal?

Tom Taulli — 2008-05-05T09:45:00+00:00

Filed under: Deals, Private equity, Bristol-Myers Squibb (BMY)

It's been slow, but the private equity folks are starting to warm up to dealmaking. In fact, a key deal came last week as Nordic Capital Fund VII and Avista Capital Partners agreed to plunk down $4.1 billion for ConvaTec, a division of Bristol-Myers Squibb Co (NYSE: BMY).

ConvaTec, which focuses on wound care, has been a star performer over the years. What's more, the deal will allow Bristol-Myers to devote its resources to its core pharma business, which certainly has some challenges - especially as drugs come off patent.

In addition, the deal has a global flavor as Nordic Capital is in Europe and Avista in the US.

It also looks like Bristol-Myers is not finished with its own dealmaking. For example, the company says it plans to launch a public offering of its Mead Johnson division.

What this really looks like, however, is that all these actions, for the most part, may just be a prelude for Bristol-Myers to sell itself to a mega pharma company.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

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Before the bell: BRK.A, HOV, UAUA, BMY, MO, F ...

Melly Alazraki — 2008-05-05T08:19:00+00:00

Filed under: Before the bell, Apple Inc (AAPL), Dell (DELL), Ford Motor (F), General Motors (GM), Berkshire Hathaway (BRK.A), Altria Group (MO), Bristol-Myers Squibb (BMY), US Airways Group (LCC), UAL Corp (UAUA)

Before the bell: Futures lower after Microsoft's Yahoo deal fails

Warren Buffett's Berkshire Hathaway (NYSE: BRK.A) reported a 64% drop in quarterly profit late Friday. At the company's annual meeting this past weekend, the legendary investor said that while a Berkshire unit has bought portfolios of subprime mortgages (and has frozen resets that were due to send interest rates on those loans higher) he warned investors that housing-market weakness isn't over yet and predicted more losses for banks. At the same time, Buffett said Sunday he will consider investing in the insurance business of U.K. banking giant Royal Bank of Scotland (NYSE: RBS) and is close to buying a medium-sized company in the country.

Hovnanian Enterprises Inc. (NYSE: HOV) estimated on Monday it would take $225 million to $275 million of land-related charges for the that fiscal second-quarter and said that home deliveries dropped 21% to 2,494 homes in the period. The company also turned cash-flow positive faster than it expected and tripled its full-year estimate of cash flow.

After being rejected by Continental Airlines Inc. (NYSE: CAL) last month, United Airlines parent UAL Corp. (NYSE: UAUA) is intensifying merger talks with US Airways Group Inc. (NYSE: LCC), according to The Wall Street Journal. A deal is said could emerge in as soon as 10 days. In light of rising fuel costs, the more than $1.5 billion in potential cost savings and revenue enhancements the companies see from joining forces is no doubt appealing more and more.

Bristol-Myers Squibb (NYSE: BMY) will sell its ConvaTec wound therapy unit to Nordic Capital Fund VII and Avista Capital Partners for $4.1 billion.

Altria (NYSE: MO) shares are trading 1% higher in premarket trading. Bloomberg reports that the tobacco company said it will raise prices on its top-selling Marlboro and other cigarette brands as of May 5. The company will reduce discounts to distributors or increase list prices.

The Canadian Auto Workers, 9,000 of which work for Ford in Canada, voted to ratify a three-year contract with Ford Motor Co. (NYSE: F), an agreement the union expects Chrysler LLC and General Motors Corp. (NYSE: GM) to match. The deal keeps Ford's labor costs essentially the same as they are now, the union said.

Apple vs. Dell -- Fortune looks at the differences, starting at the top of course.

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Earnings highlights: Bank of America, Merck, Mattel, Phillip Morris, AFLAC and others

Trey Thoelcke — 2008-04-26T09:40:00+00:00

Filed under: Earnings reports, Brinker Intl (EAT), AFLAC Inc (AFL), Bank of America (BAC), Bristol-Myers Squibb (BMY), Gannett Co (GCI), Kimberly-Clark (KMB), Mattel, Inc (MAT), Merck and Co (MRK), Hasbro Inc (HAS), Western Union (WU)

Here are some highlights from this past week's earnings coverage from BloggingStocks:

AFLAC Inc. (NYSE: AFL) reported better-than-expected earnings for the first quarter.
Ambac Financial Group Inc. (NYSE: ABK) posted a wider-than-expected loss; shares hit new low.
Amdocs Ltd. (NYSE: DOX) beat Q2 estimates on strength in the managed services businesses.
Amphenol Corp. (NYSE: APH) beat expectations in the first quarter and raised its guidance.
Amylin Pharmaceuticals Inc. (NASDAQ: AMLN) posted a larger-than-estimated Q1 loss.
Aptar Group Inc. (NYSE: ATR) posted record Q1 results and raised its Q2 guidance.
Bank of America (NYSE: BAC) Q1 earnings plunged on further housing-related write-downs.
Brinker International Inc. (NYSE: EAT) narrowly beat earnings expectations on cost cutting.
Bristol-Myers Squibb Co. (NYSE: BMY) beat analysts' estimates for the first quarter.
Credit Suisse Group (NYSE: CS) reported a wider-than-forecast loss on subprime-related write-downs.
Cree Inc. (NYSE: CREE) earnings slipped while revenues soared 29%.
Eli Lilly & Co. (NYSE: LLY) reported worse-than-expected Q1 earnings on discontinued product charge.
Gannet Inc. (NYSE: GCI) beat low expectations as earnings and revenue continue slump.
Hasbro Inc. (NYSE: HAS) posted better-than-expected Q1 earnings on international strength.
JAKKS Pacific Inc. (NASDAQ: JAKK) missed Q1 expectations on restructuring and litigation costs.
Kimberly-Clark Corp. (NYSE: KMB) beat EPS estimates by a penny, as revenue jumped 10%.

Lufkin Industries (NASDAQ: LUFK) beat analysts' expectations and raised its Q2 guidance.
Manpower Inc. (NYSE: MAN) beat Q1 earnings expectations on strength in Europe.
Mattel Inc. (NYSE: MAT) swung to a loss in Q1 on gross margin pressures.
Merck & Co. (NYSE: MRK) Q1 profit nearly doubled on a one-time payment from a partner.
Philip Morris International Inc. (NYSE: PM) posted solid results on new products and the weak dollar.
Schering-Plough Corp. (NYSE: SGP) Q1 profit plunged but still beat analysts' expectations.
UnitedHealth Inc. (NYSE: UNH) lowered its 2008 outlook after missing Q1 earnings estimates.
Western Union Co. (NYSE: WU) posted strong results on exchange rates and strength overseas.

Also, Jim Cramer discusses "crummy lenders" and Joseph Lazzaro considers Citigroup Inc. (NYSE: C) as a barometer of the economy. One analyst thinks financials may have hit bottom and it may be time to buy, and Jon Ogg looks at what short sellers are making of tech stocks. Ted Allrich discusses what to sell/what to buy.

Upcoming results to watch for include Verizon Communications (NYSE: VZ), Tyson Foods (NYSE: TSN), CBS Corp. (NYSE: CBS), Countrywide Financial (NYSE: CFC), U.S. Steel Corp. (NYSE: X), Office Depot (NYSE: ODP), General Motors (NYSE: GM), Procter & Gamble (NYSE: PG), Kraft Foods (NYSE: KFT), Starbucks (NASDAQ: SBUX), Time Warner (NYSE: TWX), Comcast (NASDAQ: CMCSA), Exxon Mobil (NYSE: XOM), and Chevron (NYSE: CVX).

Visit AOL Money & Finance for more earnings coverage.

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Bristol-Myers Squibb (BMY) gains on Q1 earnings results

Brent Archer — 2008-04-24T11:39:00+00:00

Filed under: Earnings reports, Good news, Bristol-Myers Squibb (BMY), Options, Technical Analysis

Bristol-Myers Squibb Co. (NYSE: BMY) shares are trading higher after the company reported a first-quarter profit of $661 million, or 33 cents per share. BMY's adjusted profit came in at 42 cents per share, just above analysts' estimates of 41 cents per share. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on BMY.

After hitting a one-year high of $32.35 in July, the stock hit a one-year low of $20.05 in March. BMY opened this morning at $11.66. So far today the stock has hit a low of $11.10 and a high of $11.97. As of 12:30, BMY is trading at $11.27, up 57 cents(5.3%). The chart for BMY looks neutral and improving, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bullish hedged play on this stock, I would consider a June bull-put credit spread below the $20 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 12.1% return in just two months as long as BMY is above $20 at June expiration. Bristol-Myers would have to fall by more than 8% before we would start to lose money. Learn more about this type of trade here.

BMY hasn't been below $20 at all in the past year and has shown support around $21.60 recently. This trade could be risky if one of the company's drugs runs into problems with the FDA, but even if that happens, this position could be protected by the support the stock might find around $20, where it bounced in March.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in BMY.

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Codexis: right mix for an IPO?

Tom Taulli — 2008-04-16T16:56:00+00:00

Filed under: Pfizer (PFE), Bristol-Myers Squibb (BMY), Merck and Co (MRK)

There are a variety of problems with conventional chemical reactions in the manufacturing process - such as high energy use, hazards, high temperatures, expensive equipment, and so on.

But there is an alternative: biocatalysts. These can operate at or near room temperature, which provides significant energy savings.

One of the top players in the space is: Codexis. And, the company has recently filed to go public.

Right now, the company is focused on large markets, such as pharmaceuticals and biofuels. What's more, there are key strategic relationships with companies like Royal Dutch Shell plc (ADR) (NYSE: RDS.A).

No doubt, Codexis is getting traction. In 2007, revenues hit $25.33 million, up from $12.1 million. Some of the customers include Bristol-Myers Squibb Co. (NYSE: BMY), Merck & Co., Inc. (NYSE: MRK), Inc. and Pfizer Inc. (NYSE: PFE).

While the IPO market has been dormant lately, investors may get interested in alternative-materials companies like Codexis. By all accounts, it looks like the company is in the early stages of a nice growth ramp.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

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Market highlights for next week: Alcoa to report earnings

Eric Buscemi — 2008-04-04T17:25:00+00:00

Filed under: Earnings reports, Conventions and conferences, Annual meetings, Wal-Mart (WMT), Target Corp. (TGT), Alcoa Inc (AA), Bed Bath and Beyond (BBBY), Bristol-Myers Squibb (BMY), Gap Inc (GPS), Kohl's Corp (KSS), Abercrombie and Fitch (ANF), Genentech Inc (DNA)

Monday, April 7

PDUFA date for Bristol-Myers Squibb Co. (NYSE: BMY)'s supplemental Biologics License Application for Orencia for the treatment of Juvenile Rheumatoid Arthritis.
Alcoa Inc. (NYSE: AA) to report Q1 earnings; conference call at 5pm.

Tuesday, April 8

Chattem Inc. (NASDAQ: CHTT) to report Q1 earnings; conference call at 9:00am.
FOMC to release minutes of the March 18th meeting at 2:00pm.
Embraer-Empr Bras Aeronautica (ADR) (NYSE: ERJ) conference call to announce new midsize & midlight executive jet concepts at 6:00pm.

Wednesday, April 9

2-Day House Financial Svcs Committee: Hearing on Economic, Mortgage and Housing Rescue Bill.
Dallas Federal Reserve Bank President Richard Fisher to deliver a speech in San Antonio at 1:30pm.
Hot Topic, Inc. (NASDAQ: HOTT) to report March sales at 4:00pm.
Bed Bath and Beyond, Inc. (NASDAQ: BBBY) to report Q4 earnings; conference call at 5:00pm.

Thursday, April 10

2-Day House Financial Svcs Committee: Hearing on Economic, Mortgage and Housing Rescue Bill.
The Gap Inc. (NYSE: GPS) and Wal-Mart Stores, Inc. (NYSE: WMT) to report March sales at 8:00am, Abercrombie & Fitch Co. (NYSE: ANF) to report March sales at 8:15am, Kohl's Corporation (NYSE: KSS) and Target Corporation (NYSE: TGT) to report March sales at 8:30am.
Genentech, Inc. (NYSE: DNA) to report Q1 earnings; conference call at 4:45pm.

Friday, April 11

Fastenal Company (NASDAQ: FAST) to report Q1 earnings; conference call at 10:00am.
Shaw Communications Inc. (NYSE: SJR) to report Q2 earnings; conference call at 11:00am.

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Newspaper wrap-up: Tech firm profits hurt by auction rate securities

Laurie Pasternack — 2008-03-28T08:00:00+00:00

Filed under: Newspapers, Magazines, Pfizer (PFE), Bristol-Myers Squibb (BMY), NYSE Euronext (NYX), Palm Inc (PALM), Electronic Arts (ERTS)

MAJOR PAPERS:

Once thought to be extremely safe, action rate securities have proved difficult to sell in this credit crisis. Tech companies are big holders of them and are taking charges left and right, including MetroPCS Communications Inc (NYSE: PCS), Palm Inc (NASDAQ: PALM) and Earthlink Inc (NASDAQ: ELNK), according to the Wall Street Journal.
Electronic Arts Inc (NASDAQ: ERTS) is again urging Take-Two Interactive Software Inc (NASDAQ: TTWO) to negotiate after it recommended that its stockholders not sell any of its shares to EA and help its $2B takeover bid, the Financial Times reported.

OTHER PAPERS:

NYSE Euronext Inc (NYSE: NYX) will look to increase its stakes in India's National Stock Exchange and the country's Multi Commodity Exchange, the Business Standard reported, once foreign ownership rules are eased. NYSE Euronext also intends to partner with the two Indian exchanges in order to help them develop their business.

WEB SITES:

Business Week reported that Brian Marckx of Zacks Investment Research said Bristol Myers Squibb Company (NYSE: BMY) may be an attractive takeover candidate for a larger pharma such as Pfizer Inc (NYSE: PFE) or France's Sanofi-Aventis SA (NYSE: SNY), both of which have been partners with Bristol on some of its products.

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Cramer on BloggingStocks: Financial fixation can cost you

Jim Cramer — 2008-03-18T10:50:00+00:00

Filed under: Market matters, Caterpillar (CAT), Bristol-Myers Squibb (BMY), Cramer on BloggingStocks

TheStreet.com's Jim Cramer says the Weyerhaeuser and Bristol-Myers stories slipped under the radar yesterday.

Did anyone even see that Weyerhaeuser (NYSE: WY) (Cramer's Take) made this great trade with International Paper (NYSE: IP) (Cramer's Take), getting out of the commodity container board business and pulling in $6 billion to reduce debt? To me, anytime you get out of a commodity business you lift your multiple, even if the rest is constrained by the housing-related lumber business.

Or how about the story that Bristol-Myers (NYSE: BMY) (Cramer's Take) might sell its baby-food business for a big chunk of change, another $6 billion.

Hmm, $12 billion in shuffles, both good for the shufflers, and no one really cares.

That's the problem with the endless focus on the financials, something I know I am falling prey to, too. Because of the focus, for example, I also missed that Caterpillar (NYSE: CAT) (Cramer's Take) traded back to $68 and change after trading up to $75, a terrific opportunity.

Lately I have been trying to focus on the two markets, the one that is winning and the one that is losing. It's tough because some of the winners are either owned by hedge funds that are trying to reduce leverage -- notably the coal, infra and ag names -- or are subject to wild swings in commodities: oil goes down $3 and National Oilwell Varco (NYSE: NOV) (Cramer's Take) goes down 10%.

Still, it is important to watch these sideshows. If BMY and WY both clean up their balance sheets and both generate good dividends and lots of cash flow, there are natural acquirers out there that will strike and you are paid to wait until they do.

Keep your eyes out on the non-main chance. That may be the only way to outperform in this very tough bear market.

Random musings: Vince Farrell is making some good points about friendless Bear. ... Bob Marcin knocking it out of the park on coal. ... Dougie, as usual, on top of the Bear (NYSE: BSC) (Cramer's Take) situations. Lots of stuff you are getting nowhere else here.

Newspaper wrap-up: Goldman may announce $3B writedown this week

Laurie Pasternack — 2008-03-17T08:00:00+00:00

Filed under: Newspapers, Magazines, General Motors (GM), Bristol-Myers Squibb (BMY), Goldman Sachs Group (GS)

MAJOR PAPERS:

The Wall Street Journal reported that Siemens AG (NYSE: SI) estimated that its earnings this quarter would be dragged down by about $1.4B on weaker-than-expected performance in major business prospects.
According to the Financial Times, Bristol-Myers Squibb Company (NYSE: BMY) has reportedly made informal approaches to several potential bidders for its baby formula business, Mead Johnson, which is believed to be worth between $7B and $9B.

OTHER PAPERS:

The Telegraph reported that The Goldman Sachs Group Inc (NYSE: GS) is expected to announce a $3B writedown this week, part of which is attributable to their stake in Industrial & Commercial Bank of China. Goldman will also have writedowns of about $1.6B in its leveraged loan business.
Several union leaders are accusing General Motors Corporation (NYSE: GM) of trying to lower the wages of more positions than the company and union had agreed to under their labor contract, the Detroit News reported.

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Small companies holding auction-rate securities have trouble

Douglas McIntyre — 2008-03-14T12:35:00+00:00

Filed under: Earnings reports, Analyst reports, Forecasts, Bad news, Bristol-Myers Squibb (BMY)

The Wall Street Journal points out that a number of start-ups hold illiquid auction-rate securities. Edward Wes, a partner with the law firm Perkins Coie told the paper, "The private companies need liquidity more, because they're burning cash faster than public companies."

While these new companies face a huge problem, many of them are backed by large VC firms who could loan them money against the securities in anticipation that the market will become liquid again.

Small public companies have a worse problem. They do not have one or two firms who can step in. If their balance sheets have a lot of this paper, what do they do? Several large companies like Bristol-Myers (NYSE:BMY) have said they may have to take writes-offs because of their auction-rate holdings. But companies that size have the balance sheets and borrowing power to weather the storm.

For shareholders in small-cap and mid-cap public companies, the end of the first quarter of this year may be unpleasant as firms write-down the value of auction-rate paper and take P&L hits. It could bring a lot of small company share prices down.

Douglas A. McIntyre is an editor at 247wallst.com.

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Before the bell: Stock futures lower -- second day of declines ahead?

Melly Alazraki — 2008-01-31T07:46:00+00:00

Filed under: Before the bell, Earnings reports, Google (GOOG), Starbucks (SBUX), Amazon.com (AMZN), Market matters, Bristol-Myers Squibb (BMY), Procter and Gamble (PG), Economic data, Housing, Federal Reserve

Hasn't the words 'bond insurance' been the magic ones to spark a selloff lately? Such has been the case last week; such has been the case yesterday and it seem like it might be the case again today after MBIA reported a $2.3 billion loss. Stock futures were lower, indicating a similar start for stocks a day after the Federal Reserve has cut rates yet again by half a point. Today, investors can expect to digest much earnings and economic data.

On Wednesday, stocks moved without much of a direction until the Fed announced the rate cut. Wall Street jumped with glee in response with the Dow industrials gaining over 100 points. But then concerns about the bond insurance industry resumed. These companies insured securities backed by mortgages and other loans made to borrowers with weak credit and were hence hit hard by the subprime meltdown. Yesterday, investors feared a possible credit ratings fall, which could trigger further write-downs from companies that hold the insurers' securities. The Dow industrials ended 37 points lower, or 0.30%, the S&P 500 dropped 6.5 points, or 0.48%, and the Nasdaq Composite lost 9 points, or 0.38%.

Not alleviating much these concerns, bond insurer MBIA (NYSE: MBI) reported its fourth-quarter results, posting a net loss of $2.3 billion, or $18.61 per share, that was far worse than forecasts of a loss of $2.97 per share for the quarter. The loss was due primarily to a $3.5 billion writedown on its portfolio of insured credit derivatives. The company raised $1 billion through the offering of surplus notes and another $500 million through a direct investment by private equity firm Warburg Pincus. MBI shares, which already closed down 12.64% Wednesday, are trading down 4.3% in premarket action.

Some economic readings coming out today:
At 8:30 a.m. EST, December personal income and spending is due.
At the same time fourth-quarter employment cost index and weekly initial jobless claims will also be reported.
As always, however, it is tomorrow's employment report that investors want to see.

Overseas, Asian stocks ended the session mixed while European markets generally decline in morning trading.

Earnings:
As investors still digest reports from Amazon.com, Inc. (NASDAQ: AMZN) and Starbucks Corp. (NASDAQ: SBUX), they will have a chance to look also at Bristol-Myers (NYSE: BMY) and Procter & Gamble (NYSE: PG) before the open. After the close, search giant Google Inc. (NASDAQ: GOOG) is due to report. Perhaps it could be the tech's salvation and what Apple couldn't -- lift the tech sector.

Amazon reported strong earnings for the previous quarter with profit that more than doubled on revenue that jumped 42%, beating expectations. But AMZN shares are being punished -- down 9.8% in premarket trading -- due to a forecast that wasn't quite what investors had in mind, as well as a lower operating margin for the quarter.

Meanwhile, Starbucks's Schultz outlined more of the coffeemaker's plans to refocus the company -- no more sandwiches, closing of stores and opening fewer ones. The problems lingered at Starbucks with same-store sales and U.S. traffic declining 1% and 3% respectively. Starbucks posted net earnings of $208.1 million, or 28 cents per share; analysts were expecting a profit of 27 cents per share. SBUX shares were down 1% in premarket trading.

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Bristol-Myers (BMY): Healthy outlook for growth & income

Steven Halpern — 2008-01-25T13:45:00+00:00

Filed under: Newsletters, Bristol-Myers Squibb (BMY), Bargain stocks, Stocks to Buy

"The stock that I think may put up the best performance in 2008 is Bristol-Myers Squibb (NYSE: BMY)," says Chuck Carlson, the industry's leading authority on dividend reinvestment plans and editor of The DRIP Investor.

Here, the advisor looks at the stock's role in the defensive pharmaceutical sector, its increasing dividend yield, and its takeover potential.

"I know this may strike some of you as an odd choice, especially given the fairly mediocre performance these shares have turned in over the last several years. However, some of the uncertainty hanging over these shares has been lifted.

"The firm has won its patent suit with Apotex over its important Plavix medication. Also, Bristol-Myers has finalized a civil settlement agreement with the U.S. Department of Justice.

"I like that the firm is cutting costs as well restructuring its operations. The company plans to reduce total headcount by approximately 10% by the end of 2010. Bristol-Myers recently announced the sale of its medical-imaging business.

"And Wall Street anticipates additional asset sales, possibly the company's woundcare supplies company, ConvaTec, and its Mead Johnson nutritional business. These moves would be consistent with the company's plan to become more of a player in the BioPharma sector.

"Two additional reasons Bristol- Myers may get some play in 2008 is that 1) health-care stocks traditionally perform well during rocky market periods; and 2) high dividend yielders usually provide a buffer during tough markets.

"Bristol-Myers Squibb's yield of 4.4% should prove attractive to investors who want defensive exposure
with some income.

"And for investors who were concerned that the firm would be cutting the dividend, Bristol-Myers Squibb recently announced that it would be increasing the dividend 11% - the first dividend increase since 2002. The new quarterly rate will be $0.31 per share.

"One final reason to like the shares in 2008 is takeover potential. True, the lack of takeover activity coming from private equity shops does reduce the number of potential buyers of Bristol-Myers. And many health-care firms are having their own problems to deal with and aren't likely to take on others via an acquisition.

"Still, Bristol-Myers' name always comes up in a discussion of acquisition candidates in the health-care
sector, and that takeover speculation should provide some support to the stock price."

"To be sure, Bristol-Myers Squibb has shot itself in the foot several times over the last five years, so it is not easy being totally confident in a positive scenario for these shares in 2008. Nevertheless, I still see a move to the mid-$30s for these shares. Couple that with a 4% yield and investors could see 20% to 25% returns for the stock in 2008."

Each day, Steven Halpern's TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation's leading financial newsletter advisors.

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Cramer on BloggingStocks: Buy this extremism

Jim Cramer — 2008-01-25T09:05:00+00:00

Filed under: Bausch and Lomb (BOL), Bristol-Myers Squibb (BMY), Merck and Co (MRK), Cramer on BloggingStocks

TheStreet.com's Jim Cramer says the overreaction to pharma news lets you into the best names on the cheap.

There are so many crazy mistakes being made by this market that you have to keep your eyes open every minute. The biggest-cap stocks are acting like small-cap stocks.

Which brings me to Merck (NYSE: MRK) (Cramer's Take). This morning, Merck traded down to $47 off some deaths from maybe one of the most important inventions of all time, Gardasil, the anti-cancer vaccine.

Three bucks! How can that be! This vaccine's not going off the market. When you put this on top of how Schering-Plough (NYSE: SGP) (Cramer's Take) got cut in half because of fears that a drug will be pulled that represents 50% of its earnings (after the Organon merger, that's my estimate), you can see how extremist the market has become. Both Merck and Schering act like there will be no Vytorin sales at all next year at this time.

In Stay Mad for Life, I talk about how I was spooked out of Bristol Myers (NYSE: BMY) (Cramer's Take) because people predicted that it would have to cut its dividend because a generic form of Plavix could come early and destroy that franchise. Wrong! The generic form was out there and then got pulled off, and the stock rallied 12 points from $20.

Or last year, when Bausch & Lomb (NYSE: BOL) (Cramer's Take) fell to $43 off of a worry that its main solutions business would be shut down because of an eye fungus that it caused.

A few months later you got a $65 bid.

I am telling you that when you get that kind of action in a Merck, in a Schering, ripped right off the headlines, you have to buy, not sell.

I have been buying SGP the whole way down for Action Alerts PLUS, alongside the CEO, Fred Hassan, who just bought $2 million worth of stock. Merck coming down here off of Gardasil should be bought, too.

Random musings: We might need MBIA (NYSE: MBI) (Cramer's Take) and Ambac (NYSE: ABK) (Cramer's Take) to fail in order to keep the Fed in the game. Let's hope Bernanke knows the symbols.

Chasing Value: Final list -- 8 stocks for 2008

Sheldon Liber — 2008-01-05T15:10:00+00:00

Filed under: Google (GOOG), Berkshire Hathaway (BRK.A), China, Bristol-Myers Squibb (BMY), Reliance Steel and Aluminum (RS), Valero Energy (VLO), Huaneng Power Intl ADS (HNP), Chasing Value, Oil, Anglo Amer ADR (AAUK), Newcastle Investment (NCT), Raytheon Company (RTN), Best Stocks for 2008, Bunge Ltd. (BG), Loews Corporation (LTR)

A few days behind schedule, but here is my list of eight stocks. Included in the list there are two holdovers from the 2007 list of seven stocks. I do not see any value in creating an entirely new list when I have done well over the years riding the winners. This is particularly true if the reasons you bought the stock in the first place remain valid.

These eight picks for the year will be tracked monthly with updated results. The initial share prices are from December 28, 2007. They are focused on defense, energy, food, gold, metals, mining, oil, power, and every one pays a dividends. The following are my "Quick Takes" in alphabetical order with links to the complete stories.

Anglo American plc (ADR) (NASDAQ: AAUK) is a world-class player in precious metals, diamonds, and commodities, which are all growing in demand. When the world economy is booming, all of its mining products are sought after, and when the market runs scared, gold goes up. It pays a dividend yield of 1.9% and is trading almost 25% off its 52-week high. For full story: Chasing Value: Anglo American diamonds and gold are your best friend. The closing price on December 28, 2007, for AAUK was $30.79.

Bunge Limited (NYSE: BG) is the world leader in the production of soybean products and still growing at a rapid rate. While sporting a P/E ratio of 19, which is low for a growth stock, it also has a tiny P/S ratio of 0.33. Although it jumped 70% last year, that may be just the beginning. It's my food story selection from Serious Money: ADM, Bunge, Potash Corp. -- it's a hungry world. All three should be on your watch list. I had to split hairs to choose only one. I backed away from ADM because there is a slight chance that the ethanol business could slip if oil prices do. Potash had the highest percentage increase and also has a scary P/E and P/S. For full story Chasing Value: Bunge Limited (BG) in name only. The closing price on December 28, 2007, for BG was $119.03.

Huaneng Power International, Inc. (ADR) (NYSE: HNP) is one of my favorite stocks on planet earth, and I must have said so at least once a month. I even wrote a story titled Volatile Markets: Huaneng Power (HNP) is my pick for the next 50 years. It is one of the holdovers from last year. It is not the bargain it was when I bought in at $26.50, but at the current price just under $40 per share it's 30% off it's high and it still pays a 3.5% yield. For full story: Chasing Value: Huaneng Power still the one in China. The closing price on December 28, 2007, for HNP was $41.75.

Loews Corp. (NYSE: LTR) is a "puny" version of Berkshire Hathaway (NYSE: BRK.B) but is no less well managed and has produced significant shareholder equity over the past three decades. It owns interests in oil drilling, insurance, gas pipelines, and hotels. It has announced that it plans to spin-off Lorillard, the makers of Newport brand cigarettes. When everyone on Wall Street is scrambling for cover this year, I expect the Tisch family to be cherry picking and bargain hunting. For full story: Chasing Value: Loews Corp. has all the right pieces. Closed on December 28, 2007, at $49.35.

Newcastle Investment Corp. (NYSE: NCT) is a REIT paying about a 22% yield. It does not own real estate, instead it holds loans on nonresidential properties. NCT is on record to fully fund its dividend and anticipates one billion dollars in loans to be paid off in the coming year. For full story: Chasing Value: Newcastle's 22% yield will reward patience. The closing price on December 28, 2007, for NCT was $13.08.

Raytheon Co. (NYSE: RTN) The defense sector has beaten the Standard & Poors 500 Index four eight years running through 2007 and I do not see anything stoping this trend in 2008. The basic metrics are sound, with a PEG ratio of 1.13, a P/B of 2.4, and a P/S of 1.3. For full story: Chasing Value: Raytheon in defense of the nation and your portfolio. The closing price on December 28, 2007, for RTN was $61.51.

Reliance Steel & Aluminum (NYSE: RS) is solid, and resiliant, providing 100,000 products made of carbon, alloy, stainless, and specialty steel, as well as aluminum, brass, copper, and titanium. By being a producer of value-added products and serving more than 125,000 customers it has a very broad global base. Reliance has a low P/E ratio of 8 (TTM) a very low P/S of 0.50 and a great ROE of 25%. For full story: Chasing Value: Reliance Steel & Aluminum adding value globally. On December 28, 2007, RS closed at $54.32 per share.

Valero Energy Corp. (NYSE: VLO) is the largest independent oil refiner in North America and looking to increase profit margins in 2008, while any competitors will take eight to ten years to bring a new refinery on line. It was my top pick among 2007's seven, and I am bringing it back for an encore. For full story: Chasing Value: Valero Energy (VLO) is just so refined. The closing price on December 28, 2007, for VLO was $70.55.

This year's "stalking horse" will be Berkshire Hathaway (NYSE: BRK.B). Note that I will be tracking the 'B' shares, not the more expensive 'A' shares. It was one of the stocks I considered for inclusion in the 8, but it did not make the cut. I did suggest that it be on your watch list: Chasing Value: Scratch Berkshire Hathaway from the 2008 list. It will be interesting to follow it and see how it fares against what is on the list. Last year the stalking horse was Google Inc. (NASDAQ: GOOG), and as a portfolio of one beat my picks and most everything else, see: Chasing Value: 7 for 2007 review: Props to Cramer for his 2007 picks.

There are sure to be some surprises during the year, hopefully to the upside. Newcastle is likely to produce the biggest swings given the uncertainy in the financial and real estate markets, but I think it has the greatest potential to rise as well. I will also be tracking the the indices as I did last year. The following closing numbers will be the starting point.

To find potential opportunities and verify my track record, read Chasing Value and Serious Money.

DISCLOSURE: I currently own shares of AAUK, BRK.B, HNP, NCT,and VLO

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm.

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Bristol-Myers' long-term plan: Nothing but layoffs

Douglas McIntyre — 2007-12-06T09:15:00+00:00

Filed under: Forecasts, Bad news, Employees, Bristol-Myers Squibb (BMY), Stocks to Sell

Bristol-Myers (NYSE: BMY) revealed its big plan for the next five years. It also said that the company is not for sale.

Much of what was said about the company by its management is that the firm would be more nimble and will focus on profitable areas like biotech. But the program for revenue was thin on detail and long on talk.

What the plan actually boils down to is what these things always do when a company has no answer to revenue problems: cost cuts. BMY will lay off 4,800 people over the next three years, and will close 50% of its factories between now and 2012. Among its more mature products, it will cut out a large portion of brands that face falling sales.

The Wall Street Journal writes that "in addition to the job cuts and plant closings, the company said it will divest itself of its medical-imaging business and is exploring alternatives for its ConvaTec wound-care unit and Mead Johnson nutritional businesses."

All of this will save the company about $1.5 billion a year, but in the long run that may not matter much. There was nothing in what the company said to make investors believe that management can drive new revenue.

The market saw that and yesterday the stock closed down for the day.

Douglas A. McIntyre is an editor at 247wallst.com.

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CEO of the year, 5 surprise stocks & 10 consumer-friendly credit cards - Today in Money 12/6

Allan Halprin — 2007-12-06T09:07:00+00:00

Filed under: Wal-Mart (WMT), Coca-Cola (KO), PepsiCo (PEP), Amazon.com (AMZN), McDonald's (MCD), AT and T (T), Krispy Kreme Doughnuts (KKD), Money and Finance Today, Bristol-Myers Squibb (BMY), Costco Wholesale (COST), Expedia Inc (EXPE), Toll Brothers (TOL), Genentech Inc (DNA)

In the News:

· Bush to Unveil Plan to Help Strapped Homeowners

· Wal-Mart November Sales Rise, Beating Estimates

· Coca-Cola Names COO Muhtar Kent as Next CEO

· Hope Grows for Half-Point Rate Cut

· Toll Brothers Drops to 4th Quarter Loss

· Bank of England Cuts Interest Rates

· Bristol-Myers to Eliminate 4,800 Jobs

· Genetech's Gamble

· Krispy Kreme Loss Shrinks

· Bic Wants to Flick Your Phone

· Lawmakers Seek More Food-Safety Oversight

· AT&T Flings Cellphone Network Wide Open

CEO of the Year
Coming into his own in his third year at the helm of McDonald's, Jim Skinner has made a deep impression. The evidence is on the bottom line, on the menu and on employees' lapels. Other finalists for CEO of year are Indra Nooyi of PepsiCo, Jeff Bezos of Amazon, Michael Ahearn of First Solar and Terri Lanai of MGM Mirage.
CEO of the Year 2007 - MarketWatch
Also: Worst CEO of Year Is Sears' Eddie Lampert

5 Stock Surprises of 2007
These companies should see continuing 2008 growth despite market and economic woes. They are Coca-Cola, Costco, Expedia, Eaton Vance and Chicago Bridge & Iron.
Five Stock Surprises for 2007 - Kiplinger.com

New Rate Freeze May Help Borrowers Bear ARMs
If you're a homeowner sitting with an adjustable rate mortgage that is about to reset to a much higher rate, what should you do? For now, wait to see what help the government will bring.
Homeowners may benefit from relief plan - Bankrate.com

Gift Returns: New Rules Require New Tactics
About 40 percent of Americans take back at least one gift after the holidays. If you find yourself in line to return a gift this season, you're apt to discover that store policies have become stricter. Restocking fees for opened boxes or missing packaging are increasingly common, and not just for electronics. If returning a gift follow our tips and the process should go smoothly. Also, checkout the rules at these 6 big retailers - Wal-Mart, Target, Best Buy, Costco, Sears and Amazon.
ConsumerReports.org - Gift returns: New rules, new tactics Retail Roundup: Rules at 6 Big Retailers

Top 10 Consumer-Friendly Credit Cards
Based on the perceived value of what each card offers to the most people, plus the numbers of online visits to card offers, Capital One's Card Lab was ranked No. 1, according to IndexCreditCards.com. Others making the list are the Gap Visa, BankAmericard, Zappos Rewards Visa, PayPal Debit Card and World of Warcraft Visa.
The 10 top consumer-friendly credit cards of 2007 - MarketWatch

Tats Entertainment: Marketers Get Inked
Looking to make their mark with potential customers, companies across the country are tapping into tattoos as a marketing tool. Businesses are launching products with tattoo-centric names, stamping their logos on temporary tattoos and using ink-covered models in their advertising.
Tats entertainment: Marketers get inked - USATODAY.com

A Lurid Aftermath to a Hedge Fund Manager's Life
A life of private jets and black-tie balls ended with Seth Tobias, a wealthy investment manager and a familiar presence on CNBC, floating face down in the swimming pool of his mansion here. Mr. Tobias, who was 44 years old, had apparently suffered a heart attack, his brother Spence said at the time. But now an unfolding drama over Mr. Tobias's estate is providing a lurid account of fast money and faster living in the volatile world of hedge funds.
A Lurid Aftermath to a Hedge Fund Manager's Life - New York Times

When Warranties Make Sense
In most cases, warranties aren't worth it. But there are a few exceptions. The choice to buy or not to buy is entirely situational. If you and your purchase fit several of these conditions, an extended warranty or service plan may be worth a hard second look.
When Buying a Warranty Makes Sense | SmartMoney.com

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