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Posted
Apr 28 2008, 09:01 AM
by
Robert Walberg
Rating:
Here he goes again. After runs at General Motors and Chrysler LLC in recent years, Kirk Kerkorian's investment company, Tracinda Corp, issued a release stating that it plans to bolster its stake in Ford to 5.6%, by offering $8.50 per share in cash for an additional 20 million shares. Kerkorian already owned 4.7% of the stock, or 100 million shares, at an average cost of $6.91.
Kerkorian cited Ford's improved operating performance as the rationale for his investment. Last week Ford shocked the markets when it announced a quarterly gain of 20 cents per share. The street was looking for a per share loss of 16 cents. Ford has now handily beaten the consensus estimates for six consecutive quarters, giving credence to Kerkorian's claim that the company's turnaround efforts are gaining traction.
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Posted
Apr 22 2008, 04:43 AM
by
Douglas McIntyre
Rating:
Once a year, the firm Millard Brown puts out its BrandZ 100 Most Valuable Brands. The data used for the list come from consumer research and financial data on the companies. The research house gives its methodology here.
For those who think Google is the top brand, give yourself a pat on the back. It has a brand valuation of $86 billion, up 30%. For those research mavens in the crowd, the figure makes absolutely no sense. Google has a market cap of $168 billion. Most of that would go away -- no matter how good the technology is -- if it changed it name to Dawdle.
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Posted
Apr 03 2008, 11:45 AM
by
Douglas McIntyre
Filed under: Apple, Comcast, Ford, DirecTV, Verizon, Sirius, XM Satellite Radio, AT&T, Time Warner Cable, Toyota, GM, Clear Channel, Dish Network
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When the Justice Department cleared the merger of Sirius with XM Satellite there was anticipation that once the deal got done the shares of both companies would go up. A year ago, the combination was viewed as a dream deal.
If anything, the shares have dropped. Sirius is below $3 and XM is below $13. The market began to realize that the year wasted on getting government approval was a year the companies need to stay competitive. XM has over $1 billion in debt. Refinancing it in the current market would be nearly impossible. Selling shares would lead to extremely large dilution. As we recently noted, Goldman Sachs even put Sirius on its "Conviction Sell List" with a price target of $2.25.
Growth at Sirius has slowed considerably. In the fourth quarter revenue rose only 29% to $250 million. But, for the full year, revenue was up 45%. Subscriber deactivations in the fourth quarter were almost 540,000 compared to 330,000 in the same quarter of 2006. The firm's net loss was $166 million. Long-term debt was almost $1.3 billion.
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Posted
Mar 11 2008, 08:53 AM
by
Douglas McIntyre
Rating:
Several companies in the airline and auto sectors could face bankruptcy this year with American Airlines and Ford at the head of the list
American Airlines dropped 10% yesterday to hit $10.20. The shares have not been at that level since 2004. American lost money three of the last five years. It had a small net profit in 2007 of just over $500 million on $22.9 billion in revenue. The margin is razor thin.
In 2007, American also had interest expense of over $900 million. Long-term debt is about $9.4 billion.
In an industry which is as well-known for its bankruptcies as it is for its bad food, 2008 is shaping up as a truly awful year. Fuel prices are rocketing as oil passes above $107 a barrel. The recession is likely to put a drag on passengers, both business and pleasure. The $500 million that American made last year could turn to a loss of several billion in the blink of an eye.
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Posted
Feb 11 2008, 01:44 PM
by
Douglas McIntyre
Like some many unsuccessful companies before it, Chrysler wants to cut its way to profitability. The privately held company, run by Home Depot exile Robert Nardelli, will probably chop its number of brands 50% and dealerships by a third.
According to The Wall Street Journal, "over the next three years or so, the now closely held auto maker plans to drop as many as half of the approximately 30 vehicles it now produces, a move likely to cut sales at least for a while." A while may be forever.
It is not believable to think that Toyota, Honda, and, to a lesser extent, GM will not market vehicles directly into the niches which Chrysler gives up. Toyota especially has the dealer network and broad brand line-up to do this.
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Posted
Jan 04 2008, 11:35 AM
by
Jon Markman
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Whenever your job is getting you down, just be glad you aren’t a financial journalist who has to make annual predictions that live forever on the web. Since the advent of MSN Search and Google, there is no hiding my most unfortunate calls in the drawer anymore. It’s all out there. So as an addendum to my 2008 forecast, which you can read right here, here’s how my '07 predictions fared.
1. Bull market, year 5. Well, sort of. I forecast an S&P 500 gain of 13% on 2007. We got 3.5%. The Nasdaq 100 did go up 19%, though, so let’s average them out and call it good.
2. Goldilocks lives! I forecast modestly rising inflation, modest job growth and below-trend U.S. economic growth of 2.6%. This was right on, as annualized growth came to 2.8% in 2007.
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Posted
Jan 01 2008, 02:39 PM
by
Douglas McIntyre
Rating:
It is not unusual for stocks to lose half of their value in a year. Certainly a number of financial shares like Countrywide and MBIA did it over the last few months. And other firms which have lost market share, as AMD did in the chip business, have taken very big tumbles since the beginning of 2007. All three of these companies could fall further if they do not begin to post better financial results.
These companies are part of a list of ten stocks which could fall by half in 2008. This list includes companies whose stocks were inflated because they are in hot markets like China. That puts Baidu and LDK Solar into the category of shares which could fall if the big Asian economy slows.
Some of the other shares that may fall are from companies in badly damaged industries like autos and newspapers. That includes Ford and Journal Register. The 24/7 Wall St. in-depth look at those companies is available in a longer article. The list contains an IPO from 2007, VMWare. It is in an attractive sector of the software market, but competition is heating up from companies including Microsoft, and the value of the company may have gotten ahead of itself.
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Posted
Oct 24 2007, 03:13 PM
by
Matt Koppenheffer
Rating:
Stock ratings on CAPS favor those companies that CAPS players are unanimously bullish on. This is why a stock like Ford, which has a bull/bear split of 56% / 44%, ends up with a lowly one star rating.
One star or not, though, there are still 1,755 players on CAPS that are bullish on Ford. Why you ask? Good question. The prevailing wisdom on the bullish side seems to be that Ford:
1) Is too big / established / important to go bankrupt.
2) Its new cars are going to help it turn the corner.
3) The stock is cheap at the current price.
Now I'm all about a cheap stock, but I definitely fall on same side of the line as CAPS player PSRUDY, who quipped "Henry would not be pleased with what you've done!"
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