BloggingStocks

Early analyst calls: CMR, ALL, CCU

Douglas McIntyre — 2008-04-09T08:04:00+00:00

Filed under: Before the bell, Analyst upgrades and downgrades, Allstate Corp (ALL), Bed Bath and Beyond (BBBY), Clear Channel Commun (CCU), salesforce.com inc (CRM)

Bernstein downgraded Salesforce.com (NYSE: CRM) to "market perform" from "outperform" according to Briefing.com. The news service also reports that Citigroup initiated Southern Cooper (NYSE: PCU) with a "sell".

Banc of America Securities said that Allstate (NYSE: ALL) may miss first quarter earnings due to payments for storm damages according to the AP.

Clear Channel (NYSE: CCU) cut to "hold" at Stanford Research according to 24/7 Wall St. The website also reports that Bed Bath & Beyond (NASDAQ: BBBY) cut to "sell" at Piper Jaffray

Read | Permalink | Email this | Linking Blogs | Comments

Allstate rises on upgrade

Brent Archer — 2008-03-27T14:44:00+00:00

Filed under: Analyst upgrades and downgrades, Good news, Allstate Corp (ALL), Options, Technical Analysis

The Allstate Corporation (NYSE: ALL) shares are trading higher today after a Bernstein analyst upgraded the stock to "Outperform" from "Market Perform." If you think that the company 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 ALL.

After hitting a one-year high of $63.73 in May, the stock hit a one-year low of $44.56 last week. ALL opened this morning at $49.45. So far today the stock has hit a low of $47.92 and a high of $49.46. As of 1:40, ALL is trading at $48.23, up $0.62 (1.3%). The chart for ALL looks neutral but 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 an April bull-put credit spread below the $45 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 an 11.1% return in just 3 weeks as long as ALL is above $45 at April expiration. Allstate would have to fall by more than 6% before we would start to lose money.
ALL hasn't been below $45 by more than a few cents in the past year and has shown support around $46 recently. This trade could be risky if the company's earnings (due out on 4/23) disappoint, but even if that happens, this position could be protected by the support the stock might find just above $45, where it bottomed out twice in the past two months.

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 ALL.

Permalink | Email this | Linking Blogs | Comments

Analyst upgrades: COT, HIG, ALL and VLO

Eric Buscemi — 2008-03-27T11:45:00+00:00

Filed under: Analyst reports, Analyst upgrades and downgrades, Cisco Systems (CSCO), Halliburton (HAL), Allstate Corp (ALL)

MOST NOTEWORTHY: Cott Corp, Hartford Financial, Allstate and Valero Energy were today's noteworthy upgrades:

Lehman upgraded Cott Corp (NYSE: COT) to Equal Weight from Underweight citing recent management changes, a focus on CSD business, and new product discipline.
Bernstein believes the entire non-life insurance group is oversold and that it is time to buy; the firm upgraded Hartford Financial (NYSE: HIG) and Allstate (NYSE: ALL) to Outperform from Market Perform.
Valero Energy (NYSE: VLO) was raised to Buy from Hold at Deutsche Bank on valuation with the stock trading at a -30% discount to NAV while the asset market for U.S. refineries is strong.

OTHER UPGRADES:

Goldman added Cisco (NASDAQ: CSCO) to its Conviction Buy List.
RBC Capital upgraded BJ Services (NYSE: BJS), Halliburton (NYSE: HAL) and Patterson-UTI Energy (NASDAQ: PTEN) to Outperform from Sector Perform.
Friedman Billings upgraded the Semiconductor Capital Equipment sector to Overweight from Market Weight.

Permalink | Email this | Linking Blogs | Comments

Allstate (ALL) slips on Loews (LTR) earnings

Brent Archer — 2008-02-11T12:51:00+00:00

Filed under: Earnings reports, Bad news, Industry, Allstate Corp (ALL), Options, Loews Corporation (LTR)

Allstate Corp. (NYSE: ALL) stock is declining this morning after competitor Loews Corp. (NYSE: LTR) reported a fourth-quarter profit, excluding investments, of 81 cents per share, 26 cents below analysts' forecast of $1.07 per share. LTR blamed the disappointing earnings on a 50 percent decline in profit at its CNA Financial Corp (CNA) insurance affiliate, which could be a bad sign for ALL. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on ALL.

After hitting a one-year high of $63.73 in May, the stock has hit a new one-year low today. This morning, ALL opened at $46.56. So far today the stock has hit a low of $45.30 and a high of $46.60. As of 11:05, ALL is trading at $45.89, down 68 cents (-1.5%). The chart for ALL looks neutral and improving, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bearish hedged play on this stock, I would consider an April bear-call credit spread above the $55 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. This particular trade will make a 4.2% return in two months as long as ALL is below $55 at April expiration. Allstate would have to rise by more than 20% before we would start to lose money.

ALL hasn't been above $55 since October and has shown resistance around $53 recently. This trade could be risky if the economy turns around, but even if that happens, this position could be protected by resistance ALL might find between $50 and $55, where ALL has topped out over the past few months.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in ALL or LTR.

Permalink | Email this | Linking Blogs | Comments

Analyst upgrades: UBS, CRZBY, TRMA, OPMR and MCCC

Eric Buscemi — 2007-11-07T10:20:00+00:00

Filed under: Analyst reports, Analyst upgrades and downgrades, Allstate Corp (ALL)

MOST NOTEWORTHY: UBS AG, Commerzbank , Trico Marine Services, Optimal Group and Mediacom were today's noteworthy upgrades:

JP Morgan upgraded shares of UBS AG (NYSE: UBS) to Overweight from Neutral on valuation, as they believe the risk/reward is now attractive.
Commerzbank AG (OTC: CRZBY) was upgraded to Equal Weight from Underweight at Morgan Stanley, as they believe the company has eliminated much of the uncertainty on asset quality.
Jefferies upgraded shares of Trico Marine Services Inc (NASDAQ: TRMA) to Buy from Hold and raised their target to $46 from $40 to reflect the growth potential brought on by the company's purchase of Active Subsea ASA.
B. Riley raised its rating on Optimal Group Inc (NASDAQ: OPMR) to Buy from Neutral to reflect the company's proven management team, acquisition of WowWee and strong balance sheet.
Citigroup upgraded shares of Mediacom Communications Corporation (NASDAQ: MCCC) to Buy from Hold on valuation following the recent pullback, as they now think the stock is oversold. Citigroup thinks Mediacom will generate free cash in 2008 and they like the pace of buybacks.

OTHER UPGRADES:

Citigroup upgraded shares of The Allstate Corporation (NYSE: ALL) to Buy from Hold.
UBS upgraded UnitedHealth Group Incorporated (NYSE: UNH) and Northrop Grumman Corporation (NYSE: NOC) to Buy from Neutral.
Wachovia raised Performance Food Group Company (NASDAQ: PFGC) to Outperform from Market Perform.

Permalink | Email this | Linking Blogs | Comments

Analyst downgrades: REITs, BOBJ, ALL and PGR

Eric Buscemi — 2007-10-08T11:05:00+00:00

Filed under: Analyst reports, Analyst upgrades and downgrades, Allstate Corp (ALL), Merrill Lynch (MER), Progressive Corp,Ohio (PGR)

MOST NOTEWORTHY: REITs, Business Objects, Allstate Corp and P&C Insurance were today's noteworthy downgrades:

Deutsche Bank downgraded REITs AvalonBay (NYSE: AVB), Boston Properties (NYSE: BXP), Health Care REIT (NYSE: HCN), Kimco (NYSE: KIM) and Public Storage (NYSE: PSA) to Hold from Buy on valuation following the recent share appreciation.
Business Objects (NASDAQ: BOBJ) was downgraded to Neutral from Outperform at Baird following its acquisition by SAP AG (NYSE: SAP).
Wachovia downgraded Allstate Corporation (NYSE: ALL) to Market Perform from Outperform and P&C Insurance (NYSE: PGR) citing deteriorating fundamentals in personal lines.

OTHER DOWNGRADES:

UBS downgraded BEA Systems (NASDAQ: BEAS) to Neutral from Buy.
JP Morgan downgraded Merrill Lynch (NYSE: MER) to Neutral from Outperform.
Sealy Corporation (NYSE: ZZ) was downgraded to Neutral from Buy at Banc of America.
Friedman Billings downgraded technology stocks, lowering ASE Test Limited (NASDAQ: ASTSF), ASML Holding (NASDAQ: ASML), KLA-Tencor (NASDAQ: KLAC) and Rudolph Technologies (NASDAQ: RTEC) to Market Perform from Outperform.

Permalink | Email this | Linking Blogs | Comments

Subway falls from lead in NASCAR series sponsor stakes

Tom Barlow — 2007-08-30T15:00:00+00:00

Filed under: Deals, Rumors, Competitive strategy, Marketing and advertising, Allstate Corp (ALL), Anheuser-Busch Cos (BUD), Yum Brands (YUM)

For a sport that just a few years ago was the darling of the blue-chippers, NASCAR has suddenly found love as hard to come by as a meth-addled octogenarian. After Anheuser-Busch (NYSE: BUD) dropped its 25-year long title sponsorship of the race promoter's second-tier series, Subway seemed a lock to take it on.

Now comes news that the restaurant's ardor for the series has cooled, and NASCAR has been forced to revisit formerly spurned suitors such as KFC (NYSE: YUM), Allstate (NYSE: ALL) and Dunkin' Donuts (D'OH!).

Along with the decline in interest has come a drop in price. The value of the sponsorship, once thought to run $30 million a year, has been halved. NASCAR is not the only loser in that drop; the original price included a mandatory ESPN ad buy of around $10 million, a requirement that has been relaxed.

According to Michael Smith in the Sporting News, Subway balked at the lack of exclusivity, a constant source of tension in the race industry where teams, tracks, OEMs and suppliers are also hustling sponsorships for every nut, bolt and beer cozy in the paddock.

NASCAR fans skew 60-40% male, slightly above the U.S. average in the 35-44 year of age category. They are overrepresented in the lower income categories, which would dampen the interest of luxury product companies. One interesting statistic is its popularity among America's fastest growing minority -- Hispanic fans have grown from 3.6% to 8.6% in only a few years. So how about the Taco Bell series? Or The Chipotle (NYSE: CMG) 500?

Read | Permalink | Email this | Linking Blogs | Comments

Analyst upgrades: ALL, LXK, RFMD, Q and WBSN

Kevin Shult — 2007-08-14T11:12:00+00:00

Filed under: Before the bell, Analyst reports, Analyst upgrades and downgrades, Good news, Allstate Corp (ALL), Qwest Communications Intl (Q), Stocks to Buy

MOST NOTEWORTHY: Websence (WBSN), RF Micro Devices (RFMD), Fiserv (FISV), Qwest (Q), and OSI Pharma (OSIP) were today's noteworthy upgrades:

JP Morgan upgraded shares of Websence (NASDAQ: WBSN) to Overweight from Underweight ahead of the renewal period starting in the December quarter and expects this momentum to drive shares higher.

RF Micro Devices (NASDAQ: RFMD) was raised to Buy from Hold at Citigroup, who said the Sirenza Microdevices (SMDI) deal gives the company its first real prospect for gross margin expansion in years.

Matrix USA upgraded Fiserv (NASDAQ: FISV) to Buy from Sell, and expects the company to benefit from the Checkfree (CKFR) acquisition.

Lehman upgraded shares of Qwest (NYSE: Q) to Overweight from Equal Weight, citing the hiring of industry veteran Ed Mueller as CEO. The firm believes the new CEO removes an overhang and could lead to a change in strategic direction and significantly increase capital spending.

JP Morgan upgraded OSI Pharma (NASDAQ: OSIP) to Overweight from Underweight based on valuation and upcoming catalysts for Tarceva that should be seen in the next year...

OTHER UPGRADES:

UBS upgraded Allstate (NYSE: ALL) to Neutral from Sell.

ThinkEquity raised Hansen Medical (NASDAQ: HNSN) to Buy from Accumulate.

Stanford upgraded Leap Wireless (NASDAQ: LEAP) to Buy from Hold.

FTN Midwest upgraded shares of Lexmark (NYSE: LXK) to Neutral from Sell.

Hambrecht upgraded NetGear (NASDAQ: NTGR) to Buy from Hold.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Permalink | Email this | Linking Blogs | Comments

Allstate slips as earnings miss estimates by 4 cents

Brent Archer — 2007-07-19T12:51:00+00:00

Filed under: Earnings reports, Forecasts, Bad news, Allstate Corp (ALL), Options, Technical Analysis

Allstate Corp. (NYSE: ALL) opened at $60.40. So far today the stock has hit a low of $59.00 and a high of $60.49. As of 11:00 this morning, ALL is trading at $59.67, down $0.89 (-1.5%).

After hitting a one year high of $66.14 in December, the stock has been trading slightly lower over the past six months, with support just below $60. The stock is testing that support today, as shares fall in the wake of a weaker-than-expected earnings report. The company reported earnings per share of $1.76, a tick below the $1.80 expected by Wall Street analysts, citing declining homeowner premiums for the fall. Technical indicators for ALL are bearish and steady, while S&P gives the stock a very positive 5 STARS (out of 5) strong buy rating.

For a bearish hedged play on this stock, I would consider an October bear-call credit spread above the $65 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk and leverage returns. For this particular trade, we will make a 13.6% return in just 3 months as long as ALL is below $65 at October expiration. ALL would have to rise by 8% before we would start to lose money.

ALL has never been above $65 except for a few days in December and has shown resistance around $62 recently. This trade could be risky if the company's earnings turn out to be better than they seem after closer study, but even if that happens, this stock could have trouble getting over $64, where it topped out in April and May.

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 ALL.

Permalink | Email this | Linking Blogs | Comments

Analyst downgrades 7-13-07: ALL, BDK, IMCL and RSH

Kevin Shult — 2007-07-13T11:00:00+00:00

Filed under: Before the bell, Analyst reports, Analyst upgrades and downgrades, Bad news, Allstate Corp (ALL), Black and Decker (BDK), RadioShack Corp (RSH), ImClone Systems (IMCL)

MOST NOTEWORTHY: RadioShack Corp (RSH), Visual Sciences (VSCN), Alcan (AL), U.S. Celluar (USM) and Westwood One (WON) were today's noteworthy downgrades:

Banc of America downgraded shares of RadioShack (NYSE: RSH) to Sell from Neutral and lowered their target to $18 from $26 as they believe cuts to labor costs and advertising expenses will make it more difficult to overcome declining wireless trends.

Friedman Billings cut Visual Sciences (NASDAQ: VSCN) to Market Perform from Outperform on valuation. Citigroup downgraded Alcan to Hold from buy on the acquisition news.

Soleil cut U.S. Celluar (AMEX: USM) to Sell from Hold on valuation.

Westwood One (NYSE: WON) was downgraded to Sell from Hold at Citigroup based on management distractions and weak fundamentals...

OTHER DOWNGRADES:

Cowen removed ImClone Systems (NASDAQ: IMCL) from its Focus List, as the firm believes Erbitux is now more in line with consensus but said financials remain uninspiring.

Merrill cut Allstate (NYSE: ALL) and Black & Decker (NYSE: BDK) to Neutral from Buy.

USB downgraded Frontline (NYSE: FRO) to Reduce from Neutral.

Matrix cut Thor Industries (NYSE: THO) to Sell from Strong Buy.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Permalink | Email this | Linking Blogs | Comments

Lawyers and the $54 million pants

Kevin Kersten — 2007-06-13T14:45:00+00:00

Filed under: Good news, Bad news, Products and services, Law, AFLAC Inc (AFL), Allstate Corp (ALL), Amer Intl Group (AIG), Progressive Corp,Ohio (PGR)

America is a "sue-happy" country. Where else can you sue the dry cleaners for $54 million because they lost your Hickey Freeman pants. You think I am joking; but this is a case of life being stranger than fiction. A Washington DC judge (who in my opinion should know better) is suing a dry cleaners that lost his pair of pants.

For a moment last week my trust in the American legal system began to fail as Paris Hilton, heiress of Hilton Hotels (NYSE: HLT) fortune, spent a heart-wrenching three days in jail before being released by the sheriff for "medical reasons." Then suddenly my faith was restored as the judge sent her back to jail.

Well it didn't last long. It seems this week a pair of lost pants is worth crying over -- and $54 million. I guess America is land of the free and home of too many lawyers. Maybe this is why I respect Vice President Cheney: I mean, we all talk about the problem with lawyers, but at least he shot one.

No, really. There must be some investment opportunities here -- although you'll want to be careful so you don't lose your shirt. Hartmarx Corp (NYSE: HMX) makes the Hickey Freeman brand suits. They must be really good if they are worth $54 million a piece. Although actually it was just the pants that were lost, which would suggest, using logical reasoning, that the pants with accompanying coat would be worth $108 million. Is there a discount if you buy the whole three pieces? Maybe Paris would be interested in this kind of bling.

Hertz (NYSE: HTZ) and Avis (NYSE: CAR) were looking like really good opportunities, but then Plaintiff Roy Pearson dropped the car rental (to drive to the next town to another dry cleaners) from the lawsuit. It was a $67 million dollar law suit at that time.

Maybe we just need to give everyone more Prozac, which is made by Eli Lilly & Co. (NYSE: LLY).

The real winners here are of course the lawyers and insurance companies. This could be really great advertising to sell more insurance. AllState (NYSE: ALL) and Progressive (NYSE: PGR) are two of the biggest, but there's also American International Group (NYSE: AIG), Aflac (NYSE: AFL) and Travelers Group (NYSE: TRV).

I wanted to end with a lawyer joke, but I didn't want to be taken to the cleaners...

Kevin Kersten is an Options Analyst with InvestorsObserver.com. Do you have any deadwood in your portfolio? Check out the 18 Warning Signs That Tell You To Dump A Stock.

Disclosure note: Mr. Kersten owns and or controls a diversified portfolio of long and short positions that may include holdings in companies he writes about.

Permalink | Email this | Linking Blogs | Comments

Buffett's big buy: Our top picks include Allstate, Lowe's, Target

Sarah Gilbert — 2007-05-11T20:49:00+00:00

Filed under: Deals, Newspapers, Magazines, General Electric (GE), Allstate Corp (ALL), Lowe's Cos (LOW), Lehman Br Holdings (LEH), Progressive Corp,Ohio (PGR)

When Warren Buffett announced he wanted to use between $40 and $60 billion to buy a company several days ago, picking a target for the billionairest of all billionaires became the favorite pastime of financial writers everywhere -- and our bloggers were as eager as anyone else to come up with just the thing for the guy who already has everything (and everything, in this case, includes bunches of shares of companies as diverse as dull sheetrock manufacturer USG Corp. (NYSE: USG) to hip shoe company Nike Inc. (NYSE: NKE)).

Of course, Buffett's needs are unique. First of all, the company has to be both big and a good value -- no 80x P/E multiples for Warren. It has to be a relatively simple business (I'm thinking nanotech is out), have a good management team and no dark and dirty secrets (so sub-prime lenders are probably off the list). Finally, the company should have solid, long-term competitive advantages.

Sheldon Liber suggests a couple that might make the grade: Allstate Corp. (NYSE: ALL), the insurance company, which at about $38 billion in market capitalization and a 7.8x P/E ratio fits both the "big" and "cheap" qualifiers. Plus, we all know that Warren Buffett loves insurance companies, and given its retail approach, it's not much of a competitor with longterm portfolio company GEICO. Emerson Electric (NYSE: EMR) also seems a good candidate with its $37 billion market cap and 19x P/E ratio -- but is it simple enough? Its business is, according to Hoover's, making "a host of electrical, electromechanical, and electronic products, many of which are used to control gases, liquids, and electricity." Hmmm.

When Gary Sattler suggests Warren might buy General Electric Co. (NYSE: GE)'s plastics division, it's a good concept (simple, well-managed) but the price is way too low at around $10-12 billion. A commenter, however, brings up a good replacement in Lowe's Companies Inc. (NYSE: LOW); it has a $47 billion market cap and a reasonable P/E ratio of 15.5x. What's more, it has none of the bad-management baggage of competitor Home Depot Inc. (NYSE: HD). Does it have a "moat," though? I suppose that's a question for Warren. He does own some of each company, meaning that he's already emotionally invested in the sector (a plus) although it's obvious from our near-tie in the Battle of the Brands that neither holds a substantial consumer-facing edge competitively.

What else could be in Warren Buffett's little black book? Doug McIntyre wonders about the newspaper industry, although none of them are nearly large enough, and finally settles on a leveraged transaction involving PepsiCo, Inc. (NYSE: PEP). At over $100 billion in market capitalization, it's too big, and there is the problem of Buffett's lifetime love affair with the more-expensive Coca-Cola Co. (NYSE: KO). I doubt there's any argument that could convince Buffett that buying Pepsi (great management team aside) that leveraging himself would make sense.

Peter Cohan adds his opinion to an oft-repeated speculation, that Buffett might buy GEICO competitor Progressive Corp. (NYSE: PGR). Peter likes its leadership in the homeowner's insurance industry, and notes that aging chairman Peter Lewis may be interested in selling.

So, what do I think Buffett might buy? I've discarded ideas like Valero Energy (NYSE: VLO) (way, way too expensive) and Lehman Brothers Holdings Inc. (NYSE: LEH) (just a little too expensive) and Ikea International (too little, I think, although it's privately held). I've finally decided I like Target Corp. (NYSE: TGT) -- just the right size with a $50 billion market cap, a P/E ratio of 18x is only a little expensive, and the company has a clear competitive advantage with its stylish product lines and low prices. It's a simple business and the headquarters are in the Midwest, too; Warren will be right at home in one of the store's snack shops, sipping a Coke and watching the competent management team go about its business.

Permalink | Email this | Linking Blogs | Comments

Allstate screws California

Jon Ogg — 2007-05-11T09:26:00+00:00

Filed under: Products and services, Consumer experience, Marketing and advertising, Allstate Corp (ALL)

If you are an Allstate Corp. (NYSE: ALL) customer in California for homeowners' insurance, you have a new reason to hate insurance companies. The company is going to halt new homeowners and landlord package insurance policies in the state.

Here is the quote from the company: "Allstate is taking responsible action now so that the company will continue to be in a strong position to help protect customers in California and across the country. This new strategy helps protect our existing customers and provides an alternative to California consumers looking for new property insurance policies."

TRANSLATION: We don't want the risks of mudslides, earthquakes, brushfires and replacing drastically overpriced house values.

Allstate claims that this does not affect existing policy holders and it claims it will continue to renew the existing policies ... "subject to applicable Allstate underwriting guidelines."

TRANSLATION: If we can mark this up massively and determine that you are not a risk, then we'll underwrite you.

This is an outright exit no matter how the company sugarcoats it. Anyone who doesn't believe that is the same sort that will buy the London Bridge.

Allstate says it will continue offering auto, renters, life, and other forms of insurance. What if you have all of your coverage with Allstate like many do? You'll go elsewhere. Allstate is even setting up a referral program for customers to find new coverage. Sorry, but how helpful does anyone think this will really be?

This is obviously good for the company's bottom line; Allstate's bean counters seem to have made a compelling enough case for the management to risk the negative PR. Good for them, bad for California. I can't wait to see how the Governator goes after the company.

What is funnier is the blurb on the company's website: America Deserves to be Better Protected from Catastrophes: That's Allstate's Stand

Jon Ogg is a partner at 24/7 Wall St.; he does not own securities in the companies he covers.

Read | Permalink | Email this | Linking Blogs | Comments

Today in Money & Finance - 5/11 - Saving strategies for over-50 crowd, most expensive TVs & 10 things I hate about finances

Allan Halprin — 2007-05-11T08:40:00+00:00

Filed under: Google (GOOG), McDonald's (MCD), Money and Finance Today, Allstate Corp (ALL), Alcatel-LucentADS (ALU)

In the News:

· Markets Have Worst Day in Over a Month; More to Come?

· Producer Prices Worst Than Expected

· Fuel Fears Hamper Consumer Confidence

· Alcatel-Lucent Profit Drops 35%

· Alan Greenspan Still Sees a 1-in-3 Chance of Recession

· Google Not Worried By Rival Alliance Talk

· Google: No Plans for Stock Split

· OxyContin Maker to Pay $600 Million for Misbranding

· Allstate to Stop Insuring California Homes

· Foot Locker Cuts Earnings Outlook, Stock Plunges

· Movies That Glamorize Smoking More at Risk of Restrictive Rating Now

· Why McDonald's Is Sitting Out Chicago's Olympic Bid

Animal House Meets the Empty Nest
Home developers across the country are appealing to young buyers with buildings that promise not just an affordable first home but also a great social life. But some of the buildings are drawing older buyers, and it's leading to conflicts.
Showdown at the Pool - WSJ.com

10 Things I Hate About My Finances...
...And 10 ways to get them out of the way in a snap. When it comes to finances, there's no shortage of tasks you dread -- and blow off. There's the paperwork, paying taxes, corralling piles of receipts, shelling out for insurance you hope you never have to use, avoiding your mother-in-law's phone calls, and on and on. But the ignoring the niggling details is even worse than the drudgery of getting them done. Here's how to handle them with as little pain as possible.
10 Things I Hate About Finances - [Fool.com]

The Poverty Business
In recent years, a range of businesses have made financing more readily available to even the riskiest of borrowers. Greater access to credit has put cars, computers, credit cards, and even homes within reach for many more of the working poor. But this remaking of the marketplace for low-income consumers has a dark side: Innovative and zealous firms have lured unsophisticated shoppers by the hundreds of thousands into a thicket of debt from which many never emerge.
The Poverty Business - BusinessWeek Cover Story

Saving Strategies for the Over-50 Crowd
With retirement suddenly looming uncomfortably close, people who reach their 50s without much of a nest egg may feel financially challenged to the point where they may give up even trying to save. It's not time to give up, but gear up. Federal tax rules give 50-somethings a chance to catch up on savings.
Saving strategies for the over-50 crowd - Bankrate.com

Paints and Stains - Look Beyond the Brand
Before you do that next big paint job take a look at Consumer Reports latest review. And if you've been on the fence about whether to paint your house or stain it, their findings are likely to nudge you toward paint. Get advice on how to choose, how to pick a good painter and six common painting mistakes to avoid.
ConsumerReports.org - Paints & stains 6/07: Types, Choosing a painter 6 Common Mistakes to Avoid

Most Expensive TVs
If you want to impress your neighbors with your TV, you're going to have to try harder these days--one out of every four homes in the U.S. now boasts a thin, gleaming, high-definition television. But how many people on your block own a $70,000, 103-inch Panasonic plasma?
The Most Expensive TVs - Forbes.com

Permalink | Email this | Linking Blogs | Comments

Serious Money: Buffett should buy these five companies

Sheldon Liber — 2007-05-09T16:30:00+00:00

Filed under: Berkshire Hathaway (BRK.A), Allstate Corp (ALL), H and R Block (HRB), Fortune Brands (FO), Nucor Corp (NUE), Serious Money

Warren Buffett, Chairman and CEO of Berkshire Hathaway (NYSE: BRK.A) has been doing some big time cogitating about the future. He plans to donate the lion's share of his wealth to the Gates Foundation. Recently, he said he was looking for an understudy with the right investing temperament and wisdom to lead Berkshire. There are reports that his office has been swamped with resumes. Some are reaching to the bottom of the barrel in suggesting that I seek an audience. Perhaps they were stimulated by another Serious Money: Freight Railroads - BNI, CSX, UNP & more story which I posted the day before Berkshire Hathaway announced it had become BNI's largest shareholder.

So with this and other prescient commentary I recently posted, I was asked to present some ideas on what acquisitions Berkshire might consider given Buffett's eagerness to find a good deal. It is likely that Buffett will bring several people on board to play the role of Chief Investment Officer for different segments of the company. Nobody in their right mind believes that Buffett is replaceable.

In any event here are some of my ideas on the subject. All of my ideas follow a pattern favored by Buffett including low P/E, P/S, P/B, and P/CF's, as well as a high return on equity and low debt.

Allstate Corp (NYSE: ALL) I have already posted Hot tips for Warren: Allstate & Mercury Insurance and made it known that I think this would be a good fit and a good value for acquisition. Allstate sells insurance through its own agents in local storefronts throughout the country. It could be combined with H&R Block (NYSE: HNR) in one storefront. Berkshire owns 9% of H&R. Tax consulting and insurance can be integrated and would create a synergy improving the bottom line of both companies. The closure of storefronts, the recapturing of the Allstate dividend, the increased sales and the currently low price of Allstate shares make this my favorite Berkshire play. Allstate's closing price yesterday was $63.28. It is capitalized at $38 billion, approximating the mountain of cash Buffett is sitting on. The 14% net profit margins would more than double the return Berkshire Hathaway is getting on the cash and the insurance premium float from Allstate being invested by Buffet would increase profits at the company as well. This is the deal Buffett should make, and soon.

Price/Earnings (TTM) 7.79
Price/Sales (TTM) 1.11
Price/Book (MRQ) 1.87
Price/Cash Flow (TTM) 7.89

Pulte Homes (NYSE: PHM) has suffered along with the rest of the homebuilders as sales of condominiums and single family residences has tanked. Pulte has reported a major reduction in earnings and would not even hazard a guess as to the outlook for the next few quarters. I say perfect, buy it now Warren. This company is one of the premier homebuilders in the United States. It has major interests in the southeast region of the county and is heavily into senior living developments. That is a growing business and will continue to grow. Berkshire Hathaway already owns manufactured home assets and these together could play a major role in changing how housing is designed, built, and managed as a resource. Pulte's closing price yesterday was $26.15 and it is capitalized at $6.6 billion meaning that Berkshire Hathaway could acquire it with its lunch money.

Price/Earnings (TTM) 21.02
Price/Sales (TTM) 0.49
Price/Book (MRQ) 1.14
Price/Cash Flow (TTM) 10.51

Fortune Brands (NYSE: FO) Buffett should buy this company just for the name alone. It seems to me that the conglomerate he has assembled over the last 40 years is the real fortune brands and he has made a greater fortune with his companies than anybody else including this one. Fortune, like Berkshire Hathaway, is a holding company. According to AOL Money and Finance, it is a leading US producer and distributor of distilled spirits (Jim Beam, DeKuyper, Knob Creek, Maker's Mark) and golf equipment (Titleist, Cobra, FootJoy, Pinnacle).

However, Fortune's largest segment is home products and hardware, where its holdings include Moen faucets, MasterBrand cabinets, Master Lock padlocks, and Therma-Tru doors. In 2005 it acquired former Allied Domecq brands Sauza, Courvoisier, Canadian Club, and Clos du Bois. The home products tie into Berkshire's existing businesses and my suggestion that it acquire Pulte. The golf equipment does as well given the leisure activities of seniors and how this might be integrated into new community development. Perhaps a new business -- Berkshire Hathaway 'Pro-Shops'...and it could put an H & R Block / Allstate office adjacent to it...now I'm getting really creative. The alcohol business is booming internationally and will continue to do so, given there are very few players in the market. Fortune's closing price yesterday was $80.37 and it is capitalized at $12.3 billion. This is a good fit and a good use of capital.

Price/Earnings (TTM)15.94
Price/Sales (TTM) 1.48
Price/Book (MRQ) 2.55
Price/Cash Flow (TTM) 11.76

Emerson Electric (NYSE: EMR) is a company that has reported strong growth for decades, is well managed, has worldwide manufacturing and distribution plants and makes the kind of products that are used every day at home and in industry, including a host of electrical, electromechanical, and electronic products. Emerson's closing price yesterday was $46.43 and it is capitalized at $37.1 billion, not small change. But if Berkshire Hathaway wants to make a major acquisition, this stable company would be a great buy with low risk and high returns plus the 2.25% yield would go straight to the bottom line of Berkshire which does not pay a dividend.

Price/Earnings (TTM) 20.73
Price/Sales (TTM) 1.92
Price/Book (MRQ) 3.76
Price/Cash Flow (TTM) 14.63

Nucor Corp (NYSR: NUE) is one of the leading steel producers in the country and every billionaire should own a steel company. Just look at the Mittel family of India. They are major players on the world market having taken over Arcelor and it is not likely they will stop there. They own steel companies everywhere including the United States. This is an industry that has undergone major disruption and change over the last twenty years. It has enjoyed stronger-than-average pricing power over the last few years, but the share prices still reflect fears of a downturn. Nucor's closing price yesterday was $65.93 and it is capitalized at $19.8 billion. I say strike while the iron is hot and acquire Nucor before a bidding war takes place.

Price/Earnings (TTM)11.31
Price/Sales (TTM) 1.33
Price/Book (MRQ) 3.91
Price/Cash Flow (TTM) 8.69

These companies are listed in the order of my preference for Mr. Buffett's consideration. Warren, if you want to discuss any of my ideas over lunch, I am available to meet at any time.

Disclosure: I own BRK.B shares and all of the other companies are on my watchlist.

Those of you who are new to Bloggingstocks.com can check out my other stories and read Chasing Value or Serious Money to find more potential opportunities and verify my track record as well.

Sheldon Liber is the CEO of a small private investment company and the vice president

Permalink | Email this | Linking Blogs | Comments

Serious Money: AIG, ALL, CB, HIG, MET, ORI - cheap insurance

Sheldon Liber — 2007-03-29T10:52:00+00:00

Filed under: Other issues, Apple Inc (AAPL), Columns, Allstate Corp (ALL), Chubb Corp (CB), Amer Intl Group (AIG), Top Picks 2007, Bargain stocks, Serious Money

In searching for value stocks in today's market I have run some stock screens, scanned the web, read various opinions in business periodicals and spoken to people in the insurance business. My conclusion is that insurance companies are approaching bargain prices. I have outlined various criteria that are important to me in stock selection and ranked six well respected companies in each. There are many more companies that might be included, but the point is clearly made with these.

Dividend Yield: The top four all exceed the S&P average of 1.85%

Old Republic International Corp. (NYSE: ORI): 2.70%
The Allstate Corp. (NYSE: ALL): 2.52%
The Chubb Corp. (NYSE: CB) 2.24%
The Hartford Investment Services Group Inc. (NYSE: HIG): 2.09%
American International Group Inc. (NYSE: AIG) : 0.98%
MetLife Inc. (NYSE: MET): 0.93%

Price-to-sales ratio - P/S: Historically, anything close to 1.0 is exceptional and under 2.0 is very good. From this perspective they all look cheap.

MetLife Inc. (NYSE: MET): 1.0
Allstate Corp (NYSE: ALL): 1.06
Hartford Investment Services (NYSE: HIG): 1.12
Old Republic Inc. (NYSE: ORI): 1.33
Chubb Corp (NYSE: CB): 1.5
American International Group (NYSE: AIG) : 1.54

Price-to-book ratio - P/B: A deep value investor would generally seek a P/B under 1.0 but that is hard to find. Allstate is the standout, but again, they all look reasonable.

Allstate Corp (NYSE: ALL): 1.09
Chubb Corp (NYSE: CB): 1.53
MetLife Inc. (NYSE: MET): 1.58
Hartford Investment Services (NYSE: HIG): 1.73
Old Republic Inc. (NYSE: ORI): 1.77
American International Group (NYSE: AIG) : 1.9

Price-to-cash-flow - P/CF: In any serious discussion about investing in the stock market you will find mention of the importance of good cash-flow. In the case of the top five you will note you are paying for a company that has a P/CF less than the P/E. AIG is totally unacceptable and this alone drops it from my investment consideration even though I have heard it talked up often, including by colleagues on BloggingStocks. For comparison, Apple Inc. (NASDAQ: AAPL) has a P/CF of 27.85 and AIG is not the high flyer Apple is of late.

Old Republic Inc. (NYSE: ORI): 5.03
Hartford Investment Services (NYSE: HIG): 5.28
Chubb Corp (NYSE: CB): 6.28
MetLife Inc. (NYSE: MET): 7.21
Allstate Corp (NYSE: ALL): 7.53
American International Group (NYSE: AIG) : 25.68

Return-on-invested capital - ROIC: This is important because it reflects how well management is able to allocate the company's resources. Allstate, at least over the past twelve months, has done a great job and Chubb is not far behind. MetLife and Hartford were respectable; Old Republic barely stayed ahead of the long term market average, otherwise it might as well take the money and buy an index fund. AIG, with an undistinguished ROIC, again must have stalled out this past year for reasons I would have to study in more depth to ascertain. Otherwise it is not good enough.

Allstate Corp (NYSE: ALL): 20.1%
Chubb Corp (NYSE: CB): 16.76%
MetLife Inc. (NYSE: MET): 14.51%
Hartford Investment Services (NYSE: HIG): 13.5%
Old Republic Inc. (NYSE: ORI): 10.86%
American International Group (NYSE: AIG) : 7.24%

Price-to-earnings ratio - P/E: Surprisingly, my reading of historic market data concludes that the P/E ratio is less important as an indicator of future stock appreciation than the other five criteria above. Yet, it seems to be the most commonly discussed figure, even among journals that have pointed this fact out in various studies and articles. The only reason I can think of for the references to the P/E ratios so consistently is perhaps because it is easier to understand. Having noted this information, it is interesting that Allstate and MetLife have the lowest P/E and AIG the highest.

Allstate Corp (NYSE: ALL): 7.64
MetLife Inc. (NYSE: MET): 7.93
Chubb Corp (NYSE: CB): 8.64
Hartford Investment Services (NYSE: HIG): 10.88
Old Republic Inc. (NYSE: ORI): 11.03
American International Group (NYSE: AIG) : 12.55

Closing stock prices March 28, 2007

Allstate Corp (NYSE: ALL): $59.86 MetLife Inc. (NYSE: MET): $63.36
Chubb Corp (NYSE: CB): $51.64
Hartford Investment Services (NYSE: HIG): $94.55
Old Republic Inc. (NYSE: ORI): $21.95
American International Group (NYSE: AIG) : $67.15

Based on my findings displayed hear, and more, Allstate and MetLife are the front-runners for my investment dollar. Allstate is a direct sales company leaving out the middle man while MetLife having acquired Travelers Insurance from Cititgroup Inc. (NYSE: C) now has scaling advantages and is in position to increase it's international growth . In speaking with my trusted insurance advisors (including Randy Slaughter (the best) of W. Brown & Associeas in Irvine, CA) and questioning why these stocks seemed to be such bargains I was told that the market for insurance is becoming more competitive. More companies are chasing business and this is likely to lead to less profit in the future. These patterns can run for many years and that may be priced into the stocks. All the more reason not to overpay and seek the margin of safety that deep value investing affords.

Sheldon Liber is the CEO of a small private investment company and the vice president for design and research at an architecture & planning firm. Check out his other posts for BloggingStocks here.

Permalink | Email this | Linking Blogs | Comments

When bargain hunting, be very picky

Jonathan Berr — 2007-03-02T16:10:00+00:00

Filed under: Earnings reports, SEC filings, Analyst upgrades and downgrades, Bad news, Management, Industry, Competitive strategy, Dell (DELL), Ford Motor (F), Home Depot (HD), Columns, Caterpillar (CAT), Halliburton (HAL), Allstate Corp (ALL), Amer Intl Group (AIG)

Don't confuse cheap stocks with bargains.

Remember that shares may be inexpensive for a good reason -- for instance, because the company is going down the drain. Savvy investors know that things are rarely as awesome or horrendous as the market sentiment may indicate, of course. There is a point when every single shred of potential bad news is factored into a stock price on even the most unlucky of companies.

Remember, things can always get worse before they get better. With that in mind, here's a review of some stocks that my colleagues and I think have values that are compelling.

Names that I've liked include Home Depot Inc. (NYSE:HD) and, for the truly adventurous, Ford Motor Co. (NYSE:F). My colleagues have singled out General Electric Co. (NYSE:GE), Dell Inc. (NASDAQ:DELL), Caterpillar Inc. (NYSE:CAT) and Halliburton Co. (NYSE:HAL) for your consideration.

Let me add a few others.

American International Group Inc. (NYSE:AIG) reported results Thursday that missed analysts' forecasts because of one-time charges and announced a $5 billion buyback. The stock climbed a mere 3 percent on the news. It will probably climb higher. Wall Street analysts expect it to hit $79.63, about $10 above where it's currently trading.

Other insurance stocks including Allstate Corp. (NYSE:ALL) and Ace Ltd. (NYSE:ACE) also look cheap. Allstate is trading at a forward price-to-earnings multiple of about 9. Ace is about 8, while AIG's is 11.

There seems to be some negative sentiment around defense stocks as well. Whatever you may think about the Iraq War, it's important to remember that as equipment gets used, the military needs to buy spare parts, lots of them.

Raytheon Co. (NYSE:RTN) deserves special mention since its debt was upgraded recently by Moody's on its improving earnings. The defense contractor, which had been a basket case for years, also boosted its 2007 earnings. It trades a forward P/E of 18.

Other beaten-down stocks to consider include Mothers Work Inc. (NASDAQ:MWRK), which, if you are pregnant or are married to someone who is expecting, you already know quite well. The No. 1 maker of maternity clothing has been on a tear, though its shares have dropped back because of concerns about its debt and slipping same-store sales. This company, though, makes good products and would be a good fit for a larger retailer. Its forward P/E is 12.

Good luck and happy hunting.

Read | Permalink | Email this | Linking Blogs | Comments

High (and low) lights from this week's earnings releases

Eric Buscemi — 2007-02-02T15:34:00+00:00

Filed under: Earnings reports, Google (GOOG), Allstate Corp (ALL), Anheuser-Busch Cos (BUD), Electronic Arts (ERTS), Starwood Hotels Worldwide (HOT)

Numbers are Actual vs. Estimate

Excellent Reports

Goodrich Corp. (NYSE: GR) 78c vs. 67c

Goodrich profits increased on a jump in sales of aircraft equipment to Boeing and Airbus. The company said margin expansion associated with sales growth and improved operating efficiencies are primary reasons for a continued positive outlook.

International Paper Company (NYSE: IP) 47c vs. 35c

The company's profits rose on a gain from the sale of its U.S. forestlands and a strong operating profit from its industrial packaging unit. IP is transforming operations to focus on its global uncoated papers and packaging business.

Starwood Hotels & Resorts Worldwide (NYSE: HOT) 92c vs. 73c

Higher room rates helped to contribute to a strong quarter for the parent of hotel chains including St. Regis, Westin and Sheraton. The company has been enjoying strong travel demand and limited growth in supply. It has also been selling hotels and retaining management contracts to free up cash.

Electronic Arts (NASDAQ: ERTS) 63c vs. 57c

The video game publisher had a 38% drop in quarterly profit but beat Wall Street targets, overcoming investor anxiety that holiday shortages of new video game consoles would hurt sales. Shares rose 6% on the news. Company CFO Warren Jenson said EA was entering a growth period.

On the Fence

Anheuser-Busch (NYSE: BUD) 25c vs. 25c

Shares were up slightly as profit rose on stronger shipments of beer, higher process and demand for its imports. The company saw domestic beer segment sales fall due to lower beer sales volume. It's been working to capitalize on the popularity of imported and craft beers which have taken market share from domestic beers.

Google Inc (NASDAQ: GOOG) $3.00 vs. $2.92

Although they outperformed the consensus estimate, the markets expected more of a blowout and the stock dropped 4% in trading the following day.

Sysco Corporation (NYSE: SYY) 38c vs. 38c

The company blamed winter storms in parts of the U.S. for dragging down sales. It has also conducted reviews of thousands of its food distribution contracts to look for ways to increase sales.

Awful Reports

Allstate Corporation (NYSE: ALL) $1.78 vs. $1.84

The largest trade U.S. home and auto insurer had its biggest drop in almost four years after reporting higher-than expected fourth quarter claims. The stock fell 6%, the largest one day decline since February 2003.

MBIA Inc (NYSE: MBI) $1.31 vs. $1.47

The world's biggest bond insurer saw profit fall amid a drop in premiums as customers saw less reason to insure their debt. Cities, counties and other government bond issuers, their biggest pool of clients, have been refinancing debt to take advantage of lower interest rates, forgoing the purchase of insurance on new debt, preferring additional yields on uninsured bonds.

Permalink | Email this | Linking Blogs | Comments