Archive for June, 2006

  • Take-Two Taken Down 20%
    , June 27th, 2006 at 12:02 pm

    These are hard times for the video game stocks. Electronic Arts(ERTS) is down about 30% in the past few weeks. The company had a rotten earnings report in May.
    Today we learn that Take-Two Interactive (TTWO) has been subpeonad. According to the New York Times, the grand jury is “seeking information about a range of its business practices dating back to 2001 and the inclusion of sexually explicit material in one of its games.” The shares are down about 20%.

  • Top 20 S&P 500 Stocks This Year
    , June 27th, 2006 at 11:50 am

    Ticker Company Name Industry YTD
    ATI Allegheny Technologies Steel & Iron 81.8%
    OMX OfficeMax Wholesale, Other 65.9%
    ADM Archer Daniels Midland Food – Major Diversified 62.0%
    KMG Kerr-McGee Independent Oil & Gas 57.8%
    NUE Nucor Steel & Iron 55.6%
    CIEN Ciena Processing Systems & Products 49.2%
    GM General Motors Auto Manufacturers – Major 42.9%
    X United States Steel Metal Fabrication 37.4%
    R Ryder System Rental & Leasing Services 37.3%
    BLI Big Lots Discount, Variety Stores 35.6%
    HPC Hercules Incorporated Synthetics 34.8%
    Q Qwest Communications Telecom Services – Domestic 34.5%
    SHLD Sears Holdings Department Stores 33.2%
    WFT Weatherford International Oil & Gas Equipment & Services 32.2%
    BLS BellSouth Telecom Services – Domestic 31.0%
    CTXS Citrix Systems Internet Software & Services 30.4%
    CSX CSX Corporation Railroads 30.1%
    MOLX Molex Diversified Electronics 28.8%
    NTAP Network Appliance Data Storage Devices 28.2%
    BHI Baker Hughes Oil & Gas Equipment & Services 26.5%
  • Rosneft Goes Public…Sort Of
    , June 27th, 2006 at 11:42 am

    From the WaPo:

    On sale now, for a limited time only: shares of a company whose secretive chairman is a former KGB member who steers clear of foreigners; whose crown jewel was, in effect, expropriated from another company; and whose future hinges on the power of Russian politicians scheduled to leave office in two years.
    Despite all that, investors are lining up to get in on the deal. And some of the biggest names in international banking — J.P. Morgan Chase, Morgan Stanley, ABN AMRO Rothschild, Dresdner Kleinwort Wasserstein and Goldman Sachs — are helping to bring it to market.
    The company is OAO Rosneft, a Russian state-owned oil and gas company with assets that have been estimated at more than $60 billion and which is chaired by Igor Sechin, deputy chief of staff to Russian President Vladimir Putin. Yesterday in Moscow, the company’s president, Sergei Bogdanchikov, met with investors and released details of a draft prospectus to raise $11.6 billion in an initial public offering on the London Stock Exchange.
    The offering would be the fourth-biggest ever, but its significance goes far beyond mere investment decisions. The sale of Rosneft marks another step in the evolution of Russia, which has gone from Communism to a period dominated by freewheeling corporate oligarchs to an era in which Putin has overseen a reconsolidation of state power over the economy, especially the oil sector.

  • Twinkie Lasagna!
    , June 27th, 2006 at 11:32 am

    I’m not sure about this:

    Twinkies — they’re not just for dessert anymore. The new “Twinkies Cookbook” has recipes for everything from a Twinkie Burrito to Twinkie Lasagna.
    Theresa Cogswell compiled about 50 recipes for the book.
    Many were submitted to Hostess, as part of Twinkies’ 75th anniversary celebration last year.
    Cogswell tells Illinois’ Daily Southtown newspaper that one of her favorites is a berry-laden Patriotic Twinkie Pie.
    It’s red, white and blue.
    Cogswell says it makes a great centerpiece for a Fourth of July picnic, which you can also eat for dessert.

    Twinkies are owned by Interstate Bakeries (IBCIQ.PK), which isn’t looking too hot lately.

  • EU Upholds Anheuser’s Right to “Bud”
    , June 26th, 2006 at 1:59 pm

    From AP:

    The Board of Appeal for the European Union’s Office for Harmonization in the Internal Market (the what??) ruled that Anheuser-Busch can register it’s trademark “Bud” beer throughout Europe, the company announced in a news release.
    The ruling is just one piece of a massive legal fight in several European courts between Anheuser-Busch and the Czech brewer Budejovicky Budvar. At issue is the famous Budweiser brand, which both companies claim an historical right to use.
    The Czech brewery was founded in 1895 in a town called “Budweiser” by the German immigrants who founded it, while Anheuser-Busch launched its own U.S. Budweiser brand in 1876.

    Do they really think Europeans will buy Budweiser? Dear lord! They’re in worse shape than I thought.

  • J&J Buys Pfizer’s Consumer Health Unit
    , June 26th, 2006 at 1:39 pm

    Losing Guidant to Boston Scientific was one of the best things that could have happened to Johnson & Johnson (JNJ). That merger had troubled written all over it. It’s usually a bad sign when the company you’re thinking of buying sues you. Yep, you want to avoid that.
    The wait was worth it. Today we learn that JNJ is buying Pfizer’s consumer health division (Listerine, Sudafed, Nicorette). This is a much better move for JNJ. The company has been sitting on a mountain of cash (nearly $6 a share).
    At the end of last year, I wondered if a good paired trade would be to go long Merck (MRK) and short Pfizer (PFE). It was (at least so far). The troubles for Pfizer are still pretty bad. They needed this deal.

  • Expeditors Splits 2-for-1
    , June 26th, 2006 at 10:36 am

    Shares of Expeditors (EXPD) split 2-for-1 this morning. For Buy List track record purposes, I’ve adjusted the cost basis to $33.755.

  • Biomet Subpoenad by DOJ
    , June 26th, 2006 at 8:51 am

    From MarketWatch:

    Biomet Inc. said Monday it’s received a federal grand jury subpoena from the anti-trust division of the Department of Justice. The company said the subpoena is related to possible violations of anti-trust laws involving the manufacturing and sale of orthopedic implant devices. Biomet, based in Warsaw, Ind., said the subpoena requests documents from Jan. 1, 2001 through the present, and it believes similar inquiries have been directed at other companies in the industry . The company plans to fully cooperate with the probe. The stock closed Friday at $34.98, down 21 cents.

    The stock is down about 10% in the pre-market. Earnings are due on Wednesday.

  • Buffett to Give Away Fortune
    , June 25th, 2006 at 8:52 pm

    From Fortune:”

    Buffett has pledged to gradually give 85% of his Berkshire stock to five foundations. A dominant five-sixths of the shares will go to the world’s largest philanthropic organization, the $30 billion Bill & Melinda Gates Foundation, whose principals are close friends of Buffett’s (a connection that began in 1991, when a mutual friend introduced Buffett and Bill Gates).
    The Gateses credit Buffett, says Bill, with having “inspired” their thinking about giving money back to society. Their foundation’s activities, internationally famous, are focused on world health — fighting such diseases as malaria, HIV/AIDS, and tuberculosis — and on improving U.S. libraries and high schools.
    Up to now, the two Gateses have been the only trustees of their foundation. But as his plan gets underway, Buffett will be joining them. Bill Gates says he and his wife are “thrilled” by that and by knowing that Buffett’s money will allow the foundation to “both deepen and accelerate” its work. “The generosity and trust Warren has shown,” Gates adds, “is incredible.” Beginning in July and continuing every year, Buffett will give a set, annually declining number of Berkshire B shares – starting with 602,500 in 2006 and then decreasing by 5% per year – to the five foundations. The gifts to the Gates foundation will be made either by Buffett or through his estate as long as at least one of the pair — Bill, now 50, or Melinda, 41 — is active in it.

  • Crossing Smith Island
    , June 24th, 2006 at 7:40 pm

    Smith Island2.jpg
    I spent last weekend on Smith Island which is a tiny island in the middle of the Chesapeake Bay. There are two ways to get to Smith Island, get born there or take the ferry. I chose the latter.
    Smith Island is truly a place out of time. The island is absolutely beautiful (I took the picture above at dusk). It’s one of the few inhabited islands in the Chesapeake Bay that’s not connected to the mainland by a bridge. Its isolation has served it well.
    The island was settled by English speakers over 300 years ago. I should use the phrase “English-speaking” rather delicately. Smith Islanders do indeed speak English, but their accent is…well, I’m not sure how to describe it. They beat their A’s and O’s into submission. I’m sure Professor Higgins would be appalled. And when the islanders talk to each other, they speak backward. No, seriously.
    Smith Island, and it neighbor to south, Tangier Island, are often studied by linguists. Some believe that the resident’s speech is the closest to Elizabethan English.
    The island is very small but very charming. Think of it as Gilligan’s Island meets Jamestown. Most men there are crabbers, like their fathers and grandfathers before them. There are about 380 inhabitants in three “cities.” I rented a small cottage in Ewell, which is, for lack of a better word, the capital.
    Smith Island is a libertarian’s dream. There’s no government. No mayor or town council. No police. The people simply govern themselves. Many of the cars don’t bother with license plates. There are only two roads, and not much to crash into, perhaps a wayward crab. The highest point on the island is five feet. Strangely, the Maryland-Virginia border runs across the southern tip of the island (I’m told this is a sore subject). You can easily see across the entire island.
    There are no banks or ATM’s. No McDonald’s. No hedge funds. No SEC. The entire island is cash-only. There are, however, three Methodist churches. There’s one elementary school. The high school kids take a boat to the mainland each day. The island cemetery has many of the same names: Evans, Tyler, Bradshaw, Marsh. (No Elfenbeins, I checked.)
    Smith Islanders are unfailingly polite. I’m not exaggerating when I say that every single person I passed either waved or said hello. No exceptions.
    The sad part is that Smith Island is slowing fading away. Crabbing is hard work, and there are more job opportunities on the mainland. One hundred years ago, Smith Island was home to nearly a thousand people. Steamers went straight from Ewell to Baltimore. Not anymore. Most of the young folks are moving away. For such a teeny place, I saw a surprising number of “for sale” signs.
    If you’re ever in the mid-Atlantic and want to forget about your e-mail for a weekend, I highly recommend a visit to little Smith Island.