Archive for December, 2006

  • The ‘Wow’ Factor
    , December 24th, 2006 at 12:44 pm

    Eleven months ago, Ford (F) unveiled its “The Way Forward” restructuring plan. Today, George Will takes a look at how things are going:

    Mulally’s vision for Ford is forward-looking nostalgia. He wants to restore Ford to the role it had in “the middle America that we grew up with.” But to “spiff up the blue oval” — Ford’s trademark — he must market cars designed on the assumption that gasoline prices “are staying up.” He talks about the need to “take the hard decisions” and “rationalize our product family” with a “simplified product portfolio.” He stops short of talking — yet — about scrapping brands. But why is the company still making the Mercury, the average age of whose buyers is 55? Perhaps because it cost General Motors $1 billion — payments to dealers, etc. — to eliminate the Oldsmobile brand.
    Mulally says production efficiencies can solve half the company’s economic problem. That will not suffice unless Ford efficiently produces exciting products. Mulally, a quick study, already has a rudimentary grasp of Detroit-speak: He says Ford must develop new products “with curb appeal — the ‘wow’ factor.”
    But in 2001, with much fanfare, Ford rolled out a new version of a 1950s success, the Thunderbird. It was underpowered, handled badly and is no longer in production. Recently, the company heavily advertised the Lincoln Zephyr. But now it is called the MKZ. Why? This is the behavior of a company whose left hand does not know what its other left hand is doing.

  • CEO Tells Truth, Apologizes
    , December 22nd, 2006 at 1:23 pm

    Seagate CEO: I help people “watch porn”
    We begin counting, now. One, two, thr…
    Seagate CEO apologizes for porn remark

  • Dow Flirts with 12,500, Gets Number, Never Calls
    , December 22nd, 2006 at 10:51 am

    Yawn. Talk about light volume, not a trader is stirring. The market is down again today after coming oh-so-close to breaking the elusive 12.5K barrier on Wednesday.
    Walgreen (WAG) is up on an impressive earnings report. I like WAG a lot. It’s a great company, but I think the shares are a bit pricey here. The stock pulled back earlier this year, and it seems to have bounced off $40. Ideally, I’d like to see it go lower before I’d be interested.
    I strongly considered adding Progressive (PGR) to the Buy List, but in the end, I went with WR Berkley (BER). I’m happy with my choice, but make no mistake, Progressive is another great company. But I’m not so positive on the company’s outlook for this year. Either way, this is one to keep an eye on.
    In case you missed it, here’s my Buy List for 2007:
    AFLAC (AFL)
    Amphenol (APH)
    Bed Bath & Beyond (BBBY)
    Biomet (BMET)
    Donaldson (DCI)
    Danaher (DHR)
    FactSet Research Systems (FDS)
    Fair Isaac (FIC)
    Fiserv (FISV)
    Graco (GGG)
    Harley-Davidson (HOG)
    Jos. A Bank Clothiers (JOSB)
    Medtronic (MDT)
    Nicholas Financial (NICK)
    Respironics (RESP)
    SEI Investments (SEIC)
    Sysco (SYY)
    UnitedHealth Group (UNH)
    Varian Medical Systems (VAR)
    WR Berkley (BER)
    I’ll start tracking these stocks on the first day of trading of 2007.

  • “Cramer” on WallStrip
    , December 22nd, 2006 at 10:19 am

    Lindsay has a special guest audition.

    “Shirt on.”
    Here’s another Cramer outtake.

  • The Stock Market in 3D
    , December 22nd, 2006 at 7:43 am

    spherestock.jpg
    From Information Aesthetics:

    an artistic 3D visualization of New York stock exchange data. “I Deal Solution” uses the spiral metaphor for its ability to translate 1-dimensional data into 3-dimensional space. in practice, the sphere size corresponds to the stock price, color to change, vibration to relative change, sphere position on spiral to volume, & sound to total percentual change. “the point is not to transmit a particular meaning but rather to express the power of energy concentrated in space information”.

    Plus, it weirdly aligns with the Wizard of Oz.

  • Coastal Financial Soars on Buyout
    , December 21st, 2006 at 1:36 pm

    As long-time readers know, periodically I’ll write about little-known stocks that have strong businesses, but are unheard of on Wall Street. I’ve never understood why everyone wants to own the next Google or Apple, instead of investing in proven, well-run businesses.
    Last year, I mentioned three micro-cap financial stocks; NewMil Bancorp, Northern Empire Bancshares (NREB) and Coastal Financial (CFCP). These are all great stocks, just no one knew about them.
    Well, someone found out. In April, NewMil was bought out for a 41% premium. Then in September, Northern Empire agreed to a buyout for a 22% premium. The only one left was little Coastal. I was still a fan. A few weeks ago, I even mentioned CFCP as a contender for the 2007 Buy List.
    Today Costal announced that it’s being bought by BB&T (BBT) for $395 million or $17.04 a share. That’s an 18% premium to yesterday’s close.

  • Random Thoughts
    , December 21st, 2006 at 1:05 pm

    I watch CNBC in my office with the sound muted. Strangely, even with no sound, I can always understand what Rick Santelli is saying.
    Also, if you’re looking for high CD yields, check out Bank Deals. This is a cool site. It lists high-yielding bank rates all around the country. Many require branch visits or in-state residency to qualify (though not all). Check it out, there might be a six-percenter near you.
    And finally, Lenny Dykstra—all-star centerfielder, all-star options trader.

  • 3Q GDP Revised to 2.0%
    , December 21st, 2006 at 10:11 am

    This morning, the government revised third-quarter GDP growth to 2.0%. The initial estimate was for 1.6%. Then it went to 2.2%, and now it’s back to 2.0%.
    Here’s a look at GDP growth going back to 1994:
    image374.png

  • Sarkozy Calls Shareholders Hooligans
    , December 21st, 2006 at 9:45 am

    From Nicolas Sarkozy, a candidate for president of France:

    Our country has to get organised to stop the actions of shareholders who… aren’t entrepreneurs but who behave like hooligans….

    As a proud shareholder hooligan, I almost take offense. By the way, Sarkozy is running as the free-market reformer.

  • Biomet PE Group to Bid for Smith & Nephew
    , December 21st, 2006 at 9:33 am

    This is getting interesting. There’s a report that the private equity group that’s buying Biomet is now considering a bid for Smith & Nephew.
    Just before Biomet’s board accepted the private equity group’s buyout offer, Smith & Nephew considered making a bid for Biomet. Their bid must have been very low, or Biomet’s board wanted to make it clear that it had explored all options.
    In any event, the idea of Biomet merging with Smith & Nephew still lives.