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Tuesday, June 13, 2006

Calls of Note Part 1

- Raymond James is positive on Ultra Petroleum (AMEX:UPL) noting that with the recent correction in the energy sector the shares are down 32% from their 52-week high. In addition to consistently expanding proved reserves (for example, reserve replacement of 769% in 2005), Ultra continues to have one of the highest and most visible production growth rates in the industry. Firm is projecting 28% in 2006 and 23% in 2007 - all of it organic. Also, the company's reserve booking methodology is one of the most conservative in the industry, and its finding and development (F&D) costs continue to be among the lowest in the industry, if not the lowest.

Ultra continues to be one of the great E&P growth stories; it has what every E&P company dreams of: a massive asset base with developmental upside and a vast inventory of low-risk, high rate of return prospects. They believe that the best is yet to come and remain very bullish on the company's prospects. Based on proved plus probable (P2) reserves of 6.295 Tcfe, the stock is trading at only $1.22/Mcfe, far below the large-cap median of $2.19/Mcfe. Reiterates Strong Buy rating.

Notablecalls: A very powerful call from an excellent firm. If only the chart were better. This one looks to have couple of more pts of downside in it before it bounces.

- Piper comments on Amylin Pharmaceuticals (NASDAQ:AMLN) saying that based on their diligence at the ongoing American Diabetes Association (ADA) meeting, we have learned that, shortly after the ADA meeting concludes, the Byetta sales force will tell physicians to stop initiating Byetta in new patients as a precaution to prevent any potential cartridge supply constraint issues.

Piper believes that the current demand "problem" is a significant positive for long-term estimates, and would use any concerns near term over the company's attempts to stop new patient starts as a buying opportunity for AMLN, which remains one of their top picks. Maintains Outperform and $55 tgt.

Notablecalls: Not actionable but good to know category.

- Couple of firms are commenting on Apple Computer (NASDAQ:AAPL):

Piper notes that in the last several days they have spoken with 15 Apple specialist resellers regarding MacBook Pro, overall Mac, and iPod trends. Firm's checks with 15 Apple specialist stores reinforce their initial thesis on the June quarter, which assumes that lower-than- expected iPods will be offset by strong Mac sales that result from full availability of the MacBook Pro and the launch of the MacBook. In the March quarter they had expected iPod results would be under plan and overall Apple numbers would be impacted. In the June quarter, the firm expects iPod numbers could be below Street consensus, but believe Mac will make up the difference and there may still be room for slight upside to Street.

Firm believes September has the potential to be a breakout quarter for Apple due to the convergence of the following factors: back-to- school selling season, full availability of MacBook and MacBook Pro, Boot Camp impact on overall Mac demand, PC-to-Mac switcher ad campaign, and the halo effect. Maintains Outperform and $99 tgt.

UBS notes that Apple's MacBook and MacBook Pro seem to be experiencing solid demand & they believe the strong demand for MacBooks should lend support to firm's 5% y/y unit growth estimate for Macs in the June quarter, perhaps even making this view conservative. Checks indicate Apple continues to dominate the MP3 market but demand continues to experience seasonality backing firm's estimate for units being down slightly q/q for the June qtr. UBS continues to expect new products to be announced next quarter, which should help drive growth into year end.

Notablecalls: News of strong Mac sales may provide some relief to AAPL bulls as doubts about the "Halo" effect have been pressuring the shares. Chart looks ugly and points to some more downside before we see a meaningful bounce.

- Banc of America comments on Under Armour (NASDAQ:UARM) saying co's cleats have been seeing very strong initial response. UARM cleats launched June 3rd (expected to be 15-20% of 2Q06 revs), and with just 2 days in the weekly data had the top 3 selling football cleats for the week and a market share of 24% (vs. #1 Nike at 60%).

In addition, due to the continued success of the UARM brand (particularly in women's, which should be even better positioned for spring 2007), DKS has been testing an expanded UARM assortment at the front of the store (vs. typical Nike led formats).

Notablecalls: The UARM cleat story has been getting louder over that past days. Not actionable but good to know category.

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