Tuesday, June 20, 2006

Calls of Note Part 4

- Morgan Stanley defending Bowater (NYSE:BOW) saying the recent decline in Bshares has made the stock increasingly attractive. According to their risk/reward analysis, BOW shareholders appear to be discounting continued declines in its major businesses, despite evidence that a more benign outlook is more likely. Moreover, they see signs that the recent run in bad news may be improving.

Now, they believe there is room for cautious optimism that some of pressures may be abating. Firm sees four key areas where the news flow may be improving or at least becoming less bad. See signs of a potential change on several fronts: newspaper ad trends, Bowater's management, the weakening Canadian dollar, and last but no least, pulp profitability. The stock is getting cheap both relative to its peers and according to analysis of its risk/return profile. Target goes to $27 from $30.

Notablecalls: Mother Morgan sure does have the following needed to bounce this one. Wouldn't hold it below say $21.

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