Wednesday, October 18, 2006


According to the WSJ, the Chicago Mercantile Exchange (CME) and the Chicago Board of Trade agreed to join forces to form the world's largest financial mkt, one that will dwarf exchanges in the US and Europe, even the NYSE. The CME announced plans to buy the smaller CBOT (BOT) for about $8bn.

Barron’s Online discusses Nokia (NOK), saying that investors worried that Nokia's clunky phones can't withstand Moto's (MOT) style lead, are valuing the Finnish giant way below Moto, assigning its stock a forward P/E multiple of 13x next year's expected earnings, below not only Moto's 18x, but also the avg 15x forward P/E multiple of the S&P's 500. But the co with the most cutting-edge phones, at the end of the day, might not be the best investment. In the 4 years that Nokia has repeatedly missed the latest trends in cellphone designs- first clam shells, now thinness- it's nonetheless hung on to its dominant 30% mkt share in phone sales globally. By sidestepping the costly battle to create the hippest phone, and instead cutting prices in Asia, a booming mkt, Nokia has kept operating profit in its mobile phones division higher than Moto's. The co's financial outlook is brighter as a result: EPS will rise faster next year for Nokia, at about 18%, vs 15% growth for Motorola. And Nokia bulls can take heart: Moto's thin phones didn't help the co much this week, as it reported sales of 54m units, below expectations. "What's important to shareholders is having a reasonable operating profit, and that's what Nokia has focused on," says Albert Lin, of AmTech.

“Inside Scoop” section reports that falling commodity prices have pressured oil and natural-gas co’s as of late, but a hedge fund is gushing over shares of GMX Resources (GMXR) after the co announced positive results from several new wells. Peter Seldin, a managing member of investment firm Centennial Energy Partners, shelled out $4.8m for 142K GMX shares in transactions from Oct. 3 to 4, and Oct. 13 to 16. Centennial focuses solely on energy and energy-related sectors and seeks out stocks that are trading at a discount to their intrinsic value, according to

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