Wednesday, October 25, 2006


According to the WSJ, some investors are starting to think Clear Channel Comm. (CCU) might be ripe for a family-led buyout. But like many media co’s, Clear Channel has been hurt in recent years by a soft ad mkt, which arrived just as the industry faced greater competition from rivals such as satellite radio and iPods. Ppl familiar with the situation say CEO Mark Mays is frustrated by the stock's inability to push much past $30. Meanwhile, Clear Channel's performance has put the co on the radar of some activist investors. The California Public Employees' Retirement System added Clear Channel to its corporate focus list this year, citing concerns such as the stock's underperformance over the past 5 years. And recent filings show that Highfields Capital Mgmt has taken a 1% stake in the co. The situation has many observers speculating the Mays family's next move may involve some kind of deal to take the co private.

“Heard on the Street” column discusses Comcast (CMSCA), whose shares hit 52w high yesterday. The co will report 3Q earnings tomorrow that are expected to show strong sales. Comcast is set to unveil Fearnet, a collection of horror movies and other scary programming that the co plans to make available on its Internet portal, its VOD service and to cellphone users. Moves like Fearnet also tend to reassure investors that Comcast isn't about to use its high-priced shares to launch another huge takeover bid, as it did in its ill-fated effort to take over Disney in ‘04. Rumors have been circulating for weeks that Comcast has in its crosshairs co’s ranging from SprintNextel (S) to Yahoo (YHOO). Such a move by Comcast would likely depress shares b/c, as with the Disney bid, it would indicate mgmt was unsettled about cable's long-term future. Indications the co isn't interested in major acquisitions right now should have the opposite effect.

According to the Barron’s Online, lately, there's been a buzz in the mkt about electronic derivatives exchanges such as the International Securities Exchange (ISE) and Intercontinental Exchange (ICE) following the CME's $8bn offer for the CBoT. "Portfolio managers are saying that no sector is experiencing so much change and growth," says Richard Herr, of Keefe, Bruyette & Woods. Article suggests that an investor should buy exchange stocks b/c profit margins are high and fee-rich derivatives volumes are growing fast and show no signs of slowing down. Those factors should drive earnings growth at derivatives exchanges for at least 12 more months.

“Inside Scoop” section reports that 3 investment firms have recently wrapped up purchases of shares of Chipotle Mexican Grill (CMG). In the past 2 weeks, Oz Mgmt, Deephaven Capital Mgmt and Atticus Capital have each disclosed stakes in Chipotle's class A or class B shares.

No comments: