The WSJ reprots that accelerating the buyout boom and putting some of the world's biggest public co’s in reach, Blackstone Group has decided to increase the size of the world's largest private-equity fund to $20bn. The move by Blackstone, which already had raised a record $15.6bn for the fund from investors, secures bragging rights for now in an industry that has several other giants looking to create funds of $15 bn or more. Investment strategists who compile lists of potential tgts in recent weeks have pointed to Home Depot (HD), Dell (DELL), and Texas Instruments (TXN). In Europe, investment bankers point to other big names, including BT Group (BTY) and Unilever (UN).
According to the WSJ, with Detroit's auto industry struggling through its darkest days in decades, some big investors are betting billions of dollars that the auto-parts sector is poised for a comeback. At Lear (LEA), investor Wilbur Ross says his deal to acquire its $3.5bn N-American interiors business "should be resolved in the next few days, no later than next week." Mr. Ross says he has signed confidentiality agreements with eight other suppliers. "It seems like the whole components business is for sale," he said. Another hedge fund, Pardus Capital Mgmt, has spent $109m this year to acquire 14% of Visteon’s (VC) stock, making it that supplier's 2nd-largest shareholder.
“Heard on the Street” column discusses Wild Oats Markets (OATS), which long has seemed like a plate of cold leftovers next to Whole Foods Market (WFMI). But it may just be the tastier stock. That conclusion was bolstered by the stock mkt's reaction to last week's news that Wild Oats wouldn't renew the contract of CEO Perry Odak and yesterday's announcement that he had quit. Though Mr. Odak had led the co through a 5-year turnaround, the stock price rose both times. Mr. Odak was criticized for being too timid in trying to grab customers who favor Whole Foods' sprawling stores. "Investors would be happier to see a mistake being made being too aggressive in new-store formats than to see the opposite, which is them being too conservative," says Eric J. Larson, of Piper Jaffray.
Barron’s Online discusses UnitedHealth (UNH), saying the co may find clear skies again. In March, allegations started flying that CEO William McGuire and others unfairly benefited from backdated stock-option grants. Last week, McGuire stepped down as Chmn and agreed to depart as CEO on Dec. 1 after an internal report found that millions of stock options were likely improperly backdated at the co during his tenure. Certainly, the report could add gas to shareholder lawsuits and probes by the DEC, the DOJ and Minnesota's attorney general, which could cost United in fines and settlements. But the stock already reflects these widely known concerns. Despite its woes, UnitedHealth remains an earnings machine, generating profit growth that is more than double that of the broader stock mkt. And with a cheap multiple and uncertainty about the stock-options scandal fading, the shares appear attractive."The stock is severely depressed and it's not justified," says Christopher Bonavico, manager of the Delaware Select Growth Fund. "When I look at where United's earnings could be in 3 years, this stock looks dramatically cheap."
“Inside Scoop” section reports that Morgan Stanley and Goldman Sachs units have both taken profits in IntercontinentalExchange (ICE) as the stock surged. Goldman Sachs has lowered its stake in the co to 4.7%, or 2.7m shares, down from 7.5%, or 4.26m shares. Morgan Stanley also disclosed on Oct. 24 that it had lowered its stake in ICE to 4.23%, or 2.4m shares, down from 7.4%, or 4.2m shares.
Sharesleuth.com has real nasty piece on UTEK (UTK). Last time they highlighted Xethanol (XNL), that saw its shares drop sharply after the post. Read whole story here.