Wednesday, November 22, 2006


According to the WSJ’s „Heard on the Street” column a surge in deals is stoking takeover speculation. Some point to Sprint Nextel (S), Hilton Hotels (HLT), Avis Budget (CAR) and home builders such as Lennar (LEN), Ryland (RYL) and D.R. Horton (DHI) as possible tgts. Private-equity firms are circling home-service co Service Master (SVM), say ppl familiar with the matter.

The WSJ reports that Nov started off with 30 insider sellers and no buyers among co’s in the S&P's broadcasting and cable index, said Mark LoPresti, of Thomson Financial. From the beginning of Sept through early Nov, insiders in Mr. LoPresti's study sold $32.3m of shares, while spending $91K on purchases. Univision Comm. (UVN), Liberty Global (LBTYA) and TiVo (TIVO) had the largest sales by dollar value. Cable and broadcast industry insiders headed Mr. LoPresti's list for bearishness in two metrics, the "head count" metric in which individual sales are tabulated, and another measure designed to compare sales and buying. "When I see an industry kind of take the lead in one of the metrics, and they're not a very active industry to begin with, I usually take notice," said Mr. LoPresti. "When you see this ... you want to look at the last time you saw something like this." The last time this industry's insiders behaved similarly was in ‘96, Mr. LoPresti said. "After that activity, the S&P broadcasting and cable index fell about 23%" in the next 9 months, he said.

Barron’s Online discusses Mentor (MNT), whose stock is up 41% since May. Yet Mentor faces some lofty expectations. And with the stock flirting with new highs and steep multiples, its premiums leave little room for disappointment. "We believe we are at a point of peak investor sentiment," says Alexander Arrow, of Lazard. "Silicone approval is the most important thing to happen to the industry in a decade. But the expected conversion rate to silicone is significantly higher than we expect, and over the next year, we don't see any catalysts for the stock."

“Inside Scoop” section reports that Google (GOOG) insiders trim back on sales. Insider sales, judging by the number of shares, have tapered off this year. So far in ‘06 Google execs and directors grossed more than $3.7bn by selling 9.4m shares on the open mkt. In ‘05 they sold 16.7m shares for nearly $4.7bn. From the Aug. 19, ‘04, IPO through the end of that year, insiders sold nearly 8.6m shares for $929.4m.

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