Friday, February 02, 2007

Paperstand (CAM, VIVO)

The WSJ’s ”Heard on the Street” column out saying that for the scores of co’s swept up in the options-backdating scandal, repercussions have included financial restatements, regulatory investigations and exec resignations. In what would ordinarily seem like bearish news, however, there may be some buying opportunities. A number of bets have paid off as many stocks have dipped on adverse disclosures about possible backdating, only to bounce back within weeks, days, or even hours. Gartmore Small Cap Fund had nearly a 30% return last year partly b/c it purchased stocks when they fell on backdating news, says Charles Purcell, senior portfolio manager of the $937M fund. "The underlying businesses were the same, and we were going to get past this eventually," he says. "It's taking advantage of the 'groupthink.' "

Barron’s Online discusses Cameron Intl. (CAM), which is the 2nd-largest maker of "subsea trees," the contraptions that help bring oil from ocean-floor wells to the sea's surface. Cameron's order backlog for deep-sea exploration products is growing and should bolster earnings in the next several years. The global oil-field-services co makes other products that help control oil and gas flows, contain pressure and separate impurities, on land and offshore. They should largely do well even if oil prices fall below $50 per barrel. In addition, Cameron shares might not be getting credit for the higher prices on its newly-acquired Dresser valve business. "I'm very excited about the stock b/c Cameron should exceed earnings expectations in ‘07 due to a record order backlog, rising margins, a clean balance sheet, excessive cash flow and fewer shares outstanding," says Timothy Call, of Capital Mgmt.

“Inside Scoop” section reports that Meridian Bioscience’s (VIVO) Chmn and CEO is leading a slew of insider-selling as the co's stock trades at record highs. William Motto, now rounding up his third decade as Chmn of Meridian's board, sold 200K shares for $5.85M on Tue. Last month's proxy filing indicated that he directly held a 2% stake with 523K shares. Overall, seven execs and directors sold about 326K shares on the open mkt for $9.3M over the past 90 days. Jonathan Moreland, of, says Meridian's "stock has done fabulously over the past 5 years, so you would expect a lot of selling, particularly options-related selling."

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