Wednesday, May 16, 2007


The WSJ’s ”Ahead of the Tape” column reports that in the past few months, private-equity firms have been sizing up European insurers. Expectations are building in the stock mkt for deals and restructuring. Whether this leads to action remains to be seen, but already Europe's insurers are doing more to keep their shareholders happy. The Dow Jones Wilshire Global Insurance Index is up 6.55% this year. "Incumbent managers have an opportunity to create a lot of value," says Michael Huttner, a JP Morgan insurance analyst in London, adding that "managers might think if they don't hurry, it will be done for them." Only US listed co mentioned: Aegon (AEG).

“Inside Track” section out saying that not all stock purchases by CEOs are created equal, and a smaller purchase can sometimes be a better indicator than a larger one. John Riccitiello, the new CEO of Electronic Arts (ERTS), and W. Edward Scheetz, president and CEO of Morgans Hotel (MHGC), each bought shares of his co's stock last week, but the strength of the signal sent by the transactions differs significantly, said Jonathan Moreland, of Mr. Moreland said he finds Mr. Scheetz's purchase of $291K worth of Morgans Hotel stock a more positive sign than Mr. Riccitiello's purchase of almost $1m of EA stock, partly b/c of Mr. Scheetz's more timely trading history, and partly b/c of the recent runup in Morgans Hotel stock. "I was impressed that Mr. Scheetz was putting more money into a stock after it had risen so strongly in the past months," Mr. Moreland said. "I was also impressed with his track record, much more than with the gentleman at Electronic Arts."

Barron’s Online discusses Wyeth (WYE), whose shares closed at a 5-y high last week. It's no wonder. Despite the regulatory delays, Wyeth has one of the pharma industry's strongest pipelines. 2 or 3 potential blockbusters could hit the mkt by ‘08, and profits could beat expectations. Yet the stock trades at one of the lowest multiples in Big Pharma, and its performance YTD has lagged several of its peers. Thus, it wouldn't surprise us if the stock still has room to run. "The pipeline is strong and holds a lot of potential," says Herman Saftlas, of S&P. "Key drugs are doing well, and I forecast double-digit earnings growth, perhaps 10-11% annually over the next 2 years. Yet the stock trades at a discount to Big Pharma."

“Inside Scoop” section reprots that insiders at Blue Nile (NILE) have sold nearly $20m in stock since May 1, led by Chmn and CEO Mark Vadon and President, CFO and Director Diane Irvine. "When you look at the numbers," Ben Silverman, of, says, "these guys are taking some big profits now. It's well-deserved if you look at where stock has come from." As for investors, Silverman adds, "The signal is: Proceed with caution."

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