Wednesday, June 13, 2007

Paperstand (CEN, NILE, MA)

The WSJ reprots that the largest shareholder of Ceridian (CEN) is expected to say that he opposes the $5.3bn sale of the co and that he has hired bankers to find a higher bidder for the co. The moves by William Ackman's Pershing Square Capital Mgmt, which holds a roughly 15% stake, threaten to extend a months-long feud between Pershing and Ceridian's mgmt. At the least, they put more pressure on mgmt of the co, which is already fending off a proxy contest begun by Mr. Ackman. In a letter to fellow to shareholders, Mr. Ackman argues that Ceridian isn't valued fully. "We do not support the sale of the co at this low price. It appears to us that the current deal is an ill-suited response to our proxy contest and is suboptimal for Ceridian stockholders."

“Inside Track” section reprots that execs at financial mkts are profiting from the gains the co’s shares have made in recent years as they sell part of their stock. Investor interest in exchanges has been keen, driven in part by merger announcements and expectations of more consolidation. That's helped fatten the profits of exchange execs who have sold shares. "Valuations have certainly come a long way," says Richard Repetto, of Sandler O'Neill. "There's probably a certain amount of liquidity being sought as well as diversification." NYSE (NYX) has seen a stream of selling by insiders this year. Among the sellers is Vice Chmn Gerald Putnam. This year, a series of transactions has whittled his stake in the NYSE down to a recent 516K shares, from 838K shares late last year. Top execs at Nasdaq (NDAQ) also have sold stock. Through the end of last month, Exec VP Christopher Concannon, Bruce Aust and Adena Friedman had sold a combined 57K shares this year. Officials at CME (CME) and IntercontinentalExchange (ICE) also have sold shares through 10b5-1 plans.

Barron’s Online discusses Blue Nile (NILE), whose share price has more than doubled since hitting a 2-year low last summer. Fast-growing profits, higher guidance, a well-respected mgmt team and a growing mkt for online jewelry sales have fueled great expectations. But Blue Nile's success could attract competition from online rivals with deeper pockets. And since hitting a record high last month, the shares command a premium that leaves little room for disappointment. So it's no wonder that insider selling has raised a few eyebrows. "If you are going to be disciplined about investing, you can't say 'Let's keep [the stock] and watch it go up, up, up,'" says Brian Bolan, of Jackson Securities. "You have to be disciplined and lock in profits, and this is a time to lock in some profits."

“Inside Scoop” section reprots that mutual-fund giant Fidelity Mgmt&Rsrch disclosed it now owns nearly 8.2m shares of the Mastercard (MA), a 10.2% stake. Fidelity's 3.65M new shares were purchased during a 10-week period in which MasterCard stock jumped 34%. Fidelity is now MasterCard's 2nd-largest institutional holder, behind Marsico Capital Mgmt. Ben Silverman, of, says Fidelity's new stake is a positive message given MasterCard stock's strong run of late.

1 comment:

David J. Phillips said...

Referencing Barron's comments that Blue Nile's success could attract competition: On May 22, the 10Q Detective noted: "In our view, the online jewelry market is not as fragmented as when Blue Nile was first-to-market five years ago. Brick & mortar jewelers are narrowing the gap, investing more to increase search engine visibility. In addition, by building their own interactive resources, competitors are making it as easy for their customers to browse their websites as it is to walk through their doors.

In addition, while we believe that management is committed to improving its product strategy, it has not yet executed on attracting broader customer appeal for non-diamond products. Product newness will require (unacknowledged) additional marketing dollars....

David J. Phillips, Publisher