Wednesday, July 11, 2007

Paperstand (LIZ, NUAN, MCRS)

The WSJ reports that Liz Clairborne (LIZ) is expected to announce today that it's seeking to divest itself of 16 of its 36 apparel brands representing $800m of its $5bn in annual revenue. The move, seven months after CEO William McComb joined the co, marks a bold reversal of the strategy that Claiborne and most of its competitors in the US apparel industry vigorously pursued for more than a decade: build big brand portfolios to hedge against unpredictable fashion cycles. The 16 brands that Claiborne will try to sell or license out or possibly discontinue are Sigrid Olsen, Prana, Ellen Tracy, Dana Buchman, Mac&Jac, Kensie, Intuitions, C&C California, Enyce, Laundry, Tint, Stamp10, First Issue, Emma James, Tapemeasure and JH Collectibles.

According to the WSJ, a coming govt auction of radio spectrum could hand Google and other tech co’s their first significant victory in a battle to loosen the grip held by telecom operators on the wireless and broadband mkts. FCC draft rules would set aside part of the available spectrum for creation of an "open" network free of the constraints that large telecom operators like AT&T and Verizon normally impose. The spectrum being auctioned is estd to bring in $15bn to the Treasury. The new open-access rules would apply to a slice that is big enough to create a nationwide network. Google, a satellite-TV provider, or another new entrant could now be enticed to bid in the auction and enter the wireless mkt as a competitor to the large carriers. In a number of filings at the agency and in a letter late Mon, Google has argued that some spectrum should be set aside for an open network. eBay's Skype has also weighed in with filings to back such rules. Though Google has considered the idea of buying spectrum and outsourcing the building and operation of the network to a 3rd party, it remains unclear whether Google is ready to spend billions to build and operate a new wireless network. A direct bid by Google for spectrum is very unlikely at this point, b/c the co views such a move as outside its core activities.

“Heard on the Street” column highlights Nuance (NUAN), the largest co devoted almost exclusively to selling speech-recognition software. Nuance has about 75% of the mkt for speech-enabled call centers. And about 50% of medical-transcription devices run on its software. Growing at 22% a year, sales of such technologies are forecast to reach $2.3bn in ’07. I believe the stock is still cheap," says Michael Alpert, of J&W Seligman. "Their strategy is built around domination, and we think its earnings forecasts are low," he says. One reason for the optimism: The co increasingly is cutting deals with directory-service businesses that pay recurring rev rather than one-time payments.

Barron’s Online discusses Micros Systems (MCRS), whose stock is up 30% over the past 12 mo’s. But despite the run-up, investors can still check into value with shares of Micros. The stock is currently trading at 23x estd earnings for the next 4 qrtrs, or a 4% discount to its 5y avg, and a 33% discount to its peers in the application-software sector. Micros' share price looks very reasonable given its competitive position and strong earnings growth rate, which analysts on avg est will be 23% in F’07. The co has plenty of rev growth opportunities, particularly in its hotel segment, and from its heavy exposure to fast-growing intl mkts. In addition, its strong balance sheet gives it plenty of cash to fund bolt-on acquisitions and a generous share-buyback program. In F’07, Micros expects to bring in rev of $778-781m. By F’09, Micros expects that number to increase to $1.1bn. "We are very positive on the co," says John Wullschleger, of Mitchell Capital Mgmt. He lauds the co's "good, solid US exposure and tremendous opportunity in intl mkts" and the fact that its virtually debt-free balance sheet means that the co has "tremendous amounts of cash to fund growth and development."

“Inside Scoop” section reports that Texas oil billionaire Thomas “T.” Boone Pickens is earning some slick profits off of EXCO Resources (XCO). Pickens, a director at the co, has sold more than 2.3m EXCO shares for $42.7m. The sales trimmed his stake to 11.03m shares, or 10.6%. Ben Silverman, of, notes that Pickens was restricted from selling any shares during the customary lockup period following an IPO. Right now it seems that Pickens is "just looking to take some money off the table and book some profits." Pickens' selling poses as "a mild negative" although Silverman expects the billionaire to remain a large shareholder for some time. Amid a lack of other insider sales, Pickens' transactions are somewhat offset by some positive activity by institutional players, he adds.

1 comment:

Anonymous said...

By the way, I have been looking up on the Internet and I have found some tools which are really cools to monitor the positioning of the competition, as well as seeing their tips and tricks. If you are interested, I advised to you have a look. It seems they are free: