Wednesday, August 15, 2007

Paperstand (DTV, GXP, GPS)

The WSJ reports that DirecTV (DTV) is expected to announce a wholesale agreement today with Current Group to provide high-speed Internet service over electric-power lines. Under the agreement, DirecTV will market a bundled package of Current's broadband and Voip services under the DirecTV brand.

According to the WSJ, Berkshire Hathaway (BRKA) bought a small stake in Dow Jones (DJ) in the 2Q, during Rupert Murdoch's bid to win ownership of the co. Berkshire's stake comes as a surprise because Berkshire's Chmn Warren Buffett has publicly voiced concerns in recent years about the newspaper-publishing industry and the challenges it faces from the Internet and other technology.

Federal authorities are preparing to file criminal charges against nearly a dozen individuals in connection to a years-long investigation into improper stock lending. Federal prosecutors in Brooklyn, NY, and the SEC are investigating whether current or former employees at Janney Montgomery, Morgan Stanley (MS) and other financial institutions committed fraud by taking kickbacks or engaging in self-dealing while arranging stock-lending agreements. The investigation has centered on conduct involving mostly lower-level employees across Wall Street. The cases involve "finders" or firms that act as intermediaries and assist borrowers and lenders in locating stock to borrow. The stock-lending mkt was once a backwater of Wall St., but has grown into a $10bn industry, fueled by the increased use of short-selling. For years, this mkt had been under the radar, which authorities believe created holes in compliance and an opportunity for fraud.

According to the WSJ, many investors have run for the exits in recent weeks, but insiders are taking the opposite route, displaying their most bullish behavior in several years. As stock mkts have tumbled, co execs and directors have reacted by increasing the level of their share purchases and decreasing the pace of their sales. Taken together, the pattern suggests co insiders believe that mkt conditions are set to improve, said Michael Painchaud, of Market Profile Theorems. "It's overwhelming, really, and I think it only bodes well for the mkt going forward," Mr. Painchaud said. Co’s mentioned include HMA, MYL, NT and YHOO.

Barron’s Online discusses Great Plains Energy (GXP), saying that the pullback in shares makes it among the cheapest stocks in its sector. The stock is expected to gain around 15% over the next year. New rate hikes in its regulated-utility mkts in Missouri and Kansas expected by the end of the year and the close of its acquisition next year of Aquila should offer greater earnings visibility and confidence in the stock. In the longer term, synergies from integrating Aquila, the 2010 opening of the Missouri coal plant, and the completion of environmental upgrades at existing plants will significantly boost cash flow as the projects are completed. "We are getting paid well for waiting for the earnings to come through, and also the relatively high dividend gives it [the stock] support in volatile mkts," says Barry Abramson, of Gamco Investors. "We like that they are significantly expanding their utility rate base with the construction of this new larger power plant" to expand their core business, he says.

According to the “Inside Scoop” section, Gap’s (GPS) new Chmn and CEO Glenn Murphy has made the retailer's largest insider purchase in at least 4 years. Murphy bought 150K shares for $2.3m Fri. Ben Silverman, of, says Murphy's purchase is a "confidence-inspiring move" but quickly adds, "I wouldn't classify it as very actionable."

No comments: