Wednesday, September 12, 2007

Paperstand (NCC, ZION, CMA, NHWK, ANN)

According to the WSJ, NTP sued the nation's leading wireless carriers, accusing them of infringing its patents related to mobile email services, in a follow-up to its successful litigation against RIM (RIMM). The co, which won a $612.5m settlement from RIM last year, filed lawsuits in recent days in the US District Court for the Eastern District of Virginia against Verizon Wireless, AT&T, SprintNextel and T-Mobile USA. NTP is seeking unspecified damages and an injunction requiring the carriers to stop the alleged infringement. The complaints say the wireless carriers have infringed NTP's portfolio of patents by selling and marketing phones and software applications that enable consumers to use email on mobile devices. 5 of the 8 patents at issue were also at issue in NTP's lawsuit against RIM.

“Heard on the Street” colum out saying that their branches may be far from Wall St, but some regional banks may be exposed to the same kinds of issues that are causing headaches for the world's largest financial institutions. Hungry for growth in recent years, regional banks have pumped up their traditional investment portfolios by buying loans that have financed the LBO boom. Some also have formed off-balance-sheet vehicles that issue commercial paper. Those strategies worked well when mkts were flowing and credit quality remained unusually pristine. But that might not be the case for long amid concerns of a slowing economy and as investors shy away from mkts. National City (NCC), Zions Bancorp (ZION) and Comerica (CMA) are among a number of banks that could see the value of their loans fall if the economy worsens. The banks may well need to address these issues in coming months by boosting reserves, cutting back lending or scaling back some other operations. David Konrad, of Keefe, Bruyette & Woods, says that a number of regional banks will have plenty to lose if the LBO boom continues to dry up. And if the co’s being acquired run into trouble in a slowing economy, banks could be forced to write down those loans. Although large banks typically lead the massive financings that accompany LBOs, they often syndicate those loans to other investors, including regional banks. Those other buyers of the loans typically don't receive any of the fees that big banks receive from putting the deals together, but share in the risk of default. In a weakening credit environment, "it really makes it hard for a reasonable return if you are just a participant" in the loans, Mr. Konrad says.

Barron’s Online out saying that NightHawk (NHWK) seems to be heading for a turnaround. The shares could even reach new heights. Up 59% last year from the price set for its IPO in Feb’06, NightHawk was a high roller before a selloff earlier this year. Profits, however, are growing at an eye-popping pace thanks to acquisitions, NightHawk's efforts to tackle new mkts, and growing demand for its services. And though up, the small-cap health-care stock continues to fly under the radar. "It's basically a growth stock trading at a value price," says Craig Hodges, of Hodges Fund. "Current earnings growth makes it a compelling story, but the stock is undervalued."

“Inside Scoop” section reports that one AnnTaylor (ANN) insider has decided it's time to jump in and buy shares of the co. Director James Burke purchased $1.1m worth of stock on Fri, marking the first open-market purchase by an AnnTaylor insider in at least 5ys. The transaction boosted Burke's AnnTaylor stake by 74%. He now holds 82K shares, plus an additional 33K exercisable options.

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