Tuesday, October 30, 2007

Paperstand (GOOG, SKS, CFC, ENR, CE, SONC)

According to the WSJ, Google (GOOG) is close to unveiling its long-planned strategy to shake up the wireless mkt. The co's ambitious goal: to make applications and services as accessible on cellphones as they are on the Internet. In a move likely to kick off an intense debate about the future shape of the cellphone industry, Google wants to make it easier for cellphone customers to get a variety of extra services on their phones. Within the next 2wks, Google is expected to announce advanced software and services that would allow handset makers to bring Google-powered phones to mkt by the middle of next year. In recent mo's Google has approached several US and foreign handset manufacturers about the idea of building phones tailored to Google software. Google is also seeking partnerships with wireless operators.

Investment firm Baugur Group said in a regulatory filing that it would like to explore the possibility of acquiring Saks (SKS). Baugur Group, which holds an 8.5% stake in Saks, said it might make a proposal for the acquisition of Saks with Dubai-based Landmark Group, which is owned by Indian retail billionaire Micky Jagtiani. Baugur Group is considering a $3bn offer for Saks.

"Heard on the Street" column discusses Countrywide (CFC), saying that the co cheered investors last week by pledging a quick return to profitability, boosting the stock price that day 32%. But some analysts warn that the co hasn't gone far enough in marking down the value of mortgage securities it holds and may have trouble delivering on that profit vow. "Not so fast," Frederick Cannon, of Keefe, Bruyette & Woods, said in a research note, predicting that the stock will Underperform the mkt. B/c investors have grown so jumpy about the surge in defaults on mortgages, lenders like Countrywide can no longer fund themselves with short-term borrowings in the capital mkts, such as by issuing commercial paper. So Countrywide is relying heavily on collecting more deposits at its savings-bank unit, Countrywide Bank. But Countrywide has yet to show that it can "earn above its cost of capital" under this new model at a time when the outlook for losses from defaults is unclear, Mr. Cannon says.

Fund manager likes Energizer Holdings (ENR) and Celanese Corp. (CE) -- Barron's Online.

According to the "Inside Scoop" section, from Wed through Fri Chmn, CEO and President of Sonic (SONC), J. Clifford Hudson, sold 278K shares for $7m. The transaction was the largest insider sale at the company in five years. On Oct. 19, Controller Terry Harryman sold 16K shares for $413K. Ben Silverman, of InsiderScore.com, called the sales a "mild sell signal," noting that Sonic execs receive less compensation than their peers so profit taking may be a justified reward for a job well done. Still, it does give pause for thought. "It's time for investors to take a look at their own crawlspaces, to see if they are comfortable with the earnings and guidance and the stock's valuation at this point," Silverman says.

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