Wednesday, December 19, 2007

Paperstand (BSC, JAKK, LTM, HLF)

The WSJ’s ”Heard on the Street” column reports that in an acknowledgment of the most-difficult period in Bear Sterns’ (BSC) history, CEO James Cayne and other senior execs are expected to forgo bonuses for this yr. The expectation comes as Bear prepares to announce tomorrow its 1st qrtrly loss ever, an outcome certain to curb pay for the firm's 15,500 employees. This is a turnabout for Bear, which over the yrs has used its generous, merit-driven compensation system to recruit job candidates. Bear's current exec compensation plan mandates that the firm hit a minimum ROE level before senior brass can receive bonuses. Bear just barely met that ROE standard this year and execs could draw on a small bonus pool.

”Inside Track” section reports that the recent preplanned sale of $1.9m in stock by the CEO Jack Friedman of Jakks Pacific (JAKK) sends a warning signal about the co's prospects, according to an analytical tool developed by The last time such a negative signal was recorded, Jakks shares fell by more than a third in 3 mo’s. The 4Q is particularly important for Jakks. In Oct, the co posted a 17% increase in its 3Q profit and backed its annual rev forecast of $800m in net sales. At the time, Mr. Friedman said in a statement the co is "well-positioned for the ‘07 holiday season." Mr. Friedman sold shares since then under a plan set up in March to sell as much as 150K shares. The plan called for Mr. Friedman's sale of 75K shares the week after the co filed its 3Q report. "Based on that footnote, it suggests to me that the 2nd sale didn't necessarily need to be transacted," said Ben Silverman, of InsiderScore.

Barron’s Online out saying that the coming of a new year is traditionally a time when the out-of-shape make resolutions to join health clubs or embark on diet regimens. That's why Barron's Online only feels comfortable suggesting a couple of names: Life Time Fitness (LTM) and Herbalife (HLF). "2/3 of the American population is overweight or obese, so if you have the winning product, then the mkt opportunity is huge," says Scott Van Winkle, of Canaccord. In Jan, health clubs get the largest monthly portion of new sign-ups, about 12%. And weight-loss programs like Weight Watchers and Jenny Craig, owned by Nestle, also fare well. "It's their version of Black Friday," says Tom Shaw, an analyst with Stifel, Nicolaus.

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