Wednesday, January 16, 2008

Paperstand (BA, C, SNCR, CCIX)

The WSJ reports that Boeing (BA), already 6mo’s behind schedule on its 787 Dreamliner jet program, is close to announcing more delays that might hurt its ability to deliver as many planes as promised in the initial yr of production. The aircraft maker continues to experience problems on a variety of fronts. It has had difficulty getting the first plane ready to fly, and now the 787 may not make its first flight until June. Boeing also has made slow progress in overcoming parts shortages and other issues at suppliers' factories. An announcement that would include a new time schedule might come as soon as today. Further delays would likely make it impossible for Boeing to meet its goal of delivering 109 airplanes by the end of ‘09. If that occurs, the co may have to pay millions of dollars in penalties to airlines for missing delivery deadlines.

“Heard on the Street” column discusses financials, saying that Citigroup (C) now holds the distinction of sustaining the biggest hit of any bank or broker related to the mortgage mess and ensuing credit crunch, easily topping write-downs of $10bn at UBS and $9.4bn at Morgan Stanley. But bears say there is more bad news to come, meaning it is still too early to go bargain hunting among many financial stocks. Citigroup itself practically said so, these investors add, by going out and raising more capital than would be needed if the crisis were passing. "The financials aren't out of the woods yet," says Thomas Vandeventer, of Tocqueville Asset Mgmt. "Other than brief bear-market rallies, it doesn't look like there's a compelling reason to buy these stocks now."

The WSJ highlights Synchronoss Technologies (SNCR), which has seen its share price surge in the past yr on its connection to the Apple smartphone. But Synchronoss is looking beyond the iPhone toward its contracts with several wireless and Internet phone-service providers and the launch of its European operations to fuel long-term growth. "If you look at Synchronoss 2 yrs from now, you will say the iPhone was great," said Eric Kainer, of ThinkEquity. "It really helped the co's mkting efforts and proved what it could do for customers. However, it's not going to be a huge chunk of their business." Yet 25% of the stock's float is held by investors betting it will decline. And with a large portion of its rev coming from AT&T, concerns that the co is too reliant on one customer continue to weigh on its shares. "What brought us there was the completion of AT&T's merger with BellSouth and the launch of the iPhone," said Synchronoss Chmn and CEO Stephen Waldis, responding to critics. "Our business outside of AT&T remains strong."

“Inside Track” section reports that Jana Partners and 5 insiders bought a combined $2.73m in shares of Coleman Cable (CCIX), but co's stock is still just above its all-time low. Jonathan Moreland, of Thalmann Asset Mgmt, said the recent purchases constitute a "solidly bullish insider signal," but he cautioned that only investors with a long-term horizon should look to follow the insiders' lead. "Clearly, this is not something you have to jump into today," Mr. Moreland said. "But I think these are perfectly good indications of longer-term value: both a slew of insiders and a smart value investor."

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