Friday, February 01, 2008

Paperstand (MOT, BUD, TTI, LUV)

The WSJ reports that Motorola (MOT) said it may spin off or sell its flagship handset division. The decision is a stunning setback for an American technology icon and offers a parable for other industries. The decision comes as the mobile-device mkt, which shipped 1.1bn units globally last yr, is undergoing sweeping change. Consumers are demanding easy-to-use devices with Web and multimedia capabilities. Mobile use of the Web is expected to grow even faster in coming yrs as carriers increase the bandwidth of their cellphone networks by adding new radio spectrum. "We think they are moving in the right direction, but they still have a lot of moving to do," Carl Icahn said, noting that he wants new mgmt at the handset division.

“Heard on the Street” column out saying that after mo’s of courting, beer giants Carlsberg and Heineken last wk finally talked Scottish & Newcastle into selling itself in a $15.4bn deal. Now other titans in the fast-consolidating brewing industry may be looking for dance partners. One enticing possibility: Belgian-Brazilian InBev and Anheuser-Bush (BUD). InBev and Anheuser already have held discussions. Although reports of the talks surfaced as long as a yr ago, they have become more serious, and a deal is possible this yr.

Barron’s Online highlights Tetra Technologies (TTI), whose shares are down 48% since last summer. The co sits atop a massive mkt. Billions of dollars worth of cleanup efforts are still on tap in the hurricane-ravaged Gulf of Mexico. But the Gulf of Mexico work has been slow in coming, and a series of managerial missteps and insurance battles set Tetra back in ‘07. The unexpected detour has forced improvements that should pay dividends for investors. Tetra has restructured its decommissioning strategy to better allocate equipment resources. The co has also taken write-downs for unpaid insurance claims and expedited a contract on better-priced ingredients for its fluid line. "We think it's a hidden value play," says Mark Madsen, of Wasatch Advisors. He thinks Tetra shares, trading at around $16 a share, could fetch $25-26 by the end of the yr.

“Inside Scoop” section reports that 2 insiders at Southwest Airlines (LUV) have sold $725K in the co's stock. On Mon Chmn of the Board Herbert Kelleher sold 50K shares for $604K. Also on Mon Pres and dir Colleen Barrett sold 10K shares for $121K. "The selling isn't as bad as it looks from the headline," says Jonathan Moreland, of Ladenburg Thalmann Asset Mgmt. "The chmn still owns a lot of shares and the president did have an options exercise earlier in the month." "However, given the decline the stock has seen, I'm surprised there isn't more buying," Moreland says. "Yet this is a pattern you see at airlines over the yrs: The stock goes down and instead of buying we see more selling, [perpetuating] a negative insider profile. Add to that rising fuel costs, cutthroat competition and a potential decrease in demand…and the macro aspects of this industry have not been attractive."

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