Suntech (NYSE:STP): Actionable Trading Call

Cowen is out with a good call on Suntech (NYSE:STP) saying that trading around 12x 2009E EPS, they believe STP shares offer 50%+ upside vs. the market in 12 months. Investors may be puzzled by the timing of the convert offering, given current market conditions and the low share price. However, this is driven by the lead time to add polysilicon capacity, and it should give STP access to long-term, low-cost supply. While the deal is slightly dilutive this year, it could be offset by higher revenue in 2009. And, details of poly supply deals should provide triggers for the shares.

STP had over $600MM in cash and investments at year-end 2007, which should support capacity expansion and working capital. However, raw material remains the key constraint to growth, and it takes 18-24 months to add polysilicon capacity. Given the opportunity to invest in very attractive supply deals, the firm believes it made the right strategic decision.

Reits Outperform.

Notablecalls: I think this is a very significant call.

This is what NCN Solar told me yesterday morning:

'..I've been quite battered in the group, just wanted to mention to you, from trading perspective, if STP can get even on day, would signal sentiment changing, and would likely mean that funds were buying here. Also FSLR first time held strong in face of rumor, may mean its got good support there..'

Pull up a chart of STP and take a look - see the bottoming action yesterday? I suspect STP is done going down. Calling it Actionable Trading Call here.

Also, check out this:
http://www.seia.org/solarnews.php?id=168

PS: HUM's a buy right here. Strong buy. The thing has been cut in half in 3 days!

What I like this morning?

I like Aetna (NYSE:AET) long here. The stock is down considerably after WellPoint (NYSE:WLP) the largest US health insurer warned last night.

Yet, AET reaffirmed its guidance early this AM and we have the market very positive following good news from the FED (well, at least good on the sentiment side) plus some upgrades in the major financials.

Despite several industry downgrades this morning, some smart market watchers are telling me WLP problems are mostly company specific (despite management blaming economic conditions).

Fyi,

NC

Melco (NASDAQ:MPEL): Deutsche Bank out with a significant intraday call on MPEL

- Deutsche Bank is out with a very significant call on Melco (NASDAQ:MPEL) saying that after their visit to Macau, they remain bullish on the phenomenal growth in Crown's VIP business. Channel checks suggest Crown rolled almost HK$50bn in Feb. Firm thinks MPEL will deliver a stellar performance in 1Q, based on solid rolling and a high hold in Jan-Feb. They are raising their 1Q08 EBITDA forecast by 43% to $70m, the highest on the Street.

Channel checks suggested that Crown rolled almost HK$50bn in Feb, or 23% of Macau's VIP play. This lifted Crown's overall market share from 16% in Jan to 18% in Feb.

City of Dreams looked on track to openPhase 1 by end of 1Q09, with the main podium superstructure works 95% complete. DB sees this as one of the best location on the Cotai Strip, being near the airport and ferry terminal, and directly across from the Venetian.

Given the strong trends in VIP rolling, they are raising our FY08 EBITDA estimate by 22% to $261m.

Reiterates Buy, $22 target on MPEL as a strong operator with market share gains.

Notablecalls: This looks like a very significant call for MPEL. I expect the call to generate meaningful buy interest in the stock over the next couple of days. It's not every day you see EBITDA ests upped by 43% to a new Street high.

Citigroup & Piper Jaffray comment on Solars

The solar & poly stocks are in for a wild ride this morning as we have two firms out with pretty significant comments (opposing views):

- Citigroup notes Spain is the world's second-largest solar market, and strong Spanish solar growth has been driven by generous solar feed-in tariffs from the Socialist-led government. Firm expects that reelection of the Socialist Party will result in more favorable solar tariff policies post the current policy's expiration on 30 September 2008. The new Spanish solar tariff and installation cap will be announced in May timeframe.

Given the significant share price declines of the solar sector in the last several weeks, they would not be surprised to see a relief rally for the group over coming sessions. Sees Suntech (NYSE:STP) and Yingli (NYSE:YGE) as main beneficiaries due to their exposure to Spanish mkt.

- Piper Jaffray notes a very damaging article (and pictures) appeared in the Washington Post on Sunday March 9 which highlighted one of the problems with poorly designed Chinese poly plants. Some plants in China, like Luoyang Zhonggui (a supplier to STP, LDK and CSIQ) cannot recycle the byproducts back into the process (toxic silicon tetrachloride) and the article claims the company has been dumping the unrecyclable chemicals back into the land.

Firm speculates it could poise some supply risk if the plant production is scaled back. They believe the primary customer of Luoyang is STP (over half of Luoyang output) and to a lesser extent LDK and CSIQ. We have confirmed that the local supplier to Yingli (Xinguang) is recycling its byproduct (thus it does not pollute) and additionally YGE relies on mostly foreign poly suppliers (Wacker and MEMC). JA Solar (JASO) does not rely on Chinese poly suppliers currently.

Notablecalls: Oh well, this sure is a complex situation. But let's analyze it for a minute:

- STP is the #1 player in the Spanish solar market & YGE gets around 50% of their revs from there. So the exposure is surely there.

- Take a look at the Washington Post article. It's ugly. There has been a lot of talk of chinese poly supply coming online in 2nd half of 2008, putting some downside pressure on pricing (good for solars). Some of the smartest solar watchers have expressed their doubts regarding the chinese supply, so the expectations may not be THAT high. More of a sentiment negative.

I think that following the initial knee-jerk in reaction to Washington Post article, both STP and YGE become nice bounce plays. Spain trumps China.

I also like MEMC (NYSE:WFR) for a trade here. As one of the major producers of poly, they would definitely benefit from increased demand in Spain. Also, problems at Chinese competitors is good news for the co.

Notable Calls Network (NCN): Catching the bottom in Crocs (NASDAQ:CROX)

While probably not the most profitable but quite surely among the most elegant calls made on Notable Calls Network (NCN) last week was the Crocs (NASDAQ:CROX) one.

On Thursday March 6, around 12:38 PM a NCN member pinged me with the following heads up:

- My friend who has a huge CROX position and I am currently on the phone with as I write this just spoke to the CFO of CROX who says that Costco (NASDAQ:COST) will issue a statement today stating they misrepresented the facts about CROX on their call yesterday...if the market gets hammered then of course nothing will go up but I believe we will get a reaction when it's announced.

Well, since I've had CROX on my radar for quite some time, the information seemed interesting enough to do some further dd on it. I knew the stock was down close to 15% in two days, possibly on comments from COST. I was a bit hesitatant to immediately distribute the call to other NCN members as it was coming from a relatively new member that had yet to build the highly credible track record of many of the older members.

So, in order to get a sense of the validity of the call, I quickly did two things:

First, I went back and took a closer look at what the management at Costco had said regarding Crocs on their FQ2 conf call on March 5. It went something like this:

"... General merchandise, as I mentioned, is doing fine. Again, we should continue to benefit a little bit and I don’t think this is a big impact relative to the economy, but it’s certainly a tempering offset to it. I think the fact that we -- our non-food buyers are seeing more availability of what I will call branded non-food items where historically we couldn’t get our hands on and somebody just the other day mentioned huge availability in the apparel, things like name brand jeans and name brand women’s apparel and Crocs and the like. The impact -- and we are seeing some of that even on the furniture, the home furnishing side, getting those calls ..."

The comments hit wires around noon and likely contributed to CROX's free-fall over the next couple days.

Why were the comments considered a negative for CROX in the first place?

Costco isn't exactly famous for their shopping experience nor for the quality they offer. People go there because of the low prices. So, in CROX's case it seemed investors became worried that being added to Costco's merchandise mix would indicate problems with demand & destroy pricing. Note that inventory at CROX has been growing significantly over the past qtrs.

Secondly, I ran the call by some smart retail watchers. Must say most were pretty spektical noting it would be very difficult for an investor to get through to CROX's CFO.

Yet, I felt that with the stock down considerably, still huge 30% short interest and somewhat more reasonable valuation any positive news would pop the stock.


So, around 12:46 PM I distributed the call to all NCN members. It proved to be a good decision as the stock quickly bottomed bouncing 1/2 pts.

The thing that made the call really elegant was the fact that around 90 minutes later Crocs (NASDAQ:CROX) issued the following press release:

Crocs, Inc. Reiterates Retail Distribution Strategy

In the release the co reiterated that it had segmented its distribution strategy in order to maintain price integrity and enhance brand equity. The Company also reiterated that it did not, nor did it have plans to sell its Crocs branded merchandise to Costco Wholesale Corporation.

The press release caused the stock to spike another 1.3 pts, giving investors a nice 8-9% gain on the trade (depending on exit/entry).


This is definitely the kind of stuff that makes me proud to be running Notable Calls Network. Kudos goes to G for the heads up.

Hope you enjoyed it,

NC


Want to be part of NCN?

It's easy. Just shoot me a brief email that includes a short description of yourself and your AOL nickname.

Please do note that contacts via IM are limited to people with:

- 3+ years of trading experience

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I will not accept contacts from purely technically oriented traders, penny stock fans or people who have less than 3 years of experience in the field.

Marvell Tech (NASDAQ:MRLV): Bounce?

Several firms are commenting on Marvell Tech (NASDAQ:MRLV) after the co released its Q4 results and guidance last night:

- Citigroup notes a much better-than-expected print left little for the Bears. However, once again the stock traded off post-close on the outlook's sequential growth (-8%) despite Street F1Q09 and F09 revenues which will reset HIGHER, and Street F09 EPS which should remain flat. They think MRVL's high-teens annual revenue growth and 700 bps of intra-year operating margin expansion are compelling catalysts which can pull the shares steadily higher through the year. A trough 15x multiple on ther C08E $0.72 EPS implies downside to $11.0 versus upside of 74% to $19 target, compelling risk/reward. Reits Buy.

- Deutsche Bank believes that MRVL is poised to experience a strong C08 driven by multiple product cycles in enterprise & mobile storage ICs, 802.11n WLAN ramps in enterprise, retail & notebooks, combo WLAN+Bluetooth products in embedded applications, & 3G Cellular for RIMM. Given 3 quarters in a row of revenue upside and 5 quarters in a row of operating margin expansion, they believe that the stock could perform well even in a slow demand environment. Reits Buy and $16 tgt.

Notablecalls: I continue to like MRVL here and believe the stock is bound to bounce this AM.

Annaly (NYSE:NLY), Capstead (NYSE:CMO), Anworth (NYSE:ANH) - Bounce?

A very knowledgeable NCN member focusing mainly on financials had some interesting comments this AM:

I know I keep talking about this but heres the difference between Thornburg (NYSE:TMA)... and the Annaly (NYSE:NLY), Capstead (NYSE:CMO), Anworth (NYSE:ANH),.. they are 99% that same animal.... use mortgage bonds/loans as collateral to lever themselves up and play the carry trade.

The only difference (and its a HUGE one) is that NLY,CMO,ANH are 100% FNM/FRE AGENCY mbs bonds... while TMA is 100% private sector mbs.

TMA is getting margin called to death on their aaa portfolio b/c their underlying collateral has vaporized and at 18:1 leverage... it don't take much to get your credit lines pulled.

Aan the other hand NLY, CMO, ANH only own Fannie Freddie debt which is super liquid and not seeing price erosion AT ALL. Thus...NLY, CMO, ANH running their 10:1 leverage are no where near margin calls.... but the lemmings selling these names are probably clueless to the difference between the 2 business models .

I think it's probably worth picking up a few sharres near the open for an intraday pop. I bet the smart money comes in within the first 15 min of trading and takes NLY up a point off the lows.

If u do it... just buy in increments as they are dropping... just so you dont get too heavy if some big blocks come in to knockem down further.

Check out Monday mornings open... NLY opend horribly and bounced back over 1.50 when the smart $$ came in.

The only other reason I can see for the assinine selling of these names is that folks that own TMA may also own NLY and are thus getting margin called themselves.

Notablecalls: Love the comments. This comes from a guy who got short Thorn (NYSE:TMA) when things got ugly. Watch NLY, CMO & ANH.

PS: I'm hearing some pretty loud chatter saying one tier-1 house has 7-figure amount of NLY to sell this morn. Should be enough to knock it down early on.

Taser (NASDAQ:TASR): A Deeper Dive into Story - Jefferies

Jefferies is out positive on Taser (NASDAQ:TASR) saying evidence from deployments continues to mount that Tasers save lives, reduce the cost of law enforcement, and lower injuries to officers and suspects. These forces should drive continued adoption by worldwide law enforcement and correction agencies, as well as the military, private security firms and consumers.

The company has the potential to grow its top line 30+% each of the next five years. The initial wave of growth is driven by penetration of the potentially 100 million worldwide users of the technology. As penetration increases, the company benefits from an annuity-like revenue stream from its installed base for cartridges, increasing predictability. Currently, the annual recurring revenue per existing customer is about $85, excluding replacement units. The second wave of growth likely comes in 3+ years when the company launches an upgrade to its X26 unit.

With over 12,400 law enforcement agencies buying Tasers in 45 countries, as well as growing penetration of the military, private security and consumer markets, Taser has developed a broad and stable customer base.

Reits Buy and $20 tgt on TASR

Notablecalls: The stock may be ready for a next leg up here.

Tessera (NASDAQ:TSRA): Actionable Call Alert - Cowen

- Cowen & Co is out with a superb call on Tessera (NASDAQ:TSRA) saying that given the preliminary nature of the ongoing patent review process, they have been shocked by brutal negative reaction in TSRA's stock price in reaction to the recent ITC decision to stay TSRA's infringement case against a slew of "wireless defendants".

Judging from the reaction in the stock, in Cowen's view the market is now discounting a very, very, very, very unlikely scenario where not only TSRA patents are ultimately overturned but that existing licensees( both DRAM and Wireless) breach contracts and for some reason push back and decide not to pay TSRA. They do not believe there is any basis for this. Licensees are quite knowledgeable on patent issues and surely know that we're not even close to any
patents being overturned.

Interestingly, but not surprisingly given their initial objection to the "stay" order, the ITC's own staff attorneys filed a petion for review of the stay order which they continue to assert was incorrectly and unfairly granted by the ALJ. Note that the ITC ALJ is new to the ITC, was assigned to the TSRA case late last year and has no/little patent experience.

The ongoing patent reviews are far from final. While investors read the initial ITC decision to stay and concluded that the patent reviews were going negatively for TSRA and would be concluded soon, the firm does believe this is the case.

Thinks that the stock has been unfairly and unjustifiably sold off. Reits Outperform.

Notablecalls: So, ITC's own staff has filed a petition for review of the stay order? ITC's own staff is against this stupid order imposed by Judge Essex! This judge was assigned to the case back in Oct 2007 and seems somewhat clueless. This makes it VERY likely the stay will be lifted.

This means the stock is way oversold. There is NO reason TSRA shouldn't be a $20 stock!

Buy it today & buy early.

Actionable Call by Cowen's Raj Seth.

Apple (NASDAQ:AAPL): Halo Effect Take 2? - Morgan Stanley

- Morgan Stanley is out with an interesting call in Apple (NASDAQ:AAPL) saying it's increasingly clear that Apple is focused on penetrating enterprise accounts with its Mac and iPhone products. If successful, they view this as a second halo effect that will boost revenue growth and margins beyond what is currently incorporated in consensus models. Firm sees the possibility of both software/security solutions as well as new customer wins at today's iPhone announcement (scheduled for 10am PST at Apple's headquarters), that will help validate the company's enterprise strategy.

Firm hosted Peter Oppenheimer, Apple's CFO, at Morgan Stanley's Technology conferenceyesterday. They view Apple's comments on Enterprise and International investments as the most relevant incremental data points that help support the company's growth story.

Beyond today's enterprise-related iPhone announcements, the firm highlights that Apple is investing in both US and International commercial sales people (170 sales people today); is now willing to discuss industry-vertical wins (Oil and Gas, Government etc); and views boot camp and industry-leading mobile products as drivers of potential success in the commercial PC market.

Reits Overweight and $185 tgt.

Notablecalls: So, the next leg up in AAPL will be coming from the corporate side. The bottom looks to be in. Buy AAPL today.

Paperstand (IDCC)

The WSJ’s “Heard on the Street” column out saying that it doesn't have a sexy brand name, and its HQs are far from Silicon Valley. But InterDigital (IDCC) might be a winner in the cellular-telephone industry's move to multimedia phones. The co owns an array of patents on wireless technology that it contends are essential to making the high-speed-data phones that let ppl watch videos and surf the Web. Among co’s to license its patents are Apple (AAPL) and RIM (RIMM). But industry giants Nokia (NOK) and Samsung have resisted. From this month through Nov, the US ITC is set to issue a series of opinions and rulings on whether Nokia and Samsung have infringed InterDigital's patents. If InterDigital wins, and a court decision in the UK augurs in its favor, Nokia and Samsung would come under new pressure to sign licensing deals. Fees from those deals might double InterDigital's rev over the next few yrs.

RUMOUR MILL: Sprint Nextel Corp (NYSE:S)

A curious rumour surfaced today couple of hours before the close saying Sprint Nextel Corp (NYSE:S) has hired Morgan Stanley and initiated director Ralph V. Whitworth's plan to spin-off Nextel. According to the rumour it could and must be viewed as huge positive for S. Spin-off announcement 'expected' in 2-4 weeks.

Considering Sprint Nextel (NYSE:S) has been subject to various chatter (both pos & neg), I wanted to highlight some very insightful feedback from a NCN member.

He notes:

Both iDEN and CDMA subscriber losses have been huge... this was a stupid deal in the first place and unwinding Nextel now at a depressed price makes no sense. I think they should hold on until the market condition improves and the company shows solid subscriber growth.Not sure if this is a concession that the Q-chat feature on Rev-A (QCOM product) is not viable technologically. Either way, this is not going to solve CDMA business of Sprint at all. Sprint should have just spend billions on improving coverage like VZW did in the late 1990s/early 2000s. It's paying huge dividend. Sprint is scr*w*d for sure.

Notablecalls: Couldn't agree more.

Sears Holdings (NASDAQ:SHLD): Downside to $75? - Morgan Stanley

- Morgan Stanley is cautious on Sears Holdings (NASDAQ:SHLD) reiterating their Underweight rating noting margins have now fallen for three quarters, and that is despite drops in both depreciation and ad spending. Sum-of-parts support near $90 a share remains theoretical and stretched, in their view, and less likely to find a bid in a more constrained credit and retail environment. Valuation has downside to $75 vs peer group on FCF yield, even lower on P/E.

Buybacks continued in 4Q, but with cash down to $1.66bn (roughly half in Canada), ESL's meetings with investors will be important. Original ESL fund investors are still up at least 4x from the original Kmart bond before bankruptcy investment. Some investors may want liquidity. Firm believes any signs of redemptions or sell-down of ESL stake in SHLD would be a significant negative to the share price

At $95, they believe the market is failing to account for not only risks but likely outcomes. The 90bps drop in SHLD margins equals the average we assume for WMT, TGT, HD, LOW, M, JCP, JWN, and KSS.

Notablecalls: Don't shoot the messenger but I think SHLD may have some downside in it. There were some Icahn stake rumors yesterday (10% chance of being true, imo), so there could be some weak hands around.

Not a huge convicion call by any means. Just letting you know it's out there.

Marvell Tech (NASDAQ:MRVL): Buy ahead of earnings - Jeffco

- Jefferies is out with a solid call on Marvell Tech (NASDAQ:MRVL) saying they expect CQ4 revenue to be above their and St. estimate of ~$782MM (+3% Q/Q). Firm believes Storage likely increased to $360MM (+8% Q/Q) and above their estimate of $345MM (+3% Q/Q) as strength in Mobile likely more than offset some weakness in Consumer. They also believe Mobile was likely up 20-25% Q/Q (higher than est. of up ~10%) as they estimate HDD shipments by Marvell's Mobile (2.5") HDD customers (Toshiba, Fujitsu, Samsung, and Western Digital) were up ~20% Q/Q in CQ4.

Also, Comm increased slightly to ~$435MM (+3% Q/Q), largely due to continued strength in PXA (+7% Q/Q) driven by RIMM.

Regarding guidance they believe Marvell will guide CQ1 revenue inline to above their and St. estimate of ~$765MM (-2% Q/Q). Firm expects implied EPS guidance to be inline to slightly ahead of their estimate and St. of $0.13 driven by slightly better revenue and gross margin guidance.

Reits Buy and $21 PT is based on 20x (vs. peers at 15x) CY09 EPS. Think MRVL is well positioned to regain profitability and revenue growth in CY08 as it benefits from multiple product cycles and drives operational leverage within its acquired assets (PXA, Avago, QLogic).

Notablecalls: So we have Jeffco out saying MRVL may indeed come ahead of ests when they report on Thursday. Note that STX reaffirmed this AM and WDC actually upped their guidance last week. This all points to a healthy qtr for MRVL.

MRVL is a beaten down player and I think good results may propel the shares way (10-15%) higher from here.

I'm also hearing Deutsche Bank is out positive on MRVL this morning saying the stock's a buy ahead of earnings.

I think the stock's a buy here, especially with weak open.

Royal Caribbean (NYSE:RCL): Added to Conviction Buy List at Goldman Sachs

Goldman Sachs is adding Royal (NYSE:RCL) to the Conviction Buy List given the relative appeal compared to our other sectors/companies. Royal has easy comps and is near trough valuation and margins whereas lodging and gaming show more extended valuation and likely a more difficult earnings outlook. Firm's CL designation is based on less downside risk for Royal versus other sectors. The stock is down 18% YTD and even with recent bad news (higher oil, downward revisions) it seems to have found a bottom. Any signs of good news on the consumer front could send this stock higher. GSCO's $45 12-month Royal price target is based on blended PE/DCF analysis.

This is follow on to firm's late January note (01/27/08) when they highlighted Royal as an early stage consumer rebound stock. Since then, the company reported 4Q2007 net yield growth well
above expectations (11% vs 9% estimate) repeating a string of stabilizing/solid demand trends that we saw from Carnival and Norwegian. Firm still expects net yield expectations to be met as, 1) they are against easy comparisons, and 2) the mix shift towards higher priced Europe/Alaska and bigger ships creates pricing momentum.

GSCO notes that their 2008 EPS forecast is below consensus ($3.00 vs $3.27) as theirs incorporates higher fuel forecasts. However, given the visibility of higher fuel they suspect downward revisions are already in the stock.

Notablecalls: It certainly looks like Goldman is the early bird in RCL. I certainly like it. Expect to see buy interest today.

The sector is beaten down and out-of-fav & now we have the ultimate tier-1 firm out very pos. on the best name. Watch CCL as well when RCL gets going.

Early Morning Tidbits:

- Goldman Sachs is adding Royal Carribbean Cruises (NYSE:RCL) to their Conviction Buy List with a $45 tgt. (more on this later - should be a good mover).

- Most firms are out defending Intel (NASDAQ:INTC) this morning. I'm still kicking myself for not highlighting that cautious heads up call from BofA yesterday morning saying Intel's NAND business may cause some EPS headwinds. Must say I don't see this as a warning at all. More of a reaffirm that CPU business is doing fine.

- BofA is out with call saying the next meaningful date in the Microsoft/Yahoo! saga will be March 14th, which is MSFT's deadline to nominate a slate of directors. While they believe Microsoft will likely nominate directors on this date, they ultimately expect MSFT to try and resolve the deal through a friendly negotiation, with a deal in the low $30 range the most likely outcome.

Inverness Medical (NYSE:IMA): Actionable Call Alert - Jeffco

- Jefferies is out with a wonderful call on Inverness Medical (NYSE:IMA) following a recent investor conference call with CEO Ron Zwanziger and CFO David Teitel.

Firm notes there was active participation from accounts and questions primarily focused around the pending acquisition of Matria, IMA's strategy in disease management, 4Q results, and the discrepancy in 'Street' estimates for 2008 and beyond.

Jeffco notes that based on management's lack of providing guidance the 'Street' now has EPS estimates for 2008 and 2009 that range from $1.56-$2.01 and $2.20-$3.32, respectively. Furthermore, many Sell side analysts have asserted that they have vetted their estimates with management (with a wide range of forecasts) and therefore they believe that management needs to provide directional guidance to subdue investor's concerns over what IMA's true earnings power is for 2008 and beyond (expects guidance to be provided in an 8-K this week). Firm maintains belief that their 2008 and 2009 estimates of $1,373.9MM and $2.51 and $1,557.6MM and $3.32 are still conservative and echo comments made my IMA management on their conf call about their disappointment with other analyst's estimates.

We believe that IMA has become very attractive to potential acquirers at these levels. On the conference call, Mr. Zwanziger stated that IMA does not have a poison pill in place and that IMA's board would be amenable to entertaining take out offers and management has even considered doing an LBO at these levels. Jeffo notes that in 2007 Dade Behring was purchased at a multiple of ~4.1x trailing twelve month (TTM) sales and 15.0x TTM EBITDA, Biosite was taken out at 5.1x TTM sales and 13.0x TTM EBITDA, and Ventana was acquired at ~11.3x TTM sales and ~26.0x TTM EBITDA. They believe that based on any of these prementioned metrics, IMA is grossly undervalued at current levels.

They believe that there are numerous upcoming catalyst for IMA. First, providing 2008 guidance expected in the next week or two, second, CMS' national coverage determination to expand reimbursement for home INR testing to include atrial fibrillation and venous thrombosis patients should be finalized in March 2008.

Reits Buy and $70 tgt.

Notablecalls: What a beautiful call. IMA has been absolutely destroyed and I think this is the call that will make it bounce in the n-t. The call has it all:

- Positive management comments
- Catalysts (guidance, CMS)
- Destroyed stock.

Buy IMA today. It's going higher now. Actionable Call Alert!

Early Morning Tidbits:

- Piper Jaffray is positive on Research in Motion (NASDAQ:RIMM) saying February channel checks indicated strong demand for smartphones and data-oriented devices across all four major U.S. carriers. Firm believes RIM has lowered channel inventory and should guide to sequential May quarter growth despite tough February comparisons and North American economic concerns. Reits Neutral and $112.

- OpCo's Meredith Whitney is out negative on brokers (GS, MER, BSC, MS) saying the finality of fiscal Q108 causes the firm to take yet another whack at ests.

- Morgan Stanley is positive on Leap Wireless (NASDAQ:LEAP).

Apple (NASDAQ:AAPL): Comments from BofA & RBC

We have couple of firms out on Apple (NASDAQ:AAPL) this morning:

- BofA is lowering their tgt to $160 from $180 noting that given recent production data points from Asia, continued U.S. consumer weakness, and as a follow-up to their February 1st note (first discussed iPod production units), they are lowering iPod and iPhone unit estimates.They also lower their F2008 and F2009 EPS estimates.

Firm is lowering their F2Q08 iPod sales estimate to 9.97 million units (-5% Y/Y) from 11.08 million units (5% Y/Y) and iPhone sales estimate to 1.2 million units from 1.6 million units, due to continued production weakness. That said, gross margin upside near term could offset some of the unit weakness.

F2008 EPS estimates goes to $5.01 (consensus is $5.14) from $5.05 and F2009 goes to $5.97 (consensus is $6.29) from $6.17.

Maintains Buy.

- RBC Capital is out commenting on AAPL's 10M CY08 iPhone goal noting that estimated pending contributions from Smartphone market expansion, new iPhone versions (incl 3G), 3rd party applications, expanded global distribution, enterprise server integration, unlocked phones, in their view, will contribute to Apple shipping 11M iPhones CY08.

Mid-Q2/F08 checks and proprietary data from RBC's Tech Adopter Panel (3,600) point to healthy iPhone shipments (est 2.3M units) and strong Q2 Mac sales (est 2.2M). High-end iPods appear stable, with overall iPod sales (on low-end deceleration) expected at 10.8M, inline with street/seasonality (-51% Q/Q, 2% Y/Y). For Q2, they expect $7.2B revenue (up 37% Y/Y) and $1.08 EPS, above street at $7.0B and $1.05.

Reiterating Outperform and trimming target to $175 (from $200) on multiple revaluation.

Notablecalls: I think this serves to reaffirm my prev. view that at around current levels, the expected iPod (low end) deceleration, uncertainty regarding iPhone growth & general multiple revaluation is all priced in.

My gut tells me we MAY see a test of recent lows but this should be considered a buying oppy. Shorting AAPL here may be just a quick scalp trade (not going to take it).

Notable Calls Network (NCN): Brilliant trading opportunity in ELN/BIIB

While risking being overly promotional, I wanted to highlight a brilliant trading opportunity that was presented to Notable Call Network (NCN) members this week.

On February 27 just before noon, a NCN member sent me a very good heads up on Elan (NYSE:ELN) and Biogen-Idec (NASDAQ:BIIB) noting that:

- Tysabri linked to 'significant liver injury'.

Apparently the FDA has posted a so called 'Dear Doctor' letter on their website informing physicians of a hepatotoxicity warning and new precautions. The letter warned that Tysabri may cause liver injury and should be discontinued if Jaundice or evidence of other significant liver injury result.

Having been around when the Tysabri concerns surfaced back in 2005, I immediately suspected this would have at least some impact on both ELN and BIIB stock prices so, I distributed the heads-up to other NCN members.

Must say the reaction that followed surprised me.

Both ELN and BIIB took significant hits in a short time frame, falling 2.5 pts (-10%) and 4 pts (-6%), respectively.

The best part is that NCN members had ample time to short both stocks. Even in size, if one had enough conviction.

Once the news hit Bloomberg & CNBC, hell broke loose as you can see from the charts below:



Quite surprisingly, it took the analyst community several hours to respond. While BIIB recovered most of the loss fairly quickly as Tysabri is not considered their main growth generator (as opposed to 2005 when hopes ran high), ELN continued to languish until about 2:00 PM when I got word that Banc of America was out in defense saying the liver news was actually OLD.

According to the firm Tysabri-related liver injury had been previously reported, and were already considered within their valuation. Reports of liver injury were first reported in the addendum to the FDA briefing documents for the July 31st, 2007 Gastrointestinal Drugs Advisory Committee Panel regarding Tysabri for Crohn's Disease.

I couldn't believe my eyes - the stock was still down 8-9%. BIIB was down only 2.5% and now we had a tier-1 firm out saying the news was indeed OLD!

So I disted the defense to other NCN members as quickly as I could.

It took another 5-6(!) minutes before the stock started slowly creeping higher. Must say I performed several sanity-checks on myself during these minutes: Went back and re-read the BofA note over and over again thinking I had missed something. But there it was - old news!

The stock slowly moved higher over the next 10 minutes (60-80c) or so and once the FDA's spokesperson confirmed via Reuters that the news was indeed old, the stock shot up another 1.5 pts giving us a nice gain of 2+ pts.

I think this continues to show how valuable tool Notable Calls Network (NCN) has become in a relatively short period of time. Trading is all about flow and we sure get some good flow.

Currently, about 1/3 of the 40+ NCN members actively share flow with the rest acting as the silent majority. I would hereby like to encourage the other 2/3 to more actively share their flow as well. I know many of you are privy to great info. Remember, NCN is all about synergy!

Together we can make NCN a true market force.


Want to be part of NCN?

It's easy. Just shoot me a brief email that includes a short description of yourself and your AOL nickname.

Please do note that contacts via IM are limited to people with:

- 3+ years of trading experience

- Access to quality research/analyst commentary

- Ability to generate and share (intraday) trading calls

I will not accept contacts from purely technically oriented traders, penny stock fans or people who have less than 3 years of experience in the field.


PS: Some of my calls over the past weeks have been for sh*t. I have gotten some negative feedback from NC readers lately and I must say most of it is justified. I don't know why but I have been somewhat out of touch with the market lately.

I've been in this game for a long time and so have many of the high profile traders I talk to. Most agree with me - things have gotten way tougher over the past months. One person I talk to daily that has been trading for 20+ yrs told me this is the toughest market he has seen. Think this says a lot.

Anyway, I will continue trying my best.


NC