Research in Motion (NASDAQ:RIMM): Device shipments and activations are about 20-30% ahead of plan - Canaccord Adams

- Canaccord Adams is out with a huge call on Research in Motion (NASDAQ:RIMM) after they conducted our mid-quarter channel checks with leading global handset carriers and partners, including AT&T, Vodafone and Verizon. They did this to ascertain the fact and fiction of some recent comments made on Wall Street.

Canaccord believes that RIM's device shipments and activations are about 20-30% ahead of plan for June and July up to the 14th for all carriers. At AT&T, June came in at 20% above May, and July is tracking, based on data up to Monday, to be flat to up 5% in July at AT&T (yes, the iPhone carrier). Blackberry sales have seen no adverse impact from the recent iPhone 3G launch.

They are raising their Q2 revenue and EPS from US$2.62 billion/US$0.89 to US$2.67 billion/US$0.92. This is based on new Q2 shipments and net sub adds of 6.25 million and 2.7 million, respectively (previously 6.1 million and 2.6 million). Firm continues to believe that Bold will be launched in limited capacity in August, followed by major global releases in mid-September. They expect Kickstart, Javelin and Thunder in FQ4. Reiterates BUY rating and US$225 target.

RIM continues to be on Canaccords Best Ideas list.

Notablecalls: This is a pretty big call that should give the stock a significant boost. Kudos goes to Canaccord's Peter Misek for excellent channel checks.

Sprint (NYSE:S): Colour on recent SK Telecom chatter

On July 15, CNBC reported that SK Telecom is in talks with Sprint (NYSE:S) to acquire part or all of Sprint. The report added that no deal is imminent and no price has been set at this juncture. Meanwhile Reuters reported that SKT is in talks with Sprint on a technology alliance, rather than a takeover.

- Citigroup notes SKT remained silent on this news, but they view it is highly likely that SKT is looking for opportunities around Sprint to scale up its US presence. Combining Helio with Virgin still leaves it with a subscale US presence. Firm thinks SKT believes it has competitive
edge in technology to make a difference.

SKT's market cap of $15bn compares with Sprint's $25bn. Citi believes SKT would have to be part of a buyer consortium rather than going it alone. Assuming, say, a 20% stake in Sprintis acquired at current levels and SKT takes half, the required $2.5bn of investment would be more easily digestible.

- Goldman Sachs believes at ~$45 bn in enterprise value, and $25 bn market cap, the size of a potential outright acquisition of Sprint would be problematic given SK Telecom's smaller size ($15 bn market cap). This deal would require a sizeable cash component, an unlikely scenario in current capital market conditions.

SK Telecom partnered with Providence Equity and approached Sprint last November with a proposal for an equity infusion of $5 bn, and possibly more. Firm notes that the previous funding offer was made when Sprint stock was at ~$15, 70% above current levels.

Remains Neutral on the stock, and believes the risk/reward is not compelling. Firm's analysis leads them to a potential of breakup value of $12 Sprint for Sprint and an ~$5 value value for assets.

- Cowen is most positive of the bunch saying they expect Q2's results to show improvement and see upside to estimates. Moreover, SK Telecom's interest highlights strategic possibilities.

Firm believes churn dropped steadily in Q2. They project postpaid churn of 2.4% vs. Q1's 2.5%. They also believe the Instinct handset, plus the new ad campaign, boosted store traffic; they have seen that in our store visits. cowen projects postpaid net ad losses to slow to (1.0)MM from (1.1)MM in Q1, but also think the number could be (0.9)MM or lower.

Firm continues to view Sprint with 53MM subs and T- Mobile with 31MM subs as being at a scale disadvantage to VZ with 79MM subs (pro forma for Alltel) and AT&T with 71MM. With the WiMAX spin-off to Clearwire, Sprint appears to need a 4G migration strategy, which a partner could help.

Notablecalls: NCN Telco is convinced the deal will take place this year (pinged me last night). Some of his comments:

- SK Telecom has been aggressive with its international strategy. I think recently increased its stake in China Telecom

- Now that valuation is way down from $25 when the nextel merger announced, it makes total sense.

- Currency is relatively strong now. So looking at an acquisiton in the US is a good move. I think it will happen.

- Private equity firms are wiling to do deals with korean firms. SK is one of the top 4 firms in south korea.

- Just remember that South Korea has a very forward thinking /aggressive president in the office. He will even try to broker the deal if he believes it will bring more recognition and growth to korean economy.

Wachovia (NYSE:WB): A big tell

Wachovia (NYSE:WB) back in green. Well, almost back in green.

That's a pretty bold statement by the market.

Indicates we're getting close to the bottom.

Lehman (NYSE:LEH): Lehman's a buy here

I think Lehman (NYSE:LEH) is a buy around current levels with several points worth of upside.

- WSJ reports the U.S. Securities and Exchange Commission (SEC) has sent subpoenas to more than 50 hedge-fund advisers as it investigates whether individuals spread false rumours to manipulate shares in two Wall Street firms. The subpoenas, sent as recently as Monday, are seeking trading and communications data related to short-selling and options trading in Bear Stearns Cos or Lehman Brothers Holdings Inc (LEH), the person told the paper. Rumours have been blamed for the collapse of investment bank Bear Stearns and for the 40 percent slide in Lehman shares this month.

The subpoenas relate to trading in securities of the brokers, as well as correspondence between the hedge funds and other parties, people familiar with the inquiry told the paper.

- NY Post reports Lehman Brothers' CEO Dick Fuld is seriously mulling a way to take itself private and out of the public eye. According to sources, talks internally centering on privatizing Lehman have gotten very serious consideration after a blistering onslaught of rumors and questions about the firm's solvency have caused shares to shed more than 79% this year. Details on how such a take-private maneuver might work are not clear. However, the rationale is that the free-fall in Lehman's shares is attracting hungry vultures hoping to snap up the ailing fixed-income shop on the cheap. "The idea is why sell to someone else at so cheap a price when they could buy themselves," noted one source.

Notablecalls: The actions taken by the SEC create a situation where the short sellers are forced out of the game. If they stick around pressing their bets & talking about it loudly (a.k.a spreading rumours) they risk getting caught. The good people at the SEC will show little mercy. So they are likely to fold and step aside. That takes the pressure off the stock.

Plus now we have Dick Fuld possibly looking to take Lehman private, representing a kind of a floor for the stock here around $13 per share.

Morgan Stanley was out positive on LEH yesterday reiterating their Overweight rating and $31 tgt calling it a high-beta play on possible recovery.

Looks to me like a good risk/reward trade.

Wachovia (NYSE:WB): Outlook is bleak for equity shareholders - Opco

Oppenheimer's Meredith Whitney is out downgrading Wachovia (NYSE:WB) to Underperform noting that as more news about WB comes out, they are increasingly convinced that the outlook is bleak for equity shareholders. WB has said that it's in the process of "enhancing the capital efficiency of the balance sheet" and "reducing mortgage exposure."

Firm estimates its mortgage portfolio will decline by 9% sequentially and total on-balance sheet loans will decline by at least 5% by year-end. The problem is the "denominator effect"; the loss numerator grows while the asset denominator declines, resulting in spiking loss ratios, lower assets, and lower net interest income, at least 50% of its earnings. In this very real scenario, expenses simply can not come down fast enough, seriously jeopardizing WB's ability to grow earnings.

Notablecalls: Looks like Meredith has given WB stock the proverbial kiss of death. I expect the stock to be down to the tune of -15& to -20% today (or possibly more). Anything above $8.50-$9 level is an Actionable Shorting opportunity this AM.

Marvell Tech (NASDAQ:MRVL): Colour on RIMM chatter - Avian

Avian Securities is out this morning reiterating their positive opinion on Marvell Tech (NASDAQ:MRVL) specifically putting into perspective some of the fears with regard to RIMM. Also they are once again outlining where they believe there is upside to their and street numbers, and why MRVL remains one of their favorite ideas.

Amtech is out indicating this morning that FSL has displaced MRVL in its 2.5G "Javelin" product due mid '09. While Avian is still trying to confirm whether MRVL won or lost this socket they would note that the Javelin product appears to be a lower end, lower cost, product aimed at less advanced networks. Losing such a socket to a lower end FSL product would not be as significant for MRVL which is focusing on higher end portion of the smart phone market and where MRVL is strongly entrenched within RIMM. In the next few months, RIMM has 3 updates scheduled kicking off with the "Bold", followed by "Thunder", and "Kickstart". They believe the Bold is positioned as RIMM's primary offering for enterprise users and expect 3G capabilities to expand RIMM's traction in Europe. Avian expects the touch screen Thunder (available in both CDMA and GSM versions) to target the high end consumer market with 3G capabilities again making this offering more attractive to European consumers than RIMM's previous portfolio. Finally, they see the Kickstart flip phone launching with an extremely attractive price point and targeting the lower end of the consumer market, previously an area where Marvell has not had significant traction. This diversification of RIMM's product portfolio should 1) create significant growth opportunities for Marvell at RIMM, 2) increase MRVL's ASP per part due to the ramp of 3G based products, while 3) mitigating the loss of any single design.

Thus, while Marvell may have lost the "Javelin" product, (note: speculation around potential design losses at RIMM has weighed on the name in varying degrees since they picked up coverage of Marvell in 2007 with the current speculation already having already helped cause nearly a 10% decline), the impact is far less significant than it might have been a year ago as RIMM's product portfolio has become far more segmented than it had been previously, particularly with Javelin likely appealing primarily to customers of carriers that have been slow to roll-out 3G capable networks (e.g. T-Mobile). Finally, with MRVL dominating RIMM's visible roadmap for 3G devices Avian believes that the company is well positioned to continue as a significant supplier to RIMM moving forward.

In the near-term, they continue to see a number of growth drivers beyond the new RIMM phones that should drive upside beyond the seasonal 2nd half pickup. These include Seagate's adoption of MRVL SOCs, MSFT's forthcoming Xbox update, ramp of new MRVL SSD controllers, and lastly increased traction for MRVL controllers in home server type solutions. In particular with regards to these NAS controllers, they believe this segment is becoming a meaningful portion of revenues for MRVL, and given the market growth rates (high double digit last year) will have a meaningful impact on our model as we shift to breaking out this product portfolio moving forward. Firm remains positive on MRVL given both the variety of upcoming catalysts as well as MRVL's attractive valuation (trading at approximately a 25% discount to growth on an earnings basis).

Notablecalls: Good coverage on MRVL by Avian Securities.

American Intl (NYSE:AIG): Do not think that the co definitely has to raise capital - FBR

FBR is out with a positive call on American Intl (NYSE:AIG) noting the shares fell almost 40% during 2Q08 alone, and they have lost 54% of their value since the beginning of the year. In firm's opinion, there is nothing wrong with AIG's core insurance operations. In fact, AIG is among the best poised in the P/C insurance industry to weather the soft market with its rock-bottom expense ratio and truly global presence. AIG's insurance investment portfolio and its credit default swap (CDS) portfolio, however, are two primary areas of concern for investors.

In the report, they examine the performance of several CDX indices over the past three quarters. Based on their findings, they believe that the change in the market value of AIG's multi-sector CDO CDS portfolio during 2Q08 was not significant, and they anticipate a modest gain of $500 million to $2 billion. Firm believes that AIG could incur losses in its investment portfolio for 2Q08 comparable to those the company suffered in 1Q08. While it is difficult to predict, they believe investment losses for 2Q08 could be around $7 billion after-tax.

With these potential unrealized losses, AIG has a very thin capital cushion left, but they do not think that the company definitely has to raise capital. FBR reiterates Outperform rating for investors with longer term horizons, but cautions that it will be difficult for the stock to perform until some stability returns in the financials sector. Until then, high stock volatility will remain.

FBR is lowering their 2008 estimate to $2.15 from $4.80 to account for less favorable credit default swap spreads. They are raising their 2009 estimate to $5.85 from $5.80 to reflect an updated share count.

FBR's tgt for AIG is $53.

Notablecalls: I suspect this call will create some nice buy interest in AIG today, especially in light of overall positive tone in financials. I feel AIG has been trampled ahead of the expected capital raise so that the actual news of a successful raise will actually buoy the stock.

AIG's a buy here. Could easily go to $24.50-$25 here. Today.

Fannie (NYSE:FNM) and Freddie (NYSE:FRE): Wild Week For GSE Shares, No Change in Fundamentals, Just Sentiment - Piper

Piper Jaffray is out with defending comments on Fannie (NYSE:FNM) and Freddie (NYSE:FRE) this morning noting GSE shares have gotten pummeled this week with FNM shares -30% and FRE -45%

Interestingly, there has not been one significant piece of macroeconomic or company specific news on either company to drive the decline, in firm's view. They believe FNM will likely not need new capital unless credit losses rise to over 40 bps, which would be about triple current levels.

The drop began on a bullish competitor's speculative note on capital and proposed FASB accounting changes (dispelled by the regulator). FNM/FRE's regulator, OFHEO, put out a press release last night saying "they are adequately capitalized with capital well in excess of OFHEO-directed requirements, have large liquidity portfolios, access to the debt market and over $1.5 trillion of unpledged assets." Piper doubts anyone will listen as fear is so high. They remain cautious with Neutral ratings on the GSEs due to concerns about credit. Firm notes that to upgrade, they need to get some confidence in the peak in credit losses, which they have not been able to do yet. Still, they have been surprised by the decline in FNM and FRE, as there has not been one significant piece of fundamental data to drive the decline.

The bigger decline for FRE is due to the fact that they have not raised capital (FNM recently completed a $7.4 billion financing), which they believe could make FRE capital ratios close to regulatory minimums by year end '08 unless they slow the growth of the portfolio

Firm is is lowering their price target from $30 to $15, which is based on 6x their '10 estimate of $2.50. This multiple is well below historical levels (12x is the 10yr median P/E multiple) due to the lack of visibility on peak credit losses.

They are lowering their price target on FRE from $28 to $9, which is based on 4x '10 estimate of $2.20.

Notablecalls: We have NYT reporting the U.S. government is considering taking over mortgage finance companies Fannie Mae and Freddie Mac if their funding problems worsen, in a plan that could leave shareholders nothing, citing people briefed on the matter.

These are pretty harsh statements that will likely send the shares down some more this morning. Yet, as Piper Jaffray notes, things are not as ugly as the media indicates.

Wachovia (NYSE:WB): Buyable?

- Goldman Sachs notes the good news is that Wachovia has a new CEO. The bad news is that nearly half of the ~$8bn of capital raised in April has already evaporated. If they set aside the good news, the conclusion from the bad news is that more capital is required and the easiest and least expensive source has to be a cut to the dividend, which is still sizeable at $3.2bn annually.

While the stock may be up on the initial CEO announcement, the real outlook hinges on capital. This quarter's loss of $1.23 to $1.33 per share implies that WB will be cumulatively unprofitable since the credit crunch began. Given a lack of profitability and declining capital ratios, a dividend cut is likely while a broader capital plan may include asset/business sales. A goodwill write-down will also come to recognize that Golden West is impaired, but valuation and capital are both based on tangible book.

WB trades at 1.1X GSCO estimate of 2Q tangible book value. Firm's 12-mos DCF price target is $20. Maintains Neutral.

- RBC Capital believes Wachovia's stock will likely remain under pressure until credit quality stabilizes, the timing of which will likely take place in 2009. Under the leadership of its new CEO, they expect the company to incur a significant charge to "clean-up" its problems once and for all, eliminate its dividend and raise additional capital.

- Ladenburg thinks the hiring of Robert Steele will keep alive the belief that Goldman Sachs (GS) will acquire WB.

Firm's 12-month price target of $13 represents an estimated 75% of estimated tangible book value which is well above the 30% level the "Ground Zero" banks traded down to in late 1990-early 1991. Rating is unchanged at Sector Perform with Average Risk.

Notablecalls: I must say I have to take the opposite view here. I suspect Steele wanted some decks cleared before (write-offs) coming in. A guy coming from Goldman Sachs wants to keep looking good.

That makes WB buyable here just under $13

Focus Media (NASDAQ:FMCN): Goldman defends the stock following yesterday's sell-off

Goldman Sachs notes Focus' (NASDAQ:FMCN) stock traded down ~5% intra-day yesterday, which they attribute to concern that Focus' outdoor advertising business in Beijing is subject to a rule that only Olympics sponsors can advertise on the medium during August and September.

Speaking with management overnight, the company confirmed that its commercial network, poster frame, in-store, and online businesses are not subject to this rule, which only applies to a few of the TV screens in its Beijing travel and hotel network. The travel and hotel network is immaterial to revenue or earnings. The rest of the business sounds on track, and has enjoyed a full rebound from the post-earthquake deceleration. Focus will report its 2Q2008 results in the second week of August; GSCO expects the results to be supportive for its stock in terms of both earnings and cash flows.

Reits Buy and $58 tgt.

Notablecalls: Expect the stock to trade up on this. Could go to $27 in a jiffy.

Fannie (NYSE:FNM) and Freddie (NYSE:FRE): Defenses

Several firms are out defending Fannie (NYSE:FNM) and Freddie (NYSE:FRE):

- Piper Jaffray notes there has been much discussion over the past few weeks about the effects of the FASB vote to potentially remove a QSPE concept from FAS 140.

In plain English, the FASB is looking to add visibility to off-balance-sheet assets, especially in the face of huge charges and capital requirements resulting from off-balance sheet assets at some of the large banks such as Citigroup.

Based on a competitors' report outlining worst case results for FNM/FRE, on this topic, those stocks sold off by around 17% yesterday.

Piper had a discussion with a senior partner at a Big 4 accounting firm and with some industry senior executives that have been embroiled in conversations with FASB and regulators, and one thing is clear: they don't know the end result. However, with regard to the credit card assets and the GSEs, it sounds to us like they are not the target of the accounting changes. Despite that, for GAAP accounting purposes, they may have to add those assets to the balance sheet

Firm doubts, especially in the midst of a credit crunch, that regulators or Congress would allow a massive imminent increase in the capital required by those businesses. A worst-case scenario for the GSEs, taking an asset that requires 45 bps of capital and forcing an increase to 250 bps of capital, would be a massive cost increase for the mortgage industry driving large increases in interest rates to consumers. They doubt that is acceptable.

They remain very cautious on the most credit sensitive names and need to feel more comfortable about the outlook for credit to get more optimistic. However, the firm believes the reason for the sell-off yesterday was likely not justified.

- Keefe Bruyette notes that FNM and FRE have both suffered significant share price declines based on possible FASB interpretations for off-balance-sheet treatment of securitizations. The firm believes this sell-off is unwarranted on this issue as the GSE regulations already have capital requirements for off-balance-sheet exposures of the two companies.

Notablecalls: The media is approaching this issue in a way less aggressive way I expected this morning. With several defenses, I suspect we will see at least an early bounce in the names. My fave is FNM of the two. Give the shorts a run for their money.

WHERE is the Rally??

A good hedgie contact with an excellent track just pinged me with the following:

Hey.. wait a minute... I thought that when oil drops the market would rally?? Isn't that what CNBC tells us??.

Today I see

Oil down $5
NG down 60 cents
soft commodities limit down across the board ( I think)
dollar is behaving too.

My guess is that this is the final blow to the bulls... they stayed long hope.. that an oil/commodity drop would spark a rally.... and NOW WHAT?? Perhaps we see the last of them simply throw in the towel in coming days.

Here is another observation.........

We have FNM FRE collapsing and the market down only 100?? Could there be THAT much short interest in the market?? We may very well be pushing on a coiled spring here.... and if so... at some point we could have a massive reflex rally. I see that VIX is spiking at the same time we are approaching 1210 on the SP500.

Perhaps the simultaneous intersection of $30-VIX and 1210-SP500 could be the spark that sets it off.

I wish I knew the answer to these questions. Shorts are fat and happy.... and could be getting a bit careless.

Solar In Spain: Are Stocks Pricing In An Unlikely Worst-Case Scenario? - Cowen & Co

Cowen notes Solar stocks have been pummeled by concerns about a potential sharp drop in Spanish solar subsidies. In firm's view, a proposed 2009 cap of 300MW is unlikely to become law, as it would cause significant job losses and business closures. Unemployment and economic growth are the major issues for the Spanish government. The power sector has accumulated a large deficit, because regulated prices have not kept pace with fuel costs, underscoring the case for renewables.

They see Outperform-rated thin-film players ENER ($64) and FSLR ($253) as best-positioned, but believe Outperform-rated ESLR ($9), SPWR ($64) and STP ($35) are also oversold.

Modules are fungible across PV markets, so they believe that 2009 industry volume of about 9GW is achievable, but a smaller Spanish market implies lower ASPs (perhaps down 15% for c-Si players, vs. our prior 10% est.). ENER and FSLR have not seen ASPs skewed upward by Spain and have higher gross margin. Moreover, ENER benefits from higher roof and BIPV tariffs. SPWR and STP should benefit from a lower blended-cost silicon portfolio next year, while ESLR has no spot-poly exposure and should see margin expansion from the ramp of Quad-ribbon technology and the new Devens plant.

Notablecalls: I don't have great conviction in this one but we may see a slight bounce in the Solars in the n-t.

Cleveland Cliffs (CLF): CLF should have rallied, not dropped 17% - JP Morgan

JP Morgan notes they believe the extreme sell-off in steel stocks today can be largely attributed to a Bloomberg story Tuesday – “ArcelorMittal Says Half of Customers Rejected $250 Surcharge” - quoting Lou Schorsch, head of MT’s Flat Carbon Americas. The market interpreted this information as the steel producers are unable to pass through higher raw material prices with higher steel prices.

It should also be noted that the $250/t raw material surcharge, or as MT likes to call it “cost recovery program,” was implemented for their fixed price contracts which represent less than 50% of shipments and not for MT’s spot market shipments. Firm views the program as a success by achieving a 50% success rate given this unprecedented move in altering fixed price contracts.

With steel stocks in their coverage universe off an average of 15% in the last two days, they view this as an opportunity to gain an attractive entry point in a group with strong fundamentals that should see record high earnings in both 2Q and 3Q. While they believe most steel stocks warrant a strong rebound, firm's top picks in the group are Cleveland Cliffs (CLF), Nucor (NUE) and US Steel (X). CLF dropped $19.93 or 17% today and now trades at only a 2009 PE of 7.5x and EBITDA multiple of 5.4x. Thermal coal represents only 2% of CLF sales, and they see numerous positive earnings catalysts both this year and next for the company.

For those who read beyond the title of the Bloomberg article, they should have noticed that Mr. Schorsch stated that their iron ore prices from CLF will be up 60% in 2008 (compared to JPM's 26% forecast). If this was true, CLF should have rallied, not dropped 17%. NUE is trading at a 2009 PE of 7.9x and EBITDA multiple of 4.3x, near the lows of its historical trading range and recently raised its earnings guidance.

Notablecalls: Note the call was initially issued yesterday afternoon as CLF was trading around $104. I continue to view CLF as the prime bounce candidate in the coal-steel space. See more colour below.

Cleveland-Cliffs (NYSE:CLF): Bounce time?

Several firms are out with defenses on Coal names following yesterday's sell-off:

- Citigroup notes coal has benefited from structural change, with historically isolated/fragmented regional markets linking up and "going global." Mine shortfalls, transport constraints, thin stockpiles, and voracious BRIC-country demand suggest that this process has several years yet to run.

Firm sees the recent 10 - 18% correction in the equities to be excessive, in response to a downtick in European spot from records. This seems profit-taking amid a deteriorating economy, and the "End of the beginning, not the beginning of the end." Met and PRB names should be insulated.

PRB coal is among the last large pools of cheap energy worldwide. They see it as 50 - 60% undervalued relative to C/N.App, while lags are typically 9 - 12 mos. Focus on test burns, exports, CTL/IGCC tech.

Citi is hiking forecasts across major US basins to levels in-line with survey data, with Met benchmarked to seaborne. The PRB is the only area where forecasts are materially above-market. As a result, they are upgrading BTU and ACI to Buy.

- Morgan Stanley says they remain constructive on US coal equities despite the extreme weakness yesterday. Firm believes the case for very strong 2009 domestic thermal coal contracts remains in place. There is potential for further coal price weakness in global and US coal markets following recent strong gains. They believe any further equity weakness in response to softer OTC prices presents an attractive opportunity to build positions, and in particular favorite Overweight–rated names, Alpha Natural Resources (ANR) and Peabody Energy (BTU).

US coal equities have declined sharply,likely in response to a sharp drop in European and US OTC thermal coal prices. MSCO believes the coal price correction represented some profit-taking following the sharp run-up, rather than a change in coal fundamentals. They do not believe the latest $25/ton run to approximately $150 in coal prices was fully priced into the stocks, nor do they think it should have been.

Yesterday's price action does not pose risk to estimates.

Notablecalls: Coal stocks are ready for a bounce this morning, I suspect. Apart from the usual suspects ACI & BTU my favourite of the bunch is Cleveland-Cliffs (NYSE:CLF) due to its exposure to metals. CLF was among the hardest hit yesterday and I feel it will trade back over $100 swiftly.

Deutsche Bank was only 3 days ago out with a call on CLF raising their tgt to $150 from $115. Suspect it is only a matter of time when they come to defend their stance on the name.

Sandisk (NASDAQ:SNDK): More colour from Amtech

Amtech on Sandisk (NASDAQ:SNDK) (Focus List BUY): SSD Adoption is Being Constrained by Cost/Benefit Equation. Based on our checks during the recent AmTech Asia Bus Tour, we believe that SSD demand and adoption rates are being temporarily delayed by price, performance and endurance issues, which could result in push-outs of volume ramps until 2010. The obvious headwind is SSD pricing preventing demand elasticity, including SLC and initial MLC-based solutions. Asia-based ODMs believe that pricing is preventing SSD adoption in their notebook platforms. We also think SSD performance is a significant factor holding back adoption as the throughput performance of SSD-based storage is not improving as expected, especially in high-end server systems. Volume adoption of notebook SSDs based on MLC NAND could be pushed out into 2010 as customer perceptions of high price and low performance needs to be addressed by suppliers. We believe the low endurance of inexpensive MLC SSDs is a new constraint that storage architects must accept and design solutions around and is not a permanent headwind to SSD demand elasticity.

Maintain BUY on SNDK rating and $40 price target.

Notablecalls: See below for more colour on SNDK.

Sandisk (NASDAQ:SNDK): Major positive call from ThinkPanmure

ThinkPanmure is out with a major call on Sandisk (NASDAQ:SNDK) noting the stock has been hurt by collapsing NAND pricing and build up of inventory at retail, OEMs, and the Taiwan module houses. However, NAND pricing could stabilize. Firm's checks indicate that Samsung is allocating 50M chips of 8Gb MLC to AAPL in July and August, which could substantially reduce Samsung's inventory and reduce some of the price pressure on NAND and inventory overhang in the market. In firm's view, while not a panacea for the inventory in the channel or at retail, it should stabilize NAND pricing. NAND spot pricing in the last two days has been trending up modestly.

While Bears have been calling for a renewed drop in NAND pricing, they believe the 50M chip order could remove a lot of NAND inventory and reduce a lot of inventory overhang from Samsung. Think believes it will also stabilize the NAND spot and contract pricing trends. If the pickup from the AAPL iphone, given what they view as an attractive $199 in the U.S. and free offers in some countries, is ahead of forecasts, it could drive more allocations from Samsung and help stabilize NAND pricing through the quarter

Reits Buy and $40 tgt

Notablecalls: SNDK will trade over $18 level today following this wonderful call by ThinkPanmure's Vijay Rakesh. Also note that Morgan Stanley is closing out their short SNDK idea this morning which is likely to contribute to buy interest.

Well done Vijay

PS: Digitimes talking about NAND this morning saying AAPL is back and spot pricing is going to start reflecting it.

General Motors (NYSE:GM): Downgraded to Underperform at Merril Lynch, tgt to $7

Merrill Lynch downgrades General Motors (NYSE:GM) to Underperform from Buy lowering their price objective significantly to $7, and lowering estimates to significant losses for 2008 and
2009. The key change in firm's outlook is a much lower forecast for U.S. auto sales that is driving a higher cash burn necessitating a much larger capital raise than the market is currently anticipating. Furthermore, they believe there is potential downside in the stock below $7 and that bankruptcy is not impossible if the market continues to deteriorate and significant incremental capital is not raised. Although they believe GM has made strides in restructuring and has built a solid product pipeline, there are three recent factors that dwarf management’s best efforts.

Merrill now believes that much higher cash burn is likely to result in the need for a larger capital raise than anticipated, likely about $15bn (including revolver draws), which would materially dilute return of value to existing shareholders. They also believe the company has not recognized the stress in the capital markets. As time passes, the supply of capital for GM to bridge the gap to 2010 is becoming increasingly scarce, which is at least driving up the cost.

The recent drastic drop-off in sales, which is likely to continue through 2009, has been more severe than anyone anticipated.

The mix shift away from body-on-frame large SUVs that was generally expected over the next few years has been pulled forward to present day with the spike in gas prices and has been more extreme than expected. This has essentially rendered the large SUV segment obsolete, cutting into GM’s profit potential.

Notablecalls: Lots of unhappy buyers from yesterday. I suspect GM will trade below $11 as soon as today.

General Electric (NYSE:GE): Possible 2Q08 earnings upside trade - Merrill Lynch

Merrill Lynch reiterates their Buy rating on GE with PO $37.50.

Firm thinks GE will likely deliver 2Q08 EPS results in-line with the previous guidance of 53-55 cents – this event could present a positive upside trading catalyst for GE’s shares. They believe GE would have pre-announced an earnings shortfall rather than risk even greater investor backlash from reporting a miss the day of the earnings release. After 2Q08, earnings comparisons start to ease. GE has already materially lowered guidance for the full year and consensus expectations have declined substantially since mid-April. Firm believes the impact of higher loss provisions, lower securitization gains, and slower Real Estate markets are part of the company’s previous guidance.

Notablecalls: Ah, lovely. Just what we need this morning. GE's a buy here for sure. The co already lowered the bar and has traded down significantly from here. I'm betting the stock will surpass the $27 level in the s-t.

Calling it Actionable Trading Call

DeVry (NYSE:DV): Bounce?

Two tier-1 firms are out defending DeVry (NYSE:DV) following yesterday's sell-off:

- Merrill Lynch notes the hares of DeVry were down 12.4%, with the main news being that a 3.1mn block of shares was sold. The rest of the education sector traded down as well on no new news. The sale came as a surprise as DeVry only has four institutional holders that own 3mn shares or more. However, there wasn’t any fundamental news, and the firm believes the decline presents an opportunity for a high-quality name in the education sector. DeVry has also been added to the Russell 1000.

The next catalyst for DeVry will come when it reports 4Q08 (June) earnings on 8/14 after the close. MLCO forecasts diluted EPS of $0.33 in 4Q (+26% YoY) & $1.76 for the year (+86% YoY). Their 4Q forecast is $0.05 below consensus; firm believes the main difference is margin expectations as they expect spend on growth initiatives to ramp sequentially vs. 3Q. However, they believe this will drive future growth and forecast EPS of $2.21 in FY09 (+26% YoY).

Reits Buy and $69 tgt.

- Morgan Stanley notes there is no news coming from the company and they see no reason for the decline (apart from the 3.3 mln share block). While this is likely related to concerns regarding Apollo’s earnings, expected tomorrow after the close, they view Apollo’s problems as company specific and expect little impact on its peers, including DeVry. Firm maintains $62 price target and view the weakness as a compelling buying opportunity. Reits Overweight.

Notablecalls: I think DV represents a nice bounce candidate here. The shares were hit with the block sale & with this now out of the way (block was priced at $56 with the seller being MSCO itself, btw) it's ready to move back up again. My target for the bounce is $56.