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Zacks Bull and Bear of the Day Highlights: NTT DoCoMo, Altria Group, United Health Care, Aetna and Humana – Press Releases

Zacks Market Commentaries — Wed, 29 Jul 2009 13:50:54 +0000

For Immediate Release

Chicago, IL – July 29, 2009 – Zacks Equity Research highlights NTT DoCoMo (DCM) as the Bull of the Day and Altria Group (MO) the Bear of the Day. In addition, Zacks Equity Research provides analysis on United Health Care (UNH), Aetna (AET) and Humana (HUM).

Full analysis of all these stocks is available at http://at.zacks.com/?id=2676

Here is a synopsis of all five stocks:

Bull of the Day:

We maintain our Buy recommendation and the same valuation target for NTT DoCoMo (DCM), the largest mobile service provider in Japan, ahead of first quarter of fiscal 2010 financial results. The company currently maintains a leading 50% share of the Japanese wireless market.

DCM upgraded 98% of its total coverage area with 3G HSDPA technologies and emerging 4G LTE networks are planned for deployment through 2010. DCM's decisions to focus on mobile content along with a renewed geographic expansion drive outside Japan are positive indicators.

Furthermore, the company is launching an innovative on-line money transfer service. We consider DCM as an attractive long-term investment opportunity.

Bear of the Day:

Altria Group (MO) is the leading domestic tobacco company, which generates significant cash flow and the stock has a high dividend yield. In an effort to expand into adjacent categories, Altria acquired UST, the world's leading moist smokeless tobacco manufacturer.

However, the company is engaged in numerous tobacco liability suits. Several large punitive damage awards have been upheld, most recently the $79.5 million judgment in the Williams case in 2009.

In addition, the 150+% federal excise tax increase should dramatically reduce cigarette volume. A Sell rating is recommended.

Reynolds Smokes Estimates – Analyst Blog

Zacks Market Commentaries — Mon, 27 Jul 2009 20:36:45 +0000

Reynolds American (RAI), manufacturer of four of the top 10 best-selling cigarette brands in the United States, reported its second quarter results. The company reported earnings of $1.29, and beat expectations by $0.14.

Despite the strong performance of the Conwood business and market share gains of brands like Camel, Pall Mall and Grizzly, net sales declined 3.8% year-over-year to $2.3 billion.

The company’s cigarette shipment volume declined 6.0% due to wholesale inventory reductions associated with the Federal tax increase and also due to lower volume from the company’s non-support brands. During the quarter, industry cigarette volume declined 4.1%.

The company’s growth brands, Camel and Pall Mall, gained a strong cigarette market share of 2.6 percentage points, bringing their combined share to 12.7%. This drove the company’s total cigarette market share to 28.7%, up 0.4 percentage points.

Camel, the company’s flagship brand, had a market share of 7.5%, in-line with the prior-year period. The company’s smokeless Camel Snus products contributed another 0.3 percentage points on a cigarette-equivalent basis, which assumes that a tin of Camel Snus is equal to a pack of cigarettes.

Conwood, the company’s moist-snuff brand, also posted strong volume and market share gains. Conwood’s total moist-snuff shipment volume grew 6.7% in the second quarter, despite the negative effect of trade inventory adjustments. However, industry moist-snuff shipment volume grew only 1.5% in the second quarter, primarily due to changes in competitive promotional strategies and adjustments in trade inventories following the federal tax increase.

With a full quarter of the federal excise tax increase effect, the company believes to have a better understanding of how the increases are affecting volume and pricing. Based on these factors, and with the support of a strong first-half performance, the company has increased its guidance range.

Annual earnings are now expected to be in the range of $4.40 to $4.60 per share. Previous guidance was $4.15 to $4.45 per diluted share. The guidance excludes trademark impairment charges.

Altria Group (MO), the company’s strongest competitor, also posted robust second quarter results. Earnings increased 8.7% to $0.50 from $0.46 in the prior-year quarter, primarily driven by the smokeless tobacco category. Phillip Morris International (PM), another strong player, however reported earnings of $0.80 per share, down 4.6% year-over-year.
Read the full analyst report on "RAI"
Read the full analyst report on "MO"
Read the full analyst report on "PM"
Zacks Investment Research

Philip Morris on Buying Spree – Analyst Blog

Zacks Market Commentaries — Mon, 13 Jul 2009 21:13:42 +0000

Philip Morris International (PMI) entered into an agreement to acquire 100% of the shares of privately owned Colombian cigarette manufacturer Productora Tabacalera de Colombia, Protabaco Ltda. (Protabaco), for $452 million.

Protabaco is the second largest tobacco company in Colombia, with an estimated volume of 6.1 billion cigarettes and an approximate market share of 31.8% in 2008, with leading brands such as Mustang, Premier and President. The acquisition is believed to be a strategic business fit, in order to build on the company’s business in Columbia.

The deal is expected to be marginally accretive to PM’s earnings and is expected to close in the second half of 2009. However, final approvals are still pending. In 2005, the company had acquired another Columbian company, Compañía Colombiana de Tabaco S.A. (Coltabaco).

In addition, with increasing regulation over tobacco, there has been a shift towards smoke free tobacco products and snus in the recent past. In accordance with the trend, Phillip Morris International (PM) entered an agreement to acquire South African snuff and pipe tobacco operations of Swedish Match AB (SWMA) for ZAR 1.75 billion (approximately $222 million). According to the company’s estimate, Swedish Match South Africa represents approximately 31% of the tobacco consumption in South Africa, with principal brands being Boxer, Best Blend and Taxi.

PM believes the acquisition to be a strategic fit to the existing business in South Africa, and management expects to boost the sales of smokeless tobacco products in order to mitigate the adverse impact of decline in demand for cigarettes due to smoking bans, price increases and health hazards. Further, management also believes that Swedish Match’s extensive expertise of manufacturing, developing and marketing of snuff and snus (Snus tobacco is a moist snuff most commonly packaged in a small tea-bag-like pouch which is placed against the users' gum) in Scandinavia and the U.S gives it the required core competency.

In February 2009, PM had entered into an agreement with Swedish Match AB (SWMA), the parent company, to make and sell Swedish style snus and other smoke-free tobacco products outside the Scandinavia and the U.S.

Altria Group (MO), through the acquisition of UST, is one of the leading manufacturers of smoke-free tobacco, and has a 57.4% market share of the category. Reynolds America (RAI) is the other strong player in the category, through its Camel Snus and Conwood smokeless tobacco products.
Read the full analyst report on "PM"
Read the full analyst report on "PMI"
Read the full analyst report on "MO"
Read the full analyst report on "RAI"
Zacks Investment Research

Zacks Bull and Bear of the Day Highlights: MIPS Technologies, Altria Group, Citigroup, Bank of America and JPMorgan Chase – Press Releases

Zacks Market Commentaries — Thu, 09 Jul 2009 13:55:12 +0000

For Immediate Release

Chicago, IL – July 9, 2009 – Zacks Equity Research highlights MIPS Technologies (MIPS) as the Bull of the Day and Altria Group (MO) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Citigroup (C), Bank of America (BAC) and JPMorgan Chase (JPM).

Full analysis of all these stocks is available at http://at.zacks.com/?id=2676.

Here is a synopsis of all five stocks:

Bull of the Day:

MIPS Technologies (MIPS) develops embedded processors and intellectual property for use in performance-oriented markets such as digital entertainment, wired and wireless communications (including broadband access), office automation, security and automotive markets.

The firm continues to drive bottom-line margins higher in a very difficult environment. The valuation on MIPS has become very compelling as the stock has shed significant value from its 52-week high and the new acquisition has the potential to drive margin expansion.

Further, MIPS recently sold its analog business, which is highly accretive. We would be buyers of the stock at these levels.

Bear of the Day:

However, the company is engaged in numerous tobacco liability suits. Several large punitive damage awards have been upheld, most recently the $79.5 million judgment in the Williams case in 2009.

In addition, the 150+% federal excise tax increase should dramatically reduce cigarette volume. A Sell rating is recommended.

More Regulation for Tobacco – Analyst Blog

Zacks Market Commentaries — Wed, 08 Jul 2009 14:40:22 +0000

One bill after the other is being passed for the prevention of tobacco and its ill effects on consumers. Recently, ‘The Family Smoking Prevention and Tobacco Control Act’ was signed by President Obama, primarily to prevent the teenagers from becoming addicted to tobacco.

The new act gives full authority to the Food and Drug Administration (FDA) to regulate the amount of nicotine in tobacco products, along with imposing a ban on candy flavored and other flavored cigarettes, primarily as the flavored cigarettes are considered to be more appealing to first-time smokers. The Act also requires that tobacco companies should block labels such as ‘low tar’ and ‘light’ and cover the cigarette cartons with large graphic warnings against smoking.

The signing of the new bill marks an important history in the regulation of tobacco, as approximately 20% of Americans smoke and about 440,000 people in the U.S. die due harmful diseases like cancer, heart disease, emphysema and other ailments.

Furthermore, tobacco-related heath care costs exceed approximately $100 billion annually. Companies like Altria Group (MO), Reynolds American (RAI) and Phillip Morris (PM) are all in support of the new bill allowing the FDA to impose strict regulations on tobacco.

However, MO and PM have stated some First Amendment reservations about certain parts of the act. Further, despite severe restrictions on smoking across the U.S. there are more than 40 million smokers making tobacco still a viable industry. RAI and MO state that they would continue to design better products, and under the federal regulation would continue to make its products available, while PM believes that the competition would get intense as the demand for smoke-free products will increase.

We currently rate Holds on RAI, MO and PM, as the stocks maintain a low P/E due to tobacco-related litigation issues and court case losses.
Read the full analyst report on "MO"
Read the full analyst report on "RAI"
Read the full analyst report on "PM"
Zacks Investment Research

Sin is In with Altria (NYSE: MO)

Contrarian Profits — Thu, 05 Mar 2009 17:55:17 +0000

pstrongAltria Group (NYSE: a href="http://www.google.com/finance?q=mo" target="_blank"MO/a)/strong is one of those companies that people love to hate. Considering Altria sells cigarettes, it is understandable. But Altria stock is making big moves and gives you a good chance to profit and collect a tidy dividend. /p pa href="http://www.contrarianprofits.com/wp-content/uploads/2009/03/030509_cod.jpg"/a/p pBy taking a look at Altria#8217;s chart, you’ll notice a recent support line that was formed around $14 per share. This support line held up perfectly despite the sell-off./p pAlso, the Slow Stochastic (bottom of the chart) and RSI (top of the chart) both hit oversold levels and are showing a bounce towards overbought levels. As these indicators move to overbought, we should see Altria’s share price move even higher./p pYour target should be its January highs ($17.50 a share) – a#8230;/p

The Trading Day Ahead – 01/29/09

Daniel Shepard — Thu, 29 Jan 2009 11:38:59 +0000

An extension of yesterday's stellar, across the board rally, would be very welcomed by the investment community today. However, that likelihood is threatened by key economic reports that are due out today.

Double and Triple-Profit Ideas For 2009

Contrarian Profits — Fri, 19 Dec 2008 20:35:29 +0000

pstrongQuote of the week/strong: emI stopped believing in Santa Claus when I was six. Mother took me to see him in a department store and he asked for my autograph. – /emShirley Temple/p pHere are eight stocking stuffers to unwrap./p p1) The conversation between Libertarians and the rest of us (who aren#8217;t on some nutty fringe) would go a lot smoother if we would all agree that laws and regulations do not prevent bad behavior./p pRather, they are merely guideposts to measure the quality of deviance in a way that allows the US#8217;s local, state and federal judiciary to hand out retribution./p pIf you need further proof of this, I offer you two words – Bernard Madoff./p pIn an under-regulated world, Ponzi schemes might not#8230;/p

UST Inc. (UST) – Bear of the Day

Zacks Market Commentaries — Fri, 19 Dec 2008 00:00:00 +0000

UST Inc. (UST) is the leading producer of moist smokeless tobacco products and dominates the premium sector of the domestic market. However, over the last 15 years, UST has been steadily losing market share to discounters in the sub-premium categories.

With the announced acquisition by Altria Group of UST Inc. for $69.50 per share in cash, the potential price appreciation for UST stockholders is now limited.

Hence, the rating is a Sell. The acquisition is expected to close by the first week of January 2009.
"UST" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

UpDown Virtual Investing: Earn Real Money with Zero Risk

ETF Innovators — Sun, 23 Nov 2008 14:03:00 +0000

The ultimate risk/reward trade for virtual investing – its is free and easy to register at the UpDown and users can earn real money at the site in two ways. The first is by beating the market (S&P 500 Index) on a monthly basis and the second is by referring investors. [...]

Internet Wealth Builder Recommends Philip Morris

CEO Blogger — Thu, 16 Oct 2008 15:16:47 +0000

“Philip Morris International remains a buy, despite these difficult markets,” says Tom Slee in GordonPape’s Internet Wealth Builder. Here he reviews the global tobacco firm track tom’s picks at: http://trackthepros.com/stocks/category/552 “Spun off from the Altria Group earlier this year, Philip Morris International is off to a flying start. “The company posted strong second-quarter earnings. After a special charge for [...]

Internet Wealth Builder Recommends Philip Morris

CEO Blogger — Thu, 16 Oct 2008 15:16:47 +0000

Internet Wealth Builder Recommends Philip Morris

CEO Blogger — Thu, 16 Oct 2008 15:16:47 +0000

IQ Trends TOP TEN TIMELY BUYS

CEO Blogger — Fri, 26 Sep 2008 14:23:21 +0000

“Our Timely Ten — our top ten current buys — is the best collection of high-quality stocks at or near historic low prices and high yields I have seen,” says Kelley Wright in IQ Trends. http://trackthepros.com/stocks/category/1760 “Strictly from an information standpoint, this is the most confusing, contradictory and divergent period I can recall. “I believe the market is [...]

Clarium Capital Management | Peter Thiel San Francisco Hedge Fund | Holdings Analysis

Richard C. Wilson — Mon, 22 Sep 2008 10:29:01 +0000

Clarium Capital Management

Clarium Capital | Peter Thiel Holdings Analysis

This post is being written as part of my Investment Securities Tool which analyzes the holdings of hedge fund managers.

Clarium is a $6 billion global macro hedge fund run by Peter Thiel, the co-founder of PayPal. Although they had a rough July (-6.8%), Clarium is still up over 45% year to date. Assets under management have recently ballooned to the highest amount in Clarium's history. It will be interesting to see how effective Clarium will be at deploying this new capital.

Now, to the 13F. I actually hesitated even doing a 13F analysis on Clarium Capital simply because when I say they are a global macro fund, I really mean it. The 13F they filed with the SEC details only the equities held in their portfolio. And, all their equities combined only totaled a little over $93 million. And, considering they have over $6 billion AUM, we have a bit of a problem here. The bulk of their holdings/trades seem to be in the actual commodities, futures, and currency markets themselves. And, the 13F only details equities held. So, I just wanted to point that out to everyone before proceeding further. I still think its interesting to at least see what they hold. But, take it with a grain of salt because the majority of their capital is deployed in other financial instruments/markets.

The following are Clarium Capital's current holdings as of June 30th 2008, as released in their most recent 13F filing with the SEC. I've compared the positions in this most recent 13F to last quarter's 13F and here are the changes they made to their portfolio:

New Positions: (in no particular order)
Wendy's (WEN) 7,400 shares
Pinnacle Air (PNCL) 15,220 shares
Fairfax Financial (FFH) 15,000 shares
Nvidia (NVDA) 18,000 shares
NRG Energy (NRG) 9,776 shares
MFA Mortgage Investments (MFA) 50,000 shares
Marathon Oil (MRO) 10,000 shares
Johnson and Johnson (JNJ) 12,000 shares
ITT Corp (ITT) 35,000 shares
Istar Financial (SFI) 99,800 shares
Honeywell (HON) 17,700 shares
Conoco Phillips (COP) 107,900 shares
Chevron (CVX) 6,000 shares
Canadian Superior Energy (SNG) 500,000 shares
Black and Decker (BDK) 23,437 shares
Altria Group (MO) 52,639 shares
Aircastle (AYR) 23,400 shares

Added to:
Frontier Oil (FTO): Increased their position by 1353%
Occidental Petroleum (OXY): Increased their position by 302%
CVS Caremark (CVS): Increased their position by 179%
American Express (AXP): Increased their position by 111%
Colgate Palmolive (CL): Increased their position by 77%
Oneok Inc (OKE): Increased their position by 75%
Sothebys (BID): Increased their position by 60%
Nucor (NUE): Increased their position by 49%
Cabot Oil and Gas COG): Increased their position by 42%
Foster Wheeler (FWLT): Increased their position by 22%
Walmart Stores (WMT): Increased their position by 21%
McDonald's (MCD): Increased their position by 14%
Royal Caribbean (RCL): Increased their position by 11%
Hewlett Packard (HPQ): Increased their position by 3%

Reduced Positions:
Mylan (MYL): Decreased their position by 25%
Procter and Gamble (PG): Decreased their position by 75%

Removed Positions (Positions Clarium sold out of completely):
Zimmer Holdings (ZMH)
Western Refining (WNR)
Viropharma (VPHM)
United Technologies (UTX)
McGraw Hill (MHP)
Lowes (LOW)
Lockheed Martin (LMT)
Leggett and Platt (LEG)
Heinz (HNZ)
General Motors (GM)
General Dynamics (GD)
Cisco Systems (CSCO)
Anheuser Busch (BUD)

Positions with no change:
Schering Plough (SGP)
Burlington Northern (BNI)

Top 10 holdings by % of portfolio:
1. Hewlett Packard (HPQ)
2. Conoco Phillips (COP)
3. American Express (AXP)
4. McDonalds (MCD)
5. Burlington Northern (BNI)
6. Occidental Petroleum (OXY)
7. Fairfax Financial (FFH)
8. Foster Wheeler (FWLT)
9. Royal Caribbean (RCL)
10. Frontier Oil (FTO)

---------------------------------------

Breakdown: Clarium's portfolio really looks "plain jane," doesn't it? There's nothing ridiculously exciting going on. It almost reminds me of a portfolio Warren Buffett would put his stamp of approval on. AXP, BNI, COP, and MCD are for the most part just slow and steady names that chug along with consistent returns. Again, this is why I want to reiterate that Clarium takes the majority of their positions in the commodities, futures, or currency markets since they truly are a global macro fund. The equity holdings reported in this SEC filing represent just a small sliver of their assets under management. So, on the equity side of things, Thiel has focused mostly on larger cap names with international exposure.

Clarium is definitely heavily weighted in the energy sector. They brought Conoco Phillips (COP) in as a new holding and bumped it up all the way to their 2nd largest equity position. He was also out adding to his Frontier Oil (FTO) and Occidental Petroleum (OXY) positions in a big way. Keep in mind that these holdings were reported as of June 30th, 2008 (ie: Crude Oil hadn't started its rapid descent yet). So, we'll have to see next quarter whether he was building up long term positions in these names, or merely trying to ride the oil wave higher.

Thiel has a large bet on tech, but pretty much solely through Hewlett Packard (HPQ). He added some Nvidia (NVDA), but HPQ is the fund's top equity holding. I can't disagree with this choice, as HPQ has been firing on all cylinders with Mark Hurd really turning the company in the right direction. But, even though the company is performing well, the stock really isn't.

I also noticed that Thiel seems to also be playing the 'pooring of America' theme. His MCD and WMT positions give him exposure to the companies that offer everything on the cheap. But, what surprised me a little bit was his Royal Caribbean (RCL) stake being as large as it is. To me, this translates to a discretionary item since its a cruise/vacation after all. And, with the economy the way it is, you'd think that reservations would be down. But, Thiel obviously sees something here, so it might be worth looking at more in depth.

I also want to point out Thiel's position in American Express (AXP), now his fund's 3rd largest equity position. I'm seeing more and more funds pick up stakes in AXP. For the most part, funds have favored Mastercard (MA) and even Visa (V) for their payment processing business models. Now though, it seems more funds are rotating into AXP to get some credit exposure as well. While I think American Express (AXP) is a well run company and typically has a higher credit grade portfolio, I still question adding this name. The credit exposure will continue to provide headwinds for the company and I'm curious to see what these funds do with this position over time.

Lastly, I just wanted to mention Burlington Northern (BNI). If there is one other common theme amongst hedge fund holdings, it is the rails. No matter how small or large their position, practically everyone has at least some sort of exposure to the rails. For Thiel & Clarium, BNI is their 5th largest equity holding.

You can view Clarium Capital's entire 13F as filed with the SEC here.

Guest Post by Market Folly.

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Permanent Link: Clarium Capital Management Holdings

Tags: Clarium Capital Management, Clarium Capital, Clarium Capital Management Hedge Fund, Peter Thiel Hedge Fund Manager, San Francisco based Clarium Capital Group, Hedge Fund

Altria Tries to Clear the Air – Zacks Tale of the Tape

Zacks Market Commentaries — Mon, 08 Sep 2008 11:50:12 +0000

Helping itself to a much larger share of the faster growing "smokeless tobacco" market in the U.S. and overseas, Marlboro-maker Altria Group (MO) has announced it will be purchasing UST (UST) for $10.3 billion. The buzz has indeed already begun to take hold: MO shares are up 2.2% thus far today, and UST is up 1.3%.

There has been minimal analyst estimate revision activity for either Big Tobacco firm in the past month. The acquisition looks to provide synergies and profit growth, especially after Altria spun-off its profitable overseas counterpart, Philip Morris International (PM) this past spring.

Zacks senior consumer goods industry analyst Steven Ralston, CFA covers both companies, but has kept his Hold recommendations in tact ahead of September quarter earnings. About Altria, he had this comment: "Several large punitive damage awards have been upheld by appellate courts, especially the $50 million judgment paid out in the Boeken case after the U.S. Supreme Court refused to hear the case."

In his latest UST report, he said: "The last seven quarters have seen a return of positive growth in premium moist smokeless can sales as a result of Project Momentum. However, margins are declining as the company looks to the lower margin wine business for top-line growth."

We await further commentary in relation to this new development. Both companies currently have a Zacks Rank #3 (Hold).

"MO" Free Stock Analysis: Buy? Sell? Hold?
"UST" Free Stock Analysis: Buy? Sell? Hold?
"PM" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

Highest Yielding Cigarette Stocks

Fred Fuld — Tue, 03 Jun 2008 05:44:00 +0000

Are you looking for a stock that is recession proof, generates worldwide sales, and pays a high yield, you may be just looking for a cigarette stock. About 5.5 trillion cigarettes are produced annually and smoked by over one sixth of the world's population. Here are some cigarette companies that have dividends that are smokin'.

Vector Group Ltd. (VGR) is a Florida based company that has numerous brands of cigarettes of Liggett, Grand Prix, Eve, Pyramid, USA and nicotine-free Quest. The stock has a PE of 17.576 a PEG of 1.54 , and pays a yield of 9 %.

Reynolds American Inc. (RAI) makes and markets cigarettes and other tobacco products including the Camel, Kool, Pall Mall, Doral, Winston, Salem, Misty, Capri, Dunhill, State Express 555, and Natural American Spirit brands. The stock has a PE of 10.901 a PEG of 1.99 , and pays a yield of 6.2 %.

Altria Group Inc. (MO) is a Virginia based company that makes and markets cigarettes, cigars, and beer. It is the largest cigarette company by market cap in the US. The stock has a PE of 4.969 a PEG of 1.33 , and pays a yield of 5.2 %.

British American Tobacco plc (BTI) is a London based company that markets cigarettes and cigars under the Dunhill, Kent, Kool, Lucky Strike, Pall Mall, Rothmans, Vogue, Viceroy, and Peter Stuyvesant brands. It is one of the largest cigarette companies in the world by market cap. The stock has a PE of 17.287 a PEG of 1.31 , and pays a yield of 4.8 %.

Carolina Group (CG) is a New York based manufacturer and marketer of cigarettes under the Kent, Newport, Maverick, True, and Old Gold brand names The stock has a PE of 15.077 a PEG of 1.76 , and pays a yield of 2.5 %.

If you like high yield stocks, you might want to consider REITs, electric utilities, monthly dividend stocks, Canadian income trusts, and high yield U.S. income partnerships.

Author does not own any of the above.

By Fred Fuld at Stockerblog.com