Archive for 2006

• The Dow & Terrell Owens
  Eddy Elfenbein, September 27th, 2006 at 3:39 pm

  
  December 7, 1973: Owens born in Alabama. Dow rises 3% to 838.05.
  October 14, 2002: Sharpie Incident. Dow rises 27 points to 7,877.40.
  November 15, 2004: Desperate Housewives Incident. Dow rises 11 to 10,550.24.
  September 27, 2006: Owens denies suicide attempt. Dow rises 20 points to 34 points shy of an all-time high.

• Irrational Pessimism?
  Eddy Elfenbein, September 27th, 2006 at 3:04 pm

  While the Dow is flirting with a new all-time high, the S&P 500 is still about 12% below its all-time. But what about earnings?
  
  No wonder private equity is booming! Profits are up 57% since the market’s peak in March 2000. The market’s P/E ratio has nearly been cut in half.

• Kobi Alexander Nabbed in Namibia
  Eddy Elfenbein, September 27th, 2006 at 11:38 am

  
  Here’s a cool story: The Feds finally caught up with former Comverse CEO Kobi Alexander in Namibia. He’s been a fugitive from justice since he was charged with illegal options backdating. He even made it to the FBI’s most wanted list.

• S&P Cuts Harley-Davidson to Sell
  Eddy Elfenbein, September 27th, 2006 at 10:18 am

  From BW:

  We continue to like Harley’s strong brand and market leadership. Also, we expect more dividend hikes and stock repurchases as the company utilizes free cash flow. However, in our view, based on our EPS estimates for 2006 and 2007, the stock is now at ample p-e premiums of 10% and 12% to the S&P 500, respectively. Also, we have some concern that an aging U.S. population will limit longer-term domestic motorcycle sales. Based on our discounted cash-flow model, we are keeping our 12-month target price at $62.

  By my math, Harley (HOG) is going for 15.77 times next year’s earnings ($65.64/$4.16), and the S&P 500 is going for 14.06 times 2007’s earnings (1336.18/95.04). That works out to a premium of 12.2%.

• The Butler and Insider Trading
  Eddy Elfenbein, September 27th, 2006 at 9:13 am

  The New York Times reports on an insider trading case. It turns out, the butler did it.

  On Aug. 11 and Aug. 12, 2004, Mr. Sillerman’s Manhattan office faxed documents on the buyout to the poolside office of his home in Southampton, including a draft press release and, later, a written consent form. “As the house manager,” the complaint says, Mr. Lefford “managed the day-to-day affairs” of the house and performed other services “traditionally done by a butler.” As such, he handled confidential business documents for Mr. Sillerman.
  On Aug. 12 at 10:20 a.m., Mr. Lefford faxed over the signature page of the consent agreement to Mr. Sillerman’s Manhattan office. Twelve minutes later, according to the complaint, Mr. Lefford bought 5,000 shares of Sports Entertainment stock, which traded on the over-the-counter bulletin board, through a brokerage firm account he held with his wife. He paid 12 cents a share.
  When the three-way deal was announced on Dec. 16, 2004, Sports Entertainment’s stock price rose to $6.41 a share. Mr. Lefford sold his holdings a few days later at prices ranging from $9.25 to $10.50 a share.

• Cause & Effect
  Eddy Elfenbein, September 26th, 2006 at 10:24 pm

  
  Modesty naturally prevents me from claiming sole credit for TER*. Other factors may deserve some attention.
  ——————————
  * The Elfenbein Rally

• The Ultimate in Stock-Picking Technology
  Eddy Elfenbein, September 26th, 2006 at 1:51 pm

  Ticker Sense informs us that Birinyi Associates has unveiled the latest in stock-picking technology:
  
  It goes for $89.95 (or two for $150). Don’t delay. My in-depth technical analysis indicates this price could be the beginning of long up-trend.

• 67-Month High
  Eddy Elfenbein, September 26th, 2006 at 11:44 am

  The S&P 500 just broke 1,330 for the first time since February 2001. Interestingly, the Wilshire 5000 just broke 13,300. The two index values are almost perfectly aligned at 10-to-1. By market value, the S&P 500 makes up about 73% of the Wilshire 5000.
  Here’s a graph of the Wilshire to S&P ratio since 2001:
  
  You can see how the small-cap rally has altered the ratio.

• Danaher in Preliminary Talks with Vision Systems
  Eddy Elfenbein, September 26th, 2006 at 10:46 am

  Danaher (DHR) has confirmed that it’s in preliminary talks with Vision Systems of Australia.
  Austalia’s The Age has more on the bidding:

  The battle for control of Vision Systems is expected to intensify after the entry of a third bidder willing to offer about $2.50 a share for the medical instruments company.
  The new bidder is expected to be Danaher Corporation of the US state of Washington (No, mate. Danaher is based in Washington, DC). Danahar makes a variety of instruments, tools and dental diagnostic equipment. Danaher could table a bid “within a matter of days”, according to The Wall Street Journal.
  An offer of $2.50 would give Vision a value of about $530 million and eclipse earlier indicated offers from Ventana Medical Systems and Cytyc Corporation.
  Investors yesterday pushed Vision’s shares up 3¢ to $2.54.
  Vision directors last night said they had not endorsed any offer from Cytyc and therefore the Ventana merger proposal was still live. They warned shareholders not to accept the Cytyc on-market offer.

• Viet Dinh on Patricia Dunn
  Eddy Elfenbein, September 26th, 2006 at 10:29 am

  If you have a chance, I recommend you read Viet Dinh’s article in the WSJ today on Patricia Dunn (it’s a paid link). Here’s a small bit:

  So the whole thing boils down to Mr. Keyworth deciding to speak favorably to a reporter without asking for permission. The answer to this question of authority is not self-evident as a legal matter. The chairman of the board is first among equals — entrusted with the responsibility to set agendas, conduct meetings and interact with management. But each board member individually owes a legal duty to act in the best interests of the corporation, a personal duty that cannot and should not be delegated or transferred to anyone else.
  It is true that unauthorized disclosures of board information would violate a mutual commitment of confidentiality that H-P directors made to prevent such disclosures following the ouster of Carly Fiorina as chairman and CEO. This is a serious matter, but one that could and should be handled, as Mr. Perkins suggested to Ms. Dunn early on, by a direct personal conversation with the directors. It is therefore understandable for Mr. Keyworth to reportedly exclaim, when confronted with the CNET investigation results, “I would have told you all about this. Why didn’t you just ask?”