Archive for March, 2007

• Millions of wrinkles, billions of dollars
  Eddy Elfenbein, March 21st, 2007 at 11:01 am

  Here’s an interesting article from the Arizona Republic on the growing anti-aging business:

  The face of middle age increasingly is smooth and wrinkle-free.
  More and more Americans are using an arsenal of cosmetic procedures – eyelid lifts, lasers and skin fillers – to turn back the clock.
  This is more than just a vanity play.
  The $12 billion-a-year industry is big business for companies such as Medicis Pharmaceutical Corp., which has hitched its growth to selling skin products that make people look and feel younger.
  Medicis sells the nation’s most widely used “dermal filler,” Restylane, and has two more anti-wrinkle products on the way.
  While the Scottsdale-based maker of skin and acne products sees a lot more room for growth, so does its chief rival, Irvine, Calif.-based Allergan Inc., which makes Botox and recently launched Juvederm, a skin filler that competes with Restylane.
  Both companies see dollars in demographics. Fewer than 1 million people now pay for these dermal filler injections that plump up wrinkles to help skin retain its youthful appearance, but more than 25 million American women age 30 and older earn enough money to afford such treatments.

• Two More Private Equity Buyouts
  Eddy Elfenbein, March 21st, 2007 at 10:08 am

  Two more companies are going the private equity route, Affiliated Computers (ACS) and Claire’s Stores (CLE). Both have been very good long-term investments.
  Here’s a look at ACS:
  
  This is how Claire’s Stores has done:
  

• Jim Cramer the Manipulator?
  Eddy Elfenbein, March 20th, 2007 at 3:22 pm

  There’s a recent video of Jim Cramer talking about how he used to manipulate the stock market. Personally, I think he’s just showing off for his audience, but The New York Post hints that he might have said too much.
  John Carney adds: “One added thing to watch for: Jim Cramer takes a swipe at easily manipulated financial reporters, who he calls ‘the Bob Pisani’s of the world.’ We’re sure his CNBC colleague appreciates it.”
  Jon C. Ogg at 24/7 Wall Street doesn’t think it’s a big deal. He points out that the NYP is owned by Murdoch who will soon be launching a competitor to CNBC. Naturally, they want to take JJC down a peg or two.
  Bess Levin adds:

  A few people also seem to believe that the SEC can make Cramer “give back ill-gotten gains,” especially since they apparently “hate him.” But Cramer seems to rest assured that his relationship with Eliot Spitzer, forged at Harvard, will protect him. At a lecture at the 92nd Street Y a few months back, Cramer told the audience that a reporter had called him to get dirt on the couple, and his response was “I’m never going to say anything bad about the Spitzers.” When pressed further for comment, Cramer asked him, “What do you need to know?” the answer apparently being “Something no one’s ever said about Shiva (Eliot’s wife).” Cramer offered, “She’s a knock-out.” That kind of street cred has got to count for something.

  My issue is that the video contradicts Cramer’s earlier stand. From The Fortune Tellers: Inside Wall Street’s Game of Money, Media and Manipulation:

  For all his bravado, Cramer could be hypersensitive to criticism. He called up some of his detractors after the SmartMoney fiasco and yelled at them. When he felt himself under assault, his rapid-fire cadence turned faster, his high-pitched voice a little squeakier. Cramer had no ability to hide his constant swirl of emotions. Once, after Lisa Napoli of The New York Times wrote a mixed profile about his activities and potential conflicts, Cramer declared: “I wish I had been a vicious spinmeister and just beaten the shit out of her and gotten her exactly where I wanted her…Give me a fucking break. Come on, I’m not this huge manipulator of stocks.”

  When in doubt, I always refer to Jim’s 25 Rules of Investing. Specifically, Rule #21: “Just because someone says it on TV doesn’t make it so.”
  Exactly. That’s why I use the Internet.

• The Cyclicals Keep Going
  Eddy Elfenbein, March 20th, 2007 at 2:50 pm

  To follow up on my earlier post, the Morgan Stanley Cyclical Index (^CYC) finally cracked its 13-year high yesterday. The CYC/S&P 500 ratio is now inches away from a 29-year high:
  

• Hedge Funds Loading Up on Cocoa
  Eddy Elfenbein, March 20th, 2007 at 2:39 pm

  Jim Cramer likes to say that there’s always a bull market somewhere. I think he’s right. There’s now a surging market in the cocoa pits. Yes, cocoa is hot! As always, we can blame hedge funds who have been making majors moves there. Check out this chart:
  
  The Financial Times reports:

  Investor interest in cocoa has overwhelmed the traditional trade buyers and sellers, such as the confectionary and cocoa processing companies, in the cocoa futures market.
  Weekly data from the Commodity Futures Trading Commission, the US regulator, shows that hedge funds and commodity index funds with long positions, a bet on rising prices, accounted for about a third of all New York cocoa contracts held.
  Cocoa markets are subject to wild price swings, which has made some veteran traders wary of predicting further price gains.

• Take-Two Takes Five on Their Annual Meeting
  Eddy Elfenbein, March 20th, 2007 at 1:54 pm

  The soap opera at Take-Two Interactive (TTWO) may finally be reaching a conclusion. The company which makes Grand Theft Auto is in a load of trouble. Outside of the fact they don’t make money, is that TTWO is under a slew of lawsuits and investigations. In one of the dumbest moves of the year, they’ve just launched a lawsuit against one of their biggest critics.
  A group of shareholders has had enough and is aiming to take over the company and ditch the current management. I so hope they win. It looks like they have the votes to do it. The management team has delayed its annual meeting to explore their options, including a sale. Please, no one is going to buy Take-Two. I hear people say Electronic Arts (ERTS). No way.
  If Take-Two is lucky, the dissident shareholders will win and turn the company around.

• Louie the Stockbroker
  Eddy Elfenbein, March 20th, 2007 at 12:50 pm

• Credit Spreads
  Eddy Elfenbein, March 20th, 2007 at 11:42 am

  Here’s an interesting look at credit spreads over the past few years:
  
  Notice how much closer the lines are today compared with five years ago. That’s a big reason for the private equity boom.

• FactSet Beats the Street and Doubles Its Dividend
  Eddy Elfenbein, March 20th, 2007 at 11:02 am

  FactSet Research Systems (FDS) just reported another great quarter. The company earned 52 cents a share, compared with 38 cents last year. Excluding a three cent a share gain, the company earned 49 cents a share which was a penny ahead of analysts’ expectations. Sales rose 24% to $116.3 million.
  The company also announced that it’s going to double its quarterly dividend to 12 cents a share, plus it’s expanding the stock repurchase program by $100 million.
  FactSet also guided its sales forecast for this quarter slightly higher. It now sees revenues coming in between $118 million and $121 million. That will probably translate to earnings of about 52 cents a share.
  The market doesn’t seem to know what to do. The stock had been our top-performing stock of the year. Then it fell yesterday, and Joe Bank (JOSB) rallied to take the #1 spot. FDS opened much higher today, but has given back a lot of the gain.
  

• JOSB Hits Nine-Month High
  Eddy Elfenbein, March 19th, 2007 at 1:54 pm

  When Jos. A Bank‘s (JOSB) stock collapsed last June, I immediately put it on my radar. The catalyst for the drop was a horrible earnings report. But as more evidence comes out, it looks like the company is still doing well.
  The stock finally broke out above $34 a share today.
  
  It’s now the top-performing stock on the Buy List for the year.