Following the failure of the auto bailout in the Senate, Deutsche Bank is downgrading a number of auto makers and auto supply makers to Sell, calling it an "End of an Era." Downgraded to Sell were: Ford (F), American Axle (AXL), Lear Corp. (LEA), TRW Automotive Holdings Corp. (TRW) and Magna International, Inc. (MGA). Deutsche Bank said, while there may be a reprieve from the Bush administration using TARP, an increasingly difficult operating environment will likely force leveraged automaker and supplier stocks to near bankruptcy levels." Read more...
Mattel (NYSE: MAT) and Bratz maker MGA Entertainment have been locked in bizarre litigation involving Bratz dolls -- those scantily-clad coked up Barbie wannabes that have been marketed aggressively to pre-teen girls. MGA lost an intellectual property lawsuit and is to give up control of the brand to Mattel sometime early this year. Mattel had sued, claiming that the creator of the dolls was working for Mattel when he designed the Bratz line.
But The Wall Street Journalreports (subscription required) that there is still considerable legal wrangling before the two parties as they work out a time line for the change of control. MGA Chief Executive Isaac Larian is hoping that his company will be allowed to continue manufacturing and shipping the dolls through 2009 so he can avoid laying off half of his company's employees. The matter is currently on appeal.
Financially, this doll fiasco could solve itself: The Bratz fad appears to be on its last legs. In September, I wrote that Target (NYSE: TGT) had slashed its Bratz shelf-space by 50% as sales of the dolls were expected to fall by 25% year over year.
Parents who don't want their kids to grow up to be like Paris and Lindsay should be pleased.
Keefe Bruyette upgraded IberiaBank (NASDAQ: IBKC) to Market Perform from Underperform following the company's capital raise, which the firm believes strengthens IberiaBank's balance sheet. Baird upgraded IberiaBank to Outperform from Neutral based on valuation following weakness related to the $100M capital raise.
Pali upgraded shares of Urban Outfitters (NASDAQ: URBN) to Neutral from Sell on valuation as they believe the company's comp slowdown is largely priced in at current levels.
Morgan Keegan upgraded Casey's General Store (NASDAQ: CASY) to Outperform from Market Perform based on valuation, healthy SSS, and easing comps.
American Capital (NASDAQ: ACAS) was raised to Market Perform from Underperform at Friedman Billings.
CIBC lifted Manulife (NYSE: MFC) to Sector Outperformer from Sector Performer.
Analyst downgrades:
Goldman downgraded Caterpillar (NYSE: CAT) to Sell from Neutral based on expectations for reduced capex spending by mining and oil & gas companies and the impact from the credit crunch.
Deutsche Bank downgraded auto companies and suppliers as they believe the failed government bailout increases risks. Ford (NYSE: F), American Axle (NYSE: AXL), Magna International (NYSE: MGA) and Lear (NYSE: LEA) were downgraded to Sell from Hold.
SAP (NYSE: SAP) was cut to Hold from Buy at Jefferies to reflect the "deteriorating" corporate IT spend environment.
Waters (NYSE: WAT) was downgraded to Neutral from Overweight at JP Morgan.
Agilent (NYSE: A) was lowered to Equal Weight from Overweight at Barclays; the firm also downgraded Varian (NASDAQ: VARI) to Underweight from Equal Weight.
Analyst initiations:
Jefferies believes Core Laboratories (NYSE: CLB) is well positioned to benefit from the increasing need for reservoir optimization services. Shares were initiated with a Buy rating and $70 target.
Deutsche Bank initiated Capital One (NYSE: COF) with a Sell rating and $24 target, citing the difficult economic environment and the potential for higher credit losses.
Soleil started Hexcel (NYSE: HXL) with a Buy rating and $10 target and expects the company's military business to remain strong through 2010.
On Semiconductor (NASDAQ: ONNN) was assumed with a Neutral rating and $3.80 target at UBS.
Cbeyond (NASDAQ: CBEY) was initiated at Oppenheimer with a Perform rating.
Brocade (NASDAQ: BRCD) was started with a Neutral rating at Piper Jaffray.
Magna International Inc.'s (MGA) second quarter, diluted earnings per share were $1.98, a 16% or $0.37 decline from $2.35 reported in the corresponding quarter in 2007. Although Magna is expected to benefit from major business wins and acquisitions, decli[More...]
The Price Sales Ratio, also known as the Price-to-sales ratio, P/S ratio, or PSR, is a metric used to value stocks based on the company's revenues, and used to compare companies within a sector and within an industry. It is calculated by dividing the price per share by the sales per share, or by dividing the market cap by the company's latest revenues. The lower the number, the better the buy.
All of the following stocks have market caps above $800 million, PE ratios below 11, PEG's below 1, selling below book value, and yields above 2%.
Penske Automotive Group, Inc. (PAG) with a price sales ratio of 0.10 is a retailer of new and used motor vehicles. The stock has a PE of 9 , a PEG of 0.73 , and pays a yield of 2.7% .
Oshkosh Corporation (OSK) with a price sales ratio of 0.19 makes and sells specialty vehicles . The stock has a PE of 5 , a PEG of 0.26 , and pays a yield of 2.2% .
NACCO Industries, Inc. (NC) with a price sales ratio of 0.23 manufactures lift trucks, housewares, and is in the coal mining business. The stock has a PE of 10 , a PEG of 0.89 , and pays a yield of 2.0% .
Magna International Inc. (MGA) with a price sales ratio of 0.26 makes automotive systems, assemblies, components, and modules. The stock has a PE of 10 , a PEG of 0.74 , and pays a yield of 2.4% .
Deutsche Lufthansa AG (DLAKY) with a price sales ratio of 0.28 is the German airline. The stock has a PE of 6 , a PEG of 0.64 , and pays a yield of 8.4% .
AEGON N.V. (AEG) with a price sales ratio of 0.37 is one of the world's largest life insurance and pension groups. The stock has a PE of 7 , a PEG of 0.84 , and pays a yield of 8.6% .
Fresh Del Monte Produce Inc. (FDP) with a price sales ratio of 0.39 produces and distributes fresh and fresh-cut fruit and vegetables. The stock has a PE of 8 , a PEG of 0.89 , and pays a yield of 2.4% .
Gruma S.A.B. de C.V. (GMK) with a price sales ratio of 0.42 makes and sells corn flour, tortillas, wheat flour. The stock has a PE of 7 , a PEG of 0.68 , and pays a yield of 2.8% .
Boyd Gaming Corporation (BYD) with a price sales ratio of 0.45 owns casinos in Nevada, Illinois, Louisiana, Mississippi, Indiana, and New Jersey. The stock has a PE of 10 , a PEG of 0.63 , and pays a yield of 6.0% .
AU Optronics Corp. (AUO) with a price sales ratio of 0.53 makes and sells thin film transistor liquid crystal display panels The stock has a PE of 3 , a PEG of 0.34 , and pays a yield of 7.3% .
Vimpel-Communications (VIP) is the second largest cellular carrier in Russia. Robust subscriber growth and acquisitions continue to drive revenue and earnings momentum. Growth prospects in Eastern Europe for wireless services remain firm and support our forecast for strengthening financials. <br...
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Companies featured in this segment: Alexandria Real Estate Equities (NYSE:ARE), Hormel Foods Corporation (NYSE:HRL), Pilgrim’s Pride Corporation (NYSE:PPC), Tyson Food (NYSE:TSN), Energy Incorporated (NYSE:TE), Suhail Bahwan Group Holding LLC, Mitsubishi Heavy Industries Limited (TYO:7011), Orascom Construction Industries (CAI:OCIC), Daewoo Engineering & Construction Company (SEO:047040), Total S.A. (NYSE:TOT), Hyundai Engineering & Construction Company Limited (SEO:000720), Hanwha Corporation (SEO:000880), Daewoo International Corporation (SEO:047050), Hanwha Corporation (SEO:000880), Daewoo International Corporation (SEO:047050), International Paper (NYSE:IP), Energy Resources of Australia Limited (ASX:ERA), Rio Tinto (NYSE:RTP), BHP Billiton Limited (NYSE:BHP), Mega Uranium Limited (TSX:MGA), and Cameco (NYSE:CCJ)
Interview with Marc Walther, CEO of AmeriChip (ACHI) HIGHLIGHTS
KSI’s NYSE listed Tier One customers: General Motors (GM), Ford (F), Magna (MGA), Daimler Chrysler (DCX), Honda (HMC), Toyota (TM), Caterpillar (CAT)
Tier One customers are prime candidates for ACHI”s proprietary, upgraded, patent-protected LACC (Laser Assisted Chip Control) process, which enables ACHI to be the low cost producer
KSI expects to be operating on 24/7 within two to three months, customers will pay overtime