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Under The Radar News - Tuesday

by: SA Editor Eli Hoffmann March 11, 2008 | about stocks: AAPL / BRLC / BSC / C / CCTYQ.PK / COF / CRM / CSUN / DELL / DFS / DIS / JPM / KO / LDK / LEE / MU / NYT / ORCL / PEP / SHLD / SNDK / STP / STX / TGT / WFR / WMT / YYY    
Eli Hoffmann

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Eli Hoffmann

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Rate cut odds fall. Futures now give 60% odds to a 75 BP rate cut on March 18; it was fully priced in yesterday. Many economists cheered the Fed's move to lend $200B for 28 days, vs. the current overnight term. One noted that although the action will boost liquidity, it does little to reduce counterparty risk that has banks calling margins and tightening lending standards.

Cheers. An AP investigation shows many Americans unknowingly ingest some 56 pharmaceuticals -- including antibiotics, anti-convulsants, mood stabilizers and sex hormones -- in their tap water, which has scientists worrying about the effects from decades of persistent exposure to random combinations of low levels of pharmaceuticals. Reverse osmosis removes virtually all pharmaceutical contaminants, but is very expensive. Good news for Coca-Cola's (KO) Dasani and PepsiCo's (PEP) Aquafina?

Wal-Mart dumps Linux. Wal-Mart Stores (WMT) is pulling Linux PCs off its shelves. "This really wasn't what our customers were looking for," a spokeswoman said.

Pay or free: Times still grappling. New York Times (NYT) CEO Janet Robinson says that despite increased ad revenue since the paper scrapped its $10/month TimesSelect model, it would not rule returning to a paid model in the future.

Newspapers coming back into favor? While many pare back newspaper holdings, Fidelity Investments just boosted its stake in Lee Enterprises (LEE) to 11.5% from 3.5%. SEC filings signal Fidelity has no intention of becoming active in management for now.

Apple tunes out Beatles banter. Apple (AAPL) says reports that iTunes is about to buy the Beatles music catalog for $400M is "unsubstantiated speculation." "This is not news nor is it a scoop," a spokesperson said.

Solar's image gets spotty. Solar shares were burned after a report in the Washington Post described how one polysilicon manufacturer -- who supplies Suntech Power (STP), China Sun (CSUN) and LDK Solar (LDK) -- dumps its toxic waste in open fields outside the factory, sullying the supposedly green industry. Interesting to watch how the story affects MEMC Electronic Materials (WFR), one of the few public polysilicon manufacturers.

Weak economy puts squeeze on Syntax. U.S. retailers including Circuit City Stores (CC) and K-Mart (SHLD) are looking to extend their payment terms on LCD TVs from two to 3-4 months. Vendors also report return rates as high as 15-20%. Smaller vendors, such as Syntax-Brillian (BRLC), may not be able to keep up.

Sound of silence. A journalist takes a Dell (DELL) 64 GB flash-based notebook for a spin. The best thing? The quiet. Mind you, it comes at a $900 premium. But that's likely to change over the coming years as Samsung, SanDisk (SNDK), Micron Technology (MU) and even Seagate Technology (STX) aggressively pursue the emerging market.

First active ETF: All systems go. Bear Stearns (BSC) says its Current Yield Fund (YYY) will be the first actively managed ETF to trade when it hits the markets on March 18. "This ETF is not index-based and it's not rules-based," Bear's Margo Cook said. "It is truly actively managed." It will publish its current portfolio at the end of each business day.

Oracle's CRM on Demand targets salesforce.com. Oracle (ORCL) will debut Oracle CRM on Demand 15, browser-based corporate resource management software that can run on BlackBerrys (RIMM). The tools will compete directly with similar offerings from SaaS giant salesforce.com (CRM).

Calling all overgrown kids. Sources say Disney (DIS) will open an "adult" theme park near Pleasure Island called "Disney's Night Kingdom" in the fall of 2011. The park, which will hold only 2,000 people at a time, will be open from 4 PM until midnight. Reports put admission at a whopping $300. A spokeswoman says many ideas Disney explores never become a reality, but if and when it made an announcement, "it would be done in grand Disney fashion."

Target's generosity cause for concern. While many credit-card lenders (DFS, C, JPM, COF) are cutting back in the face of a credit crisis, Target's (TGT) credit-card business burgeoned to $8.62B outstanding this quarter, up 29% from $6.71B a year ago. Now analysts are growing fearful it may have overexposed itself to more bad debt than it can handle. "Target appears to have pursued very aggressive credit growth at the wrong time," consumer-credit analyst William Ryan says.

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This article has 10 comments:

  •  
    Mar 11 01:12 PM
    In regards to your LCD info and Syntax-Brillian...

    Olevia only has one SKU at Circuit City and two at Kmart. At Target (their main retailer) there are very few returns of Olevia.

    Why pick on Syntax-Brillian when talking about near BK vendors when Olevia has a very small exposure to them?
    Reply
  •  
    Mar 12 10:17 AM
    Regarding Syntax;
    Interesting how you single out BRLC in the paragraph. What leads you to make the comment about without any research into the state of the company in light of the revised financing?

    Do you have a position in the stock? I assume you are short in BRLC since you fail to mention your position.

    Remember full disclosure?

    Reply
  •  
    Mar 12 03:13 PM
    Hi guys. Thanks for your comments. If you click through to the link at the beginning of the mini-summary, you'll find the original Digitimes article which I summarized, in which BRLC is the only company mentioned. I have no position in BRLC.
    Reply
  •  
    Mar 12 07:41 PM
    Nowhere in the washington post did it mention LDK Solar Co.
    Reply
  •  
    Mar 13 04:21 AM
    Hi Dpell1,

    In this SEC filing (link: www.sec.gov/Archives/e...), LDK Solar names the company in question, Luoyang Zhonggui High-Tech, as a supplier.
    Reply
  •  
    Mar 13 01:44 PM
    Interesting the way you weave the paragraph. You single out Syntax and not Vizio, Westinghouse, Panasonic, etc. because of the economy, mention vendors that have very little to do with Syntax, mention Syntax default, then mention that the little guys may not be able to keep up. I assume you refer to extending terms that limit cash flow, while the Digitimes article ends with the terrific growth of HDTV. An agenda or coincidence?
    Reply
  •  
    Mar 13 11:40 PM
    It never ceases to amaze me how easily people will sell their souls for money.
    Reply
  •  
    Mar 14 02:26 AM
    I see there are still many conspiracy theory BRLC longs hanging around and blaming everyone who has anything bad to say about BRLC as being in bed with the shorts.

    But really Eli, why do you bother covering BRLC though? You have all these major companies in your article like KO, PEP, WMT, NYT, AAPL, DELL, etc. And then you decide to throw in some coverage on a penny stock in danger of bankruptcy like BRLC in there also. Shouldn't that be left to the penny stock "newsletters"...

    And Larry talk about being a hyprocrite. You are obviously paid to write bullish articles on BRLC too. I consider you just as bad as the basher joker called Sanmina.
    Reply
  •  
    Mar 16 01:30 PM
    Concerning low Target returns on Olevia. Target return policy is the most difficult to abide by and return them. If you do not have original packing materials you are refused. No restocking allowed on TV.

    I have to wait a Month for Olevia to replace 47 LCD that only worked for 2 weeks.
    Reply
  •  
    Mar 26 03:00 PM
    seekingalpha put all his force to beat BRLC which means good news. blsh to big boys.
    Reply
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