Wednesday, May 25, 2011

US Hot Stock and Other Stocks In Focus may 25 2011

US Hot Stock and Other Stocks In Focus may 25 2011 : U.S. stocks traded modestly lower Wednesday as the Dow Jones Industrial Average lost 33 points to 12323, the Standard & Poor's 500 dropped 3.6 points to 1313 and the Nasdaq Composite declined a fraction to 2746. Among the companies whose shares are actively trading in the session are Polo Ralph Lauren Corp. (RL), Toll Brothers Inc. (TOL) and American International Group (AIG).

Polo Ralph Lauren Corp.'s ($120.15, -$9.24, -7.14%) fiscal fourth-quarter profit dropped 36% as higher costs and lower sales in its vital Japanese market hurt the bottom line. The results missed Wall Street expectations.

Toll Brothers' ($21.15, +$0.88, +4.34%) fiscal second-quarter loss narrowed amid sharply lower write-downs as the luxury home builder reported sales and margin growth and an improved cancellation rate.

American International Group ($28.46, -$1.01, -3.41%) priced its 300 million share stock offering Tuesday evening at $29 a share, raising $8.7 billion and reducing the U.S. government's stake in the insurer.

Well-known pizza chain California Pizza Kitchen Inc. (CPKI, $18.38, +$1.67, +9.99%) has reached a deal to sell itself to private-equity firm Golden Gate Capital for $470 million. The deal, which values the pizza chain restaurant at $18.50 a share, a nearly 11% premium to CPK's Tuesday closing price, comes after more than a year of strategic review by the company and is expected to close in the third quarter.

Collective Brands Inc.'s (PSS, $15.93, -$2.44, -13.28%) fiscal first-quarter earnings plunged by half on unexpected sales declines, as higher prices for gasoline and food and bad weather in some parts of North America deterred Payless ShoeSource's domestic customer base.


Other Stocks In Focus :
Standard & Poor's said Tuesday that Alpha Natural Resources Inc. (ANR, $50.97, +$1.08, +2.16%) would replace Massey Energy Co. (MEE, $61.96, +$1.21, +1.99%) in the S&P 500 index after the close of trade on June 1.

American Eagle Outfitters Inc.'s (AEO, $13.33, -$0.33, -2.42%) fiscal first-quarter earnings more than doubled on expense controls, though sales and margins continued to fall from last year's levels.

Avago Technologies Ltd.'s (AVGO, $33.47, +$1.76, +5.55%) fiscal second-quarter earnings grew 50% as the semiconductor designer reported strong revenue growth and wider margins.

Boston Scientific Corp. (BSX, $6.84, +$0.17, +2.55%) said it has received approval from the U.S. Food and Drug Administration to market its Promus coronary-stent system. The medical-products developer and maker said it plans to launch the product immediately in the U.S. Separately, Goldman Sachs upgraded its stock-investment rating on Boston Scientific to neutral from sell, saying it no longer sees material downside to consensus estimates and that it sees higher stent share and associated profitability.

Brown Shoe Co.'s (BWS, $10.66, -$0.25, -2.29%) fiscal first-quarter earnings fell 63%, though they still beat expectations, as its discount-footwear chain faced tough comparisons to strong year-earlier results while expenses rose.

Berkshire Fund and affiliates reported a 13.2% stake in children's retailer Carter's Inc. (CRI, $31.20, +$3.05, +10.83%), according to a filing with the U.S. Securities and Exchange Commission.

Conn's Inc.'s (CONN, $5.54, +$0.31, +5.93%) fiscal first-quarter earnings fell 31% as the consumer-electronics and appliances retailer's sales continued to be hurt by lower prices for television sets and appliances. But results at its struggling credit operations improved.

Costco Wholesale Corp.'s (COST, $79.60, -$1.75, -2.15%) fiscal third-quarter earnings rose 6% as strong revenue and same-store sales growth offset a slight decline in margins. But earnings-per-share missed analysts' expectations.

Bank of America Merrill Lynch raised its stock investment rating on Diamond Foods (DMND, $71.34, +$2.40, +3.48%) to buy from neutral, saying it has concluded that the planned acquisition of Pringles should help the company achieve its $4 earnings-per-share goal by fiscal-year 2014, a year ahead of schedule.

Dycom Industries Inc.'s (DY, $16.51, +$2.17, +15.13%) fiscal third-quarter profit slipped 9.6% on debt-related charges, though revenue rose and results beat expectations.

Express Inc.'s (EXPR, $20.78, -$2.10, -9.16%) fiscal first-quarter earnings grew 15% on strong same-store sales growth and expanding margins, helping adjusted results exceed the company's expectations. But the company gave a weak outlook for the current quarter.

Exterran Partners LP's (EXLP, $25.55, -$1.31, -4.88%) public offering of five million common units priced at $25.95, a 3.4% discount to Tuesday's close. The natural-gas-compression-services company will use the funds to repay borrowings under its credit facility and to fund a portion of its purchase of compression and processing assets from Exterran Holdings Inc. (EXH, $20.13, +$0.16, +0.80%).

Focus Media Holding Ltd. (FMCN, $32.35, +$0.75, +2.36%) swung to a first-quarter profit, topping analysts' expectations, on across-the-board top-line growth and wider gross margins.

Frontline Ltd.'s (FRO, $16.93, -$1.87, -9.95%) (FRO.LN) first-quarter profit dropped 81% on a steep decline in revenue amid sluggish tanker demand. The shipping company said it expects weak trading results in the first quarter to extend to the second quarter.

A "paradigm shift" in U.S. drilling activity toward oil should improve sustainability and reduce the volatility of the U.S. cycle, resulting in modest multiple expansion for Big 4 service names and relative multiple expansion for Halliburton Co. (HAL, $48.77, +$1.27, +2.67%), Morgan Stanley says. Halliburton has historically traded at P/E discount vs. Schlumberger Ltd. (SLB, $84.49, +$1.21, +1.45%), Baker Hughes Inc. (BHI, $72.14, +$1.85, +2.63%) and Weatherford International Inc. (WFT, $19.63, +$0.18, +0.93%) due to its outsized exposure to North America, firm says, but recent surge in U.S. drilling should make Halliburton's earnings smoother and less volatile than over the past two decades. Morgan raises its stock-investment rating on Halliburton to overweight from equalweight.

SunTrust Robinson Humphrey raised its stock-investment rating on Heartland Payment Systems Inc. (HPY, $19.40, +$1.10, +6.01%) to buy from neutral, saying it is gaining confidence in Heartland's ability and willingness to generate significant net operating margin expansion over the next several years. The firm said it is increasingly convinced that the internal management philosophy has shifted, likely setting the stage for accelerating, above-consensus EPS growth.

Heico Corp.'s (HEI, $55.06, +$5.29, +10.63%) (HEI.A, $40.71, +$4.05, +11.05%) fiscal second-quarter profit jumped 34%, topping analysts' estimates, on strength at its flight-support unit. The company raised its current-year net income growth forecast to 20% from its earlier view of 15% to 17%. It lifted its sales-growth projection to 18% from its previous estimate of 13% to 15%.

Hormel Foods Corp.'s (HRL, $28.03, -$1.99, -6.63%) fiscal second-quarter earnings rose 41%, led by improved performance at the food-processing company's refrigerated foods and Jennie-O turkey businesses, though its grocery products and specialty-foods segment results were hurt by higher commodities costs.

Kemet Corp. (KEM, $14.21, -$0.84, -5.58%) said a secondary offering of seven million shares by Platinum Equity Capital Partners II priced at a 3% discount to Tuesday's close, sending shares lower.

Kensey Nash Corp. (KNSY, $25.69, +$1.28, +5.24%) said it has acquired assets of Synthes Inc.'s Norian subsidiary for $22 million in cash. The company said it sees the deal helping its fiscal-year earnings per share by about 15 cents per share.

KongZhong Corp. (KONG, $6.62, -$0.20, -2.93%) swung to a slim first-quarter loss because of one-time items like write-downs and losses from debt repayment, but its adjusted bottom line rose on better-than-expected sales.

LTX-Credence Corp.'s (LTXC, $8.19, +$0.39, +5.00%) fiscal third-quarter earnings nearly quadrupled and beat its prior guidance, led by a rebound in the radio-frequency power amplifier, power management and applications-specific market segments.

Citi says National Oilwell Varco Inc. (NOV, $70.50, +$2.03, +2.96%) is poised to benefit from the offshore rig-building cycle that began stronger-than-expected in October 2010 and should continue through next year. Citi says orders in this building cycle will be larger than in the past due to the accelerated attrition of existing rigs and sees an $18B revenue opportunity for NOV as it places a $92 price target on the shares.

J.P. Morgan raised its stock-investment rating on Ntelos Holdings Corp. (NTLS, $19.76, +$0.71, +3.73%) to overweight from neutral as it raises its wholesale and wireline revenue estimates. The firm said it believes Ntelos could see stabilization in its wireless subscriber base, better-than-expected revenue from Sprint (S, $5.83, -$0.01, -0.17%) and improved wireline results as the integration of FiberNet and Allegheny continue and fiber-to-the-cell site opportunities are realized.

Pacific Sunwear of California Inc.'s (PSUN, $3.42, +$0.26, +8.23%) fiscal first-quarter loss edged wider as sales dipped and margins narrowed. The company also forecast a current-quarter adjusted loss wider than analysts' estimates.

Private-equity firm Vector Capital boosted its acquisition price for RAE Systems Inc. (RAE, $2.24, +$0.19, +9.27%) to $133.9 million and raised the potential breakup fee to $5.75 million as it looks to win shareholder support.

Sanderson Farms Inc. (SAFM, $43.54, -$1.59, -3.52%) saw its latest quarter's results slammed by surging feed costs, and J.P. Morgan doesn't see a turnaround near-term as it slashes its earnings-per-share target to three cents from $1.95 for the year starting Nov. 1. "Though we fully expect chicken-supply cuts to come, we wonder whether, in the near term, they will be deep enough to drive earnings as high as believed."

Take-Two Interactive Software Inc.'s (TTWO, $16.61, +$0.51, +3.16%) earnings outlook for the first quarter fell short of analyst expectations as the videogame maker ramped up marketing for its latest high-profile titles.

TiVo Inc. (TIVO, $9.52, +$0.11, +1.17%) swung to a fiscal first-quarter profit as revenue declined but it benefited from recent patent litigation.

Two Harbors Investment Corp.'s (TWO, $10.55, -$0.24, -2.22%) 20-million share offering priced at a 3.6% discount to Tuesday's close, as the real-estate investment trust seeks additional funds to purchase residential mortgage-backed securities and other assets.

Biopharmaceutical company Vivus Inc. (VVUS, $8.76, +$0.37, +4.35%) said its erectile-dysfunction drug avanafil showed significant improvement in difficult-to-treat patients, according to results from a phase 3 clinical trial.

Zale Corp.'s (ZLC, $5.17, +$0.75, +16.97%) fiscal third-quarter loss narrowed more than expected as the jewelry retailer saw double-digit revenue and same-store sales growth. (source : online.wsj.com )
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