Top 10 Most-Traded Stocks for Monday

by: Richard Saintvilus




Shares Traded

Current Price

Sirius XM Radio


Fell 4.5%



Cisco Systems


Fell .4%



Level 3 Communication





Microsoft Corp


Fell 1.4%



Intel Corp.





Micron Technology


Fell 1.8%



Oracle Corp


Rose 1.4%





Rose 2.0%





Fell 0.8%





Fell .3%



Click to enlarge

Sirius XM has been taking a beating over the past several weeks. Rocco Pendola asks investors to calm down. We live in a society that cannot get by without constant histrionics. That would be fine if the people executing the performances did so with a little less hyperbole and a little more thought and refinement. When it comes to Sirius XM stock, 80% of what you read would fit perfectly alongside a Sarah Palin speech. Frankly, outside of a handful of authors and sites, everything that gets written about SIRI amounts to little more than mindless drivel. Of course, we've discussed ad nauseam the hysteria constantly offered by SIRI cult members regarding the "manipulation" of the stock. And, of course, when the stock falls we're told that the sky is falling, yet again. A nice shot of the Manhattan skyline does not an article make. Or something like that.

Cisco Shares have been weak as of late, but a return to its core focus should permit shares to head toward the top of the current trading range, and the push closer to $30 by the end of 2012. Citibank recently forecast a return to IT growth rates to 1.5-2xs GDP growth. Cisco should be pleased, as the world’s largest purveyor of data networking equipment. It is trading relatively low at $15/share. While hot social media company names are dominating the headlines, we think Cisco offers a compelling value play. We think CEO John Chambers has a good shot at turning around the company and getting Cisco's growth engine revving again. Its forward P/E of 9.8 also suggests it is currently attractive for investors. With a coordinated effort to stabilize Japan and the world’s currently meek economic momentum, it is reassuring for the analysts at Citi as much as it is for those who decided to lever their portfolios to this trend through Cisco. At $15 per share, we think CSCO's share price is the best bargain in the tech space given the company's industry dominance.

Level 3's stock remains expensive. It has been on a tear over the past three months. I have been one of the biggest supporters of the company and the stock. I had previously written about the excitement that the company had generated when it announced earlier this year its pending merger with Global Crossing. I wrote then how I thought the Global Crossing transaction made Level 3 more valuable or even undervalued upon the announcement. I pointed to how the deal would create a company with a unique capability to meet local, national and global customer requirements in a wide range of markets. By combining the strengths of each company, the new entity will offer enterprise, government, wholesale, content and web-based customers a comprehensive portfolio of end-to-end data, video and voice solutions.

A week and a half ago, a report said that while the U.S. Department of Justice was looking into the bidding over the Nortel (OTC:NRTLQ) wireless patents, they were unlikely to object to Google (NASDAQ:GOOG) winning the rights to them. But a new opponent to Google’s bid has arisen. And it’s a familiar foe: Microsoft (NASDAQ:MSFT). Specifically, Microsoft is objecting to Google being able to purchase the over 6,000 patents without recognizing Microsoft’s existing licensing agreements on the patents, Reuters reports. As we noted a week and a half ago, these licensing agreements were precisely why Microsoft was the one obvious bidder not competing for the patents — company executives didn’t think they had to. But the current terms for the winner of the auction doesn’t back up that argument. As of right now, the company that wins the bidding would be able to terminate existing agreements.

Intel has a 5 year P/S average of 3.2, and it currently trades at 2.7 times sales per share. In 2005, 2006 and 2007, the multiples were 4.0, 3.4 and 4.1, respectively. Intel Corporation has been designing and developing integrated circuits since 1968. With a market cap of $118.3 billion, Intel is a behemoth of a company and easily the world's largest producer of computer chips. The company has a defensible competitive moat, unlike chief rival AMD. The company drew in $43.6 billion in revenues in 2010, which is an increase of 24.19%, after declining 6.5% in 2009. Net income came in at $11.46 billion (+162.39%). In 2009, profits were only $4.36 billion (- 17.4%). In 2010 and 2009, profit margins were 65.3% and 55.69%, respectively, and the EBT margins were 36.78% and 16.2%, respectively. ROIC [return on invested capital] climbed to 24% in 2010 after posting only 10.28% in 2009. Clearly, Intel has been doing something right: It holds more than its share of the market. Intel still produces around 80% of the world's CPUs.

Some more notes of praise for Micron Technology came over the transom today, similar to the bullish piece yesterday by Lazard Capital Markets. Wells Fargo’s David Wong raised his rating on the stock to Outperform from Market Perform, with a “valuation range” of $10 to $12. The stock is currently up a penny at $8.49. Wong says that contract pricing for NAND flash memory chips and DRAM chips has held up, despite a fall in spot prices, which means fiscal Q3 earnings should probably be 3 cents per share, as opposed to the net loss of 4 cents he’d previously expected. He raised his full-year EPS estimate to 29 cents from 21 cents. There’s still a risk that Micron’s contract prices will “trend down” in the coming months, given what appears to be a soft electronics environment, he writes. “Alternatively, if Micron shipped more than we have estimated in the May quarter and/or if memory prices stabilize sooner than we are currently expecting, there may be reason to raise our estimates at some point in the future.”

When Oracle bought Sun Microsystems last year, it also bought three of the leading open source projects – the Java programming language, the productivity suite, and the mySQL database. While the company's rhetoric before the acquisition indicated it wanted the open source assets, the big money at Sun was always in its server business. To open source advocates, it became clear just months after the deal went down that what Oracle wanted with these open source crown jewels was to either make them proprietary or ruin them: Oracle killed low-cost support options for mySQL, and doubled prices on commercial support. Oracle caused a split within the community, which led to its developers creating a “fork” called LibreOffice. Oracle caused Apache to leave the Java Community Process, essentially rendering the “write once, run anywhere” programming system Oracle proprietary.

Dell Inc, the technology giant recently posted strong and growing financial results. The company is launching new devices in developing markets and adding new services for business that will fuel the company's growth. It is launching Google's Android based tablet in China later this summer before introducing it the U.S. markets. The stock closed at $15.47 on Friday, up $2.3 or 17.51% in the last 90 trading days.

Comcast is set to announce that it will bring Skype calls to TV sets later this year. America’s largest cable company will announce that subscribers to its service will be able to rent a kit including a webcam and an adapter that plugs into their TV. A new cable box remote will include a keyboard on the back for typing messages. Trials for the plan will begin in the next few months, the Associated Press reports. Comcast already has 17.4 million Internet subscribers.

Alibaba Group Holding Ltd. (OTC:ALBIY) expects to resolve a dispute with shareholder Yahoo! Inc. over the spinoff of the Alipay business more easily than with stake owner Softbank Corp., reported, citing the Chinese company’s Chairman Jack Ma. Yahoo’s disagreement is over its commercial interests only, Ma said in the Caing interview. Softbank Chairman Masayoshi Son has raised additional objections over “matters of principle” regarding employee development, Ma said. Takeaki Nukii, a spokesman at Softbank, declined to comment. John Spelich, a spokesman at closely held Alibaba in Hong Kong, said he couldn’t verify the contents of the Caing report. Alibaba is in talks with Yahoo and Softbank, its two biggest shareholders, on Alipay after the online payment business was spun off to facilitate a license application in China. The divestment of Alipay lacked the approval of Yahoo and Softbank, according to the Sunnyvale, California-based company. Yahoo last month said it is seeking compensation for the transaction.

Disclosure: I am long SIRI, CSCO, MSFT, ORCL.