Buying retail. A number of influential investors are starting to pick up deflated retail stocks. To wit: Nelson Peltz in Tiffany (TIF), Richard C. Breeden in Zale (ZLC), William Ackman in Sears (SHLD) and Target (TGT), and Iceland's Baugur Group in Saks (SKS). Carl Icahn has also said retailers look to be good investments, but warned they might still go lower.
Keep an eye on the junk. Junk bond yield spreads were 7.5% higher than Treasurys last week, the highest level in more than five years, leading one money manager to call junk bonds the "canary in the coal mine." Costly junk bonds cause companies to pay hefty premiums to refinance debt. WSJ: "Perhaps investors have pushed junk bonds too far. If they're right, though, the corporate outlook is going to get very bad, very fast."
2008: Year of the LBO? The current lack of liquidity is far from the crisis the media has portrayed, private equity mogul and Carlyle chairman Louis Gerstner says. "We are in a welcome period for private equity." Gerstner says that weaker players ("those in short trousers") will fall off the boat, opening up the markets for the best deals of the next 5-10 years in 2008-9.
Gotta hand it to Nokia. Research firm iSuppli says Nokia (NOK) devastated the competition in Q4 on its way to market dominance. Global mobile-handset shipments climbed 19.5% to 133.5M units, giving NOK an insurmountable 39.5% market share. Much of its growth was at the expense of Motorola (MOT) and Samsung. Sony Ericsson (SNE) (ERIC) was the only other top-five handset maker to exceed the industry's 16.5% average growth rate.
NY Times not about to sell About. New York Times DealBook says The New York Times Company (NYT) is not looking to sell its About.com website. Silicon Alley Insider said yesterday The Times was shopping the site.
Dell (un)Direct. Sources say Dell (DELL) will to drop the 'corporate axe' on its 150 plus Dell Direct Stores. Separately, Dell laid off an undisclosed number of workers Tuesday from its Ottawa call center, despite previous plans to expand the facility.
Reading between the lines. Yahoo (YHOO) said during its Q4 earnings conference call it will receive an upfront payment of $300-$400 million from AT&T (T) from its co-branded internet venture, instead of the per-subscriber fees it was previously receiving. Nice, except that at least one analyst thinks YHOO earned $250M in 2007 alone on the deal. The new deal lasts for four years; Yahoo contends the announced deal has other benefits such as new ad targets.
Yahoo lives. Yahoo (YHOO) will launch a social-video service called Yahoo Live, which will allow people to broadcast themselves over the internet. At first, Yahoo Live will only be available to Yahoo employees.
Search success. According to a leading search-engine marketer, Google (GOOG) captured 97% of search spending growth in Q4, Microsoft (MSFT) got 6%, while Yahoo (YHOO) lost 3%. Google's overall share of search spending was a whopping 77%. Meanwhile, Panama boosted Yahoo's ROI by 39%; MSFT's rose 7%; and Google's was up 8%.
Sprint seeks WiMAX partners. Sprint Nextel (S) is negotiating with several companies in its effort to deploy its long-promised WiMAX network. The potential JV may include Clearwire (CLWR), Intel (INTC), Google (GOOG) and SK Telecom (SKM).
Honda rolls out 3D chip. While other semi makers' 3D chips are still in testing, Honda Research, the R&D unit of Honda Motors (HMC), has produced a 3-D chip that vertically stacks a CPU, memory chip and analog-digital signal converter. Stacking the chips, rather than putting them side by side, doubles the CPU's speed while reducing power consumption by 36%.
IBM's entry-level VM. IBM (IBM) is putting its Power6 chips on its System P entry-level mid-range boxes, and packaging the systems with entry-level virtualization called PowerVMExpress which runs on AIX, Linux and i5/OS. IBM says the combination enables customers to partition below the processor level to one-tenth of the processor, giving it an advantage over Intel (INTC).
Citi: Insiders finally step up to plate. Citigroup's (C) Latin America chairman and CEO Manuel Medina-Mora recently bought $5M in shares, the largest Citi insider purchase in more than five years. One analyst notes the purchase is even more significant considering Medina-Mora received almost 250K shares for free two days prior to the purchase.
Sears' Lampert speaks out. Sears (SHLD) chairman Ed Lampert says he didn't act soon enough to make changes. "We've fallen off [the] path" [of building a great company], he said, "and we need to get back there." Lampert lashed out at analysts, but conceded the five-year turnaround he predicted three years ago will take longer than that.
Ford sale, for good. Ford (F) will not retain any stake in its Jaguar and Land Rover divisions after selling them to Tata Motors (TTM); previous reports suggested Ford would retain minority stakes in the divisions.
Get inside Intel - Barron's. Barron's says Intel (INTC) shares look attractive based on its ever-strengthening position against rival AMD (AMD). Shares could jump 20% if its earnings multiple (12x) returns to a more-usual 15x.
Merck drug scrutiny grows. Merck's (MRK) osteoporosis treatment, Fosamax, faces increasing scrutiny and lawsuits after a growing number of patients say the drug causes a bone-wasting condition called ONJ. Merck's lawyers say a lawsuit filed Monday is an "isolated claim."
Happy workers, happy investors. Savvy, long-term investors should buy into companies that have a happy work-force, a UBS report says. Data suggest good-to-work-for companies outperform over the medium term.