Under The Radar News - Thursday

by: SA Eli Hoffmann

Take short-term gold profits. Investors should take profits in gold, buying it back in the summer, analysts say. Gold equities average 17% following the beginning of a Fed rate-cut cycle -- which they've now overshot by 3%. "As the positive impact of a rate cutting cycle takes effect and the economy recovers, gold generally begins to underperform the broader market," RBC Capital Markets analysts say. They think gold will make another run at $1,000 later in 2008 after consolidating at lower levels, and like Kinross Gold (NYSE:KGC), Harmony Gold (NYSE:HMY), Newcrest (OTCPK:NCMGY), Jaguar (JAG) and Western Goldfields (WGW).

Coal price rise could boost BHP's buyout bid. Japan's Nippon Steel agreed to pay $300 per metric ton for BHP Billiton's (NYSE:BHP) coking coal supply, a price rise of more than 200%, amid increased demand and supply shortages. The huge increase will boost BHP's revenue by over $7B, and could bolster its efforts to acquire Rio Tinto (RTP).

Yahoo-Google search combo worth $5/share. JPMorgan analyst Bob Peck says a full search-outsourcing deal between Yahoo (NASDAQ:YHOO) and Google (NASDAQ:GOOG) would increase Yahoo's value by more than $5 a share. Yesterday's Yahoo-Google test was "a brilliant move" in Yahoo's efforts to extract a fatter price from Microsoft (NASDAQ:MSFT).

Containers hold back exports. U.S. exporters hoping to capitalize on a weak dollar are facing a shortage of shipping containers as incoming shipments fall. The chassis that deliver the containers are also in short supply. Things aren't expected to get better untial at least the end of 2009. A lot of companies have sold product, but can't get it out -- "it's tying up a lot of inventory," one freighter says. "Even if you get containers, you find more people fighting for space on the ships."

Weak economy roils Vegas. Las Vegas gambling revenue fell 3.1% in February, following January's 1.3% decline. Room rates are also down. "With room rates down this quarter and gaming revenue declining, it is clear that Las Vegas is feeling the impact of a difficult economic environment," Deutsche Bank casino analyst Bill Lerner says. (MGM, LVS, WYNN)

Big biotech may be right medicine for downturn.Biotech stocks, up 1% this year vs. a 9% decline in healthcare and a 5.6% drop in the DJIA, could be an investor safehaven. Because firms depend more on breakthrough drugs, they are less succeptible to economic weakness than other companies. Big-cap biotech shares are the strongest of the group. (DNA, AMGN)

Lookout BlackBerry, here comes iPhone 2.0. Native third-party apps and enterprise support -- both slated for Apple's (NASDAQ:AAPL) June iPhone 2.0 firmware release -- will sap market share from Palm (PALM) and RIM (RIMM), Needham's Charlie Wolf warns. He notes RIM's development environment is "comparatively primitive" to the iPhone's, which will likely bring to the BlackBerry no more than essential "meat and potatoes" apps. One positive for RIM is Windows Mobile (MSFT); he says the "difficult" OS could drive customers to RIM.

JNJ)+Study+Demonstrates+Carotid+Stenting+with+Embolic+Protection+is+Comparable+to+Surgery/3533908.html" rel="nofollow">Stenting comparable to heart surgery. A study published in The NEJM this week of patients with severe blocked carotid arteries, the main blood vessels in the neck leading to the brain, who underwent carotid artery stenting with J&J's (JNJ) PRECISE Nitinol Stent and the ANGIOGUARD Emboli Capture Guidewire were comparably protected from stroke, heart attack, death, and repeat procedures as patients who underwent surgery.

Blogonomics: The Seeking Alpha Model. Seeking Alpha CEO David Jackson explains the economics behind builing a superb human-edited financial-blog aggregator. A must read ;-).

Katie Couric one foot out the door. CBS (NYSE:CBS) Evening News anchorwoman Katie Couric will likely leave long before her $15M/year contract expires in 2011 amid weak ratings. One possible move: She replaces CNN's (NYSE:TWX) Larry King.

CMBS crisis. While some corners of the credit markets seem to be thawing somewhat, commercial mortgage-backed securities are frozen solid. Q1 deals totalled just $3.5B, vs. $62.2B a year ago. B-piece buyers, who take on the riskiest portions of the assets in a sale, have become exceptionally choosy, resulting in potential deals being chopped up. A recently-priced issue of Credit Suisse (NYSE:CS) and Morgan Stanley (NYSE:MS), which could have sold about $2.6B in commercial real-estate debt, had to settle for $887M. Another pitfall was that some of the lenders, including PNC (NYSE:PNC), Prudential (NYSE:PRU) and Royal Bank (NYSE:RY), removed their debt from the pool, hoping for brighter days.

CAE in EADS's radar? CIBC World Markets analyst Chris Murray says CAE Inc. (CGT) looks increasingly likely to be a target of Airbus parent EADS.

IAC's new image. IAC/InterActiveCorp (IACI) is launching websites aimed at African-Americans, tweens and news junkies. IAC is restructuring, trying to cast off much of its older media businesses. Analysts are reserved about its direction: "There hasn't been anything meaningful created internally," Stifel Nicolaus's Scott Devitt says. "When I think of internal innovation and creation, IAC isn't the one that first comes to mind."

Buyout firms warm up to UK. Private-equity firms are showing renewed interest in UK companies, including U.S. firms Apollo (which yesterday announced an IPO) and Blackstone Group (NYSE:BX). Sign of good things to come this side of the Atlantic?

Ok, but what's their interest rate? Indian credit card issuer SBI, a joint venture between GE (NYSE:GE) and State Bank of India, had a default rate of 16.28% as of year-end, likely the worst in the industry.

Nvidia, partner take on Intel. Sources say a newly signed JV between Nvidia (NASDAQ:NVDA) and VIA, which will pair VIA's C7 and C8 CPUs with Nvidia's IGP chipsets, will target Intel's (NASDAQ:INTC) nettop, netbook and MID (mobile internet device) products. The JV's first product is due out in Q1 2009.

Oil giants wait for Mexico to open its doors. Royal Dutch Shell (NYSE:RDS.A) and Total (NYSE:TOT) are keenly watching proposed Mexico law changes that could open up the world's number-five oil producer to foreign companies. Analysts question whether the proposed contracts are lucrative enough to lure investors; Shell's head of exploration and production, Malcolm Brinded, seemed excited about the possibility.