Ford (F): I first talked about Ford’s merits in a June 26th article entitled More Fallen Angels. In that piece I outlined the macroeconomic concerns I had; namely, rising interest rates and decreased consumer spending, as well as the company-specific issues Ford must address in order to regain shareholder confidence.

Back in March, I pointed out that AT&T’s (T) acquisition of Bellsouth (BLS) was no blunder. Potentially delivering $8 billion in new value, the deal looks good for shareholders. Well, the market agrees. Since then, AT&T shares have gained 20%, boosting the telecom giant’s market value by more than $20 billion.

Blame it on higher gas prices, the housing bubble bursting or the possibility that creeping inflation might yet push interest rates higher. Whatever the reason, U.S. consumers continued to stay away from North American car dealerships last month in droves, and sales for the big three U.S. car makers once again disappointed.

Secondary and tertiary retailers, unlike their primary confreres, aren’t so insulated, for they rely less on economies of scale and more on management acumen. An ability to portend (or even create) consumer trends is vital to long-term success, while one misstep can undo years of superior performance.

Then, things started going wrong.

Right now is a great time to do some research, because pretty soon I think the group will be ready for a run. And my favorite longer-term pick of the bunch right now is Ciena (CIEN).

Despite the stock’s drastically reduced price-tag, my view on Dell remains downright gloomy. With Dell’s business model falling apart, and no turnaround in sight, investors are wise to stick with the herd.

That said, I will be reviewing several high profile companies that have been in the news as part of a three part running series.

The level of inventory has grown as well. Inventory days at JOSB have doubled to 334 days. The reasoning is simple: JOSB customers shop only 1-2 times per year. JOSB, by having more sizes (not variety), is helping drive sales and increase margins. JOSB is now coming to an end to this inventory buildup, and now margin expansion should accelerate, as will earnings growth. These sales may also be insulated from an economic downturn.

That special technology and expertise is in the stock of just a handful of offshore drilling contractors that have built their business around leasing specialized offshore equipment to the majors at short or long-term contract day-rates.

Winners:

• Shareholders of Energy Partners, Ltd. (EPL) are feeling like they struck oil this week as this stock soared from $18.25 to $25.01 (or 37%) as it was offered to be bought. More specifically, Woodside Exploration Ltd., an Australian petroleum company, offered to buy the American oil and gas exploration company for $23.00 per share. However, this offer would only apply if Energy Partners is to cancels its upcoming acquisition of a Stone Energy Company (SGY), which is also an oil and gas exploration company. Woodside also added that its offer to buy Energy Partners could rise to as high as $24.00, assuming it can receive a favorable ruling from the courts to drop any termination fees that would arise if Energy Partners canceled the Stone Energy acquisition. Energy Partners has not yet decided upon how to proceed and is currently examining both Woodside’s takeover offer and its own acquisition deal with Stone Energy.
• AnorMED Inc (AOM) showed signs of good health as its shares received a big boost to its share price this week. Shares of the biotech drug company climbed an amazing 80% ($5.55 to $9.94) over news that AnorMED has rejected a takeover made by Genzyme Corporation (GENZ) to acquire the company’s shares for $8.55 a share. Genzyme has expressed interest in AnorMED for a long time now. In fact, the two biotech companies have been in contact with each other ever since October of 2005. More specifically, Genzyme is most interested in AnorMED’s highly anticipated stem cell transplant related drug, Mozobil. Since AnorMED’s share price remains high even after rejecting the offer, suggests that the market assumes that a much higher second offer may be imminent.

• Share prices of Key Tronic (KTCC) slid 22% this week due to lower quarterly sales. The electronics manufacturer reported earnings from last quarter to be $7.12 million. While this does represent a substantial increase over earnings from the same quarter of last year ($2.77 million), most of this increase can be attributed to a tax benefit totaling $5 million. In actuality, Key Tronic’s operational earnings should have been lower, because this quarter’s revenues dropped compared to last year by $52.52 million and $53.15 million, respectively.

John H. Harland Co. (JH), the world’s second-largest check-printer, reported consolidated sales for the first half of 2006 of $532.9 million, which was a 17.1% increase from the $455.2 million reported for the same period a year earlier; and a consolidated net income of $37.9 million. Sales from the company's printed-products segment were $159 million, a 5.9% increase from $150.1 million reported for the same year-ago period. And the company increased its quarterly dividend 16.7%.

Now you think this would be bad news for cigarette companies, and that the finding would relegate the group to the doghouse. But, if this were your analysis, you would be wrong. Dead wrong! That’s because the judge did not impose any monetary fines based upon her ruling. In fact, she merely stated that the companies named in the suit would have to make corrective statements about the addictiveness of cigarettes, and pay the government’s court costs.

Lately, the emergence of a global bio-fuel industry prompted by the high price of oil is being hailed as major long-term positive for the agriculture sector. Growing demand for crops such as corn and soybeans, which can now be economically converted into ethanol and bio-diesel, could eventually produce a permanent upward shift in global farm incomes. This would be a hugely positive development for farm equipment manufacturers like Deere, and its chief competitors CNH Global N.V. (CNH) and AGCO Corporation (AG).

It’s In The Right Business: United Dominion is an apartment REIT. It collects rent from individuals occupying its roughly 75,000 apartments and then passes along the profits to its shareholders in the form of a dividend. Why is an apartment REIT so great right now?

In the prior eight years (i.e., prior to the bankruptcy), USG had been named in more than 250,000 asbestos-related personal injury claims and had paid more than $450 million (before insurance) to resolve asbestos-related litigation.

Despite reporting a 10% increase in earnings per share on a 15% improvement in revenues, the shares went into freefall, dropping nearly 14% intraday before closing with a loss of just over 10% on the day of the announcement. As is usually the case in these situations, the catalyst for the price drop was the company missing analyst expectations by a narrow margin. Since then, the shares have struggled, unable to recover the lost ground. Is UPS down for the count, or are investors over-reacting to the earnings miss?

Why such a negative reaction from investors? As the evidence has mounted that the U.S. economy could be heading for a recession next year, cyclical stocks like the rails, have naturally been at the top of most investors' sell lists.

IHG hotel brands include InterContinental, Crowe Plaza, Holiday Inn, Holiday Inn Express, Staybridge Suites, Candlewood Suites and Hotel Indigo.

For the period ended July 31, the company earned 72 cents per share, backing out one-time charges. That’s about a 6% improvement from the 68 cents per share the company earned in the same period last year. Same-store-sales for the period rose just 1.5%. That’s sharply lower then the 3.8% the company witnessed in the first quarter, and lower then the 3.6% the company reported last year. Total sales were up about 11%, while US sales were up just 6.9% over last year. Put another way, sales, particularly U.S. sales (its bread and butter), are slowing.