Senator Charles "Deerslayer" Schumer is at it again, this time taking aim not at Bambi but at banks charging ATM fees that the Democrat from New York judges to be "onerous." Said the senator, in demanding that the chairman of the Federal Reserve review the issue:

ATM fees are getting so onerous that the costs of accessing your money easily outweighs the convenience factor. These mounting fees demand a response from federal regulators. Consumers are bearing an unfair burden in maintaining the health of banks' balance sheets.

I know I keep coming back to this situation, but part of the theme of my writing is the notion that common stockholders be respected and protected.

Tuesday we had more ridiculousness from the Bankrate (RATE) "going private" transaction:

For readers of my blog, you know where I stand on the private equity industry. I have suggested for several years now that private equity activity would be entering a long slumber (see Private Equity: The End of an Era and Private Equity – Stupid Money Chasing Stupid Deals).

I was therefore interested to read an article that appeared in last week’s issue of the Economist claiming that private equity might be on the rebound (see The Barbarians are Coming, Again). According to the Economist:

Q2 2009 Earnings Call

July 30, 2009 11 am ET

First off, let me point out that the acquisition of Bankrate (RATE) was on my list of 12 2009 Predictions and I previously called for an acquisition in my write-up Final Option for Bankrate: Find a Buyer.

Consensus was estimating $55 million in EBITDA for Bankrate in 2009 but management stated that they would likely miss that estimate. RATE reported $22.5 million in EBITDA in the first half of 2009. I assume they could match that run rate and produce $45 million in EBITDA for the full year 2009. Assuming that EBITDA figure, the acquisition multiple is 12.7x.

Fortune Small Business is out with its annual FSB 100 list, which measures the fastest growing (by revenues) publicly-traded small business listed on U.S. exchanges. As always, it is both fascinating and frustrating.

Though the FSB 100 has many intriguing prospects, it is horribly laid out and almost impossible to assess in the format provided. For example, there’s no way on the FSB site to get a handle on the market cap of the list except one company at a time. It's another instance of a layout designed to generate unnecessary page views (and advertisement cpm’s) at the cost of reader convenience.

One of the favorite screening methods of contrarian investors is to search for companies whose stock prices have underperformed the broader market. In the screen presented below, we highlight stocks that have underperformed year-to-date in 2009 (through July 10th).

In order to minimize the occurrence of companies in financial distress as well as those posting large losses, we limit the screen to companies with no net debt and profitable operations (either based on the trailing twelve months or analyst estimates of the next twelve months). This narrowing of the field should result in a superior list of companies that may have been sold indiscriminately by investors, despite a strong balance sheet and decent operating results.

In early January I listed 12 items that I thought will or will not happen in 2009 in my post 12 Predictions for 2009. Half way through I take at look at those predictions to evaluate where we are.

Here goes.

This is the 1st Quarter 2009 edition of our ongoing hedge fund portfolio tracking series. Before reading this update, make sure you check out the Hedge Fund 13F filings series preface.

Next up, we have Tremblant Capital Group. Tremblant is a $3 billion hedge fund based in New York and is run by Bret Barakett, who is a former portfolio manager at Moore Capital Management (the hedge fund run by the great Louis Bacon, whom we also track). If the last name of 'Barakett' sounds familiar, its because his brother, Timothy Barakett, manages fellow hedge fund Atticus Capital, whose portfolio we recently covered. Taken from its site, Tremblant Capital Group's objective is "to achieve superior risk adjust returns for our investors through our focused and disciplined investment process."

This is the 1st Quarter 2009 edition of our ongoing hedge fund portfolio tracking series. Before reading this update, make sure you check out the Hedge Fund 13F filings series preface.

Next up, we have Maverick Capital. Lee Ainslie started Maverick Capital back in 1993 with $38 million. Nowadays, the fund is worth over $5 billion. Ainslie, like many of the other fund managers we've profiled, has a background rooted in learning from legendary great Julian Robertson at Tiger Management. Just yesterday we ran a profile on Robertson and took a deeper look at his current big investment. These proteges (nicknamed 'Tiger Cubs') learned from the best and have had great success running their own funds. Some of the other Tiger Cubs include Stephen Mandel's Lone Pine Capital, John Griffin's Blue Ridge Capital, and Andreas Halvorsen's Viking Global.

Bankrate Inc. (RATE)

Q1 2009 Earnings Call

I’ve been waiting for the Wall Street analysts with $40ish price targets on Bankrate (RATE) to come out and defend the stock, which has fallen 30% over the past week due to concerns on further display advertising pullback and the near collapse of the credit card business.

Citigroup Internet analyst Mark Mahaney did just that on Friday by lowering his price target on the stock to $33 from $41, but maintaining his buy rating on the shares. The analyst lowered his ’09 revenue and EBITDA estimates by 9% and 12% to $169 million and $60 million, respectively. His ’09 Adjusted EPS falls to $1.42 from $1.66. His ’10 EBITDA was cut by 11% to $73 million.

I’ve been waiting for an entry point on Bankrate (RATE) in the $20-$22 range (read previous write-up) and that opportunity presented itself last week due to cautious comments from management at an investor conference, coupled with overall market turmoil.

At that conference, management stated that the deposit and insurance businesses are performing well but the mortgage and credit businesses continue to face headwinds. Consumer demand is strong for mortgage refis but advertiser demand remains low because of the overwhelming number of leads received by the mortgage finance companies. With time I think this resolves itself and RATE will start to benefit from refi advertising dollars.

McAfee Inc (MFE) have an earning announcement today (Thursday), and as you can see from this graph of the percentage of their shares outstanding on loan (%SOOL), there has been some short covering, with investors closing their positions since early to mid-January; down from 7% SOOL then to 5% now. However, the position is not as low as three months ago when the %SOOL was at just over 1%. Investors have waited for the price to fall and have, in general, taken profits over the past month. Utilisation is low in comparison at 15%. Interestingly, on December 22nd, there were 10M shares traded in comparison to the 12-week average of 1M.

Elsewhere in the sector, Bankrate Inc (RATE), the internet-based consumer banking and personal finance network, have a considerably higher proportion of their %SOOL, 38%, up from 32% 12 weeks ago. Utilisation is extremely high at just under 90%, which means this stock is virtually impossible to locate right now. On February 6th there were 0.8M shares traded compared to the three-month average of 0.2M.

Bankrate (RATE) reported revenues and profits that missed street estimates and management declined to provide guidance for 2009. The lack of guidance was owing to low visibility, although management is expecting both revenue and EBITDA growth for the year. Revenues of $40.2 million and Adjusted EPS of $0.33, missed Street estimates of $42 million and $0.34, respectively. The shares fell 13% in after-hours trading.

Although I’ve recommended staying on the sidelines on the shares until more attractive entry points surfaced, I anticipated that RATE would have at least met estimates and provided guidance for the 2009. Thus, the results were indeed surprising. The miss was attributed to both weak display advertising and credit card revenues. The latter was due to loss of organic traffic for two thirds of the quarter due to lower positions on natural search results ($1mn impact), and credit card companies pulling back on offers and approving fewer people for cards (RATE gets paid on approved applications).

Q4 2008 Earnings Call

February 5, 2009 4:30 pm ET

Sentiment has turned negative for Bankrate (RATE) as a downgrade from Needham & Co. and cautious comments from JMP Securities, RBC Capital, and others have weighed in on the shares. Analysts were more positive on the shares just one month ago, with most increasing their price targets on the stock. However, I've been sounding the cautious bell on this stock for several months on a few write-ups: Bankrate Shares Come Under Pressure; Bankrate Now Showing Google Ads To Prop Up Revenues; Great Refi Traffic But Where Are The Advertisers; Bankrate Has Run Out of Options To Support Its Stock.

I believe that Bankrate is a great trading stock and not one to hold for the long-term given the immense volatility in the shares - a takeout is one reason to hold. I was, however, hoping the shares would drop to the low-to-mid $20s prior to earnings so I could pick up a few shares, because I do like the company and believe in the management team. It's just that the macro environment for Bankrate is challenging and the shares haven't fully reflected those challenges, in my view.

Bankrate is scheduled to report their fourth quarter 2008 results after the market closes on Thursday, February 5. Based on our analysis, we are expecting RATE to report better than expected results that exceed Wall Street’s expectations.