Note: The following program is a re-broadcast of a show that first aired on June 19, 2007.

Back on February 28 of this year, I recommended Stewart Enterprises, Inc. (STEI) to TFN readers as a long-term hold. Check out my initial research report here.

Slowly but surely, we’ve seen our stock value increase about 5% for this national supplier of “death care services”.

Thar She Blows: Kaydon (KDN)

Cramer predicts 2009 will be the year for wind power, although the difficulty is finding a pure play on the “best form of renewable energy.” Industrial bearings producer KDN currently has a grip on half the market for wind turbine bearings, and while less than 10% of revenues come from wind, this figure is expected to double next year and triple in two years according to Cramer’s “low-ball estimates.” While KDN is nearing its 52-week high, it is trading at a mere 19 times next year’s earnings with a 14.5% growth rate, and is cheap.

U.S. Markets

Dow +67.99 (+0.54%)
Nasdaq +36.57 (+1.50%)
S&P 500 +9.42 (+0.68%)

Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Friday May 23.

Quote of the Day

“It's very embarrassing.” - Astoria Homes President Tom McCormick, whose company is at the top of the list of property owners with unpaid taxes in Clark County in Las Vegas. (Astoria owes taxes on 1,300 properties in the county.) McCormick said it’s the first time ever that the company has missed a property tax payment, but “that’s what happens in a credit crunch, when banks stop lending construction financing.” (Las Vegas Review Journal, May 24th)

Homebuilder Executive Pay and Perks

Homebuilder and Housing Stocks

U.S. Markets

Dow -145.99 (-1.16%)
Nasdaq -19.91 (-0.81%)
S&P 500 -18.42 (-1.32%)

• Home prices post record drop. U.S. home prices recorded their first-ever recorded quarterly drop, falling 3.1% from a year ago. Prices also fell 1.7% from last quarter, the largest quarterly drop on record. "The large overhang of real estate inventory awaiting sale continues to force price declines," Ofheo chief economist Patrick Lawler said.
• Ballmer distances himself from Yahoo. Microsoft (MSFT) CEO Steve Ballmer says its bid for Yahoo was "never the strategy we were pursuing," (ok, so what was it?), and that the company now has $50B to spend on other strategic acquisitions. He denied speculation of a tie-up between Adobe's (ADBE) Flash technology and Microsoft's Silverlight as a move to forestall a possible Apple (AAPL)/Adobe merger.
• Yahoo pushes off shareholder meeting. Yahoo (YHOO) delayed its annual shareholder meeting from July 3 to "around the end of July." The move may give Yahoo more time to stave off a proxy fight with activist shareholder Carl Icahn. Icahn will have to reduce his proposed slate to 9 from 10, after Yahoo veteran board member Edward Kozel resigned to spend more time with his family.
• Google makes pitch for white space. Google (GOOG) CEO Larry Page urged Congress and the FCC to open up so-called white space -- TV's unused spectrum. Page says the move would ultimately "blanket" the U.S. with wireless internet access. The FCC has tested white space devices from Motorola (MOT), Microsoft (MSFT) and Philips Electronics (PHG), but has thus far found flaws. Separately, Page said a Microsoft (MSFT)/Yahoo (YHOO) merger would give the two 90% of the communications market -- but that a proposed Google/Yahoo search ad deal could be structured to be reasonable.
• Halliburton hounds Expro. Halliburton (HAL) put in a £1.71B ($3.38B) bid for U.K. oilfield-services company Expro International Group plc, trumping an agreed-upon private-equity deal worth £1.6B. Oil services companies are boosting activity due to robust oil prices and strong demand.
• Regulators wary on BHP/Rio tie-up. European regulators are scrutinizing BHP Billiton's (BHP) $188.5B bid for Rio Tinto (RTP) amid concerns a merger could further lift already high steel prices. BHP CEO Marium Kloppers claims a linkup would result in synergies that could boost iron ore (a critical steel component) production and ease prices, and says he's confident authorities won't block the deal (to which Rio has not agreed). Eurofer, Europe's steel trade and lobbying group, and the China Iron and Steel Association, are opposed to the merger.
• Fed frets foreclosure. Fed governor Randall Kroszner said the rising rate of foreclosures is an urgent problem that requires non-traditional remedies. "High loan-to-value ratios at origination, combined with stagnant and eventually declining home prices, are a key aspect of the recent rise in delinquencies and foreclosures," he said, adding that "risk layering" maneuvers such as piggyback loans and negative amortization are compounding the problem.
• Paulson says end of credit crunch in sight. Treasury Secretary Henry Paulson says the U.S. is approaching the end of the credit crisis. He expressed confidence current policies will succeed in addressing economic issues. "Ultimately, the fundamentals will restore confidence in the U.S. economy."
• Weather Channel bidders down to two. Time Warner (TWX) and an NBC (GE)/Blackstone (BX) partnership are the lead contenders in today's round-two of the Weather Channel auction, sources say. Bids, due today, are expected to come in at $3-4B. Dropouts include CBS (CBS), Liberty Media (LCAPA) and Comcast (CMCSA). Time Warner would join the Weather Channel with CNN (both are in Atlanta), resulting in staff reductions. NBC would merge it with its NBC Weather Plus.
• Merrill shrinking asset book. Merrill Lynch (MER) is setting up a unit to dump underperforming assets such as CDOs. Fixed-income, currencies and commodities assets are among those the group will look to exit.
• NYSE losing grip. Trading on the NYSE (NYX) fell 26% to the lowest since 2001 as traders move their business to alternative options such ECNs Bats Trading and Direct Edge. Nasdaq (NDAQ) trade volume is at its lowest level in more than three years. This, despite an overall jump in trade volume of U.S. equities. A noteworthy side issue is that trading systems that depend on NYSE and Nasdaq trade volume data as a critical input are losing their edge.
• Wyeth drug delayed. The FDA again denied approval of Wyeth's (WYE) osteoporosis drug bazedoxifene, saying it wants more information on stroke and blood-clot issues. Wyeth says the request was expected.
• Kerkorian wants more Ford. Kirk Kerkorian increased his loan request from Bank of America (BAC) to buy Ford (F) shares to $600M from $500M. Kerkorian revealed in late April a 4.6% stake. Ford (F) yesterday warned it will not hit a key return-to-profitability target in 2009, sending shares down 8%. CEO Alan Mulally now expects to be "about break-even" in 2009 before taxes and special items. "Unless there is a fairly rapid turnaround in U.S. business conditions, which we are not anticipating, it now looks like it will take longer than expected to achieve our North American automotive profitability goal."
• American Axle strike history. The UAW strike at American Axle & Manufacturing (AXL), which decimated much of General Motors' (GM) production, is officially over.
• Fannie's mortgage purchases jump. Fannie Mae's (FNM) mortgage purchase commitments soared 9.8% in April to $30.7B. Refinance activity fell 19.7%, following a 24.9% drop the month before.
• Debt defaults ominous. Global corporate debt defaults in 2008 have already surpassed 2007's total. S&P reports 28 defaults on $18.9B in debt. Diane Vazza, head of S&P's global fixed-income research group, says defaults will hit 4.7% over the coming year. "Defaults could be significantly more pronounced and severe, especially if the recession would be deeper and longer than expected."

Earnings: Thursday After Close

• Aeropostale (ARO): Q1 EPS of $0.26 just beats consensus of $0.25. Revenue of $336M (+21.9%) vs. consensus of $332M. Sees Q2 EPS of $0.22-0.24 vs. consensus of $0.24.
• Alkermes (ALKS): Full-year EPS of $0.31 beats consensus of $0.15. Revenue of $241M in-line. Sees 2009 EPS of -$0.16 to -$0.11, short of consensus of $0.19, and revenue of $175-200M vs. consensus of $246M.
• Aruba Networks (ARUN): FQ3 EPS of -$0.01 in-line. Revenue of $42.6M (+22.8%) in-line.
• Black Box (BBOX): FQ4 EPS of $0.74 misses consensus of $0.77. Revenue of $245M (-2%) vs. consensus of $242M. Sees 2009 revenues of $1B vs. consensus of $1.05B.
• CA Inc. (CA): FQ4 EPS of $0.22 misses consensus of $0.28. Revenue of $1.085B (+8%) in-line. Sees 2009 EPS of $1.45-1.52, better than consensus of $1.32, and revenue of $4.5-4.6B vs. consensus of $4.42B.
• Dillard's (DDS): Q1 EPS of $0.04 misses consensus of $0.21. Revenue of $1.67B vs. consensus of $1.71B.
• Foot Locker (FL): Q1 EPS of $0.14 in-line. Revenue of $1.31B (-0.5%) vs. consensus of $1.28B. Sees full-year EPS of $0.65-0.85, better than consensus of $0.70.
• Gap (GPS): Q1 EPS of $0.34 beats consensus of $0.31. Revenue of $3.38B (-4.6%) vs. consensus of $3.42B. Sees full-year EPS of $1.20-1.27, short of consensus of $1.25
• Pacific Sunwear (PSUN): Q1 EPS of -$0.17 misses consensus of -$0.10. Revenue of $267M (-0.4%) in-line. Sees Q2 EPS of $0.03-0.08, short of consensus of $0.12. Sees full-year EPS of $0.59-0.64, short of consensus of $0.67.
• Verigy (VRGY): FQ2 EPS of $0.23 beats consensus of $0.19. Revenue of $162M (-11.5%) in-line. Sees Q3 EPS of $0.24-0.29, better than consensus of $0.19, and revenue of $170-180M vs. consensus of $159M.
• Zumiez (ZUMZ): Q1 EPS of $0.05 beats consensus of $0.03. Revenue of $78.7M (+14.4%) vs. consensus of $78.1M. Sees full-year EPS of $0.90-0.93 vs. consensus of $0.92.

Earnings: Friday Before Open

• Skillsoft Corp (SKIL): Q1 EPS of $0.06 beats consensus of $0.05. Revenue of $81.6M vs. consensus of $80.4M. Sees Q2 EPS of $0.06-0.07, short of consensus of $0.08. Sees full-year EPS of $0.32-0.35 vs. consensus of $0.35.

Today's Markets

• Asia: Nikkei +0.24%. Hang Seng -1.31%. Shanghai -0.36%. BSE Sensex -1.52%.
• In Europe, markets are off at midday. FTSE -0.39%. CAC -0.76%. DAX -0.33%.
• U.S. equity futures are lower into the open. Dow -0.42%. S&P -0.39%. Nasdaq -0.29%.
• Gold +0.81% to $925.60. Crude +2% to $133.41.

Note: Thursday's show was a rebroadcast of a program that first aired on December 29, 2006.

Oil Backs Down: Exxon Mobil (XOM), Petrobras (PBR), PowerShares DB Commodity Index (DBC)

With oil heading back down to $130, Jeff Macke would not call a top in oil and thinks the commodity will resume its upward climb. Guy Adami thinks investors will be afraid of holding long positions in oil over the long weekend, and while he doesn’t see a large number of shorts, he expects selling. Tim Seymour observes U.S. consumption is down, there are internal problems with XOM and the chart is unstable. John Najarian says a top can be called when a stock fails to rise on good news, and notes oil was down in spite of predictions of a further rise. He discussed aggressive put activity in DBC which is 60% comprised of oil. However, given the fact that oil is mainly driven by rising demand, he would not short oil.

House Sales and Price Data

U.S. Markets

Dow +24.43 (+0.19%)
Nasdaq +16.31 (+0.67%)
S&P 500 +3.64 (+0.26%)

Link of the Day

• IEA sees crude crunch. "The world's premier energy monitor is preparing a sharp downward revision of its oil-supply forecast, a shift that reflects deepening pessimism over whether oil companies can keep abreast of booming demand." Previously, the IEA had forecast crude-and-equivalents supply rising to 116M barrels/day by 2030, up from a present 87M -- enough to meet demand forecasts. Now it is worried companies may struggle to hit 100M. "The oil investments required may be much, much higher than what people assume," IEA chief economist Fatih Birol says. "This is a dangerous situation." That, coupled with a 5.32M drop in U.S. inventories to 320.4M, saw oil top $135 in overnight trading. It's up 19% over the past month.
• BCE buyout stymied; could be biggest-ever deal to collapse. The Quebec Court of Appeal issued a surprise ruling allowing bondholders to challenge BCE's (BCE) $52.9B leveraged buyout because the company failed to consider their interests. Bondholders say the acquisition increases BCE's risk of debt default."The decision effectively terminates the proposed transaction," a lawyer for the bondholders says. The ruling comes amid reports the financing banks were trying to renegotiate terms. BCE and its buyers (Ontario Teachers' Pension Plan, Providence, and Merrill Lynch's (MER) private-equity arm) said they will seek leave to appeal to the Supreme Court of Quebec.
• UBS struggles to sell itself. UBS (UBS) revealed the pricing of its recent $15.5B rights issue: Investors received shares at a 31% discount to yesterday's close. Apparently UBS's offering failed to entice buyers; the price is considered an embarrassment for the firm. UBS also finalized its $15B debt sale to BlackRock (BLK) yesterday. Shares have gained 11% since the rights issue was announced on Apr. 1.
• NRG confirms Calpine bid. NRG Energy (NRG) made an unsolicited $9.6B offer for Calpine (CPN), a deal that would make it the #1 independent power company in the U.S. The all-stock offer of 0.534 share per Calpine share is a 6.7% premium. "Calpine is an almost pure play on gas-fired generation, so their carbon footprint would be attractive," as companies seek to limit their carbon-dioxide emissions, Calyon analyst Gordon Howald says. "It would be unparalleled. There is nothing like this in the competitive power generation industry," NRG CEO David Crane said. "It's really the ideal that people have talked about from time to time."
• AMR dives on dismal outlook. Shares of American Air parent AMR Corp. (AMR) plummeted 24.15% Wednesday after it announced significant reductions to its 2008 domestic flight schedule and outlined plans to retire at least 75 aircraft -- a response to record fuel prices, economic softness, and a difficult competitive environment. "The airline industry as it is constituted today was not built to withstand oil prices at $125 a barrel, and certainly not when record fuel expenses are coupled with a weak U.S. economy," CEO Gerard Arpey said. American yesterday introduced a $15 fee for the first checked bag.
• Fed likely to stay put. Minutes from the April 29-30 FOMC meeting revealed the Fed's decision to cut its target rate to 2% was a "close call" and that it would be reluctant to cut rates further, even in the face of continuing economic weakness. "The risks to growth were now thought to be more closely balanced by the risks to inflation. Accordingly, the Committee felt that it was no longer appropriate for the statement to emphasize the downside risks to growth," the minutes said.
• AIG under attack. The Jacksonville Police and Fire Pension Fund is suing American International Group (AIG) along with several of its executives for inflating its share price by understating its exposure to subprime mortgage losses. The lawsuit alleges AIG's Q1 loss of $7.8B shocked investors after the firm assured them any losses on credit insurance would be limited.
• AstraZeneca sued over drug marketing. The Arkansas AG is suing AstraZeneca (AZN) for falsely claiming its antipsychotic medicine Seroquel was safer than less-expensive drugs, and failing to warn patients of its risks. Seroquel produced over $4B in sales in 2007, second to Nexium among AZN's top sellers.
• Worse than smoking? Pfizer's (PFE) anti-smoking drug Chantix has been linked to more than 3,000 reports of serious side-effects including suicide and heart trouble, a new study says. The FAA Wednesday banned the pill for its pilots. "These data provide a strong signal that the risks have been underestimated, and show that a wide spectrum of serious injuries are being reported in large numbers," the nonprofit Institute for Safe Medication Practices said in its report.

Earnings: Wednesday After Close

• CITI Trends (CTRN): Q1 EPS of $0.36 beats consensus of $0.34. Revenue of $121M (+13.5%) in line. Comps +0.3%. Sees 2008 EPS of $1.10-1.15, short of consensus of $1.14 and full-year comps +2-3%.
• Computer Sciences (CSC): FQ4 EPS of $1.44 beats consensus of $1.40. Revenue of $4.48B (+10.9%) vs. consensus $4.43B. Sees 2009 EPS of $4.20-4.40 in-line.
• Gymboree (GYMB): Q1 EPS of $0.86 beats consensus of $0.84. Revenue of $242M (+15.7%) in-line. Sees Q2 EPS of $0.18-0.20, short of consensus of $0.21. Sees 2008 EPS of $3.10-3.15 in-line.
• Hot Topic (HOTT): Q1 EPS of -$0.03 beats consensus of -$0.04. Revenue of $159M (+1.1%) in-line. Sees Q2 EPS of -$0.02 to -$0.04 in-line.
• Jackson Hewitt (JTX): Says it prepared 3.45M tax returns in 2008, -5.3%. Sees full-year EPS of $1.34-1.39, short of previous guidance of $1.48-1.60, vs. consensus of $1.51. Sees full-year revenue of $282-292M vs. consensus of $278M.
• Limited (LTD): Q1 EPS of $0.11 beats consensus of $0.08. Revenue of $1.925B (-16.7%) in-line. Sees Q2 EPS of $0.16-0.20 in-line. Sees full-year EPS of $1.38-1.58, better than consensus of $1.41.
• Longs Drug Stores (LDG): Q1 EPS of $0.63 beats consensus of $0.60. Revenue of $1.41B (+8.5%) in-line. Sees full-year revenue +5-7% (= $5.5-6B vs. 5.53B consensus).
• Napster (NAPS): FQ4 EPS of -$0.10 beats consensus of -$0.13. Revenue of $30.8M in-line.
• NetApp (NTAP): FQ4 EPS of $0.38 beats consensus of $0.36. Revenue of $938M (+17.1%) in-line. Sees FQ1 EPS of $0.20-0.23, short of consensus of $0.27, and revenue of $845-875M vs. consensus of $871M. Sees 2009 EPS of $1.40-1.46 in-line.
• Netease.com (NTES): Q1 EPS of $0.30 misses consensus of $0.31. Revenue of $93M vs. consensus of $82M.
• Nordson (NDSN): FQ2 EPS of $0.97 beats consensus of $0.83. Revenue of $294M (+21.9%) vs. consensus of $280M. Sees Q3 EPS of $0.91-1.01, better than vs. consensus of $0.88.
• Perry Ellis (PERY): Q1 EPS of $0.60 beats consensus of $0.55. Revenue of $243.5M (+6.4%) vs. consensus of $234M. Sees full-year EPS of $1.95-$2.00, short of consensus of $1.99, and revenue of $910-925M vs. consensus of $922M.
• PetSmart (PETM): Q1 EPS of $0.32 just beats consensus of $0.31. Revenue of $1.20B (+9.1%) in-line. Comps +2.9%. Sees Q2 EPS of $0.26-0.30, short of consensus of $0.34, and comps growth in the low-single digits. Sees 2008 EPS of $1.51-1.59, better than consensus of $1.51.
• Salesforce.com (CRM): Q1 EPS of $0.08 beats consensus of $0.07. Revenue of $248M (+52.5%) vs. consensus of $236M. Net paying customers +2,600 to 43,600. Sees Q2 EPS of $0.07-0.08 in-line, and revenue of $258-259M vs. consensus of $251M. Raises full-year revenue guidance to $1.065B from $1.06B, vs. consensus of $1.05B.
• Semtech (SMTC): Q1 EPS of $0.22 beats consensus of $0.20. Revenue of $74.4M (+22.9%) vs. consensus of $72M. Sees Q2 EPS of $0.23-0.24, better than consensus of $0.22.
• Synopsys (SNPS): FQ2 EPS of $0.41 beats consensus of $0.38. Revenue of $325M (+10.8%) vs. consensus $321M. Sees FQ3 EPS of $0.38-0.40 in-line and revenue of $335-343M vs. consensus of $330M.

Earnings: Thursday Before Open

• Ann Taylor (ANN): Q1 EPS of $0.47 beats consensus of $0.46. Revenue of $592M in-line. Comps -4.3%. Sees Q2 EPS of $0.42-0.47, short of consensus of $0.47. Sees 2008 EPS of $1.80-1.90, short of consensus of $1.88. Sees 2008 comps slightly negative.
• Barnes & Noble (BKS): Q1 EPS of $0.04 misses consensus of $0.05. Revenue of $1.2B in-line. Full-year EPS of $1.70-1.90 in-line.
• Bon-Ton Stores (BONT): Q1 EPS of -$2.03 beats consensus of -$2.25. Revenue of $700M vs. consensus of $715M. Sees full-year EPS of $0.00-0.30, better than consensus of -$0.35.
• The Buckle (BKE): Q1 EPS of $0.61 beats consensus of $0.57. Revenue of $160M vs. consensus of $155M. Comps +25.6%.
• Casual Male Retail (CMRG): Q1 EPS of -$0.01 misses consensus of $0.02. Revenue of $107.6M vs. consensus of $110.15M. Sees 2008 EPS of $0.25-0.30, better than consensus of $0.24.
• Cato (CTR): Q1 EPS of $0.58 misses consensus of $0.60. Revenue of $229M in-line. Comps -2%. Sees Q2 EPS of $0.28-$0.33, better than consensus of $0.24. Sees 2008 EPS of $0.80-0.95, in-line.
• Dicks Sporting (DKS): Q1 EPS of $0.18 in-line. Revenue of $912M vs. consensus $926M. Sees Q2 EPS of $0.34-0.38, short of consensus $0.43. Comps are expected to decrease 4-7%.
• Flowers Foods (FLO): Q1 EPS of $0.39 beats consensus of $0.35. Revenue of $677M vs. consensus of $666.5M. Raises full-year EPS outlook to $1.15-$1.23 from $1.07-$.17, vs. consensus of $1.14.
• Frontline (FRO): Q1 EPS of $2.50 beats consensus of $2.38. Revenue of $393.5M (+44.1%) in-line.
• GameStop (GME): Q1 EPS of $0.37 beats consensus of $0.35. Revenue of $1.81B vs. consensus of $1.72B. Sees Q2 EPS of $0.26-0.28 vs. consensus of $0.26. Sees Q2 comps up 12-14%.
• Hormel Foods (HR): FQ2 EPS of $0.56 just beats consensus of $0.55. Revenue of $1.59B in-line. Sees full-year EPS of $2.30-2.40, short of consensus $2.37.
• Mentor Graphics (MENT): Q1 EPS of -$0.10 in-line. Revenue of $179M vs. consensus $170M. Sees full-year EPS of $1.05-1.10, better than vs. consensus of $1.03, and revenue of $915M vs. consensus of $901M.
• Patterson Companies (PDCO): FQ4 EPS of $0.51 in-line. Revenue of $778M vs. consensus of $800M. Sees FQ1 EPS of $0.38-0.40 vs. consensus of $0.40. Sees full-year EPS of $1.94-1.98 vs. consensus of $1.94.
• Sanderson Farms (SAFM): FQ2 EPS of $0.30 beats consensus of -$0.07. Revenue of $434M in-line.
• Stage Stores (SSI): Q1 EPS of $0.06 in-line. Revenue of $353.5M in-line. Sees Q2 EPS of $0.17-0.23, better than consensus of $0.15, and revenue of $360-368M vs. consensus of $368M, and comps down 3%-5%.
• Stein Mart (SMRT): Q1 EPS of $0.17 beats consensus of -$0.04. Revenue of $352M vs. consensus of $366M.
• Suntech Power (STP): Q1 EPS of $0.35 beats consensus of $0.27. Revenue of $434.5M (+76.1%) vs. consensus of $377M. Sees Q2 revenue of $430-440M vs. consensus of $428M. Sees full-year Revenue of $1.9-2.1B vs. consensus of $1.98B. Says it's virtually sold out for the year.
• Tech Data (TECD): Q1 EPS of $0.43 beats consensus of $0.42. Revenue of $6.07B vs. consensus of $5.74B. Sees Q2 revenue of $6-$6.2B vs. consensus of $5.66B.
• Zale (ZLC): FQ3 EPS of -$0.42 in-line. Revenue of $477M vs. consensus $458M. Comps +5.8%.

Today's Markets

• Asia: Nikkei +0.37% to 13,978. Hang Seng -1.64% to 25,043. Shanghai -1.65% to 3,486. BSE Sensex -1.93% to 16,911.
• Europe: FTSE +0.25% to 6,214. CAC -0.49% to 5,004. DAX -0.45% to 7,011.
• U.S. futures are up slightly at 7:10 AM. Dow +0.15% to 12,638. S&P +0.13% to 1,394.75. Nasdaq +0.08% to 1,966.
• Gold -0.65% to $923. Crude +0.39% to $133.72. High for the July contract: $135.09.

Global Home Prices