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It's no Alibaba, but the Citizens Financial Group offering is important to the market.

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Management agreed to a private takeover at a price that's way too low. As a shareholder, I say no.

By  Nov 5, 2009 10:45PM

By Vitaliy N. Katsenelson

 

IMS Health (RX) announced Thursday that it would be stolen from its shareholders for $4 billion, or about $22 share.

 

To be exact, a private equity firm will buy shareholders out. But to my mind, it is a steal.

 

IMS Health should have free cash flows this year of more than $340 million (the actual number should be higher than $400 million, but that would include a $60 million one-time tax benefit).

 

So this company, which has virtually no competition, barriers to entry impossible for new entrants to overcome, and a cash printing machine, will be sold for about 12 times free cash flows. Over the past year we've seen much lower quality companies being sold for much higher valuations than this. 

 

Hyatt IPO had a successful open. But will Pritzker family struggles damper the stock? Should investors care?

By InvestorPlace Nov 5, 2009 7:27PM
By James Dlugosch

James DlugoschIt is often said that business and family should never mix. Eventually disagreements among siblings or parent/child can greatly damage a company that decides to mix the two.

  A Failed IPO Penny Stock That's Set to Double

And yet family members still pursue this path despite the dangers.

What happens when those volatile family battles impact common shareholders? The shareholder loses.

That is why it is surprising to see such a warm reception for today’s initial public offering for shares of Hyatt Hotels (H). Shares priced in the expected range and then jumped by more than 10% once the stock began publicly trading. 

The MSN Money CAPS community can help investors evaluate companies gaining favor among institutional investors.

By Caps Editor Nov 5, 2009 5:06PM

By Rich Smith, The Motley Fool

 

Actions speak louder than words, as the saying goes. So why do the media focus more attention on what Wall Street says about companies than on what it does with them?

 

Luckily for Wall Street watchers, the Internet brings us MSN Money's list of companies the institutions are buying. True, we should be as skeptical of Wall Street's actions as we are of its words. But when the 140,000-plus lay and professional investors on MSN CAPS agree with Wall Street, it just might be time for some buying.

 

As wisdom-of-the-crowd experiments show, collective estimates are often superior to the estimates of most individuals. The ratings and comments from the CAPS community aren't always right, but there's value in a system that incorporates the knowledge, information and skills of thousands of participants.

 

Let's look at a handful of companies that recently made Wall Street's buy list, and weigh those decisions against the collective judgment of CAPS investors.

 
Tags: CAPS

Satellite radio operator surprises Wall Street by breaking even on an adjusted basis in the third quarter.

By TheStreet Staff Nov 5, 2009 4:29PM

TheStreet.comBy Robert Holmes, TheStreet.com

 

Sirius XM Radio (SIRI) surprised analysts by breaking even on an adjusted basis in the third quarter, as the company added radio subscribers.

 

Sirius lost $149.2 million, or 4 cents a share, for the quarter ended Sept. 30, narrowing its year-earlier loss of $4.87 billion, or $1.93. Excluding one-time items, the satellite radio provider broke even on a per-share basis.

 

Revenue rose 3% from a year ago to $630 million, even as Sirius XM's net subscriber total fell 2% from a year ago to 18.5 million. However, total subscribers increased by 102,295 from the second quarter.

 

Bing: More on Sirius XM Radio

 

Take advantage of the heightened interest in gold with gold mining stocks. Goldcorp is a solid pick.

By Jim J. Jubak Nov 5, 2009 4:16PM

Jim JubakThe Reserve Bank of India’s purchase of 200 metric tons of gold from the International Monetary Fund, announced on Tuesday, is a game changer for gold and investors.


It clearly signals that major sellers of gold over the last 20 years -- the world’s central banks -- have become buyers again. That switch introduces a new set of buyers that are capable of soaking up a significant portion of the world’s annual gold production. 


And it makes me recalibrate my end of 2010 target for gold from $1,150 an ounce to $1,350. (For more on this buy see my November 4 post.)


At $1,150 an ounce it was too late to buy into the gold play with gold already trading near $1,100. At $1,350 an ounce there’s still time

 

Everyone likes a bargain. But when it comes to investing, sometimes the pricey stocks are actually the better deal.

By InvestorPlace Nov 5, 2009 3:41PM
Louis NavellierBy Louis Navellier

When stock prices dropped precipitously earlier in the year, we saw many big-name companies fall to unbelievably cheap prices. Companies like Citigroup (C) and Ford (F) were trading for as little as $1 per share.


That got investors into the mentality of trying to amass huge quantities of super cheap stocks to make a killing when those stocks rebounded. Of course, the rebound was no guarantee. And any investor knows that whether a stock costs $2 or $200, the only thing that matters is will the price go up and by how much.


See Why These 7 Stocks Are Worth the Big Bucks


The fact is there are some fantastic companies out there trading for more than $100 per share, and it would be a shame to miss out on the gains they’ll produce just because they are priced higher than many other companies.

 

A look at the relative strength of the Russell 2000 to the Dow Industrials

By Anthony Mirhaydari Nov 5, 2009 2:39PM

MirhaydariThe severity of the recent market decline really depends on your perspective.

 

If you were invested in the small-cap stocks of the Russell 2000 (IWM) index, things were pretty tough: You lost about 10% in the last two weeks of October as the index returned to early-September levels. The Dow Industrials, on the other hand, lost just 3% as it bounced gracefully off of its 50-day moving average.

 

Such a wide performance disparity is rare. In fact, large-cap stocks were outperforming smaller stocks at a rate not seen since the summer of 2007. In the months that followed, the Russell 2000 turned tail and outperformed the Dow by 32%. A similar but less severe drop in relative performance back in March was followed by a 63% outperformance.

 

So can small stocks once again outrun their larger brethren?

 

Verizon's new phone triggers concerns about relevance, value for Research in Motion

By Kim Peterson Nov 5, 2009 12:51PM
The new Droid phone, out from Verizon (VZ) and using Google's operating software, could be the strongest threat to the iPhone yet.

But the phone could do more to hurt BlackBerry maker Research in Motion (RIMM), writes Martin Peers of The Wall Street Journal. In fact, he suggests, the BlackBerry is in danger of becoming the AOL of the mobile-device market.

Ooh, he did NOT just throw out the AOL dis, did he? That's a low blow.

The BlackBerry hasn't been able to produce a robust Internet browser,  

Site's managers don't seem to know what to do with the fallen star

By Kim Peterson Nov 5, 2009 12:32PM
MySpace is losing so many visitors that it probably won't get all of the $900 million it expected from a key Google deal.

That's a pretty devastating blow for the site, which signed the search deal with Google back in 2006, when it was still one of the Internet's crown jewels.

But now, MySpace has lost too much ground to Facebook and Twitter. And it's looking like Google won't even have to make the minimum payments promised under the deal. Google was supposed to pay at least $900 million based on certain traffic milestones, but those aren't being met.  

The handheld computing part is awesome, critic says. It's just the phone part that flounders.

By Kim Peterson Nov 5, 2009 12:15PM
Apple iPhone; Credit: © Manu Fernandez/APThe iPhone is the worst phone in the world, writes the folks at Cnet UK.

Pretty harsh words, but I can see the point. Cnet doesn't take issue with the phone's Web surfing or media-playing abilities. And the apps are pretty great. In fact, the iPhone is the best handheld computer out there, according to the site.

It's the phone part that blows, writes Flora Graham. Call quality is pathetic, she adds, mostly because the tiny speaker has to be perfectly aligned with your ear canal to work.

OK, I'm willing to hear her out at this point. Here's the rest of her case: 

Analysts thought 2009 would be a good year for bankers, but it turns out it will be great

By 247 wallst Nov 5, 2009 8:05AM

CEO © Roy McMahon/CorbisThere has been plenty of evidence that firms like Goldman Sachs (GS) have had such huge profits that their bonus payouts may be at all-time highs.

 

The federal government has systematically begun to control bank pay packages. The Treasury “pay czar” is effectively controlling compensation at companies which still owe TARP money. The Fed is pressuring other large financial firms to tie pay to risk.

 

None of those efforts seems to be working well, because bankers are ignoring the signals from Washington.


A new compensation survey described in The Wall Street Journal predicts that Wall Street incentive pay will rise 40% this year. For those in the fixed-income part of the industry, the increase could be closer to 60%.

 

Shares off sharply for upscale grocer on earnings news. Should you stay away?

By InvestorPlace Nov 4, 2009 7:03PM
By Jim Woods

“We believe our sales have stabilized and officially turned the corner.” That was the word from Whole Foods Market (WFMI) chief executive John Mackey about Wednesday’s quarterly earnings results.

Profit jumped to $28.7 million, or 20 cents a share, from $1.5 million, or a penny a share, a year ago. Sales also rose, climbing 2.3% to $1.83 billion. 
Consensus Wall Street estimates were for earnings of just 18 cents a share on sales of $1.84 billion. And though Whole Foods did manage to beat bottom-line estimates, it fell short on the all-important same-store sales metric. 

Warren Buffett knows a thing or two about the impact of monetary policy on investments.

By InvestorPlace Nov 4, 2009 6:04PM
By Jim Woods

down arrowWarren Buffett's doing it, and you should, too.

Doing what? Trying to profit from a falling dollar. Buffett's purchase of Burlington Northern (BNI) was, at least in part, an investment in the falling dollar. And that's something you should be doing, too.

Last week the greenback fell to new lows versus rival foreign currencies. And though there has been a bounce in the value of the buck since the U.S. Dollar Index hit a new 52-week low, I suspect that this is much more of a trading bounce than anything else.
Normally, the value of the dollar doesn’t get too much attention in the financial media.   

History shows that the unemployment rate will be key

By Anthony Mirhaydari Nov 4, 2009 3:50PM

MirhaydariAll eyes were on the Federal Reserve Wednesday as investors awaited the outcome from its two-day policy meeting.

 

As expected, interest rates were left unchanged as economic conditions "warrant exceptionally low levels of the federal funds rate for an extended period." However, policymakers did optimistically note the increased activity in the housing sector as well as the uptick in consumer spending. The largest change was a $25 billion reduction, to $175 billion, in the amount of mortgage debt the Fed will purchase. It will still buy $1.25 billion worth of mortgage-backed securities.

 

History shows policymakers have never increased the cost of credit while unemployment is rising. In fact, the Fed has waited at least six months after the peak in unemployment and when the unemployment rate has dropped by 0.7% from its high before hiking rates. Moreover, during periods of low to no inflation like we have now, the Fed can wait

 

Massive buy by India's central bank fires up speculation; can China be far behind?

By Jim J. Jubak Nov 4, 2009 2:53PM

Jim JubakIs gold the new dollar?


News on Tuesday that the Reserve Bank of India, the country’s central bank, had purchased 200 metric tons of gold between October 19 and 30 from the International Monetary Fund sent gold soaring to a new all-time high. 


The yellow metal closed at $1,090 an ounce. And it set loose speculation that could easily push gold to $1,300 an ounce on the current trend.


What’s set tongues wagging?

 
Tags: gold

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