Börsipäev 22.detsember

Oliver_Ait · detsember 22, 2005, 2:10pm

Citigroup initiates Jupitermedia (JUPM 15.15) with a Hold and $18 tgt, as they see execution risk near-term, as the co moves to centralize image content and narrow its focus through the potential sale of Media and Research operations

JP Morgan upgrades Western Digital (WDC 18.45) to Overweight from Underweight, as they believe with the prospects for longer-term HDD economics and share shifts, the co's consistently sound execution and product quality will allow it to benefit from improved economic and competitive dynamics

Stanford Group initiates Men's Wearhouse (MW 29.02) with a Buy and $36 tgt, as they anticipate better sales and higher operating margins to drive annual EPS growth of 10% - 15% for the next few years and see operational risks as largely manage

JP Morgan initiates DirectTV (DTV 13.71) with a Neutral, as they are cautious on the media distribution business in light of increasing competition

JP Morgan initiates Comcast (CMCSA 26.29) with an Overweight on valuation

UBS upgrades ATI Tech (ATYT 16.48) to Buy from Neutral and raises their tgt to $20 from $16 after the co reported Q1 results ahead of Street

UBS upgrades Transocean (RIG 69.25) to Buy from Neutral and raises their tgt to $85 from $66, saying the outlook for the oilfield services sector remains the best they have seen in over 25 years

JMP Securities raises their Google (GOOG) tgt to $575 from $400 as they believe the co is a clear winner in AOL bake off. Firms estimates suggest an even higher implied value for the AOL business than the $20 bln being reported in the media. They say that at $1.2 bln in cash and ad credits for a 5% stake, the deal would imply a value for AOL in the $25 bln range. From a strategic standpoint, they believe the deal gives GOOG multiple entres into the branded market, which is important for the co's long term growth outlook. Firm's confidence in Google's ability to meet or beat their estimates is higher than any other co in their coverage group, and they believe investors are likely to look farther out in the case of Google than most other Internet stocks

JP Morgan notes that historically, the Semi Index (SOX) has bottomed in mid-December and rallied strongly through January. The average SOX return from Dec-Jan has been +16% in the past 11 years, with three relatively mild down periods of -2% to -5%. The firm highlights Lam (LRCX 34.89) and Varian Semi (VSEA 42.83) as its two top picks in advance of the seasonally strong period. Both exhibit share gain momentum, high leverage to flash, and top tier business models. From the Dec-Jan 31 over the past 11 years, Lam and Varian have risen an average of 32% and 40%, respectively

Majandusstatistika:

Personal Income +0.3% vs +0.3% consensus

Initial Claims 318K vs 325K consensus

AloV · detsember 22, 2005, 2:15pm

Rev Shark:

If Everyone's Bullish, Well, That's Bullish
12/22/2005 9:01 AM EST
"Belief like any other moving body follows the path of least resistance."

-- Samuel Butler

Although the market has been struggling for the past week or so, the path of least resistance into the end of the year is upward. We had a little taste of positive action yesterday but really couldn't get good traction going. Although we faded at the end of the day we still had good breadth and some favorable action in small-caps and a variety of sectors.

Over on Street Insight, Doug Kass writes that almost everyone seems to be expecting a year-end rally, the implication being that if everyone expects it then it can't possibly happen.

I'm not so sure that the idea of a year-end rally has been universally accepted. Measuring sentiment is never easy and we often have a tendency to see what we want to see. When we are bearish, it often feels we are very alone even though there are many who feel the same way we do.

But let's assume the possibility of a year-end rally is widely expected. Does that mean it won't occur? Not necessarily -- the real issue here isn't what everyone thinks or feels but whether they have the cash to act on those thoughts or feelings. If everyone is bullish and also has lots of cash on hand, the great likelihood is that we will see the market rise.

Market conditions at the end of the year are always a bit peculiar and that makes it even more dangerous to adopt a contrarian approach to the market. There are some extremely strong motivations now to get this market up; don't underestimate the importance of a few percentage points of performance to fund managers. It makes a huge difference not only to the health of their future business but to the size of the year-end bonus.

At this time of the year, more than at any other time, there is a broad group of market participants who want this market to move higher. The idea of closing out the year on a positive note is very appealing, so it shouldn't be a big surprise that there seems to be a lot of folks looking for a strong finish.

Is there enough cash out there to drive such a move? I don't know, but even if cash is tight the likelihood is that selling will slow and allow the buying to prevail. There is little motivation to sell big winners at the end of the year and take profits, so it won't take a lot of buying to drive those stocks up. (On the other hand, losing stocks may see tax-related selling, although they are less likely to influence the indices.)

The path of least resistance is up and the fact that "everyone" feels that way is bullish, not bearish. Contrarian thinking is fine but it needs to be applied very carefully and at the right time, and year-end is not one of those times where it is likely to work well.

We have a slightly negative start on the day. Economic data are mostly in-line and oil and gold are trading up.