Barron’s writes that Magna‘s (MGA) bid for DaimlerChrysler (DCX) Chrysler may be attractive to the UAW because the auto parts company already has a relationship with the union. But, Magna’s bid is below the $8 billion that Daimler would like to get. Also, Magna’s own shares will remain under pressure until it can improve margins.
PetSmart (PETM) has another 20% upside in share price. More and more Americans are treating their pets like people and that mean more spending on pet supplies.
Shares in Allianz (AZ), Europe’s largest insurance company could still rise. The company trades at a discount to rival AXA (AXA) and its financial performance is continuing to improve.
Gannett (GCI) is trading at a low 12x estimated 2007 earnings, due to problems across the newspaper industry. But, the company may spin off its TV unit or raise its dividend. If Gannett significantly increases its payout, shares could rise from $56 to $65.
Al Frank Asset Management has provided an annual return of almost 16% since it opened in 1998. Some of the favorites of the fund are Microsoft (MSFT), Pfizer (PFE), Cypress Semi (CY), DR Horton (DHI), IndyMac Banc (NDE) and Rowan (RDC).
Shares of floor covering company Interface (IFSAI) could move up 35% on a sales increase of 25%. Sales of its type of flooring, carpet tile, are growing much faster than carpet sales in general.
Net neutrality, the idea that large consumers of bandwidth should pay no more than small consumers, is still hotly debated in Washington. Companies like Google (GOOG) use more bandwidth sending YouTube video than a e-maile user would. If video does drive a need for upgrading the internet infrasturcture, comapnies like Cisco (CSCO) and Juniper (JNPR) could do well. But, another technology, Deep Packet Inspection, could help improve the flow of internet traffic. The best pure play in this sector is Allot Communications (ALLT).
The stents sold by Boston Scientific (BSX) and Johnson & Johnson (JNJ) may not be doing well, as studies show that they have health risks. But, new stents from Abbott Labs (ABT) appear to have more appea with doctors, and that could change the market shares that these companies have within the medical markets.
Cbeyond (CBEY) is capturing more of the small business phone market by using the internet to channel calls. The company’s sales are rising, and, by most measures, its stock trades at a discount to rival Savvis (SVVS).
Secure Computing (SCUR) is the pure play stock among companies that provide network security to big companies. It competes with operations like McAfee (MFE) and Symantec (SYMC). With earnings rising, Lazard has a price target of $10 on the stock that now trades around $8.
Amvescap (AVZ), an asset management firm, saw its shares drop as a number of key portfolio managers left. But, earnings are expected to out-perform those of its competitors.
Douglas A. McIntyre
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