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Icahn Turns to Roots in $14 a Share Dell Tender

Tue, 18 Jun 2013 17:01:53 EDT

NEW YORK (TheStreet) - Carl Icahn is turning to his roots in a new $14 a share tender offer for Dell , as the activist tries to improve upon a $13.65 a share takeover offered by Silver Lake Partners and founder Michael Dell that now has full support from the struggling PC-maker.

Instead of a complicated $12 a share special dividend and a publicly traded stub of Dell shares, Icahn is simply proposing the company's current shareholders hand over their stock to him for 35 cents more than Silver Lake and Michael Dell's takeover offer.

Icahn is offering to buy up to $16 billion in Dell shares at $14 a share, or roughly 72% of the company's total shares. ...

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Cooperman's Omega Advisors Is 'Comfortable' With Linn Enegy

Tue, 18 Jun 2013 14:23:58 EDT

Updated from 11:45 a.m. ET to clarify Linn Energy's hedging activities and include afternoon share prices.

NEW YORK (TheStreet) -- Leon Cooperman of hedge fund Omega Advisors is comfortable with his investment in Linn Energy, amid analysis from major media and independent research firms that the oil and gas driller may be unable to support a high-yielding dividend and is only worth 50% of its current share price.

"Omega Advisors, Inc. is comfortable with our investment in Linn Energy, we are convinced of the professionalism and integrity of the company's management, we are optimistic about the company's future growth and financial performance," Cooperman wrote in a June 17 letter addressing Omega's investment in Linn Energy. ...

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The Deal: Weyerhaeuser Pares Gains Following $2.65 Billion Longview Deal

Tue, 18 Jun 2013 11:43:38 EDT

NEW YORK (TheDeal) -- Weyerhaeuser fell on Tuesday as investors erased gains in the share price made following its acquisition of land manager Longview Timber LLC for $2.65 billion.

Weyerhaeuser shares fell 1.5% to $28.24 after gaining 1.3% on Monday.

The deal comes after Weyerhaeuser has spent seven years restructuring its operations and paring down assets from 2006 as part of a conversion to a real estate investment trust. Weyerhaeuser's board approved the change to a REIT structure in December 2009; the move was done to reduce its tax rate. Almost $10 billion in assets were unloaded between 2006 and 2011. ...

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TheDeal: Markets Open Doors to PE-Backed Homebuilder IPOs

Tue, 18 Jun 2013 11:32:40 EDT

NEW YORK (TheStreet) -- Private equity firms are taking advantage of the comeback in the real estate market to take portfolio companies in sectors such as homebuilding and construction supplies public.

According to data from the U.S. Census Bureau, sales of new single-family homes in April were at 454,000, up 2.3% from the previous month and up 29% from April 2012.

Also, as of June, McGraw-Hill Construction forecasts that U.S. single-family housing starts will increase to 1.1 million by 2015. ...

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The Deal: Orchard Supply Tumbles on Bankruptcy Sale to Lowe's

Tue, 18 Jun 2013 11:27:59 EDT

NEW YORK (TheDeal) -- Orchard Supply Hardware Storesfiled for Chapter 11 on Monday with plans to sell its business in an auction led by a $205 million bid from competitor Lowe's Cos.

Orhcard Supply was losing 15% to $1.79 in mid-day trading. Lowe's was slipping 0.3% to $41.24.

The San Jose, Calif., operator of a neighborhood hardware and garden store chain and affiliates Orchard Supply Hardware LLC and OSH Properties LLC submitted petitions in the U.S. Bankruptcy Court for the District of Delaware in Wilmington. ...

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Buy-Rated Dow Components Slip To Ten

Tue, 18 Jun 2013 08:00:39 EDT

NEW YORK (TheStreet) -- My suggested allocation to stocks continues to include at least 50% out of the market in cash equivalents. Part of the amounts invested in the stock market should be allocated to buy rated stocks in the Dow Industrial Average.

On May 22 when I wrote, Allocate Assets to Buy-Rated Dow Stocks there were 15 buy rated names to choose from. Today the ranks of the buy rated companies has thinned to 10, which is a warning that the stock market could be vulnerable in the second half of the year.

Fundamentally www.ValuEngine.com still shows that stocks are trading under the cloud of a valuation warning with more than 65% of all stocks overvalued. ...

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Residential REITs: Financial Loser

Mon, 17 Jun 2013 16:10:36 EDT

NEW YORK (TheStreet) -- Residential real estate investment trusts were the worst performing group in financial sector, amid mixed expectations the Federal Reserve could begin "tapering" up to $85 billion in monthly mortgage bond purchases starting this fall.

The largest residential REITs on the S&P 500 Index, including Equity Residential , AvalonBay Communities and Apartment Investment and Management Co. , all lost ground in Monday trading, as the financial sector and broader indexes fluctuated between gains in excess of 1%.

Top performing financials included E-Trade Financial , Schwab and Blackrock amid optimism retail investor flows into equity markets could bolster brokerage earnings. ...

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Muted Reaction to Starboard's Breakup Pitch for Smithfield Foods

Mon, 17 Jun 2013 14:29:24 EDT

NEW YORK (TheStreet) -- Starboard Value, a burgeoning activist hedge fund with a 5.7% stake in Smithfield Foods , says it opposes the company's $34 a share sale to Chinese foods giant Shuanghui International Holdings and believes the integrated pork processor is worth more broken up in three parts.

Smithfield Foods is worth between $43.85 a share and $55.21 a share, according to Starboard, if the company's hog production, international and pork processing operations were split into three separate parts, the hedge fund argued in a Monday letter to Smithfield's board of directors.

Although Starboard has been successful in some activist efforts such as patent sales at AOL in 2012, investors didn't bid up Smithfield shares in Monday trading. ...

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The Deal: Starboard Challenges Smithfield to Reject Shuanghui Sale

Mon, 17 Jun 2013 14:05:26 EDT

NEW YORK (TheStreet) -- Starboard Value LP, owner of 5.7% stake in Smithfield Foodson Monday urged the hog producer to reconsider its pending $7.1 billion cash and assumed debt sale to Shuanghui International Holdings Ltd., arguing the company's shareholders would be better served if the target sold itself in pieces.

New York-based Starboard LP, in a letter to management said the company could be worth as much as $55 per share in a breakup, a significant premium to the company's $34 per share deal with Shuanghui. Also see: Lululemon Pant(ies) in a Bunch: Get Over It and Buy >>

The Smithfield, Va.-based hog company, which has businesses including hog production, pork products and international sales, agreed last month to a deal with Shuanghui. ...

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Weyerhaeuser Shifts Housing Focus in $2.45B Cascades Timber Deal

Mon, 17 Jun 2013 13:05:00 EDT

Updated from 10:37 a.m. ET to correct Doyle Simon career history and afternoon share prices.

NEW YORK (TheStreet) -- U.S. timber giant Weyerhaeuser is snapping up more than 645,000 acres of land from Canada's Brookfield Asset Management in a $2.45 billion stock deal that will bolster the company's timber holdings by about a third in the Pacific Northwest.

In a flurry of financial moves, Weyerhaeuser also reshaped the company's strategy amid expectations of a durable housing rebound in the U.S. The company said it will seek to spin off its homebuilding unit, Weyerhaeuser Real Estate Co. or Wreco, and increase its dividend to 22 cents a share from 20 cents. ...

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CIT Sale Unlikely Near-Term: Analyst

Mon, 17 Jun 2013 11:43:27 EDT

NEW YORK (TheStreet) -- CIT Group's share price reflects the possibility it will be acquired, though a sale of the lender will likely take some time, according to an analyst report published Monday.

Drexel Hamilton analyst David Hilder nonetheless upgraded CIT shares to buy from hold Monday, citing $2 billion, or $10 per share in "excess capital" -- meaning capital that is not required by regulators and so can be used for share repurchases or dividends.

CIT has more freedom to pursue buybacks or dividend hikes after the Federal Reserve Bank of New York last month terminated a "Written Agreement" from August 12, 2009. The lifting of the agreement is widely seen as a signal regulators are more comfortable with CIT's management and capital plans following its emergence from bankruptcy in late 2009. ...

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Netflix Strengthens Hand in DreamWorks Partnership

Mon, 17 Jun 2013 11:32:23 EDT

Updated from 8:29 a.m. ET to reflect additional analyst comments and opening share prices.

NEW YORK (TheStreet) -- Netflix is teaming up with DreamWorks Animation to bring TV series and movies to the streaming video service, in a deal that strengthens the company's hand in winning original content and new subscribers.

DreamWorks Animation will create at least 300 hours of original Web-only movie and TV content, in a partnership that further underscores attempts by Netflix and its CEO Reed Hastings to take on the cable TV industry. Partnering with DreamWorks indicates Netflix will be taking a multi-faceted approach to its content library, as the company picks over Hollywood for the right formula to grow its subscriber base of nearly 30 million. ...

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The Deal: Microcap Stocks Get Undeserved Promotions

Mon, 17 Jun 2013 10:05:53 EDT

NEW YORK (TheStreet) - Direct mail and e-mail campaigns have long been the staple of paid promotions of microcap stocks, but in recent months stock promoters appear to have had increasing success using a potentially more powerful outlet.

Paid stock promotions, masquerading as investment opinion articles and blogs, have been popping up on the company news pages of Yahoo! Finance, the stock research Web site Seeking Alpha and, some observers suspect, on the Website of Forbes magazine. Also see: Facebook Announcement: Video Instagram? >>

Articles published in paid stock promotions often forecast massive upside for the shares of companies whose financials indicate only marginal businesses. ...

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Moody's Disagrees on MetLife 'Shadow Insurance' Risk

Mon, 17 Jun 2013 09:56:11 EDT

NEW YORK (TheStreet) -- Metlife says ending a practice of so-called "shadow insurance" could cut at the insurer's credit rating and lead to higher costs for consumers. Moody's, a top ratings agency, appears to disagree.

The apparent difference of opinion centers on an alleged $48 billion of claims life insurers such as Metlife, Lincoln National Life Insurance, Genworth and Prudential move from their balance sheets to captive reinsurance subsidiaries and the perceived costs firms would incur to make those claims more transparent to regulators, investors and policyholders.

According to a recent report from the New York State Department of Financial Services and New York State Governor Andrew Cuomo, insurers have exploited loopholes to throw some life and health insurance products into off-balance-sheet entities, minimizing reported liabilities and the capital a firm would need to service them. ...

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Stock Ratings Define Sector Ratings

Mon, 17 Jun 2013 07:34:05 EDT

NEW YORK (TheStreet) -- In March I noticed a dramatic shift in the distribution of buy rated stocks and sell rated stocks among the 16 sectors covered by ValuEngine. My analysis resulted in how I rated key sectors and what story each told about the U.S. economy. This last time I covered this concept was on April 5 when I wrote, Stock Ratings Key Market Top. Today I provide the current status of this unique analysis.

The basic materials sector is undervalued by 6.4% but only nine stocks out of 411 in the sector have buy ratings. There are 143 sell rated stocks and 57 strong sell rated stocks and thus 48.7% of all stocks in this sector are rated sell. This gives the sector an underweight rating.

Among the sell rated names in this sector is Dow component DuPont which peaked at $57.25 on May 31. The stock closed Friday at $52.68 with this month's value level at $48.23. ...

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Click to research the Chemicals industry.