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Politics : Sioux Nation -- Ignore unavailable to you. Want to Upgrade?

To: Sea Otter who wrote (160924)	2/17/2009 4:57:43 AM
From: stockman_scott	Respond to of 362360

Recession Doesn’t Hold Back the Hottest Stocks: Commentary by John Dorfman Feb. 17 (Bloomberg) -- Sharks don’t get cancer. Scientists who are interested in understanding the dynamics of cancer, therefore, say the study of sharks may be rewarding. Similarly, looking at stocks doing well in a sour market can sometimes yield insights. One might get a clue to the market’s future leaders or discover individual stocks worth buying. Of 1,665 U.S. stocks with a market value of $500 million or more, 117 have gained 20 percent or more this year. The best gainer through Feb. 11, excluding stocks with tiny trading volumes, was Advanced Medical Optics Inc., up 231 percent on a takeover offer from Abbott Laboratories. The Santa Ana, California, company makes contact lenses, supplies for cataract surgery and other eye products. It is also the world’s largest maker of devices used in Lasik eye surgery. Abbott offered $22 a share in cash on Jan. 12, causing Advanced Medical shares to rise 143 percent that day. Today, the shares are trading near the offer price. But it’s worth noting that they commanded a much higher price in the past. In June 2006, for example, they traded at more than $50. Gamco Investors Inc., an investment firm run by Mario Gabelli, disclosed on Jan. 13 that it raised its stake in Advanced Medical Optics to more than 15 percent, from a little over 10 percent. The additional stock was acquired on various dates from mid-November through Jan. 12. The Jan. 12 purchases suggest that Gabelli may expect a higher bid to emerge for Advanced Medical. Advanced Medical’s Debt Personally, I wouldn’t count on another bid. At the current price of about $22, Advanced Medical trades at 39 times earnings, an ample multiple. Moreover, debt was 237 percent of equity as of Sept. 30, a debt load large enough to discourage some prudent potential bidders. Palm Inc., up 154 percent, was the second-biggest gainer, much to my chagrin. After holding Palm for about two years, I sold it in December, shortly before the spurt. Much of what I thought would happen at Palm did occur. A product design team under the leadership of Chief Executive Officer Jonathan Rubinstein has come up with a snappy new smart phone, the Pre. I sold, though, because Palm’s debt had climbed. As of Nov. 30, the company’s book value (corporate net worth per share) was negative to the tune of $3.72 per share. I don’t feel comfortable, during a recession and financial crisis, holding companies with weak balance sheets. GT Solar International Inc. of Merrimack, New Hampshire, was another strong performer, up 82 percent. Solar energy companies have been popular for several years, and they got a boost with the election of Barack Obama, who supports developing alternative energy sources. Tempting Prospects For the quarter ended Dec. 27, 2008, GT Solar reported sales of $205 million, beating analysts’ expectations of $195 million. Earnings came in at 30 cents a share, trumping the expected 24- cent figure. Enviably, the company is debt-free. At $4.62 a share, I find GT tempting. Analysts think that GT will earn 71 cents in the fiscal year that ends next month. If so, the stock is selling for only seven times earnings, which is my kind of multiple. InterMune Inc. was the fourth-best gainer, rising 73 percent. The Brisbane, California, biotechnology company reported strong results in trials of a drug for chronic lung disease. It expects to submit Pirfenidone shortly for approval by regulators in the U.S. and Europe. InterMune, though, is the kind of stock I would be more likely to sell short than to buy. It has reported losses every quarter since it went public in 2000, and its book value was a negative $2.34 a share as of Sept. 30. Drawing Inside Straights I believe that paying for success that has yet to be achieved is a bit like drawing to an inside straight in poker. It can work, but it isn’t an optimal strategy. CV Therapeutics Inc. of Palo Alto, California, another biotechnology firm, posted a 68 percent gain. Astellas Pharma Inc. of Japan bid $1 billion for the company in November. CV Therapeutics, which is pinning most of its hopes on a proposed drug for heart pain, spurned the offer. In late January, Astellas renewed its $16-a-share offer. This time, CV said it would “review developments.” The stock is trading at $15.45. Like InterMune, CV has never reported a profit. Its book value is negative $3.64 a share. It’s no coincidence that three of the five top gainers are in the health-care field. Health care is traditionally a defensive bastion during recessions and bear markets, and it’s playing that role this time. I continue to like the health-care sector, but I prefer the big, established pharmaceutical companies that have long records of profitability and sell for more modest multiples. Disclosure note: I have no current positions, long or short, for myself or clients, in the stocks discussed in this column. (John Dorfman, chairman of Thunderstorm Capital in Boston, is a columnist for Bloomberg News. The opinions expressed are his own.) To contact the writer of this column: John Dorfman at jdorfman@thunderstormcapital.com. Last Updated: February 17, 2009 00:01 EST

To: Sea Otter who wrote (160924)	2/17/2009 5:36:33 AM
From: stockman_scott	Respond to of 362360

C-Level Executives Weigh In On Information Security informationweek.com

To: Sea Otter who wrote (160924)	2/17/2009 6:55:47 PM
From: stockman_scott	Respond to of 362360

Recession Starts to Worry Silicon Valley, Report Finds ______________________________________________________________ By LAURIE J. FLYNN The New York Times February 17, 2009 The global recession came late to Silicon Valley, but the region is bracing for a rough year that may strain local social services. A report to be released Tuesday by Joint Venture: Silicon Valley Network, an organization that assesses the region’s social, economic and environmental health, warns that its social services network is outdated and “frayed.” It also found that per-capita income fell slightly last year, down 0.8 percent from 2007. The annual report, the 2009 Silicon Valley Index, also says that the current “patchwork” of educational and social programs will fail to meet the needs of the area when it eventually emerges from the recession and tries to prepare workers for new kinds of jobs. After holding steady through most of 2008 while the rest of the country suffered, Silicon Valley had a spike in unemployment at the end of the year, the report said. Employment dropped 1.3 percent in December from a year ago as more tech companies laid off workers. At the same time, demand for commercial real estate waned, while home foreclosures in the region rose 186 percent year over year, far more than the rate for the state as a whole. But that comparative increase is largely a function of the region’s real estate market experiencing the effect of the downturn long after the rest of the state had. The region is still faring better, with only 3 percent of California’s home foreclosures. “We are not immune to the recession. We’re just late, as opposed to 2000, when we were the recession,” said Stephen Levy, director of the Center for Continuing Study of the California Economy in Palo Alto. The California real estate market softened, then consumers reduced their “shopping at the mall,” Mr. Levy said. “Finally, they have reduced their purchasing of iPods and flat-screen TVs.” The dot-com bust at the beginning of the decade and the recession that followed were felt most severely in Silicon Valley. But this recession is clearly different. The region’s situation is exacerbated by the state government’s enormous budget deficit, which last week stood at $42 billion. The State Assembly has been struggling to write a budget proposal that includes large tax increases and deep cuts in a huge range of services and public projects, including money for education, training programs and hospitals throughout the state. One area of serious concern in the report is the state’s community college system, which employers have long relied on to help train lower and middle-income workers for new jobs. Joint Venture believes the system is underfinanced, and it has been threatened with cutbacks in state support. Joint Venture is among a number of California organizations calling for an overhaul of the state government to help solve California’s financial problems. Last week, Joint Venture’s 49-member board voted unanimously to support a convention to rewrite California’s Constitution. The group and others are hoping to gain enough support to place a proposition on the ballot in June. “This is a statement that the system is broken, and that inaction will lead to ruin,” said Russell Hancock, chief executive and president of Joint Venture. “It’s time to start over.” The report also showed that the gap between the wealthiest and the poorest residents continued to grow. The percentage of households earning more than $100,000 a year rose to 42 percent in 2008, from 35 percent in 2002, while the number of households earning $35,000 or less rose to 20 percent, from 19 percent in the same period. During that period, the number of immigrants to Silicon Valley grew 9 percent. The report highlighted reasons for optimism. Overall venture capital investment in Silicon Valley companies fell 7.7 percent during the year, but less than the decline of 11.4 percent nationwide. Investment of nearly $1.9 billion in clean technology during 2008 was nearly double that in 2007. The bulk of new technology jobs will be in clean technology businesses, according to the report. That sector has had job growth of 23 percent since 2005. In that sector, green construction has had the most growth, with a fourfold increase in jobs since 2005. “Silicon Valley has a unique role to play in solving the climate crisis and bringing an end to this recession,” Mr. Hancock said. Copyright 2009 The New York Times Company

To: Sea Otter who wrote (160924)	2/17/2009 7:04:08 PM
From: stockman_scott	Read Replies (1) \| Respond to of 362360

With a King’s Ransom in Cash, Why Is There Still No Buying Spree in the Tech Space Yet? kara.allthingsd.com by Kara Swisher Posted on February 17, 2009 Even in the midst of the economic meltdown, consider these mega-billion-dollar cash hordes of big tech companies: Microsoft (MSFT): $20.7 billion Cisco (CSCO): $29.5 billion Apple (AAPL): $25.6 billion Intel (INTC): $11.8 billion Oracle (ORCL): $10.6 billion Hewlett-Packard (HPQ): $10.2 billion Google (GOOG): $15.9 billion Yahoo (YHOO): $3.5 billion Of this moneybags list, Apple and Google have zero debt, with the others not having much at all to speak of. Better still, all typically generate a whole lot of cash flow quarterly, even in the downturn. And since very few tech companies like to hand over dividends or buy back much stock–kind of a minor sacrilege in the space since it means they have no innovative new ideas to fund–BoomTown asked a big exec at one of these companies when the buying spree of both public and private companies might begin. “Like everyone else, we are waiting for the bottom,” said the exec. “So who knows?” Said another: “No one wants to buy when prices could just keep going down. The trick is to buy before the really great deals out there collapse.” And, even as some tasty targets are suffering and might need a lifeline, none of them want to necessarily sell out at all-time lows either. “We will start eating our toner and paper first,” joked one start-up exec, whose company is increasingly strapped for cash, even after a number of cost-cutting moves. Interestingly, the only standout in the buying game has been Oracle, which has been in bargain-hunting mode, making 10 acquisitions for about $750 million in the last year, according to an article in The Wall Street Journal today. While this amount is small potatoes to Oracle, which has typically been known for doing huge merger and acquisition deals, it is still some activity in a decidedly inactive space. Oracle has especially focused on private firms, as the private-equity investing and venture capital has dried up and IPOs are an impossible dream. And while another well-known M&A addict, Cisco, has recently issued $4 billion in debt to fund more purchases, and Microsoft execs have noted recently that it is a buyer’s market, it seems Oracle CEO Larry Ellison is the only one currently putting his big money where his big mouth is. So, when do you think tech companies should commence to gobbling too?