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Largest Changes in Short Interest
An increase means people are betting against the stock, a decrease means those who were betting against are getting out of those positions. Notice the short covering in Wells Fargo and Wachovia..
INCREASES- number of shares
Washington Mutual (WM)= +12,483,000
EMC (EMC)= +11,205,000
Target (TGT)= +5,720,000
Pulte Homes (PHM)= +5,392,000
Beazer Homes (BZH)= +5,209,000
Mylan (MYL)= +5,001,000
DECREASES- number of shares
Wells Fargo (WFC)= -9.180,000
Wachovia (WB)= -8,394,000
Commerce Bank (CBH) = -8,002,000
Express Jet (XJT)= -7,409,000
McDonalds (MCD)= -6,569,000
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Analyst downgrades: TD, CYT, CRNT, MU and NVT
Filed under: Analyst reports, Analyst upgrades and downgrades, Johnson Controls (JCI)
.gif) MOST NOTEWORTHY: Toronto Dominion, Cytec Industries, Ceragon Networks, Micron and Navteq were today's noteworthy downgrades:
- CIBC downgraded shares of Toronto Dominion (NYSE: TD) to Sector Performer from Outperformer following the Commerce Bancorp (NYSE: CBH) acquisition, as they see integration risks and believes the deal will limit the company's ability to buyback stock.
- Cytec Industries (NYSE: CYT) was downgraded to Hold from Buy at Jefferies, as they believe near-term risks to demand and margins could bring a better entry point by 1H08. Target lowered to $75 from $79.
- Collins Stewart downgraded shares of Ceragon Networks (NASDAQ: CRNT) to Underperform from Buy on valuation and uncertainties surrounding the stock, which include the NEC infringement issue and increased competition.
- Micron Technology (NYSE: MU) was downgraded to Accumulate from Buy at ThinkEquity. The firm is cautious on the sustainability of PC related demand and questions component order levels relative to PC sell through.
- Banc of America downgraded shares of Navteq Corporation (NYSE: NVT) to Neutral from Buy following Nokia's (NOK) proposed buyout.
OTHER DOWNGRADES:
- JP Morgan downgraded Companhia Vale do Rio Doce (NYSE: RIO) to Neutral from Overweight.
- Goldman removed Johnson Controls (NYSE: JCI) from its Conviction Buy List.
- Citigroup downgraded GameStop Corp (NYSE: GME) to Hold from Buy.
- Friedman Billings downgraded Brookfield Asset Management (NYSE: BAM) to Neutral from Outperform.
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Through The Fly's Eyes: TD Bank and Commerce Bancorp
from Larry Ramer of Theflyonthewall.com
Investors are Unhappy with TD-Commerce Deal
The investors on both sides of Canada-based TD Bank's (TD) $8.5B acquisition of Commerce Bancorp's (CBH) don't seem too thrilled with the deal.
During a conference call Commerce held to discuss the deal, Friedman, Billings, Ramsey Group banking analyst Gary Townsend let Commerce's executives know just how unhappy their investors are with the acquisition.
"The clients that I'm speaking to think you're giving away the franchise, "said Townsend, as quoted by an Associated Press article today.
Meanwhile, TD shareholders are voting with their dollars (Canadian and American), as the company's shares on the New York Stock Exchange have been down a little more than 5% all day.
There are certainly good reasons for both Commerce and TD investors to dislike this acquisition. The deal gives Commerce shareholders a premium of about 6% over Monday's closing price. That premium certainly doesn't give Commerce shareholders a reason to dance in the streets. Meanwhile, TD's earnings per share are going to drop 28 cents in fiscal 2008 and 22 cents in its 2009 as a result of the acquisition.
But, on the other hand, there are good reasons why long-term investors on both sides should not be too upset. Commerce investors should not be devastated because the bank has not exactly been thriving. It reported that its earnings dipped 3% in Q2 to 39 cents per share. Before the bank became the subject of takeover speculation at the end of July, its stock had sagged to around $34. Meanwhile, its longtime CEO, Vernon Hill II, abruptly stepped down in late June, as Commerce reached a settlement with regulators over alleged related-party transactions, according to The Wall Street Journal. Commerce's investors will have the option of hanging on to shares of TD, whose shares and profits seem to have largely been on an upswing for the last several months.
For its part, TD was able to take advantage of the plunging U.S. dollar, the American mortgage crisis, and Commerce's internal problems to double its banking operations in the U.S. at a fairly cheap price. (The mortgage crisis has not affected Canada's banks too much, according to Brad Smith, an analyst at Toronto's Blackmont Capital who was quoted in today's Globe and Mail newspaper). Over the long-term, this deal should be a plus for TD investors.
Other Canadian banks have also been rumored to be looking to take advantage of the weak U.S. dollar and America's mortgage woes by buying U.S. regional banks. American regional banks that could appeal to Canadian financial giants include Westamerica Bank (WABC), Sovereign Bank (SOV), South Financial Group (TSFG), and The Astoria Federal Savings Bank (AF), according to Peter Winter, managing director of BMO Capital Markets. Winter was quoted in an August 22 article in Canada's Financial Post. All four of those stocks were up slightly at about 2:15 p.m today., with Westamerica up 0.66% to $50.36, Sovereign Bank up 2.15% to $17.61, South Financial Group rising 0.64% to $23.45, and Astoria Financial up 2.05% to $27.38.
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Theflyonthewall.blog
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