BloggingStocks

Will a subscription model for Microsoft Office work?

Steven Mallas — 2008-07-04T10:30:00+00:00

Filed under: Products and services, Google (GOOG), Microsoft (MSFT), Dell (DELL), Circuit City Stores (CC)

Microsoft (NASDAQ: MSFT) wants to expand the reach of its vital Office suite of products. The software giant wants to utilize a subscription model for the collection of programs. The initiative will commence later this month at Circuit City (NYSE: CC) and it will eventually reach other retail stores. People will also eventually have the option of accessing the subscription product via computers such as ones made by Dell (NASDAQ: DELL). The cost is reported to be $70 for twelve months of Office access.

This is an interesting scheme. As the article points out, businesses might not bat an eye at subscribing to software applications, but for consumers, this is a different ballgame. Many of us, myself included, are so used to going down to a Best Buy (NYSE: BBY) to purchase a software package for a flat fee that paying yearly dues just seems like an alien concept. And I'd say this goes double for something as large and complex as the Office program. Microsoft believes that $70 on an annual basis will be perceived as cheap and will expose consumers who might normally either seek upgrades on a pirated basis or who would simply continue using older versions to regular approved updates. It is a large investment, after all, to upgrade to a new iteration of Office.

Microsoft would be wise to market the heck out of the subscription model for Office, taking full advantage of the inflationary environment we are currently in. If potential users can be convinced of the value proposition, then they could eventually become hooked on the promise of upgrades over time for the relatively economical price indicated. Checking around on the net, I notice that a lot of the negative comments about this idea center on the fact that there are already free alternatives out there to Office, such as applications offered by Google (NASDAQ: GOOG).

The thing is, though, many mainstream users of software applications probably are susceptible to the brand equity of Microsoft and Office. I am. Quite honestly, I'd rather use something used by the majority of people I know and work with as opposed to a free suite on Google or elsewhere. Sure, savvy software users will make fun of me for holding such an opinion and will point out a perceived lack of sophistication on my part, but my point is that, from a business standpoint, Microsoft does have a ton of equity to leverage in the form of the Office name, and it's a worthwhile goal to invest a little capital toward converting some of the mindshare out there who don't currently engage Office upgrades into subscribing users. Incremental revenues may result over time if an effective marketing campaign is drawn up. I don't think I'd subscribe, but I have a feeling others might...

Disclosure: I don't own any company mentioned; positions can change at any time.

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Circuit City loses board member (and the patience of investors)

Steven Mallas — 2008-07-03T16:44:00+00:00

Filed under: Wal-Mart (WMT), Blockbuster Inc 'A' (BBI), Best Buy (BBY), Circuit City Stores (CC)

According to this Wall Street Journal (subscription required) piece, a member of the Circuit City Stores, Inc. (NYSE: CC) board has left the building. Lead outside director Mikael Salovaara resigned yesterday. Can you blame the guy?

No you can't. Circuit City doesn't have any sort of game plan at the moment, and it's sinking fast. The company's stock is priced at $2.31 as I write this. The goofy Blockbuster Inc. (NYSE: BBI) transaction is gone (for now, at least...there are reports saying that it could be resurrected at a later date, although I don't buy that it will happen at all). It isn't competing effectively against Best Buy Co., Inc. (NYSE: BBY) and Wal-Mart Stores, Inc. (NYSE: WMT). In short, Circuit City is a Titanic-like electronics retailer that doesn't know how to keep its ship from hitting icebergs.

So this resignation isn't surprising. Of course, is there any way to make money off the stock? I do believe there is downside to come on the share price, which would therefore imply that shorting it could work out. Alas, I wouldn't recommend it. You just know that some company and/or financial entity out there might come in at any point and make a bid, and the shares could skyrocket. Although the Blockbuster deal didn't make sense, it doesn't mean that there isn't some transaction scheme out there that would be logical. Circuit City is a stock merely to watch out of curiosity, it's not one to do anything about.

Disclosure: I don't own any company mentioned here; positions can change at any time.

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Blockbuster could come back for Circuit City?

Zac Bissonnette — 2008-07-03T10:22:00+00:00

Filed under: Deals, Blockbuster Inc 'A' (BBI), Circuit City Stores (CC)

Citing unnamed sources, The New York Post reports that Blockbuster (NYSE: BBI) could come back to Circuit City (NYSE: CC) to try to acquire the company.

The sources said that Circuit City pulled out because of weakness in the credit markets, but still feel that a deal could have strong long-term benefits. I don't think it makes sense for Blockbuster to acquire the company but, if it does, pulling out for now is probably a good idea. Shares of Circuit City tanked when Blockbuster announced that it was no longer pursuing a deal, and, according to the Post, Best Buy (NYSE: BBY) isn't interested because of antitrust concerns. With few indications that there is anyone else bidding for Circuit City, and the company's fundamentals in a rapid state of decline, it seems like the longer Blockbuster waits the less it will have to pay. Unless another bidder emerges, there's no real rush.

Back in April, Blockbuster made a preliminary proposal to acquire Circuit City "with an all cash offer in the range of $6.00 to $8.00 per share, subject to due diligence." With shares of Circuit City down 9% to $2.32 on Wednesday, Blockbuster could probably get the company for considerably less if it made another offer today.

With Circuit City bleeding cash, continued consumer weakness could make it really cheap on the courthouse steps later this year. Maybe then Blockbuster shareholders would be more supportive of a deal.

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Blockbuster-Circuit City deal was one of the silliest in memory

Zac Bissonnette — 2008-07-02T10:47:00+00:00

Filed under: Deals, Blockbuster Inc 'A' (BBI), Circuit City Stores (CC)

One of the silliest possible mergers in recent memory (no small accomplishment) is dead in the water now that Blockbuster (NYSE: BBI) has announced that it will no longer pursue its previously announced effort to acquire Circuit City (NYSE: CC).

In a press release issued yesterday afternoon, Jim Keyes, Blockbuster Chairman and CEO, said that "Based on market conditions and the completion of our initial due diligence process, we have determined that it is not in the best interest of Blockbuster's shareholders to proceed with an acquisition of Circuit City."

Given the shares of Blockbuster tanked when the company announced its initial offer, the company's shares could be expected to trade up today.

For Circuit City, the situation is more grim. With its stock in the toilet, Blockbuster's offer represented one of the few exit strategies. Blockbuster's assertion that its "initial due diligence" was a factor in its decision to withdraw its offer indicates that the company's financial situation may be worse than it appears to outside shareholders.

In a press release offered in response, Philip J. Schoonover , chairman, president and chief executive officer of Circuit City, said that "Our exploration of strategic alternatives is intended to serve the interests of our shareholders by considering every possible alternative to enhance shareholder value. The board's review was not dependent on Blockbuster's participation."

But Blockbuster was the only suitor to emerge publicly so far and, now that it's lost interest, there's little reason to expect anyone else to emerge.

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Brand name stocks under $10 to beware of, market themes for 2008's second half - Today in Money 7/2

Allan Halprin — 2008-07-02T08:59:00+00:00

Filed under: Microsoft (MSFT), Yahoo! (YHOO), Starbucks (SBUX), Ford Motor (F), General Motors (GM), Motorola (MOT), Toyota Motor Corp. (TM), Netflix, Inc. (NFLX), Citigroup Inc. (C), Sprint Nextel Corp (S), Blockbuster Inc 'A' (BBI), Money and Finance Today, Bank of America (BAC), Circuit City Stores (CC), Palm Inc (PALM), UAL Corp (UAUA), Crocs Inc (CROX), Qwest Communications Intl (Q), Rite Aid Corp (RAD)

In the News:

· Car Sales Hit 10-Year Low as June Was Bleak Month; GM Dropped 18%, Toyota 21%

· Microsoft May Take Another Stab at Yahoo

· Starbucks to Close 600 Stores

· Blockbuster Ends Pursuit of Circuit City

· Bank of America Closes Countrywide Acquisition; More Misery Ahead for BofA?

· Citibank ATM Breach Reveals PIN Security Problems

· Deepening Cycle of Job Loss Seen Lasting Well Into 2009

· Netflix Stars in a Slow Economy

· Manhattan Real Estate Finally Starts to Soften

Brand-Name Stocks Uner $10: Buyer Beware
These well-known names in the bargain bin may look appealing, but experts advise laying off until their earnings picture is clear. Among the stocks to be weary of are Sprint Nextel, Motorola, Ford Motor, Qwest, Washington Mutual, Northwest Airlines, Del Monte, Rite Aid, Chico's, Crocs, United Airlines, Palm, Sealy, Blockbuster, Circuit City and Orbitz.
Brand-Name Stocks Under $10: Buyer Beware

How to Play the Market in the Second Half of 2008
Market pro Todd Harrison discusses the top 10 themes for the rest of the year.
Where we are and where we're going: 10 market themes - MarketWatch

Finding Safety in a Bear Market
Here are five ways to protect your portfolio.
Keeping Your Balance in a Scary Market - Kiplinger.com

Airports Cash in on Flight Delays
Your delayed flight is bad news for you and your airline, but it's money in the bank for the airports who are turning into multi-billion dollar shopping malls for stranded passengers.
Delayed flights mean big money for airport industry - CNNmoney

Meet the New King of Brand Names
The CEO of Fortune 500 newcomer Jarden Corp. is busy reviving old brands, but Wall Street has its doubts. Meet Martin Franklin who is snapping up undernourished brands and give them a shot in the arm. His company now markets more than 100 brands - among them Sunbeam, Oster, Rawlings, K2, Hoyle, Mr. Coffee, Crock Pot, and First Alert - and is the market leader in such retail categories as kitchen electronics, playing cards, tents, and grill-gas canisters.
The new king of brand names - FORTUNE

How to Protect Yourself If a Store Goes Bankrupt
When furniture seller Levitz closed last fall, its Web site informed customers that they might not receive ordered merchandise, that there would be no more returns or exchanges, and that some paid-for extended warranties would not be provided. With tough times forcing Levitz and other retailers-including Sharper Image, Linens 'n Things, and Lillian Vernon-to file for bankruptcy protection, it's wise for shoppers to take precautions. Here's how.
ConsumerReports.org - Protect yourself if a store goes bankrupt

How American is American Apparel?
CEO Dov Charney has Canadian passport, extraordinary business acumen and social grace of a subway flasher.
Minyanville - NEWS & VIEWS-How American is American Apparel?

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Blockbuster yanks Circuit City bid

Peter Cohan — 2008-07-02T08:33:00+00:00

Filed under: Deals, Blockbuster Inc 'A' (BBI), Best Buy (BBY), Circuit City Stores (CC)

Ever since Circuit City Stores (NYSE: CC) CEO Philip J. Schoonover sliced 3,400 sales people in March 2007 to save money, I have questioned the savvy of its management. That's because many of those fired sales people took their customers over to Best Buy (NYSE: BBY). As its stock lost 86% of its value, I was surprised that anyone would make a bid for it.

Yet Blockbuster (NYSE: BBI), the struggling video store chain, decided to buy. I don't know what got into Blockbuster's head to make it think that combining two struggling companies would make an agile competitor. The Richmond Times reports that it wanted to create a one-stop shop for movies, games, and electronic equipment. But that dream died when Blockbuster pulled its $1.3 billion offer after reviewing Circuit City's books.

Carl Icahn has said he would buy Circuit City. But it's losing money -- $164.8 million, or $1 a share, in its fiscal first quarter. This was $100 million more than its Q1 2007 loss. And Blockbuster's conclusion after a closer look at its financial statements does not bode well for Circuit City's future. Circuit City stock is down 7.8% in pre-market. Let's see whether any new bidders emerge.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

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Pre-market movers (BBI) (YHOO) (GM) (CC)

Douglas McIntyre — 2008-07-02T07:50:00+00:00

Filed under: Before the bell, Microsoft (MSFT), Yahoo! (YHOO), General Motors (GM), Blockbuster Inc 'A' (BBI), Circuit City Stores (CC)

Apollo Group (NASDAQ:APOL) is up over 15% on strong profits.

Blockbuster (NASDAQ:BBI) is up over 10% on news it has dropped it bid for Circuit City (NYSE:CC).

Yahoo! (NASDAQ:YHOO) is up 6% on news of a possible new bid from Microsoft (NASDAQ:MSFT).

Circuit City is down over 10% due to Blockbuster walking away from a possible offer for the company.

GM (NYSE:GM) is off 5% on a brokerage downgrade.

Stocks may trade differently in the pre-market than they do in the regular session.

Douglas A. McIntyre is an editor at 247wallst.com

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Before the bell: Futures higher on SBUX, YHOO, ahead of inventory report

Melly Alazraki — 2008-07-02T07:46:00+00:00

Filed under: Before the bell, Earnings reports, Microsoft (MSFT), Yahoo! (YHOO), Time Warner (TWX), Starbucks (SBUX), Blockbuster Inc 'A' (BBI), Circuit City Stores (CC), Economic data, Oil

U.S. stock futures were higher Wednesday morning, as Wall Street could try to having yet another positive session. While Starbucks news of store closing and reports Microsoft may still be interested in Yahoo helped lift sentiment, UnitedHealth already issued a warning this morning. Employment data is also on tap before the market opens.

U.S. stocks finally ended higher on Tuesday. Surprisingly, it was car sales that helped the mood on the Street as as June sales came in not as bad as expected. The Dow industrials ended 32 points higher, or 0.28%, the S&P 500 added 4 points, or 0.38%, and the Nasdaq Composite added 11 points, or 0.52%.

Today, investors will have the ADP June private sector employment figures to chew on ahead of the government's report tomorrow. The employment report is expected to be released at 8:15 a.m. EDT. Then, at 10 a.m., May factory orders are due out.

Also on the docket today is weekly crude inventories, usually released at 10:30 a.m. EDT. While oil came off highs Tuesday due to a slightly stronger dollar, it again rose above $141 a barrel Wednesday, due to persistent supply concerns that has analysts warning of higher prices yet. An IEA report saying supplies will remain tight and demand will likely grow despite higher prices helped push prices higher.

In corporate news, Blockbuster Inc. (NYSE: BBI) said Tuesday it is withdrawing its proposal to buy Cicuit City Stores Inc. (NYSE: CC). BBI shares are 13% higher in premarket trading, CC's 7.8% lower.

UnitedHealth Group (NYSE: UNH) cut its 2008 financial outlook as it felt the impact of changing business trends during the second quarter.

Meanwhile, The Wall Street Journal reported that Microsoft (NASDAQ: MSFT) turned to other media companies such as Time Warner (NYSE: TWX) to join forces in buying Yahoo! (NASDAQ: YHOO). Apparently, Microsoft want Yahoo's search business, but could do without its content portal business, which another company could pick up. YHOO shares are up nearly 5.5% in premarket trading.

Finally, Starbucks (NASDAQ: SBUX) said it plans to close 600 stores, or about 8.5% of its total stores. While the turnaround strategy still has to prove itself, SBUX stock has been trading over 6.6% in premarket action on the news.

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The next Sony is Vizio

Georges Yared — 2008-06-29T16:00:00+00:00

Filed under: Forecasts, Consumer experience, Competitive strategy, Dell (DELL), Wal-Mart (WMT), Sony Corp ADR (SNE), Circuit City Stores (CC), Sears Holdings (SHLD), Costco Wholesale (COST)

This post is part of my series featuring established companies and the smaller, more aggressive or innovative rivals that may eventually succeed them.

Who would have thought that privately held, 2002 upstart Vizio could upset the LCD TV market and knock giant Sony (NYSE: SNE) off of its perch?

The world of televisions is transforming itself to flat-panel, high-definition and big screens. Vizio was founded in 2002 and is taking major market share from Sony and former second fiddle Samsung. Vizio's promise to its customers is simple -- small is big. The company has only 85 employees, mostly in sales and marketing, and outsources the manufacturing to other suppliers. The key to the Vizio story is getting the product through as many retail doors as possible.

The company has signed up a couple of big wigs in the retail sales channel: Wal-Mart (NYSE: WMT) and Costco (NASDAQ: COST), to go along with Sears (NASDAQ: SHLD) and Circuit City (NYSE: CC). Vizio is also available from Dell Computers e-commerce web site (NASDAQ: DELL). Vizio understands it's all about distribution, distribution, distribution.

Vizio has taken the marketing position that television decisions typically are the domain of the male of a household and, as such, has partnered up with the NFL. Football and big screen TVs are synonymous. Vizio has signed All-Pro running back LaDainian Tomlinson of the San Diego Chargers to be its spokesperson. Tomlinson is regarded as both a fine gentleman and perhaps the greatest running back since Barry Sanders. His wholesome image is magical to Vizio's marketing program.

Vizio offers the lowest prices for the new LCD TVs. The company operates with low overhead and very effective, but low-cost marketing plans. Recent market share numbers show Vizio at 14.5%, easily topping Sony. Vizio's actual numbers are hard to find but the 2nd quarter of 2007 saw the company sell 606,000 units, up 76% from the previous year, while Sony fell from 412,000 units to 253,000 units in the same period.

Vizio has managed to capture the lion's share of new unit sales, but has not disclosed its profitability numbers. The margins in the industry are thin to begin with, which explains Vizio's low expense structure.

Still, it's hard to imagine this young company knocking Sony around the block. Now Sony knows what it's like to tackle LaDanian Tomlinson!

Georges Yared is the editor of GameOnInvesting, a free service devoted to helping investors spot game-changing stocks before they breakout.

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Circuit City (CC) shares sitting on the floor; a buyout is imminent

Brian White — 2008-06-25T09:00:00+00:00

Filed under: Deals, Rumors, Management, Circuit City Stores (CC)

Circuit City Stores, Inc. (NYSE: CC) is sitting on the brink of a buyout. The question is who, and how much. The deal with Blockbuster Inc. (NYSE: BBI) is still very possible, but investor Mark Wattles of Wattles Capital Management has said to expect a deal within four weeks regardless. With Circuit City shares nearly the bottom -- closing yesterday at $4.35 -- some entity needs to swoop in and just offer cash for the company. As in, now.

It's a foregone conclusion that Circuit City can't compete with other national consumer electronics retailers. The access to its prime real estate locations would be a main reason for the chain to be bought up at such a fire sale price. Wattles said Blockbuster and two unnamed private equity firms are most likely the three finalists ready to step up and purchase Circuit City.

While all this "due diligence" is going on for buying a retailer at such a low price, shareholders are getting antsy with good reason. It's hard to imagine any shareholder making out on Circuit City stock -- including Wattles who stands to lose a good chunk of change unless the shares rebound. Circuit City's largest investor, HBK Investments (a 9% stake), probably needs to have a deal done as soon as possible with a sweet premium to the current share price. Who could blame them?

Regardless of who buys Circuit City, this is a company that needs to return shareholder equity back to its shareholders and just fold up and go away. It's not going to get any better.

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Early analyst calls (CC) (HOV) (YHOO)

Douglas McIntyre — 2008-06-24T07:20:00+00:00

Filed under: Before the bell, Analyst upgrades and downgrades, Yahoo! (YHOO), Circuit City Stores (CC), Potash Corp. of Saskatchewan (POT)

Lehman Brothers reiterated its "underweight" rating on Circuit City (NYSE:CC) ahead of the company's annual meeting, according to the AP.

Credit Suisse started Hovnanian (NYSE:HOV) and Meritage Homes (NYSE:MTH) as "underperform," according to Briefing.com.

Thomas Weisel downgraded Yahoo! (NASDAQ:YHOO) to "underweight" from "market weight," according to Briefing.com. The news service also reports that UBS upped its price target on Potash (NYSE:POT) from $250 to $285.

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Closing Bell: Mixed markets for a summer Monday

Jon Ogg — 2008-06-23T16:20:00+00:00

Filed under: Advanced Micro Dev (AMD), Circuit City Stores (CC)

Today felt like a traditional summer Monday with plenty of market winners and losers and the general sense that it was a wash day. So the Saudis agreed to boost production, but oil still rose to near $137/barrel today in a move that is becoming all too familiar. The markets are getting ready for the two-days before the FOMC announcement on the rate decision, so you can expect the talking heads to come out of the woodwork ahead of this. Here were today's unofficial closing bell levels:

DJIA 11846.27 (+3.58)
S&P500 1318.30 (+0.37)
NASDAQ 2385.74 (-20.35)
10YR T-Note 4.168% (+0.031%)
52-WEEK LOWS
TOP 10 ANALYST CALLS

Advanced Micro Devices, Inc. (NYSE: AMD) fell harder than most techs, and the news may have been some highly unusual put options activity in the stock. Shares were down 6% at $6.57 in today's final minutes.

Barrier Therapeutics (NASDAQ: BTRX) also saw a rise of more than 100% to be at $2.27 late in the day after a $4.15 buyout offer from private Stiefel laboratories.

Circuit City Stores, Inc. (NYSE: CC) is down as analysts and others are doubting whether or not the company will allow itself to be acquired. We saw a drop early on And shares were down 20% to $3.42 in the final minutes today.

Corn Products International Inc. (NYSE: CPO) saw an 18% rise by the end of the day with shares at $50.65 after Bunge Ltd. (NYSE: BG) agreed to acquire the company.

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Earnings highlights: Morgan Stanley, FedEx, Ford, GE, Circuit City and others

Trey Thoelcke — 2008-06-21T16:40:00+00:00

Filed under: Earnings reports, General Electric (GE), Ford Motor (F), Archer-Daniels-Midland (ADM), Circuit City Stores (CC), Merrill Lynch (MER), FedEx Corp (FDX), Morgan Stanley (MS), Deere and Co (DE), Lehman Br Holdings (LEH)

Here are some highlights from this past week's earnings coverage from BloggingStocks:

CarMax Inc. (NYSE: KMX) Q1 profits tumbled despite its aggressive expansion program.
Chiquita Brands International Inc. (NYSE: CQB) warned it would miss earnings due to cost hikes.
Circuit City Stores Inc. (NYSE: CC) Q1 loss widened as same-store sales dwindled.
Commercial Metals Co. (NYSE: CMC) Q3 profits declined despite strong demand, but beat estimates.
Coventry Healthcare Inc. (NYSE: CVH) lowered its Q2 and full-year outlooks after a disappointing April.
FedEx Corp. (NYSE: FDX) missed estimates on higher fuel prices and offered lackluster guidance.
Ford Motor Co. (NYSE: F) warned that 2008 full-year results would be worse than those of 2007.
General Electric Co. (NYSE: GE) was downgraded by JP Morgan because of risk to earnings.
J.M. Smucker Co. (NYSE: SJM) missed Q4 earnings expectations despite acquisitions-based growth.
La-Z-Boy Inc. (NYSE: LZB) said it swung to a Q4 loss due to diminishing retail sales.
Lehman Brothers Holdings Inc. (NYSE: LEH) CEO expressed his disappointment in the Q2 results.
Merrill Lynch & Co. (NYSE: MER) profit warnings and write-downs hit the rumor mill.
Morgan Stanley (NYSE: MS) beat low expectations despite a hefty decline in Q2 profits (see transcript).
Pier 1 Imports Inc. (NYSE: PIR) narrowed its Q1 loss but still fell short of expectations.
Winnebago Industries Inc. (NYSE: WGO) posted dismal Q3 results but still beat low expectations.

More earnings highlights from this week: Goldman Sachs, Best Buy, General Mills, Carnival and others

Also, BusinessWeek likes the earnings prospects for agricultural stocks such as Archer Daniels Midland (NYSE: ADM), Monsanto (NYSE: MON), and Deere & Co. (NYSE: DE).

Upcoming results to watch for include Walgreen (NYSE: WAG), Kroger (NYSE: KR), Bed Bath & Beyond (NASDAQ: BBBY), General Mills (NYSE: GIS), Monsanto (NYSE: MON), Nike (NYSE: NKE), Oracle (NASDAQ: ORCL), Research in Motion (NASDAQ: RIMM), ConAgra (NYSE: CAG), Discover (NYSE: DFS), McCormick (NYSE: MKC), Rite Aid (NYSE: RAD:), and KB Home (NYSE: KBH).

Visit AOL Money & Finance for more earnings coverage.

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hhgregg (HGG): Share price cycles in bullish 'pennant' pattern

Larry Schutts — 2008-06-19T16:30:00+00:00

Filed under: Earnings reports, Wal-Mart (WMT), Best Buy (BBY), Circuit City Stores (CC), Technical Analysis, Stocks to Buy

hhgregg (NYSE: HGG) is a specialty retailer of consumer electronics, home appliances and related services. The firm operates 97 southeastern and midwestern U.S. stores, under the names hhgregg and Fine Lines. It also operates a retail Web site. Offerings include notebook computers, televisions, DVD recorders, refrigerators, ranges, dishwashers, freezers, washers, dryers and Serta mattresses. Competitors include Best Buy (NYSE: BBY), Circuit City Stores (NYSE: CC) and Wal-Mart (NYSE: WMT).

The company pleased investors earlier in the month, when it reported solid Q4 results and offered FY09 EPS guidance in-line with the consensus Street view. Management attributed success to increased sales of higher-priced video and major appliance products. Plans call for opening 15 to 17 stores, during the new fiscal year.

HGG shares popped on the news and then moved into a bullish "pennant" consolidation pattern. Prices frequently exit pennants moving in the same direction they were traveling on entry. In this case, that would be to the upside.

Brokers recommend the issue with three "strong buys", four "buys" and two "holds". Analysts see a 20% average annual growth rate, through the next five years. The HGG Price to Sales ratio (0.32), Price to Cash Flow ratio (11.97), Sales Growth rate (14.41%), Return on Investment (11.96%) and Return on Equity (43.70%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 45% of the outstanding shares. Since going public last July, the stock has traded between $7.76 and $17.22. A stop-loss of $10.65 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.

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More troubles for Circuit City (CC) during the first quarter

Michael Fowlkes — 2008-06-19T15:00:00+00:00

Filed under: Major movement, Earnings reports, Forecasts, Bad news, Management, Competitive strategy, Best Buy (BBY), Circuit City Stores (CC)

It is safe to say that the past couple of years have been tough on shareholders of Circuit City (NYSE: CC), and today is no different as the company posted a large loss for its fiscal first quarter. Shares of the electronics retailer are down 7.5% after the company posted a loss of $1 a share for its most recent quarter.

The company stated that the main reason for its poor performance last quarter was weak sales performance in the company's established stores. This really should not come as a big surprise to us since we have been well aware of the company's faltering sales over the past couple of years. On the whole, same-store sales dropped by 11.3%, and continues to affirm the belief that Circuit City definitely has its work cut out for it if it ever wants to start regaining its lost market share.

The total loss on the quarter totaled $164.8 million, about triple the $54.6 million loss it recorded for the same period last year. I wish I could say that things are looking brighter down the road but that is just not the case, as the retailer is expected to post another large loss for its second quarter. Analysts had been expecting to see a loss of $143.4 million for the current quarter, but the company issued weaker guidance, stating that it expects to see a loss of somewhere between $170 and $185 million.

Revenues also dipped in the last quarter, which marks the fifth straight quarter of shrinking revenues, as the company posted revenues of $2.3 billion. This equates to a 7.4% drop in revenues, slightly below analyst estimates of $2.37 billion.

The company, which put itself up for sale last month, simply has not been able to compete against its main rival, Best Buy (NYSE: BBY). For Best Buy's most recent quarter, the company posted a same-sore sales increase of 3.7%. Looking at the difference in the two stores same-store sales growth gives us a really clear picture of just how much healthier is Best Buy.

All in all, yet another disappointing quarter for the company, and all signs are pointing to more rough times ahead.

For an idea of just how bad the stock has performed over the past 24 months, Here's a two-year chart:

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.

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Before the bell: CVH, CCL, CC, HPQ, GOOG, YHOO, GM, AAPL

Melly Alazraki — 2008-06-19T08:25:00+00:00

Filed under: Before the bell, Earnings reports, Analyst reports, Analyst upgrades and downgrades, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Apple Inc (AAPL), Hewlett-Packard (HPQ), General Motors (GM), Aetna Inc (AET), Carnival Corp (CCL), CIGNA Corp (CI), Circuit City Stores (CC), Coventry Health Care (CVH)

Before the bell: Futures mixed after selloff

Coventry Health (NYSE: CVH) shares were down nearly 17% in after-hours trading Wednesday after the managed-care provider lowered estimates for second-quarter and full-year earnings due to disappointing April and May results. Wachovia downgraded CVH to Market Perform from Outperform. Other healthcare stocks felt the pressure and were down in after-hours or premarket trading: UnitedHealth (NYSE: UNH) -7%, Aetna (NYSE: AET) -9.9%, WellPoint (NYSE: WLP) -6%, Humana (NYSE: HUM) -5% and Cigna (NYSE: CI) -5%.

Carnival (NYSE: CCL) is due to report second-quarter financial results.
Circuit City Stores Inc. (NYSE: CC) is due to release first-quarter financial results.

Hewlett-Packard (NYSE: HPQ) is reorganizing its printer unit in the face of declining growth of the business, The Wall Street Journal reported. Basically, as consumers print less, H-P is trying to adapt and is reducing five business unitsto three.

Figures released by comScore and posted on TechCrunch show that Google's (NASDAQ: GOOG) U.S. query share rose to 61.8%, Yahoo's (NASDAQ: YHOO) share also rose to 20.6%, and Microsoft's (NASDAQ: MSFT) share fell to 8.5%.
Also concerning these stocks:
- Yang Goes to Capitol Hill to Talk Up Google Deal
- Google's YouTube Is Sued by Spain's Telecinco for Copyright Infringement
- Yahoo addresses e-mail concerns with new domains

General Motors Corp. (NYSE: GM) is delaying the redesign of SUVs and full-size trucks as it undergoes a wider review aimed at building lighter, fuel-efficient vehicles, according to a report in The Wall Street Journal.

The Register claims that Apple Inc. (NASDAQ: AAPL)'s new 3G iPhone costs $100 to make.

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Stock picks under $10, 10 worst managed companies & historic site foreclosures

Allan Halprin — 2008-06-18T09:29:00+00:00

Filed under: Yahoo! (YHOO), Apple Inc (AAPL), Pfizer (PFE), Starbucks (SBUX), Ford Motor (F), Motorola (MOT), Johnson and Johnson (JNJ), Sprint Nextel Corp (S), Advanced Micro Dev (AMD), Money and Finance Today, Boston Scientific (BSX), Circuit City Stores (CC), CIT Group (CIT), Kellogg Co (K), Sears Holdings (SHLD), FedEx Corp (FDX), Morgan Stanley (MS), Amer Intl Group (AIG), Sun Microsystems (JAVA), Liz Claiborne (LIZ)

In the News:

· Morgan Stanley 2Q Profit Plunges 57%

· FedEx Profit Wrecked By High Fuel Costs, Company Warns

· Generic Versions of Lipitor Expected in 2011

· Apple's iPhone Sales May Double in 2009

· Northwest Airlines to Cut Flights, Offer Early Buyouts

· Kellogg Shrinks Size of Fruit Loops, Apple Jacks and Other Cereals

· Unhappy 1-Year Anniversary for Yahoo CEO Jerry Yang

· LinkedIn Valued at $1 Billion; Big Plans Afoot

· Tomatoes Back at Fast Food Restaurants

· Red Cross and Johnson & Johnson Dispute Over Red Cross Symbol Settled

Stock Picks for Under $10
There are a lot of once-highflying stocks that have fallen below $10 and look like bargains ripe for the picking. See if CIT Group, Ford, Motorola, Tenet Healthcare, Dynegy and Interpublic.
Stock Picks for Under $10 - CNBC

10 Worst Managed Companies in America
With the trading year almost half over and results from the first quarter out, 24/7 Wall St. presents its latest installment of its Ten Worst Managed Companies In America list. They include Sun Microsystems, Sears, Boston Scientific, Starbucks, Sprint, Circuit City, Motorola, AMD, AIG and Pfizer.
24/7 Wall St.: The 24/7 Wall St. Ten Worst Managed Companies In America

Historic Sites in Danger of Foreclosure
Mark Twain, Edith Wharton and other boldfaced names among the dead have something in common with living Americans in these hard financial times.
Foreclosure Looms Over Historic Sites - AOL Money & Finance

The Credit Trap
How rising home values and easy credit put your finances at risk.
How rising home values, easy credit put your finances at risk - USATODAY.com

Wal-Mart: The New Green Giant
From solar panels to less packaging, the retailer continues to unveil Earth-friendly initiatives.
In Pictures: Green Giant - BusinessWeek

Coffee Drinkers Live Longer?
For women, especially, the brew could boost heart health, study finds.
Coffee Drinkers Might Live Longer

Prepare Now, Save Come Winter
Taking these steps to lower your heating bills now will pay off when winter hits.
Prepare Now for a Pricey Winter Heating Season - SmartMoney.com

Tap Water Making a Comeback
With a day's worth of bottled water -- the recommended 64 ounces -- costing hundreds to thousands of dollars a year depending on the brand, more people are opting to drink water that comes straight from the sink.
Feeling thrifty, the thirsty reach for tap, not bottle - USATODAY.com

Can Mizrahi Revive Liz Claiborne?
January, Liz Claiborne hired Mizrahi away from Target to become the new creative director for women's apparel, accessories, and licensing. Claiborne C.E.O. Bill McComb hopes Mizrahi's touch will awaken Liz from the extended slumber of dowdy, forgettable styles and make the brand back into a wardrobe essential for fashion-conscious working women. Can he do it?
Liz Claiborne's Mizrahi Moment - Portfolio.com

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Option Update: Carnival volatility up into EPS

Paul Foster — 2008-06-17T10:22:00+00:00

Filed under: Carnival Corp (CCL), Circuit City Stores (CC), Options

Carnival (NYSE: CCL) is scheduled to report Q2 EPS on June 19. CCL closed at $36.22 Monday, near 54-month low. CCL June 35 straddle is priced at $2.35. CCL July option implied volatility of 41 is above its 26-week average of 36 according to Track Data, suggesting larger price movement.

Circuit City (NYSE: CC) is scheduled to report Q1 EPS on June 19. CC closed at $4.31 Monday. CC June 5 straddle is priced at 90c cents. CC over all option implied volatility of 78 is near its 26-week average according to Track Data, suggesting non-directional price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

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Best Buy Q2 profits expected to slip; Circuit City expected to widen loss

Trey Thoelcke — 2008-06-16T10:31:00+00:00

Filed under: Earnings reports, Forecasts, Blockbuster Inc 'A' (BBI), Best Buy (BBY), Circuit City Stores (CC)

Though the earnings season is winding down, consumer electronics retailers Best Buy Inc. (NYSE: BBY) and Circuit City Stores Inc. (NYSE: CC) are scheduled to report second-quarter results this week. Best Buy profits are expected to be lower, while Circuit City is expected to triple its loss.

Best Buy is expected by analysts surveyed by Thomson Financial to report second-quarter earnings of 36 cents per share, down 7.7% from the same period of last year. The company has provided positive surprises in three of the past four quarters -- by 29.2% in the fourth quarter of 2007.

Based in Richfield, Minn., Best Buy is the largest consumer electronics outlet in the U.S., with about 1,300 stores in the U.S. and Canada providing appliances, gadgets, movies and music, cell phones, and technical services. In the past year, the company's revenues were $40 billion and its net income totaled $1.4 billion. Its long-term EPS growth forecast is 15.3%, which is a little better than the retail industry average. The consensus recommendation of analysts shifted from buy to to hold Best Buy during this past quarter.

The stock is down 13.2% since the beginning of the year, but down only 4.7% from a year ago. It trades at a P/E ratio of 14.65. Shares closed Friday at $45.70.

Circuit City is expected to report second-quarter loss of $1.01 per share, compared to a loss of only 33 cents per share in the year-ago period. Despite a positive surprise in the first quarter, the company has tended to miss estimates recently; the loss was more than twice what analysts estimated in the fourth quarter of 2007.

Richmond, Va.-based Circuit City sells consumer electronics in 680 stores in the U.S. and online, and recently became a buyout target of Blockbuster Inc. (NYSE: BBI). In the past year, Circuit City's revenues were $11.7 billion and its net loss totaled $320 million. The company's long-range EPS growth forecast is 10.6%, less than that of rival Best Buy. The consensus recommendation of analysts remains to hold Circuit City.

The share price is up 3.6% since the beginning of the year, but has fallen 73.9% from a year ago. Shares closed Friday at $4.35.

Best Buy is scheduled to report earnings Tuesday morning, Circuit City on Thursday morning.

For more news that could influence the results, see BloggingStocks' Best Buy coverage and Circuit City coverage.

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Wagons circle around Yahoo

Jonathan Berr — 2008-05-23T10:45:00+00:00

Filed under: Deals, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Blockbuster Inc 'A' (BBI), Circuit City Stores (CC)

Yahoo! Inc. (NASDAQ: YHOO) Chief Executive Jerry Yang is bound to cry "uncle" sooner rather than later.

Pressure is mounting on the co-founder of the internet portal to do something -- anything -- to boost Yahoo's moribund share price. Billionaire activist investor Carl Icahn is leading a mutiny among shareholders disappointed that the company couldn't figure out a way to reach an agreement on a deal with Microsoft Corp. (NASDAQ: MSFT). Display advertising is coming under pressure as advertisers shift spending to search or demand steep rate cuts. Board member Edward Kozel today announced his resignation, another indication of management's growing isolation.

Yahoo management is clearly hunkering down. Today, comes word that the company is delaying its annual meeting from July 3 to the end of July. Is that enough time to reach an agreement with Microsoft or a search deal with Google Inc. (NASDAQ: GOOG)? Who knows? But you can bet that the meeting will not occur until there is some "good news" to report.

Meanwhile, Microsoft Chief Executive Steve Ballmer told a technology conference in Moscow that the Yahoo acquisition was not "strategic." Hmm, then why bother doing it? Clearly, Ballmer is posturing to get a better deal with Yahoo. Having Icahn on his side certainly helps.

As for Icahn's threatened proxy fight, the key word here is "threat." The last thing that Icahn wants to do is actually run a company. Operations just aren't his thing. But as he showed with Blockbuster Inc. (NYSE: BBI), Icahn is not afraid to wage proxy contests and win them. In Blockbuster's case, he trounced management. Whether that's a Pyrrhic victory remains to be seen. Shares of Blockbuster have tumbled more than 22% this year and investors are skeptical that buying Circuit City Stores Inc. (NASDAQ: CC) will boost the video-rental firm's lagging fortunes.

So,Yahoo shareholders should hope that Yahoo figures out a way to make Icahn and his allies happy before things get much worse.

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