Analyst action: Clarcor, CVS, SunTrust
Posted on November 20, 2009 at 10:42 amBB&T analyst Kevin Maczka on Thursday raised his rating on shares of Clarcor (Ticker: CLC) from ‘hold’ to ‘buy.’ His target price for the Franklin-based filtration and packaging company is $40, 27 percent above its Wednesday close.
Two stocks with a local presence have also received votes of confidence. At Credit Suisse, Craig Siegenthaler has lifted his target for SunTrust (Ticker: STI) to $23 from $21, while UBS analyst Neil Currie has started covering CVS Caremark (Ticker: CVS) with a ‘buy’ rating and a $34 target.
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The old way to invest in Dollar General
Posted on November 19, 2009 at 11:49 amGimme Credit analyst Evan Mann says Dollar General should continue to generate ample cash to invest in growth and improve its debt ratios. Because of that, investors would do well to buy the company’s subordinated debt, which has risen from $80 to $110 in the past year and comes due in 2017. Meanwhile, the company’s newly listed shares (Ticker: DG) are again testing the $22.50 level that has supported them in their first week on the NYSE.
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Hedge fund manager: Stick with BofA
Posted on at 10:03 am
John Paulson, the hedge fund guru who has hit several home runs during the current recession, has told his clients that Bank of America could double in the coming year and change.
The firm follows about 70 banks internationally and said the 139 percent gain in those stocks since the market’s March low “has resulted in inefficient valuations creating what we believe are opportunities” to benefit from rising and falling share prices.
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Look for Mapco to go M&A on us
Posted on at 7:27 amEven though he’s trimmed his 2010 estimates and valuation of Delek US Holding, Avondale analyst Dan Mannes says the company’s is ready to build on its track record as a smart M&A player with “a knack for acquiring and turning around undervalued assets.” Mannes has a target of $7 on Delek shares (Ticker: DK), which closed Wednesday after-hours trading at $6.79.
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Advocat still a ’show-me’ story
Posted on November 18, 2009 at 1:22 pm
Some pretty strong words from Avondale Senior Analyst Brian Williams, who is taking over coverage of Brentwood-based nursing home operator Advocat.
We do not believe shares will trade in line with its for-profit peers until Advocat can effectively demonstrate improvement in its organic operations or a willingness to pursue additional sources of earnings growth.
After failing to maintain its recent highs above $8, Advocat shares (Ticker: AVCA) are back near $6, where Williams says they should stay until the company both gets a firmer grip on expenses and finds a way to juice revenue growth, which will likely require acquisitions and outside financing.
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Room to run
Posted on at 11:21 am
First Trust’s chief investment officer says stocks are set to rise another 15 percent by the middle of next year. Among his best bets — with the caveat that you have to be pretty contrarian — are health care stocks.
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Pinnacle, America Service big gainers
Posted on November 16, 2009 at 1:13 pm
A good number of Middle Tennessee’s public companies are on track to gain about 3 percent today, but two names are outpacing them and the broader market. Shares of Pinnacle Financial Partners (Ticker: PNFP) are up some 7 percent while America Service (Ticker: ASGR) is 5.5 percent higher. Both stocks are now at their highest levels in about two weeks.
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Avondale: Genesco cream of the footwear crop
Posted on at 8:22 am
David Turner at Avondale Partners has conducted the channel checks and says athletic clothing sales are lagging big time. But the so-called “black/brown/casual” sector showed third-quarter growth of more than 4 percent, which plays right into the hands of Nashville-based Genesco, Turner’s only outperform-rated stock (Ticker: GCO).
Our street-high Q3′10 (current quarter) EPS estimate of $0.46 is now visible, in our opinion, as is Q4, the company’s highest volume quarter. If our secular thesis is to be believed, more upside remains to GCO’s earnings.
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Dollar General’s map of the future
Posted on November 13, 2009 at 10:29 amNewly public Dollar General (Ticker: DG) plans to open 600 stores per year for the foreseeable future, but CEO Rick Dreiling says new markets — including all of the West Coast — will only account for a tenth of that. There’s plenty of fruit still on the trees in states where the company already operates.
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HealthSpring a value from the bottom up
Posted on November 12, 2009 at 12:20 pmThe analysts at Zacks say Franklin-based HealthSpring scores well on a screen that emphasizes cash flow. The health insurer (Ticker: HS) is on track to spin off more than $150 million in cash from operations this year.
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A second look at Dollar General’s high valuation
Posted on November 11, 2009 at 9:44 am
Pali Research analysts Stacey Widlitz and Brandon Ross say Dollar General has earned its higher valuation over its main peers by virtue of strong execution, a better private-label program and more aggressive growth plans. They also expect strong per-share profit growth due in large part to the paying down next year of some $600 million in debt.
However — you kinda knew that was coming, no? — the Goodlettsville-based retailer’s pending IPO looks set to value the company a third higher than Family Dollar and Dollar Tree. And that is a bit much if you’re looking for more gains, say Widlitz and Ross. Seems like Dollar General has quite simply done too good a job over the past few years.
DG is highly exposed to consumables which have been a tailwind for the past two years. However, that means the company is less exposed to a turn. DG has also completed most of the “hard work” in its turnaround story… We would rather own a name … that has upside as a result of initiatives that are early in the game and should drive EPS upside in 2010.
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Analyst actions: Gaylord, SunTrust
Posted on November 10, 2009 at 10:56 amThe very empirical stock-picking model at TheStreet.com has downgraded shares of Gaylord Entertainment after the hotel company’s third-quarter earnings report. Gaylord (Ticker: GET) has tripled the S&P 500’s year-to-date gain.
At BMO Capital Markets, senior analyst Lana Chan has raised her rating on SunTrust Banks, saying “capital ratios are solid and there were further positive signals on credit quality in the third quarter.” She now rates SunTrust (Ticker: STI) at ‘outperform.’
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Fortress gets its price
Posted on at 9:01 am
But the majority owner of Brookdale Senior Living didn’t get as much as it could have just a few weeks ago. The Chicago-based private-equity group will sell 11 milion shares at $16, a fifth lower than where the stock (Ticker: BKD) traded in the middle of October.
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Local money manager fights REIT on preferred buyback
Posted on November 9, 2009 at 10:07 amNashville investment vehicle Southern Strategic Partners says it and other holders of Newcastle Investment Corp. preferred stock aren’t getting a fair deal in the real estate investment trust’s $150 million repurchase plan. Newcastle (Ticker: NCT) has been posting some pretty ugly results of late and is looking to restructure its balance sheet.
“While we could be supportive of a restructuring of Newcastle, we cannot support the current proposal because it fails to recognize the preferred stock’s priority position in the capital structure and does not offer preferred stockholders common stock or warrants to purchase common stock as part of the tender.”
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You don’t absolutely have to get into Dollar General at its IPO price
Posted on November 6, 2009 at 12:57 pmBut it sure will help your portfolio if you do… Jutia contributor Brandon Clay says the Goodlettsville-based retailer likely won’t trade at a discount to Wal-Mart long after it goes public.
It’s a cash cow so long as the debt load can be managed and eliminated.
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