Featured Articles

Financial Services

XL Capital: Short Interest Poised to Drop – Will the Stock Pop?

About: XL

XL Capital is a company that the market loves to hate. Its stock price has plummeted by 94% over the last twelve months, mainly over concerns about its investment portfolio. The stock could tick up a bit in connection with the unwinding of hedges related to forward share purchase contracts that settle on February 17th. The company’s fourth quarter earnings call on February 11th could also bring positive news that lifts share prices, perhaps accelerating the hedge unwinds, and potentially leading to further short covering….. View Full Article


Reinsurer Stocks: A Fear-Driven Market Creates Opportunity

About: ACE, AXS, PRE, VR, XL

Catastrophes both natural and man-made have been hitting reinsurance companies, but the outlook is good. Shares have recently retested their lows as the dysfunctional capital markets – especially for mortgage- and asset-backed securities – overshadow improving fundamentals for the group. This has created opportunity for the intrepid value investor…. View Full Article

(Skip to sections on ACE, AXS, PRE, VR or XL)


AIG’s Bond Sale is No Cause to Celebrate

About: AIG

The latest installment of the AIG “Bailout” is not the good news that one might imagine from reading AIG’s press release. It does not provide as much financing as originally anticipated. More importantly, it is a reminder that, so far, the U.S. government has done much more to minimize losses for AIG’s counterparties than to maximize value for AIG…. View Full Article


AIG’s Bailout Needs a Bailout:
A $150 Billion Problem

About: AIG

AIG could hardly support its pre-bailout debt, let alone an additional $115 billion of debt and dividend-bearing preferred stock. For AIG’s balance sheet to be healthy again, leverage needs to come down by approximately $150 billion. It appears unlikely that this can be achieved through asset sales. AIG needs more immediate attention, and the company’s franchise value erodes each day that a permanent fix is delayed…. View Full Article

Restaurants & Retail

Jamba Inc. – New CEO Gives Company a Boost

About: JMBA

The market’s valuation of Jamba Inc. (JMBA) seems to reflect a consensus view that this chain of 729 smoothie stores will not survive. After a review of JMBA’s fourth quarter and full-year 2008 results, and several calls with management, I disagree. I predict that this company will not only survive but thrive…. View Full Article

See prior articles on Jamba Inc.:

Private Equity Group Takes Stake in Jamba

Jamba Juice Should Bear Fruit by Mid-2009



Consumer Products

Cott Corp. to Lose Wal-Mart Exclusive

About: COT

Cott Corporation announced that Wal-Mart has decided to terminate its existing 10-year old exclusive supply agreement for carbonated soft drinks. While the ultimate outcome is unclear and discussions between Cott and Wal-Mart are reported to be ongoing, this is certainly not good news for Cott. Wal-Mart represents 35%-40% of Cott’s sales. If Wal-Mart were to move its business to other suppliers, Cott could have difficulty servicing its debt…. View Full Article

See prior articles on Cott:

Mysterious Silence from Cott Corporation

Cott Corp. – Could go Far, But Somebody Needs to Grab the Wheel



Technology

JDA Software: Outlook Improves as Pipeline Grows

About: JDAS

JDA Software Group, Inc. (JDAS) reported its first quarter earnings on April 20th. Particularly notable on the earnings call was management’s renewed confidence in the company’s sales pipeline. I am keeping my 12-month price target at $18.00, but I have more confidence in this figure now, and believe there is more upside than downside…. View Full Article

See prior articles on JDA:

JDA’s Retrade is Justified

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