WALL STREET JOURNAL: Long Island, NY’s Astoria Financial Corp (AF) has found a novel way to reduce the number of its nonperforming loans by changing its internal policy on when mortgages are classified on its books as troubled, the Wall Street Journal reported. By counting home loans as non performing when the borrower misses at least three payments, not two, Astoria reduced its non-performers to $69M from $106M in three months… The Wall Street Journal also reported that the indictments of Matthew Tannin and Ralph Cioffi, two former Bear Stearns hedge-fund managers, are expected to cite a personal e-mail suggesting the funds were “toast,” four days before they told investors they had little to worry about. JP Morgan (JPM) has said it will cover the legal costs of the fund managers…Hewlett-Packard (HPQ) is set to reorganize its printer unit. The Wall Street Journal said that the unit’s five business units will be cut down to three to become more efficient at adapting to a marketplace in which consumers are relying less on printing…FINANCIAL TIMES: According to people close to the situation, Anheuser-Busch’s (BUD) board of directors is planning to meet this week to discuss the $46B bid from rival brewer InBev…
The Bear Stearns case: When a hedge fund is secretly called “toast”-WSJ
The case against two soon to be indicted former Bear Stearns hedge fund managers, Matthew Tannin and Ralph Cioffi, may hinge on an email between them that said they thought the hedge funds were in trouble all the while presenting a positive united front to investors, reports the Wall Street Journal. Now owned by J.P. Morgan Chase (JPM), the Bear executive’s email described the bond securities they invested in–the High-Grade Structured Credit Strategies Fund and a similar fund–as “toast,” and it eventually cost investors $1.B, helping to set off the worldwide credit crisis.
3G iPhone suppliers expected to see revenue increases-DigiTimes
According to a report in Chinese-language Commercial Times, Taiwan component suppliers of Apple’s (AAPL) 3G iPhones are expected to, beginning in the third quarter of this year, see their revenues strengthen substantially. Sources at component suppliers indicated that total shipments of the iPhones are likely to top 10M units in Q3.
New wave of offshore drilling-NY Times
Alberto Guimaraes, an executive at Petrobas (PBR), says, “Almost 100 percent of the oil companies are constrained in their investment program because there is no rig available.” As a result drilling costs have soared and created a boom of drill-ship construction. This could lead to renewed offshore oil exploration that would bring more supplies to the oil market and push prices down.
AAPL’s iTunes Store tops over 5B songs sold.
POT: Estimates and price target raised@RBCM
RBC Capital raised POT 2008 EPS estimate to $12.26 from $9.83 and 2009 to $21.33 from $15.02 based on higher fertilizer assumptions. Target to $340 from $300. Shares are Outperform rated.
ICE: See buying opportunity at current levels@JPMS
JP Morgan thinks now is a good time to put new money into ICE as they believe volumes are very strong and that ICE Clear Europe will drive consensus estimates higher. The firm thinks the political risks are manageable and reiterates an Overweight rating with a $180 target.
Agriculture: Estimates and price targets adjusted for CF, MOS, and POT@FBCO
Credit Suisse expects higher fertilizer demand on a global basis for 2009. The firm lowers CF 2008 EPS to $14.02 from $14.62 due to higher natural gas and sulfer prices but raises 2009 EPS to $18.18 from $14.21 on higher nitorogen and phosphate prices. CF target to $180 from $165. For MOS, the firm lowered 2008 EPS estimate to $4.29 from $4.50 on higher natural gas and sulpher prices and raised 2009 to $11.60 from $8.02 on phosphorous and potash prices. MOS price target to $195 from $1.55. Lastly, POT 2008 EPS estimate was raised to $11.30 from $10.50 and 2009 EPS to $19.13 from $12.00 on stronger potash, phosphorous, and nitrogen prices. POT target to $280 from $210.
GOOG: comScore data shows fractional market share gains@PIPR
Piper notes comScore Google market share in May increased sequentially from 61.6% to 61.8%. They expect market gains to continue and maintain a Buy rating on the stock.
MON to acquire Semillas Cristiani Burkard
Monsanto Company has agreed to acquire Marmot, S.A., which operates Semillas Cristiani Burkard, a privately-held seed company headquartered in Guatemala City, Guatemala. Once completed, the acquisition will build on Monsanto’s corn business leadership and enable it to offer farmers in Central American countries broader access to corn seed varieties. The transaction will be completed as soon as practical. Additional terms of the agreement were not disclosed.
GOOG July volatility Elevated at 40 into EPS & Outlook
GOOG closed at $562.38. GOOG is expected to report Q2 EPS in early July. Smith Barney reiterated its Buy rating and $630 price target on GOOG today.
