Archive for December 27th, 2007

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Computer Conferencing for 2008Begin out 2008 with a business bang! Get free on the internet tools to help in each day and long-term technology chores. Here are some recommendations for the best free small business tools available for a 2008 launch for your business.

Keep track of your software licenses
Each time you buy a Microsoft Office or Windows software product, or one from Adobe (like Acrobat) or those expensive graphic suites (like CS3), you get a serial number usually attached to the CD case. After installing the software, does the box (with that critical serial number inside) wind up on a shelf somewhere? Resolve to undertake a software licensing program in 2008 and keep track of your serial numbers with a copy of those numbers off-site, perhaps on a portable USB storage device that’s password-protected. Use a spreadsheet and note the software title, date and place of purchase, serial number, on which personal it was installed and where the original or backup copy is. Reasonably-priced shareware is here and some free apps are here. Check out KeyFiler, an on the web solution.

Continue reading Five Small Business Tech Resolutions for 2008

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EMC logoEMC Corporation (NYSE: EMC) stock is falling today after the company stated this morning that it has concurred to acquire Document Sciences Corp. (NASDAQ: DOCX) for $14.75 per share in cash. EMC plans to operate DOCX as a business unit within the EMC Content Management and Archiving division, hoping to strengthen its presence in the transactional content management market. The deal is expected to shut in the first quarter of 2008. If you think this stock won’t be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on TSO.

After hitting a one-year low of $12.74 in March, the stock hit a one-year high of $25.47 in October. This morning, EMC opened at $18.43. So far this day the stock has hit a low of $18.41 and a high of $18.90. As of 11:05, EMC is trading at $18.44, down $0.52 (-2.7%). The chart for EMC looks bearish and steady, while S&P gives the stock a very positive 5 STARS (out of 5) strong buy rating.

For a bearish hedged play on this stock, I would think about an April bear-call credit spread above the $25 range. A bear-call credit spread is an options position that combines the buy and sale of call options to hedge risk in case the stock doesn’t do what you think but still leverage nice returns. For this particular trade, we will make a 5.3% return in 4 months as long as EMC is below $25 at April expiration. EMC would have to rise by more than 35% before we would begin to lose money. Learn more about this type of trade here.

EMC hasn’t been above $25 for more than a few days in the past year and has shown resistance around $19.50 recently. This trade could be risky if the technology sector continues to steam ahead, but this position could be protected by resistance EMC might find at its 50 day moving average, which is currently at $21 and falling.

Brent Archer is an options analyst and writer at Investors Observer. DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that might include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in EMC or DOCX.

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EMC logoEMC Corporation (NYSE: EMC) stock is falling this day after the company stated this morning that it has concurred to acquire Document Sciences Corp. (NASDAQ: DOCX) for $14.75 per share in cash. EMC plans to operate DOCX as a business unit within the EMC Content Management and Archiving division, hoping to strengthen its presence in the transactional content management market. The deal is expected to close in the first quarter of 2008. If you think this stock won’t be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on TSO.

After hitting a one-year low of $12.74 in March, the stock hit a one-year high of $25.47 in October. This morning, EMC opened at $18.43. So far today the stock has hit a low of $18.41 and a high of $18.90. As of 11:05, EMC is trading at $18.44, down $0.52 (-2.7%). The chart for EMC looks bearish and steady, while S&P gives the stock a very positive 5 STARS (out of 5) strong purchase rating.

For a bearish hedged play on this stock, I would consider an April bear-call credit spread above the $25 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn’t do what you think but still leverage nice returns. For this particular trade, we will make a 5.3% return in 4 months as long as EMC is below $25 at April expiration. EMC would have to rise by more than 35% before we would start to lose money. Learn more about this type of trade here.

EMC hasn’t been above $25 for more than a few days in the past year and has shown resistance around $19.50 recently. This trade could be risky if the technology sector continues to steam ahead, but this position could be protected by resistance EMC might find at its 50 day moving average, which is currently at $21 and falling.

Brent Archer is an options analyst and writer at Investors Observer. DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in EMC or DOCX.

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Apple (NASDAQ: AAPL) logo Apple (NASDAQ: AAPL)’s iTunes just got a new video partner in News Corp (NYSE: NWS)’s Fox motion picture studio. The deal is the first of its kind, allowing iTunes subscribers to download Fox movies and watch them for a limited period.

According to The Wall Street Journal, “sales of video through Apple’s iTunes Store have failed to grow at the same pace as the site’s music downloads, analysts state.” So, perhaps offering rentals will be a better model than selling content outright.

But the theory makes tiny sense. Short-term rentals are unlikely to trump sales. Movies sold on iTunes cost as tiny as $9.99, a visit to the Apple site shows. How much less can a rental be? And what’s the incentive for having something that can only be used for a few days?

Nice partnership, but no reason it will increase video revenue at iTunes.

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

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When it comes to green building, I always ask one question: Does building environmentally friendly residences and commercial properties bring any benefits to developers and builders?

There’s more evidence than ever suggesting that yes, it does.

The latest bit of proof came in the form of a tip by fellow blogger Alison Kriscenski at the the environmental blog Greenerassets.com. She sent me a story from the Web site GreenerBuildings that states energy efficient buildings command higher occupancy and rental rates. At the same time, the story says, sales prices came in as much as 30 percent higher per square foot.

You can read the whole story here.

I’m always glad to read stories like this. I’ve always felt that green building will never truly take off unless developers and builders recognize some financial incentive for building energy efficient homes, office buildings and retail centers. Reports like the one on GreenerBuildings, offer more evidence that building green can, indeed, help developers boost their profits.

We might like to think that developers and builders would go green out of the goodness of their hearts, but we all know that’s not the case. If building environmentally friendly homes and commercial properties didn’t make economic sense, there’d always be only a small number of builders and developers who’d commit to green construction methods.

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In a move that may represent a victory of hope over reason, Davis Selected Advisers has disclosed that it now owns 5.1% of MBIA, Inc. (NYSE: MBI).

On paper, the stock does look cheap, and Davis could claim to be something of an expert on financial shares having just put money into Merrill Lynch & Co., Inc. (NYSE: MER). But, Merrill is almost certainly the safer bet. Its business is spread across a number of sectors of the industry, from retail brokerage to mergers and acquisitions (M&A) work. MBIA is a bond insurer in a perilous bond market. And, it is a company which faces potentially ruinous downgrades from major credit agencies.

According to TheStreet.com “Fitch stated MBIA needed to shore up $1 billion in capital in the next four to six weeks to avoid a downgrade. That’s on top of the $1 billion investment from the private-equity firm Warburg Pincus that MBIA secured earlier this month.” If mortgage-related securities write-offs continue at big banks and investment houses that $1 billion might be hard to come by, or, it could represent significant dilution for MBIA’s current shareholders. The firm’s market cap is already below $3 billion.

The Davis investment looks like a loser, at least in the short term. MBIA shares are down by two-thirds from their 52-week high. A downgrade of its “AAA” rating by a bond agency would seem possible, if not probably.

Davis may have to sit on its MBIA shares for a very long time.

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

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Alcoa has agreed to sell its packaging and consumer businesses to New Zealand’s Rank Group Limited for $2.7 billion, the company announced Wednesday. Alcoa (NYSE: AA)’s shares gained 37 cents to $37.38 in Wednesday afternoon trading.

Alcoa’s packaging / consumer unit generated about $3.2 billion in revenue and $95 million in after-tax operating income in 2006, or about 3% of operating income, the company said.

Alcoa said it’s also seeking to sell its Reynolds Wrap, consumer products, flexible packaging, and plastic / aluminum packaging closure units in order to more fully concentrate on its mining / aluminum production business.
Stock Analysis: Alcoa, which has been the subject of seemingly continual takeover talk, says the Rank transaction furthers its goal of concentrating on its core business. The proof will be AA’s Q4 2007 and 2008 earnings, and until it consistently exceeds EPS consensus estimates — the Reuters F2007/F2008 EPS estimates for AA are $2.64/$3.09 — it remains in yours truly’s Don’t Buy category.

DISCLOSURE: Joseph Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds and cash certificates of deposit.

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General Electric (NYSE: GE) and Merrill Lynch (NYSE: MER) announced a deal Monday, which will result in GE picking up most of Merrill’s commercial finance business.

The deal is expected to be completed during the first quarter of 2008, and will add an estimated $10 billion plus in assets to GE Capital. Merrill has been hit pretty hard this year with the subprime mortgage mess, and this deal will result in around $1.3 billion worth of capital that the company will be able to allocate elsewhere.

Merrill, which announced a big $8.4 billion worth of write downs back in October is in the middle of what it is calling a “strategic focus on divesting non-core assets.” This sale is beneficial to Merrill because the firm’s commercial-lending business has become reliant on companies that do not posses investment-grade credit ratings and pose a financial risk that Merrill does not need to be assuming, especially after Merrill’s current write down.

Included in this deal will be Merrill Lynch Capital’s corporate, equipment, energy and healthcare finance units. Merrill’s commercial real estate finance unit, however, will not be included.

This was not the only piece of news this day regarding Merrill Lynch announced on Monday. The company also announced that it would be getting a nice $6.2 billion cash infusion from Singapore’s Temasek Holdings and Davis Selected Advisors LP.

In this other deal, Temasek will be laying out $5 billion for a less than 10% stake in the company, and Davis will be Advisors will be purchasing another $1.2 billion lot of the company’s stock.

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

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News Corp (NYSE: NWS) stated it will sell Salt Lake City-based KSTU Channel 13 and seven other Fox-affiliated televisions stations to Oak Hill Capital Partners for $1.1 billion, the Associated Press reported Wednesday. In May 2007, Oak Hill purchased nine television stations from The New York Times Co. (NYSE: NYT) for $575 million.

News Corp’s shares gained 5 cents to $21.47 on the news in Wednesday morning trading.

Alan Daniak of Anderson & Associates told BloggingStocks Wednesday that the deal should help rebuild News Corp.’s cash component, following the buy of Dow Jones.

“It’s a significant cash infusion for News Corp. KSTU was a strong revenue holding but News Corp. could benefit from the added cash after the Dow Jones deal, so it makes considerable sense,” Daniak said. “And the deal also speaks to the fact the News Corp. is committed to selling lower-profile, smaller affiliate stations to concentrate on core markets.”

Earlier this year News Corp. agreed to purchase Dow Jones, including The Wall Street Journal, for $5.2 billion.

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National Oilwell Varco (NYSE: NOV) logo CNN/Money is good enough to put out the top performing stocks of 2007 list. Most of the companies are fairly familiar, but leading the pack for the S&P 500 is National Oilwell Varco (NYSE: NOV), a stock almost no one has heard of.

The company has been in the right place at the right time. It makes equipment for the oil and gas exploration industry. With the global need for energy rising, NOV is a near-perfect investment.

The firm is not only growing due to a strong industry environment. It is also making what Wall Street thinks are some smart acquisitions. It announced it would buy oilfield service company Allow Prideco (NYSE: GRP) for $7.4 billion in cash and stock. Because the companies are in similar fields, chances are the duplicate costs can be taken out to improve operating margins.

In the September quarter, NOV net income doubled to $366 million, which beat analyst estimates. Backlog for its products also hit a record.

But, the success of National Oilwell Varco points out that in the market, it is superior to be lucky than good. The odds that the company could have done so well if oil were at $30 a barrel are probably low. The demand for exploration would be substantially less. The need for drilling equipment would be modest.

National Oilwell Varco had a great year. If oil prices move down, Wall Street should not count on it again.

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

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