Friday, February 09, 2007

News Corp Business Channel Business Friendly?

News Corp (NYSE:NWS) controlling shareholder Rupert Murdoch claims that the about to be launched Fox business channel will be more business friendly than the GE (NYSE:GE) controlled CNBC offering. Mr. Murdoch feels that CNBC jumps on every scandal.

Many investors feel that there have been a lot of scandals and therefore a lot of news stories about scandals. It becomes a circle. The financial equivalent of the “if it bleeds it leads” approach to television news is well entrenched.

I am sure we will all watch the new channel for some time. (At least one or two earnings cycles) A news medium needs to provide critical evaluation or it risks just becoming another corporate mouth piece. The investment community talks amongst itself constantly. You cannot shut us up. In the internet age with the democratization of information and investing another top down information source does not bode well. The investment community is not waiting for Rupert Murdoch's view on any particular investment.

The one area that I would like the media to improve is to provide more emphasis on total corporate reporting rather than just a fixation of earnings and guidance. Cover the labor situation, supply chain issues, marketing challenges and so on rather than just chasing the headline and tut tuting the very latest. But that is called research. Can business television with an implicit attention deficit disorder really achieve this? This will not be a major profit contributor for News Corp.

Thursday, February 08, 2007

Toyota and Maybe Subaru?

Toyota (NYSE:TM) may benefit from a subtle change in Japanese domestic anti trust regulations. At this point Japanese regulators prohibit any one entity from controlling more than 50% of the domestic market. Starting in April autoblog reports that the regulation will be changed from domestic to international market share.

How Japanese regulators plan to impose their will on non Japanese activities remains to be seen. But this new influence may explain some convoluted behaviour on the part of Japanese manufacturers.

In the meantime it has been suggested that Toyota will buy Subaru. In Japan the combined entity would be uncomfortably close to the 50% rule. Subaru is currently owned by Fuji Heavy Industry (FJHY.PK). General Motors (NYSE:GM) held a 20% stake until Oct 06. Toyota has purchased an 8.7% stake and has under taken a variety of joint ventures with Fuji.

Wednesday, February 07, 2007

Nabors Insiders Load Up

Nabors Industries (NYSE:NBR) announced excellent Q4 and year end results. Q4 income was up 34%. Gene Isenberg, Nabors' Chairman and CEO, commented on the Company's results.

"Our results for 2006 set all-time records in virtually every financial and operational metric….Most importantly, Nabors generated opportunities to increase its average capital employed by $1.75 billion during the year, maintaining a 22% return which should underpin future growth.”

The press release went on to say

“Our International operations are beginning to demonstrate the extraordinary upside we have been anticipating as existing contracts roll-over at much higher current market rates and a large volume of contracted and prospective new rig requirements materialize.”

The press release was very up tone and positive. Considering that Nabors literally started the year with a rather pessimistic guidance complaining about Canadian and lower 48 operations the expectations seemed to have turned around dramatically. Now the press release points out how well operating segments are doing. Any mildly negative news is considered to be mitigated by other factors so it will all be good.

But wait look at insider trading as reported by Yahoo Finance. Exactly one week ago on Jan 31, 2007 the Chairman & CEO Gene Isenberg purchased approximately 700,000 shares worth about $21 million. On exactly the same day Anthony Petrello COO purchased approximately 468,0000 shares worth about $14 million. The acquisitions are valued at $30.28 and carry non open market designations.

Have we aligned shareholder and management interests? Or did the boys just decide to step on the gas and power up the valuation?

Tuesday, February 06, 2007

Dell Next 100 Days

Dell (Nasdaq:DELL) Michael Dell is back in the saddle. Kevin Rollins is riding off being blamed for the past three years of disappointments. Kevin Rollins had his hands on the steering wheel. But Michael Dell was the Chairman for the same time. The Chairman and Board are there to provide direction. (Directors Direction get it?) After three years you have to believe that Kevin Rollins is not the only ultra senior person responsible for all this.

Michael Dell’s famous Friday email is like Winston Churchill rallying the British after the fall of France. We will fight them on the beaches and so on.

Other than the promise to fight like hell nothing has been offered. Focusing on efficiency is not enough.

The first hundred days will let investors know if they have something. If the announcements are not sufficiently product innovative and credible than Dell will become an efficient product aggregator but not leader.

I figure Lenovo (LNGVY:PK ADR) must be watching carefully and smacking their lips. They cannot be happy with their very small North American market share. Acquisitions or joint ventures anyone?

Monday, February 05, 2007

Pitney Bowes Still Does Not Have It

Pitney Bowes (NYSE:PBI) released impressively improving numbers. Q4 income from continuing operations is up a whopping 95%. Earnings per diluted share are up 101%. The stock is trading close to its 52 week high. It is also trading near its five year high. So is this the breakout onto new heights.

Consider the following

US Mail EBIT revenue was flat on the year as was revenue. International Mail revenue grew 10% but EBIT revenue retreated by 2%. Together these two categories account for 60% of revenues. They will also continue to dominate in the same fashion well into the foreseeable future.

The company's Chairman and CEO Michael J. Critelli points to “strategies to expand into higher growth segments throughout the mailstream have solidly positioned us to take advantage of the stability, flexibility, technology and partnerships that postal reform will bring. We are focused on the many growth opportunities available to us and committed to providing end-to-end, integrated mailstream solutions for our customers."

These strategies need to kick in now. While postal reform was probably long overdue no other significant company with sophisticated distribution systems is pointing to anticipated efficiencies. Therefore why will Pitney Bowes be making more money by delivering products and services based on this change?