tag:blogger.com,1999:blog-71248822024-03-07T19:47:48.655-08:00The urge to mergeProfiting from the M & A boom ...Guruhttp://www.blogger.com/profile/04233962331458054909noreply@blogger.comBlogger511125tag:blogger.com,1999:blog-7124882.post-50005993809379158022008-05-12T01:27:00.000-07:002008-05-12T02:19:32.637-07:00A note on the slower blog updatesI am sure most of you have noticed a slowdown in the posting frequency on this blog. I don't have the normal excuse - <b>too much work</b>. Rather it is the opposite - I am having <b>too much fun</b>.<br /><br />With the intent to travel for a year or two, I set out in late October 2007. For the last few months I have been traveling in <a href="http://www.flickr.com/photos/gurumlore/collections/72157603622635577/"><b>India</b></a> and <a href="http://www.flickr.com/photos/gurumlore/sets/72157603788672959/"><b>Sri Lanka</b></a>.<br /><br />This week I head out to <b>S.E Asia</b>, and will be there for a few months. I intend to cover <b>Bali</b>, a bit of <b>Malaysia</b>, <b>Vietnam</b>, a lot of <b>Thailand</b> and will also likely venture into <b>Cambodia</b>, <b>Laos</b> and <b>Timor</b>. If I am still left with any energy, I head to <b>Hong Kong</b> and <b>Singapore</b>. And finally, if I am still alive (mentally) by then, I hope to get to <b>China</b> & <b>Macau</b>.<br /><br />I do intend to keep blogging, but only major takeovers will feature here. I am making notes on all the smaller takeovers, and I may do a longer post covering them later.<br /><br />Meanwhile, if you are headed to the same part of the world I am going to, let me know. We can meet, and the beer is on me!Guruhttp://www.blogger.com/profile/04233962331458054909noreply@blogger.com0tag:blogger.com,1999:blog-7124882.post-72355935408117952972008-05-10T23:34:00.000-07:002008-05-11T00:48:11.129-07:00Hit #189 (Safeco)Insurer <b>Safeco (<i>SAF</i>)</b> is being acquired by <b>Liberty Mutual</b> for around <b>$6 billion</b> in an all cash deal. The <b>$68.25/share</b> offer represents a gain of <b><font color="green">84.3%</font></b> over my cost of <b>$37.04</b>.<br /><br />I first came across <i>Safeco</i> via my auto-insurance agent, and ended up as a customer for a while. It looked like a safe investment for the really long term, and hence I had bought into it in a small way.<br /><br />Another investment, that in <b>21st Century</b>, also happened in a similar way. I was a very happy auto-insurance client for a few years, and the insider buying had made me buy the stock in decent numbers. <b>21st Century</b> was bought by <b>AIG</b> recently (see <a href="http://urgetomerge.blogspot.com/2007/05/hit-166-21st-century.html">Hit #166</a>) helping me recover some part of my premium payments over the last few years.<br /><br />The insurance sector still looks very attractive, with large insider buying showing up recently. <b>AIG</b> itself, having been hammered lately by the fallout of credit crisis, is a good long-term investment for buy-and-holders. Other insurers like <b>Progressive (<i>PGR</i>)</b>, <b>Meadowbrook (<i>MIG</i>)</b>, <b>Amerisafe (<i>AMSF</i>)</b>, <b>Zenith (<i>ZNT</i>)</b>, <b>AmComp (<i>AMCP</i>)</b>, <b>Allstate (<i>ALL</i>)</b>, <b>Seabright (<i>SEAB</i>)</b>, <b>Arthur J. Gallagher (<i>AJG</i>)</b> etc are also good, though more speculative, buys. More consolidation is set to follow in this sector. <br /><hr/>Previous hit - <a href="http://urgetomerge.blogspot.com/2008/04/hit-188-audible.html">Audible (#188)</a>Guruhttp://www.blogger.com/profile/04233962331458054909noreply@blogger.com0tag:blogger.com,1999:blog-7124882.post-46719222043558484732008-04-10T23:05:00.000-07:002008-04-10T23:18:27.254-07:00Hit #188 (Audible)Late in January, <b>Amazon</b> agreed to buy <b>Audible (<i>ADBL</i>)</b> for <b>$300 million</b>. The cash offer, of <b>$11.5/share</b>, makes for a gain of <b><font color="green">9.6%</font></b> over my average cost of <b>$10.49</b>.<br /><br />The offer price is low given <i>Audible</i>'s leadership position, and its loyal customers (I know a few of them). Why didn't they fight for a better offer ?<br /><br />I had invested part of the proceeds from <i>Engelhard</i>'s sale (see <a href="http://urgetomerge.blogspot.com/2006/07/redeploying-engelhard-takeover.html">post</a>) into <i>Audible</i>. In the same post I had mentioned <i>Apple</i> or <i>Yahoo</i> as likely buyers. <i>Amazon</i> came as a surprise. <br /><br />Another <a href="http://urgetomerge.blogspot.com/2006/04/hog-havens_114587069492758819.html">post</a> I did earlier, on investing prospects related to increased bandwidth demand, also mentioned <i>Audible</i> as a candidate.<br /><hr/>Previous hit - <a href="http://urgetomerge.blogspot.com/2008/04/hit-187-millenium-pharma.html">Millenium (#187)</a>Guruhttp://www.blogger.com/profile/04233962331458054909noreply@blogger.com0tag:blogger.com,1999:blog-7124882.post-16332740942977820662008-04-10T10:14:00.000-07:002008-04-10T10:28:51.525-07:00Hit #187 (Millenium Pharma)Japan's <b>Takeda</b> is buying <b>Millenium Pharmaceuticals (<i>MLNM</i>)</b> for <b>$8.8 billion</b> in a cash deal. The <b>$25/share</b> offer makes for a gain of <b><font color="green">43.8%</font></b> over my average cost of <b>$17.38</b>.<br /><br /><i>Takeda</i> had indicated earlier (see <a href="http://urgetomerge.blogspot.com/2005/09/japan-followup.html">post</a>) that it was looking to buy. Also, when <i>Pharmion</i> was acquired (see <a href="http://urgetomerge.blogspot.com/2007/11/hit-183-pharmion.html">Hit #183</a>), I had mentioned <b>Millenium</b> though I saw it more as a buyer than a target then.<br /><br />While on this sector, I would recommend <b>Amgen (<i>AMGN</i>)</b> as a long-term value buy. The stock bumped higher today following the <i>Millenium</i> news, but still remains attractive to buy-and-holders. <b>OSI Pharma (<i>OSIP</i>)</b> and <b>Biogen (<i>BIIB</i>)</b> are also worth watching.<br /><hr/>Previous hit - <a href="http://urgetomerge.blogspot.com/2008/02/hit-186-asv.html">ASV (#186)</a>Guruhttp://www.blogger.com/profile/04233962331458054909noreply@blogger.com0tag:blogger.com,1999:blog-7124882.post-88061909622059332852008-02-17T22:14:00.000-08:002008-02-17T22:25:06.430-08:00Hit #186 (ASV)Construction vehicle maker <b>A.S.V (<i>ASVI</i>)</b> is being acquired by <b>Terex</b> in a <b>$488 million</b> cash transaction. The <b>$18/share</b> offer translates into a gain of <b><font color="green">28.9%</font></b> over my average cost of <b>$13.96</b>.<br /><br />I had mentioned <i>ASV</i> in an earlier <a href="http://urgetomerge.blogspot.com/2007/08/hit-180-united-rentals.html">post</a> pointing out that it made the <i>most promising bet</i> in the sector. <br /><br />Construction activity, residential as well as commercial, has slowed down dramatically. This has caused severe pullbacks in most stocks related to the sector. For long-term investors this has created good entry points. I would recommend buying and holding <b>Terex (<i>TEX</i>)</b>, <b>CNH Global (<i>CNH</i>)</b>, <b>Caterpillar (<i>CAT</i>)</b> and <b>Kubota (<i>KUB</i>)</b>.<br /><hr/>Previous hit - <a href="http://urgetomerge.blogspot.com/2008/01/hit-185-checkfree.html"> CheckFree (#185)</a>Guruhttp://www.blogger.com/profile/04233962331458054909noreply@blogger.com0tag:blogger.com,1999:blog-7124882.post-52882325550264192932008-01-13T23:13:00.000-08:002008-01-13T23:25:49.643-08:00Hit #185 (CheckFree)Online payment services provider <b>CheckFree (<i>CKFR</i>)</b> was acquired by <b>FiServ (<i>FISV</i>)</b> for <b>$4.4 billion</b> in cash. The <b>$48/share</b> offer translates to a gain of <b><font color="green">42.4%</font></b> over my average cost of <b>$33.7</b>.<br /><br />I had mentioned <i>CheckFree</i> as a target when it bought <i>Corillian</i> (<a href="http://urgetomerge.blogspot.com/2007/02/hit-144-corillian.html">Hit #144</a>) earlier. In the same post I had mentioned <b>S1 (<i>SONE</i>)</b> as a potential target. While it still remains a target and fairly priced, recent heavy selling by insiders does not invoke confidence.<br /><br />For long-term buy and holders <b>FiServ</b> would be a good buy, though I would recommend waiting for a better entry point.<br /><hr/>Previous hit - <a href="http://urgetomerge.blogspot.com/2008/01/hit-184-printronix.html"> Printronix (#184)</a>Guruhttp://www.blogger.com/profile/04233962331458054909noreply@blogger.com0tag:blogger.com,1999:blog-7124882.post-43660096049262750102008-01-13T22:54:00.000-08:002008-01-13T23:22:55.429-08:00Hit #184 (Printronix)Enterprise printing solutions company, <b>Printronix (<i>PTNX</i>)</b>, was acquired by <b>Vector Capital</b> for <b>$108 million</b>. The cash offer of <b>$16/share</b> is a tiny premium of <b><font color="green">6%</font></b> over my average cost of <b>$15.81</b>. Without the dividends along the way, the absolute gain would have been closer to zero.<br /><br />Beaten down <b>Presstek (<i>PRST</i>)</b> would be another bet in this year, though a risky one with the ongoing SEC inquiry. <b>Xerox (<i>XRX</i>)</b> and <b>Lexmark (<i>LXK</i>)</b> are good turnaround stories, with the former being very attractive now.<br /><br />Outsourced printing solutions provider <b>VistaPrint (<i>VPRT</i>)</b> is a growth/momentum play. Like <i>Kinko's</i> earlier, it would be acquired by a larger office solutions company.<br /><br />Veering further away, into <b>3D printers</b>, both <b>Stratasys (<i>SSYS</i>)</b> and <b>3D Systems (<i>TDSC</i>)</b> are avenues to bet on a new and growing market. The former has seen some strong insider buying lately.<br /><hr/>Previous hit - <a href="http://urgetomerge.blogspot.com/2007/11/hit-183-pharmion.html"> Pharmion (#183)</a>Guruhttp://www.blogger.com/profile/04233962331458054909noreply@blogger.com0tag:blogger.com,1999:blog-7124882.post-5270520892158017482007-11-24T00:10:00.000-08:002007-11-24T00:23:39.638-08:00ING makes a good moveMy favorite broker, <a href="http://www.sharebuilder.com">Sharebuilder</a>, is being acquired by <b>ING</b>. <i>Sharebuilder</i> wasn't public, and its growth over the last few years has mostly gone unnoticed.<br /><br />With its features directed at long-term investors, <i>Sharebuilder</i> is the perfect vehicle for betting on growth or takeover targets. I had mentioned it in a couple of very early posts, one on <a href="http://urgetomerge.blogspot.com/2004/09/on-discipline.html">investing discipline</a> and the other on the eternal question of <a href="http://urgetomerge.blogspot.com/2004/05/beating-market.html">beating the market</a>. I have influenced at least a dozen people to sign up with <i>Sharebuilder</i>. Despite its steady growth one concern that occasionally surfaced was a lack of a prominent financial house backing it. That is now solved. Who better than <i>ING</i> to ensure <i>Sharebuilder</i> remains committed to small investors. <i>ING</i> showed the way with its high-interest accounts even as other banks were fleecing customers. Hopefully, <i>ING</i> would be able to bring investing costs at <i>Sharebuilder</i> further down.<br /><br />There are still ways in which <i>Sharebuilder</i> can improve in terms of its offerings. For example, there is no way right now to request automatic dividend reinvestment for particular stocks instead of for the whole account (<i>Schwab</i> allows it). In addition, there is no graphical display of performance of a portfolio against some index (<i>FolioFN</i> has such a feature). But more importantly, none of the brokerages seem to get <i>gain & loss</i> calculations or tax optimization right, even when some of these are handled via an external service. I would rather have somebody like <a href="http://www.cakefinancial.com">Cake Financial</a> handle it for all brokerages. Hopefully, they can handle such simple and regular events like <i>splits</i>, <i>spinoffs</i>, <i>renaming</i> and <i>dividend/capital distribution</i> right!Guruhttp://www.blogger.com/profile/04233962331458054909noreply@blogger.com0tag:blogger.com,1999:blog-7124882.post-27374706824079784542007-11-21T01:16:00.000-08:002007-11-21T01:45:23.638-08:00Hit #183 (Pharmion)<b>Pharmion (<i>PHRM</i>)</b>, a pharmaceutical company with focus on cancer, is being acquired by its larger partner <b>Celgene (<i>CELG</i>)</b> for <b>$2.9 billion</b>. The part cash / part stock offer comes to <b>$72/share</b>, a gain of <b><font color="green">299%</font></b> over my average cost of <b>$18.06</b> when I bought shares a bit more than a year ago.<br /><br />I intend to hold onto the <i>Celgene</i> shares that I get in this deal. <i>Celgene</i> has the potential to grow substantially, and the presence of recent insider buying is encouraging. Despite its size <i>Celgene</i> could itself be a target down the road.<br /><br />I had bought <i>Pharmion</i> shares in my <i>self-managed IRA</i> portfolio. Some of you have asked me for a larger list of what I hold in that account. I will publish the list of major holdings in that portfolio soon.<br /><br />For those interested in trivia - among <i>Pharmion</i>'s important products is <b>Thalidomide</b>, sold under <i>Thalomid</i>. Yes, it is the same <a href="http://en.wikipedia.org/wiki/Thalidomide"><i>Thalidomide</i></a>, which happens to be effective in some cancers. The rationale behind the name <i>Thalomid</i> can be read in one of the books I had mentioned in an earlier <a href="http://urgetomerge.blogspot.com/2006/02/another-reading-update.html">post</a> - <a href="http://www.amazon.com/Inside-FDA-Business-Politics-Behind/dp/0471610917/ref=pd_bbs_sr_1/103-4954874-7175022?ie=UTF8&s=books&qid=1184992864&sr=1-1"><b>Inside the FDA</b></a>.<br /><br />Another player to watch is <b>Millenium (<i>MLNM</i>)</b>. Though more likely to be a buyer at this moment, it could also turn into prey. I would like to see more insider buying or a much better valuation before adding to my existing small position.<br /><hr/>Previous hit - <a href="http://urgetomerge.blogspot.com/2007/11/hit-182-business-objects.html"> Business Objects (#182)</a>Guruhttp://www.blogger.com/profile/04233962331458054909noreply@blogger.com0tag:blogger.com,1999:blog-7124882.post-69389951574627773922007-11-19T18:36:00.000-08:002007-11-19T22:34:57.461-08:00It is time to buyBack in <i>February</i> I had <a href="http://urgetomerge.blogspot.com/2007/02/everybody-panic-now.html">written</a> that it was <i>time to panic</i>! Ten months later it feels like the whole nation has heeded that call. Even permanent optimists like <i>BusinessWeek</i>, <i>Economist</i> and <i>Money</i> magazines have turned into bearers of <i>gloom and doom</i> this week.<br /><br />For contrarians, this is the time to start buying. As with buying anything where the value is set by others, one should be prepared to buy at better prices, but many sectors, from <i>financials</i> to <i>retail</i> have bargains now for long-term investors. Stocks of companies like <b>Citigroup</b>, <b>Moody's</b>, <b>Starbucks</b>, <b>Lowe's</b>, <b>Zions Bancorp</b> are trading as if we are headed for a <b>depression</b>. While it is possible that we are about to see <i>1929</i> all over again, odds are that we are seeing a market overreaction at the extremes. The chances of a depression are real, and definitely a bit higher than what one would have guessed a couple of years ago, but the worst we will see is a prolonged (2-3 years), hard recession. For long-term value investors that should just be noise.<br /><br />One sector where there is still too much optimism is <b>tech</b>. So, I would wait before buying big, though many like <b>Symantec</b> and <b>SAP</b> do appear attractive.<br /><br />There probably are bargains even among <i>home builders</i> and <i>lenders</i>, but I find it hard to separate the good from the bad. <br /><br />One thing is certain - buying a house now is recommended only for those who like to play <i>Russian roulette</i>! It was bad at the <a href="http://urgetomerge.blogspot.com/2005/10/end-is-here.html">peak</a>, and it is no better now.<br /><br />Another area where pessimism may have reached a turning point is the outlook for the <i>U.S Dollar</i>. Will it start moving up soon ?Guruhttp://www.blogger.com/profile/04233962331458054909noreply@blogger.com0tag:blogger.com,1999:blog-7124882.post-73067700123593798892007-11-01T11:40:00.000-07:002007-11-01T13:54:43.834-07:00Hit #182 (Business Objects)The long rumored takeover of <b>Business Objects (<i>BOBJ</i>)</b> finally materialized a few weeks ago. The buyer, <b>SAP</b>, is paying around <b>$6.8 billion</b> in cash. The offer, of around <b>$59.25/share</b>, makes for a <b><font color="green">170%</font></b> gain over my average cost of <b>$21.94</b>. The eventual dollar amount paid may vary slightly based on the <i>euro/dollar</i> exchange rate - the offer is set at <b>42 euros</b>. I had first bought some shares in 2004, and bought a few more again last year when the stock cratered following dismal earnings.<br /><br />I had mentioned <i>Business Objects</i> in a few prior posts, most notably when <a href="http://urgetomerge.blogspot.com/2007/03/hit-150-hyperion.html">Hyperion (Hit #150)</a> was acquired by <i>Oracle</i> and even earlier while listing <a href="http://urgetomerge.blogspot.com/2004/06/oracle-on-prowl.html">potential targets</a> for <i>Oracle</i>.<br /><br />In spite of my guessing <i>SAP</i> as a buyer in that <a href="http://urgetomerge.blogspot.com/2007/03/hit-150-hyperion.html">post</a> on <i>Hyperion</i>, this still comes as somewhat of a surprise. <i>SAP</i> is having trouble dealing with an aggressive <i>Oracle</i>, and this costly acquisition with its attendant integration risks will not help. For very long-term buy-and-holders <i>SAP</i> now represents an opportunity assuming this buyout will turn out to be a positive move a few years from now. A more sensible buy for <i>SAP</i> would have been <b>BEA (<i>BEAS</i>)</b> since its own attempt (<i>NetWeaver</i>) to get into application servers has failed. <br /><br />With this buyout, the only major pure business intelligence software provider left single is <b>Cognos (<i>COGN</i>)</b>. <b>IBM</b> is the most likely buyer. <i>Cognos</i> may still get a premium, but I like my stocks <i>really cheap</i> and hence won't be buying now.<br /><br />A smaller <i>reporting software/service</i> company that will also be a target is <b>Actuate (<i>ACTU</i>)</b>. The stock has more than tripled since my buy, but I will be holding onto the shares <i>forever</i>.<br /><br />A startup to watch in this sector is <b><a href="http://www.tableausoftware.com">Tableau Software</a></b>. A public offering may be in its near future. As a user I was impressed by their charting/visualization features as well as ease of use (<i>drag and drop</i>). The company will be a great target for a larger player.<br /><br />Proceeding to application and retail software, <i>Oracle</i>'s offer, and its timing in particular, was surprising. It is a shame that <i>BEA</i> even bothered to respond (with a higher demand, but still), when in fact it could set its house in order and command a much higher price a few years down the road. Folks at <i>BEA</i> seem to have given up!<br /><br />Among retail/supply-chain software vendors, <b>Manhattan Associates (<i>MANH</i>)</b> looks very attractive at is current price, with insider buying to support it further. The company will be taken out, hopefully at a much higher price. <b>Retalix (<i>RTLX</i>)</b> and newly public <b>DemandTec (<i>DMAN</i>)</b> are also worth watching, and buying in small numbers.<br /><hr/>Previous hit - <a href="http://urgetomerge.blogspot.com/2007/10/hit-182-navteq.html">Navteq (#181)</a>Guruhttp://www.blogger.com/profile/04233962331458054909noreply@blogger.com0tag:blogger.com,1999:blog-7124882.post-44084107228659239622007-10-11T11:45:00.000-07:002007-10-26T13:03:33.360-07:00Hit #181 (Navteq)Digital map provider <b>Navteq (<a href="http://finance.yahoo.com/q?s=nvt"><i>NVT</i></a>)</b> is being acquired by <b>Nokia</b> for <b>$8.1 billion</b>. The cash offer, of <b>$78/share</b>, represents a gain of <b><font color="green">195.2%</font></b> over my average cost of <b>$26.42/share</b>. Having been a <i>Navteq</i> customer since early 2000, I had added it to my watchlist when it was spun off from <i>Philips</i>. Though I missed buying early, bad news made the stock available at a significant discount once again in mid-2006.<br /><br /><i>Nokia</i> has overpaid looking at the short term, but if integrated well this would look like a cheap buy in retrospect. <i>Nokia</i> may also have been forced to pay a higher price due to possible bids by others. <i>Google</i> might well have been interested given that <i>Navteq</i> provides data for its maps. <i>Microsoft</i> seems to be missing the boat again. Some of <i>Microsoft</i>'s map presentation/usability features are actually better than <i>Google</i>'s, but unfortunately not enough (yet) to veer users away from <i>Google</i>.<br /><br />This acquisition comes just days after another digital map data provider, <i>Tele Atlas</i>, got an offer from <i>TomTom</i>. That deal itself could be in trouble with rumors of bids from other buyers who now face competition due to <i>Nokia</i>'s deal.<br /><br />The biggest potential loser is <b>Garmin (<i>GRMN</i>)</b>. <i>Garmin</i>'s standalone <i>GPS</i> devices now face competition from <i>Nokia</i>'s phones, like the <i>N95</i>. <i>Navteq</i> provided data for <i>Garmin</i>, and while <i>Nokia</i> is unlikely to restrict <i>Navteq</i>'s service clients, <i>Garmin</i> will be looking to do its own deal. Outbidding <i>TomTom</i> for <i>Tele Atlas</i> is one scenario.<br /><br />For long-term investors <i>Nokia</i> is still a great bet. Think of where <i>Apple</i> was around <i>2001-2002</i>. That is where <i>Nokia</i> is today. The potential for all connectivity/location applications to move into cell-phones is still not being appreciated. Even <i>Apple</i> seems to have missed the most important part of the puzzle from its <i>iPhone</i> - a GPS receiver (see my earlier <a href="http://urgetomerge.blogspot.com/2007/07/baby-you-can-drive-my-icar.html">post</a>). Whereas <i>Nokia</i>'s <b><a href="http://www.nseries.com/index.html#l=products,n95_8gb,demo">N95</a></b> with built-in GPS receiver, mobile broadband, and a high quality camera, increasingly looks like the <i>dream phone</i>. Nokia is unlikely to make any large acquisitions soon, but I do think that <b>RealNetworks (<i>RNWK</i>)</b> would be a great buy towards puting all the required pieces together. <i>Nokia</i> did make a smaller move in that direction earlier when it acquired <b><a href="http://urgetomerge.blogspot.com/2006/08/hit-108.html">Loudeye</a></b>.<br /><br /><i>Nokia</i> has also been selling standalone <i>Bluetooth</i>-enabled <i>GPS receivers</i>, like the <a href="http://www.nokiausa.com/A4431548">LD-3W</a>. When combined with a net-connected device (laptop, cellphone), this makes standalone <i>GPS</i> devices like the ones from <i>Garmin</i> obsolete.<br /><br />While the digital map archives from <i>Navteq</i> provides Nokia with a jumpstart, community efforts like <a href="http://www.wikimapia.org">Wikimapia</a> and <i>Google Earth</i> will be the way people annotate maps, and then download to their navigation devices in the future. There may still be some room for the likes of <b>Cobra Electronics (<i>COBR</i>)</b> that have additional useful data like the location of all traffic lights and cameras in the U.S. <br /><br />For those interested in the brains behind it all, look no further than <b>SiRF (<i>SIRF</i>)</b>. Its <i>GPS chipsets</i> power most of the receivers out there including <i>Nokia</i>'s and <i>Garmin</i>'s. I have been holding <i>SiRF</i> for a long time now, and added more recently on weakness. It is still worth buying as we have not yet seen anything when it comes to <i>GPS</i> enabled devices. We will soon see most cameras come with <i>GPS</i> receivers so that coordinates get added to <a href="http://en.wikipedia.org/wiki/Exif"><i>EXIF</i></a> data - Ricoh has one such <a href="http://www.ricohsolutions.com/geo/">camera</a> on the market (also powered by <i>SiRF</i>). That would make <i>geotagging</i> on <i>Flickr</i> a real breeze!<br /><br />There have been a few other acquisitions in the <i>GPS</i> area recently. <b>Lowrance Electronics</b> (used to trade under <i>LEIX</i> on <i>Nasdaq</i>) was acquired by <i>Norway</i>'s <b>Simrad Yachting</b>, a leader in marine electronics. <b>Novatel (<i>NGPS</i>)</b>, maker of high-end GPS chipsets/antennas (mostly for the aviation market) was bought out <i>Sweden</i>'s <b>Hexagon</b>. <i>Hexagon</i> had earlier acquired <i>Leica Geosystems</i> after a bidding battle against <b>Danaher (<i>DHR</i>)</b>.<br /><br />One area of <i>location</i> services that hasn't received much attention yet is tracking (i.e GPS transmitters), whether of vehicles or other devices. Companies like <b>LoJack (<i>LOJN</i>)</b> and <b>Ituran (<i>ITRN</i>)</b> provide vehicle tracking services, though still mostly used for commercial fleets. The cost of using these for personal vehicles, even taking into consideration the discounts provided by vehicle insurers, is still too high. But at some point, just like with GPS receivers, the price will drop enough to make it a mass market service. <i>LoJack</i> has expanded into providing laptop tracking, and newer entrants like <a href="http://www.slimtrakgps.com/products.htm">SlimTrak</a> even allow tracking your checked-in luggage - now that is something worth paying for, though there are cheaper, non-GPS, non-universal solutions like <a href="http://www.globalbagtag.com/">Global Bag Tag</a>! Niche mobile phone services like <a href="http://www.wherify.com/wherifone/">Wherifone</a> allow one to keep tabs on people who need attention.<br /><br />Others to keep an eye on include <b>Trimble (<i>TRMB</i>)</b> (see <i><a href="http://urgetomerge.blogspot.com/2006/12/hit-136-road.html">Hit #136 (@Road)</a></i>) and <b>Pitney Bowes (<i>PBI</i>)</b>, whose location intelligence service (see <i><a href="http://urgetomerge.blogspot.com/2007/04/hit-155-mapinfo.html">Hit #155 (MapInfo)</a></i>) is still a small part of the overall business. Higher end satellite-based service providers like <b>KVH Industries (<i>KVHI</i>)</b>) and <b>GlobalStar (<i>GSAT</i>)</b> could become attractive partners for willing buyers. See earlier <a href="http://urgetomerge.blogspot.com/2006/04/hog-havens_114587069492758819.html">post</a> for more picks related to increasing bandwidth demand/availability.<br /><br />Returning to <i>Nokia</i> and the <i>dream phone</i>, we may be looking at some very interesting features to debut soon on cellphones. There is inkless printing from <a href="http://www.zink.com"><b>Zink</b></a> (do watch the demo on the site - they have working devices already) and there is personal miniature projectors, from <b>Microvision (<i>MVIS</i>)</b>. The projectors have a direct application to in-vehicle navigation as well. See the demos at <a href="http://www.microvision.com">Microvision</a>. I would recommend <i>Microvision</i> as a speculative growth play. Along with the <a href="http://www.thinkgeek.com/computing/input/8193/">virtual keyboard</a>, personal wearable displays (the one from <a href="http://www.icuiti.com">iCuiti</a> isn't yet impressive, but we will get there!) can take the pain out of using cellphones as full-fledged computers. Built-in fingerprint authentication devices (most newer laptop models allow you to have one) will solve some of the privacy issues. <b>Authentec (<i>AUTH</i>)</b>, which went public recently, seems to be the dominant provider of these fingerprint readers.<br /><br />With all this on your cellphone, you may start to worry about the charge running out in minutes. Well, even that is solved with this <a href="http://www.solio.com/v2/">Solio</a> device! If only those solar cells could be built onto the back of the phone!<br /><br />One thing still missing is a universal satellite radio receiver that can switch from <b>XML</b> to <b>Sirius</b> to <b>Worldspace (<i>WRSP</i>)</b> (in Asia). Fix that, and we will be one step closer to <a href="http://urgetomerge.blogspot.com/2007/09/untethered-mobile-part-1.html">full/true mobility</a>.<br /><hr/>Previous hit - <a href="http://urgetomerge.blogspot.com/2007/08/hit-180-united-rentals.html">United Rentals (#180)</a>Guruhttp://www.blogger.com/profile/04233962331458054909noreply@blogger.com0tag:blogger.com,1999:blog-7124882.post-21532504730846311652007-09-03T18:20:00.000-07:002007-09-05T23:19:14.758-07:00Long overdue reading update - Part 1It has been a while since my last reading <a href="">update</a>. There is a lot to write about. The backlog is long enough to provide material for 3 or more posts. The others will follow soon.<br /><br />Here is the first part of the list<br /><ul><li><a href="http://www.amazon.com/Traders-Guns-Money-unknowns-derivatives/dp/0273704745/sr=8-1/qid=1169965098/ref=pd_bbs_sr_1/102-8992021-8373758?ie=UTF8&s=books">Traders, Guns and Money</a> by <i>Satyajit Das</i> : A very readable book, with interesting details on trades gone bad. Some of the derivatives blowups explained here require an understanding of more than addition and subtraction, but if you cannot take the effort to read and understand this book, I would argue that you shouldn't be investing in anything. The recent series of <i>hedge fund mishaps</i> just induces a sense of <i>deja vu</i>. The next edition of this book will hopefully see the numerous typos fixed!<br /><li><a href="http://www.amazon.com/Nowhere-Lonely-Planet-Journeys-Literature/dp/1741045193/sr=1-1/qid=1169965205/ref=pd_bbs_sr_1/102-8992021-8373758?ie=UTF8&s=books">Tales from nowhere</a> by <i>Various authors</i> : A collection of mostly short travel stories with interesting twists in the journeys. Good companion books would be <a href="http://www.amazon.com/Lonely-Planet-Middle-Nowhere-Pictorial/dp/1741047846/ref=pd_bbs_sr_1/105-8589193-5802022?ie=UTF8&s=books&qid=1189059349&sr=1-1">The Lonely Planet Guide to the Middle of Nowhere</a> and <a href="http://www.amazon.com/Bad-Lands-Lonely-Planet-Travel/dp/1741791863/ref=pd_bbs_1/105-8589193-5802022?ie=UTF8&s=books&qid=1189059420&sr=1-1">Badlands: A Tourist on the Axis of Evil</a>. I haven't read these two but a few minutes of browsing indicated that they are worthy reads. <br /><li><a href="http://www.amazon.com/Marriage-History-Obedience-Intimacy-Conquered/dp/067003407X/sr=1-2/qid=1169965567/ref=pd_bbs_sr_2/102-8992021-8373758?ie=UTF8&s=books">Marriage, a History</a>: <i>From Obediency to Intimacy, or How Love Conquered Marriage</i> by <i>Stephanie Coontz</i> - This book is filled with interesting facts about marriage as the idea progressed through the ages. But it is a hard read given the odd organization of material and too many subjective comments by the author. While the book is supposed to be a history of marriage around the world, it deals mostly with the <i>Western hemisphere</i>. Even with these drawbacks, there is a lot to learn here - from the evolution of the definition of <i>incest</i> (you will be surprised!) to the customs of the <i>Na</i> people in China, apparently the only society without any concept of marriage or like institution.<br /><li><a href="http://www.amazon.com/Global-Soul-Shopping-Malls-Search/dp/0679776117/sr=1-1/qid=1169965407/ref=pd_bbs_1/102-8992021-8373758?ie=UTF8&s=books">Global soul : Jet Lag, Shopping Malls and the Search For Home</a> by <i>Pico Iyer</i>: Not one of <i>Iyer</i>'s best. Filled with long words, and even longer sentences, at times enough to give the reader a bad headache. If you have read <a href="http://www.amazon.com/Lady-Monk-Four-Seasons-Kyoto/dp/0679738347/ref=sr_1_1/104-3374651-5476762?ie=UTF8&s=books&qid=1188869434&sr=8-1">The Lady and The Monk</a> or some other earlier work of <i>Iyer</i>, you will be disappointed. That said, the stories here do give some interesting glimpses of lives of immigrants, refugees and expats.<br /><li><a href="http://www.amazon.com/Deep-Ancestry-Inside-Genographic-Project/dp/0792262158/sr=1-1/qid=1169965898/ref=pd_bbs_sr_1/102-8992021-8373758?ie=UTF8&s=books">Deep Ancestry</a>: <i>Inside the Genographic Project</i> by <i>Spencer Wells</i> - A chronicling of the effort to map mankind's migration and population of the world. Neatly organized, and the website offers even more interesting tools. The project is ongoing, and hence at some places, non-genetic clues (linguistic etc) have been used to extrapolate. There may still be a bit of old-school <i>"we came first"</i> showing through in such extrapolations. But hopefully they will go away with the eventual finer mapping. If the theories here are correct, there are some startling facts to reconsider about race, purity etc that still holds, unfortunately, way too much significance in this world. Looks like deep down we are all <i>mutts</i>, given the right timescale!<br /><li><a href="http://www.amazon.com/Empires-Word-Language-History-World/dp/0060935723/sr=1-2/qid=1169966320/ref=pd_bbs_2/102-8992021-8373758?ie=UTF8&s=books">Empires of the word</a>: <i>A Language History of the World</i> by <i>Nicholas Ostler</i> - a stunningly beautiful work. While it goes into linguistic details, the average person can easily understand, or skip such portions, without losing much of the theme. Having used the contents of this book to quiz a few people, I must say that reading this will lead to some much required enlightenment!</ul>Previous <a href="http://urgetomerge.blogspot.com/2006/04/more-reading-material.html">reading update</a>.Guruhttp://www.blogger.com/profile/04233962331458054909noreply@blogger.com0tag:blogger.com,1999:blog-7124882.post-18403774691784752092007-09-02T23:44:00.000-07:002007-09-03T13:01:16.062-07:00Stop the bailout!<i>Bush</i> picked a Friday before a long weekend to make the first announcement of what is really a bailout. Though this is <b>thankfully</b> too little, too late, it should still be opposed by all decent people. Please vote against the bailout <a href="http://www.petitiononline.com/bailout/petition.html">here</a>.<br /><br />It is estimated that somewhere around <b>2 million</b> houses will go into foreclosure over the next year or two. Unfortunate as that may be, and harsh as it may sound, those homes <b>deserve</b> to go into foreclosure. They should never have been built or bought in the first place.<br /><br />Why didn't anybody <b>complain</b> when home prices were going up <b>20%</b> a year ? Why didn't anybody cry for <i>fed</i> intervention to prevent those gains ? That would have been the <b>right</b> thing to do. People who bought houses they could not afford, did it due to a combination of <b>stupidity</b>, <b>willful ignorance</b> and <b>greed</b>. They played the lottery, and now that they missed the right numbers, they want <b>help</b> ? Oh please! Let them start over again.<br /><br />Among public figures asking for a bailout - <b>Angelo Mozilo</b> (CEO of <i>Countrywide Financial</i>), <b>Alan Mullaly</b> (CEO of <i>Ford</i>), <b>Bill Gross</b> (PIMCO chief), <b>Jim Cramer</b> etc. I have a few choice words for them - <b>Shut the $%^# up</b>! <br /><br /><i>Mozilo</i> should have ensured that loans made by <i>Countrywide</i> were more appropriate (see latest <i>NY Times</i> <a href="http://select.nytimes.com/gst/abstract.html?res=F10C1EFB34590C758EDDA10894DF404482">piece</a>). <i>Mozilo</i> could also have showed some confidence in his company by not selling such a big portion of his shares (see <i>insider selling</i> details at <a href="http://biz.yahoo.com/t/18/6026.html">Yahoo Finance</a>). Shouldn't <i>Ford</i> CEO be taking less pay (the savings <b>can</b> be used for helping some of the homeowners!), and talking about building cars that people would like to buy ? Is <i>PIMCO</i> chief really asking for a indirect <i>bailout</i> for his underperforming funds, as some have speculated ? <br /><br />After the tech bust, countless <i>servers</i> and <i>routers</i> were being sold at firesale prices. The same is bound to happen this time, with <i>boats</i>, <i>Hummers</i> and <i>Escalades</i>. Fewer arrogant <i>Hummer</i>/<i>Escalade</i> drivers on the road is good!<br /><br />The appeals for interest rate cuts are absurd. At <b>5.25%</b> we are still at unusually low levels. If anything, we should at least get back to a more reasonable level, say <b>7.5%</b>, before thinking about lowering rates. Asking for rate cuts now is a sure sign of withdrawal symptoms from people used to free money. Taking the rate to <b>7.5%</b> right now would be crazy, but there is no reason to cut them either.<br /><br />Then there are observers talking about a severe recession in the absence of a bailout. <b>So what ?</b>. What is wrong with a recession ? It is part of the normal <i>boom bust</i> cycle. And it is about time for a deep recession - just let it happen. It will fix a few of the excesses, though in reality we need a <b>depression</b> to completely get rid of the hangover from the binge.<br /><br />Personally I am surprised at the number of people who even after living through (and fooled by) one bubble (tech), were fooled by another so soon after the first one. Incredible! I have been predicting a <b>65%</b> drop to anybody willing to listen, and the responses were very interesting. Hah - <i>they don't make any more land!</i>, do they ?! Evolution doesn't seem to have helped us much in dealing with bubbles!<br /><br />Popular magazines served no purpose during the boom, and are not doing much now either, still reporting <b>median price</b> increases and fooling so many in the process. They are still doing more harm than good by insisting that we are close to the bottom and in the worst case there will be a <b>10%</b> fall and a recovery within a year. What a shame! A full recovery from such a large boom will not start without a <b><font color="red">65%</font></b> fall (inflation-adjusted) from the top. Such a fall and recovery will take <b>12-15</b> years. A few folks, like <b>Shiller</b>, have finally started <a href="http://www.finfacts.com/irelandbusinessnews/publish/article_1011005.shtml">talking</a> about <b>40-50%</b> fall in prices, but they are being ridiculed by ignorant and downright stupid reporters.<br /><br />Amidst all the rubbish, I found just one piece in the mainstream magazines worth reading - see <a href="http://www.businessweek.com/magazine/content/07_37/b4049050.htm">Dude, where is my bailout ?</a>.<br /><br />As for those who ask what to do with their stocks, I can point to another interesting commentary, by <a href="http://money.cnn.com/galleries/2007/fortune/0708/gallery.crisiscounsel.fortune/13.html">Ben Stein</a>.<br /><br />I have kept comments on real-estate to a minimum on this blog, with past entries made when I felt that real-estate had <a href="http://urgetomerge.blogspot.com/2005/10/end-is-here.html">peaked</a> and when I thought it was time to <a href="http://urgetomerge.blogspot.com/2007/02/everybody-panic-now.html">panic</a>. There will not be another housing related post anytime soon barring a major event.<br /><br />For your daily dose of <i>housing/real-estate</i> bubble related updates, I recommend these blogs:<ul><li><a href="http://calculatedrisk.blogspot.com">Calculated Risk</a><li><a href="http://bubbletracking.blogspot.com/">Bubble Markets Inventory Tracking</a><li><a href="http://housingpanic.blogspot.com">Housing Panic</a></ul>Guruhttp://www.blogger.com/profile/04233962331458054909noreply@blogger.com0tag:blogger.com,1999:blog-7124882.post-51617326608662671702007-09-01T17:35:00.000-07:002007-09-02T23:12:12.216-07:00Untethered & mobile - Part 1I have promised a few of you that I will be blogging soon on investments arising out of my own extensive research into cutting the cord. Where available, I will disclose any positions in companies mentioned.<br /><br />First, here is the view from where I am blogging (while connected of course) <br/><a href="http://www.flickr.com/photos/gurumlore/332518900/" title="Photo Sharing"><img src="http://farm1.static.flickr.com/134/332518900_6bb93d9d77.jpg" width="333" height="500" alt="Real jaggies" /></a> <br/>I am on a ledge where the only visible living creatures are a few <i>turkey vultures</i> and <i>gulls</i>. The nearest road is a mile away. The views, breeze and sounds are incredible, and I can't think of a better place to be <i>blogging</i> from. Here is another <a href="http://farm1.static.flickr.com/116/316962389_5be9360ef0_b.jpg">view</a>, one from the bottom of my shoes.<br /><br />The connection I have is also fast enough to play a few <i>Youtube</i> streams concurrently (listening to, but not watching, <a href="http://youtube.com/watch?v=5OT7GMwZdO8">this</a> - more about this in a later post). There aren't any <i>wi-fi</i> providers around here for sure.<br /><br />All this made possible thanks to <i>cellular broadband</i>, courtesy <i>Cingular</i> and <b>Sierra Wireless (<i>SWIR</i>)</b>. The latter happens to be my single largest holding right now. It wasn't this large a part of my portfolio when I bought earlier, but the stock has more than doubled since my purchase. <br /><br />I believe that we are still in a very early phase of rapid growth in <i>wireless broadband</i> and its applications. I say <i>very early</i> because even after being available for more than a year now, there is not much love for <i>3G</i> in <i>silicon valley</i>. <br /><br />The <i>3G</i> alphabet soup gets more confusing every day, but there is at least some hope that one or more of these will be available in multiple continents, with widespread deployments within a year or two. <i>Sierra Wireless</i> makes the connection devices, like these <i><a href="http://www.sierrawireless.com/product/AC880_AC881.aspx">Aircards</i></a>.<br /><br />Speeds, especially with the new <i>HSUPA</i> protocol, are reaching ever higher levels. So much so that speed isn't really a concern anymore. <br /><br />Availability/strength of service is still a problem. Widespread rollout, by <i>Cingular</i> and <i>Verizon</i> in the U.S, should address that soon.<br /><br /><i>Sierra Wireless</i> does have competitors, chief being <b>Novatel Wireless (<i>NVTL</i>)</b>. While <i>Sierra</i> seems to have an upper hand so far, it is impossible to say who will be the eventual winner. Competition from lower-cost <i>Chinese/Taiwanese</i> players is a concern, but as long as there is constant new activity requiring new products or constant upgrades, <i>Sierra</i> and <i>Novatel</i> shouldn't have any problems on that front.<br /><br />End-user products are the most visible, but the <i>embedded</i> product market may be much larger. Also enterprise products are beginning to be rolled out. <br /><br />Both <i>Sierra</i> and <i>Novatel</i> are likely being looked at as targets by existing <i>network connectivity</i> device providers. I do hope that they don't sellout now, given the growth potential ahead. Traditional cellphone manufacturers are also getting into this market building the ability to use the cellphone as a <i>3G modem</i> without the need for an additional card.<br /><br />Competition to existing protocols comes in the form of <i>WiMax</i>, with <b>Sprint (<i>S</i>)</b> and <b>Clearwire (<i>CLWR</i>)</b> in a race to provide service in major markets. <i>WiMax</i>, along with <i>3G</i>, is also making it possible for countries without legacy <i>wired</i> infrastructure to leapfrog into the broadband era (see earlier <a href="http://urgetomerge.blogspot.com/2004/11/prospects-for-india.html">post</a>). <i>Clearwire</i>, founded by <i>McCaw</i>, is a <i>WiMax</i> pure play and a very tempting target for all sorts of companies, from <b>Sprint</b> to <i>Comcast</i> and <i>Google</i>!Guruhttp://www.blogger.com/profile/04233962331458054909noreply@blogger.com0tag:blogger.com,1999:blog-7124882.post-77536812784254017012007-08-19T14:36:00.000-07:002007-09-10T12:09:22.134-07:00Hit #180 (United Rentals)<b>United Rentals (<i>URI</i>)</b> is being taken out by private equity group <b>Cerberus</b> in a <b>$6.6 billion</b> deal. The cash offer, of <b>$34.5/share</b>, represents a gain of <b><font color="green">133.9%</font></b> over my average cost per share of <b>$14.75</b>.<br /><br />Given the rapid deceleration in <i>construction spending</i>, both residential, and (soon) commercial, it seems that <i>Cerberus</i> could not have picked a worse time. The offer represented a tiny premium to its previous day's close, and that may be a consolation. <br /><br />The only other smaller, independent construction equipment rental company seems to be <b>H&E Equipment Services (<i>HEES</i>)</b>, which went public earlier last year. Shares look attractively priced, but I will be waiting for more sure signals from the construction industry before buying.<br /><br />One name that you will see often on <i>URI</i> leased vehicles is <b>JLG</b>, a prominent manufacturer of various <i>lift</i> vehicles. <i>JLG</i> was acquired earlier this year by <b>Oshkosh Truck (<i>OSK</i>)</b> - see my post on a <a href="http://urgetomerge.blogspot.com/2006/10/another-construction-peak-sign.html">construction peak sign</a>. The latter remains a good long-term bet on a worldwide construction/mining/resource boom.<br /><br />The resource boom has led to sharp appreciation in stocks of other heavy construction and earth-moving vehicle manufacturers. For believers in a <i>new era</i> in resources, these are still a good bet, though I would rather wait for a global slowdown and the resulting pullback to add in volume. But a prolonged slowdown and an equipment glut may threaten some of them. Here is a list of potential buys in the sector:<ul><li><b>Joy Global (<i>JOYG</i>)</b>: Prefer waiting for a better entry point.<br /><li><b>Bucyrus International (<i>BUCY</i>)</b>: Insider activity indicates that a small position can be opened right away, adding more as opportunities arise.<br /><li><b>Terex (<i>TEX</i>)</b>: Same comment as for <i>Bucyrus</i>. Also has a much higher chance of surviving a severe/prolonged downturn.<br /><li><b>Agco (<i>AG</i>)</b>: <i>Agco</i> manufactures as well as distributes mostly agricultural equipment. This has been a good turnaround story so far, and makes for a perfect target for a larger strategic buyer.<br /><li><b>CNH Global (<i>CNH</i>)</b>: A sound long-term bet. Also a possible buyer of <i>Agco</i>.<br /><li><b>Deere (<i>DE</i>)</b>: I prefer waiting for a better price.<br /><li><b>Caterpillar (<i>CAT</i>)</b>: See comment on <i>Deere</i>.<br /><li><b>ASV Inc. (<i>ASVI</i>)</b>:The most promising bet in the sector. Insider activity is bullish. <i>ASV</i> is a sitting duck for an acquirer.<br /><li><b>Kubota (<i>KUB</i>)</b>: I do not know enough about this Japanese manufacturer to make any recommendation.</ul><b>Ingersoll-Rand (<i>IR</i>)</b> just got out of this sector altogether by selling its <i>Bobcat</i> division to <i>Doosan Infracore</i> of Korea. Only time will tell if they got out at the top!<br /><br />Looking much farther into the future, companies making underwater navigation equipment may have a new market to tap - ocean-bed mining. Players include <b>Teledyne (<i>TDY</i>)</b> (via its <i>Benthos</i> acquisition a while ago), <b>Oceaneering International (<i>OII</i>)</b> and <b>Acergy (<i>ACGY</i>)</b>.<br /><br />Extending coverage a bit more, <b>Force Protection (<i>FRPT</i>)</b>, a maker of heavy-duty impact-resistant military vehicles should be acquired in the near future. The stock has had a spectacular run over the last few months, but could still get a substantial premium in the event of a takeover.<br /><hr />Previous hit - <a href="http://urgetomerge.blogspot.com/2007/08/hit-179-neoware.html">Neoware (#179)</a>Guruhttp://www.blogger.com/profile/04233962331458054909noreply@blogger.com0tag:blogger.com,1999:blog-7124882.post-54238846679423671302007-08-19T14:07:00.000-07:002007-08-19T14:47:45.961-07:00Hit #179 (Neoware)On the same day that <i>HP</i> bought <b>Opsware</b> (see <a href="http://urgetomerge.blogspot.com/2007/08/hit-177-opsware.html">Hit #177</a>), it also announced a deal to buy <b>Neoware (<i>NWRE</i>)</b>. The cash offer, of <b>$16.25/share</b>, makes for a <b><font color="green">36.8%</font></b> gain over my average cost of <b>$11.88</b>.<br /><br />I had mentioned <i>Neoware</i> in an earlier post (<a href="http://urgetomerge.blogspot.com/2005/05/hit-44.html">Hit #44</a>) when <b>Tarantella</b> was acquired by <i>Sun</i>. <i>Neoware</i> has been one of my largest holdings, driven mainly by its takeover potential as well as its cash hoard. Given that <i>Neoware</i> had around <b>$6/share</b> in cash, the offer undervalues the company and its potential. Like with other such deals where investors got the short end of the stick, insiders must have gotten away with much more for agreeing to such a low price.<br /><br />It is surprising that there haven't been other bidders. <b>IBM</b>, <b>Sun</b>, but especially <b>Citrix</b>, should be making an attempt to go after <i>Neoware</i>.<br /><br />As noted in the post on <i>Tarantella</i>, <i>Citrix</i> itself remains a target - for <i>IBM</i>, <i>Computer Associates</i> or <i>Symantec</i>. But given its latest acquisition, of <b>XenSource</b>, it is unlikely to sell itself soon. <i>Citrix</i> now represents an alternative play on the growing <i>virtualization</i> trend. The leader in that sector, <b>VMWare (<i>VMW</i>)</b>, just got spun off from <i>EMC</i> in a blockbuster IPO. Having been a huge fan of <i>virtualization/VMWare</i> for a while, I see tremendous long-term potential here. <i>Citrix</i> could deliver some magic if it were to successfully integrate its existing solutions with <i>XenSource</i>.<br /><br />As for my proceeds from <i>Neoware</i>, I reinvested all of it into <b>GateHouse Media (<i>GHS</i>)</b>, and promptly lost almost <b>15%</b> - ouch! It wasn't meant to be a short-term investment, and hence will remain in my portfolio for a long time. As long as the dividend yield stays at or around <b>10%</b>, I wouldn't have much to complain. <i>GateHouse Media</i>'s large holder, <b>Fortress Investment Group (<i>FIG</i>)</b>, is also a good value buy right now, given the depressed level of this stock following the turmoil in the credit markets, and the resulting increased potential for trouble in <i>private equity</i> land. Recent negative news related to <i>Fortress</i>' involvement in lending to <i>Katrina</i> victims hasn't helped either. But <i>Fortress</i> remains a saner alternative to the other <b>public</b> private equity group, <b>Blackstone (<i>BX</i>)</b>.<br /><hr />Previous hit - <a href="http://urgetomerge.blogspot.com/2007/08/hit-178-playtex.html">Playtex (#178)</a>Guruhttp://www.blogger.com/profile/04233962331458054909noreply@blogger.com0tag:blogger.com,1999:blog-7124882.post-41825077151756459382007-08-05T16:25:00.000-07:002007-08-06T23:37:44.788-07:00Hit #178 (Playtex)<b>Playtex (<i>PYX</i>)</b> is being bought by <b>Energizer</b> for <b>$1.2 billion</b> in a cash deal. The <b>$18.3/share</b> offer makes for a <b><font color="green">77.8%</font></b> profit over my average cost of <b>$10.29</b>.<br /><br />I had mentioned <i>Playtex</i> as a buyout candidate when <i>J. Jill</i> was <a href="http://urgetomerge.blogspot.com/2005/08/jill-on-block.html">rumored</a> to be a target. The only thing surprising was that <i>Playtex</i>, mostly known for <i>tampons</i>, is being bought by a company that is primarily known for <i>batteries</i>. While I like the premium I am getting here, this combine doesn't seem to be a natural fit at all!<br /><br />There was atleast one public indicator that a takeover was coming when the <i>CFO</i> canceled an appearance at a <a href="http://blogs.wsj.com/deals/2007/07/13/playtexs-scheduling-conflict/?mod=yahoo_hs">conference</a>, supposedly due to a scheduling conflict. As detailed in the <i>WSJ</i> report, quite a few traders may have walked away with big profits. This indicator isn't anywhere near being as interesting as the <a href="http://urgetomerge.blogspot.com/2005/07/merger-hints-revisited.html">MBNA/copter crash</a> incident.<br /><br /><b>Warner Chilcott (<i>WCRX</i>)</b>, which makes women's healthcare/dermatology products, could be another target, for the likes of <b>Johnson & Johnson</b>. The stock, in spite of the debt, looks relatively cheap.<br /><br />Like with <a href="http://urgetomerge.blogspot.com/2007/07/hit-172-cytyc.html"><b>Cytyc</b></a> mentioned earlier, <i>Playtex</i> falls into a category that is uncomfortable for many investors to talk about, let alone invest in. And for that very reason, I have fun bringing it up every time somebody touts <i>Google</i> or <i>Apple</i>. The reaction varies from person to person, but it is always memorable!<br /><br /><b>Spectrum Brands (<i>SPC</i>)</b>, a company similar in profile to <b>Energizer</b>, but in very bad shape right now, is a good speculative bet for the brave!<br /><hr />Previous hit - <a href="http://urgetomerge.blogspot.com/2007/08/hit-177-opsware.html">Opsware (#177)</a>Guruhttp://www.blogger.com/profile/04233962331458054909noreply@blogger.com0tag:blogger.com,1999:blog-7124882.post-68011201015637716902007-08-05T15:59:00.000-07:002007-08-05T16:12:15.538-07:00Hit #177 (Opsware)<b>Opsware (<i>OPSW</i>)</b> is being taken out - finally! <b>HP</b> is putting down <b>$1.6 billion</b> in a cash deal, valuing shares at <b>$14.25</b> a piece. That offer makes for a <b><font color="green">141.5%</font></b> gain over my average cost of <b>$5.9</b>.<br /><br />I have repeatedly mentioned <i>Opsware</i> as a target in the past, including in a post titled <a href="http://urgetomerge.blogspot.com/2005/01/what-should-hp-do.html">What should HP do ?</a>. There I said - <i>HP should buy one or all of these players - Veritas (VRTS), Opsware (OPSW), Altiris (ATRS)</i>! More than 2 and a half years later, <i>HP</i> decided to act!<br /><br />While the offer is fair, I am stunned by the lack of competing bids. Companies from <i>EMC</i> (see <a href="http://urgetomerge.blogspot.com/2006/06/emc-trips.html">EMC trips</a>) to <i>Symantec</i> and <i>BMC</i> to <i>Macrovision</i> (see <a href="http://urgetomerge.blogspot.com/2005/08/tech-heavyweight-in-making.html">A tech heavyweight in the making</a>) should be going after <i>Opsware</i>! <br /><br />Read more about the deal directly from <i>Marc Andreessen</i> - <a href="http://blog.pmarca.com/2007/07/hp-buys-my-comp.html">HP buys my company ...</a>.<br /><br />With this deal, there aren't any more targets left in this sector. Companies like <b>BMC</b> and <b>Macrovision</b> can themselves be targets, but for shareholders they are better off as standalone companies given the growth potential in the sector.<br /><hr />Previous hit - <a href="http://urgetomerge.blogspot.com/2007/08/hit-176-djo.html">DJO (#176)</a>Guruhttp://www.blogger.com/profile/04233962331458054909noreply@blogger.com0tag:blogger.com,1999:blog-7124882.post-73929510562903915502007-08-01T08:17:00.000-07:002007-08-01T08:29:25.601-07:00Hit #176 (DJO)<b>DJO (<i>DJO</i>)</b>, formerly called <b>dj Orthopedics</b>, is being acquired by <b>Blackstone Group</b> for <b>$1.6 billion</b> in cash. The offer, of <b>$50.25/share</b> makes for a gain of <b><font color="green">190%</font></b> over my average cost of <b>$17.31</b>.<br /><br />This comes just weeks after <i>Blackstone</i>, with others, bought another related public company, <b>Biomet (<i>BMET</i>)</b>. Among the remaining, <b>Smith & Nephew (<i>SNN</i>)</b> looks like the next likely target in the sector. <br /><br />For those looking at speculative smaller players, <b>Alphatec (<i>ATEC</i>)</b>, <b>Hanger Orthopedic (<i>HGR</i>)</b> and <b>Langer (<i>GAIT</i>)</b> provide growth opportunities, with <i>Hanger</i> looking like a sound bet for the long term.<br /><hr />Previous hit - <a href="http://urgetomerge.blogspot.com/2007/07/hit-175-rural-cellular.html">Rural Cellular (#175)</a>Guruhttp://www.blogger.com/profile/04233962331458054909noreply@blogger.com0tag:blogger.com,1999:blog-7124882.post-77415877982724700342007-07-30T23:26:00.001-07:002007-08-05T17:05:42.059-07:00Hit #175 (Rural Cellular)<b>Rural Cellular (<i>RCCC</i>)</b> is being acquired by <b>Verizon</b> in a cash deal. The <b>$45/share</b> offer represents a gain of <b><font color="green">733%</font></b> over my average cost of <b>$5.4</b> (bought a bit more than 2 years ago).<br /><br />I have mentioned <i>Rural Cellular</i> a couple of times in the past, <a href="http://urgetomerge.blogspot.com/2006/03/hit-83.html">first</a> when the then <i>SBC</i> bought <i>BellSouth</i>, and <a href="http://urgetomerge.blogspot.com/2005/01/ma-bell-to-be-adopted.html">later</a> when the original <i>AT&T</i> got acquired by <i>SBC</i> (the new <i>AT&T</i>).<br /><br />The other targets mentioned in those posts have all been acquired in the recent past. <b>Dobson Communications</b> was bought by the new <i>AT&T</i>, and <b>Alltel</b> by <i>private equity</i>.<br /><br /><b>Centennial Communications (<i>CYCL</i>)</b> remains a target, though not sufficiently attractive to be a buy right now. <b>Citizens Communications (<i>CZN</i>)</b> is another rural operators that, with a current yield of <b>7%</b> and trading near its <i>52-week low</i>, looks like a bargain.<br /><br /><b>Windstream (<i>WIN</i>)</b>, which recently bought <b>CT Communications (<i>CTCI</i>)</b>, is itself a very compelling buy now for long-term holders. I expect <i>Windstream</i> to get taken out eventually. In the meantime the <b>6.5% yield</b>, and hoped-for appreciation, will do a good job of contributing to juicy returns.<br /><br /><b>Warwick Valley Telephone (<i>WWVY</i>)</b> and <b>North Pittsburgh Systems (<i>NPSI</i>)</b> are also speculative bets, though not stocks I am comfortable buying at present. A buyer for these may come from others listed in this post!<br /><br />Still keeping the focus on <i>rural service providers</i>, cable/broadband providers like <b>Mediacom Communications (<i>MCCC</i>)</b> and <b>Knology (<i>KNOL</i>)</b> will be natural targets now. I have owned <i>Mediacom</i> shares for a while now, though nothing much has really happened to the shares since I bought them. I will be holding till the buyout.<br /><br /><b>Time Warner Telecom (<i>TWTC</i>)</b> and recently spun off <b>Time Warner Cable (<i>TWC</i>)</b> are also worth watching, with the latter still making for a good buy.<br /><hr />Previous hit - <a href="http://urgetomerge.blogspot.com/2007/07/hit-174-greater-bay-bancorp.html">Greater Bay Bancorp (#174)</a>Guruhttp://www.blogger.com/profile/04233962331458054909noreply@blogger.com0tag:blogger.com,1999:blog-7124882.post-31916999970362934532007-07-22T14:12:00.001-07:002007-08-06T23:38:31.420-07:00Hit #174 (Greater Bay Bancorp)One of <i>Bay Area</i>'s last independent regional banks, <b>Greater Bay Bancorp (<i>GBBK</i>)</b>, is being bought by <b>Wells Fargo</b> for <b>$1.5 billion</b> in a cash & stock transaction. The offer, amounting to around <b>$28.5/share</b>, translates into a gain of <b><font color="green">15.24%</font></b> over my average cost of <b>$24.73</b>.<br /><br />I have mentioned <i>Greater Bay</i> in the past, when the company put itself up for <a href="http://urgetomerge.blogspot.com/2004/10/greater-bay-bancorp-on-block.html">sale</a> and in another post on bank <a href="http://urgetomerge.blogspot.com/2005/02/big-bad-bank-small-bank-bigger-bad.html">mergers</a>.<br /><br />With this, the remaining two <i>Bay Area</i> banks, <b>Bridge Bank (<i>BBNK</i>)</b> and <b>Silicon Valley Bank (<i>SIVB</i>)</b>, should naturally become targets. I do not own either of them, and would be looking for a good entry point. Another bank with a large <i>Bay Area</i> operation, <b>First Republic Bank (<i>FRC</i>)</b>, is being acquired by <i>Merrill Lynch</i> in a transaction that involved a large premium.<br /><br />Identifying smaller banks that are takeover targets is more fun than one imagines. See earlier posts on going after a particular buyer (<a href="http://urgetomerge.blogspot.com/2007/02/who-is-next-for-rabobank.html">Who is next for <i>Rabobank</i>)</a> and profiting from road-trips (<a href="http://urgetomerge.blogspot.com/2006/01/feeling-arizona.html">Feeling Arizona</a> and <a href="http://urgetomerge.blogspot.com/2006/09/revisiting-arizona-and-stockmens-bank.html">Revisiting Arizona</a>).<br /><br />The latest subprime related scare has created a few buying opportunities in high quality and well-managed banks. I have been buying or watching a number of them. An incomplete watchlist is here:<ul><li><b>PrivateBancorp (<i>PVTB</i>)</b><br /><li><b>Bryn Mawr Trust (<i>BMTC</i>)</b><br /><li><b>Trustmark (<i>TRMK</i>)</b><br /><li><b>Renesant (<i>RNST</i>)</b><br /><li><b>UnionBanCal (<i>UB</i>)</b><br /><li><b>Umpqua Holdings (<i>UMPQ</i>)</b><br /><li><b>People's United Financial (<i>PBCT</i>)</b><br /><li><b>Virginia Commerce Bancorp (<i>VCBI</i>)</b><br /><li><b>Severn Bancorp (<i>SVBI</i>)</b><br /><li><b>Farmer's Capital Bank (<i>FFKT</i>)</b><br /><li><b>New York Community Bancorp (<i>NYB</i>)</b><br /><li><b>Capital Bancorp (<i>CBC</i>)</b><br /><li><b>KeyCorp (<i>KEY</i>)</b><br /><li><b>National City (<i>NCC</i>)</b><br /><li><b>Heritage Oaks Bancorp (<i>HEOP</i>)</b><br /><li><b>Capital City Bank (<i>CCBG</i>)</b><br /><li><b>Vineyard National Bancorp (<i>VNBC</i>)</b><br /><li><b>PFF Bancorp (<i>PFB</i>)</b><br /><li><b>Huntington Bancshares (<i>HBAN</i>)</b><br /><li><b>Popular Inc. (<i>BPOP</i>)</b><br /><li><b>Old National Bancorp (<i>ONB</i>)</b><br /><li><b>Bank of Florida (<i>BOFL</i>)</b><br /><li><b>Pacific Valley Bank(<i>PVBK</i>)</b><br /><li><b>Hampton Roads Bankshares (<i>HMPR</i>)</b><br /><li><b>Texas Capital Bancshares (<i>TCBI</i>)</b><br /><li><b>Colonial Bancgroup (<i>CNB</i>)</b><br /><li><b>Lakeland Bancorp (<i>LBAI</i>)</b><br /><li><b>LNB Bancorp (<i>LNBB</i>)</b><br /><li><b>Bank of Granite (<i>GRAN</i>)</b><br /><li><b>German American Bancorp (<i>GABC</i>)</b></ul><hr />Previous hit - <a href="http://urgetomerge.blogspot.com/2007/07/hit-173-bisys.html">Bisys (#173)</a>Guruhttp://www.blogger.com/profile/04233962331458054909noreply@blogger.com0tag:blogger.com,1999:blog-7124882.post-82908981810671710682007-07-22T11:36:00.000-07:002007-07-22T12:56:00.768-07:00Hit #173 (Bisys)<b>Bisys Group (<i>BSG</i>)</b> is being acquired by <b>Citigroup</b> for around <b>$1.5 billion</b> in cash. A special dividend of <b>15 cents/share</b> was also announced subject to completion. The total offer price is a discount of <b><font color="red">12.8%</font></b> to my average cost of <b>$13.75</b>.<br /><br />The offer is unusually low, even for a company like <i>Bisys</i> that may have more regulatory troubles ahead. <i>Bisys</i> has already agreed to a <b>$66.5 million</b> <a href="http://www.tmcnet.com/usubmit/2006/10/21/2003430.htm">settlement</a> with shareholders over allegations of misleading financial statements. There has also been a <b>$25 million</b> <a href="http://www.finextra.com/fullstory.asp?id=16959">fine</a> by the <b>SEC</b> over improper accounting and reporting. Having been a customer of <i>Bisys</i> myself, I have nothing positive to say about the experience. Given all this, it is surprising that no executive has landed behind bars. <br /><br />The second largest shareholder in the company, <b>Okumus Capital</b>, is opposing the deal saying it <a href="http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070629:MTFH10413_2007-06-29_20-32-51_N29425958&type=comktNews&rpc=44">signficantly undervalues the company</a> - I couldn't agree more. It would be interesting to find out what kind of sweet package to <i>Bisys</i> executives got them to agree to a deal that is clearly not in the interests of the shareholders.<br /><br />I had mentioned <i>Bisys</i> in a couple of posts a long time ago - once when <b>Intercept</b> (<a href="http://urgetomerge.blogspot.com/2004/09/hit-22.html">Hit #22</a>) was bought out, and later when <a href="http://urgetomerge.blogspot.com/2005/04/building-bridge.html">NYSE and Archipelago</a> merged.<br /><br />A related player I would highly recommend at this point is <b>Broadridge Financial (<i>BR</i>)</b>. Barring a <i>Bisys-like sellout</i>, this should be bought for a considerable premium down the road. I mentioned <i>Broadridge</i> earlier when <a href="http://urgetomerge.blogspot.com/2007/07/hit-169-ceridian.html">Ceridian (<i>Hit #169</i>)</a> was acquired.<br /><hr />Previous hit - <a href="http://urgetomerge.blogspot.com/2007/07/hit-172-cytyc.html">Cytyc (#172)</a>Guruhttp://www.blogger.com/profile/04233962331458054909noreply@blogger.com0tag:blogger.com,1999:blog-7124882.post-11876842035916785772007-07-20T21:15:00.000-07:002007-08-01T08:14:29.667-07:00Hit #172 (Cytyc)<b>Hologic (<i>HOLX</i>)</b> is buying <b>Cytyc (<i>CYTC</i>)</b> in a deal that is set to create a powerhouse in women's health. The part cash / part stock offer, of <b>$6.2 billion</b> translates to <b>$46.46/share</b>, representing a gain of <b><font color="green">189.4%</font></b> over my average cost of <b>$16.02</b>.<br /><br />This sector has seen incredible activity over the last year. In spite of the activity, and in spite of <b>Even Ensler</b>, there is a stubborn unwillingness to talk about things like <b>endometriosis</b>, <b>menorrhagia</b> or <b>cervical cancer</b>. For most men, and an overwhelming number of investors are, these topics are downright scary!<br /><br />Here is a glimpse of the recent activity in this sector. <i>Cytyc</i> had bought <i>Adeza</i> not too long ago, paying a sizeable premium (I had missed <i>Adeza</i> by just a few days!). The furious bidding battle over <i>Biosite</i> ended just recently - <b>Beckman Coulter</b> and <b>Inverness Medical</b> were fighting with ever higher offers. <b>Qiagen</b> bought <b>Digene</b> just weeks ago. Going a bit further into imaging/diagnosis, <b>MDZ</b> bought <b>Molecular Devices</b> a few months ago. <b>Ventana Medical</b> just got a hosite bid from <b>Roche</b>. And now <b>Hologic</b> is itself rumored to be a prey after its stock fell following the offer for <i>Cytyc</i>.<br /><br />The pace is set to continue. There are still a large number of takeover candidates out there, including recently public companies. To understand the trends and leading edge research in this sector is critical for long-term investors. I would recommend reading books like <a href="http://www.amazon.com/End-Medicine-Silicon-Valley-Reboot/dp/0061130311/ref=pd_bbs_sr_1/103-4954874-7175022?ie=UTF8&s=books&qid=1184992688&sr=8-1">End of Medicine</a>, <a href="http://www.amazon.com/Inside-FDA-Business-Politics-Behind/dp/0471610917/ref=pd_bbs_sr_1/103-4954874-7175022?ie=UTF8&s=books&qid=1184992864&sr=1-1">Inside the FDA</a> and <a href="http://www.amazon.com/Survival-Sickest-Medical-Maverick-Discovers/dp/0060889659/ref=pd_bbs_sr_1/103-4954874-7175022?ie=UTF8&s=books&qid=1184992703&sr=8-1">Survival of the Sickest</a>. They give a great summary and they are well-written too.<br /><br />I expect to see a huge shakeout in this sector, and the broader diagnosis/automation/equipment/reagents sector. Companies like <b>Invitrogen (<i>IVGN</i>)</b>, <b>Cepheid (<i>CPHD</i>)</b>, <b>Beckman Coulter (<i>BEC</i>)</b>, <b>Quest Diagnostics (<i>DGX</i>)</b>, <b>Inverness Medical (<i>IMA</i>)</b>, <b>Bio-Reference Laboratories (<i>BRLI</i>)</b>, <b>Dade Behring (<i>DADE</i>)</b>, <b>Sigma Aldrich (<i>SIAL</i>)</b>, <b>Qiagen (<i>QGEN</i>)</b>, <b>Invacare (<i>IVC</i>)</b>, <b>Varian Medical Systems (<i>VAR</i>)</b>, <b>Becton Dickinson (<i>BDX</i>)</b>, <b>MDS Inc. (<i>MDZ</i>)</b> are worth following to buy on serious dips. I have recently opened positions in <b>Invitrogen</b> and <b>MDS</b>.<br /><br />An attractive buy at this point would be <b>Genomic Health (<i>GHDX</i>)</b> which develops <i>genomic tests</i> to determine the odds of cancer recurrence and the nature of response to chemotherapy. <i>Genomic</i>'s test for <i>breast cancer</i> is now formally approved by various health insurance providers. The company went public about a year ago, and hasn't been noticed much. I have been buying shares regularly, and will continue to buy. <br /><br /><b>Quidel (<i>QDEL</i>)</b> and <b>Iris (<i>IRIS</i>)</b> are also recommended buys given their growth potential, and eventual buyout likelihood.<br /><br /><b>Meridian Bioscience (<i>VIVO</i>)</b> looks like another target, and has been on my watchlist for a while. Branching further into imaging and related areas, companies like <b>Vital Images (<i>VTAL</i>)</b>, <b>Digirad (<i>DRAD</i>)</b>, <b>Microvision (<i>MVIS</i>)</b>, <b>Volcano (<i>VOLC</i>)</b>, <b>American Medical Systems (<i>AMMD</i>)</b>, <b>Urologix (<i>ULGX</i>)</b> are worth watching, though except for <i>Vital Images</i> and <i>American Medical</i>, I would consider them to be speculative.<br /><hr />Previous hit - <a href="http://urgetomerge.blogspot.com/2007/07/hit-171-oakley.html">Oakley (#171)</a>Guruhttp://www.blogger.com/profile/04233962331458054909noreply@blogger.com0tag:blogger.com,1999:blog-7124882.post-65556951347703644972007-07-07T11:48:00.000-07:002007-07-07T18:47:11.814-07:00Hit #171 (Oakley)<b>Oakley (<i>OO</i>)</b>, the purveyor of stylish glasses (with MP3 players now), is being bought by <b>Luxottica (<i>LUX</i>)</b>, the <i>Italian</i> house that owns, among other brands, <i>Ray-Ban</i>. The cash offer of <b>$2.1 billion</b>, translates to a price of <b>$29.3/share</b> which is a <b><font color="green">86.27%</font></b> gain over my average cost of <b>$15.73/share</b>.<br /><br />I have owned <i>Oakley</i> for a while now, with the first buy at around <b>$13.5</b> following an earnings miss a few years ago.<br /><br />I don't own any <i>Oakley</i> products (I am still waiting for the glasses to carry satellite radio receivers!), but my few visits to the stores (see <a href="http://www.yelp.com/biz/VkmDj5lwFW1V4qIPRZFkiQ?hrid=teOPeQkG7p_EF202mV_2rg">Yelp review</a>) have been very informative. The glasses with <i>mp3</i> player look and sound great. Wonder what is next! <i>Oakley</i> has been able to maintain an image as being different from the rest of the crowd, by promotion via lifestyle mags, by using cult icons and by never discounting merchandise.<br /><br />Going into other similar plays, <b>True Religion (<i>TRLG</i>)</b>, <b>Deckers Outdoors (<i>DECK</i>)</b> and <b>Tiffany (<i>TIF</i>)</b> are great targets. All of these are expensive currently, with <i>Tiffany</i> being the only one still worth buying. I would like to see a deeper pullback and/or large insider buys to get into <i>True Religion</i> and <i>Deckers</i>. Unlike fine jewelry from <i>Tiffany</i>, there is also the question of being able to continue commanding premium prices for <i>jeans</i> and <i>Ugg</i> boots. Just as with any fad, they may fade away in a flash. <br /><br />Retailers like <b>Sharper Image (<i>SHRP</i>)</b> and <b>Restoration Hardware (<i>RSTO</i>)</b> also fall into a niche/premium category. Both are turnaround candidates, though they both seem sick as ever.<br /><br /><i>Sharper Image</i> especially seems to be in a mess of its own making. The stores are small and packed like a garage. The staff seem to be completely uninterested in responding to questions, and this is from personal experience at more than a handful of locations. What <i>Sharper Image</i> needs is larger stores, with elegant and organized displays, and staff who know about the stuff on sale, and are geniunely intereted in giving demos. If they don't realize that, somebody else will, and make a bid for them, though at this point such a bid will not be very rewarding to investors and will not reflect the long-term value in the company.<br /><br /><i>Restoration Hardware</i> fares better when it comes to both displaying their wares and having friendly, with room for improvement, staff. But somehow they don't seem to be able to do much to get out from the slump. The housing slowdown will not help them either.<br /><br />One particular product company that should follow the <i>Oakley</i> model of having its own stores is <b>iRobot (<i>IRBT</i>)</b>. Selling through other channels just doesn't do justice to their growing range of products, especially since buying them needs convincing casual customers, and that needs friendly/enthusiastic/knowledgeable people. Did I mention that <i>Sharper Image</i> doesn't fit the bill ?<br /><br />I would recommend all the three, <b>Sharper Image (<i>SHRP</i>)</b>, <b>Restoration Hardware (<i>RSTO</i>)</b> and <b>iRobot (<i>IRBT</i>)</b>, especially <i>iRobot</i>, to patient investors.<br /><hr />Previous hit - <a href="http://urgetomerge.blogspot.com/2007/07/hit-170-1-800-contacts_04.html">1-800 Contacts (#170)</a>Guruhttp://www.blogger.com/profile/04233962331458054909noreply@blogger.com0