Noticias - fim de semana 21/12 - 22/12/2002
Best Stocks 2003
Best Stocks 2003
From Money Magazine: 7 stocks -- Safety. Reliability. True value.
December 19, 2002: 6:28 PM EST
By Aravind Adiga, Jon Birger, Jeff Nash, Nick Pachetti Ilana Polyak, Stephanie D. Smith and Cybele Weisser
NEW YORK (Money Magazine) - As we close out the third consecutive down year for the stock market, conventional wisdom has never been more worthless -- which is why a conventional recovery seems so unlikely.
At least that was the premise the editors and writers of Money magazine started with when we set out to assemble our list of the best investments for 2003. When you read through our picks you'll notice, for example, our list's strong large-cap bias -- a bias that contradicts a long history of small stocks recovering first from bear markets. The way we see it, large companies got us into this mess; they should be able to lead us out.
Overall we expect 2003 to be a solid year for stocks. The problem right now is that corporate chieftains are too nervous to spend money on personnel or equipment. "Deep pockets but short arms" is how one prominent CEO describes the predicament. "The stock market is the key to the confidence of senior management," echoes Mark Zandi, chief economist at Economy.com. CEOs, Zandi says, won't take big risks until the market rewards them for doing so.
That said, our picks for 2003 are more conservative than our overall optimism might dictate. Going out on a limb seems unwise given the market's extreme unpredictability. So after crunching numbers and interviewing scores of analysts, economists and money managers, we homed in on seven stocks that not only are well positioned for an economic recovery but also offer downside protection if it doesn't materialize. Call it a portfolio for the cautiously optimistic.
The picks are Dell Computer, Gillette, Hewitt Associates, Northern Trust, Northrop Grumman, Philip Morris, and Wyeth. Click on any name to jump straight to Money magazine's analysis.
Recommended prices are as of Dec. 2, the closing date for Money magazine's January issue.
Dell Computer
To understand why we're bullish on Dell's prospects for 2003, first consider what the world's leading computer maker just accomplished. In 2002, a year described by tech tracker IDC as "the worst ever" for the IT industry, Dell widened its profit margins and improved revenue per employee.
For 2002 it's on pace to grow profits by 23 percent. If Dell (DELL: Research, Estimates) could do all that in a year when global technology expenditures actually declined (by 2.3 percent, according to IDC), imagine what it might do when the industry is actually growing.
A whole lot, in our opinion. That's why we think Dell is so well positioned. Desktops and servers usually become obsolete or costly to maintain after three to five years. With so much of corporate America's computer hardware purchased in the two years leading up to Y2K, a burst of new IT spending is both inevitable and overdue.
Ned Riley, chief investment officer of State Street Global Advisors, is so optimistic about Dell's prospects for 2003 that he thinks the 24 percent earnings growth that analysts are predicting is too conservative. "Most of today's forecasts reflect three years of accumulated negativity," Riley contends.
Yes, Dell's P/E ratio is high -- at around $29 a share, Dell trades at 29 times next year's estimated earnings -- but we'd argue that Dell's marketing and cost advantages make it one of the safer ways to bet on a tech resurgence.
Rain or shine, Dell continues to steal market share from rivals like Gateway and Sun Microsystems. And consider Dell's cagey move into the printer business.
"If Dell is aggressive in the way it prices printers and cartridges, it's going to put pressure on Hewlett-Packard to respond in kind," says Charles Wolf, a Needham & Co. analyst who counts Dell as his top pick. "And that in turn will weaken HP's ability to compete in PCs and servers."
Another positive is Michael Dell's sudden open-mindedness on the subject of dividends. Despite its $9 billion in cash and liquid investments, Dell has long resisted paying a dividend, using excess cash for stock buybacks instead. But with Congress talking about easing the personal tax on dividends, Michael Dell tells Money that he'll "absolutely consider a dividend" if Congress acts -- something he'd like to see happen. -- back to top
Gillette
By the end of the 1990s, Gillette had gotten dull. Its 1996 acquisition of battery maker Duracell didn't fulfill synergistic promises. Missteps in its money-minting razor division bloated costs and crippled earnings. But thanks to new CEO Jim Kilts, Gillette is acquiring a sharper edge. "The company is night and day as far as what they were before Jim Kilts," says Bank of America consumer-products analyst Bill Steele.
Kilts took the helm in early 2001 after a three-year tenure as CEO of Nabisco. He has a long and impressive record in the consumer-products world, having headed up Philip Morris' Worldwide Food division (which housed Kraft and General Foods) and served as president of Kraft USA.
At Gillette (G: Research, Estimates), he's introduced the Mach 3 Turbo and a new line of Oral B toothbrushes. He's also launched a plan to cut $350 million in costs by 2006 by shuttering underutilized plants and streamlining global operations.
In 2003 Gillette will roll out promising new products, including the Sensor 3, a high-end disposable razor. Given the staggeringly profitable 43 percent operating margin of the razor and blade business, the successful launch of Sensor 3 could have a sizable impact on Gillette's profits.
While Gillette clearly dominates shaving systems with 70 percent market share, batteries are a different story. Its Duracell business has lost share to Energizer and today delivers 24 percent of Gillette's $8.6 billion in sales but just 11 percent of its $1.7 billion in profits.
Kilts has started to make headway -- he's trimmed overhead costs, cut inventory and ramped up advertising spending to revitalize the brand. So far, so good. Operating margins at Duracell have improved from 11 percent in 2001 to 16 percent in 2002. Market share has grown to 42 percent from 40 percent, and for the first time since 1999, Duracell increased profits.
Wall Street is slowly starting to take notice. At a recent $30, Gillette is up 11 percent from its low of $27. Expected to grow earnings 15 percent in 2002, the stock trades at 28 times the previous four quarters' earnings versus a five-year average of 34. Gillette, says Sanford Bernstein's Jim Gingrich, "is in the third inning of a turnaround. I think there's more to come." -- back to top
Hewitt
You know times are strange when a data processing and outsourcing company becomes one of the hottest initial public offerings of 2002. Maybe it's because Hewitt has an established franchise.
The Lincolnshire, Ill., company was incorporated in 1940 and, according to Dale Gifford (who has spent 30 years with the company, the past 10 as CEO), has had double-digit earnings growth for 38 of the past 40 years. But with so many companies struggling to manage pension liabilities and skyrocketing health insurance costs, Hewitt is the right company at the right time.
Two-thirds of Hewitt's (HEW: Research, Estimates) $1.72 billion in revenue comes from its outsourcing business, which handles record keeping, paperwork and endless questions from employees about their health benefits or 401(k) plan. The other third of the business is a human-resources consulting practice that, among other things, helps companies crunch numbers for their pension plans.
We particularly like the fact that Hewitt's outsourcing unit signs three- to five-year contracts, giving it a steady, predictable revenue stream. Investors "should take the opportunity to own a company like this," says William Blair portfolio manager Harvey Bundy.
According to a recent forecast by Gartner, the U.S. market for the outsourcing of human-resources administration is projected to grow 20 percent a year this year and next, and to reach $60 billion by 2004. Analyst Brace Brooks of T. Rowe Price, Hewitt's largest shareholder, says the company's heavy investment in top-drawer technology and its prestigious brand name will help it capture additional market share.
This promising opportunity and industry consolidation -- Hewitt bought its leading U.K. competitor in 2002 -- are why CEO Gifford decided to move ahead with IPO plans regardless of market conditions. "It was disconcerting to see the market take a pounding every day during the road show," he says, "but it was also clear that going public would enhance our long-term success."
Since its June IPO, Hewitt has notched impressive earnings (reporting 16 percent for the fiscal year that ended Sept. 30). Prospects are similarly sizzling, with Wall Street predicting 19 percent yearly profit expansion over the next five years. Moreover, its clientele is made up of Fortune 500 companies like Johnson & Johnson and GE, and no single client accounts for more than 10 percent of sales.
Despite the tumultuous market, Hewitt's potential hasn't gone entirely unrecognized; since its debut, shares have risen from $19 to a recent $33 and trade at 27 times estimated 2003 earnings. But William Blair's Bundy argues that the stock still looks cheap compared with outsourcing rivals ADP and Paychex. Brian Gerber of Brazos Funds, which owns about 1 million shares, says that given the company's growth rate, the stock could hit $43 this year. -- back to top
Northern Trust
We scoured the beleaguered financial sector for companies that would attract investors once the market's pall clears. After weighing the risks and rewards of buying shares of Citigroup, Merrill Lynch, even J.P. Morgan Chase, we settled on a financial stock that isn't tainted by SEC investigations, doesn't have incalculable exposure to lawsuits and is not the target of pesky state attorneys general. Our choice? Chicago's Northern Trust.
Here's why: Even with the stock market rout, there are still a lot of rich people around -- 2.5 million Americans have more than $1 million in investable assets, in fact. What's more, that segment of the population is expected to grow nine times faster than the population at large.
All asset managers want a piece of rich folks' assets, but Northern Trust (NTRS: Research, Estimates) has a 113-year head start. In a business where hand-holding is important, this venerable institution already has a branch near many of America's wealthiest neighborhoods. "We create an environment where people feel they have someone who listens to them," says Northern Trust CEO William Osborn.
Yes, the market slump has taken a toll on the bank's business, with revenue off 5 percent. But to offset declining sales, Northern Trust has cut expenses by closing underperforming offices and capping executive pay. At the same time, the bank has been prospecting for new business and planning for a market rebound. Osborn intends to open 17 new offices (with a recent focus on Atlanta) by 2005, bringing the total to 100.
Because of Northern Trust's sterling reputation, the stock has long commanded a premium to the market. But the shares were off 33.5 percent in 2002. The culprits: declining earnings (profits are expected to fall 4 percent in 2002 but rise 7 percent in 2003) and write-offs for soured loans and venture-capital investments.
At $40, the stock is far below the $89 it reached in late 2000. It's now trading in line with the market's P/E multiple of 18 times 2003 earnings-well below its five-year average of 28. Plus, Northern pays a 1.7 percent yield. Jeff Van Harte, manager of the Transamerica Premier Equity fund, which owns the shares, is betting that the stock will regain its premium valuation. -- back to top
Northrop Grumman
Fueled by the threat of terrorism and the prospect of a war with Iraq, the U.S. defense budget is set to grow 15 percent next year to a whopping $379 billion. That's good news for Northrop Grumman, the nation's third-largest defense contractor.
Having expanded rapidly through a series of acquisitions, Northrop now has a commanding array of products to supply to the nation's armed forces. Its arsenal-which includes Navy destroyers, the Global Hawk unmanned aircraft, the radar for the F-22 fighter and the AWACS surveillance system-roped Northrop $14 billion in sales in 2001.
In 2003 those products could bring in as much as $26 billion in revenue. That's because Northrop (NOC: Research, Estimates) is in the process of acquiring defense contractor TRW-a deal that would make it only a bit smaller than archrival Lockheed Martin. "TRW is the capstone acquisition. It gives us the capabilities that make us an absolute powerhouse," says CEO Kent Kresa.
Some investors have backed off from Northrop while it completes the complicated process of selling off TRW's automotive unit and winning federal approval for the merger. That's one reason the stock is down 29 percent from its 52-week high.
Rob Petrie, an equity analyst at MFS Investment Management, which recently owned 4.5 million Northrop shares, points out that TRW makes Northrop even more formidable by making it a player in satellite defense, an area of military spending likely to grow. Trading at 18.5 times earnings with a 1.7 percent dividend yield, Northrop looks cheap given its growth potential. Throw in the fact that defense would be the sector most likely to benefit from a war in Iraq, and you've got a value stock that doubles as a market hedge. -- back to top
Philip Morris
Philip Morris, which will be known as Altria by February, is an impeccably well-run company. It's immensely profitable. It's also a pariah, and that's what makes Big Mo such a great value. Where else can you find a company with an 8 P/E, a 7 percent dividend yield and a business protected by unscalable barriers to entry?
These days, the Philip Morris (MO: Research, Estimates) story is particularly compelling. A shaky economy and rising sin taxes have once loyal customers clamoring for cheaper smokes-a tough break, considering that Philip Morris derives 90 percent of its U.S. cigarette sales from Marlboro, Virginia Slims and other premium brands.
In November, Philip Morris CFO Dinyar Devitre informed Wall Street that he couldn't confirm earlier estimates of 8 percent to 10 percent earnings growth in 2003, and that sent shares tumbling; recently they traded at $38, off 35 percent from the high. Now Wall Street expects Philip Morris to notch 5 percent profit growth in 2003. Factor in a 7 percent dividend yield, and all of a sudden you're looking at a plenty attractive 12 percent return.
Of course there's always the threat of more litigation, but thus far it's had little impact on Philip Morris' ability to consistently grow earnings-14 percent on average for the past three years. Ron Muhlenkamp, manager of the Muhlenkamp fund, explains, "We have so many state attorneys general expecting money from these lawsuits, they're basically debt holders who have an interest in keeping Philip Morris prosperous."
And if that's not enough to convince you, how about this: Susan Byrne, manager of MONEY 100 fund Gabelli Westwood Equity, has made Philip Morris a top 10 holding solely for its stake in Kraft (KFT: Research, Estimates). Philip Morris owns 84 percent of the food giant. So in essence you're getting the country's premier food stock, which sports a 17 P/E, for a humongous discount. -- back to top
Wyeth
Why is Wyeth, formerly American Home Products, the cheapest of the large drugmakers? Its portfolio of drugs and vaccines treats everything from osteoarthritis to depression, faces little threat of patent expiration and is enjoying rapidly expanding sales. The company has struck lucrative partnership deals with biotechs like MedImmune and other pharmas like Johnson & Johnson. Plus, it owns nearly 8 percent of biotech king Amgen.
So why is it so cheap? In July, Wyeth (WYE: Research, Estimates), a leading manufacturer of female hormone replacement pills, was jolted by a study suggesting that women who take hormones to block the symptoms of menopause might run a higher risk of cancer.
At the same time, the company was hit by concerns over its capacity to manufacture enough of its infant vaccine Prevnar to meet a spike in demand. The result: The stock fell 38 percent in 2002 (through Dec. 2) and is trading close to the bottom of its five-year P/E range. That valuation makes Wyeth a likely candidate to become one of this year's big rebound stories.
For starters, the company is moving fast to reassure investors that it is fixing its manufacturing problems. "There's absolutely no reason we can't supply Prevnar reliably to the market," asserts CEO Robert Essner.
Essner points out that 2003 should see an important product launch for the company: FluMist, a nasal flu vaccine that Wyeth developed with MedImmune, could receive approval this year, just in time for the next flu season. [Editors note: On Dec. 17, the Food and Drug Administration advisory panel voted that FluMist was safe and effective for healthy people aged 5 to 49. The endorsement means the FDA likely will approve FluMist for sale because the agency usually follows its panels' advice.]
While sales of Wyeth's hormone replacement therapies are likely to decline, Kris Jenner, manager of T. Rowe Price Health Sciences fund, believes that investors are going to be surprised by the strength of Wyeth's other products in 2003. Sales of Prevnar, for instance, are projected to expand by more than 50 percent in 2003. That's why Wyeth's earnings should grow by 11 percent this year. As a bonus, investors in Wyeth pick up a dividend yield of 2.4 percent. -- back to top
From Money Magazine: 7 stocks -- Safety. Reliability. True value.
December 19, 2002: 6:28 PM EST
By Aravind Adiga, Jon Birger, Jeff Nash, Nick Pachetti Ilana Polyak, Stephanie D. Smith and Cybele Weisser
NEW YORK (Money Magazine) - As we close out the third consecutive down year for the stock market, conventional wisdom has never been more worthless -- which is why a conventional recovery seems so unlikely.
At least that was the premise the editors and writers of Money magazine started with when we set out to assemble our list of the best investments for 2003. When you read through our picks you'll notice, for example, our list's strong large-cap bias -- a bias that contradicts a long history of small stocks recovering first from bear markets. The way we see it, large companies got us into this mess; they should be able to lead us out.
Overall we expect 2003 to be a solid year for stocks. The problem right now is that corporate chieftains are too nervous to spend money on personnel or equipment. "Deep pockets but short arms" is how one prominent CEO describes the predicament. "The stock market is the key to the confidence of senior management," echoes Mark Zandi, chief economist at Economy.com. CEOs, Zandi says, won't take big risks until the market rewards them for doing so.
That said, our picks for 2003 are more conservative than our overall optimism might dictate. Going out on a limb seems unwise given the market's extreme unpredictability. So after crunching numbers and interviewing scores of analysts, economists and money managers, we homed in on seven stocks that not only are well positioned for an economic recovery but also offer downside protection if it doesn't materialize. Call it a portfolio for the cautiously optimistic.
The picks are Dell Computer, Gillette, Hewitt Associates, Northern Trust, Northrop Grumman, Philip Morris, and Wyeth. Click on any name to jump straight to Money magazine's analysis.
Recommended prices are as of Dec. 2, the closing date for Money magazine's January issue.
Dell Computer
To understand why we're bullish on Dell's prospects for 2003, first consider what the world's leading computer maker just accomplished. In 2002, a year described by tech tracker IDC as "the worst ever" for the IT industry, Dell widened its profit margins and improved revenue per employee.
For 2002 it's on pace to grow profits by 23 percent. If Dell (DELL: Research, Estimates) could do all that in a year when global technology expenditures actually declined (by 2.3 percent, according to IDC), imagine what it might do when the industry is actually growing.
A whole lot, in our opinion. That's why we think Dell is so well positioned. Desktops and servers usually become obsolete or costly to maintain after three to five years. With so much of corporate America's computer hardware purchased in the two years leading up to Y2K, a burst of new IT spending is both inevitable and overdue.
Ned Riley, chief investment officer of State Street Global Advisors, is so optimistic about Dell's prospects for 2003 that he thinks the 24 percent earnings growth that analysts are predicting is too conservative. "Most of today's forecasts reflect three years of accumulated negativity," Riley contends.
Yes, Dell's P/E ratio is high -- at around $29 a share, Dell trades at 29 times next year's estimated earnings -- but we'd argue that Dell's marketing and cost advantages make it one of the safer ways to bet on a tech resurgence.
Rain or shine, Dell continues to steal market share from rivals like Gateway and Sun Microsystems. And consider Dell's cagey move into the printer business.
"If Dell is aggressive in the way it prices printers and cartridges, it's going to put pressure on Hewlett-Packard to respond in kind," says Charles Wolf, a Needham & Co. analyst who counts Dell as his top pick. "And that in turn will weaken HP's ability to compete in PCs and servers."
Another positive is Michael Dell's sudden open-mindedness on the subject of dividends. Despite its $9 billion in cash and liquid investments, Dell has long resisted paying a dividend, using excess cash for stock buybacks instead. But with Congress talking about easing the personal tax on dividends, Michael Dell tells Money that he'll "absolutely consider a dividend" if Congress acts -- something he'd like to see happen. -- back to top
Gillette
By the end of the 1990s, Gillette had gotten dull. Its 1996 acquisition of battery maker Duracell didn't fulfill synergistic promises. Missteps in its money-minting razor division bloated costs and crippled earnings. But thanks to new CEO Jim Kilts, Gillette is acquiring a sharper edge. "The company is night and day as far as what they were before Jim Kilts," says Bank of America consumer-products analyst Bill Steele.
Kilts took the helm in early 2001 after a three-year tenure as CEO of Nabisco. He has a long and impressive record in the consumer-products world, having headed up Philip Morris' Worldwide Food division (which housed Kraft and General Foods) and served as president of Kraft USA.
At Gillette (G: Research, Estimates), he's introduced the Mach 3 Turbo and a new line of Oral B toothbrushes. He's also launched a plan to cut $350 million in costs by 2006 by shuttering underutilized plants and streamlining global operations.
In 2003 Gillette will roll out promising new products, including the Sensor 3, a high-end disposable razor. Given the staggeringly profitable 43 percent operating margin of the razor and blade business, the successful launch of Sensor 3 could have a sizable impact on Gillette's profits.
While Gillette clearly dominates shaving systems with 70 percent market share, batteries are a different story. Its Duracell business has lost share to Energizer and today delivers 24 percent of Gillette's $8.6 billion in sales but just 11 percent of its $1.7 billion in profits.
Kilts has started to make headway -- he's trimmed overhead costs, cut inventory and ramped up advertising spending to revitalize the brand. So far, so good. Operating margins at Duracell have improved from 11 percent in 2001 to 16 percent in 2002. Market share has grown to 42 percent from 40 percent, and for the first time since 1999, Duracell increased profits.
Wall Street is slowly starting to take notice. At a recent $30, Gillette is up 11 percent from its low of $27. Expected to grow earnings 15 percent in 2002, the stock trades at 28 times the previous four quarters' earnings versus a five-year average of 34. Gillette, says Sanford Bernstein's Jim Gingrich, "is in the third inning of a turnaround. I think there's more to come." -- back to top
Hewitt
You know times are strange when a data processing and outsourcing company becomes one of the hottest initial public offerings of 2002. Maybe it's because Hewitt has an established franchise.
The Lincolnshire, Ill., company was incorporated in 1940 and, according to Dale Gifford (who has spent 30 years with the company, the past 10 as CEO), has had double-digit earnings growth for 38 of the past 40 years. But with so many companies struggling to manage pension liabilities and skyrocketing health insurance costs, Hewitt is the right company at the right time.
Two-thirds of Hewitt's (HEW: Research, Estimates) $1.72 billion in revenue comes from its outsourcing business, which handles record keeping, paperwork and endless questions from employees about their health benefits or 401(k) plan. The other third of the business is a human-resources consulting practice that, among other things, helps companies crunch numbers for their pension plans.
We particularly like the fact that Hewitt's outsourcing unit signs three- to five-year contracts, giving it a steady, predictable revenue stream. Investors "should take the opportunity to own a company like this," says William Blair portfolio manager Harvey Bundy.
According to a recent forecast by Gartner, the U.S. market for the outsourcing of human-resources administration is projected to grow 20 percent a year this year and next, and to reach $60 billion by 2004. Analyst Brace Brooks of T. Rowe Price, Hewitt's largest shareholder, says the company's heavy investment in top-drawer technology and its prestigious brand name will help it capture additional market share.
This promising opportunity and industry consolidation -- Hewitt bought its leading U.K. competitor in 2002 -- are why CEO Gifford decided to move ahead with IPO plans regardless of market conditions. "It was disconcerting to see the market take a pounding every day during the road show," he says, "but it was also clear that going public would enhance our long-term success."
Since its June IPO, Hewitt has notched impressive earnings (reporting 16 percent for the fiscal year that ended Sept. 30). Prospects are similarly sizzling, with Wall Street predicting 19 percent yearly profit expansion over the next five years. Moreover, its clientele is made up of Fortune 500 companies like Johnson & Johnson and GE, and no single client accounts for more than 10 percent of sales.
Despite the tumultuous market, Hewitt's potential hasn't gone entirely unrecognized; since its debut, shares have risen from $19 to a recent $33 and trade at 27 times estimated 2003 earnings. But William Blair's Bundy argues that the stock still looks cheap compared with outsourcing rivals ADP and Paychex. Brian Gerber of Brazos Funds, which owns about 1 million shares, says that given the company's growth rate, the stock could hit $43 this year. -- back to top
Northern Trust
We scoured the beleaguered financial sector for companies that would attract investors once the market's pall clears. After weighing the risks and rewards of buying shares of Citigroup, Merrill Lynch, even J.P. Morgan Chase, we settled on a financial stock that isn't tainted by SEC investigations, doesn't have incalculable exposure to lawsuits and is not the target of pesky state attorneys general. Our choice? Chicago's Northern Trust.
Here's why: Even with the stock market rout, there are still a lot of rich people around -- 2.5 million Americans have more than $1 million in investable assets, in fact. What's more, that segment of the population is expected to grow nine times faster than the population at large.
All asset managers want a piece of rich folks' assets, but Northern Trust (NTRS: Research, Estimates) has a 113-year head start. In a business where hand-holding is important, this venerable institution already has a branch near many of America's wealthiest neighborhoods. "We create an environment where people feel they have someone who listens to them," says Northern Trust CEO William Osborn.
Yes, the market slump has taken a toll on the bank's business, with revenue off 5 percent. But to offset declining sales, Northern Trust has cut expenses by closing underperforming offices and capping executive pay. At the same time, the bank has been prospecting for new business and planning for a market rebound. Osborn intends to open 17 new offices (with a recent focus on Atlanta) by 2005, bringing the total to 100.
Because of Northern Trust's sterling reputation, the stock has long commanded a premium to the market. But the shares were off 33.5 percent in 2002. The culprits: declining earnings (profits are expected to fall 4 percent in 2002 but rise 7 percent in 2003) and write-offs for soured loans and venture-capital investments.
At $40, the stock is far below the $89 it reached in late 2000. It's now trading in line with the market's P/E multiple of 18 times 2003 earnings-well below its five-year average of 28. Plus, Northern pays a 1.7 percent yield. Jeff Van Harte, manager of the Transamerica Premier Equity fund, which owns the shares, is betting that the stock will regain its premium valuation. -- back to top
Northrop Grumman
Fueled by the threat of terrorism and the prospect of a war with Iraq, the U.S. defense budget is set to grow 15 percent next year to a whopping $379 billion. That's good news for Northrop Grumman, the nation's third-largest defense contractor.
Having expanded rapidly through a series of acquisitions, Northrop now has a commanding array of products to supply to the nation's armed forces. Its arsenal-which includes Navy destroyers, the Global Hawk unmanned aircraft, the radar for the F-22 fighter and the AWACS surveillance system-roped Northrop $14 billion in sales in 2001.
In 2003 those products could bring in as much as $26 billion in revenue. That's because Northrop (NOC: Research, Estimates) is in the process of acquiring defense contractor TRW-a deal that would make it only a bit smaller than archrival Lockheed Martin. "TRW is the capstone acquisition. It gives us the capabilities that make us an absolute powerhouse," says CEO Kent Kresa.
Some investors have backed off from Northrop while it completes the complicated process of selling off TRW's automotive unit and winning federal approval for the merger. That's one reason the stock is down 29 percent from its 52-week high.
Rob Petrie, an equity analyst at MFS Investment Management, which recently owned 4.5 million Northrop shares, points out that TRW makes Northrop even more formidable by making it a player in satellite defense, an area of military spending likely to grow. Trading at 18.5 times earnings with a 1.7 percent dividend yield, Northrop looks cheap given its growth potential. Throw in the fact that defense would be the sector most likely to benefit from a war in Iraq, and you've got a value stock that doubles as a market hedge. -- back to top
Philip Morris
Philip Morris, which will be known as Altria by February, is an impeccably well-run company. It's immensely profitable. It's also a pariah, and that's what makes Big Mo such a great value. Where else can you find a company with an 8 P/E, a 7 percent dividend yield and a business protected by unscalable barriers to entry?
These days, the Philip Morris (MO: Research, Estimates) story is particularly compelling. A shaky economy and rising sin taxes have once loyal customers clamoring for cheaper smokes-a tough break, considering that Philip Morris derives 90 percent of its U.S. cigarette sales from Marlboro, Virginia Slims and other premium brands.
In November, Philip Morris CFO Dinyar Devitre informed Wall Street that he couldn't confirm earlier estimates of 8 percent to 10 percent earnings growth in 2003, and that sent shares tumbling; recently they traded at $38, off 35 percent from the high. Now Wall Street expects Philip Morris to notch 5 percent profit growth in 2003. Factor in a 7 percent dividend yield, and all of a sudden you're looking at a plenty attractive 12 percent return.
Of course there's always the threat of more litigation, but thus far it's had little impact on Philip Morris' ability to consistently grow earnings-14 percent on average for the past three years. Ron Muhlenkamp, manager of the Muhlenkamp fund, explains, "We have so many state attorneys general expecting money from these lawsuits, they're basically debt holders who have an interest in keeping Philip Morris prosperous."
And if that's not enough to convince you, how about this: Susan Byrne, manager of MONEY 100 fund Gabelli Westwood Equity, has made Philip Morris a top 10 holding solely for its stake in Kraft (KFT: Research, Estimates). Philip Morris owns 84 percent of the food giant. So in essence you're getting the country's premier food stock, which sports a 17 P/E, for a humongous discount. -- back to top
Wyeth
Why is Wyeth, formerly American Home Products, the cheapest of the large drugmakers? Its portfolio of drugs and vaccines treats everything from osteoarthritis to depression, faces little threat of patent expiration and is enjoying rapidly expanding sales. The company has struck lucrative partnership deals with biotechs like MedImmune and other pharmas like Johnson & Johnson. Plus, it owns nearly 8 percent of biotech king Amgen.
So why is it so cheap? In July, Wyeth (WYE: Research, Estimates), a leading manufacturer of female hormone replacement pills, was jolted by a study suggesting that women who take hormones to block the symptoms of menopause might run a higher risk of cancer.
At the same time, the company was hit by concerns over its capacity to manufacture enough of its infant vaccine Prevnar to meet a spike in demand. The result: The stock fell 38 percent in 2002 (through Dec. 2) and is trading close to the bottom of its five-year P/E range. That valuation makes Wyeth a likely candidate to become one of this year's big rebound stories.
For starters, the company is moving fast to reassure investors that it is fixing its manufacturing problems. "There's absolutely no reason we can't supply Prevnar reliably to the market," asserts CEO Robert Essner.
Essner points out that 2003 should see an important product launch for the company: FluMist, a nasal flu vaccine that Wyeth developed with MedImmune, could receive approval this year, just in time for the next flu season. [Editors note: On Dec. 17, the Food and Drug Administration advisory panel voted that FluMist was safe and effective for healthy people aged 5 to 49. The endorsement means the FDA likely will approve FluMist for sale because the agency usually follows its panels' advice.]
While sales of Wyeth's hormone replacement therapies are likely to decline, Kris Jenner, manager of T. Rowe Price Health Sciences fund, believes that investors are going to be surprised by the strength of Wyeth's other products in 2003. Sales of Prevnar, for instance, are projected to expand by more than 50 percent in 2003. That's why Wyeth's earnings should grow by 11 percent this year. As a bonus, investors in Wyeth pick up a dividend yield of 2.4 percent. -- back to top
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Global IPOs May Rebound in 2003 After Falling One-Third in 2
Global IPOs May Rebound in 2003 After Falling One-Third in 2002
By Paul Scanlon
Hong Kong, Dec. 23 (Bloomberg) -- Verizon Wireless Inc. and China's Guangdong Grid Co. may help initial public offerings rise worldwide in 2003 as faster economic growth in the U.S. and Asia spurs demand for equity, investors and bankers said.
``People are more optimistic about economic growth in the U.S. and elsewhere next year, which makes them more comfortable about buying equity,'' said David Chapman, who helps manage $650 million in global shares at Towry Law Asia Ltd. in Hong Kong. ``I'm getting ready for increased new issuance over the next 12 months.''
Rising stocks may encourage more companies to sell shares to the public. Fifty-eight of 73 primary stock indexes posted gains in the fourth quarter, up from six in the previous three months.
Even so, global stock markets and economies probably won't rebound fast enough next year to lift initial share sales to 2000 levels. In Europe, IPOs are unlikely to top the $12.8 billion raised this year. The region's biggest first-time share sale due in 2003, the French government's sale of shares in gas utility Gaz de France, probably won't top 6 billion euros ($6.2 billion).
First-time stock sales worldwide slid 30 percent to $66 billion in 2002, the lowest in at least four years, Bloomberg data show. IPO fees for Goldman Sachs Group Inc., Merrill Lynch & Co. and other securities firms fell by an estimated $900 million.
A rebound in initial offerings would enable companies to raise funds, helping to revive stalled economies. It would also bring relief to Wall Street firms, which have cut more than 54,000 jobs since March 2001 as a slump in global stock sales and corporate mergers eroded investment-banking fees.
Germany, Japan
IPOs generate higher fees for Goldman and other banks than secondary share sales or corporate bond offerings. Underwriting fees for first-time share sales average about 3 percent of the funds raised and can rise as high as 7 percent, bankers said.
``Business will pick up once CEOs and boardrooms gain confidence in the economic outlook,'' said Jim Birle, co-head of global equity capital markets at Merrill Lynch.
The U.S. economy will probably expand 2.8 percent next year after growing 2.3 percent in 2002, according to the November Blue Chip Economic Indicators survey. The economy grew at a 4 percent annual rate in the third quarter of this year, and consumer confidence rose in December to a four-month high.
Europe and Japan aren't sharing in that growth. Germany's economy, Europe's biggest, may contract in the first quarter as production falls and unemployment rises. Japan's government expects the world's second-largest economy to expand 0.6 percent in the year starting April 1, slowing from a 0.9 percent pace this fiscal year.
Salomon No. 1
U.S. IPO volume will probably pick up along with economic growth by the second quarter and may rise about 15 percent to 20 percent for the year, underwriters and investors said. That increase would still bring IPOs no higher than $34 billion for the year, less than a third of the value in 1999 or 2000.
This year, U.S. IPOs slumped 38 percent from a year ago to $28 billion. That would be the smallest amount raised since 1991's $16.8 billion, according to Dealogic LLC.
CIT Group Inc., a $4.87 billion sale in July by parent Tyco International Ltd., was the world's biggest IPO of 2002. Travelers Property Casualty Corp., a Citigroup Inc. unit, completed a $4.27 billion offer in March.
The Travelers sale helped vault Citigroup's Salomon Smith Barney unit into the top spot among global IPO underwriters with $10.1 billion of sales, Bloomberg data show, up from fourth place in 2001. Goldman, the leader in 2001, fell to second. It kept its place as the biggest underwriter of overall share sales.
Verizon, Maguire
Recent share-price gains point to more U.S. deals next year. The Dow Jones Industrial Average has climbed 17 percent since Oct. 9, and the Nasdaq Composite Index has risen about 22 percent. The Bloomberg IPO Index, which tracks the performance of U.S. stocks in their first year of trading, is up 17 percent for the period.
``That suggests to us a nice 2003'' for IPOs, said Kathleen Smith, who manages the $15 million Renaissance IPO Plus Fund.
Smith expects Verizon Wireless, the cell-phone unit of Verizon Communications Inc. with $16 billion in annual sales, to complete a planned IPO in 2003. Meridian Automotive Systems Inc., Noveon Inc. and Loews Cineplex Entertainment Corp., each with $1 billion in annual sales, plan share sales. So do Converse Inc., a U.S. sneaker maker, and Orbitz Inc., an online travel company.
Maguire Properties Inc., the largest office-building owner in downtown Los Angeles, plans to raise as much as $890 million next year. It was one of 118 companies in the U.S. that had filed to go public in the year to Dec. 16, compared with 97 in the year- earlier period, according to Renaissance data.
China
China may generate some of 2003's biggest global IPOs as its government accelerates sales of state companies. Morgan Stanley's Philip Purcell and Credit Suisse First Boston Inc.'s John Mack were among the Wall Street chief executives who made several trips to Beijing this year to drum up business.
Guangdong Grid, southern China's biggest utility, and China Netcom Communication Group Corp., the nation's No. 2 fixed-line phone company, each plan initial share sales of more than $1 billion.
Chinese companies sold $4.9 billion of shares in first-time sales in 2002 and may double that figure next year, bankers said. This year's biggest sales were by Bank of China's Hong Kong unit and China Telecom Corp. Ltd., a unit of the country's No. 1 fixed- line phone company.
``Global markets have suffered, but for Asia, particularly North Asia, its been business as usual,'' said Stephen Metcalfe, head of Asian equity syndication for CSFB, who helped sell $286 million of shares for China Oilfield Services Ltd. in November. ``Next year in Asia is going to be all about China, China, China.''
Delays in Europe
Asian companies outside Japan raised $19 billion from first- time domestic and overseas share sales this year, with $15 billion coming from China. Including Japan, the Asia-Pacific region accounted for 39 percent of IPOs globally, Bloomberg data show.
In Europe, companies are postponing planned IPOs as the continent's biggest economies lag U.S. growth.
Italian luxury-goods maker Prada Holding NV, which canceled a planned IPO three times in the past two years, won't go ahead with the sale before 2005, Chief Executive Patrizio Bertelli said in September.
T-Mobile International AG, Deutsche Telekom AG's wireless unit, has postponed an initial share sale indefinitely. Enel SpA, the parent of Wind SpA, doesn't plan to take Italy's No. 2 phone company public for at least two years.
France Telecom, Renault
Europe's biggest share sale of 2003 may be by a company that's already publicly traded. France Telecom SA, Europe's most indebted phone company, plans to sell additional stock worth as much as 15 billion euros in the first quarter. France's government also plans to sell remaining stakes in companies such as Renault SA, the country's No. 2 carmaker.
For first-time share sales, ``We're planning for 2003 being like this year,'' said Christian Meissner, co-head of European equity capital markets at Goldman.
For 2002, European IPOs are headed for their worst year since at least 1996. Flows to equity funds in Europe dropped 96 percent this year from their 2000 peak, according to Schroder Salomon Smith Barney.
Investors worldwide, still reeling from the collapse of the Internet bubble in 2000, say they'll be selective about where they put their money next year.
Choosy Investors
``I'll invest in new companies so long as they are not greedy and valuations are fair,'' said Towry Law Asia's Chapman. ``They have to offer investors dividends, show profits and offer a growth story.''
China Telecom and California-based Seagate Technology Holdings completed initial share sales this year only after cutting the offer size or price or promising bigger dividends.
``We're not going to be focusing on concept stocks,'' said Tim Gould, co-head of global equity syndicate at Lehman Brothers Holdings Inc., which managed $3 billion of IPOs this year, ranking eighth among underwriters globally. ``Seasoned companies with seasoned management are a whole lot more appealing to investors.''
In Japan, where the stock market is set to lose value for a fifth year in six, the largest share sales planned for 2003 are secondary sales by the government, not IPOs.
The biggest due next year is the sale of a government stake worth about $2 billion in Japan Tobacco Inc., the nation's cigarette-manufacturing monopoly. The sale, which will be arranged by Merrill Lynch and Daiwa Securities SMBC Co., was scrapped in July because of stock-market declines
By Paul Scanlon
Hong Kong, Dec. 23 (Bloomberg) -- Verizon Wireless Inc. and China's Guangdong Grid Co. may help initial public offerings rise worldwide in 2003 as faster economic growth in the U.S. and Asia spurs demand for equity, investors and bankers said.
``People are more optimistic about economic growth in the U.S. and elsewhere next year, which makes them more comfortable about buying equity,'' said David Chapman, who helps manage $650 million in global shares at Towry Law Asia Ltd. in Hong Kong. ``I'm getting ready for increased new issuance over the next 12 months.''
Rising stocks may encourage more companies to sell shares to the public. Fifty-eight of 73 primary stock indexes posted gains in the fourth quarter, up from six in the previous three months.
Even so, global stock markets and economies probably won't rebound fast enough next year to lift initial share sales to 2000 levels. In Europe, IPOs are unlikely to top the $12.8 billion raised this year. The region's biggest first-time share sale due in 2003, the French government's sale of shares in gas utility Gaz de France, probably won't top 6 billion euros ($6.2 billion).
First-time stock sales worldwide slid 30 percent to $66 billion in 2002, the lowest in at least four years, Bloomberg data show. IPO fees for Goldman Sachs Group Inc., Merrill Lynch & Co. and other securities firms fell by an estimated $900 million.
A rebound in initial offerings would enable companies to raise funds, helping to revive stalled economies. It would also bring relief to Wall Street firms, which have cut more than 54,000 jobs since March 2001 as a slump in global stock sales and corporate mergers eroded investment-banking fees.
Germany, Japan
IPOs generate higher fees for Goldman and other banks than secondary share sales or corporate bond offerings. Underwriting fees for first-time share sales average about 3 percent of the funds raised and can rise as high as 7 percent, bankers said.
``Business will pick up once CEOs and boardrooms gain confidence in the economic outlook,'' said Jim Birle, co-head of global equity capital markets at Merrill Lynch.
The U.S. economy will probably expand 2.8 percent next year after growing 2.3 percent in 2002, according to the November Blue Chip Economic Indicators survey. The economy grew at a 4 percent annual rate in the third quarter of this year, and consumer confidence rose in December to a four-month high.
Europe and Japan aren't sharing in that growth. Germany's economy, Europe's biggest, may contract in the first quarter as production falls and unemployment rises. Japan's government expects the world's second-largest economy to expand 0.6 percent in the year starting April 1, slowing from a 0.9 percent pace this fiscal year.
Salomon No. 1
U.S. IPO volume will probably pick up along with economic growth by the second quarter and may rise about 15 percent to 20 percent for the year, underwriters and investors said. That increase would still bring IPOs no higher than $34 billion for the year, less than a third of the value in 1999 or 2000.
This year, U.S. IPOs slumped 38 percent from a year ago to $28 billion. That would be the smallest amount raised since 1991's $16.8 billion, according to Dealogic LLC.
CIT Group Inc., a $4.87 billion sale in July by parent Tyco International Ltd., was the world's biggest IPO of 2002. Travelers Property Casualty Corp., a Citigroup Inc. unit, completed a $4.27 billion offer in March.
The Travelers sale helped vault Citigroup's Salomon Smith Barney unit into the top spot among global IPO underwriters with $10.1 billion of sales, Bloomberg data show, up from fourth place in 2001. Goldman, the leader in 2001, fell to second. It kept its place as the biggest underwriter of overall share sales.
Verizon, Maguire
Recent share-price gains point to more U.S. deals next year. The Dow Jones Industrial Average has climbed 17 percent since Oct. 9, and the Nasdaq Composite Index has risen about 22 percent. The Bloomberg IPO Index, which tracks the performance of U.S. stocks in their first year of trading, is up 17 percent for the period.
``That suggests to us a nice 2003'' for IPOs, said Kathleen Smith, who manages the $15 million Renaissance IPO Plus Fund.
Smith expects Verizon Wireless, the cell-phone unit of Verizon Communications Inc. with $16 billion in annual sales, to complete a planned IPO in 2003. Meridian Automotive Systems Inc., Noveon Inc. and Loews Cineplex Entertainment Corp., each with $1 billion in annual sales, plan share sales. So do Converse Inc., a U.S. sneaker maker, and Orbitz Inc., an online travel company.
Maguire Properties Inc., the largest office-building owner in downtown Los Angeles, plans to raise as much as $890 million next year. It was one of 118 companies in the U.S. that had filed to go public in the year to Dec. 16, compared with 97 in the year- earlier period, according to Renaissance data.
China
China may generate some of 2003's biggest global IPOs as its government accelerates sales of state companies. Morgan Stanley's Philip Purcell and Credit Suisse First Boston Inc.'s John Mack were among the Wall Street chief executives who made several trips to Beijing this year to drum up business.
Guangdong Grid, southern China's biggest utility, and China Netcom Communication Group Corp., the nation's No. 2 fixed-line phone company, each plan initial share sales of more than $1 billion.
Chinese companies sold $4.9 billion of shares in first-time sales in 2002 and may double that figure next year, bankers said. This year's biggest sales were by Bank of China's Hong Kong unit and China Telecom Corp. Ltd., a unit of the country's No. 1 fixed- line phone company.
``Global markets have suffered, but for Asia, particularly North Asia, its been business as usual,'' said Stephen Metcalfe, head of Asian equity syndication for CSFB, who helped sell $286 million of shares for China Oilfield Services Ltd. in November. ``Next year in Asia is going to be all about China, China, China.''
Delays in Europe
Asian companies outside Japan raised $19 billion from first- time domestic and overseas share sales this year, with $15 billion coming from China. Including Japan, the Asia-Pacific region accounted for 39 percent of IPOs globally, Bloomberg data show.
In Europe, companies are postponing planned IPOs as the continent's biggest economies lag U.S. growth.
Italian luxury-goods maker Prada Holding NV, which canceled a planned IPO three times in the past two years, won't go ahead with the sale before 2005, Chief Executive Patrizio Bertelli said in September.
T-Mobile International AG, Deutsche Telekom AG's wireless unit, has postponed an initial share sale indefinitely. Enel SpA, the parent of Wind SpA, doesn't plan to take Italy's No. 2 phone company public for at least two years.
France Telecom, Renault
Europe's biggest share sale of 2003 may be by a company that's already publicly traded. France Telecom SA, Europe's most indebted phone company, plans to sell additional stock worth as much as 15 billion euros in the first quarter. France's government also plans to sell remaining stakes in companies such as Renault SA, the country's No. 2 carmaker.
For first-time share sales, ``We're planning for 2003 being like this year,'' said Christian Meissner, co-head of European equity capital markets at Goldman.
For 2002, European IPOs are headed for their worst year since at least 1996. Flows to equity funds in Europe dropped 96 percent this year from their 2000 peak, according to Schroder Salomon Smith Barney.
Investors worldwide, still reeling from the collapse of the Internet bubble in 2000, say they'll be selective about where they put their money next year.
Choosy Investors
``I'll invest in new companies so long as they are not greedy and valuations are fair,'' said Towry Law Asia's Chapman. ``They have to offer investors dividends, show profits and offer a growth story.''
China Telecom and California-based Seagate Technology Holdings completed initial share sales this year only after cutting the offer size or price or promising bigger dividends.
``We're not going to be focusing on concept stocks,'' said Tim Gould, co-head of global equity syndicate at Lehman Brothers Holdings Inc., which managed $3 billion of IPOs this year, ranking eighth among underwriters globally. ``Seasoned companies with seasoned management are a whole lot more appealing to investors.''
In Japan, where the stock market is set to lose value for a fifth year in six, the largest share sales planned for 2003 are secondary sales by the government, not IPOs.
The biggest due next year is the sale of a government stake worth about $2 billion in Japan Tobacco Inc., the nation's cigarette-manufacturing monopoly. The sale, which will be arranged by Merrill Lynch and Daiwa Securities SMBC Co., was scrapped in July because of stock-market declines
- Mensagens: 23939
- Registado: 5/11/2002 11:30
- Localização: 4
Cynthia Cooper, Coleen Rowley and Sherron Watkins
Cynthia Cooper, Coleen Rowley and Sherron Watkins
They took huge professional and personal risks to blow the whistle on what went wrong at WorldCom, Enron and the FBI—and in so doing helped remind us what American courage and American values are all about
By Richard Lacayo and Amanda Ripley
Posted Sunday, December 22, 2002; 4:31 a.m. EST
This was the year when the grief started to lift and the worries came in.
During the first weeks of 2002, two dark moods entered the room, two anxieties that rattled down everybody's nerve paths, even on good days, and etched their particulars into the general disposition. To begin with, after Sept. 11, the passage of time drew off the worst of the pain, but every month or so there came a new disturbance—an orange alert, a dance-club bombing in Bali, a surface-to-air missile fired at a passenger jet—that showed us the beast still at our door.
In the confrontation with Iraq, in the contested effort to build a homeland defense, we all struggled to regain something like the more secure world we thought we lived in before the towers fell. But every step of the way we wondered—was this the way back? What exactly did we need to be doing differently?
And all the while there was the black comedy of corporate fraud. Who knew that the swashbuckling economy of the '90s had produced so many buccaneers? You could laugh about the CEOs in handcuffs and the stock analysts who turned out to be fishier than storefront palm readers, but after a while the laughs came hard. Martha Stewart was dented and scuffed. Tyco was looted by its own executives. Enron and WorldCom turned out to be Twin Towers of false promises. They fell. Their stockholders and employees went down with them. So did a large measure of public faith in big corporations. Each new offense seemed to make the same point: with communism vanquished, capitalism was left with no real enemies but its own worst impulses. It can be undone by its own overreaching players. It can be bitten to pieces by its own alpha dogs.
Day after day, one set of misgivings twined around the other, keeping spooked investors away from the stock market, giving the whole year its undeniable saw-toothed edge. Were we headed for a world where all the towers would fall? All the more reason to figure out quickly, before the next blow to the system, how to repair the fail-safe operations—in the boardrooms we trusted with our money, at the government agencies we trust with ourselves—that failed.
This is where three women of ordinary demeanor but exceptional guts and sense come into the picture. Sherron Watkins is the Enron vice president who wrote a letter to chairman Kenneth Lay in the summer of 2001 warning him that the company's methods of accounting were improper. In January, when a congressional subcommittee investigating Enron's collapse released that letter, Watkins became a reluctant public figure, and the Year of the Whistle-Blower began. Coleen Rowley is the FBI staff attorney who caused a sensation in May with a memo to FBI Director Robert Mueller about how the bureau brushed off pleas from her Minneapolis, Minn., field office that Zacarias Moussaoui, who is now indicted as a Sept. 11 co-conspirator, was a man who must be investigated. One month later Cynthia Cooper exploded the bubble that was WorldCom when she informed its board that the company had covered up $3.8 billion in losses through the prestidigitations of phony bookkeeping.
These women were for the 12 months just ending what New York City fire fighters were in 2001: heroes at the scene, anointed by circumstance. They were people who did right just by doing their jobs rightly—which means ferociously, with eyes open and with the bravery the rest of us always hope we have and may never know if we do. Their lives may not have been at stake, but Watkins, Rowley and Cooper put pretty much everything else on the line. Their jobs, their health, their privacy, their sanity—they risked all of them to bring us badly needed word of trouble inside crucial institutions. Democratic capitalism requires that people trust in the integrity of public and private institutions alike. As whistle-blowers, these three became fail-safe systems that did not fail. For believing—really believing—that the truth is one thing that must not be moved off the books, and for stepping in to make sure that it wasn't, they have been chosen by TIME as its Persons of the Year for 2002.
WHO ARE THESE WOMEN?
For starters, they aren't people looking to hog the limelight. All initially tried to keep their criticisms in-house, to speak truth to power but not to Barbara Walters. They became public figures only because their memos were leaked. One reason you still don't know much about them is that none have given an on-the-record media interview until now. In early December TIME brought all three together in a Minneapolis hotel room. Very quickly it became clear that none of them are rebels in the usual sense. The truest of true believers is more like it, ever faithful to the idea that where they worked was a place that served the wider world in some important way. But sometimes it's the keepers of the flame who feel most compelled to set their imperfect temple to the torch. When headquarters didn't live up to its mission, they took it to heart. At Enron the company handed out note pads with inspiring quotes. One was from Martin Luther King Jr.: "Our lives begin to end the day we become silent about things that matter." Watkins saw that quote every day. Didn't anybody else?
What more do they have in common? All three grew up in small towns in the middle of the country, in families that at times lived paycheck to paycheck. In a twist that will delight psychologists, they are all firstborns. More unusually, all three are married but serve as the chief breadwinners in their families. Cooper and Rowley have husbands who are full-time, stay-at-home dads. For every one of them, the decision to confront the higher-ups meant jeopardizing a paycheck their families truly depended on.
The joint interview in Minneapolis was the first time the three had met. But in no time they recognized how much they knew one another's experience. During the ordeals of this year, it energized them to know that there were two other women out there fighting the same kind of battles. In preparation for their meeting in Minneapolis, WorldCom's Cooper read through the testimony that Enron's Watkins gave before Congress. "I actually broke out in a cold sweat," Cooper says. In Minneapolis, when FBI lawyer Rowley heard Cooper talk about a need for regular people to step up and do the right thing, she stood up and applauded. And what to make of the fact that all are women? There has been talk that their gender is not a coincidence; that women, as outsiders, have less at stake in their organizations and so might be more willing to expose weaknesses. They don't think so. As it happens, studies have shown that women are actually a bit less likely than men to be whistle-blowers. And a point worth mentioning—all three hate the term whistle-blower. Too much like "tattletale," says Cooper.
But if the term unnerves them a bit, that may be because whistle-blowers don't have an easy time. Almost all say they would not do it again. If they aren't fired, they're cornered: isolated and made irrelevant. Eventually many suffer from alcoholism or depression.
With these three, that hasn't happened, though Watkins left her job at Enron after a few months when she wasn't given much to do. But ask them if they have been thanked sincerely by anyone at the top of their organization, and they burst out laughing. Some of their colleagues hate them, especially the ones who believe that their outfits would have quietly righted all wrongs if only they had been given time. "There is a price to be paid," says Cooper. "There have been times that I could not stop crying."
Watkins, Rowley and Cooper have kick-started conversations essential to the clean operation of American life, conversations that will continue for years. It may still be true that no one could have prevented the attacks of Sept. 11, but the past year has shown that the FBI and the CIA overlooked vital clues and held back data from each other. No matter how many new missile systems the Pentagon deploys or which new airport screening systems are adopted, if we can't trust the institutions charged with tracking terrorists to do the job, homeland defense will be an empty phrase. The Coleen Rowleys of the federal workforce will be the ones who will let us know what's going on.
As for corporate America, accounting scams of the kind practiced at Enron and WorldCom will continually need to be exposed and corrected before yet another phalanx of high-level operators gets the wrong idea and a thousand Enrons bloom. And the people best positioned to call them on it will be sitting in offices like the ones that Watkins and Cooper occupied. The new Sarbanes-Oxley Act, which requires CEOs and CFOs to vouch for the accuracy of their companies' books, is just one sign of what Cooper calls "a corporate-governance revolution across the country."
These were ordinary people who did not wait for higher authorities to do what needed to be done. Literature's great statement on unwelcome truth telling is Ibsen's play An Enemy of the People. Something said by one of his characters reminds us of what we admire about our Dynamic Trio. "A community is like a ship," he observes. "Everyone ought to be prepared to take the helm." When the time came, these women saw the ship in citizenship. And they stepped up to that wheel.
They took huge professional and personal risks to blow the whistle on what went wrong at WorldCom, Enron and the FBI—and in so doing helped remind us what American courage and American values are all about
By Richard Lacayo and Amanda Ripley
Posted Sunday, December 22, 2002; 4:31 a.m. EST
This was the year when the grief started to lift and the worries came in.
During the first weeks of 2002, two dark moods entered the room, two anxieties that rattled down everybody's nerve paths, even on good days, and etched their particulars into the general disposition. To begin with, after Sept. 11, the passage of time drew off the worst of the pain, but every month or so there came a new disturbance—an orange alert, a dance-club bombing in Bali, a surface-to-air missile fired at a passenger jet—that showed us the beast still at our door.
In the confrontation with Iraq, in the contested effort to build a homeland defense, we all struggled to regain something like the more secure world we thought we lived in before the towers fell. But every step of the way we wondered—was this the way back? What exactly did we need to be doing differently?
And all the while there was the black comedy of corporate fraud. Who knew that the swashbuckling economy of the '90s had produced so many buccaneers? You could laugh about the CEOs in handcuffs and the stock analysts who turned out to be fishier than storefront palm readers, but after a while the laughs came hard. Martha Stewart was dented and scuffed. Tyco was looted by its own executives. Enron and WorldCom turned out to be Twin Towers of false promises. They fell. Their stockholders and employees went down with them. So did a large measure of public faith in big corporations. Each new offense seemed to make the same point: with communism vanquished, capitalism was left with no real enemies but its own worst impulses. It can be undone by its own overreaching players. It can be bitten to pieces by its own alpha dogs.
Day after day, one set of misgivings twined around the other, keeping spooked investors away from the stock market, giving the whole year its undeniable saw-toothed edge. Were we headed for a world where all the towers would fall? All the more reason to figure out quickly, before the next blow to the system, how to repair the fail-safe operations—in the boardrooms we trusted with our money, at the government agencies we trust with ourselves—that failed.
This is where three women of ordinary demeanor but exceptional guts and sense come into the picture. Sherron Watkins is the Enron vice president who wrote a letter to chairman Kenneth Lay in the summer of 2001 warning him that the company's methods of accounting were improper. In January, when a congressional subcommittee investigating Enron's collapse released that letter, Watkins became a reluctant public figure, and the Year of the Whistle-Blower began. Coleen Rowley is the FBI staff attorney who caused a sensation in May with a memo to FBI Director Robert Mueller about how the bureau brushed off pleas from her Minneapolis, Minn., field office that Zacarias Moussaoui, who is now indicted as a Sept. 11 co-conspirator, was a man who must be investigated. One month later Cynthia Cooper exploded the bubble that was WorldCom when she informed its board that the company had covered up $3.8 billion in losses through the prestidigitations of phony bookkeeping.
These women were for the 12 months just ending what New York City fire fighters were in 2001: heroes at the scene, anointed by circumstance. They were people who did right just by doing their jobs rightly—which means ferociously, with eyes open and with the bravery the rest of us always hope we have and may never know if we do. Their lives may not have been at stake, but Watkins, Rowley and Cooper put pretty much everything else on the line. Their jobs, their health, their privacy, their sanity—they risked all of them to bring us badly needed word of trouble inside crucial institutions. Democratic capitalism requires that people trust in the integrity of public and private institutions alike. As whistle-blowers, these three became fail-safe systems that did not fail. For believing—really believing—that the truth is one thing that must not be moved off the books, and for stepping in to make sure that it wasn't, they have been chosen by TIME as its Persons of the Year for 2002.
WHO ARE THESE WOMEN?
For starters, they aren't people looking to hog the limelight. All initially tried to keep their criticisms in-house, to speak truth to power but not to Barbara Walters. They became public figures only because their memos were leaked. One reason you still don't know much about them is that none have given an on-the-record media interview until now. In early December TIME brought all three together in a Minneapolis hotel room. Very quickly it became clear that none of them are rebels in the usual sense. The truest of true believers is more like it, ever faithful to the idea that where they worked was a place that served the wider world in some important way. But sometimes it's the keepers of the flame who feel most compelled to set their imperfect temple to the torch. When headquarters didn't live up to its mission, they took it to heart. At Enron the company handed out note pads with inspiring quotes. One was from Martin Luther King Jr.: "Our lives begin to end the day we become silent about things that matter." Watkins saw that quote every day. Didn't anybody else?
What more do they have in common? All three grew up in small towns in the middle of the country, in families that at times lived paycheck to paycheck. In a twist that will delight psychologists, they are all firstborns. More unusually, all three are married but serve as the chief breadwinners in their families. Cooper and Rowley have husbands who are full-time, stay-at-home dads. For every one of them, the decision to confront the higher-ups meant jeopardizing a paycheck their families truly depended on.
The joint interview in Minneapolis was the first time the three had met. But in no time they recognized how much they knew one another's experience. During the ordeals of this year, it energized them to know that there were two other women out there fighting the same kind of battles. In preparation for their meeting in Minneapolis, WorldCom's Cooper read through the testimony that Enron's Watkins gave before Congress. "I actually broke out in a cold sweat," Cooper says. In Minneapolis, when FBI lawyer Rowley heard Cooper talk about a need for regular people to step up and do the right thing, she stood up and applauded. And what to make of the fact that all are women? There has been talk that their gender is not a coincidence; that women, as outsiders, have less at stake in their organizations and so might be more willing to expose weaknesses. They don't think so. As it happens, studies have shown that women are actually a bit less likely than men to be whistle-blowers. And a point worth mentioning—all three hate the term whistle-blower. Too much like "tattletale," says Cooper.
But if the term unnerves them a bit, that may be because whistle-blowers don't have an easy time. Almost all say they would not do it again. If they aren't fired, they're cornered: isolated and made irrelevant. Eventually many suffer from alcoholism or depression.
With these three, that hasn't happened, though Watkins left her job at Enron after a few months when she wasn't given much to do. But ask them if they have been thanked sincerely by anyone at the top of their organization, and they burst out laughing. Some of their colleagues hate them, especially the ones who believe that their outfits would have quietly righted all wrongs if only they had been given time. "There is a price to be paid," says Cooper. "There have been times that I could not stop crying."
Watkins, Rowley and Cooper have kick-started conversations essential to the clean operation of American life, conversations that will continue for years. It may still be true that no one could have prevented the attacks of Sept. 11, but the past year has shown that the FBI and the CIA overlooked vital clues and held back data from each other. No matter how many new missile systems the Pentagon deploys or which new airport screening systems are adopted, if we can't trust the institutions charged with tracking terrorists to do the job, homeland defense will be an empty phrase. The Coleen Rowleys of the federal workforce will be the ones who will let us know what's going on.
As for corporate America, accounting scams of the kind practiced at Enron and WorldCom will continually need to be exposed and corrected before yet another phalanx of high-level operators gets the wrong idea and a thousand Enrons bloom. And the people best positioned to call them on it will be sitting in offices like the ones that Watkins and Cooper occupied. The new Sarbanes-Oxley Act, which requires CEOs and CFOs to vouch for the accuracy of their companies' books, is just one sign of what Cooper calls "a corporate-governance revolution across the country."
These were ordinary people who did not wait for higher authorities to do what needed to be done. Literature's great statement on unwelcome truth telling is Ibsen's play An Enemy of the People. Something said by one of his characters reminds us of what we admire about our Dynamic Trio. "A community is like a ship," he observes. "Everyone ought to be prepared to take the helm." When the time came, these women saw the ship in citizenship. And they stepped up to that wheel.
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Energizer, Exxon Mobil, Mirant, TeamStaff: U.S. Equity Previ
12/21 00:02
Energizer, Exxon Mobil, Mirant, TeamStaff: U.S. Equity Preview
By Jonathan Make
New York, Dec. 21 (Bloomberg) -- The following is a list of companies whose shares may fluctuate in U.S. markets Monday, Dec. 23. This preview includes news that broke after markets closed Friday at 4 p.m. New York time. Stock symbols are in parentheses after the company name.
Agco Corp. (AG): The maker of farm equipment said it may have to pay full pensions for employees it terminated at a U.K. plant, increasing its pension liabilities by $50 million to $60 million. Agco rose 29 cents to $22.37.
Boeing Co. (BA): The airplane maker shelved plans to make the high-speed ``sonic cruiser,'' choosing instead to develop a slower plane that's cheaper to fly as airlines struggle with declining travel and falling ticket prices. Boeing rose 46 cents to $32.71.
Energizer Holdings Inc. (ENR): The battery maker said in a statement distributed by PR Newswire that it will earn 93 cents to 96 cents a share in the first quarter, which began Oct. 1. It was expected to earn 91 cents, the average estimate of analysts in a Thomson First Call poll. A spokeswoman didn't return a telephone call for comment. Energizer fell 77 cents to $25.23.
Exxon Mobil Corp. (XOM): The oil company said the Alabama Supreme Court threw out a $3.5 billion damage award levied against it for underpaying gas royalties owed the state. Exxon rose 55 cents to $35.70.
FelCor Lodging Trust Inc. (FCH): The hotel real estate trust said its revenue per available room, a measure of average occupancy and room rate, will be below the 4 percent to 6 percent gain the company earlier expected, based on a revenue per room rise of 5.2 percent in October, 1.7 percent in November and ``slightly positive'' so far in December. FelCor rose 4 cents to $12.05.
McDonald's Corp. (MCD): The restaurant chain's credit ratings on about $9 billion in debt may be lowered by Moody's Investors Service because of a failed price-war with rival hamburger chains and slowing U.S. and European sales. McDonald's rose 11 cents to $15.75.
Mirant Corp. (MIR): The energy company said fourth-quarter profit will be 5 cents to 10 cents a share. It was expected to earn 25 cents, the average estimate of analysts surveyed by First Call. Mirant rose 2 cents to $1.52.
Novartis AG (NVS): The drugmaker won U.S. regulatory approval to sell its cancer drug Gleevec as the first treatment doctors should try to treat patients suffering from chronic myeloid leukemia. Novartis American depositary receipts, each representing a common share, fell 13 cents to $36.57.
TeamStaff Inc. (TSTF): The staffing and payroll-services company fired its chief financial officer and auditor, PricewaterhouseCoopers LLP, after the accounting firm raised concerns about its financial results. TeamStaff fell 49 cents, or 13 percent, to $3.43 before trading was halted at 3:29 p.m. Friday by the Nasdaq Stock Market
Tickers: ENR MIR TSTF XOM
Energizer, Exxon Mobil, Mirant, TeamStaff: U.S. Equity Preview
By Jonathan Make
New York, Dec. 21 (Bloomberg) -- The following is a list of companies whose shares may fluctuate in U.S. markets Monday, Dec. 23. This preview includes news that broke after markets closed Friday at 4 p.m. New York time. Stock symbols are in parentheses after the company name.
Agco Corp. (AG): The maker of farm equipment said it may have to pay full pensions for employees it terminated at a U.K. plant, increasing its pension liabilities by $50 million to $60 million. Agco rose 29 cents to $22.37.
Boeing Co. (BA): The airplane maker shelved plans to make the high-speed ``sonic cruiser,'' choosing instead to develop a slower plane that's cheaper to fly as airlines struggle with declining travel and falling ticket prices. Boeing rose 46 cents to $32.71.
Energizer Holdings Inc. (ENR): The battery maker said in a statement distributed by PR Newswire that it will earn 93 cents to 96 cents a share in the first quarter, which began Oct. 1. It was expected to earn 91 cents, the average estimate of analysts in a Thomson First Call poll. A spokeswoman didn't return a telephone call for comment. Energizer fell 77 cents to $25.23.
Exxon Mobil Corp. (XOM): The oil company said the Alabama Supreme Court threw out a $3.5 billion damage award levied against it for underpaying gas royalties owed the state. Exxon rose 55 cents to $35.70.
FelCor Lodging Trust Inc. (FCH): The hotel real estate trust said its revenue per available room, a measure of average occupancy and room rate, will be below the 4 percent to 6 percent gain the company earlier expected, based on a revenue per room rise of 5.2 percent in October, 1.7 percent in November and ``slightly positive'' so far in December. FelCor rose 4 cents to $12.05.
McDonald's Corp. (MCD): The restaurant chain's credit ratings on about $9 billion in debt may be lowered by Moody's Investors Service because of a failed price-war with rival hamburger chains and slowing U.S. and European sales. McDonald's rose 11 cents to $15.75.
Mirant Corp. (MIR): The energy company said fourth-quarter profit will be 5 cents to 10 cents a share. It was expected to earn 25 cents, the average estimate of analysts surveyed by First Call. Mirant rose 2 cents to $1.52.
Novartis AG (NVS): The drugmaker won U.S. regulatory approval to sell its cancer drug Gleevec as the first treatment doctors should try to treat patients suffering from chronic myeloid leukemia. Novartis American depositary receipts, each representing a common share, fell 13 cents to $36.57.
TeamStaff Inc. (TSTF): The staffing and payroll-services company fired its chief financial officer and auditor, PricewaterhouseCoopers LLP, after the accounting firm raised concerns about its financial results. TeamStaff fell 49 cents, or 13 percent, to $3.43 before trading was halted at 3:29 p.m. Friday by the Nasdaq Stock Market
Tickers: ENR MIR TSTF XOM
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- Localização: 4
. Korea Disables UN Surveillance Devices at Reactor (Update1
12/22 02:57
N. Korea Disables UN Surveillance Devices at Reactor (Update1)
By Seyoon Kim
Seoul, Dec. 22 (Bloomberg) -- North Korea disabled United Nations surveillance equipment installed at one of its nuclear reactors, the International Atomic Energy Agency said on its Web site.
Mohamed ElBaradei, director-general at the UN's nuclear agency expressed ``deep regret'' at North Korea's action to cut most of the seals on monitoring devices at its reactor in Nyongbyon, the agency said.
North Korea's actions ``prevented an orderly transition from IAEA monitoring of the freeze of the reactor to a situation where we would be monitoring the facility during its operation,'' ElBaradei said.
The agency urged North Korea not to take further action to resume its nuclear program. It said the UN continues to maintain a permanent inspector in North Korea and is monitoring the situation ``very closely.'' The atomic energy agency has been monitoring North Korea's nuclear facilities since 1994.
North Korea confirmed through the state-run Korea Central News Agency that it had removed seals on the devices, Agence France-Presse said.
Pyongyang has started ``the work of removing the seals and monitoring cameras from the frozen nuclear facilities for their normal operation to produce electricity,'' AFP quoted the North Korean new agency as saying.
North Korea said earlier this month it's restarting its nuclear power plants in response to a U.S. decision to halt fuel- oil shipments to the country. The oil was sent to North Korea in exchange for the government's suspension of its nuclear arms program under a 1994 agreement with the U.S., Japan and South Korea.
The South Korean government ``strongly urges the North to restore the surveillance equipment as soon as possible,'' Shim Yoon Joe, director-general at the Ministry of Foreign Affairs and Trade, said in a televised press conference
N. Korea Disables UN Surveillance Devices at Reactor (Update1)
By Seyoon Kim
Seoul, Dec. 22 (Bloomberg) -- North Korea disabled United Nations surveillance equipment installed at one of its nuclear reactors, the International Atomic Energy Agency said on its Web site.
Mohamed ElBaradei, director-general at the UN's nuclear agency expressed ``deep regret'' at North Korea's action to cut most of the seals on monitoring devices at its reactor in Nyongbyon, the agency said.
North Korea's actions ``prevented an orderly transition from IAEA monitoring of the freeze of the reactor to a situation where we would be monitoring the facility during its operation,'' ElBaradei said.
The agency urged North Korea not to take further action to resume its nuclear program. It said the UN continues to maintain a permanent inspector in North Korea and is monitoring the situation ``very closely.'' The atomic energy agency has been monitoring North Korea's nuclear facilities since 1994.
North Korea confirmed through the state-run Korea Central News Agency that it had removed seals on the devices, Agence France-Presse said.
Pyongyang has started ``the work of removing the seals and monitoring cameras from the frozen nuclear facilities for their normal operation to produce electricity,'' AFP quoted the North Korean new agency as saying.
North Korea said earlier this month it's restarting its nuclear power plants in response to a U.S. decision to halt fuel- oil shipments to the country. The oil was sent to North Korea in exchange for the government's suspension of its nuclear arms program under a 1994 agreement with the U.S., Japan and South Korea.
The South Korean government ``strongly urges the North to restore the surveillance equipment as soon as possible,'' Shim Yoon Joe, director-general at the Ministry of Foreign Affairs and Trade, said in a televised press conference
- Mensagens: 23939
- Registado: 5/11/2002 11:30
- Localização: 4
Power Producers' Shares May Keep Falling: U.S. Stocks Outloo
12/21 09:37
Power Producers' Shares May Keep Falling: U.S. Stocks Outlook
By Justin Baer
New York, Dec. 21 (Bloomberg) -- The Standard & Poor's 500 Index is about to complete its third straight losing year, and no industry's shares have dropped more than those of power producers and traders.
Dynegy Inc., the S&P 500's worst performer, has plunged 96 percent. Six competitors -- AES Corp., Allegheny Energy Inc., Calpine Corp, El Paso Corp., Mirant Corp. and Williams Cos. --have lost more than four-fifths of their value.
All of them are among the year's 10 biggest losers in the benchmark index. They may fall further after Mirant cut its 2002 profit forecast late yesterday.
Some investors expect these companies to extend their declines well into the new year as federal securities, energy and commodities regulators investigate allegations that power traders manipulated prices and improperly booked revenue.
``We're going to have to burn a few more witches before the hunt is over,'' said David Ellis, director of asset allocation and risk management for BB&T Asset Management, which oversees more than $10 billion in Raleigh, North Carolina. ``That will hang over the entire industry.''
The S&P 500 has fallen 22 percent this year, the most since 1974, as investors dealt with a potential war in the Middle East, corporate misdeeds and concern that the economy's recovery may be slowing. The index has slipped 39 percent since 1999, the deepest decline since 1930-1932, when it fell 68 percent.
`Trimming or Adding'
Stocks rose in the year's last full week of trading as 10 of the largest U.S. securities firms reached a $1.4 billion accord to settle claims that their research misled investors. As the agreement buoyed financial shares, the S&P 500 rose 0.7 percent, the Dow Jones Industrial Average rose 0.9 percent and the Nasdaq Composite Index added 0.1 percent.
U.S. markets close at 1 p.m. New York time on Tuesday and remain closed on Wednesday for Christmas.
Many money managers plan to spend the waning days of 2002 tweaking their holdings. That usually quiet time is a chance to research stocks that may have been overlooked, said Kurt Brunner, who helps oversee $1.4 billion for Swarthmore Group Inc. in West Chester, Pennsylvania.
``I may be trimming or adding if there's a weakness I think is unwarranted,'' said Brunner. ``On Monday and Tuesday, there's not going to be a whole lot of people around.''
While Brunner said he may buy software stocks and sell some shares of industrial companies, he added that he won't spend much time looking at power producers.
``There's still the potential for negative publicity,'' he said. ``For the level of risk I'd take and effort I would have to put forth to understand everything about it, I don't know if it would be worth it.''
`Not Excited'
Earlier this year, companies such as Dynegy said they made round-trip trades, or simultaneously bought and sold electricity and gas at the same price and quantity. In some cases, this was done to inflate revenue or the amount of trading taking place. Traders at some companies may face criminal charges related to price manipulation.
Last week, a U.S. Federal Energy Regulatory Commission judge concluded that Dynegy, Williams and dozens of other electricity suppliers overcharged California utilities by $1.8 billion.
The S&P 500 Multi-Utilities Index, which includes power producers and traders such as Dynegy and Williams, has lost 69 percent this year.
``It's not a group that has us excited,'' said J. Michael Gallipo, who helps manage about $8 billion at Banknorth Investment Management in Latham, New York.
The scrutiny of the industry resulted in reduced energy trading, hurting sales at companies paid to match buyers and sellers, and scared off many would-be lenders, investors said. Mild weather this year hasn't helped, either.
Late yesterday, Mirant reported a third-quarter loss of $1 million, compared with a profit in the year-earlier period, after revenue slid 9.1 percent. The company also said it would earn $1 to $1.05 a share, excluding certain costs, this year. On that basis, analysts polled by Thomson First Call had predicted $1.39.
Sorting-Out Process
``Is it going to be as bad a year? Probably not,'' Gallipo said in discussing the prospects for 2003. ``A couple of them are going to survive.''
Even so, the S&P 500's worst performers in a given year don't always rebound the following year. For example, computer makers such as Apple Computer Inc. and phone-equipment companies such as Lucent Technologies Inc., among the biggest losers in 2001, fell again this year.
Many investors will spend 2003 sorting out the strong and weak companies within industries, widening the disparity in the groups' stock performance, BB&T Asset Management's Ellis said.
This week, telephone companies such as SBC Communications Inc. were the best performers in the S&P 500. Their industry-group index rose 4.9 percent.
The S&P 500's utility-stock index had the second-biggest gain, 2.2 percent, even as power producers tumbled. Allegheny Energy, the group's worst performer, plunged 23 percent as it disclosed plans to restate this year's earnings for accounting errors and possibly file for bankruptcy
Power Producers' Shares May Keep Falling: U.S. Stocks Outlook
By Justin Baer
New York, Dec. 21 (Bloomberg) -- The Standard & Poor's 500 Index is about to complete its third straight losing year, and no industry's shares have dropped more than those of power producers and traders.
Dynegy Inc., the S&P 500's worst performer, has plunged 96 percent. Six competitors -- AES Corp., Allegheny Energy Inc., Calpine Corp, El Paso Corp., Mirant Corp. and Williams Cos. --have lost more than four-fifths of their value.
All of them are among the year's 10 biggest losers in the benchmark index. They may fall further after Mirant cut its 2002 profit forecast late yesterday.
Some investors expect these companies to extend their declines well into the new year as federal securities, energy and commodities regulators investigate allegations that power traders manipulated prices and improperly booked revenue.
``We're going to have to burn a few more witches before the hunt is over,'' said David Ellis, director of asset allocation and risk management for BB&T Asset Management, which oversees more than $10 billion in Raleigh, North Carolina. ``That will hang over the entire industry.''
The S&P 500 has fallen 22 percent this year, the most since 1974, as investors dealt with a potential war in the Middle East, corporate misdeeds and concern that the economy's recovery may be slowing. The index has slipped 39 percent since 1999, the deepest decline since 1930-1932, when it fell 68 percent.
`Trimming or Adding'
Stocks rose in the year's last full week of trading as 10 of the largest U.S. securities firms reached a $1.4 billion accord to settle claims that their research misled investors. As the agreement buoyed financial shares, the S&P 500 rose 0.7 percent, the Dow Jones Industrial Average rose 0.9 percent and the Nasdaq Composite Index added 0.1 percent.
U.S. markets close at 1 p.m. New York time on Tuesday and remain closed on Wednesday for Christmas.
Many money managers plan to spend the waning days of 2002 tweaking their holdings. That usually quiet time is a chance to research stocks that may have been overlooked, said Kurt Brunner, who helps oversee $1.4 billion for Swarthmore Group Inc. in West Chester, Pennsylvania.
``I may be trimming or adding if there's a weakness I think is unwarranted,'' said Brunner. ``On Monday and Tuesday, there's not going to be a whole lot of people around.''
While Brunner said he may buy software stocks and sell some shares of industrial companies, he added that he won't spend much time looking at power producers.
``There's still the potential for negative publicity,'' he said. ``For the level of risk I'd take and effort I would have to put forth to understand everything about it, I don't know if it would be worth it.''
`Not Excited'
Earlier this year, companies such as Dynegy said they made round-trip trades, or simultaneously bought and sold electricity and gas at the same price and quantity. In some cases, this was done to inflate revenue or the amount of trading taking place. Traders at some companies may face criminal charges related to price manipulation.
Last week, a U.S. Federal Energy Regulatory Commission judge concluded that Dynegy, Williams and dozens of other electricity suppliers overcharged California utilities by $1.8 billion.
The S&P 500 Multi-Utilities Index, which includes power producers and traders such as Dynegy and Williams, has lost 69 percent this year.
``It's not a group that has us excited,'' said J. Michael Gallipo, who helps manage about $8 billion at Banknorth Investment Management in Latham, New York.
The scrutiny of the industry resulted in reduced energy trading, hurting sales at companies paid to match buyers and sellers, and scared off many would-be lenders, investors said. Mild weather this year hasn't helped, either.
Late yesterday, Mirant reported a third-quarter loss of $1 million, compared with a profit in the year-earlier period, after revenue slid 9.1 percent. The company also said it would earn $1 to $1.05 a share, excluding certain costs, this year. On that basis, analysts polled by Thomson First Call had predicted $1.39.
Sorting-Out Process
``Is it going to be as bad a year? Probably not,'' Gallipo said in discussing the prospects for 2003. ``A couple of them are going to survive.''
Even so, the S&P 500's worst performers in a given year don't always rebound the following year. For example, computer makers such as Apple Computer Inc. and phone-equipment companies such as Lucent Technologies Inc., among the biggest losers in 2001, fell again this year.
Many investors will spend 2003 sorting out the strong and weak companies within industries, widening the disparity in the groups' stock performance, BB&T Asset Management's Ellis said.
This week, telephone companies such as SBC Communications Inc. were the best performers in the S&P 500. Their industry-group index rose 4.9 percent.
The S&P 500's utility-stock index had the second-biggest gain, 2.2 percent, even as power producers tumbled. Allegheny Energy, the group's worst performer, plunged 23 percent as it disclosed plans to restate this year's earnings for accounting errors and possibly file for bankruptcy
- Mensagens: 23939
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- Localização: 4
Slower Retail Sales May Hurt Shares: European Stocks Outlook
Slower Retail Sales May Hurt Shares: European Stocks Outlook
By Sam Fleming
London, Dec. 22 (Bloomberg) -- European retail stocks may fall this week amid signs that shoppers are spending less on Christmas presents, such as handbags and video games.
Sales during the past three weekends have lagged the previous year for at least half of Germany's retailers, the HDE retail industry association said Monday. In the U.K., the number of visitors to shopping centers declined 3.8 percent in the week ended Dec. 15 from a year ago, according to a report by FootFall, a research company.
Retailers' shares have fallen in response. Eleven of the 27 stocks in the Dow Jones Stoxx 600 Retail Index have lost at least 10 percent this month. Pinault-Printemps-Redoute SA, the owner of France's Fnac music stores, has tumbled 21 percent. Dixons Group Plc, Britain's largest seller of consumer electronics, has lost 12 percent.
``The Christmas shopping season is looking disappointing,'' said Carl Ghielen, who helps manage 11 billion euros ($11.3 billion) of European equities at ING Investment Management. ``There's a lack of confidence in economic growth and job security'' that has led consumers to curb spending, he said.
Holiday Closings
As a result, European stock indexes barely rose last week after surging Monday in response to takeover offer for two banks, France's Credit Lyonnais and Italy's Banca Popolare Commercio & Industria Scrl.
The Dow Jones Stoxx 50 advanced 0.3 percent and the Stoxx 600 added 0.1 percent during the past five trading days. The benchmarks had jumped 3.4 percent and 2.7 percent, respectively, on Monday.
Both had fallen for the previous three weeks and are headed toward the third year of losses. The Stoxx 50 is down 34 percent and the Stoxx 600 is down 31 percent. Their declines may be the biggest since their history began in 1987.
All of Western Europe's stock markets will be closed Wednesday and Thursday. On Tuesday, trading at the London Stock Exchange ends at 12:30 p.m. London time. The Amsterdam, Paris and Brussels exchanges shut at 2 p.m. local time. The rest of the region's markets will be closed all day.
Signs that consumers are reining in spending during the Christmas shopping period are also surfacing in Italy, where companies are discounting to entice buyers. Consumer prices in Europe's fourth-largest economy rose this month at the slowest pace in six months, reports from 12 cities showed Friday.
Discounted Games
Some companies have started to prepare investors for lower profit this year. Gucci Group NV, the world's third-largest maker of luxury items, posted a 14 percent drop in fiscal third-quarter profit Thursday and cut its full-year earnings forecast earlier this month. Shoppers are spending less on items such as Gucci's $1,000 handbags.
Pinault-Printemps owns a 53 percent stake in the luxury-goods company. Gucci shares have fallen 4.3 percent, far less than those of its parent, to 87.1 euros in December. The smaller loss reflects an obligation for Pinault-Printemps to purchase the shares for $101.50 apiece in 2004.
Dixons lost 2 percent last week as Game Group Plc, the biggest U.K. computer-game retailer, said it cut prices partly because of the retailer's discounting.
Game Group's shares lost three-fifths of their value as the company said slumping sales of games will hurt full-year profit. Shares of rivals such as Woolworths Group Plc, which sells video games in its retail stores, also fell. The largest U.K. discount retailer tumbled 9.2 percent.
`Negative Surprise'
``In the U.K. people were anticipating a good Christmas, and expectations seemed too high,'' said ING's Ghielen, who recently sold Dixons shares. Video games are ``one of the areas that are especially disappointing.''
An increase in unemployment in some of the 12 nations sharing the euro is adding to concern that spending may decline. France will report Friday that the number of people seeking work rose by 5,000 in November, according to economists surveyed by Bloomberg News. Unemployment in Germany rose to 4.16 million in November, the highest in more than four years.
Consumer spending accounts for 61 percent of the average gross domestic product of industrialized countries. It has helped keep economies in the U.S. and in much of Europe from contracting in 2002.
``The consumer disappointing in terms of expenditure is a potential negative surprise'' awaiting investors next year, said Ewen Cameron-Watt, head of investment strategy at Merrill Lynch Investment Managers, which oversees $450 billion.
By Sam Fleming
London, Dec. 22 (Bloomberg) -- European retail stocks may fall this week amid signs that shoppers are spending less on Christmas presents, such as handbags and video games.
Sales during the past three weekends have lagged the previous year for at least half of Germany's retailers, the HDE retail industry association said Monday. In the U.K., the number of visitors to shopping centers declined 3.8 percent in the week ended Dec. 15 from a year ago, according to a report by FootFall, a research company.
Retailers' shares have fallen in response. Eleven of the 27 stocks in the Dow Jones Stoxx 600 Retail Index have lost at least 10 percent this month. Pinault-Printemps-Redoute SA, the owner of France's Fnac music stores, has tumbled 21 percent. Dixons Group Plc, Britain's largest seller of consumer electronics, has lost 12 percent.
``The Christmas shopping season is looking disappointing,'' said Carl Ghielen, who helps manage 11 billion euros ($11.3 billion) of European equities at ING Investment Management. ``There's a lack of confidence in economic growth and job security'' that has led consumers to curb spending, he said.
Holiday Closings
As a result, European stock indexes barely rose last week after surging Monday in response to takeover offer for two banks, France's Credit Lyonnais and Italy's Banca Popolare Commercio & Industria Scrl.
The Dow Jones Stoxx 50 advanced 0.3 percent and the Stoxx 600 added 0.1 percent during the past five trading days. The benchmarks had jumped 3.4 percent and 2.7 percent, respectively, on Monday.
Both had fallen for the previous three weeks and are headed toward the third year of losses. The Stoxx 50 is down 34 percent and the Stoxx 600 is down 31 percent. Their declines may be the biggest since their history began in 1987.
All of Western Europe's stock markets will be closed Wednesday and Thursday. On Tuesday, trading at the London Stock Exchange ends at 12:30 p.m. London time. The Amsterdam, Paris and Brussels exchanges shut at 2 p.m. local time. The rest of the region's markets will be closed all day.
Signs that consumers are reining in spending during the Christmas shopping period are also surfacing in Italy, where companies are discounting to entice buyers. Consumer prices in Europe's fourth-largest economy rose this month at the slowest pace in six months, reports from 12 cities showed Friday.
Discounted Games
Some companies have started to prepare investors for lower profit this year. Gucci Group NV, the world's third-largest maker of luxury items, posted a 14 percent drop in fiscal third-quarter profit Thursday and cut its full-year earnings forecast earlier this month. Shoppers are spending less on items such as Gucci's $1,000 handbags.
Pinault-Printemps owns a 53 percent stake in the luxury-goods company. Gucci shares have fallen 4.3 percent, far less than those of its parent, to 87.1 euros in December. The smaller loss reflects an obligation for Pinault-Printemps to purchase the shares for $101.50 apiece in 2004.
Dixons lost 2 percent last week as Game Group Plc, the biggest U.K. computer-game retailer, said it cut prices partly because of the retailer's discounting.
Game Group's shares lost three-fifths of their value as the company said slumping sales of games will hurt full-year profit. Shares of rivals such as Woolworths Group Plc, which sells video games in its retail stores, also fell. The largest U.K. discount retailer tumbled 9.2 percent.
`Negative Surprise'
``In the U.K. people were anticipating a good Christmas, and expectations seemed too high,'' said ING's Ghielen, who recently sold Dixons shares. Video games are ``one of the areas that are especially disappointing.''
An increase in unemployment in some of the 12 nations sharing the euro is adding to concern that spending may decline. France will report Friday that the number of people seeking work rose by 5,000 in November, according to economists surveyed by Bloomberg News. Unemployment in Germany rose to 4.16 million in November, the highest in more than four years.
Consumer spending accounts for 61 percent of the average gross domestic product of industrialized countries. It has helped keep economies in the U.S. and in much of Europe from contracting in 2002.
``The consumer disappointing in terms of expenditure is a potential negative surprise'' awaiting investors next year, said Ewen Cameron-Watt, head of investment strategy at Merrill Lynch Investment Managers, which oversees $450 billion.
- Mensagens: 23939
- Registado: 5/11/2002 11:30
- Localização: 4
eBay processa operador do eBaytoo.com
eBay processa operador do eBaytoo.com
2002-12-21 18:26
OnMarkets.com - A casa de leilões on-line eBay ganhou, sem querer, um "clone" na Internet, o eBaytoo.com. O novo site teria violado os direitos autorais do eBay ao tentar "negociar em seu nome e levar vantagem da confusão inicial causada junto aos consumidores", segundo uma acção impetrada num tribunal de Albany, no estado de Nova York.
O eBay quer ser ressarcido por danos não especificados e por taxas legais.
Os dois sites permitem comprar e vender itens, de roupas e jóias a móveis e carros.
O eBaytoo, porém, desde outubro negocia artigos nazistas e da Ku Klux Klan, coisa que o eBay não permite em seu site, de acordo com a acção judicial.
John Wederman, que dirige o eBaytoo.com, se cadastrou como usuário do eBay em abril de 2000, e realizou cerca de 20 transações de compra e venda. Mas seu cadastro foi suspenso quando ele deixou de pagar à empresa 132,56 dólares em taxas, segundo a acção.
Wederman não foi localizado para comentar o caso. Assim como ele desapareceu, o eBaytoo.com saiu do ar, o site não pode mais ser acessado desde quinta-feira.
in CNN
2002-12-21 18:26
OnMarkets.com - A casa de leilões on-line eBay ganhou, sem querer, um "clone" na Internet, o eBaytoo.com. O novo site teria violado os direitos autorais do eBay ao tentar "negociar em seu nome e levar vantagem da confusão inicial causada junto aos consumidores", segundo uma acção impetrada num tribunal de Albany, no estado de Nova York.
O eBay quer ser ressarcido por danos não especificados e por taxas legais.
Os dois sites permitem comprar e vender itens, de roupas e jóias a móveis e carros.
O eBaytoo, porém, desde outubro negocia artigos nazistas e da Ku Klux Klan, coisa que o eBay não permite em seu site, de acordo com a acção judicial.
John Wederman, que dirige o eBaytoo.com, se cadastrou como usuário do eBay em abril de 2000, e realizou cerca de 20 transações de compra e venda. Mas seu cadastro foi suspenso quando ele deixou de pagar à empresa 132,56 dólares em taxas, segundo a acção.
Wederman não foi localizado para comentar o caso. Assim como ele desapareceu, o eBaytoo.com saiu do ar, o site não pode mais ser acessado desde quinta-feira.
in CNN
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Opep elevará produção se preços seguirem altos, dizem saudit
Opep elevará produção se preços seguirem altos, dizem sauditas
2002-12-21 18:20
OnMarkets.com - O ministro de Petróleo da Arábia Saudita, Ali Naimi, disse no sábado que a Organização dos Países Exportadores de Petróleo (Opep) aumentará sua produção se as cotações permanecerem acima dos 28 dólares durante 20 dias seguidos de operação no mercado.
"Temos um mecanismo para entrar em vigor quando for necessário", disse Naimi nos bastidores de uma reunião da Organização ao responder se a Arábia Saudita, maior exportador de petróleo do mundo aumentará a produção em janeiro para cumprir com o último acordo do cartel.
A Opep tem um acordo informal de liberar a produção em meio milhão de barris por dia (bpd) se o preço do seu basket de petróleo exceder os 28 dólares durante 20 dias.
As cotações superaram recentemente o limite da banda estabelecida pelo cartel, que varia de 22 a 28 dólares por barril, devido à combinação da paralisação das exportações da Venezuela e temores de uma guerra no Iraque, outro membro da organização.
O preço do basket da Opep ficou cotada em 29,56 dólares na quinta-feira, enquanto o contrato de fevereiro negociado em Nova York fechou em 30,30 dólares por barril.
"Se esse preço continuar... em cumprimento com o mecanismo de banda de preços, vamos implementar (a liberalização), como fizemos no passado", disse Naimi.
A Opep estabeleceu uma nova meta de produção de 23 milhões de barris por dia e acertou reduzir em até 1,7 milhões de barris diários dos mercados mundiais no próximo mês.
in Reuters
2002-12-21 18:20
OnMarkets.com - O ministro de Petróleo da Arábia Saudita, Ali Naimi, disse no sábado que a Organização dos Países Exportadores de Petróleo (Opep) aumentará sua produção se as cotações permanecerem acima dos 28 dólares durante 20 dias seguidos de operação no mercado.
"Temos um mecanismo para entrar em vigor quando for necessário", disse Naimi nos bastidores de uma reunião da Organização ao responder se a Arábia Saudita, maior exportador de petróleo do mundo aumentará a produção em janeiro para cumprir com o último acordo do cartel.
A Opep tem um acordo informal de liberar a produção em meio milhão de barris por dia (bpd) se o preço do seu basket de petróleo exceder os 28 dólares durante 20 dias.
As cotações superaram recentemente o limite da banda estabelecida pelo cartel, que varia de 22 a 28 dólares por barril, devido à combinação da paralisação das exportações da Venezuela e temores de uma guerra no Iraque, outro membro da organização.
O preço do basket da Opep ficou cotada em 29,56 dólares na quinta-feira, enquanto o contrato de fevereiro negociado em Nova York fechou em 30,30 dólares por barril.
"Se esse preço continuar... em cumprimento com o mecanismo de banda de preços, vamos implementar (a liberalização), como fizemos no passado", disse Naimi.
A Opep estabeleceu uma nova meta de produção de 23 milhões de barris por dia e acertou reduzir em até 1,7 milhões de barris diários dos mercados mundiais no próximo mês.
in Reuters
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Greve na Venezuela continuará pelo 20º dia
Greve na Venezuela continuará pelo 20º dia
2002-12-21 18:17
OnMarkets.com - Líderes da oposição na Venezuela decidiram na sexta-feira estender a greve contra o presidente Hugo Chávez para o 20º dia, aumentando a pressão pela renúncia do governante.
A "greve cívica" contra Chávez, que começou em 2 de dezembro para pressionar o presidente a renunciar e convocar eleições imediatas, tem afectado dramaticamente a indústria petrolífera, vital para a economia do país.
As exportações do óleo na Venezuela «quinto maior exportador mundial do produto» correspondem a metade dos recursos do Estado.
"O protesto continua em massa e contundente até conseguir seu objectivo, que Chávez saia e convoque eleições imediatas, livres e transparentes", disse Carlos Ortega, presidente da Confederação dos Trabalhadores da Venezuela (CTV), uma das organizações que lideram a greve.
A oposição acusa Chávez, eleito em 1998 com grande maioria dos votos e que sobreviveu a um breve golpe em abril, de levar o país à ruína económica, adoptando um regime ao estilo de Fidel Castro.
AJUDA BRASILEIRA
O presidente Fernando Henrique Cardoso confirmou na sexta-feira que a Venezuela pediu ajuda do Brasil para o garantir o abastecimento de petróleo no país, cuja produção foi gravemente reduzida devido à greve.
Entretanto, Fernando Henrique esclareceu que a ajuda faz parte de um acordo entre a Petrobras e a estatal venezuelana PDVSA, e não de uma política do governo.
"Essa é uma relação entre a PDVSA e a Petrobras, e está sendo tratada neste nível, entre empresas. O que for possível fazer em termos de mercado será feito", disse Fernando Henrique sobre a ajuda ao país vizinho, citado pela Agência Brasil.
Questionado sobre a posição brasileira em relação à crise na Venezuela, Fernando Henrique afirmou ter "estima pessoal" por Chávez e o aconselhou a "tomar cuidado" e evitar o conflito.
in Reuters
2002-12-21 18:17
OnMarkets.com - Líderes da oposição na Venezuela decidiram na sexta-feira estender a greve contra o presidente Hugo Chávez para o 20º dia, aumentando a pressão pela renúncia do governante.
A "greve cívica" contra Chávez, que começou em 2 de dezembro para pressionar o presidente a renunciar e convocar eleições imediatas, tem afectado dramaticamente a indústria petrolífera, vital para a economia do país.
As exportações do óleo na Venezuela «quinto maior exportador mundial do produto» correspondem a metade dos recursos do Estado.
"O protesto continua em massa e contundente até conseguir seu objectivo, que Chávez saia e convoque eleições imediatas, livres e transparentes", disse Carlos Ortega, presidente da Confederação dos Trabalhadores da Venezuela (CTV), uma das organizações que lideram a greve.
A oposição acusa Chávez, eleito em 1998 com grande maioria dos votos e que sobreviveu a um breve golpe em abril, de levar o país à ruína económica, adoptando um regime ao estilo de Fidel Castro.
AJUDA BRASILEIRA
O presidente Fernando Henrique Cardoso confirmou na sexta-feira que a Venezuela pediu ajuda do Brasil para o garantir o abastecimento de petróleo no país, cuja produção foi gravemente reduzida devido à greve.
Entretanto, Fernando Henrique esclareceu que a ajuda faz parte de um acordo entre a Petrobras e a estatal venezuelana PDVSA, e não de uma política do governo.
"Essa é uma relação entre a PDVSA e a Petrobras, e está sendo tratada neste nível, entre empresas. O que for possível fazer em termos de mercado será feito", disse Fernando Henrique sobre a ajuda ao país vizinho, citado pela Agência Brasil.
Questionado sobre a posição brasileira em relação à crise na Venezuela, Fernando Henrique afirmou ter "estima pessoal" por Chávez e o aconselhou a "tomar cuidado" e evitar o conflito.
in Reuters
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- Localização: 4
Fiat jettisons GM stake
Fiat jettisons GM stake
Struggling Italian car maker sells 5 percent stake in GM for $1.16 billion.
December 21, 2002: 2:44 PM EST
ROME (AP) - Fiat SpA, struggling with its loss-making car division and trying to raise cash and reduce debt, said Saturday it had sold its 5 percent stake in General Motors Corp., for $1.16 billion.
Fiat also said it had finalized a deal to sell 51 percent of its debt-ridden European consumer finance arm Fidis to its chief creditors. The sale would bring about 400 million euros ($400 million) into Fiat while also reducing about 6 billion euros in commercial debt.
Fiat spokesman Raffaello Porro said the two deals put the company "on track" to meet the financial targets set by creditor banks earlier this year after they loaned Fiat $3 billion to support its restructuring plan.
Fiat has seen its fortunes decline markedly in recent months, with auto sales sagging, market share dropping and losses piling up, particularly at Fiat Auto, once the symbol of Italy's postwar industrial miracle.
Fiat has embarked on a major restructuring plan -- which includes 8,100 layoffs at Fiat Auto -- and last week saw the conglomerate's co-chief executive resign.
In a bid to raise cash, the Turin-based company said it had sold its stake in GM -- reportedly to Merrill Lynch -- for $1.16 billion, but that the sale would have "no impact" on its previous agreements with the American automaker.
Fiat acquired the 5 percent stake in 2000, in exchange for giving GM 20 percent of Fiat Auto -- an agreement which at the time was termed a "historic alliance" by the automaking giants.
The deal also included a provision that can force GM to buy the remaining 80 percent of Fiat Auto starting in 2004 -- a provision Fiat has been mulling recently as it struggles to keep afloat.
Spokesman Porro stressed that GM (GM: Research, Estimates) was fully advised of Fiat's plan to sell the stake, and that "the framework of the alliance is completely respected."
GM spokeswoman Toni Simonetti concurred. "It doesn't really change any of our industrial relationships or our contractual relationships," Simonetti said.
In addition to raising cash, Fiat is also looking to lower its gross debt from about 33 billion euros to 23.6 billion euros -- as was set by creditor banks earlier this year.
The Fidis sale knocks off about 6 billion euros from the debt load. Two weeks ago, Fiat sold off the Brazilian arm of Fidis, removing another 800 million euros in commercial debt and bringing it close to the creditor target, Porro said.
The deals were the latest developments in a tumultuous few weeks at Fiat, Italy's largest private sector employer.
Last week, co-chief executive Gabriele Galateri resigned after less than six months on the job, and his co-CEO and Fiat chairman Paulo Fresco faced calls to step down as well.
Galateri and Fresco had backed a major restructuring plan to try to stem the losses. Among other things, the provisions call for layoffs of 20 percent of its domestic workforce -- cuts that have sparked massive protests in Italy in recent weeks.
The management shakeup had fueled reports of a dispute between Fiat's founding Agnelli family and the company's creditor banks, who have insisted on the restructuring plan.
Alessandro Barberis, a longtime Fiat official named co-CEO last week to replace Galateri, has vowed the restructuring plan would go ahead.
The restructuring plan includes the sale of noncore assets as well as the layoffs at Fiat Auto, which expects to report 2 billion euros in losses this year.
Some critics say Fresco -- a former General Electric executive who has been at the helm of Fiat since 1998 -- has neglected the company's auto unit while building up debt.
In its statement, Fiat said the sale of the GM stake "will allow Fiat to substantially improve the net financial position of the group
Struggling Italian car maker sells 5 percent stake in GM for $1.16 billion.
December 21, 2002: 2:44 PM EST
ROME (AP) - Fiat SpA, struggling with its loss-making car division and trying to raise cash and reduce debt, said Saturday it had sold its 5 percent stake in General Motors Corp., for $1.16 billion.
Fiat also said it had finalized a deal to sell 51 percent of its debt-ridden European consumer finance arm Fidis to its chief creditors. The sale would bring about 400 million euros ($400 million) into Fiat while also reducing about 6 billion euros in commercial debt.
Fiat spokesman Raffaello Porro said the two deals put the company "on track" to meet the financial targets set by creditor banks earlier this year after they loaned Fiat $3 billion to support its restructuring plan.
Fiat has seen its fortunes decline markedly in recent months, with auto sales sagging, market share dropping and losses piling up, particularly at Fiat Auto, once the symbol of Italy's postwar industrial miracle.
Fiat has embarked on a major restructuring plan -- which includes 8,100 layoffs at Fiat Auto -- and last week saw the conglomerate's co-chief executive resign.
In a bid to raise cash, the Turin-based company said it had sold its stake in GM -- reportedly to Merrill Lynch -- for $1.16 billion, but that the sale would have "no impact" on its previous agreements with the American automaker.
Fiat acquired the 5 percent stake in 2000, in exchange for giving GM 20 percent of Fiat Auto -- an agreement which at the time was termed a "historic alliance" by the automaking giants.
The deal also included a provision that can force GM to buy the remaining 80 percent of Fiat Auto starting in 2004 -- a provision Fiat has been mulling recently as it struggles to keep afloat.
Spokesman Porro stressed that GM (GM: Research, Estimates) was fully advised of Fiat's plan to sell the stake, and that "the framework of the alliance is completely respected."
GM spokeswoman Toni Simonetti concurred. "It doesn't really change any of our industrial relationships or our contractual relationships," Simonetti said.
In addition to raising cash, Fiat is also looking to lower its gross debt from about 33 billion euros to 23.6 billion euros -- as was set by creditor banks earlier this year.
The Fidis sale knocks off about 6 billion euros from the debt load. Two weeks ago, Fiat sold off the Brazilian arm of Fidis, removing another 800 million euros in commercial debt and bringing it close to the creditor target, Porro said.
The deals were the latest developments in a tumultuous few weeks at Fiat, Italy's largest private sector employer.
Last week, co-chief executive Gabriele Galateri resigned after less than six months on the job, and his co-CEO and Fiat chairman Paulo Fresco faced calls to step down as well.
Galateri and Fresco had backed a major restructuring plan to try to stem the losses. Among other things, the provisions call for layoffs of 20 percent of its domestic workforce -- cuts that have sparked massive protests in Italy in recent weeks.
The management shakeup had fueled reports of a dispute between Fiat's founding Agnelli family and the company's creditor banks, who have insisted on the restructuring plan.
Alessandro Barberis, a longtime Fiat official named co-CEO last week to replace Galateri, has vowed the restructuring plan would go ahead.
The restructuring plan includes the sale of noncore assets as well as the layoffs at Fiat Auto, which expects to report 2 billion euros in losses this year.
Some critics say Fresco -- a former General Electric executive who has been at the helm of Fiat since 1998 -- has neglected the company's auto unit while building up debt.
In its statement, Fiat said the sale of the GM stake "will allow Fiat to substantially improve the net financial position of the group
- Mensagens: 23939
- Registado: 5/11/2002 11:30
- Localização: 4
More oil from OPEC?
More oil from OPEC?
OPEC to hike oil output if price stays high, says Saudi Arabia.
December 21, 2002: 8:11 AM EST
CAIRO (Reuters) - The world's top oil exporter Saudi Arabia said on Saturday that OPEC would release more supply onto world markets if prices stayed above the cartel's $22-28 a barrel target range until mid-January.
Saudi Oil Minister Ali al-Naimi said the 11-member group remained committed to a "fair price," and would deploy an informal output mechanism to tame a price rally fuelled by an extended Venezuelan oil shutdown and fears of war in Iraq.
"We have said many times we are dedicated to preventing shortages, we are dedicated to stabilizing the market, we are committed to a fair price," Naimi told reporters on the sidelines of an Arab oil minister meeting in Cairo.
"We have a mechanism to trigger when it is necessary."
Under an informal output mechanism, OPEC aims to keep the price of its basket of crudes in the $22-$28 per barrel range by increasing supply if prices exceed the upper end of the range for 20 days.
OPEC's basket stood at $29.56 per barrel on Thursday while New York crude futures settled on Friday at $30.30 a barrel, gaining 11 cents on the day.
"Should that price continue... in accordance with the price-band mechanism, it will be implemented, like what we have done in the past," Naimi said.
Qatar and Libya also backed an automatic OPEC output increase if prices stay above $28 for 20 consecutive working days.
Reverse cut
If the mechanism is triggered in mid-January, OPEC would have to partially reverse a planned output cut, agreed only last week, of some 1.7 million barrels per day from January 1.
OPEC's mechanism calls for a minimum 500,000 barrel per day output hike, although ministers have in the past adjusted the volume according to market requirements.
OPEC agreed to rein in output on the assumption that Venezuelan supplies would resume imminently, but a strike in the world's fifth largest exporter which has crippled oil operations has now entered its 20th day and shows no signs of breaking.
Arab ministers have gathered in the Egyptian capital for an annual meeting of the Organisation of the Arab Petroleum Exporting Countries (OAPEC), which does not set output policy.
The Organisation of the Petroleum Exporting Countries (OPEC) last week set a new output target of 23 million barrels per day (bpd) for its 10 members with output restrictions. Sanctions-bound Iraq exports some two million bpd more under a United Nations oil-for-food deal.
No shortage
Despite the Venezuelan export halt, oil ministers in Cairo say they have not yet detected any shortages in the market.
"The volatility in the market is not due to shortages," Saudi's Naimi said.
"We have not heard any panic or any high voices from any consumers complaining about a shortage," the Qatari minister Abdullah al-Attiyah said.
Other OPEC ministers have said prices were rising on speculation and political factors related to Iraq rather than any real shortage.
Algerian Oil Minister Chakib Khelil shed some doubt over the mechanism, saying that OPEC would only release more oil if ministers detected a genuine requirement for extra supply, rather than a speculative price jump.
Price spikes produce windfall revenues for oil exporters, but they also damage world economic growth by raising energy costs, and undermine demand for oil.
OPEC, which pumps about two-thirds of world exports, has sufficient spare capacity to replace either Venezuelan or Iraqi exports.
But analysts said the unlikely scenario of a simultaneous halt in both countries would test the cartel's supply limits.
"If both were knocked out, that would push OPEC's capacity to the limit," said Mehdi Varzi, senior energy consultant at Dresdner Kleinwort Wasserstein bank.
"You could see an even more dramatic jump in prices, but this situation could not last long and you would see a subsequent collapse in demand and prices," he added.
OPEC to hike oil output if price stays high, says Saudi Arabia.
December 21, 2002: 8:11 AM EST
CAIRO (Reuters) - The world's top oil exporter Saudi Arabia said on Saturday that OPEC would release more supply onto world markets if prices stayed above the cartel's $22-28 a barrel target range until mid-January.
Saudi Oil Minister Ali al-Naimi said the 11-member group remained committed to a "fair price," and would deploy an informal output mechanism to tame a price rally fuelled by an extended Venezuelan oil shutdown and fears of war in Iraq.
"We have said many times we are dedicated to preventing shortages, we are dedicated to stabilizing the market, we are committed to a fair price," Naimi told reporters on the sidelines of an Arab oil minister meeting in Cairo.
"We have a mechanism to trigger when it is necessary."
Under an informal output mechanism, OPEC aims to keep the price of its basket of crudes in the $22-$28 per barrel range by increasing supply if prices exceed the upper end of the range for 20 days.
OPEC's basket stood at $29.56 per barrel on Thursday while New York crude futures settled on Friday at $30.30 a barrel, gaining 11 cents on the day.
"Should that price continue... in accordance with the price-band mechanism, it will be implemented, like what we have done in the past," Naimi said.
Qatar and Libya also backed an automatic OPEC output increase if prices stay above $28 for 20 consecutive working days.
Reverse cut
If the mechanism is triggered in mid-January, OPEC would have to partially reverse a planned output cut, agreed only last week, of some 1.7 million barrels per day from January 1.
OPEC's mechanism calls for a minimum 500,000 barrel per day output hike, although ministers have in the past adjusted the volume according to market requirements.
OPEC agreed to rein in output on the assumption that Venezuelan supplies would resume imminently, but a strike in the world's fifth largest exporter which has crippled oil operations has now entered its 20th day and shows no signs of breaking.
Arab ministers have gathered in the Egyptian capital for an annual meeting of the Organisation of the Arab Petroleum Exporting Countries (OAPEC), which does not set output policy.
The Organisation of the Petroleum Exporting Countries (OPEC) last week set a new output target of 23 million barrels per day (bpd) for its 10 members with output restrictions. Sanctions-bound Iraq exports some two million bpd more under a United Nations oil-for-food deal.
No shortage
Despite the Venezuelan export halt, oil ministers in Cairo say they have not yet detected any shortages in the market.
"The volatility in the market is not due to shortages," Saudi's Naimi said.
"We have not heard any panic or any high voices from any consumers complaining about a shortage," the Qatari minister Abdullah al-Attiyah said.
Other OPEC ministers have said prices were rising on speculation and political factors related to Iraq rather than any real shortage.
Algerian Oil Minister Chakib Khelil shed some doubt over the mechanism, saying that OPEC would only release more oil if ministers detected a genuine requirement for extra supply, rather than a speculative price jump.
Price spikes produce windfall revenues for oil exporters, but they also damage world economic growth by raising energy costs, and undermine demand for oil.
OPEC, which pumps about two-thirds of world exports, has sufficient spare capacity to replace either Venezuelan or Iraqi exports.
But analysts said the unlikely scenario of a simultaneous halt in both countries would test the cartel's supply limits.
"If both were knocked out, that would push OPEC's capacity to the limit," said Mehdi Varzi, senior energy consultant at Dresdner Kleinwort Wasserstein bank.
"You could see an even more dramatic jump in prices, but this situation could not last long and you would see a subsequent collapse in demand and prices," he added.
- Mensagens: 23939
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- Localização: 4
WASHINGTON (CNN) -- U.S. President George W. Bush has delaye
WASHINGTON (CNN) -- U.S. President George W. Bush has delayed his January trip to Africa in part because of the Iraqi situation, as the Pentagon reportedly made preparations to deploy tens of thousands of troops to the Persian Gulf.
The announcement came after Bush described a United Nations-mandated Iraqi declaration on alleged weapons of mass destruction as "not encouraging." The declaration -- which has been described by many U.S. and U.N. officials as incomplete -- is supposed to list all Iraqi weapons, chemical, biological and nuclear as well as facilities that could be used to manufacture such weapons.
Bush has threatened military action against Iraq if it refuses to abide by the resolution. Baghdad has repeatedly denied possessing weapons of mass destruction.
In a statement, White House spokesman Ari Fleischer said Bush "looks forward to visiting Africa in 2003 to continue building America's partnership with the continent and to sharing firsthand with African leaders his commitment to working on issues ranging from the war on terrorism to economic development." (Full story)
U.S. prepares troop deployments
U.S. military sources Friday told CNN that Bush had essentially signed off on a plan to deploy 50,000 U.S. troops to the Persian Gulf region in early January, which would bring the total number of American forces there to more than 100,000.
Gen. Tommy Franks, the head of the U.S. Central Command, met with Bush and his national security team for a second consecutive day. At the top of the agenda was to put the troop deployment plans in place, and to discuss which troops will head first to the region and what targets are to be selected for any possible war on Iraq, the sources said.
Targeting is among the most sensitive matters to resolve, with questions about how, when, and under what circumstances to bomb selected sites throughout Iraq and its capital, Baghdad.
Bush: Iraqi declaration 'not encouraging'
U.S. Marines participate in a training exercise in the Kuwaiti desert near the Iraqi border Friday.
Bush said Friday that Iraq's United Nations-mandated arms declaration "was not encouraging" and that the United States "will fulfill the terms and conditions" of the resolution.
Thursday, U.S. Secretary of State Colin Powell declared Iraq in "material breach" of U.N. Security Council Resolution 1441 because of "flagrant omissions" in that nation's declaration on weapons of mass destruction.
"This is an exaggerated response," Gen. Hussam Mohammed Amin told Reuters when asked to comment on Powell's criticism of the declaration.
"It was political," Amin, the chief Iraqi official working with U.N. weapons inspectors, said by telephone. "Even before they were able to read and analyze the declaration they said it had many gaps." (Full story)
Bush commented on the declaration Friday. "The world spoke clearly that we expect Mr. Saddam Hussein to disarm," Bush said during a meeting attended by Powell, Vice President Dick Cheney, U.N. Secretary-General Kofi Annan and other top international officials.
"Yesterday's document was not encouraging. We expected him to show that he would disarm, and as the secretary of state said, it's a long way from there."
But Russian Foreign Minister Igor Ivanov said the Iraqi declaration contains "no troubling definitions which might qualify as violations by Iraq of the U.N. Security Council resolution," according to the Interfax news agency.
On December 7 Iraq delivered to U.N. weapons inspectors what Baghdad said were details of its now inactive weapons of mass destruction programs and possible facilities that might be used to develop them.
The resolution also called on Iraq to abide by all the U.N. resolutions that Iraq promised to follow in a ceasefire agreement reached after it lost the 1991 Persian Gulf War.
The announcement came after Bush described a United Nations-mandated Iraqi declaration on alleged weapons of mass destruction as "not encouraging." The declaration -- which has been described by many U.S. and U.N. officials as incomplete -- is supposed to list all Iraqi weapons, chemical, biological and nuclear as well as facilities that could be used to manufacture such weapons.
Bush has threatened military action against Iraq if it refuses to abide by the resolution. Baghdad has repeatedly denied possessing weapons of mass destruction.
In a statement, White House spokesman Ari Fleischer said Bush "looks forward to visiting Africa in 2003 to continue building America's partnership with the continent and to sharing firsthand with African leaders his commitment to working on issues ranging from the war on terrorism to economic development." (Full story)
U.S. prepares troop deployments
U.S. military sources Friday told CNN that Bush had essentially signed off on a plan to deploy 50,000 U.S. troops to the Persian Gulf region in early January, which would bring the total number of American forces there to more than 100,000.
Gen. Tommy Franks, the head of the U.S. Central Command, met with Bush and his national security team for a second consecutive day. At the top of the agenda was to put the troop deployment plans in place, and to discuss which troops will head first to the region and what targets are to be selected for any possible war on Iraq, the sources said.
Targeting is among the most sensitive matters to resolve, with questions about how, when, and under what circumstances to bomb selected sites throughout Iraq and its capital, Baghdad.
Bush: Iraqi declaration 'not encouraging'
U.S. Marines participate in a training exercise in the Kuwaiti desert near the Iraqi border Friday.
Bush said Friday that Iraq's United Nations-mandated arms declaration "was not encouraging" and that the United States "will fulfill the terms and conditions" of the resolution.
Thursday, U.S. Secretary of State Colin Powell declared Iraq in "material breach" of U.N. Security Council Resolution 1441 because of "flagrant omissions" in that nation's declaration on weapons of mass destruction.
"This is an exaggerated response," Gen. Hussam Mohammed Amin told Reuters when asked to comment on Powell's criticism of the declaration.
"It was political," Amin, the chief Iraqi official working with U.N. weapons inspectors, said by telephone. "Even before they were able to read and analyze the declaration they said it had many gaps." (Full story)
Bush commented on the declaration Friday. "The world spoke clearly that we expect Mr. Saddam Hussein to disarm," Bush said during a meeting attended by Powell, Vice President Dick Cheney, U.N. Secretary-General Kofi Annan and other top international officials.
"Yesterday's document was not encouraging. We expected him to show that he would disarm, and as the secretary of state said, it's a long way from there."
But Russian Foreign Minister Igor Ivanov said the Iraqi declaration contains "no troubling definitions which might qualify as violations by Iraq of the U.N. Security Council resolution," according to the Interfax news agency.
On December 7 Iraq delivered to U.N. weapons inspectors what Baghdad said were details of its now inactive weapons of mass destruction programs and possible facilities that might be used to develop them.
The resolution also called on Iraq to abide by all the U.N. resolutions that Iraq promised to follow in a ceasefire agreement reached after it lost the 1991 Persian Gulf War.
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- Registado: 5/11/2002 11:30
- Localização: 4
Blue-Ribbon Companies
Blue-Ribbon Companies
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Cisco Systems
The top network equipment business is one of three companies that made six FORTUNE company lists in 2002, including the FORTUNE 500, Best Companies to Work For, and Best Companies for Minorities. Intel and Procter & Gamble also share the achievement. · What Went Right · Ask Annie: Best Career Advice
· Find the Right Company For You · Download the Fortune Database
Company F5 G5 BC MA GMA BCM Industry
Intel • • • • • • Semiconductors
Procter & Gamble • • • • • • Household and Personal Products
Abbott Laboratories • • • • • Pharmaceuticals
Allstate • • • • • Insurance: P & C (stock)
American Express • • • • • Diversified Financials
Bank of America Corp. • • • • • Commercial Banks
BellSouth • • • • • Telecommunications
Citigroup • • • • • Diversified Financials
Coca-Cola • • • • • Beverages
Eli Lilly • • • • • Pharmaceuticals
Fannie Mae • • • • • Diversified Financials
FedEx • • • • • Mail, Package, Freight Delivery
Ford Motor • • • • • Motor Vehicles & Parts
J.P. Morgan Chase • • • • • Commercial Banks
Johnson & Johnson • • • • • Pharmaceuticals
Lucent Technologies • • • • • Network and Other Communications Equipment
Marriott International • • • • • Hotels, Casinos, Resorts
Merck • • • • • Pharmaceuticals
Microsoft • • • • • Computer Software
PepsiCo • • • • • Beverages
Pfizer • • • • • Pharmaceuticals
Prudential Financial • • • • • Insurance: Life, Health (stock)
SBC Communications • • • • • Telecommunications
Sun Microsystems • • • • • Computers, Office Equipment
TIAA-CREF • • • • • Insurance: Life, Health (mutual)
UAL • • • • • Airlines
United Parcel Service • • • • • Mail, Package, Freight Delivery
Verizon Communications • • • • • Telecommunications
Wal-Mart Stores • • • • • General Merchandisers
Xerox • • • • • Computers, Office Equipment
LEGEND
F5 = FORTUNE 500
G5 = Global 500
BC = Best Companies to Work For
MA = Americas Most Admired Companies
GMA = Global Most Admired Companies
BCM = Best Companies for Minorities
December 16, 2002
View list by: Most Lists Most Employees Best States Best of the Best
Cisco Systems
The top network equipment business is one of three companies that made six FORTUNE company lists in 2002, including the FORTUNE 500, Best Companies to Work For, and Best Companies for Minorities. Intel and Procter & Gamble also share the achievement. · What Went Right · Ask Annie: Best Career Advice
· Find the Right Company For You · Download the Fortune Database
Company F5 G5 BC MA GMA BCM Industry
Intel • • • • • • Semiconductors
Procter & Gamble • • • • • • Household and Personal Products
Abbott Laboratories • • • • • Pharmaceuticals
Allstate • • • • • Insurance: P & C (stock)
American Express • • • • • Diversified Financials
Bank of America Corp. • • • • • Commercial Banks
BellSouth • • • • • Telecommunications
Citigroup • • • • • Diversified Financials
Coca-Cola • • • • • Beverages
Eli Lilly • • • • • Pharmaceuticals
Fannie Mae • • • • • Diversified Financials
FedEx • • • • • Mail, Package, Freight Delivery
Ford Motor • • • • • Motor Vehicles & Parts
J.P. Morgan Chase • • • • • Commercial Banks
Johnson & Johnson • • • • • Pharmaceuticals
Lucent Technologies • • • • • Network and Other Communications Equipment
Marriott International • • • • • Hotels, Casinos, Resorts
Merck • • • • • Pharmaceuticals
Microsoft • • • • • Computer Software
PepsiCo • • • • • Beverages
Pfizer • • • • • Pharmaceuticals
Prudential Financial • • • • • Insurance: Life, Health (stock)
SBC Communications • • • • • Telecommunications
Sun Microsystems • • • • • Computers, Office Equipment
TIAA-CREF • • • • • Insurance: Life, Health (mutual)
UAL • • • • • Airlines
United Parcel Service • • • • • Mail, Package, Freight Delivery
Verizon Communications • • • • • Telecommunications
Wal-Mart Stores • • • • • General Merchandisers
Xerox • • • • • Computers, Office Equipment
LEGEND
F5 = FORTUNE 500
G5 = Global 500
BC = Best Companies to Work For
MA = Americas Most Admired Companies
GMA = Global Most Admired Companies
BCM = Best Companies for Minorities
December 16, 2002
- Mensagens: 23939
- Registado: 5/11/2002 11:30
- Localização: 4
BEST OF 2002
BEST OF 2002
Cream of the Crop
View list by: Most Lists Most Employees Best States Best of the Best
AFLAC
The insurance company is one of eight companies that appear on both Best Companies to Work For and Best Companies for Minorities. Making the lists requires high-quality workplace culture and a commitment to diversity. · What Went Right · Ask Annie: Best Career Advice
· Find the Right Company For You · Download the Fortune Database
Company Best For Minorities Rank Best to Work For Rank Revenues ($ millions)
American Express 29 91 22,582
Cisco Systems 34 15 22,293
Fannie Mae 1 79 50,803
Intel 45 49 26,539
Marriott International 24 90 10,152
Nordstrom 36 84 5,634
Procter & Gamble 20 97 39,244
December 16, 2002
Cream of the Crop
View list by: Most Lists Most Employees Best States Best of the Best
AFLAC
The insurance company is one of eight companies that appear on both Best Companies to Work For and Best Companies for Minorities. Making the lists requires high-quality workplace culture and a commitment to diversity. · What Went Right · Ask Annie: Best Career Advice
· Find the Right Company For You · Download the Fortune Database
Company Best For Minorities Rank Best to Work For Rank Revenues ($ millions)
American Express 29 91 22,582
Cisco Systems 34 15 22,293
Fannie Mae 1 79 50,803
Intel 45 49 26,539
Marriott International 24 90 10,152
Nordstrom 36 84 5,634
Procter & Gamble 20 97 39,244
December 16, 2002
- Mensagens: 23939
- Registado: 5/11/2002 11:30
- Localização: 4
Best States for Business
Best States for Business
View list by: Most Lists Most Employees Best States Best of the Best
California
Maybe it's all that sunshine--California tops our list of states that are home to fast-growing companies. With 39 businesses experiencing surging revenue, it has almost double the number of sprouters as its closest competitor, Texas. · What Went Right · Ask Annie: Best Career Advice
· Find the Right Company For You · Download the Fortune Database
CALIFORNIA
Company City Revenue Growth
(%, 3-yr. annual rate)
Advent Software San Francisco 34.0
ArthroCare Sunnyvale 48.0
AXT Fremont 44.1
Berry Petroleum Bakersfield 51.0
Capital Corp. of the West Merced 19.5
Catalyst Semiconductor Sunnyvale 39.2
Ceradyne Costa Mesa 25.1
Cheesecake Factory Calabasas Hills 27.0
Cholestech Hayward 27.8
Copart Benicia 32.0
Corinthian Colleges Santa Ana 35.0
eBay San Jose 111.0
Elantec Semiconductor Milpitas 45.1
Greater Bay Bancorp Palo Alto 61.0
Hot Topic City of Industry 49.0
ICU Medical San Clemente 19.2
IDEC Pharmaceuticals San Diego 44.0
Indymac Bancorp Pasadena 30.0
Interpore International Irvine 23.6
Jakks Pacific Malibu 49.0
KLA-Tencor San Jose 33.0
Macrovision Santa Clara 58.0
Micromuse San Francisco 86.0
Monterey Pasta Salinas 31.0
Nanometrics Milpitas 29.7
National Mercantial Bancorp Los Angeles 40.4
Novellus Systems San Jose 44.0
Nvidia Santa Clara 104.0
Oakley Foothill Ranch 26.0
Occidental Petroluem Los Angeles 34.0
Pixar Emeryville 77.0
QLogic Aliso Viejo 53.0
Quaker City Bancorp Whittier 17.1
Rambus Los Altos 47.0
Semtech Camarillo 28.9
Sicor Irvine 27.0
Siebel Systems San Mateo 84.0
Verity Sunnyvale 34.2
Westcorp Irvine 37.0
TEXAS
Company City Revenue Growth
(%, 3-yr. annual rate)
AdvancePCS Irving 168.0
AmeriCredit Fort Worth 54.0
Apache Houston 53.0
AZZ Fort Worth 23.2
D.R. Horton Arlington 25.0
Dorchester Hugoton Garland 31.4
Dynacq International Pasadena 59.0
Frontier Oil Houston 104.0
Group 1 Automotive Houston 35.0
Newfield Exploration Houston 60.0
Pogo Producing Houston 46.0
Quanta Services Houston 86.0
Quicksilver Resources Fort Worth 69.0
Remington Oil & Gas Dallas 20.6
Rent-A-Center Plano 29.0
Smith International Houston 25.0
Swift Energy Houston 42.5
Team Alvin 17.0
The Dwyer Group Waco 15.1
Toreador Resources Dallas 114.1
U.S Physical Therapy Houston 22.3
XTO Energy Fort Worth 53.0
NEW YORK
Company City Revenue Growth
(%, 3-yr. annual rate)
4Kids Entertainment New York 64.9
Actrade Financial Technologies New York 90.0
Albany Molecular Research Albany 51.0
Barr Laboratories Pomona 28.0
Comtech Telecommunications Melville 69.4
Dime Community Bancshares Brooklyn 16.7
Espey Manufacturing & Electronics Saratoga Springs 17.1
Forest Laboratories New York 37.0
Frequency Electronics Mitchel Field 37.5
Hudson River Bancorp Hudson 30.0
IMPATH New York 52.3
Intermagnetics General Latham 15.0
L-3 Communications Holdings New York 33.0
MapInfo Troy 22.6
National Home Health Care Scarsdale 33.0
Staten Island Bancorp Staten Island 32.0
Steven Madden Long Island City 41.0
TMP Worldwide New York 31.0
Westwood One New York 30.0
COLORADO
Company City Revenue Growth
(%, 3-yr. annual rate)
Advanced Energy Industries Fort Collins 39.6
Air Methods Englewood 25.5
CoBiz Denver 40.5
Evergreen Resources Denver 87.0
Key Production Denver 54.7
Patina Oil & Gas Denver 45.0
Prima Energy Denver 36.8
SpectraLink Boulder 22.7
St Mary Land & Exploration Denver 49.0
Vail Banks Vail 32.0
MASSACHUSETTS
Company City Revenue Growth
(%, 3-yr. annual rate)
Aware Bedford 32.0
Boston Private Financial Boston 36.9
Capital Crossing Bank Boston 27.0
Cytyc Boxborough 70.0
Forrester Research Cambridge 52.9
Investors Financial Services Boston 40.0
Mercury Computer Systems Chelmsford 24.1
PolyMedica Woburn 41.0
Tweeter Home Entertainment Group Canton 37.0
Zoll Medical Burlington 28.0
PENNSYLVANIA
Company City Revenue Growth
(%, 3-yr. annual rate)
AmerisourceBergen Chesterbrook 34.0
ICT Group Newtown 26.0
II-VI Saxonburg 31.4
Kensey Nash Exton 22.9
Orleans Homebuilders Bensalem 35.0
Penn National Gaming Wyomissing 54.0
Southern Union Wilkes-Barre 45.0
Tollgrade Communications Cheswick 29.0
NEW JERSEY
Company City Revenue Growth
(%, 3-yr. annual rate)
Asta Funding Englewood Cliffs 41.0
Bed Bath & Beyond Union 29.0
Bradley Pharmaceuticals Fairfield 15.1
Cognizant Technology Solutions Teaneck 49.2
Hovnanian Enterprises Red Bank 27.0
Opinion Research Skillman 39.4
Quest Diagnostics Teterboro 39.0
CONNECTICUT
Company City Revenue Growth
(%, 3-yr. annual rate)
Dianon Systems Stratford 26.0
FactSet Research Systems Greenwich 29.4
MemberWorks Stamford 43.0
NYFIX Stamford 89.8
ILLINOIS
Company City Revenue Growth
(%, 3-yr. annual rate)
CDW Computer Centers Vernon Hills 34.0
Hemlock Federal Financial Oak Forest 27.2
MB Financial Chicago 42.9
Quixote Chicago 15.2
MINNESOTA
Company City Revenue Growth
(%, 3-yr. annual rate)
Christopher & Banks Plymouth 37.0
Metris Companies Minnetonka 62.0
SurModics Eden Prairie 32.0
Techne Minneapolis 15.3
MISSOURI
Company City Revenue Growth
(%, 3-yr. annual rate)
Engineered Support Systems St. Louis 55.0
Express Scripts Maryland Heights 50.0
First Banks America Clayton 60.0
TALX St. Louis 19.0
OHIO
Company City Revenue Growth
(%, 3-yr. annual rate)
First Defiance Financial Defiance 26.9
Interlott Technologies Mason 30.9
Keithley Instruments Solon 15.5
Multi-Color Cincinnati 15.8
OKLAHOMA
Company City Revenue Growth
(%, 3-yr. annual rate)
AAON Tulsa 15.6
Panhandle Royalty Oklahoma City 48.6
Unit Tulsa 47.0
XETA Technologies Broken Arrow 58.9
FLORIDA
Company City Revenue Growth
(%, 3-yr. annual rate)
Lennar Miami 36.0
Noven Pharmaceuticals Miami 32.3
Priority Healthcare Lake Mary 42.0
MARYLAND
Company City Revenue Growth
(%, 3-yr. annual rate)
CompuDyne Hanover 51.0
Corporate Office Properties Trust Columbia 48.5
FTI Consulting Annapolis 44.6
MICHIGAN
Company City Revenue Growth
(%, 3-yr. annual rate)
Mercantile Bank Wyoming 60.8
Neogen Lansing 24.7
Stryker Kalamazoo 28.0
NORTH CAROLINA
Company City Revenue Growth
(%, 3-yr. annual rate)
Cree Durham 63.2
Embrex Durham 16.5
Sonic Automotive Charlotte 60.0
TENNESSEE
Company City Revenue Growth
(%, 3-yr. annual rate)
Accredo Health Memphis 35.0
Concord EFS Memphis 47.0
King Pharmaceuticals Bristol 67.0
VIRGINIA
Company City Revenue Growth
(%, 3-yr. annual rate)
Capital Automotive McLean 44.9
Capital One Financial Falls Church 40.0
Performance Food Group Co Richmond 26.0
ARIZONA
Company City Revenue Growth
(%, 3-yr. annual rate)
Mobile Mini Tempe 30.7
P.F. Chang's China Bistro Scottsdale 60.0
NEVADA
Company City Revenue Growth
(%, 3-yr. annual rate)
MGM Mirage Las Vegas 79.0
Shuffle Master Las Vegas 25.3
SOUTH CAROLINA
Company City Revenue Growth
(%, 3-yr. annual rate)
Community Capital Greenwood 20.9
ScanSource Greenville 46.0
SOUTH DAKOTA
Company City Revenue Growth
(%, 3-yr. annual rate)
Black Hills Rapid City 41.0
Daktronics Brookings 22.3
WEST VIRGINIA
Company City Revenue Growth
(%, 3-yr. annual rate)
MTR Gaming Group Chester 40.0
Petroleum Development Bridgeport 33.5
WISCONSIN
Company City Revenue Growth
(%, 3-yr. annual rate)
Kohl's Menomonee Falls 27.0
Renaissance Learning Wisconsin Rapids 34.7
ALABAMA
Company City Revenue Growth
(%, 3-yr. annual rate)
Eufaula BancCorp Eufaula 18.8
ARKANSAS
Company City Revenue Growth
(%, 3-yr. annual rate)
Murphy Oil El Dorado 115.0
WASHINGTON, D.C.
Company City Revenue Growth
(%, 3-yr. annual rate)
Corporate Executive Board Washington 34.0
GEORGIA
Company City Revenue Growth
(%, 3-yr. annual rate)
Manhattan Associates Atlanta 38.0
INDIANA
Company City Revenue Growth
(%, 3-yr. annual rate)
Escalade Evansville 16.6
KANSAS
Company City Revenue Growth
(%, 3-yr. annual rate)
EPIQ Systems Kansas City 40.0
KENTUCKY
Company City Revenue Growth
(%, 3-yr. annual rate)
Delta Natural Gas Winchester 33.6
LOUISIANA
Company City Revenue Growth
(%, 3-yr. annual rate)
Shaw Group Baton Rouge 53.0
MONTANA
Company City Revenue Growth
(%, 3-yr. annual rate)
Stillwater Mining Columbus 39.0
NORTH DAKOTA
Company City Revenue Growth
(%, 3-yr. annual rate)
MDU Resources Group Bismarck 36.0
OREGON
Company City Revenue Growth
(%, 3-yr. annual rate)
Metro One Telecomm. Beaverton 76.0
UTAH
Company City Revenue Growth
(%, 3-yr. annual rate)
ClearOne Communications Salt Lake City 30.7
VERMONT
Company City Revenue Growth
(%, 3-yr. annual rate)
Green Mountain Coffee Waterbury 19.8
December 16, 2002
View list by: Most Lists Most Employees Best States Best of the Best
California
Maybe it's all that sunshine--California tops our list of states that are home to fast-growing companies. With 39 businesses experiencing surging revenue, it has almost double the number of sprouters as its closest competitor, Texas. · What Went Right · Ask Annie: Best Career Advice
· Find the Right Company For You · Download the Fortune Database
CALIFORNIA
Company City Revenue Growth
(%, 3-yr. annual rate)
Advent Software San Francisco 34.0
ArthroCare Sunnyvale 48.0
AXT Fremont 44.1
Berry Petroleum Bakersfield 51.0
Capital Corp. of the West Merced 19.5
Catalyst Semiconductor Sunnyvale 39.2
Ceradyne Costa Mesa 25.1
Cheesecake Factory Calabasas Hills 27.0
Cholestech Hayward 27.8
Copart Benicia 32.0
Corinthian Colleges Santa Ana 35.0
eBay San Jose 111.0
Elantec Semiconductor Milpitas 45.1
Greater Bay Bancorp Palo Alto 61.0
Hot Topic City of Industry 49.0
ICU Medical San Clemente 19.2
IDEC Pharmaceuticals San Diego 44.0
Indymac Bancorp Pasadena 30.0
Interpore International Irvine 23.6
Jakks Pacific Malibu 49.0
KLA-Tencor San Jose 33.0
Macrovision Santa Clara 58.0
Micromuse San Francisco 86.0
Monterey Pasta Salinas 31.0
Nanometrics Milpitas 29.7
National Mercantial Bancorp Los Angeles 40.4
Novellus Systems San Jose 44.0
Nvidia Santa Clara 104.0
Oakley Foothill Ranch 26.0
Occidental Petroluem Los Angeles 34.0
Pixar Emeryville 77.0
QLogic Aliso Viejo 53.0
Quaker City Bancorp Whittier 17.1
Rambus Los Altos 47.0
Semtech Camarillo 28.9
Sicor Irvine 27.0
Siebel Systems San Mateo 84.0
Verity Sunnyvale 34.2
Westcorp Irvine 37.0
TEXAS
Company City Revenue Growth
(%, 3-yr. annual rate)
AdvancePCS Irving 168.0
AmeriCredit Fort Worth 54.0
Apache Houston 53.0
AZZ Fort Worth 23.2
D.R. Horton Arlington 25.0
Dorchester Hugoton Garland 31.4
Dynacq International Pasadena 59.0
Frontier Oil Houston 104.0
Group 1 Automotive Houston 35.0
Newfield Exploration Houston 60.0
Pogo Producing Houston 46.0
Quanta Services Houston 86.0
Quicksilver Resources Fort Worth 69.0
Remington Oil & Gas Dallas 20.6
Rent-A-Center Plano 29.0
Smith International Houston 25.0
Swift Energy Houston 42.5
Team Alvin 17.0
The Dwyer Group Waco 15.1
Toreador Resources Dallas 114.1
U.S Physical Therapy Houston 22.3
XTO Energy Fort Worth 53.0
NEW YORK
Company City Revenue Growth
(%, 3-yr. annual rate)
4Kids Entertainment New York 64.9
Actrade Financial Technologies New York 90.0
Albany Molecular Research Albany 51.0
Barr Laboratories Pomona 28.0
Comtech Telecommunications Melville 69.4
Dime Community Bancshares Brooklyn 16.7
Espey Manufacturing & Electronics Saratoga Springs 17.1
Forest Laboratories New York 37.0
Frequency Electronics Mitchel Field 37.5
Hudson River Bancorp Hudson 30.0
IMPATH New York 52.3
Intermagnetics General Latham 15.0
L-3 Communications Holdings New York 33.0
MapInfo Troy 22.6
National Home Health Care Scarsdale 33.0
Staten Island Bancorp Staten Island 32.0
Steven Madden Long Island City 41.0
TMP Worldwide New York 31.0
Westwood One New York 30.0
COLORADO
Company City Revenue Growth
(%, 3-yr. annual rate)
Advanced Energy Industries Fort Collins 39.6
Air Methods Englewood 25.5
CoBiz Denver 40.5
Evergreen Resources Denver 87.0
Key Production Denver 54.7
Patina Oil & Gas Denver 45.0
Prima Energy Denver 36.8
SpectraLink Boulder 22.7
St Mary Land & Exploration Denver 49.0
Vail Banks Vail 32.0
MASSACHUSETTS
Company City Revenue Growth
(%, 3-yr. annual rate)
Aware Bedford 32.0
Boston Private Financial Boston 36.9
Capital Crossing Bank Boston 27.0
Cytyc Boxborough 70.0
Forrester Research Cambridge 52.9
Investors Financial Services Boston 40.0
Mercury Computer Systems Chelmsford 24.1
PolyMedica Woburn 41.0
Tweeter Home Entertainment Group Canton 37.0
Zoll Medical Burlington 28.0
PENNSYLVANIA
Company City Revenue Growth
(%, 3-yr. annual rate)
AmerisourceBergen Chesterbrook 34.0
ICT Group Newtown 26.0
II-VI Saxonburg 31.4
Kensey Nash Exton 22.9
Orleans Homebuilders Bensalem 35.0
Penn National Gaming Wyomissing 54.0
Southern Union Wilkes-Barre 45.0
Tollgrade Communications Cheswick 29.0
NEW JERSEY
Company City Revenue Growth
(%, 3-yr. annual rate)
Asta Funding Englewood Cliffs 41.0
Bed Bath & Beyond Union 29.0
Bradley Pharmaceuticals Fairfield 15.1
Cognizant Technology Solutions Teaneck 49.2
Hovnanian Enterprises Red Bank 27.0
Opinion Research Skillman 39.4
Quest Diagnostics Teterboro 39.0
CONNECTICUT
Company City Revenue Growth
(%, 3-yr. annual rate)
Dianon Systems Stratford 26.0
FactSet Research Systems Greenwich 29.4
MemberWorks Stamford 43.0
NYFIX Stamford 89.8
ILLINOIS
Company City Revenue Growth
(%, 3-yr. annual rate)
CDW Computer Centers Vernon Hills 34.0
Hemlock Federal Financial Oak Forest 27.2
MB Financial Chicago 42.9
Quixote Chicago 15.2
MINNESOTA
Company City Revenue Growth
(%, 3-yr. annual rate)
Christopher & Banks Plymouth 37.0
Metris Companies Minnetonka 62.0
SurModics Eden Prairie 32.0
Techne Minneapolis 15.3
MISSOURI
Company City Revenue Growth
(%, 3-yr. annual rate)
Engineered Support Systems St. Louis 55.0
Express Scripts Maryland Heights 50.0
First Banks America Clayton 60.0
TALX St. Louis 19.0
OHIO
Company City Revenue Growth
(%, 3-yr. annual rate)
First Defiance Financial Defiance 26.9
Interlott Technologies Mason 30.9
Keithley Instruments Solon 15.5
Multi-Color Cincinnati 15.8
OKLAHOMA
Company City Revenue Growth
(%, 3-yr. annual rate)
AAON Tulsa 15.6
Panhandle Royalty Oklahoma City 48.6
Unit Tulsa 47.0
XETA Technologies Broken Arrow 58.9
FLORIDA
Company City Revenue Growth
(%, 3-yr. annual rate)
Lennar Miami 36.0
Noven Pharmaceuticals Miami 32.3
Priority Healthcare Lake Mary 42.0
MARYLAND
Company City Revenue Growth
(%, 3-yr. annual rate)
CompuDyne Hanover 51.0
Corporate Office Properties Trust Columbia 48.5
FTI Consulting Annapolis 44.6
MICHIGAN
Company City Revenue Growth
(%, 3-yr. annual rate)
Mercantile Bank Wyoming 60.8
Neogen Lansing 24.7
Stryker Kalamazoo 28.0
NORTH CAROLINA
Company City Revenue Growth
(%, 3-yr. annual rate)
Cree Durham 63.2
Embrex Durham 16.5
Sonic Automotive Charlotte 60.0
TENNESSEE
Company City Revenue Growth
(%, 3-yr. annual rate)
Accredo Health Memphis 35.0
Concord EFS Memphis 47.0
King Pharmaceuticals Bristol 67.0
VIRGINIA
Company City Revenue Growth
(%, 3-yr. annual rate)
Capital Automotive McLean 44.9
Capital One Financial Falls Church 40.0
Performance Food Group Co Richmond 26.0
ARIZONA
Company City Revenue Growth
(%, 3-yr. annual rate)
Mobile Mini Tempe 30.7
P.F. Chang's China Bistro Scottsdale 60.0
NEVADA
Company City Revenue Growth
(%, 3-yr. annual rate)
MGM Mirage Las Vegas 79.0
Shuffle Master Las Vegas 25.3
SOUTH CAROLINA
Company City Revenue Growth
(%, 3-yr. annual rate)
Community Capital Greenwood 20.9
ScanSource Greenville 46.0
SOUTH DAKOTA
Company City Revenue Growth
(%, 3-yr. annual rate)
Black Hills Rapid City 41.0
Daktronics Brookings 22.3
WEST VIRGINIA
Company City Revenue Growth
(%, 3-yr. annual rate)
MTR Gaming Group Chester 40.0
Petroleum Development Bridgeport 33.5
WISCONSIN
Company City Revenue Growth
(%, 3-yr. annual rate)
Kohl's Menomonee Falls 27.0
Renaissance Learning Wisconsin Rapids 34.7
ALABAMA
Company City Revenue Growth
(%, 3-yr. annual rate)
Eufaula BancCorp Eufaula 18.8
ARKANSAS
Company City Revenue Growth
(%, 3-yr. annual rate)
Murphy Oil El Dorado 115.0
WASHINGTON, D.C.
Company City Revenue Growth
(%, 3-yr. annual rate)
Corporate Executive Board Washington 34.0
GEORGIA
Company City Revenue Growth
(%, 3-yr. annual rate)
Manhattan Associates Atlanta 38.0
INDIANA
Company City Revenue Growth
(%, 3-yr. annual rate)
Escalade Evansville 16.6
KANSAS
Company City Revenue Growth
(%, 3-yr. annual rate)
EPIQ Systems Kansas City 40.0
KENTUCKY
Company City Revenue Growth
(%, 3-yr. annual rate)
Delta Natural Gas Winchester 33.6
LOUISIANA
Company City Revenue Growth
(%, 3-yr. annual rate)
Shaw Group Baton Rouge 53.0
MONTANA
Company City Revenue Growth
(%, 3-yr. annual rate)
Stillwater Mining Columbus 39.0
NORTH DAKOTA
Company City Revenue Growth
(%, 3-yr. annual rate)
MDU Resources Group Bismarck 36.0
OREGON
Company City Revenue Growth
(%, 3-yr. annual rate)
Metro One Telecomm. Beaverton 76.0
UTAH
Company City Revenue Growth
(%, 3-yr. annual rate)
ClearOne Communications Salt Lake City 30.7
VERMONT
Company City Revenue Growth
(%, 3-yr. annual rate)
Green Mountain Coffee Waterbury 19.8
December 16, 2002
- Mensagens: 23939
- Registado: 5/11/2002 11:30
- Localização: 4
Where the Jobs Are
Where the Jobs Are
View list by: Most Lists Most Employees Best States Best of the Best
Wal-Mart Stores
Almost one half of one percent of all Americans work at Wal-Mart--that's 1,383,000 people. No other FORTUNE 500 company even comes close; second-ranked McDonald's employs nearly 1 million fewer workers. · What Went Right · Ask Annie: Best Career Advice
· Find the Right Company For You · Download the Fortune Database
Company Fortune 500 Rank Number of Employees
McDonald's 139 395,000
United Parcel Service 55 370,000
General Motors 3 365,000
Ford Motor 4 352,748
Intl. Business Machines 9 319,876
General Electric 6 310,000
Sears Roebuck 32 310,000
Kroger 22 288,000
J.C. Penney 50 270,000
Citigroup 7 268,000
Home Depot 18 256,300
Verizon Communications 11 247,000
Kmart 40 240,525
Target 34 223,550
Albertson's 38 220,000
Delphi 67 195,000
SBC Communications 27 193,420
Safeway 45 193,000
Boeing 16 188,000
FedEx 103 176,960
Philip Morris 10 175,000
HCA 113 174,000
Aramark 246 162,000
United Technologies 59 152,000
December 16, 2002
View list by: Most Lists Most Employees Best States Best of the Best
Wal-Mart Stores
Almost one half of one percent of all Americans work at Wal-Mart--that's 1,383,000 people. No other FORTUNE 500 company even comes close; second-ranked McDonald's employs nearly 1 million fewer workers. · What Went Right · Ask Annie: Best Career Advice
· Find the Right Company For You · Download the Fortune Database
Company Fortune 500 Rank Number of Employees
McDonald's 139 395,000
United Parcel Service 55 370,000
General Motors 3 365,000
Ford Motor 4 352,748
Intl. Business Machines 9 319,876
General Electric 6 310,000
Sears Roebuck 32 310,000
Kroger 22 288,000
J.C. Penney 50 270,000
Citigroup 7 268,000
Home Depot 18 256,300
Verizon Communications 11 247,000
Kmart 40 240,525
Target 34 223,550
Albertson's 38 220,000
Delphi 67 195,000
SBC Communications 27 193,420
Safeway 45 193,000
Boeing 16 188,000
FedEx 103 176,960
Philip Morris 10 175,000
HCA 113 174,000
Aramark 246 162,000
United Technologies 59 152,000
December 16, 2002
- Mensagens: 23939
- Registado: 5/11/2002 11:30
- Localização: 4
Placing a Bet on Biotech
Placing a Bet on Biotech
Right now this risky sector is a bust. That's exactly why I think it's so attractive.
FORTUNE
Wednesday, December 18, 2002
By Herb Greenberg
I've decided to add a small component of high risk to my IRA, and I can't think of anything riskier than to buy a mutual fund that invests in nothing but biotechnology. I'm not talking about some watered-down fund that mixes in other health-care-related stocks to soften the blow of biotech's eventual blowups. What I want is a pure, high-octane fund that can get full-throttle gains from the next biotech boom.
If the phrase "biotech boom" causes your eyebrow to arch or your lips to quiver, no wonder. Right now biotech is a bust--as an investment, that is. The Amex biotechnology index, a group of 17 stocks created in 1991, is down 38% this year, vs. the S&P 500's 21% decline. And that's just why it caught my eye.
I've written about biotech companies on and off since the late 1980s. Because any individual bio stock can (and probably will) melt down at some point, snookering even sophisticated investors, buying a basket of them has always been the smartest tack. But a still better idea is to buy that basket when nobody else wants it, and wait. With my time horizon of ten to 15 years, I'm willing to bet that at some point biotech stocks will be driven to dizzying heights--perhaps even higher than the sector's last boom, when the Amex biotechnology index, for instance, leaped 62% in 2000. (The S&P dropped 10% that year.)
Here's why. With biotech, all it takes to spark a buying frenzy is one major breakthrough in the quest to cure cancer, AIDS, or another disease. And unlike regular technology, which goes through cycles, biotech doesn't create a commodity that can quickly be leapfrogged by a competitor. "These three- to five-year boom-to-bust cycles have been in biotech for 20 years," says John Freund, managing director at venture capital firm Skyline Ventures, which invests in biotech stocks. But if you look back, he adds, even after each cycle of bust the sector has held sustainable market gains. "That reflects that this is now a real industry with real drugs," he says. Drugs like Genentech's Herceptin for breast cancer, Amgen's anemia-fighting Epogen, and Rituxan, an innovative cancer drug developed by IDEC Pharmaceuticals.
So which fund to buy? There are now only a dozen or so that appear to be invested exclusively in biotech--unlike the sector's early go-go days when a new one was being created every minute. Schwab, the caretaker of my IRA, lists only a handful of funds. There's also the American Stock Exchange-traded Biotech HOLDRS, a passively-managed basket of 20 stocks. This lack of options, thankfully, makes it easy to whittle down the choices, especially considering my criteria: My fund pick has to be actively managed (that dings the Biotech HOLDRS), and the manager has to be seasoned enough to have guided the fund through the previous boom and bust.
That pretty much narrows it down to the Fidelity Select Biotechnology fund, the Pimco RCM Biotechnology D fund, and the Franklin Biotechnology Discovery fund. All three have a good mix of large and small names and similar track records. However, Fidelity's manager, Andraz Razen, was just an analyst before taking the job earlier this year. I'll let him learn to manage on someone else's dime! (With my luck, his fund will be the biggest winner of all.)
That leaves the Franklin and Pimco funds, and choosing between them is a gut wrencher. Both funds, according to mutual-funds research firm Morningstar, are considered volatile (duh!) and (reading between the lines) are only for nuts like me. Franklin's lead manager, Evan McCulloch, has been with the fund since 1997, mostly with a co-manager who left after helping guide the fund to a 98% gain in 1999 and a 47% rise in 2000. (So far this year it's down 39%, in line with the Amex biotech index.) The Pimco offering has fallen a comparable 37% this year but shot up an IRA-goosing 111% in 1999 and 82% in 2000. Michael Dauchot, who became the Pimco fund's lead manager in 2001, was a co-manager during that period. He has also co-helmed its biotech-rich sibling fund, Pimco RCM Global Health Care (which rose 73% in 2000), since 1999. Furthermore, the Pimco biotech fund is a more active trader than the Franklin fund, which means it is more likely to cut its losses faster. But the real kicker? The Pimco fund is load-free, vs. the fat 5.75% upfront charge for Franklin. (I'd pay the load for a fund that was the clear-cut best of the bunch, but why shell out the cash if you don't have to?)
Buying, though, is always easy. The trick will be figuring out when the next boom cycle is topping out so I can sell. Hopefully, when the time comes, I'll know the difference between bulls, bears, and pigs--especially the genetically altered kind.
Right now this risky sector is a bust. That's exactly why I think it's so attractive.
FORTUNE
Wednesday, December 18, 2002
By Herb Greenberg
I've decided to add a small component of high risk to my IRA, and I can't think of anything riskier than to buy a mutual fund that invests in nothing but biotechnology. I'm not talking about some watered-down fund that mixes in other health-care-related stocks to soften the blow of biotech's eventual blowups. What I want is a pure, high-octane fund that can get full-throttle gains from the next biotech boom.
If the phrase "biotech boom" causes your eyebrow to arch or your lips to quiver, no wonder. Right now biotech is a bust--as an investment, that is. The Amex biotechnology index, a group of 17 stocks created in 1991, is down 38% this year, vs. the S&P 500's 21% decline. And that's just why it caught my eye.
I've written about biotech companies on and off since the late 1980s. Because any individual bio stock can (and probably will) melt down at some point, snookering even sophisticated investors, buying a basket of them has always been the smartest tack. But a still better idea is to buy that basket when nobody else wants it, and wait. With my time horizon of ten to 15 years, I'm willing to bet that at some point biotech stocks will be driven to dizzying heights--perhaps even higher than the sector's last boom, when the Amex biotechnology index, for instance, leaped 62% in 2000. (The S&P dropped 10% that year.)
Here's why. With biotech, all it takes to spark a buying frenzy is one major breakthrough in the quest to cure cancer, AIDS, or another disease. And unlike regular technology, which goes through cycles, biotech doesn't create a commodity that can quickly be leapfrogged by a competitor. "These three- to five-year boom-to-bust cycles have been in biotech for 20 years," says John Freund, managing director at venture capital firm Skyline Ventures, which invests in biotech stocks. But if you look back, he adds, even after each cycle of bust the sector has held sustainable market gains. "That reflects that this is now a real industry with real drugs," he says. Drugs like Genentech's Herceptin for breast cancer, Amgen's anemia-fighting Epogen, and Rituxan, an innovative cancer drug developed by IDEC Pharmaceuticals.
So which fund to buy? There are now only a dozen or so that appear to be invested exclusively in biotech--unlike the sector's early go-go days when a new one was being created every minute. Schwab, the caretaker of my IRA, lists only a handful of funds. There's also the American Stock Exchange-traded Biotech HOLDRS, a passively-managed basket of 20 stocks. This lack of options, thankfully, makes it easy to whittle down the choices, especially considering my criteria: My fund pick has to be actively managed (that dings the Biotech HOLDRS), and the manager has to be seasoned enough to have guided the fund through the previous boom and bust.
That pretty much narrows it down to the Fidelity Select Biotechnology fund, the Pimco RCM Biotechnology D fund, and the Franklin Biotechnology Discovery fund. All three have a good mix of large and small names and similar track records. However, Fidelity's manager, Andraz Razen, was just an analyst before taking the job earlier this year. I'll let him learn to manage on someone else's dime! (With my luck, his fund will be the biggest winner of all.)
That leaves the Franklin and Pimco funds, and choosing between them is a gut wrencher. Both funds, according to mutual-funds research firm Morningstar, are considered volatile (duh!) and (reading between the lines) are only for nuts like me. Franklin's lead manager, Evan McCulloch, has been with the fund since 1997, mostly with a co-manager who left after helping guide the fund to a 98% gain in 1999 and a 47% rise in 2000. (So far this year it's down 39%, in line with the Amex biotech index.) The Pimco offering has fallen a comparable 37% this year but shot up an IRA-goosing 111% in 1999 and 82% in 2000. Michael Dauchot, who became the Pimco fund's lead manager in 2001, was a co-manager during that period. He has also co-helmed its biotech-rich sibling fund, Pimco RCM Global Health Care (which rose 73% in 2000), since 1999. Furthermore, the Pimco biotech fund is a more active trader than the Franklin fund, which means it is more likely to cut its losses faster. But the real kicker? The Pimco fund is load-free, vs. the fat 5.75% upfront charge for Franklin. (I'd pay the load for a fund that was the clear-cut best of the bunch, but why shell out the cash if you don't have to?)
Buying, though, is always easy. The trick will be figuring out when the next boom cycle is topping out so I can sell. Hopefully, when the time comes, I'll know the difference between bulls, bears, and pigs--especially the genetically altered kind.
- Mensagens: 23939
- Registado: 5/11/2002 11:30
- Localização: 4
Bush: 'A disappointing day' for peace
Bush: 'A disappointing day' for peace
Document 'not encouraging'
Friday, December 20, 2002 Posted: 10:18 PM EST (0318 GMT)
"Yesterday was a disappointing day for those who long for peace," Bush said.
--------------------------------------------------------------------------------
Story Tools
--------------------------------------------------------------------------------
VIDEO
CNN's Richard Roth interviews Hans Blix, the Chief U.N. Weapons Inspector, about Iraq's failure to account for its weapons of mass destruction (December 20)
PLAY VIDEO
--------------------------------------------------------------------------------
Meeting with Russia, the European Union and United Nations, U.S. President George W. Bush demands Iraq disarm. CNN's Suzanne Malveaux reports (December 20)
PLAY VIDEO
SPECIAL REPORT
• Where do they stand?
Germany | Saudi Arabia | Turkey | Iran | Kuwait | Others
• Timeline: U.N. weapons inspections
• Maps: Suspected weapons facilities
• Map: Potential U.S. military bases
• Document: Iraqi weapons declaration
RELATED
Gallery: Reaction to U.N. briefing
• Transcript: Powell: 'World will not wait forever' on Iraq
• On the Scene: Richard Roth: U.S. building its case against Iraq
Examples of omissions to declaration, according to U.S.
WHAT'S NEXT?
• January 27: Blix to present report on inspections to Security Council, 60 days after inspections began.
WASHINGTON (CNN) -- President Bush Friday said the Iraqi arms declaration "was not encouraging" and that the United States "will fulfill the terms and conditions" of the U.N. resolution calling on Saddam Hussein to disarm.
"Yesterday was a disappointing day for those who long for peace," Bush said.
Thursday, the United States declared Iraq in "material breach" of U.N. Security Council Resolution 1441 because of "flagrant omissions" in that nation's declaration on weapons of mass destruction.
"The world spoke clearly that we expect Mr. Saddam Hussein to disarm," Bush said during a meeting attended by Secretary of State Colin Powell, Vice President Dick Cheney, U.N. Secretary-General Kofi Annan and other top international officials.
"Yesterday's document was not encouraging. We expected him to show that he would disarm, and as the secretary of state said, it's a long way from there."
Military sources earlier in the day told CNN Bush had essentially signed off on a plan to deploy 50,000 U.S. troops to the Persian Gulf region in early January, bringing the total number of American forces there to more than 100,000.
Gen. Tommy Franks, the head of the U.S. Central Command, met with Bush and his national security team for a second consecutive day. At the top of the agenda was to put the troop deployment plans in place, and to discuss which troops will head first to the region and what targets are to be selected for any possible war on Iraq, the sources said.
Targeting is among the most sensitive matters to resolve, with questions about how, when, and under what circumstances to bomb selected sites throughout Iraq and its capital, Baghdad.
But even as the Bush administration continued to criticize the Iraqi weapons report, Russian Foreign Minister Igor Ivanov said the declaration contains "no troubling definitions which might qualify as violations by Iraq of the U.N. Security Council resolution," according to the Interfax news agency.
Blix asks for intelligence
Meanwhile, two key U.N. weapons inspectors appealed for intelligence from Security Council members to help them determine whether Iraq's nearly 12,000-page submission to the world body is truthful.
"We would like to have clues as to where the United States' and other countries' intelligence feel they know Iraqis are storing weapons of mass destruction," chief weapons inspector Hans Blix told CNN. "Then, we can send in the inspectors."
"I think now is the time for countries that have information that contradicts Iraq's declaration to come forward with this information," concurred Mohamed ElBaradei, director general of the International Atomic Energy Agency, the U.N. agency that investigates the uses of nuclear material.
White House press secretary Ari Fleischer said the United States is prepared to supply information to the inspectors.
"It is highly in the interest of the United States and of this government to give the inspectors the tools that they need to do their job and we will do so, and we will do so in a way that does not compromise sources and methods," Fleischer told reporters.
U.N. Security Council Resolution 1441, adopted unanimously in November, called for Iraq to declare any weapons of mass destruction programs in its borders.
ElBaradei said he was "somewhat disappointed" with the weapons declaration that Iraq gave to the United Nations on December 7, saying it "is very long on old details, very short on new evidence."
Iraq insists that it has been forthcoming and truthful and that it has no weapons of mass destruction. Iraqi officials maintain the nation has not committed a material breach of the U.N. resolution, and that they're happy to provide any more information the Security Council is looking for.
POWELL PLAN:
Continue to "audit and examine" Iraqi declaration
High priority to interviewing scientists outside Iraq
Inspectors should intensify "efforts within Iraq"
Continue to consult with allies on how to "compel compliance"
Thursday, when Powell called the document a "material breach," he did not say military action was imminent. He said the United States would continue to examine the document and encourage U.N. weapons inspectors to take steps that could help them find evidence of weapons of mass destruction.
U.S. officials have said that if a material breach is found, the United States may call for a meeting of the Security Council to discuss the possibility of launching military action. And no matter what the council decides at such a meeting, the United States has said it may join with its allies to disarm Saddam by force.
"We're serious about keeping the peace, serious about working with our friends at the United Nations so that this body ably led by Kofi Annan has got relevance as we go into the 21st century," Bush said Friday.
Bush has rescheduled his upcoming January trip to Africa due to international and domestic considerations, Fleischer said Friday.
A senior administration official said the situation with Iraq and domestic issues, like appropriations bills that have not been passed and the selection of a new Senate majority leader, figured in his decision. (Full Story
Document 'not encouraging'
Friday, December 20, 2002 Posted: 10:18 PM EST (0318 GMT)
"Yesterday was a disappointing day for those who long for peace," Bush said.
--------------------------------------------------------------------------------
Story Tools
--------------------------------------------------------------------------------
VIDEO
CNN's Richard Roth interviews Hans Blix, the Chief U.N. Weapons Inspector, about Iraq's failure to account for its weapons of mass destruction (December 20)
PLAY VIDEO
--------------------------------------------------------------------------------
Meeting with Russia, the European Union and United Nations, U.S. President George W. Bush demands Iraq disarm. CNN's Suzanne Malveaux reports (December 20)
PLAY VIDEO
SPECIAL REPORT
• Where do they stand?
Germany | Saudi Arabia | Turkey | Iran | Kuwait | Others
• Timeline: U.N. weapons inspections
• Maps: Suspected weapons facilities
• Map: Potential U.S. military bases
• Document: Iraqi weapons declaration
RELATED
Gallery: Reaction to U.N. briefing
• Transcript: Powell: 'World will not wait forever' on Iraq
• On the Scene: Richard Roth: U.S. building its case against Iraq
Examples of omissions to declaration, according to U.S.
WHAT'S NEXT?
• January 27: Blix to present report on inspections to Security Council, 60 days after inspections began.
WASHINGTON (CNN) -- President Bush Friday said the Iraqi arms declaration "was not encouraging" and that the United States "will fulfill the terms and conditions" of the U.N. resolution calling on Saddam Hussein to disarm.
"Yesterday was a disappointing day for those who long for peace," Bush said.
Thursday, the United States declared Iraq in "material breach" of U.N. Security Council Resolution 1441 because of "flagrant omissions" in that nation's declaration on weapons of mass destruction.
"The world spoke clearly that we expect Mr. Saddam Hussein to disarm," Bush said during a meeting attended by Secretary of State Colin Powell, Vice President Dick Cheney, U.N. Secretary-General Kofi Annan and other top international officials.
"Yesterday's document was not encouraging. We expected him to show that he would disarm, and as the secretary of state said, it's a long way from there."
Military sources earlier in the day told CNN Bush had essentially signed off on a plan to deploy 50,000 U.S. troops to the Persian Gulf region in early January, bringing the total number of American forces there to more than 100,000.
Gen. Tommy Franks, the head of the U.S. Central Command, met with Bush and his national security team for a second consecutive day. At the top of the agenda was to put the troop deployment plans in place, and to discuss which troops will head first to the region and what targets are to be selected for any possible war on Iraq, the sources said.
Targeting is among the most sensitive matters to resolve, with questions about how, when, and under what circumstances to bomb selected sites throughout Iraq and its capital, Baghdad.
But even as the Bush administration continued to criticize the Iraqi weapons report, Russian Foreign Minister Igor Ivanov said the declaration contains "no troubling definitions which might qualify as violations by Iraq of the U.N. Security Council resolution," according to the Interfax news agency.
Blix asks for intelligence
Meanwhile, two key U.N. weapons inspectors appealed for intelligence from Security Council members to help them determine whether Iraq's nearly 12,000-page submission to the world body is truthful.
"We would like to have clues as to where the United States' and other countries' intelligence feel they know Iraqis are storing weapons of mass destruction," chief weapons inspector Hans Blix told CNN. "Then, we can send in the inspectors."
"I think now is the time for countries that have information that contradicts Iraq's declaration to come forward with this information," concurred Mohamed ElBaradei, director general of the International Atomic Energy Agency, the U.N. agency that investigates the uses of nuclear material.
White House press secretary Ari Fleischer said the United States is prepared to supply information to the inspectors.
"It is highly in the interest of the United States and of this government to give the inspectors the tools that they need to do their job and we will do so, and we will do so in a way that does not compromise sources and methods," Fleischer told reporters.
U.N. Security Council Resolution 1441, adopted unanimously in November, called for Iraq to declare any weapons of mass destruction programs in its borders.
ElBaradei said he was "somewhat disappointed" with the weapons declaration that Iraq gave to the United Nations on December 7, saying it "is very long on old details, very short on new evidence."
Iraq insists that it has been forthcoming and truthful and that it has no weapons of mass destruction. Iraqi officials maintain the nation has not committed a material breach of the U.N. resolution, and that they're happy to provide any more information the Security Council is looking for.
POWELL PLAN:
Continue to "audit and examine" Iraqi declaration
High priority to interviewing scientists outside Iraq
Inspectors should intensify "efforts within Iraq"
Continue to consult with allies on how to "compel compliance"
Thursday, when Powell called the document a "material breach," he did not say military action was imminent. He said the United States would continue to examine the document and encourage U.N. weapons inspectors to take steps that could help them find evidence of weapons of mass destruction.
U.S. officials have said that if a material breach is found, the United States may call for a meeting of the Security Council to discuss the possibility of launching military action. And no matter what the council decides at such a meeting, the United States has said it may join with its allies to disarm Saddam by force.
"We're serious about keeping the peace, serious about working with our friends at the United Nations so that this body ably led by Kofi Annan has got relevance as we go into the 21st century," Bush said Friday.
Bush has rescheduled his upcoming January trip to Africa due to international and domestic considerations, Fleischer said Friday.
A senior administration official said the situation with Iraq and domestic issues, like appropriations bills that have not been passed and the selection of a new Senate majority leader, figured in his decision. (Full Story
- Mensagens: 23939
- Registado: 5/11/2002 11:30
- Localização: 4
Analyze this!
Analyze this!
The Wall Street conflicts of interest settlement might not be good for investment bank stocks.
December 20, 2002: 4:28 PM EST
By Paul R. La Monica, CNN/Money Staff Writer
NEW YORK (CNN/Money) - After weeks of discussion, major investment banks finally announced a settlement to end investigations about alleged conflicts of interest in Wall Street research.
Ten firms, including Morgan Stanley (MWD: Research, Estimates), Citigroup (C: Research, Estimates) and J.P. Morgan Chase (JPM: Research, Estimates) agreed to pay a collective $1.4 billion in fines as well make changes to their research departments. (For more on the terms of the settlement, click here.)
Investors responded favorably to the news, perhaps thinking that the settlement will eliminate a major negative that had been hurting brokerage stocks. The Amex Securities Broker/Dealer Index, which includes five of the ten companies fined, closed 2.3 percent higher on Friday. Citigroup and J.P. Morgan Chase, which are not part of the index, were up 3.1 percent and 6.6 percent respectively.
But does this really mean that investment banks can put this scandal behind them and move on? Some institutional money managers don't think so.
Wall Street winners
Shares of the ten companies involved in the research settlement rose on Friday.
Company Price change*
Bear Stearns 2.3%
Citigroup 3.1%
Credit Suisse 0.7%
Deutsche Bank 1.1%
Goldman Sachs 2.2%
J.P. Morgan Chase 6.6%
Lehman Brothers 2.3%
Merrill Lynch 0.8%
Morgan Stanley 4.3%
UBS 0.3%
* based on 12/20 closing prices
Source: CNN/Money
"I don't think this settlement matters at all. If anything, it could lead to a lot of civil lawsuits," says Miles Seifert, manager of the Legg Mason Financial Services Trust fund. "It's a bit early to raise the victory flag for the big banks and brokerages." Seifert does not own any shares of investment banking companies in his fund.
If burned shareholders start suing investment banks en masse, then the concerns about conflict of interest will likely continue to plague the brokerage stocks. And the problem with civil lawsuits is that it won't be easy to predict what kind of financial impact they will have on the investment banks.
"Today's actions were pretty well discounted and well telegraphed," says Frank Barkocy, an analyst with Keefe Managers, a hedge fund that focuses on the financial services industry. "It's much more difficult to ascertain what the magnitude of the potential costs from lawsuits might be. So there's still a high degree of headline risk for the brokerages," he says.
Barkocy says his fund has small short positions (i.e. bets that the stocks will go down) in several brokerage stocks but declined to name which ones. He does not own long positions in any of the brokers.
Don't forget Enron
The settlement also doesn't affect ongoing investigations into the role that some investment banks, including J.P. Morgan Chase and Citigroup, had in allegedly helping bankrupt energy trader Enron set up structured finance deals to hide debt.
Although the banks have denied any wrongdoing, Christopher Bingaman, manager of the Diamond Hill Bank and Financial fund says that as long as Enron remains in the news, the allegations won't go away and that will have an effect on investment banking stocks.
Bingaman owns Citigroup and Merrill Lynch in his fund but says that he has been trimming those positions recently since the stocks are no longer cheap enough to outweigh some of the legal risks.
Reilly Tierney, an analyst with Fox-Pitt, Kelton, a boutique research firm focusing on financial services companies, also downplayed the research settlement. "I'd stop short of saying this will restore investor confidence quickly. Legal problems in general for the brokerage group persist." Fox-Pitt, Kelton has not performed investment banking for any of the brokerage companies. Tierney does own shares of J.P. Morgan Chase, however.
Lastly, somewhat lost amidst the hoopla about the settlement is the fact that the fundamental outlook for most brokers still remains incredibly weak. Although Lehman Brothers and Bear Stearns posted relatively strong earnings this week due to their bond trading business, Goldman and Morgan Stanley were hurt by the continued slump in merger activity and equity underwriting.
Unless the market and economy pick up, it's unlikely that the investment banking business will show any major signs of improvement. Brokerages tend to post their best performance in times when the stock market is rising. That's because they earn higher amounts of trading commissions as well as more fees from advising companies that are looking to go public or buy other companies.
But Barkocy thinks the best investors can hope for next year is that things won't get any worse for the market. "2003 will be a running in place type year, if you will," he says.
The Wall Street conflicts of interest settlement might not be good for investment bank stocks.
December 20, 2002: 4:28 PM EST
By Paul R. La Monica, CNN/Money Staff Writer
NEW YORK (CNN/Money) - After weeks of discussion, major investment banks finally announced a settlement to end investigations about alleged conflicts of interest in Wall Street research.
Ten firms, including Morgan Stanley (MWD: Research, Estimates), Citigroup (C: Research, Estimates) and J.P. Morgan Chase (JPM: Research, Estimates) agreed to pay a collective $1.4 billion in fines as well make changes to their research departments. (For more on the terms of the settlement, click here.)
Investors responded favorably to the news, perhaps thinking that the settlement will eliminate a major negative that had been hurting brokerage stocks. The Amex Securities Broker/Dealer Index, which includes five of the ten companies fined, closed 2.3 percent higher on Friday. Citigroup and J.P. Morgan Chase, which are not part of the index, were up 3.1 percent and 6.6 percent respectively.
But does this really mean that investment banks can put this scandal behind them and move on? Some institutional money managers don't think so.
Wall Street winners
Shares of the ten companies involved in the research settlement rose on Friday.
Company Price change*
Bear Stearns 2.3%
Citigroup 3.1%
Credit Suisse 0.7%
Deutsche Bank 1.1%
Goldman Sachs 2.2%
J.P. Morgan Chase 6.6%
Lehman Brothers 2.3%
Merrill Lynch 0.8%
Morgan Stanley 4.3%
UBS 0.3%
* based on 12/20 closing prices
Source: CNN/Money
"I don't think this settlement matters at all. If anything, it could lead to a lot of civil lawsuits," says Miles Seifert, manager of the Legg Mason Financial Services Trust fund. "It's a bit early to raise the victory flag for the big banks and brokerages." Seifert does not own any shares of investment banking companies in his fund.
If burned shareholders start suing investment banks en masse, then the concerns about conflict of interest will likely continue to plague the brokerage stocks. And the problem with civil lawsuits is that it won't be easy to predict what kind of financial impact they will have on the investment banks.
"Today's actions were pretty well discounted and well telegraphed," says Frank Barkocy, an analyst with Keefe Managers, a hedge fund that focuses on the financial services industry. "It's much more difficult to ascertain what the magnitude of the potential costs from lawsuits might be. So there's still a high degree of headline risk for the brokerages," he says.
Barkocy says his fund has small short positions (i.e. bets that the stocks will go down) in several brokerage stocks but declined to name which ones. He does not own long positions in any of the brokers.
Don't forget Enron
The settlement also doesn't affect ongoing investigations into the role that some investment banks, including J.P. Morgan Chase and Citigroup, had in allegedly helping bankrupt energy trader Enron set up structured finance deals to hide debt.
Although the banks have denied any wrongdoing, Christopher Bingaman, manager of the Diamond Hill Bank and Financial fund says that as long as Enron remains in the news, the allegations won't go away and that will have an effect on investment banking stocks.
Bingaman owns Citigroup and Merrill Lynch in his fund but says that he has been trimming those positions recently since the stocks are no longer cheap enough to outweigh some of the legal risks.
Reilly Tierney, an analyst with Fox-Pitt, Kelton, a boutique research firm focusing on financial services companies, also downplayed the research settlement. "I'd stop short of saying this will restore investor confidence quickly. Legal problems in general for the brokerage group persist." Fox-Pitt, Kelton has not performed investment banking for any of the brokerage companies. Tierney does own shares of J.P. Morgan Chase, however.
Lastly, somewhat lost amidst the hoopla about the settlement is the fact that the fundamental outlook for most brokers still remains incredibly weak. Although Lehman Brothers and Bear Stearns posted relatively strong earnings this week due to their bond trading business, Goldman and Morgan Stanley were hurt by the continued slump in merger activity and equity underwriting.
Unless the market and economy pick up, it's unlikely that the investment banking business will show any major signs of improvement. Brokerages tend to post their best performance in times when the stock market is rising. That's because they earn higher amounts of trading commissions as well as more fees from advising companies that are looking to go public or buy other companies.
But Barkocy thinks the best investors can hope for next year is that things won't get any worse for the market. "2003 will be a running in place type year, if you will," he says.
- Mensagens: 23939
- Registado: 5/11/2002 11:30
- Localização: 4
A rally for the New Year? Maybe not.
A rally for the New Year? Maybe not.
After three straight losing years, you'd think 2003 would be great for stocks. Think again.
December 19, 2002: 11:29 AM EST
By Meghan Collins, CNN/Money Staff Writer
NEW YORK (CNN/Money) - Pity the poor investor. The markets are set to log losses for the third consecutive year in 2002, hurt by a weak economy, tepid corporate earnings and the lingering prospects of war with Iraq.
Which means stocks will be ready to bounce back big time in 2003, right? Not so fast, veteran money managers and market experts say. The new year could prove to be mediocre for the financial markets as the economy struggles to mount a meaningful recovery from the recession of 2001.
"I think sentiment will improve steadily, but we're in no way at the beginning of a great bull market," said John Bollinger, technical analyst and stock market strategist with Bollinger Capital Management. "The market is at the beginning of a long process."
The market's major indexes were all set to end lower this year for the third year running, the first time this has happened since 1941. The Dow Jones industrial average was off about 14 percent as of Dec. 16, while the Nasdaq composite had fallen 28 percent and the Standard & Poor's index was down 21 percent.
The last time the Dow and S&P registered declines for four years running was from 1929 to 1932 -- starting with the two-day stock market crash in October 1929 that helped usher in the Great Depression. The Nasdaq market did not yet exist.
Bullish on techs?
While tech stocks have floundered over the past three years, many analysts say this sector is set to rally and outperform other sectors of the market in 2003.
"I now feel more strongly than ever that the Dow Jones industrials and the blue chips will bear the lion's share of the brunt of the leg down," said Bernie Schaeffer, chairman of Schaeffer Investment Research. "And while the IBMs and the Dells and the Microsofts of the world may also get hit hard, there may be enough strength in the smaller-cap tech names to keep the Nasdaq composite on a relatively even keel -- even if the blue chips implode."
Since hitting lows on Oct. 9, the tech-laden Nasdaq has gained about 22 percent, while the Dow is up 16 percent from its lows and the S&P has risen 15 percent.
Experts said that some of the small- to mid-cap tech stocks could prove to be real bargains and that, eventually, the psychological aspect of investing in stocks -- the worry that one won't get into the market before the next big rally -- will catch up with investors.
Another factor in the predicted strength in techs is the possibility that fundamentals might surpass expectations. While analysts aren't necessarily suggesting huge earnings gains, if any at all, they think the smaller-cap companies could beat forecasts -- giving a boost to those stocks.
"Some investors might see value in these names ... and the tables are set for the fundamentals to be better than what's been factored in," said Todd Salamone, vice president of research at Schaeffer Investment Research.
Meanwhile, companies have begun buying computers again. According to the Commerce Department, American businesses increased technology outlays by an annualized 10.3 percent in the third quarter. Also, chip equipment makers say that they have seen increased demand -- which could be a sign that demand for other tech gear is about to pick up.
Beyond techs, experts said they see gold stocks rising, as investors hedge their bets against rising inflation or a major meltdown in the economy. The metal hit its highest level since June 1997 at $341.25 an ounce Tuesday as investors headed for a safer investment in the wake of falling stocks and weakness in the dollar.
They also said to watch some of the more defensive sectors including consumer products, especially casual dining. As people continue to stay close to home, experts bet that the products they use, and places they dine, will do well.
Choppy seas just won't calm
The market appears to be seeking direction, meaning more choppiness ahead. Most analysts think the volatile trading of yore also will define market activity in the new year.
"I think stock prices will be positive going into 2003. But in the consolidation period, the buy-and-hold strategy really doesn't work and investors really won't be adopting that strategy in 2003 either," Bollinger said.
Some experts expect the new year to bring slowly improving economic news, better corporate profits and, thus, rising stock prices. Several issues likely will have a strong impact on where the economy goes from here, including the possibility of a Fed interest rate hike, whether businesses start spending again, and what economic stimulus package Congress eventually passes.
A recent Bond Market Association survey found economists, on average, think gross domestic product will grow at a 3.4 percent annual rate in 2003, compared with estimated growth of 2.8 percent in 2002. GDP is the broadest measure of the nation's economy.
But a war with Iraq -- if it happens -- would threaten this rosy scenario.
For much of the past year, investors have been worrying that oil prices would soar if the United States were to go to war in, or near, the Middle East. Higher oil prices would probably hurt the economy, putting a big roadblock in front of any recovery in corporate profits, and stock prices.
"The biggest risk, I think, will continue to be on the geopolitical front," said James Awad, chairman and market strategist at Awad Asset Management. "With Iraq, the question will be how long will it take to win the war and what will we do with the victory."
And analysts don't expect high oil prices to reverse any time soon -- save a resolution of political issues between Iraq, the United States and the United Nations. The White House said Wednesday that Iraq's 12,000-page weapons declaration to the United Nations was Saddam Hussein's "last chance" -- leading many investors to believe the report is not the beginning of the end.
Oil prices could fall "only if we have some sort of settlement or a decisive victory in the Middle East," Scott Hess, a trader at G&H Commodities, told CNNfn. "And until we have that, I think we are going to maintain lofty prices."
After three straight losing years, you'd think 2003 would be great for stocks. Think again.
December 19, 2002: 11:29 AM EST
By Meghan Collins, CNN/Money Staff Writer
NEW YORK (CNN/Money) - Pity the poor investor. The markets are set to log losses for the third consecutive year in 2002, hurt by a weak economy, tepid corporate earnings and the lingering prospects of war with Iraq.
Which means stocks will be ready to bounce back big time in 2003, right? Not so fast, veteran money managers and market experts say. The new year could prove to be mediocre for the financial markets as the economy struggles to mount a meaningful recovery from the recession of 2001.
"I think sentiment will improve steadily, but we're in no way at the beginning of a great bull market," said John Bollinger, technical analyst and stock market strategist with Bollinger Capital Management. "The market is at the beginning of a long process."
The market's major indexes were all set to end lower this year for the third year running, the first time this has happened since 1941. The Dow Jones industrial average was off about 14 percent as of Dec. 16, while the Nasdaq composite had fallen 28 percent and the Standard & Poor's index was down 21 percent.
The last time the Dow and S&P registered declines for four years running was from 1929 to 1932 -- starting with the two-day stock market crash in October 1929 that helped usher in the Great Depression. The Nasdaq market did not yet exist.
Bullish on techs?
While tech stocks have floundered over the past three years, many analysts say this sector is set to rally and outperform other sectors of the market in 2003.
"I now feel more strongly than ever that the Dow Jones industrials and the blue chips will bear the lion's share of the brunt of the leg down," said Bernie Schaeffer, chairman of Schaeffer Investment Research. "And while the IBMs and the Dells and the Microsofts of the world may also get hit hard, there may be enough strength in the smaller-cap tech names to keep the Nasdaq composite on a relatively even keel -- even if the blue chips implode."
Since hitting lows on Oct. 9, the tech-laden Nasdaq has gained about 22 percent, while the Dow is up 16 percent from its lows and the S&P has risen 15 percent.
Experts said that some of the small- to mid-cap tech stocks could prove to be real bargains and that, eventually, the psychological aspect of investing in stocks -- the worry that one won't get into the market before the next big rally -- will catch up with investors.
Another factor in the predicted strength in techs is the possibility that fundamentals might surpass expectations. While analysts aren't necessarily suggesting huge earnings gains, if any at all, they think the smaller-cap companies could beat forecasts -- giving a boost to those stocks.
"Some investors might see value in these names ... and the tables are set for the fundamentals to be better than what's been factored in," said Todd Salamone, vice president of research at Schaeffer Investment Research.
Meanwhile, companies have begun buying computers again. According to the Commerce Department, American businesses increased technology outlays by an annualized 10.3 percent in the third quarter. Also, chip equipment makers say that they have seen increased demand -- which could be a sign that demand for other tech gear is about to pick up.
Beyond techs, experts said they see gold stocks rising, as investors hedge their bets against rising inflation or a major meltdown in the economy. The metal hit its highest level since June 1997 at $341.25 an ounce Tuesday as investors headed for a safer investment in the wake of falling stocks and weakness in the dollar.
They also said to watch some of the more defensive sectors including consumer products, especially casual dining. As people continue to stay close to home, experts bet that the products they use, and places they dine, will do well.
Choppy seas just won't calm
The market appears to be seeking direction, meaning more choppiness ahead. Most analysts think the volatile trading of yore also will define market activity in the new year.
"I think stock prices will be positive going into 2003. But in the consolidation period, the buy-and-hold strategy really doesn't work and investors really won't be adopting that strategy in 2003 either," Bollinger said.
Some experts expect the new year to bring slowly improving economic news, better corporate profits and, thus, rising stock prices. Several issues likely will have a strong impact on where the economy goes from here, including the possibility of a Fed interest rate hike, whether businesses start spending again, and what economic stimulus package Congress eventually passes.
A recent Bond Market Association survey found economists, on average, think gross domestic product will grow at a 3.4 percent annual rate in 2003, compared with estimated growth of 2.8 percent in 2002. GDP is the broadest measure of the nation's economy.
But a war with Iraq -- if it happens -- would threaten this rosy scenario.
For much of the past year, investors have been worrying that oil prices would soar if the United States were to go to war in, or near, the Middle East. Higher oil prices would probably hurt the economy, putting a big roadblock in front of any recovery in corporate profits, and stock prices.
"The biggest risk, I think, will continue to be on the geopolitical front," said James Awad, chairman and market strategist at Awad Asset Management. "With Iraq, the question will be how long will it take to win the war and what will we do with the victory."
And analysts don't expect high oil prices to reverse any time soon -- save a resolution of political issues between Iraq, the United States and the United Nations. The White House said Wednesday that Iraq's 12,000-page weapons declaration to the United Nations was Saddam Hussein's "last chance" -- leading many investors to believe the report is not the beginning of the end.
Oil prices could fall "only if we have some sort of settlement or a decisive victory in the Middle East," Scott Hess, a trader at G&H Commodities, told CNNfn. "And until we have that, I think we are going to maintain lofty prices."
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- Registado: 5/11/2002 11:30
- Localização: 4
For the market, silent's right
For the market, silent's right
Good news for investors: The war chatter should die down during the Christmas week.
December 20, 2002: 7:26 PM EST
By Justin Lahart, CNN/Money Staff Writer
NEW YORK (CNN/Money) - More than anything else, war and rumors of war have been weighing on Wall Street's mind.
The impasse between the United States and Iraq over weapons inspections, the seeming inevitability of conflict, have made for a tough slog in the stock market this month. Not knowing what the next headline to flash might be has made investors gun-shy, unwilling to commit.
The coming week may bring a respite, allowing stocks to lift. Although peace on earth is, sadly, an unlikely prospect, a little peace and quiet isn't such a tall order. The Christmas week will throw a muffle over Washington's war chatter. (Click here for a lineup of key events in the coming week.)
"Unless we have a war, I think the market is going to be positive," said Mizuho Futures strategist Phil Ruffat. "And I don't think the U.S. is going to go to war at Christmas."
It looks to be a quiet week on all counts. The market closes early Christmas eve and is closed on Christmas. There are no company results to speak of, and the economic calendar is light. With many Wall Streeters having closed their books for 2002 Friday, the market will be run by a skeleton crew.
The resulting light volume could make the market volatile -- a little cash can move things a lot when there aren't many players at the table.
"Obviously, we're going to be dealing with thin markets," said Morgan Stanley economist Bill Sullivan. "The influence of the holiday should dampen the war rhetoric, but if there are any surprises we could get exaggerated moves in prices for sure."
Durable gains?
The economic highlight of the week will be the November durable goods report, due out Tuesday morning. Economists watch this one closely, because it can give an early read on both manufacturing activity and, if you look into the guts of the report, business spending on new equipment.
It's that second element that economists are most keenly interested in. Although consumer spending has kept up well over the past two years, businesses' reticence in shelling out money on capital equipment has left the economy weak.
"Iraq and corporate governance issues have bogged down capital investment decisions," said Diane Swonk, chief economist at Bank One. "We're seeing companies that are ready to go; they're just waiting for a sign."
Swonk thinks that by the second half of next year businesses will be busy spending money on new equipment, letting the consumer "kick back, put up his feet for a bit and not have to carry the burden of keeping the economy going alone."
Will Tuesday's durable goods report give investors any sense of whether businesses are warming up to the idea of boosting equipment outlays again? Perhaps, but bear in mind that as useful as this report is, it's also one of the most volatile economic series out there. Markets often jump one way or another on it, but economists care more about the trend in durable orders over time than they do about an month's particular sounding.
Key events in the week ahead
Monday the Commerce Department releases personal income and spending figures for November. Although not a closely watched report, it should be reassuring in that it shows consumers remain uncowed. Economists polled by Briefing.com expect personal income to gain 0.2 percent and for personal spending to lift 0.4%.
Tuesday morning brings the durable goods report. Economists expect they rose by 0.9 percent compared with last month's big jump of 2.4 percent.
The stock market closes at 1 p.m. ET Tuesday and is closed Wednesday for Christmas.
Friday morning the University of Michigan puts out its final reading on consumer sentiment for December. Although there are often big differences between how people say they feel and how they actually act, the market often moves on this report. Economists think the U of M's sentiment index will slip slightly from the initial December reading of 87 to 86.5.
New home sales for November get released Friday morning. This tends to be a lagging indicator and can also be incredibly volatile, but it should serve to emphasize that, despite everything, the housing department remains strong. Economists expect sales came in at 1 million in November. That would make it the fourth month in a row, and the fourth time ever, that sales came in at a million or more.
Good news for investors: The war chatter should die down during the Christmas week.
December 20, 2002: 7:26 PM EST
By Justin Lahart, CNN/Money Staff Writer
NEW YORK (CNN/Money) - More than anything else, war and rumors of war have been weighing on Wall Street's mind.
The impasse between the United States and Iraq over weapons inspections, the seeming inevitability of conflict, have made for a tough slog in the stock market this month. Not knowing what the next headline to flash might be has made investors gun-shy, unwilling to commit.
The coming week may bring a respite, allowing stocks to lift. Although peace on earth is, sadly, an unlikely prospect, a little peace and quiet isn't such a tall order. The Christmas week will throw a muffle over Washington's war chatter. (Click here for a lineup of key events in the coming week.)
"Unless we have a war, I think the market is going to be positive," said Mizuho Futures strategist Phil Ruffat. "And I don't think the U.S. is going to go to war at Christmas."
It looks to be a quiet week on all counts. The market closes early Christmas eve and is closed on Christmas. There are no company results to speak of, and the economic calendar is light. With many Wall Streeters having closed their books for 2002 Friday, the market will be run by a skeleton crew.
The resulting light volume could make the market volatile -- a little cash can move things a lot when there aren't many players at the table.
"Obviously, we're going to be dealing with thin markets," said Morgan Stanley economist Bill Sullivan. "The influence of the holiday should dampen the war rhetoric, but if there are any surprises we could get exaggerated moves in prices for sure."
Durable gains?
The economic highlight of the week will be the November durable goods report, due out Tuesday morning. Economists watch this one closely, because it can give an early read on both manufacturing activity and, if you look into the guts of the report, business spending on new equipment.
It's that second element that economists are most keenly interested in. Although consumer spending has kept up well over the past two years, businesses' reticence in shelling out money on capital equipment has left the economy weak.
"Iraq and corporate governance issues have bogged down capital investment decisions," said Diane Swonk, chief economist at Bank One. "We're seeing companies that are ready to go; they're just waiting for a sign."
Swonk thinks that by the second half of next year businesses will be busy spending money on new equipment, letting the consumer "kick back, put up his feet for a bit and not have to carry the burden of keeping the economy going alone."
Will Tuesday's durable goods report give investors any sense of whether businesses are warming up to the idea of boosting equipment outlays again? Perhaps, but bear in mind that as useful as this report is, it's also one of the most volatile economic series out there. Markets often jump one way or another on it, but economists care more about the trend in durable orders over time than they do about an month's particular sounding.
Key events in the week ahead
Monday the Commerce Department releases personal income and spending figures for November. Although not a closely watched report, it should be reassuring in that it shows consumers remain uncowed. Economists polled by Briefing.com expect personal income to gain 0.2 percent and for personal spending to lift 0.4%.
Tuesday morning brings the durable goods report. Economists expect they rose by 0.9 percent compared with last month's big jump of 2.4 percent.
The stock market closes at 1 p.m. ET Tuesday and is closed Wednesday for Christmas.
Friday morning the University of Michigan puts out its final reading on consumer sentiment for December. Although there are often big differences between how people say they feel and how they actually act, the market often moves on this report. Economists think the U of M's sentiment index will slip slightly from the initial December reading of 87 to 86.5.
New home sales for November get released Friday morning. This tends to be a lagging indicator and can also be incredibly volatile, but it should serve to emphasize that, despite everything, the housing department remains strong. Economists expect sales came in at 1 million in November. That would make it the fourth month in a row, and the fourth time ever, that sales came in at a million or more.
- Mensagens: 23939
- Registado: 5/11/2002 11:30
- Localização: 4
Acções da Instinet caem após Goldman negar intenção de compr
Acções da Instinet caem após Goldman negar intenção de compra
2002-12-20 21:11
OnMarkets.com - As acções da Instinet perderam a grande valorização obtida no início da sexta-feira depois que o Goldman Sachs Group negou uma reportagem que afirma que o banco de investimentos mantinha negociações para adquirir a plataforma electrónica de transações de acções da empresa.
"Não existe nada relacionado a esta história", disse Kathleen Baum, uma porta-voz do Goldman Sachs. Silvia Davi, porta-voz da Instinet classificou as informações sobre as supostas negociações como "rumores de mercado" e não comentou o assunto.
A Instinet tem sua participação maioritária vinculada ao grupo de notícias e informações financeiras globais Reuters Group .
Depois de saltarem 15 por cento no início da sessão da Nasdaq, os papéis da Instinet registravam queda de 2,31 por cento, cotados a 3,78 dólares. Os papéis do Goldman Sachs subiam 1,92 por cento no mesmo horário, cotados a 71,65 dólares.
No início deste ano a Instinet fechou um acordo para comprar a rival Island ECN, por cerca de 389 milhões de dólares, e criar um negócio maior, capaz de desafiar o sistema de negociações de acções da Nasdaq.
A companhia anunciou recentemente planos para reduzir em 17 por cento seu quadro de funcionários em um plano que pretende cortar 100 milhões de dólares em custos, em 2003.
in Reuters
2002-12-20 21:11
OnMarkets.com - As acções da Instinet perderam a grande valorização obtida no início da sexta-feira depois que o Goldman Sachs Group negou uma reportagem que afirma que o banco de investimentos mantinha negociações para adquirir a plataforma electrónica de transações de acções da empresa.
"Não existe nada relacionado a esta história", disse Kathleen Baum, uma porta-voz do Goldman Sachs. Silvia Davi, porta-voz da Instinet classificou as informações sobre as supostas negociações como "rumores de mercado" e não comentou o assunto.
A Instinet tem sua participação maioritária vinculada ao grupo de notícias e informações financeiras globais Reuters Group .
Depois de saltarem 15 por cento no início da sessão da Nasdaq, os papéis da Instinet registravam queda de 2,31 por cento, cotados a 3,78 dólares. Os papéis do Goldman Sachs subiam 1,92 por cento no mesmo horário, cotados a 71,65 dólares.
No início deste ano a Instinet fechou um acordo para comprar a rival Island ECN, por cerca de 389 milhões de dólares, e criar um negócio maior, capaz de desafiar o sistema de negociações de acções da Nasdaq.
A companhia anunciou recentemente planos para reduzir em 17 por cento seu quadro de funcionários em um plano que pretende cortar 100 milhões de dólares em custos, em 2003.
in Reuters
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Accenture espera lucros acima das expectativas
Accenture espera lucros acima das expectativas
2002-12-20 20:11
A maior empresa de consultadoria do mundo estima que o lucro do seu primeiro trimestre fiscal, que terminou a 30 de Novembro, atinja os 27 cêntimos por acção, acima dos 24 cêntimos esperados pelos analistas. As receitas são esperadas entre os 2,9 e os 2,95 mil milhões de dólares, ligeiramente acima dos 2,87 mil milhões prognosticados pelos peritos.
«Embora a performance da Accenture no primeiro trimestre do ano fiscal de 2003 tenha sido sólida, a empresa continua cautelosa relativamente ao futuro, porque o clima económico e geopolítico permanece instável», diz a empresa em comunicado.
in DE
2002-12-20 20:11
A maior empresa de consultadoria do mundo estima que o lucro do seu primeiro trimestre fiscal, que terminou a 30 de Novembro, atinja os 27 cêntimos por acção, acima dos 24 cêntimos esperados pelos analistas. As receitas são esperadas entre os 2,9 e os 2,95 mil milhões de dólares, ligeiramente acima dos 2,87 mil milhões prognosticados pelos peritos.
«Embora a performance da Accenture no primeiro trimestre do ano fiscal de 2003 tenha sido sólida, a empresa continua cautelosa relativamente ao futuro, porque o clima económico e geopolítico permanece instável», diz a empresa em comunicado.
in DE
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- Localização: 4
Euro mantém-se estável
Euro mantém-se estável
2002-12-20 20:09
OnMarkets.com - O euro manteve-se hoje estável face ao dólar, numa sessão que ficou marcada por alguma falta de liquidez, com os investidores a aguardarem por sinais claros relativamente a um eventual conflito entre os Estados Unidos e o Iraque. Nem o optimismo do discurso de Alan Greenspan, proferido ontem, conseguiu fazer inverter a tendência da moeda daquele país.
A moeda única valia, no fecho do mercado cambial, 1,0268 dólares, tendo oscilado entre um mínimo de 1,0245 dólares e um máximo de 1,0277 dólares.
in DE
2002-12-20 20:09
OnMarkets.com - O euro manteve-se hoje estável face ao dólar, numa sessão que ficou marcada por alguma falta de liquidez, com os investidores a aguardarem por sinais claros relativamente a um eventual conflito entre os Estados Unidos e o Iraque. Nem o optimismo do discurso de Alan Greenspan, proferido ontem, conseguiu fazer inverter a tendência da moeda daquele país.
A moeda única valia, no fecho do mercado cambial, 1,0268 dólares, tendo oscilado entre um mínimo de 1,0245 dólares e um máximo de 1,0277 dólares.
in DE
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