Thursday, September 30, 2010

Wunderlich Reiterates First Solar (Nasdaq:FSLR) "Sell" Rating

In a note to clients, Wunderlich Securities equity analyst Theodore O'Neill maintained his "Sell" rating on First Solar (Nasdaq:FSLR), the No. 1 company in the world for making solar power modules.

First Solar has been wildly successful in Germany, generating over 50 percent in growth, but that has caused some concern.

O'Neill said, "We don't believe the German growth rate of more than 50 percent is sustainable."

"Overall, we project revenue, gross profit, and earnings growth to slow due to increased competition and as FSLR executes on its system business plan," he added.

So even though shares of First Solar closed Wednesday at $149.27, he drastically lowered his price target to $90.

Yingli Green Energy (NYSE:YGE) Gaining Favor

Yingli Green Energy (NYSE:YGE) is becoming one of the favorite picks of analysts covering the solar sector, will sales estimated to increase to somewhere around $1.6 billion.

The solar module supplier has been gaining market share because of its low costs, and they're positioned to continue on gaining share.

For 2010, sales are projected to increase by over 50 percent, with consensus estimates they'll grow 11 percent more on top of that in 2011. But with prices no longer dropping, they may perform far better than that.

Volume for Yingli Wednesday soared to far over double the usual 3-month average of just over 3 million, rising to 7,178,121 million on the day.

Compass Minerals (NYSE:CMP) Raising Product Prices for Specialty Fertilizer

Compass Minerals International Inc. (NYSE:CMP) subsidiary Great Salt Lake Minerals Corp. is going to increase the selling price on its entire line of sulfate of potash specialty fertilizer products, according to Great Salt.

The increase in prices will start with shipments going out on November 1, or as contracts allow.

Included in the price raise will be worldwide shipments of both standard and granulated products.

Compass was trading down on Wednesday, dropping to $78.03, falling $0.48, or 0.61 percent, as of 3:10 PM EDT.

Wednesday, September 29, 2010

Goldman (NYSE:GS) Says Monsanto (NYSE:MON) Smartstax Corn Won't Outperform Triples

Monsanto (NYSE:MON) Chief Executive Officer Hugh Grant has been counting on the performance of their Smartstax corn to battle their major competitor DuPont (NYSE:DD), who has been gaining market share on them.

As data come in though, the news hasn't been that good, as the corn seed, which includes eight genetic traits, is unlikely to outperform less expensive seed with fewer traits, according to Goldman Sachs (NYSE:GS).

Goldman Sachs analyst Robert Koort said, “We no longer expect SmartStax to outyield its robust triple stacks. Yield parity is the new target.”

Yields from Iowa confirm Koort's statement, as the are behind the triple stacks yield by 3 percent to 5 percent. Koort added the gap between the two seeds could shrink as northern areas with larger insect infestation return data.

While Goldman maintains their "Neutral" rating on the stock, along with earnings estimate of $2.87, they did lower the price target on Monsanto from $71 to $64.

BHP (NYSE:BHP) Acquisition of Potash (NYSE:POT) Good for Market

The reason so much resistance has emerged from the BHP Billiton (NYSE:BHP) bid for Potash Corp. (NYSE:POT) has been the socialist nature of the agricultural industry in general, and the potash industry in particular.

With the Canpotex consortium and the Belarusian Potash Co., they pretty much control the potash market and its prices. That needs to end and free market prices allowed to determine how much the fertilizer will cost.

In the case of Potash, the Canadian Province of Saskatchewan sucks a bunch of money out of them, the reason they want things to continue on as they are with controlled prices, rather than allowing the market to dictate events.

The Canadian consortium includes Agrium (NYSE:AGU) and Mosaic (NYSE:MOS), along with Potash. They oppose the acquisition by BHP as well, as they would have to compete with them directly, rather than continue the cozy relationship among one another.

Competition is always the best way to decide who wins in business, and to keep Canpotex operational goes against that idea, as well as keeps the costs of Potash artificially high.

Interestingly, China is concerned about higher prices of Potash if BHP takes over the fertilizer giant, and the Province of Saskatchewan is concerned about lower prices if they do.

All that government has to do is start to become more limited, the best way to deal with out-of-control spending and promises.

Either way, BHP is good for the industry, and whether they land Potash or not, they'll eventually ramp up their Jansen property, which may produce 8 million tons of potash a year.

Citigroup (NYSE:C), Bank of America (NYSE:BAC), Enter Loan Deal with Tata Steel (NSE:TATASTEEL.NS)

Citigroup (NYSE:C) and Bank of America (NYSE:BAC) are part of a consortium of 13 banks which have entered into an agreement with Tata Steel (NSE:TATASTEEL.NS) to raise over 3.53 billion pounds.

The proceeds of the loan will be used to refinance the loan Tata took out to fund part of its deal to acquire Corus.

Leading the deal are Standard Chartered and State Bank of India.

Tata Steel Europe MD & CEO Kirby Adams said about the financing, "Lenders to Tata Steel showed confidence by supporting the company''s plans to weather the financial crisis. is very satisfying that another key strategic objective of the company - the securing of a sound and more favourable financing structure for the future - is being achieved."

The financing structure of the deal includes two parts. One a 5-year loan close to GBP 1.8 billion and a 7-year loan of GBP 1 billion.

Citigroup participated via its Citicorp Securities Asia Pacific unit.

BP (NYSE:BP), Transocean (NYSE:RIG), Halliburton (NYSE:HAL) Sued by Three Mexican States

Lawsuits have been filed by three Mexican states against BP (NYSE:BP), Transocean (NYSE:RIG) and Halliburton (NYSE:HAL), asserting the alleged oil plume has reached their shores.

The lawsuits were filed by Tamaulipas, Veracruz and Quintana Roo in a San Antonio court. The beaches of the three Mexican states are popular with tourists and locals.

Damages sought from the Mexican states weren't specified.

There was no comment from BP on the lawsuits. Halliburton said through spokeswoman Teresa Wong that the allegations were without merit, and Transocean said they'll let their position be known during the legal process.

BP (NYSE:BP) Shares Up on Management Changes, Safety Unit

BP (NYSE:BP) shares are in the positive Wednesday after incoming CEO Bob Dudley shook things up in management, firing Andy Inglis, who was responsible for deep water operations when the Deepwater Horizon oil well exploded.

Inglis will also be leaving the board of TNK-BP on October 31. Outgoing CEO Tony Hayward will sit on the board.

Heading up exploration and production, Inglis will be replaced by three executives after the E&P business is split into three different divisions.

There was also an announcement BP was creating a new safety division to oversee all aspects of the business. They are authorized to intervene in any activity being performed throughout the company.

BP shares are up today to $39.92, gaining $0.63, or 1.60 percent at 11:46 AM EDT.

Barclays (NYSE:BCS) Reiterates "Overweight" on Valero (NYSE:VLO)

Valero Energy (NYSE:VLO) retains an "Overweight" rating from Barclays (NYSE:BCS), also keeping its price target and earnings per share estimates in place as well.

Barclays noted the sale of its Paulsboro refinery to PBF Holding Co. in particular, saying while it's a positive move, it's not enough to change their expectations.

"After the close on 9/27/10, Valero announced that the company signed an agreement to sell its 185 mb/d (000's b/d) Paulsboro refinery to PBF Holding Co...We think this announced asset sale is a slight positive factor for VLO, with selling price largely in-line with our expectations...We also think this announcement is a positive factor for Sunoco (NYSE:SUN) because it demonstrates that there is still a market for Northeast refineries," said Barclays.

Earnings per share remain at $1.70 for 2010 and $2.10 for 2011.

Valero closed Tuesday at $17.07, gaining $0.19, or 1.13 percent. They have a price target of $22 on them.

Bucyrus (Nasdaq:BUCY), Joy Global (Nasdaq:JOYG) Price Targets Raised by Jefferies

Bucyrus International Inc. (Nasdaq:BUCY) and Joy Global, Inc. (Nasdaq:JOYG) had the price target on them raised by Jefferies visiting and investigating their facilities in Wisconsin, and meeting with management.

The price target on Bucyrus, which Jefferies has at a "Buy," was raised from $70 to $80. Bucyrus closed at $71.37, down $0.23, or 0.32 percent.

Joy Global, Inc. had their price target raised from $65 to $74, and have a "Hold" on them by Jefferies. Joy closed Tuesday at $70.71, down $0.10, or 0.14 percent.

Other Wisconsin companies didn't fare quite so well with Jefferies, and they maintained their price target on Regal Beloit Corporation (NYSE:RBC) at $64, and lowered Oshkosh Corporation's (NYSE:OSK) price target from $36 to $30. Both the companies have a "Hold" on them.

Newmont (NYSE:NEM) Interested in Developing Afghanistan Mines

Newmont Mining Corp. (NYSE:NEM) has reportedly shown an interest in developing mines in Afghanistan, according to the Minister of Mines Wahidullah Shahrani in a Bloomberg interview.

“They also expressed their interest in coming and investing in the gold mines of Afghanistan,” Shahrani said. “Since then, there has been some communication on getting some information from the government of Afghanistan.”

The troubled country is attempting to generate interest in the development of their mineral resources to produce jobs and revenue. In about five years Sharani expects to generate revenue up to $1.2 billion annually, and over a ten to fifteen year period, increase that to $3 billion to $3.5 billion.

That includes all its mineral resources, not only gold.

Citigroup (NYSE:C), Goldman (NYSE:GS), Barclays (NYSE:BCS) Part of Exelon's Note Sale

Exelon Generation Company enlisted the help of Citigroup (NYSE:C), Goldman Sachs (NYSE:GS), Barclays Capital (NYSE:BCS), among others, to be book-runners on their sale of $900 million in senior notes.

Included with the offering is $550 million in 4 percent notes due October 1, 2010, and $350 million in 5.75 percent notes due on October 1, 2041.

Exelon is raising the capital to pay for the takeover John Deere Renewables LLC and for general corporate purposes.

Other book-runners connected to the deal are Wells Fargo Securities, BNP Paribas Securities, RBS Securities, Mizuho Securities USA, The Williams Capital Group. Co-managing the deal is Lebenthal & Company.

The deal is expected to close September 30.

Demand for BP (NYSE:BP) Bonds Increases Sales

BP's (NYSE:BP) funding unit BP Capital Markets surpassed original expectation of issuing between $2 billion and $3 billion in bonds, with large demand driving the total up to $3.5 billion.

That wasn't the entire story for the five- and 10-year bonds, as they were oversubscribed to $12 billion in orders.

A spokesman for BP said, "In recent years, we have had four issues of this scale, and this continues to be an effective means of raising cash which has repeatedly been attractive to the markets. This particular bond issue is part of routine management of the group's finances and is not specifically related to the costs of the Gulf of Mexico oil spill."

BP Plc will guarantee the bonds, whose sale was led by Citigroup (NYSE:C), Barclays (NYSE:BCS) BNP Paribas, Royal Bank of Scotland (NYSE:RBS) and Mizuho Securities USA Inc.

Tuesday, September 28, 2010

US Steel (NYSE:X) Interested in Severstal's Wheeling Facility

With Russian steelmaker OAO Severstal looking to sell three plants based in the U.S., they have drawn interest in some of them from US Steel (NYSE:X) and Essar Steel from India.

Reportedly there are five suitors interested in the three U.S. steel plants, and Severstal has given all interested parties until October 22 to make a binding offer.

U.S. Steel has been said to be looking into the Wheeling plant located in West Virginia, and Essar Steel may make an offer for the Sparrows Point plant in Maryland.

Other companies showing interest in acquiring all three are Aurora Capital Group and Renco Group, both based in the U.S.

Monsanto (NYSE:MON) Plunges on SmartStax Concerns

Monsanto (NYSE:MON) are taking a big hit again today as what appears to be ongoing concerns over genetically modified corn seed brand SmartStax.

Farmers have been gradually moving away from some Monsanto seed in general because of the way the company marketed them, as well as high prices.

Major competitor DuPont (NSYE:DD) has also successfully embedded the question in the minds of farmers over whether or not the extra traits of the seed is worth the extra cost, implying their seed, while having less traits, still produces well for farmers.

Developing new pipelines is becoming a challenge for Monsanto because of legal issues as well as the economic environment we're in.

But with corn prices rising during the summer, if farmers didn't acquire the seed strongly when margins aid the sales, it has to be extremely concerning for Monsanto on how to position themselves going forward.

If SmartStax hasn't yielded the sales and earnings expected, as a number of analysts believe, Monsanto will have to downwardly revise their profit targets, which the market now seems to be pricing into the shares at this time.

Monsanto dropped to $48.03, down $5.04, or 9.50 percent at 2:11 PM EDT.

BP (NYSE:BP) Refining Margins Lower in Fourth Quarter Says Company Economist

According to BP PLC's (BP) Chief Economist Christof Ruehl, refining margins for the company in the fourth quarter will drop because of the large amount of global oil inventory.

Ruehl said, "We have bloated OECD product stocks - the highest for at least 12 years - caused by an increase in crude runs over the last few quarters. Just when you thought there was a decent few weeks in terms of margins, the existing product overhang points to short-term pressure on margins."

Ruehl added that usually margins in refining are historically lower in the fourth quarter, with eight out of the last ten years experiencing that.

This is year is no different, as refiners raised production because of higher margins earlier in the year, but the demand hasn't met the supply, putting downward pressure on margins.

Problems in Europe's strategy of so-called clean and renewable fuels is a problem as well, with it causing refineries there to be much more costly and less competitive.

Man Alleges BP (NYSE:BP) Oil Burning Made Him Sick

Before the lawsuits against BP (NYSE:BP) are through, many people will make extraordinary claims of damages in relationship to the oil spill.

One of the latest ones is a claim by a man living in Navarre Beach, Florida that he and his family got sick from BP burning the oil off the water near the area.

In a complaint in Harris Count Court, the alleged victim said he and his family suffered "blinding headaches, sore throats, burning eyes, uncontrollable vomiting, coughing, dizziness, loss of appetite, and blurred vision."

According to Charles Smith, who filed the lawsuit, "Defendants' representatives held a town hall meeting along with the Florida EPA and provided assurance that the smell was not harmful and presented no danger to the community, the plaintiff or his family."

Smith claims when he and his family got sick he called the emergency response line of BP and was told no evacuation orders were in effect for the area.

For some reason Smith took his son out of school and went to California to stay with grandparents. Odd that no one else in the entire area has reported similar symptoms and suffering.

Of course if this is allowed to go forward people will come out of the woodwork to claim they suffered the same symptoms.

Smith wants BP to pay for his medical bills, trip to California, lost wages and punitive damages for gross negligence.

Goldman (NYSE:GS) Acquires 80 Percent of Endesa (ELE.MC) Gas Grid

With parent company Enel (ENEI.MI) needing to slash its debt burden, Endesa (ELE.MC) sold 80 percent of its gas grid to Goldman Sachs (NYSE:GS) fund for $1.1 billion.

If the deal is cleared, it would help the Italy-based Enel to turn a before tax profit of 450 million euros, said the company.

Enel is the most indebted utility in all of Europe, owing about 51 billion euros at the close of 2009, with a goal of cutting that to 45 billion euros by the end of 2010.

Goldman is acquiring the grid via two of its infrastructure funds.

Enel is also attempting to raise an additional 3 billion euros through the sale of its stake in Enel Green Power (ENZ:SG).

Bank of America analysts said in a note to clients, "Ahead of the IPO of Enel Green Power (EGP), this is another important step in (Enel's 2009-2010) 10 billion euros disposal program."

Goldman (NYSE:GS) Bumps Halliburton (NYSE:HAL) Price Target Up

Goldman Sachs raised their price target and earnings per share estimate on Halliburton (NYSE:HAL), while maintaining a "Buy" on the oil company.

Although Goldman already has an earnings per share estimate on Halliburton above consensus, they raised it again from $0.56 to $0.59. Consensus has EPS at $0.54.

Oppenheimer analyst G. Scott Burk also raised his earnings estimate on the company, increasing it by 22 cents to $1.94 for the full year. For 2011 he added 18 cents to EPS to $2.58.

Burk based his decision on an expected surge in drilling in the third quarter and on, which will increase demand for drilling materials. That will be beneficial to companies like Halliburton which provide services to the industry.

Halliburton closed Monday at $32.41, falling $0.32, or 0.98 percent.

Goldman upped their price target from $35 to $37.

Morgan Stanley (NYSE:MS) Upgrades DryShips (Nasdaq:DRYS)

Morgan Stanley (NYSE:MS) likes what they see with DryShips (Nasdaq:DRYS), upgrading them to "Equal Weight."

Morgan said they would have upgraded them to "Overweight" if they took care of several issues.

First there is the financing of four new vessels which are sitting without contracts. If DryShips were to sell a couple of drillships, Morgan said that would help solve that problem by lowering the debt from the capital raised.

A continuing $350 million at-the-market offering and $700 million in convertible notes, along with a $300 million convertible preferred offering has the potential to increase the dilution of the shares.

DryShips closed Monday at $4.47, gaining $0.35, or 8.36 percent. Morgan Stanley has a price target of $5.50 on them.

Silver Wheaton (NYSE:SLW) Downgraded by UBS (NYSE:UBS)

Silver Wheaton Corp. (NYSE:SLW) was downgraded by UBS (NYSE:UBS) from "Buy" to "Neutral," as the silver company stands near its 52-week high, having gained well over 100 percent over that time.

One thing that concerns some investors is the approximate PE of 50 the company has, causing some to look for alternatives in the industry for those with much lower ratios.

Yet it seems silver prices have broken through and is poised to run up with gold, and that is good news for Silver Wheaton and investors.

That doesn't mean there isn't a possibility of a correction, that happens with any sector and company that has enjoyed consistent success in share price.

With silver considered a place of safety as a precious metal, but also in demand as an industrial metal, there is still a long way for silver prices to run, along with Silver Wheaton before things pull back significantly.

In the near term there could be some leveling off, but I don't think over the long term Silver Wheaton can be held back from continuing to grow in share price and market value.

FBR Capital Maintains "Outperform/Top Pick" on Arch Coal (NYSE:ACI)

After taking part in the analyst day for Arch Coal (NYSE:ACI), FBR Capital liked what they heard and said they're maintaining their "Outperform/Top Pick" rating on the company.

FBR said, "We attended the Arch Coal analyst day and came away with conviction in our thesis that Arch Coal is in position for significant stock price appreciation and an FBR Top Pick. The company has been transformed over a long time to a low-cost, safe steam and met coal mining company. While the stock has not been rewarded for its underutilized capacity and short-term contracting strategy yet, we believe the company is on the cusp of generating solid rates of return above its cost of capital."

Arch closed Monday at $25.94, down $0.30, or 1.14 percent.

FBR has a price target of $37 on Arch Coal.

Citigroup (NYSE:C) Says Copper Prices Could Go Either Way

Citigroup (NYSE:C) said copper is in a period of flux depending on reliable economic data and the ongoing depth and length of the weak housing market.

The giant bank said it would take "Some dramatically good economic news" to push copper above its resistance level of $8,000, although the financial institution said there's a 25 percent chance of that happening.

It's hard to see what that 25 percent chance is based upon, but we'll see.

As far a big drop in price, Citi sees that equally possible as a big jump, saying that has about a 25 percent chance of happening as well.

Dropping from five-month highs today, Citi said the probability is copper will remain level for some time until the economics play out.

Expected weak economic growth has the market believing copper will probably pull back some more, as there is nothing in housing to signal a reason that will change.

Monday, September 27, 2010

UBS (NYSE:UBS) Raises Price Target on Freeport-McMoRan (NYSE:FCX)

Freeport-McMoRan (FCX) had their price target raised on them by UBS (NYSE:USB), while having a "Buy" rating from them reiterated.

UBS especially likes their exposure to molybdenum, and secondarily gold and copper.

"We have revised our 2011 EPS estimate slightly from $8.06 to $8.63 to reflect slightly higher moly production at Henderson and a slightly lower tax rate," said UBS.

Freeport closed Friday at $86.61, adding $2.38, or 2.83 percent.

UBS raised their price target from $84 to $97.

Potash (NYSE:POT) Hearing Date Over BHP (NYSE:BHP) Bid Extended by Judge

Saying the parameters for gathering information for the discovery phase of a motion by Potash Corporation (NYSE:POT) to halt the attempt by BHP (NYSE:BHP) to take over the company is too broad, Judge David Coar extended the hearing date to November 4.

BHP responded saying, "We are gratified that the court made clear that the Potash Corp. discovery proposals are excessively broad. We believe the case is without merit and we intend to contest it vigorously, including by filing a motion to dismiss later this week."

While allowing a request for discovery to go forward, the judge gave the responsibility for narrowing the parameters of discovery to a federal magistrate.

The judge evidently took into consideration the expiration date of the offer from BHP, where they've given Potash shareholders until November 18 to tender their shares. Otherwise they may have had to extend their expiration deadline to compensate for it.

Alcoa (NYSE:AA) Hearing Over Yadkin River Begins Today

After contentious debate and legal maneuvers, hearings over whether or not Alcoa (NYSE:AA) will be able to renew a 50-year license to operate dams on the Yadkin river have begun today.

The issue is over a water permit issued to Alcoa by the state of North Carolina, which was opposed by some state officials and others.

Before the federal government would consider whether or not to renew the license of Alcoa, they must get approval from the North Carolina Division of Water Quality.

What is at issue concerning the water quality permit in relationship to the hearing is for the judge to decide to uphold it or not. If he does, they have a strong chance of having the license renewed for another 50-year period by the federal government.

Alcoa generates millions in revenue annually from selling hydropower from the dams. Over the 50-year period going forward, that would amount to well over a billion in profits, and possibly a lot higher depending on prices in the decades ahead.

This would be a blow to Alcoa who is mostly boxed in by the price of aluminum, if they lose the deal, as it's one of the few alternative sources of revenue outside the sector they serve.

BP (NYSE:BP) Approved by Venezuela to Sell Oil Assets

In an attempt to raise up to $30 billion to pay for liabilities related to the Gulf of Mexico oil spill, BP (NYSE:BP) is trying to sell assets in Venezuela, and they've been given approval by the government to go ahead with the process.

The assets held in Venezuela include an interest in heavy oil and minority stakes in two exploration and production ventures with state-owned oil company PDVSA.

Combined it is estimated BP should be able to raise up to $1 billion from the assets. Although a relatively minor deal in comparison with others, it is one of the bigger challenges for the company to divest of.

The only two companies considered a buyers for the stakes are PDVSA itself, and possibly the joint venture of BP with Russia called TNK-BP. The Russian connection would make it more palatable to Venezuela.

BP holds a 50 percent stake in TNK-BP, which also has interests in Vietnam and Algerian assets held by BP.

Citigroup (NYSE:C), Deutsche (NYSE:DB) Hired by Sinochem for Counter Bid for Potash (NYSE:POT) Against BHP (NYSE:BHP)

Rumors continue to circulate that China's Sinochem is back in the game for making a bit for Potash (NYSE:POT) against BHP (NYSE:BHP), with Citigroup (NYSE:C) and Deutsche Bank (NYSE:DB) being hired to help finance a potential bid, according to a newspaper report.

While Sinochem continues to assert they're interested, they evidently haven't decided to take the step, but are rather putting financial pieces into place in case they do.

China was furious with BHP, along with Vale (NYSE:VALE) and Rio Tinto (NYSE:RTP) over iron ore pricing, and seem to believe if BHP were to land Potash Corp., it could result in higher potash prices years into the future.

That is actually a wrong assessment by China, as least as measured by past practices of BHP, who historically prefer to produce at market price rates, rather than attempt to control supply in order to keep potash prices at higher levels in order to protect margins and earnings.

This is what the big stink in Canada is about when BHP said they would eventually leave Canpotex once current agreements were fulfilled. That has Saskatchewan particularly upset, as they perceive royalty money extracted form Potash Corp. shrinking.

More than likely that's not true, as volume would make up for lower margins, similar to how Wal-Mart (NYSE:WMT) has low margins but turns their inventory over at incredible rates to make up for it.

Add to this the higher probability of Canada opposing a takeover of Potash by a Chinese government-controlled company, and it seems a step backward from BHP.

Unless Canada decides they don't want BHP at any price to own Potash, it's hard to see on what basis they could legitimately reject the deal.

More than likely the shareholders of Potash will be the determining factor, and if they get it in their heads BHP will pay far more than the current offer, we will probably see the deal thwarted in that regard, rather than from regulatory hurdles.

Arch Coal (NYSE:ACI) Still Waiting for EPA Decision on Spruce No. 1 Mine

The expected recommendation to the EPA by its Region 3 administrator was received concerning the Spruce No. 1 Mine of Arch Coal (NYSE:ACI), but the agency refused to disclose what it was, according to a spokeswoman, saying it'll be some time before a final decision is made.

At issue is whether to allow Arch to proceed with their mountaintop-removal coal mining operation at the site, which will be the largest in the region.

Now the recommendation will be sent to the EPA's Office of Water to be reviewed. The EPA said a decision on the matter will be made this fall.

The mine, located in Logan County, West Virginia, is the first in the history of the EPA to be put on hold after a permit was issued by the Corp of Engineers to go forward with a project like this.

The EPA is empowered to veto the permits if they choose.

United Mining (TSE:UMG) Lands Western CEO, Newmont (NYSE:NEM) Executive

United Mining (TSE:UMG) announced it has landed former Western Canadian Coal CEO and president Charles Pitcher, who will step into the role of CEO for the miner.

They also added former Senior Vice President and General Counsel for Newmont Mining (NYSE:NEM), Graham (Chip) Clarke, Jr., who landed the role of Independent Director for United.

CFO Erik Panke resigend as Non-Independent Director to make room for Clark, Jr. to step in as Independent Director. Panke will remain on as CFO and Corporate Secretary for United.

Chairman Greg Stewart will continue on in that position, as well as President of the company, adding the role of COO to his duties. Stewart founded the company.

Pitcher said about his new job, "I wish to thank Greg Stewart and the UMG Board for this appointment. Over the years, Greg Stewart has built a superb mining services company, which has expanded to include the Crescent Silver Mine. I compliment Greg and his team for their superlative work. I look forward to working with Greg and his team to move UMG to the next level of growth."

Steward said in a press release about landing Pitcher, "Charles Pitcher has the senior mining experience which is critical to our company, especially as we move towards production on the Crescent Silver Mine. Chip Clark has the experience and connections in the mining world which will be indispensable to our growth. I am proud to welcome Charles and Chip to the UMG team. I would like to thank Erik Panke for his considerable help as Director. His contribution to obtaining our TSX listing was indispensable."

Soleil Slashes SunPower (Nasdaq:SPWRA) to "Hold" on Share Runup

SunPower Corporation (Nasdaq:SPWRA) was downgraded by Soleil Securities from "Buy" to "Hold," citing the approximate 40 percent surge of the stock over the last month.

Along with a large number of equities, SunPower's rally wasn't based on increased guidance or outlook.

Soleil said, "There has been little to no change in the outlook for the company's earnings over the next two to four quarters - all of the move in SunPower's shares has been multiple driven."

The company said they were concerned that "SunPower is moving toward a greater reliance over time on the downstream installation portion of the photovoltaic business."

The price target for the energy company was raised slightly from $14 to $15.

SunPower closed the week at $13.94, gaining $0.02, or 0.14 percent.

BHP (NYSE:BHP) Passes U.S. Antitrust Hurdle for Potash (NYSE:POT) Bid

BHP Billiton (NYSE:BHP) successfully passed the first regulatory hurdle on its way to attempting to acquire Potash Corp. (NYSE:POT). The U.S. Federal Trade Commission cleared them to go forward with their $39 billion bid for the fertilizer giant.

Although there are many hoops to jump through, there really is only one that has an actual chances of interfering with the deal from a regulatory standpoint.

That would be in relationship to the Canadian Investment Act, which determines whether it's in the best interest of the country for a company located there to be taken over.

Most of that is centered around the single issue of royalties received by Saskatchewan from Potash.

With BHP wanting to opt out of Canpotex, which is a cartel controlling the supply, and thus potash prices in the region, the Canadian province is fighting against the deal going forward because of the perceived loss of income.

BHP wants to compete at market levels, which is of course the only way to go. That would put downward pressure on prices to the benefit of farmers, and ultimately consumers.

Saskatchewan leaders don't understand how selling more product at lower prices makes up for the higher margins sold with lower sales.

Either way, it seems only the shareholders of Potash will make or break the deal, and they of course will want more money for the company to give their approval. But if they stretch too far it will fall apart, as BHP CEO Marius Kloppers has stated he won't increase the bid in a way that would hurt the shareholders of his company.

While there may be a little wiggle room to increase the bid, it seems Kloppers is adamant on his outlook and won't jeopardize the financial health of BHP to acquire Potash at any cost.

Gleacher Maintains "Buy" on Mosaic (NYSE:MOS), Increases EPS

Gleacher & Co. said it maintaining its "Buy" rating on Mosaic Company (NYSE:MOS), while increasing their earnings per share estimate, citing higher pricing power on growing demand for fertilizer.

"We expect MOS to report FYQ1 EPS of $0.72 (vs. prior $0.68), up 218% y/y but down 19% q/q in the seasonally slower Q1. As the year progresses, we expect the rebound in fertilizer demand to continue gaining traction and we have increased our FY2011E EPS to $3.95 from $3.60 and FY2012E to $4.55 from $3.95 on surging DAP prices and higher potash price assumption," said Gleacher.

"With supportive crop prices, tight inventories, and anticipated strong demand heading into the fall application season, the momentum has returned to the fertilizer industry. In addition, we believe the BHP (NYSE:BHP) bid for Potash (NYSE:POT) has unlocked the value of potash. We maintain our belief that investors can continue owning Mosaic heading into the fall."

Mosaic closed the week at $62.09, gaining $0.74, or 1.21 percent.

The price target on the fertilizer company was raised by Gleacher from $56 to $70.

Czech President Slams UN Over Global Economic Power Grab

Czech President Vaclav Klaus, one of the few world leaders who understands the outcome of government interference in free market, boldly blasted the United Nations for their call for even more one world governance of the global economy.

Klaus called for the organization to stay out of economics and national governments should be the ones to tackle the problems.

The Czech president said, the solution won't come from "creating new governmental and supranational agencies, or in aiming at global governance of the world economy."

"On the contrary, this is the time for international organizations, including the United Nations, to reduce their expenditures, make their administrations thinner, and leave the solutions to the governments of member states," said Klaus.

This doesn't mean Klaus was calling for federal government interference in markets, he was simply saying it begins at a national level, not an extra-national level.

For example, he helped his country move toward the privatization of businesses after the failure of communism and socialism in Czechoslovakia, which he's battling against almost alone as a world leader, seeing it attempt to raise its ugly head again.

He also castigates the idea that it was the failure of the markets which led to the economic crisis.

"The anti-crisis measures that have been proposed and already partly implemented follow from the assumption that the crisis was a failure of markets and that the right way out is more regulation of markets," he said.

He rightly concludes those actions will only "destroy the markets and together with them the chances for economic growth and prosperity in both developed and developing countries."

This is all a grab by third world countries to steal from productive countries instead of pursuing free markets and entrepreneurship, instead of maintaining their cultures of entitlement.

Klaus got riled up in response to Swiss president of the General Assembly, Joseph Deiss, saying the United Nations should "comprehensively fulfill its global governance role."

I hate to say it Deiss, but the United Nations have no global governance role, and Klaus is right.

FBR Likes PG&E (NYSE:PCG), SCANA (NYSE:SCG), Among Regulated Utilities

Among regulated utilities, FBR Capital says their top pick is Pacific Gas & Electric Co. (NYSE:PCG), and right behind them SCANA Corporation (NYSE:SCG).

Responding to questions on whether or not regulated utilities expensive to the S&P, FBR said, "A recurring question comes up during client meetings: Are regulated utilities expensive to the S&P? This question is particularly relevant now. Regulated utilities are trading at a forward P/E multiple of approximately 13x, a premium to the S&P trading at approximately 12x. This represents a relative P/E ratio for
utilities of 1.1x the S&P, which is high relative to the historical
average of 0.76x...Within the regulated group, we currently favor PG&E
(FBR Top Pick) and SCANA. These two companies have the best earnings
growth prospects, in our view, and are currently trading at a discount
to other regulated peers. They also happen to be among the least
interest-rate sensitive within our coverage universe."

PG&E closed the week at $45.82, gaining $0.60 on Friday, or 1.33 percent. SCANA closed at $40.45, up $0.78 on Friday, or 1.97 percent.

Volume for both companies was down in comparison to the 3-month daily average.

Williams (NYSE:WMB), Devon (NYSE:DVN), Noble (NYSE:NBL), Apache(NYSE:APA), Williams (NYSE:WMB) Cutting Spending

Natural gas companies like Devon Energy Corp (NYSE:DVN), Noble Energy Inc (NYSE:NBL) Williams (NYSE:WMB) and Apache Corp (NYSE:APA) are all expected to lower their capital expenditures in 2011 in light of ongoing low natural gas prices.

A large portion of the lower capex will be from cutting back on drilling for natural gas by the companies, and other companies with natural gas exposure.

Some of those cuts could be offset by transferring spending to oil exploration and cash generation from free-flowing debt markets.

Williams has already confirmed they're going to cut spending in 2011, and the others mentioned are sure to follow. Lower prices and lower margins, which will result in lower earnings are the reasons behind the spending cuts. That means less money to spend, as too much debt spending would crush the performance of the companies.

One positive area for gas companies is liquids, where companies holding those assets will be able to sell it at premium prices.

An area that will demand capital expenditure are those holding leases on acreage that must be drilled unless they expire.

But based on the price of natural gas, some experts in the industry say supply is so abundant it could be many years before natural gas prices turn around.

The smart companies are increasing their exposure to oil and the liquids mentioned above. Those companies which don't adapt are going to struggle to increase earnings and be profitable.

EOG Resources Inc (NYSE:EOG) and Chesapeake Energy (NYSE:CHK), among others, have already moved in that direction.

Another strategy recently has been for companies heavily exposed to natural gas to raise capital through debt, with Linn Energy (Nasdaq:LINE) and Anadarko Petroleum Corp (NYSE:APC) among the most recent.

They are doing that for the time when the natural gas market recovers, which will probably be a long wait. But they will be prepared for it whenever it does happen.

Beet Farmers Devastated Over Monsanto (NYSE:MON) Seed Ban

The decision by seemingly activist Federal District Court Judge Jeffrey White to ban genetically modified sugar beet seeds from Monsanto (NYSE:MON) has farmers crushed under the uncertainty of what will happen to their industry going forward.

White stated in his ruling, agreeing with the Center for Food Safety, which filed the lawsuit against Monsanto, that they had not been tested thoroughly enough to ensure safety of human consumption and possible environmental risks.

The Animal and Plant Health Inspection Service or APHIS, a unit of the USDA, deregulated the sugar beet seeds, leading to the lawsuit.

White ordered the USDA to prepare an environmental impact statement and to approve the crop again. That could take up to a period of two years, or possibly more.

Similar to their other genetically modified seeds, Monsanto makes them strongly resistant to their Roundup herbicide, which allows farmers to spray the beets without concern of damaging the crop.

The benefit is much higher yields and significantly lower cost inputs, as the need to water as much, use fuel and labor costs are lowered.

Proponents of the lawsuit and decision say it shouldn't be a problem for sugar beet farmers, as they can just go out and buy sugar beet seed, which they assert is plentiful.

According to Luther Markwart, executive director of the American Sugar Beet Growers Association, it's far from as simple as that.

As far as the seed part of it goes, finding non-genetically modified seed isn't as easy as stated. And once it is found, Markwart said it will be at least two to three years old, with no guarantees as to the viability of the seed. That assumes all sugar beet growers can even obtain the seed in the first place.

Markwart added that very little conventional seed has been grown for planting in the last couple of years, making it nowhere near as easy to find as some say.

He said, "If you can even get conventional seed it would be two to three years old, so its viability is a question."

That's only the beginning of problems for sugar beet growers though. New equipment like weed sprayers have been acquired to make way for the Roundup Ready seed. Farmers would have to go out and buy old equipment to use on the old seeds.

Just as difficult will be finding past herbicides used on conventional sugar beets, said Markwart. The market is no longer there, as approximately 95 percent of sugar beets are grown in the U.S. using genetically modified seed.

He concluded, only the Animal and Plant Health Inspection Service can save things for American sugar beet farmers, which has the authority to deregulate the beets partially or conditionally, which would pave the way to planting them in the coming spring season.

Saturday, September 25, 2010

Rand Paul Gets Backing of National Federation of Independent Business

Dynamo Rand Paul has picked up another business endorsement, this time the National Federation of Independent Business, a week after the U.S. Chamber of Commerce announced they were supporting Paul, and were going to launch a $500,000 advertising campaign in Kentucky.

The U.S Chamber of Commerce ad campaign notes that Paul's Obama Democrat opponent, Kentucky attorney general Jack Conway, supported cutting Medicare through his backing of Obamacare.

Kentucky state director of the National Federation of Independent Business, Tom Underwood, said they won't be launching a TV ad campaign, but will be sending out mailings to about 7,000 members of the business organization residing in Kentucky.

Conway is attempting to lose the Obamacare label attempting to use the extremist Democrat tactic they've used for many years by saying Paul wants to "force seniors to pay more for basic health care." He adds that makes Paul "out of step with Kentucky values."

That's only because Paul has the courage to address the issue, and admits there will ultimately be a shortfall, and that could push the costs of Medicare up in order to combat it. Anyone that says something different is either a liar or clueless.

Conway is the extremist who doesn't represent Kentucky values, as the majority of the state opposed Obamacare and Obama's radical agenda. We don't need another politician in that mold being voted into office.

It's good to see business-friendly and limited government candidates being in place to vote for.

Friday, September 24, 2010

Warren Buffett Losing it? Attacks Tea Party over "Anger"

When you think of Warren Buffett, the first thought that usually comes to mind is one of the greatest investors of all time, with the trained ability to be able to consume economic data in a way that he can make extremely accurate projections of how a company will perform over the long term; something a small handful of people have the skill to do. And Buffett is among the elite in history.

Buffett's problem is in his later years he has increasingly emerged as a big government backer, and as committed to Keynesianism as anyone around, and uses his popularity to justify outrageous spending, especially by his man Obama.

It makes me wonder if the years he spend building his legacy will crumble from these last years of his life, as America rises up against the things he's supporting and backing.

Recently he made the incredible statement that Americans should quit being angry at the government, and get over it. That was a direct attack on the tea party movement, no matter how it is spun later.

After all, while the majority of Americans are already fed up with the Obama administration and their destructive policies, the tea party is the outlet of that frustration, and for Buffett to outright attack them and their anger, goes beyond his pay grade, as some politician said not that long ago.

Buffett said, " is not helpful to have people as unhappy as they are about what’s going on in Washington.”

As Buffett has aged, he doesn't seem as coherent as he was in his youth, and he can make what appears to be contradictory statements about the same issue.

For example, he says we shouldn't be angry, but then says things like this: “The truth is we’re running a federal deficit that’s 9 percent of gross domestic product. That’s stimulative as all get out. It’s more stimulative than any policy we’ve followed since World War II.”

He also recently stated we're still in a recession, something we've continue to say here at Commodity Surge.

So the government is stimulating beyond imagination, stealing from the future of our children and grandchildren, saying they're ready to do it again via the Federal Reserve, but we need to just relax and let the government do what it wants no matter how destructive it is.

Respected or not, Buffett is just another Obama backer who drank the Kool Aid and in a state of being mesmerized, throws away a lot of what he would have opposed in the past.

In reality, it seems Buffett has been afraid of the government because he understands the monopoly it holds, and how it extends beyond its mandate.

That's why if you ever read his Berkshire Hathaway (NYSE:BRK-A) quarterly reports, you'll see he never attacks the outrageous taxes corporations and individuals have to endure from the government, as he knows it'll cost him and his company when he becomes a target.

Also remember that Buffett has stated more than once in the past that he prefers monopolies in the business world, and it seems by extension, he likes how the government can be played to take advantage of their monopoly in a way to advantage Berkshire Hathaway.

In the end, I think Buffett's legacy is going to suffer for his attempt to prop up Obama and his policies, which is doubtful he would put up with from any executive in his numerous companies.

Buffett isn't stupid by any stretch of the imagination, but he abandoned the ways of his father Howard Buffett long ago, who was a champion of limited government and free markets.

It would have better for Buffett if he would have stuck to what he was best at doing, and not venture into politics, which has now stained his reputation, and brought out against the mainstream of American thinking.

Maybe people should starting thinking of boycotting his companies to show them what they think about his words and actions.

If you're not convinced the directly attacked the Tea Party, you don't see what he actually said. The public anger is being expressed through the Tea party movement, and his attempt to strip the anger away from the movement is a direct attack against it, because the healthy anger is driving the vermin out of office; both Democrats and Republicans.

This is evidently too much for even Warren Buffett to put up with, and he couldn't just leave it alone like he should have.

Citigroup (NYSE:C) Convinced Bunge (NYSE:BG) Will Meet Earnings Estimates

Analysts from Citigroup (NYSE:C) say there are convinced Bunge Limited (NYSE:BG) will be able to meet its guidance for earnings per share in 2010.

Bunge's EPS estimate was a range of $3.25 to $3.50 for the year, and for 2011, Citigroup sees them performing above consensus of $5.32, estimating EPS at $5.70.

Two major reasons were given by Citi analyst David Driscoll for the conviction. He said it was "based upon the potential for $120 million ($0.60/sh) in cost savings next year along with improving global demand for oilseeds and the opportunities presented to Bunge arising from tight global wheat supplies."

The price target was upped on Bunge from $60 to $68 a share.

Alcoa (NYSE:AA), Caterpillar (NYSE:CAT) Lead DJIA Higher

Alcoa (NYSE:AA) and Caterpillar (NYSE:CAT) are leading the Dow Jones Industrial Average to the fourth straight week in positive territory. For the month the Dow has gained 8.2 percent so far.

At 12:47 PM EDT, Alcoa was at $12.18, gaining $0.44, or 3.71 percent. Caterpillar stood at $79.89, an increase of $3.63, or 4.76 percent at the same time.

Perceived economic stability and upward revisions in durable-goods orders and sales of new homes for July seem to be the catalyst for the upward move, as August figures show durable-goods orders and sales of new homes were weaker than expected.

Orders for manufactured goods increased in August as well, and news that business confidence in Germany also added to the positive sentiment.

As has been happening throughout September, a large number of equity investors have seemed to pick and choose the economic news they wanted to include in making decisions, and ignore the many bits of news that created a mixed bag at best.

The Dow was at 10849.77, up 187.35, or 1.76 percent at 12:52 PM EDT.

Bernstein Thinks BHP (NYSE:BHP) Bid for Potash (NYSE:POT) Could Reach $156 a Share

A Bernstein analyst today said he believes the bid by BHP Billiton (NYSE:BHP) for Potash Corp (NYSE:POT) could be increased to $156 a share, far above the existing offer of $130 a share.

BHP Chief Executive Office Marius Kloppers has been adamant he won't be increasing the offer, especially to levels where it would offer no value to shareholders in the company.

And while there has been alleged interest from China in bidding for Potash, Bernstein asked the question of why China would make a bid for the company focuses on domestic production and the acquisition of potash from the middle east.

The answer is if China is actually interested in Potash, and it's not a ploy to push BHP's bid up, it would probably be because of their experience with the iron ore industry, which is dominated by three companies, including BHP, Vale (NYSE:VALE) and Rio Tinto (NYSE:RTP), where they were able to name their price because of their dominance in the sector.

If that were to happen with potash, it would cause China to pay much more for fertilizer as their agriculture sector needs to produce significantly more to meet the needs of their people. Another major consortium in Russia has control of the sector on that side of the world, which is even more powerful than Canpotex, which controls the supply end of potash in the region, thus prices, and includes Agrium (NYSE:AGU), Mosaic (NYSE:MOS), and Potash Corp.

So barring a major competitive bid, it would be surprising to see a bid as high as suggested by Bernstein.

Gold Breaks $1,300 Today For First Time, Eases Back

For the first time in history gold hit the $1,300 mark, although it has pulled back some in mid-day trading.

Gold futures broke $1,300 in New York, as the U.S. dollar continues to disintegrate and investors move to protect their capital.

In London bullion traded at an all-time high as well.

The dollar will lose against the euro for the week as the Federal Reserve reiterated they're poised to stimulate the economy once again when needed, even after the wasted $1.7 trillion which miserably failed, although we'll have to still pay it all back.

Gold has broken records in four out of five trading sessions this week, and there's little to stand in the way of that continuing, although there will be corrections along the way.

Gold futures for December delivery rose to $1,300 an ounce on the Comex in New York.

Credit Suisse (NYSE:CS) Upgrades Allegheny (NYSE:AYE) and FirstEnergy (NYSE:FE), Downgrades Entergy (NYSE:ETR)

Credit Suisse (NYSE:CS) took aim at the energy sector, raising the rating of Allegheny Energy (NYSE:AYE) and FirstEnergy (NYSE:FE) while downgrading Entergy Corporation (NYSE:ETR).

Allegheny Energy and FirsEnergy were upgraded from "Neutral" to "Outperform," and Entergy Corporation was downgraded from "Outperform" to "Neutral."

Allegheny closed Thursday at $23.54, gaining $0.29, or 1.25 percent. Volume was up over 30 percent from the 3-month average.

FirstEnergy closed at $37.39, up $0.32, or 0.86 percent. Volume for them was also much higher than the daily average.

Entergy closed at $76.40, falling $0.65, or 0.84 percent. Trading volume increased for them as well.

Mosaic (NYSE:MOS), Agrium (NYSE:AGU), Intrepid (NYSE:IPI) Now Covered by Susquehanna

Susquehanna took aim at the fertilizer industry, initiating coverage on Mosaic Co. (NYSE:MOS), Agrium (NYSE:AGU), and Intrepid Potash (NYSE:IPI).

On Mosaic, they were started off with a "Positive" rating, with a price target of $76 on them.

Susquehanna noted that Mosaic is the largest producer of phosphate in the world, and second in the world for potash. They believe the potash segment of the company is underestimated by investors.

For Agrium, coverage also launched with a "Positive" rating, with a 12-month price target of $96 on them.

Susquehanna especially likes the diversity of the company, and considers them one of the better ways to get exposure to increasing healthy agricultural fundamentals.

They said, Agrium the "most diversified way to gain exposure to rapidly improving agricultural fundamentals."

Along with fertilizer, Agrium is also a top U.S. distributor of seeds and chemicals for crop protection.

Intrepid Potash has coverage initiated with a "Neutral," mostly on concerns over their ability to compete because of the regional focus of the business, which is a strength and weakness.

The strength of being a regional company is the ability to deliver potash a lower cost to local markets. But their weakness is the potential strategies of their larger competitors to go head to head in pricing if they choose.

They have a price target on the company of $26.

Susquehanna expects Intrepid Potash to increase by 94 percent its 2011 potash segment EBITDA, with estimates they'll rise as high as $164 million.

CF Industries (NYSE:CF) Gets Mixed Coverage

CF Industries (NYSE:CF) has received a lot of coverage from companies lately, with two looking positive at the fertilizer company, and one looking negative, with most investors seeming to believe the negative report rather than the two positive ones.

The damage was done by Dahlman Rose, which downgraded CF in the middle of Thursday's trading session, dropping their rating from "Buy" to "Hold." The stock plunged afterwards.

Soleil on the other hand upgraded CF from "Hold" to "Buy," while raising their price target from $105 to $116.

They said CF "embeds a paired trade: long corn and short natural gas."

Earnings per share for full year 2011 was raised from $8.10 to $9.44 by Soleil.

Susquehanna initiated coverage on CF with a "Positive," citing the strength of their nitrogen business.

The company said they consider CF the "purest" nitrogen play in the North American market.

With nitrogen profits expected to explode by Susquehanna, they believe nitrogen EBITDA could could grow as much as 77 percent in 2010, with 2011 adding another 28 percent.

"CF provides the best leverage to surging corn prices, and our
expectations for a 4 million increase in 2011 corn acreage," said Susquehanna.

They have a price target of $129 on CF.

CF closed at $98.68 Thursday, plummeting $2.75, or 2.71 percent.

Constellation Energy (NYSE:CEG) Retains "Equalweight" from Barclays (NYSE:BCS)

Barclays (NYSE:BCS) said it has maintained its "Equalweight" rating on Constellation Energy (NYSE:CEG), while raising their earnings per share range.

"Raising our 2012 EPS to $2.30 from $2.14 and our 2013E is $3.00. We believe the prospects for NewEnergy at a range of $1.00-$1.40 for 2012 produces a range of $2.10-$2.50 for CEG. Getting to the higher end of the range requires $5/mwhr margins on Retail and $3/Mwhr for Wholesale including $0.50/MWhr of portfolio management. A mix shift to larger accounts also helps to control costs. We also include Boston Gen in our forecast starting in 2011."

Constellation closed Thursday at $32.04, gaining $0.04, or 0.13 percent. Volume was down from the 3-month average.

Susquehanna Initiates Coverage on DuPont (NYSE:DD)

Susquehanna initiated coverage on EI DuPont de Nemours & Co. (NYSE:

DD), giving them a "Positive" rating, believing their strong performance will not subside.

Even with the outperformance through August, the company says they should continue to perform at these levels, citing low P/E in comparison to peers as well as low historical averages.

Also noted were the structural changes by DuPont's CEO which should continue to position them to meet their growth and earnings guidance.

DuPont has shown that in the seed business, where they've made an end-run around Monsanto (NYSE:MON) and gained market share against superior seeds with more traits, by emphasizing price and taking advantage of disgruntled farmers.

They did it by asking farmers if the numerous traits of Monsanto were worth the extra cost. A growing number of farmers don't believe it is.

DuPont Closed Thursday at $44.42, dropping $0.20, or 0.45 percent.

The firm has a 12-month price target of $52 on DuPont.

Barclays (NYSE:BCS) Reiterates "Equalweight" on JA Solar (Nasdaq:JASO)

Barclays (NYSE:BCS) reiterated its "Equalweight" on JA Solar Holdings(Nasdaq:JASO), while also raising the price target on the alternative energy stock.

"Checks indicate cell fundamentals could likely remain strong in December (flat cell pricing in December, a good leading indicator for Q1 module demand). Robust cell market fundamentals and relatively strong execution could drive upside to Q3/Q4 fundamentals and street estimates," said Barclays.

Earnings per share for full year 2010 were raised to a range of $1.10 to $1.25, and for full year 2011, from $0.70 to $0.95.

JA Solar closed Thursday at $7.86, dropping $0.03, or 0.38 percent. Barclays' price target was increased from $6 to $8.

Citigroup (NYSE:C) Initiates Coverage on Petrohawk Energy (NYSE:HK)

Citigroup (NYSE:C) started covering Petrohawk Energy (NYSE:HK), starting them off with a "Hold" rating.

Citigroup analyst Robert Morris said in a note to clients that the downward pressure on natural gas prices will continue, and until that changes, there won't be much happening to change the rating.

While Morris likes the move away from conventional natural gas sources in North America to shale projects, especially Eagle Ford and Haynesville, until the supply and demand scenario changes, gas prices will continue to be low in the midst of an abundant supply.

Consequently, Petrohawk has the right production pieces in place, but until the fundamentals for gas prices improve, conditions will stay the same no matter how much resources a company may have.

This is why many natural gas companies have added oil assets recently in order to offset their exposure to natural gas pricing.

It's hard to see anything that will change this for some time.

Petrohawk closed Thursday at $14.95, gaining $0.24, or 1.63 percent. Citigroup has a price target of $19 on them. Not bad in these types of circumstances.

Thursday, September 23, 2010

Teck (NYSE:TCK) Coal Sales Down on Westshore Terminals Capacity Issues

Teck Resources Limited (NYSE:TCK) said coal sales will be down because capacity constraint problems at Westshore Terminals.

The problem will affect coal sales not only for the current quarter, but also for the full year, driving them down.

Estimates for coal sales in the third quarter have been downwardly adjusted to a range of 5.2 million tons to 5.5 million tons, in contrast to original estimates of 5.8 million tons to 6.2 million tons.

Coal sales for the calendar year were downwardly revised from 23.5 million tons to 24.5 million tons to 23 million tons to 23.8 million tons.

Teck is taking interim steps to move their coal as the temporary constraints continue to hurt the business, by seeking alternative terminals to move their coal.

Westshore Terminals said the problem should be mitigated for 2011, expecting all of Teck's deliveries to be loaded for the year.

Warren Buffett: Still in a Recession, Will be "for Awhile"

It was good to hear Warren Buffett admit we are still in a recession, and that we're not going to get out of if "for awhile."

Many analysts and commentators have been slapped down by Buffett's comments, as they have taken any positive bit of economic news and spun it into a real recovery.

Buffett noted at the Burlington Northern Santa Fe railroad owned by Berkshire Hathaway (NYSE:BRK-A), that they were only back to 61 percent of capacity from before the recession, and that is their best performer.

He added that it is probably performing better than the vast majority of businesses in the U.S. at this time, giving somewhat of a loose measure as to where things are at.

Responding to the assertion the recession was over last year by the National Bureau of Economic Research, Buffett rightly laughed, saying "they define it differently" then he does.

His definition of the recession is this: "I define it, I think we're in a recession until real per capita GDP gets back up to where it was before. That is not the way the National Bureau of Economic Research measures it. But I will tell you that to any, on any common sense definition, the average American is below where he was before, or his family, in terms of real income, GDP. We're still in a recession. And, and we're not gonna be out of it for awhile..."

Unfortunately, Buffett continues to adhere to his Keynesianism economic theory, saying the stimulus from the government was the right thing to do, even with the devastation it will cause our children and grandchildren, as well as us.

Buffett said, "And, and basically, the government did the right thing in terms of getting the economy going again."

Amazing that he can be so right concerning the economy and so wrong concerning the outright failed stimulus from the Obama Administration.

Alcoa (NYSE:AA) Continues Upward Climb

Alcoa (NYSE:AA) has drawn a lot of interest over the last couple of days, after moving up close to 5 percent yesterday, and up another 2.5 percent today.

Volume has been strong, already surpassing its 3-month average at 1:40 PM EDT.

There is no known reason Alcoa is moving up, as aluminum prices have remained at about their six-week high.

Alcoa has done a good job of cutting costs, but that is already been factored into the price.

Even so, analysts like the stock over recent months, and it may be based on the probability it may have hit its low and has nowhere to go but up.

But with Alcoa going as aluminum demand and prices go, there's nothing on that end which explain this upswing.

Alcoa closed Wednesday at $11.70, gaining $0.53, or 4.7 percent. There were at $11.97, up $0.27, or 2.26 percent, at 1:44 PM EDT.

How High Can Gold Prices Go During These Times of Market Uncertainty?

The year of 2010 will go down in the history books as a period of financial crisis and uncertainty as markets ponder the direction of future price movements. All eyes have been transfixed on the S&P 500 Index for some indication of what is to come, primarily since most market drivers have settled into direct correlation with the popular index. Gold and the U.S. Dollar, typically inversely correlated, have been dance partners for nearly a year, and have locked on to the S&P 500 index on occasion.

Presently, the stock index has finally broken through its 200-day moving average again, the third time in as many months, but resistance appears to be building as technical indicators signal another overbought condition. Stocks and other correlated market indexes seem to enjoy this sideways motion. Market traders have learned to profit from the predictable swings, but the long-term investor is confused as to where to invest his capital. Invariably, the conclusion reached by many is to invest in Gold where record highs are the norm for this year, as is a continual upward march in bullion values.

Can this trend in Gold prices continue or it just another market aberration brought on by a year of crises and risk-averse capital fleeing to safe havens? For the past decade, Gold has been ramping up in value, unabated by most conditions that have impacted other markets. The recession, whether we are out of it or not, did little to slow down the Gold parade, and its honored status as a “safe haven” has been tested several times in the recent past to no avail. Gold remains impervious to economic data that destroys value on many other fronts.

The following chart provides a longer-term perspective for evaluating present conditions:

This chart suggests that Gold has been in a “recovery” mode for the past decade, making up lost ground on the S&P 500. The price of Gold reached “parity” with the index while the recession was in full bloom and crossed above it in November of last year. Currently, the multiple is 1.12 versus the S&P 500 index, still a bit below the historical average of 1.40. From this perspective, it is easy to argue that Gold has more room to grow

Current Gold prices are due for a slight correction, as buyers and sellers consolidate their positions. Technical indicators, as with the S&P 500, are suggesting that current price levels have run out of momentum, resulting from an overbought status. However, these conditions have occurred four times in the past year, only to be followed by another resurgence in demand.

The surprise for the past year has been that Gold and our greenback have been so tightly entwined together. Traditionally, the two dance partners have been more like oil and water. When one goes down, the other goes up, and vice-versa. The advent of the Euro at the turn of the millennium coincided with Gold’s upward move. As all forex brokers will attest, the “EUR/USD” currency pair bore witness to tradition as the Euro and Gold both strengthened together. That correlation broke down at the beginning of 2010 as concern over debt issues in Europe began to materialize.

If basic correlations have broken down this year, then what are we to believe going forward? A quick review of Gold’s fundamentals may provide the desired insights.

  1. Intrinsic Value: Investors the world over appreciate the metal’s ability to retain value and continue to view it as a primary safe haven;
  2. Hedge Against Inflation: As recessionary forces wane and recovery plans take hold, interest rates and inflation will surely follow, if only delayed by central bank fears of a return to negative GDP growth. Gold has always been valued as a perfect hedge against inflation;
  3. Mining Prospects: Mining interests have had to fight new taxes on their efforts and find new and better extraction methods, but exploration has not suffered, nor discovered any new major deposits;
  4. Industrial Usage: Demand is predictable in this area and can only increase as economic recovery spreads;
  5. Current Inventories: Despite fear mongering by Gold critics, central banks have no plan or cause to release their stored reserves. Even if they did, China would gladly exchange their U.S. Dollar CDs for Gold today.

While markets and traders alike ponder the uncertainty of economic conditions, the price of Gold continues to set new records and bolster its decade-long upward trend. While technical indicators signal that a slight pullback in price level is in the cards, the fundamental outlook for Gold remains unshaken by the market’s inability to clearly see the way forward. Gold futures on December delivery have shown slight declines, but these are part of the expected correction in price levels.

BP (NYSE:BP) Extends Planned Flaring at Carson Refinery

BP PLC (NYSE:BP) told California state environmental regulators that they were going to the original planned period of flaring at its Carson, California refinery will be extended from the three-day period ending Friday, to an additional three days ending on Monday.

Flaring has been done on a regular basis at the plant since the beginning of summer.

BP didn't identify the specific units in the communications with the South Coast Air Quality Management District.

Two employee suffering burns at the Texas City, Texas, refinery of BP remain hospitalized, and the company had safety reviews all day Wednesday in response to the accident.

JPMorgan (NYSE:JPM) Leading Sempra Energy (NYSE:SRE) Share Buyback

Sempra Energy (NYSE:SRE) has enlisted the help of JPMorgan Chase (NYSE:JPM) bank to buy back $500 million in common shares from the market.

The energy company said they'll re-acquire the common shares at a fixed discount based on market averages over the period of the acquisition, which should extend into the first quarter of 2011.

Sempra gained $0.69 a share on Wednesday, closing at $53.60, rising 1.30 percent.

Sempra Energy serves close to 29 million customers around the globe, and engages mostly in the development of energy infrastructure and operation of utilities. They also provide a variety of other products and services related to the energy sector.

Pioneer Southwest (NYSE:PSE) Plummets after UBS (NYSE:UBS) Downgrade

UBS (NYSE:UBS) downgraded Pioneer Southwest Energy (NYSE:PSE) from "Neutral" to "Sell," pushing the share price of the company down Wednesday.

UBS analyst Ronald J. Barone said, "With a portfolio of long-lived, slow decline assets, diverse commodity exposure, significant hedge positions, and a close affiliation with Pioneer Natural Resources (PXD), we have long considered PSE a high-quality upstream MLP. Its consistent, strong performance through varied market conditions since its IPO underscores the benefits of its structure and asset profile. However, PSE units are up - 38% y/y and - 24% YTD and trade with a yield that is 1 STD below its historic average; at these levels, we see downside risk and are downgrading to Sell, from Neutral.

"With superior distribution coverage (1.23x YTD), a very successful acquire and exploit track record, dominant size/scale, and game changing opportunities in the Granite Wash, we believe Linn Energy (Nasdaq:LINE) presents an attractive alternative for investors. In fact, LINE ($34 PT) is our top pick for new money in the upstream MLP space," UBS said in a note to clients.

UBS maintained a price target of $23 on Pioneer Southwest Energy.

Pioneer closed Wednesday at $26.37, down $1.58, or 5.65 percent. Linn Energy closed at $30.27, gaining $0.09, or 0.30 percent.

Goldman (NYSE:GS) Likes Caterpillar (NYSE:CAT) Short Term

Goldman Sachs (NYSE:GS) said they really like the short-term prospects of Caterpillar (NYSE:CAT), and increased their earnings per share and price target estimates for the large equipment company.

Even so, the risk/reward balance over the long term is balance said Goldman, and they maintained their "Neutral" rating on Caterpillar.

Earnings per share estimates for the next three were increased by an average of 10 percent. 2010 was raised to $4.25; 2011 to $5.45; and 2012 to $6.80 a share.

That is dependent on an economic recovery said Goldman, although the strength of commodities and the resultant demand for equipment for miners, and possibly farmers in reference to agriculture, could keep the company growing even if the majority of the rest of the economy sputters.

Many companies had been holding off on purchasing new equipment, and now they must do it, and so that restocking should also benefit Caterpillar in the near term.

The price target on Caterpillar was raised by Goldman from $70 to $77.

Caterpillar closed Wednesday at $76.18, down $0.21, or 0.27 percent.

BP (NYSE:BP) Seeks New PR Head

In a position that may be as hard as capping the failed BP (NYSE:BP) oil well, the energy giant is starting the search for a new public relations leader, as the the company begins its work on healing its diseased reputation.

Since the days in the early part of the crisis when outgoing CEO Tony Hayward committed public relation gaffe after gaffe, the company has been in need of someone in place who can help restore the image of the company.

Now that the oil well is permanently sealed and the focus of the media slowly leaving the company, they have some room to begin working in this regard, and at least something to hang their hat on, although they're just at the beginning process of litigating their way through numerous lawsuits.

The current head of media relations for BP, Andrew Gowers, is expected to stay on at the company, although he'll be reporting to the new communications director when he comes on board.

Citigroup (NYSE:C) Selling Shares in Monex

In its ongoing strategy of divesting of its Japanese assets, Citigroup (NYSE:C) will sell its shares in Monex Group Inc.

The sell of the 503,250 shares will reduce the stake of Citigroup in Monex from 20.6 percent to 3.6 percent, according to a Monex statement.

Citi did say they'll continue to look for retail opportunities with Monex as it continues to exit the brokerage business.

The price of the shares will be determined by Monex sometime from October 4 to October 7

Chief Executive Officer Vikram Pandit said in 2009 after writedown and credit losses of over $100 billion, that they were going to focus on banking going forward, rather than the investment banking side.

Bank of America (NYSE:BAC) Hires Belan for EMEA Metals Unit

Bank of America (NYSE:BAC) has hired Joseph Belan to head up its metals and mining investment banking unit, which covers Europe, the Middle East and Africa.

Belan used to work at Goldman Sachs (NYSE:GS) as leader of their metals and mining EMEA as well, and also at Credit Suisse (NYSE:CS).

In 2009 Belan was interim chief executive and board member of Coalcorp, a portfolio company of Pala.

Belan comes from Pala Investments, a private equity firm, where he also headed up metals and mining EMEA. He starts in his position in November 2010.

Potash (NYSE:POT) Seeks to Block BHP (NYSE:BHP) in U.S. Court

Their latest move against BHP Billiton (NYSE:BHP) by Potash Corp. (NYSE:POT) is to file a complaint against the mining company in U.S. court in hopes of blocking the hostile takeover attempt.

BHP is being accused by Potash of making false and misleadings statements when making the $38.6 billion bid for the fertilizer company.

Potash's board of directors and CEO called the offer "wholly inadequate" at the time.

With only 50 percent of shareholders needing to support the BHP offer, Potash labled BHP as being "unusually coercive," citing the usual two-thirds majority needed to support bids for other companies.

Monsanto (NYSE:MON), CF Industries (NYSE:CF), Mosaic (NYSE:MOS), Agrium (NYSE:AGU) all Revised by Atlantic Equities

Atlantic Equities didn't show a lot of love towards the agriculture sector, as the downgraded a couple of giants, while maintaining their current rating on the rest, including Monsanto (NYSE:MON), CF Industries (NYSE:CF), Mosaic (NYSE:MOS) and Agrium (NYSE:AGU).

Analyst Colin Isaac downgraded Monsanto from "Overweight" to "Neutral," while lowering the price target on the giant seed company from $75 to $65.

For Mosaic, they were downgraded from "Neutral" to "Underweight," with the price target also cut - from $53 to $51.

Agrium was maintained at "Overweight," with their price target being increased from $75 to $85, and CF Industries was also maintained, them at "Neutral," with the price target raised in a big way from $70 to $95.

The price target on Potash (NYSE:POT) was maintained at $95, as well as the "Neutral" rating on the company.

Wednesday, September 22, 2010

BHP (NYSE:BHP) Says Potash (NYSE:POT) Deal Must Add Value

BHP Billiton (NYSE:BHP) CEO Marius Kloppers said he wouldn't increase the offer for Potash Corp. (NYSE:POT) to a place where it would provide good value for the shareholders of BHP (NYSE:BHP).

At the same time, Kloppers reiterated he isn't concerned about the rumor of a rival bid for Potash, as his is the only offer on the table.

Rather said Kloppers, he's focusing on navigating his way through regulatory hurdles and seeking political support in Canada.

He also reiterated that he wouldn't hesitate to walk away from the process if rival bids do emerge and they become too high.

"If somebody offers a price at which we cannot demonstrate value for
our shareholders, we're probably not going to show, and I think that
continues to be the case," Kloppers said.

Concerning what is considered one of the largest stumbling blocks, the eventual leaving of Canpotex, which is basically a price-fixing cartel, although also a marketing arm of Potash, Mosaic (NYSE:MOS) and Agrium (NYSE:AGU), Kloppers said market-based pricing would ultimately generate more revenue than the price-fixing of the cartel.

In other words, margins aren't everything, and the increased amount of sales from market prices would surpass the higher prices set by Canpotex, in Kloppers' view.

BP (NYSE:BP) Oil Spill Health Effects to be Studied

In a study to determine, what, if any, health effects came from the BP (NYSE:BP) oil spill concerning the public or cleanup workers, BP has donated $10 million to the cause.

The preliminary sketches by scientist and doctors has begun, which will hopefully attract thousands of people that had a connection to the spill.

The nonprofit Institute of Medicine was asked by the Department of Health and Human Services to put together a team for the large-scale study.

As there haven't been many oil spills, there hasn't been a lot of work done to deal with how it affects people physically or pychologically.

So far only 8 oil spills have been studied, but none with the level of effect from the BP spill, which could provide a larger pool of participants to get a better idea of the overall effects.

Citigroup (NYSE:C), RBS (NYSE:RBS) Hired to Sell Italian Bond

Citigroup (NYSE:C) and the Royal Bank of Scotland (NYSE:RBS), among others, were hired to sell a new 15-year bond for Italy.

According to the Italian Treasury, also hired for the bond sale were Banca IMI SpA, Deutsche Bank AG (NYSE:DB) and Nomura Bank International Plc.

Based on market conditions, the released statement said there will be more details announced in the near future.

The bond will mature in March 2026.

Citigroup (NYSE:C) Likes Bunge (NYSE:BG) Long Term

Citigroup (NYSE:C) said over the long term they like Bunge Limited (NYSE:BG), citing the strong move in sugar prices recently.

Citigroup analyst David Driscoll said, "We like Bunge's new sugar business and think investors will warm to it as well. We believe that Bunges sugar ethanol investments in Brazil make sense long term, but currently see better investment opportunities in Food over the next 12 months highlighted by Kellogg, our top pick."

Analysts see bioenergy and sugar contributing about 22 percent, or $275 million, to the earnings of Bunge for 2011.

Citi is stronger in its earnings per share projections concerning Bunge for 2011 than consensus, seeing them reaching $5.70, while consensus has earnings at $5.32.

For 2010, Citi projects EPS of $3.25, with consensus at $3.01.

Massey (NYSE:MEE) CEO Says Government Lying in Mine Investigation

Massey Energy chief executive officer Don Blankenship the Mine Safety and Health Administration, saying the isn't even attempting to seriously investigate the Upper Branch mine explosion which killed 29 workers.

More than that though, Blankenship said they're outright lying in an attempt to win publicity wars, rather than perform a legitimate investigation into the matter.

Massey and Blankenship contend the methane involved with the incident leaked in through a floor crack, which resulted in the safeguards in place being overwhelmed. For example, ventilation equipment.

On the other hand, the MSHA set forth a new regulation which requires mines to better manage the coal dust, focusing on that while dismissing the methane issue.

Should We Worry About Gold Now?

A growing number of investors, individual and institutional, have started to get worried about whether or not gold is in bubble territory.

There is nothing to justify those fears, as until the reasons for such strong support for gold are over, gold has every reason to continue on its upward climb, and it will.

That's not to say there won't be any corrections, as there is sure to be one on the horizon sometime soon, probably after a season of time which gold incrementally continues to move up to a point where profits are taken and some type of temporary, supposed positive economic news from somewhere helps the selling along.

But there is nothing in the short term, or mid-term for that matter, that suggests gold is too high, and will come plummeting down to earth.

Even if there was a gold correction stronger than expected, that does nothing to change the underlying fundamentals, and it'll again resume its climb until those things change.

Some of those fundamentals include inflation, deficits, weak U.S. dollar, weak global economy and the sovereign debt crisis in Europe. And even if there is deflation, it would be another reason to own gold.

All these solid reasons are making some investors nervous, as it sounds like too solid of a case, and too predictable.

It's hard to see anything short term which could stop the rise of gold, and that is also worrying to a growing number of people.

It seems the fundamentals supporting gold prices are strong, and there is nothing that could perceivably happen that will change that in any surprising way.

Now over the long term, whenever interest rates are increased again, along with a real economic recovery, that would be a time to seriously look at selling gold.

A secondary, but easy to identify possibility, would be if the regular man on the street starts to irrationally invest in gold without knowing why, other than his friend or neighbor is going it.

In that case, even the reason for high gold prices could be outrun by their exuberance, and bring gold to very high levels which couldn't even in our economic environment be justified.

But again, that won't matter in the long run, as until the fundamentals are no longer in place, gold prices will rise, even if there are significant peaks and valleys along the way.

US Steel (NYSE:X), Steel Dynamics (Nasdaq:STLD, Nucor (NYSE:NUE) Downgraded by Longbow

The steel industry continues to be out of favor, and Longbow Research reflectd that with their downgrades of U.S. Steel (NYSE:X), Steel Dynamics (Nasdaq:STLD and Nucor (NYSE:NUE), although MF Global (NYSE:MF) did upgrade Arcelor Mittal (MT) from "Neutral" to "Buy" in the sector.

US Steel was downgraded from "Buy" to "Neutral," with a price target of $60 kept in place; Steel Dynamics was downgraded from "Buy" to "Neutral," with Longbow keeping a price target of $20 on the company; Nucor was dropped from "Neutral" to "Sell."

Steel prices are expected to remain under pressure for some time, and competition in certain segments like flat roll mill will continue to challenge a number of the steel producers.

Goldman Sachs (NYSE:GS) also downgraded several steel producers recently, including U.S. Steel and Nucor.

Citigroup (NYSE:C) Says BHP (NYSE:BHP) Deal for Potash (NYSE:POT) May Not Go Forward

Citigroup (NYSE:C) said the $40 billion offer for Potash Corp. of Saskatchewan Inc. (NYSE:POT) by BHP Billiton (NYSE:BHP) is in danger of failing, as the company will probably not be willing to increase its bid, and the possibility of a white knight emerging is highly unlikely, even with all the talk about interests from China.

“The probability of a white knight or of BHP overpaying is low, in our view, hence we see a risk that the deal may not proceed,” the Citigroup analysts wrote in a note.

Marius Kloppers, BHP’s chief executive officer, has been holding firm to the original bid of $130 a share, and has given no indication he would be willing to sweeten the offer.

That would be tested if rumors of a Chinese bid were to become a reality.

Kloppers will meet with Canadian lawmakers on Wednesday talk about the bid after pressure for the transaction to be reviewed.

Citigroup (NYSE:C) Says Sell Euro (EUR/USD) Against Dollar

Citigroup (NYSE:C) recommends investors to sell the euro against the dollar (EUR/USD), as it closed in on a one-month low against the U.S. dollar.

Citing technical indicators, Citigroup said investors should take a short position, or in the case of an order to sell, at $1.3095 with a target level of $1.2588.

In a note to clients, Citi technical analysts said, “We believe it is best to wait and see what happens around these levels.”

Lead technical analyst Tom Fitzpatrick said the euro may appreciate to 41.3334 if there is a breakthrough from $1.3158 to $1.3228.

Tuesday, September 21, 2010

Federal Reserve Decides to Do Nothing, About Time

The highly anticipated meeting of the FOMC resulted in a decision that unfortunately not the historic practice of the Federal Reserve, and that was to do nothing and see if the economy will heal itself before initiating any other actions.

After "stimulating" the economy with about $1.7 trillion, and getting no results, it's not surprising to see them hold off here, as the highly unpopular and outrageous spending of the Obama administration will result in a huge political swing in November.

It probably goes without saying there was pressure on the "independent" Fed to do nothing, as it would have probably made things even worse for the Democrats.

Like the last meeting, the Fed did say they stood ready to interfere in the economy again if things continue on as they are.

It's incredible to see the Fed say they're going to wait to see if the weak economy will heal itself after skewing it with the $1.7 trillion.

There can be no doubt this was a political decision, and there was no way a new stimulus or quantitative easing was going to be put into play before the November elections.

The FOMC doesn't meet again till after the elections, which at that time we'll be sure to see the usual response from the Federal Reserve.

Other than ending the Fed, it's too bad they don't do all the time what they did today, but then they wouldn't be considered necessary, as in reality they aren't.

Canada Questioning BHP's (NYSE:BHP) Potash (NYSE:POT) Bid

The Canadian government is attempting to sway public opinion against the bid by BHP Billiton Ltd. (NYSE:BHP) for Potash Corporation of Saskatchewan (NYSE:POT), generating the question on whether or not the bid is good for the Canadian province.

The premier of Saskatchewan, Brad Wall, said, "The question needs to be, 'Are Saskatchewan people, are Canadians better off as a result of this, is our economy stronger as a result of this very large deal?'". We're doing our homework, we'll see what all of that due diligence tells us, but as of today I'm having a hard time answering that question in the affirmative."

This is all smoke and mirrors, as the real issue is the Canadian province extracts royalty fees from Potash, and the announcement by BHP they weren't interested in continuing on with the marketing arm Canpotex, is what's really behind the "better for Canada" issue.

Canpotex is the consortium of Potash, Mosaic (NYSE:MOS) and Agrium (NYSE:AGU), which in reality are a monopoly controlling potash prices in this part of the world.

They are afraid, and rightly so, that BHP will abandon the monopoly once the existing agreements run out, which would lower the price of the fertilizer and Saskatchewan wouldn't receive as much in fees as they had been.

This shouldn't be any of the business of the Canadian government, as they shouldn't have any say in non-legal matters of a company and how it is run or whether it is acquired or not.

Since when does a business equate to a quasi-government entity, where clueless politicians consider an asset of the country and not the shareholders or individuals which own it?

ConAgra (NYSE:CAG) Earnings Plunge 12 Percent

The first fiscal quarter of ConAgra Foods Inc. (NYSE:CAG) wasn't a good one, as the earnings of the company dropped 12 percent, with ConAgra citing tough competition, a weak economy, concerns over inflation and weak sales at the retail level.

Earnings for the quarter came in at $146.4 million, or 33 cents a share. That was down from $165.9 million, or 37 cents a share learning the same period last year.

Revenue also dropped in the quarter, although not dramatically, falling to $2.82 billion, or 2 percent. That was down from $2.89 billion last year. Analysts had been looking for revenue of $2.98 billion.

Chief Executive Office Gary Rodkin said, "Our fiscal first-quarter margins and EPS were lower than planned because of an intense promotional environment and inflation that outpaced cost savings. There were, however, several signs of strength in terms of market share and brand sales, demonstrating progress and growth potential for important parts of our portfolio."

The need to discount to move product was the primary reason for the poor performance, as the largest division of the company, the consumer food unit, dropped 2 percent in revenue to $1.82 billion.

Full year guidance was also lowered by ConAgra, from the former 8 percent to 10 percent growth to 5 percent to 7 percent growth. For the year that would be an earnings range of $1.83 to $1.86 a share.

Consolidated Water (Nasdaq:CWCO) Upgraded by Brean Murray

Brean Murray Carret & Co. analyst Michael Gaugler upgraded Consolidated Water (Nasdaq:CWCO) from "Hold" to "Buy," citing valuation.

Gaugler said, "In the past six weeks the shares have dropped 27%
and are now trading at their historically low P/E levels. The
compelling valuation is backed by a few other key items of interest
which include: 1) shares trading below book value; 2) strong balance
sheet; and 3) potential upside to current estimates if the company
returns to operate the Baugher Bay plant in BVI."

The bottom line is Consolidated may be an acquisition target on these prices.

"The company is now looking like an attractive acquisition candidate, given we believe the shares are now trading at the liquidation value of the assets," Gaugler said.

Gaugler has a price target of $12 on the company.

Barclays (NYSE:BCS) Maintains "Overweight" on ReneSola (NYSE:SOL)

Barclays (NYSE:BCS) reiterated its "Overweight" on ReneSola Ltd (NYSE: SOL), with a price target of $12 a share.

"Wafer market tightness could continue to drive near-term positive earnings momentum and share price outperformance, in our view. Shares are trading at - 6x our '11 estimates, at a discount to Chinese solar peers. Bull case '11 earnings power of $2.50 likely assuming shipments/pricing trends turn out to be in line with mgmt expectations. Downside risk limited to $9, upside potential to $12-$14 likely, in our view," said Barclays' analyst.

ReneSola closed at $10.87 Monday, gaining $0.59, or 5.79 percent. They have a market cap of $938.66 million.

BP's (NYSE:BP) Joint Venture TNK-BP (RTS:TNBPI) Signs Supply Deal with Vietnam

BP (NYSE:BP) has inked a contract via its Russian joint venture TNK-BP (RTS:TNBPI) to supply ESPO crude oil blend to Vietnam, as the company is set to acquire assets held by BP in the country.

The deal, which was signed with state-run PetroVietnam, will launch its first cargo in November, which will be a load of 100,000 tons at the Pacific Ocean port of Kozmino.

In a statement, Maxim Barsky, deputy chairman of TNK-BP's management board, said, "We are committed to establishing a long-term presence in Vietnam and to pursuing joint projects in the upstream and refining sectors."

TNK-BP is also going to bid on rights to two large oil fields in Russia, the Trebs and Titov.

Wisconsin Energy (NYSE:WEC) Upgraded by Goldman Sachs (NYSE:GS)

Commenting on several energy and utility companies, Goldman Sachs (NYSE:GS) ranked Wisconsin Energy (NYSE:WEC) among their favorites of those they took a look at.

Goldman raised Wisconsin Energy (NYSE:WEC) from "Neutral" to "BUY."

What was attractive to Goldman about the company was the raising of its estimates because of higher transmission earnings. They also said they're planning on increasing the dividend to a significant level sometime in the next several months.

Other companies Goldman upgraded and downgraded were El Paso Electric (NYSE:EE), which they upgraded to "Neutral," and Great Plains Energy (NYSE:GXP) which they downgraded to "Neutral."

BP (NYSE:BP) Claims Can be "Bundled" says Barbier

U.S. Disrict Judge Carl Barbier has given the go ahead to allow claims against BP (NYSE:BP) to be placed in what are being called "pleading bundles," which both the defense and plaintiff lawyers agreed to.

Another agreement was made concerning the complaint process itself, which will be simplified in order to make the filing go quicker.

How that will work is the lawyers of the oil companies will put together a "master" complaint which includes all the causes of action brought against Transocean (NYSE:RIG), Halliburton (NYSE:HAL) and BP, or other oil companies connected to the oil spill.

After the plaintiffs file the master complaint, defense attorneys will be able to respond with a "master" answer.

From there, anyone who wants to file a lawsuit can simply check off every cause of action against the oil companies they want to go after.

An example of what a pleading bundle would entail is a grouping of those claiming economic losses, such as hotels and restaurants.

Morgan Joseph Downgrades Monsanto (NYSE:MON)

Monsanto (NYSE:MON) was slashed by Morgan Joseph from "Buy" to "Hold," not long after they had reiterated a "Buy" on the company in the early part of September.

The seed company had been doing fairly well in the Monday session before the downgrade, which brought them into negative territory soon after.

Monsanto closed Monday at $55.54, down $0.68, or 1.23 percent.

Volume was about a million above the 3-month average, hitting 7,733,725.

Sempra (NYSE:SRE), RBS (NYSE:RBS) Sell Noble Group (SI:NOBG) Sempra Energy Solutions

Sempra Energy (NYSE:SRE) and The Royal Bank of Scotland (NYSE:RBS) announced they've sold their Sempra Energy Solutions to Noble Group for the assumption of debt $265 million in and $317 million in cash.

The Sempra Energy Solutions unit was the retail commodity marketing arm of the joint venture between the two companies.

RBS-Sempra Commodities sold their global metals and oil business to JPMorgan Chase (NYSE:JPM) in July, along with its European natural gas and power business, which was the first step in the sale of assets by the joint venture.

RBS and Sempra said their final asset sale of the joint venture, the North American wholesale power and natural gas business, is in the latter part of negotiations.

The deal with Noble should close sometime in the fourth quarter.

RBS as been required to sell some of its assets in response to antitrust concerns in the European Union.

Recession Over, Happy Days are Here Again?

The pathetic notion set forth by the National Bureau of Economic Research group that the recession has been over since 2009 can't even be taken seriously.

While they attempt to say they took other things into consideration, the key factor was the GDP. The problem and joke with that is throwing of money at the problem via the stimulus is included in the jacked up numbers of the GDP, giving the illusion of a recovery.

That's why when the gimmicks and money ran out, the naked economy was revealed to be what it continues to be: recessionary, and possibly heading to a depression.

The usual attempt to slap this type of garbage down by pointing to the obvious in relationship to no jobs being created is largely ignored, and simply identified as historically being a "lagging indicator." That was also said concerning the depressed housing market as well, among other lagging indicators.

Bizarrely they said the continuing downturn in the US could inflict long-term damage on the economy, resulting in long-term unemployment. All of this with no recession. Amazing how bad things can get in a "recovery."

One thing I do like that these people publicly stated was if there is an economic downturn, it'll be a new recession, not a continuation of the one that allegedly is over.

What time will surely tell - and hopefully will result in the removal of these people who aren't anybody from being taken seriously as economists - is the recession in fact never ended, and covering their rearends by saying if there is a new recession it's not connected to the old one, will expose their agenda and intentions.

That statement that if there is another recession it's a new one, is meaningless. We must accept their conclusion they're telling us, and they're actually trying to control the future outlook for the ongoing recession by saying it will be a new one.

In other words, it's an attempt to protect Keynesianism. If the stimulus is said to have failed, and the recession has continued on, it blows away the anemic economic theory on the spot, leaving even more confusion and needed explanations as to what is really going on.

The answer to economic weakness isn't the government or central banks, it's the removal of barriers to businesses and allowing the free market to thrive.

There can be no doubt we're still in a recession, and no manipulation of the numbers or data can change that fact. Happy days aren't here again, and there is no yellow brick road to follow. As a matter of fact we can rightly say, "goodbye yellow brick road."

Citigroup (NYSE:C) Says Comverge Likely (Nasdaq:COMV) Target

The recent announcement that Constellation Energy (NYSE:CEG) would be acquiring CPower has Citigroup (NYSE:C) thinking Comverge (Nasdaq:COMV) could very well become a takeover target.

Comverge has plummeted in value in just a couple short months, dropping at times almost 40 percent since the latter part of July.

The inability to control operating costs has been the major problem with Comverge, and if a company were to acquire them with the will and ability to cut costs, said Citigroup, they would probably be able to turn that around.

Possible suitors according to Citi are Progress Energy (NYSE:PGN), RRI (NYSE:RRI), Allegheny Energy (NYSE:AYE), Calpine (NYSE:CPN), or even Constellation Energy.

Citi maintains their "Hold" rating on Comverge, while dropping their price target from $13 to $8 a share. Comverge closed Monday at $6.90, gaining $0.30, or 4.55 percent.

Volume was almost four times the 3-month average of 153,639, ending the day at 605,402.

Monday, September 20, 2010

Morgan Stanley (NYSE:MS): US Dollar (USD) Selling to Increase

Morgan Stanley's (NYSE:MS) Calvin Tse says he sees the U.S. Dollar (USD) being sold off at a quicker pace, with the pressure to sell remaining on the greenback.

Tse said, "As has been the theme, we saw continued USD selling this week. Indeed, USD has been sold for the fourth week in a row. Bigger picture, this represents USD selling for 14 out of the past 15 weeks. Moreover, last week’s flow was in the seventh percentile, indicating that USD net selling has only been greater than this amount 7% of the time over the past two years.

"On the back of strong USD selling on high volume, our gauge is indicating that USD selling momentum has entered into significant levels. Our reading is close to -3.0, which signals heavy USD-bearish momentum. The last time we’ve seen levels as extreme as this was in mid-August."

Everyone is looking toward the Fed meeting tomorrow to see what is said as well, with gold investors and U.S. dollar investors ready to make decisions if quantitative easing is even hinted at.