Most mergers are driven by the notion, sometimes wildly mistaken, that the combination will bring both a competitive advantage. Some pairs of companies, however, seem so intuitively right for one another, no bottom-line considerations should be allowed to interfere with their matrimony. Like a slot machine and a blue hair with a pocket full of quarters, these two were meant for one another.
Dollar General is a leader in recreational shopping for the denominationally challenged. If you have a hankering for neon-colored plastic, something covered in polyester fur, food with the half-life of uranium-235 or clothing with the style of Piltdown Man, DG is your go-to source.There you'll find shelf after shelf of non-essentials, the kind that end up in storage sheds. Currently, the 8,260-store company is in the process of merging with Buck Holdings LP.
If this deal falters, though, how about a merger with Public Storage? PSA (I'm a little uneasy with a company whose stock ticker is the name of a prostate cancer screening test, by the way) is a REIT with direct and indirect interest in over 2,000 self-storage developments in the U.S., containing, I'm sure, a great deal of material from Dollar General. The merger would be an excellent opportunity to double-down on America's seemingly inexhaustible need for more stuff.
The markets made mild gains closing out the holiday week on lighter volume. The Dow gained 203 points this week to close at 13611.68 a 1.5% gain for the week.
The NYSE had volume of 2.3 billion shares with 1,971 shares advancing while 1,285 declined for a gain of 49.15 points to close at 1,0075.39. On the NASDAQ, 1.6 billion shares traded, 1,740 advanced and 1,259 declined for a gain of 9.86 to 2,666.51.
Top Tech Titans Constant reinvention of who you are, what you produce, and how you sell it is critical for any tech player. BusinessWeek's annual list of top companies is led by Amazon.com this year. They have moved well beyond retail and are one of the most innovative tech companies. Other companies ranking highly include Apple, AT&T, Nintendo, Microsoft, Research in Motion, Accenture and Telefonica. The Info Tech 100
How to Marry a Billionaire Sure, the challenge is steep. But this field guide to the mating habits of the ultrarich shows just what it takes to land Mr. or Ms. Big. How to marry a billionaire - MONEY magazine
Top Home Sellers' Markets Looking to unload your property? It pays to live in these areas, where conditions are ripe for a quick sell. Raleigh, NC tops the list where a robust local economy continues to yield high job creation figures and migratory outsiders. Other top places include San Francisco, Austin, San Antonio and St. Louis. Top Home Sellers' Markets - Forbes.com
Google Is Watching You Kevin Bankston didn't think anyone would notice his little cigarette break. His family didn't know he sometimes snuck a smoke. He was shocked when, in May, he found out he was caught on candid camera -- possibly smoking -- this time by Google's new "Street View" map service. Bloggers began buzzing about Bankston's double-lightning-strike luck, and the two photos now appear all over the Internet. A Web search for "Kevin Bankston smokes" reveals more than 20,000 links. Brankston says he felt embarrassed and a bit spied upon. Brankston who coincidentally is one of the leading advocates for digital privacy is trying to turn his personal problem into a larger point: In the quest to fill the Web with information, online companies are often trampling on individuals' right to privacy. So, what else does the Internet know about us? Google Is Watching You - BusinessWeek
The Doctor's In, But It'll Be a While Despite spending lots more per capita on health care than any other country, the U.S. is often as bad or worse than other industrialized nations in wait times. Changing demographics are only worsening the problem. Patients are getting older and sicker and requiring more care. But a new generation of doctors, half or more of them women, is no longer interested in working long, grueling hours. Low insurance reimbursements and heavy paperwork loads also limit physicians' willingness to see any patient any time. The Doc's In, but It'll Be a While
The Baby-Name Business -- What's in a Name? Stress Name choices have long been agonizing for parents. Some claim to suffer from "namer's remorse," but with a host of resources on the fast-growing market most are likely suffering from information overload. To deal with the pressure, many are hiring consultants to help pick names that set their children apart. The Baby-Name Business - WSJ.com
An American Idol Cracks Kelly Clarkson's latest album has set off a cascade of fiascoes that represent the first downturn in a career that had only skyrocketed. Hollywood Report - WSJ.com
So, you run a chain of stores where everything costs a dollar and you are wondering how to advertise it. One of the biggest such outfits in the U.S. does so simply by referring to its shopping experience as the "Thrill of the Hunt."
Dollar Tree Stores (NASDAQ: DLTR) runs a network of about 3,300 discount variety stores in 48 states, operating under Dollar Tree, Deal$, Dollar Bills and Dollar Express banners. The stores offer housewares, toys, seasonal items, food, health and beauty aids, gifts and books. All items are priced at one dollar. The outlets are generally located in high-traffic strip centers, anchored by mass merchandisers and supermarkets. Dollar General (NYSE: DG) and Family Dollar Stores (NYSE: FDO) are major competitors.
The firm pleased investors earlier in the week, when it reported Q1 EPS of 38 cents and revenues of $975 million. Analysts had been looking for 37 cents and $966.4 million. Management also guided Q2 EPS to 29-32 cents (31 cent consensus), Q2 revenues to $960-$985 million ($963.64M consensus), FY08 EPS to $2.00-$2.12 ($2.10 consensus) and FY08 revenues to $4.28-$4.38 billion ($4.30B consensus). The news kept DLTR shares cycling through a positive three month trading channel. The price is currently at the base of that channel, where Momentum and Stochastic technical parameters suggest the potential for a rise back toward the top.
Brokers recommend the issue with four "strong buys," three "buys" and 10 "holds." Analysts expect a 13% average annual growth rate through the next five years. The DLTR Price to Cash Flow ratio (11.87), Price to Free Cash Flow ratio (18.00), EPS Growth rate (22.58%), Return on Assets (10.46%) and Return on Investment (12.83%) compare favorably with industry, sector and S&P 500 averages.
Institutional investors hold about 95% of the outstanding shares. The stock is one of those used to calculate the S&P 400 MidCap Index. Over the past 52 weeks, it has traded between $23.90 and $44.12. A stop-loss of $36.95 looks good here.
I didn't complain when John Kerry appeared on the $20 bill (stop and take a look; I'll wait), but 20th Century Fox (Owned by NewsCorp, NYSE:NWS) has taken the misuse of American money to a new low by altering 40,000 U.S. mint quarters with an advertisement for their latest Fantastic Four movie. The Franklin Mint altered the image on the back of California quarters to show the Silver Surfer character from the upcoming film, "Rise of the Silver Surfer," probably to tempt people like me to write stories like this, confident that there is no such thing as bad publicity.
According to a story on Superheroflix.com, the quarters will be distributed across the country in especially outfitted silver armored cars and dumped into general circulation. Those lucky enough to find such a quarter can then register for prizes including a chance to win a trip to the world premiere in London.
The U.S. Mint has already informed Fox that such use of American tender for advertising purposes is illegal. Duh. I strongly suspect this comes as no surprise, but that they believe any penalty will be more than offset by the press received.
If this works, look for 20th Century Fox ads on our twenty dollar bills, Tenneco (NYSE:TEN) ads on tens, ads for T-Mobile's Fav5 on fives, Dollar General (NYSE:DG) logos on dollars, and casino ads on Sacagawea dollar coins.
Tom Petruno at the Los Angeles Timesmakes a strong case [registration required] for strength in companies catering to working-class folks as opposed to hedge funds managers and Hollywood types. The trend has been in the opposite direction in recent years. Consider this: "On Wall Street, Coach Inc. (NYSE: COH) versus Wal-Mart Stores Inc. (NYSE: WMT) hasn't been much of a contest since 2000. The high-end leather goods maker's stock price is up 1,326% since then; shares of Wal-Mart, the retailer to the masses, are down 9% in the period."
But here's what's changed. Wages are rising: "Average weekly earnings of U.S. production workers rose 4.4% in the 12 months through March, according to the Labor Department. That was up from a 3.8% increase in the 12 months ended in March 2006 and a mere 2.6% in the period before that." Worker incomes rose 1.1% in the first quarter, the largest such rise in six years.
At the same time, growth in corporate profits is slowing. So if you decide to go with the hypothesis of working- and middle-income people having more money to spend, here are two stock picks:
America's Car-Mart (NASDAQ: CRMT) is the other company from Bentonville, Arkansas. These guys specialize in buy-here, pay-here used cars, and have struggled recently with an increase in bad loans, but are making efforts to tighten up. If people are making more money, they'll want new cars, and they might even be able to afford their car payments. Pat Dorsey of Morningstar suggest CarMax Inc. (NYSE: KMX), but Car-Mart is smaller and looks a little cheaper. Plus they're from Bentonville, so they must be good.
According to the Wall Street Journal, discount/single-price point stores like Family Dollar Stores Inc. (NYSE: FDO), Dollar Tree Stores Inc. (NASDAQ: DLTR), and the soon to be KKR owned Dollar General Corp. (NYSE: DG) are growing in popularity [subscription required] with consumers, reporting solid same-store sales growth and expanding sales of food products. According to Family Dollar CEO Howard Levine, "The low-income customer is always stressed and always strained. When things like a minimum-wage increase happen, that's a great benefit to them. When gas prices come down, that's a great benefit to them, and conversely when they go the other way, that has a negative impact."
Because of sky-high real estate prices in my area, we have no dollar stores. There used to be one in a local mall but it got replaced by a jeweler. I'm not kidding. However, anytime I'm traveling, I go to a dollar store, not because I'm "always stressed and always strained," but because it's fun. I was recently driving with my brother and we passed a Family Dollar and I practically ordered him to turn the car around. He reluctantly agreed with only this protest: "You are such a loser."
Discount general merchandise retailer Dollar General Corp. (NYSE: DG) had the kind of earnings in 4Q 2006 one would expect from a company closing over 400 underperforming stores and liquidating that inventory. Although the short term numbers are not good, they are more or less in line with what Dollar General forecast it would cost to shed that much baggage. Last week, Dollar General reported fourth-quarter net income of $50 million, or $0.16 per share. This compares with 4Q 2005 net income of $145.3 million, or $0.46 per share. For the full year 2006, Dollar General reported net income of almost $138 million, $0.44 per share, compared with full year 2005 net income of $350 million, $1.08 per share.
Dollar General marked down over $279 million worth of inventory, and had closing related costs of almost $33 million. It is not surprising its earnings were not favorable. Despite these factors, 4Q net sales were still $2.5 billion, up 3% from 4Q 2005. Net sales for 2006 were $9.17 billion, an increase of almost 7% over 2005. Dollar General also repurchased 4.5 million shares of its common stock for $80 million.
Dollar General still has very strong cash flow and continues to operate over 8,000 neighborhood stores. These factors convinced affiliates of Kohlberg Kravis Roberts & Co. (KKR) to purchase Dollar General for $22 per share, a slight premium over the closing price of $21.11 on 4 April 2007, but at a 31% premium at the time of the deal in March.
A deal for the telecom company would be worth about CAD$30 billion (over USD$25 billion), making it the largest acquisition in Canadian history and one of the largest buyouts ever, according to the Globe and Mail newspaper. KKR is looking for Canadian partners such as the Ontario Teachers' Fund since foreign firms are prohibited from owning more than 46% of a telecom company's voting shares.
Shares of BCE were up 12% pre-market trading. They have dropped about 4% this year.
KKR already has its hands full:
The New York-based buyout firm is part of the $45 billion TXU Corp. (NYSE: TXU) deal, the largest buyout ever. KKR also is among the companies in the hunt for Australian retailer Coles Group Ltd. Last month, it agreed to buy Dollar General Stores Corp. (NYSE: DG).
Apparently, there's no limit to the number of multi-billion acquisitions that KKR can juggle at the same time.
MOST NOTEWOTHY: ConocoPhillips (COP), InfoSpace, Inc (INSP), Verizon Communications (VZ) and Advanced Micro Devices (AMD) were some of today's more notable downgrades:
Goldman Sachs downgraded ConocoPhillips (NYSE: COP) to Neutral from Buy.
Stanford cut InfoSpace Inc (NASDAQ: INSP) to Sell from Hold as the firm believes shares are overvalued since the company has no clear plans to reignite growth.
Buckingham downgraded Verizon Communications (NYSE: VZ) to Neutral from Accumulate.
Advanced Micro Devices (NYSE: AMD) was cut to Hold from Strong Buy at Matrix as the firm believes growing competition is driving down selling prices and narrowing margins.
OTHER DOWNGRADES:
Goldman downgraded Anadarko Petroleum Corp (NYSE: APC) to Sell from Neutral.
Merriman cut Fiberstars, Inc (NASDAQ: FBST) to Neutral from Buy.
Bank of America downgraded Dollar General (NYSE: DG) to Neutral from Buy.
Cantor cut AudioCodes Ltd (NASDAQ: AUDC) to Hold from Buy following the company's lowered Q1 outlook.
One of the land's dollar store chains has been sold, as Dollar General (NYSE:DG)has agreed to be taken private by equity firm Kohlberg Kravis Roberts & Co. for $6.9 billion. KKR plans to speed up the chain's existing plans to close stores in order to boost profit.
Dollar General is the retailer with the most stores open in the U.S., with about 8,260 discount stores all across the nation. Many stores are located in rural towns and sell food, cleaning supplies and household goods. Yes, there are towns where Wal-Mart (NYSE:WMT)and Target (NYSE:TGT)stores don't exist --- and Dollar General's strengths are in those markets. The problem is not all are making the chain a decent enough profit.
In the last seven years, Dollar General has literally doubled its store count, and with that came slower and declining profits. Wal-Mart starting pecking away at Dollar General's profit as more and more customers apparently opted to shop at only one discounter for all their needs. Dollar General also said late last year that it would close down about 400 stores and slow its expansion. This LBO will allow Dollar General to do what they need to in order to restore profit without quarterly results pressure from the market. I believe this is a good move.
MOST NOTEWORTHY: Some of today's more notable downgrades include Accredited Home Lenders Holding Co (LEND), RadioShack Corp (RSH) and Shuffle Master, Inc (SHFL):
Keefe Bruyette cut Accredited Home Lenders Holding Co (NASDAQ: LEND) to Underperform from Market Perform, saying the downturn in the subprime market raised liquidity concerns on the stock.
RBC downgraded RadioShack Corp (NYSE: RSH) to Underperform from Sector Perform, explaining that cost cutting measures are largely complete and margin expansion estimates are too aggressive.
Shuffle Master Inc (NASDAQ: SHFL) was downgraded to Hold from Buy at Jefferies, citing the lack of visibility into the company's placements and potential IP protection risk in Macau. Shuffle Master was also cut to Underperform from Peer Perform at Bear Stearns following the company's announcement that it will have to restate prior financial results.
OTHER DOWNGRADES:
UBS downgraded shares of Marvell Technology Group (NASDAQ: MRVL) to Reduce from Buy, citing risks to HDD demand given upcoming launches by Apple (NASDAQ: AAPL) of NAND-based Video iPods. The analyst expects HDD weakness to phase in and not collapse, but sees limited growth in the HDD segment.
Roth Capital cut WPT Enterprises, Inc (NASDAQ: WPTE) to Sell from Hold, citing valuation, reduced earnings expectations and execution risk related to bringing the online gaming business in house.
China Eastern Airlines Corp (NYSE: CEA) was downgraded to Underweight from Equal Weight at Morgan Stanley.
China GrenTech Corp (NASDAQ: GRRF) was downgraded to Neutral from Positive at Susquehanna.
RBC cut Nova Chemicals Corp (NYSE: NCX) to Sector Perform from Outperform.
Sandler downgraded shares of OceanFirst Financial (NASDAQ: OCFC) to Hold from Buy.
Citigroup downgraded Dollar General Corp (NYSE: DG) to Hold from Buy.
The markets are higher today, with mild gains fueled by optimism after some big takeover deals helped lift investor's spirits. With warmer weather there was also some weakness in Oil futures as they fell about a dollar a barrel. In economic news, for the first five months of the fiscal year the federal deficit is 25% lower than last year as tax receipts are larger than expected. What this means is that as people prosper -- in what has been very good economic growth over the last few years -- they pay more in taxes to the government. Those unexpected taxes drive down the federal deficit.
The NYSE had volume of 2.6 billion shares with 2,154 shares advancing while 1,142 declined for a gain of 25.94 points to close at 9120.93. On the NASDAQ, 1.6 billion shares traded, 1,766 advanced and 1,276 declined for a gain of 14.74 to 2,402.29.
4 Great Companies With Overvalued Stocks To some investors, great companies and great stocks are inherently synonymous. Unfortunately, this is not the case, and investors who ignore this crucial fact are certain to experience subpar returns. Morningstar found four companies with business models, well-known brands, and solid management, but whose stocks are overvalued. They include Google, Coach, Amazon.com and T.Rowe Price. Four Great Stocks That Cost Too Much
Best Values in Private Colleges These schools offer aid that slashes the cost of a private education. The combination of academic excellence and financial flexibility puts liberal arts college Swarthmore, near Philadelphia, and private California Institute of Technology, in Pasadena, at the top of Kiplinger's 2007 rankings for the best values among private institutions. 100 Best Values in Private Colleges Top 50 Liberal Arts Colleges Top 50 Private Universities
Why Your Home Isn't the Investment You Think It Is It may be late for a lot of homeowners to read this, but here it goes anyway: It's risky and bad planning to have too much of your net worth in your principal residence. Homes have become the retirement plan for many people, who figure they can sell when they're ready, and live off the gains. But those gains aren't nearly as great as homeowners think. Here's a rundown of some financial issues of home owning. Why Your Home Isn't the Investment You Think It Is - WSJ.com
American's Clueless About Taxes Here's some tax trivia for you: What is this year's deadline for filing your taxes? If you answered April 15, don't feel bad. In fact, over three quarters of 1,000 people polled in a recent survey failed to answer correctly. According to a new H&R Block survey less than 50% of American's know about the telephone tax refund, child tax credit and the alternative minimum tax(AMT). While ignorance can be bliss for those Americans that rely on a tax professional or tax preparation software, a lack of tax knowledge can be quite painful for a lot of Americans. Americans don't know jack about taxes - CNNmoney
The One Tax Scam to Really Worry About It's easy to avoid most of the IRS' 'dirty dozen' tax scams, except for one. You don't need to be a tax expert to realize that most of the tax scams do not appear legitimate. Most of the scams "seem to be based on greed and wishful thinking." The dirty dozen scam taxpayers really need to worry about is No. 6, "return preparer fraud." It's easy to avoid most of the IRS' top tax scams, except for one - MarketWatch
Rewards Programs With the Most Bang for the Buck Just how rewarding is your credit card's rewards program? It's a question more consumers ought to be asking. We crunched the numbers to find the best value in credit-card awards programs. Also, here are five strategies to try to maximize your points value. The Rewards Programs With the Most Bang for Your Buck - SmartMoney.com
Billionaire Bachelors It's time to stop scouring the grocery store aisles and singles bars and start checking out Forbes' annual list of billionaires. Among the ranks are about 100 eligible men, including singles, divorcees and widowers. The group includes the Google founders, a German prince, a former Olympic hockey player and a former fire-breathing accordion player. Billionaire Bachelors - Forbes.com
Billionaire Divorcees "Don't get mad--get even!" Ivana Trump famously declared after her 1992 divorce from billionaire husband Donald. Seems that many billionaire divorcées have since taken her advice to heart. Ending a marriage is no simple process for anyone, but the armies of lawyers, heated media attention and public displays of greed that often accompany mega-rich split-ups raise the stakes (and acrimony levels) a few notches. Billionaire Divorcees - Forbes.com
Apple Inc. (NASDAQ:AAPL) troubles in Europe over its iTunes practices are far from over if the European Union consumer chief Meglena Kuneva has a say in the matter. The chief talked about the iPod/iTunes bundling issues arguing it limits consumer free use of purchased songs.
The Wall Street Journal reported that top two executives at Intel Corp. (NASDAQ:INTC) have not complied with a company directive to retain e-mail relevant to antitrust litigation against the company from rival Advanced Micro Devices Inc. (NYSE:AMD).
300 Spartans made Time Warner Inc.'s (NYSE:TWX) Warner Bros. $70 million this weekend. "300" - the movie about the 300 Spartans who had fought off a much larger Persian force in an epic battle brought in more crowd than the top ten movies combined. Next was "Wild Hogs" from the Walt Disney Co. (NYSE:DIS) Disney studios that made $28 million for a total of $77.4 million.
After sinking more than 5% on Friday Yahoo Inc. (NASDAQ:YHOO) shares are up 0.45% in pre-market trading. The sell-off was triggered by fears following unconfirmed report in The Wall Street Journal about a setback in a lucrative partnership with AT&T Inc. (NYSE:T) that could undercut Yahoo!'s gains.
I wonder whether the publicity Starbucks Corp. (NASDAQ:SBUX) is getting right now in China is a good one even though some say all publicity is good publicity. A Chinese parliament member added his voice to the campaign, demanding that a Starbucks coffee shop set up inside Beijing's Forbidden City be closed. Starbucks removed its logo but didn't close the store after the campaign was launched two months ago.
Dollar General Corp. (NYSE:DG) has agreed to be acquired by private equity firm Kohlberg Kravis Roberts & Co. L.P. in a deal valued at $7.3 billion, including approximately $380 million of debt. Dollar General competes with Wal-Mart Stores Inc. (NYSE:WMT).
JC Penney (NYSE:JCP) and Kohl's Corp. (NYSE:KSS) were upgraded at UBS from Neutral to Buy. Nokia Corp. (NYSE:NOK) was upgraded by Oppenheimer from Neutral to Buy. Advanced Micro Devices Inc. (NASDAQ:AMD) was downgraded by Thomas Weisel from Overweight to Market Weight.
Most mergers are driven by the notion, sometimes wildly mistaken, that the combination will bring both a competitive advantage. Some pairs of companies, however, seem so intuitively right for one another, no bottom-line considerations should be allowed to interfere with their matrimony. Like a slot machine and a blue hair with a pocket full of quarters, these two were meant for one another.
The markets made mild gains closing out the holiday week on lighter volume. The Dow gained 203 points this week to close at 13611.68 a 1.5% gain for the week. 
had been looking for 37 cents and $966.4 million. Management also guided Q2 EPS to 29-32 cents (31 cent consensus), Q2 revenues to $960-$985 million ($963.64M consensus), FY08 EPS to $2.00-$2.12 ($2.10 consensus) and FY08 revenues to $4.28-$4.38 billion ($4.30B consensus). The news kept DLTR shares cycling through a positive three month trading channel. The price is currently at the base of that channel, where Momentum and Stochastic technical parameters suggest the potential for a rise back toward the top.
I didn't complain when John Kerry appeared on the $20 bill (stop and take a look; I'll wait), but 20th Century Fox (Owned by 
According to the Wall Street Journal, discount/single-price point stores like 
One of the land's dollar store chains has been sold, as Dollar General (NYSE:
The markets are higher today, with mild gains fueled by optimism after some big takeover deals helped lift investor's spirits. With warmer weather there was also some weakness in Oil futures as they fell about a dollar a barrel. In economic news, for the first five months of the fiscal year the federal deficit is 25% lower than last year as tax receipts are larger than expected. What this means is that as people prosper -- in what has been very good economic growth over the last few years -- they pay more in taxes to the government. Those unexpected taxes drive down the federal deficit. 
Main market news 
With the Fed Funds rate at 2%, why are mortgage rates so high?
Cramer on BloggingStocks: Banks fail to raise money when they could 
Check your bank's safety rating
