Jim Cramer's Mad Money Review

Texas Utilities (NYSE: TXU - News), Exelon Corp. (NYSE: EXC - News), Edison International (NYSE: EIX - News), Dominion (NYSE: D - News): Since the Texas Utilities buyout "changed the equation," Cramer says he is "scared to death to bet against this group," and adds that EXC, EIX and D are all undervalued.
Total System (NYSE: TSS - News), Synovus (NYSE: SNV - News), Aon (NYSE: AOC - News), Marsh McLennan (NYSE: MMC - News), Ross Stores (NasdaqGS: ROST - News), Cheesecake Factory (NasdaqGS: CAKE - News): Cramer lists companies that could get snapped up it the private-equity buyout frenzy: TSS and parent company SNV, Aon and "headless horseman" MMC (whose CEO Michael Cherkasky may soon end up on Cramer's CEO Wall of Shame), ROST, and CAKE.

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Labels: AOC, CAKE, D, EIX, EXC, Jim Cramer, MMC, ROST, SNV, Stop Trading, TSS, TXU

Wall Street flattened Monday as investors theorized that last week's robust jobs data lessens the likelihood that the Federal Reserve will cut interest rates. Their disapppointment offset upbeat speculation about a takeover bid for Dow Chemical Co.
Since the market was closed for Good Friday, traders got their first opportunity to react to Labor Department data that showed stronger-than-expected job growth in March. The numbers indicated the economy might be in better shape than previously thought, and helped offset concerns about a continued slowdown in the housing market.
That initially lifted stocks, but investors apparently had second thoughts about the data, and so the market turned lower.
Takeover news provided some lift to the markets, with reports that Dow Chemical has been targeted by Middle Eastern investors and U.S. buyout firms in a deal that could be worth $50 billion. It would be the biggest leveraged buyout on the books.
In addition, Citigroup Inc. expanded its Asian operations by acquiring a Taiwan-based bank for $426 million. Warren Buffett's Berkshire Hathaway Inc. said it became the largest shareholder of railroad company Burlington Northern Santa Fe Corp. In midmorning trading, the Dow Jones industrial average rose 1.46, or 0.01 percent, to 12,561.66. The Standard & Poor's 500 index was up 0.04, or less than 0.01 percent, at 1,443.80, and the Nasdaq composite index fell 4.67, or 0.19 percent, to 2,466.67.
The Russell 2000 index of smaller companies was down 3.27, or 0.40 percent, at 810.08. The Labor Department reported showed nonfarm payrolls rose by 180,000 in March, above forecasts of 135,000. The unemployment rate fell to 4.4 percent, a five-month low. Bonds did regain some traction from the selloff, with the yield on the benchmark 10-year Treasury note falling to 4.73 percent from 4.75 percent. The dollar rose against other major currencies, while gold prices edged higher.
Oil continued to fall, with a barrel of light sweet crude dropping 63 cents to $63.65 on the New York Mercantile Exchange. Dow Chemical spiked $2.72, or 6.1 percent, to $47.19 after British tabloid The Sunday Express reported it could receive a buyout offer of $50 billion as soon as this week. Citigroup fell 5 cents to $51.52 after it announced the acquisition of Bank of Overseas Chinese to broaden operations in Asia, and particularly in the greater China region. The bank also said it will detail a long-expected cost cutting plan on Wednesday.
Burlington Northern Santa Fe rose $6.56 cents, or 7.9 percent, at $88.28 after Berkshire Hathaway announced it bought a 10.9 percent stake. Berkshire's class A shares rose $141 to $108,890.
Advanced Micro Devices Inc. expects its first-quarter revenue to miss Wall Street expectations due to sharply weaker sales results at its computing solutions unit. However, shares rose 46 cents, or 3.6 percent, at $13.32 after the chip maker said it will cut costs.
Sanmina-SCI Corp. fell 15 cents, or 3.9 percent, to $3.66 after cutting its second-quarter revenue forecast. The contract electronics manufacturer said it was seeing weaker demand in the communications and the high-end computing markets.
Advancing issues outnumbered decliners by about 8 to 7 on the New York Stock Exchange, where volume came to 218.3 million shares.
Soure: AP

Labels: AMD, BNI, BRK-A, C, DOW, SANM, TXU

Credit-card and payment processor First Data Corp. (NYSE:FDC - News) said on Monday it has agreed to be acquired by private equity firm Kohlberg Kravis Roberts & Co. (KKR.UL) for about $29 billion in the second-largest buyout ever. The deal is the latest in a string of high-profile leveraged buyouts of U.S. corporations in an era of easily accessible financing, ranking only behind KKR's and Texas Pacific Group's ongoing takeover of TXU Corp. (NYSE:TXU - News) in terms of size. Under the agreement, First Data shareholders would be paid $34 for each share of the company they own, a 26 percent premium to where the shares closed on March 30। Based on the 775.1 million shares outstanding the company had in February, the deal has an equity value of $26.4 billion. At $34 per share, KKR is paying 27 times estimated 2007 earnings of $1।24 per share. Based on the $26.4 billion equity value, KKR is paying nearly 14 times estimated 2007 earnings before interest, taxes, depreciation and amortization of $1.9 billion, according to Reuters Estimates. First Data said it was a great time to maximize the company's value and deliver cash to shareholders.
The agreement was unanimously approved by the First Data board of directors based upon the recommendation of the strategic review committee made up of three independent directors.
The deal is expected to close by the end of the third quarter, subject to shareholder and regulatory approvals.
First Data intends to tender for all of its outstanding bonds in conjunction with closing.
The move comes about six months after First Data spun off Western Union (NYSE:WU - News), the payment processing company that built the first transcontinental telegraph line. With private equity firms competing hard for large buyout targets, the First Data deal makes KKR the firm behind the top three largest leveraged buyouts.
Source: Reuters

Labels: FDC, Hot Stocks, Private Equity, TXU, WU

Stocks were narrowly mixed Tuesday as concerns about a market correction offset investor optimism that acquisition activity is on pace to set a record this year.
The $45 billion buyout of electric utility TXU Corp. injected confidence into the market that merger and acquisition activity could surpass last year's record $4 trillion level. The deal, led by a consortium of buyout shops that include Kohlberg Kravis Roberts & Co. and Texas Pacific Group, would go down as the largest leveraged buyout in U.S. history.
Other deals announced before the opening bell included Station Casinos Inc., which agreed to be bought by a private equity firm started by the company's founding family. Temple-Inland Inc., a conglomerate that offers everything from packaging material to financial services, announced it plans to separate itself into three standalone public companies.
However, stocks were unable to sustain gains as there continued to be concern major indexes are in need of a correction. The Dow Jones industrials, after hitting a peak last week, fell for three straight sessions in their worst weekly decline since August.
"Despite the buyout news, we're seeing the broader market a little concerned that we've had such strength without a correction," said Peter Dunay, an investment strategist with New York-based Leeb Capital Management. "We maybe be in a period where the market wants to step back for a bit."
In late morning trading, the Dow rose 9.70, or 0.08 percent, to 12,657.18.
Broader stock indicators were mixed. The Standard & Poor's 500 index was up 2.06, or 0.14 percent, at 1,453.25, and the Nasdaq composite index fell 7.81, or 0.31 percent, to 2,507.29.
Bonds continued to rise from last week's sell-off, with the yield on the benchmark 10-year Treasury note falling to 4.65 percent from 4.68 percent late Friday. Bonds had been weaker amid concerns that subprime lenders would be forced to take write-downs if consumers defaulted on mortgage payments.
The dollar was mixed against other major currencies, while gold prices rose.
Oil prices rose as a winter storm plowed across the United States, spurring expectations of strong demand for heating oil. A barrel of light sweet crude rose 31 cents to $61.45 on the New York Mercantile Exchange.
TXU rose $7.67, or 12.8 percent, to $67.69 after it agreed to be bought by private equity firms. Directors of the electric utility voted Sunday night to recommend that shareholders approve the sale, which values its stock at a 15 percent premium.
Meanwhile, Dow Chemical Co. spiked $2.88, or 6.6 percent, to $46.33 on speculation it could be the target of a leveraged buyout. London's Sunday Express newspaper, in an unsourced report, said the chemical company might be given an offer of about $54 billion from buyout funds.
Station Casinos rose $3.51, or 4.2 percent, to $86.81 after it agreed to go private in a $5.4 billion deal, which represents an 8 percent premium over its closing price on Friday. The deal still allows Station to solicit acquisition proposals from third parties for 30 days.
Temple-Inland rose $7.55, or 13.7 percent, to $62.50 after it agreed to spin off its real estate and financial services arms, and sells its timberland business. The decision came days after activist shareholder Carl Icahn said he'd wage a proxy fight to seize control of the board.
Gilead Sciences Inc. rose 30 cents to $73.93 after the biopharmaceutical company said one of its drugs used to treat HIV works well with other therapies. Merck & Co. rose $1.10, or 2.6 percent, to $44.04 after the third-biggest U.S. maker of prescription drugs was upgraded to "Buy" from Citigroup.
Declining issues barely outpaced advancers on the New York Stock Exchange, where volume came to 475.4 million shares.
The Russell 2000 index of smaller companies fell 1.88, or 0.23 percent, at 824.76.
Overseas, Japan's Nikkei stock average closed up 0.15 percent. In afternoon trading, Britain's FTSE 100 was up 0.56 percent, Germany's DAX index added 0.55 percent, and France's CAC-40 rose 0.87 percent.

Labels: DOW, GILD, MRK, STN, Stocks, TIN, TXU