CONFERENCE CALLS
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FOOL PLATE SPECIAL
GE Gobbles First Colony
The race for life insurance assets continues, with GENERAL ELECTRIC'S <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GE)") else Response.Write("(NYSE: GE)") end if %> Capital unit gobbling down shares of FIRST COLONY <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FCL)") else Response.Write("(NYSE: FCL)") end if %> this morning. Small life insurers are quickly becoming an endangered species as GE Capital and insurance industry giant ALLSTATE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ALL)") else Response.Write("(NYSE: ALL)") end if %> look to get more involved in the life insurance business. With products like annuities blurring the lines between financial services and life insurance companies, both companies look to increase their involvement in the world of annuities as more and more baby boomers become antsy about retirement.
This First Colony purchase is certainly one the first moves in the chess game. In April, AON CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AOC)") else Response.Write("(NYSE: AOC)") end if %> sold two of its life insurance units to GE Capital. Allstate purchased the Laughlin Group in October for an undisclosed sum and recently sold one of its property and casualty units to St. Paul's with the stated intention of using that money to continue to focus on building its life insurance business. Both companies are looking to enhance their position in the annuity game and are using acquisitions to achieve this.
The likely beneficiaries of these elephants trampling around in the forest? Other small life insurance outfits with a focus on the annuity business. Names that fit this bill include COTTON STATE LIFE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: CSLI)") else Response.Write("(NASDAQ: CSLI)") end if %>, EQUITABLE OF IOWA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: EIC)") else Response.Write("(NYSE: EIC)") end if %>, PROTECTIVE LIFE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PL)") else Response.Write("(NYSE: PL)") end if %>, WESTERN NATIONAL <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WNH)") else Response.Write("(NYSE: WNH)") end if %>, RELIASTAR FINANCIAL <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RLR)") else Response.Write("(NYSE: RLR)") end if %>, GUARANTEE LIFE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: GUAR)") else Response.Write("(NASDAQ: GUAR)") end if %>, ALLIED LIFE FINANCIAL <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ALFC)") else Response.Write("(NYSE: ALFC)") end if %>, PRESIDENTAL LIFE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: PLFE)") else Response.Write("(NASDAQ: PLFE)") end if %> and US LIFE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: USH)") else Response.Write("(NYSE: USH)") end if %>, just to name a few. As it is the annuity business that is the object of acquisition, the analysis of any of these companies as investment opportunities would clearly need to focus on how much of each company's business is in the annuity business versus straight life or other product lines.
SCHWEITZER-MAUDUIT <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SWM)") else Response.Write("(NYSE: SWM)") end if %> advanced $1 1/4 to $29 3/4 today after a Barron's article over the weekend mentioned significant insider buying. The world's largest manufacturer of cigarette paper, the shares represent a play on the U.S. cigarette market without the legal baggage.
HEARTSTREAM <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: HTST)") else Response.Write("(NASDAQ: HTST)") end if %> continued to rise this morning off of Friday's announcement that the company sees a positive ruling out of the Food & Drug Administration (FDA) this month for its ForeRunner product. Shares were up $7/8 to $14.
More consolidation in the utility industry as players position themselves for deregulation. MIDAMERICAN ENERGY <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MEC)") else Response.Write("(NYSE: MEC)") end if %> made a $1.17 billion hostile bid for IES INDUSTRIES <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IES)") else Response.Write("(NYSE: IES)") end if %>, pushing shares of IES up $3 5/8 to $33 3/8.
FHP INTERNATIONAL <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: FHPC)") else Response.Write("(NASDAQ: FHPC)") end if %>, specializing in health care and insurance, soared $5 3/4 to $33 5/8 after an announcement that the company will merge with PACIFICARE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: PHSYB)") else Response.Write("(NASDAQ: PHSYB)") end if %>.
Caller I.D. concern COLONIAL DATA TECHNOLOGY <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: CDTX)") else Response.Write("(NASDAQ: CDTX)") end if %> shares surged $1 3/4 to $12 on news that the company will be acquired by U.S. ORDER <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: USOR)") else Response.Write("(NASDAQ: USOR)") end if %> in a $158 million stock swap. Shares of U.S. order tumbled $1 3/4 to $12 1/4.
SILICON GRAPHICS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SGI)") else Response.Write("(NYSE: SGI)") end if %> continues on its rebound, up $1 1/4 to $23 1/2 after being upgraded from "outperform" to "strong buy" by Morgan Stanley.
Intranet solution developer NETMANAGE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: NETM)") else Response.Write("(NASDAQ: NETM)") end if %> saw its shares leap $1 3/8 to $11 following news of a partnership with ASCEND COMMUNICATIONS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: ASND)") else Response.Write("(NASDAQ: ASND)") end if %>.
COMMERCIAL INTERTECH <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TEC)") else Response.Write("(NYSE: TEC)") end if %> managed to beat off UNITED DOMINION'S <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: UDI)") else Response.Write("(NYSE: UDI)") end if %> hostile bid today, causing shares to deflate $3 7/8 to $22 3/4. Commercial now plans to spin-off 100% of its CUNO unit.
Continued doubts about PANDA PROJECT'S <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: PNDA)") else Response.Write("(NASDAQ: PNDA)") end if %> ability to stay in business weigh on the shares today, dropping them $5/8 to $7 1/4. The development stage technology company has been plagued by a lack of revenues.
STRATTEC SECURITY <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: STRT)") else Response.Write("(NASDAQ: STRT)") end if %> slid $1 1/8 to $13 7/8 today with Friday's lower-than-expected results still impacting shares of the mechanical and electro-mechanical lock manufacturer.
MICRON TECHNOLOGY <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MU)") else Response.Write("(NYSE: MU)") end if %> retreated $1 1/4 to $21 5/8 after a big run-up on Friday, on general technology bullishness and news of an impending new multi-function chip.
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