<% ' AvantGo:MarketMidday %>DJIA 9207.69 -125.39 (-1.34%) S&P 500 1174.55 -17.74 (-1.49%) Nasdaq 1975.72 -40.72 (-2.02%) Value Line ndx 895.07 -9.61 (-1.06%) 30-Year Bond 102 10/32 +31/32 5.10% Yield<% ' AvantGo:End %>
| This Feature | |
| Related Items | |
|
|
FOOL PLATE SPECIAL
An Investment Opinion
by Warren Gump
Medtronic Scoops Up Arterial Vascular
<% ' AvantGo:FoolPlate %>Continuing its recent buying binge, Medtronic <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MDT)") else Response.Write("(NYSE: MDT)") end if %> today announced that it has agreed to acquire coronary stent maker Arterial Vascular Engineering <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AVEI)") else Response.Write("(Nasdaq: AVEI)") end if %> for $54 per share in stock, as long as Medtronic stays above $61.20 per share. This news caused Arterial Vascular to jump $16 5/8 to $49, while Medtronic dipped $5/16 to $69 11/16. This transaction will be a return to Medtronic for Arterial Vascular CEO Scott Solano, who worked at Medtronic between 1991 and 1995.
Since July, Medtronic has now announced 5 major acquisitions with stated values in excess of $8 billion. In addition to today's deal, the company has announced the following acquisitions:
Sofamor Danek Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:SDG)") else Response.Write("(NYSE:SDG)") end if %>
-Spinal and neurological surgery
Physio Control International (merger closed)
-External defibrillators
Avecor Cardiovascular <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AVEC)") else Response.Write("(Nasdaq: AVEC)") end if %>
-Cardiac surgery products
Midas Rex, L.P. (merger closed)
-Neurological surgery
All of these mergers are designed to enhance Medtronic's position in its core cardiovascular and neurological and spinal surgery businesses. Revenues will soar because of these transactions. Medtronic CEO William George commented that 1999 revenues are anticipated to exceed $5 billion, over double the company's expectations for 1998.
This merger should be quite accretive to Medtronic, as its stock is trading at 41x calendar 1999 earnings estimates while the offer is for only 21x Arterial Vascular's estimated earnings. The deal is so accretive, in fact, that Medtronic will be able to increase its research and development spending to keep Arterial Vascular at the forefront of the stent market. This increased spending will be necessary to combat rising competition from Guidant Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:GDT)") else Response.Write("(NYSE:GDT)") end if %>, which already offers a strong product line, and Johnson & Johnson <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:JNJ)") else Response.Write("(NYSE:JNJ)") end if %>, which claims that it will have competitive products next year. Medtronic's hefty stock multiple is allowing the company be a voracious acquirer, thus dramatically enhancing its competitive position.<% ' AvantGo:End %>
<% ' AvantGo:Ups %>The share price of seed developer Dekalb Genetics Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DKB)") else Response.Write("(NYSE: DKB)") end if %> grew $4 1/2 to $99 1/2 after life sciences company Monsanto Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MTC)") else Response.Write("(NYSE: MTC)") end if %> said it has "resolved all issues raised" by the Justice Department's Antitrust Division concerning the company's proposed acquisition of Dekalb, clearing the way for Monsanto to complete its $100 per share cash tender offer for the company.
Digital broadcast satellite (DBS) television system operator EchoStar Communications Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DISH)") else Response.Write("(Nasdaq: DISH)") end if %> gained $3 7/16 to $38 7/16 after the company said it will receive two yet-to-be-launched satellites and a DBS uplink center from News Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NWS)") else Response.Write("(NYSE: NWS)") end if %> and MCI WorldCom <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: WCOM)") else Response.Write("(Nasdaq: WCOM)") end if %>. In exchange, EchoStar agreed to carry News Corp.'s Fox News Channel on its DISH network and gave MCI the right to bundle its DBS offerings with MCI's telephony services.
Cellular telephone systems operator Centennial Cellular Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CYCL)") else Response.Write("(Nasdaq: CYCL)") end if %> rang up $3 5/16 to $40 3/16 despite the decision of investment firm Welsh, Carson, Anderson & Stowe to reduce the cash consideration of its previously announced $43.50 per share cash and debt buyout offer for the firm to $41.50 per share. However, Welsh Carson and other investors also agreed to increase their equity investment in Centennial to $400 million from $350 million.
Open-wheel auto racing sanctioning body Championship Auto Racing Teams <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MPH)") else Response.Write("(NYSE: MPH)") end if %> sped ahead $1 15/16 to $29 1/4 after signing a five-year exclusive licensing agreement with motorsports merchandise maker Action Performance Companies <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ACTN)") else Response.Write("(Nasdaq: ACTN)") end if %> to make collectible die-cast vehicles and various other racing-related toys.
Business and consumer services firm Cendant Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CD)") else Response.Write("(NYSE: CD)") end if %> ascended $7/8 to $18 7/8 after Goldman Sachs upgraded the firm to "recommended list" from "market perform" and set a 12-month price target of $24 per share.
Online and catalog retailer Sharper Image <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SHRP)") else Response.Write("(Nasdaq: SHRP)") end if %> jumped $7 11/16 to $15 1/4 on good vibes about its prospects in the all-important holiday shopping season. Fellow catalog retailer Lands' End <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LE)") else Response.Write("(NYSE: LE)") end if %> gained $3 13/16 to $24 7/16, Brylane <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BYL)") else Response.Write("(NYSE: BYL)") end if %> moved up $2 5/8 to $15 9/16, and Fingerhut Companies <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FHT)") else Response.Write("(NYSE: FHT)") end if %> rose $5/8 to $10 5/16.
Advertising holding company True North Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TNO)") else Response.Write("(NYSE: TNO)") end if %> climbed $1 7/8 to $28 3/8 after filing a registration statement with the Securities and Exchange Commission to sell a minority stake in its Modem Media Poppe Tyson Inc. online marketing services unit in an initial public offering.
Educational services provider Sylvan Learning Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SLVN)") else Response.Write("(Nasdaq: SLVN)") end if %> added $1 1/4 to $29 5/16 after winning a $125 million six-year contract to operate computer-based drivers' license testing centers for Great Britain's Driving Standards Agency.
Real estate marketing and property management company Kennedy-Wilson Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: KWIC)") else Response.Write("(Nasdaq: KWIC)") end if %> gained $1 1/2 to $12 1/2 after setting a three-for-two stock split payable on Dec. 15.
Semiconductor and wireless communications products maker Motorola Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MOT)") else Response.Write("(NYSE: MOT)") end if %> picked up $1 5/8 to $62 1/4 following an upgrade from NationsBanc Montgomery Securities to "buy" from "hold."<% ' AvantGo:End %>
<% ' AvantGo:Downs %>General Electric <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GE)") else Response.Write("(NYSE: GE)") end if %> dimmed $1 1/8 to $91 3/16 on reports in The Wall Street Journal that its GE Capital subsidiary is in talks to buy $7 billion of assets from an affiliate of the defunct Long-Term Credit Bank of Japan that filed for bankruptcy in the fall. Reports put a potential purchase price at between $2 and $4 billion.
The closer Hoechst AG <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HOE)") else Response.Write("(NYSE: HOE)") end if %> and Rhone-Poulenc SA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RP)") else Response.Write("(NYSE: RP)") end if %> come to merging their drug and agrochemical businesses, the less investors seem to like the news. Hoechst's American depositary receipts fell $1 7/8 to $42 3/4 this morning while Rhone-Poulenc was off $1 3/8 to $49 13/16 following reports in The Wall Street Journal that a deal is expected to be announced tomorrow.
Integrated oil giant Mobil Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MOB)") else Response.Write("(NYSE: MOB)") end if %> leaked $1 1/2 to $84 1/2 on reports that a deal with Exxon Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: XON)") else Response.Write("(NYSE: XON)") end if %> could be announced tomorrow. The premium Exxon would pay for Mobil's shares is apparently the sticking point in discussions. The companies confirmed Friday that they were in talks.
The recent breakneck run-up for bookseller Books-A-Million <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: BAMM)") else Response.Write("(Nasdaq: BAMM)") end if %> appears to have ended today as the company lost $8 3/8 to $30 9/16 this morning. News of an "enhanced" website drove the company's stock as high as $44 1/2 per share last week from as low as $3 on Monday.
An announcement of a new website didn't help software retailer Egghead.com <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: EGGS)") else Response.Write("(Nasdaq: EGGS)") end if %> this morning, as the company cracked $2 5/8 to $29 despite launching "a newly redesigned, faster and more scalable web site at www.egghead.com."
Meanwhile, a post-Thanksgiving malaise set in for several other Internet stocks this morning. Online transactions technology firm CyberCash <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CYCH)") else Response.Write("(Nasdaq: CYCH)") end if %> dropped $4 1/2 to $17 5/8, browser developer Spyglass Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SPYG)") else Response.Write("(Nasdaq: SPYG)") end if %> blurred $5 1/4 to $24 1/2, advertising firm DoubleClick <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DCLK)") else Response.Write("(Nasdaq: DCLK)") end if %> retreated $5 1/2 to $47 7/8 while NetGravity Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NETG)") else Response.Write("(Nasdaq: NETG)") end if %> sank $4 to $22, music retailer N2K Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NTKI)") else Response.Write("(Nasdaq: NTKI)") end if %> warped $1 7/8 to $18 3/16, consumer products retailer K-tel International <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: KTEL)") else Response.Write("(Nasdaq: KTEL)") end if %> flopped $1 to $16 3/8, CyberShop International <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CYSP)") else Response.Write("(Nasdaq: CYSP)") end if %> tumbled $8 1/2 to $19 1/8, and auctioneer Onsale Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ONSL)") else Response.Write("(Nasdaq: ONSL)") end if %> gave back $23 1/8 to $74 1/2.
A host of contract oil drillers that fell late last week as a meeting of OPEC oil ministers wrapped up without any new pledges of further oil production cuts, continued to fall today. Transocean Offshore <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RIG)") else Response.Write("(NYSE: RIG)") end if %> fell $1 7/8 to $24 1/8, Diamond Offshore <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DO)") else Response.Write("(NYSE: DO)") end if %> slid $1 5/8 to $22 1/4, Noble Drilling <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NE)") else Response.Write("(NYSE: NE)") end if %> shed $1 to $11 5/16, and Santa Fe International <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SDC)") else Response.Write("(NYSE: SDC)") end if %> dropped $1 1/8 to $12 7/16.
Rail freight network operator Kansas City Southern Industries <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: KSU)") else Response.Write("(NYSE: KSU)") end if %> rumbled down $3 3/8 to $43 9/16 after Merrill Lynch cut its rating on the company to "neutral" from "accumulate."
Chemical company Millennium Chemicals <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MCH)") else Response.Write("(NYSE: MCH)") end if %> burned off $1 7/8 to $23 3/8 after it said in a statement that it expects Q4 earnings to be "near break-even," well off First Call's 10-analyst estimate of $0.23 per share. The company also announced a $200 million stock buyback plan and the sale of its interest in Suburban Propane Partners <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SPH)") else Response.Write("(NYSE: SPH)") end if %> to a management group for $75 million.
International long-distance telecommunications services provider Telscape International <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TSCP)") else Response.Write("(Nasdaq: TSCP)") end if %> disconnected $11/16 to $6 3/4 on Friday's announcement after market close that Q4 revenues will come in below company expectations, at between $27 and $31 million. The company blamed regulatory difficulties at its Mexican operations.
Cable Internet service provider SoftNet Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: SOF)") else Response.Write("(AMEX: SOF)") end if %> softened $1 11/16 to $16 3/16 after the company said it appointed Douglas Sinclair, formerly with privately held test management software provider Silicon Valley Networks Inc., as its CFO.
Christian website operator Didax Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AMEN)") else Response.Write("(Nasdaq: AMEN)") end if %> gave away $3 3/4 to $17 1/8 after it announced plans to expand its personal financial services targeting Christian and conservative investors through a partnership with Louisiana investment firms Quantum/Gabelli LP and Quantum American Inc. The investment philosophy involves a method called "values-based investing."<% ' AvantGo:End %>
Please see the Motley Fool's Conference Calls page for call information and links to synopses.
Click here for continually updated Portfolio Numbers.
See something moving a stock that we didn't cover?
E-mail the Fool News Team
and we will start working on the story.
Unfortunately, we cannot answer every e-mail
or respond to individual questions.
|
Contributing Writers Yi-Hsin Chang (TMF Puck), a Fool Brian Graney (TMF Panic), another Fool David Marino-Nachison (TMF Braden), a new Fool
Editing |