6/16T8:57 Co. in the News

Companies in the News:

Dry Bulk Shippers: DSX, DRYS, EXM ...

Jefferies believes dry bulk spot charter rates are likely to increase significantly from current levels during 2H08
Jefferies notes that last week, Capesize dry bulk spot charter rates declined significantly as the Chinese government formally ordered ports to clear excess iron ore stocks. While the successful implementation of the orders from Beijing could continue to have a negative impact on Capesize spot charter rates in the near-term, the firm believes dry bulk spot charter rates are likely to increase significantly from current levels during 2H08 as demand for iron ore remains strong and any de-stocking over the next few weeks will create pent-up demand for the commodity ahead of next year's annual contract price negotiations that begin in November 2008.


Dry-bulk yield spreads vs. T-notes indicate sell-off is overdone - Lazard
Lazard says spreads between dry bulk yields and Treasuries have expanded dramatically in a week. Certain dry bulk yield stocks, particularly GNK, EGLE, and DSX, have the majority of their operating days covered by sound contracts for 2008 with coverage into 2009. As well, the world economy, while dampened by inflation, is still creating dry bulk demand growth that exceeds the growth in supply of dry bulk ships through 2H09. While spreads may be deservedly wider due to global macro fears, firm believes investors have overestimated the risk. There will be dramatic volatility in dry bulk shares while the BDI comes down to reasonable levels, but they believe that dry bulk names with long-term contract cover have already been oversold in the meantime.


Friedman Billings notes WM,WB, WFC, CFC, DSL, and FED as having greatest exposure to Central California housing market
Friedman Billings took a tour of the hardest hit housing markets in Central California. Firm says the degree of the price declines in these markets was their biggest takeaway. Sacramento is by far the worst hit, and unfortunately, it is also the largest market visited. On a positive note, housing inventories are beginning to move across all the areas, but at prices 30%-70% below FY05 peak price levels. So on one hand, buyers are beginning to come back into the market, but at a substantial cost to the banking system. Firm's overall conclusion from the trip is that severity rates are greater than anticipated in the visited markets, which will remain an overhang on valuations for institutions with the largest exposures to the Central California housing market. The major banks and thrifts that have the greatest exposure to Central California are WM, WB, WFC, CFC, DSL, and FED.


SWKS Skyworks: Kaufman expects momentum to continue (10.61 )
Kaufman believes SWKS continues to see handset demand tracking as expected, with certain softer markets fluctuating week by week rather than showing any pronounced directional trend. Firm believes a relatively stable demand environment can enable SWKS to execute on its share gain opportunity. A key driver of momentum is the recently announced QCOM reference design, from which they expect rev contributions beginning in calendar 2009. Firm expects SWKS to broaden its customer footprint in the handset market with: 1) an expected greater than 10% rev contribution from nearly all the top-five handset OEMs by year-end, and 2) a strong smartphone and emerging market footprint.