MBIA Inc. (NYSE: MBI) may now hold the record for the world’s longest conference call, which came in at something near four hours with more than 200 questions thrown at the troubled bond insurance company. Luckily, it paid big dividends as shares rose more than 30% from an opening level of $11.80 to $15.90. The marathon call came after activist investor William Ackman sent a long letter detailing problems facing bond insurers and MBIA and Ambac in general. Shareholders are now bullish on the stock once again, despite a negative credit watch from the S&P.

MBIA’s main point seemed to be that the credit-default swaps that they write don’t behave the same way that credit-default swaps that banks write. Notably, they cannot be accelerated, except by the firm, which means that any claims will trickle out rather than be all subjected to be paid at once. However, even if the have liquidity concerns under control, that doesn’t mean there won’t be problems with solvency. Many also saw the CFOs attempt to showing lots of excess capital unconvincing as he was forced to guess (like everyone else) at the level of capital that ratings agencies would require going forward. However, he did say (perhaps ironicaly), “It is virtually impossible to imagine a circumstance under which MBIA would become insolvent.”

Many continue to wonder how a company with a market cap of $2 billion that just announced that it lost $2.3 billion last quarter was able to have its share price soar as a result. Some are speculating that it could be a short squeeze while others. The CEO insisted that MBIA would not get taken over by New York State regulators because it would have to be insolvent and the company said it would show excess capital of billions above NYS’s capital requirements. However, the accuracy of these and other statements and the health of MBIA remain to be seen. Regardless, this is definitely a stock worth watching!

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Google Inc. (NDAQ: GOOG) shares fell today after the company announced disappointing fourth quarter earnings showing slower growth than analysts predicted. The search giant earned $4.43 per share on revenue of $3.39 billion compared to analyst expectations of $4.44 per share on revenues of $3.45 billion. The company continues to feel the heat from rising traffic acquisition costs and operating expenses that are putting pressure on its margins. Shareholders sold on the news sending shares down more than 9 percent in early trading.

Google’s traffic acquisition costs have been increasingly lately due to the rising guaranteed payments the company owes through advertising deals to MySpace, Ask.com and others and without operating leverage. There is also larger concern that online ad spending may be hurt by any recession in the United States and abroad. Since Google derives the vast majority of its revenues through Google AdWords, this could spell trouble for the company. And finally, there is also the rising concern over declining keyword costs that has affected the entire industry as it matures.

Google is taking some steps in the right direction, however. First, the search giant is finally starting to control its head count by hiring just 6% over the third quarter. This was a major problem last year that is one of the culprits behind its high operating expenses. Secondly, Google generated more than 50 percent of its traffic internationally and there has been substantial improvement in the international markets that should drive pay-per-click growth.

In the end, there are no short-term catalysts that will help Google so investors may want to shy away from the stock until things improve. It will also be interesting to see how a combined Microsoft-Yahoo will affect the search giant that currently commands a 58% market share. Combined, these are all factors that make Google a stock worth watching!

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Yahoo Inc. (NDAQ: YHOO) shares are up over 40 percent today after Microsoft Corporation (NDAQ: MSFT) revealed a $31 per share friendly takeover offer for the troubled web portal. The cash-or-stock proposal represents a 62% premium to the closing price of Yahoo shares yesterday - a compelling value by any financial measure. Microsoft believes that this combination would enable them to better capitalize on web and display advertising trends. Shareholders applauded the deal sending share substantially higher, but still left some room for opposition.

“Microsoft’s consistent belief has been that the combination of Microsoft and Yahoo clearly represents the best way to deliver maximum value to our respective shareholders, as well as create a more efficient and competitive company that would provide greater value and service to our customers,” said Microsoft in their letter to Yahoo. “We would value the opportunity to further discuss with you how to optimize the integration of our respective businesses to create a leading global technology company with exceptional display and search advertising capabilities.”

The offer comes at an opportune time as Yahoo shares have been beaten down and many have lost faith in the company. Shareholders have been looking for an exit strategy that has clearly presented itself in the form of a cash-rich buyer like Microsoft. Meanwhile, employees have been looking for new direction and job security, and Microsoft has already promised “significant retention packages” to “engineers, key leaders and employees across all disciplines”. The offer is also a great deal for Microsoft as Yahoo shares are available at bargin basement prices!

A combined Microsoft and Yahoo would have revenues of $65 billion per year with net profits of around $17.6 billion per year and about 90,000 employees. Perhaps most importantly, it would command a 32.7% marketshare in the U.S. search industry. This is still behind Google’s 58.4% by a wide margin, but it does represent a substantial step in the right direction. Microsoft’s more organized culture, cash in the bank, and talented engineers may be just what Yahoo’s technologies need to get off the ground and compete.

In the end, there is still a lot of question as to whether this deal will even go through as planned. Yahoo’s Terry Semel stepped down from the board yesterday, presumably because of this deal taking place. Whether it was in protest or because he felt it was a “sure thing” remains to be seen, but many shareholders are also likely to oppose an acquisition at such historically low levels. However, many others are simply looking for an exit and may take up Microsoft stock to benefit from future growth. Regardless, this is definitely a situation worth watching!

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Mastercard Inc. (NYSE: MA) rose rose over 10 percent in early trading after the credit card company announced better-than-expected fourth quarter results despite concerns about pressure on U.S. consumers. The jump was primarily attributed to international growth and the sale of its holdings in Brazilian credit card company Redecard. Mastercard did note a slowdown in domestic consumer spending, but is more insulated with about half of their business being generated outside of the United States. Shareholders are hoping that the U.S. can stay out of a recession and the rest of the world can stay on track.

Mastercard reported fourth quarter net income of $304.2 million, or $2.26 per share, versus $40.9 million, or 30 cents per share, a year earlier. Results did include $1.37 per share from the sale of its stake in Brazil’s Redecard that went public in July. The company is also facing less stress than others like Amex because it doesn’t issue cards itself; rather, it makes money from processing and transaction fees that it charges bank customers. Consequently, the company could see lower profits if there were a global slowdown, but right now worldwide gross dollar volume jumped 15% this year, processed transactions increased 17% and the number of cards in circulation rose 13%.

Mastercard offered some useful insight into the domestic economy as well. The firm noted that consumers were spending more money on staples than discretionary items. Consumers are moving away from items like jewelry, restaurants, and home furnishings to instead purchase things like gasoline, groceries, and personal health care items. The company also noted a slowdown in spending in the U.S.; however, spending still did manage to grow at 5.1%. However, countries in Asia, Middle East, and Africa saw their spending increase an astounding 42%. Meanwhile, our neighbors in Latin America saw spending increase 28%. So, while things may be bad in the U.S., they are certainly booming abroad.

In the end, this is another interesting stock that many investors grouped with consumer spending in the United States alone. It is important to research companies as anyone who did their homework would realize that much of Mastercard’s profits are derived abroad and the company is not responsible for any loans that are defaulted on as it does not issue the cards itself. Combined, these factors make MA a stock that is definitely worth watching!

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Garmin Ltd. (NDAQ: GRMN) are trading sharply off of their highs of around $120 per share in late October to their current levels of around $70 per share on concerns about consumer spending and market saturation. Many shareholders are hoping that these concerns are overblown and that the company can work to turn itself around and return to its previous highs. So, what is the company really worth and what do its future prospects look like?

Many analysts are now saying that it may be time to buy as the GPS-maker isn’t seeing any signs of weakness impacting its U.S. business and management believes the concerns surrounding European personal navigation market saturation are overblown. The company expect growth of at least 40% in 2008 in all but the most penetrated countries with Garmin taking share. These were the two largest concerns that weighed on the stock in recent months, particularly as the U.S. economy moves closer to a recession that could spread to other developed countries as well.

There are still some problems with Garmin, however. Many analysts believe that the current margin relief is only temporary and that negative structural trends in mix and pricing should make it difficult for the stock to sustainably outperform. In other words, more competition will force the company to compete on pricing and bundle addtional products and services, which will make it difficult to live up to the high expectations that it has from its past. Many are also concerned about the company’s attempts to penetrate the handset market and would prefer to see a greater focus on software partnerships.

In the end, the first quarter is likely to be a good one with seasonable shifts to higher-end merchandise should prop up margins and ease investor concerns. However, increased competition and competitive pricing will likely keep the company from seeing the earnings surprises to which many are accustomed. This means that we may not see another run-up in the stock price as we did last year. However, many believe that the stock could reach $80 to $85 per share in the near term. This make GRMN a stock worth watching!

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Dillard’s Inc. (NYSE: DDS) management received some advice from two hedge funds looking to boost the company’s share price earlier this week. James Mitarotonda’s Barington Capital and Michael Popson’s Clinton Group disclosed a letter to the board of directors suggesting that the company better manage its inventory, close under performing stores, and sell properties or sell and lease back some stores. The move follows a 52 percent drop in the company’s share price since it began making changes last summer. Shareholders are hoping that the company will heed the advice and work to turn itself around with the help of two great activists.

“Given the Company’s poor share price performance over the past six months, we are convinced that Dillard’s is an undervalued asset with tremendous opportunity for improvement,” the pair said in their letter. “Unfortunately, it appears to us that you have not only ignored our letters but have also done little to improve the Company on your own initiative, as Dillard’s financial results have gone from bad to worse since our initial communication in June 2007.”

The activist hedge funds made a series of specific proposals to the company. First, they suggested initiatives aimed at improving cost containment, inventory management and the company’s merchandising strategy. Secondly, they encouraged measures to enhance the value of the company’s real estate properties, including the conversion of certain properties into higher and better uses, the closure of underperforming stores and the sale/leaseback of owned properties. Thirdly, they suggested a boad evaluation of the company’s management team and executive compensation. And finally, they encouraged the company to improve its record in corporate governance by removing the dual class share structure, terminating the poison pill, and separating the chairman and chief executive positions.

“Dillard’s can and must deliver considerably better financial and share price performance,” said the hedge funds. “As significant stockholders of the Company, we are committed to taking all actions necessary to enhance shareholder value.”

In the end, it will be interesting to see if the company listens this time around given their failures when ignoring the hedge funds last time. The pair of hedge funds are known for their activist involvements, so they may take future actions in order to attempt to overtake the board. Unfortunately, there is a poison pill in place that would make this extremely difficult; however, it would be an expensive and annoying process for the company who may just decide to listen if such a threat surfaced. Combined, these factors make DDS a stock worth watching!

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Amazon.com, Inc. (NDAQ: AMZN) continues to impress the street with solid earnings and bullish outlooks. The online retailer posted fourth quarter revenues of $5.67 billion and earnings per share of 48 cents today - beating revenue estimates by analysts. Amazon also issued a surprisingly bullish outlook considering that the street expected the company to issue conservative guidance. Shareholders are hoping that the online retailer can continue stealing market share and work to dominate the ecommerce arena.

Amazon announced that it sees sales of $3.95 billion to $4.15 billion for the first quarter, which is well ahead of street estimates of $3.92 billion. Meanwhile, the company sees operating income for the quarter of $155 million to $200 million, which represents year over year growth of 37% to 38%. Amazon sees its full year sales at $18.75 billion to $19.95 billion compared to street estimates of $18.25 billion. Meanwhile, it sees operating income of $785 million to $985 million. These are all strong numbers that has some investors very bullish on the company.

However, investors pushed the stock down some 11% afterhours on the news as concerns surfaced about the company’s suffering margins. Some investors are concerned that the company may have cut prices in order to achieve sales goals, which is only a temporary solution to a long-term problem. The company needs to find a way to grow without resorting to price cuts or they may be forced to deal with increasingly lower margins on their goods sold. The forecasts also take into account further cuts into margins and have only served to amplify concerns.

Regardless, analysts still remain impressed that the company was able to publish such high numbers and felt that these estimates should be rather conservative. If Amazon is able to pull off another earnings surprise in the fourth quarter, we could see shares move much higher. In the end, it looks like this online retailer is continuing to pull market share from brick-and-mortar competition and increase in dominance in the fast-growing ecommerce marketplace. combined, these factors make AMZN a stock worth watching!

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MIVA, Inc. (NDAQ: MIVA) shares have been beaten down from their highs of almost $8 per share back in July to it’s current level of just over $2 per share on no specific negative news. The Internet company’s most recent quarterly results surely disappointed investors, but many investors and analysts insist that the sell off may be significantly overdone. So, are MIVA shares a buy at these levels?

MIVA has a lot of things going for it. First, its “Alot.com” toolbar initiative seems to be gaining a lot of traction. Alot.com is also showing improved traffic rankings and is now ranked higher than many other search portals like Looksmart.com and Local.com, according to Alexa’s traffic rankings. Moreover, over 7 million active users are also using its toolbar program. MIVA is entitled to profit sharing on any searches made from this toolbar to the tune of $0.10 to $5 per click depending on the search.

MIVA has also been caught under some litigation for click fraud and gambling advertisements that plagued other industry giants. Google and Yahoo announced that they settled by paying huge fines and setting aside additional funds, and many feared the the same conclusion may be reached by this company. Yesterday, MIVA announced that it had settled its litigation for only $1.3 million out of pocket, leaving its $25 million still in tact.

MIVA has also experienced problems in the third quarter with a decrease in revenue per click that its advertisers pay for traffic. Many believe that this is due in part to the quality of advertisers on its network compared to that of others like Google AdWords, Overture, or others. However, the value of this network in the event of a buyout would be apparent as the quality of advertisers would increase if it were purchased by a company like Interactive/IAC or CNET Networks.

In the end, there is a lot of value potential in this company. The company has $25 million in cahs, an add network that could be worth more than $100 million and a growing toolbar segment that is quickly positioning the company for profitability once again. Given these facts, one could reasonable see a valuation of at least $3 to $4 per share. Combined, this makes MIVA a stock worth watching!

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Intel Corporation (NDAQ: INTC) shareholders have seen their investment drop more than 25 percent during January 2008 alone on fears of worsening economic conditions. Many investors and analysts believe that the drop was not justified by any underlying fundamental reasoning, but just the assumption that technology stocks (especially semiconductors) are the first casualties during an economic downturn. The notion was somewhat confirmed by a weak guidance offered by the company in the fourth quarter suggesting that business may slow down. However, do these two concerns justify such a steep drop?

Intel did not indicate that it expected chip sales to soften in 2008, despite its cautionary outlook. Rather, the chipmaker announced that it expects robust demand for processors and chipsets as PC sales are expected to remain consistent. Furthermore, they expect any slower sales in the United States to be offset by emerging markets around the world. In fact, a growing piece of Intel’s record operating income of $8.2 billion in 2007 came from emerging markets and other overseas markets.

So, how can the drop in fourth quarter earnings be justified? Well, the drop stemmed from an excess in supply of flash memory chips in the market, which affected more companies than just Intel. In fact, this is also the main reason that the chipmaker issued cautionary guidance - it expects its other products to remain strong. Luckily, these flash drives only account for a small portio of Intel’s total sales, and all other parts of the business promise to remain strong performers.

In the end, Intel’s demand is set to remain strong during 2008. These expectations have been confirmed by other industry giants like Microsoft (NDAQ: MSFT) who expects PC sales to rise by 11% to 12% in 2008 despite the economic problems in the United States. Moreover, 75% of Intel’s sales come from other countries and these countries have shown record growth. Overall, we should not see any significant downfall in 2008 as is currently priced into this stock. Combined, these factors make INTC a stock worth watching!

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New York Times (NYSE: NYT) board members may be in for a fight after two large shareholders announced that they will nominate four candidates to the company’s board of directors on April 22nd. The candidates would occupy the four board seats that are elected by regular Class A shareholders while the superior Class B shares - held by the Ochs-Sulzberger family - would appoint the other nine and retain control of the company. Regardless, shareholders are hoping that the four candidates could bring change to a troubled company.

Janet Robinson of Harbinger Capital Partners and Firebrand Partners announced that they were submitting the proposal in a spirit of “cooperation with the board and management that moves beyond the old dichotomy of ‘hostile’ and ‘friendly’”. The hedge funds said they would not pursue a change in the dual class shareholder structure that has garnered so much complaint, but would push for change in a board that “has not been effective in inspiring the requisite bold action this media environment demands”.

The hedge funds demanded that the company immediately take action to redeploy capital to acquire more digital assets, including content and distribution platforms. Many investors have long complained that the New York Times was simply falling behind the times by ignoring key Internet and digital trends and failing to make acquisitions to drive growth. To this end, the hedge funds are bringing on at least two directors with experience in Internet media to help drive the company in the right direction.

In the end, the New York Times still faces a number of key issues that it must solve before it can be considered a good company and investment. The dual class voting structure, which came under fire last year, is still a major problem. However, now investors realize that it is impossible to combat it. Consequently, these hedge funds are now focusing on the next problem: the failure to embrace the digital revolution. To this end, the investors are nominating board members with broad experience in this arena to drive management to focus in on these areas. Combined, these factors make NYT a stock worth watching!

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