Investor Alert

Stocks to Watch

Feb. 14, 2004, 4:06 p.m. EST

Applied Materials, H-P, Wal-Mart

By CBS MarketWatch

Earnings results slow to a trickle after Presidents Day, but big names are doing the reporting.

Applied Materials (NAS:AMAT) , a leading chip-equipment maker, is on tap Wednesday. See Earnings Outlook. Thursday is the big one, with Dow components Hewlett-Packard (NYS:HPQ) and Wal-Mart (NYS:WMT) delivering results.

ABX Air's long-term contracts and potential for higher sales make the cargo airline a good investment prospect, Barron's said in its Sizing Up Small Caps column Saturday. See full story.

Advanced Micro Devices (NAS:AMD) and the other 15 chip-related stocks on the Philadelphia Semiconductor Index (NASDAQ:SOX) were flagged as overpriced Saturday in Alan Abelson's Barron's column. Citing data from Fred Hickey's High Tech Strategist newsletter, Abelson noted the average 36 price-to-earnings multiple of the index stocks, compared with a 10-year average of 20, plus a 5.5 price-to-sales ratio compared with a 10-year average of 2.6.

American Capital Strategies said late Friday that it invested $21.6 million in Nivel Parts & Manufacturing, a distributor of golf-cart parts. American Capital will hold an 11 percent stake in Nivel after the transaction closes.

Ameritrade , the online brokerage, said late Friday that it completed the purchase of about 11,000 online accounts from BrokerageAmerica. The accounts will switch to their new platform on Monday.

ArvinMeritor , a maker of vehicle parts for manufacturers and replacement parts such as the Purolator brand, had its debt rating cut late Friday by Moody's. The move, affecting about $2 billion in debt securities, cited ArvinMeritor's disappointing 2003 results and a tougher stance from automakers with their suppliers.

Bandag , a truck tire specialist, said late Friday it purchased an 87.5 percent interest in Speedco, which owns 26 highway truck-servicing sites and licenses six others. The $56.1 million price paid to Shell Oil Products and three Speedco founders includes retirement of $20.1 million of debt. Bandag said Speedco revenue totaled about $46 million in 2003. Earnings per share for Bandag are estimated to grow 10 to 15 cents a share in 2004 as a result of the purchase, the company said, citing the direction of oil prices as a crucial factor that could affect the trucking industry and its business.

C2 , which provides services such as refrigerated warehousing, said late Friday that its Total Logistic Control division is acquiring packing assets from Keebler, a unit of Kellogg (NYS:K) . Terms were not disclosed for purchase of a 225,000 square foot operation in Statham, Ga.

Caremark Rx and AdvancePCS said their shareholders will meet March 22 to vote on Caremark's purchase of AdvancePCS. Approval of new Caremark shares is one of the voting items; AdvancePCS shareholders are to receive Caremark shares at a value equal to 2.15 Caremark shares as 90 percent of their compensation, plus the other 10 percent in cash. Assuming approval, Caremark holders will control 58 percent of the combined company.

Duke Energy (NYS:DUK) , the Southeast energy marketer, said late Friday that its Duke Capital division remarketed $875 million of 5.87 percent notes due 2006, with a new rate of 4.302 percent. As part of the transaction, Duke will issue 22.5 million shares of common stock in May to settle forward purchase contracts.

Energizer Holdings (NYS:ENR) said late Friday that it filed a patent infringement suit against Gillette (NYS:G) , alleging the razor giant's Mach3, Mach3Turbo and Venus brands violate Schick patents held by Energizer.

Glenayre Technologies , a provider of phone message services, said late Friday that a company owned by former employees will take over obligations of discontinued paging services. That operation had $21.3 million in obligations as of Sept. 30, 2003, the company said, and the new accord will help relieve much of that obligation. The company also said its fourth-quarter results, formerly scheduled for release Tuesday, will be posted March 2 instead.

II-VI Inc. (NAS:IIVI) , which makes infrared optical equipment, said late Friday that its board voted to end a shareholder rights defense against potential takeovers. Shareholders will receive 1 cent per share as the company redeems their rights under the plan.

Janus Capital , embarrassed in last year's mutual fund investigations, could see its stock move up 20 percent, Barron's suggested Saturday. Balance-sheet debt reduction impresses Barron's, as well as an 18.5 P/E multiple that's lower than competitors. Prudential Equity's John Hall tells Barron's he expects a price move upward after Janus settles regulatory issues. Separately, Colorado disclosed late Friday that it is in settlement talks with Denver-based Janus over "market-timing" transactions. The state's securities regulators said a $31.5 million offer by Janus to compensate its shareholders is being reviewed and might not be enough, according to a Saturday report in the Rocky Mountain News.

Lifeway Foods (NAS:LWAY) , a maker of health foods, said late Friday that its board approved a 2-for-1 split in its common stock, effective March 8 for shareholders as of Feb. 27. Lifeway said it will have about 8.4 million total common shares outstanding after the split.

Luminent Mortgage said late Friday that it received SEC approval for registration of 11.5 million shares of common stock to be sold by current holders. The shares were privately placed in June 2003, Luminent said.

Manor Care , a large, nationwide operator of nursing homes, was the subject of a CBS News report on allegations of poor care amid lawsuits in California.

Mattel (NAS:MAT) , the maker of Barbie and other toys, said late Friday that investors should disregard a Bloomberg News report from a Mattel executive who forecast rising sales for its fashionable doll. Mattel said it is the company's policy not to predict results.

News Corp. (NAS:NWS) said late Friday that it had completed its $430 million sale of the Los Angeles Dodgers baseball team to real estate developer Frank McCourt. See full story.

The Pantry , a chain of convenience stores, said late Friday that it completed pricing on $250 million of 7.75 percent notes due 2014, with proceeds of $243.3 million expected when the deal closes on Feb. 19. The Pantry said it is redeeming 10.25 percent notes due in 2007 and also paying down some of its senior credit facility.

Pepsico (NAS:PEP) , the soft drink and snack maker, had its long-term debt rating raised late Friday by Moody's, which cited strong brand names and successful restructuring since the mid-1990s.

Performance Food Group (NYS:PFGC) , which distributes food to institutions such as schools and hospitals, said late Friday that it reached agreement with the Securities and Exchange Commission on accounting errors by a subsidiary. The accord, which does not admit SEC findings, does not require a fine, the company said.

Roche Holding (OTC:RHHVF) , the Swiss pharmaceutical giant, completed its acquisition Friday of IGEN International (OTC:IGEN) , whose holders will receive $47.25 in cash and one share of BioVeris share for each share they hold. Igen ceased trading separately.

Timeline , which makes financial software compatible with Microsoft's Windows, said late Friday that Cognos had settled a patent infringement suit. Cognos will pay $1.75 million to Timeline and license some patents without admitting liability, Timeline said. Separately, Timeline said it expects to report a fiscal fourth-quarter profit that would erase $471,000 in losses during the previous nine months.

Trump Hotels & Casinos (DJX:DJT) looks increasingly like a low-roller, according to Barron's. The company that is majority held by Donald Trump, is awash in debt, with $1.3 billion in mortgage bonds coming due in 2006 and annual payments of about $215 million, Barron's says. A $400 million rescue plan offered last week by DLJ Merchant Banking Partners faces an uncertain reception from bondholders, who would be asked to take as little as 85 cents on the dollar instead of seizing control of the company's Atlantic City hotels and casinos.

UnitedGlobalCom , a broadband service provider, said late Friday that a rights offering will bring in about $1 billion as an oversubscribed plan sells about 83 million Class A shares, 2.3 million Class B shares and about 85 million Class C shares.

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