In today's action we look at the volatile solar sector after
recently updating our estimates for LDK Solar (NYSE:LDK), which
fell 10% on Wednesday and bounced 7% today. Our estimates are still
well above the market price based on the our sanguine long-term
view of the solar industry, despite Chanos and other naysayers.
) agreed to buy back its shares from Bank of America (
), and we look at how this could impact its balance sheet. We
inspect Silver Wheaton's (NYSE:SLW) deal with Capstone Mining Corp.
and the upside could add on silver demand. Finally, we discuss
) growing reliance on the China market to drive its growth and what
value drivers move the needle for LinkedIn (NYSE:LNKD).
Bank of America Offloads BlackRock Stake
), the world's largest publicly traded asset management firm,
recently agreed to buy back Bank of America's remaining 7% stake in
the company for about $2.5 billion. The transaction involves an
exchange of 13.6 million Series B convertible preferred shares at
$187.65 per share, which is at a 3.6% discount to the average
closing price for the 15-day period prior to the announcement.
BlackRock plans to fund the purchase with the available cash and $2
billion of commercial paper, medium-term and long-term debt.
Taking Another Look at LDK Solar's Upside
LDK Solar (NYSE:LDK) and other solar plays like First Solar (
), Suntech Power (NYSE:STP) and Sunpower (NASDAQ:SPWRA) have
traditionally been dependent on demand driven by government
subsidies. This has made these companies vulnerable to government
policies, especially as countries like Germany, Spain and Italy
have made budget cuts to their solar subsidies. LDK in particular
has seen large swings in its stock over the past year and a half,
which rose from $5.20 in July 2010 to a high of $14.55 in February
2011 before declining to around $6.18 Wednesday.
Elevated Silver Prices Give Wheaton's Silver Large
The average silver price (per ounce) realized by Silver Wheaton
(NYSE:SLW) from its streaming contract with Capstone Mining Corp.
rose from $16.20 in 2009 to $32.30 currently. We expect the average
price to keep rising given the growing industrial demand for silver
as well as on fears of inflation. Silver Wheaton mainly competes
with silver manufacturers like Silver Standard Resources (
), Pan American Silver (NASDAQ:PAAS), Bear Creek Mining
Corporation (BCM) and Endeavor Silver (EXK).
GM's Growing Dependence On China
The Chinese auto market is growing at blistering speeds despite
concerns around a withdrawal of government incentive programs and
the potential supply chain disruption from the tragic Japanese
tsunami. We think GM (
) will be one of the main beneficiaries of the growth, as it beat
Toyota (NYSE:TM) this year to become the second largest passenger
car manufacturer in China after Volkswagen (ETR:VOW). Other
automobile makers like Ford (F), Daimler (ETR:DAI), and Honda
(NYSE:HMC) also stand to benefit from the growing Chinese vehicle
2 Key Value Drivers for LinkedIn
LinkedIn's (NYSE:LNKD) recruitment services and job postings
business accounts for around 50% of our $30 price estimate for
LinkedIn stock, making it the most valuable business for LinkedIn.
Here we take a look at two key value components of the recruitment
services and job postings segment. LinkedIn competes
with Monster (NYSE:MWW) in the recruitment services
market, but also competes with social networking portals
like Facebook and Twitter, as well as Google
(NASDAQ:GOOG) and Yahoo (NASDAQ:YHOO) in the online