): Maintains 3 STARS (hold)
Analyst: Efrain Levy
Shares are lower after the media focused Wednesday on weakness in Ford-issued bonds. S&P remains concerned about Ford's near-term competitive position, as well as its employee pension and retirement funding obligations. However, the depressed shares may be of interest to investors with a longer-term time horizon looking toward potential benefits from restructuring efforts and an increase in new vehicle introductions. Although there is risk to the 5.6% dividend yield, Ford's $10.9 billion in net cash as of June 30 should provide near-term liquidity.
Gemstar-TV Guide (GMSTE
): Upgrades to 3 STARS (hold) from 2 STARS (avoid)
Analyst: Howard Choe
Gemstar's board has replaced its CEO and CFO with News Corp. executives. While the move was anticipated, the agreement by replaced CEO Yuen to assign Gemstar his current and future intellectual property was a surprise -- and is a positive development for securing the company's licensing and interactive businesses. With management now able to increase its focus on reinvigorating growth across its business lines, the shares are likely to gain support.
FTI Consulting (FCN
): Maintains 5 STARS (buy)
Analyst: Michael Santicchia
The stock is weak Wednesay on news that FCN has filed a registration statement for an underwritten public offering of 2.1 million common shares. The company intends to use proceeds to pay down debt incurred to acquire PriceWaterhouse Cooper's business recovery unit. S&P is keeping its 2002 earnings per share estimate of $1.38 (which does not include the PriceWaterhouse acquisition) and sees earnings per share of $2.00 in 2003. At 18 times the 2003 estimate, the stock is trading at a discount to its 20% projected international growth rate. S&P continues to like FCN's long-term outlook and view Wednesday's weakness as a buying opportunity.