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Buyout Buzz Is Fueling Anadarko

After Anadarko Petroleum (APC) was rumored to be a takeover target in 2006, its stock climbed to a record split-adjusted 67.98 on Dec. 26, 2007, up from 48 in late 2005. It fell in January to the mid-50s when no deal emerged. But now it's back up to 65.85 as new rumors have surfaced, abetted by oil prices at $102 a barrel on Mar. 3. "More than ever, Big Oil is under pressure to find more crude, and the easier path is to buy an exploration company with big reserves, preferably in North America," says Michael Metz, chief investment strategist at Oppenheimer (OPY). Anadarko is a large explorer and producer of oil and gas, mainly in Alaska, Louisiana, Texas, and the Gulf of Mexico. Its proven reserves climbed 23%, to 3 billion barrels of oil equivalent, at yearend 2006. Anadarko has become a more attractive target since its 2006 acquisition of Kerr-McGee and Western Gas Resources, says Fadel Gheit, oil guru at Oppenheimer. One big holder is activist investor Carl Icahn, with a 3.16% stake. Icahn made a run for Texaco in the 1980s. "Any of the major oil companies would be interested in acquiring Anadarko," says Stephen Leeb, president of Leeb Capital Management and author of the 2004 book The Oil Factor. With fuel prices destined to go higher, Anadarko's assets are cheap, says Leeb. He figures the stock is worth 90 a share. "Big Oil isn't avidly pursuing new explorations," he says. Anadarko declined comment.

Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.

Wynn: A Winner in the Long Run?

Casino stocks have taken it on the chin because of fears their business will dive with the economic downturn. Wynn Resorts (WYNN) plunged to 99.19 on Mar. 3, down from 174 on Oct. 29, despite strong earnings and revenues. Some see an opportunity. Its results in Las Vegas and Macau show that Wynn has established itself as the "premium high-end casino brand," says Robert LaFleur of Susquehanna Financial Group, who rates the stock a buy. It could trade upwards of 145 in the next 12 to 18 months, says LaFleur, who sees profits of $2.97 a share in 2008 and $3.32 in 2009. "Wynn is a pure play on global upscale gaming," he says. Dominic Silva of Value Line (VALU) notes high-roller VIPs generated 60% of operating income in Macau. In Vegas, operations will perform well despite the slow economy, he adds.

Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.

Tech Biggies Rely on comScore

Tiny comScore (SCOR) serves giant customers, such as AOL (TWX), Best Buy (BBY), Google (GOOG), Merck (MRK), Microsoft (MSFT), Verizon (VZ), and Yahoo! (YHOO) Why? They benefit from comScore's proprietary technology that provides customized information about Web sites and also gives demographic characteristics, attitudes, and lifestyle profiles of online customers. ComScore, for instance, was the first to detect that fewer users have been clicking on Google's search ads. Scott Wieler, CEO of Signal Hill Capital Group, says ComScore's core market is still underpenetrated, and he adds that ComScore is the way to play the Internet and its growth. Zachs Investment's consensus analysts' estimates see earnings of 42 cents a share in 2008 and 64 cents in 2009. Jeetil Patel of Deutsche Bank (DB) also rates comScore, now trading at 19.45, a buy, with a stock price target of 35.

Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.


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