Monday Stocks to Watch

The market advances on lower volume. It is still trying to stabilizing from sharp drop from late February and early March. I would still like to see confirmations to come in the next few sessions. (OMRI) has been a very good performer through out the turbulent time. It is one of my decent holding last year.
Here is the advancers and decliners from MarketWatch worth watching:

Akzo Nobel (AKZOY) shares rallied after the company agreed to sell its Organon BioSciences unit to Schering-Plough (SGP) for 11 billion euros ($14.4 billion) in cash. Akzo Nobel previously had considered an IPO for the unit. Schering-Plough said the deal will lift earnings per share by around 10 cents in the first full year, excluding purchase-accounting adjustments and acquisition-related costs. Schering-Plough expects to achieve annual synergies of $500 million in three years. Akzo Nobel said it will buy back 1.3 billion euros in shares. See full story.

Business Objects (BOBJ) was upgraded to buy from hold at Deutsche Bank, which cited increasing evidence that business momentum has been strong. Analyst Tom Ernst, Jr. also said valuation had become more favorable. Ernst raised his stock price target to $42 from $40, and his fiscal 2008 earnings estimate to $2.30 a share from $2.15, and his revenue forecast to $1.57 billion from $1.54 billion. "We are encouraged that solid execution during the first-half of 2007 may drive a higher trading multiple as [Wall] Street sentiment is mixed, given the company's choppy execution during three of the last five first halves of the fiscal year," Ernst said in a research note.

Ceridian Corp. (CEN) named Gregory Macfarlane its chief financial officer, effective March 26. The Minneapolis information services company said Macfarlane had been chief financial officer and an executive vice president at General Electric Co.'s GE-WMC Mortgage group.

Cimatron Ltd. (CIMT) shares leapt after the Israel-based company reported a fourth-quarter net profit of $557,000, 7 cents a share, compared with a net loss of $1.72 million, or 22 cents a share, in the year-ago period. Revenue rose to $6.03 million from $5.43 million. Cimatron makes computer-aided design/computer aided manufacturing software products.

Dollar General (DG) agreed to be acquired by affiliates of private equity firm Kohlberg Kravis Roberts & Co. in a transaction with a total value of about $7.3 billion, including roughly $380 million of debt. See full story.

EMC Insurance (EMCI) was upgraded to buy from hold at A.G. Edwards.

Express Scripts Inc. (ESRX) said its current bid for rival pharmacy benefits manager Caremark Rx Inc. (CMX) was its "best and only," though it would consider sweetening the offer if it were able to perform due diligence.

Imax Corp. (IMAX) shares rose after the Toronto-based company announced that Dickinson Theatres Inc. has agreed to open five Imax theaters in new multiplexes in the Midwest. Although financial terms of the deal were not disclosed, Imax said it's the company's largest lease agreement since 2004. Separately, Imax also said Regal Cinemas Inc., a subsidiary of Regal Entertainment Group, will install two Imax MPX theater systems at multiplexes in California and Oregon in the next two months.

J.C. Penney (JCP) was upgraded to buy from neutral at UBS.

La Jolla Pharmaceutical Co. (LJPC) shares continued to rally Monday after the company was upped to buy at Pacific Growth on Friday.

Shares of Lumera Corp. (LMRA) jumped after the company said it received a purchase order from Lockheed Martin Corp. for its high electro-optic activity materials. Financial terms weren't disclosed. The agreement runs through December 2007, when Lockheed will advise Lumera of its plans regarding a commercial license for the materials, the company said. Bothell, Wash.-based Lumera is a nanotechnology company.

S1 Corp. (SONE) shares rose after the Atlanta-based software company said it plans to launch a modified Dutch Auction tender offer to buy back roughly 15% of its shares. S1 expects the tender offer to total $55 million at a per-share range of $5.25 to $5.75. The company said it plans to launch the offer as soon as possible.

Sierra Health Services (SIE) agreed to be acquired by UnitedHealth Group Inc. (UNH) for $2.6 billion. See full story.

Smith & Nephew (SNN) said it's agreed to buy Plus Orthopedics, a privately held Swiss firm, for $889 million (1.09 billion Swiss francs). The deal makes Smith & Nephew the number four player in the global orthopaedic reconstruction market. The deal will be broadly neutral to adjusted earnings per share in 2007 and lift it from 2008 and beyond, and exceed the cost of capital in the third full year.

Spartech Corp. (SEH) said first-quarter net income rose to $8.07 million, or 25 cents a share, from $5.66 million, or 18 cents a share, after sales rose 1% to $347 million. It's lifting its fiscal-year earnings forecast by 2 cents a share to a range between $1.55 and $1.62 a share, excluding special items. Demand didn't meet 2006 levels due to shortfalls in the automotive, heavy truck and residential construction markets.

Tom Online (TOMO) U.S.-listed shares leapt after parent company Tom Group Ltd. said it will offer up to HK$1.57 billion ($200.9 million) to buy out Tom Online.

Vertex Pharmaceuticals (VRTX) was upgraded to neutral from sell at Banc of America Securities.

Decliners

Amgen (AMGN) was downgraded to reduce from neutral at UBS. The firm said it expects more Medicare carriers to drop coverage of erythropoiesis-stimulating agents in anemia of cancer, which will impact Amgen's revenue. "We also believe more restrictive than anticipated safety language in the newly issued black box labeling of ESAs will have an additional adverse impact on anemia franchise revenues," UBS added.

Cogent Communications Group Inc. (CCOI) shares fell after the Washington-based provider of Internet access and Internet protocol communications services reported a fourth-quarter net loss of $9.97 million, or 21 cents a share, compared with a net loss of $20.3 million, or 47 cents a share, in the year-ago period. Revenue rose to $40.5 million from $33.2 million. Analysts polled by Thomson Financial were expecting a per-share loss of 24 cents on revenue of $40.4 million. Cogent forecast a first-quarter loss of 20 cents to 25 cents a share on service revenue of $43 million to $44 million, and a 2007 loss of 55 cents to 85 cents on service revenue of $180 million to $190 million. Analysts expect a first-quarter loss of 22 cents and a 2007 loss of 69 cents.

Countrywide Financial Corp. (CFC) was downgraded to underperform from market perform at Wahovia, which citing weakness in secondary mortgage market liquidity. "While the origination and sale of subprime mortgages represents only a small part of the Countrywide story, we are more concerned that the weakness has spread to other sectors of the residential mortgage market," Wachovia said. "While we cannot estimate how long conditions are likely to persist, we believe that Countrywide can withstand several months with minimal access to the capital markets," it added. The company also reported its operating statistics for February, saying total loan fundings rose 10% to $35 billion. It added that the volume of sub-prime loans it made in February fell as the company tightens lending standards in response to rising defaults. Countrywide said subprime loan fundings in February fell to $2.6 billion from $2.8 billion a year ago, and that subprime applications have fallen as the company has tightened its lending criteria. It plans to tighten its criteria further, and said it expects short-term earnings volatility as the changes are made.

Dyax Corp. (DYAX) said it has entered into an agreement with Glenmark Pharmaceuticals under which it will perform funded research to identify therapeutic antibodies for three targets provided by Glenmark. Dyax said it will receive technology license fees as well as clinical milestones payments and royalties on net sales that may result from Glenmark's commercialization of antibodies.

Fremont General Corp. has hired Credit Suisse to help the company sell its sub-prime-mortgage business, according to a regulatory filing. See full story.

Isle of Capri Casinos (ISLE) said it would restate its financial statements for fiscal 2004 through fiscal 2006, and the first two quarters of fiscal 2007, to adjust the accounting for lease space for a casino in England and the amortization of certain assets. The St. Louis casino operator expects the restatements to reduce earnings by no more than $12 million. The stock closed Friday up 28 cents at $26.34.

New Century Financial (NEW) said in a filing to the Securities and Exchange Commission, said as of March 9, all of the company's lenders under its short-term repurchase agreements and aggregation credit facilities had discontinued their financing with the company or had notified New Century of their intent to do so, and some have also purported to terminate the company's servicing rights. New Century has amended an agreement allowing it to pledge $265 million in additional assets for new financing. See full story.

Swiss state-controlled telecommunications group Swisscom AG (SCM) has offered to buy Italian broadband operator Fastweb for 3.7 billion euros ($4.9 billion) or 47 euros a share. Swisscom said it is seeking a recommendation from Fastweb's board of directors and added the offer is conditional on receiving more than 50% of the shares in Fastweb. The offer represents an 11.9% premium to Fastweb's closing price of 42.02 euros on Friday. Swisscom said Italy represents one of the most attractive broadband markets in Europe, with significant expected growth potential over the next few years.

Vernalis (VNLS) said its 2006 net loss widened to 42.4 million pounds ($81.9 million) from 32.8 million pounds, while revenue rose 15.6% to 16.3 million pounds. The company said its increased loss was largely due to a rise in research and development costs and a 9.8 million pound impairment charge on its V1003 drug due to uncertainty over its future development. The company said that the Federal Drug Administration will respond to its application for approval of its Frova drug by May 19. If the application is successful, Vernalis will be due to receive a $40 million milestone payment.