On February 22nd, Genzyme (GENZ) said Carl Icahn will nominate 4 directors, including himself, to Genzyme’s board of directors. The election is slated to take place at the annual meeting on May 20th.

The Genzyme news is an opportune time to take notice of some of Icahn’s recent botched investments. We uncovered a lot of shareholders dumped in the mud while trying to piggy-back Icahn’s investments. Here are six Icahn flops that I could find for you after a round of stock sifting:

1) WCI Communities (former ticker: WCI)

On January 16, 2007, a Securities and Exchange Commission filing disclosed that Icahn was the beneficial owner of 14.57%, or 6.1 million shares, of WCI Communities Inc. In the filing, Icahn indicated he intended to contact WCI to discuss how to “unlock the inherent value” of its shares. Icahn served as chairman for the homebuilder. Icahn paid an average $18.46 a share — about $112.6 million — for his stake in WCI. Icahn’s shares of WCI stock are worthless today since WCI filed for bankruptcy and no longer trades on the NYSE under the ticker WCI.

2) Motorola (MOT)

On January 30, 2007, Motorola (NYSE: MOT) received notice that Icahn owned about 33.5 million shares — at the time representing a 1.39% interest in the company. Again, Icahn pushed for a seat on the board. The stock price was around $19 per share. But he was turned down by the majority of the stock holders in an election for Board of Directors. On March 24, 2008, Icahn sued Motorola as part of his efforts to gain 4 seats on Motorola’s Board and force a sale of its mobile business. Today, shares of MOT are fetching $7 per share.

3) Blockbuster Inc (BBI): “Wow! What a difference (Icahn makes)!

In 2005, Carl Icahn began his investment stake in Blockbuster (BBI) and securing representation on the company’s board. Icahn spent roughly $320 million on his stake at a time when BBI was over $10 per share. Icahn has been snowboarding downhill with BBI’s shares ever since he became an “activist” investor in the company. Today, Blockbuster shares are trading at $.41 per share. I guess his activism has been to destroy value.

4) Time Warner (TWX)

In 2006, Carl Icahn controlled 3% of the Time Warner (TWX) and waged a quixotic campaign to split the company into 4 separate units.
But he didn’t get anywhere close. Instead, he only convinced management to increase share repurchases — even that was a horrible move. Shares were trading at about 45 when that was announced. Today, TWX shares trade at $30.50 per share.

4) Telik (TELK)

In early 2007, Carl Icahn owned over 5 million shares in biotech company, Telik (TELK). He purchased shares between $7 and $17 per share. By early 2009, Icahn sold his stake in Telik for under $1 per share.

5) Greenbrier Companies (GBX)

In early 2008, Carl Icahn acquired an approximate 10% stake in railroad freight car company Greenbrier Companies (GBX). At the time of Icahn’s share acquisition, shares of GBX were over $20. Icahn had the vision to hopefully merge GBX with another one of his heavily owned companies, American Railcar (ARII). However, his vision remained nothing but a vision. His vision flopped, and today Greenbrier is trading at appoximately $10 per share.

6) Guaranty Financial (former ticker: GFG)

In January 2008, Carl Icahn owned roughly 10% of the Texas-based financing group. The stock was trading over $12 per share. Icahn pressured its former parent, Temple-Inland (TIN), to spin off the financial group. The bullied action resulted in Guaranty finally declaring bankruptcy in the summer of 2009.

Relative Success

Two deals exhibiting Icahn’s corporate raider success include Eli Lilly’s (LLY) acquisition of ImClone and Anadarko’s (APC) acquisition of Kerr-McGee.

As you can see and conclude, the road bumps in Icahn’s track record are not so friendly to the Billionaire’s fellow shareholders. Would you rather invest with Warren Buffett or Carl Icahn? I would opt for the more shareholder friendly of the two and steer clear of Genzyme (GENZ) right now. Another disaster might be brewing with Icahn.

Disclosure: No positions in the companies mentioned.

To get entry points, stop-loss points, and profit targets for our fresh March watch list stocks and Featured Trade, simply try a 14-day complimentary trial to Wall St. Cheat Sheet Premium by visiting here:

http://wallstcheatsheet.com/newsletter/

Sunday is the NCAA tournament bracket selection show on CBS (ticker: CBS). So, with March Madness in the air, I thought I would take a page out of David Letterman’s book and highlight a CBS Top Ten for you:

10) CBS owns the rights to March Madnes. CBS has a $6 Billion, 11-year rights deal with the NCAA for the Tourney, with 3 years and $2.1 Billion remaining. CBS pays the NCAA a licensing fee of roughly $610 million.

9) New mobile products for the NCAA March Madness Championship are rolling out so you can have the tourney at your fingertips.

Leno’s return to late night television was too late! David Letterman’s ‘Late Show’ earned $271 Million Ad Dollars in ‘09 vs. ‘The Tonight Show’ earning $175.9 Million Ad Dollars in ‘09.

7) According to Ad Age, from Sept. 21st ‘09 to Feb. 14th ‘10, Letterman’s audience was 4.2 million viewers vs. ‘The Tonight Show’ total audience of 2.92 million viewers during a longer period from June 1st ‘09 to Jan 24th ‘10.

6) CBS’s total advertising revenues tied to the tourney are roughly $600 million — third to just the World Series and the Super Bowl.

5) According to WPP-owned Kantar Media, CBS’s online March Madness revenue totaled 5% of the overall $600 million plus ad revenue pie last year, up from 3.5% the year before and expected to edge even higher this year.

4) Fun fact: office pool betting tallied across the U.S. reaches over $3 billion for the NCAA tournament this year, with the online CBS tourney brackets being utilized the most of any online options.

3) Tiger Woods is planning his return to Golf later this month in preparation for the 2nd most-watched sports event of the year, the Masters, aired by CBS in April.

2) Insider Sumner Redstone owns over a half million shares of stock in CBS, now more shares than Viacom (ticker: VIA-B) (see my other Haute Investing Article). link to this http://www.hauteliving.com/blog/viacom-kicks-off-the-new-decade-with-viable-strength/

1) CBS’s stock is up 375% from its March ‘09 low a year ago.

In the words of Dickie V, CBS and March Madness are “awesome baby!”

Disclosure: No positions in the companies mentioned.

To get entry points, stop-loss points, and profit targets for our fresh March watch list stocks and Featured Trade, simply try a 14-day complimentary trial to Wall St. Cheat Sheet Premium by visiting here:

http://wallstcheatsheet.com/newsletter/

Coinstar (ticker: CSTR) is fast-becoming an emerging momentum play. The company is approaching a $1 billion enterprise due to their red hot Redbox located at the front of every grocery store all over the country.

Redbox dishes out DVD rentals for only a $1 with plenty of feature titles licensed from Paramount Home Entertainment, a division of Viacom (see: http://www.hauteliving.com/blog/viacom-kicks-off-the-new-decade-with-viable-strength/). Gary Cohen, SVP of Redbox, said, “From road warriors to moms on the run, the iPhone app from Redbox helps customers rent and reserve at any of the thousands of neighborhood locations nationwide.”

Recently, the iPhone app from Redbox surpassed 1 million downloads. Keep a close eye on Coinstar as they steal more business from Blockbuster.

Meanwhile, Netflix (ticker: NFLX) has a market cap over 3 times that of Coinstar. Founder and CEO Reed Hastings possesses the key leadership quality of adaptability — a quality he must have learned while serving in the Peace Corps in his younger days.

His company’s stock has doubled over the past year and grown to serve over 12 million subscribers. Analysts forecast Netflix to double their subscriber base by 2016. A key catalyst is their continuing investment in streaming online movies, ultimately the customer’s next destination for viewership.

On the flip side, Blockbuster (ticker: BBI) was just too late to the online game. The company is now a penny stock! Blockbuster is like an old-fashioned travel agency in the early 90s that didn’t see the Internet boom coming. Eventually, the old-fashioned, traditional travel agencies were run over by online travel agencies like Expedia, Orbitz and Yahoo! Travel. Lesson learned by Blockbuster: adapt to change, otherwise get left behind.

Lastly, keep your eye on TiVo (ticker: TIVO). This week, TiVo announced they are ready to release new DVRs this spring. Unlike the current models, critics are calling the new device a solution to integrating TV and Internet content.

The TiVo Premiere is the answer to the company’s urgency to spark the growth of its stagnant 1.5 million customer base. Price could be an issue, as the new DVRs will range from $299-$499 in addition to required subscription fees ranging from $12.95 a month to $299 for three years.

TiVo CEO Tom Rogers said, “We’re moving toward get anything you want whenever you want it.” A search for Penelope Cruz on the new TiVo DVRs would bring up her movies that are showing soon on TV, available for rental or purchase through Amazon.com (ticker: AMZN), as well as related YouTube videos. Sounds like a convenient one-stop shop library for those willing to pay.

Furthermore, TiVo just won an intellectual property case worth $300 million against EchoStar Communications Corp. (ticker: SATS) the parent company of Dish Network Corp. (ticker: DISH). The win means companies like Comcast Corp. (ticker: CMCSA) and DirecTV (ticker: DTV) must enter into commercial arrangements with TiVo which will yield future licensing fees.

Three new pioneering options are unfolding before our eyes. Which one will you integrate into your experience? Your answer may lead to a great investment.

Disclosure: No positions in the companies mentioned.

To get entry points, stop-loss points, and profit targets for our fresh March watch list stocks and Featured Trade, simply try a 14-day complimentary trial to Wall St. Cheat Sheet Premium by visiting here:

http://wallstcheatsheet.com/newsletter/

Damien & Derek Hoffman

Brothers Damien and Derek Hoffman work well together. In fact, they are quickly working their way into the inner circle of financial gurus—the people that other people actually listen to, and more importantly, the people that other people should be listening to. As a result, their site, Wall St. Cheat Sheet, is one of the most popular new financial media companies on the web.

Wall St. Cheat Sheet was launched only days after the S&P 500 crashed. As they explain, after the crash both believed it was necessary, “Like a samurai, our mission is to cut through the bull and bear shit with extraordinary insights, a fresh voice, and razor-sharp wit. We provide the highest quality education and information for active investors and financial professionals.”

Wall St. Cheat Street aims to:

• Profile the brightest minds, those better at who they are than what they do
• Cover important issues which require deeper analysis and better evidence than that in the public focus
• Provide investing and trading education from successful pros who practice what they preach.

The Hoffman brothers have no problem reaching those goals, probably because they are both extremely hard working. Derek joined his brother Damien after accumulating a decade of investing experience and outperforming the S&P 500 for the past five years. Prior to that, he handled media investment and tactical strategy planning for Procter & Gamble and Gillette’s national asset portfolio. He worked in private wealth management for Morgan Stanley and graduated from the University of Michigan with a degree in Economics. Damien started a successful company during the dotcom boom, worked at an investment bank, and clerked at the Florida Supreme Court. He graduated from Duke University with a degree in Public Policy.

When asked what gave them the idea to start this business, Derek thought back to the end of 2007, “the Dow Jones Industrial Average was over 14,000 and we were telling our network of clients and friends to get out of the stock market because banks were riding high on very suspicious loans.

As the market crashed, we watched the mainstream media tell everyone to sit tight. In some horrible situations, commentators were telling people to buy banks like Wachovia and Washington Mutual because they were “bargains.” Clearly, these people had no idea what they were talking about. After witnessing this irresponsible behavior by the media, we knew there was a demand and need for objectivity in financial media.”

After that the Hoffman brothers knew what they had to do. Here is what Derek had to say about starting Wall St. Cheat Street.

YOUNG MONEY: Where did you get the funding for your business?
DEREK HOFFMAN: We funded our business purely with sweat equity and the ability to fund our personal cost of living during the start-up phase. We built everything in-house. From soup-to-nuts, we invested in ourselves, the foundation of Wall St. Cheat Sheet.

YM: What was the hardest thing you encountered while starting your business?
DH: Launching our business during a recession—a time when people are tightening their wallets. However, we were pleasantly surprised by the response of growing readership at our site and the Premium Newsletter we publish monthly. We serve a growing demand for objective analysis and financial education which is valuable to people’s hard-earned savings. So, they have been willing to spend a small amount of money to protect their capital—even during a recession.

YM: What surprised you the most?
DH: The willingness of top pundits at various places all over the world—from Jim Rogers in Singapore to Dylan Ratigan in New York—to sit down with us and share their insights and personal stories.

YM: Is this your first business?
DH: Not quite. I helped launch a restaurant in college and have co-founded a record label. Damien started a successful dotcom during the tech boom and also co-founded the record label with me.

YM: How many employees do you have?
DH: Between six and eight right now, with as many as ten depending on the editorial contributions, web development, and research.

YM: How do you get your name out there and get customers? What has been your most effective marketing technique or tactic?
DH: Word-of-mouth. We provide premium content to other best-in-class sites on the web. We now contribute to CNNMoney, The Huffington Post, Minyanville, The Business Insider, BBC World News, and CBS Radio, just to name a few of the major media outlets that spread the awareness of the Wall St. Cheat Sheet.

YM: If you could offer one piece of concrete advice to other people, what would it be?
DH: First, pursue what you are passionate about and the money will follow. Wake up everyday doing what you want to do. Second, work hard because eventually hard work pays off.

YM: Is there anything else you would like our readers to know?
DH: Please stop by our site and Young Money readers will enjoy a complimentary issue of our Premium newsletter: http://wallstcheatsheet.com/newsletter

This interview was conducted by Young Money Editor-in-Chief Cara Newman.

In case you were distracted by Ben Bernanke’s testimony last week, an interesting trend in consumer behavior is taking shape during this year’s tax-filing season.

Based on news from the top tax service companies, you will see individuals are in a very cost conscious state-of-mind. Consumers are quickly selecting the cheaper of the two options: preparing your own tax forms.

In this week’s Edge, we look at H&R Block, Intuit, as well as a quick snapshot of Jackson Hewitt.

H&R Block (HRB): $17.28 The “Hamburger Helper” of Tax Prep

Shares were crushed last Wednesday after the company warned they would miss their puffed up 2010 earnings outlook. H&R Block had expected fiscal 2010 earnings from continuing operations to amount to $1.60 to $1.80 a share. The consensus estimate from analysts polled by Thomson Reuters is at the low end of that range, $1.61 per share.

Past quarter earnings are due out after the bell on March 8th. The current estimate of analysts polled by Thomson Reuters is for a profit of $.16 cents per share on revenue of $959.2 million.

CEO Russ Smyth said, “We believe industry filings are down significantly due to the recession and sustained, high levels of unemployment … the weak economic conditions have also contributed to a greater shift to do-it-yourself tax preparation methods among first-half clients.”

Comment: The Kansas City-based tax services giant has prepared 6.3 percent fewer tax returns — 10.06 million — through Feb. 15 than during the same span last year (10.7 million tax returns prepared). H&R Block will just have to bear the brunt of less clients and more empty desks at their retail locations this season.

Intuit (INTU): $32.36 The Do-It-Yourself Software Provider

The maker of Turbo-Tax earned $.34 cents per share vs. $.26 cents per share in the same period a year ago. Consensus estimates were expected to be $.32 cents per share, an upside beat for Intuit.

Revenue in the most recent quarterly report increased 8%, better than analyst expectations.

President and CEO of Intuit Brad Smith said on the quarterly conference call, “We’re off to a good start and we’re on track to deliver better than expected revenue and earnings growth for fiscal year 2010.”

Sales of best-in-class TurboTax products jumped 11%. Intuit reported selling 10.97 million TurboTax products compared to 9.9 million in the same period a year ago. The web-based version of the product saw a 23% gain in sales, a sign that online tax preparation is leading the way this season.

Comment: Management recently raised full-year guidance estimates for revenue and profits. Also, It’s important to note that Director David Batchelder purchased a sizable insider stake of over 12.5 million shares on December 15, 2009 when the stock was around $30 per share — only slightly lower than today’s price of $32.36 per share. Initial signs show Intuit with a strong start in capturing the demand for do-it-yourself tax prep.

Jackson Hewitt (JTX): $2.44 The Franchise with Ugly Financials

Fiscal 2010 3rd Quarter earnings results are scheduled for March 11, 2010.

Comment: JTX is quickly burning cash. The company has only $60K in cash remaining relative to $311 million in debt obligations. I would steer clear of this company until the financials improve; otherwise, you might get caught holding the bag as this company files for bankruptcy in the near future or becomes a penny stock.

Among the three tax preparation players highlighted above, Intuit is definitely the safest trend play, while H&R Block and Jackson Hewitt are the contrarian higher-risk pullback plays. Jackson Hewitt is definitely the weakest of the three companies, but still possesses a recognized brand name in the marketplace. Consumers do not mind the hold-your-hand service when they have the extra cushion. However, companies like H&R Block are coming to realize the cushion is either minimal or non-existent for most individuals filing taxes this year.

Disclosure: No positions in the companies mentioned.

To get entry points, stop-loss points, and profit targets for our watch list stocks and Featured Trade, simply try a 14-day complimentary trial to Wall St. Cheat Sheet Premium by visiting here:

http://wallstcheatsheet.com/newsletter/

On Friday, Wall St. Cheat Sheet CEO Derek Hoffman was on Chicago’s most popular business radio show discussing important levels on the S&P 500 and Berkshire’s recent split … Robert Prechter was also on talking about Elliot Wave:

Click to Listen

2010 is in the red, more people watched the Super Bowl than ever before (i.e. unemployment still must be high), the Saints finished with a story book ending to the post-Katrina rollercoaster that New Orleans faced, and the DOW recently cracked below 10,000 for the 1st time in 3 months.

Today, I’m going to dig a little deeper into the Battle of the Beverage Behemoths: Coke (KO) vs. Pepsi (PEP):

Coca-Cola (KO): Still the Real Thing

Earnings: $.66 cents per share compared to $.43 cents per share in the same period a year ago. The consensus analyst estimate was $.66 per share, in-line with expectations.

Revenue increased 5.6% to $7.5 billion from $7.1 billion. Analysts expected revenue of $7.2 billion, an upside surprise for KO.

On the conference call, CEO Muhtar Kent said, “”Compared to this time last year, there’s a lot more clarity in terms of what the consumer is seeing. Not all good, but there’s a lot more clarity.”

Comment: Coca-Cola said it gained market share globally in the non-alcoholic ready-to-drink beverage category for the 10th straight quarter. KO sold 5% more beverages worldwide in its 4th quarter, with stronger sales in China and India. North America saw a 1% decline in case volume, an evident sign the U.S. consumer is still less willing to spend than once before. Coca-Cola is focused on its international growth, as international sales now consist of 75% of total company revenue. KO seems more focused on ‘opening happiness’ in other parts of the world, since North American happiness has experienced a plateau over the past couple years.

PepsiCo (PEP): Super Bowl Dorito Domination

Earnings: $.90 cents per share compared to $.46 cents per share in the same period a year ago. The consensus analyst estimate was $.91 per share, a minor expectation miss for PEP.

Net revenue increased 4.5% to $13.3 billion from $12.7 billion. PepsiCo positively nudged analyst expectations of $13.26 billion.

Comment: The true winner of cheers and laughter during the Super Bowl commercial showdown clearly goes to ‘Keep Yo Hands off my Momma and my Doritos.’ The post-game commercial buzz is still lingering the Doritos commercial, and the sign of a true win for PEP’s Super Bowl investment. Today’s quarterly earnings release proved PepsiCo’s snacks business to be a major catalyst for growth. Like Coca-Cola, the reiterated theme from PEP management was a focus on accelerating growth in developing, overseas markets since PepsiCo’s North American beverage revenue also declined. On a bright note, PepsiCo forecasted an 11-13% growth rate for core constant currency Earnings per Share for fiscal 2010. As PepsiCo hopes to complete the $7.8 billion acquisition of its two largest bottlers by the end of the month, patience will pay you with more clarity into PEP’s future numbers.

The markets are displaying heavy volume down days, an ominous sign that the recent ‘Great Recession’ bear market rally is no longer dancing, but wobbling with shaky legs. Capital preservation is never a losing a proposition during turbulent times like these.

Coke (KO) or Pepsi (PEP)? Who do you think won the battle of Super Bowl Ads?

Disclosure: No positions in the stocks mentioned.

To see our Featured Trade in February’s Premium Newsletter, get your feet wet with a 14-day complimentary trial by visiting here:

http://wallstcheatsheet.com/newsletter/

News Corp. (NWSA): Avatar and Ad Dollars lift the Big Media Ship

Earnings: Earned $.10 per share in the quarter ending Dec. 31st compared to a loss of $2.45 per share in the same period a year ago.

Revenue grew 10% this quarter, doubling analysts’ expectations.

News Corp. chairman and chief executive Rupert Murdoch said, “We continue to reap the benefits from the restructuring and cost containment measures we instituted before the downturn began.”

Comment: There is much anticipation surrounding the content payment model being tossed around for WSJ and other NWS properties. Rupert Murdoch reiterated that content shall have a price tag for access in the brave new world of iPads and other devices. Avatar was a tremendous success to the NWS top line this quarter. Additionally, on the conference call, Rupert Murdoch said he expects a sequel to ‘Avatar,’ which means you can expect another legendary revenue generator for NWS in the future. It might take the next decade to create the sequel, so think long-term with your NWS investment.

Polo Ralph Lauren (RL): Revenues miss; shares sink

Earnings: Earned $1.10 per share in the recent quarter compared to $1.05 per share in the same period a year ago.

Net revenue declined .6%, missing analyst expectations and further showing consumer weakness. Polo said it expects fiscal 2010 net revenue to decline by a low-single-digit rate.

Tracey Travis, CFO of Polo Ralph Lauren, said on the conference call, “Overall traffic trends in our stores remained challenging during the third quarter especially in the US.”

Comment: The trend toward online purchases continued as RalphLauren.com online sales rose 13% over the quarter. Put RL on your watchlist until the fears of unemployment are eased. No jobs = less consumers at retail.

Time Warner (TWX): A pure play content company?

Earnings: In its first release since spinning off AOL, Time Warner said it earned $.53 cents per share, compared to $.19 cents per share in the same period a year ago.

Revenue slightly rose 2% from the prior year’s quarterly revenue.

On the conference call, John Martin, CFO at Time Warner, said, “We are seeing improved trends virtually across the board.”

Comment: The company’s board raised the quarterly dividend by 13% and improved Time Warner’s ability to make stock repurchases from $1 billion to $3 billion. With the AOL spinoff, TWX flexes a leaner operation and foresight of new media adaptability (i.e. the future of Sports Illustrated: http://www.youtube.com/watch?v=ntyXvLnxyXk). Alas, both TWX and AOL can shine their true colors as separately standing entities!

Disclosure: No positions in the stocks mentioned.

To see our Featured Trade in January’s Premium Newsletter, get your feet wet with a 14-day complimentary trial by visiting here:

http://wallstcheatsheet.com/newsletter/

On Tuesday morning, January 19th, I spoke to CNNMoney during the pre-markets and said we were in for “somewhat of a reality check” as a slew of bank earnings reports were slated for release. The markets were at their highs for the year.

Fast forward to today, and the DOW and S&P are in negative territory for 2010, Bernanke is continuing to keep the printing presses roaring as he wins his 2nd term, Obama is calling for financial reform (broken record), and economic reports continue to disappoint (i.e. jobless claims rising and housing sales declining).

One bright spot amidst all the bad news is innovation and technology companies that are the cream-of-the-crop performers so far in 2010.

Today, I breakdown earnings from three leaders in the technology sector: Apple (AAPL), Amazon (AMZN) and Microsoft (MSFT) …

Apple (AAPL): The iPod, iMac, iPhone and now iPad. But will the iPad be a winner at $499?

Earnings Info: Earned $3.67 per share, compared to $2.50 per share in the same quarter a year ago. Analysts were expecting $2.07 per share, a huge upside surprise.

Revenue jumped 32% to $15.68 billion, beating analyst expectations of $12.06 billion.

Comment: AAPL announced record earnings — its most profitable quarter in history. AAPL beat expectations with ease on both earnings and revenues. Everyone loved the iPod, the iPhone, and iMacs. Although questions remain around the iPad, given the successful track record and hot streak that Steve Jobs has been blazing during the ‘lost decade,’ Apple should continue to impress as a media company with a best-of-breed product line that just keeps expanding.

AMZN (AMZN): The Kindle is changing the game of book consumption.

Earnings Info: Earned $.85 per share this quarter, a 71% year increase in earnings compared to the same quarter a year ago. AMZN’s earnings beating analyst estimates of $.72 for the quarter.

Revenues skyrocketed 42% to $9.5 billion from a year ago.

CEO Jeff Bezos said, “We now sell 6 Kindle Books for every 10 physical books.”

Comment: Once again, AMZN proved they are here to stay and the Kindle is altering our world during the exciting shift in the book publishing landscape. AMZN was even bold enough to raise their forward outlook expectations above analyst estimates. Be careful they don’t inflate the balloon of estimates too fast too soon. AMZN has been known to not keep up with the outlooks it puts out to market, so ideally wait for pullbacks (if possible) as buying opportunities.

MSFT (MSFT): Windows 7 creates satisfied PC enthusiasts … making up for the VISTA buzz-kill.

Earnings Info: Earned $.74 per share compared to $.47 per share in the same period a year ago. Consensus estimates among analysts were $.60 per share in the quarter, so Microsoft beat expectations.

Revenue rose 14% to $19 billion from $16.6 billion quarter-over-quarter. Revenue jumped 70% in the Windows division due to the Windows 7 launch in October ‘09.

Comment: Microsoft beat expectations on earnings, but missed on revenue growth. However, MSFT still managed to impress Wall Street with a double-digit revenue increase! MSFT said it still sees no signs of big companies increasing their spend on technology yet. MSFT is expected to release a new version of Office later this year, which will need to be a catalyst for the company as the ever-competitive Google is creeping up with improving business software.

Disclosure: No positions in the stocks mentioned.

To see our Featured Trade in January’s Premium Newsletter, get your feet wet with a 14-day complimentary trial by visiting here:

http://wallstcheatsheet.com/newsletter/

This week, I decided to hand pick three stocks within the restaurant sector displaying best-of-breed characteristics of expansion and growth during what was a dismal ‘09. Although other restaurants saw revenue declines, these three restaurants satisfied an increasing appetite in cities all over the country. Moreover, these restaurants proved they are off to a great start in the Next Decade.

B-Dubs: Buffalo Wild Wings (BWLD): ~$46/share

Why is there a line out the door? The demand: a great sports bar experience with chicken wings and a variety of sauces.

• BWLD sports a P/E of 28 and a Market Cap of $830 Million.
• Financial position: $52 Mill in cash and zero debt.
• Employs over 1,200 people.
• 620 stores in 41 states at the end of December ‘09 vs. 560 stores in 38 states at the end of December ‘08.

The earnings estimate is $.50/share vs. actual earnings of $.43/share the same quarter a year ago — a 16% year-over-year increase. B-Dubs’ quarterly earnings will be released February 11th, 2010.

Chipotle (CMG): ~$98/share

Why is there a line out the door? The demand: quick-service burritos, tacos, fajitas, and ‘burrito bowls’.

• CMG sports a P/E of 28 and a Market Cap of $3.11 Billion.
• Financial position: $238 million in cash and nearly zero debt on the books.
• Potential for a short squeeze if Chipotle surprises to the upside in their earnings report. As of December 31st, 2009, there is 42% short interest in the stock.
• Employs over 20,000 people.
• 911 restaurants as of the end of Q3 2009 vs. 837 stores of current restaurants in 33 states as of Dec. ‘08. In 2010, Chipotle plans to open about 120-130 new stores.

The earnings estimate is $.79/share vs. actual earnings of $.52/share the same quarter a year ago — a 52% year-over-year increase. Chipotle’s quarterly earnings report is slated to be released on Feb 8th, 2010.

Panera Bread (PNRA): ~$68/share

Why is there a line out the door? The demand: ‘fast casual’ hand-crafted breads, sandwiches, salads and drinks.

• PNRA sports a P/E of 25 and a Market Cap of $2.15 Billion.
• Financial position: $173 million in cash and zero debt.
• Employs about 10,000 people.
• 1,362 stores as of the end of Q3 2009 vs. 1,325 stores as of Dec. 30th, 2008. In 2010, Panera plans to open 80-90 new stores.

The earnings estimate is $.88/share vs. actual earnings of $.84/share the same quarter a year ago — a 5% year-over-year increase. Panera’s quarterly earnings will be released on Feb 11th, 2010.

These rising restaurants have displayed three important growth measures during the past year: increasing revenue, expanding their number of stores, and maintaining healthy balance sheets during an unhealthy economy.

Disclosure: No positions in the stocks mentioned.

To see our Featured Trade in January’s Premium Newsletter, get your feet wet with a 14-day complimentary trial by visiting here:

http://wallstcheatsheet.com/newsletter/

Readers who liked this also enjoyed this post:

2010 Market Outlook Report by Jordan Roy-Byrne, CMT