Insiders' Blog

Traders always have there ears open for the next hot piece of gossip and how they can translate that into making money. Below are the some juicy tidbits traders are talking about today.

• Trading in Cisco (Nasdaq: CSCO) was halted after an apparent "fat finger" trade printed at $26 triggering the single-stock circuit breakers. When shares re-opened they were back flat on the session. Joe Saluzzi of Themis Trading commented, saying, "Cooler heads got to prevail" is what we will hear and that the circuit breakers are working. And we say, just the opposite: confidence continues to erode and these false halts are causing more agitation with investors."
  
  
• Sanofi-Aventis (NYSE: SNY) is reportedly preparing a formal offer for Genzyme Corp. (Nasdaq: GENZ). Some say the offer will come at $70 per shares, leaving little upside. Other say it will have to be north of $80 to entice Genzyme shareholders.
  
  
• Goldman Sachs (NYSE: GS) has told employees not longer to use profanity in e-mails or other electronic communications, the Wall Street Journal reported. No more "shitty deals" from Golden Slacks I guess.
  
  
• Federal Reserve Bank of St. Louis President James Bullard argues that the Federal Open Market Committee’s extended period language may be increasing the probability of a Japanese-style deflationary outcome for the U.S. within the next several years. Bullard concludes that an appropriate quantitative easing policy offers the best hope for avoiding a low nominal interest rate, deflationary outcome. More Here
  
  
• Pactiv Corp. (NYSE: PTV) picked up interest mid-day on renewed speculation the company could be close to hammering out a takeover deal. In the past, private equity firm Apollo Global Management has been rumoed as a suitor in addition to Georgia-Pacific Corp. and New Zealand's Rank Group. Shares are up 1.6 percent today.
  
  
• Takeover talk continues to surround BJ's Wholesale Club Inc. (NYSE: BJ) after private equity firm Leonard Green & Partners took a large stake in the company earlier in the month. Reports last week said the company has hired Greenhill & Co. (NYSE: GHL) to evaluate options.

Barrick Gold Corp. (NYSE: ABX) said Thursday that it saw a 59 percent jump in second-quarter profit as gold prices reached record highs last quarter.

The world’s largest gold miner reported quarterly earnings of $783 million or 79 cents per share, compared to $492 million or 56 cents in the same quarter last year. Excluding one-time items, Barrick earned 77 cents per share in the quarter, 5 cents better than the analyst estimate of 72 cents per share.

Revenue for the company rose 34 percent to $2.64 billion in the three month period ended June 30, slightly better than the market consensus of $2.61 billion.

Gold hit a record high of $1,260 an ounce in June, and averaged nearly $1,200 an ounce throughout the quarter, up nearly 30 percent from the year-ago quarter.

"We had another good quarter with solid operational and financial results. Our operating costs were stable and when combined with the higher realized gold price led to significant margin expansion, record quarterly earnings and strong cash flow generation," said Aaron Regent, Barrick's President and CEO. "We continued to advance our project pipeline in line with our plans.”

The company also said that its board approved a quarterly dividend of 12 cents per share, about 20 percent higher than the previous dividend payment.

Shares of Barrick are up 52 cents to $40.55 on Thursday.

Although Goldman Sachs (NYSE: GS) has been the whipping boy in the fight by President Barack Obama and his administration in recent months as it has pushed through with financial reform, when the government needs to get down to business -- it still calls on the firm.

In a report from New York Post reporter Mark DeCambre, it is pointed out that the government has time and time again shunned the Wall Street mega bank, but has also turned to it when something needs to be done.

The government publicly attacked Goldman before a Senate subcommittee in April when it called the bank’s financial products “junk" and “crap.” Yet, when the government looked needed to have a firm handle the public offering of American International Group’s (NYSE: AIG) AIA unit, it was Goldman’s job. This, even after Goldman was accused of being the biggest benefactor of the $182 billion bailout of AIG.

"They all articulate anger at the company, but they all do business there," said Dick Bove, an analyst at Rochdale Securities. "The value of Goldman isn't its lovability; the value of Goldman is that it can get things done that other people can't."

Goldman CEO Lloyd Blankfein was one of only two top executives not to be invited to the signing of the historic FinReg bill, but Obama did call the scorned CEO hours after the event to apologize for not sending an invitation.

So despite the government’s perceived anger -- atleast in the public eye -- of how Goldman conducts business, the current administration has no problem tapping the firm when something must be done right.

Jim Cramer recently spoke with Clean Energy Fuels (Nasdaq: CLNE) president and CEO Andrew Littlefair, and the CEO made comments about the new energy bill that is about to be passed.

The CEO said that, although lighter vehicles (like cars and trucks) consume 100 billion gallons of fuel each year, they are targeting the eight million heavy duty trucks on the road which use 35 billion each year. The bill, Littlefair said, would offer incentive for heavy duty truck owners to convert to natural gas, which could save about $1 per gallon of gasoline.

Littlefair also commented that, since 85% of all trucking is regional, meaning less than 350 miles per day, nat gas stations could be built in clumps around truck stops. He notes that many stations can be built in six months or less.

The CEO said that, with the passage of the energy bill, over 500K in new jobs could be created.

Upon the news, Cramer reiterated his Buy rating on the shares.

Shares of Vale S.A. (NYSE: VALE) are trading moderately lower today, down about 0.4% to $27.67, as the company announced that they would make a bid of R6.30 per share for 100% of Brazil's leading copper smelter Paranapanema. Total consideration for the transaction would be R2.108 billion, or $1.137 billion if converted today.

According to Vale, one of their strategic objectives is "to become, in the medium term, one of the main copper producers in the world." The company already has projects in Canada and Brazil, and will be starting two new projects in Chile and Brazil in 2010 and 2011, respectively, as well as a Zambian property which will begin production this year. The completion of the new projects will increase their overall copper production capacity from 300,000 tons to 458,000 tons.

Copper sales currently only account for about 3% of Vale's revenues.

Details:
The auction will be held on September 1st, 2010, at 15:00 hours. The Paranapanema’s shareholder who wishes to participate in the auction shall qualify according to the terms of the Prospect.

If the offer is successful, Vale intends to conduct studies that could result in corporate and/ or asset reorganization. [They] will release more information once this is defined.

The Prospect, as well as the independent valuation report, can be found at Vale, CVM, BM&FBovespa and Bradesco BBI websites. Vale will forward a copy of such documents to Paranapanema’s management, so they can be made available for the shareholders at the company’s headquarter and website.

Paranapanema shares are currently trading 7.245 on the BM&FBOVESPA.