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S&P Picks and Pans: AIG, New York Times, YRC Worldwide


Analyst opinions on stocks making headlines in Wednesday's market

From Standard & Poor's Equity Research12/24/2008- 11:11am S&P MAINTAINS HOLD OPINION ON SHARES OF AMERICAN INTERNATIONAL GROUP (AIG)

AIG announces that a recently created financing entity has purchased $16 billion of collateralized debt obligations insured by AIG unit via credit default swaps. The purchase was funded by a net payment of $6.7 billion to counterparties and the surrender by AIG of roughly $9.2 billion of collateral previously posted to counterparties. We believe the transaction helps lower AIG's risk profile, but it still has a significant amount of exposure to collateralized debt obligations, which, in our view, will likely weigh on results and necessitate asset sales to maintain liquidity. /C. Seifert, S. Plesser

12/24/2008- 11:00am S&P MAINTAINS SELL RECOMMENDATION ON SHARES OF NEW YORK TIMES (NYT)

Revenues for the month of November declined 13.9%, slightly worse than our forecast and compared with October's 9.4% decline. The negative trend in advertising revenues worsened, with November ad sales down 20.9% vs. October's down 16.2%. Circulation revenues, helped by higher prices, rose 4.2% in November vs. 3.9% rise in October. Other revenues, less than 10% of total, fell 11.7% in November. We reduce our '08 EPS estimate by $0.05 to $0.48 and '09's by $0.02 to $0.53; both include severance costs. Our target price, based on enterprise value/EBITDA and historical P/Es, remains $4. /L. Braverman, CFA

12/24/2008- 10:25am S&P MAINTAINS HOLD RECOMMENDATION ON SHARES OF YRC WORLDWIDE (YRCW)

YRCW says Q4 tonnage is down sharply, and we believe its double-digit declines are worse than for peers. Although it expects to be in compliance at year-end with leverage covenants, YRCW has entered a new round of discussions with banks to modify its credit agreement. We leave our estimate for '08 at a loss of $0.70 per share, but lower '09's from $0.90 EPS to breakeven since we anticipate restructuring and financial concerns will lead even more clients to shift volumes to other carriers. Our target price, based on price/tangible book, remains $4 on this high-risk investment. /K. Kirkeby, CFA


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