Boeing’s CEO James McNerney may be in some trouble.  Even though the company announced an increase in earnings greater than what Wall Street expected the continuing difficulties facing the airline manufacturer with regard to its delivery of its 787 Dreamliner model continues to place undue pressure on the CEO’s management status.  I would suggest investors keep a close eye on Boeing and its management.  For more:   Chicago Tribune    Seattle Times

As part of our recent TWST Investing Strategies Report We spoke with Tina Larsson is the CEO and Lead Portfolio Manager of Pendo LLC.  Below are some highlights from the Interview:

Tina Larsson manages an international equity portfolio in a strict value style, buying companies that trade below their intrinsic value and have a low correlation to the US market, economy and currency. She sees tremendous growth opportunities in countries like China possibly for the next 50 years. International investments, especially emerging market investments, will outperform US investments, in some cases dramatically. Because she believes that the growth potential in the US is relatively low and the risk of inflation is fairly high, she is adamant that international investing is no longer diversification as a hedge, but as a necessity.

Companies mentioned include: Sichuan Expressway; China Unicom (CHU); China National Offshore Oil Company (CEO); CEMIG (CIG); Cresud (CRESY); Cameco (CCJ); Johannesburg Stock Exchange; Philip Morris International (PM).

Leslie Gaines-Ross who writes the reputationXchange.com blog for Weber Shandwick referred to a recent book by Jim Collins on How the Mighty Fall.  The piece is worth a read and seems very instructive for current CEOs and top leaders.

We spoke to analyst Aaron Deer of Sandler O’Neill + Partners in the most recent issue of TWST, as part of our special focus on Western Banks. He gave us a relatively positive outlook for the space, given the current state of the economy:

 Mr. Deer: I certainly think the banks are doing the right things. The problem assets are working their way through the pipeline, they’re selling notes that they can sell, they’re selling their foreclosed assets. But as quickly as they’re able to move things off the balance sheet, new problems are developing. So it’s a process, but they’re doing what they need to do. Maybe most encouraging is the fact that the banks have had some success in raising new capital to bolster their balance sheets. Meanwhile, they’re also taking steps to improve liquidity. In the first quarter, we saw strong deposit growth at most banks in the West. My sense is that has continued into the second quarter.

For the complete Western Banks report, including a full interview with Mr. Deer, as well as CEOs from top companies in the space, click here. 

As part of our recent TWST Investing Strategies Report We spoke with Frederic G. Burke  of Johnston Lemon Asset Management, Inc. Below are some highlights from the Interview:

Frederic G. Burke manages investment portfolios of well-capitalized companies that are positioned to deliver both capital appreciation and dividend growth. He believes the financial markets have seen the worst, but because of the repercussions of the economic slowdown, the stock market cannot move significantly above the current levels in the immediate future. Market confidence will return when the unemployment rate decreases and mortgage payments are made. He is skeptical about forecasts of impending inflation, explaining that for inflation to unfold in the next two years would require a major shift upward in labor compensation, which he thinks is unlikely. He continues to maintain a high cash and fixed income position as well as an emphasis on the energy, industrial and technology sectors. Within health care, select subsectors such as medical appliance and biotech companies will flourish.

Companies mentioned Companies include: ConocoPhillips (COP), Chevron (CVX); Devon (DVN); Google (GOOG); Microsoft (MSFT); St. Jude Medical (STJ); Wal-Mart (WMT); Boeing (BA); 3M (MMM).

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Tim Armstrong, AOL’s new CEO, is beginning to put his stamp on the company.  Over the weekend Staci D. Kramer of PaidContent.org published a memo from Armstrong outlining his new AOL management team.  Armstrong is trying to work his management magic to make for a real turnaround at AOL.  Check out the memo and get a sense of his latest team members.

Donald A. Worthington of Howe Barnes Hoefer & Arnett, Inc. in our recent Western Banks roundtable gave us his view on the industry and his picks for the sector:

“Buy ratings at the time. I just have a couple and they tend to be smaller, under the radar screen banks like Pacific Premier Bancorp (PPBI), and Central Valley Community Bancorp (CVCY). Even though it is located in the Central Valley, CVCY has done a good job of avoiding the severe credit problems that others have had in that market. I think it is a matter of keeping an eye on the quality franchises and being familiar enough with them so that you can buy them on dips in their stock prices and get into them at attractive prices. You need to have a longer-term outlook. Fundamentally, I believe this industry will bounce back and there will be many good investment opportunities in the future. You just have to select names that are going to survive and are well positioned to build market share once the credit cycle works its way through.”

Mr. Worthington also has a sell:

“The only Sell rating I have currently is on TriCo Bancshares (TCBK), which is actually a good, well-run franchise. I just think it’s overvalued, particularly with a large home equity loan exposure relative to its total loan portfolio. So it is a valuation call based on where the stock is trading — substantially north of tangible book value and well above the median peer group valuation. I would just avoid that stock for now. “

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The Obama administrations appears to be close to getting its proposal through Congress for a non-binding say over executive compensation in public companies.   According to a story by Del Jones, for USA Today,

The Obama administration offered legislation Thursday that would require publicly traded companies to give shareholders a non-binding vote on the compensation of CEOs and other highly paid executives and to vote on exit packages, known as golden parachutes, at the time of a merger or acquisition.

It would appear the Obama administration is working hard to go right down the middle on this issue.  While top executives from key associations are adamantly opposed to even non-binding resolutions on executive pay their counterparts such as corporate governance advocates and a number of institutional investors would prefer far greater teeth in the new proposal.  At least this is a minor beginning.

Our featured company for this week Burzynski Research Institute(BZYR) can be read in full here.

Burzynski Research Institute is a biopharmaceutical company which is developing cancer treatment based on genomic principles. We are in the process of obtaining FDA approval for marketing four antineoplaston (ANP) drugs. Two of these antineoplastons – Atengenal® and Astugenal®, are administered intravenously, and the other two -  Cengenal® and Fengenal® are administered orally in capsules.

In our recent Western Banks Report we spoke with Aaron James Deer of Sandler O’Neill + Partners, LP  where he gave us his opinion on the state of Western banks

“The banks’ loan books tend to be shrinking, and so you’re seeing much stronger liquidity on banks’ balance sheets. Loan to deposit ratios are coming down, they’re paying down their borrowings, and they’re letting higher cost, brokered CDs run off. So they’re doing all the things that they need to do, which you’d expect to see at this point in the cycle, and I think that they’re on the road to recovery barring any kind of big step down in the economy.”

Mr. Deer did have some positive things to say about Nara Bancorp:

“Nara Bancorp is a small Korean bank down in Los Angeles that in my view is arguably one of the best Korean banks operating, and they’ve got good solid capital levels. They’ve got some exposure to retail and hospitality in their commercial real estate book, but I think that the problems are manageable, and they’ve got a good management team that’s been very transparent in how they’re dealing with their challenges.”

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