Sapient Corporation (NASDAQ: SAPE) provides business, marketing and technology consulting services. The firm's design and implementation expertise are used by information-based businesses and government agencies with needs in e-commerce, customer relationship management, high volume transaction processing, online supply chain development and knowledge management. Clients include BP (NYSE: BP), Harrah's Entertainment (NYSE: HET) and Verizon Communications (NYSE: VZ).

The firm pleased investors late last month, when it reported Q4 EPS of seven cents and revenues of $155 million. Analysts had been looking for five cents and $146.7 million. Management also guided Q1 revenues to $155 million, versus consensus of $146.75 million.

The news popped SAPE shares out of a February "cup" into the March "handle" of a Cup & Handle formation. The price is now showing signs of completing the pattern with a bullish rise from the right-hand side of the "handle".

Brokers recommend the issue with two "strong buys", three "buys" and five "holds". Analysts see a 32% average annual growth rate, through the next five years. The SAPE Price to Sales ratio (1.56), Sales Growth rate (36.45%) and EPS Growth rate (-0.01 to 0.07 y/y) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 66% of the outstanding shares. Over the past 52 weeks, the stock has traded between $5.73 and $9.12. A stop-loss of $5.80 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.

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Paris Hilton, who rose to fame as an heiress, is less than 3% the heiress she could have been. Her grandfather, Hilton Hotels patriarch Barron Hilton is leaving 97% of his $2.3 billion personal fortune to charity, leaving approximately $69 (what an appropriate number!) million available for everyone else, including Paris.

According to the Los Angeles Times, "The contribution to the Conrad N. Hilton Foundation, to come from the sale of Hilton Hotels Corp. and the pending sale of Harrah's Entertainment Inc. after the money is placed in a trust, is the largest in the foundation's history and will bring its value to about $4.5 billion."

But don't feel too bad for Paris. Even if she won't really be much of an heiress, she has already built her own empire based on her grandfather's wealth -- well, that and going to jail and such.

But still, it's refreshing to see Barron Hilton giving his money to people who deserve it. It's hard to imagine anyone less deserving than Paris Hilton, and maybe this will encourage her to stop acting like such a spoiled brat.

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Today's announcement that Citigroup (NYSE: C) will take $49 billion worth of Structured Investment Vehicles (SIVs) onto its balance sheet suggests to me that its new CEO is following a path I wrote about earlier this week -- the first step of which is to take a big bath write-down fast. I think Citi stock will fall further before hitting bottom -- say $15.

Why is Pandit doing this? First, investors give a new CEO a chance to put all his predecessor's mistakes in the past through a write-down -- which generally includes closing businesses and firing staff. Second, Pandit probably realized that the alternative -- a fire sale of securitized assets (the average net asset values of SIVs tumbled to 55% from 71% a month ago and 102% in June) -- would be the lesser of two evils.

Nevertheless -- Pandit's move came with pain attached. Bloomberg News reports that two hours after Citi's announcement, Moody's Corp. (NYSE: MCO) lowered its credit ratings to Aa3, the fourth-highest level, from Aa2, saying "capital ratios will remain low." Citi's capital ratio is likely to tumble far below its target -- causing it to take further capital preservation moves. Specifically, its Tier I capital ratio is likely to hit 6.8% by the end of this year from 7.32% on September 30 -- far short of its 7.5% target.

Expect more unpleasantness -- like a cash dividend cut -- as Citi stock continues to tumble. But I think if it hits $15, it may be worth considering an investment.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He owns Citigroup shares and has no financial interest in Moody's securities.

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The development of new information technologies leads to fresh opportunities for businesses to expand and serve their customer bases. There is a Cambridge, Massachusetts firm that rides the crest of the IT wave, helping companies take full advantage of those opportunities.

Sapient Corporation (NASDAQ: SAPE) provides business, marketing and technology consulting services. The firm's design and implementation expertise are used by information-based businesses and government agencies with needs in e-commerce, customer relationship management, high volume transaction processing, online supply chain development and knowledge management. Clients include BP (NYSE: BP), Harrah's Entertainment (NYSE: HET) and Verizon Communications (NYSE: VZ).

Brokers recommend the issue with two "strong buys," five "buys," three "holds" and a "sell." Analysts see a 17% average annual growth rate through the next five years. The stock's Price to Sales ratio (1.90), Price to Book ratio (3.95) and Sales Growth rate (32.46%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 65% of the outstanding shares. Over the past 52 weeks, SAPE has traded between $5.09 and $8.26. A stop-loss of $6.30 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.

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The markets moved significantly lower today as the dollar continued its free fall on news that China diversified its foreign currency holdings.

Over the last five years, the U.S. dollar has lost about 32% of its value compared to the euro (see chart below). What does this mean for you? Well, it means that 32% of the rise in the price of oil is due to the weak U.S. dollar. It means if you want to travel internationally, it is going to cost you about 1/3 more than it would have five years ago.

Some companies benefit from a weak U.S. dollar long term. Domestic agriculture like corn has been strong recently, and companies like Deere (NYSE: DE) that support agriculture benefit. Also, foreign tourists will find it more attractive to visit the United States as their euros will convert into more dollars. So Disney (NYSE: DIS) or Harrah's (NYSE: HAS) Las Vegas casinos could benefit. A weak U.S. dollar helps jobs domestically, as any company that is exporting will find its goods cheaper for foreigners to buy. But all foreign goods are going to be more expensive for Americans to buy.

The NYSE had volume of 4.3 billion shares, with 297 issues advancing while 2,991 declined for a loss of 272.26 points to close at 9,830.15. On the NASDAQ, 2.5 billion shares traded; 593 issues advanced and 2,450 declined for a loss of 76.42 to 2,748.76.

Stocks moving today included Washington Mutual (NYSE: WM), which fell $4.19 (-17%) to $20.04. Fannie Mae (NYSE: FNM) fell $5.60 (-10%) to $49.79. Citigroup (NYSE: C) fell $1.67 (-5%) to $33.41. In options there were 7.2 million puts and 8.5 million calls traded for a put/call open interest ratio of 0.85.

Kevin Kersten is an Options Analyst with InvestorsObserver.com. Disclosure note: Mr. Kersten owns and or controls a diversified portfolio of long and short positions that may include holdings in companies he writes about.

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According to The Wall Street Journal, "Major properties on the Las Vegas Strip are now offering lavish commitment ceremonies to same-sex couples (though same-sex marriage is illegal in Nevada), as well as special hotel and entertainment packages geared specifically toward gay and lesbian travelers. Some resorts have mandated sensitivity programs to teach employees how to make gay and lesbian travelers feel welcome."

It's hard to imagine what took them so long. By ignoring the gay market, Las Vegas casino operators were failing to capitalize on their perfect market: Single people who like to have fun and, because they tend not to have families to support, have more disposable income. Research also shows that gay men spend 30% more than straight men. If Las Vegas wants to remake itself into a world of pricey cuisine and luxury shopping, this is the market to target -- not coupon-clipping senior citizens.

But why is this just starting to happen now, as most experts say it is? Fear that Bible-trumping prudes would be offended if gay couples were part target market of Las Vegas promoters? If so, that could be the reason for the city's decline in glamor, and utter loss of cultural relevance.

Perhaps targeting the gay community is the beginning of Las Vegas' rebirth.

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I read recently that the average Las Vegas visitor leaves behind around $200 in gambling losses. However, in my flights back from Vegas I've noticed that many passengers still have their diamond rings, fine luggage and iPods, which tells me they haven't been wrung completely dry.

For companies such as Harrah's Entertainments (NYSE: HET), that's just opportunity lost, so I have a suggestion for how Harrah's could improve its take. Simply merge with EZCorp (NASDAQ: EZPW), operator of a chain of 82 EZPAWN pawn shops, which offer short-term credit to needy individuals based on personal property collateral, as well as 334 EZMoney stores offering pay advances.

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• Alltel Corporation (NYSE: AT) trading for $67.80 with take-out price of $71.50-12% annualized rate of return.
• Clear Channel Communications (NYSE: CCU) trading for $37.70 with take-out price of $39.20-10% annualized rate of return.
• First Data Corporation (NYSE: FDC) is selling for $32.65 and has a take-out price of $34-for an 18% annualized return.
• Harrah's Entertainment Inc (NYSE: HET) is selling for $85.25 and has a take offer of $90-14% annualized rate of return.
• Tribune Company (NYSE: TRB) is trading at $29.50 with a take-price at $34-30% annualized return.
  
• The most attractive arb play from a return perspective is Tribune but that deal also carries the most risk. Tribune already has a considerable amount of debt and is attempting to add more debt and use the company's ESOP plan to close the deal. In addition, the fundamentals of the newspaper industry continue to remain not very good.

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With higher interest rates and pushback in the debt markets, it's been tougher for the private equity folks to get deals done. Just look at the recent IPO of the Blackstone Group (NYSE: BX). The stock has been, well, like a stone.

But, according to this week's Barron's [a paid service], this may be an opportunity. That is, there may be a way to arbitrage returns.

Huh? Well, many deals have a spread between the buyout price and the current stock price. Why? Since a deal has not been closed, there's a risk of a deal falling through.

With the recent general problems in private equity, there's been a widening of spreads.

In fact, there are 10%+ spreads on such marquee companies like First Data Corp. (NYSE: FDC), Alltel Corp. (NYSE: AT), Alliance Data Systems Corp. (NYSE: ADS), and Harrah's Entertainment (NYSE: HET).

These firms have top-tier private equity sponsors. And, in terms of reputation, it would not be good for them to walk away. So while the financing costs may be higher, I still think private equity firms will work pretty hard to get these deals done.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

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The development of new information technologies leads to fresh opportunities for businesses to expand and serve their customer bases. There is a Cambridge, Massachusetts firm that rides the crest of the IT wave, helping companies take full advantage of those opportunities.

Sapient Corporation (NASDAQ: SAPE) provides business, marketing and technology consulting services. The firm's design and implementation expertise are used by information-based businesses and government agencies with needs in e-commerce, customer relationship management, high volume transaction processing, online supply chain development and knowledge management. Clients include BP (NYSE: BP), Harrah's Entertainment (NYSE: HET), Novartis (NYSE: NVS), Sony (NYSE: SNE), Staples (NASDAQ: SPLS), United Parcel Service (NYSE: UPS) and Verizon Communications (NYSE: VZ).

The firm pleased investors last week, when it reported Q1 EPS of one cent and revenues of $121.3 million. Analysts had been looking for a penny and $117.4 million. Management also guided Q2 revenues to $126 million ($122.61M consensus). RBC Capital Markets and UBS subsequently declared the issue a "buy" and issued price targets in the $9.25-$10.00 range. The stock popped into a bullish "flag" formation on the news. Prices frequently exit flags moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.

Brokers recommend the issue with two "strong buys," four "buys," four "holds" and two "sells." Analysts see a 72% growth rate, through the next year. The stock's Price to Sales ratio (2.37), Price to Book ratio (4.58) and Sales Growth rate (39.0%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 61% of the outstanding shares. Over the past 52 weeks, SAPE has traded between $4.35 and $8.26. A stop-loss of $6.60 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.

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When you want to build a house, you look in the phone book for a local contractor. When you want to build a stylish facility, the list of firms that can help you is a short one. There is a 113-year old outfit in Framingham, Massachusetts that invariably occupies a position near the top of the list.

Perini Corporation (NYSE: PCR) is a leading construction services company offering diversified general contracting, construction management and design/build services to private clients and public agencies worldwide. The firm is well known for its casino and hotel projects, but is also active in the design and construction of schools, health care facilities, entertainment facilities and sports complexes. Its civil division builds and maintains highways, subways, and airports. Clients include Harrah's Entertainment (NYSE: HET), Hilton Hotels (NYSE: HLT), Marriott International (NYSE: MAR), Sears Holdings (NASDAQ: SHLD), Honeywell International (NYSE: HON), American Express (NYSE: AXP) and Alcatel-Lucent (NYSE: ALU).

The company surprised the Street earlier in the month, when it reported Q1 EPS of 84 cents and revenues of $987.4 million. Analysts had been expecting 58 cents and $947.2 million. Management also guided FY07 EPS to $2.40-2.60 ($2.17 consensus) and FY07 revenues to $4.0-4.2 billion ($3.98B consensus). The COO cited a near-record backlog of $8.6 billion for the favorable outlook.

Brokers recommend the issue with one "strong buy" and three "holds". Analysts see a 70 percent growth rate this year. The PCR PEG ratio (1.65), Price to Sales ratio (0.39), Price to Free Cash Flow ratio (8.10), Sales Growth rate (61.13%), EPS Growth rate (180.00%), Return on Investment (19.02%) and Return on Equity (24.12%) compare favorably with industry, sector and S&P 500 averages.

Institutional investors hold about 85% of the outstanding shares. Over the past 52 weeks, the stock has traded between $19.80 and $51.97. A stop-loss of $43.65 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.

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Suppose you have a wildly successful business in an ultra hot market. Time to sell?It's probably something to consider. Well, that's certainly the state of affairs in the private equity world.

According to the Wall Street Journal, the founder of Apollo Management LP, Leon Black, is mulling these kinds of cash-out issues [subscription required]. His private equity firm is one of the largest and has done deals such as for Harrah's Entertainment Inc. (NYSE: HET), Realogy Corp. (NYSE: H), and Nalco Holding Co. (NYSE: NLC).

Based on the market multiples -- such as for Fortress Investment Group LLC (NYSE: FIG) -- it looks like he can take home about $1.5 billion selling a minority stake of 10% but still keeping control of his destiny. To me, this is having your cake and eating it too.

What's more, by selling the stake to private investors, there's no need to go through the hassles of the IPO process. In other words, Black has more time to do deals. Although, if the Apollo stock is registered - which is likely to happen - it will become publicly traded within the year.

It's an interesting structure and is typical for small companies. As for Black, he does think out of the box and the back-door IPO does make a lot of sense.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

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With big companies like Harrah's Entertainment (NYSE:HET) and TXU Corp.(NYSE:TXU) going private, a buyout of The Home Depot (NYSE:HD) is not far-fetched. In fact, it does look like there's lots of potential to improve things. The real estate assets are also juicy. And, oh yea, the fees would be juicy for Wall Street.

But, according to a report in Reuters, a deal looks unlikely. That's the word from Home Depot's new CEO, Frank Blake. Oh, there is likely to be some dealmaking. For example, Home Depot says it might sell its massive supply business. Unfortunately, the problem remains: Housing is weak and is likely to remain weak for some time, especially with the recent blow-up in the subprime market.

At least Blake is stepping up to the plate. He's been tireless in reaching out to shareholders, which is refreshing. And he's a pretty good politician. He even had some nice words about his predecessor, Robert Nardelli.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

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