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Will Carl Icahn's Resignation from Yahoo Matter?


Regardless of whether he stays or leaves, Google is a better pick.


The three Halloween parties I attended this weekend went really well. My wife and kids made up my face and I put on a suit jacket and pants. All I needed to do was stick out my arms, grunt here and there, and voila -- Frankenstein's monster.

Asian stocks were up overnight. The Nikkei was up 0.77% and the Hang Seng was closed on holiday. European stocks were in positive territory early this morning, too. And here in the US, we're currently trading higher.

Here's what I'm focused on this fine Monday morning:

Word is that Carl Icahn is relinquishing his seat on the Internet giant's board. Apparently he handed in a resignation letter late this past Friday. Is this good or bad news?

My take:

1. Carl Icahn has plenty of critics, but I'm generally not one of them. Sure -- I have the impression that at a restaurant, he'd be the guy to send back his steak three times. But I think his presence and ideas are usually a good thing for the common shareholder. And according to Reuters: "In his letter, Icahn said he believed the Microsoft transaction would provide great long-term benefits to Yahoo and commended Bartz on a great job." I don't have the impression that praise is something Icahn offers up lightly, so that's a good sign.

2. Icahn hitting the bricks doesn't affect my bullish outlook for the company. In fact, as I've said before, I'd still rather be parked in Yahoo then sitting in shares of Google (GOOG).

Ingersoll Rand
I know it's not the sexiest story on the Street, but it deserves a little ink, nonetheless.

Check out the Dublin-based company's third-quarter release. Excluding a restructuring cost, it put up $0.70, which wasn't too shabby because the estimate I'm seeing was $0.61.

My feel:

1. It wasn't so much the current quarter that caught my eye but the following comment in the release:

The outlook for the strength and timing of the global economic recovery and the performance of our end markets remains cloudy. A preliminary review of our internal cost reduction and productivity improvement actions for next year gives us confidence that we can grow our earnings for 2010 even if our markets remain weak. Even in a flat year over year end market environment, with planned productivity exceeding cost inflation by one to two percentage points, our projected EPS would be in the range of $2.00 to $2.40 per share, excluding restructuring costs, up 21% to 45% compared with the midpoint of our full year 2009 forecast. We will continue to refine our estimates in the fourth quarter and will provide a more definitive forecast review at our regularly scheduled fourth quarter earnings call.

That $2 to $2.40 sticks out to me because the estimate is $2.05.

My hope is that we could see estimates get bumped up as a result of management's comments.

If the company is able to turn in numbers like that in what I can only describe as a dismal environment, can you imagine what it might kick out when the economy is rocking? I'll be paying close attention.

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No positions in stocks mentioned.

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