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It's time to let you in on a dirty little secret: You may not own the stock you own. That's right, if you invest with a brokerage firm, the shares you bought are almost certainly not held in your name. Technically, they're held in the name of the Wall Street firm you do business with, hence the term "street name."
No, you haven't been robbed. Ultimately, the decision to hold shares on the books under a different name doesn't affect the economic ramifications for you. You¿re listed as the "beneficial owner," even though the firm is the official owner of the shares. But, you are giving up some rights, and investors concerned about good corporate governance might want to get that stock back in their own names.
Here's the problem: If your stock is technically owned by, say, Merrill Lynch, then Merrill Lynch gets to do things with it that might work against your wishes. Take short selling. Investors who want to sell shares short need to first borrow those shares. The lenders are often the big Wall Street firms that are handing out Street-name shares. So, if you feel that a company you own is a victim of aggressive short selling, chances are your own shares are being used to fuel the shorting.
Also, your brokerage firm can cast ballots on some corporate matters affecting a company without getting your input. Technically, this can only happen in votes considered ¿routine¿ by securities regulators. But, there's a big catch: some big events, like board elections, are considered "routine" under law.
The good news is that you can easily fix the Street name problem: Just request that your brokerage firm makes you the listed owner of the shares. If they refuse, find a new firm.
Home / Markets / Industries / Retail
Friday, May 16, 2008
William Blair & Company Initiates Coverage of The Scotts Miracle-Gro Company With Outperform Rating
Comtex
CHICAGO, May 16, 2008 (BUSINESS WIRE) ----William Blair & Company initiated research coverage of The Scotts Miracle-Gro Company (NYSE:SMG) ($28.77), the largest manufacturer and marketer of do-it-yourself lawn and garden care products in the world, with an Outperform rating and company profile of Core Growth.
Analyst Jon Andersen estimated that the company would earn $2.08 in fiscal 2008, $2.35 in fiscal 2009, and $2.65 in fiscal 2010.
"Scotts represents one of the more attractive long-term growth opportunities among midcap stocks in the consumer products industry owing to its clear leadership position in a healthy market with positive demographic underpinnings; sustainable competitive advantages in commitment to innovation, brand support, and in-store execution; and experienced, talented management team," Andersen said.
"While we acknowledge 2008 should prove to be an investment year for Scotts, we believe the shares represent an attractive long-term investment opportunity," he added. "Furthermore, given our outlook for EPS acceleration beginning in fiscal 2009 (September), we encourage longer-term investors to take advantage of near-term uncertainties related to 1) the consumer environment, 2) a weather-driven slow start to the lawn and garden season, and 3) incremental 2008 investment to enhance future growth and profitability."
William Blair & Company, L.L.C. has received compensation for investment banking services from the company within the past 12 months, or expects to receive or intends to seek compensation for investment banking services in the next 3 months.
William Blair & Company, L.L.C. is a Chicago-based investment firm offering investment banking, asset management, equity research, institutional and private brokerage, and private capital to individual, institutional, and issuing clients. Since 1935, we have been committed to helping clients achieve their financial objectives. As an independent, employee-owned firm, our philosophy is to serve our clients' interests first and foremost. We place a high value on the enduring nature of our client relationships, the quality of our products and services, and the continuity and integrity of our people. William Blair & Company's offices include Chicago, Boston, London, New York, San Francisco, Shanghai, Tokyo, and Zurich. For more information, please visit www.williamblair.com.
For important disclosures and information regarding the firm's rating system, valuation methods and potential conflicts of interest, please visit: http://www.williamblair.com/Pages/news_story_dept.asp?uid=1366&depID=4
Additional information is available upon request.
SOURCE: William Blair & Company, L.L.C.
William Blair & Company, L.L.C. Tony Zimmer 312-364-8611 tzimmer@williamblair.com
Copyright Business Wire 2008
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