Today - Sunday, December 22, 2013
- Tomorrow is the deadline for people to sign up for health insurance that is due to take effect on January 1.
- However much uncertainty exists among insurers and consumers, due to government decisions to delay some of Obamacare's most important provisions, a result of the fiasco that has been the Healthcare.gov Web site, which suffered a three-hour outage on Friday.
- The latest change is allowing anybody whose current plan is illegal under the new law to buy "catastrophic coverage", whereby benefits are limited and the deductables are high. Those plans were initially supposed to be restricted to people under 30 years of age.
- President Obama said on Friday that over 1M Americans have selected new health-insurance plans through the new exchanges. That's well below the initial target of 3.3M by the end of December.
- Industry trade group Health Insurance Plans said its members will give consumers until January 10 to pay the first month's premium of a plan as long as they pick a scheme by tomorrow night. The move follows a request from the White House for insurance companies to be relaxed about the various deadlines.
- The NYT profiles how Obamacare has hit those in the middle class who earn too much to be eligible for subsidies. "In some places, prices can quickly approach 20% of a person's income," the NYT writes. "Experts consider health insurance unaffordable once it exceeds 10%."
- More on Obamacare.
- Relevant company tickers: AET, HNT, HUM, UNH, WLP, MOH.
- ETFs: XLV, XHE, VHT, FXH, IHF, IHI, IYH, PTH, RYH, PSCH, RXL, RXD, XHS.
- Investigators believe that the hackers who carried out a massive cyber attack on Target (TGT) were from abroad, a source tells Reuters reports, although the source didn't say from which country.
- In response to the breach, in which the thieves gained access to up to 40M payment cards, JPMorgan (JPM) has said that customers using Chase branded debit cards at Target during the period of the breach - from November 27 through December 15 - will be temporarily restricted to daily cash withdrawals of $100 and purchases of $300 while the bank reissues cards. The usual amounts are $200-500 and $500 respectively.
- Described as a precaution, the limits are the first from a major bank and they affect 2M accounts.
Saturday, December 21, 2013
- "Investors should regard it as a clear path to faster profit growth," Jack Hough says of PVH's move to reunite Calvin Klein's product lines with the $2.9B purchase of Warnaco.
- Barron's is bullish on PVH and says the shares could gain as much as 20% next year if the Warnaco purchase is handled as well as the fist Calvin Klein deal (in 2003) and the Tommy Hilfiger buyout (in 2010).
- They have "a knack for making ... purchases pay off for shareholders," Hough says.
- See also: A lot to like with PVH
- German automaker Daimler (DDAIF) says it has hedged itself against a drop in the share price of Tesla Motors (TSLA) after watching its 4.3% stake in the EV juggernaut have an adventuresome year.
- Currently, Tesla provides electric motors and batteries for Mercedes-Benz EVs. Execs with Daimler signaled further cooperation between the two companies in their remarks.
- What to watch: Sales for the Mercedes-Benz B-Class electric vehicle are forecast to be relatively light in the U.S. It's Tesla's development deal with Toyota (TM) that provides the most revenue upside.
Friday, December 20, 2013
5:30 PM| 4 Comments
- Levin Capital discloses a 5.5% passive stake in Pinnacle Foods. (13G)
- Target (TGT +0.5%) says that it doesn't believe PIN numbers of Target cardholders have been compromised in the massive security breach the retailer disclosed earlier this week.
- The company also says customer date of birth and social security numbers weren't part of the data leak.
- Not all Target cardholders at risk have been notified just yet, the process should be completed by the end of the weekend.
- Only a "few" cases of actual fraud have been reported so far, says Target.
- Previous: Did Target fiddle while its security breach burned?
- Regulators in Maryland select MGM Resorts (MGM +0.3%) as the casino operator which will be allowed to build the newest complex in the state.
- The land allotted for the project is situated just across the Potomac River from Washington D.C.
- Early information from MGM indicates the complex will have a hotel, high-end shopping, and a casino with 3,600 slot machines and 140 table games.
- Penn National Gaming (PENN +0.1%) was left on the outside looking in.
- The Maryland gaming commission's take: "MGM has a better approach...MGM will attract high rollers."
- Delta Air Lines (DAL +0.3%) could rise 20% despite the gaudy gains it has already racked up this year, says Raymond James.
- The investment firm's price target of $33 factors in a multiple of 15X 2015 EPS with Delta set to reap more capacity and cost benefits.
- It's hard to find anything resembling a DAL bear on Wall Street. The analyst scorecard reads: 12 Buy ratings, 2 Overweights, and a lonely Hold.
- Target (TGT +0.6%) is taking a little bit of heat for the length of time it took to report on a major security breach of credit and debit account data.
- In the past, some companies have heard from state AGs over the issue as data breach notices are now part of the law in 46 states.
- The catch is that most of the laws aren't very specific, but only say notice to consumers must be made in a "reasonable" amount of time. Defining reasonable is tricky.
- Shares of Target are on the mend today with more retail watchers noting high-profile breaches at other firms such as TJX Companies and Barnes & Noble were outlived.
- Republic Airways (RJET +5.8%) shares climb after Imperial Capital gets back on the bull side with an Outperform rating and PT of $13.
- Analyst Bob McAdoo thinks much of the uncertainty regarding RJET's Frontier disposition is in the past, with shares having traded lower to "more attractive valuation levels."
- Fiat (FIATY) CEO is back in the room with the UAW trust that holds the elusive 41.5% stake in Chrysler that the company would like to land.
- The automaker has been rejected twice by the UAW group, but could still strike a deal that would be more attractive than watching Chrysler go public before buying it.
- Reports indicate the gap between the two sides has narrowed to under a billion dollars. The trust wants $5B and Fiat is pitching $4.2B.
12:35 PM| 1 Comment
- Graze.com is creating a ripple in the food industry with its plans to sell personalized boxes of snacks in the U.S.
- The concept, which sounds more than vaguely familiar to Netflix's original DVD-by-mail model, has the potential to be a market disrupter if Graze can land some brands that resonate with consumers.
- General Mills (GIS) isn't waiting around to see what happens with Graze. The company started its own snack subscription service in the U.S. last month.
- Both Graze and General Mills are charging $6 a month for their personalized snack packs.
- Blackhawk Network (HAWK +1.4%) shares are higher after Barrington Research initiates coverage with an Outperform rating and PT of $29-$31.
- Analyst Gary Prestopino thinks Blackhawk's network has a dominant position in the grocery channel with over 20K locations that encompass ~90% of grocery store locations of the top 50 operators in the U.S. and Canada.
- He notes, "The Blackhawk network benefits consumers, content providers and distribution partners providing a broad selection of prepaid and gift cards in a one-stop location with expanded reach to the consumer driving store traffic and incremental high margin revenues to the retailer."
10:47 AM| Comment!
- JPMorgan takes its lumps on 3M (MMM +1.1%) after watching the stock rise 48% YTD with the investment firm tagging it early as an Underperform.
- Analysts lifted MMM to Neutral today after digesting the "aggressive" capital allocation plan 3M announced earlier in the week that caught them by surprise. Though 3M has raised its dividend every year since Dwight Eisenhower began his second term, the amount of the payout increase and a healthy buyback to boot was unanticipated.
- JP's still not fully on board with MMM due to its lack of EPS upside compared to peers.
- Jones Group (JNY +4.8%) has officially been acquired by P-E firm Sycamore Partners for $15.00 per share in a $2.2B deal.
- The transaction is expected to close in Q2 of 2014.
- Shares of The Jones Group have been active ever since reports on the buyout first filtered out earlier in the month.
- Sycamore-JNY timeline
- Shares of CarMax (KMX -9.1%) sputter after the company's penny miss on the bottom line for FQ3 turned off some investors.
- During the quarter, CarMax saw used vehicle sales rise 15.9% Y/Y and new vehicles sales improve by 9.6%.
- Investors might be paying attention to this eye-opener from the company's PR: "Late in the quarter, however, we began to see tightening of the credit terms offered by our subprime providers."