Valeant soars on $8.7B deal to buy Bausch & Lomb. Valeant (VRX) shares surged 7.7% premarket following news the company will acquire Bausch & Lomb for $8.7B in cash, including $4.2B in debt. The purchase - Valeant's 15th since 2010 - will boost its offerings in the ophthalmology sector, which, said CEO Mike Pearson, the company has been looking at for three years. "It's a lot like dermatology - a growing market, a growing specialty."
China steals designs from top defense firms. Chinese hackers have stolen the designs for some of the U.S.'s most advanced weapons' systems, a study for the Pentagon has reportedly alleged. The programs to have been breached include missile systems from Raytheon (RTN) and Lockheed Martin (LMT), and aircraft made by Boeing (BA), Textron's (TXT) Bell Helicopter and United Technology's (UTX) Sikorsky. Pentagon officials are not surprisingly frustrated by the degree of theft from the contractors.
Japanese stocks regain footing, Europe up. Japanese stocks regained their footing today after a number of sessions of volatility as a weakening yen helped support exporters and as large constituents recovered from heavy selling on Monday. Asian shares in general rose, inspiring their counterparts in Europe in the absence of any major news. U.S. stock futures were also looking good premarket ahead of consumer confidence and manufacturing data.
Top Stock News
Tiffany's earnings top the street. Tiffany's (TIF) Q1 EPS beat expectations by $0.18, coming in at $0.70, while revenue grew 9% to $895M as comparable-store sales rose 8%. By region, revenues in Asia-Pacific increased 15% to $223M, while those in Europe and the Americas climbed 6%. A mix shift to lower gross margin products cut into profitability during the quarter as SG&A expenses grew 8%. Tiffany sees FY13 EPS of $3.43-$3.53, unchanged from prior guidance.
Lloyds takes bids for $8.7B in U.S. mortgage bonds. Lloyds (LYG) is reportedly accepting offers today for $8.7B in U.S. mortgage debt in what is the largest widely marketed sale of securitized debt for at least three years. While one analyst has applauded Lloyds' timing, Ben Bernanke's dovish comments last week about QE might be making the sale a bit tougher. The results of the auction could determine whether other European banks sell their U.S. mortgage bonds.
EU to order Google to make more concessions to settle probe. EU Competition Commissioner Joaquin Almunia plans to demand more compromises from Google (GOOG) after he and his team have analyzed feedback from the company's rivals over its proposals to settle anti-competitive complaints related to its search-engine practices. Almunia has also yet to decide whether to open a formal probe into Google's Android operating system.
Toyota projects 42% jump in FY net profit. Having reported its largest annual profit in five years earlier this month, Toyota (TM) has forecast that its FY 2014 net income will jump 42% to ¥1.37T ($13.4B). Meanwhile, the car maker intends to increase the total compensation paid to directors by 28% to ¥1.53B.
AstraZeneca widens heart-drug portfolio. AstraZeneca (AZN) has agreed to acquire Omthera Pharmaceuticals (OMTH) for up to $443M as the U.K. company carries out its strategy of building up its cardiovascular drug business. The price includes an upfront payment of $323M and another $120M based on the success of Omthera's experimental drug Epanova for treating very high levels of triglycerides, a fat found in the blood. AstraZeneca's shares were +2.7% premarket while those of Omthera surged 89%.
RBS board starts CEO succession planning. RBS's (RBS) board has reportedly held talks about identifying a successor to CEO Stephen Hester, placing doubt upon his long-term future as the bank prepares for the sale of the government's 82% stake. However, RBS's non-executive directors are keen to retain Hester, with one insider saying it's "likely" that he will be managing RBS for a good while to come.
Shell pulls out of Mozambique project talks. Shell (RDS.A) has pulled out of talks to acquire a stake in Anadarko Petroleum's (APC) gas discoveries off the coast of Mozambique in East Africa, due to the high price. Instead, Shell will focus on projects off the coasts of Benin, Gabon and South Africa on the other side of the continent. While these projects are more uncertain, they could be more lucrative.
What do hedge funds see that Seeking Alpha readers don't? Of Goldman's list of stocks most-loved by hedge funds, two - John Malone cable plays Virgin Media (VMED) and Charter Communications (CHTR) - are barely followed by our readers, each with less than 500 Real Time Email Alerts subscribers. Another three - Hertz (HTZ), CBS (CBS) and Equinix (EQIX) - have, at best, moderate followings. While hedge funds as a whole struggle to beat the market, their top 20 holdings have done so with ease this year.
Top Economic & Other News
China prepares world for lower growth. Chinese Premier Li Keqiang has added to the campaign to get the world used to slower economic expansion in China as it embarks on reform, saying the country needs an annual expansion of 7% in order to double per capita GDP by 2020. That's down from a 7.5% target that Li gave in March and below 2012's 7.8%. Li's comments follow remarks from President Xi Jinping that China won't sacrifice the environment for short-term growth.
Ireland mulls ending 'Double Irish' tax break. Ireland is reportedly looking at closing the "Double Irish" loophole that allows multinational companies to keep their tax bills low by funneling their profits through two linked Irish subsidiaries. Apple (AAPL) is one beneficiary, and another is Google (GOOG), which enjoys what's called a "Double Irish Dutch sandwich" whereby its Irish operations make tax-deductible payments to a Bermudan subsidiary via a Dutch affiliate.
Recent Alpha-Rich Ideas
1) Ann Inc: Deep Value And Growth Catalysts; by Josh Arnold. Lofty brand-store performance, a successful share buyback, and margin expansion could drive shares much higher.
2) Favorable Tailwinds For Carnival Cruises; by Jeffrey Dow Jones. Headline headwinds cloud a secular growth story for this industry leader. Numerous catalysts and a solid dividend floor create good value.
Alpha-Rich Stock Movers and Great Calls
1) Hydrogenics closed +11.6% Wednesday after Joe Springer named it "one of the most undervalued stocks in the market."
2) On Friday, May 10th, buyside analyst Daniel Phillips analyzed Valero's CST Brands spin-off and concluded the stock offers 26% upside over the coming 12 months. CST is +10% since publication.
Alpha-Rich articles are the best long and short ideas on Seeking Alpha. SA Pro subscribers receive early access to these Alpha-Rich articles, which often move markets. For more information about SA Pro and becoming a subscriber, click here.
In Asia, Japan +1.2% to 14312. Hong Kong +1.1% to 22924. China +1.2% to 2321. India +0.7% to 20161.
In Europe, at midday, London +1.6%. Paris +1.4%. Frankfurt +1%.
Futures at 7:00: Dow +0.6%. S&P +0.6%. Nasdaq +0.85%. Crude +0.5% to $94.71. Gold -0.6% to $1378.90.
Today's economic calendar:
9:00 S&P Case-Shiller Home Price Index
10:00 Consumer Confidence
10:00 State Street Investor Confidence Index
10:00 Richmond Fed Mfg.
10:30 Dallas Fed Manufacturing Outlook
1:00 PM Results of $35B, 2-Year Note Auction
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