South Korea to acquire 40 F-35 combat jets. South Korea intends to buy 40 Lockheed Martin (LMT) F-35 fighter planes in an 8.3T won ($7.8B) deal, with the government opting for aircraft that are more expensive but have greater stealth capabilities as it looks to defend the country against North Korea's nuclear threat. While the choice of the F-35 is not unexpected, it's a disappointment for Boeing (BA) and EADS (OTCPK:EADSF), which had hoped the government would split the tender.
Intel predicts that 2014 revenue will be flat. Intel (INTC) expects that its 2014 revenue will show no growth compared with 2013, when it is expected to earn $52.6B. Intel's projections are below consensus for an increase of 2.1%, but it is aiming for a return to growth in 2015. With the PC market still declining - although Intel is seeing signs of stabilization - the company aims to quadruple its tablet CPU shipments in 2014. Shares were -1.5% premarket.
Top Stock News
Ackman set to launch new attack on Herbalife. Herbalife's (HLF) shares are on watch today, as Bill Ackman is expected to renew his attack on the company with a presentation at a conference. It's been almost a year since Ackman first revealed his $1B short position on Herbalife and accused it of being a pyramid scheme. Since then, his Pershing Square hedge fund has made hundreds of millions of dollars of paper losses as rivals such as Carl Icahn and George Soros took the other side of the bet.
Novartis to repurchase $5B in shares over two years. Novartis (NVS) intends to buy back $5B in stock over two years, while it will also "allocate capital to its strong and growing dividend" and for bolt-on acquisitions. Novartis expects to start Phase III trials of its LEE011 pill for breast cancer next month. The treatment would rival Pfizer's (PFE) Palbociclib, which is already in Phase III testing and is seen as a potential blockbuster. Novartis' shares were +2.3% premarket.
Pandora swings to loss but mobile monetization improves. Online music service Pandora swung to an FQ3 loss of $1.7M from $2.1M a year earlier, although its adjusted EPS of $0.06 was in line, while revenue jumped 50% to $181.6M and beat consensus. Increased expenditures on content, as well as on sales and marketing, helped offset a 36% rise in ad revenue. Pandora's mobile monetization continued to improve, while a dip in active listeners in October has been reversed. Shares were -1.8% premarket.
Console battle heats up as Xbox One goes on sale. Microsoft's (MSFT) Xbox One computer games console has gone on sale in 13 countries, including the U.S., U.K. and France, prompting long queues outside consumer-electronics stores. The Xbox is going up against Sony's (SNE) PlayStation 4, of which over 1M were sold within 24 hours of the device's North America launch last Friday. Retailers GameStop (GME) and BestBuy (BBY) have sold out of PS4s, with 2.3M GameStop customers waiting for the new players from Sony and Microsoft.
Charter lining up cash for Time Warner bid. Charter Communications (CHTR) is reportedly close to a deal with banks to borrow money to fund a cash and stock offer for Time Warner Cable (TWC). Other sources of financing could include sovereign wealth funds and wealthy individuals. However, a deal remains a tall order. Time Warner is not keen, while its market cap of $34.45B dwarfs Charter's $13.2B.
Caterpillar probed for possible train repair scam. Caterpillar (CAT) is reportedly the subject of a grand-jury investigation into whether it dumped train parts into the ocean as part of a scam to charge railway operators for unnecessary repairs. Caterpillar recently disclosed that it had received a subpoena for documents and information about its Progress Rail unit, but the company didn't provide details about the probe. Affected customers could include Union Pacific Corp. (UNP).
Audiences ravenous for Hunger Games sequel. Lions Gate's (LGF) sequel to its blockbuster film "The Hunger Games" is due out this weekend, with a frenzied pre-release demand for tickets indicating that the box-office numbers could beat the early forecasts. Lions Gate's guidance is low, while most Hollywood-watchers predict $160M-$175M in sales this weekend. However, a little extrapolation shows that the film could haul in $180M+.
Spotify valued at over $4B in latest financing round. Pandora (P) rival Spotify has reportedly raised a $250M round of funding at a valuation somewhere "north" of $4B. While that's below Pandora's market cap of $5.7B, Spotify earned more revenue last year - €434.7M, or about $585M vs Pandora's $427M. Silicon Valley-based venture-capital firm Technology Crossover Ventures led Spotify's round.
Top Economic & Other News
German business confidence tops forecasts. The Ifo institute's business climate index increased to its highest since April 2012, rising to 109.3 this month from 107.4 in October and topping consensus of 107.7. The current-situation reading also rose, as did the expectations print. The Ifo index "continues its underlying upward trend, which is consistent with a progressive improvement of the economy," says economist Annalisa Piazza. "Prospects for the future remained bright in November."
Alpha-Rich Stock Movers and Great Calls
1) On Monday, Bishop Research & Analytics wrote that Points International's (PCOM) stock price belied its impressive cash flow and growth, leaving shares 40% undervalued. The stock is +11.7% since. Read article »
2) On July 23, Inflection Point Investing argued that shares of Zhone Technologies (ZHNE) - which had recently doubled - still had multi-bagger potential. The call looks prescient, as the stock is +144.3% to date. Read article »
Alpha-Rich Stocks To Watch
1) Wavelength Asset Management says a corporate transformation and rapid deleveraging have left shares of Dex Media (DXM) deeply undervalued and with triple-digit upside. Read article »
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In Asia, Japan +0.1% to 15382. Hong Kong +0.5% to 23696. China -0.4% to 2196. India -0.1% to 20217.
In Europe, at midday, London -0.2%. Paris +0.2%. Frankfurt -0.2%.
Futures at 6:20: Dow flat. S&P -0.05%. Nasdaq flat. Crude -0.3% to $95.16. Gold -0.1% to $1,244.10.
Ten-year Treasury Yield -1 bps to 2.78%.
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