- SA contributors highlight stocks investors should be watching for unusual movement, including their bias (long/short), and a brief explanation of why.
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- Yesterday, AECOM announced its acquisition of URS Corp. (NYSE:URS) in a $6 billion cash and stock deal including the assumption of debt.
- The transaction is expected to provide significant synergies and AECOM expects the deal to be accretive to the company’s cash EPS in 2015 by more than 25% excluding transaction costs.
- Obviously, shares of URS should rise in today’s trading, however look for upward momentum in AECOM as acquiring companies have performed well in this market, especially with transactions that are expected to be as accretive as this one.
- As the bi-annual Farnborough Airshow kicks off today in Hampshire, England, look for Boeing to take in new commercial orders as is typical at such airshows.
- Keep note of Boeing’s orders relative to Airbus (OTCPK:EADSF), especially in relation to the competing Boeing 787 and Airbus A350 aircraft.
- Boeing has seen strong order trend recently and a continuation of this at the Farnborough Airshow should support the company's shares.
- C is releasing its Q2 earnings. Analysts expect $1.08 EPS and revenue of $18.94 billion.
- Bearish sentiment toward the stock means it is trading only $1.82 above its 52-week low, has a P/B of 0.71, and a trailing P/E of 10.81. An earnings surprise could change this.
- 15 analyst firms rate C as a strong buy, 4 as a hold, and 1 as a sell. Bullish sentiment is bound to return if earnings surprise. Analyst price consensus is $58 within a 12-month period.
- July 14 marks the expiration of the SEC-enforced 25-day quiet period for ECR. On July 15, ECR's underwriters will likely release positive reports on ECR into the market.
- Academic studies show an increase in share price beginning two days before the quiet period expiration and lasting two days afterward, for companies with research reports released. Although ECR has not performed well post-IPO, its powerful list of underwriters could give ECR a boost on July 15; energy stocks have also been successful in recent months.
- We suggest ECR's quiet period expiration as a potential buying time for aggressive investors. Additional details here.
Glu Mobile (NASDAQ:GLUU) - short - Bill Maurer
- Stock up nearly 59% in 12 days thanks to Kardashian game success.
- While long-term potential may exist, short-term potential seems limited.
- Technicals getting stretched, a near-term pullback seems likely.
Illumina (NASDAQ:ILMN) - long - Bill Maurer
- The UK government has chosen the company to sequence 100,000 human genomes.
- Deal could push shares to a new 52-week high.
Molycorp (NYSE:MCP) - long - Bill Maurer
- Recent positive analyst note has helped shares bounce off 52-week lows.
- Stock gained positive momentum late last week.
- Large short position could help to further produce a short squeeze.
Nordion (NYSE:NDZ) – long – Chris DeMuth Jr.
- I first bought this following Howard Shainker’s presentation in early 2013.
- It is the target of a definitive $13 deal, but has a spread due to regulatory reviews. NDZ announced HSR and CCB clearance and now awaits Investment Canada.
- This merger arb opportunity offers a double-digit return to a November 1 closing.
Oasis Petroleum (NYSE:OAS) - long - Brad Kenagy (no position or plans)
- With news coming out that fellow Bakken Operator Whiting Petroleum (NYSE:WLL) is buying Kodiak Oil & Gas (NYSE:KOG), this will put a spotlight on Oasis Petroleum and the reserves it holds in the Bakken.
- On June 30th Topeka Capital Markets reiterated its buy rating on Oasis Petroleum and raised its price target from $56 to $64.
- Currently Oasis has the formation of a double top. However with the Kodiak Purchase by Whiting Petroleum, I believe this will push shares through the double top resistance to new highs.
Potbelly (NASDAQ:PBPB) - short - Bill Maurer
- Friday's relief rally, which may have been a partial short squeeze, should be short lived.
- Stock still trades at nearly 46 times forward expected adjusted EPS, very rich considering recent struggles.