Outstanding Performance Article Rewards
We're excited to announce our latest two Outstanding Performance award winners. Each author receives $2,500. Read more about our Outstanding Performance award winners here.
Winner #1: Long idea on PVA (Penn Virginia) by Richard Zeits, published April 11, 2013. Return to date: +212%
Winner #2: Long idea on WLB (Westmoreland Coal) by Ryan Perlowin, published April 22, 2013. Return to date: +277%
Note: In honor of their awards, we have unlocked these articles for the next 24 hours; afterwards, they will be part of the SA PRO equity research archive available exclusively to SA PRO subscribers.
Islamic State fighters have taken control of Iraq's biggest dam, two oil fields and three predominantly Kurdish towns in northern Iraq. Islamic State, previously known as ISIS, captured the electricity-generating Mosul Dam (which could give the ability to flood major Iraqi cities or withhold water from farms) in less than 24 hours, The Ain Zala and Batma oil fields have a production output of 30,000 barrels per day.
Japanese stocks fell to a more than one-week low this morning, with financials and sea transporters leading the losses, as investors turned risk averse due to last week's U.S. stock sell-off, concerns over Argentina's default and Portugal's banking problems. The Nikkei sank 0.3% to 15,474.50, its lowest close since July 25, extending losses for a third straight trading day. The Topix shed 0.4% to 1,276.19, while the JPX-Nikkei Index 400 dropped 0.3% to 11,620.36.
The newly increased EU sanctions imposed on Russia continue to kick in, as Aeroflot (OTC:AERAY), Russia’s state-run flag carrier, suspended flights of its low-cost division due to the now annulled leasing, servicing and insurance contracts of European companies with the unit. The West continues to press Vladimir Putin to use his influence on separatists to end the Ukraine conflict, and to stop the flow of Russian weapons aiding rebels across the border.
Portugal is spending $6.6B to rescue Banco Espirito Santo, splitting it into a "good bank", to be renamed Novo Banco, and a "bad bank", which will house Banco Espirito's exposures to the troubled Espirito Santo business empire. The bad bank's losses will be borne by the bank's shareholders, including the Espirito Santo Financial Group (OTC:ESFHF), one of the holding companies of the Espirito Santo family, and Credit Agricole (OTCPK:CRARY) which owns a 14.6% stake.
KKR has raised its bid for Australia's Treasury Wine Estates (OTCPK:TSRYF) to $3.15B, lifting its bid price 10.6% to A$5.20 per share. Treasury Wine Estates rejected KKR's (NYSE:KKR) earlier $2.85B bid in May stating the offer was too low. The Australian wine industry has been struggling through volatile market conditions and a high currency in recent years, which has greatly affected Treasury's operations.
Wall Street firms led by Goldman Sachs (NYSE:GS) are closing in on a deal to purchase a stake in chat and instant messaging start-up Perzo as an alternative to Bloomberg's similar application. Banks and asset managers including Morgan Stanley (NYSE:MS), JPMorgan (NYSE:JPM), Bank of America (NYSE:BAC), Deutsche Bank (NYSE:DB), HSBC (NYSE:HSBC), and BlackRock (NYSE:BLK) have already received term sheets for the Perzo deal and have signed non-disclosure agreements. Bloomberg's trading and news terminal costs about $20K a year, while Perzo's applications are open-source and free.
Freddie Mac has sold $659M of soured mortgages in its first offering of such debt. Twenty-two potential buyers participated in the auction, which was directed by affiliates of Bank of America. It didn’t disclose the price, and won’t be naming the buyer, according to spokesman Tom Fitzgerald. Monthly disclosures show that Freddie (OTCQB:FMCC) held $169.1B of loans as of this past June 30.
McDonald’s will restore its full menu in China later this week, after the fast-food chain pulled many items for almost two weeks due to the expired meat investigation at Shanghai Husi Food, a unit of McDonald’s (NYSE:MCD) long-term supplier OSI Group. While McDonalds will continue using food from OSI’s alternate operations in China, other brands like Yum (NYSE:YUM) and Burger King (BKW) have cut ties with OSI since the food scandal surfaced.
GM has asked Dicastal, its main Chinese supplier, to find an alternative source of components after a Zhongrong Metal Products plant exploded on Saturday killing at least 69 people and injuring approximately 200. The Zhongrong factory made wheels that were supplied to GM (NYSE:GM) through Dicastal - its tier-1 component supplier. General Motors notes that the accident will not cause any immediate impact on its production because it currently has "sufficient inventory".
Mitsubishi Heavy Industries' involvement in the $400B F-35 project could be delayed as concerns have surfaced over the subsidies which back the program. The worries could force Mitsubishi (OTCPK:MHVYF) to renegotiate the deal with Britain's BAE Systems (OTCPK:BAESY) to supply F-35 rear fuselage parts under an international consortium. BAE, Lockheed Martin (NYSE:LMT) and other members of the nine-nation group welcome Japan's F-35 participation, but not if it means relenting on tight production costs.
Kennedy-Wilson Holdings (NYSE:KW) - new article by Eight Diamonds Advisors »
Lynden Energy (OTCPK:LVLEF) - new article by TheValueMan »
Bally Technologies (NYSE:BYI) +19.7% since Mar. 31 Shaun Currie, CFA article »
U.S. Silica (NYSE:SLCA) +66.1% since Mar. 4 Michael Filloon article »
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In Asia, Japan -0.3% to 15475. Hong Kong +0.3% to 24600. China +1.7% to 2223. India +1% to 25723.
In Europe, at midday, London +0.5%. Paris +0.8%. Frankfurt +0.3%.
Futures at 6:20: Dow +0.3%. S&P +0.4%. Nasdaq +0.3%. Crude +0.1% to $97.98. Gold flat at $1295.
Ten-year Treasury Yield flat at 2.5%
Notable earnings after today's close: ACLS, ACXM, AEIS, AIG, ANV, APL, AREX, BRS, CAR, CHGG, CKEC, CKP, CNQR, CRK, CUTR, DRC, ECOM, ELNK, ENH, EOX, EPAM, GTAT, ININ, IRWD, JMBA, KAMN, KONA, LF, LLNW, LMNS, MCEP, MDR, MRO, MWA, NLS, OGS, OTTR, PHH, PL, PLOW, PXD, QLYS, REGI, ROSE, RP, RTEC, SALE, SNHY, THC, TNET, TNET, TSRA, TXRH, VNO, VNR, VVC, WAGE, Y
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