Today is an off day for economic news, as there is none due out. We will actually have to wait until Tuesday of next week to get anything meaningful and this means that all eyes shall be upon Europe and the issues facing Spain, Italy and the rest of the trouble areas there. Be prepared for rumors and swings in the market as there will not be the possibility of U.S. economic news bailing out the market on a bad day for Europe, so any bad day for Europe will be a bad day for North America. This is just something to be aware of for Monday as we have quite a few days for "news" to surface.
Looking at Asian markets we see markets are mixed:
All Ordinaries - up 0.07%
Shanghai Composite - up 1.19%
Nikkei 225 - down 0.28%
NZSE 50 - down 0.25%
Seoul Composite - down 1.26%
In Europe markets are higher:
CAC 40 - up 0.81%
DAX - up 0.62%
FTSE 100 - up 0.15%
OSE - down 0.09%
Apple (AAPL) broke through $600/share yesterday, and this is becoming more and more of a focal point for traders. The shares held in pretty well using the $600 level as a bit of support, but once it was apparent the shares were not going to hold, the shares quickly headed lower finishing the day down $20.90, or 3.44%, to close at $587.44/share. News of the smaller iPad, rumors rather, is spreading like wildfire across the web and it seems likely that this is the Apple buzz machine at work.
Mellanox (MLNX), which makes interconnect solutions for servers and storage devices, saw shares rise in dramatic fashion after their 1Q earnings. Volume shot up to 5.2 million shares and the shares rose by $22.58, or 52.11%, to close at $65.91/share. For the first quarter, the company's sales increased 61% while profits rose 113%. The Israeli company indicated that much of the strength resulted from their high-end business and the demand created from new Intel chips for servers and the Web 2.0 demand.
Sirius XM (SIRI) continues to hang in above $2.20/share and after reviewing our notes and some other research materials we had last night, we continue to think that this should be a good deleveraging play going forward. We think that the company can continue to grow the top line at a respectable rate, while growing the bottom line at a quicker pace as debt is paid off and the interest expense begins to fall. As the free cash flow grows, opportunities open up for the company and its shareholders including but not limited to buybacks, dividends and reinvesting in other growth opportunities.
SXC Healthcare (SXCI) had another good day rising $7.64, or 8.55%, to close at $97/share on volume of 5.3 million. The pharmacy benefit manager agreed to buy a rival, Catalyst Health Solutions, earlier in the week and investors have embraced the combination. The $4.4 billion combination will create the fourth largest entity in the PBM industry which should enjoy some economies of scale and pricing power. Also of importance is that this deal will add to earnings in 2013.
Yesterday Human Genome (HGSI) rose $7.00, or 97.63%, to close at $14.17/share on the news that GlaxoSmithKline had offered to buy the company at $13/share. Human Genome declined the offer, however they did hire investment bankers (Credit Suisse and Goldman Sachs) to explore alternatives and did invite Glaxo to participate in that process - which means that the company is for sale in our eyes. Most of the run in this one has now been realized, however we think that this is one to watch for another 10-30% in gains on a revised bid or new bidder emerging.