Alpharma Inc. (ALO)
- Drug manufacturer for humans and animals.
- King Pharmaceuticals (KG) started a $1.6 billion tender offer on September 11 for $37 per share. This is up from KG’s $1.4 billion offer in August.
- ALO condemns the hostile takeover attempt and took on a shareholder rights plan which should make it more difficult for KG.
- Jefferies & Co. downgraded ALO from “Buy” to “Hold” on September 12.
- ALO formed its second continuation gap indicating that the stock is heading higher.
Covidien Ltd. (COV)
- A healthcare company specializing in devices, drugs, imaging, and supplies.
- COV reported positive earnings this entire year and beat estimates in their latest four quarters (Q308 reported: $0.72, estimate: $0.66. Q208 reported: $0.66, estimate: $0.59, Q108 reported $0.59, estimate: $0.57, Q407 reported: $0.63, estimate: $0.60).
- BMO Capital Markets upgraded COV from “Market Perform” to “Outperform” on September 11.
- COV continues its uptrend having broken through $55.50 resistance (prior high). Major moving averages continue to slope upward.
Nicor Inc. (GAS)
- A natural gas distributor that also owns one of the largest cargo carriers in the Caribbean as well as provides service contracting for repairs and maintenance for everything related to natural gas.
- GAS reported positive earnings this entire year and beat estimates in their latest three quarters (Q208 reported: $0.59, estimate: $0.28, Q108 reported: $0.91, estimate: $0.89, Q407 reported: $1.2, estimate: $1.11).
- GAS is outperforming most of its competitors and has remained resilient ever since the sharp decline in natural gas prices.
- Formed a long-term reverse head-and-shoulder pattern (not shown) which broke out mid-August. Uptrend remains intact and recently broke through $47 resistance (prior high). Major moving averages continue to slope upward.
Ikon Office Solutions Inc (IKN)
- Involved in the copier and printer business, provides professional services such as technical support and strategy assessments and provides lease financing to customers.
- Ricoh announced in August that they will acquire IKN for $1.62 billion or $17.25 per share in cash. Unlike ALO, this deal has been approved by both companies.
- IKN reported positive earnings this entire year and beat estimates for the latest two quarters (Q308 reported: $0.37, estimate: $0.35, Q208 reported $0.24, estimate: $0.23, remained in-line for the past three quarters thereafter)
- Outperforming its two closest competitors, Pitney Bowes Inc. (PBI) and Xerox Corp. (XRX) by a wide margin.
- On the day of the deal announcement, IKN formed its third continuation gap. Currently in consolidation and about to breakout.
Leggett & Platt Inc. (LEG)
- A consumer discretionary company focusing on home furnishings. The entire sector has been performing well along with the consumer staples sector.
- LEG hasn’t performed too well with earnings, coming in-line in Q208 ($0.28) and missing in Q108 (reported: $0.23, estimate: $0.25).
- The August 25 upgrade by Stifel Nicolaus (“Hold” to “Buy”) helped fuel the uptrend from its high-and-tight flag consolidation in August.
- The uptrend remains intact, but I expect a pullback to the mean.
Disclosure: None, but will consider going long IKN today.