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John P. Gavin, CFA, is the founder and CEO of Disclosure Insight®, an independent publisher of investment research. Mr. Gavin has spent his entire career of over 25 years in the financial services industry. Prior to starting “DI” in 2000, he worked as an equity analyst and portfolio manager... More
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  • Companies With Risk Of Undisclosed SEC Probes

    The following is excerpted from a research report we originally published for subscribers on 12-Jan-12. It is based on data we routinely acquire from the United States Securities and Exchange Commission under the Freedom of Information Act. This particular report warns of the risk of undisclosed SEC investigative activity in the companies noted below. The full report of 12-Jan-12 is attached.

    Undisclosed SEC Investigative Activity

    Jefferies Group Inc. (JEF)- $14.62 Mkt. Cap.- $2.9 B) New SEC Data Point Re-affirms Risk of Involvement in an Undisclosed SEC Investigation. In a letter dated 28-Sep-11, the SEC confirmed that this company was somehow involved in an active and ongoing investigation that appeared undisclosed at the time. In a letter dated 11-Jan-12, we received new information from the SEC suggesting, again, this company was involved in unspecified SEC investigative activity. We continue to find no disclosure of the same as of this date.

    Medifest Inc. (NYSE:MED)- $15.78 Mkt. Cap.- $244 mm) Possible, Undisclosed SEC Investigation. In a letter dated 6-Jan-12, we received information from the SEC suggesting this company was involved in unspecified SEC investigative activity. We found no disclosure of the same as of this date.

    Full report here.

    Tags: LUK, MED
    Jan 26 3:13 PM | Link | Comment!
  • Briggs & Stratton Announces Upcoming Restructuring And Impairment Charges
    Briggs & Stratton (NYSE: BGG announced that it plans to record up to $50 million of restructuring charges during fiscal 2012 in connection with 2 facilities consolidations and a capacity reduction at a facility in Missouri. The restructuring charges are expected to include at least $35 million of asset impairment charges. To give some perspective, BGG recorded asset impairment charges in FY07 and FY09 totaling $48 million.
    Tags: BGG
    Jan 26 3:12 PM | Link | Comment!
  • Is Roche Overpaying For Illumina?

    Roche (OTCQX:RHHBY) announced this morning that it has made a proposal to acquire Illumina (NASDAQ: ILMN, a provider of integrated systems for DNA sequencing, for approximately $5.7 billion. As part of the deal, Roche would acquire ILMN for $44.50 per share in cash, a 64% premium over the closing price on 21-Dec-11 (the day rumors about a deal began to fly). The hefty premium brings about a natural question: Is Roche paying too much?

    With ILMN trading between $50 and $55 per share after the announcement, the market thinks Roche or another suitor is willing to pay more. That may be the case. However, back-of-the-envelope analysis says $44.50 a share could already be rich.

    The significant purchase price relative to tangible equity (9.4x) indicates that a substantial amount of goodwill and other intangible assets will result from the transaction. Such intangible assets are supposed to represent excess earning potential. ILMN's relatively stable growth rate combined with its gloomy future outlook (see below), however, has us wondering where that excess earning potential is going to come from.

    On 25-Oct-11, ILMN announced a global restructuring program. As part of the program, ILMN indicated that it would cut approximately 200 employees (of an estimated 2,100) and record $15 million - $17 million in 4Q11 charges. In the announcement, ILMN cited "uncertainties associated with academic and government research funding and the global economic environment" as its reason for the workforce reduction.

    Tags: ILMN
    Jan 25 5:35 PM | Link | Comment!
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