MARKET CURRENTS
real-time news and commentary for investors
MARKET CURRENTS
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Today - Saturday, May 25, 2013
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6:30 PM To what extent should boards take direction from shareholders? Not much, in the eyes of CommonWealth REIT (CWH) and Urban Outfitters (URBN). Each has done a noble job of thumbing its nose at investors; the former by reinstating a director kicked out in a proxy vote, and the latter by finally giving into shareholders' wishes to elect a female director - by nominating the CEO's wife. (NYT, Gretchen Morgenson) Comment!
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6:00 PM Where's a GARP investor to look given a relative shortage of cheap growers? Barron's Jack Hough likes stocks "experiencing midlife growth spurts," particularly: Conn's (CONN), BioScrip (BIOS), JDS Uniphase (JDSU), and AFC Enterprises (AFCE). [Quick Ideas] Comment!
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5:30 PM Shares of Trimble Navigation Limited (TRMB) could rise 25% over the next year, Barron's says: "Over the past decade, as farmers embraced its technology, Trimble earnings grew at an annualized rate of 26%. This year, profits are likely to advance a more subdued 13%... As the construction sector rebounds and Trimble expands its end markets, profits should take off once again." [Quick Ideas] Comment!
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4:46 PM Barron's takes a liking to UTi Worldwide (UTIW): "As the restructuring proceeds and the airfreight market rebounds, profit margins could rise significantly, boosting earnings. The shares could rally 35% in the next 18 months." One criticism left unanswered: UTIW's margins are much thinner than those of freight-forwarding heavyweight Expeditors International of Washington (EXPD). [Quick Ideas] Comment!
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4:15 PM Apple's (AAPL) effective tax rate of 14% is just a smidgin lower than IBM at 15% and Google (GOOG) at 17%. And Apple's hardly on the lowest rung: Amazon's (AMZN) rate is just 6%, Ford's (F) 3%, and Carnival's (CCL) just 1%. In trying to untangle what S&P 500 companies pay in taxes, David Leonhardt finds top executives are exceptionally shrewd at holding tax rates down. (infographic) 12 Comments
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1:25 PM Blackstone (BX) plans to pull a "significant portion" of the ~$550M it has invested with Steve Cohen and SAC Capital in light of the ongoing insider trading investigation, according to a letter from pension consulting firm Russell Investments reviewed by Reuters. Blackstone's redemption request came "sometime before May 15," meaning the asset management firm made the decision prior to SAC's disclosure that it would no longer cooperate unconditionally with authorities and prior to news that Cohen himself had been subpoenaed. [Financials] 1 Comment
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9:01 AM Getting crowded? After a home-run of a buy idea by Oscar Schaefer at the Roundtable in January, Barron's is back with another bullish call on Hertz (HTZ) - only now the price is 55% higher, the $10B market cap company is a favorite of the hedge fund crowd, and the winners of a recent high-profile investment competition won by pitching a buy of the auto-rental leader. [Quick Ideas] 1 Comment
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8:25 AM Reuters’ Robert Campbell thinks Keystone XL (TRP) has become a victim of political posturing and says a rival plan, ETP's Trunkline, is being held to a far lower standard thanks to an incoherent U.S. environmental policy. But if a pipeline isn’t built, crude will move by more carbon intensive methods that also are susceptible to accidents. Indeed, moving oil by road or rail is no longer seen as a stopgap until pipelines are built. [Energy] 17 Comments
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Friday, May 24, 2013
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6:25 PM News Corp. (NWS, NWSA) expects to write down the value of its soon-to-be-independent publishing business by $1.2B-$1.4B this quarter, according to an SEC filing. The media company says "certain of its goodwill and intangible assets were potentially impaired” at the publishing business, which includes newspapers such as the NY Post and WSJ. [Consumer] 1 Comment
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6:02 PM Actavis (ACT) confirms that an Appeals Court has granted an injunction to AstraZeneca (AZN) to enjoin ACT from further distribution of its generic version of Pulmicort until AZN's appeal before the Court gets resolved. ACT launched its generic version on April 1, following a ruling that AZN's patent was invalid. The following day, the Court then issued a temporary restraining order blocking ACT's generic sales to permit AstraZeneca an opportunity to seek injunctive relief with the Federal Circuit. Shares -0.3% AH. [Healthcare] 1 Comment
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6:00 PM On the hour: S&P flat. 10-yr +0.02%. Euro +0.02% vs. dollar. Crude -0.44% to $93.84. Gold -0.47% to $1385.25. Comment!
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5:54 PM The U.S. State Department takes the unusual step of releasing publicly the feedback it received about the controversial Keystone XL pipeline (TRP) in response to its draft environmental report. Well represented in the first batch of ~1.2M total comments are green groups like Tar Sands Action and the Sierra Club as well as advocacy groups like Americans for Tax Reform and the Institute for Energy Research. [Energy] 6 Comments
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5:42 PM Starz (STRZA) +3.2% AH after an SEC filing reveals Berkshire Hathaway (BRK.A, BRK.B) acquired ~5.62M shares, or a 5% stake, in the company. [Consumer, On the Move] 3 Comments
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5:37 PM Galena Biopharma (GALE) files a primary offering to sell up to 10,771,184 shares of common stock tied to the exercise of its warrants. Shares -2.3% AH. [Healthcare, On the Move] Comment!
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5:15 PM Google (GOOG) is developing plans to build a wireless network in emerging markets such as Africa and southeast Asia, seeking to target major cities currently lacking wired service, WSJ reports. GOOG plans to team with local companies to develop the networks and formulate business models to support them, but it's unclear whether GOOG already has lined up such deals or alliances. [Tech, Global & FX] 2 Comments
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5:00 PM On the hour: S&P 0%. 10-yr +0.02%. Euro +0.02% vs. dollar. Crude -0.44% to $93.84. Gold -0.48% to $1385.15. Comment!
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5:00 PM Here's an interesting tidbit about the Dow, which managed to edge up again today: The blue-chip average has gone 101 trading days without a three-day losing skid, the longest stretch in its history. The closest run to what we're seeing today came in 1935, when the blue-chip average went 93 days without a three-day losing blip. (video) [U.S. Economy] Comment!
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4:47 PM Problems at the Pascua-Lama mine were already factored into Barrick Gold’s (ABX -2%) share price, and the slide after today's construction halt should be considered short-term, Gold Newsletter's Brien Lundin says. The $16M fine imposed by Chile is "immaterial" when contrasted to the $8.5B currently allocated to the project, Cowen analysts say. [Commodities] 5 Comments
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