Today - Thursday, December 12, 2013
3:22 PMNo stopping Elf on the Shelf
- The unexplainable toy juggernaut that is known as Elf on the Shelf is showing massive sales gains again at retail outlets as the little red-adorned feller becomes even more entrenched as a holiday season tradition for households with children.
- A self-financed book by a mother and daughter team in 2005 has evolved to a retail winner with more products and tie-ins being developed. One online British retailer reports sales gain of 900% for Elf on the Shelf products this year.
- Target (TGT), Pottery Barn (WSM), and Barnes & Noble (BKS) get a piece of that action as preferred retailers with expanded kiosks.
3:19 PMJim Rogers hedges gold holdings
- I'd rather buy silver (SLV -3.8%) says Jim Rogers, when asked to choose between precious metals. Gold (GLD -2.1%), he says, is off about 30-35% from its highs while silver is down more like 60%. Rogers is an owner of both, but not adding just yet, and while he's hedged his gold holdings, he hasn't done so for silver because it's already down so far.
- "If it goes down more, I hope I'm smart enough to buy."
- PM ETFs: GLD, SLV, IAU, AGQ, PHYS, SIVR, USLV, ZSL, SGOL, UGL, DGP, GLL, DZZ, UGLD, DBS, DGL, DSLV, DGZ, AGOL, GLDI, DGLD, SLVO, TBAR, USV, UBG
3:18 PMApache, Marathon Oil downgraded at Citigroup on valuation
- Apache (APA -0.4%) and Marathon Oil (MRO +1.5%) are downgraded to Neutral from Buy at Citigroup, citing valuation.
- The firm maintains its $95 price target on APA, based on the stock achieving 2014-15 EV/DACF multiples of 5.7x/5.6x based on normalized prices of $90/bbl for WTI and $4.50/MMbtu, and 96% of its revised sum-of-the-parts NAV assessment, which is now $99/share under lower oil price projections.
- The MRO downgrade is accompanied by a reduced $40 price target, down from $42, based on the stock achieving 2014-15 EV/DACF multiples of 6.2x/5.7x based on normalized prices of $90/bbl and $4.50/MMBtu, and 100% of its sum-of-parts NAV assessment based on commodity price forecasts.
3:02 PMFidelity revokes Bitcoin investment
- "The Bitcoin Investment Trust is not currently available from Fidelity, nor does Fidelity allow its customers to use Bitcoins to purchase investments," says the investment manager, responding to an earlier report saying the opposite.
- Fidelity at one point did allow accredited investors to invest in the trust, but it's unclear if anyone actually did. "We are no longer allowing that," says a Fidelity spokesman. Why the change of heart?
- Follow the latest Bitcoin news on Seeking Alpha using the ticker [[BITCOIN]].
3:00 PMLyondellBasell upgraded to Top Pick at RBC
- LyondellBasell (LYB +1.6%) is upgraded to Top Pick from Outperform with a $110 price target, up from $90, at RBC Capital, which cites strong organic and market driven growth potential and an under-levered balance sheet which should lead to $12B-$14B of potential cash for capital returns over the next three years.
- Following 12%-16% EPS growth in 2012-13 mainly from higher U.S. ethylene margins (offset by weak refinery margins), the firm believes a pase of accelerated EPS growth of 25%-plus will begin in 2014 via three levers: low-risk, high-return capacity de-bottlenecks with staggered start-ups; share repurchases, assuming ~10% each year; and margin expansion and cost reductions.
3:00 PMOn the hour
- Dow -0.39%.
- 10-yr -0.19%.
- Euro -0.29% vs. dollar.
- Crude +0.06% to $97.50.
- Gold -2.30% to $1227.2.
2:58 PMTSMC slips after providing foundry, chip industry growth outlook
- TSMC (TSM -1.8%), estimated to have ~50% of the global chip foundry services market, thinks the market's growth will slow to 9% in 2014 from 11% in 2013. At the same time, the company thinks total chip industry growth will increase to 5% from 2013's 4%. Trade association WSTS has forecast 4.4% 2013 growth and 4.1% 2014 growth.
- Foundries have been steadily growing their share of chip industry output for years, as the exorbitant cost of building new fabs leads more and more chipmakers to outsource manufacturing. But with dozens of major chipmakers already fully relying on foundries, the market could be hard-pressed to significantly outpace broader industry growth going forward.
- Other foundries: UMC, SMI, TSEM
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
2:50 PMMerrill to pay $131.8M to settle SEC CDO claims
- Merrill Lynch (BAC +0.4%) settles with the SEC over allegedly faulty disclosures about collateral selection on two collateralized debt obligations, and for maintaining inaccurate books about a third CDO.
- According to the SEC, Merrill failed to inform those it sold the investments to that hedge fund Magnetar Capital helped select the collateral for the CDOs and then shorted them. How charming.
2:46 PMAGL gets regulator OK to install new pipelines, will invest $215M
- AGL Resources (GAS +0.9%) unit Atlanta Gas Light says it received regulatory approval to install new pipelines and other facilities to improve capacity and pressure in the six countries comprising metro Atlanta.
- GAS plans to invest ~$215M during the next four years to improve core transmission and distribution facilities to minimize the risk of service disruption during periods of extreme cold weather.
2:43 PMEarly excitement over Tesla's 3rd-gen platform
- A tidbit from a German publication's interview with Tesla Motors chief designer Franz von Holzhausen (TSLA +3.3%) has crossed the pond to create a little stir.
- The exec says the mass-market Model E, also referred to as the 3rd-gen platform, might be ready to be unveiled at the 2015 Detroit Auto Show which comes in only 13 months.
- Details are sketchy, but many Tesla projections have the Model E becoming a factor in 2016.
2:34 PMMexico's Congress approves energy bill allowing foreign investment in oil
- Mexico's Congress approves the landmark energy bill allowing foreign investment in oil, ending the government's 75-year monopoly on crude production.
- Under the new law, Mexico will offer profit-sharing and production-sharing contracts and licenses to foreign firms, but will maintain ownership of the oil while allowing the firms to book reserves, a crucial concern for oil companies that depend on reserves for valuation and borrowing.
- The measure still needs approval from 17 of Mexico’s 31 state governments before becoming law, and there's plenty of opposition.
- ETFs: UNG, USO, OIL, UCO, GAZ, UGAZ, SCO, BOIL, DBO, DTO, BNO, DGAZ, UNL, CRUD, KOLD, USL, NAGS, DBE, GASZ, RJN, DNO, SZO, OILZ, UWTI, DWTI, OLO, DCNG, UOIL, JJE, RGRE, ONG, DOIL, OLEM, TWTI, UBN
2:34 PMCare.com files public S-1; company looking to raise $80M
- A month after the WSJ reported Care.com had confidentially filed for an IPO, the company has filed a public S-1. Care.com, which acts as a marketplace for hiring nannies and other home caregivers, is looking to raise $80M and trade on the NYSE; no symbol has yet been given. Morgan Stanley, BofA/Merrill, JPMorgan, Allen & Co, and Stifel are the underwriters.
- Over the first nine months of 2013, Care.com had revenue of $59M (+81% Y/Y), and a net loss of $24.7M. Sales/marketing expenses rose 57% Y/Y to $43.9M, and equaled 77% of revenue.
- The company claims 9.5M registered members - 5.1M families and 4.4M caregivers - and has seen an average of 6.4M+ monthly unique visitors in 2013 (over 2.2M via mobile devices). 60% of 2013 job listings have been for part-time services, and 40% for full-time services.
2:32 PMNo-go for Showtime Vatican drama
- Showtime (CBS) has pulled the plug on a pilot for a series about intrigue at the Vatican which was directed by Ridley Scott.
- There is some scuttlebutt that Time naming Pope Francis as the Man of the Year may have influenced the decision-making, although insiders say the pilot itself was weak.
- Execs with CBS are likely to be patient with Showtime due to its run of hits that have been a boon to the company's bottom line.