Today - Sunday, December 8, 2013
1:33 PMInfinity Pharmaceuticals reports data from IPI-145 blood cancer studies
- Infinity Pharmaceuticals (INFI) reports preclinical data that demonstrates the activity of IPI-145 (PI3K inhibitor) in models of DLBCL and T-ALL.
- INFI also says Phase 1 data in aNHL shows the treatment "led to a reduction in adenopathy" in three of eight DLBCL patients and two of three with Richter transformation. (PR)
- in other company news from ASH, INFI says updated Phase 1 data from an ongoing study in relapsed/refractory indolent iNHL shows IPI-145 is clinically active "with an overall response rate of 73%." There were 3 CRLs and 53% of patients "remained progression free for over one year." (PR)
- Finally, INFI says IPI-145 "was highly active in patients with relapsed/refractory CLL." Nodal response rate: 89%. OR rate: 48%. (PR)
5:29 AMMexico unveils radical bill to open up energy market
- Legislators in Mexico are today due to start debating a draft bill to open up the country's energy industry and end the decades-long monopoly of state-run Pemex, which suffers from inefficiency, falling output and chronic under-investment.
- The measures would allow private oil companies to explore for, produce, and refine oil and gas, as well as share and market the resources they extract. Firms would also be able to include the projected income of long-term contracts on their balance sheets, something that is crucial for obtaining funds. However, the proposals stop short of offering firms full-blow concessions - a loaded term in Mexico.
- If the bill becomes law, it could add 50-100 bps to Mexico's GDP and prompt rating agencies to give the country's debt a positive outlook, says economist Pedro Tuesta.
- Congress is expected to pass the legislation this week, as it's supported by the main opposition party as well as by the government, although it faces significant public hostility.
- ETFs: UNG, USO, OIL, UCO, EWW, GAZ, SCO, UGAZ, BOIL, DBO, DTO, BNO, DGAZ, UNL, CRUD, KOLD, USL, NAGS, DBE, GASZ, RJN, DNO, SZO, OILZ, UWTI, DWTI, OLO, DCNG, UOIL, JJE, UMX, RGRE, ONG, DOIL, SMK, OLEM, TWTI, UBN
5:25 AMSupreme Court justice blocks last-ditch try to stop AMR-US deal
- The merger of American Airlines' (AAMRQ) and US Airways (LCC) is all set to take off tomorrow after Supreme Court Justice Ruth Bader Ginsburg denied a last-minute effort by consumer groups and travel agents to prevent the deal from taking place.
- The plaintiffs fear that the deal will force prices up, hurt services and make planes more crowded.
5:24 AMSEC widens probe into hiring practices at banks
- Goldman Sachs (GS), Deutsche Bank (DB) and Credit Suisse (CS) have reportedly joined JPMorgan (JPM) on the list of banks being investigated for their hiring practices in China. Morgan Stanley and Citigroup are also being scrutinized.
- The SEC is looking at whether the banks breached laws relating to foreign bribery by recruiting the family members of the well-connected in order to win business.
- The probe into JPMorgan has uncovered an email from a senior JPMorgan executive in Hong Kong saying that the bank's recruitment program for family members of senior government and other officials - called Sons and Daughters - had an almost "linear relationship with winning assignments to advise Chinese companies." A spreadsheet tracks JPM's record for converting hires into business deals.
- However, documents that JPMorgan has handed over as part of the investigation don't indicate that executives at the bank's New York HQ knew of the recruitment strategy.
5:19 AMCovidien to swallow Given Imaging for $860M.
- Covidien (COV) has agreed to acquire Given Imaging (GIVN), an Israeli provider of an ingestible camera for diagnosing stomach problems, for $860M.
- The offer of $30 a share represents a premium of 27% over Given's closing price on Nasdaq on Friday. Shares in Tel Aviv have jumped 21%.
- "We believe GI (gastrointestinal) is one of the most attractive specialty procedure areas," said Covidien's (COV) Bryan Hanson. "Acquiring Given will enable Covidien to significantly expand its presence in a $3B GI market."
- Covidien intends to finance the transaction, which is expected to be completed by March 31, with cash on hand.
- The Irish-based firm forecast that Given will add $40-50M a quarter in incremental revenue. The acquisition is seen as being neutral to operating margin and adjusted EPS in FY 2014, and then as adding to those metrics in 2015 and beyond.
- Given shareholders that control 44% of the company have approved the deal, including Elron Electronic Industries (ELRNF). (PR)
5:15 AMFreezing weather hits airlines, freight companies
- Airlines have canceled over 1,000 flights, while freight companies and online retailers have delayed deliveries, due to severe winter weather across the U.S., particularly in the south.
- American Airlines (AAMRQ, LCC) has been especially affected after more than 400 flights from Dallas/Fort Worth, American's largest hub, were scrapped.
- FedEx (FDX) and UPS (UPS) have also felt the impact of the weather, while eBay (EBAY) has warned of shipment delays.
- Meanwhile, ice storms have cut power to over 200,000 homes from Texas to Tennessee.
- More freezing weather is predicted for tomorrow.
- It's likely to take a while for the economic cost of the storm to be calculated. Insurer Aon (AON) reckons that the losses from the tornadoes and thunderstorms that hit the U.S. last month will top $1B. Allstate (ALL) may take a large hit after towns in Illinois, where it is the second-biggest insurer, were among those to feel the full wrath of the storms.
- ETFs: KIE, IAK, KBWP, KBWI
5:06 AMChina's trade surplus rises to high of almost five years
- China's trade surplus increased to the highest level in nearly five years in November, rising to $33.8B from $31.1B in October and easily topping consensus of $21.7B.
- Exports climbed 12.7% on year vs +5.6% in October and exceeding forecasts of +7.1%.
- Imports grew 5.3% vs +7.6% and +7.2%.
- Exports to Europe +18.4% and to the U.S. +17.7%.
- "There are signs that the global activity and trade cycle is gaining momentum, driven by the recovery in high income countries, and China's exporters are benefiting from that," says RBS economist Louis Kuijs.
- The data is the first in a number of reports due out this week, including inflation, industrial production and retail sales. (PR - use Google to translate)
- ETFs: FXI, PGJ, GXC, FXP, HAO, CYB, YINN, CNY, TAO, CHIQ, CHIX, MCHI, YANG, PEK, CQQQ, XPP, QQQC, DSUM, YAO, ASHR, CHXX, CHII, FXCH, CHXF, ECNS, CHIE, YXI, CHIM, KWEB, KFYP, TCHI, FCA, CHLC, CHNA
5:02 AMBain, Golden Gate enter battle for Compuware
- Bain and Golden Gate Capital have reportedly teamed up to make a bid for software provider Compuware (CPWR), whose market cap is $2.34B.
- The private-equity firms agreed to acquire larger rival BMC Software (BMC) in May, although they wouldn't necessarily merge Compuware with BMC.
- Bain and Golden Gate could face competition from Thoma Bravo and Vista Capital.
- Any deal could represent an exit for activist investor Elliot Management, Compuware's largest shareholder with an 8.6% holding. Elliot tried to buy Compuware a year ago but was rebuffed.
5:01 AMWTO finally agrees to new trade pact after years of talks
- A meeting of ministers at the World Trade Organization has agreed to a "trade facilitation decision" that is designed to cut the cost of trade by 10-15%, which could add $400B-$1T to the global economy and create 21M jobs.
- Once the deal is adopted - slated for July 2014 - it should "speed up customs procedures; make trade easier, faster and cheaper; provide clarity, efficiency and transparency; reduce bureaucracy and corruption; and use technological advances."
- The pact came at the latest round of the Doha talks, which have been going on since 2001, and is much weaker than the original goals of the discussions. There was much concern that a deal wouldn't be agreed this week, a failure that would have hurt the stature of the WTO. (PR)
4:58 AMObamacare Web site improving but problems still remain
- The government's HealthCare.gov Web site for Obamacare was failing to accurately transmit around 10% of applications to insurers - as of Friday - although that represents a vast improvement on the error rate in October.
- Still, up to 25% of the enrollment records for people who bought coverage in October and November could contain mistakes, raising doubts about whether those customers would be insured if the policies take effect from January 1, as scheduled.
- Meanwhile, insurers are working with the Centers for Medicare & Medicaid Services (CMS) on a short-term back-up system that will enable the government to pay the firms for the income-based subsidies that many consumers qualify for under Obamacare.
- More on Obamacare.
- Relevant company tickers: AET, HNT, HUM, UNH, WLP, MOH.
- ETFs: XLV, XHE, VHT, FXH, IHF, IHI, IYH, PTH, RYH, PSCH, RXL, RXD, XHS.
4:38 AMBP enjoys another court win
- U.S. District Judge Keith Ellison has blocked an attempt by BP (BP) shareholders to join together in a class action suit against the company over accusations that it misled them before and after the 2010 Gulf of Mexico oil spill, which led to a steep fall in the firm's stock price.
- However, Ellison gave the plaintiffs 30 days to file a new motion so they can re-argue their case.
- Ellison based his decision on a Supreme Court ruling in March that a class action against Comcast was improperly certified.
- Ellison's verdict came after BP won a favorable decision earlier last week over the compensation it has to pay out for the spill. That decision could save the company hundreds of millions of dollars.
4:35 AMJudge OKs $500M BofA deal with pension funds over mortgage bonds
- District Court judge Mariana Pfaelzer has approved a $500M class-action settlement between Bank of America (BAC) and pension funds related to problematic mortgage bonds sold by Countrywide from 2004-7.
- BofA said that following the deal, the bank will have resolved up to 75% of its exposure to MBS claims resulting from its purchase of Countrywide in 2008.
- Judge Pfaelzer authorized the deal over the objections of the FDIC.
- The agreement follows a $404M settlement that BofA struck with Freddie Mac over mortgage-repurchase claims, which was announced on Monday last week.
Saturday, December 7, 2013
7:02 PMCARs show promise in treating blood cancer
- Technology now licensed to Novartis (NVS) for clinical testing is showing promise in the treatment of blood cancer, studies outlined at ASH show.
- Chimeric antigen receptors, or CARs, are T-cells that have been modified to target leukemia cells and, once re-infused into the body, are "showing a very promising remission rate in both adult and children with advanced leukemia where there is no therapy that works," Carl June, professor of immunotherapy at the University of Pennsylvania, says.
- The research presented today shows 15 of 32 CLL patients saw a reduction in their disease and 7 achieved remission, Bloomberg notes.
6:43 PMIndian shares may still offer value despite rally: Barron's
- A multitude of factors — including a delay in the Fed taper and the appointment of new RBI governor Raghuram Rajan — have conspired to spark a 20% rally in Indian stocks since September, but "despite the recent gains, the country's equities still offer value," Barron's says.
- Shares trade at just 13 times 2014 EPS estimates, that's below the long-term average.
- With earnings growth seen at 8-10% going forward, analysts like Credit Suisse's Neelkanth Mishra say shares aren't generally expensive and may be worth a look.
- ETFs: EPI, INDY, SCIF, PIN, INP, INDL, ICN, INR, INXX, SCIN, INDA, INCO, SMIN
12:03 PMCoach may be fashionable again in 2014: Barron's
- "I have every confidence that under our leadership, [the company] will resume growth," Coach's (COH) Chairman and CEO Lew Frankfort tells Barron's, referencing an upcoming shakeup wherein he will assume the role of executive chairman, while current CCO Victor Luis will take the CEO reins.
- Investors are hoping Luis can preside over a renaissance at the company which, thanks to "pinched" consumer spending and competition from the likes of Michael Kors," is "selling for [just] 16 times forward earnings estimates."
- Analysts cited by Barron's seem generally upbeat about the prospects and with new products and designs on the way in 2014, Christopher Williams thinks "a few COH shares might make great stocking stuffers."
11:48 AMSeattle Genetics presents results from study of ADC candidate in B-cell malignancies
- Seattle Genetics (SGEN) presents interim data (at ASH) from a Phase 1 study of the company's ADC SGN-CD19A in B-cell malignancies.
- The company says the CD19 targeted therapy "has demonstrated encouraging early antitumor activity and a generally well-tolerated safety profile among heavily pretreated patients with acute lymphoblastic leukemia and very aggressive types of lymphoma."
- SGEN adds that in a study of SGN-CD19A in non-Hodgkin lymphoma, "multiple complete remissions have been observed."
- Results from the relapsed or refractory B-lineage acute leukemia and highly aggressive lymphoma study: Maximum tolerated dose as yet undetermined; 19% of 16 treated patients achieved complete remission or complete remission with incomplete platelet recovery; 8% resistant disease or stable disease; 31% progressive disease.
- For more detail, see the PR
11:36 AMWhen top-line growth is scarce, buy those with something to sell: Barron's
- "The S&P 500 index is up 27% this year, but its underlying revenue increased just 2.9% during the third quarter," Jack Hough writes, adding that if you want real top-line growth (i.e. not derived from acquisitions and not simply the product of a bounce off "depressed levels") you have to pay 30, 50, or even 100 times earnings.
- Thankfully, "fast growth isn't the only path to handsome stock returns," Hough continues, before recommending investors look to "reasonably priced companies with plenty to sell."
- Making the list are: General Electric (GE), Dow Chemical (DOW), Royal Dutch Sell (RDS.B), and Time Warner (TWX).
10:30 AMBarron's top picks for 2014
- Barron's top 10 stock picks for 2014 shows an affinity for low P/E ratios, with 6 of the group sporting multiples of 10 or lower. The 2013 picks - which are up 35.2% on average, 900 bps ahead of the S&P 500 - had five names with single-digit P/Es. This year's list:
- A depressed play on a depressed commodity, don't be surprised if Barrick Gold (ABX) gets the attention of an activist investor next year.
- Up just 11% YTD, Canadian Natural Resources' (CNQ) free cash flow is set to quintuple to $5B in 2018 once the Horizon oil-sands facility expansion is completed.
- A rising world population needs food. At less than 10x earnings, Deere (DE) is the kind of company Warren Buffett might like to buy if it became available. "Stranger things have happened," writes Andrew Bary.
- Even after gaining 55% YTD, MetLife (MET) sells for less than 10x 2014 EPS and just above book value, but bigger gains are ahead once the company is given regulatory permission to buy back stock and boost its dividend. Met's also a good hedge against rising rates, as life insurers will benefit by having higher yields to invest in.
- The rest: Citigroup (C), GM, Intel (INTC), Nestle (NSRGY, NSRGF), Simon Property (SPG), U.S. Airways (LCC).