Today - Monday, December 9, 2013
3:45 PMBob Evans fires back at Sandell
- Management with Bob Evans Farms (BOBE +1.2%) contends the company undertook a detailed analysis of the suggested moves put forth by Sandell Asset Management before concluding they weren't in the best interest of shareholders.
- A plan to sell and then lease back properties would limit the restaurant chain's ability to be financially flexible.
- The company also reiterates that recent investments should pay off in the near future with margin expansion.
3:15 PMSodaStream spikes on no readily apparent news, reverses slide
- SodaStream shares slid earlier in the day as much as -3.0% with Green Mountain Coffee Roasters CEO Brian Kelley scheduled to speak at Beverage Digest's "Future Smarts" industry conference in the afternoon. BofAML speculated that he would unveil a competitive offering aimed at SodaStream.
- Shares (SODA +3.3%) have now spiked, beginning on the hour, on no apparent news, and have closed losses and then some. Rumors are floating that positive industry data has been released.
3:13 PMShaving trends nick Procter & Gamble and peers
- Growth rates for shaving products are down as the fashionable trend by men of keeping some stubble around wreaks havoc on what's supposed to be an easy industry to forecast demand.
- Energizer (ENR +1.2%), Unilever (UL +0.3%), and Procter & Gamble (PG +0.3%) have cut back on R&D spending in response to the consumer shift and are competing harder at the premium razor price points.
2:31 PMRetail sector picks: Luxury sellers, dollar store group, and Nike
- LVMH (LVMHF), Neiman Marcus, Macy's (M +0.7%), Tiffany (TIF +0.5%), and other luxury names will do well this holiday season, predicts retail analyst Kristin Bentz.
- She also likes the dollar store group (DLTR, FDO, DG, FIVE) to hold up well as consumers make the extra effort to bargain shop.
- The giant chasm in the middle is where the retail pain will be felt.
- An outlier: Wearable technology will be an on-trend holiday season item, forecasts Bentz. Early adopter Nike (NKE) could have a big Q4.
2:23 PMAmazon estimated to have 16.7M Prime subs; Janney a fan of Kiva's robots
- Research firm CIRP estimates Amazon (AMZN -0.8%) now has 16.7M Prime subs, up 72% from a year-ago level of 9.7M. The firm also reports 93% of Prime subs responding to a survey said they're happy with the service, and plan to renew.
- The estimate meshes with a recent report from Dan Rayburn, who was told by an Amazon insider the e-commerce giant ended Q3 with 15M+ Prime subs.
- Amazon's October decision to hike its minimum free shipping order size to $35 from $25 could be fueling a pickup in Prime subscriptions (free two-day shipping for $79/year, no order minimum). More recently, Amazon struck a deal with the USPS to enable Sunday delivery for Prime subs in major metro areas.
- If CIRP's estimate is reasonably accurate, it means close to 17M Amazon accounts now have access to Prime Instant Video (whether they're using it is a whole other question). Rival Netflix (NFLX -0.2%) ended Q3 with 31.1M U.S. streaming subs.
- Separately, Janney estimates Kiva Systems' robots could lower Amazon's per-order fulfillment costs by 20%-40% from a current $3.50-$3.75. That, in turn, spells estimated cost savings of $458M-$916M/year.
- Amazon mentioned in its Q3 report it deployed 1,382 Kiva robots during the quarter in three fulfillment centers.
2:13 PMRepublic Airways reports November traffic tallies| 1 Comment
1:51 PMHeard during AMC Networks' presentation at a media conference
- AMC Networks (AMCX -1%) sees getting a continued lift from VOD and streaming if it can continue to deliver strong content. Execs note the company's strong track record - it now has 4 of the top 10 critically acclaimed shows by one industry publication - which it sees continuing.
- Can the push to original programming continue as consumer reach the point of over-saturation? AMC execs think technology will continue to serve the company's business model as shows like Breaking Bad can get a late lift even if early rating suffer.
- The company says it has a conservative approach to backing new shows, but notes SVOD and international gives it a safety net to recapture investments if it misfires.
- On licensing vs. development, the bias is toward quality not one track or the other.
- Movies will be a less significant part of AMC's business in the future.
- UBS Global Media and Communications Conference webcast
1:42 PMHeard during Viacom's presentation at a media conference
- The cost of programming was a key point during Viacom's (VIAB) presentation at a media conference today.
- Execs says the company will try to stick to an increase in programming costs in the mid- to high-single digit range.
- The risk of an unbundled Pay-TV sector is dismissed rather easily.
- Of note, CEO Philippe Dauman says he sees a strong chance that a virtual multichannel provided will launch next year. It wasn't clear if the exec had an inside line on what Google, Sony, or Intel might be up to in that area.
- UBS Global Media and Communications Conference webcast
1:17 PMEngaged to Abercrombie & Fitch: We're not going away
- Abercrombie & Fitch (ANF -2.7%) decided to ignore the unsolicited advice of Engaged Capital to fire CEO Mike Jeffries when it gave the exec a new contract, but the leash this time around looks shorter.
- Jeffries is on a performance-based compensation plan and the retailer has three new brand presidents who will be groomed for succession.
- Still, Engaged isn't taking the news lightly. The firm expressed displeasure with the move and says it will consider "all options" when taking on the ANF board.
1:08 PMTesla Motors roundup: Shares range-bound, supercharger network, Oxen vs. Musk
- Shares of Tesla Motors (TSLA +1.7%) stay close to the $140 level as sentiment stays positive on the company, but not enough to break through the tight range of the last week.
- The EV automaker's map of Supercharger networks has grown to 39 in the U.S. to link more major cities. By most accounts, progress on the Superchargers is on pace with the company's projections.
- On the bear front, Oxen Group maintains its stance that Tesla is at most a $100 stock. The investment firm says even if Tesla hits Porsche-like margins and grows sales to 90K per yer by 2017 that the current valuation is too high as demand hits a ceiling. The outlook runs counter to Elon Musk's comments that Tesla is supply-constrained and not demand-constrained, although he hasn't been clear at what production level the equation flips.
12:49 PMJefferies, Deutsche Bank initiate Eros International at Buy
- Jefferies and Deutsche Bank are bullish on Eros International (EROS +0.6%), initiating shares at Buy with $14 and $20 PTs respectively.
- Jefferies analyst Randal Konik: "Eros is a pioneer in Indian filmed entertainment that is well positioned to capitalize on multiple growth opportunities within India and globally. This is a company that provides exposure to a growing industry in an expanding economy at what we view as a favorable valuation."
12:28 PMGM gains as Treasury exit could be imminent
- General Motors (GM +2.3%) is an outlier to the upside in the auto sector today - hitting a new 52-week high amid a WSJ report, the Treasury could exit the rest of its stake (31.1M shares) as soon as this week. North America boss Mark Reuss expects a boost in sales thanks to the return of some customers who shunned "Government Motors" in wake of the bailout.
- The government exit will allow GM to immediately adjust executive pay, which should boost the recruitment and retention of key talent.
- Separately, the company says it is moving some call center ops back to the U.S. to hopefully improve interaction with customers. About 300 workers and 35 managers will be employed at a new "customer engagement center" in Warren, MI. The jobs are coming from the closing of a call center in Argentina.
- Earlier: GM to cut South Korean output; end Australian production.
11:56 AMRuby Tuesday +7.7% on report it's exploring strategic options| Comment!
11:47 AMBox office roundup: Frozen takes over for Catching Fire, Gravity a hit in China
- Frozen topped the U.S. box office rankings with a $31.6M haul, but perhaps more importantly the Disney (DIS) film did very well in Europe and still has Russia and Italy to debut in this week. More than any other studio Disney gets a lot of bang for its bucks if it delivers a hit with children due to its merchandise and theme park tie-ins.
- Hunger Games: Catching Fire (LGF) fell back to earth with a $27M hold, but is still on pace to eclipse the $400M mark.
- China continues to be a strong market for Gravity (TWX) as the movie has now earned over $64M in the market. The sci-fi thriller has been one of the biggest surprises of the year with a global box office take of over $630M and counting. The movie has also backed up the idea of the must-see IMAX format for particular features.
11:37 AMHilton reportedly moving IPO up a day
- Amid strong demand from investors, Blackstone's (BX +1.4%) Hilton Worldwide (HLT) is moving its IPO ahead by a day to after the close on Wednesday, reports the WSJ.
- Should the stock price at the top of its anticipated $18-$21 range, the company would raise $2.7B with which to pay down debt and cash out stakes of some who took part in the 2010 debt restructuring.
11:24 AMA lot to like about Sysco-US Foods combination
- The outsized rally in Sysco (SYY +13.1%) following its purchase of US Foods is tied to a deal price which analysts see as coming in on the low end.
- Though shares have fallen back from their lofty +$43 perch, sentiment is still decidedly bullish on volume already 10X normal trading activity due to the enormous synergy opportunities presented by the combination.
- Unlike many merger partners, Sysco and US Foods are fairly complimentary on a geographic basis.
11:12 AMAmerican Airlines Group starts off with some tailwinds
- Shares of American Airlines Group (AAL) rise close to 7% to $24.35 in early trading as holders of US Airways and American Airline size up their positions following the distribution of AAL shares.
- Traders expect some selling pressure in the near-term as creditors of American convert their holdings to cash, but airline analysts like the long-term profit potential for American coming out of bankruptcy leaner.
- American Airlines CEO Doug Parker tells CNBC that the carrier's new fleet, which will be coming on board in the next couple of years, will give it an edge over Delta Airlines and United Continental. (video)