MARKET CURRENTS
real-time news and commentary for investors
MARKET CURRENTS
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Today - Tuesday, May 21, 2013
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11:06 AM Shares of Carnival (CCL, CUK) fall 6.8% following the company's guidance cut and a dispiriting wave of analyst downgrades. Though execs with the cruise line operator gave a spirited pitch for a turnaround during the Q1 earnings call (transcript), increased promotional activity continues to take a heavy toll on the company's sales and profits. Comment!
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11:03 AM Chembio Diagnostics (CEMI +4.1%) gains after entering into an international assembly and distribution agreement with Labtest Diagnostica SA, a leading diagnostics manufacturer and marketing organization in Brazil, for products based upon its patented Dual Path Platform in Brazil and potentially other markets in the region as well. Both companies plan to immediately begin product registration for an initial group of infectious disease products with sales expected to commence by early 2014. Comment!
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10:46 AM Edap (EDAP -8.3%) plunges after announcing a registered direct placement of $12M in shares at $4 each with attached warrants for up to 1.5M additional shares at an exercise price of $4.25. Today's losses erase strong gains posted Monday on the back of positive data from a long-term study of HIFU therapy. (PR) Comment!
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10:42 AM Shares in Embraer (ERJ +3.3%) move up after it and SkyWest (SKYW -0.4%) earlier announced a firm order for 40 Embraer 175 aircraft. Additionally, another 60 firm orders were reconfirmable aircraft, subject to SkyWest being awarded CPA agreement contracts with United Airlines. If all firm orders are exercised, the order has a current estimated value of $4.1M. 1 Comment
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10:14 AM Supercomputer maker Cray (CRAY +2.3%) rallies after Sterne Agee starts coverage with a Buy and $25 PT. Shares were drubbed earlier month after Cray provided soft Q2 guidance in tandem with a Q1 beat. Comment!
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10:04 AM SA Pro author Money Investor is even more convinced of his short thesis (see comment thread) on hhgregg (HGG -8.5%) after listening to last night's earnings call (transcript). A focus on various non-standard promotions is a tell of a company grasping at ways to drum up business, he says, and flat-negative same-store sales guidance shows management doesn't see things getting better. Comment!
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10:01 AM Jefferies initiates BioScrip (BIOS +3%) at Buy with a $17 price target citing expectations "for sustained, robust top line and EBITDA growth over the next five years" and the likelihood of "incremental market share gains." On the latest CC, management told analyst Brian Tanquilut that the reduced interest expense from a debt refinancing would more than offset the increase in aggregate principal necessary to pay the associated redemption premium. (transcript) Comment!
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9:52 AM FX Energy (FXEN +9.3%) reports a successful production test at its Tuchola-3K well and says it plans to collect final data from the downhole pressure gauges and finish completing the well for production. The test flowed gas at rates of 3.8M-5.5M cu. ft./day with no water, and "raises the real possibility of opening a significant new exploration play for us in Poland," CEO David Pierce says. Comment!
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9:46 AM Cantor Fitzgerald's Irina Rivkind upgrades Cubist Pharmaceuticals (CBST +5%) to hold from sell (price target raised to $49 from $40) saying concerns about generic competition have abated. Rivkind also notes that investors have plenty of time to wait for "a more attractive entry point," as the next big catalyst for the company is hospital pneumonia data not due until 2015. Comment!
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9:41 AM IAMGOLD (IAG -4.9%) reports encouraging drill results from its Boto Gold project in West Africa, saying drilling continues to return wide intervals with good grades, confirming previous results and further extending the zones drilled. But gold miners (GDX -2.5%) are broadly lower as futures resume their descent after yesterday's wild ride: KGC -4.7%, EGO -4.6%, GFI -3.6%, ABX -2.8%, GG -2.2%, NEM -1.8%. Comment!
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9:28 AM Advantage Oil & Gas (AAV) +3.6% premarket after saying financial advisers will begin soliciting interest in a sale of the company or other strategic transactions to maximize shareholder value. AAV also announces an increase in reserves and contingent resources at its Glacier property. Comment!
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9:21 AM Solar stocks took off in response to JA Solar's results yesterday, and they're surging premarket in response to Yingli's guidance hike today. Chalk it up to both heavy short interests, and growing optimism capacity cuts and rising non-European demand can put the troubled industry on more stable footing. Lux Research predicts solar's supply glut will evaporate, but not until 2015. TSL +9.1%. JASO +14.6%. LDK +9.8%. FSLR +1.6%. CSIQ +6.2%. JKS +6.5%. SOL +11.3%. Comment!
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9:21 AM Jefferies initiates coverage on Sony (SNE) with a Buy rating. With Loeb making some noise, an exit from the electronics business looks more likely, according to the firm. By Jefferies' math, Sony's profits would almost double if that were to happen. SNE +0.9% premarket. Comment!
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9:15 AM Heard during Best Buy's (BBY) earnings call: 1) CEO Hubert Joly indicates the company might do more store-within-a-store deals with vendors. Talks are ongoing. 2) No specific details are given, but the company says it's already seeing a positive impact on sales in states where online sales taxes are collected. 3) Joly seems to be doing what he does best, negotiating cost reductions at Best Buy and squeezing out more savings. 4) A nice improvement in online sales is a highlight for the company as execs pitch the case the brand is being resurrected. BBY -2.7% premarket. (webcast) Comment!
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9:09 AM Sprint (S) raises its offer for Clearwire (CLWR) to $3.40/share ahead of today's shareholder vote on a $2.97/share offer, which was widely expected to be shot down. The revised offer, which trumps Dish's (DISH) $3.30/share bid and has been sent to Clearwire's board for review, is said to have the support of Comcast, Intel, and Bright House, who collectively own 26% of Clearwire shares not held by Sprint. Nonetheless, Clearwire +6.1% to $3.46, above the offer price. Sprint +1.1%. (previous) 4 Comments
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9:06 AM More on Tidewater's (TDW) Q1 results: Vessel revenue in sub-Saharan Africa and Europe rose 19% to $155.1M; revenue in the Americas rose 4.2% to $82.6M. Average day rates increased 16% Y/Y; worldwide fleet utilization rate improved to 69.4%. Operating margin rose to 17.8% from 16%. Total expenses climbed 11% to $269.8M. Shares +4.1% premarket. Comment!
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