Today - Wednesday, December 11, 2013
8:49 AMCB&I reaffirms 2013 guidance, sees 2014 EPS and revenue in-line
- CB&I (CBI) reaffirms guidance for 2013, seeing EPS of $4.00-$4.35 vs. $4.16 consensus estimate and revenue of $10.7B-$11.2B vs. $11.17B consensus.
- Issues in-line guidance for 2014, seeing EPS of $4.80-$5.65 vs. $5.16 consensus estimate and revenue of $12.6B-$13.2B vs. $12.98B consensus. (Investor Day slides)
- CBI +1.9% premarket.
8:43 AMUrban Outfitters busts out of retail malaise
- Urban Outfitters (URBN) gains after disclosing it's running a rosy-sounding mid single-digit comp for FQ4.
- What to watch: The solid report isn't expected to give a lift to the sector, according to analysts. The out-performance compared to other mall-based retailers could be based on the company's vibrant e-commerce business and an assortment that is seen as fashion-forward.
- URBN +4.1% premarket to $37.20.
8:42 AMSpectrum Pharma outlines Marqibo, Folotyn studies
- Spectrum Pharmaceuticals (SPPI) is up 5% in premarket action.
- Out Wednesday morning are what the company calls "encouraging" data from Marqibo and Folotyn studies.
- Results from a Phase 2 study suggest Marqibo could have utility in the treatment of diffuse large B-cell lymphoma" (front-line). Summary: Marqibo substituted for Vincristin in R-CHOP; ORR, 95%; CRR, 90%; 10-year PFS, 64%; 10-year OS, 87%.
- As for Folotyn, data suggest the drug "may provide benefit to patients with early stage peripheral T-cell lymphoma." (PR)
8:25 AMAlibaba signals delay in IPO plans
- Likely signaling a sizable delay in the timing of its IPO, Alibaba is reportedly seeking to extend the draw-down period of an $8B loan to December of next year (from January).
- "We have plenty of cash on the balance sheet and there is no need to draw down at this time, so we are extending the availability of funds to maintain flexibility," the company says.
- YHOO -0.6% premarket
8:23 AMCytRx reports positive top-line data from aldoxorubicin STS trial
- CytRx (CYTR) is out with top-line results from a Phase 2b study of aldoxorubicin in first-line metastatic, locally advanced or unresectable STSs.
- Summary (intent-to-treat analysis): Median PFS for aldoxorubicin, 8.4 months; median PFS for doxorubicin, 4.7 months.
- Summary (blinded central lab review): Median PFS for aldoxorubicin, 5.7 months; median PFS for doxorubicin, 2.8 months.
- OR rate: 25.4% for aldoxorubicin, 5.4% for doxorubicin.
- "These results are extraordinary for a single agent treating these chemotherapy-resistant tumors," the study's principal investigator says. (PR)
- CYTR +32% premarket.
8:11 AMEcho Therapeutics rises on Chinese licensing deal for Symphony System
- After rallying 8% Tuesday, shares of Echo Therapeutics (ECTE) are up some 26% in premarket action.
- The company has inked a licensing, development, and commercialization agreement with Medical Technologies Innovation Asia for the manufacture and distribution of the Symphony CGM System in China, Hong Kong, Macau, and Taiwan.
- Medical Technologies Innovation will take on the development, marketing, and manufacturing costs for the Chinese market, and will also be responsible for "obtaining regulatory approval for the product in the licensed territories."
- Medical Technologies Innovation is also entitled to $1.5M in development cost reimbursement, payable in ECTE stock.
- The companies will share any net sales of the system in the region. (PR)
8:08 AMWalter gains after MSR acquistion
- Walter Investment Management (WAC) is up 1.7% premarket after agreeing to buy MSRs with about $30B in UPB from "a large national depository."
- The portfolio consists of about 270K accounts - projected to be 99% current - and includes more than 100K HARP-eligible mortgages. The transfers are expected to occur in staged boardings in the first three quarters of 2014.
- Management's plan is to acquire MSRs with UPB of about $62B, and, to date, the company has entered into agreements for about $54B.
- Press release
8:08 AMCostco lower after expenses cut into profits
- Costco (COST) slips in early trading after an increase in expenses cut into profitability during the retailer's FQ1.
- Retail analysts are still finding plenty to like in Costco's report. For starters, amid a promotional retail atmosphere selling margin was higher and membership income grew at a nice clip during the period.
- An important note on Costco (h/t SA contributor The Investment Doctor): This year's FQ1 doesn't include Black Friday like it did last year.
- COST -2.5% premarket.
7:55 AMNorthStar flies on spinoff plan
- NorthStar Realty (NRF) is now ahead 16.7% in the premarket following its plan to spin off its asset management business.
- The conference call is set for 10 ET, but the presentation slides are currently available.
- Certainly working at the moment is page 14 of the presentation which compares NRF's P/E multiple (8.3x) with that of what it picks out as competitors - Real Estate Managers (19.4x), Small Traditional Asset Managers (19.9x), MLP GPs (35.1x), and Altisource Asset Management (AAMC) at 50.1x.
- The comps may or may not make sense, but if NorthStar Asset Management is anything like the Altisource Asset Management spinoff, investors would be wise to get in early ... in size. AAMC's more than a 10-bagger since being spun off from Altisource Portfolio Solutions (ASPS) one year ago.
7:32 AMGroupon gains amid positive sell-side calls
- Wells Fargo upgrades to Groupon (GRPN +2.4%) to Buy and raises its price target to $13-$14 from $5-$6. "We believe Groupon is positioned well to take continued share in the massive local commerce market," says analyst Trisha Dill. "We are bullish on the company’s strategy to transform into a “pull” marketplace, away from its daily deals legacy, and early indications suggest this transition is gaining traction."
- Morgan Stanley's Scott Devitt - after meetings with management - said the company is making progress on becoming a unique mobile commerce marketplace.
- He thinks it's a $15 stock by the end of next year thanks to improved deal quality and density in the U.S. and improvements internationally. Near-term, the site redesign is a positive tailwind.
- Earlier coverage from Devitt
5:30 AMWorld shares mixed following U.S. budget deal
- Global equities are mixed as markets mull the impact of U.S. Congressional leaders agreeing to a budget deal.
- Such an agreement would normally be construed as a good thing, but not so when there's the Fed's QE to consider.
- "The deal...would certainly have the potential to bring forward the prospect of tapering," says Interactive Investor's Rebecca O'Keeffe. This, in turn, would weigh on stocks.
- Asian shares are lower, with profit-taking also affecting shares. Japan -0.6%, Hong Kong -1.7%, China -1.5%, India -0.4%.
- EU Stoxx 50 +0.3%, London +0.1%, Paris +0.7%, Frankfurt +0.2%, Milan -0.2%, Madrid +0.5%.
- U.S. stock futures: Dow flat. S&P flat. Nasdaq -0.05%.
Tuesday, December 10, 2013
5:36 PMAvanir -13.8% AH, AVP-923 misses primary efficacy endpoint in phase II trial
- Avanir Pharmaceuticals (AVNR) shares plunge 13.8% AH after the company announces that AVP-923 did not meet the primary efficacy endpoint in PRIME.
- "[T]here was no difference between the treatment arms and placebo," the company disclosed, attributing results to a higher-than-expected placebo response.
- See also: Avanir Pharmaceuticals EPS in-line, misses on revenue
5:26 PMVimicro +22.2% AH on $41M surveillance tech order
- Vimicro International (VIMC) shares rocket up 22.2% AH after the company's Chinese subsidiary receives an ~$41M order (of which Vimicro will receive ~$16M) for Surveillance Video and Audio Coding tech from the Baoding Public Security Bureau.
- The installed network will consist of several thousand video surveillance stations; the project represents the first phase of a multi-year deployment commencing in Q4.
- Management expects Q4 revenue of $3.5M-$4.5M from its PC and notebook image processor ops and at least $9M-$11M in revenue from its surveillance products business.
5:24 PMHomeAway announces 6.02M-share stock offering; shares -4.7% AH
- HomeAway (AWAY) is issuing 5.5M new shares through its offering, and selling 519K on behalf of existing stockholders. Underwriters will have a 903K-share overallotment option. (PR)
- At current levels, the offering would yield HomeAway gross proceeds of $201M. Those funds will help pay for the company's $198M all-cash purchase of Australian vacation rental site owner Stayz Group.
- HomeAway ended Q3 with $352.6M in cash/investments on its balance sheet, and no debt.
4:51 PMDiscovery reportedly mulling bid for Scripps
- Variety reports Discovery's (DISCA) board discussed a possible bid for Scripps (SNI) at a Tuesday meeting.
- The magazine points out Scripps, which owns the Food Network, HGTV, and the Travel Channel, would mesh well with Discovery's own stable of "lifestyle-driven" channels. A merger would also give Discovery more leverage and bundling opportunities in talks with pay-TV providers.
- Scripps remains controlled by 24 descendants of founder E.W. Scripps. The heirs currently face restrictions on their ability to liquidate their holdings via public markets.
- SNI +9.6% AH. DISCA nearly unchanged for now.
4:48 PMAllison Transmission stockholders sell 12.5M shares
- Allison Transmission (ALSN) announces the sale of 12.5M shares by "investment funds affiliated with The Carlyle Group and Onex Corporation."
- ALSN isn't receiving any of the proceeds.
- The selling stockholders' combined stake will be reduced to 54.3% following the deal. (PR)
- ALSN -2.4% AH on top of the 2.2% the shares lost in the regular session.
4:39 PMSmith & Wesson +5.8% AH; FQ2 report, FQ3 guidance clean out expectations
- Smith & Wesson (SWHC) shares jump 5.8% after the company cleaned out expectations in FQ2 and issued higher-than-expected FQ3 guidance.
- Net sales of $139.3M were up 2% Y/Y; excluding Walther products (under a distribution agreement that ended in April), revenue grew 9.2% Y/Y, driven by a 27.4% Y/Y spike in handgun sales.
- Gross margin represented a 510bp expansion to 41.6%, building on the trend in FQ1. The company cited favorable product mix, absorption, and manufacturing efficiencies, as well as absence of lower-margin Walther sales.
- Opex jumped to 20.9% of sales, or $29.2M, from 16% of sales, or $21.8M, in FQ2 2012; excluding one-time ERP system expenses, opex would have come in at 18.2% of sales, or $25.3M.
- Income from continuing operations was $17.1M ($0.28/share) vs. $16.4M ($0.24/share) in Q2 2012.
- Management sees revenue in FQ3 of $140M-$145M (well above analyst consensus of $137.4M) and EPS of $0.28-$0.30 (vs. $0.27). It reiterates FY2014 guidance for sales of $610M-$620M (vs. $617M) and EPS of $1.30-$1.35 (vs. $1.32).
- Conference call at 5pm ET, PR
4:31 PMAmerican Midstream buys storage facilities for $60M, -4.3% AH
- American Midstream Partners (AMID) -4.3% AH after agreeing to acquire Blackwater Midstream, a developer and operator of terminal storage facilities, from an affiliate of ArcLight Capital for $60M.
- The acquisition includes Blackwater's three operating terminals, which have 1.3M barrels of storage capacity for a variety of products including chemical, agricultural and petroleum liquid products; the revenues are fee-based and almost entirely derived from take-or-pay lease contracts.
- To fund the deal, AMID will launch a public offering of 2.4M common units.