MARKET CURRENTS
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MARKET CURRENTS
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Today - Wednesday, June 19
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12:26 PM MFRI (MFRI +12%) pops as the company announces $55M in new orders, including additions to two landmark projects in Saudi Arabia and piping to support the construction of flow lines in the Gulf of Mexico. The company noted however, that $25M of the orders were already reported in its Q1 backlog. Comment!
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11:35 AM Genetic Technologies (GENE -1.1%) says its subsidiary Phenogen Sciences has executed an agreement with FedMed to use its national provider network. FedMed's network includes more than 550K, 60K ancillary care providers and 4K hospitals nationwide, with more than 40M covered individuals. Comment!
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11:23 AM bluebird bio (BLUE) opens for trade at about $25, nearly 50% higher than the IPO price of $17. The IPO itself priced above the expected $14-$16 range and was upsized from 5M to 5.9M shares. Comment!
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11:20 AM The Street reacts favorably to Nvidia's (NVDA +7.3%) decision to license its GPU cores and related IP to other mobile processor developers, rather than simply pin its mobile hopes on Tegra sales. "If there was ever a way for Nvidia to get into Apple, the IP licensing angle is likely it," says Raymond James, which thinks the move could also limit traction for ARM's (ARMH -0.8%) Mali GPU cores. Evercore is less optimistic about Apple, stating checks point to "significant internal GPU design efforts" at the company. It views Samsung as a possibility, but adds the Korean electronics giant is "cycling through IP vendors and chip suppliers." 2 Comments
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11:09 AM ReneSola (SOL +4.9%) spikes higher after SA contributor Sneha Shah argues a low cost structure and diminishing competition in the solar wafer and polysilicon markets will allow the company to keep gaining share (it recently passed LDK to be the world's #2 wafer vendor), and that shares are due to rally after underperforming Chinese peers with stronger Japanese exposure. Shah also sees gross margin bottoming - it's expected to rise to 3%-5% in Q2 after coming in at -2% in Q1 - and predicts ReneSola will become a top-10 module supplier in 2013, with a 4%-5% share. 12% of the float was shorted as of May 31. Comment!
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10:34 AM WSI Industries (WSCI -7%) slides after reporting FQ3 net income of $106K, or $0.04 per diluted share, down from $598K, or $0.21 per diluted share, in the prior year third quarter. Sales were also lower, totaling $9.2M, down 3% from $9.5M Y/Y. The company cites declines in its energy business, and startup costs in new programs in its recreational vehicle market as well its new firearms business for the miss. The company also declared a quarterly dividend of $.04 per share. Comment!
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10:23 AM BofA/Merrill upgrades Adobe (ADBE +6.1%) to Buy in the wake of its FQ2 EPS beat and strong Creative Cloud adds: the firm is upbeat about CC into 2015, and sees Adobe converting much of its Creative Suite base. Jefferies notes CC net adds of 221K beat a consensus of ~185K. Mentioned on the earnings call: the majority of paid CC subs are individual members; Adobe is evaluating new options for CC pricing (previous); "targeted promotions" could hurt CC ARPU in the near-term; and Adobe thinks its infrastructure and analytics tools will allow Marketing Cloud to remain differentiated in the face of new competition. Ad software rival Marketo (MKTO +10.1%) is in sympathy. Comment!
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10:16 AM Gevo (GEVO +6.2%) continues to rise on momentum from yesterday's news that it has resumed production of isobutanol at its Minnesota plant. But Raymond James downgrades shares to Market Perform, seeing production challenges ahead and positive margins unlikely to emerge before Q1 2014, with the next plant perhaps not coming online until beyond 2014. 1 Comment
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10:06 AM Century Aluminum (CENX -2.5%) is downgraded to Underperform from Neutral with a $9 price target at BAML, which says its newly lowered estimated 2013 LME price of $0.87/lb. vs. $0.93 offsets an eventual benefit from CENX's recently negotiated lower power costs. The firm also notes sentiment toward added aluminum capacity globally has soured. Comment!
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10:03 AM Shares of Goodyear Tire (GT +2.9%) trade higher as industry factors such as the price of rubber and overall automobile demand stay in the company's favor. Goodyear is also in the midst of some labor negotiations with a steel workers union which could impact future costs. Comment!
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9:56 AM Macquarie's Kevin Smithen downgrades Sprint (S -3.5%) to Neutral after Dish decides to pass on making a new bid for the #3 U.S. mobile carrier before a Tuesday deadline. In addition to the lack of a counterbid, Smithen is worried about the unresolved battle over Clearwire, and the fact Sprint is about to enter a period of heavy spending and negative free cash flow. Comment!
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9:54 AM Men's Wearhouse (MW -0.7%) narrows its premarket loss quite a bit as the news of the firing of its founder is digested. Though a termination - instead of a resignation - signals there's more to the story, some forward-looking investors are jumping in on the prospect that a change of direction will benefit the retailer. Comment!
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9:46 AM UniPixel (UNXL +5.3%) jumps out of the gate after announcing it has finished building out a 7.5K-square foot Texas office and wet lab facility that will support its UniBoss touch sensor manufacturing ramp. The company adds its employee count is up to 32, and that a motion for summary judgment in its breach of contract dispute with CIT is currently pending. Shares have been mostly treading water in June after crashing in May. 3 Comments
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9:35 AM Jefferies' Biren Amin hikes the price target on Celldex Therapeutics (CLD +0.7%) to $19 from $15 citing potential royalties from rindopepimut and CDX-011. 1 Comment
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9:26 AM Ubiquiti (UBNT) +2.5% after JMP starts coverage with an Outperform and $21 PT. BofA/Merrill started coverage with a Buy two days ago. Though short interest has been gradually declining over the last 10 months, 17% of the float was still shorted as of May 31. Comment!
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9:24 AM More on J.P. Morgan's Keryx BioPharma (KERX) initiation: Zerenex (I, II) has "pharmacoeconomic advantages [that] could drive rapid uptake in the price sensitive end stage renal disease market," analyst Cory Kasimov says. Additionally a "deep dive" analysis has JPM "increasingly comfortable" with the issues that have weighed on the shares recently. Comment!
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9:19 AM Shares of Jos. A Bank Clothiers (JOSB) could see some action with rival Men's Wearhouse (MW) taking the dramatic step of firing its founder. SA contributor Money Investor already made the case that Jos. A Bank looks undervalued compared to Men's Wearhouse and could attract a buyer due to its strong fundamentals. Premarket: MW -7.1% premarket, JOSB inactive. Comment!
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9:15 AM Market preview: U.S. stock futures remain flat as investors look to be staying well out of the way until Ben Bernanke has his say later today. For those interested in something other than the "will they or won't they" tapering saga, Sprint is -3.4% as its acquisition process heads towards a Japanese endgame, while Adobe jumps 7.3% following earnings and Alcatel-Lucent climbs 4.8% on news of its revamp. Ongoing: Paris Air Show Comment!
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9:11 AM Men's Wearhouse (MW) fires George Zimmer from his position as executive chairman and says it will postpone its annual meeting as it seeks new director candidates. For those curious, Zimmer is the guy from the Men's Wearhouse commercials with the personal guarantee. MW -6.6% premarket. 12 Comments
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8:55 AM Linn Energy (LINE) and LinnCo (LNCO) are upgraded to Outperform at Howard Weil, which believes the Berry Petroleum (BRY) merger could be a great catalyst, providing improved organic targets and an oilier profile. While LINN's primary focus is closing the BRY deal, H2 could prove exciting with an improved organic growth program and the potential for additional large acquisitions. LINE +1.6% premarket. 7 Comments
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8:55 AM Orchard Supply (OSH) tells investors rather bluntly that it expects equity holders will experience a "complete loss" of their investment as a result of the pending bankruptcy. Shares were bid up early this week on speculation that the sale of assets to Lowe's would leave some value in the company. OSH -51.5% premarket. Comment!
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8:38 AM Vanda Pharmaceuticals (VNDA) sinks 14% premarket after Adam Feuerstein raises questions about the design of the company's Phase 3 trial for Tasimelteon (previous) which he says has "changed numerous times." Specifically, Feuerstein notes that the company changed the primary endpoint to a measure it created which "has never been used before in sleep-drug clinical trials [and is not ] endorsed by the FDA." Comment!
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8:29 AM Vivus' (VVUS +4.3%) Stendra drug for erectile dysfunction demonstrated a statistically significant improvement vs a placebo a trial of 440 patients between the ages of 40 and 70, with the aim being for the medication to take effect within 15 minutes of being consumed. A major problem with other treatments is that patients are advised to wait 1-2 hours for the drugs take effect, or they have to be consumed daily. (PR) Comment!
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8:13 AM Cliffs Natural Resources (CLF) -1.8% premarket after shares are downgraded to Underperform from Neutral with a $16 price target (from $24) at BAML, which notes CLF's high cost of iron ore and met coal production. The firm thinks CLF will struggle to compete with new Australia capacity but sees no reason for a liquidity panic. 1 Comment
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8:11 AM BlackBerry (BBRY) slips 3% premarket after a downgrade to Sell at Bernstein, which sees earnings peaking in FQ1 and "significant risk" of a miss in H2. OTR Global says U.K. Q10 sales fell off a cliff and have been - "not a typo" - just 30K-50K units since launch, reports Notable Calls. 63 Comments
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8:10 AM BT Group (BT -3.1%) CEO Ian Livingston will leave the company in September to become the Minister of State for Trade & Investment in the U.K. government. Livingston will be replaced by Gavin Patterson, who has led BT Retail and served as a BT Board member since 2008. (PR) Comment!
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7:56 AM In a blog post announcing a partial recall of Model S vehicles, Tesla Motors (TSLA) CEO Elon Musk notes the automaker hasn't received a single customer complaint on the issue of a potentially-weak mounting bracket. Maintaining its sense of style, the company will arrange to have recalled vehicles picked up from its owners to be fixed. TSLA -2.0% premarket to $101.30. 14 Comments
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7:54 AM Tetra Tech (TTEK) -10.2% premarket after saying yesterday it expects to post an FQ3 loss due to higher than expected restructuring costs related to its eastern Canada and mining operations. Brean Capital downgrades TTEK to Hold from Buy, noting the pre-announcement implies that it will be several quarters before the company regains its footing in terms of overall profitability. Comment!
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6:56 AM American Capital Agency (AGNC) gains 2.5% premarket after cutting its quarterly dividend 16% to $1.05/share, a 16.6% annualized yield based on last night's close, suggesting the cuts aren't over with. SA Pro's Dane Bowler a month ago suggested an annual payout of about $3.50 as a "sustainable" level for the dividend. (PR) 8 Comments
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5:05 AM Shares in new News Corp. (NWS), which will hold the company's publishing assets when it splits on June 28, fell 3% to $14.55 on their trading debut in Sydney after opening at a lower-than-expected $15. The non-voting stock slumped over 8% to $14.30. Due to the split, shares in 21st Century Fox, the entertainment business that comprises the other half of News Corp and is still trading under the parent company's name for now, dropped 6.9% to $30.53. 1 Comment
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4:22 AM European shares (FEZ) mostly fall as investors adjust their positions ahead of the Fed, although there does seem to be increasing confidence that the FOMC won't signal the end of its QE program today. "There is a lot of slack in the economy and there is no inflation pressure," says Standard Chartered's Ned Rumpeltin. EU Stoxx 50 -0.1%, London -0.7%, Paris -0.6%, Frankfurt -0.7%, Madrid +0.5%, Milan flat. Comment!
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4:11 AM Japanese shares (DXJ) buck the trend in Asia and rise 1.8% after exports jump a better-than-expected 10.1%, with Sony and SoftBank rising on corporate news (I, II). Stocks elsewhere in the region fall as investors stay cautious ahead of the FOMC monetary policy announcement later. Hong Kong -1.1%, China -0.7%, India -0.3%. Comment!
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