Today - Wednesday, March 4, 2015
1:39 PM| Comment!
- Unsurprisingly, India has decided not to allow Fifty Shades of Grey to exhibit in the country (but: for dialogue?).
- Universal Studios (CMCSA +0.4%) has already appealed the decision but may not expect much traction -- the company is also not pursuing distribution in China, where sexually explicit films tend to be banned.
- Considering the country's huge moviegoing base, the India decision could have a material effect on the film's global take (which was expected to crest $500M this week): At the beginning of the week, only India and Egypt remained on the film's international rollout.
1:34 PM| Comment!
1:30 PM| Comment!
- SanDisk (NASDAQ:SNDK) is up sharply a day after revealing InfiniFlash, a line of very dense and cheap enterprise flash storage arrays that support up to 512TB of capacity within just 3 rack units (3U) of space. This is made possible in part by a lack of built-in computing power; InfiniFlash relies on servers to provide it.
- InfiniFlash arrays will cost less than $1/GB, leading SanDisk to assert it offers "breakthrough pricing." Three models are offered: An "open platform" solution that third parties can run custom software on; a version for scale-out data centers (beloved by Internet giants); and a high-performance version for database storage. The last model runs on recently-acquired Fusion-io's ION Accelerator software.
- SanDisk plans to offer the system to existing server/storage OEM partners and resellers - its PR contains a positive quote from Dell - and (notably) also directly sell it to scale-out data center owners. SanDisk argues the solution, which enters a crowded flash array market featuring EMC, IBM, Pure Storage, Violin Memory, and many others, is optimized for big data/analytics, Web content, and media streaming needs (rather than general-purpose flash storage).
- "This is very disruptive and very competitive with other all-flash offerings," declares Bernstein. The Register's Chris Mellor observes InfiniFlash's density easily outpaces that of many existing arrays.
- Also: As is its custom, SanDisk has refreshed its mobile product lineup at the Mobile World Congress. New offerings include a 200GB microSD card and an embedded NAND flash module for phones/tablets that supports 1Gbps transfer speeds.
- Not long after Citigroup (C) CEO Michael Corbat sent out invitations last spring for the retirement party for former head of Citibank, Gene McQuade, he was asking McQaude to take the most important job at the bank - making sure it passes this year's stress test and CCAR.
- McQuade grew up in NYC housing projects, put himself through college driving a taxi, and - well-liked by both regulators and bankers - has earned a reputation as a go-to person for managing a crisis.
- “He’s absolutely the person you want in a conflict situation where the stakes are high. Smart, ethical, keeps his cool,” says Dick Kearns, who served with McQuade as a trustee at St. Bonaventure during a 2003 recruiting controversy. "If he were an airline pilot, he'd be Sully Sullenberger."
- Under McQuade, Citi this year has renovated risk models, hired more compliance staff, and attempted to address a Fed complaint that risk procedures are too centralized at HQ.
- "We really need to turn this into an A-plus paper," McQuade tells his colleagues.
- Stress test results are due after the close on Thursday, with the CCAR results six days later.
- Thinly-traded nano cap InspireMD (NSPR -41.6%) craters on a massive 30x surge in volume in response to its announcement of a public offering of 34M shares of common stock at $0.40 per share and warrants to purchase 34M shares of common at $0.55 per share for five years. Closing date is March 9.
- Net proceeds will fund the commercial launch of CGuard EPS, sales activities related to MGuard Prime EPS, advancement of its pipeline and general corporate purposes.
1:03 PM| Comment!
- CSX (CSX -0.3%) says it expects its domestic coal shipments will decline at least 5% this year, though it still expects to record strong Q1 earnings growth and double-digit earnings growth for 2015.
- Coal shipments are a major part of the business of railroad operators; for CSX, coal represented ~18% of the company's total freight volume and ~22% of its revenue for 2014.
- CSX also sees more moderate growth in shipments of crude oil than expected previously; crude shipments are a smaller portion of rail shipments - less than 2% at CSX - but have been one of the fastest growing parts of the rail industry.
- CSX estimates that last month's crude oil train derailment in West Virginia will knock a penny or two off Q1 EPS; it also estimates overall freight volume will increase 3% for the quarter.
- While rival Royal KPN (OTCPK:KKPNY +1%) is hoping to draw €1B in selling Base, its Belgian mobile division, France's Orange (NYSE:ORAN) -- which has a majority stake in Belgium's No. 2 provider Mobistar -- says it wants to stay in the country.
- Orange's Gervais Pellissier says his company hasn't been contacted about the Base sale but: "Consolidation is necessary in the market and it would make sense for someone already in the country to buy it."
- He expected if Mobistar got involved, in an effort to better take on market leader Belgacom, it would be tough to get the deal approved by regulators.
- Strategic bidders or private-equity funds still seem the likely candidates to buy Base in a market hit by a price war and ripe for consolidation.
- Transgenomic (TBIO +5.3%) closes its public offering of 3,573,899 shares of common stock and corresponding warrants to purchase 714,780 shares of common for a combined unit price of $1.95. Each warrant can purchase one fifth of a share of common price at a full-share price of $2.24.
- Net proceeds of $6.2M will fund working capital and general corporate purposes.
- Credit Suiise reiterates an Outperform rating on William Hill (OTC:WIMHF, OTCPK:WIMHY).
- The online betting firm was hit by a week of betting losses recently that was bit of an outlier.
- Analysts think results should smooth back out in the bookmaker's favor.
- William Hill's growing presence in Nevada sports books also makes it an interesting bet to some.
- On top of soundly beating Q4 estimates, Autohome (NYSE:ATHM) is guiding for Q1 revenue of RMB573M-RMB602M ($92.4M-$97M), good for 67.5%-76% Y/Y growth and well above an RMB519.1M consensus.
- A 120.2% Y/Y revenue increase for Autohome's dealer yellow page business (covers dealer ads and subscription services, 54.5% of total revenue) fueled the Q4 beat. Automaker ad services revenue (45.5% of total revenue) rose 65.6%. Dealers paying for subscription services rose 69.4% Y/Y to 17,080, aided by Autohome's expansion into Tier 3/4 Chinese cities.
- Gross margin rose to 83.4% from 77.3% a year ago. Operating expenses rose 111.9% Y/Y to $50.8M and made up 42.6% of revenue (up from 38.5% a year ago). Sales/marketing spend rose 129%, R&D 118.8%, and G&A 49.4%.
- Rival Bitauto (NYSE:BITA) is following Autohome higher ahead of its March 9 Q4 report.
- Autohome's Q4 results, PR
- Alcoa (AA -4.9%) tumbles to five-month lows following BofA's downgrade, which cited worsening aluminum fundamentals and the expectation that falling premiums can no longer offset price strength on the London Metal Exchange in the near term.
- The downgrade coincides with BofA's lowering of its average 2015 aluminum price forecast by 7.8%, and its global average premium forecast to $300/ton.
- A lower price is not the only impact from the downgrade, as implied volatility in the shares has jumped by 8.7% to 31.6% and stands just above the historic reading of movement on the underlying share price.
- Calling Korea one of just three emerging markets which "destroys value," Credit Suisse cuts its 15% overweight stance on the country to 5%, and uses the money to cut back on its deep underweight position in Russia.
- Among the Korean concerns are the weakest earnings revisions of any emerging market, the competitive threat of yen weakness, amongst the worst payout ratios and dividend yields, and the more attractive valuation of Taiwan.
- Why even 5% overweight? Korea, says CS, is an effective play on a relatively strong U.S., it's well-protected from a stronger greenback, it's got accommodative monetary policy, and the country is underowned by dedicated EM equity funds.
- ETFs: EWY, KORU, FKO, HKOR, DXKW, QKOR, DBKO
- Investors betting on the Chinese automobile market need to factor in how runaway pollution impacts investment potential, warn analysts.
- The air Pollution index in China has hit dangerous levels this week with Beijing registering a 168 today and Nanjing hitting a shockingly high 288 yesterday (extremely unhealthy).
- Other cities with an "unhealthy" reading on air quality include Guangzhou, Nanjing, Maanshan, Chengdu, Chuzhou, Zhenjiang, Yahgzhou, Wuhu, and Hong Kong.
- Reports indicate the Chinese population has become more concerned about the medical ramifications of long-term exposure to pollution.
- Some automobile industry watchers think foreign car manufacturers could benefit at the expense of domestic automakers if the government in China is to take further steps to push low-emission cars and EVs.
- The other side of the equation is the restrictions placed on car sales in certain regions in the nation.
- China auto sales are expected to rise 8.3% this year.
- China-related auto stocks (including JVs): KNDI, OTCQX:VLKAY, GM, F, OTCPK:DDAIF, TSLA, OTCPK:BAMXY, OTCPK:BCAUY, OTCPK:GWLLY, OTCPK:GWLLF, OTCPK:GELYF, OTCPK:GELYY, OTCPK:DNFGF, OTCPK:DNFGY, OTC:HYMLF, CAAS, SORL, OTCPK:BYDDY, OTCPK:BYDDF.
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