Seeking Alpha
  • Today - Sunday, April 26, 2015

  • 6:48 AM
    • While the Bank of Japan is likely to cut growth and inflation forecasts this week, the question of additional stimulus still remains.
    • Japan's central bank is expected to trim its inflation forecast for 2015 by several tenths of a percentage point from 1%, and shave its growth forecast from the current 2.1%.
    • Despite inflation dropping back to zero, governor Haruhiko Kuroda has argued strongly that the BOJ's existing QE program intended to boost inflation is on track, leading many economists to think further easing is unlikely for now.
    | Comment!
  • 6:14 AM
    • Sony (NYSE:SNE) has again raised its operating profit estimate for fiscal 2015, the Nikkei reports, upping its forecast for the third time in three months.
    • Due to expectations for higher display sensor and Playstation console sales, the company now anticipates operating profit of ¥300B ($2.52B) - four times its previous estimate and its highest earnings since 2008.
    • Sony also expects earnings for fiscal year 2016 to improve as its restructuring costs decline.
    • Previously: Sony raises forecast for full-year profit (Apr. 22 2015)
    | Comment!
  • Saturday, April 25, 2015

  • 7:30 PM
    • A Phase 3 trial, ALLY-1, evaluating a 12-week regimen of the combination Bristol-Myers Squibb's (NYSE:BMY) daclatasvir and Gilead's (NASDAQ:GILD) Sovaldi (sofosbuvir) plus ribavirin (RBV) for the treatment of HCV patients with advanced cirrhosis (n=60) or post-liver transplant recurrence of HCV (n=53) met its primary efficacy endpoints.
    • Cure rates, defined as SVR12, were 83% (n=50/60) for patients with advanced cirrhosis; 94% (n=50/53) for those with post-transplant HCV recurrence; 95% for post-transplant HCV-1s and 82% for HCV-1s with advanced cirrhosis.
    • The data were presented at the 50th Annual Congress of the European Association for the Study of the Liver in Vienna, Austria.
  • 7:05 PM
    • Merck (NYSE:MRK) announces the presentation of results from two Phase 2 studies of its investigational HCV combination therapy, grazoprevir/elbasvir (G/E).
    • The first trial, C-SALVAGE, assessed 12 weeks of G/E therapy plus ribavirin (RBV) in HCV-1 patients who previously failed treatment with peginterferon and RBV combined with a direct-acting antiviral (DAA) (boceprevir, simeprevir or telaprevir). 34 patients (43%) of the 79 who received at least one dose of G/E were cirrhotic. The overall cure rate (sustained virologic response 12 weeks after treatment or SVR12) was 96% (n=76/79). The cure rate in patients with compensated cirrhosis was 94% (n=32/34). Three patients relapsed after the completion of therapy. All three had resistance-associated variants at baseline.
    • The second trial, C-SWIFT, was a proof-of-concept study assessing G/E + Gilead's (NASDAQ:GILD) Sovaldi (sofosbuvir) over shorter treatment durations in treatment-naive HCV-1 and HCV-3 patients with or without cirrhosis. The cure rates (SVR12) were: HCV-1 non-cirrhotic/4 weeks: 33% (n=10/30); HCV-1 non-cirrhotic/6 weeks: 87% (n=26/30); HCV-1 cirrhotic/6 weeks: 80% (n=16/20); HCV-1 cirrhotic/8 weeks: 94% (n=17/18); HCV-3 non-cirrhotic/8 weeks: 93% (n=14/15); HCV-3 cirrhotic/8 weeks: 100% (n=14/14); HCV-3 cirrhotic/12 weeks: 91% (n=10/11).
    • The data were presented at the 50th Annual Congress of the European Association for the Study of the Liver in Vienna, Austria.
    | 1 Comment
  • 6:18 PM
    • A Phase 2 "proxy" study evaluating the combination of Gilead's (NASDAQ:GILD) Sovaldi (sofosbuvir) and Achillion Pharmaceuticals' (NASDAQ:ACHN) investigational NS5A inhibitor, ACH-3102, in treatment-naive HCV-1 patients showed a cure rate (SVR12) of 100% (n=6/6) after six weeks of treatment and 100% (n=12/12) after eight weeks of treatment. According to the company, this is the first study to report 100% SVR12 based on a two-drug combo for six weeks.
    • In a Phase 1 proof-of-concept study, six HCV-1 patients who received the company's prodrug inhibitor of HCV NS5B polymerase, ACH-3422, once daily for 14 days showed a mean reduction in HCV viral RNA load of 4.6 log10 IU/ml with three being undetectable.
    • The company reported basically the same data on an interim basis in December.
    • The data were presented at the 50th Annual Meeting of the European Association for the Study of the Liver in Vienna, Austria.
    • Previously: Achillion reports positive interim results for HCV candidates (Dec. 22, 2014)
  • 5:53 PM
  • 5:48 PM
    • Preliminary data from a Phase 3 study, RUBY-1, evaluating AbbVie's (NYSE:ABBV) Viekirax (ombitasvir/paritaprevir/ritonavir) + Exviera (dasabuvir), with or without ribavirin, for 12 or 24 weeks in treatment-naive, non-cirrhotic HCV-1 patients with severe renal impairment (stage 4 or 5), including those on hemodialysis, showed a 100% SVR4 rate (n=10/10) (sustained virologic response four weeks after treatment). Enrollment is 20 patients, but only half had reached week 4 post treatment at the data cutoff.
    • The primary endpoint of the trial is the percentage of patients achieving SVR12. Cohort 1 consists of 20 patients without cirrhosis while cohort 2 has 20 patients with or without compensated cirrhosis.
    • The data were presented at the 50th Annual Meeting of the European Association for the Study of the Liver in Vienna, Austria.
    • Related tickers: (NASDAQ:ENTA) (NASDAQ:GILD) (NYSE:MRK) (NYSE:BMY)
  • 5:22 PM
    • A 592-patient randomized Phase 3 study, called BOSON, evaluating the regimen of Gilead Sciences' (NASDAQ:GILD) Sovaldi (sofosbuvir), in combination with ribavirin (RBV) alone or pegylated interferon (PEG) and RBV, demonstrated high cures rates (sustained virologic response 12 weeks after treatment or SVR12) in patients with chronic hepatitis C infection, genotypes 2 and 3.
    • The regimen of Sovaldi + RBV for 16 or 24 weeks was compared to Sovaldi + PEG/RBV for 12 weeks in treatment-naive or treatment-experienced HCV-3 patients with or without cirrhosis and treatment-experienced HCV-2 patients with cirrhosis. 37% of the study participants were cirrhotic.
    • The cure rate for the Sovaldi + PEG/RBV/12-week arm in HCV-3 patients was 93% (n=168/181). Additional cure rates were: Sovaldi + RBV/24 weeks - HCV-3: 84% (n=153/182); Sovaldi + RBV/16 weeks - HCV-3: 71% (n=128/181); Sovaldi + PEG/RBV in treatment-experienced HCV-3 with cirrhosis: 86% (n=30/35).
    • Cure rates in HCV-2 were: Sovaldi + PEG/RBV: 94% (n=15/16); Sovaldi + RBV/24 weeks: 100% (n=17/17); Sovaldi + RBV/16 weeks: 87% (n=13/15).
    • Results from a France-based Phase 2 study assessing Harvoni (ledipasvir/sofosbuvir) in HCV genotypes 4 and 5 (half were cirrhotic) showed cure rates of 93% (n=41/44) for HCV-4 and 95% (n=39/41) for HCV-5.
    • Genotype 3, the second most prevalent after genotype 1, is the most resistant to therapy. Genotypes 4 and 5 are less prevalent and have not been studied as closely. Genotype 2 characterizes almost one third of HCV infections in Japan.
    • The data were presented at the 50th Annual Meeting of the European Association for the Study of the Liver in Vienna, Austria.
    | 1 Comment
  • 2:47 PM
    • "We already own enough of it, thank you very much," says SoftBank (OTCPK:SFTBF) Internet/media chief Nikesh Arora about Yahoo Japan (OTCPK:YAHOY). Yahoo's (NASDAQ:YHOO) recently-disclosed efforts to explore options for its 35.5% YJ stake had fueled speculation SoftBank (owns 43% of YJ) would try to buy the stake.
    • At the same time, Arora, formerly Google's sales chief, states SoftBank (has a portfolio of 1,300+ investments) is up for making new investments in growth companies ... at the right price. With valuations for private U.S. tech companies having soared, India, which has relatively low Web, smartphone, and e-commerce penetration rates and a new government widely seen as more business-friendly than its predecessor, has been an area of interest.
    • SoftBank led a $627M funding round in Indian e-commerce marketplace Snapdeal last year, and has been rumored to be weighing a major investment in low-end Indian Android OEM Micromax. It has also led a $600M round for Chinese ride-sharing platform Kuaidi Dache (recently merged with top rival Didi Dache), and invested $250M in top Southeast Asian ride-sharing platform GrabTaxi.
    • The Japanese conglomerate's 797.7M-share Alibaba stake (current pre-tax value of $67.5B) leaves it with plenty of fresh powder for further dealmaking.
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  • 1:54 PM
    • 95% of all Oracle (NYSE:ORCL) products will be available as cloud-based services by the time the company holds this year's Oracle OpenWorld conference in October, says co-CEO Mark Hurd. He asserts 65% of Oracle products are offered via the cloud today.
    • Hurd: "We are still investing, very much in our traditional products. But that said, we are moving those products to now be available in the cloud at a really incredible pace ... We are not protecting, so to speak, anything."
    • Oracle has rapidly fleshed out its cloud app (SaaS), app platform (PaaS), and infrastructure (IaaS) lineup over the last 3 years through a mixture of acquisitions and internal product launches, with the goal of keeping clients from abandoning Oracle for either the offerings of cloud-focused rivals (e.g. Salesforce, Workday) or those of fellow IT giants making their own large cloud investments (e.g. SAP, Microsoft, IBM).
    • Though Oracle faces a tough sell with Internet firms and startups that have eschewed its offerings (often for some mixture of Amazon Web Services, open-source software, and apps from cloud-only upstarts), it's gaining traction with its core enterprise base: The company's SaaS/PaaS revenue rose 30% Y/Y in the February quarter to $372M, and its IaaS revenue rose 28% to $155M. At the same time, traditional software license revenue fell 7% to $1.98B (forex was a headwind).
    • In a recent note, D.A. Davidson (Buy, $51 target) reported its research indicates Oracle's SaaS/PaaS offerings "continue to gain customer traction and mindshare, particularly in Europe," where the company faces less competition from upstarts. "Most ... pure play SaaS vendors are in earlier stages of building the distribution and channel partnerships needed to succeed longer term in this geography."
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  • 12:09 PM
  • 12:05 PM
    • Starbucks (NASDAQ:SBUX) reports all stores are operating as usual after a national sales register outage disrupted functions last night and led to thousands of stores closing early.
    • The point-of-sale crash struck after a daily system refresh.
    • The Starbucks outage created a stir on Twitter on widespread reports of stores giving away free food and drinks.
    • Earlier this week, tech initiatives were a focal point of Starbucks earnings report and conference call presentation and Q&A.
    • Shares of Starbucks were up 8.86% last week to close at $51.84.
    • Previously: Powerful comp lifts Starbucks (April 23)
    • Previously: Tech initiatives at Starbucks gain momentum (April 23)
  • 7:46 AM
    • Taubman Centers (NYSE:TCO) trades at a whopping 25% discount to estimated NAV, according to Green Street Advisors, versus General Growth Properties (NYSE:GGP) at just a 3% discount, and Macerich (NYSE:MAC) and SImon Property Group (NYSE:SPG) at small premiums.
    • At least partly behind the discount is worry over Taubman's capital allocation - particularly the development of two Chinese malls whose expected returns are sizably less than what the company could earn on domestic redevelopment projects (or maybe on buybacks). And what if Taubman - which still sees itself as a family company (the Taubman's own 29% of it and haven't sold a share since the 1992 IPO) - isn't satisfied with just two Chinese malls?
    • “Anybody who can put on blinders and blot out the chatter should do well,” says Green Street's Mike Kirby, arguing the Chinese fears are overblown. Taubman's a money-maker: Since the 1992 IPO, the company has generated a 15%-plus annual total return - six hundred basis points better than the S&P 500 - and dividends have grown at a 4% annual rate. The stock's sizable underperformance against its peers over the last year - add disappointing 2015 guidance to the China fears - offers investors a chance to get in relatively cheaply.
    • Source: Barron's Andrew Bary
    | 1 Comment
  • 7:46 AM
    • Texas regulators have ordered Exxon Mobil's (NYSE:XOM) XTO Energy subsidiary and another company to prove their wells near Fort Worth are not causing earthquakes.
    • On Friday the Texas Railroad Commission, which regulates the state’s oil and gas industry, told both companies they need to appear at hearings scheduled for June to justify why their wells should not be shut down.
    • The action follows a Southern Methodist University study released this week that linked a rash of small earthquakes in the area to nearby natural gas wells and the injection of wastewater deep underground.
    • Also this week, the U.S. Geological Survey reported that an increase in seismic activity in Texas, Oklahoma and six other states "very likely" was caused by  wastewater injection from oil and gas operations.
  • Friday, April 24, 2015

  • 7:30 PM
  • 7:11 PM
    • After barely moving in response to its Q1 numbers yesterday, Proto Labs (NYSE:PRLB) sold off today in the wake of downgrades to neutral ratings from Piper and Craig-Hallum. Needham downgraded ahead of the report.
    • Though the custom parts maker narrowly beat Q1 revenue estimates and posted in-line EPS, it guided for on its CC (transcript) for Q2 revenue of $61M-$64M and EPS of $0.46-$0.50, below a consensus of $63.4M and $0.49 at the midpoints. Forex is expected to have a $2M impact on sales, up from Q1's $1.75M.
    • Proto's North American revenue rose 36% Y/Y in Q1 (23% excluding the FineLine acquisition). Japanese revenue rose 23% (43.5% in constant currency), and European revenue fell 5% (up 10% in constant currency). Unique product developers/engineers served rose 44% to 11K.
    • Gross margin fell 280 bps Y/Y to 60.2% - lower additive manufacturing margins had a 110 bps impact, and forex a 220 bps impact. GAAP operating expenses rose 33% to $19.4M (compares with 27% revenue growth).
    • Q1 results, PR
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  • 6:50 PM
    • In another day of broad losses among in precious metals miners, Newmont Mining (NYSE:NEM) enjoyed a 6.5% surge following strong Q1 results that included impressive cost reductions in gold and copper production.
    • J.P. Morgan analysts especially liked the strong first quarter at Batu Hijau and Yanacocha and the deferral of some capex that allowed NEM to generate $344M in free cash flows and pay down $200M in debt; the firm says full-year guidance could be raised if cost reductions can be maintained in Q2.
    • Otherwise, it was not a good day for mining equities, following another drop in gold futures which tumbled to their lowest level in more than a month.
    • NEM CEO Gary Goldberg expects gold prices to gain ~25% to $1,500/oz. by 2020 on rising demand from China and a weaker dollar; for now, Goldberg says the strong U.S. dollar is “definitely having an adverse effect” on gold prices, and he expects the dollar will “eventually come back off of its highs in the next couple of years."
    • In today's trade: ABX -0.9%, AU -4.2%, GG -2.6%, SBGL -7.7%, GOLD -2%, AUY -2.5%, NGD -1.9%, GFI -4.4%, SLW -1%, PAAS -1.6%, EGO -4.1%, RGLD -2.7%, FNV -2.1%, KGC -0.4%, IAG -1.4%, BTG -1.9%, HL -1.9%, AGI -1.6%, AUQ -3.1%.
  • 6:47 PM
    • Though NetSuite (NYSE:N) beat Q1 estimates, it guided on its Q1 CC (transcript) for Q2 revenue of $170M-$172M and EPS of $0.03-$0.04, below a consensus of $172.1M and $0.06. A strong dollar is blamed (26% of Q1 revenue was international).
    • Not counting the impact of the Bronto Software acquisition (announced yesterday morning, expected to close in early June), full-year revenue and EPS guidance of $715M-$725M and $0.32 is maintained. Counting Bronto, guidance is now at $730M-$743M and $0.23. Bronto is expected to contribute $40M-$45M to 2016 revenue.
    • Calculated billings rose 28% Y/Y in Q1 to $174M, topping revenue of $164.8M. However, growth slowed from Q4's 34%, and was below revenue growth of 34%. NetSuite thinks forex had a 5% impact on billings growth, up from Q4's 2%.
    • The deferred revenue balance rose 3% Q/Q and 36% Y/Y to $323.4M. GAAP operating expenses rose 29% Y/Y to $131.4M. A record number of $250K+ deals were struck.
    • NetSuite also guided light in January.
    • Q1 results, PR
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  • 6:23 PM
    • Marketo (NASDAQ:MKTO) sold off today in spite of beating Q1 estimates and issuing above-consensus sales guidance: The cloud marketing automation software provider expects Q2 revenue of $49.5M-$50.5M (consensus was at $49.2M) and 2015 revenue of $208M-$210M (consensus was at $205.5M).
    • The Street might have been looking for better EPS guidance in light of the top-line strength: Q2 EPS guidance is at -$0.22 to -$0.24 (-$0.22 consensus), and full-year guidance at -$0.81 to -$0.85 (-$0.82 consensus).
    • Calculated billings rose 37% Y/Y in Q1 to $49.9M, topping revenue of $46M (+42%), and the deferred revenue balance grew 6% Q/Q and 47% Y/Y to $66.9M. GAAP operating expenses rose 44% Y/Y to $48.5M. The customer count rose by 198 Q/Q to 3,972.
    • Q1 results, PR
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  • 6:12 PM
    • Reuters reports Nutanix, a fast-growing maker of integrated server/storage systems for companies adopting hyperscale data center architectures (beloved by many Internet firms), is in talks to hire underwriters for an IPO that could value it at over $2.5B.
    • Nutanix was valued at over $2B in a $140M 2014 funding round. To a large extent, its systems are aimed at companies that want the cost, integration, scalability, and deployment time benefits of hyperscale data centers, but (unlike Google, Facebook, or Amazon) don't want to take a do-it-yourself approach to hardware and management software.
    • As of last August, Nutanix had over 800 customers; its client list includes Starbucks, the U.S. Army, Best Buy, Honda, Yahoo Japan, and eBay. Last year, VMware launched a rival platform (known as EVO:RAIL) that leverages its vSphere server virtualization platform and has been adopted by OEMs such as EMC, Dell, and Fujitsu.
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