Today - Wednesday, March 12, 2014
4:23 PM| Comment!
- Stocks recovered from early losses to finish little changed, as investors were unsettled by worries about global growth and tensions over Ukraine; the Dow ended slightly lower but the Nasdaq bucked the downtrend, rising modestly after a four-session skid.
- U.S. declines were mild compared with some overseas markets, as investors say recent news hasn't led them to significantly change their views on U.S. markets, especially after last Friday's better than expected employment report.
- Industrials and financials were the worst performing of the S&P's 10 major sector groups, with and utilities and technology faring best.
- Gold futures rallied $23.80, or 1.8%, to settle at their highest close in six months, benefiting from demand for safe-haven assets.
- Crude oil fell 2% to $97.99 following a jump in U.S. crude inventories and U.S. plans for a “test” sale of oil from the Strategic Petroleum Reserve.
- Treasury prices rose for a third straight session after strong 10-year auction; the benchmark 10-year yield dropped 5 bps to ~2.72%.
4:17 PM| Comment!
- The offering size is 28.28M Class A shares with underwriter greenshoe of 4.242M. Insiders are selling about 5.077M shares. Fortress (FIG) will use the proceeds to purchase an equivalent number of outstanding Fortress Operating Group partnership units from company principals.
- Shares -3.2% AH
- Press release
4:10 PM| 3 Comments
- RetailMeNot (SALE -5.8%) saw profit-taking following the arrival of its final lockup expiration. Shares remain up 77% from a July 2013 IPO price of $21.
- Wunderlich's Blake Harper is defending the online coupon/promo code site, arguing its valuation is far more attractive than that of newly-public Coupons.com (COUP +5.8%), which went in the opposite direction today.
- Harper notes that while RetailMeNot posted 45% sales growth in 2013 and is trading at 9x EV/sales, Coupons.com is trading at 11x EV/sales after having grown 50%. He also observes RetailMeNot's 38% EBITDA margin dwarfs Coupons.com's 1%; the latter figure is expected to rise to a double-digit level this year.
- Apache (APA -0.4%) says it has been paid by YPF (YPF -0.7%) for its previously announced $800M cash deal to sell its operations in Argentina, a payment that may help the Latin American country further rebuild credibility with foreign investors.
- Two years after seizing YPF from Spain's Repsol, Argentina is working to quell concerns about its economic conditions and energy policy.
- APA had stakes in ~25 fields in Argentina, including the giant Vaca Muerta shale oil and gas field.
- Infosys (INFY -6.2%) chairman Narayana Murthy, CEO S.D. Shibulal, and CFO Rajiv Bansal held an investor meeting earlier today at the company's Bangalore campus. Shares have fallen sharply since.
- IT outsourcing rival Cognizant has been hit by a valuation-driven Berenberg downgrade, but its losses are much milder.
- Boeing (BA -1%) shares, already down 9% YTD after surging 94% last year, are slipping again today as UBS cuts its price target to $127 from $137 on the belief that problems with 787 production means cash burn will go on longer than expected.
- The firm's updated learning curve analysis forecasts Boeing’s 787 cash burn at ~$6B in 2014, only slightly better than 2013, and it sees cash burn improving by ~$2B/year beyond 2014 and reaching breakeven in 2017, two years later than guidance.
- CRT Capital, however, says sources expect 5-6 787 deliveries this month getting back on track to normal levels by June; while a modest impact could be felt in Q1 and possibly Q2, the firm doesn't expect any change for the full year (Briefing.com).
- Andreas Bachmann pleaded guilty to fraud for helping Americans evade taxes by hiding money in Switzerland. The plea came as part of a deal, and the former Credit Suisse (CS) broker is cooperating with the government's investigation of banks and tax evasion.
- Impeding the investigation: Many of the bankers investigators would like to talk to reside out-of-reach on the other side of the Atlantic. Bachmann has agreed not to leave D.C.
- Papa Murphy's (FRSH) filed for a $70M IPO this week.
- The restaurant operator is one of the leading names in the fast-casual pizza concept that some analysts tap as the next high-growth area of the restaurant sector.
- The company brought in sales of $786M last year on same-store sales growth of 2.8%.
- SEC Form S-1
- Shorts against the share prices of red-hot fuel cell manufacturers are climbing as questions emerge about the prospects for profits.
- Plug Power’s (PLUG +11.4%) short interest reached a two-and-a-half-year high of 10.6% of shares outstanding on March 10, up from 2.4% in September; shorts in FuelCell Energy (FCEL +1.8%) reached 14.2% yesterday vs. 4% in June; and Ballard Power (BLDP +1.7%) surged to a record 3% from 0.2% in October.
- PLUG plunged yesterday after short-seller Andrew Left said in a report that the shares are worth 50 cents, and Left adds another criticism today, saying PLUG will be threatened if larger companies move into its market, such as Toyota (TM), which plans to release a fuel-cell sedan next year.
- "If fuel cells become standard in fork lifts, Toyota is ready to step in,” Left says today. "If hydrogen becomes the fuel of the future, then Wal-Mart will take the cheapest supplier.”
- Cowen's Robert Stone, who downgraded FCEL today, counters that PLUG dominates the market in fuel cells for material handling and has more than 100 patents that will help protect its advantage should additional suppliers enter the market.
- "Buyside demand was the highest in a year for any 10-year auction and it showed," says RBS of today's $21B sale of reopened Treasury notes.
- Already ahead on the session, Treasury prices added to gains following the auction, and the 10-year yield is now off five basis points to 2.72%. TLT +0.8%, TBT -1.6%.
- GMP Securities Adrian Miller notes demand was far higher than for Tuesday's 3-year auction, with a bid-to-cover ratio of 2.92:1. He notes expectations for the Fed to adjust forward guidance next week to assure markets of no rate hikes until 2015 H2.
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