Today - Friday, March 7, 2014
- AstraZeneca (AZN) says Nexium is safe despite an FDA-imposed ban on US shipments on a key ingredient's manufacturer.
- Ranbaxy Laboratories was slapped with the ban in January because it was allegedly retesting QC-failed products in order to get acceptable results. AZN switched suppliers to Minakem SAS in France shortly thereafter.
- It has no plans to withdraw the $4B product from the marketplace.
- Originally inked in 2010, the agreement gives Schwab (SCHW) customers access to JPMorgan's new issue and secondary municipal and corporate bonds. Since the deal started, Schwab clients have had access to over 800 corporate deals and total orders for these grew 70% Y/Y in 2013.
- "Retail demand for access to this traditionally institutional product has exceeded our expectations," says Schwab SVP Peter Crawford. "We believe this agreement has been an important step on the road to changing a market that previously was the near-exclusive domain of institutional investors."
- Press release
- More brinksmanship in the Ukraine crisis: Gazprom (OGZPY) says Ukraine has missed today's deadline in paying for February gas deliveries and is threatening to cut off the country's gas supply.
- Russian Pres. Putin and Gazprom already have said Russia will scrap price discounts for Ukraine as of April because Ukraine failed to pay for gas on time.
- Gazprom says Russian gas transit via Ukraine to Europe remains stable.
- Big Lots (BIG +21.3%) rips higher after the company solves its Canadian headaches.
- Losses from operations in Canada during Q4 were much lower than analysts forecast and the retailer says it will pull out of the nation completely during Q1.
- The exit was tipped off previously, but the details today showed an accelerated timetable.
- A new $125M buyback has also been approved by the company.
- Mindray Medical International Ltd (MR) will pay its recently-declared $.50/share dividend on or around April 8 to shareholders of record March 8.
- The life insurers open strongly in the green as interest rates shoot higher following this mornings jobs report. Up the most is Prudential (PRU +3%) after BAML upgrades to Buy and boosts the price target to $103 from $94.
- The team views PRU's valuation as attractive after its sluggish start to the year - off 6% vs. a 1% increase in the median life name. There's also increased confidence the company can sustain an ROE above 14%, and a rising equity market means a lower cost of capital for the industry.
- Noting PRU's status as a SIFI, BAML takes a conservative view towards buybacks, assuming just $500M over the next five quarters. "However, we would not be surprised if PRU continued its current $1B a year pace of buyback, which we believe would help support the ROE."
- Others: MetLife (MET +2.1%), Lincoln National (LNC +2.2%), ING U.S. (VOYA +1.1%), Protective Life (PL +1.3%).
- Public Service Enterprise Group (PEG -0.1%) unveils a $12B five-year capital spending plan, including an additional $2B in utility transmission investments to $6.8B, in an effort to boost earnings growth at its utility segment.
- PEG expects its capital spending program to result in a double-digit increase in utility business earnings through 2016.
- PEG also will make additional investments to strengthen New Jersey's electric and gas systems against severe weather, if approved by the New Jersey Board of Public Utilities, which is expected to make a decision in April.
- GT Advanced (GTAT +4.8%) has been upgraded to Outperform by Credit Suisse, and is making new 52-week highs. Goldman started shares at Buy on Tuesday.
- JA Solar (JASO +2.6%) has been started at Buy by Sidoti. The company was one of several Chinese solar names to post big gains yesterday.
- Polycom (PLCM +3.3%) has been upgraded to Buy by Citi.
- AppliedMicro (AMCC +1.1%) has been started at Buy by Roth.
- Quality Systems (QSII +3.6%) has been upgraded to Market Perform by FBR.
- Imagination (IGNMF) has been cut to Sell by Canaccord. Shares are down 1.7% in London.
- "We view shares of New Media (NEWM) as an opportunity to invest in a viable business strategy with a clean balance sheet at a price that appropriately reflects well known industry challenges," says analyst Jason Stewart, starting the Newcastle (NCT) spinoff with a Buy and $18 price target. "At a high level, NEWM’s business strategy is simple: implement technological improvements and make strategic acquisitions. The company has several levers to pull for growth, and unlike some of its peers, a clean fair value balance sheet and minimal leverage."
- Stewart's earnings estimates already account for declining circulation volumes and lower advertising per publication, and he notes the stock trades at a EV/2015 EBITDA ratio of 5.7x vs peers at 7.5x, despite better growth prospects and a cleaner balance sheet for New Media.
- Columbia Laboratories (CBRX) purchases 1.4M shares of its common stock from Actavis (ACT) at $6.08/share, a supposed 10.75% discount to yesterday's closing price. In reality, the price was a 2% premium to the close of $5.96.
- The CEO calls it a "unique opportunity to acquire Actavis' large block of shares at an advantageous price". No word on shareholders reaction to this one-in-a-lifetime use of 41% the company's $20.7M of cash and equivalents.
- Consensus 2014 estimates are earnings of $.33/share on revenues of $32M.
- EPS for 2013 was $.73 on revenues of $29.2M.
- Sprint (S) network infrastructure chief Bob Azzi and product development/operations chief Steve Elfman are leaving the company, as SoftBank (SFTBF, SFTBY) continues shaking up the carrier's executive ranks. Ex-Clearwire CTO John Saw has been named Sprint's chief network officer.
- Sprint's sales and marketing chiefs left last October. A possible factor behind the latest moves: Sprint has seen widespread service quality complaints - Consumer Reports ranked it last among U.S. carriers in 2013 - as it moves aggressively to migrate users to its 4G LTE network.
- Another potential trigger: Sprint's LTE buildout is slightly behind schedule. The carrier originally planned to offer LTE coverage to 250M POPs by the end of 2013, but later lowered its target to 200M.
9:29 AM| Comment!
- Stock futures point to strong gains at the open following the better than expected non-farm payroll report; S&P and Dow +0.4%, Nasdaq +0.3%.
- The S&P 500 and Russell 2000 will open in record territory, the Dow will start within ~1% of its own all-time high, while the Nasdaq readies for its best print in almost 15 years.
- European stocks pared some losses but remained lower after the U.S. jobs data; most Asian markets ended higher.
- Investors had discounted earlier weak economic reports, blaming the harsh winter weather, so the jobs report gives fuel to those who have bid up the market on the belief that stronger numbers are just around the corner.
- Investors may turn cautious going into the weekend, however, given tensions between Russia and the West over Ukraine.
- In corporate news, Safeway -3.5% premarket after agreeing to a sale, while Skullcandy +26% and Big Lots +18% after earnings results.
- Treasurys are near their lowest levels of the day, with the benchmark 10-year yield higher by 7 bps at 2.81%; gold and silver futures are sharply lower.