Seeking Alpha
  • Today - Thursday, December 18, 2014

  • 1:14 PM
    • In addition to beating FQ1 estimates, Accenture (ACN +4.3%) has hiked its guidance for FY15 (ends Aug. '15) local currency revenue growth to 5%-8% from 4%-7%. On the other hand, forex is now expected to have 500 bps impact on revenue, up from a prior 200 bps.
    • As a result, FY15 EPS guidance has been lowered to $4.66-$4.80 from $4.74-$4.88 - consensus is at $4.81 - and FQ2 revenue guidance of $7.25B-$7.5B is mostly below a $7.46B consensus. The market appears to have discounted forex pressures in advance.
    • FQ1 new bookings totaled $7.7B, down from $8.7B a year ago. Consulting bookings fell to $3.9B from $4.3B, and outsourcing bookings to $3.8B from $4.4B.
    • Gross margin fell 110 bps Y/Y to 32.2%, but cost controls helped SG&A spend fall to 17.1% of revenue from 18.7%. As a result, op. margin rose 20 bps to 15%. $670M was spent on buybacks.
    • North America revenue +11% to $3.44B; Europe +5% to $2.91B; "Growth Markets" +3% to $1.55B. Forex respectively had 400 bps and 600 bps impacts on Europe and Growth Markets revenue growth.
    • Accenture has made new highs. Outsourcing rivals Infosys (INFY +3%), Wipro (WIT +4.9%), and Cognizant (CTSH +4.3%) are also outperforming on a good day for equities.
    • FQ1 results, PR
    | Comment!
  • 1:11 PM
    • Through November ETFs have taken in $192B vs. $188B for all of 2013, according to ETF.com. BlackRock's (NYSE:BLK) iShares and Vanguard account for $7 out of every $10 of inflows this year, says InvestmentNews, and BlackRock says it brought in $89.7B globally, $71.4B in the U.S.
    • Vanguard places flows at $75B globally, $63.5B in the U.S., putting it in position to overtake State Street (NYSE:STT) in the #2 spot in ETF business.
    • ETF.com's Dave Nadig calls it a "victory of Vanilla" story, noting that for all of the low-vol, currency hedging, and smart beta strategies, core product offerings with broad exposure to stock and bond markets continue to dominate inflows.
    | Comment!
  • 1:01 PM
    • IPO Bellicum Pharmaceuticals (NASDAQ:BLCM) debuts strongly. Shares are up 41% on turnover of 6.3M. Juno Therapeutics (Pending:JUNO) is on deck for tomorrow.
    • Previously: Bellicum Pharma on deck for IPO (Dec. 10, 2014)
    | Comment!
  • 1:00 PM
     
    • Dow +1.75%.
    • 10-yr -0.54%.
    • Euro -0.47% vs. dollar.
    • Crude -0.81% to $56.33.
    • Gold +0.05% to $1,195.10.
    | Comment!
  • 12:56 PM
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  • 12:55 PM
    • Global demand for motorcycles will grow 6% to 132M units in 2018, according to a new forecast.
    • Sales of electric models are projected to soar outside of China over the next few years as more nations implement incentives.
    • Motorcycle sellers: Honda (NYSE:HMC), Yamaha (OTCPK:YAMHF), Harley-Davidson (NYSE:HOG), Bajaj Auto, Hero MotoCorp.
    | Comment!
  • 12:54 PM
    • Russian carrier MTS (MBT +24.7%) has soared on a day Russia's MICEX index rose 4.5%. Rival VimpelCom (VIP +5.7%) and online payments firm Qiwi (QIWI +5%) are also outperforming.
    • The ruble has seen relatively modest price swings today after plunging on Monday and Tuesday, and rebounding on Wednesday. The dollar/ruble exchange rate is currently at 61.04.
    • Yesterday: Russian tech/telecom stocks rebound
    | Comment!
  • 12:54 PM
    • Phillips 66 (PSX -0.2%) is upgraded to Buy from Hold while fellow refiner Valero Energy (VLO -2.2%) is downgraded to Hold from Buy at Deutsche Bank.
    • On PSX, the firm notes that fears of margin pressure on the CPChem and DCP segments are somewhat warranted given the oil price backdrop, but still thinks shares are pricing in a fairly draconian scenario as investors overstate PSX’s exposure; on its sum-of-the-parts analysis, the firm thinks investors are getting the refiner segment essentially for free.
    • Deutsche Bank cites valuation and its more cautious view on the sector in its VLO downgrade, as concerns around persistent weakness in Gulf coast refining margins coupled with currently narrow WTI-Brent differentials keep it on the sidelines for now.
    | Comment!
  • 12:47 PM
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  • 12:41 PM
    • The FDA's PDUFA date for its Priority Review of AbbVie's (ABBV +1.2%) three-pronged combination HCV regimen is December 21. Since the date is Sunday, the agency may issue its decision tomorrow. One of the anti-virals, ABT-450 (ritonavir), was co-developed with Enanta Pharmaceuticals (ENTA +5%).
    • Previously: AbbVie HCV regimen gets priority review (June 13, 2014)
    | Comment!
  • 12:37 PM
    • Groupon (NASDAQ:GRPN) is among the tech sector's top performers on a day the Nasdaq is up 1.5%. 21.3M shares (well above a 3-month daily average of 15.9M) have already changed hands.
    • The gains come a day after Leon Cooperman declared on CNBC Groupon is worth 40%-50% more than what it's trading for. 89.3M shares (21% of the float) were shorted as of Nov. 28.
    | Comment!
  • 12:36 PM
    • Volkswagen (OTCQX:VLKAY) CEO Martin Winterkorn says the automaker is on track to make its 2017 profit goal.
    • The German automaker wants to cut costs by €5B within three years through cost-cutting initiatives.
    | Comment!
  • 12:35 PM
    • Peabody Energy (BTU +0.6%) is one of two remaining bidders for a contract to develop the Tavan Tolgoi coking coal deposit in Mongolia, which holds 7.4B tons of the coal used to make steel.
    • Development of the mine has stalled since a botched tender in 2011 that saw the Mongolian government rescind an agreement that would have allowed BTU, China Shenhua and OAO Russian Railways to operate the mine.
    • A unit of Mongolia Mining (OTCPK:MOGLF), which already mines coal at another site in the Tavan Tolgoi coal basin, leads a group making the other bid.
    | Comment!
  • 12:29 PM
    • The FDA's PDUFA date for its Fast Track/Priority Review of Cubist Pharmaceuticals' (CBST) New Drug Application (NDA) for its combination drug, ceftolozane/tazobactam, for the treatment of complicated urinary tract infections is December 21. Since this is Sunday, the agency may issue its decision tomorrow.
    • Ceftolozane/tazobactam is designated a Qualified Infectious Disease Product (QIDP). If approved, it will have a five-year period of market exclusivity.
    • Previously: Cubist NDA gets Priority Review (June 20, 2014)
    | Comment!
  • 12:26 PM
    • Worthington Industries (WOR -11.2%) plunges to 52-week lows after reporting higher FQ2 earnings and sales but misses expectations due to higher manufacturing costs and a product miss.
    • Gross margins declined $3M Y/Y as higher manufacturing expenses across all business segments combined with the unfavorable impact of inventory holding losses in steel processing more than offset the impact of higher volume.
    • Oil and gas equipment and engineered cab operations suffered elevated manufacturing costs, and the oil and gas equipment business facility had a product miss on the commercial side, WOR says, adding that they are "isolated issues."
    • In its Q2 earnings conference call, WOR said it is not seeing any demand decrease in oil and gas equipment due to declining oil prices.
    | Comment!
  • 12:18 PM
    • While the Guggenheim Solar ETF is only modestly outperforming the Nasdaq (+2% vs. +1.6%), First Solar (FSLR +6.2%) and SolarCity (SCTY +6.9%) are posting big gains.
    • Both names had tumbled in late November and early December, in tandem with plunging crude oil prices. More than a few bulls had argued the link between crude prices and solar demand is limited.
    • Recent SA Pro articles on First Solar and SolarCity: I, II
    | 4 Comments
  • 12:11 PM
    • Oil price drops similar or greater in magnitude than what's recently been seen have occurred a number of times over the past 30 years, say new Pimco CIO Daniel Ivascyn along with Saumil Parikh. Some have coincided with major recessions and others with faster global growth. So what gives for 2015?
    • The short answer: This drop in oil is supply-, not demand-driven, they conclude, and thus should foster faster economic growth than otherwise next year.
    • As for inflation, expect negative headline prints in developed economies next year, but these should bounce back later in 2015 and into the following year.
    • Investment themes: 1) The outlook for easier monetary policy (in all but the U.S.) has been priced in, making for limited upside for high-quality duration 2) TIPS are attractive as their prices have more than discounted the coming negative inflation prints 3) Globally, eurozone peripheral bonds are the pick 4) In the U.S. non-agency mortgages (see Ivascyn's PDI) are poised for outperformance, but agency paper is overvalued, particularly as the Fed's purchases have ended.
    • Ivascyn also manages the Pimco Income Fund (MUTF:PONAX) and (formerly managed by Bill Gross) the Pimco Unconstrained Bond Fund (MUTF:PUBAX).
    • ETFs: AGG, BND, BOND, SCHZ, LAG, SAGG, DI, GBF, FBND, LDUR, FWDB, IUSB, VBND, TIP, VTIP, SCHP, IPE, LTPZ, STPZ, TIPZ, STIP, TPS, TDTT, TIPX, TDTF, SIPE
    | Comment!
  • 12:02 PM
    • Pac Crest has upgraded Infoblox (NYSE:BLOX) to Outperform. Shares of the DNS/IP address hardware vendor have risen to their highest levels since May.
    • The upgrade comes three weeks after Infoblox beat FQ1 estimates and named a new CEO.
    | Comment!
  • 12:00 PM
     
    • Dow +1.5%.
    • 10-yr -0.5%.
    • Euro -0.42% vs. dollar.
    • Crude -1.78% to $55.78.
    • Gold +0.02% to $1,194.70.
    | Comment!
  • 12:00 PM
    • Thinly-traded nano cap Aveo Pharmaceuticals (AVEO +18.6%) jumps on a massive 10x surge in volume in apparent response to the news that superstar investor Seth Klarman (Baupost) has established a position in the penny stock which has lost 96% of its value since mid-2011. Baupost established its position in February, however.
    • The company has four cancer therapeutic candidates in development that have been vetted through its Human Response Platform.
    • In November, the company extended an exclusive license to Ophthotech (OPHT +0.4%) for tivozanib for the potential treatment of non-cancer diseases of the eye.
    • Previously: Aveo licenses tivozanib to Ophthotech (Nov. 12, 2014)
    | Comment!
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