Today - Tuesday, July 7, 2015
- Dow +0.55% to 17,780.10. S&P +0.62% to 2,081.50. Nasdaq +0.11% to 4,997.45.
- Treasurys: 30-year +0.76%. 10-yr +0.17%. 5-yr +0.08%.
- Commodities: Crude +0.2% to $53.12. Gold -1% to $1,154.90.
- Currencies: Euro -0.35% vs. dollar. Yen +0.02%. Pound +0.86%.
- GE (GE +0.6%) and NTT DoCoMo (DCM +0.1%) plan to team up to offer a new remote monitoring service for bridges and other structures in Japan, Nikkei Asian Review reports.
- The pair reportedly will offer Internet-based solutions to monitor the country's aging structures, which also includes roads, power transmission and other equipment.
- GE sensors would monitor such items as rotation, vibration, flow rates and temperature, transmitting the information via DCM's mobile network; the info would be analyzed to predict equipment trouble and notify clients of potential problems in advance to help save on maintenance costs.
- Potash Corp. (POT -2.2%) reportedly would be open to raising its $8.6B bid for K+S (OTCQX:KPLUY) if the German company could reveal more value not currently seen by the Canadian company.
- POT's €41/share bid represents a 43% premium to the average weighted price of K+S shares over the past six months, but K+S CEO Norbert Steiner has said the Legacy project alone is worth at least €21/share on top of €29 for the German company’s existing operations.
- The market may be factoring in a better than 50-50 probability that a deal happens, but J.P. Morgan Ben Scarlett sees only a one-in-three chance of success, believing a deal would face substantial execution risk and anti-trust or other concessions.
- The firm thinks European and North American anti-trust authorities will examine the impact of a deal in their own regions, and perhaps invoke conditions that require approval from authorities in places such as Brazil, China and India.
- Mostly silent as the Germans played the "bad cop" during 2015's version of the Greek crisis, things have gotten serious enough for France to get involved, with chatter of a French official saying the ECB could provide emergency funding support for Greek banks as long as some sort of deal is in the works.
- Always being in favor of stock market charts headed upward and to the right, the U.S. gets involved as well, with President Obama - after earlier speaking with Greek PM Tsipras - placing a call to Angela Merkel, pressuring the German Chancellor to get a deal done.
- Down more than 1% earlier, the U.S. averages are in the green less than 30 minutes before the bell: S&P 500 (SPY +0.6%), DJIA (DIA +0.5%), Nasdaq 100 (QQQ +0.3%).
- Frontier Communications (FTR -0.7%) has sold next-generation 9-1-1 emergency call systeems to six counties in New York State.
- That's in addition to last year's sales to Monroe County and the City of Rochester, meaning the company is selling its system both inside and outside its standard New York footprint.
- The new systems offer better analysis of call data, the ability to transmit text, data and video images as needed, and the capability to set up in a mobile environment in case of evacuation.
- Gannett (GCI -1.5%) has reached a deal to sell its headquarters in Tysons Corner, Va., to London-based Tamares Group for about $270M.
- The two office towers that Gannett called home were visible from the Washington Beltway and total about 785K square feet. The complex cost about $300M to build back in 2001.
- Divesting its headquarters offers some room for cost savings as Gannett recently performed a split into its print operations and a broadcast-focused company, TEGNA (TGNA +2.3%).
- Gannett will stay in the D.C. area; it's leasing back part of the complex on a long-term basis, but most of the building will be left to Tamares to rework.
- Previously: After the spinoff: Gannett off 7.3%, TEGNA -3.5% after downgrade (Jul. 02 2015)
- Previously: Gannett completes split into print, broadcast firms (Jun. 29 2015)
- Schlumberger (SLB +0.6%) is upgraded to Focus Stock from Sector Outperform, with a $100 price target, at Howard Weil, which says the combination of SLB's global scale, technology and transformational initiatives that were ongoing prior to the downturn provides a level of forward clarity that is unique among oil service companies.
- While SLB is typically viewed as a defensive stock in times of turmoil in the oilfield services sector, shares have underperformed its large-cap diversified peers YTD, which the firm says presents a tremendous opportunity since SLB management has a differentiated story that will become more evident as the upcoming conference call season unfolds.
- Howard Weil also upgrades Cameron (CAM +2.5%) to Sector Outperform from Sector Perform with a $61 price target; given CAM's robust backlog carried into the start of the year, the firm believes CAM has a fair amount of earnings visibility this year and finds management's conviction level of its shorter-cycle revenue businesses higher despite a dismal U.S. onshore rig count.
- Dow +0.46%.
- 10-yr +0.36%.
- Euro -0.71% vs. dollar.
- Crude -0.57% to $52.71.
- Gold -0.96% to $1,155.40.
- A raised bid for the real estate assets of Pinnacle Entertainment (PNK +5.6%) by Gaming and Leisure Properties (GLPI -2.9%) is putting pressure on Boyd Gaming (BYD +2.9%) to think about its possibilities, says Union Gaming analyst Christopher Jones.
- In addition, it could mean "considerable" value adjustment for MGM's regional assets, he notes.
- MGM is now up 4.3% this afternoon. Jones rates Boyd Gaming and MGM as Buys, along with GLPI.
- Previously: MGM, LVS, Wynn up sharply as Credit Suisse says "worst is over" for Macau (Jul. 07 2015)
- Linn Energy's (LINE -0.8%) new partnerships to develop properties and a deal to sell some assets generally were well received by analysts, but its shares and those of sister company LinnCo (LNCO -0.7%) are lower.
- While UBS sees some improvements, the firm still rates both companies at Sell and expects Linn will need to cut its distribution in Q4, with the likelihood of increasingly unfavorable impacts to debt facilities during the fall redetermination over vs. this spring if commodity prices remain weak.
- UBS raises its earnings estimates for LINE based on the asset sale, which will help pay down debt and reduce interest costs, but it cuts its price target for LINCO to $8 from $9 due to reduced distributions.
- Ingrid Burton, formerly SAP's SVP of tech/innovation marketing, has been named Hortonworks' (HDP -1.5%) chief marketing officer.
- Burton's old job made her responsible for marketing various data/analytics products, including SAP's popular Hana in-memory database. Before working at SAP, she was CMO at smart grid hardware/software provider Silver Spring and headset maker Plantronics.
- Hortonworks' sales/marketing spend rose 173% Y/Y in Q1 to $27.8M (compares with 167% revenue growth), as the company works to grow enterprise mindshare for its Hadoop software platform and continues battling archrival Cloudera.
- The Macau casino sector is defended at Credit Suisse, which says the "worst is over" for the sector as it sees a fundamental shift towards supportive policy from both Macau and the central government, and seasonally stronger months are ahead.
- "Negatives are well-known," the firm says, noting that with fixed cost's contribution increasing, the earnings upside from a recovery should be strong; long-term investors should find the sector attractive when gross gaming revenue stops falling, which will put an end to Wall Street's earnings cut and allow investors to "refocus on the structural story" of Macau.
- MGM +2.8%, LVS +2.8%, WYNN +5.5%, MPEL +5.3%.
- The ruble has fallen to 57 against the dollar amid a steep selloff in oil prices - WTI crude is now at $52.45/barrel. The decline has fueled speculation Russia's central bank will curb foreign currency purchases.
- QIWI is now down 29% from a May high of $35.45. The Russian online payments leader remains up 26% YTD.
- A U.S. Court of Appeals last night affirmed a lower court ruing striking down the Puerto Rico Public Corporation Debt Compliance & Recovery Act of 2014 which would have created a bankruptcy-like process for the island's public corporations.
- It's good news for the likes of MBIA (MBI +1.9%), Assured Guaranty (AGO +1.1%), and Ambac (AMBC +0.8%), writes Mark Palmer from BTIG, but the appeals court also said Puerto Rico's inability to authorize its municipalities to file for Chapter 9 protection is unconstitutional.
- "Puerto Rico should be free to authorize its municipalities to file for bankruptcy protection under the existing Chapter 9 of the Bankruptcy Code if that is the judgment of its Legislature.”
- Kandi (NASDAQ:KNDI) hasn't been left out as U.S.-traded Chinese stocks post massive losses (see Internet stocks and solar stocks). The selloff follows fresh declines for mainland exchanges in the wake of an early-2015 run-up that stoked memories of the Dot.com bubble.
- The EV maker is now down 47% YTD. Yesterday, Kandi announced its EV JV with Geely has inked a contract for the sale of 4K cars - 2,500 Kandi K10 and 1,500 K11 units. The deal is worth over RMB540M ($89M); delivery is expected to be finished by year's end.
- Stone Energy (SGY +5.9%) says operations at its Cardona #6 development well in the deepwater Gulf of Mexico have been proceeding ahead of schedule and below budget, and drilling has been completed through the targeted zones.
- SGY expects Q2 production to come in at or above the high end of previous guidance of 246MM-258MM cfe/day, the result of reduced scheduled third-party pipeline downtime in the deepwater Gulf and flatter than expected production declines in Appalachia.
- SGY says it may realize additional upward revisions in Appalachian production in Q2 earnings pending participation elections by SGY's operating partners.
- Magna Hospitality last week sold the Element Times Square, whose location is just doors away from Hersha Hospitality's (HT +1.7%) three Times Square properties. Element sold for an implied value (building valuation plus land valuation) of $654K per key, and a blended implied cap rate of 5.3% based on trailing NOI.
- HT's "TRIO" of hotels is similar in age to the Element, and were purchased in 2010 for $166M, or $285K per key.
- Hersha presentation
- CBS (CBS +0.5%) is pricing a debt offering of $800M in senior notes, at 4%.
- The sale of the notes will close July 10. CBS plans to use the proceeds for general purposes, including share buybacks as well as paying back short-term loans like commercial paper.
- In Q1, CBS repurchased $1B in stock (17.2M shares).
- Believing the upsell opportunity for Salesforce's (CRM +0.6%) cloud marketing automation and customer support offerings (Marketing Cloud and Service Cloud) is now "better aligned" with the needs of users of the company's mainstay Sales Cloud product, Brean's Sarah Hindlian has upgraded to Buy, and hiked her target by $9 to $85.
- Hindlian states Brean's research points to "pent-up demand for better ad management tools," which she expects will fuel Marketing Cloud's growth as new products launch, and that Service Cloud is "addressing a growing customer need for better support in an increasingly 'on-demand' world."
- She asserts Salesforce "can now offer better capture of the entire customer lifecycle: from marketing, to sales conversions, and subsequent support services." Her FY17 (ends Jan. '17) and FY18 revenue estimates have been hiked by $100M and $110M to $8B and $9.75B (1% and 3% above consensus).
- Time Inc. (NYSE:TIME) has assembled three digital sports acquisitions into a new unit, Sports Illustrated Play, that marks another move into non-print ad and circulation revenue streams.
- Time's bought SportsSignup and LeagueAthletics.com, which serve youth sports league management tools to about 8,500 leagues with 8M athletes, while a buy of iScore Sports garners apps for digital scorecards.
- Jeff Karp, a veteran gaming executive, has been hired as CEO of the new unit and will report to a board of six senior Time execs, though it will operate independently of the Sports Illustrated business.
- In May, Time acquired the FanSided website network and began integrating it throughout its digital properties. Media companies are increasingly shoring up in this area (Time Warner/Bleacher report; Comcast/FanDuel; Disney/DraftKings).
- Along with those deals, Time has bought inVNT LLC, an events business that it could use to organize conferences built from its titles.
- Continuing its efforts to grow its premium brand exposure, Ambev (ABEV -2.2%) has bought Colorado, a brewer based in Brazil's Sao Paulo state.
- Colorado exports its beers to the U.S. and France, and had 2014 revenue of R$19M ($6M). The deal follows Ambev's February acquisition of Brazilian craft brewer Wäls, and its May acquisition of top Colombian craft brewer Bogotá Beer Company.
- Dow -0.12%.
- 10-yr +0.39%.
- Euro -0.82% vs. dollar.
- Crude -2.11% to $51.89.
- Gold -1.1% to $1,153.80.
- Skyview Capital is acquiring EMC's (EMC - unchanged) Syncplicity enterprise cloud storage, file-sharing, and collaboration software platform for an undisclosed sum. EMC will maintain a stake in the business.
- EMC bought Syncplicity back in 2012. The business has faced competition from Box (generally seen as a market leader), Dropbox, Microsoft, Google, and Citrix, among others.
- Separately, a bio page for an M&A lawyer (uncovered by The Register) indicates EMC paid $1B last year to buy high-end flash storage array startup DSSD. EMC hasn't disclosed a purchase price for DSSD, which has been working on arrays aimed at I/O-intensive workloads such as in-memory databases and big data/analytics projects.
- Dex Media (DXM -1.1%) says it's been notified by Nasdaq of noncompliance with its listing standard, due to its market value falling below $15M for the last 30 days.
- The company has until Dec. 28 (180 calendar days) to regain compliance by holding $15M in public market value for 10 straight business days in that period, or face delisting.
- The company has about 15M shares in public float and the share price fell under $1.00 after June 1. Shares had been over $3 in the first week of May. Today Dex Media is trading at $0.782.
- While most major North American solar names are down moderately or trading higher, Chinese firms are seeing heavy losses as a domestic rout in equities continues. Many Chinese Web and mobile stocks are seeing similar drops; margin calls and general panic selling appear to be contributing.
- Major decliners include Trina (TSL -9.1%), Yingli (YGE -10.2%), Daqo (DQ -14.6%), China Sunergy (CSUN -13.8%), JA Solar (JASO -7.7%), JinkoSolar (JKS -7%), and ReneSola (SOL -6.6%).
- Solar ETFs have felt the impact. TAN -2.7%. KWT -4%.
- Yesterday: Solar stocks off sharply after oil plunge, Greek "no" vote, Chinese tech selloff
- RF chipmakers Skyworks (SWKS -3.8%), Qorvo (QRVO -4.1%), and Avago (AVGO -3.2%) are posting 3%+ declines on what's proving a rough day for many high-beta tech stocks.
- With Chinese equities plunging, Skyworks, Qorvo, and Avago's Chinese exposure could be contributing to their selloff. The Nasdaq is down 0.7%, and the Philadelphia Semi Index 1.7%.
- Avago's decline comes as Oppenheimer's Rick Schafer downgrades merger partner Broadcom (BRCM -2%) to Market Perform. Curiously, he also declares Avago (along with Skyworks) to be a top wireless chip pick.
- Schafer: "Rising RF complexity (and content) remains one of our favorite thematic plays heading into 2H15 ... We see incremental RF content opportunities for both Avago and Skyworks on the forthcoming iPhone 6S ... Skyworks further benefits from 50 percent plus 4G reference design share with China's major baseband suppliers."
- Broadcom shareholders are set to receive either $54.50/share in cash, 0.4378 Avago shares for each Broadcom share, or some combination thereof, with the cash portion of the deal totaling $17B. Broadcom currently trades 7% below the cash payout price, and (based on Avago's current trading levels) 11% below an equity payout price of $56.87.
- Dow -0.22%.
- 10-yr +0.44%.
- Euro -1.06% vs. dollar.
- Crude -2.04% to $51.93.
- Gold -0.96% to $1,155.40.
- Royal Dutch Shell’s (RDS.A, RDS.B) drive to resume Arctic drilling this summer hits another roadblock, as a hole is found in the hull of an ice management vessel meant to safeguard the company’s operations in the Chukchi Sea.
- The icebreaker has returned to port and is being examined by marine experts, but it is uncertain how quickly the breach in its hull can be repaired and whether it will delay Shell’s hopes to begin drilling an oil well in the Chukchi Sea later this month.
- The ship is just one of the 29 vessels in Shell’s Arctic fleet, but it is unique since it carries a critical piece of the company’s Arctic containment system: a capping stack designed to fit on top of a damaged well in case of a blowout or other emergency.
- The FDA's Oncologic Drugs Advisory Committee meets on Thursday, July 9 to discuss Eli Lilly's (LLY +1%) Biologics License Application (BLA) seeking approval for necitumumab, in combination with gemcitabine and cisplatin, for the first-line treatment of patients with locally advanced or metastatic squamous non-small cell lung cancer.
- Necitumumab is a recombinant IgG1 human monoclonal antibody that binds to the epidermal growth factor receptor (EGFR).
- One area of concern is necitumumab's safety profile. A Phase 3 study, called INSPIRE, was stopped early at the request of the data monitoring committee in light of an imbalance in the number of deaths attributed to potential thromboembolic events (TEs) (blood clots). The incidence of TEs in INSPIRE in the necitumumab arm was 11% compared to 6% for the control arm. In another Phase 3, called SQUIRE, TE rates were 9% and 5%, respectively. Overall, though, necitumumab appears to be as safe as other anti-EGFR therapies.
- FDA briefing material
- Lilly briefing material
- Technip (OTCPK:TNHPF, OTCQX:TKPPY) shares have dropped nearly 8% today after the French oil industry engineering and construction group repositions itself for a long slowdown with a restructuring plan in a cost-cutting program aimed at saving ~€830M ($914M), of which €700M is expected to be delivered in 2016.
- Technip's overhaul bodes ill for oilfield services companies, Heard On The Street's Helen Thomas writes, as questions linger about the chances for an imminent pickup in work for the industry.
- Technip's €650M of one-off restructuring charges is an unspecified amount related to standoffs with clients over payments on existing projects, which will spark existing worries about clients becoming more combative on pricing and raising doubts about how robust backlogs will prove, Thomas writes.
- After following markets lower earlier today, Workday (WDAY +1.1%) has turned positive in the wake of a column from The Information's Steve Nellis arguing Microsoft (NASDAQ:MSFT) should buy the cloud HCM/financials software leader.
- Nellis: "Only Salesforce (NYSE:CRM) and Workday have enough revenue momentum to help Microsoft become a major seller of software for tracking customers, employee records and financials. But Workday is the better choice for several reasons, including the fact that Salesforce’s products feel dated."
- CNBC reported in May Microsoft held buyout talks with Salesforce, the sole enterprise cloud software pure-play larger than Workday, while adding the companies "remained far apart on a price."
- With a current market cap of $14.8B - would the company be willing to sell at $19B-$20B? - Workday would be a much less costly acquisition for Microsoft than Salesforce ($45.3B market cap). Both the company's forward sales multiples and expected growth rates are notably higher than Salesforce's.
- Cisco (CSCO -0.8%) is acquiring MaintenanceNet, a provider of cloud software for managing, renewing, and selling recurring service contracts, for $139M in cash and retention incentives.
- In a blog post, Cisco exec Debbie Dunham notes her company has been offering joint solutions with MaintenanceNet since 2009 to Cisco distributors and resellers. "MaintenanceNet’s software identifies customers with service contracts that are coming up for renewal, overdue, or with products that are not yet covered. Their low-touch solution enables automated quoting, notifications, and, in some cases, ordering online. This helps Cisco partners capture high-volume and low-dollar sales opportunities that may risk being overlooked."
- The deal follows Cisco's $635M deal to buy DNS security software/services provider OpenDNS. In late 2012, the company set a goal of doubling software revenue within 5 years.
- China's crude oil production looks set to rise this year from a record 4.2M bbl/day in 2014 as new production from Cnooc (NYSE:CEO) helps to counter reductions from its two bigger domestic rivals, PetroChina (NYSE:PTR) and Sinopec (NYSE:SNP).
- While there is no official Chinese production outlook, information from the biggest state oil companies indicates China's output will rise slightly in 2015, largely due to increased production from Cnooc.
- China raised its output in the first five months of this year by 1.8% Y/Y to 4.25M bbl/day, vs. growth of just 0.1% over the same period in 2014.
- OmniVision (NASDAQ:OVTI) has sold off yet again, leaving shares even further below the $29.75/share buyout price it agreed to with a Chinese investor group in April. Fears U.S. regulators will reject the deal have weighed on shares, as have shareholder suits attempting to stop it on the grounds it undervalued OmniVision.
- Yesterday morning, OmniVision announced it's rescheduling a special meeting to vote on the deal to July 23 to "provide additional time for court resolution" of a shareholder motion to prevent the company's sale under certain "corrective actions" are taken. Shareholders on record as of June 9 will be able to vote.
- Today's drop comes as many U.S.-traded Chinese tech stocks nosedive. SA author Vince Martin argued today OmniVision has limited downside even if the buyout unravels.
- Fixed wireless provider Towerstream (NASDAQ:TWER) is bucking a down market today, up 2.8% with nearly every industry peer trading lower today.
- The company has recently begun deployment of its non-line-of-sight technology for backhaul operations, with an eye to using a 3.5 GHz band that the FCC recently decided to free up.
- It's told FierceWirelessTech that without requiring direct line of sight, it'll be able to deploy Wi-Fi and other services into hard-to-reach locations.
- Aside from its interest in the 3.5 GHz band -- formerly reserved for the Department of Defense -- it's already working in "E Band" between 60 GHz and 80 GHz as a cost-effective way to carry heavy bandwidth.
- Showtime (NYSE:CBS) is ready early with its over-the-top direct streaming service, having launched through Apple, Roku, Hulu and PlayStation Vue.
- Most customers are paying $10.99/month for the video service, while members of Sony's premium game subscription service PlayStation Plus can get it for $9.99/month, and Hulu has it bundled (Hulu subscribers pay $7.99/month for core service and another $8.99/month for Showtime).
- The service has access to Showtime's live coastal feeds as well as its video-on-demand library. As with HBO Now's launch, signups get a 30-day free trial.
- Previously: Hulu announces deal to offer Showtime service (Jun. 23 2015)
- Previously: Streaming Showtime coming to Roku, PlayStation Vue for July launch (Jun. 08 2015)
- Silicon Motion (NASDAQ:SIMO) has sold off after pre-announcing it now expects 7%-9% Q/Q Q2 sales growth vs. prior guidance of 5%-10%. 793K shares have been traded, topping a 3-month daily average of 659K.
- The selloff comes amid a 1.2% drop for the Nasdaq, and a 2.2% drop for the Philadelphia Semi Index. Shares now go for 13x a 2016 EPS consensus of $2.36.
- Dow -0.67%.
- 10-yr +0.51%.
- Euro -0.95% vs. dollar.
- Crude -0.96% to $52.50.
- Gold -0.93% to $1,155.70.
- Vale (VALE -4.2%) shares extend their three-day slide and touches their lowest levels in 10 years, as iron ore drops below $50/metric ton for the first time since April on concern low-cost supplies from producers including Brazil will expand further while demand falls in China.
- Iron ore prices are lower by 5.1% to $49.60, according to a price index compiled by Metal Bulletin, down more than 20% from a June high and capping a nine-day losing streak, the longest losing streak since last August.
- Bloomberg reports that inventories at Chinese ports rose 2.8% last week to 81.55M tons; as trade seems to pick up, analysts say iron ore prices could slump to $40.
- Earlier: China's stock turmoil whacks Freeport McMoRan, copper producers
- Mattersight (NASDAQ:MATR) now expects 33%-38% Y/Y Q2 sales growth, up from prior guidance of 30%-35% and above a 30.8% 2-analyst consensus. Subscription growth guidance has been hiked to 38%-43% from 35%-40%.
- Q2 bookings annual contract value (ACV) totaled $5.8M, the second-highest quarterly figure in the company's history. ACV bookings over the last 4 quarters total $19M (+46% Y/Y).
- The customer service/sales analytics software vendor has named Sheau-ming Ross, formerly the CFO of cloud/SaaS workforce software vendor EPAY Systems, its new CFO. She replaces interim CFO David Gustafson. Meanwhile, former employee Frank Suljic has returned to Mattersight as SVP of SVP of strategic sales. He reports to sales chief Richard Dresden.
- Full Q2 results arrive on Aug. 5.
- Jefferies upgrades its ratings on Anadarko Petroleum (APC +0.3%), EOG Resources (EOG -0.1%) and Noble Energy (NBL -1.5%), citing “more realistic embedded oil price and growth.”
- APC is lifted to Buy from Hold with an $88 price target, raised from $85, as the firm notes increased confidence in “a deep, future Delaware Basin (Wolfcamp) development, the potential for opportunistic monetizations (i.e., Mozambique, WGP shares) and a now more attractive valuation.”
- EOG and NBL are raised to Hold from Underperform following recent pressure on the shares, which now better reflect “a slower ramp.”
- It's not just Greece, where that country's government officials arrived in Brussels today with no new proposal to save its EMU membership (one is now promised for tomorrow), but China's stock market bubble is in the midst of a spectacular collapse. This even as Beijing's efforts to prop up share prices make the Federal Reserve look like the Ayn Rand Institute.
- The 10-year U.S. Treasury yield is lower by nine basis points to 2.20%, the U.K. 10-year yield is down 16 bps to 1.86%, and the German 10-year yield is down 12 bps to 0.65%. Copper is leading across the board declines in commodity prices.
- European stocks closed down another 2.1%, and the S&P 500 is down 1%. The Utilities SPDR (NYSEARCA:XLU), however, is up 1.6%, and the iShares Real Estate ETF (NYSEARCA:IYR) is up 0.7%. A mortgage REIT ETF (NYSEARCA:REM) is up 0.7%.
- Realty Income (O +0.6%), Omega Healthcare (OHI +1.3%), HCP (HCP +1.7%), Equity Residential (EQR +1.4%), Simon Property (SPG +1.2%), Kimco (KIM +1.3%), Public Storage (PSA +1.5%), Boston Properties (BXP +1.6%), Strategic Hotels (BEE +1.2%), First Industrial Realty (FR +1.1%).
- ETFs: IYR, VNQ, DRN, URE, RQI, SCHH, ICF, SRS, RWR, RNP, JRS, KBWY, RFI, NRO, DRV, RIT, REK, RIF, FRI, FTY, PSR, DRA, FREL, WREI, IARAX
- ETFs: XLU, UTG, IDU, VPU, GUT, BUI, FUTY, RYU, UPW, FXU, PUI, SDP, PSCU, FUGAX
- Bernstein upgrades Tiffany (TIF) to Outperform from Market Perform, pointing to an improving consumer environment and more attractive "entry point pricing" for its silver jewelry category.
- "In the long term, our outlook for the company remains positive on solid sector fundamentals, and with opportunities to evolve and reinvigorate the product assortment and the brand," the research firm said.
- The price target on the stock has been raised from $100 to $108.
- Madison Plaza is a 154K square foot community center in Huntsville, and CBL sold it for $5.7M. Earlier this year, the company sold the mall adjacent to this property.
- The company also announces the retirement of four loans totaling $322.7M, with the funds coming from its line of credit. The loans had been secured by four Midwest malls.
- Source: Press Release
- Though the Nasdaq is down 1.5% and many solar stocks are seeing bigger losses, TerraForm (NASDAQ:TERP) is up strongly after announcing a deal to buy 930MW of wind plants from Invenergy for $2B.
- The SunEdison solar/wind project YieldCo is now up 29% YTD. Its dividend yield is currently at 3.3%; based on a 2016 target of $1.70/share, the forward yield is 4.3%.
- Among a number of technical moves today, Comcast (CMCSA -0.7%) has extended its cloud DVR service to central California, allowing its X1 customers to stream their TV lineup on any screen in the home, or to download recorded programs to view on various devices.
- The company has launched an Xfinity app for iOS and Android as well as a dedicated portal for viewing on computers (Comcast points to CEA data showing 46% of TV households watch on a laptop, notebook or netbook).
- Meanwhile, it's upgrading speeds at no cost for most Xfinity Internet customers in the Eastern U.S., moving speed for its "Blast" tier to 150 Mbps and launching a new tier at 75 Mbps.
- And it's launched more than 1,800 new Wi-Fi hotspots in its "Keystone Region" in Pennsylvania.
- While U.S. growth is bouncing back, the Fed needs to hold off on rate hikes until "clear signs of wage and price inflation," says the IMF, putting itself at odds with Janet Yellen who has said "clear signs" are not a prerequisite for higher rates.
- The IMF doesn't see inflation hitting the Fed target of 2% until at least 2017, and would prefer rate hikes wait until at least 2016.
- As part of the same report, the IMF also warns the life insurance industry poses a risk to the country's financial stability - whether it be from too low rates posing "a slow burning solvency risk," or a spike in rates leading to policyholder surrenders.
- ETFs: KIE, IAK, KBWP, KBWI
- Astrotech's (ASTC) subsidiary, 1st Detect, has officially entered the phase II test and evaluation process for its prototype Multi-Sample Identifier Detector solution.
- The mass spectrometer is capable of detecting a wide variety of chemicals including residues from explosives, food and beverage contaminants and pollutants.
- Though not seeing the 10%+ declines witnessed by many U.S.-traded Chinese tech peers, Alibaba (NYSE:BABA) and Baidu (NASDAQ:BIDU) are down sharply following fresh overnight losses for the Shanghai and Shenzhen exchanges.
- Yahoo (NASDAQ:YHOO), whose 384M-share Alibaba stake is currently worth $29.4B, is once more following in Alibaba's footsteps. The Nasdaq is down 1.5%.
- Alibaba has made fresh post-IPO lows. Baidu is less than $7 away from a 52-week low of $176.69. Alibaba now trades for 21x an FY17 (ends March '17) EPS consensus of $3.72. Baidu trades for 20x a 2016 EPS consensus of $9.29.
- Adaptive Medias (OTCQB:ADTM +4.7%) says in an 8-K that it has removed director Norman Brodeur for cause.
- The filing says Brodeur has been ousted for violating fiduciary duties. Company bylaws say that directors can't be removed without 80% of voting power in agreement.
- "However, the Chairman of the Company's Board of Directors has determined to remove Mr. Brodeur as a Director nonetheless because he considers Mr. Brodeur's actions to be detrimental and deems his removal to be in the best interests of the Company," the filing states.
- Kansas City Southern (KSU +0.8%) is upgraded to Buy from Neutral with a $102 price target at UBS, which says near-term challenges already are reflected in the valuation while the railroad's long-term volume growth story is differentiated from the broader rail group.
- UBS expects only modest exposure to coal for KSU after 2015 vs. large U.S. rail peers, but sees "multiple clear drivers" for long-term growth, especially due to "new auto plants in Mexico, large investment in Lazaro Cardenas intermodal port infrastructure, and a long runway for share gain from truck in the cross border intermodal market."
- The firm expects Q2 to mark the point of KSU's weakest Y/Y EPS while volumes also are likely near a bottom.
- Dow -0.84%.
- 10-yr +0.59%.
- Euro -1.15% vs. dollar.
- Crude -4% to $50.89.
- Gold -1.18% to $1,152.80.
- Believing price changes not expected by the Street and set to be revealed in 12-24 months will pave the way for the company to deliver $8 in 2023 EPS (compares with an FY16 consensus of $1.04), Credit Suisse has hiked its Autodesk (ADSK +1.7%) by $5 to $80, while reiterating an Outperform.
- The CAD/CAM software giant is up moderately on a day the Nasdaq is down 1.4%. Shares remain down 15% YTD.
- Two months ago: Autodesk drops post-earnings due to billings slowdown, light guidance
- UIL Holdings (UIL +2.9%) pops after an SEC filing shows it and Iberdrola (OTCPK:IBDSF, OTCPK:IBDRY) will submit a new application to Connecticut's Public Utilities Regulatory Authority regarding their merger.
- The companies say they will file a new application for a change of control of UIL in a manner they believe addresses the points and guidance included in the state's rejection of their proposed merger.
- In its decision, the regulator had said a lack of certain corporate safeguards could "weaken" the Connecticut utilities.
- Edwards Lifesciences (EW -0.8%) upgraded to Overweight from Equal Weight with a $168 (17% upside) price target (up from $135) by Morgan Stanley.
- HealthSouth (HLS -0.7%) upgraded to Market Outperform from Market Perform with a price target of $54 (15% upside) by JMP Securities.
- AstraZeneca (AZN -0.6%) upgraded to Buy from Hold with an $81 (25% upside) price target by Berenberg.
- Humana downgraded to Hold from Buy by Argus Research.
- Intuitive Surgical (ISRG -1.1%) downgraded to Underweight from Equal Weight by Morgan Stanley. Price target lowered to $500 (6% upside) from $560.
- Aegerion Pharmaceuticals (AEGR -0.5%) downgraded to Sell from Neutral by Guggenheim Securities.
- Centene (CNC -3.3%) downgraded to Equal Weight from Overweight by Barclays. Price target lowered to $81 (20% upside) from $88.
- Raptor Pharmaceutical (RPTP -1.8%) downgraded to Underperform from Perform with an $8 (40% downside risk) price target by Oppenheimer.
- Aetna (AET -3.5%) downgraded to Market Perform from Outperform by FBR Capital Markets. Price target lowered to $120 (6% upside) from $130.
- Baxter International (BAX -2.3%) downgraded to Neutral from Buy by Bank of America. Price target lowered to $40 (8% upside) from $78.
- Axel Springer (OTC:AXELF) has responded to reports of merger talk with satellite broadcaster ProSiebenSat.1 (OTCPK:PBSFF) by saying its majority owner, Friede Springer, wouldn't give up control of the publisher.
- That doesn't mean a merger still isn't on. Reports are that a tie-up between the publisher and broadcaster would have ProSieben taking a dominant role, but Axel Springer has been pursuing plans to change legal structure to one that would have the Springer family maintaining control even if its stake slips below 50%.
- The Springer family currently holds about 57% of Axel Springer.
- The two companies have a combined market cap of nearly €15B, and accounted for combined revenues last year of €5.88B.
- Previously: German media firms ProSieben, Axel Springer talk tie-up (Jul. 06 2015)
- Greek government officials arrived at today's meeting of European finance ministers without a new proposal, according to the FT, shocking the group and angering some in the room.
- One Eurogroup source says Greece instead will present its latest gambit tomorrow directly to the Troika. Another source says the Greek officials presented an outline of a plan to the Eurogroup, but written materials were still being worked on. A Greek official says his government presented the same plan from last week that's already been rejected.
- In any case, the eurocrats don't seem pleased. Europe has taken a new leg down, led by France's (NYSEARCA:EWQ) 1.5% decline. Germany (NYSEARCA:EWG) is off 1.4%, Italy (NYSEARCA:EWI) and Spain (NYSEARCA:EWP) 1.3%. The Stoxx 50 (FEZ -2.4%). Greece ETF (GREK -4.6%), National Bank of Greece (NBG -7.8%).
- The euro (NYSEARCA:FXE) is lower by 1% to $1.0942.
- Previously: Europe can't hold gains (July 7)
- The selloff in Chinese equities refuses to let up: Shanghai fell 1.3% overnight, Shenzhen fell 5.3%, and Hong Kong fell 2.7%. The declines come amid a backdrop of frantic government efforts to halt the plunge, and requests by hundreds of Chinese companies for trading halts.
- The lion's share of U.S.-traded Chinese Web and mobile firms are down at least 5%, and many are down more than twice that. In alphabetical order by ticker, major decliners include Autohome (ATHM -10.6%), Biatuto (BITA -18.7%), Baozun (BZUN -22.7%), ChinaCache (CCIH -14.6%), Cheetah Mobile (CMCM -15.2%), China Mobile Games (CMGE -13.2%), Ctrip (CTRP -10.1%), Changyou (CYOU -12.6%), Dangdang (DANG -13.8%), iDreamSky (DSKY -15.4%), E-House (EJ -15.9%), Jumei (JMEI -20.2%), Leju (LEJU -12.1%), eLong (LONG -12.6%), Momo (MOMO -9.4%), NQ Mobile (NQ -16.7%), NetEase (NTES -12.2%), Qihoo (QIHU -10.3%), Qunar (QUNR -14.2%), Renren (RENN -17.8%), SouFun (SFUN -16.3%), Sohu (SOHU -10.9%), Taomee (TAOM -15.1%), Vipshop (VIPS -9.7%), Weibo (WB -10.9%), 500.com (WBAI -26.2%), Wowo (WOWO -26.7%), 58.com (WUBA -17.3%), Xunlei (XNET -14%), Youku (YOKU -12.2%), and YY (YY -9.4%).
- The plunge seen over the last two months (aided by panic selling and margin calls?) has led multiples for U.S.-traded Chinese tech names to compress dramatically, with forward P/E and P/S ratios often below those of U.S. peers sporting similar growth profiles. The Guggenheim China Tech ETF (CQQQ -9.3%) is down 29% from a May peak of $45.64.
- ETFs: KWEB, QQQC, EMQQ
- Yesterday: Chinese tech stocks tumble again in spite of fresh government support
- Earlier today: Chinese phone firms decline as country's markets sink
- Down 1.8% on the session, gold is within a couple of dollars of its lowest price the year as the bulls get no leverage from a teetering Greece and the bursting of China's stock bubble.
- The yellow metal isn't the only commodity getting whacked: Oil has tumbled to $51 per barrel, its lowest price in three months.
- Perhaps the best indicator of trouble in China, copper's descent has quickened over the past couple of sessions and it's hit a 2015-low of $2.41 per pound.
- ETFs: GLD, USO, OIL, IAU, UCO, PHYS, UWTI, SCO, SGOL, BNO, DBO, UGL, DWTI, DGP, GTU, GLL, DTO, UGA, UGLD, DZZ, USL, GLDI, OUNZ, DGL, DNO, DGZ, DGLD, AGOL, DBP, UHN, OLO, SZO, TBAR, GEUR, JJP, UBG, GYEN, TWTI, OLEM, RGRP, BLNG, QGLDX
- Frontier Communications (FTR -1.4%) has hired Kathleen Weslock to serve as its chief people officer and executive VP, effective next Monday.
- She'll play a key role in integrating 11,000 employees coming on board early next year, as Frontier assumes control of Verizon wireline assets in California, Florida and Texas.
- Frontier currently has about 17,800 employees.
- Most recently, Weslock was senior VP and chief human resources officer at Cisco Systems. She began her career at GTE (now Verizon).
- Previously: Frontier sets transition plans for Verizon wireline takeover (Jul. 06 2015)
- Biotie (BITI +0.6%) initiated with Buy rating and $26 (33% upside) price target by Roth Capital and a Buy rating with $30 (53% upside) price target by Stifel Nicolaus.
- Boston Scientific (BSX -0.1%) initiated with Overweight rating and $21 (20% upside) price target by Stephens & Co.
- Ophthotech (OPHT +1.9%) initiated with Outperform rating and $80 (49% upside) price target by Cowen & Co.
- Teva Pharmaceutical Industries (TEVA -0.5%) initiated with Buy rating and $77 (25% upside) price target by BTIG Research.
- Axovant Sciences (AXON -1.1%) initiated with Buy rating and $31 (64% upside) price target by Jefferies.
- PRA Heath Sciences (PRAH) initiated with Sector Weight rating and $36.06 (0% upside) price target by KeyBanc.
- Baxalta (BXLT -0.4%) initiated with Neutral rating and $36 (14% upside) price target by Goldman Sachs.
- Freeport McMoRan (FCX -7.3%) is the S&P 500's worst performer in early trading as copper prices retreat to five-month lows.
- Other global miners of copper, iron ore and other metals also are posting sharp losses: VALE -6.1%, BHP -3.8%, RIO -3.9%, SCCO -4.4%, TCK -6.4%.
- China’s stock market swoon is magnifying investor fears about weaker demand from one of the world’s largest consumers of raw materials.
- Overnight, the S&P, Goldman Sachs and the Bloomberg commodity indexes fell the most since November, and analysts say the worst is yet to come.
- "China's demand stumble comes at an awkward time, just when more and more supply of raw materials is coming on stream in many sectors. No quick fix in sight," says HSBC co-head of Asian economic research Frederic Neumann.
- ETFs: JJC, CPER, CUPM
- With a Standard License, Taser's (TASR -0.9%) new Evidence.com program will enable prosecutors to manage any type of digital evidence shared from law enforcement partners for free.
- A Pro License, which unlocks premium features like redaction, advanced reporting, and other enterprise features, will be available for $39 per user per month.
- BofA/Merrill's Heather Balsky: "We are downgrading Dillard's (NYSE:DDS) to Underperform (from Neutral) as we believe sales and margin expansion opportunities are played out due to sector pressures, and we expect the company to miss consensus EPS estimates."
- Balsky's 2015 EPS estimate has been cut by $0.59 to $7.54 (8% below consensus), and she now forecasts flat 2015-2017 comps. The sales forecast is said to reflect "ongoing pressures, including the mid-cycle environment with consumers shifting from big ticket purchases and out of apparel, the lack of a strong apparel fashion cycle, Dillard's not offering free shipping online, and weakness in the home category."
- Higher inventories, weaker comps, wage growth, fewer cost cut options, and weakening credit income are expected to lead op. margin to fall 70bps in 2015 to 7.7%. Shares are now less than $4 above a 52-week low of $100.00.
- Lamar Advertising (LAMR -0.5%) says it's acquired Alliance Airport Advertising, adding a number of displays (traditional and experiential) across major airports in five cities: Las Vegas, Phoenix, Salt Lake City, Portland, Ore., and Burbank, Calif.
- The move means Lamar is serving ads at a dozen airports serving 125M passengers per year.
- Alliance founder Shauna Forsythe will lead a new division at Lamar called Lamar Alliance Airport Advertising.
- A. Schulman (SHLM -12.1%) plunges in early trading after reporting FQ3 earnings and revenues below expectations, including a 13% Y/Y revenue decline to $561M.
- SHLM does most of its business outside the U.S. and has been hit hard by falling demand in Europe and a weaker euro; FQ3 revenue from Europe, the Middle East and Africa fell 21% Y/Y, which would have been only 1.9% without currency fluctuations.
- Sales rose 4.1% in the U.S. and Canada and by 4.3% in the Asia Pacific region, bolstered by recent acquisitions.
- SHLM issues downside guidance for FY 2015, seeing EPS of $2.37-$2.42 vs. $2.46 analyst consensus estimate, lowered from $2.50-$2.55, citing its recent HGGC Citadel Plastics Holdings acquisition and the effect of a capital restructuring.
- Dow -0.38%.
- 10-yr +0.54%.
- Euro -0.98% vs. dollar.
- Crude -3.41% to $51.20.
- Gold -1.03% to $1,154.60.
- The European Patent Office issues patent number 1986633 to Summit Therapeutics (SMMT -3.5%) covering its candidate for the treatment of Duchenne muscular dystrophy (DMD), SMT C1100. The composition of matter patent, titled, "Treatment of Duchenne Muscular Dystrophy," will be effective until 2027.
- SMT C1100 is the company's most advanced utrophin modulator. Top line results from a Phase 1b trial in patients with DMD are expected in Q3.
- A continuing rout in China is pressing the country's mobile providers.
- In U.S. trade, China Telecom (NYSE:CHA) is off 5.6%; China Unicom (NYSE:CHU) down 4.9% and China Mobile (NYSE:CHL) down 2.9%.
- Hong Kong's PCCW (OTCPK:PCCWY) is off 6.2% in over-the-counter trading as well.
- The Shanghai Composite is back to a selloff despite a rash of support measures from Beijing. Several hundred companies have taken the risky move of filing for a trading halt in Shanghai and Shenzhen in an attempt to escape the downdraft.
- Australia's New South Wales state proposes changing its mining approval process to give greater consideration to environmental concerns, potentially threatening Rio Tinto's (RIO -3.2%) planned expansion of its Mount Thorley Warkworth coal mine.
- The New South Wales planning minister says he wants to alter the state's mining approval policy to reflect "careful deliberation of environmental, economic and social issues," shifting away from prioritizing the extraction of resources.
- Rio says it already has made extensive changes to its plans to accommodate community concerns regarding the mine, which is awaiting final clearance after an approval process that has taken several years.
- Among the changes expected to save about $500K annually: The disbanding of the Strategic Planning and Finance Committee, not renewing the NYC office space lease with Hyde Park Real Estate, cutting the number of directors to five from six, paying director compensation half in stock and half in cash (rather than all cash). Bill Fox has been elected to chair both the Nominating and Governance Committee and the Compensation Committee.
- After checking the market for interest, Essex (NASDAQ:ESSX) has decided not to pursue a sale of Essex Crane Rental or the company as a whole.
- Source: Press Release
- The stock's lower by 4% in thin, early trading.
- Previously: Essex Rental tumbles after receiving notice of default (June 24)
- Previously: Essex Rental: Dissidents win board spots (June 9)
- The FDA removes its partial clinical hold on the 240 mg dose of Esperion Therapeutics' (ESPR +2.9%) LDL-cholesterol fighter ETC-1002 (bempedoic acid). This will allow the company to assess doses above 240 mg in clinical trials.
- A Phase 3 study assessing ECT-1002 180 mg for the treatment of hypercholesterolemia is expected to commence in Q4.
- ETC-1002 is designed to lower LDL-cholesterol without the side effects associated with statins.
- Grupo Televisa (NYSE:TV) is down 6.5% out of the open as JPMorgan Chase downgrades the stock to Neutral.
- The firm had upgraded Televisa from Neutral to Overweight on May 7, with a $42 target. Shares are trading currently at $35.84.
- Recently, Citigroup had upgrades shares to Buy as well. A consensus price target of $40.50 implies more than 10% upside at the moment.
- Previously: As Univision pursues IPO, Televisa firms its partnership (Jul. 02 2015)
- Dow +0.01% to 17,684.50. S&P +0.17% to 2,072.20. Nasdaq +0.02% to 4,992.70.
- Treasurys: 30-year +1.21%. 10-yr +0.48%. 5-yr +0.25%.
- Commodities: Crude -1.08% to $52.44. Gold -0.76% to $1,157.70.
- Currencies: Euro -1.05% vs. dollar. Yen -0.07%. Pound +1.09%.
- Following checks, Chardan Capital thinks Himax (NASDAQ:HIMX) is supplying LCoS microdisplays for Microsoft's HoloLens augmented reality headset, with 2x as much content as it has for Google Glass. It also states checks indicate Microsoft (NASDAQ:MSFT) will announce HoloLens' availability later this month; no formal launch date has been given yet.
- The firm has upgraded Himax to Buy from Sell - it downgraded to Sell on May 29, when Himax was at $6.30 - and hiked its target all the way to $13 from $4.
- Himax has risen to $8.15 premarket. Shares jumped in January when Microsoft originally unveiled HoloLens. The headset's display tech hasn't yet been officially announced.
- Update: More details here. Chardan's Jay Srivatsa: "If the timeline of MSFT's [HoloLens] introduction is consistent with our checks, we could expect HIMX to begin modest ramp in Q3:15 and more so in Q4:15 with full production in FY:2016." He sees a $20M-$30M 2H15 revenue opportunity, and an $80M-$120M 2016 opportunity.
- Ballard Power (NASDAQ:BLDP) has closed its previously announced underwritten offering of 9,343,750 common shares for gross proceeds of approximately $15M.
- The company expects to use the net proceeds from the offering (which are expected to be $13.6M) for working capital and other general corporate purposes.
- BLDP +3.1% premarket
- Previously: Ballard announces proposed U.S. offering (Jul. 01 2015)
- Discovery Communications (NASDAQ:DISCA) is up 1.1% premarket as Nomura boosts its price target to $34, from $31.
- Shares closed yesterday at $33.09.
- The stock has been the subject of neutral coverage of late. More than a dozen firms have ratings equivalent to Hold, with price targets implying about a 25% upside (just over $41).
- Discovery shares are down 4% YTD.
- Previously: Comcast, Discovery negotiating carriage as 'Shark Week' looms (Jul. 01 2015)
- Stock futures have given up their earlier gains amid continuing uncertainty over the crisis in Greece; S&P, Dow and Nasdaq -0.1%.
- Investors also are taking note of the continued weakness in China, as the Shanghai Composite reverted back into sell mode with a 1.3% loss despite Monday's massive liquidity injection from the PBOC.
- Major European bourses have moved lower across the board, with France's CAC (-0.7%) trailing; Asian markets finished mostly lower.
- Crude oil hovers just below its flat line at $52.49/bbl after plunging nearly 8% yesterday; today, energy prices are contending with a 0.9% gain in the Dollar Index.
- Treasury prices are higher, with the 10-year yield down 6 bps at 2.22%.
- Still ahead: job openings/labor turnover
- Pfizer (NYSE:PFE) begins enrollment in a Phase 2b clinical trial evaluating its investigational Staphylococcus aureus (S. aureus) multi-antigen vaccine, PF-06290510, in adult patients undergoing elective spinal fusion surgery. The objective of the study, called STRIVE, is to determine if it prevents postoperative S. aureus infections in patients undergoing the surgery. There are currently no approved vaccines for the prevention of these infections.
- The primary endpoint of the 2,600-subject trial will measure the number of patients in each treatment group with postoperative S. aureus blood stream infections and/or deep incisional or organ/space surgical site infections occurring within 90 days after surgery. Secondary endpoints will include a 180-day assessment period.
- Surgical Site Infections (SSIs) are a growing concern for hospitals and care providers. S. aureus accounts for about one fifth of all SSIs in the U.S., costing over $12B to treat.
- Digital Ally (NASDAQ:DGLY) expects to report Q2 revenue of $5.5M, up 25% Q/Q and over 55% Y/Y.
- Seven $100K+ orders were shipped in Q2, and FirstVU body camera shipments topped 2K. Gross margin is said to have "improved significantly" from a Q1 level of 38.9% (was down sharply Q/Q and Y/Y).
- The company still expects 2015 sales of ~$25M, up ~40% Y/Y. However, due to higher-than-expected spending, DGLY no longer expects to hit a 2015 op. income forecast of $2.5M, though it does expect to be profitable.
- Shares -1.1% premarket to $13.26. They fell sharply in May following the Q1 report.
- Electronic Arts (NASDAQ:EA) is up 1.8% premarket as UBS upgrades shares to Buy.
- The analysts set a price target of $80, raised from $65. Shares closed yesterday at $68.01.
- UBS has raised fiscal year estimates for the game maker, putting its non-GAAP revenues at $4.63B (up from $4.48B) and EPS to $3.01 (from $2.84). Consensus estimates for revenues are at $4.49B and for EPS of $2.86.
- UBS also expects adjusted fiscal 2016 EBITDA of $1.5B, up from $1.43B and vs. a consensus of $1.38B.
- The firm says there's "continued runway for outperformance" considering factors including a continuing shift to digital sales and a title slate that will get a boost from Star Wars: Battlefront.
- Silicon Motion (NASDAQ:SIMO) now expects to report Q2 revenue rose 7%-9% Q/Q, slightly favorable at the midpoint to prior guidance of 5%-10% and mostly above a consensus for 7.1% growth to $86.3M.
- Gross margin (non-GAAP) is expected to be near the midpoint of a prior 50%-52% guidance range. That compares with a GM of 52% in Q1 and 52.2% in Q2 2014.
- Shares haven't yet moved premarket. SIMO closed yesterday up 45% YTD. Full Q2 results arrive on July 27.
- Ventas (NYSE:VTR) previously agreed to purchase Ardent Health Services - one of the ten-largest investor-owned hospital companies in the U.S. - and today agrees to sell the majority AHS's hospital operations to Equity Group Investments (Ventas will retain a 9.9% stake). Ventas will retain the owned real estate.
- The deal values Ardent at about $475M. Closing is expected in Q3, and at that time, Ventas and Ardent will enter into long-term, triple-net leases will an initial base rent of $105M.
- Ventas now expects the unlevered cash rental yield on the real estate to be about 7.5%.
- Source: Press Release
- Hostess Brands, the bakery firm that was pursuing a sale after two years under private-equity ownership, has taken itself off that market and will pursue an IPO instead, Reuters reports.
- The company reportedly turned down offers from other companies and P-E firms that valued it from $2.4B-$2.5B including debt. It'll now seek a new loan to pay a dividend to its owners, Dean Metropoulos and Apollo Global Management (NYSE:APO).
- Hostess has turned its business around quickly after filing for bankruptcy three years ago, but its market share is still below pre-bankruptcy levels.
- Brands have been relaunched and profitability has improved since being bought out of bankruptcy.
- Snack rivals: MDLZ, HSY, FLO, OTCPK:GRBMF.
- Thinly traded nano cap Oramed Pharmaceuticals (NASDAQ:ORMP) is up 9% premarket on increased volume in response to its announcement that it has signed a non-binding Letter of Intent for an investment and license agreement in China with Sinopharm Capital Management and Hefei Life Science & Technology Park Investments and Development Co. valued at $50M plus royalties. Oramed will receive $500K in exchange for exclusively negotiating with Sinopharm/Hefei for 60 days to finalize the deal.
- The transaction will allow Sinopharm/Hefei to acquire a 10% stake in Oramed via the purchase of 1,155,367 shares of common stock for ~$12M and obtain the rights to Oramed's oral insulin in China for $38M, $18M of which will be paid when the license agreement is signed and $20M after the current Phase 2b trial ends in the U.S. Oramed will also receive royalties of 10% on commercial sales.
- A "go shop" provision will allow PartnerRe (NYSE:PRE) to solicit further bids after signing an agreement with EXOR (OTCPK:EXOSF) until August 31. During this period, EXOR will cut the termination fee to $135M, or 2% of the deal value.
- If PartnerRe is not obligated to pay the $315M termination fee to AXIS (NYSE:AXS), EXOR commits to passing on the full value ($6.39 per share) to PartnerRe shareholders.
- There are also sweeteners for preferred shareholders, including a 100 basis point boost in the dividend rate, call protection until 2021, and five years of capital distribution limits.
- Source: Press Release
- S&P -0.21%.
- 10-yr +0.42%.
- Euro -1.17% vs. dollar.
- Crude -0.91% to $52.53.
- Gold -0.75% to $1,157.90.
- Cardtronics (NASDAQ:CATM) -12.7% premarket on news that 7-Eleven will not renew its ATM placement agreement with the company upon the mid-2017 expiration of the current deal.
- 7-Eleven is the largest merchant customer in CATM's portfolio, representing 17.5% of revenues for 2014; no other merchant customer generated in excess of 5% of pro forma revenues.
- Separately, CATM acquires ATM and payment card transaction processor Columbus Data Services for ~$80M.
- Netflix (NASDAQ:NFLX) is up 0.7% premarket after a big price target raise from Raymond James.
- The firm set its target for the stock to $730, up from its previous $585. Shares are trading premarket at $666.35.
- Raymond James maintains an Outperform rating on the stock.
- The past few weeks have seen some heavy bullishness from some analysts. BTIG hiked its own price target to $950 from $600, and Oppenheimer put its target at $800 from $610. MKM Partners raised its price target to $885 from $690.
- On the other hand, SocGen showed more caution, downgrading to Sell on June 24 with a $585 target, and Citigroup downgraded to Neutral the next day with a $722 target.
- The contracts will provide simulation products as well as training services for global military customers.
- Orders include: MH-60R training devices for the Royal Australian Navy, UH-72A Lakota flight training devices for the U.S. Army, and two full-mission simulators for an undisclosed customer in the EMEA region.
- The rebranding of the former Crowne Plaza Beverly Hills follows a $26M renovation off all guest rooms and public space, as well as exterior enhancements.
- The Beverly Hills Marriott will continue to be managed by Remington Lodging & Hospitality.
- AHT management expects the renovations, upgrades, and re-branding to meaningfully accelerate RevPAR, noting this is the only full-service Marriott hotel in this particular market and is thus able to capitalize on Marriott Rewards members.
- Source: Press Release
- Telecom Italia's (NYSE:TI) towers unit Inwit (Infrastrutture Wireless Italiane) says that the greenshoe option connected with its IPO has been fully exercised.
- With the overallotment purchase price the same as the global offering, €3.65/share, a total of 239.8M shares were placed, meaning a free float of about 40% and gross proceeds from the offering of about €875.3M (about $956M).
- Shares of Inwit are trading down 0.3% in Milan and are down 3% over the past five days.
- The comprehensive project hopes to transform Spring Hill Mall into the top retail, dining, and entertainment destination in Northwest Chicago. As part of the development - expected to begin in Q4 - Cinemark Holdings (NYSE:CNK) will open an eight-screen, 37K square foot state-of-the-art theater (expected in Spring 2017).
- Source: Press Release
- Tesla (NASDAQ:TSLA) -1.6% premarket after Deutsche Bank downgrades shares to Hold from Buy, citing valuation and an "insufficient" risk/reward at current levels.
- The firm thinks the electric vehicle market should increase dramatically from current levels, and TSLA could become the dominant player in the space, but the company's opportunity looks priced into the stock at current levels.
- Despite the downgrade, the firm raises its 2020 EPS to $22.20 from $20 and raises its stock price target to $280 from $245.
- The U.S. Department of Justice reports that AstraZeneca (NYSE:AZN) has agreed to pay $46.5M to the U.S. and certain states to resolve allegations that it underpaid rebates owed under the Medicaid Drug Rebate Program.
- Under a separate settlement in the same case, Cephalon (NYSE:TEVA) agrees to pay $7.5M to resolve the same allegations.
- Drug makers are required to pay quarterly rebates to state Medicaid programs in exchange for Medicaid's coverage of their drugs. The rebates are based, in part, on the Average Manufacturer Prices (AMPs) that the companies report to the government for each of their covered medicines. The higher the reported AMP, the higher the rebate. The allegations in this case were that the two firms underreported AMPs by improperly reducing the reported AMPs for service fees they paid to wholesalers which resulted in the government being overcharged for the products.
- The settlements partially resolve a whistleblower suit brought by pharmacist Ronald Streck.
- Carnival (NYSE:CCL) expects to begin excursions to Cuba beginning in May 2016 after the Treasury and Commerce Departments grant their approvals.
- The cruises will be part of the newly-launched fathom brand - a new social impact travel brand - which will initially begin in April with travel to the Dominican Republic.
- "Carnival Corporation intends to operate fathom travel itineraries directly to Cuba for the purpose of providing cultural, artistic, faith-based and humanitarian exchanges between American and Cuban citizens."
- Source: Press release
- "Expensive Any Way You Shake It," goes the title of Morgan Stanley's downgrade of Shake Shack (NYSE:SHAK) to Underweight. The $38 price target stays the same.
- "While a powerful emerging brand executing on all its early commitments to its investors, stock is overpriced in our view, potentially reflecting both technical market dynamics as well as "brand"-related optimism that is not supported by fundamentals."
- Shares -5.6% premarket to $55.64, and now down nearly 40% from late May.
- Mindray Medical (NYSE:MR) acquires the rest of Wuhan Dragonbio Surgical Implant Co. for ~$72.6M. It acquired a controlling stake in 2012. The deal will be financed with cash on hand and should close this month.
- Dragonbio is a Chinese maker of orthopedic products focused primarily on trauma, spine and joints.
- Premier (NASDAQ:PFBI) is paying $26.5M in cash and stock for the Ronceverte, West Virginia headquarter bank. The purchase will boost Premier's footprint into the Greenbrier Valley and into Covington, VA along I-64 with six branches.
- Premier will issue about 1.4M shares for the deal.
- Source: Press Release
- Plug Power (NASDAQ:PLUG) +11.6% premarket after announcing Q2 was a record revenue quarter, citing strong fuel cell and hydrogen infrastructure shipments and installations.
- PLUG forecasts Q2 revenues of $100M vs. $99.9M analyst consensus estimate, and projects full-year 2015 bookings of more than $200M, with ~75% coming from repeat customers.
- The company will release its full Q2 earnings report in early August.
- An attempt at a bounce has failed in Europe, and the major market averages are now down about 1%.
- The Greek government is submitting new proposals to the eurozone as its banks run out of time to stay solvent after the ECB yesterday kept in place a cap on ELA funding and boosted the haircut on collateral.
- Rates are headed south, not just in the U.S. and Germany, but in the periphery as well. The U.S. 10-year yield is lower by six basis points to 2.23% and the German 10-year Bund yield is down nine bps at 0.68%. Italy down 11 bps to 2.28%, Spain down three bps to 2.30%.
- ETFs: TBT, TLT, VGK, TMV, FEZ, HEDJ, TBF, EDV, TMF, IEV, EU, TTT, ZROZ, EPV, EZU, TLH, SBND, VGLT, FEU, UBT, DLBS, EEA, TLO, EURL, FEP, UPV, DBEU, BUNL, ADRU, HEZU, FEEU, TENZ, IEUR, LBND, BUNT, GGOV, DLBL, TYBS, FIEU, VUSTX, DBEZ, FEUZ, SBEU, HFEZ
- The FDA designates Dyax's (NASDAQ:DYAX) investigational fully human monoclonal antibody inhibitor of plasma kallikrein (pKAL), DX-2930, a Breakthrough Therapy for the treatment of hereditary angioedema (HAE). Uncontrolled pKAL activity leads to excessive generation of bradykinin, a vasodilator believed to play a key role in localized swelling, inflammation and pain associated with HAE.
- HAE is a rare acute inflammatory condition characterized by episodes of severe, painful swelling of the extremities, GI tract, genitalia and larynx. It is caused by abnormally low levels of C1 esterase inhibitor (C1-INH), a naturally occurring molecule that inhibits pKAL. HAE affects ~1 in 50,000 people.
- Breakthrough Therapy status provides for more intensive guidance from the FDA, the involvement of more senior agency staff and a rolling review of the New Drug Application (NDA).
8:04 AM| Comment!
- A sell-sider finally steps into the carnage in the mortgage REIT sector. Upgraded to Outperform from Market Perform: Annaly Capital (NYSE:NLY), American Capital Agency (NASDAQ:AGNC), PennyMac Mortgage (NYSE:PMT), American Capital Mortgage (NASDAQ:MTGE), AG Mortgage (NYSE:MITT), MFA Financial (NYSE:MFA), CYS Investments (NYSE:CYS), Capstead Mortgage (NYSE:CMO), and Chimera Investment (NYSE:CIM).
- NLY +0.6%, AGNC +0.5%, MTGE +1.9%, MFA +0.9% premarket
- ETFs: MORL, REM, MORT, LMBS
- S&P -0.15%.
- 10-yr +0.3%.
- Euro -0.92% vs. dollar.
- Crude -1.39% to $52.28.
- Gold -0.2% to $1,164.30.
- "While valuation has gotten stretched following strength since the IPO, we believe estimates could prove conservative and expect operating momentum to push the shares higher," says Baird analyst William Power, starting Fitbit (NYSE:FIT) with an Outperform and $52 price target - about 24% above yesterday's close.
- "Our proprietary fitness band survey and other retail channel checks suggest strong ongoing sales momentum."
- Shares +6.3% premarket to $42.25.
- Silver Wheaton (NYSE:SLW) -1.9% premarket after saying it received a proposal letter from the Canada Revenue Agency to reassess the company under various income tax rules.
- The CRA is seeking to tax streaming income earned by the company's foreign units, and says SLW's taxable income should be increased by ~C$715M for the 2005-10 period.
- SLW estimates it would be subject to federal and provincial tax of ~C$150M for the relevant taxation years if it would be assessed taxes on income from foreign subsidiaries on the same basis as its Canadian income.
- SLW says it is not required to make any payment to the CRA at this time and that it intends to vigorously defend its tax filing positions.
- Allergan (NYSE:AGN) acquires the worldwide rights to Merck's (NYSE:MRK) investigational small molecule oral calcitonin gene-related peptide (CGRP) receptor agonists which are under development for the treatment and prevention of migraine.
- Under the terms of the agreement, Allergan will pay Merck an upfront fee of $250M, half when the deal clears antitrust review and half in April 2016. Merck will be eligible for development and commercial milestones and tiered double-digit royalties. Allergan will be responsible for the full development costs of the CGRP programs as well as manufacturing and commercialization.
- Specifically, Allergan obtains the rights to two CGRP receptor agonists:
- MK-1602, for the acute treatment of migraine. A Phase 2 study was just completed. After discussing the results with the FDA, a Phase 3 trial should begin in 2016.
- MK-8031, for the prevention of migraine. A Phase 2 trial is expected to commence in 2016.
- In July 2011, Merck discontinued development of an earlier oral CGRP antagonist, Telcagepant (MK-0974), due to potential liver toxicity. MK-1602 and MK-8031 belong to a different chemical series than Telcagepant and have shown no evidence of liver toxicity.
- Migraines affect ~36M Americans.
- Horizon Pharma (NASDAQ:HZNP) proposes to acquire all the outstanding shares of Depomed (NASDAQ:DEPO) for $29.25 per share or ~$3B. According to Horizon, the deal would generate significant revenue and operating synergies and would be immediately accretive to earnings. Projected full-year pro forma revenues and non-GAAP EBITDA would be ~$950M and ~$350M, respectively.
- Horizon will host a conference call this morning at 8:30 am ET to discuss its proposal.
- Nexvet Biopharma (NASDAQ:NVET) enters into an R&D agreement with Nippon Zenyaku Kogyo's Zenoaq to develop therapeutic biologics for companion animals. The biologics will target certain proteins in immuno-oncology and allergy/inflammation.
- Under the terms of the agreement, Nexvet will apply its PETization technology to Zenoaq monoclonal antibodies already identified as having therapeutic potential in animals. Development costs will be shared equally. Zenoaq will have commercial rights to the products in Europe and Asia while Nexvet will retain the rights in all other territories including the U.S.
- Specific financial terms are not disclosed.
7:08 AM| 1 Comment
- S&P -0.33%.
- 10-yr +0.28%.
- Euro -0.21% vs. dollar.
- Crude -0.08% to $52.97.
- Gold -0.15% to $1,164.70.
- Saudi Arabia has signed a commitment to invest up to $10B in Russia over the next five years, in a move signaling a thawing in relations between the two countries.
- The majority of the money will be spent on Russia’s agricultural projects, as well as medicine, logistics, and the country's retail and real estate sectors.
- Facing a political standoff with the West, Moscow has been turning eastward, to reduce reliance on Europe and the U.S. In early May, the country signed economic deals with China worth up to $25B.
- ETFs: RSX, RUSL, RUSS, ERUS, RSXJ, RBL
- Japan +1.31%.
- Hong Kong -1.03%.
- China -1.29%.
- India -0.13%.
- London -0.05%.
- Paris -0.34%.
- Frankfurt -0.15%.
- A South Korean court has denied an injunction request by a hedge fund Elliott Associates to block builder Samsung C&T from selling treasury shares to KCC Corp., clearing another hurdle for the proposed $8B merger of Samsung C&T and Cheil Industries.
- The ruling is another slap in the face to Elliot, which just bought shares in both Samsung Fire & Marine (OTC:SZVZF) and Samsung SDI (OTC:SSDIY) to block the merger.
- The potential deal would see heirs of patriarch Lee Kun-hee consolidate affiliate stakes and keep control of the Samsung group.
- Previously: Elliott makes next move against Samsung merger (Jul. 06 2015)
- Greece faces what many call its last chance to stay in the eurozone today when Prime Minister Alexis Tsipras puts proposals to an emergency eurozone summit a day after Greeks overwhelmingly voted to reject more austerity.
- Tsipras will have to persuade the bloc's other 18 leaders for a major new loan to rescue his country, while failure to reach a deal would increase the likelihood of a Grexit.
- Other updates: The Athens stock exchange will remain closed until tomorrow, Greece has appointed a new finance minister - Euclid Tsakalotos, and the ECB has maintained its emergency loan cap for Greek banks.
- Euro -0.8% to $1.0966.
- FTSE 100 -0.2%; DAX -0.2%; CAC 40 -0.2%; Euro Stoxx 50 flat
- Crude oil prices steadied this morning after posting one of their biggest sell-offs this year in the previous session due to bearish factors including Greece, China's uncertain economy and a new flood of Iranian oil.
- Monday's fall took the U.S. crude market down by 7.7%, or $4.40, to close at $52.53, almost rivaling the price decline in the aftermath of OPEC’s decision to not intervene in oil markets last year.
- Crude futures +0.4% to $52.73/bbl.
- Previously: U.S. crude sinks 7.7% to $52.53 in worst day since April (Jul. 06 2015)
- ETFs: USO, OIL, UCO, UWTI, SCO, BNO, DBO, DWTI, DTO, USL, DNO, OLO, SZO, TWTI, OLEM
- Aetna (NYSE:AET) shares tumbled over 6% yesterday, after Humana (NYSE:HUM) (which recently agreed to be acquired by the former for $37B) prompted investor concerns by lowering its forecasts for the year.
- Stating inpatient hospital admissions were not performing in line with what it had expected, the company slashed its anticipated 2015 operating profits by more than 8%.
- "If you take the downgrade of their earnings and roll that through, that makes what Aetna paid pretty expensive," said Tareo Capital's Joel Emery.
- Previously: Humana and Aetna to host conference call this am to discuss merger; Humana lowers 2015 EPS guidance (Jul. 06 2015)
- Monsanto (NYSE:MON) Chief Executive Hugh Grant had held "very constructive" talks with Syngenta (NYSE:SYT) shareholders and could raise the company's $45B offer for the Swiss group under certain conditions.
- "If Syngenta commits to opening its books and detailing why it thinks it is worth more, we would reconsider our offer," Grant said in an interview to Le Temps.
- Tokyo prosecutors plan to release former Toyota (NYSE:TM) executive Julie Hamp from custody after she was arrested last month for an alleged drug violation.
- Prosecutors lacked enough evidence to indict her, Kyodo News reports.
- Hamp's arrest was seen as dealing a major setback to Toyota, which is aiming to lead Japan in making management more international and accepting of female executives.
- Previously: Toyota exec steps down after arrest (Jul. 01 2015)
- Loss of U.S. Export-Import Bank financing would put Boeing (NYSE:BA) at a "huge competitive disadvantage" since its rivals still have access to such financing support, the head of the company's commercial aircraft division told reporters.
- "We absolutely need Ex-Im Bank to compete on a level playing field," Ray Conner declared.
- Ex-Im is currently putting together a liquidation plan and completing transactions that had already been approved, but the lapse of the bank's charter last month means it cannot work on any new deals.
- Australia's central bank left its official cash rate unchanged at 2% at its July monetary policy meeting as sliding commodity prices and uncertainty in China argued for continued stimulus, and even the chance of more cuts.
- RBA Governor Glenn Stevens also underlined the need for a lower currency, stating further depreciation seemed "both likely and necessary."
- The central bank has already eased twice this year as the unwinding of a mining boom carves a gaping hole out of business spending and national income.
- ETFs: FXA, EWA, IAF, AUSE, CROC, KROO, EWAS, FAUS, QAUS, HAUD
- Wiping out most of yesterday's rebound, Chinese shares fell sharply again today, casting doubt on the slew of recent support measures unleashed by Beijing.
- Traders are also getting increasingly nervous about the unusually large number of Chinese companies asking for their shares to be suspended.
- About a quarter of the roughly 2,800 companies listed in Shanghai and Shenzhen filed for a trading halt by the close on Monday, and another 200 announced a suspension today.
- Shanghai -2.2%; Shenzhen -6%; ChiNext -5.7%.
- ETFs: FXI, ASHR, EWH, CAF, YINN, KWEB, PGJ, GXC, FXP, HAO, YANG, TAO, CHIX, CHN, PEK, CHIQ, CQQQ, MCHI, TDF, QQQC, XPP, YAO, GCH, ASHS, YXI, CN, CHXF, FCA, CHNA, CNXT, CHII, ECNS, CHIE, EWHS, CHIM, KBA, KFYP, FCHI, JFC, FHK, AFTY, CHAU
- Plagued by a supply shortage and tepid demand, Samsung Electronics (OTC:SSNLF) is anticipating a seventh straight quarter of profit declines, reinforcing worries that Galaxy S6 sales fell short of expectations.
- Operating profit for the second quarter likely fell 4% from a year earlier to 6.9T won ($6.1B), while revenue for the period likely dropped 8.3% to 48T won.
- The declines come amid robust growth in Samsung's semiconductor operations, leaving most of the blame on the the company's once-highflying mobile division.
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