Seeking Alpha
  • Today - Friday, October 31, 2014

  • 4:00 PM
    • "Sometimes truth does come in a jar," say Jefferies CEO Richard Handler and Chairman Brian Friedman after a number of investment bankers at the firm took drug tests to refute claims of widespread narcotics use at the firm. The tests came back negative.
    • The claims came as part of a sensational child-custody case involving a Jefferies banker.
    • “Suggestions of rampant drug use are pure fabrication,” say Handler and Friedman. “We are embarrassed that we even have to discuss these matters, but this should put to rest the heart of the allegations about our firm."
    • Jefferies' parent in Leucadia National (LUK +2.5%), of which Handler is Chairman and CEO. Friedman is also a board member.
    | 1 Comment
  • 3:48 PM
    • The combination of solid earnings and initiation of a dividend and buyback coming alongside a beaten-down share price and sizable short interest alone would have been enough to send WisdomTree (WETF +27.4%) nicely higher today.
    • But add to that the BOJ's bombshell expansion of its asset purchase program, and the resultant moonshot in the Nikkei and dive in the yen. The move is sure to renew interest in WisdomTree's once red-hot, but lately flagging currency-hedged Japan Equity Fund (DXJ +6.5%).
    • Previously: WisdomTree initiates dividend and buyback
    • Previously: Nikkei soars, yen slides, after BOJ unexpectedly eases monetary policy
    • WisdomTree remains lower by 16% YTD.
    | 1 Comment
  • 2:53 PM
    • "October 1 was an academic exercise," says a pension-law expert. "[Thursday] was a reality check." The lawyer is referring to a bankruptcy judge yesterday approving Stockton, CA's reorganization plan which leaves untouched its pension obligations. On Oct. 1 that same judge had ruled Stockton could cut its payments to Calpers as it emerged from bankruptcy.
    • Ultimately, city managers - already faced with a hard time retaining municipal workers - decided slashing pension benefits would force an even quicker rush to the exits.
    • Losers when the ruling was issued, government pension plans and organized government labor groups are pleased, but advocates for pension reform say the reorganization plan is a mistake as it allows the city to exit bankruptcy without dealing with the pension obligations which helped put it there in the first place.
    • Monolines today: Ambac (AMBC +4.7%), Assured Guaranty (AGO +1.8%), MBIA (MBI +1.1%).
    • Muni ETFs: MUB, PZA, TFI, CMF, XMPT, PRB, PWZ, CXA, PVI, RVNU, VRD, FMB
    | 1 Comment
  • 1:06 PM
    • Announced today is AJG's purchase of Insurance Associates, located in Boulder and Estes Park, CO. Terms were not disclosed.
    • Founded in 1919, Insurance Associates is a broker providing retail property/casualty and risk management insurance services for commercial and personal lines throughout the west, specializing in coverage for farms, ranches, and water/sanitation operations.
    • Source: Press Release
    | Comment!
  • 12:59 PM
    • "Citigroup (C +0.2%) at these levels is like free candy," says Mike Mayo (sure to give you a belly ache?). Appearing with the CNBC FastMoney crew, Mayo says his first though upon reading of the Q3 earnings restatement was "Not again," but he's not concerned with the longer term story and sees Citi as a $100+ stock in four years.
    • Citigroup slipped in after-hours action last night, but has retuned to the green during today's session. Its current price of $53.30 stands against tangible book value per share of $57.53 (after the restatement). Free candy indeed.
    | 5 Comments
  • 12:49 PM
    • The FTSE NAREIT All REIT Index climbed 6.94% through October 29 vs. the S&P 500's return of 0.62%. Strong earnings reports from REITs helped, but maybe helping more was a steep drop in interest rates amid the broad market's major swoon during October's first two weeks.
    • Leading the way for REITs were manufactured homes up 10.19%, followed by industrial (9.79%), healthcare (9.77%), and shopping centers (9.43%).
    • Among the REIT laggers were timber (up 4.42%), mortgage REITs (3.71%), and infrastructure (1.89%).
    • ETFs: IYR, VNQ, DRN, URE, REZ, SRS, RWR, SCHH, ICF, ROOF, DRV, KBWY, RTL, REK, FRI, FTY, PSR, FNIO, IFNA, GQRE, WREI
    | 2 Comments
  • 12:30 PM
    • Ahead of earnings next week, NorthStar Asset Management (NSAM +2.2%) is added to Deutsche's short-term Buy list, the team noting numerous potential catalysts, and its expectation of strong CAD growth over the next few years.
    | Comment!
  • 12:04 PM
    • Trust Risk Group is the sole distributor for AmTrust's (AFSI -2.1%) $500M Italian medical malpractice business, and their relationship has broken down "under acrimonious circumstances," reports The Insurance Insider.
    • Both parties allege they are owed significant sums by the other, and Trust Risk intends to sue in Italy for $629M in earnings it expects to lose over the remaining 11 years of the agreement.
    | Comment!
  • 11:41 AM
    • Q3 net income of $48.1M or $0.57 per share vs. $41M and $0.47 one year ago. Operating revenue of $148.9M vs. $136.7M.
    • Adjusted operating income of $75.1M up 10% Y/Y. Operating margin of 50.4% up 40 basis points.
    • Average daily volume of 4.95M up 7% Y/Y. Average revenue per contract of $0.329 up 4%.
    • 1.014M shares repurchased during quarter at average price of $50.64 each. YTD purchases of 2.75M shares at average price of $51.22 each. Roughly $118.4M of buyback availability remains.
    • Previously: CBOE Holdings beats by $0.02, revenue in-line
    • CBOE -0.5% for the session after gaining about 25% over the last three months.
    | Comment!
  • 11:02 AM
    • Q3 adjusted FFO per share of $0.39 up 11% Y/Y. Same-store NOI of $112.3M up 4.4%.
    • Same-store average rent per apartment of $1,434 up 3.7% Y/Y. Average daily occupancy of 95.7% up 20 basis points.
    • Q3 renewal rent increases of 5.6%. New lease rent increases of 6.4%.
    • Full-year AFFO guidance is narrowed to 1.67-$1.71 vs. $164-$1.74 previously.
    • Conference call at 1 ET
    • Previously: Apartment Investment FFO in-line, beats on revenue
    • AIV +2.75%
    | Comment!
  • 10:46 AM
    • There was little reaction to the company's Q3 about inline earnings results yesterday, but Medical Properties Trust (MPW +2.7%) is gaining in today's session as JMP Securities - looking like it's a believer in MPW's $1B+ in recent deals - upgrades to Market Outperform.
    | 1 Comment
  • 10:38 AM
    • Royal Bank of Scotland (RBS +4.8%) is the latest to do so, today announcing the setting aside of $640M for potential settlements in the currency-rigging investigations.
    • In total, seven major U.S. and European banks have boosted their legal reserves by $6.5B in October. Last night, Citigroup (C +0.4%was forced to cut its Q3 earnings by $600M amid "rapidly-evolving" probes.
    • UBS has put aside the most of any single bank this month - $1.9B. Next in line is Deutsche Bank (DB +0.7%) with $1.1B, and JPMorgan (JPM +1.3%) with $1B. None of the lenders disclosed exactly how much was specifically for foreign exchange, and none have yet been formally accused of wrongdoing.
    • Barclays (BCS +5.6%) reserved $800M for FX-related settlements, and Credit Suisse (CS +0.5%) $400M.
    • ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, IAI, SEF, IYG, FXO, FNCL, FINU, RWW, RYF, FINZ
    | Comment!
  • 10:26 AM
    • American Capital (ACAS +1.5%) closes on a $500M senior secured revolver provided by Deutsche Bank. The facility matures in two years and currently bears an interest rate of Libor plus 1.6%.
    • The line gives American Capital more capacity to invest in senior secured floating rate loans. "Appropriately levered," says CFO John Erickson, "[these] can enhance our NOI."
    • Source: Press Release
    | Comment!
  • 10:21 AM
    • Q3 adjusted FFO of $42.8M or $0.28 per share vs. $35.1M and $0.25 one year ago.
    • Same-store metrics: Revenue up 7.7% Y/Y, operating expenses up 1.1%, NOI up 10.8%.
    • Full-year adjusted FFO guidance of $1.06-$1.07 vs. $1.03-$1.06 previously. Full-year acquisition target is lifted to $570M from $250M-$300M previously (YTD has purchased $293.5M).
    • Conference call at 11 ET
    • Previously: CubeSmart beats by $0.01, beats on revenue
    • CUBE +3.5%
    | Comment!
  • 10:15 AM
    • Q3 core FFO per share of $2.11 is up 9.9% from a year ago.
    • Same-store (1,982 of them) operating metrics: Rental income up 5.6% Y/Y, Operating costs up 0.8%, NOI up 7.3%, gross margin of 73% up 180 basis points. Square foot occupancy of 94.7% up 30 bps, realized annual rental income per occupied square foot of $15.25 up 5.3%, per available square foot of $14.44 up 5.6%.
    • Previously: Public Storage beats by $0.05, misses on revenue
    • PSA +1.7%
    | Comment!
  • 10:07 AM
    • Compass Point pulls the plug on its Buy recommendation on Armour Residential (ARR -0.5%) following the Q3 earnings report this week.
    • Most metrics were soft, with core income failing to cover the dividend, book value falling, and net interest spread narrowing amid climbing prepayments.
    • The current price of $3.95 is a 13.8% discount to Sept. 30 book value.
    • Previously: Rising prepayments ding Armour Residential
    | 1 Comment
  • 9:44 AM
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  • 9:22 AM
    • Energy Investors Funds has about $4B in AUM across four co-mingled funds and related co-investment vehicles. The deal is being funded mostly with cash raised from a previously announced senior note offering by a ARES subsidiary, and is expected to close this year.
    • President Michael Arougheti: "The energy sector is an area of increasing importance across our business given the large, growing and contractual nature of the asset class and the differentiated risk-adjusted returns that can be generated by experienced managers."
    • Source: Press Release
    | Comment!
  • 9:14 AM
    • Alongside its 16.7% dividend increase, JMP Group (NYSE:JMP) boosts the buyback authorization to 1M shares through the end of next year. The current float is just shy of 24M shares. 473.7K shares remained under the prior authorization.
    • Press release
    | Comment!
  • 9:11 AM
    • OmniAmerican Bancorp (NASDAQ:OABC): Q3 EPS of $0.15.
    • Revenue of $13.41M (-11.7% Y/Y).
    • Press Release
    | Comment!
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