Seeking Alpha
  • Today - Friday, October 31, 2014

  • 2:15 PM
    • Cliffs Natural Resources (CLF +8.7%) spikes higher on a WSJ report that Nucor (NUE +1.2%) is in talks to invest in CLF’s Bloom Lake iron ore mine in Quebec.
    • Two Japanese steel companies reportedly would also be part of the venture, which would allow CLF to more than double production at the mine to 13.5M tons/year; the three partners and another existing Japanese partner would buy the iron ore produced at the mine.
    • The partnership apparently would allow CLF to make Broom Lake profitable, after taking a $6B writedown earlier this month mostly related to the mine.
    | Comment!
  • 1:58 PM
    • "Management demonstrated this quarter that it could reaccelerate North America local billings, which should be viewed positively by investors," writes William Blair's Ralph Schack following Groupon's (GRPN +24.7%) Q3 beat. He adds the company's Nov. 11 analyst day could serve as a fresh catalyst.
    • Sterne Agee's Arvind Bhatia declares "execution improved and management delivered on all three of its Q4 targets a quarter early." He sees investors who had written off Groupon taking a second look.
    • Brean also notes Groupon's improved North American local performance, and declares its mobile metrics "continue to impress." Credit Suisse is more cautious: It's hiking its long-term gross profit and EBITDA forecasts, but also notes active customers fell by 700K Q/Q and expects "continued marketing and investment to drive Marketplaces awareness" to pressure near-term profits.
    • 22% of the float was shorted as of Oct. 15, providing plenty of fuel for a squeeze.
    • Prior earnings coverage
    | 1 Comment
  • 1:42 PM
    • Expedia (EXPE +5%)  is rallying after beating Q3 estimates on the back of a 29% Y/Y increase in gross bookings (even with Q2's clip) to $13.5B. U.S. bookings rose 35% to $7.9B, and international bookings 22% to $5.6B.
    • Hotel room nights rose 24% Y/Y (down from Q2's 28%), and air tickets 30% (up from Q2's 28%). Revenue per room night fell 2%; revenue per ticket fell 7%.
    • Sales/marketing spend (much of it on Google) rose 30% to $815.8M, and tech/content spend 20% to $172.8M. $130M was spent on buybacks.
    • On the CC (transcript), the company reiterated guidance for 16%-19% full-year adjusted EBITDA growth. CEO Dara Khosrowshahi noted the Travelocity deal is boosting top-line performance, and said the company plans to increase investments in its Chinese eLong (LONG -0.5%) unit, which is facing "challenges and competitive headwinds."
    • With marketing spend remaining high and investments in eLong and Trivago ramping, Benchmark expects "minimal EBITDA margin expansion" in 2015. But it also expects 13%  sales growth after the Travelocity deal reaches its 1-year anniversary.
    • Priceline (PCLN +4.6%) and TripAdvisor (TRIP +2.8%) are getting a lift from Expedia. The Nasdaq is up 1.3%.
    | Comment!
  • 1:18 PM
    • Audience (ADNC -41.2%) has guided for Q4 revenue of $13M-$16M and EPS of -$0.47 to -$0.53, far below a consensus of $25.9M and -$0.30.
    • The voice processor developer says its Q3 sales were hurt by "continued near-term weakness in our core smartphone market, largely due to less than expected market acceptance of certain smartphone models." Leading customer Samsung's high-end Android sales have been weak, as other chipmakers can attest.
    • Pac Crest and Topeka have downgraded. Pac Crest thinks Audience will burn through its cash in 2015, given Samsung weakness and smart audio codec cancellations, and will likely have to do a capital raise.
    • Q3 results, PR
    | Comment!
  • 1:07 PM
    • BofA/Merrill has downgraded Care.com (CRCM -5.2%) to Underperform, and cut its target by $4 to $9.
    • Shares of the child/family care service marketplace are near their post-IPO low of $7.87.
    | 1 Comment
  • 12:55 PM
    • LinkedIn's (NYSE:LNKD) Q3 beat more than offsets its light Q4 guidance, thinks FBR, one of several firms to hike its target today.
    • FBR likes LinkedIn's Q3 Talent Solutions customer adds - 2.2K vs. 1.7K a year ago - as well as user engagement trends, 14% Q/Q growth in sponsored news feed update ad sales (now 31% of Marketing Solutions revenue), and ongoing progress for Sales Navigator (now 25% of subscription revenue).
    • SunTrust expects a new Talent Solutions price hike to boost 2015 growth, and (like many others) considers Q4 guidance conservative. RBC takes note of LinkedIn's ARPU growth (5% Y/Y) and strong user metrics - registered members +28% Y/Y to 332M, monthly unique visitors +16% to 90M; member page views +28%.
    • Shares now +66% from a May low of $136.02.
    • Results/guidance, details.
    | Comment!
  • 12:47 PM
    • Westport Innovations (WPRT -3%) is lower after posting a lighter than expected Q3 loss but revenues fell 45% Y/Y and operating expenses rose 61%.
    • Deutsche Bank downgrades shares to Hold from Buy with an $8 price target, down from $12, seeing a weak oil price environment impacting near-term adoption of natural gas vehicles and uncertainty about timing of cash flow breakeven.
    • The firm expects shares to remain range-bound until seeing more evidence of EBITDA improvement or OEM/product announcements.
    | Comment!
  • 12:47 PM
    | Comment!
  • 12:38 PM
    • KLA-Tencor (KLAC +2.9%) is selling $250M worth of 2.375% notes due 2017, $250M of 3.375% notes due 2019, $500M of 4.125% notes due 2021, $1.25B of notes due 2024, and $250M of notes due 2034.
    • The chip equipment maker will use the proceeds, along with $750M in term loans and cash on hand, to finance its $2.75B ($16.50/share) special dividend, and to redeem $750M worth of 6.9% notes due 2018.
    • KLA had $2.9B in cash/marketable securities at the end of September, and $748M in debt. Shares are rallying on a good day for chip industry names.
    | Comment!
  • 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!
  • 12:25 PM
    • Aegerion Pharmaceuticals (AEGR -41.1%) plummets to 52-week lows after reporting a wider than expected Q3 loss and issuing downside guidance for FY 2014.
    • AEGR now sees 2014 revenues of $150M-$160M from its prior range of $180M-$200M and below $172M analyst consensus estimate, after Q3 sales of its flagship Juxtapid drug fell $5M short of expectations at $44M.
    • Shares are downgraded by at least five firms, including BofA Merrill, which cut its rating all the way down to Underperform from Buy.
    | 1 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!
  • 11:49 AM
    • Eastman Chemical (EMN +5.5%) surges after reporting Q3 earnings that topped expectations and revenue growth at most of its main businesses.
    • EMN raises its estimated FY 2014 EPS to $7.00 from a prior outlook of $6.70-$7.00, expecting strong Q4 results as demand remains solid with normal seasonality, product mix improvement continues, and raw material and energy costs are a tailwind.
    | Comment!
  • 11:48 AM
    • SouFun (SFUN +3.6%) has added top-5 Chinese home real estate agency Tospur to its list of partners.
    • SouFun will buy a 16% stake in Tospur for $62M, and the companies will respectively invest $9.8M and $6.5M in a JV providing "real estate Internet financing services."
    • Prior investment/partnership deals: Century 21 China, World Union/Hopefluent
    | Comment!
  • 11:35 AM
    • Precious metals miners are slammed for a third straight session as gold prices plunged to multiyear lows.
    • Japan’s surprise stimulus move is supporting the U.S. dollar and driving the ICE U.S. Dollar index to a four-year high, making gold more expensive to overseas buyers; while the prospect for more monetary stimulus usually increases the lure of gold, the threat of global deflation has withered gold’s appeal as a hedge against rising prices, Barron's Chris Dieterich explains.
    • Nearly everyone in the sector is hitting 52-week lows (again): ABX -4.5%, NEM -7.7%, GG -0.5%, SLW -3.6%, AGI -5.8%, AEM -4.1%, AUY -10.6%, IAG -4.6%, KGC -16.2%, NGD -6.1%, AU -2%, GOLD -1.6%.
    • Also: GFI -7.4%, RGLD -3.8%.
    • ETFs: GDX, GDXJ, NUGT, DUST, SIL, JNUG, GLDX, JDST, SLVP, RING, SGDM, PSAU
    | 11 Comments
  • 11:31 AM
    • Three weeks after providing a calendar Q3 warning that triggered a massive chip stock rout, Microchip (MCHP +7.3%) has provided Q4 guidance that's in-line with lowered estimates. The microcontroller vendor, which has often seen trends emerge ahead of peers, also said it saw most of its inventory correction in Q3, and expects Q4 sales to be just "slightly below typical seasonal levels."
    • Chip stocks are up strongly (SOXX +4%) on a day the Nasdaq is up 1.4%. Since Microchip's warning, a slew of analog chipmakers and microcontroller firms (e.g. Atmel, Freescale, STMicro, Intersil, Linear) have offered light Q4 guidance, and other firms have reported seeing high-end Android weakness (e.g. Synaptics, Cirrus Logic, Amkor).
    • On the other hand, several mobile chipmakers (Skyworks, RF Micro, TriQuint, Silicon Motion), some of which have decent iPhone exposure, have provided strong results and/or guidance. Other chipmakers, such as Broadcom, Texas Instruments, and Xilinx, have rallied after delivering in-line guidance.
    • Susquehanna's Chris Caso: "By now, we think it’s clear that the weakness MCHP saw in September is not company specific ... The question now is if the full extent of the weakness has been dialed into estimates. If it has, then this would be among the shortest and mildest downturns in many years."
    • Notable gainers: SNDK +3.9%. MU +4.1%. AMAT +3.9%. TXN +4.7%. NXPI +3.9%. NVDA +3.5%. MXIM +4.7%. LLTC +5.1%. FCS +9.6%. FSL +8.8%ADI +6.5%. TQNT +6.8%. RFMD +6.5%. ATML +5.9%. AVGO +5.1%. MRVL +4.7%. AMCC +8.9%. BRCM +3.6%. TSM +4.4%. ARMH +3.3%.
    • Intel (INTC +3.5%) has recovered most of the losses it saw yesterday due to Intesil's (ISIL +3.3%) results and guidance, and related comments about a PC chip inventory correction.
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | 8 Comments
  • 11:03 AM
    • Boyd Gaming (BYD +6.9%) trades higher after reporting mixed Q3 results.
    • The company disclosed yesterday that it's working out potential REIT strategies with advisers.
    • CEO Keith Smith was cautious during the firm's earnings call about the REIT process.
    • The exec read a prepared statement and stonewalled Q&A on the topic.
    | 2 Comments
  • 10:59 AM
    • Niska Gas Storage (NKA -11.6%) is downgraded to Sell from Hold with a $3.30 price target at Stifel, as the partnership continues to face a challenging natural gas storage market.
    • Amid narrow summer-winter differentials and minimal volatility in the natural gas market, NKA withdrew guidance and indicated a likelihood of lower or the elimination of distributions.
    • Stifel believes raising capital would be a challenge given NKA's equity value decline and a limited ability to borrow given a lower fixed charge ratio (Briefing.com).
    | 3 Comments
  • 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.
    | Comment!
  • 10:44 AM
    • Ellie Mae (NYSE:ELLI) beat Q3 estimates and guided for Q4 revenue of $41M-$42M, above a $39.5M consensus. But EPS guidance of $0.15-$0.18 is well below a $0.29 consensus.
    • On its CC (transcript), the mortgage origination software provider noted it's investing heavily to grow its sales to enterprise lenders. Expenses related to the acquisition of mortgage information provider AllRegs are also expected to ding EPS, as is a higher tax rate.
    • Active users of ELLI's Encompass mortgage origination platform rose 11% Y/Y in Q3 to 104.1K, and revenue per active Encompass user grew 17% to $419. Industry origination volumes are expected to be down 15% Q/Q and 20% Y/Y in Q4.
    • Q3 results, PR
    | Comment!
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