Seeking Alpha
  • Today - Monday, April 21, 2014

  • 10:24 AM
    • Drexel Hamilton's Richard Whittington has upped his Micron (MU +3.1%) PT all the way to $50 from $30. He expects DRAM prices to keep rising this year and next thanks to a favorable supply/demand balance, and expects DRAM margins to eventually hit 50%.
    • Micron had a Feb. quarter gross margin (covers both DRAM and NAND flash sales) of 34%. Shares rallied on Thursday following SanDisk's Q1 beat and margin guidance hike, and are once more close to a 52-week high of $25.68.
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  • 9:43 AM
    • India's Supreme Court ends a 19-month ban on the mining of iron ore in the state of Goa, allowing mining to begin again but at a restricted level of 20M metric tons/year.
    • The additional supply from Goa would add to an expected surplus of iron ore this year, as big mining companies such as Rio Tinto (RIO -0.4%) and BHP Billiton (BHP +0.1%) boost production while demand from top consumer China slows.
    • Goa, India's largest producer of iron ore, accounted for about half the country's iron ore exports until the ban was imposed.
    • Shares of Sesa Sterlite (SSLT +2.9%), India's largest private iron ore miner, open higher on news that the ban had been lifted.
    | Comment!
  • 9:39 AM
    • Jabil (JBL -1.5%) has been cut to Sector Perform by RBC.
    • Plexus (PLXS +2.9%) has been upgraded to Buy by Needham five days after posting an FQ2 revenue beat.
    • A10 Networks (ATEN +2.3%) has been started at Buy by Citi. IPO underwriters launched coverage last Wednesday. Shares are right near their $15 March 21 IPO price.
    • 2U (TWOU +1.8%) has been started at Buy by Compass Point. Shares are slightly above their $13 March 28 IPO price.
    | Comment!
  • 9:15 AM
    • Walter Energy (WLT) -3.4% premarket after Goldman Sachs downgrades shares to Sell from neutral with a $5 price target, down from $9, citing a more negative view of met coal pricing and more positive thermal price forecast.
    • Three factors underpin the Sell rating: the firm's EBITDA estimates are 59% and 35% below consensus for 2014 and 2015 given its met price view; it believes WLT's $250M asset sale goal will be difficult to achieve; and at current met prices, WLT may face a potential liquidity challenge in two years given negative free cash flow.
    • Goldman raises its rating on Arch Coal (ACI) to Neutral from Sell to reflect its more constructive thermal coal price outlook.
  • 9:14 AM
    • Kimberly-Clark (KMB) says it expects to enact the spinoff of its healthcare unit at the end of Q3 or in Q4.
    • The spinoff plan still needs to meet board approval and be cleared regulators.
    • Earlier: Q1 earnings
    • KMB +0.6% premarket
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  • 9:13 AM
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  • 8:57 AM
    • Plug Power (PLUG) +3.5% premarket on news it will host a conference call this morning to provide a business update, including recent GenKey deals and ReliOn plans.
    • PLUG says it has closed nine GenKey deals so far this year, totaling ~$80M in bookings.
    • Also: FCEL +3.6%, BLDP +5%.
    | Comment!
  • 8:53 AM
    • Shares of Home Depot (HD) are higher in early trading after a favorable cover story article in Barron's pitched the stock as an undervalued gem.
    • HD +1.5% to $78.21 premarket. Shares of the home improvement giant haven't crested the $80 mark since the middle of March.
    | 1 Comment
  • 8:42 AM
    • Suncor Energy (SU) -2% premarket after a worker dies from injuries received at the company's oil sands operations at Fort McMurray in Alberta.
    • SU says it is premature to speculate on the cause of the incident, and is working with authorities to complete a full investigation.
    | Comment!
  • 8:25 AM
    • Cbeyond (CBEY) +38.8% premarket after agreeing to be acquired by privately-held Birch Communications for $323M.
    • The combination of Atlanta-based companies will create a communications, cloud and managed services company with a nationwide reach, 200K business customers and ~$700M in annual revenue.
    | Comment!
  • 8:02 AM
    • Nano cap Prosensa Holding N.V. (RNA) is up 28% premarket on light volume apparently riding on Sarepta's coattails.
    • Prosensa has its own product candidate, drisapersin, for Duchenne Muscular Dystrophy. A Phase 3 clinical trial failed, however, to meet its primary endpoint of demonstrating a statistically significant or clinically meaningful treatment difference compared to placebo. The drug also failed to meet the majority of its secondary endpoints.
    • Retail investors should tread carefully here.
    | Comment!
  • 7:42 AM
    • Based on updated guidance from the FDA regarding an early approval pathway for eteplirsen, Sarepta Therapeutics (SRPT) plans to file an NDA by the end of 2014.
    • The agency provided specific examples of additional safety and efficacy data for Duchenne muscular dystrophy that would enhance the acceptability of the NDA. The company will conduct several open label confirmatory studies later this year on patients with exon-51 amenable genotypes.
    • The company plans to conduct three studies: 1) ambulatory patients between the ages 7 and 16 years who can walk a minimum distance, 2) patients younger than 7 years, 3) DMD patients who cannot walk a minimum distance or who are non-ambulant.
    • The firm also plans to start a placebo-controlled study with one or more if its follow-on DMD exon-skipping drug candidates by year end.
    • Shares are up 78% premarket on heavy volume.
    | Comment!
  • Friday, April 18, 2014

  • 6:47 AM
    • Pro-Russian protesters, many of whom are armed, have refused to vacate administrative buildings they have occupied in eastern Ukraine despite an agreement between the government, Russia, the U.S. and EU to "de-escalate" the crisis.
    • Under the deal, the buildings were to be vacated and armed militias disbanded.
    • Despite the continued standoff, Russia's Micex index is +2.2% in response to the agreement. The USD-RUB is +0.1% at $35.568.
    • More on Ukraine
  • 6:23 AM
    • Japan's Nikkei ended up 0.7% and China's Shanghai Composite -0.05%, although with many bourses closed across the world for the Good Friday Holiday, volumes were low.
    • Elsewhere in Asia, South Korea's KOSPI rose 0.6% and the Taiwan Weighted 0.25%.
    | Comment!
  • Thursday, April 17, 2014

  • 5:44 PM
    | 1 Comment
  • 5:38 PM
    • Top gainers, as of 5:15 p.m.: AMD +5.7%. MACK +4.0%. M +3.2%. FRAN +3.2%. PBCT +2.7%.
    • Top losers, as of 5:15 p.m.: TPLM -9.2%. KNL -8.0%. MPO -6.9%. ACTG -6.2%. PVTB -5.8%.
    | 1 Comment
  • 5:26 PM
    • After underperforming yesterday in response to a mixture of in-line and soft outlooks from Intel, ASML, and Linear, chip stocks bounced back strongly following more encouraging numbers from foundry giant TSMC, NAND flash giant SanDisk, and well-diversified Cypress.
    • TSMC, seen as a bellwether for chip demand due to a client list that includes most of the world's top fabless chipmakers (Qualcomm, Broadcom, MediaTek, Xilinx, etc.), beat Q1 estimates, issued strong Q2 guidance, and reported seeing healthy sales from mobile clients, and for its advanced 28nm process node.
    • SanDisk offered strong margin guidance to go with a Q1 beat. Cypress posted a slight Q1 revenue beat, and issued Q2 revenue guidance that beat consensus at the midpoint.
    • Notable gainers: ARMH +3.9%. MRVL +2.2%. CODE +5.1%. RMBS +4.4%. IDTI +3%. ENTR +3.7%. PXLW +6.1%. QUIK +2.4%.
    | 1 Comment
  • 4:39 PM
    • AMD expects Q2 revenue to be flat to up 6% Q/Q; that's better than a consensus for a 3% decline.
    • Due to desktop weakness, Computing Solutions (PC/server CPU) sales fell 8% Q/Q and 12% Y/Y in Q1; they were down 13% Y/Y in Q4, and 15% in Q3.
    • Graphics & Visual Solutions (GPUs, console/embedded designs) sales fell 15% Q/Q and rose 118% Y/Y. Console-related sales fell Q/Q, but GPU sales rose.
    • CPU ASPs were flat Q/Q and down slightly Y/Y. GPU ASPs rose Q/Q and Y/Y due to Radeon R7/R9 demand (some of it from Litecoin miners).
    • Gross margin (a point of concern lately) was 35%, flat Q/Q, down 600 bps Y/Y, and in-line with guidance. GM is expected to remain at 35% in Q2.
    • R&D spend fell 11% Y/Y to $279M, MG&A spend fell 13% to $156M. AMD ended Q1 with $982M in cash, down from $1.19B at the end of Q4 thanks to a GlobalFoundries payment. Debt fell by $43M to $2.06B.
    • Q1 results, PR, CFO commentary (.pdf)
  • 4:20 PM
    • Though pre-IPO demand was muted (leading to conservative pricing) and initial trading wasn't impressive, Weibo (WB +19.1%) and Leju (LEJU +18.6%) closed up strongly. The former is now worth $4.05B (21x sales), and the latter $1.57B (4.7x sales).
    • Sina (SINA +6.7%) managed to follow Weibo higher, but E-House (EJ -5%) couldn't get a similar lift from Leju.
    • Chinese Internet companies with upcoming IPOs - the list includes, (JMEI), and Cheetah Mobile - are likely breathing sighs of relief.
  • 4:03 PM
    • TSMC (TSM +2.8%) has guided for Q2 revenue of NT$180B-NT-$183B ($5.97B-$6.07B), well above a $5.61B consensus. Gross margin is expected to be in a range of 47.5%-49.5%, after coming in at 47.5% in Q1 (+170 bps Y/Y).
    • TSMC states strong mobile chip demand contributed to its Q1 beat, which follows a March guidance hike, and that it's also benefiting from inventory restocking and "better performance and higher yield and reliability" for advanced process nodes.
    • 28nm wafers made up 34% of Q1 revenue, and 40/45nm wafers 21%.
    • UBS' William Dong has upgraded shares to Buy, and thinks strong demand for 4G smartphones (have higher chip content than 3G phones) is giving the foundry a lift. He expects 10%-12% Q/Q Q3 revenue growth as orders for Apple's A8 CPU ramp, and 3%-5% growth in Q4.
    • At the same time, Dong expects TSMC to see a more "balanced pricing environment" in 2015 as smaller foundry rivals such as Samsung try to take share.
    • Q1 results, PR
    | Comment!
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