Today - Monday, March 30, 2015
- Lululemon (LULU +2.1%) trades higher in early action as the stock recovers from a mini-slump last week.
- The company's new line of men's pants are a "smash hit" with consumers, according to CNN Money.
- Other publications are also giving Lululemon some free pants publicity.
- The $128 slacks are made with a high-tech fabric and are being promoted as comfortable in all the right places.
- Dynegy (DYN +5.4%) opens higher after announcing late Friday that it won approval from the FERC to buy power plants in Illinois, Ohio and Pennsylvania from Duke Energy (DUK +0.5%) and Energy Capital Partners for $6.25B.
- The approval clears the way for DYN to complete its acquisition, which was announced last August.
- In buying the units, which sell power in competitive wholesale markets, DYN will nearly double its electricity generation capacity, owning and operating nearly 26K MW of fuel-diverse power generating facilities, primarily in the Midwest and Northeast.
- Online real estate plays SouFun (SFUN +9%), E-House (EJ +4.1%), and Leju (LEJU +8.1%) are shooting higher in early trading after PBOC governor Zhou Xiaochuan stated China has "room to act" to counter deflation. The Shanghai Composite rose 2.6% overnight, and the Nasdaq is currently up 0.9%.
- The PBOC has already carried out a series of monetary easing moves over the last several months, including multiple rate cuts and reserve requirement cuts. SouFun, E-House, and Leju all trade far below their 2014 highs thanks to worries about a weak Chinese property market and the impact of a listing fee price war.
- Andy Rothman, a strategist at fund manager Matthews Asia, argues in the FT today fears of a Chinese real estate crash are overblown, and that prices are likely to rise Y/Y in 2H15 (aided by favorable comps). "There are no sub-prime mortgages and there are very few mortgage-backed securities [in China]. There is no secondary securitization, so no collateralized debt or loan obligations (CDOs and CLOs). China’s residential market is clearly very soft, but I believe a housing crisis is very unlikely."
- DreamWorks Animation (NASDAQ:DWA) is up 8.2% after Home -- its only film release for 2015 -- led the weekend box office and beat its own expectations with $54M, the company's third-largest non-sequel opening.
- Following a series of flops for DWA, the film was expected to draw about $30M-$35M.
- Home is another standout child-focused success in a year filled with adult fare so far. R-rated prison comedy Get Hard (NYSE:TWX) took the No. 2 spot, drawing $34.6M.
- Insurgent (NYSE:LGF) and Cinderella (NYSE:DIS) followed those two, adding to their considerable takes with $22M and $17.5M respectively. New foreign markets joined Cinderella, pushing it to more than $300M globally, and Insurgent has made $180M worldwide.
- Kingsman: The Secret Service is a hit with legs for Twenty-First Century Fox (NASDAQ:FOXA), plugging away at sixth place this week (its seventh) with $3M, and passing $300M globally.
- Previously: DreamWorks up 7.7%, on two-day surge as planning takes shape (Mar. 04 2015)
- ITG sees revenue for Zulilly (ZU +3.9%) tracking above the Wall Street consensus for Q1
- LMM's Bill Miller was also talking up the beat-up name last week on CNBC.
- Q! results from Zulilly are expected to be released in the early part of May.
- Shares of Zulilly are down 43% YTD due in part to some supply chain issues.
- Nano cap Can-Fite Biopharma (CANF -51.1%) plunges on average volume in response to its announcement that its lead product candidate, CF101, failed to achieve its primary efficacy endpoint in a Phase 2/3 study in patients with moderate-to-sever plaque psoriasis. The measure of efficacy was a statistically significant improvement in Psoriasis Area Sensitivity Index (PASI) score compared to placebo.
- The proportion of patients treated with CF101 who achieved PASI 75 (75% improvement in psoriasis from baseline) was 8.5% compared to 6.9% for placebo.
- The company's analysis of the data is ongoing.
- Ziopharm (NASDAQ:ZIOP) jumps 15% premarket on robust volume in response to Intrexon's announcement of a collaboration with Merck Serono. Intrexon will share the economic benefits of the partnership equally will Ziopharm based on their joint license deal with MD Anderson Cancer Center.
- Previously: Intrexon and Ziopharm set for opening gaps (Feb. 10)
- Previously: Intrexon and Merck Serono team up in cancer immunotherapy (March 30)
- Cal-Maine Foods (NASDAQ:CALM) reports egg sales rose 5.24% Y/Y to 283.03M in FQ3.
- Specialty egg volumes increased 22.6% Y/Y.
- Average price +6.14% to $1.50 per dozen.
- Specialty-egg sales accounted for 26.9% of total revenue, up 320 bps from a year ago.
- Gross margin rate +248 bps to 25.71%.
- Operating margin rate grew 468 bps to 16.46%.
- CALM -0.20% premarket.
- After catching a Baird upgrade to Outperform last Thursday, GoPro (NASDAQ:GPRO) has been upgraded to Buy this morning by Dougherty. The firm's target is $55.
- Dougherty calls GoPro "one of the most valuable brands in consumer technology," and argues Xiaomi's Yi camera might prove a positive for the company in terms of stimulating demand. FBN declared Xiaomi-related fears to be overblown last week.
- The action camera leader has risen to $43.65 premarket. Shares go for 32x 2015E EPS and 3.2x 2015E sales; estimates have trekked higher since the IPO.
9:06 AM| 1 Comment
- YOU On Demand (NASDAQ:YOD) is off 15.3% premarket after posting a wider loss per share in 2014, but finishing with revenue strength in Q4 (up 536% Y/Y and up 55% sequentially).
- Gross loss for 2014 of $794K was down from $2.8M in 2013 primarily due to the revenue gains coming from video on demand.
- Net loss from continuing operations was $13M, comparable to the prior year's $13.1M.
- CFO Marc Urbach is resigning effective tomorrow as part of the company's plans to re-center personnel in Beijing, and will work over the coming six months to help the firm seek a China-based CFO. Finance VP Grace He will take over day-to-day duties.
- Cash and equivalents at year's end were about $10.8M, up from $3.8M at 2013's end. The company said on its conference call that cash burn is about $2M/quarter.
- Press release
8:37 AM| Comment!
- Harvest Natural Resources (NYSE:HNR) -5.7% premarket after its Q4 net loss widens to ~$180M and warning that it is facing a severe cash crunch and will consider restructuring if it fails to obtain sufficient funding.
- HNR says it is experiencing severe liquidity constraints brought about by the failure of the Venezuelan government to approve the company's sale of its Venezuelan assets, the failure to pay dividends and other contractual breaches related to its Petrodelta joint venture with Petroleos de Venezuela.
- The Q4 loss was mostly due to the writedown of its investment in the Petrodelta JV; HNR also calls its Dussafu project off Gabon “economically marginal” due to the collapse in oil prices.
- Fortune Brands Home & Security (NYSE:FBHS) announces it acquired Norcraft Companies (NYSE:NCFT) for an enterprise value of $600M.
- Norcraft shareholders will receive $25.50 per share in a tender offer under the terms of the deal.
- The company expects to fold Norcraft into its cabinets business after the merger closes in Q2.
- NCFT +13.54% premarket to $26.00.
- Breitburn Energy Partners (NASDAQ:BBEP) agrees to sell $1B of convertible preferred units and senior secured notes in private offerings to investment funds managed by EIG Global Energy Partners and other purchasers.
- EIG, which specializes in energy-related debt and equity investments, will purchase $350M of convertible preferred equity, which pays monthly dividends that equal 8%/year and give EIG a ~18% voting interest in BBEP; EIG also gets to appoint one director to BBEP’s board.
- The $650M of senior secured notes mature in 2020, will pay a 9.25% annual interest rate and rank senior to BBEP’s existing debt and any future unsecured debt.
- BBEP says it plans to cut its annual common distribution to $0.50/unit in conjunction with the offerings.
- BBEP says the capital infusion provides additional liquidity and allows it to "opportunistically pursue strategic acquisitions” made possible by depressed commodity prices.
- BBEP also says it is revising its borrowing base under its credit facility to $1.8B through April 2016.
- BBEP -2.2% premarket.
7:55 AM| Comment!
- Q4 adjusted FFO of $205.5M or $0.22 per share vs. $70.5M and $0.26 one year earlier. Real estate investment segment AFFO of $193.9M or $0.21 per share vs. $70.5M and $0.26. Cole Capital segment AFFO of $11.5M or $0.01 per share (company didn't own Cole a year ago).
- There's no dividend announcement yet, but company expects it to be inline with net lease peers.
- Conference call at 10 ET.
- Previously: American Realty Capital misses by $0.02, beats on revenue (March 30)
- ARCP +2% premarket.
- BioDelivery Sciences (NASDAQ:BDSI) craters 35% premarket on light volume in response to its announcement that a Phase 3 trial assessing Clonidine Topical Gel for the treatment of diabetic neuropathy failed to achieve its primary efficacy endpoint versus placebo.
- According to EVP of Product Development Dr. Andrew Finn, the 80 patients added to the trial after the interim analysis performed differently than those already enrolled. This accounted for the failure.
- The company plans to use the results to better refine the protocol criteria (patient selection).
- Management will host a conference call this morning at 8:00 am ET to discuss the results.
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