Buffett Could Buy American Express

American Express is the type of company that interests Buffett. 

At a take out price of $100 per share, AXP will have a market cap just shy of $90 billion mark.

Warren Buffett’s #Berkshire Hathaway #BRK.A announced that it has applied with the Federal Reserve Board for permission to retain voting shares of American Express $AXP reflecting ownership of up to 24.99% of the amount outstanding. Before this filing, Berkshire was the major shareholder at 16.77% followed by Vanguard’s 5.4% stake.

Buffett has amassed over $90 billion in cash and market chatter has been that a mega deal could be announced shortly by the Oracle of Omaha. Among names mentioned have been Costco $COST and Nike $NKE.

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Even at 86, #Buffett is eager to show that he’s far from done building his empire — and that he can top his largest takeover, the $34 billion purchase of railroad Burlington Northern Santa Fe in 2010. Some have argued that he wants to do a $100 billion deal before he departs.

Neither Nike nor Costco have indicated that they would be open to a deal. Another thing can be pretty much counted out: a hostile bid. Buffett has said he doesn’t chase deals. He recently pulled an offer with Kraft Heinz Co. for Unilever $UL — which has a market capitalization of roughly $150 billion — because UL, the consumer products giant deemed it unfriendly. But with AXP there would not be buffettsuch a potential opposition. Buffett has said that he wouldn’t want to own a bank because of the regulation that would come along with it.

American Express is the type of company that interests Buffett. He understands the business and he is an insider. If he has raised his stake to 25%, why not go ahead and buy the rest of the shares. AXP earnings per share have grown from $3.91 per share in 2012 to $5.56 per share in 2016. The growth in EPS has come while the long term debt has been reduced from $59 million to $47 million in the respective period. At a take out price of $100 per share, AXP will have a market cap just shy of $90 billion mark.

American Express shares last traded at $76.92.

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The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Canada Health approves Intercept’s Ocaliva

Ocaliva represents the first new treatment option in over 20 years for PBC

PBC is a chronic liver disease that causes the small bile ducts in the liver to become inflamed

 

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Intercept Pharmaceuticals $ICPT announced that Health Canada has granted a conditional approval for #Ocaliva for the treatment of primary biliary cholangitis, or PBC, when used in combination with ursodeoxycholic acid, or #UDCA, in adults with an inadequate response to UDCA or as monotherapy in adults unable to tolerate UDCA.

In May 2016, the U.S. Food and Drug Administration (FDA) granted accelerated approval for Ocaliva for the treatment of primary biliary cholangitis (PBC) in combination with ursodeoxycholic acid (UDCA).

Intercept is actively pursuing reimbursement of Ocaliva with private insurance carriers and public drug plans across Canada. The firm is pursuing the same across Europe and U.S.

PBC is a chronic, or long lasting, disease that causes the small bile ducts in the liver to become inflamed, damaged and ultimately destroyed. This causes bile to remain in the liver, which damages the liver cells over time, and results in cirrhosis, or scarring of the liver. As #cirrhosis progresses, and the amount of scar tissue in the #liver increases, the liver loses its ability to function.

#Obeticholic acid (abbreviated to OCA, trade name Ocaliva), is a semi-synthetic bile acid analogue. It is used as a drug to treat primary biliary cholangitis, and is undergoing development for several other liver diseases and related disorders. Intercept Pharmaceuticals Inc. holds the worldwide rights to develop OCA outside Japan and China, where it is licensed to Dainippon Sumitomo Pharma.

Ocaliva, given orally, binds to the farnesoid X receptor (FXR), a receptor found in the nucleus of cells in the liver and intestine. #FXR is a key regulator of bile acid metabolic pathways. Ocaliva increases bile flow from the liver and suppresses bile acid production in the liver, thus reducing the exposure of the liver to toxic levels of bile acids.

STICKER SHOCK:  It has been a year since FDA approved Ocaliva but its use has been slow. The drug’s price tag–almost $70,000 a year- has many insurance companies reluctant to approve its use and physicians from prescribing the drug. A group of researchers believe that cost of the drug needs to be around $20,000 per year in order for its use to become popular with patients, physicians and insurance companies. It is doubtful that Intercept is willing to lower its price given the cost involved with developing a new drug. We expect ICPT will be taken over by a larger pharmaceutical company such as NVS, BIIB or AMGN.

COST JUSTIFICATION

“When establishing the price for Ocaliva, we considered several factors, including the benefit that Ocaliva offers to people living with PBC, which of course is an orphan disease for which there have been no new treatments in nearly 20 years,” said the company’s chief commercial and corporate affairs officer, Lisa Bright recently. “We consider the consequences of an inadequate treatment in a progressive liver disease, including . . . liver transplants and death and the savings associated with slowing disease progression.”

STOCK PRICE: ICPT closed at $115.26. Shares have a 52-week trading range of $96.63 – $177.93. Others to watch in the sector: ARWR, ASMB, FGEN.

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Web.com is For Sale

Web.com has held early stage talks with private equity groups

The takeover interest in the company comes as its sector has become crowded

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Web.com is for sale

#Web.com (WEB) is in discussions with private equity firms after drawing takeover approaches, Reuters reports, citing people familiar with the matter.

The takeover interest in the company comes as its sector has become crowded, with competitors such as Wix.com (WIX), Weebly, GoDaddy (GDDY), and Squarespace trying to gain market share, the report notes.

Web.com $WEB has held early stage talks with private equity groups in response to approaches over a possible leveraged buyout, the report says. The company is not actively soliciting bids, the report notes.

Web.com generated $710.5 million in revenue in 2016, compared to $543.5 million the year before. It reported adjusted earnings before interest, tax, depreciation and amortization in 2016 of $179.5 million, up from $155.8 million the year before.

Web.com has been trying to expand into new areas, buying local marketing services firm Yodle last year for more than $300 million.

Web.com’s top shareholder is New York-based hedge fund Okumus Fund Management, which owned 18.64 percent of the company as of March 31. In 2015, the company reached an agreement with Okumus to add two independent directors to its board.

The market for web services to small and medium size businesses remains fiercely competitive, as low barriers to entry and downward pressure on prices have weighed on the profitability of many companies in this space.

GoDaddy, Web.com competitor, has been pursuing acquisitions following its initial public offering in 2015. Private equity firms KKR & Co LP and Silver Lake Partners LP had acquired GoDaddy in 2011 for $2.25 billion before taking it public.

Last year, GoDaddy spent $1.82 billion on buying Host Europe, a company that provides similar web services, in a bid to expand its international expansion.

PRICE ACTION: WEB closed at $21.20. The stock has a 52-week trading range of $12.90 – $22.50.

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AstraZeneca to present Cancer Drugs at ASCO Meeting

American Society of Clinical Oncology Annual Meeting is in Chicago from June 2 to June 6

AstraZeneca to present data on its drug candidates for Ovarian Cancer, Bladder Cancer, Neck and Shoulder Cancer and Lung Cancer

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#AstraZeneca $AZN , along with its global biologics research and development arm, #MedImmune, will demonstrate its progress on the company’s cancer medicine development at the 2017 American Society of Clinical Oncology Annual Meeting in Chicago, IL, June 2 to June 6.

“With three new oncology medicines addressing the unmet needs of patients with ovarian, lung, and bladder cancers approved in under three years, AstraZeneca is now halfway to delivering on its promise to launch six new medicines for cancer by 2020,” the company says.

“This progress is reflected in the 100 company-sponsored and supported abstracts, including five Best-of-ASCO presentations, 11 oral presentations and eight poster discussions, accepted for the meeting.”

These include new data on approved and potential new medicines from the company’s pipeline across multiple scientific platforms and tumor types.

‘Late-breaker’ data from the #OlympiAD trial of olaparib versus chemotherapy in HER2-negative germline #BRCA1 or BRCA2 mutated breast cancer patients are the first positive Phase III results for a poly ADP-ribose polymerase inhibitor beyond #ovarian cancer.

Additional #olaparib data will include: SOLO-2: Oral presentation of Phase III data on the relationship between health-related quality of life and patient-centered and clinical outcomes with olaparib maintenance following chemotherapy in patients with BRCA-mutated platinum-sensitive relapsed serous ovarian cancer and Study 19: Randomized Phase II overall survival and updated progression-free survival data for the combination of olaparib and cediranib versus olaparib alone in recurrent platinum-sensitive ovarian cancer.

AstraZeneca’s unique DDR pipeline will also be illustrated through an oral presentation of Phase I data on the WEE1 inhibitor, AZD1775, in combination with radiation therapy and temozolomide in patients with newly diagnosed glioblastoma multiforme and evaluation of intratumoral drug distribution in patients with recurrent GBM.

Additional information will also be presented from a Phase I trial of AZD1775 in combination with neoadjuvant weekly cisplatin and docetaxel in borderline-resectable head and neck squamous cell #carcinoma.

Latest #osimertinib investigational data from the AURA3 trial to be released during an oral presentation will provide further evidence of the response to treatment in patients with epidermal growth factor receptor T790M mutation-positive non-small cell lung cancer and central nervous system metastases. Further insights into the ability of osimertinib to cross the blood-brain barrier will be provided through updated results from the #BLOOM trial of osimertinib in patients with EGFR mutation-positive NSCLC and leptomeningeal disease.

AstraZeneca will be presenting updated data from the NSCLC and bladder cancer cohorts of the Phase I/II Study 1108 of #durvalumab in patients with advanced solid tumors. New data in locally advanced or metastatic urothelial carcinoma reinforce the May 2017 US FDA approval of #Imfinzi for the treatment of patients with locally advanced or mUC who have disease progression during or following platinum-containing chemotherapy, or whose disease has progressed within 12 months of receiving platinum-containing chemotherapy before or after surgery.

Updated durvalumab monotherapy Study 1108 results in Stage IIIB/IV NSCLC will also be presented.

These data underline AstraZeneca’s forward momentum in lung cancer following the positive top-line results of the Phase III PACIFIC trial of #durvalumab as sequential treatment in patients with locally advanced, unresectable NSCLC.

In an oral presentation, MedImmune will present data on a novel relationship in NSCLC between EGFR pathway activation and the immunosuppressive molecule CD73.

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The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Rig Counts Continue to Rise

U.S. Rig Counts rise to 908 from last year’s 404 rigs

Canadian Rig Counts rise to 93 from last year’s 43

 

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Rig Counts Rise

#Baker Hughes $BHI reports that the U.S. rig count is up 7 rigs from last week to 908, with oil rigs up 2 to 722, gas rigs up 5 to 185, and miscellaneous rigs unchanged at 1.

The U.S. Rig Count is up 504 rigs from last year’s count of 404, with oil rigs up 406, gas rigs up 98, and miscellaneous rigs unchanged.

The U.S. Offshore Rig Count is unchanged from last week at 23 and down 1 rig year over year.

The Canadian Rig Count is up 8 rigs from last week to 93, with oil rigs up 4 to 40 and gas rigs up 4 to 53.

The Canadian Rig Count is up 50 rigs from last year’s count of 43, with oil rigs up 26, gas rigs up 25, and miscellaneous rigs down 1 to 0.

In an attempt to shore up oil prices, yesterday, the Organization of Petroleum Exporting Countries, #OPEC, ministers meeting in Vienna produced an agreement to maintain production reduction of 1.8 million barrels per day for another nine months. On the news, the commodity sold off more than 5% on Thursday. Prices have rebounded some today and #WTI crude oil last traded at $49.82 per barrel. Brent crude last traded at $52.20 per barrel.

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Tegna may be a takeover target

Consolidation in Media Companies is underway

Tegna recently spun off Cars.com, CareerBuilder might be next

 

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Tegna (TGNA) may be a takeover target of Nexstar (NXST), Dealreporter says.

#Tegna, formerly known as Gannett, engages in media and digital businesses in the United States.

The company operates in two segments, Media and Digital. It operates 46 television stations that produce local programming, such as news, sports, and entertainment. The company also operates Cars.com, an online destination for automotive consumers that offers information about car shopping, selling, and servicing; CareerBuilder, which provides human capital solutions. The company has a market capitalization of $5.1 billion.

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#Nexstar Media Group $NXST operates as a television broadcasting and digital media company in the United States. It focuses on the acquisition, development, and operation of television stations and interactive community Websites in medium-sized markets. The company offers free over-the-air programming to television viewing audiences. It also provides sales, programming, and other services through various local service agreements to 30 power television stations owned and/or operated by independent third parties. The company has a market capitalization of $2.7 billion.

Media companies in recent months have been looking for mergers to improve their earnings and competition from various internet based media compete for advertisers dollars. YouTube (GOOG) has recently offered a service similar to cable companies for $35 per month. YouTube will take a cut from advertising dollars that are sold on its network.

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The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.