Day: July 18, 2017

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Media Stocks to Watch

Discovery Communications, Scripps in talks to merge, WSJ reports

Discovery Communications (DISCA) is in discussions to merge with Scripps Networks (SNI), the Wall Street Journal reports, citing people familiar with the situation.

Terms of the negotiations could not be learned, the Journal says.

According to S&P Global Market Intelligence, Discovery has a market valuation of roughly $15B, while Scripps is valued at $8.8B, the report says.

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Lightower Sold for $7.1 Billion

Crown Castle to acquire Lightower for $7.1B in cash

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Crown Castle International Corp. (CCI) announced that it has entered into a definitive agreement to acquire LTS Group Holdings, or #Lightower, from #Berkshire Partners, Pamlico Capital and other investors for approximately $7.1B in cash, representing approximately 13.5x expected adjusted EBITDA contribution during Crown Castle’s first full year of ownership.

Lightower owns or has rights to approximately 32,000 route miles of fiber located primarily in top metro markets in the Northeast, including Boston, New York and Philadelphia.

Lightower’s products include network and video transport, alternative access, nationwide long haul services, dark fiber, Ethernet, and cloud computing services. Lightower has built out access to over 22,000 service locations throughout the Northeast, Mid-Atlantic, and Midwest including 275+ data centers and 7,000+ wireless towers

Following completion of the transaction, Crown Castle will own or have rights to approximately 60,000 route miles of fiber.

Crown Castle CEO Jay Brown said, “We expect the transaction to be immediately accretive to our AFFO per share and long-term dividend growth and, as a result, anticipate increasing our annual common stock dividend rate, subject to approval by our board of directors, between 15c and 20c per share following the closing of the transaction.”

Crown Castle International Corp., owns, operates, and leases shared wireless infrastructure in the United States and Australia. Th company is headquartered in Houston Texas.

CCI closed at $96.64.

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Stocks to Watch for Today-Homebuilders Down as Lumber Prices Spike

Homebuilder sentiment falls to eight month low as lumber prices spike

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Shares of U.S. homebuilders are all trading lower after a key metric for the group missed expectations.

HOME BUILDER SENTIMENT

The Housing Market Index ( #HMI ) is based on a monthly survey of #NAHB members designed to take the pulse of the single-family housing market. The survey asks respondents to rate market conditions for the sale of new homes at the present time and in the next six months as well as the traffic of prospective buyers of new homes.

Builder confidence for newly-built single-family homes dropped to its lowest level since before the Trump election. The confidence metric slipped two points in July to 64.

The HMI measure of current sales conditions has been at 70 or higher for eight straight months, indicating strong demand for new homes,” said NAHB Chief Economist Robert Dietz.

“However, builders will need to manage some increasing supply-side costs to keep home prices competitive.” “Home builders are troubled due to the increasing costs of material, in particular lumber,” said NAHB Chairman Granger MacDonald. The situation is impacting housing affordability even as consumer interest purchasing a new home is strong.

CANADIAN LUMBER TARIFFS

In June, commerce secretary Wilbur Ross proposed new lumber tariffs adding to the previous tariffs proposed by the Trump administration on Canadian softwood lumber imported into the U.S. That type of lumber is used to build U.S. homes.

Back in June, NAHB Chair MacDonald said adding the new tariffs “to the proposed 20% countervailing lumber duty that the Trump administration slapped on imports of lumber this spring means that total tariffs would be a whopping 27%.”

Publicly traded companies in the space include Beazer Homes (BZH), D.R. Horton (DHI), Hovnanian (HOV), KB Home (KBH), Lennar (LEN), PulteGroup (PHM), and Toll Brothers (TOL). Shares of construction materials vendors are also lower, including Vulcan (VMC), Martin Marietta Materials (MLM), Eagle Materials (EXP), US Concrete Inc (USCR), and Beacon Roofing Supply (BECN).

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Chipotle Tumbles as Health Woes Continue

Chipotle Mexican Grill shuts Virginia restaurant down after reports of illnesses

Chipotle Mexican Grill spokesman Chris Arnold says the company is aware of a "small number" of illnesses linked to a store in Sterling, Virginia

Chipotle has shut down a location in Sterling, Virginia, after eight reports were made to the website iwaspoisoned.com stating that at least 13 customers fell sick after eating there from July 14-15, according to Business Insider.

The company’s executive director of food safety, Jim Marsden, told Business Insider: “We are working with health authorities to understand what the cause may be and to resolve the situation as quickly as possible.

The reported symptoms are consistent with #norovirus. #Norovirus does not come from our food supply, and it is safe to eat at Chipotle.”

Norovirus is different from E. coli, the bacteria that led to a widespread outbreak at Chipotle restaurants in 14 states two years ago.

Cases of norovirus stemming from restaurants can often involve a worker who failed to wash his or her hands after going to the bathroom.

The virus is highly contagious and causes symptoms like stomachaches, nausea, diarrhea, and vomiting. It’s the most common cause of food-borne illnesses in the US with more than 21 million cases annually.

Chipotle (CMG) has dealt with norovirus cases in the past. In December 2015, nearly 120 Boston College students fell sick after a norovirus outbreak at a restaurant close to campus.

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Stock Upgrades Downgrades for July 18, 2017

Stockwinners’ analysts upgrades, downgrades and initiations for July 18, 2017

Everyday, we will e-mail our readers a list of analysts actions as shown below. Please see below on how to sign up for Stockwinners’ Service.

 

STOCK UPGRADES

CMG Chipotle to Buy from Hold at Maxim
CMG Chipotle to Buy on queso launch at Maxim
IPXL Impax to Neutral from Underweight at Piper Jaffray
MMP Magellan Midstream to Buy from Neutral at UBS
NFLX Netflix to Buy from Neutral at Rosenblatt
OAS Oasis Petroleum to Buy from Hold at Williams Capital
ORLY O’Reilly Automotive to Buy from Neutral at Northcoast
QDEL Quidel to Outperform from Market Perform at William Blair
SC Santander Consumer to Outperform from Market Perform at JMP Securities
SEAS SeaWorld to Neutral from Sell at Goldman Sachs
SEDG SolarEdge to Outperform at Oppenheimer
SEDG SolarEdge to Outperform from Perform at Oppenheimer
SKX Skechers to Positive from Mixed at OTR Global

DOWNGRADES

ADP ADP to Equal Weight from Overweight at Barclays
CCJ Cameco to Underperform at Credit Suisse
COG Cabot Oil & Gas to Hold from Buy at Williams Capital
DDC Dominion Diamond to Market Perform from Outperform at BMO Capital
DDC Dominion Diamond to Hold from Buy at Gabelli
DNN Denison Mines to Underperform from Neutral at Credit Suisse
EXLS ExlService to Neutral from Buy at Citi
FMC FMC Corporation to Neutral from Buy at Seaport Global
FPI Farmland Partners to Market Perform from Outperform at FBR Capital
IPGP IPG Photonics to Hold from Buy at Canaccord
NYLD NRG Yield to Hold from Buy at Deutsche Bank
OAS Oasis Petroleum to Hold from Buy at Deutsche Bank
OAS Oasis Petroleum to Hold at Deutsche Bank
QEP QEP Resources to Hold from Buy at Deutsche Bank
SSL Sasol to Neutral from Overweight at JPMorgan
UAA Under Armour to Negative from Mixed at OTR Global

STOCK INITIATIONS

DC Agree Realty with a Buy at Canaccord
ADRO Aduro Biotech with an Outperform at Cowen
ALBO Albireo Pharma with a Buy at Needham
BFAM Bright Horizons with a Buy at Citi
BHGE Baker Hughes resinstated with a Sell at Goldman Sachs
CVNA Carvana with a Neutral at Wedbush
FANG Diamondback Energy with an Outperform at Imperial Capital
FCPT Four Corners Property Trust with a Hold at Canaccord
GOOD Gladstone with a Hold at Canaccord
GPMT Granite Point Mortgage with an Overweight at JPMorgan
GPMT Granite Point Mortgage with a Market Perform at Keefe Bruyette
GTY Getty Realty with a Buy at Canaccord
INFN Infinera with a Buy at Craig-Hallum
MSCI MSCI with an Equal Weight at Barclays
MTDR Matador with an Outperform at Imperial Capital
O Realty Income with a Buy at Canaccord
OMF OneMain Holdings with a Buy at DA Davidson
REN Resolute Energy with an Outperform at Imperial Capital
RM Regional Management with a Neutral at DA Davidson
TAL TAL Education with a Neutral at Citi
TWOU 2U with a Buy at Citi
WPX WPX Energy with an Outperform at Imperial Capital

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Watch Nektar Therapeutics on its Opioid Painkiller

Nektar says NKTR-181 shows ‘significantly less abuse potential’ than oxycodone

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Nektar Therapeutics (NKTR) announced topline results from an oral Human Abuse Potential study of #NKTR-181, an opioid analgesic that is the first full mu-opioid agonist molecule designed to provide potent pain relief without the high levels of euphoria that can lead to abuse and addiction with standard opioids.

The NKTR-181 HAP study was designed to confirm and assess the relative oral abuse potential of NKTR-181 at its maximum analgesic or therapeutic dose of 400 mg and at a supratherapeutic dose of 3 times to 12 times greater than its analgesic dose range of 100 mg to 400 mg compared to common therapeutic doses of a Schedule II opioid, oxycodone.

In the study, NKTR-181 400 mg had a significantly lower rating of peak liking compared to oxycodone 40 mg; NKTR-181 400 mg had a significantly lower rating of peak liking compared to oxycodone 60 mg; NKTR-181 600 mg had a significantly lower rating of peak liking compared to oxycodone 40 mg; NKTR-181 600 mg had a significantly lower rating of peak liking compared to oxycodone 60 mg; and NKTR-181 1200 mg had a significantly lower rating of peak drug liking compared to oxycodone 60 mg.

This dose was not statistically different from #oxycodone 40 mg, the company said.

Ivan #Gergel, Chief Medical Officer of Nektar, said, “It is clear from our new study results that NKTR-181 is highly differentiated in this respect from oxycodone, which is a choice drug of abuse.

Further, and critically important in the context of this public health emergency, NKTR-181’s less rewarding properties and strong analgesia are inherent to its novel molecular structure and independent of any abuse-deterrent formulation…We are committed to bringing this new pain treatment to patients and physicians as quickly as possible.”

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