No more rate hikes in 2019

Majority of Fed members see rates unchanged for rest of 2019

Members see rates to remain unchanged in 2019, Stockwinners

Minutes from the last Federal Reserve meeting read, “With regard to the outlook for monetary policy beyond this meeting, a majority of participants expected that the evolution of the economic outlook and risks to the outlook would likely warrant leaving the target range unchanged for the remainder of the year.

Several of these participants noted that the current target range for the federal funds rate was close to their estimates of its longer-run neutral level and foresaw economic growth continuing near its longer-run trend rate over the forecast period.

Participants continued to emphasize that their decisions about the appropriate target range for the federal funds rate at coming meetings would depend on their ongoing assessments of the economic outlook, as informed by a wide range of data, as well as on how the risks to the outlook evolved.

Short term rates should decline as 30-year rates rise, Stockwinners

Several participants noted that their views of the appropriate target range for the federal funds rate could shift in either direction based on incoming data and other developments.

Some participants indicated that if the economy evolved as they currently expected, with economic growth above its longer-run trend rate, they would likely judge it appropriate to raise the target range for the federal funds rate modestly later this year.”

Economic growth in 2019 likely lower than previous forecast

“Participants continued to view a sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective as the most likely outcomes over the next few years.

Underlying economic fundamentals continued to support sustained expansion, and most participants indicated that they did not expect the recent weakness in spending to persist beyond the first quarter.

Nevertheless, participants generally expected the growth rate of real GDP this year to step down from the pace seen over 2018 to a rate at or modestly above their estimates of longer-run growth. Participants cited various factors as likely to contribute to the step-down, including slower foreign growth and waning effects of fiscal stimulus.

A number of participants judged that economic growth in the remaining quarters of 2019 and in the subsequent couple of years would likely be a little lower, on balance, than they had previously forecast. Reasons cited for these downward revisions included disappointing news on global growth and less of a boost from fiscal policy than had previously been anticipated.”


STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This 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.

5G Service coming to Chicago and Minneapolis

Verizon discloses pricing for first 5G mobile service

Verizon brings 5G service to Chicago and Minneapolis, Stockwinners

Verizon (VZ) earlier said it will launch its 5G Ultra Wideband Network in Chicago and Minneapolis on April 11.

To coincide with this launch, Verizon is offering the new 5G moto mod, which is exclusive to Verizon. Beginning March 14, customers anywhere in the U.S. can pre-order the 5G moto mod.

Verizon said: “Select areas of Chicago and Minneapolis will be the first to experience Verizon’s 5G Ultra Wideband mobile service, and the company has plans to rapidly expand the coverage area.

Last month, Verizon announced that it intends to launch its 5G Ultra Wideband network in more than 30 U.S. cities in 2019.”

It added, “For a limited time, preorder the 5G moto mod for just $50 ($349.99 retail).

5G Antennas are the size of a large pizza, Stockwinners

Verizon postpaid customers with any Verizon unlimited plan, including Go Unlimited, Beyond Unlimited or Above Unlimited, get unlimited 5G data for $10 per month (with the first three months free).

To buy a 5G moto mod, customers must either have an active moto z3 on their account or purchase a moto z3 at the same time as the 5G moto mod.”

What is 5G?

Like the earlier generation 2G, 3G, and 4G mobile networks, 5G networks are digital cellular networks, in which the service area covered by providers is divided into a mosaic of small geographical areas called cells.

 Analog signals representing sounds and images are digitized in the phone, converted by an analog to digital converted transmitted as a stream of bits.

All the 5G wireless devices in a cell communicate by radio waves with a local antenna array and low power automated transceiver(transmitter and receiver) in the cell, over frequency channels assigned by the transceiver from a common pool of frequencies, which are reused in geographically separated cells.

The local antennas are connected with the telephone network and the Internet by a high bandwidth optical fiber or wireless backhaul connection. Like existing cellphones, when a user crosses from one cell to another, their mobile device is automatically “handed off” seamlessly to the antenna in the new cell.

Their major advantage is that 5G networks achieve much higher data rates than previous cellular networks, up to 10 Gbit/s; which is faster than current cable internet, and 100 times faster than the previous cellular technology, 4G LTE.

 Another advantage is lower network latency (faster response time), below 1 ms (millisecond), compared with 30 – 70 ms for 4G.[ Because of the higher data rates, 5G networks will serve not just cellphones but are also envisioned as a general home and office networking provider, competing with wired internet providers like cable. Previous cellular networks provided low data rate internet access suitable for cellphones, but a cell tower could not economically provide enough bandwidth to serve as a general internet provider for home computers.

5G networks achieve these higher data rates by using higher frequency radio waves, in or near the millimeter wave band from 30 to 300 GHz, whereas previous cellular networks used frequencies in the microwave band between 700 MHz and 3 GHz.

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This 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.

Economy expanded at a moderate rate

Fed’s Beige Book says “economic activity continued to expand”



Fed’s Beige Book says economic activity continued to expand , Stockwinners


Fed’s Beige Book: “economic activity continued to expand in late January and February,” said the report.

But 10 Districts noted “slight-to-moderate” growth, with Philly and St Louis reporting flat conditions. That’s the most tepid characterization in sometime, as the more normal description has been “moderate” to “modest.”

About half of the Districts said the shutdown weighed on some sectors, including consumer spending was mixed, but in part due to “harsh winter weather and higher costs of credit.”

Manufacturing generally strengthened but “numerous” contacts worries about weaker global growth, higher costs due to tariffs, and continued trade policy uncertainty.

The service sector increased at a modest-to-moderate pace. Also, residential construction activity was steady or slightly higher in most of the U.S., but home sales were generally lower.

There was little change in the employment outlook, with employment increasing in most Districts, with “modest-to-moderate gains in a majority of Districts and steady to slightly higher employment in the rest.

Labor markets remained tight for all skill levels.

Wages continued to increase for both low- and high-skilled positions, and a majority of Districts reported increases were moderate.

And for prices, they continued to increase at a modest-to-moderate pace, “with several Districts noting faster growth for input prices than selling prices. The ability to pass on higher input costs to consumers varied by region and industry.”

The report (prepared by KC Fed with data collected on or before February 25) is consistent with the FOMC’s outlook for slower growth with tame inflation.

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This 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.


Kforce Government Solutions sold for $115 million

ManTech to acquire Kforce Government Solutions for $115M

KForce sold for $115 million, Stockwinners

ManTech (MANT) announced that it has signed a definitive agreement to acquire Kforce Government Solutions, or KGS, formerly a wholly-owned subsidiary of Kforce (KFRC) for $115M in cash.

Headquartered in Fairfax, Virginia, KGS provides technology solutions, transformation management, data management and analytics in support of federal health and defense missions.

KGS has built a legacy of success with its customers particularly within the Department of Veterans Affairs, or VA.

The acquisition adds over 500 employees to the ManTech team. In 2018, KGS generated approximately $98M of revenue and has profitability comparable to ManTech.

The combination will substantially increase ManTech’s footprint at the VA and enable ManTech to deliver services through the VA’s Transformation Twenty-One Total Technology Next Generation, or T4NG, program.

The T4NG program is a 10-year indefinite delivery, indefinite quantity contract awarded by the VA Technology Acquisition Center to help the VA transform its information technology programs.

ManTech will fund the acquisition from cash on hand with additional funding from its existing line of credit. ManTech expects the acquisition to be slightly accretive to earnings per share in 2019.

The acquisition is subject to various closing conditions and approvals, including approval under the Hart-Scott-Rodino Act, and is expected to be completed in March.

David L. Dunkel, Chairman and Chief Executive Officer commented, “Our federal government solutions business has been a meaningful part of our business since our initial government acquisition in 2006. I am immensely proud of the success that our KGS management team has had in growing and positioning this business for continued future success despite the competitive challenges it has faced, given its scale.

We are excited for our KGS management team and associates to join forces with ManTech, which we expect will enhance KGS’s competitive positioning and leverage its deep and long-standing customer relationships to drive further growth. We firmly believe in the strong secular drivers within the commercial technology space and, with this divestiture, virtually all of our revenues are derived from domestic professional and technical staffing services and solutions.”


STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This 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.

Fiat Chrysler to invest $4.5B in Michigan

Fiat Chrysler to invest $4.5B in five existing Michigan plants

FCA (FCAU) would invest $1.6 billion to convert the two plants that comprise the Mack Avenue Engine Complex into the future assembly site for the next-generation Jeep Grand Cherokee, as well as an all-new three-row full-size Jeep SUV and plug-in hybrid (PHEV) models, adding 3,850 new jobs to support production.

The Company intends to start construction of the new Detroit facility by the end of Q2 2019 with the first three-row vehicles expected to roll off the line by the end of 2020, followed by the all-new Grand Cherokee in the first half of 2021.

Also as part of this announcement, the Jefferson North Assembly Plant would receive an investment of $900 million to retool and modernize the facility to build the Dodge Durango and next-generation Jeep Grand Cherokee.

FCA expects to create 1,100 new jobs at Jefferson North. The reborn Mack facility would be the first new assembly plant to be built in the city of Detroit in nearly three decades.

In 1991, Jefferson North was the last new assembly plant built in the city.

When complete, Mack would join Jefferson North as the only automotive assembly plants to be located completely within the city limits of Detroit. The Pentastar engines – the 3.6-, 3.2- and 3.0-liter – currently built at Mack would be relocated to the Dundee Engine Plant as part of a $119 million investment. Pentastar production at Mack I would end by Q3 2019.

Mack II has been idle since it ceased production of the 3.7-liter V-6 in September 2012.FCA also confirms the investment at Warren Truck to retool for production of the all-new Jeep Wagoneer and Grand Wagoneer, announced in 2017, along with their electrified counterparts, would increase to $1.5 billion.

The Pentastar Engines currently built at Mack would be relocated to the Dundee Engine Plant, Stockwinners

Production is expected to launch in early 2021. In addition to the new Jeep models, the plant would continue building the Ram 1500 Classic, which is being extended to meet market demand. It is expected that 1,400 new jobs would be added.

As a result of this investment announcement, production of the all-new Ram Heavy Duty will continue at its current location in Saltillo, Mexico.

To support the additional production, the Company’s Warren Stamping (Warren, Michigan) and Sterling Stamping (Sterling Heights, Michigan) plants would receive investments of $245 million and $160 million, respectively, with Sterling Stamping expected to add more than 80 new jobs.


STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This 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.

Spark Therapeutics sold for $4.8 billion

Roche acquires Spark Therapeutics for $114.50 per share, a 122% premium

Spark tumbles on hemophilia study , Stockwinners

Roche acquires Spark Therapeutics for $114.50 per share , Stockwinners

Spark Therapeutics (ONCE) announced that it has entered into a definitive merger agreement for Roche (RHHBY) to fully acquire Spark Therapeutics at a price of $114.50 per share in an all-cash transaction.

This corresponds to a total equity value of approximately $4.8B on a fully diluted basis, inclusive of approximately $500M of projected net cash expected at close.

The per share price represents a premium of 122% to Spark’s closing price on Feb. 22, 2019. The merger agreement has been unanimously approved by the boards of both Spark and Roche.

Under the terms of the merger agreement, Roche will commence a tender offer to acquire all outstanding shares of Spark’s common stock, and Spark will file a recommendation statement containing the unanimous recommendation of the Spark board that Spark shareholders tender their shares to Roche.

Spark Therapeutics will continue its operations in Philadelphia as an independent company within the Roche Group.

The closing of the transaction is expected to take place in Q2 of 2019.

Bernstein analyst Vincent #Chen notes that he has long seen Spark Therapeutics (ONCE) as a takeout candidate in gene therapy after the Wall Street Journal reported Roche (RHHBY) is near acquiring the company for close to $5B.

The analyst thinks the deal makes sense as adding hemophilia gene therapy to Hemlibra sets up Roche as a leader in next-gen non-factor hemophilia drugs, CNS gene therapy pipeline is a good fit for Roche’s growing neuroscience franchise, and as it serves as a cornerstone in establishing Roche as a gene therapy leader, to rival the likes of Novartis (NVS).


Credit Suisse analyst Martin Auster notes that the Wall Street Journal recently reported that Roche (RHHBY) is nearing a deal with Spark Therapeutics (ONCE) for $5B.

The analyst believes the transaction value implies the re-emergence of Spark’s hemophilia A gene therapy program with a competitive profile and substantial value assigned to additional pipeline programs, such as SPK-3006 for Pompe, and the technology platform.

Spark’s acquisition would further strengthen the company’s position in the hemophilia space, he contends. Further, Auster argues that the deal may increase M&A interest among other gene therapy names in his coverage universe, which include BioMarin (BMRN), Sarepta (SRPT), Ultragenyx (RARE), PTC (PTC) and Solid Biosciences (SLDB). He sees particularly strong read-through to Sarepta.


STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This 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.


Multi-Color sold for $2.5 billion

Multi-Color to be acquired by Platinum Equity affiliate for $50 per share in cash

Multi-Color to be acquired by Platinum Equity affiliate for $50 per share in cash, Stockwinners
Multi-Color to be acquired by Platinum Equity affiliate for $50 per share in cash, Stockwinners

Multi-Color Corporation (LABL) announced that it has entered into a definitive merger agreement to be acquired by an affiliate of Platinum Equity LLC.

Under the terms of the agreement, which has been unanimously approved by Multi-Color Corporation’s Board of Directors, Multi-Color Corporation shareholders will receive $50.00 in cash for each share of common stock they own, in a transaction valued at $2.5B including the assumption of $1.5B of debt.

The cash purchase price represents a premium of approximately 32 percent over Multi-Color Corporation’s 30-day volume weighted average share price prior to January 22, 2019, the last trading day prior to media speculation regarding a potential transaction involving Multi-Color Corporation.

The transaction will be financed through a combination of committed equity financing provided by Platinum Capital Partners IV, L.P., as well as debt financing that has been committed to by Bank of America Merrill Lynch, Deutsche Bank AG New York Branch, Deutsche Bank AG Cayman Islands Branch and Deutsche Bank Securities Inc.

The transaction is expected to be completed by Q3 FY 2019 and is subject to Multi-Color Corporation shareholder approval, regulatory clearances and other customary closing conditions.

Upon the completion of the transaction, Multi-Color Corporation will become a privately held company and shares of Multi-Color Corporation common stock will no longer be listed on any public market.

Constantia Flexibles Holding GmbH and affiliates of Diamond Castle Partners, who together currently own 5,889,093 shares of Multi-Color Corporation common stock, representing approximately 28.7 percent of Multi-Color Corporation’s outstanding shares, have each separately entered into a voting and support agreement to vote its shares in favor of the transaction as provided in each agreement.

The Multi-Color Corporation Board has unanimously recommended that all of Multi-Color Corporation’s shareholders vote to approve and adopt the merger agreement at an upcoming special meeting of Multi-Color Corporation’s shareholders.

LABL closed at $48.55.


STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This 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.

Bristol-Myers comments on Celgene’s purchase

Bristol-Myers sees ‘meaningful financial benefits’ from Celgene transaction.

Bristol-Myers treatment for colorectal cancer approved, Stockwinners

Bristol Meyers Comments on Celgene purchase, Stockwinners

Bristol-Myers Squibb (BMY) said an updated its investor presentation about the Celgene (CELG) transaction.

The company said, “The Celgene transaction is the natural next step in Bristol-Myers Squibb’s proven strategy that has consistently delivered results for over a decade.

Through a disciplined approach to driving innovation, focusing on high-value opportunities and sourcing innovation externally to complement its internal portfolio and pipeline, Bristol-Myers Squibb has generated consistently strong growth and increased its dividend for 10 consecutive years.

The combination with Celgene will create a leading biopharma with increased scale, while maintaining the same agility and a focus on delivering for patients in core disease areas of high-unmet medical need.

The pipeline of the combined company provides significant near-, medium- and long-term opportunities for value creation. Bristol-Myers Squibb is acquiring Celgene’s robust and complementary pipeline at an attractive price.

In addition to six expected near-term product launches representing more than $15B in revenue potential, the combination will greatly increase Bristol-Myers Squibb’s Phase I and II assets, which will provide the next set of registrational opportunities in core therapeutic areas.

With an expanded set of scientific platforms and research capabilities, Bristol-Myers Squibb will be well positioned to discover and develop highly innovative medicines and accelerate these new options to patients through one of the highest-performing commercial organizations in the industry.

Bristol-Myers Squibb is well positioned for 2025 and beyond with continued leadership across Oncology and a diversified portfolio of assets.

The combined company will have a broad, balanced and earlier life-cycle marketed portfolio with a significantly higher number of opportunities across multiple diseases to drive the growth of Bristol-Myers Squibb in the second half of the decade. These opportunities will support financial strength for continued investment and innovation.

The Celgene transaction is expected to generate meaningful financial benefits for all stockholders.

With more than $45B of expected free cash flow generation over the first three full years post-closing, the combination will enable rapid debt reduction to de-lever the balance sheet and strengthen Bristol-Myers Squibb’s credit profile.

Bristol-Myers Squibb expects to realize run-rate cost synergies of approximately $2.5B by 2022 from the combination, and the combined company is expected to grow revenue and EPS every year through 2025.”

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This 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.

Levi’s coming to NYSE

Levi Strauss & Co. said in a regulatory filing that it intends to seek listing on the New York Stock Exchange under the symbol “LEVI” via an initial public offering.

Levis coming to NYSE – Stockwinners.com

“Today we design, market and sell products that include jeans, casual and dress pants, tops, shorts, skirts, jackets, footwear and related accessories for men, women and children around the world under our Levi’s, Dockers, Signature by Levi Strauss & Co. and Denizen brands.

With $5.6 billion in net revenues and sales in more than 110 countries in fiscal year 2018, we are one of the world’s leading apparel companies, with the Levi’s brand having the highest brand awareness in the denim bottoms category globally,” the company disclosed.

The underwriters on the deal include Goldman Sachs, J.P. Morgan, Morgan Stanley, Evercore, BNP Paribas, Citigroup, Guggenheim, HSBC, Drexel Hamilton, Telsey Advisory and The Williams Capital Group.


Levi Strauss was founded in May 1853  when German immigrant Levi Strauss came from Bavaria, to San Francisco, California to open a west coast branch of his brothers’ New York dry goods business. 

Levi Strauss & Co. introduces its first bicycle pants in 1895. It took another 116 years for the company to come out with Levi’s® Commuter, a multi-functional performance product designed for the modern cyclist. When Levi Strauss passes away in September, his four nephews take over the business and carry out his numerous bequests to Bay Area charities serving children and the poor. On April 18, The San Francisco earthquake and fire destroy the headquarters and two factories of Levi Strauss & Co.

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This 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.

Tribune Media sold for $6.4 billion

Nexstar to acquire Tribune Media for $46.50 per share

Nexstar agrees to acquire Tribune Media, Stockwinners
Nexstar agrees to acquire Tribune Media, Stockwinners

Nexstar Media Group (NXST) and Tribune Media (TRCO) announced that they have entered into a definitive merger agreement whereby Nexstar will acquire all outstanding shares of Tribune Media for $46.50 per share in a cash transaction that is valued at $6.4B including the assumption of Tribune Media’s outstanding debt.
The transaction reflects a 15.5% premium for Tribune Media shareholders based on its closing price on November 30, 2018, and a 45% premium to Tribune Media’s closing price on July 16, 2018, the day the FCC Chairman issued a public statement regarding his intention to circulate a Hearing Designation Order for Tribune Media’s previously announced transaction with a third party.
Tribune Media shareholders will be entitled to additional cash consideration of approximately 30c per month if the transaction has not closed by August 31, 2019, pro-rated for partial months and less an adjustment for any dividends declared on or after September 1, 2019.
The transaction has been approved by the boards of directors of both companies and is expected to close late in the third quarter of 2019, subject to receipt of required regulatory approvals and satisfaction of other customary closing conditions.
Upon closing, the transaction is expected to be immediately accretive to Nexstar’s operating results inclusive of expected operating synergies of approximately $160M in the first year following the completion of the transaction and planned divestitures.
The proposed transaction will combine two leading local media companies with complementary national coverage and will reach approximately 39% of U.S. television households pro-forma for anticipated divestitures and reflecting the FCC’s UHF discount.
The transaction is not subject to any financing condition and Nexstar has received committed financing for the transaction from BofA Merrill Lynch, Credit Suisse and Deutsche Bank. Completion of the transaction is subject to approval by Tribune’s shareholders, as well as customary closing conditions, including approval by the FCC, and satisfaction of antitrust conditions.

Nexstar intends to divest certain television stations necessary to comply with regulatory ownership limits and may also divest other assets which it deems to be non-core. All after-tax proceeds from such asset sales are expected to be applied to leverage reduction.


STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This 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.

 

 


Athenahealth sold for $5.7 billion

Athenahealth to be acquired by Veritas Capital for $135 per share in cash

Athenahealth sold for $5.7 billion, Stockwinners
Athenahealth sold for $5.7 billion, Stockwinners

Athenahealth (ATHN), Veritas Capital and Evergreen Coast Capital, announced that they have entered into a definitive agreement under which an affiliate of Veritas and Evergreen will acquire athenahealth for approximately $5.7B in cash.

Under the terms of the agreement, athenahealth shareholders will receive $135 in cash per share.

The per share purchase price represents a premium of approximately 12% over the company’s closing stock price on November 9, 2018, the last trading day prior to today’s announcement, and a premium of approximately 27 percent over the company’s closing stock price on May 17, 2017, the day prior to Elliott Management Corporation’s announcement that it had acquired an approximate 9% interest in the company.

Following the closing, Veritas and Evergreen expect to combine athenahealth with Virence Health, the GE Healthcare Value-based Care assets that Veritas acquired earlier this year.

The combined business is expected to be a leading, privately-held healthcare information technology company with an extensive national provider network of customers and world-class products and solutions to help them thrive in an increasingly complex environment.

Following the close of that transaction, the combined company is expected to operate under the athenahealth brand and be headquartered in Watertown, Massachusetts.

The company will be led by Virence Chairman and Chief Executive Officer Bob Segert and an executive leadership team comprised of executives from both companies.

Following the completion of the transaction, Virence’s Workforce Management business will become a separate Veritas portfolio company under the API Healthcare brand.

Athenahealth investor Elliott Management has expressed support for the transaction.

Elliott Partner Jesse Cohn said, “We are pleased to support this transformative transaction combining athenahealth and Virence, which we believe represents an outstanding, value-maximizing outcome for athenahealth shareholders.”

Upon completion of the transaction, Elliott’s private equity subsidiary, Evergreen Coast Capital, will retain a minority investment stake in the combined company.

The transaction is expected to close in the first quarter of 2019, subject to the approval of the holders of a majority of athenahealth’s outstanding shares and the satisfaction of customary closing conditions and regulatory approvals.

The athenahealth Board of Directors has unanimously approved the merger agreement and intends to recommend that athenahealth shareholders vote in favor of it at a Special Meeting of Stockholders, to be scheduled as soon as practicable.

The transaction is not subject to a financing condition. In light of today’s announcement and the pending transaction, athenahealth will no longer be hosting its previously announced Q3 2018 earnings call.

ATHN closed at $120.35.


STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This 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.

Investment Technology Group sold for $1 billion

ITG to be acquired by Virtu Financial for $30.30 per share in cash

Investment Technology Group sold for $1 billion, Stockwinners
Investment Technology Group sold for $1 billion, Stockwinners

Investment Technology Group (ITG) announced that it has reached a definitive agreement for Virtu Financial (VIRT) to acquire all outstanding shares of ITG’s Common Stock for $30.30 per share in cash.

Investment Technology Group, Inc. operates as a financial technology company in the United States, Canada, Europe, and the Asia Pacific.

Virtu Financial, Inc.  provides market making and liquidity services through its proprietary, multi-asset, and multi-currency technology platform to the financial markets worldwide.

The price represents a premium of more than 40% over ITG’s average closing share price of $21.55 in the 30 days prior to news reports of a potential sale on October 4, 2018.

Minder Cheng, Chairman of the Board of Directors, said, “ITG has made tremendous progress in executing on its Strategic Operating Plan over the past two years, and the agreement with Virtu is a result of the dedicated efforts of our management team and employees.

After careful consideration, ITG’s Board of Directors determined that the proposal from Virtu, which provides an immediate and significant cash premium, offers the most value for ITG stockholders. The combination of Virtu and ITG will create an industry-leading financial technology franchise with true global capabilities and scale.” J.P. Morgan is serving as the financial advisor and Wachtell, Lipton, Rosen & Katz is providing legal counsel to ITG.


STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This 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.

Tesla jumps on results, upgrades

Tesla rises as analysts digest first profit in two years

Tesla Model 3 named Popular Mechanics' Car of the Year
Tesla Model 3 named Popular Mechanics’ Car of the Year

Shares of Tesla (TSLA) are on the rise after the company reported third quarter results, with a net profit of $312M, the electric-vehicle maker’s largest ever.

Tesla also said deliveries of its Model 3 grew to 56,000, adding that it “was the best-selling car in the U.S. in terms of revenue and the 5th best-selling car in terms of volume.”

Following the announcement, Wolfe Research analyst Dan Galves upgraded Tesla to Outperform, while several other firms raised their targets on the stock. Nonetheless, some Wall Street analysts remain bearish on Tesla, telling investors to “not get used to [this quarter’s profitability.]”

stockwinners.com/blog
Tesla jumps on results, upgrades – See Stockwinners Market Radar

RESULTS

Last night, Tesla reported third quarter adjusted earnings per share of $2.90 and revenue of $6.82B, both above consensus of (19c) and $6.3B, respectively.

The company said that, “Model 3 quarterly production and deliveries should continue to increase in the fourth quarter compared to the third quarter.

Our target of delivering 100,000 Model S and X vehicles this year remains unchanged.

We expect gross margin for Model 3 to remain stable in the fourth quarter as manufacturing efficiencies and fixed cost absorption offset a slightly lower trim mix and the negative impact of tariffs from Chinese sourced components.

https://stockwinners.com/blog/
Stockwinners.com,Tesla jumps on results, upgrades

For all three vehicles, additional tariffs in the fourth quarter on parts sourced from China will impact our gross profit negatively by roughly $50M […] The third quarter of 2018 was a truly historic quarter for Tesla.

Model 3 was the best-selling car in the U.S. in terms of revenue and the 5th best-selling car in terms of volume.

With average weekly Model 3 production through the quarter, excluding planned shutdowns, of roughly 4,300 units per week, we achieved GAAP net income of $312M.”

WOLFE RESEARCH SAYS BUY TESLA

In a post-earnings research note, Wolfe Research’s Galves upgraded Tesla to Outperform from Peer Perform, with a $410 price target.

Saying that “Tesla became a real company,” the analyst argued that third quarter non-GAAP earnings of $2.90 and free cash flow of $881M are proof that Tesla’s earnings power is likely to outperform traditional automakers.

Management’s focus on cost and capital efficiency boosted Galves’ confidence that priorities have changed from unit growth at all cost to profitable growth and self-funding.

Further, the analyst argued that demand and margin outlook appear “very positive” and the fact that 50% of trade-ins on the Model 3 are non-luxury vehicles indicates the buyer base is likely bigger than expected.

Also bullish on the stock, Piper Jaffray analyst Alexander Potter raised his price target for Tesla to $396 from $389 as he believes the company reported a “milestone quarter,” with margins, earnings, and cash flow easily beating expectations.

While there is a still a lot of “hair” on the company, bears will struggle to poke holes in the results, Potter contended, adding that Tesla appears increasingly likely to achieve financial self-sufficiency.

The analyst reiterated an Overweight rating on Tesla shares. Oppenheimer, JMP Securities, and RBC Capital also raised their price targets on the stock.

‘DON’T GET USED TO IT’

Still bearish on Tesla shares, UBS analyst Colin Langan reiterated a Sell rating on the stock in a research note titled “Profitability at last, just don’t get used to it.”

The analyst continues to expect Model 3 average selling prices to decline into fourth quarter and 2019 as Tesla begins delivering the new $46,000 mid-range model.

Voicing a similar opinion, Needham analyst Rajvindra Gill told investors that while Tesla posted its first quarterly profit and positive free cash flow in over two years thanks to higher-margin Model 3 sales, he remains concerned over margin in the first half of 2019 given an “unfavorable mix shift of Model 3s, decline in ZEV sales, service margins stay in -35%-40% and pricing pressure on Model S/X.” Gill also questions the speed and profitability of Tesla’s production of a $45K car, “not to mention the $35K version”, in order to match its backlog of orders.

The analyst reiterated an Underperform rating on the shares.

PRICE ACTION

In Thursday’s trading, shares of Tesla have gained about 5% to $302.46.


STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This 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.

JetPay sold for $184 million

NCR Corp. to acquire JetPay for $5.05 per share

JetPay sold for $184 million, Stockwinners
JetPay sold for $184 million, Stockwinners

NCR Corporation (NCR) announced a definitive agreement to acquire Allentown, PA-based JetPay (JTPY).

The transaction will be a cash tender offer of $5.05 per JetPay share, which represents a multiple of 2.9 times 2018 consensus revenue forecast of $63.4 million.

The purchase price is approximately $184 million and will be financed with a combination of cash on hand and existing capacity under NCR’s revolving credit facility.

The offer has been approved by each company’s board of directors.

This acquisition will enable NCR to integrate a cloud-based payments platform into its enterprise point-of-sale solutions for retail and hospitality industries.

It also accelerates NCR’s strategy of increasing recurring revenue growth and expanding margins by enhancing its mix of software and services.

The transaction is anticipated to close by year-end, subject to regulatory approval and other customary closing conditions. The two companies anticipate a smooth transition for customers, channel partners and employees.

Two of JetPay’s major stockholders, Flexpoint Ford, a private equity investment firm that specializes in the financial services and healthcare industries, and Larry Stone, a longstanding executive in the payment processing industry, have agreed to tender their shares in support of the transaction.


STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This 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.

GE fires CEO, Shares rise

GE shares jump after CEO Flannery ousted amid Power unit challenges

GE introduces new company AiRXOS, Stockwinners
GE fires CEO, Shares rise

Shares of GE (GE) are rising in pre-market trading after the shrinking conglomerate announced that H. Lawrence Culp, Jr. has been named Chairman and CEO, replacing John Flannery, effective immediately.

POWER WRITE-OFF

The company stated that while its businesses other than Power are “generally performing consistently with previous guidance,” the company will fall short of previously indicated guidance for free cash flow and EPS for 2018 due to weaker performance in the GE Power business.

GE expects to take a non-cash goodwill impairment charge related to the GE Power business that will likely be as much as the approximately $23B current goodwill balance for the business, GE added.

GE previously forecast FY18 EPS at the low end of its $1.00-$1.07 range. The current EPS consensus is 95c.

RECENT ANALYST CONCERNS

In a recent note to investors, RBC Capital analyst Deane Dray lowered his price target on GE shares to $13 from $15, stating that the company had yet to reach a point where bad news does not make the stock decline and arguing that the bottom had not yet been reached.

Last month, JPMorgan analyst Stephen Tusa lowered his price target for General Electric to $10 from $11 and kept an Underweight rating on the shares.

The analyst’s channel checks, which were confirmed by GE Power’s CEO, GE investor relations, suggested GE had experienced a failure in a first stage blade on an H-frame in one of its two initial marquee installations in the U.S., Colorado Bend. Further, Tusa said the problem was material enough for Exelon (EXC) to have shut the plant down, along with the “award winning” Wolf Hollow plant for precautionary measures.

There should no longer be any doubt that GE Power has company-specific issues, Tusa contended at the time, stating that his new price target assumed weaker results at GE Power and some franchise value impact.

PRICE ACTION

In Monday’s pre-market trading, GE shares are up $1.53, or 13.5%, to $12.82.


STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This 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.