International Speedway sold for $2 billion

NASCAR to acquire International Speedway for $45.00 per share

NASCAR to acquire International Speedway for $45.00 per share, Stockwinners

International Speedway (ISCA) has entered into an agreement and plan of merger with NASCAR pursuant to which NASCAR will acquire ISC.

The transaction is valued at approximately $2B. The consideration to be paid to ISC’s shareholders will be $45.00 in cash for each share of ISC Class A common stock and ISC Class B common stock.

The merger agreement was unanimously recommended and approved by a special committee comprised solely of independent directors of the board of ISC and was unanimously approved by the full board.

NASCAR to acquire International Speedway for $2B, Stockwinners

In addition, the participating shareholders have signed a letter agreement to cause their respective shares of ISC Class A common stock and ISC Class B common stock to be transferred to NASCAR prior to the effective time of the merger.

Under the terms of the merger agreement, ISC shareholders will be entitled to receive $45.00 in cash, without interest, for each share of ISC Class A common stock and ISC Class B common stock held immediately prior to the effective time of the merger.

The transaction, which is expected to close in calendar year 2019, is conditioned on the approval of a majority of the aggregate voting power represented by the shares of ISC Class A common stock and ISC Class B common stock not owned by the controlling shareholders of ISC, voting together as a single class.

The transaction is also conditioned on other customary closing conditions.

In connection with the transaction negotiations, counsel for the plaintiff in The Firemen’s Retirement System of St. Louis v. James C. France, the previously-disclosed class action lawsuit on behalf of ISC shareholders challenging the transaction, met with representatives of the special committee and has determined to not challenge the fairness of the transaction price.

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Cannabis stocks rise amid interest by Coca-Cola

Cannabis stocks rise amid interest by Coca-Cola, opportunities for Shopify

Cannabis stocks rise amid interest by Coca-Cola, Stockwinners
Cannabis stocks rise amid interest by Coca-Cola, Stockwinners

Shares of cannabis stocks are in focus following a report that Coca-Cola (KO) is in talks with Aurora Cannabis (ACBFF) as it eyes the cannabis industry and an analyst note from Keybanc which said Shopify (SHOP) has cannabis potential.

COCA-COLA EYES CANNABIS

Coca-Cola is monitoring the nascent cannabis drinks industry and is in talks with Canadian marijuana producer Aurora Cannabis to develop the drinks, Bloomberg reported Monday.

“We are closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world,” Coca-Cola spokesman Kent Landers said. “The space is evolving quickly. No decisions have been made at this time” Landers added.

The move comes as beverage makers are looking towards cannabis as soda consumption and traditional business slows.

Constellation Brands (STZ, STZ.B) previously announced it will spend $3.8B to increase its stake in Canadian marijuana producer Canopy Growth (CGC) and Molson Coors Brewing (TAP) is starting a joint venture with Quebec’s Hydropothecary to develop cannabis drinks.

In addition, Diageo (DEO) has been holding talks with at least three Canadian cannabis producers regarding a potential deal and Heineken’s (HEINY) Lagunitas label has launched a brand focused on non-alcoholic drinks infused with THC.

SHOPIFY MAY BENEFIT FROM CANNABIS SALES

KeyBanc analyst Monika Garb told investors in a research note on Monday that she is a buyer of Shopify, as the company has “ample” growth opportunities ahead.

She sees potential upside to her above-consensus estimates and expects that recreational sales of cannabis in Canada could be a general merchandise volume and revenue driver further benefiting Shopify’s business momentum.

The analyst said the company has been selected by several Canadian provinces to run their e-commerce sites and in-store point of sale solutions and has also signed deals with private cannabis producers and distributors, including Canopy Growth and Aurora.

Additionally, Garb says Shopify is the best positioned to benefit from growth in emerging brands, citing brands like Rebecca Minkoff and Kyle Cosmetics that already use Shopify. Garb maintained an Overweight rating and $182 price target on shares.

CANNABIS STOCKS

Publicly-traded companies in the space include Cronos Group (CRON), Canopy Growth, Tilray (TLRY), Cannabis Science (CBIS), Innovative Industrial Properties (IIPR) and Aurora Cannabis.

PRICE ACTION:

Aurora Cannabis gained over 16% in Monday’s trading, while Tilray gained 7.3%.


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Goldman says sell Pepsi, buy Coca Cola

Goldman swaps sell call on Coca-Cola to PepsiCo on growth outlook

Goldman says sell Pepsi, buy Coca Cola, Stockwinners
Goldman says sell Pepsi, buy Coca Cola

In a research note to investors on the beverage space, Goldman Sachs analyst Judy #Hong upgraded Coca-Cola (KO) to Neutral and downgraded PepsiCo (PEP) to Sell.

While the analyst sees an improving organic sales growth outlook for Coca-Cola, Hong sees potential for continued softer North American Beverage volumes to weigh on PepsiCo’s organic sales growth.

BEVERAGE SPACE

Within the Staples sector, beverage valuations look most elevated, while food stocks appear oversold on consensus estimates, Goldman Sachs’ Hong told investors in a research note.

The analyst sees the beverage group’s premium valuation as mostly justified given industry characteristics that are more attractive versus secularly challenged U.S. center store food companies.

Goldman says sell Pepsi, buy Coca Cola, Stockwinners.com
Goldman says sell Pepsi, buy Coca Cola,

Beverages have more channel diversification and are less reliant on food grocers, beverage categories tend to have low level of private label penetration and a greater level of market/brand concentration also allows for higher pricing power, she contended.

Hong believes all these dynamics should drive higher top-line growth and more insulated margin structure for beverage companies compared to food companies in the U.S. over the next 12 months.

Additionally, the analyst pointed out that she sees “a few relevant trends” across the beverage theme playing out thus far in 2018, namely relative convenience store underperformance, comparative alcohol slowdown, and improvement in emerging markets benefiting multinationals, particularly in Latin America.

SWAPPING COCA-COLA, PEPSICO

Goldman Sachs’ Judy Hong upgraded Coca-Cola to Neutral from Sell, while trimming her price target on the shares to $46 from $47.

The analyst told investors that she sees an improving organic sales growth outlook, a “cleaner base” post-refranchising, and better visibility on its margin and earnings targets.

Hong believes Coca-Cola is “one of the rare” over 4% organic growth mega-cap stories, and now has increased confidence in its organic sales growth outlook.

Additionally, Hong noted that she now views fundamentals as warranting a relative premium given Coca-Cola’s positioning as a beneficiary of moderating foreign exchange impact, improving emerging markets growth, and higher margins post-refranchising.

Meanwhile, the analyst downgraded PepsiCo to Sell from Neutral and lowered her price target on the shares to $110 from $118, citing the potential for continued softer North American Beverage volumes to weigh on organic sales growth and present modest downside risk to gross margins.

While the analyst does not expect Pepsi shares to be “a material absolute underperformer,” she does see scope for it to underperform other beverage names over the next 12 months given muted fundamentals and lack of clear catalysts. Both top-line and margin gains are likely to be harder to come by for PepsiCo’s North America beverage business as multi-year tailwinds to volume are no longer driving growth while c-store underperformance is creating a drag, she contended.

OTHERS TO WATCH

Goldman’s Hong also upgraded Coca-Cola European Partners (CCE) to Buy, as she believes muted sentiment in the context of sugar tax implementation in the UK and France provides a compelling opportunity, and downgraded Molson Coors (TAP) to Neutral, predicting that weaker than expected beer volumes will drive cuts to consensus estimates. The analyst reiterated a Buy rating on Monster Beverage (MNST).

PRICE ACTION

In Tuesday’s trading, shares of Coca-Cola are fractionally up to $44.79, while PepsiCo’s stock dropped over 1% to $108.41.


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Cannabis in California

Names to watch ahead of California marijuana legalization

Names to watch ahead of California marijuana legalization. Stockwinners.com
Names to watch ahead of California marijuana legalization

As recreational use of marijuana is set to become legal in California on the first day of the year, the space seems to be getting more and more attention, with a new marijuana ETF starting to trade this week and Constellation Brands (STZ) taking a stake in a Canadian medical marijuana producer earlier this year.

CANNABIS IN CALIFORNIA

For people residing in California, the New Year means they will able to buy recreational marijuana as it is set to become legal in the state starting January 1, a date that dispensaries and consumers have had in their sights on since Proposition 64 made it the official opening of the adult-use market in California.

In keeping with state rules, retailers will be able to sell or deliver cannabis between 6am and 10pm.

NAMES TO WATCH

Among the publicly traded names in the space is Innovative Industrial Properties (IIPR), a REIT that owns dispensary properties.

Last year, NYSE became the first major exchange to list a cannabis company with its acceptance of Innovative Industrial Properties’ initial public offering.

Constellation Brands seems to also be interested in the blossoming cannabis industry as the company bought a minority stake in a Canadian medicinal marijuana producer.

In October, Constellation announced it paid C$245M for a 9.9% interest in Canopy Growth, a Canadian provider of medicinal cannabis products.

Constellation, which is looking to develop cannabis products that don’t contain alcohol, does not expect to sell products in the U.S. before marijuana is nationally legalized but may begin to sell products in Canada, where such products are expected to be legalized by 2019.

Earlier this week, ETF Managers Group announced that MJX, the ETFMG Alternative Harvest ETF, was live and available for trading on the NYSE Arca.

This fund is one of the first of its kind available to U.S. investors and is designed to replicate the Prime Alternative Harvest Index, which tracks companies likely to benefit from the increasing global acceptance of various uses of the cannabis plant.

This includes treatments from innovative medicinal breakthroughs involving the plant’s unique properties.

PRICE ACTION

In Wednesday’s trading, shares of Constellation Brands are fractionally down to $224.95, while Innovative Industrial Properties is up nearly 5% to $27.24.


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Tesla gets a boost from Budweiser

Anheuser-Busch reserves 40 Tesla all-electric Semi trucks

Tesla gets a boost from Bud. See Stockwinners.com
Tesla gets a boost from Bud.

Anheuser-Busch (BUD), parent company of Budweiser, has reserved 40 of Tesla’s (TSLA) all-electric Semi trucks and plans to use the trucks for shipments to wholesalers within 200 miles of its brewery locations, The Wall Street Journal reports.

Anheuser-Busch hasn’t yet decided whether to buy the Semi vehicles outright or lease them, James Sembrot, the company’s senior director of logistics strategy, says. The Semi will be available in 2019.

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Tesla gets a boost from Budweiser – Stockwinners.com

The vehicles would be deployed among the brewer’s so-called dedicated fleets of about 750 trucks, which bear the company’s branding but are owned and managed by outside carriers.

Anheuser-Busch hasn’t yet decided whether to buy the vehicles outright or lease them, said James Sembrot, the company’s senior director of logistics strategy. It could also ask one of its dedicated carriers to buy or lease the trucks. The Semi won’t be available until 2019.

“We put the reservations down so we can prioritize our place in line,” Mr. Sembrot said. “We don’t know who the carrier is going to be in two to three years when these things are actually produced.”

He declined to discuss the cost for the reservation, which he said was placed before the Semi’s debut in California last month. Tesla had set deposits at $5,000 at the time of the November announcement but has since raised the amount to $20,000. Tesla expects the trucks to list for $150,000 to $200,000; a new diesel-powered heavy-duty truck can sell for $150,000.

OTHER  ORDERS

According to a Bloomberg report, the Michigan-based grocery chain Meijer, Inc. placed deposits on four of the new trucks at $5,000 apiece.

Meijer fleet manager Dan Scherer told Bloomberg’s Dana Hull: “Electricity is cheaper fuel than diesel, and you are less dependent on the spot-pricing of fossil fuel.”

Wal-Mart issued the following statement: “We have a long history of testing new technology – including alternative-fuel trucks – and we are excited to be among the first to pilot this new heavy-duty electric vehicle. We believe we can learn how this technology performs within our supply chain, as well as how it could help us meet some of our long-term sustainability goals, such as lowering emissions.”

Wal-Mart says has pre-ordered 10 units of Tesla’s new heavy-duty electric vehicle for Wal-Mart Canada.

J.B. Hunt Transport Services (JBHT) announced that it placed a reservation to purchase multiple Tesla (TSLA) Semi tractors to be manufactured by Tesla.

J.B. Hunt plans to deploy electric tractors to its Intermodal and Dedicated Contract Services divisions to support operations on the West Coast.

TSLA shares are up $3.04 to $316.10.


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Buffalo Wild Wings sold for $2.9 billion

Arby’s to acquire Buffalo Wild Wings for $157 per share in cash

Buffalo-Wild-Wings gets $2.3 billion offer. See Stockwinners.com for details
Buffalo-Wild-Wings sold for $2.9 billion offer.  

Arby’s Restaurant Group and Buffalo Wild Wings (BWLD) announced that the companies have entered into a definitive merger agreement under which ARG will acquire BWLD for $157 per share in cash, in a transaction valued at approximately $2.9B, including BWW’s net debt.

The agreement, which has been unanimously approved by both companies’ Boards of Directors, represents a premium of approximately 38% to BWW’s 30-day volume-weighted average stock price as of November 13, 2017, the latest trading day prior to news reports speculating about a potential transaction.

The transaction is not subject to a financing condition and is expected to close during the first quarter of 2018, subject to the approval of BWW shareholders and the satisfaction of customary closing conditions, including applicable regulatory approvals.

Following the close of the transaction, BWW will be a privately-held subsidiary of Arby’s Restaurant Group and will continue to be operated as an independent brand.

Paul Brown will serve as CEO of the parent company.

Arby’s is majority owned by affiliates of Roark Capital Group, an Atlanta based private equity firm that focuses on investing in franchised and multi-unit businesses in the restaurant, retail and other consumer sectors.

Affiliates of Roark are committing all of the equity that, together with the proceeds of debt financing, will be necessary to complete the transaction. Certain funds advised by Marcato Capital Management, LP, which own approximately 6.4% of the outstanding shares of BWW, have entered into an agreement to vote in favor of the transaction.

BWLD closed at $146.40.


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Barron’s is bullish on GM, China Mobile

Barron’s, the weekly publication owned by the Wall Street Journal, in its latest issue mentions several names: 

Stockwinners offers Barron's review of Stockwinners offers stocks to buy, stocks to watch, upgrades, downgrades, earnings, Stocks to Buy On Margin

BULLISH  MENTIONS

Activision to continue earnings growth from in-game spending – Activision Blizzard (ATVI) started encouraging more in-game spending, getting users to pay for new weapons, new missions, and new virtual outfits within titles they owned and as a result its stock soared since the beginning of the year, Emily Bary writes in this week’s edition of Barron’s. Smaller competitors have also ramped up recurring spending, with shares of Electronic Arts (EA) and Take-Two Interactive Software (TTWO) also jumping in 2017, she notes. Bary adds game makers should continue to see strong earnings growth from in-game spending.

China Mobile looks cheap, but there may be a catch – China Mobile (CHL) has $60B of net cash, equal to 30% of its market shares, Andrew Bary writes in this week’s edition of Barron’s. But many fear the Chinese government, which owns 73% of the company, will divert it to prop up other enterprises, he notes, adding that as a result the company’s shares have performed poorly in the last few years.

Cognizant is returning cash to investors – Cognizant (CTSH) is building a lucrative digital-consulting business, Resham Kapadia writes in this week’s edition of Barron’s. Meanwhile, the company’s shareholders could see a twofold payoff thanks to activist investor Elliott Management, which took a 4% stake last November, acquired three board seats, and pressed management to prioritize profit-margin expansion, the publication noted, adding that Cognizant will return $3.4B through 2018 via stock buybacks and dividends.

GM (GM) well-placed to make self-driving, battery-powered cars – In a follow-up story, Barron’s says General Motors has become an autonomously driven stock, climbing to $45 on chatter over GM being well-placed to make the self-driving, shared, battery-powered cars of the future. GM remains more than 60% cheaper than the S&P 500, the publication noted, adding that investors should hold out for more upside, and the 3.4% dividend yield.

BP, Royal Dutch Shell dividends look safe – Foreign companies tend to favor paying dividends over buying back stock, Lawrence Strauss writes in this week’s edition of Barron’s. BP (BP), Enel, ING Group (ING), Royal Dutch Shell (RDS.A), TSMC (TSM) and WPP (WPPGY) dividends all look safe, Strauss notes, adding that with the exception of Royal Dutch Shell and BP, they are all expected to pay higher dividends in 2018 than in 2017.

Nvidia stock/options market disconnection an opportunity – While Nvidia (NVDA) is “red hot” in the stock market, it is “lukewarm” in the option market, which creates an “intriguing” opportunity, Steven Sears writes in this week’s edition of Barron’s.

E-Commerce helping Wal-Mart ‘jump-start stalled revenue – While Wal-Mart (WMT) has played in online shopping since 2000, it got a boost a year ago with its $3.3B acquisition of Jet.com, Jack Hough writes in this week’s edition of Barron’s. As an e-Commerce player, Wal-Mart is growing faster than Amazon (AMZN) has in years, and shareholders will benefit, he adds.

BEARISH  MENTIONS

Costco shares still fell despite good quarter– Since Amazon (AMZN) announced its acquisition of Whole Foods, Costco (COST) has been “on the ropes,” Ben Levisohn writes in this week’s edition of Barron’s. The retailer shares have dropped 12% since then, even as the company delivers earnings beats and same-store sales increases, he adds.

RH shares fully priced – Combined with July-quarter report, RH‘s shares (formerly known as Restoration Hardware) buyback has lifted its stock 146% this year and “squeezed those unwelcome guests called short sellers,” Bill Alpert writes in this week’s edition of Barron’s. But now RH shares look fully priced, and is one of the most richly priced retailers around, he adds.

Gun shares look overvalued – Tragedies involving guns and political pronouncement about gun violence tend to move shares of publicly traded firearms companies, such as Sturm Ruger (RGR), American Outdoor Brands (AOBC) and Vista Outdoor (VSTO), Vito Racanelli writes in this week’s edition of Barron’s. But with prospects dim for stricter gun control, an impetus for long-term sales growth is lacking, he notes, adding that the stocks look overvalued.


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Changes to S&P Indices

S&P announces changes to S&P MidCap 400, S&P SmallCap 600 indices

Stocks to buy, stocks to watch, upgrades, downgrades, earnings S&P Dow Jones Indices will make the following changes in the S&P MidCap 400 and S&P SmallCap 600 indices effective prior to the open of trading on Monday, October 2:

Six Flags Entertainment (SIX) will replace PAREXEL International (PRXL) in the S&P MidCap 400. Pamplona Capital Management is acquiring PAREXEL in a deal expected to be completed soon pending final conditions.

S&P SmallCap 600 constituent Sterling Bancorp (STL) will replace Oil States International (OIS) in the S&P MidCap 400, and

KEMET (KEM) will replace Astoria Financial (AF) in the S&P SmallCap 600, and

Oil States will replace Sterling Bancorp in the S&P SmallCap 600. Sterling Bancorp is acquiring Astoria in a deal expected to be completed soon pending final closing conditions. Post merger, Sterling Bancorp will be more representative of the mid-cap market space. Oil States is more representative of the small-cap market space.


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Disney Tumbles on guidance, streaming service, and Irma

Disney slides after CEO comments on guidance, streaming service

This blog was updated with Disney World Closure Information

Disney to end Netflix distribution agreement in 2019. See Stockwinners.com Market Radar for details

During Bank of America Merrill Lynch’s Media, Communications & Entertainment Conference, Disney (DIS) CEO Bob Iger said that he expects the company’s 2017 earnings per share to be roughly in line with last fiscal year, sending the stock into negative territory.

The executive also said Marvel and Star Wars will go exclusively to the company’s upcoming streaming service.

GUIDANCE

Disney CEO Bob Iger expects the company’s fiscal year 2017 earnings per share to be roughly in line with last fiscal year.

In 2016, Disney reported adjusted earnings per share of $5.72, according to Bloomberg data. The consensus estimate for 2017 prior to Iger’s comments today was for 2017 earnings per share of $5.88, according to First Call.

“I think you have to look at the year as being roughly in line with an EPS basis that we delivered in fiscal ’16, and that’s for a few reasons, some, by the way, very topical. We mentioned all the way at the beginning of the year the impact of the NBA, big growth in cost to ESPN on the rights front. We also did not have a big Star Wars movie. […]

HURRICANE  IRMA

In addition to that, we have had some impact already from Hurricane Irma. There, we’ve seen cancellations in Orlando, and we’ve also had to cancel three cruise itineraries and shorten a couple of others. Lastly, there will be some expense us in fiscal ’17 that are tied to the BAMTech acquisition,” the executive said during the media conference.

[youtube https://www.youtube.com/watch?v=Ki6q5KaGqrA?rel=0&controls=0&w=560&h=315]

Walt Disney World to close from Saturday until Tuesday or later – Walt Disney World will begin closing its theme parks from Saturday September 9 and “hopes” to resume normal operations on Tuesday September 12, the company stated in an update on Hurricane Irma posted to its website. 

DISNEY STREAMING SERVICE

During the presentation, CEO Bob Iger also said that Marvel and Star Wars titles will go exclusively to the new Disney streaming platform, a service that is set to launch in late 2019.

“We’re going to launch it in late 2019. We’re doing that for two reasons. First of all, as we exit the Netflix (NFLX) output deal, we don’t get access to our theatrical release movies until the beginning of ’19.  Secondly, we wanted time to actually develop and build up original programming for the platform. So late ’19, we’ll launch a Disney-branded service.

It will have — it will be the output distributor for the theatrical release movies. […] We’ve now decided that we will put the Marvel and Star Wars movies on this app as well. So it will have the entire output of the studio: animation, live action, Disney including Pixar, Star Wars and all the Marvel films,” he explained.

Additionally, it will also have four to five original Disney series as well as three to four exclusive Disney movies. “We are going to make less costly movies that are going to be on our proprietary service,” he said.

ESPN

Discussing the company’s ESPN sports network, Iger pointed out that he expects its own streaming service to launch sometime in the Spring, and that ultimately each user will be able to choose the events and sports he wants to watch.

“We will launch with 10,000 live sporting events that are not currently on ESPN’s linear channels. And those will include Major League Baseball, the National Hockey League, MLS, some other tenants and a lot of college in sports that we own the rights to already. […] It will be an ESPN app that exists today. Today, on that ESPN app, you can watch ESPN’s linear channels live authenticated. That will continue to exist. On top of that in the same app, you’ll be able to subscribe to, let’s call it, a plus service. You’ll be able to subscribe to significantly more sports programming than you get just through the linear channels. […] Over time, I think the way you have to look at this is this will be a sports marketplace platform.

You’ll be able to pick and choose over time what it is you want. It won’t necessarily be a one-size-fits-all. We may launch it that way, but the goal eventually is to create something that the sports fan can essentially use to design what their sports media experience can be,” Iger stated.

PRICE ACTION

On Thursday shares of Disney dropped about 4.4% to $97.06, while Netflix’s stock closed fractionally lower to $179.00.


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The Real Winners of Mayweather McGregor Fight

CBS will broadcast the fight on radio while its subsidiary, Showtime charges $100 for pay-per-view

The real winner of Mayweather vs McGregor. See Stockwinners.com to read more

Tonight’s matchup between Floyd Mayweather and Conor McGregor has been called the “The Money Fight.” You may ask why?  The $99.95 high-definition price tag on CBS Corp.’s Showtime is the highest ever charged for a pay-per-view event. CBS (CBS) expects about 4.9 million viewers will sign up for the broadcast.

It is the most distributed event in pay-per-view history. It will be shown in in over 200 countries on pay-per-view.

WINNERS

CBS has deals with other companies to show the fight live. Buffalo Wild Wings (BWLD) will show the fight at most of its 1,220 restaurants. Stocks of BWLD and CBS are probably worth watching more than the fight itself!

It is estimated that  $700 million revenue will be generated from pay-per-view buys, ticket sales and other sources of income, according to sources. By comparison, Mayweather’s record-breaking match with Pacquiao in 2015 raked in an estimated $600 million. And let’s not forget tickets to the T-Mobile Arena, sponsorships, simulcast rights, merchandise and the many peripheral activities — gambling, hotel stays, meals — leading up to the big day on the Las Vegas Strip.

Japan’s boxing fans can view the fight with their smartphone and a $15 subscription to DAZN, a UK-owned sports streaming service that’s seeking to turn sports nuts into cord cutters.  This is a new business model for pay-per-view.

“Mayweather vs. McGregor truly is a unique event and I doubt there will ever be one quite like it in the future,” said CEO of DAZN James Rushton. “We are analyzing how fans react to having this fight on DAZN and will evaluate if it’s something we want to continue doing in the future.”

Floyd Mayweather is expected to have a $300 million payday while McGregor is set to earn anywhere from $50 million to $100 million, according to various estimates.

[youtube https://www.youtube.com/watch?v=8oXy51JvkFY&w=640&h=360]

The last time Mayweather lost was in 1996, in a highly controversial decision at the semi-finals of the Atlanta Olympic Games, to Bulgarian Serafim Todorov. Even the Egyptian referee for the fight assumed Mayweather had won and held Mayweather’s hand aloft just as Todorov was announced as the winner.  It would seem a mistake to bet against Mayweather now!

LOSERS

The biggest loser of the night will be HBO and its parent company Time Warner or soon to be AT&T (T).

With no real challengers remaining in boxing this year, Mayweather turned to the UFC and its biggest star, Conor McGregor. According to insiders, he timed the announcement and staged the fight in a manner designed to deal maximum damage to his former network partner, HBO, and two of their biggest pay-per-view fights of 2017.

Begin with the choice of an Aug. 26 fight date. “It’s perverse,” tells Bloomberg Jim Lampley, HBO boxing’s longtime commentator. “If there’s one indelible, accepted principle in operating pay-per-view, it’s ‘never before Labor Day.’

That’s why, for the upcoming HBO bout between middleweight titleholder Gennady Golovkin and former champ Canelo Alvarez—one of boxing’s best tilts, on paper, in years—the channel jumped on Sept. 16 to maximize the number of pay-per-view buys, assuming that Showtime would choose a later date in the fall for Mayweather-McGregor.

Instead, Mayweather-McGregor was set for Aug. 26, creating a tidal wave of publicity that is currently drowning the lead-up to the Canelo-Golovkin fight.

ODD MAKERS

The action is reflected in the odds, which bookmakers adjust either way as money comes in on the two fighters. Bookmakers have been lowering the odds steadily since the fight was announced, but even that hasn’t stopped the deluge of McGregor bets.

The big bettors are putting their money on Mayweather, who is 49-0 as a pro. But so many McGregor fans are betting small amounts that the betting slips were running 18-1 in the Irish fighter’s favor. McGregor fans have flooded sports books with $100 bills backing the mixed martial arts fighter, and even a late surge of money on Mayweather might not be enough to balance the books.

A fight that began with Mayweather an 11-1 favorite is now 5-1 or even less in some sports books.

Should McGregor somehow manage to knock out Floyd Mayweather Jr. in the early rounds Saturday night, Las Vegas’ bookmakers would lose millions of dollars in the biggest single event loss in the history of sports betting, according to Fox Business


Floyd Mayweather vs Conor McGregor

Date: Saturday, Aug. 26, 2017
Time: 9 p.m. ET
Location: T-Mobile Arena in Las Vegas


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Priceline and Tripadvisor Sink Following Earning Reports

Priceline, Tripadvisor sink as competition weighs on OTAs

Travel-Agent-Cartoon

The shares of online travel agencies Priceline (PCLN) and Tripadvisor (TRIP) are falling after Priceline’s Q3 profit guidance came in below expectations and Tripadvisor reported that its transaction revenue per hotel shopper fell last quarter.

PRICELINE

Priceline reported Q2 earnings per share, excluding some items, of $15.14, versus the consensus outlook of $14.20. The company’s revenue came in slightly above expectations. However, it provided Q3 EPS guidance, excluding some items, of $32.40-$34.10, versus the consensus outlook of $34.20.

TRIPADVISOR

Tripadvisor reported Q2 EPS of 38c, versus the consensus outlook of 30c. The company’s revenue came in slightly above expectations. However, it reported that its TripAdvisor-branded click-based and transaction revenue per hotel shopper decreased 2% year-over-year.

REACTION ON PRICELINE

Priceline failed to beat its guidance last quarter for the first time since 2012, wrote Cowen analyst Kevin Kopelman. The analyst blamed this development on tougher competition from #Expedia (EXPE) and “heavy Asia discounting.”

However, he says the high end of the company’s Q3 EPS guidance is “solid,” and he kept a $2.250 price target and a Buy rating on the shares.

Priceline’s room night growth did not beat the high end of its guidance and the company provided “disappointing” Q3 room night guidance, wrote Credit Suisse’s Paul Bieber.

Although “conservatism” could be a factor behind these developments, the company’s comments about the return on its marketing investments and its competition in Asia will probably hurt sentiment towards the company until it shows that its Q3 results will surpass its guidance, #Bieber believes.

However, citing what he sees as “a favorable demand environment with healthy macro trends and no significant changes to the competitive landscape in core Western markets,” Bieber kept an Outperform rating on Priceline shares. He did, however, cut his price target on the stock to $2,070 from $2,150.

Priceline tends to grow at the slowest rate in Q3 because Europe, the company’s most mature market, makes up a greater share of its revenue than in other quarters, wrote #Barclays analyst Ross #Sandler. Moreover, the company has a tough comparison this quarter, the analyst stated.

Additionally, Priceline is gaining market share in most areas, and its supply, “continues to grow at a very healthy rate,” wrote Sandler, adding that supply is “a leading indicator” for the company. He recommends buying the shares “selectively on weakness.”

REACTION ON TRIPADVISOR

TripAdvisor, which “continues to stumble,” blamed the decline in its revenue per hotel shopper on “a faster than anticipated shift to lower monetizing mobile users,” wrote Piper’s Michael #Olson.

Going forward, there are questions about how TripAdvisor will deal with lower monetization as mobile users make up a high percentage of its visitors, the analyst stated. He expects the stock to remain “range-bound” for the rest of the year, and he kept a Neutral rating on the shares.

However, he expects the company to improve its monetization over the longer term and advises longer term investors to start evaluating the stock now.

PRICE ACTION

In Wednesday’s trading, Priceline sank 8% to $1,884 and Tripadvisor fell 6% to $37 per share.

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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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Macau Casinos Drop on Money Laundering Probe

Macau gaming names slide after Daiwa uncovers junket operator warning

Macau gaming names slide on money laundering probe. See Stockwinners.com Market Radar for the latest.

Shares of several Macau gaming stocks are lower after #Daiwa analyst Jamie Soo told investors that his checks uncovered that a memo was distributed to customers and key staff by “one of Macau’s largest” #junket operators warning of recently heightened enforcement of anti-money laundering initiatives in both China and #Macau.

The junket operator advised its customers to withdraw funds out of “underground” bank accounts, which is the first time such a dissemination has occurred to Soo’s knowledge, he informed clients.

The expected further heightening of enforcement continues to be reaffirmed given this news and other events over the past six months, added #Soo, who said he remains Neutral on the Macau gaming sector.

Stocks to watch

Las Vegas Sands (LVS) MGM Resorts (MGM), Wynn Resorts (WYNN) and Melco Resorts (MLCO).

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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.

Congressman Requests Hearing on Amazon Whole Food Merger

Democratic Rep calls for oversight hearing on Amazon-Whole Foods tie-up

Democratic House Representative David Cicilline of Rhode Island wrote a letter to the Republican leaders of the House Subcommittee on Regulatory Reform, Commercial and Antitrust Law, requested that the committee hold an oversight hearing on Amazon’s (AMZN) proposed takeover of Whole Foods (WFM).

#Cicilline said in the letter that he has heard concerns that the merger may discourage innovation and entrance into emerging markets, such as grocery and food delivery.

The Rep added that some have raised concerns that the deal will also increase Amazon’s online dominance, enabling it to “prioritize its products and services over competitors.”

“Without taking a position on the legality of the transaction under the antitrust laws, Amazon’s proposed acquisition of Whole Foods raised important questions concerning competition policy, such as how the transaction will affect the future of retail grocery stores, whether platform dominance impedes innovation, and if the antitrust laws are working effectively to ensure economic opportunity, choice, and low prices for American families,” Cicilline said in the letter.

Note that United Natural Foods (UNFI) is headquartered in the Congressman’s district. United Natural Foods, Inc. distributes and retails natural, organic, and specialty foods and non-food products in the United States and Canada. The company operates through three divisions: Wholesale, Retail, and Manufacturing and Branded Products.

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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.

 

Media Stocks to Watch on 2024 Olympic Announcement

Discovery Comms should move on Olympics host cities announcement 

 In the 2024 race are Budapest, Los Angeles and Paris. See Stockwinners Market Radar to see stocks to buy.

The International Olympic Committee is expected to meet today and vote on whether to accept an earlier recommendation from some of its members to award both the 2024 and 2028 Summer Olympic bids at the same time.

In the race are Los Angeles, Budapest and Paris.

Loop Capital analyst David Miller argued that Discovery Communications (DISCA), which has full European broadcast rights to the 2024 edition, may see a fair degree of volatility ahead of this decision.

A Paris win to host the 2024 summer games may drive shares higher, he contended.

BACKGROUND 

Back in 2015, Discovery Communications announced that it had secured full media rights to broadcast the next four Olympic Games in the pan-European region after the 2016 summer games in Brazil,

#LoopCapital’s David Miller pointed out in a note to investors last month. The deal takes effect with the 2018 Winter Games in South Korea, he noted, adding that at the time the host cities for the 2020, 2022 and 2024 had not been announced.

Last month, the International Olympic Committee issued a loose overture that the host cities for both the 2024 and 2028 summer editions would be announced at the same time, with those being either #LosAngeles or #Paris.

The cities have completed the required presentation of their technical plans for staging hundreds of medal events, and the full International Olympic Committee is expected to convene today and vote on whether to accept the recommendation to award both bids at the same time.

According to the Associated Press, however, the IOC may not announce this week which of Los Angeles or Paris will host the 2024 Olympics and which will get the 2028 edition. The latter has been seen as favorite for 2024, 100 years after it hosted its last Olympics, the publication noted, with Los Angeles Mayor Eric #Garcetti and Los Angeles 2024 bid chairman Casey #Wasserman open to look ahead to 2028.

DISCOVERY LOBBYING FOR PARIS:

Loop Capital’s David Miller told investors that #Discovery is “clearly lobbying” for Paris as the 2024 recipient, as that would ensure at least one Olympics within the pan-Euro time zone over the next eight years, which would be critical for advertising. The situation, however, is still fluid, the analyst noted, with no guarantees.

According to some press reports, the #IOC loves LA because most of the venues are already in place, most are relatively new or are being built, the climate is amenable to the athletes, the bid has unanimous public support, and Los Angeles has hosted the games twice before, both profitably, Miller pointed out.

On the other hand, 2024 would mark the 100th anniversary of the last time Paris hosted the games and the Committee has gone on record in recognizing that, he added. The analyst reiterated a Hold rating and $29 price target on Discovery’s shares.

PRICE ACTION

In late Tuesday morning trading, Discovery’s stock is down 0.9% to $26 per share.

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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.