Twilio Jumps on Amazon Messaging Service

Amazon two-way messaging seen as opportunity for Twilio

Amazon two-way messaging seen as opportunity for Twilio. See Stockwinners.com for details

Shares of Twilio (TWLO) are on the rise today after several analysts pointed out that Amazon’s (AMZN) launch of AWS Global SMS two-way text messaging should not be seen as a competitive threat to the company, especially since the new Pinpoint service is powered by Twilio.

AWS TWO-WAY MESSAGING

Amazon Pinpoint has launched the AWS Global SMS two-way text messaging.

Commenting on the new service, Amazon’s Randall Hunt wrote in a post to the AWS Blog: “Last week Amazon Pinpoint launched AWS Global SMS two-way text messaging and we didn’t get an opportunity to cover the launch. AWS Pinpoint users can now programmatically respond to their end-users’ text messages. Users can provision both short codes and long codes which send inbound messages to an SNS topic.”

Last night, Twilio CEO and co-founder Jeff Lawson tweeted:

“Excited that @twilio is now helping to power engagement on @AWS Pinpoint, with their launch of 2-way SMS!”

YESTERDAY’S SELLOFF OVERDONE

In a research note to investors following the news, KeyBanc analyst Brent #Bracelin argued that yesterday’s selloff in Twilio appears to be an “overreaction.”

Twilio and Amazon have had a close relationship in the past that includes a small equity stake in Twilio that Amazon acquired prior to the Twilio IPO.

Twilio has gone “all-in” on AWS and operates its global CPaaS operation on AWS’ data centers, he pointed out. Nonetheless, the analyst reiterated a Sector Weight rating on Twilio’s shares based on decelerating growth trends and margin erosion that is expected to occur in the second half of 2017.

His peer at MUFG also pointed out that while the new Amazon service may appear to be a direct competitor to Twilio’s programmable SMS Product, the company is actually helping to power engagement of the Pinpoint product.

Analyst Stephen #Bersey argued that he views this as a “broadening of the partnership” between Twilio and AWS more than direct competition. He reiterated an Overweight rating and $35 price target on Twilio’s shares.

Voicing a similar opinion, Oppenheimer analyst Ittai Kidron told investors in a research note of his own that investor fears that the new AWS two-way messaging service will compete with Twilio are incorrect.

While there is no “Powered by Twilio” branding, AWS’s new Pinpoint SMS capability is powered on the back-end by Twilio’s platform, he contends, adding that given Twilio’s presence behind the scenes, he would view the announcement as a positive for Twilio. Furthermore, the analyst said he would be an aggressive buyer on any weakness, and reiterated an Outperform rating on Twilio’s shares.

NOT COMPETING WITH VONAGE

Also commenting on the news, Needham analyst Richard Valera noted that Vonage’s (VG) shares fell yesterday due to the blog post discussing Amazon Pinpoint two-way SMS capability. However, the analyst pointed out that he believes it is “narrowly” focused on enabling user engagement campaigns for app developers and not a general purpose SMS/voice API, such as offered by Vonage. Valera reiterated a Buy rating and a $9.50 price target on Vonage shares.

PRICE ACTION

In Wednesday’s trading, shares of Twilio have jumped about 7% to $29.49. Yesterday, the stock was under pressure on concerns related to Amazon’s new product, dropping almost 7%.

Vonage (VG), which also slid late in yesterday’s trading, is up 3% this morning.


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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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Accenture, Microsoft expand strategic alliance

Accenture, Microsoft expand strategic alliance to offer cybersecurity solutions

 Accenture, Microsoft expand strategic alliance. See Stockwinners.com for details

Accenture (ACN), Microsoft (MSFT) and Avanade are collaborating through a multi-year, multi-million-dollar agreement to develop, integrate and bring to market enhanced cyber defense solutions to help clients better detect, investigate and respond to cyber threats.

The collaboration extends the companies’ longstanding strategic relationship, which began in 2000.

The cyber defense offerings will be infused with joint threat intelligence and initially span three core areas:

Managed Security Operations: enhancing existing Accenture managed security services with integration of the latest Microsoft security products and services to monitor, detect and quickly respond to security breaches – targeted for on-premises, cloud and hybrid systems.

Incident Response Support: a joint, global and collaborative teaming approach leveraging tools and integrated processes to help clients return to normal operations after a significant security breach.

Integrated Threat Hunting: leveraging the Incident Response experience of the three companies to actively locate previously undetected breaches. According to the Accenture Security Index, more than 70% of organizations globally cannot identify and fully protect their corporate high-value assets.

In addition, the associated costs of cyber attacks are having a growing financial impact on businesses.

In 2017, the average cost of cyber crime climbed to $11.7M per organization, a 23% increase from last year, according to a new study by Accenture and the Ponemon Institute.


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Barron’s is bullish on Oracle, bearish on Six Flags

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

Gene therapy may be nearing ‘major breakthrough.’  – Gene therapy is rapidly emerging as one of the most exciting areas in biotechnology, and generating new hope for patients with rare and often deadly inherited diseases, Andre Bary writes in this week’s edition of Barron’s. The first regulatory approval for replacement gene therapy could come as soon as January, if the FDA gives the go-ahead to Spark Therapeutics (ONCE) for its one-time treatment that targets a rare, inherited retinal condition leading to blindness, he adds. Other publicly traded companies developing treatments in this area include AveXis’ (AVXS), Regenxbio (RGNX), Audentes Therapeutics (BOLD), and Voyager Therapeutics (VYGR).

Key events may create ‘short squeeze’ in GoPro stock.  GoPro (GPRO), a heavily shorted stock, could be the object of “one of the most interesting trades in the options market,” Steven Sears writes in this week’s edition of Barron’s. Options on the shares are relatively inexpensive ahead of key events that may create a short squeeze in the stock, he argues, adding that a recommended upside call trade that expires in January could produce “extraordinary profits” if that happens.

Oracle shares could return 20% in a year. – Oracle (ORCL) is a latecomer to the cloud, but the company’s revenue from that business has been growing quickly from a small base, and shares have responded, Jack Hough writes in this week’s edition of Barron’s. At a recent $48, shares look like “a good deal,” he argues, adding that they could return 20% in a year.

Xilinx, Synopsys are ‘rising stars’ amid natural evolution of AI. – As everyday items get “smart,” the technology around artificial intelligence gets more real, Tiernan Ray writes in this week’s edition of Barron’s, adding that the “rising stars” in this natural evolution of AI include Xilinx (XLNX), Synopsys (SNPS), and Cadence Design (CDNS).

BEARISH  MENTIONS

iRobot suffering after onslaught of SharkNinja cheaper models. – In a follow up story, Barron’s notes that as it warned in July, iRobot’s (IRBT) Roomba robot vacuum now has a “formidable” new rival, with the recent introduction of cheaper products from SharkNinja. While IRobot has maintained a commanding share of the product category it pioneered, aggressive marketing, broad sales distribution, and value-priced products have quickly won SharkNinja a hunk of the market for conventional vacuum cleaners, the publication adds.

Six Flags may have peaked– Investors have had an incredible ride with theme-park operator Six Flags (SIX), with shares climbing sixfold since it exited bankruptcy in 2010, Bill Alpert writes in this week’s edition of Barron’s. However, “every ride ends,” and with the number of individuals coming to the parks flat for years, upside looks limited.

Major aircraft makers, suppliers face off – While United Technologies (UTX) proposed $30B acquisition of Rockwell Collins (COL) is not a done deal, its aggressive expansion strategy illustrates trends unfolding in the industry, namely a shift in traditional turf boundaries, Lawrence Strauss writes in this week’s edition of Barron’s. This is just the latest in a spate of recent M&A deals that illustrate a battle between major commercial aircraft manufacturers, namely Boeing (BA) and Airbus (EADSY), and some of their suppliers, he argues, pointing out that there is “lots of maneuvering” to see who will dominate the lucrative business of being an aerospace hardware and service provider.


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Siris Capital Walks Away from Synchronoss

Siris no longer interested in all-cash acquisition of Synchronoss

SNCR receives a $18 per share offer. See Stockwinners.com Market Radar

Siris Capital Group disclosed in a regulatory filing that on September 15, it informed Synchronoss Technologies (SNCR) that it is no longer interested in pursuing an all-cash acquisition of the company.

As such, its indication of interest set forth in the June 22 letter is withdrawn. Siris, which owns 12.93% of the company’s shares, added that it is “prepared to consider other forms” of a potential transaction.

Shares of Synchronoss climbed 28.7% in June after the managed mobility solutions specialist received an $18-per-share cash acquisition offer from Siris Capital Group.

Note that earlier this summer, the company’s filings revealed that its financial statements for both 2015 and 2016 will need to be restated. It is not clear if this was the reason for Siris Capital to walk away from the deal.

Synchronoss Technologies, Inc. provides cloud solutions and software-based activation for connected devices worldwide. The company’s products and services include cloud-based sync, backup, storage and content engagement capabilities, broadband connectivity solutions, analytics, white label messaging, and identity/access management that enable communications service providers, cable operators/multi-services operators, original equipment manufacturers with embedded connectivity, and multi-channel retailers, as well as other customers to accelerate and monetize value-add services for secure and broadband networks and connected devices.

PRICE

Synchronoss shares (SNCR) are down 12%, or $1.95, to $14.80 in pre-market market trading. Shares have a 52-weeks trading range of $10.11 – $49.94


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Orbital ATK Sold for $9.2 billion

Northrop Grumman Corp. to buy Orbital ATK for $134.50 a share

Orbital ATK Sold for $7.5 billion. See Stockwinners.com Market Radar to read more

Northrop Grumman (NOC) and Orbital ATK (OA) announced they have entered into a definitive agreement under which Northrop Grumman will acquire Orbital ATK for approximately $7.8B in cash, plus the assumption of $1.4B in net debt.

Orbital ATK shareholders will receive all-cash consideration of $134.50 per share.

The agreement has been approved unanimously by the boards of both companies. The transaction is expected to close in the first half of 2018 and is subject to customary closing conditions, including regulatory and Orbital ATK shareholder approval.

Upon completion of the acquisition, Northrop Grumman plans to establish Orbital ATK as a new, fourth business sector to ensure a strong focus on operating performance and a smooth transition into Northrop Grumman.

On a pro forma 2017 basis, Northrop Grumman expects to have sales in the range of $29.5B-$30B based on current guidance.

Northrop Grumman expects the transaction to be accretive to earnings per share and free cash flow per share in the first full year after the transaction closes, and to generate estimated annual pre-tax cost savings of $150M by 2020.

Northrop Grumman has received fully committed debt financing and expects to put in place permanent financing prior to closing.

Northrop Grumman remains committed to maintaining a solid investment grade credit rating and will use its strong cash flow to support debt reduction, while continuing to pay a competitive dividend and repurchase shares.


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Barron’s is bullish on Cullen/Frost and Caterpillar

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

Affiliated Managers bull case ‘working out well,’ – In a follow up story, Barron’s says that Affiliated Managers (AMG) stock has jumped about 25% over the past 12 months but the opportunity is not over.

Betting on Cullen/Frost (CFR) stock could produce a 25% gain – Frost Bank has survived the Great Depression, the oil-patch bust of the 1980s, and the housing bubble of the 2000s, but investors seem to be betting it will have a tough time handling Texas latest challenges, namely weak energy prices and the effects of Hurricane Harvey, Lawrence Strauss writes in this week’s edition of Barron’s. However, he believes anyone making that wager is likely to lose in the long run, with the shares of its parent Cullen/Frost Bankers looking like a bargain for patient investors who could have a 25% gain.

Caterpillar, Analog Device among few stocks rising on earnings surprises – Until recently, companies that beat quarterly earnings estimates could routinely expect shares to rise, but not anymore, Jack Hough writes in this week’s edition of Barron’s. Although there is a shortage of true upside surprises, Hough says there are still some, with Align Technology (ALGN), Analog Services (ADI), Caterpillar (CAT), E-Trade Financial (ETFC) and Red Hat (RHT) among those who beat earnings and revenue estimates and enjoyed quick share price gains as a result, which should bode well for future performance.

 

BEARISH  MENTIONS

Equifax breach unsettles online investors – Equifax (EFX) breach unsettles online investors, with brokers stressing the need for getting rid of Social Security IDs and for close monitoring of accounts for unusual activity, Theresa Carey writes in this week’s edition of Barron’s.

Almost no one expecting FedEx results to be good– FedEx  (FDX) is set to report first-quarter earnings on Tuesday, and almost no one is expecting them to be good, Ben Levisohn writes in this week’s edition of Barron’s. Levisohn argues, however, that just because FedEx is “an express shipper doesn’t mean we need to rush to judgment,” and says sitting back and waiting to see how TNT plays out looks like the best strategy.

Goldman Sachs might be underdog – Goldman Sachs (GS) is rarely thought of as an underdog, but it might be right now, Ben Levisohn writes in this week’s edition of Barron’s. Goldman’s decline is a result of its own missteps, Levisohn notes, adding that if it can correct its problems, its stock may be able to close the performance gap with its peers.


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iPhone X Coming Soon!

Watch Apple ahead of iPhone X launch

iPhone-X Coming Soon. See Stockwinners.com for details

Apple (AAPL) is expected to unveil the highly anticipated iPhone X tomorrow along with other new versions of its flagship mobile device. Commenting on the tech giant’s event, RBC Capital analyst Amit #Daryanani told investors that it may surpass expectations.

Meanwhile, his peer at JPMorgan argued that he expects the OLED based iPhone X to become available in October as Apple begins volume production in September.

APPLE EVENT

On Tuesday, September 12, Apple is expected to unveil its much anticipated 10th anniversary iPhone. According to a leak over the weekend, the new device will be called the iPhone X and will include wireless charging, facial recognition, edge-to-edge display and no home button.

Alongside the iPhone X, Apple is expected to release two other phones, namely the iPhone 8 and iPhone 8 Plus. Many also expect to see a third generation of the Apple Watch and a 4K Apple TV.

EVENT MAY TOP EXPECTATIONS

RBC Capital’s Daryanani told investors that Apple’s event tomorrow could surpass investors’ expectations, particularly as some of the new iPhone features are demonstrated live.

The analyst noted he believes the next generation flagship iPhone will feature a brand new form factor with an OLED display that spans edge-to-edge, upgraded A11 processors, wireless/inductive charging capability, a virtual home button embedded in the display, a 3-D facial recognition sensor for the front-facing camera, an augmented reality enabled rear-facing vertical dual lens camera, glass front and back with stainless steel edges, 3GB of RAM, 64GB and 256GB storage tiers, and improved water resistance.

Additionally, Daryanani expects Apple to introduce two new LCD iPhones, with pricing for the OLED device to start at $999 while the LCD models should be priced similarly to the current 7/7-plus. Alongside the new iPhones, Apple should also introduce a new Apple Watch with a cellular connection and a new TV product in addition to software updates for each device announced, he contended. The analyst reiterated an Outperform rating and $180 price target on the shares.

OLED IPHONE AVAILABLE IN OCTOBER

In a research note of his own, #JPMorgan analyst Rod #Hall told investors he currently expects the OLED based iPhone X to become available in October as Apple begins volume production in September. The specific week of October that the device begins shipping will have a few million units of impact on the December earnings forecasts, Hall noted, adding that the risk to earnings estimates is relatively small heading into the event.

The analyst pointed out that he estimates the 256GB version will cost $1,100, while the LCD models’ pricing should be similar to the iPhone 7 models. The analyst also believes that the most important thing Apple is likely to say about the Apple TV financially relates to the content available on the device, as he is expecting Amazon (AMZN) Prime Video to finally become available.

While the Apple Watch update that has been reported including LTE should be a small incremental positive, it is unlikely to move numbers, he added. Hall reiterated an Overweight rating on Apple’s shares.

SUPPLIERS TO WATCH

Here’s a look at five Apple iPhone chipmakers that should benefit from launch of iPhone X: Skyworks Solutions (SWKS), Texas Instruments (TXN), Analog Devices (ADI), Qorvo (QRVO) and Broadcom (AVGO).

PRICE ACTION

In Tuesday’s trading, shares of Apple have gained about 2% to trade near $161.50. Year-to-date, Apple shares have risen nearly 40%


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Equifax Hacked, Shares Tumble

Hackers stole data of 143 Million Americans including Social Security numbers

Equifax Site Hacked, 143 Million people affected. See Stockwinners.com for details

Hackers broke into credit-reporting firm of Equifax Inc. (EFX), possibly accessing personal data from up to 143 million or about two-thirds of the adult population of the U.S., the company disclosed late Thursday.

The hackers had access from mid-May until July of this year, and the breach may have compromised data from 143 million Americans including Social Security numbers, driver’s license numbers and credit card numbers. About 209,000 credit card numbers were exposed as well as “dispute documents with personal identifying information” for 182,000 Americans, the company said in a news release.

Equifax is one of the three largest U.S. credit reporting firms, which analyze detailed financial records of consumers across the world. The firms reports on creditworthiness determine if people can take out loans, get housing, and take jobs. Equifax says that it handles data on more than 820 million consumers, and 91 million businesses around the world.

The company has not found evidence core consumer or commercial credit reporting databases were hacked, but in addition to the U.S. data, hackers accessed data for some Canadian and U.K. residents.

[youtube https://www.youtube.com/watch?v=JARx3E7-BLs?rel=0&controls=0&w=560&h=315]

INSIDERS STOCK SALE

Before the news became public, several executives sold their shares.

According to Bloomberg News, Chief Financial Officer John Gamble sold $946,374 of company’s stock, U.S. Information Solutions President Joseph Loughran made $584,099 and Consumer Information Solutions President Rodolfo Ploder earned $250,458.

In the same filing, Loughran exercised an option to buy 3,000 shares at a price of $33.60.

ANALYSTS REACTION

#Deutsche Bank analyst Kevin #McVeigh believes shares of Equifax (EFX) could close down 10% today after the company disclosed a security breach potentially impacting up to 143M consumers. The stock in premarket trading is down 13%, or $18.72, to $124.00.

The analyst says that while difficult to quantify, his best effort suggests the financial impact could be in the range of $300M-$400M, which reflects the costs for credit monitoring, regulatory fines and penalties. Keith recommends waiting for Equifax shares to settle before accumulating fresh positions. The analyst, however, recommends buying TransUnion (TRU) on any selloff in sympathy to Equifax. He thinks TransUnion could trade down 3%-5% today before rebounding. Keith has a Buy rating on Equifax with a $160 price target.

JPMorgan analyst Andrew #Steinerman recommends buying shares of Equifax should today’s selloff on the data breach exceed 10%.  Important, Equifax’s core credit reporting databases were not impacted, Steinerman tells investors in a research note after speaking to management. The company’s CEO emphasized his belief that the financial impact of this incident will be isolated to the B2C segment, the analyst adds. Steinerman says his conviction in Equifax’s longer term business outlook “remains steadfast.” The analyst keeps an Overweight rating on the shares.

Stifel analyst Shlomo #Rosenbaum said he is not yet changing his estimates for Equifax (EFX) to account for its significant cybersecurity breach due to a lack of clarity, but added that “clearly our and the consensus estimates for 2017 and 2018 are just too high.

” Citing the prior large scale breaches at Target (TGT) and Home Depot (HD) as examples, Rosenbaum said $300M-$325M in gross costs would not be unreasonable for Equifax before accounting for the longer-term reputational impact and affect on existing and future customer relationships. Rosenbaum removed Equifax from the firm’s Select List, but as of now has a Buy rating and $149 price target on the stock.

PRICE ACTION

EFX has a 52-weeks trading range of $110.87 – $147.02. Shares closed at $142.72, last traded at $124.00


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