Intra-Cellular receives FDA Fast Track designation

 Intra-Cellular receives FDA Fast Track designation for lumateperone

Intra Cellular Therapies receives FDA's fast track designation. See Stockwinners.com for details

Intra-Cellular (ITCI) announced that the FDA has granted Fast Track designation for lumateperone for the treatment of schizophrenia.

Lumateperone (INN; developmental code names ITI-007ITI-722) is an investigational atypical antipsychotic which is currently under development by Intra-Cellular Therapies, licensed from Bristol-Myers Squibb, for the treatment of schizophrenia.  It is also being developed by Intra-Cellular Therapies for the treatment of bipolar disorder, depression, and sleep and behavioral disturbance in dementia, autism, and other neuropsychiatric disorders.

The company requested Fast Track designation for lumateperone based on clinical evidence that lumateperone has the potential to address the unmet medical need for the treatment of schizophrenia with significant improvements on several clinically significant safety parameters, including with respect to metabolic, motor and cardiovascular issues associated with many currently available antipsychotic agents.

The FDA’s Fast Track designation is designed to facilitate the development and expedite the review of drug candidates to treat serious and life-threatening conditions.

Fast Track designation may allow for more frequent meetings and communications with the FDA to discuss a drug candidate’s development plans and review process.

Drug candidates with Fast Track designation may also qualify for priority review to expedite the FDA review process, if relevant criteria are met.

ITCI closed at $15.32.


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.

Cavium sold for $6 billion

Marvell to acquire Cavium for $40.00 per share in cash plus 2.1757 MRVL stock

Cavium sold for $6 billion. See Stockwinners.com

Marvell Technology Group (MRVL) and Cavium (CAVM) announced a definitive agreement, unanimously approved by the boards of directors of both companies, under which Marvell will acquire all outstanding shares of Cavium common stock in exchange for consideration of $40.00 per share in cash and 2.1757 Marvell common shares for each Cavium share.

Upon completion of the transaction, Marvell will become a leader in infrastructure solutions with approximately $3.4B in annual revenue.

The transaction combines Marvell’s portfolio of leading HDD and SSD storage controllers, networking solutions and high-performance wireless connectivity products with Cavium’s portfolio of leading multi-core processing, networking communications, storage connectivity and security solutions.

The combined product portfolios provide the scale and breadth to deliver comprehensive end-to-end solutions for customers across the cloud data center, enterprise and service provider markets, and expands Marvell’s serviceable addressable market to more than $16B.

This transaction also creates an R&D innovation engine to accelerate product development, positioning the company to meet today’s massive and growing demand for data storage, heterogeneous computing and high-speed connectivity.

The transaction is expected to generate at least $150M-$175M of annual run-rate synergies within 18 months post close and to be significantly accretive to revenue growth, margins and non-GAAP EPS. Under the terms of the definitive agreement, Marvell will pay Cavium shareholders $40.00 in cash and 2.1757 Marvell common shares for each share of Cavium common stock.

The exchange ratio was based on a purchase price of $80 per share, using Marvell’s undisturbed price prior to November 3, when media reports of the transaction first surfaced.

This represents a transaction value of approximately $6B.

Cavium shareholders are expected to own approximately 25% of the combined company on a pro forma basis. Marvell intends to fund the cash consideration with a combination of cash on hand from the combined companies and $1.75B in debt financing.

Marvell has obtained commitments consisting of an $850M bridge loan commitment and a $900M committed term loan from Goldman Sachs Bank USA and Bank of America Merrill Lynch, in each case, subject to customary terms and conditions. The transaction is not subject to any financing condition.

The transaction is expected to close in mid-calendar 2018, subject to regulatory approval as well as other customary closing conditions, including the adoption by Cavium shareholders of the merger agreement and the approval by Marvell shareholders of the issuance of Marvell common shares in the transaction.

Matt Murphy will lead the combined company, and the leadership team will have strong representation from both companies, including Marvell’s current CFO Jean Hu, Cavium’s Co-founder and COO Raghib Hussain and Cavium’s Vice President of IC Engineering Anil Jain.

In addition, Cavium’s Co-founder and CEO, Syed Ali, will continue with the combined company as a strategic advisor and will join Marvell’s Board of Directors, along with two additional board members from Cavium’s Board of Directors, effective upon closing 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.

Barron’s turns bullish on Baker Hughes

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

Buy Baker Hughes – While it is “not easy” to be a General Electric company (GE) and seems like GE may be giving up on Baker Hughes (BHGE), it does not mean investors should, Ben Levisohn writes in this week’s edition of Barron’s. The recent selloff may be a chance to pick up shares of Baker Hughes at a bargain, he adds.

Activist investors Nelson Peltz still in P&G picture. – In a follow-up story, Barron’s notes that while a month ago Procter & Gamble (PG) claimed to have survived a challenge from activist Nelson Peltz, a new vote tally last week showed that Peltz’s Trian Fund Management had won a board seat. A Peltz win would be good for the stock, as the consumer-products giant has faced a lack of significant revenue growth, the publication contends

IBM could be next to fetch higher valuation – Investors are warming to moderately priced blue chips, and IBM could be the next “slumbering giant” that could fetch a higher valuation, Jack Hough writes in this week’s edition of Barron’s. IBM’s gross profit could grow in the current quarter for the first time in years, suggesting its big investment in analytic and cloud products are winning over customers, he notes, adding that a stock rebound could follow.

BEARISH MENTIONS

More needed for Cisco to have ‘groove back.’  – While the Nasdaq composite returned to its heights a couple of years ago, it took Cisco Systems (CSCO) until last week to regain its footing, with an upbeat outlook by the company, Tiernan Ray writes in this week’s edition of Barron’s. Cisco has “certainly achieved something,” but not everything it needs, he notes, adding that while it seems to have stability, it has a kind of fixation on its own balance sheet that does not bode well for its competitiveness in the years to come.

Risk remains after GE dividend cut – While buying General Electric (GE) shares after a big payment cut may seem like a safe move, it might not be as GE would have to move still lower to give it the “sort of plump yield befitting a struggling giant” in need of a turnaround, Jack Hough writes in this week’s edition of Barron’s. 


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.

NovoCure reports positive data from its brain cancer drug

Novocure says increased compliance with Optune showed increased survival

Novocure reports positive brain cancer data. See Stockwinners.com for details

Novocure (NVCR) announced results from a retrospective post-hoc analysis of its phase 3 pivotal EF-14 trial data showing that increased compliance with Optune predicted increased survival in glioblastoma patients.

Glioblastomas  are tumors that arise from astrocytes—the star-shaped cells that make up the “glue-like,” or supportive tissue of the brain. These tumors are usually highly malignant (cancerous) because the cells reproduce quickly and they are supported by a large network of blood vessels. Glioblastomas are generally found in the cerebral hemispheres of the brain, but can be found anywhere in the brain or spinal cord.

Results were highlighted in an oral presentation at the 22nd Annual Meeting of the Society for Neuro-Oncology in San Francisco.

The analysis showed that an Optune compliance threshold as low as 50% correlated with significantly improved outcomes in patients treated with Optune together with temozolomide compared to patients treated with temozolomide alone.

The results also demonstrated that the greater patients’ compliance with Optune, the better their outcomes.

Patients who used Optune more than 90% of the time had the greatest chance of survival: a median survival of 24.9 months from randomization and a five-year survival of 29.3%.

The median time from diagnosis to randomization was 3.8 months for patients treated with Optune together with temozolomide.

Novocure’s phase 3 pivotal EF-14 trial compared Optune in combination with temozolomide to temozolomide alone in 695 patients with newly diagnosed GBM. The trial was designed to test both progression free survival and overall survival.

The trial demonstrated unprecedented five-year survival results in newly diagnosed GBM.

Patients treated with Optune in combination with temozolomide experienced a significant extension of overall survival without added systemic toxicity compared to patients treated with temozolomide alone.

The data also showed that Optune-treated patients were able to maintain quality of life for longer compared to patients treated with temozolomide alone.

Patients in the EF-14 trial treated with Optune together with temozolomide were recommended to use Optune 75 percent of the time, or 18 hours per day.

This new analysis demonstrated that a threshold value as low as 50% compliance with Optune led to an extension of both PFS and OS versus temozolomide alone.

As compliance increased to 75% or greater, the survival benefit significantly increased. Patients who used Optune 70-80 percent of the time had a median survival of 21.7 months.

Patients who used Optune more than 90% of the time had the greatest chance of survival: a median survival of 24.9 months from randomization and a five-year survival of 29.3%.

The median time from diagnosis to randomization was 3.8 months for patients treated with Optune together with temozolomide.

The data also show that increased compliance independently predicted survival and was not affected by prognostic factors such as performance status, age or MGMT methylation.

NVCR closed at $18.60.


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.

JB Hunt and Wal-Mart to use Tesla’s trucks

J.B. Hunt reports reservation to purchase multiple Tesla Semi tractors

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

[youtube https://www.youtube.com/watch?v=5n9xafjynJA&w=640&h=360]

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

The electric tractor was unveiled by Tesla at an event on November 16.

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

In addition to the electric truck investment, J.B. Hunt is also supporting sustainable initiatives such as reducing engine idle time, governing top speed limits, converting over-the-road shipments to intermodal, engineering fleet routes that maximize efficiency, and using biodiesel fuels when possible.

In April, J.B. Hunt announced a five-year, $500M commitment to enhancing operating systems, developing cloud infrastructure, and creating innovative and disruptive technologies.

The additional investment in Tesla trucks further demonstrates J.B. Hunt’s commitment to meeting the needs of an evolving supply chain and introducing new technology for its customers and employees.

TESLA  TRUCKS

Tesla unveiled a sleek electric semi truck with semi-autonomous capabilities and a new roadster.

Emphasizing the truck’s “badass” performance, Tesla CEO Elon Musk pitched the new Tesla Semi as the safest, most comfortable truck ever.

The semi is a fully electric Class 8 truck, a category of freight vehicles that weigh more than 33,000 pounds, including tractor-trailer rigs that form the backbone of commercial road freight. This one, Musk said, can haul 80,000 pounds.

The truck can gain 400 miles of range with just a 30-minute charge from a “megacharger” and its operating cost per mile is 20 percent below that of conventional diesel semi trucks.

Tesla’s offering has a range of 500 miles at maximum weight at highways speeds, much higher than early spec reports of a range of 300 miles. Musk said the truck has a coefficient of drag of just 0.36, making it more aerodynamic than the Bugatti Chiron, a $2.7 million supercar with a drag coefficient of 0.38.

At the end of the event, Musk also presented the company’s new four-seat roadster, a car with 620 miles of range that can go from zero to 60 mph in 1.8 seconds. “The point of doing this is to give a hardcore smackdown to gasoline cars,” Musk said. It’s also claimed to be the fastest production car ever made.

ANALYST COMMENTS

Morgan Stanley analyst Ravi Shanker said Tesla “unveiled the future of trucking” with its Class 8 semi truck, which he contends appears to best current diesel truck performance in “almost every measurable way.” While what he heard was very impressive, questions remain about battery size, launch partners and third-party logistics services, said Shanker, who adds that “its now time to deliver.” The firm has an Equal Weight rating and $379 price target on Tesla shares.

Wal-Mart Gets Onboard

Following Tesla’s (TSLA) unveiling of a new electric semi-tractor-trailer last night, Wal-Mart issued the following statement to CNBC: “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.

TSLA closed at $313.00   JBHT closed at $102.98


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 to unveil its electric semi-truck tonight

Tesla to unveil its electric big-rig truck tonight

https://stockwinners.com/blog/

Tesla Inc (TSLA) to unveil a prototype electric big-rig truck, which may be able to drive itself, tonight at 8 pm PST.

Chief Executive Elon Musk has described electric trucks as Tesla’s next effort to move the economy away from fossil fuels through projects including electric cars, solar roofs and power storage.

Reuters in August reported that Tesla was working on self-driving technology for the truck. Several Silicon Valley companies see long-haul trucking as a prime early market for the self-driving technology, citing the relatively consistent speeds and little cross-traffic trucks face on interstate highways and the benefits of allowing drivers to rest while trucks travel.

The truck would have a working range of 200 to 300 miles, at the low end of what is considered “long-haul” trucking, Reuters reported. Diesel trucks are capable of traveling up to 1,000 miles on a single tank of fuel.

Musk said this week that the truck would “blow your mind clear out of your skull” when it was introduced in a webcast on Thursday at 8 p.m. PST.

He later tweeted, the truck “can transform into a robot, fight aliens and make one hell of a latte.” Musk seems to be embracing the criticism and he’s a hype man and making light of it.

“Semi specs are better than anything I’ve seen reported so far. Semi eng/design team work is aces, but other needs are greater right now,” Musk tweeted in October.

A Tesla truck with a range of 300 to 450 miles would be able to address less than half of the total semi-truck market, estimated Bernstein analyst .

The original debut date for the truck was October 26, which was delayed because of Model 3 production delays, and Tesla’s battery projects in Puerto Rico after the hurricane took out power on the island country after Hurricane Maria.

“A lot of people don’t think you can do a heavy-duty, long-range truck that’s electric, but we are confident that this can be done,” Musk told Tesla shareholders at its annual meeting in September. “So we’ll be showing off a working prototype not too long from now, at the end of September.”

Musk has said the Tesla Semi Truck will hit the roads in 2019. “We will probably reach scale production on the semi in about two years,” he said at the shareholder meeting in September. “Maybe 18 months, but probably about two years.”

TSLA last traded at $313.92.


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.

Merit Medical goes shopping

Merit Medical to purchase Becton Dickinson assets for $100M 

Merit Medical goes shopping. See Stockwinners.com for details

Merit Medical (MMSI) has signed an asset purchase agreement with Becton, Dickinson (BDX) to acquire certain assets which BD proposes to sell in connection with its proposed acquisition of C.R. Bard.

Merit’s proposed asset acquisition is subject to the closing of BD’s proposed acquisition of Bard as well as other usual and customary closing conditions.

The assets to be acquired are soft tissue core needle biopsy products currently sold by BD under the trade names of Achieve Programmable Automatic Biopsy System, Temno Biopsy System and Tru-Cut Biopsy Needles.

Additionally, Merit proposes to acquire the Aspira Pleural Effusion Drainage Kits and the Aspira Peritoneal Drainage System currently marketed by Bard.

The purchase price for the product lines and related assets to be acquired is $100M, subject to adjustment for fluctuations in the value of transferred inventory. Merit intends to finance the acquisition at closing through borrowings which are currently available under its revolving credit facility.

After giving effect to the proposed transaction, Merit anticipates its debt to adjusted EBITDA will increase from approximately 2.20 to approximately 2.70.

This transaction is expected to be accretive to both GAAP and non-GAAP earnings in 2018. Merit’s management expects the acquisition to provide incremental annual revenues in the range of $42M-$48M, adjusted gross margins for the subject product lines in the range of 60-70%, and, over a period of six to twelve months, to be accretive by 50-120 basis points to Merit’s adjusted gross margins.

The transaction is also expected to expand operating margins and increase cash flow. Merit’s management expects the acquisition to provide 10c-19c in adjusted non-GAAP EPS accretion in FY18.


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.

Almost Family and LHC Group merge

LHC Group, Almost Family to combine in an all-stock merger of equals transaction

LHC Group (LHCG) and Almost Family (AFAM) announced today that they have agreed to combine in an all-stock merger of equals transaction pursuant to a definitive merger agreement unanimously approved by the Boards of Directors of each company.

The merger will create a nationwide provider of in-home healthcare services with a long track record of successfully partnering with hospitals and health systems led by the most experienced management team steeped in home health.

The combined company will have 781 locations in 36 states with more than 31,000 employees and revenue of $1.8 billion and Adjusted EBITDA of approximately $145 million for the trailing 12-month period ended September 30, 2017.

Under terms of the transaction, Almost Family shareholders will receive 0.9150 shares of LHC Group for each existing Almost Family share. Upon closing of the transaction, LHC Group shareholders will own 58.5% and Almost Family shareholders will own 41.5% of the combined company.

The stock issuance in the merger is expected to be tax-free to shareholders of both companies.

The transaction, which is expected to be completed in the first half of 2018, is subject to the receipt of regulatory approvals and other customary closing conditions as well as the approval of shareholders of both LHC Group and Almost Family.

The combined company will continue to trade on NASDAQ under the ticker symbol, “LHCG.” William Yarmuth, current chairman and chief executive officer of Almost Family, will remain as a special advisor to the combined company, while Steve Guenthner, current president and principal financial officer of Almost Family, will be named chief strategy officer.

Keith Myers, current chairman and chief executive officer of LHC Group, will be named chairman and chief executive officer of the combined company, while Donald Stelly will be named president and chief operating officer and Joshua Proffitt will be named chief financial officer.

The Board of Directors will be comprised of ten members, six of which (including Mr. Myers and Lead Independent Director Billy Tauzin) will be current LHC Group directors and four of which will be Almost Family directors.

The combined companies’ Home Office will remain in Lafayette, La., and Personal Care Services, Healthcare Innovations and other support services will continue to operate out of Louisville, Ky.


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.

Ultragenyx announces FDA approval of its Sly Syndrome drug

Ultragenyx announces FDA approval of MEPSEVII

Ultragenyx announces FDA approval of MEPSEVII. See Stockwinners.com for details

Ultragenyx Pharmaceutical (RARE) announced that the U.S. Food and Drug Administration has approved MEPSEVII, the first medicine approved for the treatment of children and adults with Mucopolysaccharidosis VII.

MEPSEVII is an enzyme replacement therapy designed to replace the deficient lysosomal enzyme beta-glucuronidase in MPS VII patients.

MPS VII is a mucopolysaccharide disease also known as Sly syndrome.

MPS VII is a rare genetic, metabolic lysosomal storage disorder caused by the deficiency of beta-glucuronidase, an enzyme required for the breakdown of the glycosaminoglycans dermatan sulfate, chondroitin sulfate and heparan sulfate. These complex GAG carbohydrates are a critical component of many tissues.

The inability to properly break down GAGs leads to a progressive accumulation in many tissues and results in a multi-system tissue and organ damage.

MPS VII is one of the rarest MPS disorders, with an estimated 200 patients in the developed world.

MEPSEVII was evaluated by the FDA with Priority Review, which is reserved for drugs that offer major advances in treatment or provide a treatment where no adequate therapy exists.

With this approval, the FDA issued a Rare Pediatric Disease Priority Review Voucher, which confers priority review to a subsequent drug application that would not otherwise qualify for priority review.

The rare pediatric disease review voucher program is designed to encourage development of new drugs and biologics for the prevention or treatment of rare pediatric diseases.

MEPSEVII will be available to patients in the U.S. later this month.

In Europe, the European Medicines Agency is currently reviewing the Marketing Authorization Application for vestronidase alfa, and an opinion from the Committee for Medicinal Products for Human Use is expected in the first half of 2018.

RARE last traded at $46.44, up 88 cents.


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.

Wal-Mart reports on Thursday

What to watch in Wal-Mart earnings report

Wal-Mart Guides Higher. See Stockwinners.com for details

Wal-Mart (WMT) is scheduled to report results of its third quarter before the market open on Thursday, November 16, with a conference call scheduled for 7:00 am EDT.

What to watch for:

1. GUIDANCE:

Wal-Mart is expected to update its guidance for the fiscal year. Wal-Mart previously forecast Q3 EPS of 90c-98c and comp sales for Walmart U.S. up 1.5%-2% excluding fuel and Sam’s Club comps excluding fuel up 1%-1.5%.

The company raised the low end of its FY18 adjusted EPS view to $4.30-$4.40 from $4.20-$4.40 and backed this guidance at its investor day.

Also at the investor day event, Wal-Mart forecast FY19 EPS to be up approximately 5% vs. FY18 adjusted EPS, with consolidated net sales growing at or above 3%. Baird analyst Peter Benedict expects a solid quarter with good comps and traffic momentum and a guide to earnings growth.

2. COMPETITION:

Retailers like Wal-Mart have been hurt by an increase in online shopping on sites like Amazon (AMZN) rather than at brick-and-mortar stores.

According to reports, Wal-Mart has raised prices for some food and household items on its U.S. website to be higher than prices for the same products sold in-store in an effort to increase profits and drive store traffic.

Wal-Mart, which has previously tried to keep online prices equal to in-store prices, is testing a new system, which has caused higher web prices for products that would otherwise be unprofitable to ship.

Wal-Mart recently sent a recreational vehicle to the University of Pennsylvania as part of a roughly dozen college recruitment tour to break into Ivy League recruitment, Bloomberg reported. The move comes after CEO Doug McMillon told investors Wal-Mart would “look even more like a tech company” to respond to competition from Amazon.

Recently, rival eBay (EBAY) said it will match rivals’ prices on many top Black Friday deals through Cyber Monday. Lidl is gaining little traction after expanding in the U.S. with grocers Wal-Mart and Kroger (KR) recovering most of the market share they lost when the German discounter opened its first nine U.S. stores in June, The Wall Street Journal reported last month.

In October, Wal-Mart said it expects to have grocery pickup in over 2,000 stores by the end of 2018 and noted that its Sam’s Club fresh food efforts are “really encouraging.”

3. OTHER INITIATIVES:

Wal-Mart is looking to grow its presence in the online fashion market, recently buying Bonobos, ShoeBuy, Moosejaw and ModCloth.

Wal-Mart President and CEO Doug McMillon said on the Q2 earnings call that the retailer is testing associate delivery of online orders in “a few” stores and plans to have approximately 100 automated pickup towers in stores across the U.S. by the end of the year, “where customers can pick up their orders within a matter of minutes.”

He also noted that Wal-Mart has tests going on with “digital endless aisle shopping, robotics and image analytics to scan aisles for outs and we’re using machine learning to assist our merchants with pricing.”

More recently, Walmart.com and Lord & Taylor said that Lord & Taylor will launch a flagship store on Walmart.com in Spring 2018.

4. HOLIDAY SEASON:

Wal-Mart is giving employees the opportunity to work extra hours during the holiday season rather than hire temporary seasonal workers.

In addition, the retailer said it will offer more than 2M items for free two-day shipping without a membership fee on orders over $35.

Also, Wal-Mart announced plans to bring back its Holiday Helpers, associates dedicated to assisting customers, and will increase the number of them in stores to help customers.

Wal-Mart will also host more than 20,000 holiday parties at its Supercenters.

WMT last traded at $90.58.


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.

Bonanza Creek sold for $746 million

SandRidge Energy to acquire Bonanza Creek for $36.00 per share in cash, stock

Bonanza Creek sold for $764M. See Stockwinners.com for details

SandRidge Energy (SD) and Bonanza Creek Energy (BCEI) jointly announced today that the two companies have entered into a definitive merger agreement under which SandRidge will acquire all of the outstanding shares of common stock of Bonanza Creek in a cash-and-stock transaction valued at $36.00 per share.

The consideration consists of $19.20 in cash and $16.80 of SandRidge shares for each Bonanza Creek share, subject to the collar mechanism described below.

Bonanza Creek Energy, Inc. engages in the exploration, development, and production of onshore oil and related liquids-rich natural gas in the United States.

Bonanza Creek shareholders will receive $36.00 per share under the terms of the agreement, comprised of $19.20 per share in cash and $16.80 per share in common shares of SandRidge stock, subject to the collar mechanism.

This represents a 17.4% premium to Bonanza Creek’s closing price as of November 14.

This purchase price implies a total transaction value of approximately $746M, comprised of $398M in cash and 18.89M shares of SandRidge stock, based on SandRidge’s stock price as of November 14.

Following the transaction, shareholders of Bonanza Creek are expected to own between approximately 31.4% and 35.8% of the outstanding shares of SandRidge based upon the Average Parent Stock Price.

One of the independent directors of Bonanza Creek will be joining the Board of Directors of SandRidge.

The stock portion will be subject to a collar based on the volume weighted average price of SandRidge common shares over the 20 business days ending on the third business day prior to closing. If the Average Parent Stock Price is greater than or equal to $17.50 but less than or equal to $21.38, Bonanza Creek shareholders will receive a number of SandRidge shares between 0.7858 and 0.9600 equal to $16.80 in value per Bonanza Creek share. Bonanza Creek shareholders will receive 0.9600 SandRidge common shares if the Average Parent Stock Price is below $17.50 and 0.7858 SandRidge common shares if the Average Parent Stock Price is above $21.38.

The Boards of Directors of both companies have unanimously approved the terms of the agreement, and have recommended that both shareholder groups approve the transaction.

The completion of the transaction is subject to the approval of each company’s shareholders, certain regulatory approvals and customary closing conditions.

The transaction is expected to close in the first quarter of 2018.

Accretive Purchase

James Bennett, SandRidge’s CEO, said “This acquisition greatly enhances our existing portfolio by adding a deep inventory of drill-ready locations in the DJ Basin of Colorado and is highly complementary to our existing North Park, Northwest STACK and Mississippian assets.

The geological and operational characteristics of Bonanza’s Niobrara and Codell locations are analogous to our existing Colorado North Park assets, and we expect to benefit from the expertise of their teams. Overall, we believe this will drive strong risk-adjusted returns in both areas. Likewise, SandRidge will benefit from the greatly increased scale and substantial cost and operational synergies as a result of the transaction. Lastly, the acquisition will be accretive to cash flow per share and will enhance our ability over time to increase cash flow generation of the business.”


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.

Envision Healthcare could be sold

Envision rises amid report of private equity interest

Envision Healthcare could be sold. See Stockwinners.com for more

Shares of Envision Healthcare (EVHC) are on the rise following a report by Bloomberg claiming the company has attracted buyout interest from private equity investors.

The hospital based physician group, which activist Starboard Value has targeted, had previously announced that it was exploring options to enhance shareholder value.

Meanwhile, Baird analyst Whit Mayo told investors that Envision could be worth in the area of $40 per share in a leveraged buyout, which is an estimated value that his peer at Keybanc also sees as possible.

PRIVATE EQUITY INTEREST

According to a report by Bloomberg, Envision has attracted buyout interest from firms including Carlyle Group (CG) and Onex Corp.

The two are among companies that may bid for Envision alone or as part of a group, the report added.

The health-services provider has been under pressure from activist investor Starboard Value, who revealed a stake in Envision in October and recommended the company as an attractive takeover target, Bloomberg noted.

LBO ‘DOABLE’

In a research note to investors published prior to the release of Bloomberg’s report, Baird‘s Mayo noted that he would guess that about three to four hedge funds now collectively own about 20% of Envision Healthcare, with “potentially more in the shadows,” and that a leveraged buyout is “very doable” if one believes there is an investment case for industry volumes.

If there is a case seen for structural changes in volumes, cash collections and/or physician rate, Mayo sees the potential for “very acceptable returns” on a theoretical leveraged buyout in the $40 per share area, he contended.

#Mayo pointed out that he thinks the upside risk of a leveraged buyout is being “underappreciated,” and reiterated an Outperform rating and $35 price target on the shares.

Meanwhile, KeyBanc analyst Jason #Gurda told investors in a research note of his own that he also believes a private equity buyer could reasonably bid “in the low $40s” for Envision in a leveraged buyout.

The analyst noted that he was not surprised to hear of reports that there is private equity interest in the company as in the past there has been a considerable level of private equity investment in both of Envision’s business segments – physician services and ambulatory surgical centers. Gurda reiterated an Overweight rating on the stock, while raising his price target on the shares to $40 from $37.

PRICE ACTION

In Tuesday’s trading, shares of Envision have jumped about 7% to $27.66. Year-to-date, however, the stock is still down over 56%.


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.

Target reports on Wednesday

What to watch in Target’s earnings report

target

Target (TGT) is scheduled to report results of its third fiscal quarter before the market open on Wednesday, November 15, with a conference call scheduled for 8:00 am EDT.

What to watch for:

1. COMPETITION WITH ONLINE RETAILERS

Retailers like Target have been hurt by an in online shopping on sites like Amazon (AMZN) rather than at brick-and-mortar stores. Analysts and investors will be listening for Target executives to comment on Amazon’s acquisition of Whole Foods.

Earlier this month, Reuters said Target and other retailers are using legal rights in real estate agreements to limit the initiatives of Amazon’s Whole Foods Market in malls, adding that the retailers have legal rights that enable them to limit Amazon’s Whole Foods activity near their location and bans on Amazon lockers and delivery operations near Target stores in Illinois and Florida have already been established. Morgan Stanley analyst Kimberly Greenberger told investors that her firm’s latest apparel survey lends support to her belief that Amazon is quickly gaining traction at the expense of department stores and certain specialty retailers.

Target Chairman and CEO Brian Cornell said that the retail environment is “crowded” and the environment will continue to be challenging.

2. GUIDANCE

Following better than expected second quarter results, Target forecast third quarter adjusted EPS of 75c-95c and said both Q3 and Q4 comp growth will be within the range the company experienced in Q1 and Q2. The company expects FY17 comp sales growth to be around flat, plus or minus 1%.

Target again raised its FY17 adjusted EPS view to $4.34-$4.54 from $3.80-$4.20.

3. HOLIDAY SEASON UPDATE

Target recently announced plans for the holiday season, including free shipping and gifts under $15.

The company is also allowing customers to receive their orders in several ways, including visiting one of its 1,800 stores, ordering online for delivery from Target.com, using Order Pickup or using Target Restock.

Last month Target said it planned to hire about 100,000 team members across the country for the upcoming holiday season, up from the 70,000 employees it hired last year, and said it would hire 4,500 team members at the company’s distribution and fulfillment centers to replenish products to stores and fulfill digital sales throughout the season. Earlier this month, Target announced its nationwide expansion on Google Express (GOOG, GOOGL), including voice- activated shopping, as well as the addition of Target REDcard as a payment option in 2018.

4. STORE REMODELS, CLOSURES

Target is expanding its plans to remodel supercenters and open smaller stores in cities. Target will remodel over 55% of its current stores by year end 2020.

CEO Brian Cornell said sales have increased 2%-4% at recently remodeled stores.

In addition to the 110 stores remodeled in 2017, Target plans to fully renovate more than 325 in 2018, 350 in 2019 and 325 in 2020.

CNBC said Target is planning to close about a dozen underperforming stores in Michigan, Florida, Illinois, and Texas, with those locations closing in February of 2018.

“We have a rigorous process in place to evaluate the performance of every store on an annual basis, closing or relocating underperforming locations as needed,” a spokesperson said, adding that “Typically, a store is closed as a result of seeing several years of decreasing profitability.”

TGT last traded at $59.78. The issue has a 52-weeks trading range of $48.56 – $79.33.


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.

Buffalo Wildwing soars on takeover offer

Buffalo Wild Wings receives $2.3 billion offer

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

Shares of Buffalo Wild Wings (BWLD) are sharply higher following a Wall Street Journal report saying that private-equity firm Roark Capital Group has made a bid for the company.

According to the report, Roark offered to pay “more than $150 a share,” or more than $2.3 billion, for Buffalo Wild Wings.

Buffalo Wild Wings has faced some trouble over the last year, as the company struggles with high wing costs and declining sales at stores open for at least 15 months.

Activist investors at Marcato Capital Management won several board seats during the summer and are pushing the company to franchise more of its restaurants and improve its technology.

ANALYST  COMMENTS

#Mizuho analyst Jeremy Scott wrote to clients that “we can only speculate as to whether or not this bid was solicited.” But he also thinks the company’s board is likely taking the offer seriously. “We anticipate that the activist refranchising initiative may have faced growing resistance both internally and externally,” he adds.

Wells Fargo analyst Jeff Farmer has “conviction in a potential Roark acquisition,” due to the company’s financial struggles as of late and its “leadership void” — CEO Sally Smith announced her resignation on the same day that Marcato won its board seats.

He thinks that there is “modest opportunity for a competing bid” but isn’t sure if one will come around. On one hand, investors might feel that a $150/share bid undervalues the company. But interested bidders might not want to pay much more for Buffalo Wild Wings given falling traffic and weak financials at the chain.

Credit Suisse analyst Jason West says he views the offer as a modest surprise given the latter’s negative same store sales and margins trends in recent years. The analyst reiterates a Neutral rating on Buffalo Wild Wings’ shares.

Maxim analyst Stephen Anderson notes yesterday’s press speculation of a bid for Buffalo Wild Wings from Roark Capital, saying that while the $150/share price is “plausible”, there is potential for a competing bid given the company-specific initiatives to cut expenses and an improving food cost climate.

Anderson says that despite the industry headwinds and the pending exit of CEO Sally Smith, the company is laying the groundwork for a return to SSS growth, margin expansion, and increased shareholder returns.

The analyst also says the recent decline in spot wing costs, already down 15% since summer end, will add to EPS next year. Anderson keeps his Buy rating and $160 price target on Buffalo Wild Wings.

Stifel analyst Chris O’Cull said he thinks Roark could be a credible buyer given its success with several restaurant investments, including Wingstop, and that BWW could be a willing seller given Marcato’s involvement and the company’s recent struggles defining a clear vision for improving shareholder value. O’Cull has a Hold rating and $115 price target on Buffalo Wild Wings shares.

BWLD closed at $117.25. It last traded at $148.40.


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.

Loxo Oncology to receive $400 million

Loxo Oncology, Bayer enter into an exclusive global collaboration

Loxo Oncology to present at upcoming lung cancer conference. See Stockwinners.com for details

Bayer (BAYRY) announced that the company has entered into an exclusive global collaboration with Loxo Oncology (LOXO) for the development and commercialization of larotrectinib (LOXO-101) and LOXO-195.

Both compounds are being investigated in global studies for the treatment of patients with cancers harboring tropomyosin receptor kinase gene fusions, which are genetic alterations across a wide range of tumors resulting in uncontrolled TRK signaling and tumor growth.

Under the terms of the agreement, Loxo Oncology will receive an upfront payment of $400M and is eligible for $450M in milestone payments upon larotrectinib regulatory approvals and first commercial sale events in certain major markets and an additional $200M in milestones payments upon LOXO-195 regulatory approvals and first commercial sale events in certain major markets.

Bayer and Loxo Oncology will jointly develop the two products, larotrectinib and LOXO-195, and share development costs on a 50/50 basis.

Bayer will lead ex-U.S. regulatory activities, and worldwide commercial activities. In the U.S., where Bayer and Loxo Oncology will co-promote the products, the parties will share commercial costs and profits on a 50/50 basis.

Loxo Oncology will remain responsible for the filing in the U.S. Bayer will pay Loxo Oncology tiered double-digit percentage royalties on future net sales outside of the U.S., and U.S. and ex-U.S. sales milestones totaling $500M.

Bayer will pay Loxo Oncology a $25M milestone upon achieving a certain U.S. net sales threshold. Outside of the U.S., where Bayer will commercialize, Bayer will pay Loxo Oncology tiered, double-digit royalties on net sales, and sales milestones totaling $475M. Bayer will book revenues worldwide.

Loxo Oncology was advised by Fenwick and West in the transaction.

WHAT’S NOTABLE

In a clinical trial presented in June by Loxo, larotrectinib demonstrated a 76% objective response rate in patients with cancers that contained the TRK fusions but originated in different parts of the body.

In those studies 12% saw their tumors entirely disappear while 64% saw theirs tumors partially shrink. David Hyman, MD, of Memorial Sloan Kettering Cancer Center, said at the time that “We believe [these data] demonstrate that larotrectinib is profoundly effective in a durable manner in patients with TRK fusion cancers.”

Loxo expects to submit an NDA to the FDA for the larotrectinib program in late 2017 or early 2018, with the potential for an FDA decision by mid-2018. As the only selective pan-TRK inhibitor currently in clinical development, larotrectinib could “potentially be the first novel targeted therapy that’s developed and eventually used in a ‘tumor-agnostic’ manner,” Hyman said.

TRK fusions occur in between 1,500 and 5,000 cancer patients per year, or about 1%-3% of cancer cases.

PRICE ACTION

Though Loxo Oncology initially jumped, the stock is now down about 5.4% to $78.75 after pre-market trading was resumed.

RELATED BLOGS


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.