Economic Activities Slowed in December

U.S. flash Markit PMIs all slipped in December

U.S. flash Markit Purchasing Managers Index’s (PMI) all slipped in December as activity eased amid well known headwinds such as capacity constraints and Omicron variant spread.

Flash Manufacturing PMI is an estimate of manufacturing for a country, based on about 85% to 90% of total Purchasing Managers’ Index (PMI) survey responses each month.

Any reading of the Flash Manufacturing PMI above 50 indicates improving conditions, while readings below 50 indicate a deteriorating economic climate.

The manufacturing index fell another -0.5 ticks to 57.8 in December after dipping -0.1 ticks to 58.3 in November. It is the weakest since the 57.1 last December.

The index has been sliding from the record high of 63.4 in July, but it remains in expansion for an 18th straight month.

New orders declined to 56.3 from 56.9, while supplier delivers increased to their best reading since May.

The preliminary services index also fell -0.5 ticks to 57.5 on the month following the -0.7 point decline to 58.0. The reading is above the 54.8 from a year ago, however, and has been above 50 since July 2020.

The business expectations component improved to its highest reading since November 2020.

Input prices climbed to 77.4 versus 75.7 last month and is at an all-time peak (data goes back to 2009).

The composite reading dipped -0.3 ticks to 56.9 from November’s 57.2 and was at 55.3 last December. Input prices increased to a new record level at 78.1 from November’s 77.6.

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Altice USA to acquire Cogeco for $7.8B

Altice USA to acquire Cogeco, to sell Cogeco Canadian assets to Rogers

Altice USA (ATUS) announced that it has presented an offer to Cogeco, or CGO, and Cogeco Communications, or CCA, (CGEAF) to acquire 100% of the issued and outstanding shares of Cogeco.

COGECO sold and broken into pieces

Cogeco Inc. is a Canadian telecommunications and media company. The company operates Cogeco Communications Inc. which is structured into three strategic business units; Cogeco Connexion, Atlantic Broadband, and Cogeco Media.

Altice USA buys Cogeco and sells parts to Roger Comm.

Altice USA has also entered into an arrangement to sell all the Canadian assets of Cogeco to the largest long-term shareholder of Cogeco, Rogers Communications (RCI), if its transaction with Cogeco is completed.

Upon completion of the overall transaction, Altice USA would own all the U.S. assets of Cogeco, namely Atlantic Broadband.

The aggregate all-cash consideration offered for all of the outstanding shares of CGO and CCA, including those owned by Rogers, is approximately $7.8B.

This includes approximately $3.6B to be paid by Altice USA for the U.S. assets: All the multiple voting shares of CGO are held in a company controlled by Mr. Louis Audet, the Executive Chairman of Cogeco, and members of the Audet family.

Given the position of the controlling shareholder, its support is necessary to complete a transaction, and as such the Altice USA offer includes a sizeable premium on those shares.

Altice USA ends up with Atlantic Broadband

Specifically, the offer includes $612M to the Audet family for their ownership interests, which include 100% of the multiple voting shares of CGO, or CGO MVS, and approximately 0.9% of total outstanding CGO subordinate voting shares, or CGO SVS.

The offer also includes C$106.53 per share for the remaining CGO SVS and C$134.22 per share for each CCA subordinate voting share, or CCA SVS.

These offer prices represent a significant premium of 30% to each stock’s 1-month volume weighted average price, or VWAP, on the Toronto Stock Exchange (the offer prices also represent a 36% premium for CGO SVS and 37% premium for CCA SVS to the August 31 closing prices).

This offer is in line with Altice USA’s previously stated objective to opportunistically grow through value-accretive acquisitions.

The acquisition of Atlantic Broadband, if consummated, would allow Altice USA to build on its success with prior cable acquisitions in the United States and expand its operations across 11 states on the east coast of the United States, adjacent to its existing Optimum and Suddenlink footprints.

Altice USA’s share repurchase and net leverage targets for 2020 remain unchanged from this transaction.”

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Polycom sold for $2 billion

Plantronics to acquire Polycom for $2B in cash, stock deal

 Plantronics to acquire Polycom for $2B. Stockwinners.com
Plantronics to acquire Polycom for $2B.

Plantronics (PLT)  and Polycom announced that they have entered into a definitive agreement under which Plantronics will acquire Polycom in a cash and stock transaction valued at $2B enterprise value.

The transaction has been unanimously approved by the boards of directors of both companies, is subject to regulatory approvals and other customary closing conditions, and is expected to close by the end of the third calendar quarter of 2018. With the acquisition of Polycom, Plantronics will become the partner of choice for the communications and collaboration ecosystem.

Polycom, a privately held company, brings a global leadership position in voice and video collaboration, accelerating Plantronics vision of delivering new communications and collaboration experiences.

With the addition of Polycom, Plantronics will have the broadest portfolio of complementary products and services across the global communications and collaboration ecosystem, and the ability to create exceptional user experiences.

The combination positions Plantronics to capture additional opportunities across the $39.9B Unified Communications and Collaboration industry driven by innovation in video and the ubiquity of audio, building growth opportunities through data analytics and insight services.

Polycom significantly expands Plantronics services offering, providing a meaningful presence in management and analytics services.

The transaction is expected to be immediately accretive to Non-GAAP EPS. Plantronics targets achieving annual run-rate cost synergies of $75M within 12 months of transaction close.

Under terms of the definitive agreement, Plantronics will acquire Polycom for $2B enterprise value consisting of an estimated $690M of net debt and an estimated $948M in cash and 6.352M Plantronics shares, valued at $362M based on the 20 trading day average closing price of Plantronics stock prior to signing, resulting in Polycom shareholders owning approximately 16.0% of the combined company.

Estimated amounts are subject to customary post-closing adjustments per the definitive agreement. Frank Baker, Founder and Managing Partner, Siris Capital, and Daniel Moloney, Executive Partner, Siris Capital, will join Plantronics Board of Directors.

Plantronics intends to fund the cash portion of the consideration with cash on hand and approximately $1.375B in new, fully-committed debt financing. Wells Fargo Bank and affiliates have committed to provide the debt financing for the transaction, subject to customary conditions. P

lantronics expects to pay down a significant portion of the debt within the next several years with cash on the balance sheet and through cash generation.


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Mr. Broadcom goes to Washington

Broadcom pledges cooperation with U.S., sees U.S. ‘global leader’ in 5G 

Broadcom goes to Washington, Stockwinners.com
Broadcom goes to Washington

Broadcom Limited (AVGO) released an open letter to Members of Congress regarding its offer to acquire Qualcomm (QCOM), stating in part:

“We appreciate your interest in our offer to acquire Qualcomm Incorporated and would like to take this opportunity to respectfully address a number of issues with regard to this transaction and its potential impact.

Much of the recent communication about our acquisition has centered on concerns about the future development of 5G technology. To make it clear that we are steadfast in our support of 5G development, I recently made this public pledge: Broadcom is committed to making the United States the global leader in 5G.

Mr. Broadcom goes to Washington

Any notion that a combined Broadcom-Qualcomm would slash funding or cede leadership in 5G is completely unfounded. We have a proven track record of investing in and growing core franchises in the companies we acquire. In the case of Qualcomm, this will be 5G cellular.

We are fully committed to making the United States the global leader in 5G by focusing resources and strengthening leadership in this area. We also will work closely with the United States government as we drive to achieve and sustain this global leadership in 5G and beyond.

Consistent with that commitment, Broadcom is also pledging to create a new $1.5 billion fund with a focus on innovation to train and educate the next generation of RF engineers in the United States. This will ensure America’s continued leadership in future wireless technology.

In addition, Broadcom will not sell any critical national security assets to any foreign companies. Of course, any dispositions of assets to foreign buyers would be themselves subject to CFIUS review…

Second, I want to make it clear that Broadcom is today in every important respect an American company. We are built on the roots of several innovative and leading United States technology companies including Hewlett-Packard, AT&T, Broadcom Corporation and Brocade Communications Systems.

Broadcom is led by an executive team of American citizens and a Board of Directors made up of nearly all American citizens…T

he bottom line is that a combined, American Broadcom-Qualcomm will be a more focused and stronger champion for sustained United States leadership in 5G than a standalone Qualcomm, an outcome that strongly supports America’s national security interests.”


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T-Mobile to launch TV service

T-Mobile acquires TV tech company Layer3 TV, launch new TV service

T-Mobile to Launch TV Service - Stockwinners
T-Mobile to Launch TV Service

T-Mobile (TMUS) US resident and CEO John Legere unveiled the next phase in the Un-carrier’s mobile video strategy, announcing plans to launch a disruptive new TV service in 2018.

To fuel that, Legere also announced the Un-carrier has signed a definitive agreement to acquire TV technology innovator Layer3 TV, Inc. and will work with Layer3 TV’s leading technology and talent to create T-Mobile’s new TV service.

People love their TV, but they hate their TV providers. And worse, they have no real choice but to simply take it – the crappy customer service, clunky technology and outrageous bills loaded with fees! That’s where we come in. We’re gonna fix the pain points and bring real choice to consumers across the country,” said John Legere, president and CEO of T-Mobile.

“It only makes sense for the Un-carrier to do to TV what we’re doing to wireless: change it for good! Personally, I can’t wait to start fighting for consumers here!”

T-Mobile added: “Currently, Layer3 TV delivers a product that seamlessly integrates the best of television, streaming online video content and social media and is available in five cities across the US. With Layer3 TV’s leading technology and talented team, T-Mobile plans to launch its own disruptive new TV service next year, tapping into the amazing content available from creators today to disrupt legacy cable and satellite TV’s distribution model.

The Un-carrier’s new TV service will take full advantage of T-Mobile’s nationwide retail presence, top-rated brand and award-winning sales and customer care organizations.”

Legere also said that services like Netflix (NFLX) are “absolutely booming.” Says TV service plans part of long-term Un-carrier strategy for video and mobile entertainment. Says legacy TV model “utterly broken,” looks like wireless from a few years ago. Legere expects the Layer3 deal to close in the next few weeks.

TMUS is up 82 cents to $64.30.


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DOJ to block AT&T and Time Warner’s merger

Analysts cut Time Warner, AT&T targets following DOJ lawsuit

Time Warner Name to Become History, See Stockwinners.com Market Radar

Following the news that the U.S. Department of Justice is suing to block AT&T (T) and Time Warner’s (TWX) merger deal, several Wall Street analysts lowered their price targets for both names.
Nonetheless, Baird analyst William Power argued that he sees the merits of the antitrust case favoring AT&T.

DOJ LAWSUIT

Yesterday, the U.S. Department of Justice announced that it is suing to block the deal agreed to between AT&T and Time Warner.
Commenting on the news, AT&T’s Senior Executive VP and General Counsel David McAtee II said the DOJ lawsuit is “a radical and inexplicable departure from decades of antitrust precedent.”
He added: “Vertical mergers like this one are routinely approved because they benefit consumers without removing any competitor from the market.
We see no legitimate reason for our merger to be treated differently. […] Fortunately, the Department of Justice doesn’t have the final say in this matter. Rather, it bears the burden of proving to the U.S. District Court that the transaction violates the law. We are confident that the Court will reject the Government’s claims and permit this merger under longstanding legal precedent.”

PRICE CUTS

In light of the news that the DOJ will be suing to block the merger, Wells Fargo analyst Marci Ryvicker lowered her price target for Time Warner to $84 from $100 to reflect its standalone value.
Looking at Time Warner purely on fundamentals, the analyst told investors that she is not totally sure 2018 estimates are accurate given that the company has given no sense of trends for next year.
While #Ryvicker acknowledged that many investors have asked what Time Warner is worth, she does not think anyone steps in for it. The analyst reiterated a Market Perform rating on Time Warner’s shares.
Her peer at Barclays also cut his price target for Time Warner to $92 from $107.
Analyst Kannan #Venkateshwar argued that the DOJ move “in effect goes against almost 40 years of judicial commentary and action and, therefore, is quite unprecedented.”
Based on past DOJ frameworks, the analyst believes it may be tough for it to establish competitive harm, but the companies are likely in a 4-6 month period of litigation that should delay not only the closing of the deal but may also “chill other M&A activity across the space.”
Absent a deal, Venkateshwar estimates Time Warner could trade at $77 per share.
Meanwhile, Nomura Instinet analyst Jeffrey Kvaal lowered his price target for AT&T shares to $42 from $45 as he considers shares on fundamentals, while noting that he did not cut his target post the third quarter video miss given the pending deal.
Nonetheless, Kvaal told investors he believes the shares have “room to run” with or without Time Warner.

CASE MERITS FAVOR AT&T

Commenting on the lawsuit, Baird analyst William Power argued that the merger deal may be delayed, but is not dead.
The analyst argued that with Facebook (FB), Google (GOOG; GOOGL), Amazon (AMZN) and Netflix (NFLX) now media forces, including in original content, he finds it difficult to believe that AT&T will be able to significantly raise pricing for the Turner properties or HBO and risk driving away current partners.
Ultimately, Power believes the merits of the case favor AT&T. The analyst reiterated an Outperform rating and $42 price target on AT&T shares.

PRICE ACTION

In Tuesday’s trading, shares of Time Warner have gained over 1% to $88.79 while AT&T is fractionally down to $34.42 per share.


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Barron’s is bullish on Facebook, bearish on GE

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

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BULLISH  MENTIONS

Cummins, United Technologies good industrial bets – Cummins (CMI), United Technologies (UTX), Honeywell (HON), Ingersoll-Rand (IR) and Illinois Tool Works (ITW) boast good dividends that should rise, Lawrence Strauss writes in this week’s edition of Barron’s.

Facebook still looks like a buy – In a follow-up story, Barron’s says that Facebook’s  (FB) political-advertising imbroglio has obscured some very good revenue news. Slowing supply growth helped drive up demand and prices for Facebook ads, marking a reacceleration of growth, the report notes, adding that the company is also coming up with innovative ways to cash in on booming interest in video and creating new ad opportunities on its Messenger and Instagram platforms.

Kohl’s updated return policy raises Amazon takeover questions – Following Kohl’s (KSS) announcement that Amazon (AMZN) purchases could be returned at its stores in Chicago and Los Angeles, some have questioned if the e-Commerce giant is planning to buy the retailer, Steven Sears writes in this week’s edition of Barron’s. Citing Madison Global Partners’ Bernard Sosnick, the publication said Amazon may be testing the merits of owning a retailer that can build private-label products to showcase Amazon devices and services, with the holiday season to test the theory further.

May be time to play Mattel – Mattel (MAT) is half the stock it used to be, but the maker of Barbie and Hot Wheels knows it has a problem, Ben Levisohn writes in this week’s edition of Barron’s. Management said it would target $650M in cost cuts through 2019, while also enacting initiatives to reduce unpopular products and create new ones to help boost sales, and if it works, Mattel could be a winner, he adds.

Upside ahead for smaller companies – As tech giants soar and as the rally favors the biggest companies, there may be upside on deserving, smaller companies, such as AMD (AMD), Impinj (PI) and Everspin Technologies (MRAM), Tiernan Ray writes in this week’s edition of Barron’s. Meanwhile, companies such as Finisar (FNSR), Lumentum (LITE), Viavi (VIAV), Oclaro (OCLR), Applied Optoelectronics (AAOI), Inphi (IPHI), and NeoPhotonics (NPTN) are grappling with a slowdown in spending in China, but are “back for real,” he argues.

Intel AI push to boost growth – Artificial intelligence has been perceived to be a threat to Intel’s (INTC) decades-long dominance in computer chips, but its shares are up 30% this year, maybe due to third quarter earnings or maybe due to its plans to release a new line of A.I. chips developed in collaboration with Facebook (FB), and as the company’s purchase of Mobileye makes it an early leader in autonomous driving, Jack Hough writes in this week’s edition of Barron’s, adding that he still sees more upside ahead.

IBM, Google among potential AI winners – After decades of development, Artificial Intelligence-style computing now works, and its impact will spread far beyond board games such as Go or chess, Bill Alpert writes in this week’s edition of Barron’s. Citing Wells Fargo analyst Ken Sena, the report says the biggest beneficiaries will be the firms pioneering the technology, with machine learning already powering search suggestions of Google (GOOG; GOOGL) and Microsoft (MSFT), chatbots like Amazon’s (AMZN) Alexa, and the recommendations at Facebook (FB), and Netflix (NFLX). Given China’s vast size, the analyst also has similar outperformance expectations for Alibaba (BABA), Baidu (BIDU), JD.com (JD), and Tencent (TCEHY), Barron’s adds.

BEARISH  MENTIONS

Powerful bearish trend in General Electric – Investor’s confidence has eroded and General Electric’s (GE) stock price is at 2012, with a powerful bearish trend, Michael Kahn writes in this week’s edition of Barron’s. But while it may look like a bargain and the stock could be the buy of the decade, Kahn argues that he still needs to see the market give him either an unambiguous selling climax, or a strong upside reversal. If not for inertia, most investors would probably have already sold their shares of General Electric, but they may be persuaded as early as November 13, when its new leader, John Flannery, holds an investor day meeting, Steven Sears writes in this week’s edition of Barron’s. However, he notes that it is difficult to know how investors will react to whatever is announced at the meeting. If GE releases a draconian restructuring plan, shares could rally as investors reason that all of the bad news is out of the way, but if they lack confidence in Flannery’s approach, the stock could trade sharply lower, Barron’s adds.

Sell Under Armour as troubles ‘run deep.’  – In a follow-up story, Barron’s says that despite the skid in Under Armour (UA) shares, the sportswear company faces continuing woes, from a shift to lifestyle garments to the internet. Further, the publication notes that there seems little reason to hold shares through the holidays in hopes of a rebound.


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Broadcom tumbles on plans to redomicile in the U.S.

Broadcom confirms plans to redomicile in the U.S.

broadcom_chip

Broadcom Limited (AVGO) announced that it intends to initiate a redomiciliation process to change the parent company of the Broadcom corporate group from a Singapore company to a U.S. corporation.

The redomiciliation will occur whether or not there is corporate tax reform in the United States, although the final form and timing of the redomiciliation will be affected by any corporate tax reform.

The redomiciliation will be voted on by the company’s shareholders and is expected to be effected in a manner intended to be tax-free to Broadcom’s equity holders.

“We believe the USA presents the best place for Broadcom to create shareholder value,” said Hock Tan, the company’s President and CEO.

“We expect the tax reform plan effectively to level the playing field for large multinational corporations headquartered in the United States and to allow us to go all in on U.S. redomiciliation. However, we intend to redomicile to the United States even if there is no corporate tax reform.”

“The returns we can drive by continuing to pursue our growth strategy far outweigh the incremental taxes we would expect to pay by redomiciling in the USA,” said Tom Krause, the company’s CFO.

“We support the tax reform plan because it is pro-growth and would allow companies like us to bring off-shore earnings back to the United States after paying an annual U.S. minimum tax on global profits.”

EARNINGS GUIDANCE

Earlier today,  the company said for Q4 2017, Broadcom expects revenue will be at the higher end of the business outlook provided during its earnings announcement on August 24.

The company said in August it expected GAAP revenue in Q4 ended Oct. 29 at $4.78 billion plus or minus $75 million and non-GAAP revenue at $4.8 billion plus or minus $75 million.

ANALYST COMMENTS

BofA Merrill Lynch estimates moving its domicile to the U.S. could raise Broadcom’s (AVGO) tax rates from 4%-5% to about 12%, but the firm thinks this could be offset by potential Brocade (BRCD) synergies. The firm keeps a Buy rating on Broadcom, arguing that the reasons to own the stock – namely its premium assets, best-in-class management, and dividend potential – remain intact. The firm adds that being in the U.S. could be a precondition to acquiring Brocade and may enable Broadcom to pursue future M&A.

JPMorgan analyst Harlan Sur says Broadcom’s (AVGO) U.S. domiciliation process will occur with or without tax reform, which should pave the way for the Brocade (BRCD) deal to close in two weeks. Assuming a worst case of no tax reform, the analyst estimates the company’s earnings power including the contribution from Brocade will be $18.00-$18.50 in 2018. Assigning a Semiconductor group price-to-earnings multiple would drive fair value for Broadcom to around $310 to $315 per share, Sur tells investors in a research note. Further, citing strong near-term demand trends, the analyst remains confident management raising the annual dividend by at least 50% to $6.00 in early December. He keeps an Overweight rating on Broadcom shares with a $315 price target.

AVGO last traded at $252.16, down $7.12.


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Barron’s is bullish on biotechs, Target

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

Local Chinese consumer plays to have significant advantages – China’s 19th Communist Party Congress gave expanded powers to President Xi Jinping to wield in a second five-year term as the country’s leader, endorsing the continued shift of China’s economy toward domestically focused consumer goods and services, which should be bullish for stocks such as Alibaba (BABA) and China Life Insurance (LFC), John Kimelman and Assif Shameen write in this week’s edition of Barron’s. Meanwhile, U.S. companies with footholds in the country’s consumer markets can expect to face regulatory and other roadblocks in the years ahead, they add.

Biotech selloff creates buying opportunity for investors – Biotech companies are not looking that healthy, with Amgen (AMGN), Biogen (BIIB), Celgene (CELG), and Gilead Sciences (GILD) all offering disappointments of one kind or another, but the selloff has created a buying opportunity for investors, Ben Levisohn writes in this week’s edition of Barron’s. Biotech looks like a victim of high expectations and could be ready to run again, he adds.

Tech giants continue to exploit their dominance – The latest earnings, particularly from Amazon.com (AMZN), Alphabet (GOOGL; GOOG), and Microsoft (MSFT), show that tech giants continue to exploit their dominance to Wall Street’s amazement, Tiernan Ray writes in this week’s edition of Barron’s. All three are examples of network effects, the ability of a business to exploit its position in a kind of virtuous cycle, and the payoff continues to astound Wall Street, he adds, noting that Apple (AAPL) is expected to report earnings this Thursday.

Playing double-up strategy with GE worth considering – General Electric (GE) stock is down 34% this year and seems poised to trade even lower amid fears that it may cut its dividend, Steven Sears writes in this week’s edition of Barron’s. While Sears has profitably recommended wagering against the stock since May, and still thinks bearish trades make sense, he recognizes that many investors feel stuck with their GE holdings and are not sure what to do. The “humble double-up strategy” is worth considering for anyone who wants to maintain ownership of the stock, and also realize a tax loss, he argues.

Target shares could return up to 30% amid renovation – Target’s (TGT) missteps have cost the company $15B in stock-market value over the past three years, Vito Racanelli writes in this week’s edition of Barron’s. The retailer is now remodeling stores, cutting costs and ramping up its online business to combat Amazon (AMZN), and store traffic and earnings look poised to rise in coming years, which could lead to an upward revaluation of the shares, he adds.

May be ‘lots to be gained’ from CVS/Aetna possible tie-up – In a follow-up story, Barron’s says that while CVS Health (CVS) shares were under pressure following a report by The Wall Street Journal saying the company and Aetna (AET) were in talks, there is “lots to be gained from a tie-up.” By securing better drug pricing from CVS than it gets now, Aetna stands to win more health-plan customers, and it can send many of them to CVS for drugs but also for care, the report explains, adding that the deal would help transform CVS into a company that also profits from health outcomes. Further, Barron’s argues that it could help protect it from future changes in health-care law, and from losing sales to Amazon (AMZN).

Enterprise Products Partners promises growth, income – Enterprise Product Partners (EPD) is a leader among U.S. energy master limited partnerships but its units are depressed like those of many peers, with investors worrying about slowing growth, competitive pressures, weak energy prices and cuts or moderating gains in distributions, Andre Bary writes in this week’s edition of Barron’s. However, he argues that compared with other MLPs, Enterprise has better corporate governance and a stronger sheet, offering an “enticing yield” of nearly 7% and a good growth outlook that investors should see as a “winning combination.”

Apple iPhone X may be catalyst for Sony – Long ago considered a rival of sorts for Apple (AAPL), Sony (SNE) has instead emerged as one of its key suppliers, but its stock is up just 10% over the past six months, while other suppliers have seen their shares almost double in the same period, Assif Shameen writes in this week’s edition of Barron’s. Sony supplies iPhone X’s12-megapixel camera, as well as state-of-the-art 3-D sensors designed to boost iPhone’s Face ID and augmented-reality capabilities, he adds, noting that Jefferies analyst Atul Goyal believes these attributes merit a re-rating for the shares, which he thinks can rise at least 40%.

Shire bear case may be too extreme – While Shire (SHPG) has struggled against generic pressures and rising competition, the bear case may be too extreme, Victor Reklaitis writes in this week’s edition of Barron’s.


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Nokia and Amazon join forces

Nokia announces strategic collaboration with Amazon Web Services

Nokia Gets $2 Billion from Apple. See Stockwinners.com Market Radar

Nokia (NOK) announced a strategic collaboration with Amazon Web Services, or AWS, (AMZN) that will accelerate the migration of service provider applications to the cloud and drive digital innovation for large enterprise customers.

Nokia and AWS are working together to bring a unique and powerful set of solutions that will enable service providers to implement cloud strategies faster leveraging Nokia’s expertise in wireless, wireline and 5G technologies.

The two companies will work to deliver differentiated solutions using Nokia SD-WAN and its IMPACT IoT platform in combination with AWS Greengrass, machine learning and artificial intelligence services.

The scope of the agreement announced today covers four areas of collaboration: Nokia will support service providers in their AWS implementation strategy with a complete suite of services including consulting, design, integration, migration and operation for infrastructure and applications.

Nokia and AWS will work together to generate new 5G and Edge Cloud strategies and guidance for customers including reference architectures that enable both service providers and enterprises to benefit.

Nokia and AWS are working to bring an improved user experience for Nuage Networks SD-WAN customers who use AWS.

Enterprises can benefit from this seamless integration with AWS and launch secure branch connectivity in hybrid environments with “Single Pane of Glass” capabilities.

Finally, the companies are commercializing IoT use cases with AWS Greengrass, Amazon Machine Learning, Nokia Multi-access Edge Computing and Nokia IMPACT platform.


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Ionis Pharmaceuticals presents data on NEURO-TTR study

Ionis Pharmaceuticals presents new data from NEURO-TTR study

Ionis Pharmaceuticals presents new data from NEURO-TTR study. See Stockwinners.com

Ionis Pharmaceuticals  (IONS) announced that new data from the Phase 3 NEURO-TTR study with inotersen in patients with hereditary TTR amyloidosis with polyneuropathy were presented at the 142nd annual meeting of the American Neurological Association in San Diego, California.

In healthy people, normal, so-called “wild-type” TTR functions as a transporter of thyroid hormone and vitamin A (retinol) within the bloodstream.

People with mutations in the TTR gene produce abnormal, amyloidogenic (“variant”) TTRthroughout their lives. Over the course of several decades, usually by the time these people are middle aged, they may develop symptoms of disease caused by the build-up of amyloiddeposits. This is called Familial Amyloid Polyneuropathy.

In the study, inotersen-treated patients achieved a mean 19.73-point benefit in the mNIS+7 co-primary endpoint after 15 months of treatment, compared to placebo-treated patients, further demonstrating the clinically meaningful benefit of inotersen treatment.

A statistically significant benefit in mNIS+7 was also observed at eight months.

Key safety findings of thrombocytopenia and renal events identified during the study were shown to be monitorable and manageable with routine blood and urine testing.

Multiple other innovative drugs from Ionis’ portfolio of drugs for patients with serious neurological and neurodegenerative diseases will be highlighted as part of the Antisense Oligonucleotide Treatment of Genetic Neurological Diseases plenary session on Tuesday, October 17.

IONS closed at $59.10. Shares have a 52-weeks trading range of  $24.58 – $61.08.


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Barron’s is bullish on JD.com, Softbank

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

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M&A may be easiest way for Google to catch-up in the Cloud – Alphabet’s (GOOG; GOOGL) Google has been chasing competitors Amazon (AMZN) and Microsoft (MSFT) in cloud computing, Tiernan Ray writes in this week’s edition of Barron’s. The easiest way to close in may be through M&A, the publication notes, with rumors saying Alphabet could contemplate a deal as large as buying Workday (WDAY) or Salesforce (CRM).

JD.com could rise 25% or more – With the China Single’s Day – the biggest shopping day of the year – less than a month away, investors looking for growth stocks in the country may want to look to JD.com (JD), its number two online retailer after Alibaba (BABA), Jack Hough writes in this week’s edition of Barron’s. JD.com stock could gain 30% or more in the next year, he adds.

Post-Peltz, P&G must to do more than cut costs – Last week, Procter & Gamble (PG) announced that its eleven standing board members won re-election, while activist Nelson Peltz had not won a seat, Vito Racanelli writes in this week’s edition of Barron’s. Nonetheless, Peltz has yet to concede, saying the vote remains too close to call, with an independent inspector expected to certify the results, the publication adds. Management’s victory means that its CEO David Taylor is on “a short leash,” facing the task of doing more than just cutting costs, Racanelli contends.

Softbank shares can still go higher – SoftBank (SFTBF) is reportedly ready to announce a $10B deal to buy up to 17% of Uber, as it negotiates a merge of its Sprint (S) unit with rival T-Mobile (TMUS) to challenge Verizon (VZ) and AT&T (T), Assif Shameen writes in this week’s edition of Barron’s. SoftBank stock is up 27% year to date and 140% from the lows of February 2016, but its shares can go still higher, the publication adds.

Time to rethink how to play Wal-Mart. – Wal-Mart (WMT) has had a good run, so it is time to rethink how to play the stock, Steven Sears writes in this week’s edition of Barron’s. The sell-side analyst community may spend the next few months getting bullish on Wal-Mart’s digital future, while realizing that more than 4,000 retail stores offer competitive advantages, Sears noted, adding that the November earnings report should provide additional evidence for “analysts to update earnings models, raise price targets, and hike investment ratings.”


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Verifone higher after CEO says shares undervalued

Veritone jumps after CEO rebuts short seller attack

Veritone higher on short squeeze. See Stokwinners.com for details

Shares of Veritone (VERI) are on the rise after the company’s CEO Chad #Steelberg told Bloomberg that the company’s shares are not worthy of shorting and in fact are undervalued. This comes a few weeks after short-seller #Citron argued that the stock is headed dramatically lower.

SHARES STILL CHEAP

Veritone is a cloud-based artificial intelligence company, whose shares have seen a 300% gain over the last couple of months. While it has drawn criticism from short sellers such as Citron Research that say the gains are overblown, its CEO Chad Steelberg believes that not only is the stock a bad short, it is still undervalued, according to a report by Bloomberg.

Further, the chief executive believes the market opportunity for Veritone’s technology is huge, the publication noted, citing their interview with the executive.

Steelberg, who envisions thousands of companies using applications on his platform, is quoted as having said: “Our general solution can be applied to so many problems. It clearly shows that our stock is undervalued given the use cases being leveraged by our partners.”

HEADING TO $20

Back on September 27, short-selling firm Citron Research tweeted, “$veri is not artificial intelligence, more like natural stupidity. Stock should trade right back to $20.” Veritone shares fell by about 30% that day.

THE ‘REAL DEAL’

Commenting on the short report, Roth Capital analyst Brian Alger said on September 29 that he is convinced Veritone is “the real deal” and is transforming businesses through the orchestration of third party ANI engines.

#Alger, who said Veritone has been clear in its intentions to utilize M&A and now has a list of over 30 potential targets, told investors that he thinks that with deal potential incorporated a $1B valuation is “not only reasonable, but could be conservative.”

The analyst raised his price target on the shares to $62 from $13.20, while reiterating a Buy rating on the stock.

PRICE ACTION

In Monday’s trading, shares of Veritone have gained 10% to $40.71. Stock has a 52-weeks trading range of  $7.76 – $74.92.


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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: 

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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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Exa Corporation sold for $400 million

Exa Corp. to be acquired by Dassault Systemes for $24.25 per share 

Exa Corporation sold for $400 million. See Stockwinners.com for details

Exa Corporation (EXA) announced that its board has unanimously agreed to be acquired by Dassault Systemes in a transaction valued at approximately $400M or $24.25 per share.

Under the terms of the merger agreement, a subsidiary of Dassault Systemes will commence a tender offer within the next 10 business days to acquire all of the issued and outstanding shares of Exa common stock for a price of $24.25 per share payable in cash upon completion of the offer.

This represents a fully diluted equity value for Exa of approximately $400M. The acquisition is expected to close in Q4.

With the addition of Exa, Dassault Systèmes’ 3DEXPERIENCE platform will provide customers with a proven portfolio of Lattice Boltzmann fluid simulation technologies, fully industrialized solutions and over 350 highly experienced simulation professionals.

Simulation of fluid flow, such as the cooling of an engine or the lift of a wing, is a necessary component of simulating the physical behavior of products, nature and life. For the many situations where fluid flow conditions change rapidly, simulation of dynamically variable flows is critical to accurate assessments of a product and its behavior in its environment. For these applications, the combination of Exa’s accuracy and timeliness provides results that are superior to those of alternative CFD methods.

Completion of the transaction is subject to customary closing conditions, including required regulatory approvals. The acquisition is expected to close in the fourth quarter of 2017, subject to the satisfaction of customary closing conditions.


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