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:

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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. 


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Pfizer to spin of its Consumer Healthcare Business

Pfizer reviewing strategic alternatives for Consumer Healthcare Business

Pfizer to spin off its Consumer Healthcare Business. See Stockwinners.com for details.

Pfizer (PFE) announced that it is reviewing strategic alternatives for its Consumer Healthcare business.

A range of options will be considered, including a full or partial separation of the Consumer Healthcare business from Pfizer through a spin-off, sale or other transaction, and Pfizer may ultimately determine to retain the business.

This announcement is part of Pfizer’s continuing efforts to allocate resources and capital to best serve patients and maximize value for its shareholders.

Pfizer Consumer Healthcare is one of the largest OTC health care products businesses in the world with 2016 revenues of approximately $3.4B, operating in more than 90 countries globally.

Consumer Healthcare markets two of the ten top selling consumer healthcare brands globally – Centrum and Advil.

In addition, the business has ten brands that each exceeded $100M in 2016 sales, and several local brands that are top-ranked in their respective markets.

Pfizer has engaged Centerview Partners LLC, Guggenheim Securities LLC and Morgan Stanley & Co. LLC as financial advisors for the strategic review process.

Pfizer expects that any decision regarding strategic alternatives for Pfizer Consumer Healthcare would be made during 2018.

The company does not plan to make any further statements about the strategic review process until a decision has been reached or upon the completion of the strategic review.

PFE closed at $36.14. Shares have a 52-week range of $29.83 to $36.24.


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Barron’s is bullish on Applied Materials and Expedia

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

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BULLISH  MENTIONS

Applied Materials, TSMC among ‘heroes’ of AI – Shares of Applied Materials (AMAT), the largest vendor of tools to Intel (INTC) and others, and TSMC (TSM), the largest contract manufacturer of circuits, which serves chip vendors such as Nvidia (NVDA) seem a good bet for the foreseeable future as computer-chip technology enters a bold new phase, Tiernan Ray writes in this week’s edition of Barron’s.

General Dynamics most promising amid corporate aircraft comeback – The business-jet market is showing signs of a comeback and the plane maker that offers the most promise to investors appears to be General Dynamics (GD), whose Gulfstream models are among the most popular corporate jets, Lawrence Strauss writes in this week’s edition of Barron’s.

First Solar to benefit from potential aggressive tariff hike – Cheap imported solar cells have fueled an alternative-energy boom in the U.S., but now President Donald Trump is considering tariffs that could slow the flow of foreign cells, Avi Salzman and Bill Alpert write in this week’s edition of Barron’s. If the White House pushes ahead with an aggressive tariff hike, the major beneficiary would be First Solar (FSLR), the U.S. industry leader, whose products would become cheaper than those sold by foreign competitors, while residential solar firms such as Sunrun (RUN) would be hurt, as they would no longer have access to cheap cells, they added.

Expedia still has room to rise – In a follow-up story, Barron’s says that Expedia’s HomeAway is starting to look like a “home run” as it is contributing a hefty portion of overall growth. That bodes well for Expedia (EXPE) stock, the publication notes, adding that a double-digit return seems likely over the next year.

Senate Health funding helps Thermo Fisher – In a follow-up story, Barron’s says that by blocking President Trump’s proposed research funding cuts, the Senate helps Thermo Fisher’s (TMO) key market.

Target lifts pay as retailers bid for workers in tight market – In a follow-up story, Barron’s notes that with the jobless rate at a 16-year low, it could be challenging for retailers to find sufficient holiday sales help this year. As retailers bid for workers in a tight labor market, Target (TGT) followed Wal-Mart (WMT) in lifting hourly pay, the publication noted.

BEARISH MENTIONS

Competition may be coming after Tesla – While electric vehicles currently sell for about $8,000 more than gas guzzlers, they will be cheaper than traditional cars by the early to mid-2020s, Emily Bary writes in this week’s edition of Barron’s, citing Cowen analyst Jeffrey Osborne. The increasing affordability of electric vehicles may not be good news for Tesla (TSLA), as rivals may see it as an incentive to take the space seriously, Bary adds


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Watch Puma Biotechnology!

Puma Biotechnology announces “positive” results from Phase III ExteNET trial

sTOCKS TO WATCH, FDA Approves Breast Cancer Drug. See Stockwinners.com Market Radar, Stocks to Buy, Stocks to Invest In, Stocks to Buy on Margin

Puma Biotechnology (PBYI) announced the presentation of positive results from the Phase III clinical trial of Puma’s drug neratinib for the extended adjuvant treatment of early stage HER2-positive breast cancer following trastuzumab-based therapy in a proffered paper oral session at the European Society of Medical Oncology 2017 Congress in Madrid, Spain.

#Neratinib was approved by the FDA in July for the extended adjuvant treatment of adult patients with early stage HER2-positive breast cancer following adjuvant trastuzumab-based therapy, and is marketed in the United States as NERLYNX tablets.

The most common adverse reactions were diarrhea, nausea, abdominal pain, fatigue, vomiting, rash, stomatitis, decreased appetite, muscle spasms, dyspepsia, AST or ALT increase, nail disorder, dry skin, abdominal distention, epistaxis, weight decreased and urinary tract infection.

The ExteNET trial is a double-blind, placebo-controlled, Phase III trial of neratinib versus placebo after adjuvant treatment with trastuzumab in patients with early stage HER2-positive breast cancer.

The predefined 5-year invasive disease free survival analysis as a follow-up to the primary 2-year iDFS analysis of the Phase III ExteNET trial was presented.

The ExteNET trial randomized 2,840 patients in 41 countries with early stage HER2-positive breast cancer who had undergone surgery and adjuvant treatment with trastuzumab.

After completion of adjuvant treatment with trastuzumab, patients were randomized to receive extended adjuvant treatment with either neratinib or placebo for a period of one year. Patients were then followed for recurrent disease, ductal carcinoma in situ, or death for a period of five years after randomization in the trial.

The patient characteristics in the trial were well balanced between the neratinib and placebo arms of the trial. For the 1,420 patients in the neratinib arm of the trial, 1,085 were node positive while of the 1,420 patients in the placebo arm of the trial, 1,084 were node positive.

Additionally, in the neratinib arm of the trial, 816 patients were hormone receptor positive, and in the placebo arm of the trial, 815 patients were hormone receptor positive.

The median time from the last trastuzumab dose to entry into the trial was 4.4 months for the neratinib-treated patients and 4.6 months for the placebo-treated patients. The primary endpoint of the trial was invasive disease free survival.

The results of the trial demonstrated that after a median follow up of 5.2 years, treatment with neratinib resulted in a 27% reduction of risk of invasive disease recurrence or death versus placebo.

The 5-year iDFS rate for the neratinib arm was 90.2% and the 5-year iDFS rate for the placebo arm was 87.7%. The secondary endpoint of the trial was invasive disease free survival including ductal carcinoma in situ. The results of the trial demonstrated that treatment with neratinib resulted in a 29% reduction of risk of disease recurrence including DCIS or death versus placebo.

The 5-year iDFS-DCIS rate for the neratinib arm was 89.7% and the 5-year iDFS-DCIS rate for the placebo arm was 86.8%. For the pre-defined subgroup of patients with hormone receptor positive disease, the results of the trial demonstrated that treatment with neratinib resulted in a 40% reduction of risk of invasive disease recurrence or death versus placebo.

The 5-year iDFS rate for the neratinib arm was 91.2% and the 5-year iDFS rate for the placebo arm was 86.8%.

For the pre-defined subgroup of patients with hormone receptor negative disease, the results of the trial demonstrated that treatment with neratinib resulted in a hazard ratio of 0.95.

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Barron’s is bullish on WalMart, bearish on Papa John’s

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

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BULLISH  MENTIONS

Wal-Mart, BlackRock attractive amid seasonal market volatility – September and October may bring seasonal volatility that could push stocks around, Steven Sears writes in this week’s edition of Barron’s, while recommending that rather than just trading the swoons, one should focus on companies with indestructible, “cockroach-like qualities.” Some nearly indestructible stocks seem to be Wal-Mart (WMT) and BlackRock (BLK), the publication notes.

Wall Street may want to look at Japan – Investors worried about valuations and an impending correction on Wall Street may want to take a look at Japan, as its macroeconomic fundamentals have not looked this good in years, Assif Shameen writes in this week’s edition of Barron’s. Honda (HMC) and Sony (SNE) hold attractions, the publication noted.

Gartner Inc. (IT) could earn $8 a share of free clash flow in 2019, and potentially could trade 20 times or more to at least $160, Andrew Peck, a fund manager at Baron Capital Management, tells Barron’s. The tech research and advisory firm closed at $120.79 on Friday. TransUnion (TRU), which closed at $47.81, could rise to the mid $60s by 2019 as it expands its data products from credit to health care, Peck says. Online travel giant Priceline Group Inc. (PCLN), which closed at $1,850 on Friday, could rise to $2,500.

Nathan’s Famous trading at 40%-45% discount – Nathan’s Famous (NATH) has gobbled up share in the premium hot-dog market, while its stock has done well, compounding at 17% a year in the past decade, but the stock is not followed by Wall Street analysts and the company is “poorly understood,” Adam Seessel writes in this week’s edition of Barron’s. At a recent $58, Nathan’s trades at a 40%-45% discount to his estimate of intrinsic asset value, he notes.

Most of Harvey insurance money will go to replace flooded cars – A big part of Harvey insurance dollars will go to replace flooded cars, Alex Eule writes in this week’s edition of Barron’s. Wall Street analysts spent the last few days trying to better understand the transfer of wealth from insurance companies to car makers and auto dealers, with investors quick to pounce on their findings, the publication notes. Publicly traded companies that saw their shares rise include Group 1 Automotive (GPI), AutoNation (AN), and Penske Automotive Group (PAG), Eule adds.

Refiner shares probably volatile, long run opportunity – Hurricane Harvey flooded refineries and forced about a quarter of U.S. capacity off-line, but the damage “didn’t faze Wall Street,” and most refining stocks rose afterward, Avi Salzman writes in this week’s edition of Barron’s. While this dynamic may be short-lived, and the refiners could give back those gains in the near-term, in the longer-term, U.S. refining stocks are attractive, and people looking to profit from U.S. energy independence should consider buying them, the publication notes. Publicly traded companies in the space include Delek US (DK), HollyFrontier (HFC), Marathon Petroleum (MPC), Phillips 66 (PSX), Andeavor (ANDV), Valero (VLO) and Western Refining (WNR).

BEARISH  MENTIONS

Papa John’s run of underperformance may continue– Papa John’s (PZZA) is lagging behind the S&P 500 this year and, despite a plan to spend $500M to buy back shares, its run of underperformance may continue as competition hits its plans for growth, Leslie Norton writes in this week’s edition of Barron’s. Competition is everywhere as pizza will increasingly be delivered by Amazon (AMZN) and Uber, she notes, adding also that the choices have expanded dramatically, with chicken nuggets and fries being ordered from McDonald’s (MCD) or soup and a bagel from Panera.

Dialysis providers claim they make no money on patients – Although 88% of dialysis patients are insured by government programs, dialysis providers say they make no money on those patients, Bill Alpert writes in this week’s edition of Barron’s. And if private insurers succeed in cutting payments to dialysis firms, either by refusing subsidized premiums or simply reducing reimbursement rates, DaVita (DVA) and American Renal (ARA) will see their profits contract, he notes. Other dialysis providers include Fresenius Medical Care (FMS).


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Health Insurance Innovations Drops on ACA Cuts

Health Insurance Innovations sinks following reports of ACA ad spend cuts

Health Insurance Innovations sinks following reports of ACA ad spend cuts . See Stockwinners.com for details

Shares of Health Insurance Innovations (HIIQ) have slid over the last two sessions after several media outlets reported that President Trump’s administration is cutting spending on advertising and promotion for enrollment under the Affordable Care Act.

Health Insurance Innovations, Inc. operates as a developer, distributor, and administrator of cloud-based individual health and family insurance plans, and supplemental products in the United States. The company offers short-term medical plans that cover individuals for up to 364 days with various deductible and copay levels; hospital indemnity plans, which provide daily cash benefit for hospital treatment and doctor office visits, as well as accidental injury and death or dismemberment benefits

The New York Times said earlier this week that the Trump administration wanted to stabilize health insurance markets, but refused to say if the government would promote enrollment under the ACA.

[youtube https://www.youtube.com/watch?v=Z7mj0WV1Rjs?rel=0&controls=0&w=560&h=315]

WHAT’S NEW

The New York Times reported yesterday that officials at the Department of Health and Human Services told reporters on a conference call that the advertising budget for the open enrollment period for ACA that begins in November would be slashed to $10M, a 90% drop from the $100M spent by the Obama administration a year ago.

In addition, grants to roughly 100 nonprofit groups that help people enroll in health plans offered by the insurance marketplaces will be reduced to $36M from roughly $63M, the report said. The HHS officials told the Times that the administration felt that the cuts were necessary due to “diminishing returns” from advertising, noting that the number of first-time enrollees in ACA coverage fell by 42% this year, compared with 2016.

According to Talking Points Memo, HHS Press Secretary Caitlin Oakley said in a statement in defense of the cuts, “Judging effectiveness by the amount of money spent and not the results achieved is irresponsible and unhelpful to the American people. Under the Trump Administration, we’re committed to more responsible, effective government.”

CANACCORD SEES ENTRY POINT

Canaccord analyst Richard Close attributes the sharp dip in Health Insurance Innovations to all this news, saying he views a less stabilized ACA market as being positive for the stock, noting that people would increasingly look for lower-cost alternatives in a market with higher premium rates and fewer options.

The analyst added that, with less advertising and funding to promote ACA, it is possible that fewer people would seek insurance, thus fewer people will seek lower-cost alternatives, which would be a negative for Health Insurance Innovations.

On the other hand, #Close said he sees this action by the administration as a potential positive for the company, since less advertising also implies a potentially lower cost per lead/conversion and he still expects solid demand for its offerings. The analyst maintained a Buy rating and a $39 price target on the shares.

PRICE ACTION

In Friday afternoon’s trading, Health Insurance Innovations (HIIQ) is down 10% to $30.25. Over the last two days, the stock has declined about 17%.


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GE’s Immelt May Become Uber CEO

GE’s Immelt has held ‘active’ discussions with Uber search committee

GE's Immelt May Become Uber CEO. See Stockwinners.com for more details

Uber is considering General Electric (GE) CEO Jeff Immelt among “a handful” of candidates for its CEO, The Wall Street Journal reports, citing a person familiar with the matter.

According to the person, Uber’s search committee has held “active” discussions with Immelt, who is stepping down as GE’s CEO at the end of the month, though he will remain chairman through the end of the year.

Uber hopes to wrap up the CEO search process by Labor Day, according to the report.

HP Enterprise (HPE) CEO Meg Whitman, who was rumored to be in contention for Uber CEO, says she is “fully committed” to HPE and she will not take the job at Uber.

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Stocks to Watch: Tesla Cheap or Expensive

Tesla stock low if you believe in company’s future, Elon Musk says

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In a recent tweet, clarifying earlier comments, Tesla CEO Elon Musk tweeted:

“I should clarify: Tesla stock is obviously high based on past & present, but low if you believe in Tesla’s future. Place bets accordingly …”

Earlier in the day, according to CNBC, Musk said, “I’ve gone on the record several times that the stock price is higher than we have the right to deserve and that’s for sure true based on where we are today,” Musk told Nevada Gov. Brian Sandoval at the National Governors Association summer meeting on Saturday.

According to media reports, Musk added when speaking at the meeting that Tesla’s current stock price reflects a “lot of optimism” adding that he has tried to bring expectations in line.

Musk noted that it has been “quite tough” to temper expectations in a euphoric environment.

Shares of Tesla (TSLA) dropped to an intraday low of $313.45 per share after his comments from the governor’s meeting but have regained some ground and are currently down 2.6% to $319.50 per share in afternoon trading.

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We believe TSLA shares will continue to be under pressure till they reach around $275-$285 level.

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MetLife to Buy Fortress Investment’s Logan for $250 Million

MetLife to acquire Logan Circle Partners for roughly $250M in cash

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MetLife (MET) and Fortress Investment Group (FIG) announced a definitive agreement for MetLife to acquire Logan Circle Partners, L.P., Fortress’ traditional fixed income asset management business, for approximately $250M in cash.

Following the anticipated separation of Brighthouse Financial next month and assuming the closing of the Logan Circle Partners acquisition, MetLife’s Investment Management business would have more than $560B in total assets under management, of which more than $140B would be managed on behalf of third parties.

Under the terms of the agreement, MetLife will acquire 100% of Fortress’ ownership stake in Logan Circle Partners.

This transaction will not impact MetLife’s existing $3B repurchase authorization, which is expected to be completed by year-end 2017. The transaction is subject to customary closing conditions and regulatory approvals, and is expected to close in the third quarter of 2017.

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Dakota Access Pipeline Begins Carrying Oil

The “Bakken Pipeline” begins carrying oil

The Bakken Pipeline is a 1,872-mile, mostly 30-inch pipeline system that transports domestically produced crude oil from the Bakken/Three Forks productions areas in North Dakota to a storage and terminalling hub outside Patoka, Illinois, and/or down to additional terminals in Nederland, Texas.

 

dakota-access
Bakken Pipeline is a 1872 mile, 30-inch diameter line

Energy Transfer Partners (ETP) announced that the #DakotaAccess Pipeline and the Energy Transfer Crude Oil Pipeline, collectively the “Bakken Pipeline,” are in commercial service under the Committed Transportation Service Agreements through their respective pipeline systems.

The #Bakken Pipeline, owned by Dakota Access, LLC and Energy Transfer Crude Oil Company LLC, respectively, is a 1,872-mile, mostly 30-inch pipeline system that transports domestically produced crude oil from the Bakken/Three Forks productions areas in North Dakota to a storage and terminalling hub outside Patoka, Illinois, and/or down to additional terminals in Nederland, Texas.

The Bakken Pipeline is a joint venture between Energy Transfer Partners with a 38.25 percent interest, MarEn Bakken Company LLC with a 36.75 percent interest, and Phillips 66 (PSX) with a 25 percent interest.

MarEn is an entity owned by MPLX LP (MPLX) and Enbridge Energy Partners L.P. (EEP).

Dakota Access and ETCO, developed at a combined cost of approximately $4.78 billion have commitments, including shipper flexibility and walk-up, for approximately 520,000 barrels per day. This is up from 470,000 barrels per day due to the successful Supplemental Open Season held earlier this year that committed an additional 50,000 barrels per day.

The combined system is expandable to a capacity of approximately 570,000 barrels per day. The pipeline will transport light, sweet crude oil from North Dakota to major refining markets in a more direct, cost-effective, safer and more environmentally responsible manner than other modes of transportation, including rail or truck.

Energy Transfer Partners approved and announced the pipeline project on June 25, 2014. In October 2014, Phillips 66 acquired 25% stake in the project. Since then, the project has been controversial. The firm had to fight several lawsuits to secure right-of-way for the project. The company was sued by Indian tribes, Iowa farmers, and environmental groups. The U.S. Army Corp of Engineers ( #USACE ) got involved and the entire project became a political issue. On November 1, 2016, President #Obama announced his administration was monitoring the situation and had been in contact with the USACE to examine the possibility of rerouting the pipeline to avoid lands that Native Americans hold sacred.

On January 24, 2017, President Donald #Trump, in contrast to the Obama administration, signed a presidential memorandum to advance the construction of the pipeline under “terms and conditions to be negotiated.”

Energy Transfer Partners began loading the pipeline with crude oil by April 2017. A small, 84-gallon spill of crude oil occurred at a South Dakota pumping station on the route on April 6, 2017. With full operation, East Coast refineries reduced their orders for rail-delivered oil in May and June.

Crude oil last traded at $50.68 per barrel.

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Pilots Strike Leads to Passenger Brawl!

saveShares of #Spirit Airlines $SAVE are lower by 3% in Tuesday trading after its pilots’ strike forced the carrier to cancel several of its flights.  To make matters worse for the discount airline, a brawl erupted among Spirit Airlines passengers in Florida late Monday after another round of flight cancellations from the carrier, reports Reuters, citing a video of the event.

The cancellations are “just the latest of hundreds” from Spirit, which is engaged in a labor dispute with its pilots, Reuters says. “We are shocked and saddened to see the videos of what took place,” a spokesperson told the news service, adding that its pilots are engaged in “unlawful” strikes.

Footage of the fights spread widely on social media, creating the latest in a string of public relations headaches for U.S. airlines.

At least 11 Spirit flights were canceled at Fort Lauderdale airport on Monday and 31 delayed, according to data.

Hundreds of Spirit flights have been canceled in recent days. On Tuesday, the airline filed for a temporary restraining order against its pilot union.

Broward County Sheriff’s deputies responded to the incident at the airport as about 500 passengers became irate, police said. Video showed people falling down fighting as security officials tried to restrain them.

Three people were arrested for threatening to harm airline employees and challenging them to fight, police said, adding the trio had made the crowd become “increasingly aggressive.”

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