Spectranetics Sold for $2.1 Billion

Philips to acquire Spectranetics for $38.50 per share in cash

Stocks to Buy Now

Royal Philips (PHG) and Spectranetics (SPNC) announced that they have entered into a definitive merger agreement. Pursuant to the agreement, Philips will commence a tender offer to acquire all of the issued and outstanding shares of Spectranetics for $38.50 per share, to be paid in cash upon completion. This represents a 27% premium to Spectranetics closing price on June 27.

The implied enterprise value is approximately EUR 1.9B, inclusive of Spectranetics’ cash and debt.

The board of directors of Spectranetics has approved the transaction and recommends the offer to its shareholders.

The transaction is expected to close in Q3. Spectranetics is currently growing double digits and projects 2017 sales to be in the range of $293M-$306M. Upon completion of the transaction, Spectranetics and its more than 900 employees will become part of the Image-Guided Therapy Business Group within Philips.

Spectranetics’ standalone revenue growth is expected to be double-digit and adjusted EBITA to be positive by 2018. Philips sees sustained high sales growth through new product introductions across a highly synergistic therapy device portfolio.

Moreover, the transaction will enhance the geographical expansion of Spectranetics’ products and commercialization opportunities in new, adjacent segments.

As part of Philips, the Spectranetics business will benefit immediately from Philips’ platform enabling cost and working capital synergies. As a result, the combined Spectranetics and Philips Image Guided Therapy Devices business, within the Image-Guided Therapy Business Group, is expected to grow to approximately EUR 1B by 2020.

For the overall Image-Guided Therapy Business Group, Philips targets a high single-digit comparable sales growth and high-teens adjusted EBITA margin for the medium-term. In 2016, this business group reported sales of approximately EUR 1.9B of which approximately 20% was attributable to device sales.

The transaction is expected to be accretive to Philips’ revenue growth, adjusted EBITA margins and adjusted EPS by 2018.

To read stories similar to this, sign up for a free trial membership to Stockwinners; be sure to check the Market Radar section.

The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

First Potomac Sold for $1.4 Billion

First Potomac shareholders will receive $11.15 in cash per share

stockwinners.com/blog

First Potomac Realty Trust (FPO) announced that it has entered into a definitive merger agreement with Government Properties Income Trust (GOV) under which GOV will acquire all of the outstanding shares of First Potomac.

The transaction, which is valued at $1.4B, including the assumption of debt, is expected to close prior to year end 2017.

Under the terms of the agreement, First Potomac shareholders will receive $11.15 in cash per share at the close of the transaction. This represents a premium of approximately 9.3% to First Potomac’s 30-trading day Volume Weighted Average Price ended April 24, the last trading day before media speculation regarding a potential sale of First Potomac.

The transaction is subject to customary closing conditions, including approval by First Potomac shareholders at a special meeting. The Board of Trustees of First Potomac has unanimously approved the merger agreement and has recommended approval of the merger by First Potomac’s shareholders.

To read stories similar to this, sign up for a free trial membership to Stockwinners; be sure to check the Market Radar section.

The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Apple Annual Net Revenue to Reach $292 Billion by 2022, says Munster

Munster lays out five-year Apple model, sees ‘Apple Glasses’ wearable in 2020

Stockwinners offers winning Stock Research since 1998

Gene #Munster, a longtime analyst at #Piper Jaffray who recently departed to found #Loup Ventures, this week published the venture capital firm’s five year model for Apple.

Munster wrote: “We are publishing our Apple model with forecasts out to 2022 including Apple Glasses, an AR wearable, starting in 2020.

By year end of 2022, we see net revenue of $292B and EPS of $13.20, up from $221B and $8.74 in FY17…

Gross margin stays close to constant as Apple Services’ higher margin offsets declining iPhone hardware gross margin.

The auto opportunity is not in our model.” Among the key takeaways from his report, Munster said he expects iPhone growth to peak in FY19 before “slowly” declining as Apple Glasses emerge, with the iconic mobile phone eventually comprising a “much smaller part” of the company’s business.

How Will Apple Go to Market in Auto?

There are three ways Munster sees Apple potentially bringing its car technology to market. The first option would be to partner with a manufacturer to bring an Apple-branded car to market. The second option would be to focus on developing software and implementing it across as many car platforms as possible. Lastly, but unlikely, the could enter as a fleet service.

Services: Steady, Growing, Profitable.

Munster expects steady growth from Services over the next 5 years. In Mar-17, Services accounted for 13% of revenue and grew at 18% y/y. He believes that in 2022 Services will account for 21% of revenue and grow at 14% y/y. His confidence is supported by the predictability of Services over the past two years, along with the belief that AR apps will be a catalyst for consumer spending on apps over the next 5 years. This segment should remain about 2x more profitable than Apple’s hardware business with a ~60% gross margin, with gains in margin from Services offsetting the loss of margin in hardware.


STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to StockwinnersStockwinners offers stock picks, option picks, daily stock upgrades, stock downgrades, and earnings reports that are delivered to your email.

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.

Sprint Rises on Charter, Comcast Talk

The two-month exclusivity agreement puts any merger talks between Sprint and T-Mobile “on hold”

Stockwinners.com offers stock research since 1998

Shares of Sprint (S) jumped Tuesday after the Wall Street Journal said the company is in exclusive talks with Charter (CHTR) and Comcast (CMCSA) on several possible transactions, putting its oft-rumored merger talks with T-Mobile (TMUS) on hold.

WSJ REVEALS CABLE TALKS

The Wall Street Journal reported late Monday that Sprint has entered exclusive talks with Charter and Comcast as the cable giants explore a deal to potentially boost their wireless offerings, according to its sources.

The two-month exclusivity agreement puts any merger talks between Sprint and T-Mobile “on hold,” the sources told the Journal.

Under one of the contemplated plans, the cable operators would invest in Sprint’s network in exchange for favorable terms for offering wireless service on its network, the sources said, adding that such a deal could involve an equity stake in Sprint.

The negotiations also include the possibility of the companies jointly acquiring Sprint, according to the Journal’s sources, though that idea was “thought to be the much less likely scenario.”

Any wireless resale deal wouldn’t preclude a merger between Sprint and T-Mobile, some of the publication’s sources said. The report also noted that John Malone, whose Liberty Broadband is the largest investor in Charter, has been trying to persuade Comcast CEO Brian Roberts over the past year that the companies should jointly acquire a carrier such as Sprint, though Roberts — more interested in a resale deal — has been reluctant as of yet, according to sources.

CNBC DOWNPLAYS STAKE POSSIBILITY

Following the Wall Street Journal report, CNBC’s David Faber added that his sources indicated the talks are focused on a resale, or MVNO, deal and that an equity investment from either company is unlikely.

PREVIOUS M&A REMARKS

Speculation of a merger between Sprint and T-Mobile have swirled over the past several months, with company executives going as far as openly cheering the concept at recent investor events.

On June 8, T-Mobile CFO Braxton Carter spoke about the “significant” synergy potential of a Sprint deal, which built on similar comments on May 18.

Meanwhile, Germany’s Handelsblatt reported as recently as June 20 that T-Mobile owner Deutsche Telekom (DTEGY) was preparing to merge the company with Sprint.

JEFFERIES SEES T-MOBILE HURDLES

Jefferies analyst Mike McCormack writes that the Journal’s report is “not surprising” given the interest from cable companies in securing better resale terms, though an equity stake or outright acquisition of Sprint is “less likely” but not impossible in his view. Notably, the news “likely suggests major hurdles” in any talks between Sprint and T-Mobile, potentially reigniting speculation around a Dish (DISH)-T-Mobile tie-up should those negotiations collapse.

NOMURA SEES NEGATIVE FOR T-MOBILE

Nomura Instinet analyst Anthony DiClemente views a potential deal as positive for Charter and Comcast, and a negative for T-Mobile given investor anticipation of a synergy-rich merger with Sprint.

Joint ownership of a wireless carrier “has appeal” for the cable operators, but DiClemente believes Comcast currently prefers the resale approach for the inexpensive experimentation it allows.

Turning to T-Mobile, the analyst argues that a merger of the two carriers would offer more synergies than the cable companies, though he considers regulatory barriers “high” and says the probability of a deal “has likely declined.”

To read stories similar to this, sign up for a free trial membership to Stockwinners; be sure to check the Market Radar section.

The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Bank of America Ups Homebuilders

Homebuilders advance after Bank of America raises estimates, targets

Visit Stockwinners for stock research

Bank of America Merrill Lynch increased its estimates for single-family housing starts and new home sales in 2018 and 2019.

As a result, the firm raised its estimates and price targets for multiple homebuilders while calling out D.R. Horton (DHI) and PulteGroup (PHM) as its favorite names in the sector.

ESTIMATES INCREASED:

Bank of America analyst John #Lovallo now expects single family housing starts and new home sales to rise 9% year-over-year in 2018, up from his previous forecast for 6% increases for both metrics. In 2019, he predicts that the metrics will increase about 8%, versus his previous forecast for 5% gains.

DEMAND/SUPPLY DRIVERS:

Homebuilders have said that demand has accelerated over the past six months, partly due to increased consumer confidence, an improved labor market, and the “return of the first-time home buyer,” according to Lovallo. Supply constraints should weaken “over the next few years” because builders are more confident and consequently more willing to build further from city centers, the analyst stated. Additionally, there are signs that the sector’s labor shortage is beginning to ease, while the potential reform of banking regulations could stimulate lending, Lovallo wrote. Finally, the analyst believes that “easing land entitlement burdens could reduce builder cost and increase available lot supply.”

TOP PICKS:

D.R. Horton could be a “primary beneficiary” of labor market easing, given its “high volume and even-flow production strategy,” Lovallo wrote. Additionally, its consistent execution and solid exposure to entry-level buyers are positive, the analyst stated. Pulte’s valuation is below the average of large homebuilders, while its “solid return on equity and balanced capital” are positive, the analyst stated. Pulte’s orders could accelerate next year as it increases the number of communities that it builds, the analyst added.

TARGET INCREASES

Lovallo increased his price target on D.R. Horton to $42 from $41, on Pulte to $30 from $29, on Toll Brothers (TOL) to $46 from $43, on Meritage Homes (MTH) to $38 from $36, on KB Home (KBH) to $19 from $17, and on M.D.C. Holdings (MDC) to $27 from $24.

 

To read stories similar to this, sign up for a free trial membership to Stockwinners; be sure to check the Market Radar section.

The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Goldcorp to Buy Exeter Resource

Exeter Resource, Goldcorp enter agreement to proceed with acquisition

stockwinners.com/blog

Exeter Resource (XRA) has entered into an arrangement agreement with Goldcorp (GG) pursuant to which Goldcorp has agreed to acquire all common shares of Exeter not already owned by Goldcorp by way of a plan of arrangement.

The arrangement, which is subject to the approval of the holders of Exeter, will constitute the subsequent acquisition transaction proposed by Goldcorp in order to acquire all Exeter shares it did not acquire under its offer to purchase dated April 20.

Goldcorp currently owns a total of roughly 78M Exeter Shares, representing approximately 83.16% of issued and outstanding Exeter shares.

A special meeting of Exeter shareholders has been called for July 31 to consider, and if thought advisable, pass a special resolution in relation to the arrangement.

The consideration payable under the arrangement is the same as the consideration received by Exeter shareholders under the offer. Exeter shareholders will be entitled to receive 0.12 of a Goldcorp share for each Exeter share.

Closing of the arrangement is expected to take place on or about August 2. At that time, Exeter will become a wholly-owned subsidiary of Goldcorp, the Exeter shares will be delisted, and Exeter will apply to cease to be a reporting issuer.

To read stories similar to this, sign up for a free trial membership to Stockwinners; be sure to check the Market Radar section.

The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Ameresco Selected by Chicago to Update City Lights

Amerseco selected by Chicago for Smart Street Lighting Project

stockwinners.com/blog
Ameresco receives contract from Chicago

Ameresco (AMRC) announced it has contracted with the City of Chicago for the city’s comprehensive Smart Street Lighting Project to modernize its infrastructure.

Working with Silver Spring Networks (SSNI), a networking platform and solutions provider for the Internet of Important Things, the project is believed to be the largest city-led wireless smart street light program in the U.S., and will connect more than 250,000 street light fixtures across Chicago.

The four-year modernization project is expected to transform Chicago’s street light system by replacing approximately 85% of the city’s existing street lights with smart LEDs.

The multi-phase project will commence this summer.

The new smart LED street lights will be owned and operated by the City of Chicago, supported by Silver Spring Networks’ managed services and its Streetlight.Vision Control and Management System software.

The new LED street lights are expected to consume between 50 and 75% less electricity than the city’s existing lighting infrastructure.

Silver Spring’s IPv6 platform will enable the City to remotely dim or brighten street lights as needed, as well as to remotely monitor street lights for proactive maintenance and faster repairs if failures do occur.

To read stories similar to this, sign up for a free trial membership to Stockwinners; be sure to check the Market Radar section.

The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

FDA Grants Conatus’ IDN-7314 Orphan Drug Designation

Conatus (CNAT) granted orphan drug designation for IDN-7314 for treatment of PSC

Stockwinners.com/blog

Conatus Pharmaceuticals (CNAT) announced that the U.S. FDA has granted Orphan Drug Designation to Conatus’ drug candidate IDN-7314 for the treatment of primary sclerosing cholangitis, a disease affecting bile ducts in the liver which can lead to cirrhosis and liver failure.

The FDA’s Orphan Drug Designation program is intended to encourage the development of drugs and biologics that may provide benefit to patients suffering from rare diseases or conditions.

IDN-7314 is an orally active pan-caspase protease inhibitor designed to reduce the activity of enzymes that mediate inflammation and cell death, which has demonstrated reduction of relevant biomarkers in two preclinical models of PSC. One nonclinical model, the Mdr2-/- mouse model, is considered the current benchmark nonclinical model of PSC.

A new preclinical model, second mitochondria-derived activator of caspases-mimetic induced PSC in mice, has recently been reported that reproduces much of the phenotype of human PSC. IDN-7314 significantly improved biochemical indices of hepatic and biliary damage in these murine models of PSC, and these results suggest the involvement of caspases in the progression of PSC.

Other stocks to watch include: ICPT, INCY and AZN.

To read stories similar to this, sign up for a free trial membership to Stockwinners; be sure to check the Market Radar section.

The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

 

Barron’s Is Bullish on Cigna, Red Hat

Barron’s is bullish on RHT, UTHR, ALXN, CI, AIZ, and NCR

Barron’s remains bearish on Foot Locker (FL)

Barron's Logo on stockwinners

Barron’s, the weekly publication owned by the Wall Street Journal, in its latest issue is bullish on several names. They include:

Shares of NCR Corp. (NCR) could gain 30% in a year, Barron’s contends in a feature article. The publication argues that the cash-register company is a “rising software star with the discount valuation of a legacy hardware player,” and that NCR has opportunities to sell digital capabilities to retailers threatened by e-commerce leaders.

Assurant (AIZ) could double as investors reevaluate company.  Assurant is shifting toward a capital-light model, and some investors believe the stock could double in coming years as Wall Street begins to appreciate the company’s new focus on fee-based businesses, Barron’s contends in a feature article. In an interview with the publication, CEO Alan Colberg said Assurant is “on track for double-digit earnings-per-share growth this year.”

Alexion, United Therapeutics worth a look. After the recent jump in biotech stocks, Barron’s urges investors to look for companies that haven’t yet joined the rally, or that have unique reasons for potentially continuing higher. In a ‘Trader Extra’ column, Barron’s notes that a Credit Suisse screen of “fresh ideas” included Alexion Pharmaceuticals (ALXN) and United Therapeutics (UTHR), and the publication argues that both “could be attractive now” given the former’s now concluded sales investigation and the latter’s cheap valuation.

Red Hat may eke out double-digit returns.  Red Hat (RHT) investors shouldn’t take profits yet, as order momentum and Wall Street’s appetite for growth suggest the stock can “eke out” double-digit returns in the year ahead, Barron’s contends in a ‘Follow Up’ column. The publication cautions that “it’s a close call.”

Cigna could gain over 15% by end of next year.  The GOP healthcare plan looks like a boon for Cigna (CI) and other insurers, and the stock could gain more than 15% by the end of next year, Barron’s contends in a ‘Follow Up’ column. Passage of the plan is “far from certain,” but it proposes to remove taxes, inject funding into insurance markets, and ease requirements on how much insurers spend on health care, Barron’s explains. Cigna has taken a “cautious approach” to Obamacare, and the company seems to be “firing on all cylinders,” the publication adds.

To read stories similar to this, sign up for a free trial membership to Stockwinners; be sure to check the Market Radar section.

The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

 

Rigs Counts Continue to Rise

Baker Hughes reports U.S. rig count up 8 to 941 rigs

This marks the 23rd straight week of increases

https://stockwinners.com

Baker Hughes (BHI) reports that the U.S. rig count is up 8 rigs from last week to 941, with oil rigs up 11 to 758, gas rigs down 3 to 183.

 

The U.S. Rig Count is up 520 rigs from last year’s count of 421, with oil rigs up 428, gas rigs up 93, and miscellaneous rigs down 1 to 0.
The U.S. Offshore Rig Count is unchanged from last week at 22 and up 1 rig year over year.
The Canadian Rig Count is up 11 rigs from last week to 170, with oil rigs up 7 to 98 and gas rigs up 4 to 72.
The Canadian Rig Count is up 94 rigs from last year’s count of 76, with oil rigs up 62, gas rigs up 33, and miscellaneous rigs down 1 to 0.

 

This marks the 23rd straight week of increases, and comes despite oil prices having fallen below $43 bbl this week into bear market territory.

 

#WTI is on track for its worst 1H since the 1990s. WTI crude prices are presently down by 20.2% on the year-to-date.

 

To read stories similar to this, sign up for a free trial membership to Stockwinners; be sure to check the Market Radar section. No credit card required. 

The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Box Office Battle for this Weekend

‘Transformers’ expected to top ‘Cars 3,’ ‘Wonder Woman’

https://stockwinners.com/blog

Viacom (VIA, VIAB) subsidiary Paramount’s “Transformers: The Last Knight,” the fifth installment in the transforming robots series, is expected to open domestically at about $46M, after opening Wednesday to an estimated $15.7M, the lowest single-day opening for any film in the Transformers franchise, which hints at franchise fatigue.

Disney/Pixar’s (DIS) “Cars 3,” an animated film featuring anthropomorphic cars, is expected to take second place this weekend with a domestic gross of around $29M, after topping the box office in its opening weekend last week.

Time Warner’s (TWX) superhero flick “Wonder Woman,” starring Gal Gadot, is expected to take third place in its fourth weekend at theaters, earning an additional $28M-$29M, which would bring the domestic total for the film to $322M.

Lionsgate’s (LGF.A, LGF.B) Tupac biography “All Eyez on Me” is expected to earn an additional $9M-$10M domestically, after opening last weekend with $26.4M.

Other publicly traded companies in filmmaking include 21st Century Fox (FOX, FOXA), Comcast (CMCSA, CMCSK), and Sony (SNE).

To read stories similar to this, sign up for a free trial membership to Stockwinners; be sure to check the Market Radar section. No credit card required. 

The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.