Cognizant Higher as Immigration Reform Dies Down

Easing immigration reform worries seen as boost for Cognizant

Cognizant Higher as Immigration Reform Dies Down. See Stockwinners.com Market Radar to read more.

Research firm Berenberg upgraded Indian IT outsourcing company Cognizant (CTSH) to Buy from Hold, saying that the stock is poised to rise because investors have become less worried about the company being hurt by immigration reform.

EASING WORRIES

Noting that Cognizant’s stock has rallied recently, Berenberg analyst Georgios #Kertsos says the surge indicates that investors are less worried that Cognizant could be hurt by immigration reform. The longer it takes Congress to enact immigration reform, the better positioned Cognizant will be since it is reducing its reliance on foreign workers by hiring more employees who are already in the U.S., Kertsos added.

Meanwhile, Kertsos is upbeat about the company’s decision to expand its consulting business, saying that this strategy will increase the company’s addressable market and “drive sustainable top-line performance.” He raised his price target on the stock to $85 from $65.

LOOP MORE BULLISH TOO

On August 4, Loop Capital analyst Joseph Vafi upgraded Cognizant to Buy from Hold. “Demand headwinds” that had been hurting the company are easing, while the company “has ample room” to meet its 2019 margin target, wrote Vafi, noting that its margins are currently below those of its peers.

Easy comparisons should help the company’s earnings per share growth begin to accelerate at the end of this year, potentially enabling its multiple to rise slightly, according to the analyst. He raised his price target on Cognizant shares to $83 from $63.

PRICE ACTION

In Tuesday trading, Cognizant added 0.7% to $70. Shares have a 52-week trading range of $45.44 – $71.57.

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Time Warner Name To Become History!

AT&T plans to drop Time Warner name after deal closes

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AT&T (T) is planning to drop the Time Warner (TWX) name after the proposed $85B takeover deal closes, The New York Post reports.

Additionally, sources say AT&T has approached potential candidates for a position that would sit above Time Warner units, including Turner, #HBO and Warner Bros., and would report to John Stankey, AT&T’s Entertainment chief; The company has hired Heidrick & Struggles (HSII) to conduct the search after media vet Peter Chernin said no to the role, sources say.

Time Warner CEO Jeff #Bewkes is expect to leave the company “as soon as the deal closes, — with a $95 million going-away prize” according to the report.

AT&T is expected to cut around two-thirds of the staff in the corporate unit, sources said. The company is also planning to create an ad tech platform across the company.

The deal is expected to be approved because AT&T and Time Warner don’t directly compete. But unlike past huge mergers such as Comcast’s purchase of NBCUniversal in 2013, this one is potentially trickier from an antitrust perspective.

That’s because AT&T has a nationwide footprint with its wireless and DirecTV satellite service, and could use that reach to demand higher fees from media companies and other cable and satellite firms.

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China’s Growth Forecast Boosts Miners and Basic Materials

Shares of industrial metal makers, miners surge on IMF’s China comments

Shares of industrial metal makers, miners surge on IMF's China comments. See Stockwinners.com for stocks to buy, stocks to watch, stocks to trade

Shares of industrial metal makers and miners are surging after the latest International Monetary Fund, or #IMF, update.

GLOBAL RECOVERY

The global economic recovery is on solid ground, said the IMF in a report out Monday. “As in our April forecast, the World Economic Outlook Update projects 3.5% growth in global output for this year and 3.6% for next,” the IMF predicted.

CHINA GROWTH CONTINUES

Government policies in China have been the foundation for the recent high growth rates in the country. The IMF has raised its China growth view for 2017 and 2018 by 0.1% and 0.2% points, respectively, to 6.7 % and 6.4%. “But higher growth is coming at the cost of continuing rapid credit expansion and the resulting financial stability risks. China’s recent moves to address nonperforming loans and to coordinate financial oversight, therefore, are welcome,” added the agency.

MUTED EXPECTATIONS FOR US GROWTH

The IMF said the said globally speaking, the critical hindrance to global growth will come from the United States. “Over the next two years, U.S. growth should remain above its longer-run potential growth rate. But we have reduced our forecasts for both 2017 and 2018 to 2.1 percent because near-term U.S. fiscal policy looks less likely to be expansionary than we believed in April,” argued the IMF.

COPPER SURGES

Copper prices jumped to the highest levels since this past February. According to a Citi research note,”Sentiment towards copper from the physical market has improved as fabricators in China have replenished their inventories,” said Reuters.

STOCKS TO WATCH

Shares of metal makers and miners are all higher in afternoon trading, with copper miners Freeport-McMoRan (FCX) and Southern Copper Corporation (SCCO) up 14% and 3%, respectively. Iron ore miners Cliffs Natural Resources (CLF) is up 5%, with peers Vale S.A. (VALE) and Rio Tinto plc (RIO) both up over 4%. Aluminum makers are also jumping, with Alcoa up almost 2%, with peers Century Aluminum (CENX) up 4% and Kaiser Aluminum (KALU) up fractionally. Shares of United States Steel Corporation (X) are 5% higher.

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India Approves Anika Therapeutics’ Treatment for Osteoarthritis Pain

Anika Therapeutics says Monovisc approved in India

Anika Therapeutics says Monovisc approved in India. See Stockwinners.com Market Radar for Stock Upgrades, stock downgrades, stock earnings, stocks to watch

Anika Therapeutics (ANIK) announced that regulatory authorities in India granted approval to MONOVISC, its single injection viscosupplement for the treatment of pain associated with osteoarthritis of all human synovial joints.

#MONOVISC is commercially available in the United States, Canada and Europe, and Anika plans to expand into India, Australia, New Zealand and additional international markets over the next six to nine months.

“Expanding our global commercial footprint is one of our key strategic pillars of growth, and the approval of MONOVISC in India is a proof point for our ability to execute against the benchmarks we define each year,” said Charles H. Sherwood, Ph.D., President and Chief Executive Officer of Anika Therapeutics.

“There is a growing demand for non-invasive, long-acting treatments for osteoarthritis in emerging countries such as India where knee replacement surgery is often the last option or not an option at all, due to limited medical resources outside major cities and high costs of surgery and postsurgical care.

With its ability to safely relieve pain for up to six months with fewer office visits, lower treatment costs and no downtime after treatment, MONOVISC is poised to be well-received by physicians and patients in India.”

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Nektar Gets $150 Million from Eli Lilly

Eli Lilly and Nektar announce collaboration to develop NKTR-358

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Eli Lilly and Company (LLY) and Nektar Therapeutics (NKTR) have announced a strategic collaboration to co-develop NKTR-358, a novel immunological therapy discovered by Nektar.

NKTR-358, which achieved first human dose in Phase 1 clinical development in March, has the potential to treat a number of autoimmune and other chronic inflammatory conditions.

Under the terms of the agreement, Nektar will receive an initial payment of $150M and is eligible for up to $250M in additional development and regulatory milestones.

The parties will share Phase 2 development costs 75% Lilly and 25% Nektar.

Nektar will have the option to participate in Phase 3 development on an indication-by-indication basis.

Nektar has the opportunity to receive double-digit royalties that increase commensurate with their Phase 3 investment and product sales. Lilly will be responsible for all costs of global commercialization.

Nektar will have an option to co-promote in the U.S. under certain conditions. This transaction is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions.

Lilly expects to incur an acquired in-process research and development charge to earnings in 2017 of approximately 9c per share. The company’s reported EPS guidance in 2017 is expected to be reduced by the amount of the charge. There will be no change to the company’s non-GAAP EPS guidance as a result of this transaction.

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Amazon Investigated by FTC for Deceptive Pricing

FTC exploring possible deceptive discounting by Amazon

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The FTC is exploring allegations of potential deceptive discounting by Amazon (AMZN), Reuters reports, citing a source close to the investigation.

The FTC is investigating a complaint brought by Consumer Watchdog, an advocacy group which looked at around 1,000 products on Amazon’s website last month and found that Amazon put reference prices on about 46% of them; an analysis by Consumer Watchdog found that in more than half of products with reference prices, Amazon’s reference prices were higher than it had sold the same product in the previous three months, Reuters says.

The FTC is looking into the allegations as part of its review of Amazon’s proposed acquisition of Whole Foods (WFM).

Amazon said in a statement that Consumer Watchdog’s study was “deeply flawed,” calling the conclusions “flat out wrong.”

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RLJ Lodging Trust Says No to $3 Billion Purchase Offer

Blackstone made $3B offer to buy RLJ Lodging Trust, WSJ says

Blackstone Group (BX) made an approximately $3B offer to purchase RLJ Lodging Trust (RLH), which if successful would end the real estate investment trust’s plans to acquire FelCor Lodging Trust (FCH), the Wall Street Journal reports, citing people familiar with the matter.

RLJ disclosed that it had received an unsolicited proposal on June 12 from a private-equity firm but the company rejected the offer as “not reasonably likely” to be superior to its acquisition of FelCor, resulting in the private-equity firm twice raising its offer, which reached $25.50 a share on June 23, but then dropping its offer on July 6 to the original price of $24 following a review of RLJ, which rejected that offer.

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Lightower Sold for $7.1 Billion

Crown Castle to acquire Lightower for $7.1B in cash

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Crown Castle International Corp. (CCI) announced that it has entered into a definitive agreement to acquire LTS Group Holdings, or #Lightower, from #Berkshire Partners, Pamlico Capital and other investors for approximately $7.1B in cash, representing approximately 13.5x expected adjusted EBITDA contribution during Crown Castle’s first full year of ownership.

Lightower owns or has rights to approximately 32,000 route miles of fiber located primarily in top metro markets in the Northeast, including Boston, New York and Philadelphia.

Lightower’s products include network and video transport, alternative access, nationwide long haul services, dark fiber, Ethernet, and cloud computing services. Lightower has built out access to over 22,000 service locations throughout the Northeast, Mid-Atlantic, and Midwest including 275+ data centers and 7,000+ wireless towers

Following completion of the transaction, Crown Castle will own or have rights to approximately 60,000 route miles of fiber.

Crown Castle CEO Jay Brown said, “We expect the transaction to be immediately accretive to our AFFO per share and long-term dividend growth and, as a result, anticipate increasing our annual common stock dividend rate, subject to approval by our board of directors, between 15c and 20c per share following the closing of the transaction.”

Crown Castle International Corp., owns, operates, and leases shared wireless infrastructure in the United States and Australia. Th company is headquartered in Houston Texas.

CCI closed at $96.64.

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Stocks to Watch: Paratek Pharmaceuticals Study Meets EndPoint

Paratek study meets primary, secondary FDA, EMA efficacy endpoints

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Paratek Pharmaceuticals (PRTK) announced positive top-line results from a pivotal Phase 3 clinical study comparing its once-daily, oral investigational antibiotic, omadacycline, to twice-daily oral linezolid in the treatment of acute bacterial skin and skin structure infections.

The study met all of its primary and secondary endpoints required to support approval for this indication by the U.S. Food and Drug Administration and the European Medicines Agency.

This represents the third positive Phase 3 registration study of omadacycline.

“This successful study demonstrates the potential of an oral-only dosing regimen of omadacycline, which would enable treatment in the outpatient setting and potentially reduce the need for admission to the hospital,” said Michael Bigham, Chairman and Chief Executive Officer of Paratek.

“The utility of the oral only dosing regimen represents a significant potential benefit to patients and prescribers who are in need of new, effective oral agents to combat serious community-acquired infections.”

The pivotal Phase 3 clinical study known as #OASIS-2 evaluated the efficacy and safety of once-daily, oral-only omadacycline compared to twice-daily, oral-only linezolid in 735 adults with ABSSSI.

#Omadacycline met the FDA-specified primary endpoint of statistical non-inferiority in the modified intent-to-treat population compared to linezolid at the early clinical response 48 to 72 hours after the first dose of study drug.

The ECR rate for omadacycline was 87.5% compared to 82.5% for linezolid.

Additionally, omadacycline met statistical NI compared to linezolid for the EMA-specified co-primary endpoints at the post therapy evaluation, 7 to 14 days after completion of therapy in the mITT and the Clinically Evaluable populations.

Clinical success rates at PTE in the mITT population for the omadacycline and linezolid arms were 84.2% vs. 80.8%, respectively; and in the CE population were 97.9% vs. 95.5%, respectively.

Omadacycline demonstrated high clinical success rates for infections caused by the most common #ABSSSI pathogens, including methicillin-resistant Staphylococcus aureus.

STOCK PRICE

PRTK last traded at $24.95. Stock has a 52-week trading range of $9.80 – $26.10.

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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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Multi-Color on $1.3 Billion Shopping Spree

Multi-Color to acquire Labels Division of Constantia Flexibles for $1.3B

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Multi-Color announces that it has signed a definitive agreement to acquire the Labels Division of Constantia Flexibles from Constantia Flexibles GmbH for approximately $1.3B, payable in cash and stock.

The combined annual revenues and EBITDA of the two businesses will be approximately $1.6B and $300M, respectively.

The combination brings together Constantia Labels’ high performing Food and Beverage business with Multi-Color’s strong Wine and Spirit, and Home and Personal Care platforms, and emerging global position in Healthcare.

Additional growth opportunities for Multi-Color exist in Home and Personal Care by utilizing Constantia Labels’ European operational footprint and assets. Growth opportunities for Constantia Labels exist in Food & Beverage and derive from Multi-Color’s U.S. operational footprint and assets.

The stronger combined footprint in Asia will provide further revenue opportunities. Cost synergies are anticipated to reach $15M by FY20 through a combination of procurement, SG&A, and manufacturing efficiencies.

As an example, Multi-Color will utilize Constantia Labels’ pressure sensitive substrate manufacturing capability in the U.S. and Europe to drive future efficiencies. Both companies currently generate EBITDA margins of approximately 18%.

As part of the transaction, Mike Henry, current EVP and Head of Constantia Labels, is expected to become CEO-elect of Multi-Color Corporation.

Current Multi-Color CEO, Vadis Rodato, is expected to retire in early 2018 after a transition period. Nigel Vinecombe will remain Executive Chairman. Two representatives of Constantia Flexibles will join Multi-Color’s board, and the shares issued as consideration will be subject to customary lock-up provisions.

The transaction is expected to close in Q3 of 2018.

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Waterpik Sold for $1 Billion Cash

Church & Dwight to acquire Waterpik for $1B in cash

 

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Church & Dwight (CHD) has signed a definitive agreement to acquire Water Pik for approximately $1B in cash. The transaction, which is subject to regulatory approval and other customary conditions, is expected to close in the third quarter.

Waterpik’s net sales for the trailing twelve months through June 30, 2017 were approximately $265M.

Waterpik is the #1 water flosser brand and the #1 replacement showerhead brand in the U.S. Approximately 70% of net sales are in the water flosser segment with the remainder in showerheads.

The international business represents approximately 20% of sales. The products are marketed in the U.S. and Canada and exported to over 80 countries.

Waterpik’s trailing twelve months EBITDA was approximately $80M, a 30% EBITDA margin.

Once the business is fully integrated, Church & Dwight expects to leverage its distribution network and operating discipline to achieve an estimated $10M in operating synergies by 2019.

The acquisition is structured as a stock purchase that the Company expects to finance with debt. The acquisition is expected to be neutral to 2017 EPS, inclusive of transition costs, acquisition-related expenses, interest expense and intangible amortization expense.

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Dominion Diamond Sold for $1.2 Billion

Dominion Diamond to be acquired by The Washington Cos for $14.25/share in cash

 

Dominion Diamond in advanced talks to be bought by Washington Companies. See Stockwinners.com Market Radar for more

 

Dominion Diamond (DDC) and The Washington Companies, a group of privately held North American mining, industrial and transportation businesses founded by industrialist and entrepreneur Dennis R. Washington, announced that they have entered into an arrangement agreement under which an entity affiliated with Washington will acquire all of Dominion’s outstanding common shares for $14.25 per share in cash or a total equity value of approximately $1.2B pursuant to a plan of arrangement under the Canada Business Corporations Act.

The transaction represents a 44% premium to Dominion’s unaffected share price of $9.92 on March 17, 2017. The transaction marks the result of Dominion’s review of strategic alternatives as previously announced on March 27, 2017.

The Board of Directors of Dominion, after consultation with financial and legal advisors, and based on the recommendation of a special committee of the Board consisting of four independent directors, has unanimously determined that the Arrangement is in the best interests of the Company, approved the Arrangement and recommends that Dominion’s shareholders vote in favor of the Arrangement.

All directors of the Company have entered into support agreements to vote their common shares in support of the Arrangement.

As part of this acquisition, Washington plans to: Operate Dominion as a standalone business as Washington does with its other successful operating companies; Appoint a new CEO based in Canada to the Dominion management team; Keep Dominion’s headquarters in Canada and maintain a significantly Canadian management team.

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CBO Delays Health Care Bill Analysis, Stocks to Watch

CBO delays health care bill analysis 

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The Congressional Budget Office had been scheduled to release an analysis Monday on the latest GOP bill, including estimated cost and scope of insurance coverage, but the Senate Budget Committee said the release had been postponed, according to Associated Press.

The committee did not indicate an explanation or when the analysis was expected, the report noted.

The CBO’s announcement comes after Senate Majority Leader Mitch McConnell said he was delaying a highly anticipated Senate vote this coming week on the bill, after Sen. John McCain’s disclosed that he had undergone surgery.  Doctors had advised McCain to recover in Arizona this week.

Publicly traded hospital operators include HCA Holdings (HCA), LifePoint (LPNT), Tenet Healthcare (THC), Community Health (CYH) and Quorum Health (QHC), and health insurance providers include Aetna (AET), Anthem (ANTM), Centene (CNC), Cigna (CI), Humana (HUM), Molina Healthcare (MOH), UnitedHealth (UNH) and WellCare (WCG).

 

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