Friday, July 22, 2011
Hot Stocks: Microsoft (MSFT) sees business PC growth outpacing consumer PC growth in FY12...Bristol-Myers (BMY) to acquire Amira Pharmaceuticals...Hewlett-Packard (HPQ) announced additional $10B share repurchase program...Oracle (ORCL) announced that it acquired Ksplice, Inc., the creator of innovative zero downtime update technology for Linux...athenahealth (ATHN) to acquire Proxsys, a leading provider of services and technology focused on the front end of the revenue cycle for hospital systems...Apple (AAPL) announced Lion downloads topped 1M on its first day...Meredith (MDP) to provide editorial content to new European online network...Johnson & Johnson (JNJ) unit announced FDA recommends approval for REMICADE...Merck & Co. (MRK), acting through an affiliate and known as MSD outside the U.S. and Canada, and China's Simcere Pharmaceutical Group (SCR) announced the signing of a framework agreement to establish a joint venture focused on serving China's expanding health care needs...Books-A-Million (BAMM) submitted bid in Borders (BGPIQ) bankruptcy
APPLE IS SAID TO CONSIDER MAKING BID FOR HULU ONLINE TV SERVICE. Apple is in early talks that may lead to an offer for the Hulu online video service, two people with knowledge of the auction said., i'd think a major neg for nflx?
US Equity Strategy FLASH (Thomas J Lee, CFA)
Corporates are the new "sovereigns": 22 stocks to own around sovereign default
EW ($82.55/UW/Michael Weinstein)
Quarterly Results Take a Back Seat as US Sapien Launch Beckons
BCR ($112.23/N/Michael Weinstein)
A Tough 2Q: Implications for the Group
TC ($10.01/N/Michael F. Gambardella)
D/g to N, New PT of $12.50; Lower Moly Prices + Mt. Milligan Spend Weighing on Valuation
FCX ($55.34/OW/Michael F. Gambardella)
Raising EPS and PT to $74; Cash Generation and Growth Prospects Remain Strong
NUE ($40.63/OW/Michael F. Gambardella)
Lowering 2011E EPS on Summer of "Sheet," Still Expecting 2012 Spring in Demand & Pricing
AFL CBI ($42.34/OW/Scott Levine)
Another Clean Beat; Raising Estimates & Price Target Following Recent Bookings Surge
WDC ($35.13/OW/Mark Moskowitz)
Stark Contrast: WD�s Execution and Operating Model Avoid the Banana Peels that Tripped-up Seagate
CREE ($32.75/OW/Christopher Blansett)
Lowering Estimates and Price Target on Weaker-than-Expected LED Demand in C2H11
AFL RBCN ($14.95/OW/Christopher Blansett)
Lowering Estimates and Price Target on Lower Core Pricing and Slower Growth in 6" Revenue
VECO ($40.74/OW/Christopher Blansett)
Lowering Ests and Price Target on Increased Risk of Shipment Delays to China & Weaker MOCVD Demand Elsewhere
MMI ($25.19/UW/Rod Hall, CFA)
Patent Wars: A few thoughts on the MMI patent portfolio @ jpm
Microsoft downgraded to Market Perform from Outperform at William
Blair - William Blair downgraded Microsoft based on
Microsoft downgraded to Market Perform from Outperform at William Blair - Willia
m Blair downgraded Microsoft based on
Microsoft downgraded to Market Perform from Outperform at William Blair -
William Blair downgraded Microsoft based on headwinds that include margin
pressure from cloud computing, market share risk, and slowing revenue growth.
GREECE/FITCH: Fitch added that it will place the Greek sovereign
rating into 'Restricted Default' and assign 'Default' ratings to the
affected Greek government bonds on the date that the offer period for
the proposed debt exchange closes. Fitch will assign new post-default
ratings to Greece and to the new debt instruments once the default event
is cured with the issue of new securities to participating bondholders.
Fitch will assign new post-default ratings to Greece and to the new debt
instruments once the default event is cured with the issue of new
securities to participating bondholders
Knee-jerk reaction to Caterpillar's (CAT) report is
negative after a bottom-line miss and updated outlook. CAT raises full-year
view EPS view to $6.75-$7.25 excluding Bucyrus business, $6.25-$6.75
including Bucyrus. Bit confusing as it's not quite clear whether Street's
$7.08 EPS view is including or ex Bucyrus. Judging by negative reaction,
looks as if it may be including Bucyrus. CAT down 5.9% premarket at $105.00.
At that level during regular trading, CAT's drop would be a roughly 50-point
negative drag on the DJIA. S&P futures flat, Dow futures down 18.
1. Stocks rose for a fourth day while Greek, Irish and Spanish bonds rallied as European officials agreed to a $229b bailout to contain the debt crisis.
2. The ECB�s willingness to drive up borrowing costs in the midst of a debt crisis threatens to widen the gaps between the region�s economies.
1. Greece faces a �restricted default� after the EU crafted a $229B bailout for the nation, which includes getting bondholders to assume part of the cost.
2. Banks pledged to participate in a bond exchange and debt buyback program as part of a new rescue package for Greece.
3. Greece led a decline in the cost of insuring against a default on European government bonds after politicians agreed on an aid package.
? U.S. DOLLAR�
1. The European sovereign debt crisis is driving French companies to raise funds in the dollar market at the fastest rate in four years.
2. President Obama and House Speaker Boehner press for a broad agreement to boost the debt limit while cutting spending by trillions of dollars and overhauling the tax code
? IMF� Investigators probing the recent ransacking of International Monetary Fund computers have concluded the attack was carried out by cyber spies connected to China.
1. German Ifo Business Confidence Fell to Nine-Month Low in July
2. K1 Group founder Helmut Kiener was convicted of defrauding investors with a $497MM Ponzi scheme and sentenced to 10 years and eight months in prison.
? SPAIN�Spanish Banks� Quest for Capital Piles Risk on Their Customers
? ARGENTINA� Argentine securities tied to economic growth are climbing to a record.
? JAPAN� Japan to Hold Reduced Oil Stockpiles for an Extended Period
? LIBYA� NATO Allies Opens to Possibility Qaddafi Could Stay in Libya
? INDIA-- India Inflation May Curb Consumer Stock Rally
THOUGHTS OF THE DAY
? CS-- Credit Suisse Banker Indicted by U.S. in Tax Conspiracy Case
1. Beef Prices Seen Rising to Record
2. Oil Heads for Fourth Week of Gains
3. Copper May Rise on Mine Strike
4. Sugar Heads for Fourth Weekly Gain
5. Coffee Rises
? GE-- GE Profit Rises 18% as Finance Unit Blunts Energy-Sales Drop
? MSFT� Microsoft Fourth-Quarter EPS, Rev. Beat Est.
? BHP� BHP�s Escondida Workers Strike as Coal Miners Prepare for Action
? NOK� isn�t just losing mobile-phone market share to iPhone maker AAPL. NOK�s dominance in China, the world�s largest wireless market, is being eroded as prices sink. NOK�s 2Q handset shipments in China fell to 11.3MM, less than half the previous Q�s number and 41% less than a year earlier.
1. Apple Surpasses Lenovo Sales in China on Strength of IPhones
2. Apple Is Said to Consider Making Bid for Hulu Online TV Service
? VOD-- Vodafone Service Growth Beats Estimates on Data Sales Surge
? TOMTOM-- TomTom Posts Surprise Loss on Writedown, Plans Cost Cuts
? HPQ� Hewlett-Packard Authorizes $10 Billion in Added Stock Buybacks
? NEW HIGHS: 266.
? NEW LOWS: 28.
? OVERBOUGHT: 144.
? OVERSOLD: 116.
MSFT: 4Q on to Windows 8 (Ed Maguire)
MSFT�s 4Q results saw a modest top line beat and good EPS beat with benefit from tax benefit. PC weakness had a clear impact on Windows revenues at the consumer while corporate spending offset this both in PCs but also in Office and Server & Tools revenues. Windows was flat YoY, company saw PC growth of 1-3%. Enterprise (Server and Tools) grew 12% YoY driven by Windows Server and System Center. Business Division (Office) grew 7% driven by corporate business while consumer declined 8%. Online Services grew 17% as operating loss narrowed from -121% to -110%. Entertainment and Devices grew 30% YoY. , clsa
GOLD IN EUR TERMS: THE
CORRECTION IS TAKING SHAPE:
Gold traded to �1145 five trading
sessions ago, and we were sellers into
that strength amidst raucous laughter,
with some even suggesting that our
decision to lighten up on the trade
marked the start of the next leg upward.
Instead, our selling marked what we
shall think will be seen as interim highs.
We�ve not �dry powder� with which to
shoot, and we�ll be returning to the
market as a buyer on another �20-25
lower from here. �1080 seems like a
reasonable target. gartman
San Francisco Cell Phone Retailers to Warn Consumers on Radiation Risk: The
city has passed an ordinance that will require retailers to "post general
warnings" about the possible risks associated with cell phone usage. Last
May the World Health Organization published a report saying that cell phones
are "possibly carcinogenic."
*Special thanks to Option Radar, BMO Capital, MEB Options, Bloomberg, Reuters, Optionistics, LiveVolPro, CBOE, AMEX, Option Monster, T.O.P. group, and all of the options desks and traders we work with to provide the option flow! No position at this time.
Position declarations are believed to be accurate at time of writing but may change at any time and without notice.