WSJ : Goldman Sachs: Here Are 25 Small-Cap Stocks to Buy

While Goldman Sachs is cautious on small-cap stocks due to valuation concerns, the firm still finds some pockets of opportunity among individual names within the group.
Goldman strategist David Kostin identified 25 small-cap stocks (companies with market capitalizations of less than $4 billion) that could offer at least a 25% upside to the Goldman price target over the next 12 months.
The list skews heavily toward consumer discretionary and tech stocks, including RetailMeNot Lumber Liquidators and Office Depot

Here’s a look at Goldman’s buy-rated Russell 2000 stocks that have significant upside over the next year.


Agios Pharmaceuticals Inc. AGIO Health Care 39 55 66
Axiall Cop. AXLL Materials -5 61 36
Boise Cascade Co. BCC Materials -12 38 47
Cornerstone Ondemand Inc. CSOD Information Technology -28 55 43
Darling Ingredients Inc. DAR Consumer Staples -7 25 29
Granite Construction Inc. GVA Industrials 1 47 35
GT Advanced Technologies Inc. GTAT Information Technology 64 22 54
Infinera Corp. INFN Information Technology -9 11.5 30
Lumber Liquidators Holdings Inc. LL Consumer Discretionary -47 77 40
Marketo Inc. MKTO Information Technology -33 41 64
MGIC Investment Corp. MTG Financials -8 11 42
Nimble Storage Inc. NMBL Information Technology -46 34 38
NPS Pharmaceuticals Inc. NPSP Health Care -11 40 48
NuVasive Inc. NUVA Health Care 0 43 32
Office Depot Inc. ODP Consumer Discretionary -5 7 40
Polycom Inc. PLCM Information Technology 12 16 27
Proofpoint Inc. PFPT Information Technology 1 42 26
Qlik Technologies Inc. QLIK Information Technology -21 28 33
Radian Group Inc. RDN Financials -8 18 39
RetailMeNot Inc. SALE Consumer Discretionary -17 $44.00 85
Ryland Group Inc. RYL Consumer Discretionary -13 48 27
Steven Madden Ltd. SHOO Consumer Discretionary -9 46 37
Synageva BioPharma Corp. GEVA Health Care 10 126 78
Universal Display Corp. OLED Information Technology -16 44 52
Vitamin Shoppe Inc. VSI Consumer Discretionary -19 60 42

>>> Banco Espirito Santo could sell non-core assets including 10% stake in Portu

Banco Espirito Santo could sell non-core assets including 10% stake in Portugal Telecom as part of restructuring

Banco Espirito Santo (BES)'s restructuring plan could include sale of non-core assets including its 10% stake in Portugal Telecom (PT), reported Jornal de Negocios. Sources familiar with the situation told the business paper that BES is working with financial advisors on a plan to bolster its solidity, which should conclude by September.

Offloading some BES assets like shares in PT, insurer BES Vida, toll highways operator Ascendi and car park operator Empark is among a range of possible asset disposals under consideration by the bank's new management team led by CEO Vitor Bento, the same sources said.


Source Jornal de Negocios

>>> Holcim/Lafarge assets sale attracts more than 100 interested parties

Holcim/Lafarge assets sale attracts more than 100 interested parties 

More than 100 parties have registered an interest in assets to be sold by cement groups Holcim and Lafarge, Tagesanzeiger reported.

The Swiss daily cited Holcim Chief Executive Bernard Fontana as saying that potential buyers include investment groups and other cement companies. Talks are due to begin in August.

Fontana said in the report that a spin-off or an IPO for units is also possible.


Source Tagesanzeiger

(BFW) Croda 2Q Rev. GBP263m, Est. GBP268m; Confirms 2014 Forecast

Croda 2Q Rev. GBP263m, Est. GBP268m; Confirms 2014 Forecast
2014-07-22 06:16:45.241 GMT


By Chiara Remondini
July 22 (Bloomberg) -- Croda 2Q rev. GBP263m, est. GBP268m.
* Adj. pretax profit GBP60.1m vs restated GBP68.1m
* Adj. operating profit GBP63.6m vs restated GBP71.2m
* FX had “significant impact” on results
* Currency translation reduces 1H sales by GBP38.3m (6.8%)
* FX, transaction costs cut operating profit by GBP11.4m
* Interim div. 29.5p, BDVD est. 30.5p
* Outlook: repeats 2013 pretax profits to come in below 2013,
sees underlying profit progress this yr
* Says visibility remains limited
* Sees adverse FX effects in 3Q at similar level vs 2Q
* Sees underlying sales, profit progress in 2H and beyond
* NOTE June 24: Croda cut 2Q pretax profit outlook, saw it to
drop 8% q/q vs previous forecast of similar to 1Q
* Still expected to achieve underlying profit progress in
2014, saw pretax profit drop vs 2013; said M/T targets
unchanged, confident in L/T strategy
Statement

For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>

To contact the reporter on this story:
Chiara Remondini in Milan at +39-02-8064-4241 or
cremondini@bloomberg.net
To contact the editors responsible for this story:
James Ludden at +44-20-7673-2645 or
jludden@bloomberg.net
Jurjen van de Pol

>>> What to look at today - 22/07/2014

US Market Closed lower, but not on lows even with more tension about potential new Russians sanctions. we saw some "Buy-the-dip" activity but volumes were still low at 530mil shares vs Average of 658mil, the health care (-0.4%), utilities (-0.1%), consumer staples (-0.4%), and telecom services (-0.3%) sectors all finished lower, only sector up where Energy (+0.2%) following crude prices higher ($104.89 +1.7%)...the Russell 2000, which fell as much as 1.0% early in the day, recouped a good portion of its losses and ended the session down 0.4%...VIX @ 12.81 +6.22%...After Hours NFLX higher on Earnings, CMG +10% on ERN & Guid.... Six Dow components are reporting today KO, DD, MCD, TRV, UTX & VZ...China June economic assessment from Conference Board increased at the highest rate in 7 months. Resident economist said the June pickup "is unlikely to be fully felt until the final quarter of the year...the PBoC skipped its regular repo drain for the first time in 7 scheduled operations in spite of the high lending volume reported last month, China Banking Regulatory Commission (CBRC)'s Yan Qingmin called for mainland banks to accelerate bad loans write off, expressing concern over the possibility of rising NPLs...Japan govt cut its economic projection for real GDP in FY14/15 to 1.2% from
1.4% as had been speculated in local press. Fin Min Aso put the blame on lagging exports amid soft demand from emerging economies. Meanwhile, a Sankei survey revealed disapproval rating for PM Abe's cabinet climbing 6pts to a record high above 40%. Econ Min Amari also reiterated the govt will not make a decision on another sales tax hike until this December...Nikkei +1.03% Hang Seng +1.32% Shanghai +0.90%

Eur$ 1.3523 S&P +0.10% Eurostoxx +0.39% FTSE +0.27% Dax +0.38% SMI +0.43%

Macro
- France Prepared to Cancel Warship Sale to Russia, Hollande Says
- M&A Deals in Emerging Markets Show ’Home Bias’, Citigroup Says

Keep an eye on :
- ACX SM : Acerinox 2Q Net EU51 Mln; Analyst Est. EU44.9 Mln
- ATLN VX : Actelion 2Q Drug Sales Rise; Sets ’Higher’ Base for 2015, CEO Says Co. Hasn't Had Any M&A Approaches
- AI FP : Air Liquide to Supply Natgasoline Oxygen for Methanol Plant
- BBVA SM : BBVA to Buy Catalunya Banc for EU1.19b, FROB Says
- CA FP : E. Leclerc Half-Year Sales Rise 3.5%, Leclerc Tells Figaro
- CSGN VX : Credit Suisse 2Q Core Pretax Loss CHF370m, Says to Exit Commodities Trading Business
- DAI GY : Mercedes Aims to Sell More Than 300,000 Units in China in 2015
- DLG GY : Dialog Semiconductor, AMS Terminate Merger Talks {NSN N93N5P6S972C<Go>}
- EDF FP : EDF Cuts Electricity Prices for French Industry’s Biggest Users,
- ENG SM : Enagas 2Q Net EU110.2M; Analyst Est. EU109.8M
- GET FP : Groupe Eurotunnel 1H Ebitda In Line, Sales Beat Estimates
- FCT IM : Fincantieri 1H Ebitda EU142m vs EU140m Y/Y
- GEC FP : Gecina Confirms Forecast for Stable Recurrent Net Income in 2014
- LI FP : Klepierre Raises Full-Year Net Current Cash Flow Forecast
- KPN NA : America Movil cuts KPN Satke to 22.6% from 24.8%
- FOI FP : PAI to Buy Half of Labeyrie Today, Les Echos Reports
- NHY NO : Norsk Hydro 2Q Profit Misses Estimates on Prices, Power Output
- PHIA NA : Philips could close, slim down or sell traditional lighting plants - Het Financieele Dagblad
- PUB FP : Publicis 2Q Revenue Drops, Damps 1H; 3Q Expected to Be Better
- RNO FP : Renault Sales in Russia Fell 13% in June, Les Echos Says
- SPM IM : Saipem sales process likely to be launched after summer
- SAN SM : Santander Says It Wasn’t Contacted By Bank of Portugal on BES
- SGO FP : Saint Gobain Will Keep Investing in Russia, Les Echos Says
- SRT3 GY : Sartorius 2Q Sales Rise 11%; Ebitda Up 7%; Reiterates Outlook
- SUN SW : Sulzer 1H Orders, Operating Income Drop; Sales Miss Estimates
- TRELB SS : Trelleborg 2Q Op. Profit Beats Est.; Sees Flat 3Q Demand
- UHR VX : Swatch 1H Operating Profit Misses Estimates; 2H Outlook ’Good’
- VIV FP : Vivendi considering relaunching GVT sale or merger with Tim Brasil; Moelis could be advising - La Lettre de l'Expansion
- ZO1 GY : Zooplus 2Q Revenue Rises 28%; Raises 2014 Sales Outlook

>>> Brokers Upgrades & Downgrades

>>> Up
*ATRESMEDIA RAISED TO BUY VS NEUTRAL AT GOLDMAN
*JULIUS BAER GROUP RAISED TO HOLD VS SELL AT BERENBERG
*SARAS RAISED TO NEUTRAL VS SELL AT UBS

>>> Down
*ABERTIS CUT TO NEUTRAL AT MACQUARIE
*MEDIASET ESPANA COMUNICACION CUT TO SELL VS HOLD AT BERENBERG
*MORGAN ADVANCED MATERIALS CUT TO HOLD VS BUY AT JEFFERIES
*ROTORK CUT TO HOLD VS BUY AT JEFFERIES
*STADA ARZNEIMITTEL CUT TO NEUTRAL VS OVERWEIGHT AT JPMORGAN

>>> PT Change


>>> Initiation


>>> Call
>> Sector
* Bernstein Cuts Steel, Iron Ore, Coking Coal Price Estimates {NSN N93E9F6TTDSF <go>}

>>> Saipem sales process likely to be launched after summer

Saipem sales process likely to be launched after summer

A formal sales process for Saipem, the listed, Italian, oil industry services group controlled by listed, petroleum giant Eni, is likely to take place after the summer, Italian-language daily Il Sole 24 Ore reported.

The article cited sources with knowledge of the dossier who said that while no formal sale was as yet underway, such an operation would be launched after the summer.

The report claimed that a mandate had been awarded to Goldman Sachs by previous Eni CEO Paolo Scaroni to find a buyer. The report said that Goldman Sachs would still be retained in this capacity but another financial advisor would also be chosen to work alongside if a decision on Saipem's sale is made.

The item added that listed, Norwegian groups Subsea 7 and Sea Drill, Russian oil giant Rosneft, and Dubai-based oil services group Arabtec are believed to be interested in Saipem.

The item noted that Eni holds a 43% stake in Saipem which has a market cap of EUR 8.06bn.


Source Il Sole 24 Ore

(BFW) Dialog Semiconductor, AMS Terminate Merger Talks

Dialog Semiconductor, AMS Terminate Merger Talks
2014-07-22 05:56:13.296 GMT


By Jurjen van de Pol
July 22 (Bloomberg) -- Dialog Semi says it was unable to
agree suitable terms for deal.
* Dialog Semi to continue independent strategy, committed to
exploring ways to enhance portfolio
* NOTE June 26: Dialog Semi, AMS Confirm Preliminary Talks on
Merger of Equals {NSN N7RJWY6KLVRY<Go>}
* NOTE July 17: Dialog Falls Most in 19 Wks; Lampe Cuts,
Skeptical on AMS Deal {NSN N8UIUM6JTSEN <go>}


Link to Statement:{NSN N93MZ73PR6RL <GO>}
Link to Company News:{DLG GR <Equity> CN <GO>}
Link to Company News:{AMS SW <Equity> CN <GO>}

For Related News and Information:
First Word scrolling panel: {FIRST<GO>}
First Word newswire: {NH BFW<GO>}

To contact the reporter on this story:
Jurjen van de Pol in Frankfurt at +49-69-9204-1104 or
jvandepol@bloomberg.net

To contact the editor responsible for this story:
James Ludden at +44-20-7673-2645 or
jludden@bloomberg.net

EMC Faces $10 Billion Test to Counter Call for Breakup: Real M&A

+------------------------------------------------------------------------------+

EMC Faces $10 Billion Test to Counter Call for Breakup: Real M&A 2014-07-21 23:09:34.593 GMT

(For a Real M&A column news alert: SALT REALMNA <GO>.)

By Brooke Sutherland July 22 (Bloomberg) -- EMC Corp. needs to convince investors that keeping the company together is worth more than the estimated $10 billion that could be unlocked in a breakup. Activist investor Elliott Management Corp. has built a stake in EMC and is pushing the $58 billion company to spin off its publicly traded VMware Inc. software unit, according to a person familiar with the matter. While the average of five analysts’ estimates signals a breakup could unlock more than $10 billion in shareholder value, Royal Bank of Canada said management has a point in arguing that a split would weaken the parts and harm growth. “This looks good on paper, but because of the strategic value of that asset, it might not be that practical to spin it off or sell it,” Rajesh Ghai, a New York-based analyst at Macquarie Group Ltd., said in a phone interview. “There are reasons why EMC is structured this way.” EMC needs to do something to boost its stock price, according to Cantor Fitzgerald LP. The shares climbed just 1 percent in the three years before reports of Elliott’s stake, compared with a 52 percent rally for the Standard & Poor’s 500 Index. The content management and security divisions are less integral to EMC, which makes storage computers, and spinning off those assets is an alternative that could create $5 billion for shareholders, Macquarie said. Or EMC could consider more share repurchases or dividends, said Janney Montgomery Scott LLC. Representatives for Hopkinton, Massachusetts-based EMC and New York-based Elliott declined to comment.

Stock Frustration

Elliott has accumulated more than $1 billion in EMC stock, said a person familiar with the matter, who asked not to be named because the information isn’t public. Splitting with VMware could make EMC an attractive takeover target for technology giants including Oracle Corp., said the person. Investors frustrated with the laggard stock may be receptive to Elliott’s proposal, Steven Milunovich, a New York- based analyst at UBS AG, wrote in a report yesterday. Even after EMC rose 5 percent yesterday, it still has a lower price-earnings ratio than the median for peers larger than $5 billion, according to data compiled by Bloomberg. While the company’s primary information storage business has been under pressure as more businesses shift to cloud storage, the unit is worth more than shareholders are giving it credit for, said Brian Alexander of Raymond James Financial Inc.

Underappreciated Core

Investors are “not really valuing EMC on a sum-of-the- parts basis because they haven’t had a reason to,” Alexander, a St. Petersburg, Florida-based analyst, said in a phone interview. Using a breakup to highlight “the valuation of core EMC, which we would argue is very depressed, makes a lot of sense to us.” EMC’s core business is valued at about 7.8 times estimates for earnings per share over the next year, Bill Choi of Janney wrote in a report yesterday. That’s almost half the multiple of pure-play rival NetApp Inc., he said. On average, analysts estimated that a breakup would boost EMC’s share price to as much as $33.60, 19 percent more than yesterday’s close. That equates to about $10.8 billion, data compiled by Bloomberg show.

Bigger Picture

Just because a breakup looks attractive financially in the short term, that doesn’t mean it’s the best strategy for EMC, said Amit Daryanani, an analyst at RBC Capital Markets, a unit of Royal Bank of Canada. Severing the ties between EMC and VMware risks undermining expansion at both businesses, he said. “I can make the case that EMC storage does much better in VMware-centric environments versus non-VMware,” the analyst said in a phone interview. “The federation grows faster than the standalone entities would.” One example of how closely EMC and VMware work together is their joint venture called Pivotal, which will help the companies gain relevance in cloud computing. VMware’s software that lets computers run different operating systems also gives the company an advantage as it competes with large rivals such as Oracle, Cisco Systems Inc. and International Business Machines Corp., said UBS’s Milunovich. “If you break it up, you just weaken every part,” EMC Chief Executive Officer Joe Tucci said at a conference in May. “So I just think it’s better together.” EMC would also still be a big takeover target even without VMware and getting rid of the holding wouldn’t increase the likelihood of a deal, said Daryanani of RBC.

Activist Spark

Still, the entry of an activist investor “was a long time coming,” he said. Whether or not the company decides to pursue a breakup, Elliott’s involvement should at least spark conversations about how to boost shareholder returns, he said. “There’s a lot of value at EMC, but it’s not being appreciated by the market,” Brian White, a New York-based analyst at Cantor Fitzgerald, said in a phone interview. “That’s what they need to grapple with -- how do they show that value to shareholders?” One alternative to separating VMware from EMC is to spin off smaller assets, such as the content management and RSA security divisions, said Ghai of Macquarie. “Those are two businesses that could easily be hived off to unlock some value that’s probably not being reflected in the shares right now,” Ghai said. It’s also possible that EMC instead decides to focus on returning more cash to shareholders with a dividend boost or increased stock buybacks, said Choi of Janney. Ultimately it will be up to shareholders to decide what they think is the best path for the company, said Brent Bracelin, a Portland, Oregon-based analyst at Pacific Crest Securities. “EMC is an undervalued asset,” Bracelin said in a phone interview. “A breakup would be able to unlock the value probably in a shorter period of time but ultimately, in the long run, does that actually mean that profitability would be higher? Maybe not.”

For Related News and Information: EMC Said Targeted by Activist Elliott for VMware Separation NSN N92M4H6S972D <GO> EMC Projects 2014 Earnings That May Miss Analyst Estimates NSN N4I9806KLVRY <GO> Symantec Breakup Is Best Hope to Revive Cheap Stock: Real M&A NSN N3BI4S6TTDSB<GO> EMC financial analysis: EMC US <Equity> FA PGEO <GO> Real M&A columns: NI REALMNA <GO> Top deal stories: TOP DEAL <GO>

--With assistance from Beth Jinks in New York.

To contact the reporter on this story: Brooke Sutherland in New York at +1-212-617-0448 or bsutherland7@bloomberg.net To contact the editors responsible for this story: Beth Williams at +1-212-617-2307 or bewilliams@bloomberg.net Whitney Kisling