TWX - CNBC's Faber: Don't look for a deal to acquire Time Warner in the near term, nothing is going on right now - Something could happen over the next couple of years
Gapping down
In reaction to disappointing earnings/guidance/SSS: LL -19.8%, PBPB -18.8%, CATO -8.1%, HELE -6.1%, LB -5.5%, TSCO -5.4%, WDFC -5.2%, LQDT -4.6%, HELI -4.3%, FDO -2.5%, SMRT -0.5%, .
Select financial related names showing weakness: NBG -5.2%, BCS -3.6%, DB -3.5%, ING -3.2%, HSBC -2.1%, UBS -2%, LYG -1.8%.
Other news: KOS -8.7% (announced that funds affiliated with The Blackstone Group L.P. and Warburg Pincus agreed to sell an aggregate of 17 mln of Kosmos's common shares in a registered underwritten public offering), RGDO -6.3% (announces clinical hold of REGULATE-PCI trial following voluntary halt of trial by Regado), MEMP -6.3% (announces public offering of 8.6 mln common units),EROS -5% (prices 7 mln ordinary shares at a price of $14.50 by co and selling shareholders), AXLL -3.6% (announced that its PHH vinyl chloride monomer manufacturing facility in Lake Charles, Louisiana, has been repaired and the facility has returned to full operating rates; sees Q2 adjusted EBITDA of $125-130 mln), OCRX -3.4% (announces proposed public offering pursuant to an effective shelf registration), MBUU -2.9% (prices 4.8 mln shares of common stock at $18.50 per share by co and selling shareholders), WBAI -2.7% (announced that Anthony Liu will resign from his post as Chief Risk Officer), LOW -2.5% (following LL results), TKMR -2.5% (receives $1.5 mln milestone payment), ZQK -2.4% (announces additional licensing agreements), VRTX -2% (announces that Peter Mueller Executive VP of Global R&D and Chief Scientific Officer will retire), HD -1.8% (following LL results), SDRL -1.3% (refinances three high specification ultra-deepwater units), BAC -1.3% (reports indicate settlement talks have stalled).
Analyst comments: ISBC -2.1% (downgraded to Neutral from Buy at Guggenheim), QGEN -1.9% (initiated with a Market Perform at Wells Fargo), NTI -1.6% (downgraded to Neutral from Outperform at Macquarie).
In reaction to disappointing earnings/guidance/SSS: LL -19.8%, PBPB -18.8%, CATO -8.1%, HELE -6.1%, LB -5.5%, TSCO -5.4%, WDFC -5.2%, LQDT -4.6%, HELI -4.3%, FDO -2.5%, SMRT -0.5%, .
Select financial related names showing weakness: NBG -5.2%, BCS -3.6%, DB -3.5%, ING -3.2%, HSBC -2.1%, UBS -2%, LYG -1.8%.
Other news: KOS -8.7% (announced that funds affiliated with The Blackstone Group L.P. and Warburg Pincus agreed to sell an aggregate of 17 mln of Kosmos's common shares in a registered underwritten public offering), RGDO -6.3% (announces clinical hold of REGULATE-PCI trial following voluntary halt of trial by Regado), MEMP -6.3% (announces public offering of 8.6 mln common units),EROS -5% (prices 7 mln ordinary shares at a price of $14.50 by co and selling shareholders), AXLL -3.6% (announced that its PHH vinyl chloride monomer manufacturing facility in Lake Charles, Louisiana, has been repaired and the facility has returned to full operating rates; sees Q2 adjusted EBITDA of $125-130 mln), OCRX -3.4% (announces proposed public offering pursuant to an effective shelf registration), MBUU -2.9% (prices 4.8 mln shares of common stock at $18.50 per share by co and selling shareholders), WBAI -2.7% (announced that Anthony Liu will resign from his post as Chief Risk Officer), LOW -2.5% (following LL results), TKMR -2.5% (receives $1.5 mln milestone payment), ZQK -2.4% (announces additional licensing agreements), VRTX -2% (announces that Peter Mueller Executive VP of Global R&D and Chief Scientific Officer will retire), HD -1.8% (following LL results), SDRL -1.3% (refinances three high specification ultra-deepwater units), BAC -1.3% (reports indicate settlement talks have stalled).
Analyst comments: ISBC -2.1% (downgraded to Neutral from Buy at Guggenheim), QGEN -1.9% (initiated with a Market Perform at Wells Fargo), NTI -1.6% (downgraded to Neutral from Outperform at Macquarie).
Gapping up
In reaction to earnings/guidance/SSS: DRWI +6.7%, BURBY +5.4%, ZUMZ +5.1%, .
M&A news: IGT +5.9% (renewed GTech (GTKYY) bid speculation).
Select metals/mining stocks trading higher: KGC +3%, AG +2.9%, IAG +2.2%, SLW +2%, GG +1.9%, AU +1.8%, SLV +1.7%, ABX +1.7%, GDX +1.7%, GFI +1.2%, GLD +1.1%, GOLD +1%
Other news: UAL +4.8% (reports June 2014 consolidated traffic (RPM) was flat y/y and consolidated capacity (ASM) increased 0.8% vs June 2013), NG +2.6% ( reports major progress in advancing Donlin Gold up the Value Chain), SIR +1.2% (CommonWealth REIT sells its 22 mln shares of Select Income REIT for $31.51 per share), APP +1.2% (entered into a Nomination, Standstill and Support Agreement with Standard General and Dov Charney), SSE +0.9% (Carl Icahn disclosed 9.98% stake in 13D filing), REGN +0.9% (co and Sanofi (SNY) announced positive results from Phase 2b study of dupilumab in patients with moderate-to-severe atopic dermatitis), PAYX +0.7% (increases quarterly dividend), .
Analyst comments: MRC +2.1% (upgraded to Neutral from Underperform at BofA/Merrill
)
In reaction to earnings/guidance/SSS: DRWI +6.7%, BURBY +5.4%, ZUMZ +5.1%, .
M&A news: IGT +5.9% (renewed GTech (GTKYY) bid speculation).
Select metals/mining stocks trading higher: KGC +3%, AG +2.9%, IAG +2.2%, SLW +2%, GG +1.9%, AU +1.8%, SLV +1.7%, ABX +1.7%, GDX +1.7%, GFI +1.2%, GLD +1.1%, GOLD +1%
Other news: UAL +4.8% (reports June 2014 consolidated traffic (RPM) was flat y/y and consolidated capacity (ASM) increased 0.8% vs June 2013), NG +2.6% ( reports major progress in advancing Donlin Gold up the Value Chain), SIR +1.2% (CommonWealth REIT sells its 22 mln shares of Select Income REIT for $31.51 per share), APP +1.2% (entered into a Nomination, Standstill and Support Agreement with Standard General and Dov Charney), SSE +0.9% (Carl Icahn disclosed 9.98% stake in 13D filing), REGN +0.9% (co and Sanofi (SNY) announced positive results from Phase 2b study of dupilumab in patients with moderate-to-severe atopic dermatitis), PAYX +0.7% (increases quarterly dividend), .
Analyst comments: MRC +2.1% (upgraded to Neutral from Underperform at BofA/Merrill
)
Time Warner: Even with no Google (GOOG) guys, no Rupert; price implies negative 2014-18 ad growth; maintain Buy
TWX shares rose 2.3% yesterday off reports that Rupert Murdoch could be interested in acquiring co through Twenty-First Century Fox (FOXA), with GOOG presented as a bookend possible acquirer. The current possibility presents itself off Fox possibly getting near $14 bln in proceeds from BSkyB (BSYBY) (for its European assets. However, thesupposed interest does highlight TWX's continued undervaluation, as WSI estimates that the current stock price implies negative 2.5% annual ad growth through 2018 assuming other forecast building blocks, including near double-digit affiliate fee growth, are satisfied.
Trio of Apple sapphire-related inventions point to iOS device displays, illuminated buttons
Early premarket gappers
Gapping up: DRWI +10.7%, ZUMZ +10%, CWH +6.9%, APP +5.9%, UAL +3.2%, SSE +2.6%, AG +2.4%, KGC +2.3%, AU +2%, SLW +1.9%, IAG +1.9%, GG +1.8%, SLV +1.7%, GFI +1.5%, ABX +1.4%, REGN +1.3%, GDX +1.3%, SIR +1.2%, TKMR +1.2%, GLD +1%
Gapping down: LL -20.7%, PBPB -11.3%, KOS -9.6%, KOS -9.6%, MEMP -6%, AXLL -5.4%, WDFC -5.2%, HELE -4.9%, TSCO -4.5%, HELI -4.3%, SAN -4.1%, PT -4%, BCS -3.5%. DB -3.5%, BBVA -3.5%, MT -3%, TWTR -2.7%, UBS -2%, LOW -1.8%, HD -1.6%, RGDO -1.5%, EROS -1.3%, OCRX -0.7%
Gapping down: LL -20.7%, PBPB -11.3%, KOS -9.6%, KOS -9.6%, MEMP -6%, AXLL -5.4%, WDFC -5.2%, HELE -4.9%, TSCO -4.5%, HELI -4.3%, SAN -4.1%, PT -4%, BCS -3.5%. DB -3.5%, BBVA -3.5%, MT -3%, TWTR -2.7%, UBS -2%, LOW -1.8%, HD -1.6%, RGDO -1.5%, EROS -1.3%, OCRX -0.7%
Family Dollar misses by $0.04, beats on revs; reaffirms Q4 EPS guidance, lowers Q4 comp guidance
Reports Q3 (May) adj. earnings of $0.85 per share, $0.04 worse than the Capital IQ Consensus Estimate of $0.89; revenues rose 3.3% year/year to $2.66 bln vs the $2.61 bln consensus.
"Our recent investment to permanently lower prices is resonating with customers; we are seeing savings from our workforce optimization efforts; and we are on track to close approximately 370 underperforming stores by the end of the fiscal year. We remain confident that these steps will position the Company to improve our financial performance and deliver higher long-term shareholder returns."
- Comparable store sales for the 13-week period decreased 1.8% as a result of fewer customer transactions, partially offset by an increase in the average customer transaction value. Sales in the third quarter of fiscal 2014 were strongest in the Consumables category, driven primarily by strong growth in refrigerated/frozen food and tobacco.
- June comps ~flat
- Excluding the inventory write-down, adjusted third quarter fiscal 2014 gross profit increased 2.2% to $912.3 million, or 34.3% of net sales, compared to $892.5 million, or 34.7% of net sales, in the third quarter of fiscal 2013. As a percentage of sales, the impact on gross profit of stronger sales of lower-margin consumables, lower markups and higher markdowns was partially offset by lower inventory shrinkage.
"Our recent investment to permanently lower prices is resonating with customers; we are seeing savings from our workforce optimization efforts; and we are on track to close approximately 370 underperforming stores by the end of the fiscal year. We remain confident that these steps will position the Company to improve our financial performance and deliver higher long-term shareholder returns."
J Sainsbury could see rekindled Qatari takeover interest
J Sainsbury, the listed UK-based supermarket chain, could face a takeover bid from the government of Qatar, The Independent suggested in a think-piece.
The article cited J Sainsbury’s falling share price and the departure of chief executive Justin King as two possible reasons for a takeover attempt.
Qatar tried to acquire J Sainsbury in 2006 with an offer pitched just below 600p per share, the item said. Should Qatar return, it would be able to offer a much lower price, the report added.
The Qatar Investment Authority is the Persian Gulf state's sovereign wealth fund, which invests via its Qatar Holdings vehicle.
Source Independent
Slim’s Empire Breakup Seen Spurring Up to $20 Billion in Deals
2014-07-10 04:59:59.0 GMT
By Ben Bain and Nacha Cattan
July 10 (Bloomberg) -- Carlos Slim’s plan to break up his
telecommunications empire will give a boost to Mexico’s
financial firms by generating as much as $20 billion in deals,
one of the billionaire’s bankers said.
Grupo Financiero Santander Mexico SAB Chief Executive
Officer Marcos Martinez, 60, said the dismantling of America
Movil SAB will fuel mergers and acquisitions, underwriting and
advising work for financial institutions. He called Slim’s
company “a very important client.”
“We’re excited,” Martinez said yesterday in an interview
in the Mexico City headquarters of the nation’s fourth-largest
bank by outstanding loans. “This announcement for America Movil
is a huge opportunity for the banks, including us, because of
the investment that they’re going to do.”
Slim, the world’s second-richest person, will divest
America Movil assets, the company announced this week. The
largest Latin American telecommunications company, with a market
value of about $79 billion, America Movil is shrinking to
appease regulators and avoid fines for having more than 50
percent market share in Mexican landlines and mobile phones.
Martinez said his firm, a unit of Spain’s biggest bank,
will be among lenders pin
"}ing to help America Movil make deals.
Slim, 74, and his family hold a 57 percent stake in the firm,
which has 272 million wireless subscribers in Latin America and
70 percent of Mexico’s mobile-phone market.
“There is an opportunity to advise them, to take to the
market some of the assets that they are going to sell,”
Martinez said. “It will be M&A opportunities.”
Facing Penalties
Slim’s flagship faces the toughest penalties under
antitrust laws that Mexican President Enrique Pena Nieto could
sign as soon this week. Pena Nieto took office in 2012 with
promises to break monopolies in sectors including
telecommunications.
Mexican lawmakers approved legislation yesterday that would
force some companies including America Movil to share parts of
their networks and eliminate fees charged to other operators to
connect calls to their customers.
“The regulatory environment has become more efficient,”
Martin Lara, a Mexico City-based analyst with Corp. Actinver SAB, said in a
telephone interview. “Other companies will want to participate here, especially
if Slim sells something. Because the competitive environment is more balanced
now.”
America Movil didn’t specify which assets would be sold.
The Mexico City-based company may receive about $8.6 billion
from the sales and will need to divest about 21 million wireless
users and 4 million landlines, Lara said in a note to clients.
Stock Climbs
Shares of Slim’s company surged 9.4 percent yesterday in
Mexico City after the announcement, the most since April 2009.
The firm trades at 12.1 times analyst estimates for next year’s estimated
earnings, the least among the 10 biggest telecommunications companies in
the Americas, which have an average of 19.3 times, according to
data compiled by Bloomberg.
The divestment decision “should have a positive effect on
the market” in Mexico, Manuel Jimenez, an analyst at Grupo
Financiero Banorte SAB, said in a phone interview. “It should
improve the environment of doing business in Mexico. If the
country has an improved global perception and growth
perspective, that would attract investment.”
For Santander, Mexico’s fourth-largest bank by lending, the
announcement comes amid a push to boost the commercial business.
Martinez said he expects Santander’s loan growth to outpace the
Mexican financial system’s expansion over the next three years.
The bank’s portfolio could grow by 16 percent or 17 percent
in the next three years and borrowing from small- and medium-
sized companies may increase 30 percent annually, he said.
A press official for America Movil didn’t respond to an e-
mail message seeking comment after normal business hours.
For Related News and Information:
Carlos Slim Plans Mexican Breakup Amid New Antitrust Laws
NXTW NSN N8GCCV6JTSEC <GO>
Grand-Bargain Dealmaker Is Back in Bullish Sign: Mexico Credit
NXTW NSN N8CW996TTDS4 <GO>
Santander Housing Hangover Lasts as Loans Sour: Mexico
NXTW NSN N0UWBH6K50ZD <GO>
Santander earnings: SANMEXB MM Equity EM <GO>
M&A analysis: MA <GO>
Top stories: TOP <GO>
--With assistance from Isabella Cota, Eric Martin and Patricia
Laya in Mexico City.
To contact the reporters on this story:
Ben Bain in Mexico City at +52-55-5242-9256 or
bbain2@bloomberg.net;
Nacha Cattan in Mexico City at +52-55-5242-9283 or
ncattan@bloomberg.net
To contact the editors responsible for this story:
Christine Harper at +1-212-617-5983 or
charper@bloomberg.net
Dan Reichl, Carlos Manuel Rodriguez
2014-07-10 04:59:59.0 GMT
By Ben Bain and Nacha Cattan
July 10 (Bloomberg) -- Carlos Slim’s plan to break up his
telecommunications empire will give a boost to Mexico’s
financial firms by generating as much as $20 billion in deals,
one of the billionaire’s bankers said.
Grupo Financiero Santander Mexico SAB Chief Executive
Officer Marcos Martinez, 60, said the dismantling of America
Movil SAB will fuel mergers and acquisitions, underwriting and
advising work for financial institutions. He called Slim’s
company “a very important client.”
“We’re excited,” Martinez said yesterday in an interview
in the Mexico City headquarters of the nation’s fourth-largest
bank by outstanding loans. “This announcement for America Movil
is a huge opportunity for the banks, including us, because of
the investment that they’re going to do.”
Slim, the world’s second-richest person, will divest
America Movil assets, the company announced this week. The
largest Latin American telecommunications company, with a market
value of about $79 billion, America Movil is shrinking to
appease regulators and avoid fines for having more than 50
percent market share in Mexican landlines and mobile phones.
Martinez said his firm, a unit of Spain’s biggest bank,
will be among lenders pin
"}ing to help America Movil make deals.
Slim, 74, and his family hold a 57 percent stake in the firm,
which has 272 million wireless subscribers in Latin America and
70 percent of Mexico’s mobile-phone market.
“There is an opportunity to advise them, to take to the
market some of the assets that they are going to sell,”
Martinez said. “It will be M&A opportunities.”
Facing Penalties
Slim’s flagship faces the toughest penalties under
antitrust laws that Mexican President Enrique Pena Nieto could
sign as soon this week. Pena Nieto took office in 2012 with
promises to break monopolies in sectors including
telecommunications.
Mexican lawmakers approved legislation yesterday that would
force some companies including America Movil to share parts of
their networks and eliminate fees charged to other operators to
connect calls to their customers.
“The regulatory environment has become more efficient,”
Martin Lara, a Mexico City-based analyst with Corp. Actinver SAB, said in a
telephone interview. “Other companies will want to participate here, especially
if Slim sells something. Because the competitive environment is more balanced
now.”
America Movil didn’t specify which assets would be sold.
The Mexico City-based company may receive about $8.6 billion
from the sales and will need to divest about 21 million wireless
users and 4 million landlines, Lara said in a note to clients.
Stock Climbs
Shares of Slim’s company surged 9.4 percent yesterday in
Mexico City after the announcement, the most since April 2009.
The firm trades at 12.1 times analyst estimates for next year’s estimated
earnings, the least among the 10 biggest telecommunications companies in
the Americas, which have an average of 19.3 times, according to
data compiled by Bloomberg.
The divestment decision “should have a positive effect on
the market” in Mexico, Manuel Jimenez, an analyst at Grupo
Financiero Banorte SAB, said in a phone interview. “It should
improve the environment of doing business in Mexico. If the
country has an improved global perception and growth
perspective, that would attract investment.”
For Santander, Mexico’s fourth-largest bank by lending, the
announcement comes amid a push to boost the commercial business.
Martinez said he expects Santander’s loan growth to outpace the
Mexican financial system’s expansion over the next three years.
The bank’s portfolio could grow by 16 percent or 17 percent
in the next three years and borrowing from small- and medium-
sized companies may increase 30 percent annually, he said.
A press official for America Movil didn’t respond to an e-
mail message seeking comment after normal business hours.
For Related News and Information:
Carlos Slim Plans Mexican Breakup Amid New Antitrust Laws
NXTW NSN N8GCCV6JTSEC <GO>
Grand-Bargain Dealmaker Is Back in Bullish Sign: Mexico Credit
NXTW NSN N8CW996TTDS4 <GO>
Santander Housing Hangover Lasts as Loans Sour: Mexico
NXTW NSN N0UWBH6K50ZD <GO>
Santander earnings: SANMEXB MM Equity EM <GO>
M&A analysis: MA <GO>
Top stories: TOP <GO>
--With assistance from Isabella Cota, Eric Martin and Patricia
Laya in Mexico City.
To contact the reporters on this story:
Ben Bain in Mexico City at +52-55-5242-9256 or
bbain2@bloomberg.net;
Nacha Cattan in Mexico City at +52-55-5242-9283 or
ncattan@bloomberg.net
To contact the editors responsible for this story:
Christine Harper at +1-212-617-5983 or
charper@bloomberg.net
Dan Reichl, Carlos Manuel Rodriguez
Schlumberger Rally Can Continue Amid Upgrades
The stock should stay hot given that we're in "the sweet-spot of the oilfield services upcycle."
Early Wednesday, HSBC analyst Phillip Lindsay upgraded shares of the oilfield service giant to Overweight from Neutral, and increased his target price by $30, to $135.
The upgrade follows Schlumberger's (ticker: SLB ) upbeat analyst day late last month. Lindsay writes that "new technology introductions [will be] driving market share gains and incremental margins," and adds, "if Schlumberger can deliver this ambitious level of operational performance, we think there is ample cushion to outperform its financial objectives – perhaps significantly."
Other firms have grown more constructive, too. On Friday, Argus Research's Michael Burke raised his target price on the stock from $121 to $150, which came less than a week after Credit Suisse's James Wicklund increased his target from $120 to $137, calling the company "open, honest, confident and impressive" following the June 25 meeting with analysts.
While the stock was little changed today, at a recent $116.54, we expect more gains, too.
Although Schlumberger is flirting with new highs, the company's impressive growth track appears to justify further price appreciation. At its analyst day, Schlumberger said it expects earnings per share to grow at an average annual rate of 17% to 20% and is targeting a return on capital above 20%. Although its 1.4% yield isn't as high as many might like, Schlumberger forecast returning over 75% of earnings back to stockholders in the form of dividends and share repurchases in the coming years.
"We see significant medium-term attractions to the Schlumberger story based on a strengthening earnings trajectory, and an improving financial returns and free cash flow profile," writes Lindsay.
Schlumberger, a best-in-breed firm, is benefitting from tailwinds that should continue for several years. Schlumberger has always invested in research and development, which means that its technologies are the go-to products for oil companies ramping up production and looking to tap increasingly difficult reserves.
"The combination of attractive West Texas Intermediate [oil] prices, rising capital expenditure budgets, [and] strong rig/well count trends suggest we are in the sweet-spot of the oilfield services upcycle," writes Susquehanna analyst Charles Minervino, who notes his earnings estimates are well above consensus for Schlumberger. "Industry dynamics are improving, capacity is tightening, and pricing is rising in the U.S., which should be catalysts for upward revisions to EPS estimates for 2014-2016."
Schlumberger also has a clean balance sheet and operations in growing areas like arctic and deep-sea drilling.
Schlumberger is up more than 26% since Barrons.com recommended shares earlier this year, easily outpacing the Standard & Poor's 500's 5.9% gain. (See Weekday Trader, "Undervalued Schlumberger Could Rise 28%," Feb. 27.)
Trading at more than 17 times forward, Schlumberger isn't as cheap as it was in February, but given the company's strong outlook, shares remain below historical valuation levels.
"Were Schlumberger to simply hold their pre-meeting multiple in the mid to high teens, it is not hard to envision significant upside from here on targets that could prove conservative given that we do expect a meaningful recovery in U.S. gas directed activity and some international pricing/mix improvement," according to Deutsche Bank analyst Mike Urban who writes that Schlumberger is "increasingly entering a new league: A global mega-cap growth company."
Indeed, Schlumberger's strong growth in an expanding industry puts it in a league of its own.