>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: PRGS +10.8%, AMED +8.2%, FINL +5.7%, AZZ +5.5%, NKE +2.8%, KBH +1.7%.

M&A news: LBTYA +1.1% (announce recommended public offer for all issued and outstanding ordinary shares of Ziggo not yet owned by Liberty Global), EXPE +0.8% (announced agreement to purchase Auto Escape Group, a European care rental reservation company; terms not disclosed).

Other news: AWRE +17.1% (declared special cash dividend of $1.75 per share), MTW +9.2% (the target of shareholder activist Relational Investor, according to NYTimes Dealbook), DRRX +3.8% (secures $20 mln debt financing), ECA +2.5% (reaches agreement to sell Bighorn assets to Jupiter Resources for ~ $1.8 bln), GPRO +1.9% (follow through after yesterday's IPO), BCS +1.8% (Some banks withdrawing from BCS dark pool, according to reports), TEX +1.4% (trading higher in sympathy with MTW), APP +1.4% (denies speculation that lender declared default, according to WWD), QEP +1.2% (filed Form 10 registration statement for spin-off of midstream business), DSGX +1.1% (prices 9.5 mln common shares at a price of $13.50 per share).

Analyst comments: AMPE +10.4% (initiated with a Buy at Jefferies), DRWI +4.7% (upgraded to Sector Outperform from Sector Perform at CIBC Wrld Mkts), BRKS +3.3% (upgraded to Buy at Stifel), SXC +3.2% (added to Conviction Buy list at Goldman), YRCW +3% (upgraded to Buy from Hold at BB&T Capital Mkts), ANF +2.2% (target raised to $60 from $50 at Jefferies), GMCR +1.6% (upgraded to Buy from Hold at Argus), MPEL +1.4% (initiated with a Buy at Buckingham Research), MGM +1% (initiated with a Buy at Buckingham Research), SLXP +1% (initiated with a Buy at Canaccord Genuity), FUL +0.9% (upgraded to Buy from Hold at Deutsche Bank )

>>> Nike: Color on Quarter --> +3% Pre-Open

Nike: Color on Quarter

NKE shares trading higher by 3% following earnings and futures orders

  • Janney Capital Markets says following NKE's 4Q print, they continue to be positively biased on long-term fundamentals but look for a better entry point and/or improved visibility to FY15 upside before getting more constructive. They recognize there is a lot to like about the NKE story: (1) the innovation pipeline is robust, (2) LT global growth remains strong (global futures +12% co currency, with NA +11%, WE +22%, China appears to be inflecting), (3) revolutionary manufacturing (Flyknit, 3D printing LT), which in combination with structural levers (DTC and higher price/margin mix) drives GM expansion, and (4) a strong cash position (~$6/share) supports shareholder-friendly moves.
  • Stiffel notes, global constant currency futures growth of 12% was strong but shy of their estimate of 14% (above consensus estimates 11.6%). Upside to their futures estimates in North America (11% vs. their 9%) and Eastern Europe (14% vs. their 9%) was tempered by lower than estimated futures from Western Europe (22% vs. their 24%), Greater China (6% vs. their 7%), Japan (flat vs. their 2% estimate), and the Emerging Markets (9% vs. their 24%). They raised their price target to $89 from $87.
  • DA Davidson says moving into FY15, NKE's primary growth engines remain strong. In FY14, 11% c.c. growth was driven by DTC (+22% y/y), soccer (21%), basketball (19%), young athletes' (16%), and women's (12%). Price increases, improving mix, and DTC outgrowth remain on track to continue gross margin expansion; however, double-digit SG&A growth will likely be a muting factor to earnings growth. They look to get more positive on the company with greater conviction that NKE's mid-teens earnings growth target is realizable.
  • NKE tgt raised to $90 from $85 at Deutsche Bank



Read more: http://www.briefing.com/InPlayEq/InPlay/InPlayDual.htm#ixzz35qEk09LQ

WSJ : Goldman Sachs Loses in ‘Vampire Squid’ vs Octopus

A now-deceased U.K.-born cephalopod seems to have succeeded where Goldman Sachs GS -0.22%’s economics team stuttered.

Paul The Octopus shot to fame in 2010 by correctly predicting the outcome of each game involving Germany at that year’s FIFA World Cup as well as the final won by Spain. In contrast, Goldman’s much-fancied economics team has managed to achieve a paltry success rate of 37.5% so far for the preliminary stage at this year’s competition.*

Goldman’s economists analyzed reams of data to predict the outcome of matches.

The less-than-impressive results underscore that past performances on the soccer pitch and prestige are not reliable predictors of future success.

But should traders and investors now seek refuge in the wisdom of animals or birds with perceived Oracle-like properties?

Not quite.

For one, the sample size of Paul The Octopus’ predictions was much smaller. It is much harder to accurately predict the correct result randomly for 48 games than it is for 8 games. The eight-armed creature also had to just pick the winner out of two teams. Had it been confronted with the task of predicting a draw as well, the probability of getting the right result would have fallen to 33% from 50%.

Predicting draws has been Goldman’s Achilles heel at this tournament. There have been far fewer than the bank estimated.
What’s also becoming increasingly clear is that many of the pretenders to Paul The Octopus’s crown are one-trick ponies. Nasar the horse jockeyed into position to fill the gap left by Paul The Octopus’s demise but its only prediction: a win for the USA over Germany turned out to be incorrect. Big Head the Brazilian turtle’s success rate is iffy as well.

There still seems enough room for humans to make their mark. Retired South Korean international footballer Lee Young-pyo has managed to correctly predict outcomes of several games, including the exact score at this year’s tournament.

And Goldman has past successes in forecasting sporting events as well. It correctly predicted the exact order of the top 4 countries on the medal table at the 2012 London Olympics. Its bet for a Brazil win at this year’s World Cup could still turn out to be correct.


*The author of the piece has managed a success rate of 48% thus far without incorporating regression analysis. No animals were harmed while making those predictions.

>>> US Early premarket gappers

Early premarket gappers

Gapping up: AWRE +21.5%, PRGS +10.8%, MTW +10.2%, AZZ +4.7%, FINL +4.4%, DRRX +3.8%, BRKS +3.4%, YRCW +3%, NKE +3%, BCS +1.5%, TEX +1.4%, GPRO +1.3%, QEP +1.2%, PLUG +1.1%, MGM +1%, EXPE +0.8%, EGO +0.8%, EXPE +0.8%

Gapping down: ANAD -6.7%, ISIS -5.6%, DD -2.6%, AIXG -2.4%, IG -1.7%, AMSG -1.6%, JPM -1.5%, LOGI -1.4%, UBS -1.1%, SAN -0.9%

FT : London’s IPO market is becoming a racket

Private equity is stuck with businesses it meant to sell years ago

Tempted by the latest IPO? Then lie down until the feeling goes away. London’s new issues market is in danger of becoming a racket.
Prospectuses are frequently published only after conditional dealings have started; banks or brokers whose analysts might be expected to take a robust view are brought on board, thus silencing criticism, while any prospective investor asking awkward questions risks being cut out of the issue.

The process has become less transparent, not more. Competition was supposed to drive down fees, but the evidence shows the opposite and in some recent IPOs a significant portion of the flotation proceeds has gone to the advisers. One finance director who negotiated a lower price from bank A was asked by bank B to accept the tariff in return for better terms on some future deal. Some of the real clunkers can only have got away by those in charge warning potential buyers that they might not see the next (better) offer.
So who are the villains of this particular piece? Not all private equity companies have behaved badly, but a disconcerting number of the real dogs at flotation have been done over by the PE boys. They are overstocked with businesses they expected to sell years ago, before the bear market got in the way. Some of those businesses have been sold to other private buyers en route, with equity replaced by debt at each transaction.
Nobody is forced to buy new issues. Anyone tempted to do so should ensure that there’s a published prospectus and that the business has been trading in its current shape for more than just a year or two. Then look at who is selling in the offer. Ignoring this market completely may mean you miss the odd nugget, but it saves sifting through all that low-grade ore.
Pricey floorcovering
It is hardly surprising that Philip Harris is reluctant to give up the carpet business. The 71-year-old knows almost nothing else and this week rescinded his earlier proposal to leave the chair at Carpetright, arguing that 71 no longer looks old to him.
The puzzle, though, is why so many outside shareholders (his family owns a fifth of the stock) are also clinging on. Carpetright is nothing like as successful as Allied Carpets, the previous venture of Lord Harris, which made his fortune. Carpetright sales hit £475m in 2007, when EY (as Ernst & Young is now called) made him entrepreneur of the year, and it has been increasingly threadbare ever since.
The last dividend was more than three years ago and there is red ink all over the accounts. Yet the shares refuse to reflect this depressed reality and actually perked up on this week’s horrid trading news. At 511p Carpetright is valued at £346m, but last year’s £448m of sales yielded just 4.7p of “underlying” earnings per share. If the housing market is picking up, it has not picked up Carpetright’s carpets.
When EY was giving Lord Harris his award, earnings hit 46p a share, supporting a 33.9p dividend. Perhaps the company’s exciting new luxury vinyl tiles and lovely soft polyprop carpets will bring those days back, but it’s a distant prospect and time is not on Lord Harris’ side, however young he feels.
Joy for jobsworths
Ooh, goody, a brand new boondoggle. The Chinese are prepared to lob in a spare $100bn as starting capital for “a new global financial institution” and 22 other countries with too much money want to join the proposed Asian Infrastructure Investment Bank.
The first aim is to finance a rail link from Beijing to Baghdad (a sort of iron silk road) but the real attraction is to found an institution that is not controlled by the smug western bankers and bureaucrats who dictate policy at the World Bank and International Monetary Fund.
These boondoggles are easy to start, quickly sprouting their own secretariats, conferences and cushy jobs for cronies of the founding governments. The Paris-based OECD shows that stopping them is another matter. It sails on long after performing any useful function, as does the UN Industrial Development Organisation, or UNIDO, to which the only response is: “Oh no we don’t”.

WSJ : BNP Plans to Slash Dividend, Sell Multibillion Euro Bond Next Week

BNP Plans to Slash Dividend, Sell Multibillion Euro Bond Next Week
Move Comes Amid Investigation into Bank's Alleged Violation of U.S. Sanctions

BNP Paribas plans to slash its dividend and sell billions of euros of bonds to investors next week as it settles a long-running U.S. investigation into its alleged violation of U.S. sanctions, according to a person familiar with the matter.

The settlement between the large French bank and U.S. authorities is expected to be announced on Monday, although both sides are still ironing out final details, this person said. BNP Paribas is expected to plead guilty to criminal charges and pay up to $9 billion, people familiar with the negotiations have said.

New York's financial regulator also is expected to suspend for up to a year the bank's ability to engage in certain dollar-clearing activities, according to other people familiar with the matter. The planned suspension, which will be phased in over several months, is likely to focus on transactions specifically related to BNP's trade-finance unit, which is at the center of the sanctions-violation case, these people said..

The expected penalty of up to $9 billion will hurt BNP's capital ratios, but the bank doesn't currently plan to issue new shares to replenish its capital, according to the person familiar with the matter.

Instead, the bank expects to dramatically reduce its dividend, this person said. It isn't clear if the dividend will be scrapped entirely, or if BNP will maintain a token dividend for symbolic purposes.

BNP has paid out a dividend each year since at least 1998. Earlier this year, the bank paid out a 2013 dividend of €1.50 per share. BNP previously had said it hoped to increase that dividend payment for 2014.

Analysts say BNP is likely to suspend its dividend for up to two years.

One victim of the dividend cut will be the State of Belgium, which owned a 10.3% stake in the French bank as of Dec. 31. The Belgian government, which bought shares in the French bank back in 2009, this year received about €192 million in dividend payments from BNP Paribas.

A spokesman for the Belgian Finance Ministry declined to comment.

BNP also plans to issue a multibillion-euro bond, according to the person familiar with the matter. The exact size of the bond issuance isn't clear.