>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: SONC +2%, MU +1.1%.

M&A news: STBZ +4% (State Bank Financial to acquire Georgia-Carolina Bancshares and its wholly-owned subsidiary in a cash and stock transaction with a purchase price of ~$82 million, or $22.35 per share).

Select metals/mining stocks trading higher:GFI +1.9%, MUX +1.8%, IAG +1%, AU +0.8%, EGO +0.7%, SLV +0.7%, MT +0.7%, AUY +0.6%, GG +0.5%.

Other news: XGTI +80% (awarded subcontractor position on $497 mln multiple-award contract for communications and networking services to U.S. Army), VRTX +53.6% (Two 24-week Phase 3 studies of Lumacaftor in combo with Ivacaftor met primary endpoint with statistically significant improvements in lung function), CRMD +24.8% (finalized pivotal Phase 3 study protocol for FDA), FRO+7.5% (cont strength), WIX +5.6% (surpasses 50 million users worldwide ), ZPIN +4.3% (Tiger Global Investments disclosed 18.6% passive stake in 13G filing), HCLP +2.1% (announced new long-term frac sand purchase agreement with Halliburton), TTM +2% (strong mkts in India overnight), CAW +1.2% (stated its policy is not to comment on unusual market activity), EXK +1.1% (drilling continues to intersect high grade silver-gold mineralization in La Luz-Asuncion Vein at Bolanitos Mine), IBN +1.1% (strong mkts in India overnight).

Analyst comments: CDE +1.5% (upgraded to Mkt Perform from Underperform at BMO Capital Mtkts), HTGC +1.4% (upgraded to Outperform from Market Perform at Wells Fargo), BBY +0.8% (initiated with a Overweight at Morgan Stanley), SBH +0.6% (initiated with a Overweight at Morgan Stanley), WEC +0.5% (upgraded to Outperform from Market Perform at Wells Fargo)

>>> Elisabeth Arden (RDEN US) News hitting the tape -9% Pre Open

Discloses approved approved a broad restructuring and cost savings program that is intended to reduce the size and cost of the Company's overhead structure and exit low-return businesses
- 2014 Performance Improvement Plan includes the exiting of certain unprofitable retail doors and fragrance license agreements, changes in customer, distribution and supply chain relationships, the discontinuation of certain products, the elimination of employee positions globally and the closing of the Company's Puerto Rico affiliate. The 2014 Performance Improvement Plan is only a part of the Company's ongoing broad restructuring and cost savings program, and the Company is continuing to target annual savings in the range of $40M to $50M upon full implementation of the program. 
- Currently estimates that the 2014 Performance Improvement Plan will result in pre-tax charges beginning in the fourth fiscal quarter of 2014 and through fiscal 2015 of $65M to $72M, of which an estimated $32M to $36M is comprised of future cash expenditures.

(Hollywood-Reporter) Disney Not Pursuing Equity Stake in Vice Media

Disney Not Pursuing Equity Stake in Vice Media {http://bit.ly/1jcq2rj}

The "Vice" TV show is most famous for sending Dennis Rodman to North Korea.
Time Warner is still considered a suitor for the media company, though the two parties are $400 million apart.

Reports suggesting that several major media conglomerates are interested in paying big money for a stake in Vice Media are overblown, multiple sources told The Hollywood Reporter on Monday.

It was revealed a few weeks ago that Time Warner was interested in taking a position in Vice that would value the hip and edgy new-media company at as much as $2.2 billion, up from the $1.4 billion it was worth a year ago when 21st Century Fox bought a 5 percent stake for $70 million.
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But reports have surfaced since then suggesting that Time Warner might have to fend off other suitors. A story in the New York Times on Monday, for example, indicated that Walt Disney has entered the fray and that 21st Century Fox is interested in upping its stake. But in both cases the conglomerates have ruled out an investment — or in the case of the latter, a further investment — in Vice, according to several sources who spoke to THR on the condition of anonymity because of the secretive nature of negotiations.
"An interested party is obviously trying to drum up a bidding war," one person familiar with the matter told THR. "It’s interesting that Viacom isn’t usually mentioned as a bidder, since MTV is most analogous to Vice’s business."
Viacom, Disney, Time Warner and 21st Century Fox declined a request for comment, as did Vice.
Sources said Disney kicked the tires on Vice but is now uninterested in part because its content wouldn’t fit with the conglomerate’s family friendly brand. On Monday, for example, profanity was peppered into several stories at Vice’s website, which also contained some partial nudity and some fairly graphic sexual references.
"Disney has no interest. It’s unclear where they’d even put something like this," one source said.
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Another source confirmed that 21st Century Fox is already "happy with its current stake" in Vice and will not be competing against others who might want to invest. "The 5 percent stake had an opportunity to do more and decided against it," said a source.
And that leaves Time Warner, which spoke to Vice as recently as last week, according to sources, and is looking to make an investment in Vice that would value the whole company at about $1.8 billion, though its CEO, Shane Smith, thinks his company is worth at least $2.2 billion.
One scenario has Time Warner taking a large but not necessarily a majority stake in Vice, then turning HLN into a joint venture between Time Warner and Vice, with the latter handling the programming. In that case, HLN would likely be rebranded.
While Vice is primarily an online company targeting 18-34-year-olds with websites that attract 220 million unique visitors monthly and 5.5 million subscribers to its YouTube channels, it also has TV show Vice on Time Warner’s HBO.
Vice was founded in Montreal, Canada, in 1994. The private company does not disclose financial information, though sources say it will generate about $500 million in revenue in 2014. The company says it has 36 global offices and 1,400 full-time employees. Its online videos boast about 500 million views monthly and it gets $16 CPM rates and more for its video ads. It founded Vice Records in 2002 and also operates a robust branded-content business. A website page promoting the latter business lists more than a dozen recent partners, such as Intel, Budweiser, Nike and Ford, along with a single film studio: Warner Bros., owned by Time Warner.
The HBO television show — which is probably most famous for sending former NBA star Dennis Rodman to North Korea — is in its second season and attracting an average of 760,000 viewers, not including on-demand and online viewing. Sources say that if Time Warner and Vice cannot come to terms on a deal involving an investment stake or joint venture, the conglomerate might simply end up licensing more content from Vice.
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"Negotiations are progressing," said a source. "They’re figuring out a way for the companies to work together, possibly through a joint venture or programming relationship. It’s not likely though that Vice will want to sell itself entirely. They’ll want to maintain a controlling stake."
While Disney, 21st Century Fox and Viacom may not be interested in an equity investment in Vice, content partnerships are often discussed, say several people close to the situation. Vice produced 11 hours worth of TV content for HBO, but in total it has produced 76 hours of programming, including lots of TV content in Canada and Germany, and four years ago it produced a show called Vice Guide to Everything for MTV.
"It does make sense for Time Warner to invest because it will give it multimedia exposure to an alternative news platform that skews the news demo younger," said Tony Wible of Janney Capital Markets.

Kerix (KERX) : Mentionned in Seeking alpha as a potential target as Baupost new

Keryx Biopharmaceuticals Inc Hearing strength attributed to positive financial blog comments {http://bit.ly/1ma36ZI}


Keryx Biopharmaceuticals: Baupost Group's New Position Suggests A Possible Takeout And 100%+ Gains

Summary
•In 1Q 2014, top hedge fund Baupost Group started a position in KERX and is now its largest shareholder.
•Two weeks ago, Idenix announced it's getting acquired by Merck for over three times its share price. Baupost Group owns 35% of Idenix outstanding shares.
•Worldwide, Keryx's drug Zerenex will likely become the best treatment for chronic kidney disease (CKD) dialysis and pre-dialysis patients.
•If Zerenex is widely used for dialysis and pre-dialysis CKD patients, KERX's value is $60+ using PropThink's model.
•In January 2014, Zerenex got approved in Japan for pre-dialysis and dialysis use in CKD patients.

In this bullish market, it is good to own at least one stock in your portfolio with takeout potential and a possible 100%+ return. There is a good chance that this could happen with Keryx Biopharmaceuticals (KERX). The reason is because Baupost Group, of Idenix (IDIX) fame, has recently acquired an over 10% stake in KERX and has become its largest shareholder.

As explained by Market Realist, Seth Klarman of Baupost Group is one of the best performing hedge fund managers of all time, generating $21.5B in returns over its history. If Warren Buffett announced that he's taking a big position in KERX, then the stock would instantly shoot up, right? Except Buffett doesn't invest in biotech, that isn't his specialty. However, Seth Klarman does and is like the "Buffett of biotech" and unknown to most investors. He takes huge positions in only a select few stocks with a big margin of safety, and has had tremendous success.
Baupost Group's largest position increase in 1Q 2014 was IDIX. By the end of the quarter, Baupost Group owned a whopping 35% of the outstanding shares in IDIX. This kind of large ownership in a stock is very rare for a hedge fund. Maybe he knew something that us mere mortal investors didn't know? Yes, he emphatically did! On June 6th, IDIX closed at $7.23 per share. On June 9th, Merck announced it agreed to buy IDIX for $3.85B, and the stock closed at $23.79, for a 230% gain. Something similar could happen to KERX any day. KERX is a plausible takeover candidate for its phosphate binder drug, Zerenex, to treat chronic kidney disease (CKD). Zerenex is a unique, and very valuable chemical compound. It is comparable to Idenix's nucleotides that are also unique and valuable compounds to treat Hepatitis C.
Baupost always seems to know how to be in the right place at the right time. The firm also initiated a large 6 million share position in Cheniere energy in 1Q 2014, which has already increased over 15% since then. Also, TriQuint Semiconductor (TQNT) and RF Micro Devices (RFMD) are both up almost 100% since Baupost initiated the positions in 1Q 2014. Those and KERX were the only four positions Baupost initiated in 1Q 2014.
The following were Baupost's top holdings in 1Q 2014:

>>> Vertex (VRTX) +54% on Traffic & Transports Data 1.3mil shares traded alreadd

Vertex Pharm resumes trade at 14 year high above $90 then pops above $100/share following positive TRAFFIC and TRANSPORT data

  • Vertex Pharm (VRTX $100.60 +33.87) announced results from two Phase 3 studies of lumacaftor in combination with ivacaftor that showed statistically significant improvements in lung function (percent predicted forced expiratory volume in one second, or ppFEV1) in people ages 12 and older with cystic fibrosis who have two copies of the F508del mutation in the cystic fibrosis transmembrane conductance regulator gene. All four 24-week combination treatment arms in the studies, known as TRAFFIC and TRANSPORT, met their primary endpoint of mean absolute improvement in ppFEV1 from baseline compared to placebo at the end of treatment. Mean absolute improvements in ppFEV1 of between 2.6 and 4.0 percentage points from baseline compared to placebo were observed across the studies (p=0.0004), with mean relative improvements of 4.3 percent to 6.7 percent.
  • The combination regimens were generally well tolerated. The most common adverse events, regardless of treatment group, were infective pulmonary exacerbation, cough, headache and increased sputum. 4.2 percent of patients who received the combination regimens discontinued treatment because of adverse events compared to 1.6 percent of those who received placebo. More than 1,000 patients have entered a rollover study to receive a combination regimen. Data from a pre-specified pooled analysis showed improvements in multiple key secondary endpoints. For patients who received the combination regimens compared to those who received placebo, there were statistically significant reductions in the rates of pulmonary exacerbations and statistically significant improvements in both body mass index and the proportion of patients with at least a 5 percent relative improvement in ppFEV1. Statistically significant changes were not consistently observed for patient-reported respiratory symptoms as reported in the CF questionnaire-revised.
  • Based on these data, Vertex plans to submit regulatory applications for approval in multiple countries, including a New Drug Application in the United States and Marketing Authorisation Application (MAA) in Europe, in the fourth quarter of 2014 for people with CF ages 12 and older who have two copies of the F508del mutation.

>>> Walgreens misses by $0.03, reports revs in-line with pre-ann

--> WAG -1.8% Pre Open - 100k shares traded

Walgreens misses by $0.03, reports revs in-line with pre-announcement; co plan to hold call in late July/early August to discuss next step in Alliance Boots transaction/strategy

Reports Q3 (May) earnings of $0.91 per share, excluding non-recurring items, $0.03 worse than the Capital IQ Consensus Estimate of $0.94; revenues rose 5.9% year/year to $19.4 bln vs the $19.22 bln consensus. (pre-announced $19.49 bln sales on Jun 4).
  • Front-end comparable store sales increased 2.2% in the third quarter, customer traffic in comparable stores decreased 0.7 percent and basket size increased 2.9 percent, while total sales in comparable stores increased 4.8 percent.
  • Prescription sales, which accounted for 64.4% of sales in the quarter, increased 8.4 percent, while prescription sales in comparable stores increased 6.3 percent.
  • The combined synergies for Walgreens and its strategic partner, Alliance Boots, in the first nine months of fiscal 2014 were approximately $367 million. The joint synergy program is now estimated to deliver second-year combined synergies of $400-$450 million, an increase from the previous second-year estimate of $375-$425 million.
  • GAAP total gross profit dollars increased $218 million, or 4.2 percent, compared with the year-ago third quarter, with gross profit margins decreasing 40 basis points versus the year-ago quarter to 28.1 as a percentage of sales. Adjusted gross profit dollars increased $139 million, or 2.6 percent, compared with the year-ago third quarter.
  • Alliance Boots contributed 15 cents per diluted share to Walgreens third quarter 2014 adjusted results. The company estimates that the accretion from Alliance Boots in the fourth quarter of fiscal 2014 will be an adjusted 6 to 7 cents per diluted share.
  • As a result of the many step two considerations and current business performance, the company is withdrawing its fiscal year 2016 goals that were previously announced in 2012. Specifically, once key decisions have been made on the above matters, Walgreens anticipates being in a position to hold an investor call, which is expected to occur by late July or early August. At that time, the company expects to provide a new set of goals and metrics for the proposed combined enterprise for fiscal year 2016.

>>> Fed's Plosser (hawk, FOMC voter): Current policy guidance may be too passive

Fed's Plosser (hawk, FOMC voter): Current policy guidance may be too passive given economic recovery, to be above-trend growth for the remainder of 2014
- There is plenty of easy money sloshing around the economy to hit the 2% inflation target. Expects inflation to stabilize around 2% in 2015. 
- Rule-based monetary policy models suggest that rates should increase next quarter. 
- Fed may need to adjust its communications soon, rule-based policy would drive more effective communication.
- Fed could publish periodic monetary policy reports to the public. 
- Dot chart are not an FOMC forecast, do not represent policymakers' views on appropriate policies.

>>> US Early premarket gappers

Early premarket gappers

Gapping up: CRMD +20.8%, ZPIN +4.4%, ASTI +4.3%, SONC +2%, TTM +1.9%, IAG +1.7%, HCLP +1.6%, AUY +1.6%, EGO +1.5%, AEM +1.4%, CAW +1.2%, SLV +1.2%, GDX +0.9%, GG +0.7%, MT +0.7%, GLD +0.6%, GFI +0.5%

Gapping down: OHRP -16.7%, GIGA -12.1%, KNOP -6.8%, BRX -3.7%, SYT -3.2%, SHPG -2.5%, PANW -2.1%, RIO -1.7%, MELI -1.6%, WWWW -1.5%, VNCE -1.2%, AZN -1.2%, ING -1.1%, LYG -1%, DF -0.9%, PRTA -0.9%, UBS -0.9%, MU -0.8%, CS -0.6%