Anadarko Petroleum Corp Greenlight (Einhorn) said to have taken a stake in the company, issued in letter to shareholders
Fitch expects stable ratings for most issuers within the homebuilding sector in 2014; projects single-family starts to improve 20% in 2014 and multifamily volume +9%
Fitch forecasts new home sales to advance about 20% to 518,000 while existing home volume increases 2% to 5.16 million.
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Homebuilders outperforming in early trade - TPH +2.8%, BZH +2.3%, RYL +1.9%, TOL +1.4%, MHO +1.4%, MTH +1.3%, KBH +1.1%, DHI +1.1%, LEN +1%, MDC +1.1%, PHM +0.9%, SPF +0.8%, ITB +0.8%, HOV +0.7%
(Barron's) Investing in Illiquidity --> KKR, BX, CG could be interesting name to look at, long term OP equities...no real risk on financing for these names...
Have a look
Investing in Illiquidity
The next big investment opportunity might not be stocks. Citi Private Bank’s chief investment officer Steven Wieting says that post-financial crisis investors have accepted that the world isn’t ending but still crave investments that can be exited quickly. Patient investors with a longer time horizon can play this lingering anxiety by buying less liquid investment vehicles— like private equity firms and real estate— that are still sitting in the bargain bin. Among the opportunities are European corporate debt and investing in smaller North American energy firms.
With all the noise about folks moving up the risk curve, and the general shift from cash and fixed income to equities, it turns out a good portion of investors globally are still frozen in time. A recent Citi Private Bank survey of 50 family offices from over 20 countries found an average allocation of only 25% to equities and an astonishing 40% in cash. Unbeknownst to these wealthy investors across the globe, their excessively conservative portfolios produced mediocre results, a paltry 6% return last year compared to the MSCI World Index’s 20.3% return. Citi Private Bank’s gains, for a portfolio with 51% in equities and 5% to cash, came to 11%.
While Wieting is not predicting another equities gusher this year, he still thinks U.S. large-cap equities will grow by an additional 9% to 10%, with dividends reinvested. Generally, however, upward-trending markets like the U.S. and Japan are nearing their historic averages and maturity from a valuation standpoint, he says, while emerging markets remain unattractive. The commodity super-cycle – that realized ten years of double-digit annual growth in emerging markets– is coming to an end. European equities are the most attractive of the lot and Citi expects them to grow 13% next year.
But even more opportunities abound for investors willing to man up and brave the illiquidity of alternatives. Wieting estimates that over the next ten years, private equity and real estate vehicles will produce annualized returns of 11.9%, almost double the 6.7% return he is estimating for developed market large-cap equities.
Why are alternatives so attractive? It’s partially because of post-financial crisis investor psychology, Wieting says. To some extent investors are warming to risk but alternatives remain a no-go zone. “There has been a thawing of risk tolerance,” he explains, “but if you tell investors that we can offer you a higher return – but that we can’t tell you exactly what length of time you need to commit to – there is suddenly much less interest.”
All too familiar in their minds are the precipitous declines from the financial crisis, when most alternative strategies fell in lockstep with the broader market, declining up to 40% in 2009 alone. Unable to exit private equity or certain real estate vehicles due to the five to ten year lock-ups – or, if so, only at distressed give-away prices – investors couldn’t scramble up the cash they suddenly needed to pay their bills. They never want to experience that again.
Wieting thinks that while this psychology persists, the time to buy alternative investments is now. The fear of illiquidity is overblown, particularly since the economy is chugging along steadily again, and the disconnect means bargains are to be found.
How? Before locking your money up for ten years or so, do the necessary due diligence to select the right manager. Data from alternatives research and consultancy firm Preqin, suggests that 65% of private equity and real estate funds with top or second quartile performance go on to manage a top or second quartile successor fund. So a strong track record, though not indicative of future returns, is important.
The next factor to consider is market opportunity. One investment theme Wieting likes is non-performing loans, such as residential and commercial real estate, that are languishing on the balance sheet of European banks. See our recent coverage, “The Sweet Smell of Euro Trash.”
Wieting also is helping his clients lend directly to Europe’s cash-starved corporations. Euro Zone banks are under deeper scrutiny to meet the demands of regulators and capital requirements, and are furiously cutting and pruning their businesses, while generally tidying up their balance sheets. Deustche Bank’s recently reported losses are just the latest chapter entry in this unfolding story.
The thing to bear in mind: Since December 2010, Europe’s 16 largest banks have cut exposure to corporate credit by 9%, or nearly $600 billion, which provides an opening for Citi and other international lenders. More opportunities are coming online. The securitization products, known as collateralized loan obligations, that allowed the banks to slice-and-dice and offload tranches of European loans, are facing a cut-back as well. That reduction in capacity will force yet more limitations on what the European banks can underwrite.
With these methods of financing drying up, liquidity-starved corporations will increasingly turn to private debt managers, who, in turn, will extract attractive terms for clients. Firms like Alcentra, a sub-investment grade debt specialist owned by BNY Mellon, and Marc Lasry’s hedge fund Avenue Capital Group, are among the recent market entrants.
Wieting also has a thesis that takes advantage of the North American energy revolution powered by hydraulic fracking. Wieting thinks the debt of the smaller energy companies, having trouble accessing public capital markets, are attractive holdings. A related and relevant report by PwC, projects that investments in U.S. shale infrastructure alone will require $5 trillion over the next 20 years.
But caution. There is an entire continuum of risk and return to choose from among these energy companies. Midstream energy transporters are lower risk and yield lower returns, since the business is fee driven via long-term contracts; gas storage companies, meanwhile, are exposed to demand volatility and price swings, hence the heftier payoffs for their investors. The smart money is learning the trade. Earlier this month, the fabled private equity shop KKR opened an office in Canada, announcing it expects to invest between $500 million and several billion dollars in energy-related companies over the next five years. Early moving competitors, like Arc Financial and Kern Partners, already have billion dollar portfolios in the energy sphere.
Last year, conservative investors finally dipped their toes into the equity markets, some would say a little too late. Folks who are quicker to embrace illiquidity, the next thawing in our post-crisis “normalizing” process, should be rewarded for their decision
Facebook Is About to Lose 80% of Its Users, Study Says Link {http://ti.me/LTBWMR}
Social media is like a disease that spreads, and then dies
Facebook’s growth will eventually come to a quick end, much like an infectious disease that spreads rapidly and suddenly dies, say Princeton researchers who are using diseases to model the life cycles of social media.
Disease models can be used to understand the mass adoption and subsequent flight from online social networks, researchers at Princeton’s Department of Mechanical and Aerospace Engineering say in a study released Jan. 17. The study has not been peer-reviewed. Updating traditional models on disease spread to assume that “recovery” requires contact with a nondiseased member — i.e., a nonuser of Facebook (“recovered” member of the population) — researchers predicted that Facebook would see a rapid decline, causing the site to lose 80% of its peak user base between 2015 and 2017.
Basically, Facebook users will lose interest in Facebook over time as their peers lose interest — if the model is correct. ”Ideas, like diseases, have been shown to spread infectiously between people before eventually dying out, and have been successfully described with epidemiological models,” write the researchers.
Full Study attached - if you want more details
Allergan, Inc Discloses issuance of patent on Jan 21 from the USPTO - filing
- On January 21, 2014, the United States Patent and Trademark Office (the USPTO) issued U.S. patent number 8,633,162 (the 162 Patent), covering a method of use relating to the Restasisproduct. On January 21, 2014, the Company submitted the 162 Patent for listing in the Orange Book. The 162 Patent will expire in August 2024.
- On January 21, 2014, Allergan, Inc. (the Company) received a notice letter dated January 14, 2014 (the Notice Letter) from Watson Laboratories, Inc. (Watson) stating that Watson has filed an Abbreviated New Drug Application containing a Paragraph IV patent certification with the U.S. Food and Drug Administration (the FDA) seeking approval to market a generic version of the Companys Restasis(cyclosporine ophthalmic emulsion) 0.05% product. The Notice Letter states that the Paragraph IV patent certification was made with respect to U.S. patent number 8,629,111 (the 111 Patent), covering the Companys specific formulation of the Restasisproduct, which is listed in the FDAs Approved Drug Products With Therapeutic Equivalence Evaluations, commonly known as the Orange Book. The 111 Patent will expire in August 2024. The Company is currently evaluating the Notice Letter and intends to vigorously enforce its intellectual property rights relating to the Restasisproduct, including the 111 Patent.
Filings, Offerings and Pricings
Filings:
- Splunk (SPLK) filed for a 6 mln share common stock shelf offering.
- ePlus (PLUS) filed for a $200 mln mixed securities shelf offering and a ~2.87 mln share common stock offering by selling stockholders.
- Synaptics (SYNA) filed for a ~1.954 mln share common stock offering by selling stockholders.
- Avino Silver & Gold (ASM) filed for a $13.5 mln mixed securities shelf offering.
- Ampliphi Biosciences (APHB) filed for a ~73.362 mln share common stock offering by selling stockholders.
- JGWPT Holdings (JGW) filedf or a ~853.7 mln share Class A common stock shelf offering to certain holders of common membership interests in JGWPT Holdings, LLC
- Ashford Hospitality Prime (AHP) announced offering of 8 mln shares of common stock.
- NanoString Technologies (NSTG) launched follow-on offering of $55 mln of its common stock.
- Nektar Therapeutics (NKTR) filed mixed securities shelf offering for an undisclosed amount; also announced public offering of 8.5 mln shares of common stock.
- Keryx Biopharma (KERX) commenced a $90 mln underwritten public offering of shares of its common stock.
- BRE Properties (BRE) announced a redemption of 6.75% Series D Cumulative Redemable Preferred Stock.
- Frontline (FRO) announced it has a prospectus supplement covering the amendment and restatement of its previously announced equity distribution agreement, which FRO may offer and sell, at any time and from time to time in an at-the-market offering, was increased to having aggregate sales proceeds of up to $100.0 mln, from up to $40.0 mln.
- Envision Healthcare Holdings (EVHC) announced it filed for a ~27.5 mln share common stock offering by selling stockholders.
- Alliance One (AOI) increased purchase price of and extends tender offer for any and up to all of its outstanding 5 1/2% Convertible Senior Subordinated Notes due 2014.
KORS (reports earnings Feb 4 before the open), RL (Feb 5 before the open), FOSL / JWN (expected mid Feb), TUMI / GES / TIF (expected mid March), SIG (expected late March). A few overseas based retailers recently update guidance -- BURBY traded higher after reporting Q3 comps +12% (see Jan 15) and HNNMY reported update last week - Dec total sales + 10% YoY
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Conf call :
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Conf call :
Earnings Conference Call: (888)405-2080 on Jan 22 2014 8:30AM
Coach misses by $0.05, misses on revs; N Am comps of -13.6% (52.55 )
Reports Q2 (Dec) earnings of $1.06 per share, $0.05 worse than the Capital IQ Consensus Estimate of $1.11; revenues fell 5.6% year/year to $1.42 bln vs the $1.49 bln consensus.
- Co reports Q2 N Am comps of -13.6% (previously guided N Am comp run rate to be down HSD for the balance of FY14).
- Co reports Q2 gross margin of 69.2% vs 69.7% estimate and 72.2% year ago.
- Sales in China rose about 25% and the business is on track to meet annual guidance of $530 million. In Japan, sales declined 2% on a constant-currency basis, while dollar sales were 21% below the prior year, reflecting the weaker yen. Shipments into international wholesale accounts increased significantly, as expected, due to timing of a Chinese holiday while underlying POS sales trends increased slightly.
- "During the holiday quarter, total sales fell slightly in constant currency as weakness in our North American women's bag and accessories business offset strong growth in Men's, footwear, and robust results in emerging Asian markets and Europe. We continued to be disappointed by our performance in North America, which was impacted by substantially lower traffic in our stores and by our decision to limit access to our e-factory flash sales site. At the same time, China results remained resilient with total sales growing about 25% and comparable store sales rising at a double digit rate. Importantly, we continued to advance our transformation initiatives and position Coach to launch Executive Creative Director Stuart Vevers's first collection in September."