FT : US college cheating scandal snares fund sector executives

US college cheating scandal snares fund sector executives
Big names in asset management are among the accused

Hollywood actors grabbed the headlines but a clutch of big names in asset management featured in the group of wealthy parents accused of paying millions of dollars to buy places for their children at elite American universities.

Those charged as part of Operation Varsity Blues include Douglas Hodge, former chief executive of investment manager Pimco, John Wilson, former independent member at one of Franklin Templeton’s fund boards, and Bill McGlashan, a former top executive at private equity firm TPG and poster boy for the impact investing sector.

In a criminal complaint filed in Boston, the Department of Justice accused 50 individuals of engaging in a scheme to bribe college entrance-exam administrators and university coaches.

An FBI affidavit filed in support of the complaint listed Georgetown, Stanford and Yale among the eight institutions affected in one of the biggest cheating scandals in US higher education.

Mr Hodge, a Pimco veteran who led the $1.7tn California investment group between 2014 and 2016 before retiring, is alleged to have used bribery to get two of his children into college “as purported athletic recruits” and to have considered the use of bribery to help a third child into college.

Mr Wilson is the chief executive of Hyannis Port Capital, a private equity and commercial property group he founded in 2002. He was also lead independent trustee of the Franklin funds board and chair of its audit committee. He no longer holds these positions, according to a statement from Franklin, which did not provide further detail.

Mr Wilson is accused of conspiring to bribe a water-polo coach at the University of Southern California to help his son gain admission, as well as seeking to use bribes to help his daughters gain admission to Harvard and Stanford as athletes.

“Thanks again for making this happen! Pls give me the invoice,” Mr Wilson wrote a day after his son was admitted to USC in 2014.

The DoJ’s criminal complaint alleged that Mr McGlashan paid a university admissions consultant $250,000 to find a “side door” into USC for his son.

The affair has cost him his roles at TPG Growth and the Rise Fund, an ethical investment vehicle. News of his departure came in clashing statements from the two sides. Mr McGlashan told fellow directors he had resigned but TPG said his employment had been terminated.

Correspondence reviewed by the Financial Times appeared to confirm that Mr McGlashan had submitted his resignation by the time he received notice.

Mr McGlashan is a founder of the Rise Fund with singer Bono and recently received an industry award for his work.

The fund, whose mandate is to achieve “social and environmental impact alongside competitive financial returns” invests in several education businesses in the US, Argentina and India.

These include Renaissance and Dreambox, which both provide educational software and learning materials to US schools. “Dreambox provides students the opportunity to receive high-quality learning tools, regardless of their background,” the fund’s website states.

There has been a surge in the number of sustainable and ethical investment product launches as investment managers seek to burnish their image as responsible investors.

“What asset managers cannot do is preach the virtues of ethical investing to their clients but in their private lives do something quite different,” said Amin Rajan, chief executive of Create-Research, the consultancy.

Mr Rajan said that although TPG had acted swiftly to contain the risk of reputational fallout there would still be some damage. “These sorts of things do undermine faith in asset managers.”

Mr McGlashan and TPG were relatively new entrants to impact investing but were notable for securing $2bn in their first fundraising, said Fran Seegull, executive director of the US Impact Investing Alliance, a non-profit that promotes environmental and social considerations in investing.

“It’s not an impact investing scandal . . . nonetheless it’s certainly a reminder we need to hold ourselves to the highest standards,” she said, adding that when there is an alleged ethical breach by a senior individual “it affects the reputation of the fund”.

Jim Coulter, TPG’s co-chief executive, has taken over as chief executive of Rise. In a memo sent to employees and seen by the FT, Mr Coulter and co-chief executive Jon Winkelried said news of Mr McGlashan’s arrest and the charges against him were “a shock and a blow”.

“While the actions he is accused of are of a personal nature, not related to our business, they are antithetical to the values TPG is built on,” the memo said. It added that TPG has “engaged outside counsel . . . to determine whether any other person or part of the firm has been tainted in any way by the misconduct of which Bill has been accused,” saying that they do not believe this to be the case. More than 100 TPG employees work on the Rise Fund.

Other investment professionals have been charged.

The day after the scandal broke, Manuel Henriquez, founder, chairman and chief executive of investment group Hercules Capital and also charged, stepped down from his roles. However the Palo Alto company said Mr Henriquez would continue as an adviser to the company and a member of its board.

Robert Zangrillo, also charged in the DoJ's complaint, is the founder and chief executive of Dragon Global, a private investment company headquartered in Miami.

“I am deeply troubled by the recent complaint [and] I regret my and my daughter’s involvement in this college admissions matter,” Mr Zangrillo said in an emailed statement. “This is a personal issue and the alleged activities described in the complaint have no connection to my business endeavors.”

Others listed are Bruce Isackson, a president at WP Investments, and Robert Flaxman, founder and chief executive of Crown Realty & Development, both property companies in California.

Another defendant is Gordon Caplan, co-chairman of law firm Willkie Farr & Gallagher. His LinkedIn profile states he has chaired the group’s private equity practice since 2002.

Messrs Wilson, McGlashan, Henriquez, Isackson, Flaxman and Caplan did not respond to requests for comment made via LinkedIn. Mr Hodge could not be reached for comment.

Barron's " This U.K. Insurance Stock Offers a Hefty Dividend — and Refuge From B

This U.K. Insurance Stock Offers a Hefty Dividend — and Refuge From Brexit

Brexit-weary investors in European stocks might want to take refuge in a solid stock with limited downside and the potential for lasting income: London–based insurer Phoenix Group Holdings . The firm makes its money by buying up closed lines of pensions and life insurance at a discount and then winding down the books of business. An annuity provider, for example, might have stopped selling a product to new customers but needs to service existing customers.

A hefty dividend, room for price appreciation, and the company’s upcoming inclusion in the FTSE 100 index of Britain’s leading stocks all make the shares appealing. The stock (ticker: PHNX.UK) has an “attractive yield backed by strong cash flows and solid solvency position,” states a recent report from RBC Capital Markets. The firm has a price target of 8.20 pounds sterling ($10.90) for Phoenix, or about 18% higher than its recent price of £6.95.

“Phoenix’s unique business model means standard valuation methods cannot be used on their own,” the report states.

One way to think about the stock is that it is similar to an annuity. Effectively, investors are buying a stream of stable dividends that are relatively high and also safe, a rare combination.

The firm is expected to pay a bigger cash dividend than its peers in the generally high-yielding life insurance industry. In a recent report, Barclays said it expects Phoenix’s dividend yield to total 7.5% this year versus 7% from Legal & General Group (LGEN.UK) and 6.7% from Dutch life insurer Aegon (AEG).

A solid balance sheet protects that high dividend, analysts say. “The company has the most defensive balance sheet of its peers, due to an increased level of hedging,” the Barclays report says. “The recent acquisition of Standard Life Insurance protects the dividend for 18 years.” Standard Life, another U.K. insurer, is now incorporated into Phoenix.

The firm, founded in 1782, should be able to keep sending cash back to shareholders for a long time. “They are able to fund the dividend quite easily,” says Helal Miah, an analyst at U.K.-based brokerage The Share Centre. Phoenix agrees.

“Our substantial new business flows… in the U.K. and Europe, bring increased sustainability to our long term cash generation,” says Clive Bannister, CEO of Phoenix.

The stock has rallied over the past quarter. In the latest three months, the stock gained around 26% versus 6.8% for the FTSE 100, according to data from Yahoo! Both figures exclude dividends.

Part of the recent run-up in the share price is due to three developments. First, the stock should benefit from its inclusion in the FTSE 100 index starting on March 18. As a result, fund managers that track that index will need to buy the stock. Some money managers may have already started, says Miah.

Second, the company says its targeted cost savings, or synergies surrounding the acquisition of Standard Life, will be higher than previously thought. The “synergy target increased by £500 million to £1.2 billion,” the firm stated in a recent presentation.

The firm also gained from a change in life expectancy of its policyholders. The annuity business relies on assumptions about mortality. When they change, the level of reserves that need to be retained changes. In this case, the lower life expectancy means that smaller reserves are needed, freeing up cash.

There are risks. The mortality assumptions could change, boosting costs. There is also the possibility that Phoenix doesn’t acquire enough new business to offset the legacy businesses that are running off. Ultimately, that would impair the firm’s ability to pay dividends.

Still, the management has a good track record, and the risks seem to warrant the probable rewards of buying Phoenix.

Barron's : Fallout from the Boeing 737 MAX 8 Crash Could Last for Years

Fallout from the Boeing 737 MAX 8 Crash Could Last for Years

“ Boeing Gets Two Orders for 737-400,” read a short item in the Seattle Times in March 1990.

Looking back, it illustrates how even dire news can eventually fade. There was no mention that the plane was coming off two deadly crashes during its first full year of service. In January 1989, a British Midland plane crash-landed onto a highway embankment, killing 47 of 126 aboard. That September, a USAir flight skidded off a LaGuardia airport runway into the East River of New York, killing two of 63.

Six months after the second accident, Boeing stock was 20% higher. Both crashes involved pilot error linked in part to unfamiliarity with the 737-400, but both also resulted in the company making changes to the plane. Orders continued apace for a decade. As of last summer, there were more than 250 of the planes still in service.

Today, Boeing shareholders can look to precedents like that one for reason not to panic as investigators seek a cause for the crash a week ago of an Ethiopian Airlines 737 MAX 8, one of Boeing’s newest planes, in which all 157 aboard perished.

Don’t count on a quick recovery this time, however.

Consider how the flow of bad news and buying decisions has changed. In 1989, cable news was in its infancy, and although the web was conceived that year and born the next, it was a virtual filing cabinet for scientists, and not yet a place where travelers could book their own flights. Today, smartphone-wielding consumers are awash in real-time news and endless information on spending choices.

Indeed, if the U.S. had not grounded the 737 MAX fleet on Wednesday after days of pressure, vacationers and corporate travel managers might well have accomplished the task themselves.

As Boeing now investigates and remedies any defects, it must not only win back regulators and airlines but also soothe skittish customers.

The stakes are high. The 737 MAX is Boeing’s fastest-selling plane ever. Airlines prize the plane’s fuel efficiency and had regarded it as reliable; after all, the 737 has been in service in one form or another since the 1960s. Although the 737 MAX makes up a tiny percentage of the world’s fleet, JPMorgan has put its contribution to Boeing’s operating cash flow this year at 35%.

“Airplanes are becoming far too complex to fly,” tweeted President Donald Trump on Tuesday. That is debatable on the facts, but spot-on as a summary of public angst that could play out for years to come.

Last year, there were 15 deadly commercial flight accidents including cargo flights, the third fewest on record, according to the Aviation Safety Network. The fewest was 10 in 2017. Adjusted for the rising number of flights, if last year’s accident rate resembled that of 2000, there would have been more than four times as many deadly accidents. If anything, complexity has been quietly saving lives for many years, including through autonomous systems like the ones that land planes safely in poor visibility.

Machines will gradually take more control over flying and driving because humans are comparatively slow, distracted, and fatigable, as well as prone to anger and overconfidence. But along the way, the statistical saviors will occasionally seem like unfeeling killers.

It is early in the investigation of the Ethiopian Airlines crash, but there are eerie similarities to the Lion Air crash last October that killed all 189 occupants.

Both 737 MAX 8s appear to have experienced variations in vertical speed within minutes of takeoff. That raises the possibility that something called the Maneuvering Characteristics Augmentation System, which is believed to have played a significant role in the first crash, was involved in the second, too. Unique to the 737 MAX, the MCAS is designed to detect when nose-up flight, low speed, and other conditions create a risk of stalling; it then acts on its own to bring the nose down.

One theory is that a faulty sensor fed the MCAS bad information on the Lion Air flight, causing the system to calculate that pushing the nose lower would be helpful, even as pilots were frantically trying to pull it up. The system can be disabled, but it is unclear whether the pilots knew how.

After that crash, the poor safety record at Lion, a low-cost Indonesian carrier, came under renewed scrutiny. But Ethiopian Airlines has an excellent record. It is a member of the worldwide Star Alliance along with United Airlines, Lufthansa , and Singapore Airlines .
The Ethiopian Airlines data recorder will be analyzed at a French lab in the days ahead. If the cause of the crash is similar to that of the Lion Air crash, a fix could be close.

Boeing is already preparing an MCAS software update for April, as mandated by the Federal Aviation Administration. “We do not expect airlines to adjust 737 MAX orders, particularly if they are satisfied with...the updated MCAS solution, which we expect they will be,” wrote UBS analyst Myles Walton in a Thursday note to investors.

The best-case scenario for Boeing is a grounding of six to eight weeks, says Canaccord Genuity analyst Ken Herbert. A grounding of the 787 fleet in 2013 over wiring issues offers some clues on the cost. Boeing could lose $1 billion a month in free cash flow to delayed 737 MAX deliveries, which it could ultimately recover, plus $500 million for the fix, plus up to $1 billion a month from concessions that it gives as a peace offering to customers while its planes are grounded, Herbert estimates.

An earlier analysis by the investment bank Jefferies put the cost of a three-month grounding of the fleet at $5 billion. It helps that Boeing carries little debt and is expected to generate $15 billion in free cash this year, gradually rising to $21 billion four years from now.

That gathering flood of cash, and Boeing’s record of weathering rare but dreadful air disasters, prompted Barron’s to recommend the stock in November at $318. The shares topped $440 at the beginning of this month, but have since fallen to $375. We wouldn’t sell them here, at a price of less than 14 times this year’s projected free cash flow, versus nearly 20 for the S&P 500 index.

A quick software fix for the 737 MAX won’t necessarily be the end of Boeing’s unwanted publicity. To achieve greater fuel efficiency, the plane uses larger engines than its predecessors, and these newer engines had to be placed higher and farther forward on the aircraft. That is believed to give the plane a tendency to pitch up slightly during some maneuvers, which could explain the addition of the MCAS. Long after the safety engineers have had their say, fliers could need fresh convincing that this combination of features makes them better off.

Don’t expect a falloff in 737 MAX orders, however. There’s a yearslong wait for the planes. Customers who switch to the A320neo from Airbus will wait years there, too.

The larger risk may be that Boeing’s setback creates a bigger opportunity for a looming new rival, China, and its Comac C919. But it won’t begin deliveries until 2021, barring delays. And almost all orders so far have come from Chinese customers.

Stocks are said to climb a wall of worry. Boeing’s could remain grounded after its planes return to service. Over time, as safety resumes its long-term course higher, the shares will fly again.

Barron's : A Way to Play European Stock Dividends

A Way to Play European Stock Dividends

LONDON—As turmoil swirls over the United Kingdom’s impending departure from the European Union, one London money manager is ignoring the crosswinds of Brexit.

Thirty-one-year-old Natasha Sibley, who co-manages the $250 million AlphaGen Castor Fund for institutional clients at the Janus Henderson Group (ticker: JHG), is focusing instead on a curious anomaly involving European stock dividends.

She believes that European stock dividends are trading too cheaply and that a surer way to make money amid the political uncertainty is to capitalize on the discrepancy between the price of European stock dividends, which U.S. investors can trade by buying dividend futures on the Euro Stoxx 50 index, and the forecasts for payouts from European companies.

Dividends on European stocks “are one of the richest hunting grounds from our perspective,” says Sibley, speaking from Janus Henderson offices here. “You see pricing really getting pulled away from fundamentals.”

The divergence first emerged after the financial crisis of 2008, when banks, shackled by a raft of new regulations such as Basel III and the U.S. Volcker rule, scrambled to rid their balance sheets of risky assets.

At the same time, the plunge in interest rates world-wide left investors yearning to earn more on their capital. They began clamoring for a product that would offer a higher yield than bank deposits.

To quench the burgeoning demand, banks crafted structured notes, which are typically linked to a popular index of stocks like the Euro Stoxx 50. By one count, there is about $120 billion (notional amount) of structured notes today that reference the Euro Stoxx 50 index.

To hedge the risks from the note sales, banks typically buy equity forwards, a financial instrument that allows for the purchase of an individual stock or equity index at some time in the future at an agreed-upon price. Banks can also manage their risks by buying stocks and selling future dividends.

Both moves put downward pressure on dividend prices. Based on current trading levels, Euro Stoxx 50 dividend futures are pricing in more than 3% in dividend cuts each year for the next decade, while forecasts by analysts at Goldman Sachs expect the opposite to happen. The Goldman analysts are calling for European companies to increase their dividends at an annual rate of close to 5% over the same period.

“The pricing is saying there are going to be significant dividend cuts, to the tune of 4% a year,” Sibley says. “If you don’t think it is going to be that bad, you should do this trade.”

Surprisingly, some of Europe’s biggest and most well-established companies offer this arbitrage. German industrial giant Siemens (SIE.Germany) is trading at a discount of nearly 3% to Bloomberg’s dividend forecast and French insurance titan AXA (CS.France) is trading at nearly a 4% discount to expectations. Individual stock futures, however, aren’t as attractive because the market in them isn’t as deep as the Euro Stoxx 50 index futures and the individual company stock dividend futures run only for a few years.

This divergence is more pronounced in Europe than anywhere else in the world. In the U.S., for instance, dividends for S&P 500 index companies are forecast to grow at annual rate of 3.6%, according to Goldman, and S&P 500 dividend futures are pricing in growth of 2.5% a year, a far narrower gap than in Europe. One reason may be that structured notes are not that popular in the U.S.

Of course, individual investors seeking to capitalize on the arbitrage opportunity need to be cautious. Simply buying a basket of dividend-heavy European stocks won’t allow investors to exploit the pricing anomaly because acquiring a company’s shares doesn’t allow an investor to take a view on its dividend payouts.

One way to pursue Sibley’s strategy is to buy dividend futures on the Euro Stoxx 50 index. Another way is to sell equity forwards, which gives you a bullish position in dividends.

Individual investors, however, should be mindful that in trading futures you have to post margin, or a down payment, on the full value of the futures contracts. This can open up investors to margin calls if prices move against them.

And even if the strategy ends up a winner, investors should be prepared for potholes along the road, leading to mark-to-market losses, like the bumps that jolted the Castor fund late last year. The December selloff in stock markets pushed the Castor fund to a 7.66% loss in 2018.

“We added exposure late last year, which has been profitable,” Sibley says. “The fund we run aims to increase exposure as the parameters become more stressed, and reduce it as pricing improves.”

At Janus Henderson, Sibley has had a front-row seat observing the dividend anomaly. A mathematics graduate from Brasenose College, Oxford University, Sibley joined the fund company in its graduate training program straight out of university amid the depths of the financial crisis in 2009.

“I sort of fell into this career,” she says. “I don’t know many people who have left academia and have found something so intellectually satisfying.”

For the past decade, Sibley has worked on the dividend arbitrage play in a multistrategy fund that Janus Henderson offers to institutional investors. In 2017, prodded by interest from clients, Janus Henderson launched Castor, which is named after the constellation, like all the funds in the company’s alternative-assets universe.


Sibley sits on the firm’s gender diversity group and is the only woman manager of a hedge fund at Janus Henderson. Some of the firm’s mutual funds, which cater to retail investors, have female managers at their helm.

From where Sibley stands, the dividend arbitrage play is a way to cut through the chaos of Brexit. There is, of course, one big risk. “If companies cut their dividends severely, you could lose money on this trade,” she allows.

For now, though, that seems unlikely. Owing to last year’s bear market in the Euro Stoxx 50 and supply pressures, “longer-dated dividends are trading at a material discount to fundamentals,” Goldman Sachs says in a February report.

>>> US Close Dow +0.54% S&P +0.50% Nasdaq +0.76% Russell +0.25%

Closing Stock Market Summary

The S&P 500 gained 0.5% on this quadruple-witching expiration Friday, supported by reported progress in U.S.-China trade talks and the outperformance of semiconductor stocks. Friday's advance capped an impressive 2.9% weekly gain in the benchmark index and established a new closing high for 2019.

The Dow Jones Industrial Average (+0.5%), the Nasdaq Composite (+0.8%), and the Russell 2000 (+0.3%) extended their weekly gains to 1.6%, 3.8%, and 2.1%, respectively.

The S&P 500 information technology sector (+1.2%) was the session's outright leader, followed by the consumer discretionary sector (+0.7%). Conversely, the real estate (-0.4%), industrials (-0.3%), and energy (-0.1%) sectors were the lone groups to finish with losses.

Stocks began the session on a higher note, helped by a Chinese report that the U.S. and China have made "concrete progress" in talks about the text of a trade agreement. Separately, talk that China is considering using monetary tools to further help the economy, and Japan explicitly saying it will keep interest rates low for an extended period, aided investor sentiment. The Bank of Japan left its interest key policy rate unchanged at -0.1%, as expected.

The semiconductor space rallied around Broadcom (AVGO 290.29, +22.09, +8.2%) providing a better-than-feared earnings report and calling for the industry to hit a bottom in the second quarter. The Philadelphia Semiconductor Index jumped 2.9% Friday and 5.6% this week.  Many of its components helped drive the outperformance of the tech sector and the Nasdaq.

Shares of Boeing (BA 378.99, +5.69, +1.5%) found some reprieve after AFP News Agency tweeted Boeing is going to roll out a software upgrade for its 737 MAX in ten days. Boeing responded, telling Reuters that its timeline for the software update has not changed and is expected to be rolled out in the coming weeks.

The initial news helped lift the stock into positive territory after it was down as much as 1.9% in the morning. Its turnaround helped propel the broader market, and Dow, into higher ground.

On the other hand, Facebook (FB 165.98, -4.19, -2.5%), Adobe Systems (ADBE 257.09, -10.60, -4.0%), and Tesla (TSLA 275.43, -15.53, -5.0%) were some notable laggards Friday.

Facebook announced the departure of its chief product officer; Adobe underwhelmed investors with its earnings report; and Tesla underwhelmed many analysts with its Model Y, which it unveiled Thursday evening. 

U.S. Treasuries closed the session on a higher note, pushing yields lower across the curve. The 2-yr yield declined one basis point to 2.44%, and the 10-yr yield declined four basis points to 2.59%. The U.S. Dollar Index declined 0.2% to 96.60. WTI crude lost 0.3% to $58.39/bbl.

Reviewing Friday's batch of economic data:

  • Industrial production increased just 0.1% in February (consensus +0.4%) on the heels of an upwardly revised 0.4% decline (from -0.6%) in January. The capacity utilization rate dipped to 78.2% (consensus 78.5%) from an upwardly revised 78.3% (from 78.2%) in January.
    • The key takeaway from the report is that manufacturing output remained weak, declining 0.4%, which was the second consecutive monthly decline.
  • The preliminary March reading for the University of Michigan Index of Consumer Sentiment checked in at 97.8 (consensus 94.9), up from the final reading of 93.8 for February.
    • The key takeaway from the report is that real income expectations, which account for inflation, increased in households across lower, middle, and upper incomes. That favorable outlook is supportive for consumer spending activity.
  • The January Job Openings and Labor Turnover Survey showed that job openings increased to 7.581 million from a revised 7.479 million (from 7.355 million) in December.
  • The Empire State Manufacturing Survey for March fell to 3.7 (consensus 10.0) from the prior month's unrevised reading of 8.8.

Looking ahead, investors will receive the NAHB Housing Market Index for March on Monday. 

  • Nasdaq Composite +15.9% YTD
  • Russell 2000 +15.2% YTD
  • S&P 500 +12.6% YTD
  • Dow Jones Industrial Average +10.8% YTD

>>> US Gapping down


Gapping down
In reaction to disappointing earnings/guidance:

  • ASNA -15.9%, DPLO -15.4%, HEAR -11.7%, KIRK -9.8%, ZUMZ -8.6%, TLYS -8.4%, PVTL -6.7%, DOCU -4.4%, BKE -4.2%, VRAY -4.1%, KNDI -4%, ORCL -3.7%, ADBE -3.5% (also will replace Twenty-First Century Fox in the S&P 100), NDLS -1.8%

Other news:

  • KOPN -22.1% (proposed public offering of common stock)
  • MTNB -10.8% (commences underwritten public offering of common stock)
  • SPPI -7.6% (voluntarily withdraws Biologics License Application for ROLONTIS)
  • TRTX -3.7% (prices 6 mln common stock offering; Total estimated gross proceeds of the offering are approximately $119.4 million)
  • SCM -3.2% (announces public offering of common stock)
  • GDS -2% (prices offering of 11,940,299 ADS at $33.50/ADS)
  • FB -1.7% (Chief Product Officer Chris Cox has left the company, also WhatsApp VP Chris Daniels)
  • HR -1.1% (prices underwritten public offering of 3.25 mln newly issued shares of common stock for gross proceeds of $102.1 mln)
  • OKTA -0.8% (files mixed securities shelf offering)

Analyst comments:

  • ZG -3.7% (downgraded to Underweight from Equal Weight at Barclays)
  • ORCL -3.7% (downgraded to Market Perform from Outperform at BMO Capital Markets)
  • AVY -1.2% (downgraded to Neutral from Overweight at JP Morgan)

>>> US Gapping up


Gapping up
In reaction to strong earnings/guidance:

  • MDCA +29.1%, ASUR +16.4%, CATS +15.7%, AVID +8.4%, HTHT +7.3%, TRQ +5.9%, ULTA +5.4%, AVGO +5%, CTRN +2.6%, LTS +2.1%, MRAM +1.3%, JBL +0.7%, TERP +0.7%

M&A news:

  • BIOS +23.2% (Bioscrip and Option Care Enterprises announce definitive merger agreement) 

Other news:

  • KPTI +18.2% (announces FDA extension of review period for selinexor New Drug Application; PDUFA action date extended by three months to July 6, 2019)
  • YTRA +8% (entered into a mutual confidentiality agreement with Ebix (EBIX) in regards to Ebix's proposal made on March 11, 2019 to acquire the co)
  • ADMP +6.4% (announces FDA acceptance of NDA for its higher dose naloxone injection product candidate )
  • ORGO +5% (announced new $100 million credit agreement with Silicon Valley Bank and MidCap Financial)
  • GNW +3.9% (Genworth Financial and Oceanwide extend merger agreement)
  • NWL +2.4% (announces retirement of CEO Michael Polk, effective at the end of the second quarter)
  • HIIQ +1.4% (expands common stock repurchase authorization by additional $100 mln)

Analyst comments:

  • RCII +2.1% (upgraded to Outperform from Mkt Perform at Raymond James)
  • CFX +1.7% (upgraded to Equal Weight from Underweight at Barclays)
  • AMZN +1.2% (upgraded to Overweight from Sector Weight at KeyBanc Capital Markets)
  • T +1.1% (upgraded to Outperform from Mkt Perform at Raymond James)

>>> US Early premarket gappers


Early premarket gappers

Gapping up:

  • KPTI +29.3%, CATS +13.7%, ASUR +10.5%, ADMP +9.6%, HTHT +7.4%, AVGO +5.5%, HIIQ +4.4%, ULTA +4.3%, TRQ +3%, GNW +2.4%, AVID +2.4%, ORGO +2.2%, MRAM +1.3%, NWL +1.1%

Gapping down:

  • KOPN -22.8%, ASNA -20.6%, HEAR -12.1%, MTNB -10.8%, ZUMZ -8.6%, TLYS -8.4%, PVTL -6.3%, VRAY -4.1%, DOCU -3.7%, ORCL -3.5%, ZG -3.2%, ADBE -2.9%, SCM -2.1%, NDLS -1.8%, FB -1.6%