Very interesting doc. on Cambridge analytics & the trump campaign
Gapping down
In reaction to disappointing earnings/guidance:
- BLKB -19% (lowers outlook), PPG -9.7% (issues downside Q3 guidance), UMC -1.7% (Sep revs) DHI -0.9% (reports prelim Q4 results)
Other news:
- AFMD -25.9% (placed AFM11 on clinical hold and notified authorities of its decision)
- IGC -15.3% (ongoing volatility - closed up 66% on Monday)
- SHW -4% (following PPG guidance)
- PRGO -2.6% (appoints Murray Kessler as Pres/CEO effective immediately; Uwe Roehrhoff steps down)
- PBR -1.2% (after Brazilian stocks outperformance following the first round of the country's presidential elections)
- GWRE -1.2% (coverage resumed/downgraded to Hold from Buy at Deutsche Bank)
Analyst comments:
- SEMG -4.1% (downgraded to Sell from Neutral at Goldman)
- KR -3.1% (downgraded to Sell from Hold at Deutsche Bank)
- MYL -3.1% (downgraded to Equal-Weight from Overweight at Morgan Stanley)
- SNAP -2.7% (Target lowered to 6.50 from 8.00 at MoffettNathanson)
- WHR -2.1% (downgraded to Neutral from Overweight at JP Morgan)
- WRK -1.8% (downgraded to Market Perform from Outperform at BMO Capital Mkts)
- IP -1.1% (downgraded to Market Perform from Outperform at BMO Capital Mkts)
- MPLX -1% (downgraded to Neutral from Buy at Goldman)
- COHR -1% (downgraded to Neutral from Buy at Longbow)
- MMP -0.9% (downgraded to Neutral from Buy at Goldman)
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Gapping up
In reaction to strong earnings/guidance:
- EBIX +6.7% (comments on change in auditor, says targeting FY19 revs of $650 mln+ vs $589.62 mln S&P Capital IQ Consensus Estimate) HELE +4.5%, PF +3.4% (guidance) KIM +1.1%
Other news:
- PYX +20.1% (after closing 37% higher on the day)
- PEIX +17.5% after closing more than 40% higher on the day)
- PZZA +8.8% (lifting on WSJ report of potential Trian Fund [Nelson Peltz] bid)
- GCAP +8.5% (commences modified Dutch auction tender offer to purchase up to $50 mln of shares of its common stock between $7.24-$7.94 per share)
- ZIOP +4.6% (ZIOPHARM & Intrexon (XON) subsidiary Precigen announce new definitive license agreement to replace all existing agreements between the companies)
- CGC +1.6% (increases licensed platform; 4.3 million square feet now licensed across Canada)
- YEXT +1.1% (light volume; initiated with Buy at DA Davidson), .
Analyst comments:
- BHGE +3.1% (upgraded to Buy from Hold at Jefferies)
- ESV +2.2% (upgraded to Outperform from Market Perform at Wells Fargo)
- MNR +1.2% (upgraded to Buy at B. Riley FBR)
- SCG +1% (upgraded to Buy from Neutral at Mizuho)
- TSLA +0.9% (initiated with Outperform and $430 tgt at Macquarie)
- NWSA +0.8% (upgraded to Buy from Neutral at Goldman)
- WMT +0.7% (upgraded to Buy from Hold at Deutsche Bank)
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Sentiment among corporate investors in the eurozone is at the highest level in three years despite trade tensions and political uncertainty, according to a survey by UBS.
Almost half of the of 600 firms polled during the third quarter said they planned to increase investment, while just 14 per cent said they were planning cuts. The net balance of 36 per cent — up from 29 per cent in the second quarter — is the highest recorded by the survey since it began in 2015.
The survey also showed a pick-up in firms’ recruitment plans, adding further evidence that eurozone economies are withstanding trade worries.
“At a time when the resilience of the eurozone has been questioned, these results are encouraging,” Reinhard Cluse, an economist at UBS said.
“Hiring intentions are strong . . . and a growing number of firms expect to pay higher wages, which suggests that the recovery in labour markets, real wage growth and core inflation is on track”.
That should give the European Central Bank confidence as it moves to end its massive bond-buying programme, he added.
Investment in the eurozone has been recovering following a cutback between 2008 and 2014.
Eurozone fixed investment grew by 2.8 per cent year-on-year in the second quarter, according to analysis by UBS. That was up from a trough at the height of the crisis in 2009 when it shrank by more than 12 per cent.
While investment growth decelerated between the first and second quarter of this year, Mr Cluse said he was “relieved to see that corporate investment activity has held up reasonably well at a time when concerns were growing over global protectionism and political risks” such as Italy and Brexit.
But while access to funding improved in almost all eurozone economies during the third quarter, in Italy the situation has deteriorated since May, the survey showed.
Along with a decline in perceptions of the bloc’s health in the eurozone’s third-largest economy, “these datapoints may be early signs of the current political issues in Italy impacting corporates,” Mr Cluse said.
Aviva chief to depart as insurer says new leadership needed
Aviva is parting ways with its chief executive, Mark Wilson, after almost six years, citing a need for “new leadership to take the group to the next phase of its development”.
The FTSE 100 insurer said it had agreed with Mr Wilson, who took the helm in January 2013, that he would step down with immediate effect, but that he would remain with Aviva until April to “assist with the planned and orderly transition”.
A search for Mr Wilson’s successor “will commence immediately, with internal and external candidates being considered”, the company said. That process should be wrapped up within the next four months.
“Mark was brought in to deliver the turnaround of Aviva. The board and Mark believe that given the turnaround has been successfully completed, it is time for new leadership to take the group to the next phase of its development,” Aviva said.
Chairman Sir Adrian Montague will take over executive responsibilities until a permanent CEO is found. He will lead a “chairman’s committee” of the three executive directors, Aviva said, before returning to his role as non-executive chairman.
“We have agreed with Mark this is the right time for a new leader to ensure Aviva delivers to its full potential,” Sir Adrian said in a statement. “Our priority is to ensure, with our new chief executive, that we have the right strategy, focus, capabilities and leadership.”
Mr Wilson said: “When I joined Aviva, the company was in poor health. Aviva is very different today. I have achieved what I wanted to achieve and now it’s time for me to move on to new things.”
Trian Considers a Takeover Bid for Papa John’s
Pizza chain has also drawn interest from other restaurants and buyout firms
Trian Fund Management LP is evaluating a takeover bid for Papa John’s International Inc., PZZA 0.14% people familiar with the matter said.
The activist hedge fund recently contacted the pizza chain to collect information as it explores a possible bid, the people said. Trian is one of several parties to express interest since Papa John’s put itself up for sale amid an acrimonious fight with its founder, John Schnatter, who remains on the board and owns nearly 30% of the company’s shares.
There is no guarantee that Trian will make an offer or that Papa John’s will ultimately be sold. There are several other potential bidders, some people familiar with the situation added, including companies and private-equity firms.
Papa John’s is the world’s third-largest pizza delivery chain after Domino’s Pizza Inc. DPZ -0.94% and Yum Brands Inc.’s Pizza Hut. The Louisville, Ky., company that Mr. Schnatter founded in 1984 has more than 5,000 locations in 45 countries.
Trian, which owns a roughly 13% stake in Wendy’s Co. and holds three seats on the burger chain’s board, is known for working with the management of struggling companies. Nelson Peltz, Trian’s co-founder and Wendy’s chairman, invited Mr. Schnatter in late June to meet the burger company’s leaders to discuss a possible deal.
Mr. Schnatter brought Papa John’s chief development officer, Tim O’Hern, with him to the June meeting rather than Chief Executive Steve Ritchie, with whom he was fighting, according to people familiar with the matter. Messrs. Schnatter and O’Hern flew by helicopter to meet Wendy’s Chief Executive Todd Penegor at a private airport in Columbus, Ohio, where Wendy’s is based. Mr. Schnatter, wearing a red shirt emblazoned with the Papa John’s logo, wanted to know how many seats he would have on the board of a combined company, according to one person familiar with the meeting.
Mr. Schnatter stepped down as chairman in July after reports leaked that he had used a racial slur on a company marketing call.
Mr. Schnatter’s relations with the board and management began to unravel last fall, when he drew criticism on social media for blaming Papa John’s poor sales on the National Football League’s handling of players’ protests during the national anthem. He resigned as chief executive in December.
Mr. Schnatter and the company have since been engaged in a public battle over who is to blame for declining pizza sales. The company recently retained bankers to help it conduct a strategic review.
Should Trian proceed with a bid for Papa John’s, it isn’t clear whether Wendy’s would acquire the pizza chain or whether Trian would purchase and operate the chain separately.
Analysts have said Papa John’s, which has a market value of about $1.6 billion, could be attractive to a company that can focus on building a strong brand, as Wendy’s has done. Wendy’s, the world’s third-largest hamburger chain, is known for snarky social-media posts that take aim at rivals and for emphasizing fresh ingredients.
Papa John’s is trying to focus on the quality of its pizza and distance itself from Mr. Schnatter. For years the chain’s marketing was tied closely to Mr. Schnatter, whose image was on its pizza boxes. The recent controversies have led the company to remove him from ads.
Trian has a history with pizza. The firm in 2011 became Domino’s largest shareholder and met with management to make strategic suggestions. It sold its stake the following year after Domino’s updated its menu and marketing materials and made other improvements, according to Trian’s website.
Trian doesn’t typically look to buy companies outright, but it bought Wendy’s in 2008 and combined it with Arby’s, which it owned through holding company Triarc Cos.
Another activist investor drawn recently to Papa John’s wants executives to improve the business before considering a sale. Legion Partners Asset Management LLC and the California State Teachers’ Retirement System last week disclosed a 5.5% stake in Papa John’s.
Ted White, a Legion managing director, said the chain should sell more U.S. stores to franchisees and cut costs while setting aside differences with Mr. Schnatter.
Papa John’s board in July adopted a “poison pill” provision to prevent Mr. Schnatter from regaining control of the company.
Hedge Funds Retreat as Markets Advance
Shutdown of Tourbillon Capital Partners marks at least the third large hedge fund closure this month
Three hedge funds have closed in less than a week as investors question a once-highflying industry plagued by weak returns.
Tourbillon Capital Partners LP on Monday told clients it would return money and close its main fund. Last week, Highfields Capital Management and Criterion Capital Management announced they would return billions of dollars to clients.
The closures are the latest in a multiyear re-evaluation of such investment vehicles by managers and investors.
Some funds have closed as skepticism has increased about the value of paying hedge fund’s famously high fees. Hedge funds often charge a 2% management fee and a 20% cut of performance gains.
Others have been hurt by poor performance relative to a stock market that has notched nearly a decade of gains. This year, through September, stock hedge funds on average returned 1.9% according to industry research firm HFR. By comparison, the S&P 500 had an average return of 10.6% over that period, including dividends, according to Dow Jones Market Data.
Tourbillon, which managed about $4 billion in 2016, had been losing money for some time. The firm’s flagship fund was down about 3.2% this year through Sept. 28, according to information reviewed by The Wall Street Journal. The firm had assets of about $2 billion as of earlier this year.
When funds underperform, hedge-fund managers must make a choice.
“In the end, you make the decision to close the fund or the investors are going to do it for you,” said Tim Ng, the chief investment officer at consulting firm Clearbrook Global Advisors.
Hedge funds can close at any time of the year, but around October many start to receive redemption notices from some clients and re-evaluate their future business plans. Instead of closing, some funds have lowered their fees.
The industry controls about $3.2 trillion in assets, according to data provider HFR.
Some hedge funds have blamed low interest rates for their problems. As rates have stayed low and stocks have rallied, so-called passive funds have come to dominate inflows as everyone from pension funds and endowments to middle-class Americans have pushed into these low-cost funds.
Still, hedge funds abound. In the first half of this year, more hedge funds launched than closed, with 270 closures compared with 306 startups, according to HFR. There were 8,413 hedge funds as of the end of the second quarter, down slightly from a peak of 8,474 in 2015, according to the research firm. More recent figures aren’t available.
At Tourbillon, the closure stems largely from performance. The firm’s flagship fund launched with gains of about 21% in 2013, and for the next two years posted gains. But since 2016 the flagship fund has lost money, with a 13.8% loss last year, according to a person familiar with the fund’s returns.
“We have recently not delivered the results that you expect of us and what we know we are capable of,” founder Jason Karp told clients Monday in a letter reviewed by the Journal.
Mr. Karp said in the letter he planned to return more than $1 billion from the firm’s main fund at year-end. Mr. Karp didn’t comment beyond the letter.
Mr. Karp previously was the co-chief investment officer at hedge fund Carlson Capital and a portfolio manager at Steve Cohen’s SAC Capital Advisors LP. A founding partner who served as Tourbillon’s chief operating officer and president left the firm earlier this year.
In the letter, Mr. Karp said he and senior members of Tourbillon would continue to invest in stocks “in a radically different unconstrained manner that I believe will allow us to focus only on our highest conviction ideas.”
Mr. Karp added that he plans to focus on private and public companies within the health and wellness space, an area he called “deeply personal.”
Tourbillon is known for its health awareness. Clients who visited the New York office were told the firm didn’t serve soda or other unhealthy foods, said people close to the firm.
Mr. Karp said his family launched New York-based Hu Kitchen, a food company and restaurant, in 2012.
The closure of Tourbillon’s main fund follows last week’s decisions by Criterion and Highfields to shut.
San Francisco-based Criterion managed about $2 billion and focused on picking stocks in the technology, media and telecommunications industries.
Boston hedge fund Highfields is returning billions in client money to convert into a family office. Founder Jonathon Jacobson cited multiple reasons in his unusual decision to return money from the $12 billion firm, including the “all-consuming” nature of running a fund.
It is unusual for such a large hedge fund to close. At that size, managers could continue to collect handsome fees even with weak relative performance or try to hand the business to a successor. Redemptions at Highfields remained within the range of what the fund had experienced in the past, according to a person familiar with the matter.
In an industry rife with big personalities, Mr. Jacobson and co-founder Richard Grubman, who retired in 2010, kept relatively low profiles. But they received notice for profiting off a bet against Enron Corp., which ultimately filed for one the largest bankruptcies in U.S. history.
The latest hedge-fund closures add to a string of notable shutdowns over recent years.
Among them, investor Eric Mindich moved to close his $7 billion hedge-fund firm Eton Park Capital Management LP in 2017 and billionaire Richard Perry announced his decision to shutter his hedge-fund firm in 2016.
In discussing the personal nature of his new investment focus, Mr. Karp said in Monday’s letter that in his early 20s he became “very ill with several autoimmune diseases and was told repeatedly by doctors that, while there was no cure, I should take myriad pharmaceuticals to mitigate my various symptoms. I was also diagnosed with an incurable, degenerative eye disease which impaired my vision and told I would be blind by the age of 30.”
He added that he later found his diseases were linked to food, and that “within nine months of dramatically improving my nutrition and lifestyle, all of my ailments reversed, including my ‘incurable’ eye disease.”
China’s stock sell-off eased after the biggest decline in more than three months, while Japanese shares slumped as the yen strengthened. Ten-year Treasury yields hit a fresh seven-year high as they resumed trading after a holiday.
Stocks posted modest rises in Shanghai and Hong Kong as investors weighed increasingly attractive valuations against deepening U.S.-China tensions. The yuan also gained in onshore trading after sliding on Monday. The yen’s Monday climb, when Japan’s markets were shut, left Japanese stocks under pressure today. Meantime, the IMF’s first reduction in its outlook for global growth since 2016 underscored headwinds to stocks going forward -- particularly outside the U.S., which continues to benefit from tax cuts.
“China has been selling off because of dollar strength but also because of the weak data” showing the country’s economy in a slowdown, David Hauner, a cross-asset strategist at Bank of America Merrill Lynch, said in an interview with Bloomberg Television. “For China to rally you really need the domestic picture to improve. The external picture is unlikely to help much.”
US After Hours BLKB -12.5%, PPG -10% following guidance, TSLA Upgraded by Macqaurie +2.1%
Nikkei -1.42% Hang Seng +0.23% CSI -0.05% Shanghai +0.14% Shenzen -0.19%
Eur$ 1.1486 CNH 6.9172 CNY 6.9174 JPY 113.09 GBP 1.3089 RUB 66.6913 CHF 0.9931 TRY 6.0914 WTI$ 74.66 +0.50%
S&P -0.22% EuroStoxx +0.06% FTSE +0.06% Dax -0.02% SMI -0.03%
Makor :
- IMF Cuts Global Growth Forecast for First Time in Two Years
- Tourbillon to Return $1 Billion as Hedge-Fund Closings Mount
- Watch Auto Stocks Ahead of Possible Tougher EU Emissions Caps
Keep an eye on :
- AED BB : Aedifica Buys Two Rest Homes in Belgium for EU35m at ~5% Yield
- AIR FP : Airbus Board Selects Guillaume Faury as Future CEO
- AKZA NA : Akzo Nobel Specialty Chemicals Division Renamed to Nouryon: FD
- AST IM : Astaldi Chairman Tells Milan Mayor Metro Line Work Continuing
- BAYN GY : Bayer Sues Apotex to Block Copies of Nexavar Kidney Cancer Drug
- BSS IM : Consob Bans Short Selling on Banca Ifis and Biesse Oct. 9
- BWLPG NO : Dorian LPG Says It Asked BW to Improve Bid ’Several Times’
- CEC GY : Ceconomy Cuts Ebitda, Ebit Forecast on Weak Unit Earnings
- CLN SW : Clariant CEO Sees ~CHF1b-CHF2b Proceeds From Asset Sale: T-A
- DNO NO : DNO Says Peshkabir Production Reaches 50,000 Bopd Ahead of Time
- IF IM : Consob Bans Short Selling on Banca Ifis and Biesse Oct. 9
- DANSKE DC : Danske Bank’s Brutal Stock Selloff May Have Gone Much Too Far
- DEC FP : JCDecaux Wins Unibail-Rodamco-Westfield Deal for 2 U.K. Malls
- GIVN SW : Givaudan Strong 3Q Vindicates Management Confidence: Berenberg
- GIVN SW : Givaudan Third Quarter Sales Beat Highest Estimate
- NHH SM : NH Hotel Group Board Says Bid Price of EU6.30/Shr Is Below Value
- NHY NO : Norsk Says Alunorte to Return to 50% Capacity Within Two Weeks
- PZZA US : Trian, Others Consider Takeover Bid for Papa John’s: WSJ
- ROG SW : Roche to Present Study Results for Oncology Drugs Incl. Alecensa
- RPC LN : RPC Group Reports 1H Rev. From Continuing Ops of GBP1.9b
- RYA ID : EU Cabin Crew Unions Want Ryanair to Use Local Contracts: SNPVAC
- SDR L N : Schroders to Buy, Lloyds Deal Offers Potential Upside: Berenberg
- SOLB BB : Solvay Names Ilham Kadri CEO Effective March 1, 2019
- TEL NO : Telenor, Uy, Singson Eye Third Philippine Telco Slot: Star
- TEL2B SS : Tele2: EU Commission Closes Investigation of Swedish Carriers
- VOW3 GY : VW Is Said to Near Hiring Top Banks for Truck Unit IPO
- WDI GY : Wirecard Has No Plan to Change Dividend Policy: Boerse Online
- WDI GY : Wirecard Announces Growth Targets For 2025, Confirms 2018 Goals