>>> US Filings, Offerings and Pricings

Filings, Offerings and Pricings

Filings:
  • Arlington Asset Investment (AI) files for $750 mln mixed securities shelf offering
  • Axovant (AXON) files for $750 mln mixed securities shelf offering
  • Biostar Pharma (BSPM) files for offering of 346,429 share common stock issuable upon the exercise of outstanding warrants previously issued
  • Clean Diesel Technologies (CDTI) files for 6,232,750 common stock offering by selling stockholders
  • Clovis Oncology (CLVS) files for common stock offering by the co and/or selling stockholders; terms not disclosed. Co later announced an underwritten public offering of shares of its common stock to raise aggregate proceeds of about $175 mln.
  • Professional Diversity Network (IPDN) files for offering of 246,445 shares of common stock issued upon the exercise of warrants to purchase our common stock by selling stockholder
  • Novavax (NVAX) files for $125 mln mixed securities shelf offering and $75 mln at-the-market offering pursuant to a sales agreement with FBR Capital
  • Ryerson (RYI) files for 21,037,500 share common stock offering by selling stockholders
  • 22nd Century Group (XXII) files for $100 mln mixed securities shelf offering
Offerings:
  • Parkervision (PRKR) entered into an At Market Issuance Sales Agreement to sell common stock having an aggregate offering price of up to $10 mln through FBR
  • StoneMor Partners LP (STON) announces $20 mln private placement of 2,332,878 common units representing lp interests to StoneMor GP Holdings, the sole member and owner of the general partner of the Partnership
Pricings:
  • Kopin (KOPN 2.84) will sell 7.339 mln shares to Goertek for $3.25/share in conjunction w/ partnership

>>> US Gapping up:

Gapping up:
M&A related:
  • DEPO +12.4% (DepoMed could still be acquired by KKR (KKR), according to NY Post)
  • CEL +12.2% (Cellcom Israel updates on negotiations w/ third parties interested in purchasing Golan Telecom's share capital and a liquidation request filed by the co against Golan Telecom)
  • FNBC +10.3% (First NBC Bank to sell nine branches and certain assets and liabilities to Hancock Holding's Whitney Bank)
  • ALJ +8.9% (Delek US Holdings (DK) to acquire remaining 53% of outstanding shares it doesn't already own in ALJ USA for about $12.13/share or total equity value of about $464 mln)
  • XRX +7.8% (after spinnig off Conduent (CNDT), Credit Suisse upgraded to Outperform)
Select oil & gas names higher on 2% gain in crude oil: SGY +10.5%, SDRL +6.2%, FRO +4.6%, ATW +4.3%, PBR +4.3%, RIG +2.4%,CHK +1.9%,

Financials showing relative strength: CS +4.8%, BCS +3.0%, BAC +2.0%, C +1.6%.

Brazil ADRs extending recent gains; iShares Brazil ETF (EWZ +1.6%): GGB +8.6%, PBR.A +5.2%, BBL +3.7%, VALE +3.9%, VALE +3.4%.
Other news:
  • KOPN +7.4% ( enters a relationship w/ Goertek; will sell 7,339,000 shares of its common stock to Goertek at $3.25/share)
  • CDTI +7.0% (ticking higher; files for 6,232,750 common stock offering by selling stockholders)
  • ARRY +5.4% (still checking)
  • AMD +1.7% (positive Barron's mention)
  • NVDA +1.7% (still checking)
  • FIT +1.6% (announced the addition of Fitbit Charge 2 into the recently expanded UnitedHealthcare (UNH) Motion wellness program)
Analyst actions:
  • IHG +3.8% (upgraded to Overweight from Equal Weight at Barclays)
  • GRPN +3.0% (upgraded to Sector Perform from Underperform at RBC Capital Mkts)
  • SRPT +2.8% (upgraded to Buy from Neutral at Janney; $65 tgt)

>>> MAKOR - Share Class Report

January 3, 2017 

 

MAKOR - Share Class Report

 

Good morning and happy new year !

 

 

Please find below our most recent share class report dated 3/1/2017.

 

Our favorite trades remain the following:

 

+ RDSA LN/ - RDSB LN, with a catalyst (see our extensive discussions on this trade).

 

+ REN NA / - REL LN vs – UNA NA / + ULVR LN (combined)

 

+ CCL LN / - CCL US

 

– FOXA US / + FOX US

 

– UHRN SW / + UHR VX

 

 

 

  

  ​     ​     ​

 

Makor Capital

 

11 Menachem Begin St., 26th FL

Ramat Gan 52681
ISRAEL
Tel         +972 3 5453 762

Fax        +972 3 7162 680

 

   

Research Disclaimer

 

This publication has been prepared by Makor Capital Limited (“Makor Capital”) and is intended for professional or qualified investors only. Makor Securities London Ltd (“Makor Securities”)is distributing this material to its clients who are Eligible Counterparties or Professional Clients under FCA Rules. It may also be disseminated to persons who are Investment Professionals within the meaning of the Financial Services and Markets Act 2000 (Financial Promotion Order 2005).  In the United States, Makor Capital only distributes this material to major US institutional investors (as that term is defined in Rule 15a-6 of the Securities and Exchange Act of 1934) and to SEC-registered broker-dealers or  banks acting in a broker–dealer capacity. This material is not intended for distribution to any other persons and should not be redistributed.  If you do not fall into any of these categories you should disregard it.

 

This material is a marketing communication.  It is not investment research and has not been prepared in accordance with legal requirements designed to promote the independence of investment research. It is not subject to any prohibition on dealing ahead of the dissemination of investment research under U.K. law. This material is not a research report and is not intended to be a research report as defined under U.S. securities laws and regulations.  This material is not intended to provide information reasonably sufficient upon which to base any investment decision.   

 

This material does not take into account the particular investment objectives, financial situation or needs of individual clients or other recipients. Before acting on this material, clients and other recipients should consider whether it is suitable for their particular circumstances and, if necessary, seek professional advice. 

 

This material should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. 

 

In the United States, Makor Capital does not offer securities services to U.S. persons except pursuant to SEC Rule 15a-6 only to major US institutional investors and SEC registered broker-dealers or  banks acting in a broker–dealer capacity. Transactions in the United States must be effected through the U.S. broker-dealer, Oscar Gruss & Son Incorporated. Oscar Gruss & Son has not prepared, reviewed or distributed this material.

 

Some of this material is produced by providers which Makor Securities believes to be reliable, but Makor Securities does not warrant or represent (expressly or impliedly) that it is accurate, complete, not misleading or as to its fitness for the purpose intended and it should not be relied upon as such. 

Opinions expressed will be the current opinions of those producing this material as of the date appearing on this material only. We expect those producing the material in  this publication to update it on a timely basis but can give no undertaking that they will do so and regulatory compliance or other reasons may prevent  them from doing so (or us from disseminating updated material).  

 

Members and employees of Makor Securities London Ltd, employees of Makor Capital, Makor Capital Markets may from time to time have long or short positions in securities, warrants, futures, options, derivatives or other financial instruments referred to in this material. For Makor Securities, this information is set out in our Conflicts of Interest Policy which is available on request.  Policies for the production of research from other research providers are available on request.  Unless otherwise stated, share prices provided within this material are as at the close of business on the day prior to the date of the material.

 

Neither the whole nor any part of this material may be duplicated in any form or by any means. Neither should any of this material be redistributed or disclosed to anyone without prior consent. This material is issued for general information and discussion purposes only. None of  Makor Securities, Makor Capital, Makor Capital Markets accepts  liability whatsoever for any direct, indirect or consequential loss or damage of any kind arising out of the use of all or any of this material. 

 

The services, securities and investments discussed in this material may not be available to, nor are suitable for all investors. Investors should make their own investment decisions based upon their own financial objectives and financial resources and it should be noted that investment involves risk, including the risk of capital loss. Past performance is no guide to future performance. In relation to securities denominated in foreign currency, movements in exchange rates will have an effect on the value, either favourable or unfavourable.

 

All investors. Investors should make their own investment decisions based upon their own financial objectives and financial resources and it should be noted that investment involves risk, including the risk of capital loss. Past performance is no guide to future performance. In relation to securities denominated in foreign currency, movements in exchange rates will have an effect on the value, either favourable or unfavourable.

 

Entities

 

Makor Securities London Ltd is authorised and regulated by the Financial Conduct

Authority (FCA registration number 625054) 

 

Makor Capital, company number 514456466, is incorporated in Israel and is a 100% held

subsidiary of Makor Holdings Pte Ltd incorporated in Singapore. 

 

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and is also a 100% held subsidiary of Makor Holdings Pte Ltd.

 

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FT Lex : Société Générale: déclinisme denied Premium

Société Générale: déclinisme denied Premium
As French profits become less important. foreign earnings could underpin a re-rating

The French obsession with the country’s perceived national decline is nicknamed déclinisme. Société Générale, knows it well. Doubts about the sustainability of its dividend means the lender trades at a 20 per cent discount to book value, steeper than rivalBNP Paribas. As the proportion of profits from la patrie falls, however, greater overseas earnings should help close that valuation gap.

Granted, the top line doesn’t look pretty. Group net interest income has fallen by 7 per cent annually since 2011. French banking — still the bank’s earnings bedrock — is an especially difficult place. Negative interest rates and a flat yield curve mean a lower return on reinvested deposits. And there is limited ability to re-price liabilities thanks to state rules mandating fixed interest rates on savings. In its latest quarterly results in November, French retail banking operating income declined by a fifth on the quarter while lending margins were squeezed.

Thankfully for shareholders, SocGen is becoming less French. The lender earns half its revenues overseas. Its international retail and financial services division — which covers francophone Africa and eastern Europe — has grown in importance. Over the past three financial years its portion of group net profits has risen 10 percentage points (to 27 per cent of the total in 2015) even as revenues have slid slightly; loan growth is significantly higher than the group average. UBS reckons central and eastern European operations alone will account for one-tenth of profits by 2018. Recently, Russia, source of a €525m goodwill write off two years ago, went into the black for the first time since 2013.

Having plumbed the depths five years ago, the shares have beaten the FTSE Eurofirst 300 banks index by 81 per cent; payouts have also risen in absolute terms each year since 2012. The discount to BNP is unwarranted. If SocGen can keep expanding its overseas earnings while cutting costs at home, the gap will disappear.

FT : Chinese insurers under pressure to rein in overseas deals

Chinese insurers under pressure to rein in overseas deals
Regulators and concerns over leverage put squeeze on appetite for foreign assets

In mid-December, Chinese conglomerate Fosun International announced the sale of its casualty insurance unit Ironshore to Liberty Mutualfor nearly $3bn. That same week, a team of Anbang Insurancestaffers flew to Seoul from the group’s Fifth Avenue building in New York, in connection with its planned purchase of two insurance companies in South Korea.

These two insurers spent much of last year scouring the world for potential targets and were among the most aggressive purchasers. They provided rescue capital to troubled financial firms in Europe and scooped up real estate and other investments in the US and Asia. They were among the contributors to the $225bn in Chinese offshore acquisitions announced last year, according to data from Dealogic.

But a combination of strictures from mainland regulators and internal pressures from within for many firms, including Anbang and Fosun, may mean that China’s voracious appetite for overseas assets is about to be curbed.

Regulators now say that any deal with a price tag of more than $5m needs approval; while big strategic acquisitions are likely to receive the nod acquisitions of noncore assets, such as real estate, are not. Meanwhile, the slide in the renminbi, which makes diversification offshore more attractive, also makes deals increasingly expensive.

The shift away from acquisitions is likely to be particularly pronounced among Chinese insurers, and that will have an impact beyond China. Not only have the country’s insurers been among the highest (or only) bidders for some global assets, they are also an important source of funds for major pools of money outside China.

In the past, for example, mainland insurance companies have written big cheques to private equity firms like Blackstone. They were attracted by promises of double digit returns because it is just as hard for insurers in China as elsewhere to earn the big returns their clients want.

Until recently, many analysts expected Chinese insurers to increase their offshore activity.

“More assets are expected to flow overseas as Chinese insurers see a growing need for better returns outside their domestic market,” Boston-based consultancy Cerulli Associatesnoted in a report just weeks ago.

“A fall in interest rates will inevitably have an impact on their investment income and will push insurers to deploy assets more efficiently by diversifying their sources of returns, including overseas. Investments in the ‘others’ category — which includes listed and unlisted long-term equity investments, bank wealth management products, trusts, private equity, venture capital, loans and real estate — rose from 23.7 per cent in 2014 to 34.2 per cent in June 2016.”

Fitch Ratings, meanwhile, is worried about the overall health of Chinese insurers, which have largely been overlooked amid concerns about the country’s banks. Its analysts noted that “the insurers have shifted to investing in riskier assets to sustain investment yields. This makes their credit profiles more vulnerable to unfavourable capital market fluctuations and potential credit-quality deteriorations amid an economic slowdown”.

Fosun, which is listed in Hong Kong, is starting to respond to investor concerns that it has too much leverage. Moody’s analysts see the sale of Ironshore, which the company bought in 2015, as one clear example.

“Fosun slowed its pace of overseas expansion in 2016 and management has indicated its commitment to improve the company’s financial profile and focus on integrating previously acquired businesses,” the analysts noted. “The cash proceeds . . . will help improve its weak liquidity profile.”

Anbang, which does not have an offshore equity listing, has not sold any large overseas assets so far. People briefed on its plans said it would probably not proceed with an international bond offer after US rating agencies suggested that it was likely to receive a non-investment grade rating.

Without easy access to offshore funds, and facing tighter rules at home, Anbang may also have trouble finding the financing it needs to complete some of the overseas acquisitions it has already agreed. That in turn would crimp its ability to buy more.

In recent years, bankers with assets to sell have often counted on bidders from China to help push up the price. With commodity prices subdued, and the US focused inward, it is not clear who will take their place.

Reuters - Credit Suisse, AstraZeneca among top BofA-ML's top European picks for

Credit Suisse, AstraZeneca among top BofA-ML's top European picks for Q1 - Reuters News

LONDON, Jan 3 (Reuters) - Credit Suisse and AstraZeneca are among Bank of America-Merrill Lynch's top picks for the first quarter of 2017, as the market is overly pessimistic on both stocks, according to analysts at the bank.
BofA-ML picked out six key "buy" calls and 4 "underperforms" as their top ideas in EMEA for the first quarter.
The analysts highlighted Swiss bank Credit Suisse CSGN.S as a candidate to outperform, saying that the markets division was set to beat expectations and lead to positive surprises.
"After years of watching the gradual erosion of Markets revenue forecasts, we now believe consensus estimates are far too bearish for 2017," analysts at BofA-ML said in a note.
The bank said its 2018 pre-tax profit forecasts for Credit Suisse were 10 percent above consensus, but still 10 percent below company targets.
AstraZeneca AZN.L is favoured as the firm has an "under-appreciated pipeline which offers potential for premium growth" compared to sector peers, the analysts say.
The company has five drugs with a combined potential $18 billion in peak sales due to see final stage results in the U.S. over the next 12-18 months, BofA-ML analysts note.
The other "buys" are British American Tobacco BATS.L, Telecom Italia TLIT.MI, payments processor Worldpay WPG.L and media group ProSieben PSMGn.DE.
Among stocks expected to underperform are Italian luxury stock Luxottica LUX.MI and Airbus AIR.PA.
The bank says that greater competition and waning brand momentum make it harder for Luxottica to justify a 30 percent premium valuation, while Airbus also looks expensive given its own headwinds, including slowing order momentum.
Dutch coatings and paints maker Akzo Nobel AKZO.AS and Sweden's Sandvik SAN.ST are highlighted as the other two key "underperform" ideas.

WSJ : Earnings, Not Donald Trump, Are Stocks’ Best Friend in 2017

Earnings, Not Donald Trump, Are Stocks’ Best Friend in 2017
Continued rebound in corporate profits should prop up share prices regardless of Washington policies

Here’s one simple thing set to help sustain stocks’ march in 2017: corporate earnings.

While Donald Trump’s election supercharged investors’ hopes for business-friendly policies, corporate earnings quietly climbed out of a five-quarter slump.

It’s a long-awaited improvement. Stock performance was tepid in 2015 and early 2016, with many investors and analysts citing the lack of earnings growth as a main culprit. The S&P 500 gained 1.9% from the end of 2014 through the first half of 2016.

The 6.7% rally since then, much of it since Election Day, has largely been attributed to the potential for tax cuts, looser regulation and fiscal spending under the president-elect. But the rise has also coincided with a fundamental improvement: U.S. companies’ return to earnings growth.

“It’s earnings growth that drives stocks over the long term,” said Tom Cassidy, chief investment officer at Univest Wealth Management Division. While “we won’t know if any of these policies will actually be implemented until later next year,” a continued rebound in earnings should nevertheless prop up stocks for additional gains, Mr. Cassidy said.

Earnings for companies in the S&P 500 grew 3.1% in the third quarter from a year earlier, according to FactSet, entering positive territory for the first time since the first quarter of 2015, when they grew 0.5%. Analysts polled by FactSet expect the rebound to continue, and are estimating a 3.2% growth rate in the fourth quarter of 2016.

An end to the longest earnings slump since the financial crisis also comes against a backdrop of improving economic data. U.S. gross domestic product, a broad measure of the goods and services produced across the economy, posted its strongest quarterly pace of growth in two years in the third quarter, according to data released by the Commerce Department in December.

The S&P 500 climbed 9.5% in 2016, its biggest gain since 2014.

While it’s only one quarter of earnings data, the return to growth is giving investors more reason to believe the stock market will keep climbing in 2017.

The improved outlook for financial companies also bodes well. The S&P 500 financials sector was up 20% in 2016 and was responsible for nearly half of the total earnings growth for the S&P 500 in the third quarter, according to FactSet data.

Financials posted 8% year-over-year earnings growth, according to FactSet. J.P. Morgan Chase & Co., Citigroup Inc., Wells Fargo & Co., Bank of America Corp., Goldman Sachs Group Inc. and Morgan Stanley all beat analysts’ estimates on an earnings-per-share basis.


Several lenders, including J.P. Morgan, the largest U.S. bank by assets, reported a rebound in their trading businesses. While low interest rates have for years cut into banks’ net interest margins--a key measure of lending profitability--events like the U.K.’s surprise vote to leave the European Union or uncertainty around the Fed’s next steps on interest rates have helped boost trading revenues, some of the banks said.

Many of the banks expect trading gains to continue. Executives at Citigroup, Bank of America and J.P. Morgan said at a banking conference in early December that they expect key fourth-quarter trading metrics to grow by double-digit percentages from the year-earlier period.

ENLARGE
But risks remain.

Industrials—which have helped lead the recent stock-market rally with a 7% gain in the S&P 500 since Election Day—are expected to report an earnings decline of more than 8% in the fourth quarter from the year-earlier period, according to analysts polled by FactSet.

Caterpillar is projected to be among the biggest drags on the sector’s earnings in the fourth quarter. Shares of the maker of construction and mining equipment—whose results are closely watched as a barometer for global manufacturing activity—gained 36% in 2016. But for the fourth quarter, the company is expected to report earnings of 66 cents a share, down from $1.02 a share at the start of the quarter, according to FactSet estimates. The company said in October that it could report a loss for the year, and it predicted another tough year for 2017.

A strengthening U.S. dollar could also hamper the earnings of multinational companies. While a stronger dollar increases U.S. buyers’ purchasing power abroad, it also makes U.S. exports more expensive to foreign buyers, putting pressure on the bottom lines of companies that receive a significant chunk of their revenue from abroad. Roughly 31% of S&P 500 revenues come from outside the U.S., according to FactSet estimates.

The dollar has rallied since Election Day on prospects of a higher-growth, higher-rate environment, which makes it more attractive to yield-seeking investors. The WSJ Dollar Index, which measures the dollar against a basket of 16 other currencies, gained about 3% in 2016.

The prolonged S&P 500 earnings slump has also helped make stocks more expensive than their historical averages. The S&P 500 was trading at around 21 times its past 12 months of earnings last week, according to FactSet. Its 10-year price/earnings average is 16.

“People are very inclined to ignore P/E values going up,” said Bret Chesney, senior portfolio manager at Alpine Global, who added that he thinks stocks are too expensive relative to how companies have performed over the past several quarters. “I wouldn’t be too gung-ho to invest at these levels.”

Still, many analysts believe there is reason to be optimistic about the coming year.

Corporate earnings are projected to grow by double digits through 2017. Analysts polled by FactSet expect earnings to grow 11% in the first quarter, 11% in the second quarter, 9.1% in the third quarter and 14% in the fourth.

“There’s some meat to the rally,” said Karyn Cavanaugh, senior market strategist at Voya investment Management. “I think 2017 is shaping up to be a good year.”

WSJ : Peak Auto Sales Make 2017 a Waiting Game for Investors

Peak Auto Sales Make 2017 a Waiting Game for Investors
Low valuations suggest an earnings downturn is on its way

Peak Car?

In cyclical industries, the best of times for manufacturers tend to be the worst of times for investors.
The auto sector is a case in point. Car sales are running ahead of their precrisis peak in the U.S., but earnings multiples, even after a postelection bounce, are meager by historical standards. Investors should probably interpret low valuations as a warning flag rather than a discount sticker: A downturn in earnings is surely on its way.
The cycle is most mature in U.S. light-vehicle sales, which doubled over the seven years through November 2015 to an annualized peak of 18.1 million units. In 2016, following the first increase in the federal-funds rate since the recovery started, sales stalled. Now the Federal Reserve is signaling a faster pace of rate increases. More than seven in 10 new cars sold in the U.S. are financed with debt, according to research group IHS, which expects 17.4 million light-vehicle sales in 2017.

As the period running into the 2007 credit crunch showed, the problem with even flattish sales is that it encourages manufacturers to sacrifice their profits in a fight for market share. There are early warning signs that this is happening again: Industry inventories have been rising, and rebates with them. Of the Detroit Three, Ford may be best placed to deal with this more difficult market environment, having called an end to the boom in July and announced production cuts in October—earlier than its peers.
The picture is slightly brighter in Europe, if only because the eurozone crisis delayed the recovery by a few years in parts of the continent. Across the European Union, car registrations for the year through November were up 7.1% from the previous year.
With U.K. sales already running well ahead of the 2007 peak, growth is being driven by pent-up demand in Southern Europe. HSBC said it expects Italian consumers to buy about 1.9 million cars this year, roughly a fifth more than last year but still far below the 2.5 million vehicles sold in 2007. This suggests there is gas left in the tank, which is a boon to local market leader Fiat Chrysler in particular. The not insignificant risk is that consumer sentiment is thrown off course by a political or banking crisis in Italy, or a renewal of the eurozone crisis more generally.

Yet growth hopes are pinned above all on China. After a weak patch in the summer of 2015, a cut in sales tax was spectacularly successful in reviving the world’s largest car market. This incentive has been scaled back for 2017, which is likely to weigh on demand for smaller engines. But the bigger problem for Western car makers is more likely to be supply than demand: Production capacity is rising fast, including by increasingly sophisticated local manufacturers. Whatever its growth path, the Chinese market will become more competitive in 2017.
The year ahead could be a waiting game. Better buying opportunities are likely to emerge when times get a bit worse for car manufacturers.