Reportedly considering acquisition of Becca Cosmetics - WWD
- Becca had been in a tentative deal to be sold to private equity for $200M but that deal never closed, the exclusivity clause has now expired.
Algeria Oil Min: will not come out of Algiers meeting empty handed; oil freeze deal is still possible
- risk that oil prices will fall to $30/bbl
- all oil producers agree that there is a need to stabilize the energy market
- underinvestment in oil production could lead to an oil price spike that hurts the economic recovery
Barron's weekend summary: Cover positive on CBS and speculates about it buying VIAB; positive on COF, SAVE
- Cover story : Amid ongoing turmoil at VIA, simple management changes, such as the departure of interim chief executive Tom Dooley, won't be enough to fix the problems; The company should consider a sale, with CBS the most natural buyer-though the network's investors will likely prosper with or without such a deal. With or without a Viacom deal, CBS shares might double in the next 4 years.
- Features : 1) Positive on COF: Firm's skillful loan underwriting and its growing commitment to credit cards that offer rewards have put it in a strong competitive position relative to other issuers and regional banks; 2) Positive on SAVE: Though rivals have adapted some of the discount carrier's business strategies, both the fares it charges and the share price should rise soon, giving earnings a boost.
- Technology Trader : Positive on DLPH, MAG: Automotive parts makers play a key role in the development of new cars, so their shares-which have reasonable valuations-are a good way for investors to gain exposure to the growing autonomous vehicle sector.
- Trader : The Fed's lower rate expectations have longer-term implications for defensive stock sectors such as utilities, telecoms, and staples, according to Michael Yoshikami of Destination Wealth Management; Positive on WFM: Concerns about growing competition, slowing sales growth, and the need to lower prices have been discounted into the grocer's share price, and a little good news could send it higher; Spending on healthcare is denting consumer finances, despite a healthy jobs and housing market, low gas prices, and rising wages.
- Interview : Jamie Cook, an analyst at CSFB, talks about what companies will benefit if the next president ramps up infrastructure spending (Positive on CMI, DE, CAT, PH, ACM).
- Alternative Investments : Richard Merage runs MIG Capital with a long/short strategy that focuses on the consumer and invests with a longer time line than most peers (top 10 holdings: S, RCL, AAPL, Liberty Global, CCOI, CPRT, CCI, VSAT, DSW, CMG).
- Small Caps : Positive on KLXI: "Distributor of aerospace parts is poised to benefit from a new aircraft-maintenance cycle, which could help lift the stock price more than 30%."
- Follow-Up : Positive on SRPT: Following the recent FDA approval of Sarepta's Duchenne muscular dystrophy drug, Exondys 51, shares could see more upside, and the company could become a lucrative biotech play in the coming years.
- International Trader : Positive on Dufry: Operator of duty-fee and retail stores at airports, seaports, and railway stations has 24% market share in airport travel retail and should continue to provide investor gains.
- Asian Trader : Even if the Bank of Japan succeeds in boosting long-term bond yields, earnings at Japanese banks will hardly improve, says BNP Paribas analyst Toyoki Sameshima; Unlike in Europe, negative interest rates don't work in Japan.
- Emerging Markets : It's not yet clear whether infrastructure spending can contribute to Brazil's economic growth, though that question shouldn't dampen investor enthusiasm for the country.
- Commodities : Demand for lead in China has slowed, and supplies of the metal are ample, but that won't necessarily halt recent price gains.
- Streetwise : The Fed should take its time raising rates, says columnist Ben Levisohn, who adds that "Economic growth is still sluggish, and inflation is low, leaving no real reason for an increase except a desire to get one done."
Tuifly subject of sale talks with easyJet, other airlines - reports
Tuifly, the German airline owned by German travel group TUI [LON:TUI], is a subject of sale talks with easyJet [LON:EZJ] and other airlines, Boersen-Zeitung reported.
The German-language daily cited unidentified sources close to the Tui supervisory board as saying that Tui is in different sets of negotiations on selling Tuifly. It said the potential buyers are easyJet, the British low-cost airline, and other air transportation players.
However, a message to Tuifly's employees by the business unit's leadership denied that easyJet is seeking any cooperation or equity investment, the article noted.
A report in the UK newspaper The Daily Mail on Saturday, 24 September mentioned talk that easyJet was in negotiations with Tui about acquiring Tuifly's fleet of 41 aeroplanes. The item quoted Tui, which said the speculation was baseless.
However, The Daily Mail report also quoted Martin Lochler, a member of Tuifly's supervisory board, who said easyJet and Tuifly had been in discussions for a while.
Boersen-Zeitung
GKN suitor SAIC Motor Corp said to be sounding out US groups for possible consortium bid - report
SAIC Motor Corporation and its adviser JPMorgan were said to have contacted several US-based industrial groups regarding a potential consortium bid for the FTSE-100 engineering company GKN [LON:GKN], The Daily Mail reported.
The newspaper’s market report section cited City sources who said JPMorgan had already sounded out US-based groups including Northrop Grumman Corporation [NYSE:NOC] and United Technologies Corporation [NYSE:UTX] about forming a consortium with SAIC to make a offer for GKN.
SAIC is keen to acquire GKN’s land systems and driveline businesses, the item said. Any bid partner would therefore be looking to acquire GKN’s aerospace operations, the report added. The article said the prospective consortium offer could value GKN at GBP 7bn (EUR 8.07bn).
Making a joint offer with a western partner would mitigate the political or regulatory concerns regarding an offer from SAIC, which is backed by the Chinese government, the item said.
The report also mentioned the UK-base industrial groups BAE Systems [LON:BA], Rolls-Royce [LON:RR] and Melrose [LON:MRO] as potential consortium partners.
GKN’s share price closed 2.3p up at 323.2p in London on Friday, 23 September, giving the company a market capitalisation of GBP 5.54bn.
J Sainsbury shareholder Qatar Investment Authority could attract offer for 22% stake from Chinese bidder - report
The Qatar Investment Authority’s 22% shareholding in the UK-based supermarket company J Sainsbury [LON:SBRY] is said to have attracted interest from a potential bidder from Asia, The Daily Mail reported.
The newspaper’s market report section cited one senior investment banker who claimed that there was interest in the QIA’s stake from China.
J Sainsbury’s share price closed 2.2p up at 253.9p in London on Friday, September 24, giving the company a market capitalisation of GBP 5.55bn (EUR 6.40bn).
When is insider trading not insider trading?
Hedge fund founder Leon Cooperman will find out in court
If a hedge fund manager buys shares ahead of a major corporate announcement but fails to lock in his profits from the resulting price rise, could it still count as insider trading?
Leon Cooperman, the billionaire founder of Omega Advisors, and the US Securities and Exchange Commission are now going to court to find out.
This week, the SEC filed civil insider trading charges against Mr Cooperman and Omega, alleging that they “generated substantial illicit profits”of $4.1m by buying shares, bonds and options in Atlas Pipeline Partners after receiving information about a planned asset sale from a company executive in July 2010. The SEC also says Mr Cooperman explicitly promised not to trade on the information, which later boosted Atlas’ share price by 31 per cent when it was made public.
Mr Cooperman “categorically” denies wrongdoing, writing in a letter to his investors that his Atlas investment “was based on fundamental research, rigorous analysis, and insight — not inside information.” He also pointed out that Omega had been investing in the company since 2007, and the shares bought in July 2010 represented a tiny fraction of the firm’s total investment.
Crucially for his fight against the SEC, Mr Cooperman also argues that he never made money from his July 2010 trading. Although Atlas shares leapt to $16.22 when the asset sale was announced, Mr Cooperman and Omega did not sell, and ended up losing money on their investment when they sold out last year. Mr Cooperman also argues that the options he bought offset a different set of options he had previously sold — so he did not make any money from them either. “In short, none of the trading is indicative of someone trying to . . . reap profits from inside information,” he wrote.
All these details matter because of a quirk of US law. While the UK and EU defines market abuse to include almost any trading while in possession of non-public, market-moving information, the American rule is much narrower. It requires enforcers to show that confidential information was intentionally “misappropriated”. If Mr Cooperman’s lawyers can show the July 2010 trades were a minor part of a broader — ultimately unsuccessful — investment strategy, the SEC may well have trouble proving he meant to misuse inside information.
But do not count the regulators out — they have a couple of key weapons.
First, they are bringing a civil case, so they have a lower standard of proof than a criminal prosecution. Second, they have neatly sidestepped a controversial 2014 appeals court decision that makes it harder for regulators to prove insider trading. This ruling requires proof that the person who tips off a trader has reaped financial benefit. But the SEC alleges that Mr Cooperman effectively stole the information, so there was no tipper.
Finally, on the important question of bad intent, the SEC has highlighted Mr Cooperman’s behaviour when he learnt regulators were on his tail. The complaint alleges that the hedge fund titan contacted the Atlas executive and sought assurances that there had been no sharing of confidential information “despite knowing this was not true.” The executive “believed Cooperman was trying to fabricate a story in case the two were questioned.”
Now it will be up to a court to decide: Does the alleged cover-up show that Mr Cooperman knew he was trading on inside information? Or is his failure to sell his shares proof that he is, as he insists, an innocent man? Stay tuned.