>>> US Gapping Down

Gapping down
In reaction to strong earnings/guidance:
  • QHC -31.8%, SHLM -18.3%, NMM -9.3%, SHAK -7%, WSTL -6.6%, MCRB -4%, FLO -3.3%, EFOI -3.1%, VSTO -2.6%
  • CHMA -1.8%, BCLI -1.7%, DOOR -1.3%, SCON -1.3%, AEG -1.2%, IMOS -1.1%, CPG -1%
Other news:
  • ALIM -11% (commences common stock offering for undisclosed amount)
  • AMRN -9.6% (commences an underwritten public offering of its American Depositary pursuant to a shelf registration)
  • OMER -8.5% (commences 40 mln common stock offering )
  • FSP -6.1% (Franklin Street Properties announces underwritten public offering of 6,125,000 shares of its common stock)
  • CLF -3.3% (Cliffs Natural Resources priced 44.4 mln Common Shares at a public offering price of $6.75 per share )
  • BMCH -3% (commences 2.4 mln common stock offering by certain stockholders, including affiliates of The Gores Group, LLC and affiliates of Davidson Kempner Capital Management)
  • NRZ -2.3% ( priced its public offering of 20 mln shares of its common stock for gross proceeds of ~$284.0 mln)
  • RBS -1.8% (prices $2.65 bln of 8.625% Perpetual Subordinated Contingent Convertible Additional Tier 1 Capital Notes due 2021)
  • BRX -1.6% (announces secondary offering of 42.4 mln shares of common stock by selling shareholders )
  • HCLP -1.5% (Hi-Crush Partners enters into contribution agreement with Hi-Crush Proppants LLC to acquire Hi- Crush Blair LLC; commences primary public offering of 6.5 mln common units representing limited partnership interests in the Partnership)
Analyst comments:
  • SPWR -0.9% (downgraded to Equal Weight from Overweight at Barclays)
  • LITE -0.7% (downgraded to Underweight from Equal-Weight at Morgan Stanley)
  • CBOE -0.7% (downgraded to Underperform from Neutral at BofA/Merrill)

>>> US Gapping up

Gapping up
In reaction to earnings/guidance:
  • BSTG +22.5%, HSGX +21.2%, ANW +19.1%, GURE +17%, LEU +14.8%, M +10.9%, HIMX +8.9%, KSS +8.4%
  • SSRI +8%, EAT +6.4%, SPKE +5.7%, MIDD +5.7%, TPIC +5.2%, (also TPI Composites extends and expands its long-term agreement with Nordex to continue to supply wind blades from its existing Izmir, Turkey manufacturing facility through 2020)
  • MICT +4.9%, BABA +4.8%, CSRA +3.4%, SEED +3.2%, NVTR +2.9%, BUFF +2.3%, DTRM +1.7%, SLW +1.1%
M&A news:
  • CHK +6.3% (Chesapeake Energy exits Barnett Shale, Announces Renegotiation Of Mid-Continent Gas Gathering Agreement; co sees 2017 adjusted production growth down 2-7%)
  • RDUS +2% (vague takeover chatter out of the UK, mentioning Shire (SHPG))
  • UN +1% (announced tha it has completed the acquisition of Dollar Shave Club)
Other news:
  • KURA +49% (co reported earnings and provided update on its Phase 2 clinical trial in HRAS mutant solid tumors with 'promising' clinical activity)
  • NVGN +9.3% (announces that it has submitted an IND application to the FDA for Cantrixil (TRX-E-002-1) in ovarian cancer)
  • JWN +5.6% (in sympathy with M earnings), YHOO +3.4% (in sympathy with BABA earnings
  • WPZ +3% (Williams Partners confirms it has conditionally committed to execute a new gas gathering agreement with a new producer customer, a private company successor to Chesapeake Energy (CHK), in the Barnett Shale)
  • CLNE +1.8% (selected as a supplier to provide natural gas upgrades to facilities in Cummins Inc.'s (CMI) Distribution Business Unit)
  • WBAI +1.7% (in sympathy with BABA earnings)
  • EXAS +1.6% (announces that Health Care Service Corp. and Florida Blue recently updated their medical policies to cover Cologuard)
  • NFLX +1.1% (Director Orange Investor LP disclosed purchase totaling ~300K shares worth ~$28.3 mln)
  • BIDU +1.1% (in sympathy with BABA earnings)
  • JD +1% (in sympathy with BABA earnings)
  • LGF +0.8% (Lions Gate Entertainment Director disclosed purchase of 50K shares, worth total of ~$1.1 mln )
  • ADXS +0.8% (Phase 2 study of axalimogene filolisbac in patients with late-stage HPV-associated oropharyngeal cancer met its stage 1 primary objective),
Analyst comments:
  • OCUL +17.3% (initiated with a Mkt Outperform at JMP Securities)
  • SEAS +1.4% (upgraded to Neutral from Underperform at Credit Suisse)

FT : Abengoa staves off insolvency with €1.7bn restructuring

Abengoa has struck a €1.17bn restructuring deal with its creditors, ensuring the survival of the debt-laden Spanish renewables group after a year of financial turbulence that pushed it to the brink of bankruptcy
In a regulatory statement issued on Thursday, Abengoa outlined the details of the restructuring, which included a debt-for-equity swap for creditors who otherwise face a 97 per cent haircut on their loans. Under the terms of the deal, 70 per cent of pre-existing debt will convert into 40 per cent of Abengoa’s new share capital.

“At the end of the restructuring process, the current shareholders in the company would hold around 5 per cent of the share capital,” Abengoa said in a statement.
Once hailed as a standard bearer for Spain’s high-flying renewables industry, Abengoa was forced to launch insolvency proceedings last November, raising the possibility that it could become one of the country’s largest ever bankruptcies. After years of expansion, the group had built up an €8.9bn debt load, which it was no longer able to service.
Abengoa has since committed to a more focused approach, selling non-core stakes as well as photovoltaic plants in Spain and a wind farm in Uruguay. The group — which in the past both built and owned renewable energy plants — has told investors that it wants to concentrate on designing, building and servicing such installations for outside owners.
In April, a Spanish bankruptcy court gave Abengoa until the end of October to come to a deal with its creditors. Thursday’s announcement outlined the terms of an agreement, although it has not yet been signed and still has to be accepted by 75 per cent of creditors, as required by Spanish law. The company said it would update the markets in a conference call next Tuesday.
Under the terms of the deal, Abengoa will receive €1.17bn in funds, made up of fresh investment as well as the rollover of existing credit facilities. In addition, Abengoa will be able to call on a new credit facility worth €307m.
The group’s new financiers include big name hedge funds and other investors, including Abrams Capital, Baupost Group, Canyon Capital Advisors, Centerbridge, D.E. Shaw, Elliott Management, Hayfin Capital Management, KKR, Oaktree Capital Management and Värde.
Abengoa said it was being advised by Lazard, the investment bank, and Cortés Abogados, a Spanish law firm.

>>> Oi SA (OIBRQ) reported Q2 net earnings from cont ops of (R 656 mln) versus (

Oi SA (OIBRQ) reported Q2 net earnings from cont ops of (R 656 mln) versus (R 442 mln) last year; revs -8.8% YoY to R 8.624 bln versus R 6.607 bln Capital IQ consensus
  • Residential ARPU continued to improve, presenting an increase of 4.5% up y.o.y. and 1.6% up q.o.q., and reaching R$ 82.1 in 2Q16. It is worth noting the positive ARPU performance in each of the services: wireline, broadband and pay TV.

>>> Radius (RDUS) - Radius Health ticking higher in early trade amid renewed, va

Radius Health ticking higher in early trade amid renewed, vague takeover chatter out of the UK, mentioning Shire

FT Artcile :
'..Shire edged 0.6 per cent lower to £50.75 amid continued speculation around Radius Health, a US-listed osteoporosis drugmaker with a market value of $2.2bn.
Radius was rumoured to have recently rejected a bid of about $70 a share from Shire, a premium of 37 per cent on Wednesday’s price, with Shire said to be weighing up whether to sweeten the offer by about $10 a share.
Roche, Pfizer and Amgen have also been linked with Radius, which has key trial data due next month.

>>> US Early premarket gappers

Early premarket gappers
Gapping up: KURA +33%, HSGX +21.2%, ANW +19.1%, LEU +14.8%, GURE+9.4%, KSS +7.8%, SPKE +5.7%, CHK +5.4%, SSRI +5.4%, TPIC +5.2%, VSTO+5.2%, MICT +4.9%, HIMX +4.3%, BABA +4%, CSRA +3.4%, SDRL +3.2%, MIDD+2.4%, RIG +1.9%, DTRM +1.7%, BHI +1.6%, YHOO +1.5%, NFLX +1.5%, BUFF+1.3%, GSK +1.2%, WMB +1.2%, JD +1.2%, LGF +0.8%

Gapping down: QHC -20.2%, FLO -12.7%, AMRN -11.1%, ALIM -11%, OMER-8.7%, SHAK -7.3%, WSTL -6.6%, FSP -5.9%, MCRB -3.9%, HCLP -3.6%, NRZ-2.5%, DOOR -2%, CHMA -1.8%, BRX -1.6%, SCON -1.3%, BT -1.2%, IMOS -1.1%,RBS -1%, CPG -1%, MXPT -0.9%, LYG -0.7

(MS) US Strategy - Remain positive on US Eq. 12mth S&P PT 2,200 (+1%)

We remain positive on US equities.
Our stance remains that the US equity market is the best one in the world. Why? Because we think EPS expectations are reasonably achievable for the next two quarters, that the base case for the US is positive earnings growth, whereas it is a decline in any other region of the world, and when most people do asset allocation, they will find the US relatively attractive. On that score, if you think of the US equity market as having modest positive (not declining) EPS growth, a 2.3% net buyback, a dividend yield over 2%, plus over 70% of all equities in the world with $100 million or more in daily trading volume, you start finding it difficult not to allocate some meaningful capital to at the very least a high quality basket of US equities. Hence, our guess is that the price-to-earnings ratio of the S&P500 could continue to expand.

We have been breaking the market into three groups: defensives, growth, and “the unknown”, which is our phrase for energy and financials given that forecasting the oil price and 10-yield has been nearly impossible.
–Defensive: we prefer utilities to consumer staples.
–Growth: we are overweight healthcare and underweight technology and prefer biotechnology to software.
–Unknown: we are neutral on financials and energy. For financials, we are generally attracted to the valuation, and think it is interesting they have recently performed well without a back-up in the long-end of the yield curve, but our house view is for a 1% US 10-year by Q1 of 2017, balancing our optimism. For energy, the oil market is healing, but the fundamentals of the offshore group are poor and the valuations of the exposed E&Ps don’t seem attractive. Exposure to the best properties in Texas and Oklahoma seems prudent.

What is implied by today’s market price?
Putting it all together, we forecast 4% earnings growth per year from now through Q1 of 2018. We apply a 17x multiple, 12 months from now, on earnings 13-24 months from now. This yields a 12-month forward S&P500 price target of 2200.