>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance: NEON -16.3%, (issues guidance; also prices its underwritten public offering of 3.2 mln shares of common stock at $1.90/share), YUM -15.4%, NUS -14.5%, MON -3.5%, RPM -3.1%, PAH -2.9%, ADBE -2.2%

Select pharma related names showing weakness: AZN -1.5%, TEVA -1.5%, SNY -1.4%, SHPG -1%

Other news: AXPW -55% (announced that the exclusivity period under its Binding Letter of Intent with LCB International expired; LCB has indicated an unwillingness to move forward with any deal structure that contemplates anything further than a technology license), ADXS -19.5% (reports Clinical Hold of Investigational Agent Axalimogene Filolisbac; expects hold to be resolved expeditiously and without significant interruption to the HPV clinical development program), CTRV -13.5% (announces offering of common stock and warrants to purchase common stock for an undisclosed amount ), RSPP -3.4% (commences an underwritten public offering of 6 mln shares of its common stock), SUNE -2.8% (cont volatility pre-mkt), AVXL-2.1% (announces a 1-for-4 reverse stock split in preparation for Nasdaq uplisting), MCD -1.4% (following YUM results), PBF -0.5% (prices public offering of 10 mln shares of class A common stock at $31 per share)

Analyst comments: GPRO -2.3% (target lowered to $35 from $62 at Morgan Stanley), TSLA -1.8% (downgraded to Neutral from Outperform at Robert W. Baird), JCP -1.8% (initiated with Sell at Citigroup)

>>> US Gapping up


Gapping up
In reaction to strong earnings/guidance: GBX +1.8%, STZ +1.3%

M&A news: BUD +2.8% (increases offer to acquire SABMiller (SBMRY) for GBP42.15 per share), CYBR +1.4% (acquires privately held Viewfinity for $30.5 mln in cash; expected to be accretive to non-GAAP EPS for 2016)

Select China related names showing strength: SOHU +3.4%, CMCM +3%, WYNN +2.4%, YY +2.1%, QIHU +2.1%, HSBC +2%, WUBA +2%, YNDX +1.7%

Select metals/mining stocks trading higher: MT +8.6%, HMY +5.4%, BBL +4.2%, BHP +3.8%, FCX +3.3%, AU +3.1%, VALE +3.1%, GOLD +2.9%, X +2.8%, AKS +2.5%, AA +1.9%

Select oil/gas related names showing strength: SDRL +5.9%, SD +4.8%, SSL +4.3%, BP +4.1%, DNR +3.9%, PBR +3.7%, TOT +3.5%, RIG +2.8%, RDS.A +2.7%, NE +2.5%, CHK +1.9%, COP +1.5%

Other news: MDCO +8.4% (co and SymBio Pharmaceuticals established a strategic partnership for IONSYS in Japan), DERM +5% (presents DRM01 Phase 2a trial data, showing the topline met all primary efficacy endpoints), CANF +3.6% (to deliver 2 presentations on its cancer drug CF102 on Oct 8-10 in Athens), AMRI +3% (extended Supply Agreement with GE Healthcare), CDE +2.5% (reported preliminary Q3 production of 3.8 mln ounces of silver and 85,658 ounces of gold, or 9.0 mln silver equivalent ounces; maintained FY15 production guidance), LINE +1.9% ( Linn Energy and LinnCo announces Board approval to suspend the companies' distribution and dividend, effective September 30, 2015), CLF +1.7% ( Terminates Pellet Supply Agreement with Essar Algoma ), EXAS +1.7% (modestly rebounding following yesterday's sell off), TWTR +1.4% (Prince Alwaleed Bin Talal discloses 5.17% passive stake in 13G filing), EXC +1.3% (late move higher on reports of DC announcement), POM +1.3% (late move higher on reports of DC announcement), PFE +1.3% (Pfizer and Merck KGaA (MKGAY) granted Fast Track designation by the FDA for avelumab for the treatment of metastatic Merkel cell carcinoma)

Analyst comments: RIO +8.9% (upgraded to Overweight from Equal-Weight at Morgan Stanley), BHP +3.9% (upgraded to Overweight from Equal-Weight at Morgan Stanley), CTRP +3.1% (upgraded to Buy from Neutral at BofA/Merrill), MPC +2.3% (upgraded to Outperform from Market Perform at Wells Fargo), UBS +1.6% (upgraded to Buy at BofA/Merrill), MS +1.2% (upgraded to Outperform at RBC Capital Mkts)

>>> Constellation Brands beats by $0.24, reports revs in-line; raises FY16 EPS a

Constellation Brands beats by $0.24, reports revs in-line; raises FY16 EPS above consensus

  • Reports Q2 (Aug) earnings of $1.56 per share (driven by beer business and favorable quarterly tax rate, excluding non-recurring items), $0.24 better than the Capital IQ Consensus of $1.32; revenues rose 7.8% year/year to $1.73 bln vs the $1.73 bln consensus.
    • For the quarter, the co generated consolidated organic net sales growth on a constant currency basis of nine percent.
    • Beer net sales increased 14%, primarily due to volume growth. Beer depletions grew 10 percent, reflecting strong consumer demand for the beer portfolio.
    • Wine and spirits net sales on an organic constant currency basis increased three percent. This primarily reflects volume growth within the spirits portfolio.
  • Co issues upside guidance for FY16, raises adj. EPS to $5.00-5.20 from $4.80-5.00 vs. $4.98 Capital IQ Consensus, driven primarily by strong beer business results
    • For fiscal 2016, the beer business continues to expect net sales growth of ~10% but now expects operating income growth in the 15 - 18% range.
    • For the wine and spirits business, the co continues to expect net sales and operating income growth to be in the low-to-mid single- digit range before any benefit from the Meiomi acquisition.

>>> US Early premarket gappers

Early premarket gappers
Gapping up: MT +8.8%, MDCO +8.4%, RIO +8.1%, SDRL +6%, HMY +5.4%, SSL +4.8%, SD +4.8%, BBL +4.3%, BHP +4.2%, FCX +4.1%, DNR +3.9%, BP +3.9%, NEON +3.8%, TOT +3.5%, RIG +3.4%, AU +3.3%, YNDX +3.3%, PBR +3.3%, WYNN +3.2%, AMRI +3%, VALE +2.9%, RDS.A +2.9%, CDE +2.5%, X +2.5%, NE +2.5%, AKS +2.5%, GOLD +2.4%,HSBC +2.3%, GBX +2.3%, CNHI +2.2%, CTRP +2.1%, BUD +2.1%, QIHU +2.1%, PFE +2%, YY +2%, WUBA +2%, CHK +1.9%, AA +1.8%, CLF +1.1%, POM +0.9%, LOGM +0.8%, ALTR +0.7%, VDSI +0.6%

Gapping down: AXPW -59.5%, ADXS -22.5%, YUM -16.4%, CTRV -13%, NUS -12.2%, JWN -4.8%, SUNE -3.3%, ADBE -3.1%, PAH -2.9%, AVXL -2.1%, GPRO -2.1%, TSLA -1.8%, AZN -1.7%, MCD -1.5%, SNY -1.5%, TEVA -1.5%, CCL -1.4%, RCL -1.2%, VOD -0.9%, SHPG -0.7%, ATI -0.7%

WSJ : Now Is the Time to Buy Chinese Stocks, Says Prominent Lond

Now Is the Time to Buy Chinese Stocks, Says Prominent London Hedge Fund

Algebris LLP sees August selloff as turning point and has piled tens of millions of dollars into China

China’s stock market has burned more than 40% of its value since June as investors fret over the health of the world’s second-largest economy. But one prominent London hedge fund says now is the time to buy.

In recent weeks, London-based Algebris LLP, which runs $2.2 billion in equity and credit hedge funds, has been piling tens of millions of dollars into Chinese stocks for the first time since its launch in 2006, betting that August’s sharp market selloff in Asia marked a turning point, according to the firm’s founder.

“We are long Chinese equities for the first time in our history,” said Davide Serra, chief executive of the firm, saying that the probability of a full blown economic collapse in China is lower than what the market estimates. Algebris declined to reveal the precise size of its bet on China.

China’s main stock index has tanked since its peak in June, as fears over the impact of a slowdown in the country’s growth on other economies caused panic selling and sent shockwaves to other markets. The market losses have put off most investors into China. Data analysis by UBS shows that China was the biggest underweight among emerging markets against the MSCI benchmark at the end of August. Investors’ allocation to the country’s assets is close to a 15-years low.

Latest data from Eurekahedge shows a slump in investor inflows into China-focused hedge funds since the market sell-off, with just $58 million net going into such funds in August, 95% down on inflows in May when the stock market was riding high. China-focused hedge funds lost almost $1.5 billion in performance terms in August and $1.8 billion in July, according to data from Eurekahedge.

Despite not having exposure to China at the time of the selloff, Algebris’ fund lost about 1% in August, as market volatility extended from China to other markets.

Some funds, while perhaps not as bullish as Algebris, are betting that the outlook for the country could be less negative than several predictions suggest. Man Group, which runs $78.8 billion in hedge funds and other investing strategies, has been buying onshore Chinese equities for one of its newly-launched long-only portfolio, in the belief the Chinese economy will perform better than many observers expect, according to Ed Cole, a portfolio manager at the firm.

Hugh Hendry, founding partner at Eclectica Asset Management and one of London’s best-known hedge fund managers, remains upbeat on China’s economic outlook. He said China’s shock currency devaluation in August was driven by short-term capital pressures and wrote in a recent letter to investors: “Time will tell whether we were wrong or just early.”

Others remain cautious on the region. Michael Hintze, chief executive of CQS and one of London’s most influential hedge fund managers, said in his fund’s most recent letter to investors, reviewed by The Wall Street Journal, that he had cut bets on Asian corporate bonds “materially”. On Friday, U.S. hedge fund Third Point said in an investor update that while it had large bets on rising stock prices in the Americas it had increased the size of its NET bets on falling prices in Asia.

And London-based Veritas Asset Management has cut exposure to China over the summer, said one hedge fund investor. The firm’s $400 million Real Return Asian fund had earlier this year increased its bets on Chinese stocks to 69% around the time the market peaked, according to the latest letter to investors. However, the firm has been looking for opportunities to buy back in at bargain prices, the investor said.

Veritas declined comment.