>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance: AAVL -16.8%, LOCO -14.7%, CBK -13.9%, STV -11.9%, KING -11.5%, BIOD -8.4%, OGXI -8.2%, REED -7.4%, CAPR -6.9%, AEZS -5.6%, AZPN -4.8%, CVSL -3.4%, WLDN -3.3%, VUZI -3.2%, CLNT -2.7%, COSI -2.2%, AMAT -1.5%, ACTS -1.4%, PRSS -0.9%, HOLI -0.6%, INVE -0.5%

Select financial related names showing weakness: NBG -3.7%, DB -2%, BCS -0.9%, SAN -0.8%.

Other news: MTL -13.8% (still checking), ANY -6.5% (Sphere 3D' subsidiary Overland Storage, acquires the RDX removable disk product lines and inventory assets from Imation Corp (IMN); expects accretion to this quarter's rev and gross margin), SVM -3.4% (announced suspension of dividend payment; co also reported earnings), WLH -2.6% (announces a 2 mln share secondary offering of common stock by selling shareholders, affiliated with Luxor Capital Group ), ASML -1.8% (still checking), DLR -0.9% (prices 10,000,000 Shares Of 6.350% Series I Cumulative Redeemable Preferred Stock)

Analyst comments: WFM -0.9% (initiated with Sell at Pivotal Research Group)

>>> US Gapping up

Gapping up 
In reaction to strong earnings/guidance: GV +12.9%, SA +11.2%, CTSO +10%, DAR +9.9%, AMDA +7.5%, BSQR +7.1%, WX +5.5%, VJET +5.5%, JWN +5.4%, GOL +5.1%, AGRX +4.8%, FGEN +3.7%, JCP +3.2%, YY +3%, PAAS +2%, NBY +1.7%, SBS +1.6%, BUFF +0.8%

M&A news: WX +5.5% (enters into definitive merger agreement equal to $46 per ADS)

Select metals/mining stocks trading higher: AU +5.6%, HMY +4.1%, GOLD +2.3%, GDX +1.6%, ABX +1.3%

Other news: PBMD +64% (will receive an undisclosed clinical milestone payment, from its collaboration and licensing agreement with Novartis (NVS) relating to its Phase I IMP701 LAG-3 antibody), ONTX +31.3% (announced the submission of an investigational new drug application to the FDA for IV rigosertib as a treatment for higher-risk myelodysplastic syndromes), QTM +9.8% (reported positive data from its intranasal human abuse liability study of KP201/APAP, indicating significantly lower exposure to hydrocodone when administered intranasally; co also reported earnings), KMPH +9.6% ( reports positive data from its intranasal human abuse liability study of KP201/APAP, indicating significantly lower exposure to hydrocodone when administered intranasally), EBIO +9% (cont strength), OSGB +5.5% (co amended its credit agreement to provide additional flexibility in using proceeds from loans under the agreement to repay the $84 million in convertible notes due Nov. 15, 2015.), NVO +2.6% (Genmab A/S grants Novo Nordisk (NVO) commercial licenses to use the DuoBody technology platform to create and develop bispecific antibody candidates for two therapeutic programs), SD +1.9% (announces the repurchase of $250 mln of its senior unsecured notes, for $94.5 mln in cash and the exchange of $275 mln in notes for new convertible notes), FIT +1.7% (cont vol), DXCM +1.7% (favorable commentary on Thursday's Mad Money), TSLA +1.6% (priced ~2.694 mln share common stock offering at $242.00/share), ATVI +1.2% (NPD data released +6% YoY)

Analyst comments: EGO +4.7% (upgraded to Outperform at BMO Capital Markets ), CYBR +3% (upgraded to Outperform at Wells Fargo), KMI +1.8% (added to Conviction Buy list at Goldman ), MTOR +1.5% (upgraded to Buy at Longbow ), DD +1.5% (upgraded to Overweight at JP Morgan), NAV +0.6% (upgraded to Market Perform at BMO Capital Markets)

(Citi) Global Equity Strategy, China Exposed Stocks

Global Equity Strategy

China Exposed Stocks

 China Slowdown— We think the global economy can probably manage a soft- landing in China, but a hard-landing would pose a significant risk to our growth forecasts and positive view on global equities.
 RMB Depreciation — Citi economists view the recent RMB depreciation as a commitment to a “managed float”, partly intended to increase the likelihood of SDR status. They expect USDCNY will drift higher.
 Stocks Exposed To China Slowdown — For those investors worried about the effects of the Chinese economic slowdown, we provide a list of stocks within Developed Markets that are most exposed to China. These 48 stocks are generating on average more than 30% of their revenues from China.
 Performance — Our China in DM screen has fallen by 10% since June, as worries around China slowdown have exacerbated.  Fundamentals — Despite this underperformance, they are not yet especially cheap given their EPS momentum has also been deteriorating. If the recent depreciation of CNY continues, this is likely to put further downward pressure on EPS.
 For The Brave — We would recommend buying Chinese stocks directly. Our China equity strategist Jason Sun has a positive stance on MSCI China (the H shares) which is now trading at a 9.1x forward PE vs 17.1x for our China in DM basket.

>>> US Close Dow+0.03 S&P-0.13% Nasdaq -0.21% Russel-0.33%

Closing Market Summary: Stocks Slip While Crude Oil Marks Six-Year Low

The stock market ended the Thursday session on a modestly lower note after spending some time on both sides of the unchanged level. The S&P 500 shed 0.1% while the Dow Jones Industrial Average eked out a slight gain (+0.03%).

Before delving into the details of today's session, it is worth noting that the People's Bank of China tried to calm investor fears during overnight action by holding a press conference. During that conference, bank officials said the yuan adjustment "is almost complete" and called the rumors of a 10.0% devaluation "nonsense." Markets across Asia posted gains while European indices ended mostly higher.

Once the U.S. session got going, stocks slipped from their opening levels, but the early weakness was largely isolated to the energy sector (-1.4%), which retreated alongside crude oil. The energy component faced selling pressure throughout the day, notching a fresh six-year low under $42.00/bbl during intraday action before inching up to settle lower by 2.3% at $42.25/bbl.

The daylong weakness in the energy sector was not enough to keep the market in negative territory as the four largest sectors displayed modest strength at the start and helped the market climb out of the red; however, only two groups were still in the green once the closing bell rang. The consumer discretionary sector (+0.6%) and financials (+0.3%) held their gains throughout the day while technology (-0.2%), and health care (-0.2%) slipped ahead of the close.

Notably, the discretionary sector received broad support from automakers, homebuilders, and retailers after the Retail Sales report for July beat expectations. On the earnings front, News Corp (NWSA 15.19, +1.07) spiked 7.6% after reporting a two-cent beat on light revenue while other media names ended mixed. Meanwhile, the homebuilder group displayed notable strength with iShares Dow Jones US Home Construction ETF (ITB 28.66, +0.43) spiking 1.5%. Despite today's outperformance, the discretionary sector remains lower by 2.4% so far in August, which puts the group behind the other nine sectors.

Elsewhere, financials (+0.3%) displayed relative strength throughout the session as the sector rebounded from yesterday's underperformance. Heavyweights like Citigroup (C 57.30, +0.39) and JPMorgan Chase (JPM 67.55, +0.31) gained near 0.6% apiece while the sector narrowed its week-to-date loss to 0.4%.

Also of note, the top-weighted technology sector (-0.2%) settled in-line with the market while chipmakers struggled, evidenced by a 1.0% decline in PHLX Semiconductor Index. Advanced Micro (AMD 1.79, -0.11) was a clear soft spot in the chipmaker index as the stock fell 5.8%.

As for large cap tech names, Cisco Systems (CSCO 28.70, +0.80) spiked 2.9% after beating bottom-line estimates on light revenue while other influential components ended in mixed fashion.

Treasuries retreated during overnight action and they added to their losses during the session. The benchmark 10-yr yield rose six basis points to 2.13%.

Today's participation was a bit below recent averages as 750 million shares changed hands at the NYSE floor.

Economic data included Initial Claims, Retail Sales, Import/Export Prices, and Business Inventories:
  • Weekly initial claims increased to 274,000 from a downwardly revised 269,000 (from 270,000) while the consensus expected an increase to 271,000 
    • The four-week moving average fell to 266,250 from 268,000, representing the lowest level since April 2000, when it also reached 266,250 
    • Continuing claims increased to 2.273 million from an upwardly revised 2.258 million (from 2.255 million) while the consensus expected a decline to 2.247 million 
  • Retail sales increased 0.6% in July while the consensus expected an increase of 0.5% 
    • An upward revision lifted June sales to the flat line from -0.3% 
    • Motor vehicle demand played a large part in the increase in sales growth as motor vehicle manufacturers reported unit sales increased to 17.6 million SAAR in July from 17.0 million SAAR in June. That gain pushed up sales at motor vehicle and parts dealers by 1.4% after declining 1.5% in May 
    • Excluding autos, retail sales increased 0.4% in July after increasing an upwardly revised 0.4% (from -0.1%) in June 
  • Export prices, excluding agriculture, decreased 0.4% in July after decreasing 0.1% in the prior reading 
    • Excluding oil, import prices decreased 0.3%, which followed last month's decrease of 0.2% 
  • Business inventories increased 0.8% in June after an unrevised 0.3% gain in May while the consensus expected an increase of 0.3% 
    • The inventory changes from manufacturers (0.6%) and merchant wholesalers (0.9%) were known prior to the release. The only new information was that retailer inventories increased 0.9% in June after a 0.2% gain in May 
      • Retailer inventory growth was strong across the board as all sectors reported growth above 0.5%, with the largest gains coming from motor vehicles (1.4%), building materials (1.0%), and furniture (0.9%) 
Tomorrow, July PPI (consensus 0.1%) will be reported at 8:30 ET while July Industrial Production (consensus 0.3%) and Capacity Utilization (expected 78.0) will both be released at 9:15 ET. The day's data will be topped off with the 10:00 ET release of the preliminary reading of the Michigan Sentiment Index for August (expected 93.7).
  • Nasdaq Composite +6.3% YTD 
  • S&P 500 +1.2% YTD 
  • Russell 2000 UNCH YTD 
  • Dow Jones Industrial Average -2.3% YTD

(BN) Biggest LBO of Year Signals Appetite May Be Growing: Real M&A


Biggest LBO of Year Signals Appetite May Be Growing: Real M&A
2015-08-13 16:45:36.65 GMT


(For a Real M&A column news alert: {SALT REALMNA <GO>}.)

By Brooke Sutherland and Devin Banerjee
(Bloomberg) -- Carlyle Group LP’s $8 billion purchase of
Symantec Corp.’s data-management business shows big buyouts can
still happen.
The deal announced Tuesday was the largest private-equity
takeover of a U.S. company so far this year. It may not hold
that title through December. While the purchase price is a far
cry from the record $45 billion spent on the buyout of TXU Corp.
in 2007, there are signs that private-equity firms’ dealmaking
ambitions are expanding as they seek to put record amounts of
money to work.
There have already been more $5 billion-plus private-equity
takeovers in 2015 than in all of last year, according to data
compiled by Bloomberg. Just one more $8 billion acquisition
could put U.S. volumes on track for the biggest year since the
financial crisis.
Private-equity firms are facing pressure to invest their
piles of cash. Firms were sitting on $1.32 trillion in dry
powder as of June 30, according to research firm Preqin. That’s
roughly equivalent to the gross domestic product of Mexico.
There could be a handful of buyouts in the $5 billion to $10
billion range before the end of the year, said David Fann, chief
executive officer of TorreyCove Capital Partners.
“Transactions of over $5 billion in enterprise value are
still more the exception than the rule,” said Fann, whose firm
advises investors in private equity. But “there’s just a lot of
money on the table. There’s a possibility of larger deals
happening.”

Reloading Time

Buyout firms have already exited more than $100 billion in
U.S. investments this year through sales and public offerings,
according to data compiled by Bloomberg. It’s time to reload.
“This is an asset management merry-go-round and it’s
moving,” said Scott Rostan, chief executive officer of Training
The Street, a New York-based firm that trains junior bankers and
business school students. “If they don’t get on, the horse goes
away because they’re going to have to return the committed
capital. But they need to make smart investments because if they
don’t, it’s going to be a short ride.”
The prospect for a handful of bigger deals doesn’t mean the
floodgates are open. U.S. buyout volume this year will still
fall way short of the $378 billion record set in 2007. There are
a number of things making it difficult for private-equity
buyers: near-record equity valuations, regulatory limits on debt
burdens and increasing competition from corporate buyers who are
also under pressure to put cash to work.
That means the big buyouts these days won’t be as big as
those in the boom years, and they will probably be structured a
little differently.

New Clubs

Very few, if any, private-equity suitors can undertake an
$8 billion acquisition without help. Before the financial
crisis, that aid may have come from another private-equity firm
as in the case of the TXU buyout, which involved a number of
firms. But these club deals have largely disappeared because of
government scrutiny. Instead, pension or sovereign wealth funds
-- some of the biggest investors in private-equity funds -- are
increasingly becoming equity partners on transactions.
“It’s the new club deal with a very different twist,”
Rostan said.
Regulators have also taken note. The U.S. Securities and
Exchange Commission, in its review of the industry after
implementation of the 2010 Dodd-Frank law, highlighted co-
investments as an area of concern. SEC officials have said
private-equity managers should increase disclosure regarding
which investors receive the opportunity to co-invest in deals
and why.
About 10 percent, or $380 billion, of private-equity assets
under management is co-invested capital, the consulting firm
Bain & Co. said in a March report.

Too Big

Some targets are still just too large. CDK Global Inc., the
provider of information technology to automobile dealers that’s
exploring a sale to private-equity firms, could be one of those.
Blackstone Group LP, Hellman & Friedman and Permira have
been examining CDK Global’s financial information, according to
people familiar with the matter. CDK Global has an enterprise
value of about $8.7 billion. Tacking on a 30 percent premium
would increase the purchase price to more than $11 billion.
No one has attempted a buyout of that size in the U.S.
since 3G Capital agreed to buy H.J. Heinz Co. for more than $23
billion in 2013 -- and it had help from Warren Buffett.
Even so, there’s reason to be optimistic that private-
equity buyers will be busy with deals of all sizes. Interest
rates are still favorable, debt financing is still available and
that cash keeps building.
“You’re only in business as a private-equity fund to do
deals, so sooner or later, you’ve got to do deals,” said Mel
Cherney, a partner at law firm Kaye Scholer in New York who has
represented private-equity buyers. “It takes a lot of
discipline to stay within the parameters that you set for
yourself in terms of projected returns, but clearly there’s
pressure to put that money out there.”

For Related News and Information:
Carlyle to Buy Veritas for $8 Billion in Year’s Biggest LBO
Leveraged Loans Left Behind in M&A Boom as Buyout Firms Outbid
LBO Comeback Nears as PetSmart Leads Busy Two Months: Real M&A
Top deal news: DTOP <GO>
Real M&A columns: NI REALMNA <GO>

--With assistance from Leslie Picker in New York.

To contact the reporters on this story:
Brooke Sutherland in New York at +1-212-617-0448 or
bsutherland7@bloomberg.net;
Devin Banerjee in New York at +1-212-617-1534 or
dbanerjee2@bloomberg.net
To contact the editors responsible for this story:
Beth Williams at +1-212-617-2307 or
bewilliams@bloomberg.net
Elizabeth Wollman

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance: MXPT -10.1%, SZMK -8.8%, AEG -8.3%, AEG -8.3%, CPA -7.4%, KSS -6.8%, XNET -6.1%, IOT -6%, PAH -3.3%, NTES -3%, NRX -2.9%, AYA -1.3%

Select metals/mining stocks trading lower: GFI -5.6%, HMY -5.2%, AU -5%, CDE -3.8%, ABX -2.3%, GDX -2%, GOLD -2%, PAAS -1.9%, MT -1.4%, SLW -1.2%, AEM -1.2%, RIO -1%, SLV -0.7%, GLD -0.7%, BHP -0.7%

Other news: BGMD -31.8% (announces a public offering of Series A and Series B units), SHAK -7.8% (priced 4 mln share secondary offering of common stock at $60 per share), AQXP -7.7% (10% owner Johnson & Johnson disclosed sale of ~1.51 mln shares), CTRE -5.5% (prices offering of 14,200,000 shares of its common stock at a price to the public of $10.50 per share), CERE -5.3% (modest pull back following yday advance), LDRH -3% ( announces a public offering of common stock; size and terms not disclosed ), FANG -2.4% ( launches a 2 mln share public offering of common stock), FANG -2.4% upsizes offering by 500K shares and prices 2.5 mln shares of its common stock for total proceeds of ~$176 mln, CDW -1.8% (prices offering by selling stockholders of 11,250,000 shares of common stock at $38.25 per share), POST -1.4% (priced offering of 5.85 mln shares of common stock at $60 per share)

Analyst comments: KERX -4.8% (initiated with an Underweight at Morgan Stanley), ICPT -3% (initiated with an Underweight at Morgan Stanley), RLYP -2.9% (initiated with an Underweight at Morgan Stanley), MEMP -1.9% (downgraded to Neutral from Overweight at JP Morgan ).

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: EBIO +32%, OPXA +15%, GBSN +14.6%, PGN +12.9%, CRNT +12.5%, SEDG +10.4%, RNDY +9.1%, CLCD +6.5%, SVT +6.1%, BGG +5.1%, NWSA +4.8%, SVA +4.5%, KINS +4.3%, DARA +3.7%, CSAL +3.7%, CSCO +3.4%, CSCO +3.4%, TDOC +2.9%, LXFT +2.5%, CPG +1.4%, DDS +1.2%, JUNO +1%

M&A news: PLNR +33.3% (to be acquired by Leyard for $6.58 per share), PRGO +0.9% (Mylan (MYL) lowers the acceptance condition for its offer to acquire Perrigo, from not less than 80% of shares, to greater than 50% )

Other news: OHGI +92% (agreement to be the exclusive supplier of Voice over IP services to KeyIdea Information Technology), IMUC +43.2% (reaches an agreement with the FDA on a Special Protocol Assessment for its ICT-107 Phase 3 registrational trial), GALT +32.4% (receives U.S. Patent notice of allowance for use of Pectin compounds to reduce fibrosis in multiple diseases), ALIM +4.3% (signs an exclusive five-year agreement with Societa Industria Farmaceutica Italiana S.p.A., for the distribution of Iluvien in Italy, San Marino and the Vatican City), SUNE +4.2% (SunEdison signs a definitive agreement with Dominion (D) to establish a JV Four Brothers, a 420 megawatt (MW) DC, or 320 megawatt AC, solar project in Utah), S +4.1% (SoftBank Group (SFTBY) discloses it acquired additional shares of Sprint), BDSI +4% (announces US FDA approval of an SNDA for a new formulation of Onsolis CII to manage breakthrough pain in opoid intolerant cancer patients), CMCM +3.3% (China mkts rebound overnight), JD +2.5% (rebounding after recent declines), ITEK +2.5% (prices offering of 5,400,000 shares of its common stock at $12.75 per share), FGEN +2.4% (announced that Nephrology Dialysis Transplantation has published 'encouraging' Phase 2a safety and efficacy data for roxadustat for the treatment of anemia associated with chronic kidney disease), FIT +2.3% (cont volatility), NVAX +2.2% (favorable commentary on Wednesday's Mad Money ), TSLA +1.9% (announces a $500 mln common stock offering; CEO Elon Musk intends to purchase $20 mln of the offering), GSAT +1.6% (NASA selecte Globalstar and ADS-B technologies' ALAS aviation tracking solution), MN +1.1% (reports July, 2015 prelim AUM of $41.7 billion, down from $43.1 billion in prior month)

Analyst comments: GWPH +4% (initiated with a Overweight at Morgan Stanley), BBEP +3% (upgraded to Neutral from Sell at UBS), GPRO +3% (initiated with an Outperform at Cowen), YHOO +1.5% (upgraded to Outperform from Mkt Perform at Bernstein ), QLIK +1.3% (upgraded to Buy from Hold at Deutsche Bank), RAD +1.3% (initiated with a Buy at BofA/Merrill), MNST +1% (upgraded to Overweight from Equal-Weight at Morgan Stanley), MSFT +1% (upgraded to Buy from Hold at Stifel), EZCH +0.9% (upgraded to Buy from Hold at Brean Capital)

>>> US Early premarket gappers

Early premarket gappers

Gapping up: PLNR +29.5%, BBIO +22.2%, PGN +21%, OPXA +15%, GBSN +14.6%, SEDG +11.6%, RNDY +9.1%, ABGB +7.4%, CLCD +6.5%, COTY +6.2%, SVT +6.1%, BGG +5.1%, NWSA +4.8%, SUNE +4.5%, SVA +4.5%, KINS +4.3%, JD +4.1%, GWPH +3.9%, CSCO +3.7%, CSCO +3.7%, DARA +3.7%, BDSI +3.3%, TDOC +2.9%, GPRO +2.5%, LXFT +2.5%,FGEN +2.4%, CMCM +2.4%, WLL +1.6%, TSLA +1.5%, FIT +1.5%, PYPL +1.5%, PRGO +1.4%, CPG +1.4%, CCL +1.3%, RAD +1.3%, NFLX +1.2%, MN +1.1%, MSFT +1.1%, HTZ +1.1%, AA +1.1%

Gapping down: BGMD -35.8%, CPA -9.9%, SZMK -8.8%, AEG -7.3%, KSS -7.3%, AEG -7.3%, XNET -6.8%, HMY -6%, IOT -6%, GFI -5.9%, CERE -5.8%, AQXP -5.7%, AU -5.2%, KERX -4.8%, SHAK -4.6%, MXPT -4.5%, CDE -4.3%, NRX -2.9%, LDRH -2.7%, FANG -2.7%, ABX -2.5%, GDX -2.4%, GOLD -2.4%, NTES -2.3%, CDW -2.1%, PAAS -1.9%, PAH -1.9%, SLW-1.8%, AEM -1.7%, SDRL -1.6%, TOT -1.5%, POST -1.3%, AYA -1.3%, OKS -1.2%, SLV -1.2%, RIO -0.9%, MT -0.9%, BHP -0.8%, GLD -0.7%

>>> Coty beats by $0.01, beats on revs; announced $700 mln share repurchase auth

Coty beats by $0.01, beats on revs; announced $700 mln share repurchase authorization (28.72)
Reports Q4 (Jun) earnings of $0.08 per share, $0.01 better than the Capital IQ Consensus Estimate of $0.07; revenues fell 2.2% year/year to $1.02 bln vs the $996.1 mln consensus.
  • The Company is targeting modest improvement in total like-for-like net revenue coupled with continued strong growth in profitability behind its efficiency programs.
  • The Company is now aiming to deliver annual savings of $270 million by fiscal year 2017. The anticipated pre-tax charges associated with the Program remained unchanged at $250 to $300 million.
  • Co also announced a $700 million share repurchase authorization