Genzyme Corporation (NASDAQ: GENZ) still has no official bid from Sanofi-Aventis as of Saturday night nor as of Sunday morning. The rumors and telegraphed deal are now 10 days old. There is no way to know if the buyout will even be above this $70 hurdle right now and this was a $54+ stock before the rumors surfaced of a buyout. The new market cap is roughly $18.5 billion. If no deal comes by Monday morn
ing or Tuesday morning, it is probably going to be a situation where traders and investors begin to assume that the value is just not supportable at current levels.
Research In Motion Ltd. (NASDAQ: RIMM) gained about 3.2% and is up about 20% from lows. The company is expected to have a new phone, a new upgrade to its mobile operating system, is expected to debut its competition to the iPad, and it has juiced up its Apps development. This will be the week we get to see the launch announcements. If these are deemed solid, no one will care what the U.A.E. or Saudi BlackBerry bans bring.
Symantec Corporation (NASDAQ: SYMC) did major damage to itself and the ability for its long-term holders to have faith in the turnaround. The stock’s earnings, light revenues, and light guidance on sales push-outs and over its note of a choppy environment were NOT followed by rival McAfee, Inc. (NYSE: MFE). Symantec’s losses might have been McAfee’s gain. A slew of analysts downgraded the stock even as it hit new 52-week lows. Unless there is a screaming bull market, this is one we fear may repeat the mantra of ‘stocks that hit a 52-week low tend to put in more 52-week lows. Longer-term, we’d actually take a look at Symantec if shares get about 15% cheaper AND if the company appears to be stabilizing in operations. Near-term we would only expect selling to prevail. In short, that 15% loss this last week was probably not the very end of the selling.
Warner Chilcott plc (NASDAQ: WCRX) was one that we felt would be the first of all of the drug and/or biotech outfits to join into the dividend game in 2010. The Irish drug company did do it. They just did it in a manner that guts the company’s cash and it adds significant leverage. It is selling debt of $2.50 billion and is paying a one-time dividend of $8.50 per share. There is now a lower likelihood it could be acquired. This leverage higher may have also made it not even be an opportunistic acquirer either. Our take: Bravo for the dividend move, not so much bravo on the leverage. S&P Equity research cut the rating to Hold from Buy on the move. Still, shares closed up almost 5% Friday and almost 7% for the week.
This weekend’s Barron’s cover story depicts Africa just like Star Trek as “The Final Frontier” for investors that will be a huge missed opportunity for investors that stay away. The publication notes, “Investors will lose a huge opportunity if they avoid vibrant and changing Africa. Fast growth in a continent of misconceptions.” Investing directly into these markets is very difficult for U.S. investors, but we have three diversified easy ways in for our readers: iShares MSCI South Africa ETF (NYSE: EZA), Morgan Stanley Frontier Emerging Markets Fund (NYSE: FFD), and the Market Vectors Africa ETF (NYSE: AFK).
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JON C. OGG
