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Closing Bell for Monday on Wall Street: Markets Open Lower, Bounce Once, Then Go Flat

Paul Ausick — Mon, 20 May 2013 20:06:15 +0000

U.S. equity markets opened lower this morning but soon rose above the break-even line where it stayed until noon when share prices began to dip. That was quite a shift from Asian markets, where the three major indexes were all higher, with the Nikkei at a five-and-a-half year high. In Europe the only economic data of note came from Italy, where industrial new orders rose 1.6% in April and industrial sales declined 0.9%. In the U.S., there was no economic data of note released today. Gold and silver took a beating early, but came back to close higher. Remarks by Chicago Fed President William Evans, however, sent equities markets back into negative territory.

The U.S. dollar index is trading down 0.6% today, now at 83.7490. The GSCI commodity index is up 0.7% at 632.05. WTI crude oil closed up 0.7%, at $96.71 a barrel. Brent crude trades up 0.1% at $103.80 a barrel. Natural gas is up 0.9% today at about $4.09 per million BTUs. Gold settled up 1.4% today at $1,384.10.

The unofficial closing bells put the DJIA down about 19 points to 15,335.28 (-0.12%), the NASDAQ fell more than 2 points (-0.07%) to 3,496.43, and the S&P 500 fell -0.07% or about 1 point to 1,666.29.

There were a several analyst upgrades and downgrades today, including:

Kansas City Southern (NYSE: KSU) cut to ‘sell’ at Stifel Nicolaus;
Leap Wireless International Inc. (NASDAQ: LEAP) cut to ‘sell’ at Deutsche Bank;
J.C. Penney Co. Inc. (NYSE: JCP) raised to ‘buy’ at Maxim Group;
Abbott Laboratories (NYSE: ABT) raised to ‘buy’ at Goldman Sachs; and
Pandora Media Inc. (NYSE: P) raised to ‘equal weight’ at Barclays.

Earnings reports released since markets closed last Friday have resulted in some price changes for reporting companies as of the last half hour of trading today:

Campbell Soup Co. (NYSE: CPB) is down 3.9% at $45.78 and
Qihoo 360 Technology Co. Ltd. (NASDAQ: QIHU) is up 6.6% at $43.77 after posting a new 52-week high of $45.11 earlier today.

Before markets open tomorrow morning we are scheduled to hear earnings from Kid Brands Inc. (NYSE: KID), TiVo Inc. (NASDAQ: TIVO), Best Buy Co. Inc. (NYSE: BBY), Dick’s Sporting Goods Inc. (NYSE: DKS), The Home Depot Inc. (NYSE: HD), Saks Inc. (NYSE: SKS), TJX Companies Inc. (NYSE: TJX), and Vodafone plc (NASDAQ: VOD).

Some standouts among heavily traded stocks today include:

National Bank of Greece SA (NYSE: NBG) is down 34% at $1.58. The Greek bank’s shares gave back last week’s gains after announcing a 1-for-10 reverse split and an issuance of 2.27 billion new shares following the split..

Real Goods Solar Inc. (NASDAQ: RSOL) is up 68% at $6.77, after posting a new 52-week high of $7.17 earlier today. The solar PV installation company has mysteriously appeared on investors’ radar screens and shares have more than tripled in the last 2 trading days.

JA Solar Holding Co. Ltd. (NASDAQ: JASO) is up 69% at $9.46 after posting a new 52-week high of $9.53 earlier today. The solar PV panel maker reported earnings this morning, and they were better than expected..

Stay tuned for Tuesday. St. Louis Fed President James Bullard and New York Fed President William Dudley are giving speeches. We have also noted the following event on the schedule (all times Eastern):

11:30 a.m. – 4-week bill auctions

Filed under: 24/7 Wall St. Wire, HI/LOW, Market Close Tagged: ABT, BBY, CPB, DKS, HD, JASO, JCP, KID, KSU, LEAP, NBG, P, QIHU, RSOL, SKS, TIVO, TJX, VOD

Closing Bell for Friday on Wall Street: Stock Markets Open Higher Today, March Upward

Paul Ausick — Fri, 17 May 2013 20:06:51 +0000

U.S. equity markets opened higher this morning, taking advantage of buying opportunities after yesterday’s slide in equities’ prices. In the U.S., the Thomson Reuters/University of Michigan consumer sentiment index and the Conference Board leading indicators both posted better-than-expected numbers and added more buying enthusiasm. In Europe, Spain recorded its first ever trade surplus, but there was no other economic news of note. In Asia, the Hong Kong exchange was closed for a holiday. In Japan, the Nikkei rose to a five-and-a-half-year high and the Shanghai exchange closed at a seven-week high after regulators eased some refinancing restrictions.

The U.S. dollar index is trading up 0.8% today, now at 84.2540. The GSCI commodity index is up 0.5% at 627.99. WTI crude oil closed up 0.9%, at $96.02 a barrel. Brent crude trades up 0.1% at $103.80 a barrel. Natural gas is up 3.1% today at about $4.06 per million BTUs. Gold settled down 1.6% today at $1,364.70, down nearly $72 for the week.

The unofficial closing bells put the DJIA up more than 121 points to 15,354.79 (0.80%), the NASDAQ rose nearly 34 points (0.97%) to 3,498.97, and the S&P 500 rose 0.95% or nearly 16 points to 1,666.12.

There were a several analyst upgrades and downgrades today, including:

Deere & Co. (NYSE: DE) cut to ‘sell’ and price target slashed to $85 at Goldman Sachs;
The Walt Disney Co. (NYSE: DIS) cut to ‘neutral’ at Atlantic Securities;
General Motors Co. (NYSE: GM) raised to ‘buy’ at Credit Agricole;
United Continental Holdings plc (NYSE: UAL) raised to ‘market perform’ at Avondale Partners; and
Pandora Media Inc. (NYSE: P) cut to ‘hold’ at Maxim Group on a valuation call.

Earnings reports since markets closed last night have resulted in some price changes for reporting companies as of the last half hour of trading today (more coverage is linked to the company’s name):

Autodesk Inc. (NASDAQ: ADSK) is down 7% at $37.00;
Dell Inc. (NYSE: DELL) is down 0.2% at $13.40;
J.C. Penney Co. Inc. (NYSE: JCP) is down 3.6% at $18.11;
Nordstrom Inc. (NYSE: JWN) is down 0.7% at $60.72; and
Stage Stores Inc. (NYSE: SSI) is down 7.6% at $24.11;

Before markets open Monday morning we are scheduled to hear earnings from Campbell Soup Co. (NYSE: CPB), JA Solar Holdings Co. Ltd. (NASDAQ: JASO), and Qihoo 360 Technology Co. Ltd. (NYSE: QIHU).

Some standouts among heavily traded stocks today include:

National Bank of Greece SA (NYSE: NBG) is up 19% at $2.38. The Greek bank’s shares rise following a boost to the country’s sovereign debt rating earlier this week.

Real Goods Solar Inc. (NASDAQ: RSOL) is up 98.4% at $3.48, after posting a new 52-week high of $3.63 earlier today. The solar PV installation company is finally getting some attention from investors, even though its first quarter earnings released last week were weak.

Tableau Software Inc. (NYSE: DATA) is up 62.5% at $50.38. The cloud-based, big data visualization maker held its IPO today.

Stay tuned for Monday. We have noted the following events on the schedule (all times Eastern):

8:30 a.m. – Chicago Fed national activity index
11:30 a.m. – 3- and 6-month bill auctions

Have a great weekend!

Filed under: 24/7 Wall St. Wire, HI/LOW, Market Close Tagged: ADSK, CPB, DATA, DE, DELL, DIS, GM, JASO, JCP, JWN, NBG, P, QIHU, RSOL, SSI, UAL

24/7 Wall St. Closing Bell — February 15, 2013: Markets Continue to Limp Along (CSCO, GOLD, RIG, KGC, JCP, CBS, GG, AEP, BKW, CPB, SJM, TOWR, CRMT, ESRX, NI, WIN, XOOM, TRLA, END)

Paul Ausick — Fri, 15 Feb 2013 21:05:56 +0000

U.S. equity markets opened slightly higher this morning on better economic news out of Europe and basically good data in the U.S. In Europe, the eurozone trade balance came in better than expected, but U.K. retail sales declined by 0.6% compared an expected rise of 0.4%. Spain’s CPI dropped 1.3% in January, just a bit less than an expected drop of 1.4%. In Asia, the Shanghai exchange remained closed and Japan’s Nikkei got bogged down as the G20 central bankers meet to talk about currency manipulation. In the U.S. the Empire State manufacturing index jumped to a reading of +10, its first positive reading since last July (more coverage here). The consumer sentiment index also came in better than expected.

U.S. markets are closed Monday in observance of the Presidents’ Day holiday.

The U.S. dollar index rose 0.03% today, now at 80.482. The GSCI commodity index is up fractionally at 679.20, with commodities prices mixed again today. WTI crude oil closed down 1.5% today, at $95.86, up about 0.2% for the week. Brent crude trades down 0.4% at $117.50 a barrel. Natural gas is down 0.3% today at about $3.16 per million BTUs. Gold settled down 1.6% today at $1,609.50 an ounce, finishing the week down 3.4%.

The unofficial closing bells put the DJIA up about 6 points to 13,979.61 (0.04%), the NASDAQ fell more than 6 points (-0.21%) to 3,192.03, and the S&P 500 fell -0.10% or less than 2 points to 1,519.79.

There were a several analyst upgrades and downgrades today, including Cisco Systems Inc. (NASDAQ: CSCO) reiterated as ‘buy’ and price target raised to $26 at Argus; Randgold Resources Ltd. (NASDAQ: GOLD) cut to ‘sell’ at Citigroup; Transocean Ltd. (NYSE: RIG) cut to ‘sell’ at Deutsche Bank; Kinross Gold Corp. (NYSE: KGC) raised to ‘outperform’ with a price target of $11.50 at Credit Suisse; and J.C. Penney Co. Inc. (NYSE: JCP) maintained as ‘underperform’ with a price target of $15 at Credit Suisse.

Earnings reports since markets closed last night resulted in several price moves today, including these: CBS Corp. (NYSE: CBS) is up 3.3% at $44.34 after posting a new 52-week high of $45.87 earlier today; Goldcorp Inc. (NYSE: GG) is down 2.5% at $33.80; American Electric Power Co. Inc. (NYSE: AEP) is up 0.4% at $44.96; Burger King Worldwide Inc. (NYSE: BKW) is up 4.1% at $17.26 (more coverage here); Campbell Soup Co. (NYSE: CPB) is up 1.5% at $39.31; J.M. Smucker Co. (NYSE: SJM) is up 0.2% at $92.37 after posting a new 52-week high of $94.99 earlier today; and Tower International Inc. (NYSE: TOWR) is up 13.6% at $11.17.

After markets close today and before they open Tuesday morning we are scheduled to hear from America’s Car-Mart Inc. (NASDAQ: CRMT), Express Scripts Holding Co. (NASDAQ: ESRX), NiSource Inc. (NYSE: NI), and Windstream Corp. (NASDAQ: WIN).

Some standouts from today include the following stocks:

Xoom Corp. (NASDAQ: XOOM) is up 43.2% at $22.91. The international money transfer firm held its IPO today. More coverage here.

Trulia Inc. (NYSE: TRLA) is up 17.6% at $35.88 after posting a new 52-week high of $38.22 earlier today. The Internet real estate site reported solid earnings earlier this week and is getting a big bounce again today, likely based on Zillow Inc.’s (NASDAQ: Z) strong results last night.

Endeavour International Corp. (NYSE: END) is down 13.2% at $3.08 after posting a new 52-week low of $3.06 earlier today. The oil & gas company said yesterday it would explore “strategic alternatives.” More coverage here.

Stay tuned for Tuesday. U.S. markets are closed on Monday. We have noted the following events on Tuesday’s schedule (all times Eastern):

10:00 a.m. – Housing market index
11:30 a.m. – 3- and 6-month Treasury bill auctions

Have a great weekend!

Filed under: 24/7 Wall St. Wire, HI/LOW, Market Close Tagged: AEP, BKW, CBS, CPB, CRMT, CSCO, END, ESRX, featured, GG, gold, JCP, KGC, NI, RIG, SJM, TOWR, TRLA, WIN, XOOM

24/7 Wall St. Closing Bell — February 14, 2013: Markets Punt Again Today (CL, NVDA, LMT, DELL, VZ, AMAT, CAR, CTL, CSCO, CLD, IPI, KGC, MET, NTAP, PXD, TRIP, Z, ANR, ABX, DTV, GM, PEP, CBS, GG, AEP, BKW, CPB, SJM, TOWR, HNZ, ANGI)

Paul Ausick — Thu, 14 Feb 2013 20:59:26 +0000

U.S. equity markets opened lower this morning, dragged down by weak economic data from Europe. Germany, France, Italy, and Greece all reported worse-than-expected GDP contraction for the fourth quarter of 2012, and the eurozone as whole experienced GDP contraction of 0.6% (more coverage here). In Asia, Japan reported a second consecutive quarter of GDP contraction, officially placing the country in recession (more coverage here). In the U.S., new jobless claims fell more than expected, but the data is suspect because two large states — Illinois and Connecticut — provided only estimates (more coverage here). Revisions will almost certainly affect next week’s report. The good news is that continuing claims fell by 130,000. Indexes drifted around the break-even line most of the day before finishing mixed.

The U.S. dollar index rose 0.47% today, now at 80.462. The GSCI commodity index is up fractionally at 679.20, with commodities prices mixed again today. WTI crude oil closed up 0.3% today, at $97.31. Brent crude trades up 0.1% at $117.94 a barrel. Natural gas is down 4.1% today at about $3.17 per million BTUs following a smaller-than-expected draw on inventories (more coverage here). Gold settled down 0.6% today at $1,635.50 an ounce, its lowest settlement since August 20th.

The unofficial closing bells put the DJIA down about 9 points to13,974.31 (-0.06%), the NASDAQ rose about 2 points (0.06%) to 3,198.67, and the S&P 500 rose 0.07% or about 1 point to 1,521.41.

There were a several analyst upgrades and downgrades today, including Colgate-Palmolive Co. (NYSE: CL) started as ‘sell’ at Canaccord Genuity; Nvidia Corp. (NASDAQ: NVDA) cut to ‘hold’ at Needham; Lockheed Martin Corp. (NYSE: LMT) cut to ‘neutral’ at Cowen; Dell Inc. (NASDAQ: DELL) cut to ‘market perform’ at Raymond James; and Verizon Communications Inc. (NYSE: VZ) raised to ‘outperform’ at Raymond James.

Earnings reports since markets closed last night resulted in several price moves today, including these: Applied Materials Inc. (NASDAQ: AMAT) is up 1.1% at $13.93 after posting a new 52-week high of $13.99 earlier today (more coverage here); Avis Budget Group Inc. (NASDAQ: CAR) is up 5.8% at $24.39 after posting a new 52-week high of $24.90 earlier today; Cisco Systems Inc. (NASDAQ: CSCO) is down 0.9% at $20.96 (more coverage here); Cloud Peak Energy Inc. (NYSE: CLD) is down 1.4% at $16.72; Intrepid Potash Inc. (NYSE: IPI) is down 6% at $22.10; Kinross Gold Corp. (NYSE: KGC) is up 6.2% at $8.38; Metlife Inc. (NYSE: MET) is down 1.8% at $36.84 (more coverage here); NetApp Inc. (NASDAQ: NTAP) is down 0.3% at $35.72; Pioneer Natural Resources Co. (NYSE: PXD) is up 2.8% at $130.26 after posting a new 52-week high of $133.68 earlier today; TripAdvisor Inc. (NASDAQ: TRIP) is down 7.3% at $43.50; Zillow Inc. (NASDAQ: Z) is up 9.3% at $42.59 after posting a new 52-week high of $47.85 earlier today; Alpha Natural Resources Inc. (NYSE: ANR) is up 13.8% at $9.66 (more coal coverage here); Barrick Gold Corp. (NYSE: ABX) is up 3% at $32.54 (more coverage here); DirecTV (NASDAQ: DTV) is down 3.2% at $50.00; General Motors Co. (NYSE: GM) is 3.4% at $27.71 (more coverage here); and PepsiCo Inc. (NYSE: PEP) is up 1.2% at $72.34 (more coverage here).

After markets close today and before they open tomorrow morning we are scheduled to hear from CBS Corp. (NYSE: CBS), Goldcorp Inc. (NYSE: GG), American Electric Power Co. Inc. (NYSE: AEP), Burger King Worldwide Inc. (NYSE: BKW), Campbell Soup Co. (NYSE: CPB), J.M. Smucker Co. (NYSE: SJM), and Tower International Inc. (NYSE: TOWR).

Some standouts from today include the following stocks:

H.J. Heinz Co.(NYSE: HNZ) is up 19.7% at $72.39 after posting a new 52-week high of $72.61 earlier today. The food products maker is being acquired by Berkshire Hathaway Inc. (NYSE: BRK-A) and a private equity firm for $28 billion. More coverage here.

CenturyLink Inc. (NYSE: CTL) is down 22.6% at $32.26 after posting a new 52-week low of $32.05 earlier today. The communications company cut its dividend after a poor quarter. More coverage here.

Angie’s List Inc. (NASDAQ: ANGI) is up 24.6% at $16.97. The Internet firm soared on results and guidance. More coverage here.

Stay tuned for Friday. Cleveland Fed President Sandra Pianalto is giving a speech. We have also noted the following events on the schedule (all times Eastern):

8:30 a.m. – Empire State manufacturing survey
9:00 a.m. – Treasury International Capital (TIC) data
9:15 a.m. – Industrial production
9:55 a.m. – University of Michigan/Thomson Reuters consumer sentiment index
10:00 a.m. – E-commerce retail sales

Filed under: 24/7 Wall St. Wire, HI/LOW, Market Close Tagged: ABX, AEP, AMAT, ANGI, ANR, BKW, CAR, CBS, CL, CLD, CPB, CSCO, CTL, DELL, DTV, featured, GG, GM, HNZ, IPI, KGC, LMT, MET, NTAP, NVDA, PEP, PXD, SJM, TOWR, TRIP, VZ, Z

Berkshire-Heinz Merger Drives More Value to All Food Giants

Jon C. Ogg — Thu, 14 Feb 2013 15:20:47 +0000

The Berkshire Hathaway Inc. (NYSE: BRK-A) $28 billion buyout of H.J. Heinz Co. (NYSE: HNZ) is already all over the news. What investors need to consider now is how this impacts other large food industry players. The end result is that $72.50 per share values Heinz at 20.5 times its expected fiscal April 2013 earnings estimate of $3.54 per share. Even when you consider the 3.4% dividend yield at the prior close, this is a premium valuation that is driving interest in the food sector. This was at more than 6.7 times the stated book value, according to Finviz.com.

We would caution about chasing these. Some of these companies are already at highs, and some are either controlled or would be very difficult for an outside buyer to acquire. The valuations look very high and may drive away value investors with trailing P/E ratios and forward P/E ratios being above the S&P 500 Index average. We did not value the Kraft Foods breakup, and we cut the list off after a point where a company could reasonably be acquired.

Dean Foods Co. (NYSE: DF) trades at 25 times earnings, but Finviz.com lists its forward P/E as about 13. Dean Foods is still in a turnaround, and its market cap is $3.1 billion. Finviz shows that it trades at more than 60 times book value. Note that the book value here may be distorted due to issues the company has faced and due to restructuring efforts. There is no dividend, and Dean Foods shares are up 0.4% at $16.77 on the day.

McCormick & Co. (NYSE: MKC) recently hit a snag, but its market cap is still $7.7 billion. It trades at 21 times trailing earnings, and Finviz lists its forward P/E as almost 18. The dividend yield here is 2.1%, and Finviz shows that it trades at five times book value. Shares are up 1% at $64.75.

Tyson Foods Inc. (NYSE: TSN) is worth about $8.5 billion and trades at about 14.5 times earnings. The forward P/E is only 10, according to Finviz. As a reminder, due to the founding family control, this is not as easily accessible as some investors might think. The dividend yield is a pathetic 0.9%, and Finviz shows that it trades at 1.4 times book value. Shares are up only 0.9% at $24.08, but that is a new 52-week high.

Hormel Foods Corp. (NYSE: HRL) is worth some $9.5 billion. It trades at closer to 20 times earnings, but it trades at about 18.3 times the forward October 2013 earnings estimate. Its dividend yield is only 1.9%. Finviz shows that it trades at 3.3 times book value. Shares are up 0.8% at $36.12.

J.M. Smucker Co. (NYSE: SJM) is worth $9.8 billion and trades at 21 times trailing earnings. Finviz shows that it trades at 15.9 times forward earnings. The dividend yield is 2.3%, and Finviz shows that it trades at 1.9 times book value. Shares are up 1.8% at $91.96.

Campbell Soup Co. (NYSE: CPB) is worth $12 billion in market capitalization and trades at 16 times trailing earnings. Finviz shows its forward P/E as 14.2, and it trades at more than 10 times book value. Campbell’s dividend yield is 3%, and its shares are up 3.5% at $39.52.

ConAgra Foods Inc. (NYSE: CAG) is worth some $13.9 billion in market capitalization. Finviz shows it trading at just over 20 times earnings, but only about 14.2 times forward earnings expectations. This is also just under three times book value. Its dividend yield is 3%, and shares are up 0.8% at $33.74.

Kellogg Co. (NYSE: K) is worth some $21.25 billion and trades at 23 times earnings. Finviz shows its forward multiple on earnings as being 14.4, and its price-to-book ratio is almost 9. Kellogg’s dividend yield is 3%, and its shares are up 1% at 59.95.

General Mills Inc. (NYSE: GIS) is already worth about $28 billion, so it is getting to the cut-off level of any possible “easy” buyout price. It trades at about 16 times earnings, and the forward earnings multiple is listed by Finviz as being 14.8. General Mills trades at about four times book value, and it has a dividend yield of 3.1%. Shares are up 2.2% at $43.95 so far.

H. J. Heinz shares are up about 19.9% to $72.52, a new all-time high.

Filed under: 24/7 Wall St. Wire, Food, Mergers & Acquisitions, Mergers and Buy Outs, Value Investing Tagged: BRK-A, CAG, CPB, DF, featured, GIS, HNZ, HRL, K, MKC, SJM, TSN

Top Analyst Upgrades and Downgrades (ADTN, AIG, AAPL, CPB, CTRN, DNDN, DPS, EA, GIS, JCP, MMM, NOK, PM, RIMM, THC, VIAB, WYNN)

Jon C. Ogg — Fri, 11 Jan 2013 13:40:11 +0000

These are some of the top analyst upgrades, downgrades and initiations seen from Wall St. research firms this Friday.

ADTRAN Inc. (NASDAQ: ADTN) maintained Underperform but named Bear of the Day at Zacks.

American international Group Inc. (NYSE: AIG) started as Outperform at FBR.

Apple Inc. (NASDAQ: AAPL) saw its numbers modestly lowered on iPhone units, sales prices, margin and earnings, but maintained at Buy and a $750 target at Canaccord Genuity. Apple also made one of the top spots on the Morgan Stanley Best Ideas List.

Campbell Soup Co. (NYSE: CPB) maintained Buy but removed from Conviction Buy List at Goldman Sachs.

Citi Trends Inc. (NASDAQ: CTRN) raised to Outperform and named Bull of the Day at Zacks.

Dendreon Corp. (NASDAQ: DNDN) raised to Outperform at Bernstein.

Dr Pepper Snapple Group Inc.(NYSE: DPS) cut to Market Perform at Bernstein.

Electronic Arts Inc. (NASDAQ: EA) cut to Neutral at Piper Jaffray.

General Mills Inc. (NYSE: GIS) cut to Sell at Goldman Sachs.

J.C. Penney Co. Inc. (NYSE: JCP) cut to Sell at UBS.

3M Co. (NYSE: MMM) cut to Underweight at J.P. Morgan.

Nokia Corp. (NYSE: NOK) raised to Buy at Societe Generale and maintained Hold but raised target to $4 at Canaccord Genuity..

Phillip Morris International Inc. (NYSE: PM) raised to Conviction Buy List at Goldman Sachs.

Research In Motion Ltd. (NASDAQ: RIMM) cut to Underperform at BMO.

Tenet Healthcare Corp. (NYSE: THC) raised to Buy at BofA/Merrill Lynch.

Viacom Inc. (NASDAQ: VIAB) raised to Buy at Janney.

Wynn Resorts Ltd. (NASDAQ: WYNN) cut to Outperform at CLSA.

Here are six stock picks with the most upside from the 2013 Cantor Fitzgerald Conviction Buy List.

Filed under: 24/7 Wall St. Wire, Analyst Calls Tagged: AAPL, ADTN, AIG, CPB, CTRN, DNDN, DPS, EA, GIS, JCP, MMM, NOK, PM, RIMM, THC, VIA-B, WYNN

Walmart, Kroger Among Bidders for Hostess

Paul Ausick — Thu, 13 Dec 2012 21:18:16 +0000

A couple of surprise names have popped up in the bidding war for bankrupt Hostess Brands Inc., makers of Twinkies, Ho-Hos, and Wonder Bread. Last Monday was the deadline for bidders to show interest in acquiring the iconic American brands.

According to a report at Bloomberg that cites a “person familiar with the matter,” Wal-Mart Stores Inc. (NYSE: WMT) and Kroger Co. (NYSE: KR) are among some two dozen bidders. The bankruptcy sale of Hostess could generate $1 billion for the company’s creditors.

Previous speculation had named Flower Foods Inc. (NYSE: FLO), Campbell Soup Co. (NYSE: CPB), and Mexico’s Grupo Bimbo as likely bidders. Each already operates bakery operations and could probably tool up to produce the Hostess goodies without having to deal with the bankrupt company’s union bakers.

Not all the bidders are seeking all the assets of Hostess according to Bloomberg’s source. Some want just the cake or bread business and some are interested only in the company’s plants.

Walmart’s history with unions casts some doubt on the likelihood of a bid from the world’s largest retailer. If Walmart is the eventual acquirer, the form Hostess union bakers will likely be very unhappy. Kroger already has a contract with the United Food and Commercial Workers Union, the group that represents Hostess workers.

Paul Ausick

Filed under: 24/7 Wall St. Wire, Bankruptcy, Food, Labor & Unions Tagged: CPB, FLO, KR, WMT

Hostess Bids Due Today

Paul Ausick — Mon, 10 Dec 2012 12:51:31 +0000

Today is the deadline for interested bidders to get their bids in for bankrupt Hostess Brands Inc. At last count, about 110 potential bidders had expressed interest. The maker of Twinkies, Ho Hos and Wonder Bread has been valued as high $1 billion and as low as $450 million.

One front-runner to acquire Hostess is Flower Foods Inc. (NYSE: FLO), a Georgia-based bakery company with a market cap of about $3.25 billion. Others include Mexico’s Grupo Bimbo, which bought Sara Lee’s bakery businesses last year, and Campbell Soup Co. (NYSE: CPB), which owns baker Pepperidge Farm.

Unless one of the prospective bidders offers to take Hostess lock, stock and barrel, it could take some time to sort out the best bids. No potential bidder is thought to be interested in the whole company. The brands are the thing.

While no specific names have surfaced, private-equity firms are also believed to be interested in Hostess’s brands, but the difficulty there is that it could take too long to turnaround a profitable sale and, unless the deal includes all the bakeries and workers, the brand’s lustre could well fade by the time the PE guys can cash out.

Many of the company’s union employees wanted Hostess to reorganize under bankruptcy law, believing that they would be able to keep their jobs under a new owner. That reasoning could well turn out to be faulty.

Paul Ausick

Filed under: 24/7 Wall St. Wire, Bankruptcy, Consumer Product, Food, Private Equity Tagged: CPB, FLO

24/7 Wall St. Closing Bell — November 20, 2012: Markets Open Lower, Manage Flat Close (COH, AMAT, ARMH, INTC, WFM, BRCD, JACK, KKD, QIHU, SCVL, BWS, CPB, HNZ, TECD, KID, CRM, ZLC, DE, HPQ, KKD, BBY)

Paul Ausick — Tue, 20 Nov 2012 21:04:58 +0000

U.S. equity markets opened lower this morning and were never able to make a sustained push into positive territory. In Europe, the downgrade of French sovereign debt cooled the equity markets a bit (more coverage here), but the major indexes finished higher for the day. Eurozone finance ministers continued to dither over the pending loan to Greece (more coverage here). In Asia, markets were mixed as the Bank of Japan kept interest rates and asset purchases unchanged and China’s year-to-date foreign direct investment was reported to have fallen by 3.5% compared with the first 10 months of 2011. In the U.S., today’s only data point showed a higher-than-expected number of housing starts (more coverage here). Fed Chairman Ben Bernanke’s afternoon speech today didn’t boost any buying action either (more coverage here).

The U.S. dollar index rose today, now up 0.12% at 80.975. The GSCI commodity index is up 2.1% at 650.58, with commodities prices mixed today. WTI crude oil closed down 2.8% today, at $86.75 a barrel. Brent crude trades down about 1.7% at $109.76 a barrel. Natural gas is up 3.1% today at about $3.83 per thousand cubic feet. Gold settled down 0.6% today at $1,723.60 an ounce.

The unofficial closing bells put the DJIA down more than 6 points to 12,789.74 (-0.05%), the NASDAQ rose less than 1 point (0.02%) to 2,916.68, and the S&P 500 rose 0.07% or less than 1 point to 1,387.82.

There were several analyst upgrades and downgrades today, including Coach Inc. (NYSE: COH) started as ‘outperform’ at Wells Fargo; Applied Materials Inc. (NASDAQ: AMAT) reiterated as ‘buy’ with a target price of $16 at Argus; ARM Holdings plc (NASDAQ: ARMH) cut to ‘outperform’ from ‘strong buy’ at Raymond James; Intel Corp. (NASDAQ: INTC) cut to ‘neutral’ at UBS; and Whole Foods Market Inc. (NASDAQ: WFM) raised to ‘buy’ at Goldman Sachs.

Earnings reports of interest since U.S. markets closed last Friday have resulted in some price moves today, including these as of the last half hour of trading: Brocade Communications Systems Inc. (NASDAQ: BRCD) is down 0.2% at $5.53 (more coverage here); Jack in the Box Inc. (NASDAQ: JACK) is down 1% at $26.00; Qihoo 360 Technology Co. Ltd. (NYSE: QIHU) is up 2.1% at $24.19; Shoe Carnival Inc. (NASDAQ: SCVL) is down 11.1% at $20.46; Brown Shoe Co. Inc. (NYSE: BWS) is up 6.4% at $16.75 after posting a new 52-week high of $16.96; Campbell Soup Co. (NYSE: CPB) is down 2.3% at $36.10; H.J. Heinz Co. (NYSE: HNZ) is down 2.2% at $57.46; and Tech Data Corp. (NASDAQ: TECD) is down 1.7% at $44.69.

After markets close today and before they open tomorrow morning we are scheduled to hear from Kid Brands Inc. (NYSE: KID), Salesforce.com Inc. (NYSE: CRM), Zale Corp. (NYSE: ZLC), and Deere & Co. (NYSE: DE).

Some standouts from today include the following stocks:

Hewlett Packard Co. (NYSE: HPQ) is down 11.9% at $11.72 after posting a new 52-week low of $11.35 earlier today. The high-tech giant took a charge of $8.8 billion against earnings this morning, and we covered the sad story here and here.

Krispy Kreme Doughnuts Inc. (NYSE: KKD) is up 23.1% at $9.28 after posting a new 52-week high of $9.49 earlier today. The doughnut maker reported strong earnings and revenues last night and guided above consensus.

Best Buy Co. Inc. (NYSE: BBY) is down 13% at $11.97 after posting a new 52-week low of $11.74 earlier today (more coverage here). The consumer electronics retailer reported poor quarterly numbers this morning. More coverage here.

Stay tuned for Wednesday. Richmond Fed President Jeffrey Lacker and Fed Chairman Ben Bernanke are giving speeches. We have also noted the following events on the schedule (all times Eastern):

7:00 a.m. – Mortgage Bankers Association purchase applications
8:30 a.m. – New claims for unemployment benefits
8:30 a.m. – Flash PMI
9:55 a.m. – Thomson Reuters/University of Michigan consumer sentiment index
10:00 a.m. – Leading economic indicators
10:30 a.m. – EIA weekly petroleum status report
11:30 a.m. – 10-year Treasury inflation-protected securities (TIPS) auction
12:00 p.m. – EIA weekly natural gas storage report

Paul Ausick

Filed under: 24/7 Wall St. Wire, HI/LOW, Market Close Tagged: AMAT, ARMH, BBY, BRCD, BWS, COH, CPB, CRM, DE, HNZ, HPQ, INTC, JACK, KID, KKD, QIHU, SCVL, TECD, WFM, ZLC

24/7 Wall St. Closing Bell — November 19, 2012: Markets Ride High All Day (LH, HAL, RMBS, MO, WSM, LOW, TSN, BRCD, JACK, KKD, QIHU, SCVL, BBY, BWS, CPB, HNZ, HPQ, TECD, BMTI, WMGI, DMND, AAPL)

Paul Ausick — Mon, 19 Nov 2012 21:04:29 +0000

U.S. equity markets opened higher this morning following comments after Friday’s meeting between President Obama and Congressional leaders to discuss ways of dodging the fiscal cliff. Some were also expecting negotiations to begin in the conflict between Israel and Hamas, but these have not yet materialized. There was little new economic data in Europe today, and little from Asia as well. Hong Kong’s unemployment rate rose from 3.3% to 3.4% and in China coal imports rose for the first time in four months. In the U.S., existing home sales rose, as did homebuilder confidence (more coverage here). Both mark a continuation of the slow recovery in the U.S. housing market.

The U.S. dollar index fell today, now down 0.46% at 80.881. The GSCI commodity index is up 0.5% at 637.01, with commodities prices mostly higher today on the weaker dollar. WTI crude oil closed up 2.7% today, at $89.28 a barrel. Brent crude trades up about 2.7% at $111.68 a barrel. Natural gas is down 2.1% today at about $3.71 per thousand cubic feet. Gold settled up 1.1% today at $1,733.30 an ounce.

The unofficial closing bells put the DJIA up more than 207 points to 12,795.58 (1.65%), the NASDAQ rose nearly 63 points (2.21%) to 2,916.07, and the S&P 500 rose 2% or nearly 27 points to 1,386.86.

There were several analyst upgrades and downgrades today, including Lab Corp. of America (NYSE: LH) cut to ‘sell’ at Goldman Sachs; Halliburton Co. (NYSE: HAL) raised to ‘outperform’ at Macquarie; Rambus Inc. (NASDAQ: RMBS) raised to ‘overweight’ at JPMorgan; Altria Group Inc. (NYSE: MO) raised to ‘buy’ at UBS; and Williams-Sonoma Inc. (NYSE: WSM) raised to ‘buy’ at BofA/ML.

Earnings reports of interest since U.S. markets closed last Friday have resulted in some price moves today, including these as of the last half hour of trading: Lowe’s Companies Inc. (NYSE: LOW) is up 6.1% at $33.92 after posting a new high of $34.50 earlier today (more coverage here) and Tyson Foods Inc. (NYSE: TSN) is up 10.9% at $18.72 (more coverage here).

After markets close today and before they open tomorrow morning we are scheduled to hear from Brocade Communications Systems Inc. (NASDAQ: BRCD), Jack in the Box Inc. (NASDAQ: JACK), Krispy Kreme Doughnuts Inc. (NYSE: KKD), Qihoo 360 Technology Co. Ltd. (NYSE: QIHU), Shoe Carnival Inc. (NASDAQ: SCVL), Best Buy Co. Inc. (NYSE: BBY), Brown Shoe Co. Inc. (NYSE: BWS), Campbell Soup Co. (NYSE: CPB), H.J. Heinz Co. (NYSE: HNZ), Hewlett-Packard Co. (NYSE: HPQ), and Tech Data Corp. (NASDAQ: TECD).

Some standouts from today include the following stocks:

BioMimetic Therapeutics Inc. (NASDAQ: BMTI) is up 74.5% at $7.24 after posting a new high of $7.41 earlier today. The regenerative medicine products maker has agreed to combine with Wright Medical Group Inc. (NASDAQ: WMGI) in a deal worth about $380 million to BioMimetic shareholders.

Diamond Foods Inc. (NASDAQ: DMND) is down 11.4% at $13.40 after posting a new 52-week low of $13.31 earlier today. The snack food maker continues to suffer from its earnings restatements.

Apple Inc. (NASDAQ: AAPL) is up 6.9% at $564.23. The consumer electronics and computer maker bounced back big today from a recent flurry of sell-offs. Apple’s weight carried the Nasdaq Composite up more than 2% today.

Stay tuned for Tuesday. Richmond Fed President Jeffrey Lacker and Fed Chairman Ben Bernanke are giving speeches. We have also noted the following events on the schedule (all times Eastern):

8:30 a.m. – Housing starts
11:30 a.m. – 4-week Treasury bill auctions

Paul Ausick

Filed under: 24/7 Wall St. Wire, HI/LOW, Market Close Tagged: AAPL, BBY, BMTI, BRCD, BWS, CPB, DMND, HAL, HNZ, HPQ, JACK, KKD, LH, LOW, MO, QIHU, RMBS, SCVL, TECD, TSN, WMGI, WSM