24/7 Wall St. » HWD

24/7 Wall St. Closing Bell (GOOG, CMA, AIG, DE, PNRA, ANGO, HWD, PSMT, STZ, LEDS, WDFC, PLCM, ALTH, WOLF, NDAQ, RT)

Paul Ausick — Thu, 05 Apr 2012 20:09:11 +0000

Markets opened lower this morning and there was no news sufficient to unleash significant buying. The report on new claims for unemployment benefits came in about as expected (our coverage here), and investors are waiting for tomorrow’s official unemployment report, which is expected to be flat at 8.3%. The US dollar index rose today, now up 0.38% at 80.080. Commodities were mostly higher, with lumber and wool posting the largest gains. WTI crude oil closed up 1.8% at $103.31/barrel, and Brent crude trades up 0.90% at $123.44/barrel. Gold settled up 1% today, at $1,630.10/ounce.

The unofficial closing bells put the DJIA down more than 14 points to 13,060.14 (-0.11%), the NASDAQ rose more than 12 points (0.40%) to 3,080.50, and the S&P 500 fell -0.06% or less than 1 point to 1,398.08.

There were several analyst upgrades and downgrades today, including Google Inc. (NASDAQ: GOOG) reiterated as ‘buy’ with a target price of $730 at Argus; Comerica Inc. (NYSE: CMA) cut to ‘sell’ at Citigroup; American International Group Inc. (NYSE: AIG) reiterated as ‘buy’ with a price target of $40 at BofA/ML; Deere & Co. (NYSE: DE) reiterated as ‘buy’ with a price target of $104 at BofA/ML; and Panera Bread Co. (NASDAQ: PNRA) started as ‘outperform’ with a $190 target price at Credit Suisse.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: AngioDynamics Inc. (NASDAQ: ANGO) is down -3.6% at $11.82 after posting a new 52-week low of $11.73 earlier today; Harry Winston Diamond Corp. (NYSE: HWD) is down -3.9% at $13.89; PriceSmart Inc. (NASDAQ: PSMT) is down -4.7% at $74.41; Constellation Brands Inc. (NYSE: STZ) is down -11.8% at $21.78; Pier One Imports Inc. (NYSE: PIR) is up 3.1% at $18.83 (more coverage here); Carmax Inc. (NYSE: KMX) is down -4.5% at $33.34; and SemiLEDS Corp. (NASDAQ: LEDS) is down -9.9% at $3.56 (more coverage here). After markets close today we get earnings from WD-40 Co. (NASDAQ: WDFC).

Next week marks the start of a brand new earnings season. See our preview here.

Other standouts from today include the following stocks:

Polycom Inc. (NASDAQ: PLCM) is down more than -20% at $14.51 after posting a new 52-week low of $14.41 earlier today. The videoconferencing/enterprise phone maker cut its first quarter outlook today. More coverage here.

Allos Therapeutics Inc.(NASDAQ: ALTH) is up nearly 27% at $1.82. The drug maker is being acquired. More coverage here.

Great Wolf Resorts Inc. (NASDAQ: WOLF) is up 15.8%% at $6.60 after posting a new 52-week high of $6.65 earlier today. The company could be the prize in a bidding war between two private equity firms. More coverage here.

Nasdaq OMX Group Inc. (NASDAQ: NDAQ) is up 1.2% at $25.53. The company gets the stock listing for Facebook. More coverage here.

Ruby Tuesday Inc. (NYSE: RT) is down -18.2% at $7.27. The restaurant operator missed earnings expectations this morning.

Stay tuned for Friday. US markets are closed for Good Friday, but we have noted the following events on the schedule (all times Eastern):

8:30 a.m. – Non-farm payroll and unemployment rate
3:00 p.m. – Consumer credit

Paul Ausick

Filed under: HI/LOW, Market Close Tagged: AIG, ALTH, ANGO, CMA, DE, GOOG, HWD, LEDS, NDAQ, PLCM, PNRA, PSMT, RT, STZ, WDFC, WOLF

Shake-up Coming in the Diamond Business? (BHP, HWD, KKR, APO, AAUKY)

Paul Ausick — Wed, 14 Mar 2012 18:41:06 +0000

The Ekati diamond mind in northern Canada could be about to change hands. BHP Billiton plc (NYSE: BHP), which owns 80% of the mine, is reportedly in discussions with several potential buyers, including Harry Winston Diamond Corp. (NYSE: HWD) and separate groups led by Kohlberg Kravis Roberts & Co. (NYSE: KKR) and Apollo Global Management LLC (NYSE: APO).

The Ekati mine’s production slowed considerably in the last half of 2011, to just 938,000 carats. The mine produced about 3 million carats in all of 2010, and made our August 2011 list of the world’s top diamond mines.

Bloomberg News reports that the mine could fetch $500-$750 million for BHP, while an earlier estimate valued Ekati at $300-$500 million.

Another major transaction in the diamond business that is set to happen in the second half of this year is the purchase by Anglo American plc (OTC: AAUKY) of an additional 40% of DeBeers, the world’s largest producer of rough diamonds. Anglo American already owns 45% of DeBeers and the government of Botswana owns the other 15%.

Anglo American’s objective in spending $5.1 billion to acquire the rest of DeBeers is likely to make the company less attractive to potential acquirers. The value of the DeBeers assets will be around $10 billion and there are more miners trying to get out of the diamond mining business than are trying to get into it. Anglo American’s diamond business contributed just 9.4% of the company’s 2011 sales and a mere 6% of operating profit. Anglo American also owns some under-performing platinum mining assets.

Because neither diamonds nor platinum is traded on commodities markets, Anglo American may have to shed its diamond and platinum assets if the company hopes to drum up interest from the likes of the soon-to-be-combined Glencore/Xstrata behemoth. Xstrata killed a proposed $46 billion merger with Anglo American in October 2009.

Glencore, a commodities trading company with mines and smelters to go along with the trading business, is unlikely to want Anglo’s diamond and platinum assets. Xstrata, primarily a mining company, may think that it could turn the assets around.

One thing for sure: diamonds at your favorite jewelry store are not likely to get cheaper.

Paul Ausick

Filed under: Commodities, Metals, Rumors Tagged: AAUKY, APO, BHP, HWD, KKR

Dividend Watch: High Silver & Gold Prices No Issue At Tiffany (TIF, HWD, SIG, ZLC)

Administrator — Thu, 19 May 2011 13:58:47 +0000

Tiffany & Co. (NYSE: TIF) has been an amazing stock. Despite the rise in precious metals, the company has so far not been impacted by rising prices when it comes to sell-through rates. It was not even damaged too much from the Japan situation if you just look at its stock performance. Tiffany has shown one more sign of strength now that it has just raised its dividend payout. The prior $0.25 dividend is now jumping to $0.29 per quarter.

When we look at the luxury jewelry market of US-traded shares, Tiffany & Co. stands above companies like Harry Winston Diamond Corporation (NYSE: HWD), Signet Jewelers Limited (NYSE: SIG), and Zale Corporation (NYSE: ZLC). Zale’s has been losing money and is not in a position to pay a dividend, but Signet last had a dividend in 2008 and Harry Winston last paid a dividend in early 2009.

When you annualize this to $1.16 per year and use roughly a $70.00 stock price it comes to a dividend yield of 1.65%. This might not sound like a super-high dividend, but some of that is because Tiffany & Co.’s stock has a 52-week range of $35.81 to $70.26. Its market cap is now $8.9 billion and Thomson Reuters has a consensus price target of only $68.75.

With shares currently above the consensus price target objective, Tiffany’s only real choice was to hike its dividend. Hiking a dividend is much better of a signal to investors than share buybacks. Share buybacks are usually meant to infer that the stock is cheap at the current time, but when companies raise a dividend it is meant to imply that business is going to remain ample to support that payout for years. A company can stop buying stock, but investors generally treat a lowering of dividends with a poor reception.

As far as how $1.16 per year comes out on the math, Thomson Reuters has estimates of $3.32 EPS for its Fiscal January-2012 and $3.79 EPS for its Fiscal January-2013. If Tiffany can come anywhere close to its earnings estimates ahead then it can keep raising its dividends.

JON C. OGG

Filed under: Dividend, Luxury, Retail Tagged: HWD, SIG, TIF, ZLC

Early Bird Pre-Market Analyst Upgrades (ALB, AUXL, BIIB, CBEY, HAIN, HWD, LVS, SYMC, TEVA, TWTC, WBSN, WFMI)

247wallst — Thu, 11 Sep 2008 06:23:19 +0000

These are some of the early bird analyst upgrades and positive calls we are seeing this Thursday morning with more than two hours to the open:

Auxilium Pharma (AUXL) Started as Outperform at Oppenheimer.
Biogen-Idec (BIIB) Started as Buy at Stanford Group.
CBeyond (CBEY) Started as Buy at SunTrust Robinson Humphrey.
Hain Celestial (HAIN) Started as Buy at Jefferies.
Harry Winston Diamond (HWD) Raised to Overweight at Thomas Weisel.
Las Vegas Sands (LVS) Raised to Hold at KeyBanc.
Symantec (SYMC) Started as Buy at B of A.
Teva Pharma (TEVA) Started as Outperform at Oppenheimer.
TW Telecom (TWTC) Started as Buy at SunTrust Robinson Humphrey.
Websense (WBSN) Started as Buy at B of A.
Whole Foods (WFMI) Started as Buy at Jefferies.

Jon C. Ogg
September 11, 2008

Tiffany Rescues Luxury (TIF, NILE, ZLC, HWD)

247wallst — Mon, 24 Mar 2008 08:58:02 +0000

This morning, Tiffany & Co. (NYSE: TIF) reported earnings. While results were down more than 15% from last year, its adjusted earnings of $1.27 EPS ($0.89 after loan and other charges) beat analysts estimates with First Call showing consensus was $1.21 on EPS. Revenues were in-line with expectations at $1.05 Billion.

The net earnings included a $0.22 charge that was made to Tahera Diamond Corp., which has sough creditor protection earlier this year. It also included $0.09 charges for watch discontinuations. One change it is making is its LIFO accounting (last in first out) incost recognition and will use an average cost accounting method.

Its total retail sales were up 4% year over year, and same store sales were down at -1%. Tiffany is maintaining a cautious US-stance for 2008 but noted robust growth internationally. Its 2008 forecast is $2.75 to $2.85, which was above $2.49 or $2.50 consensus estimates. It also put sales up 10% to approximately $3.23 Billion, and estimates were $3.18 Billion.

Tiffany earnings on a net-net basis were great for the current environment. The luxury jeweler wouldn’t have gotten such a great market reward like this morning if this was a year ago. But right now coming close to estimates is good enough. And beating estimates is even better. Shares are up about 14% to $44.00 shortly after the open.

This is also helping some other jewelry players who have seen hard times. Shares of Zale Corp. (NYSE: ZLC) are up 2.5% to $21.81, and its 52-week trading range is $12.48 to $29.22. Blue Nile Inc. (NASDAQ: NILE) is the real winner here with a 10% pop to $51.70, and its 52-week trading range is $38.35 to $106.16. Harry Winston Diamond Corp. (NYSE: HWD) is up less than 1% at $23.65 this morning, and its 52-week trading range is $21.78 to $45.18.

Jon C. Ogg
March 24, 2008