24/7 Wall St. » KALU

24/7 Wall St. Closing Bell (INTC, KALU, NOR, MA, V, BBY, FDS, FCEL, PTRY, MILL, LIVE, SYNO, RVSN, ECYT, IVN, GMCR, FST)

Paul Ausick — Tue, 13 Dec 2011 21:09:38 +0000

Stocks opened firmly higher this morning and the DJIA rose by more than 130 points in the first hour of trading. The dollar gained strength against the euro putting more enthusiasm into the market. Investors were also hoping that the Fed would indicate that a new round of quantitative easing would be available instantly if necessary. That didn’t work out however, and equities tumbled following the Fed’s mid-afternoon statement. Crude oil also rose on a threat from Iran to block the Strait of Hormuz. WTI crude is up more than 2%, at $99.81/barrel after topping $100 earlier in the day, and Brent crude is up 1.9% at 109.30/barrel. Gold is down nearly -2%, at $1,636.90.

The unofficial closing bells put the DJIA down more than 66 points to 11,954.94 (-0.55%), the NASDAQ fell nearly 33 points (-1.26%) to 2,579.27, and the S&P 500 fell -0.87% or nearly 11 points to 1,225.73.

There were several analyst upgrades and downgrades today, including Intel Corp. (NASDAQ: INTC) maintained ‘outperform’ but estimates cut at Credit Suisse and maintained ‘hold’ with a $24 price target at Canaccord Genuity. Other ratings actions today include Kaiser Aluminum Corp. (NASDAQ: KALU) started as ‘buy’ at BofA/Merrill Lynch; Noranda Aluminum Holding Corp. (NYSE: NOR) started as ‘buy’ at BofA/ML; Mastercard Inc. (NYSE: MA) and Visa Inc. (NYSE: V) both started as ‘buy’ at Nomura.

Here are today’s post-earnings news reactions with prices during the last half-hour of trading: Best Buy Co. Inc. (NYSE: BBY) is down more than -15.5% at $23.68 (more details here); FactSet Research Systems, Inc. (NYSE: FDS) is down more than -8% at $87.01; FuelCell Energy Inc. (NASDAQ: FCEL) is down more than -15% at $0.93; The Pantry Inc. (NASDAQ: PTRY) is down more than -12% at $10.41, after posting a new 52-week low earlier today of $9.52; and Miller Energy Resources, Inc. (NYSE: MILL) is down nearly -11% at $2.90.

Other standouts from today include the following stocks:

LiveDeal Inc. (NASDAQ: LIVE) is up more than 236%, at $4.88. The customer acquisition company issued 1.6 million shares of new stock, raising its capital by by $2 million and enabling it to meet Nasdaq listing requirements.

Synovis Life Technologies, Inc. (NASDAQ: SYNO) is up more than 50%, at $27.78. The medical device maker agreed to be acquired by Baxter International Inc. (NYSE: BAX) for $28/share, a 52% premium to the stock’s Monday closing price. The deal is worth $325 million.

RADVision Ltd. (NASDAQ: RVSN) is up more than 14%, at $9.62. The communications equipment maker is said to be an acquisition target for Avaya at a price of around $200 million.

Endocyte Inc. (NASDAQ: ECYT) is down more than -65%, at $3.56, a new 52-week low. The pharmaceutical maker announced that trials of a new cancer drug have not shown that the drug helps patients live longer.

Ivanhoe Mines Ltd. (NYSE: IVN) is down nearly -22%, at $16.16. The junior miner lost a court decision to Rio Tinto plc (NYSE: RIO) which essentially kills Ivanhoe’s poison pill plan. Rio owns 49% of Ivanhoe and can maintain that stake regardless of new share issuances until April 2013.

Green Mountain Coffee Roasters, Inc. (NASDAQ: GMCR) is down more than -11%, at $50.03. The coffee merchant has lost some market share for its single-cup coffee products, and prices are also falling.

Forest Oil Corp. (NYSE: FST) is down nearly -13%, at $14.01. The oil & gas E&P company announced its outlook for 2012, and analysts were disappointed with the level of capital expenditures and cash flows.

Stay tuned for Wednesday. Dennis Lockhart, president of the Atlanta Federal Reserve Bank, is giving a speech in the morning. Here are some other noteworthy events on the schedule (all times Eastern):

7:00 a.m. – Mortgage Bankers Association purchase applications
10:30 a.m. – EIA weekly petroleum status report
1:00 p.m. – 30-year Treasury bond auction

Paul Ausick

Filed under: HI/LOW, Market Close Tagged: BBY, ECYT, FCEL, FDS, FST, GMCR, INTC, IVN, KALU, LIVE, MA, MILL, NOR, PTRY, RVSN, SYNO, V

Top Analyst Upgrades & Downgrades (MT, AVNR, CTRN, ETH,INTC, IGT, KALU, LVS, MA, MGM, MNTA, NOR, SFD, SO, SE, URBN, V, WYNN)

Administrator — Tue, 13 Dec 2011 13:35:40 +0000

These are some of the top analyst upgrades, downgrades, and initiations seen from Wall Street research calls this Tuesday morning.

Arcelor Mittal (NYSE: MT) Started as Equal Weight at Barclays.
Avanir Pharmaceuticals, Inc. (NASDAQ: AVNR) Reiterate as “Buy” with a $6 price target by Canaccord Genuity.
Citi Trends, Inc. (NASDAQ: CTRN) Maintained Underperform as Bear of the Day at Zacks.
Ethan Allen Interiors Inc. (NYSE: ETH) Started as Hold at Argus.
Intel Corporation (NASDAQ: INTC) Maintained Outperform but cut estimates at Credit Suisse; maintained Hold with $24 price target objective at Canaccord Genuity.
International Game Technology (NYSE: IGT) resumed with “Outperform” rating at Wells Fargo.
Kaiser Aluminum Corporation (NASDAQ: KALU) Started as Buy at BofA/Merrill Lynch.
Las Vegas Sands Corporation (NYSE: LVS) resumed with “Outperform” rating at Wells Fargo.
Mastercard Incorporated (NYSE: MA) Started as Buy at Nomura.
MGM Resorts International (NYSE: MGM) resumed with “Outperform” rating at Wells Fargo.
Momenta Pharmaceuticals Inc. (NASDAQ: MNTA) reiterate as Buy with a $23 price target objective by Canaccord Genuity.
Noranda Aluminum Holding Corp. (NYSE: NOR) Started as Buy at BofA/Merrill Lynch.
Smithfield Foods Inc. (NYSE: SFD) named as Value stock of the day at Zacks Investment Research.
Southern Co. (NYSE: SO) Cut to Hold from Buy for short-term coverage but maintained a Buy for long-term at Argus.
Spectra Energy Corporation (NYSE: SE) Maintained Outperform as Bull of the Day at Zacks Investment Research.
Urban Outfitters Inc. (NASDAQ: URBN) Maintained Neutral and lowered estimates at Credit Suisse; Maintained Underperform with $17 price target objective by Jefferies.
Visa, Inc. (NYSE: V) Started as Buy at Nomura.
Wynn Resorts Ltd. (NASDAQ: WYNN) resumed with “Market Perform” at Wells Fargo.

JON C. OGG

Filed under: Analyst Calls Tagged: AVNR, CTRN, ETH, IGT, INTC, KALU, LVS, MA, MGM, MNTA, MT, NOR, SE, SFD, SO, URBN, V, WYNN

Earnings Season Arrives, Top Earnings Previews For The Week Ahead (NVLS, AA, ADTN, HST, PEP, GOOG, JBHT, JPM, SWY, MAT)

Administrator — Fri, 07 Oct 2011 17:15:40 +0000

They’re Here! Next week will launch the corporate earnings season for the third quarter. The media is going to tell you that this is the most important earnings season in quite some time. The media always says that, but this time it is true because investors want to know whether to still model in growth or whether they need to dig in for a recessionary climate.

24/7 Wall St. has compiled detailed earnings previews for the following companies: Novellus Systems Inc. (NASDAQ: NVLS); Alcoa Inc. (NYSE: AA); ADTRAN Inc. (NASDAQ: ADTN); Host Hotels and Resorts Inc. (NYSE: HST); Pepsico Inc. (NYSE: PEP); Google Inc. (NASDAQ: GOOG); J. B. Hunt Transport Services Inc. (NASDAQ: JBHT); J.P. Morgan Chase & Co. (NYSE: JPM); Safeway Inc. (NYSE: SWY); and Mattel Inc. (NASDAQ: MAT).

Some of these companies will not really seem on the surface to be sector-movers or market-moving companies, but these have been selected because they are the first ones of their peer groups to be reporting earnings.

We have created a detailed earnings preview for each with consensus estimates from Thomson Reuters and added color in on each for investors to see what exactly is worth consideration this earnings season. We have also added in recent price history and named where to look for additonal action (or fallout).

Monday, October 10

Novellus Systems Inc. (NASDAQ: NVLS) is the first chip equipment player to report for this earnings season. it has been a few weeks since we have had earnings reports or guidance in the sector so we will be paying close attention since so many companies that are chip equipment customers have talked down their numbers in recent weeks. Our belief is that expectations are very low for the quarter ahead. Estimates are $0.68 EPS and $311.9 million in revenue; next quarter estimates are $0.50 EPS and $278.5 million in revenue. With shares hovering around $30.00 on Friday, the 52-week range is $25.26 to $41.82 and shares were above $36 in early July. After Novellus reports, we would be watching the following: Applied Materials Inc. (NASDAQ: AMAT), KLA-Tencor Corporation (NASDAQ: KLAC), and Lam Research Corporation (NASDAQ: LRCX).

Tuesday, October 11

Alcoa Inc. (NYSE: AA) has already talked down aluminum prices and we have already seen slowing demand out of China talked about by many sectors. Alcoa keeps maintaining that it can double its business by 2020 and we do not expect that to be changed by management even if it guides lower expectations ahead. Estimates are $0.23 EPS and $6.24 billion in revenue; next quarter estimates are $0.23 EPS and $6.11 billion in revenue. At $9.80 on Friday, the 52-week range is $8.45 to $19.47 and this one was above $16 at the start of July. There are many metals stocks to watch, some in aluminum and some in other metals: Century Aluminum Co. (NASDAQ: CENX), Reliance Steel & Aluminum Co. (NYSE: RS); Kaiser Aluminum Corporation (NASDAQ: KALU); Titanium Metals Corporation (NYSE: TIE); and Nucor Corporation (NYSE: NUE).

Filed under: Calendar, Corporate Governance, Earnings, Earnings Warning, Economy, Editor's Picks Tagged: AA, ADTN, AMAT, BAC, C, CENX, CHH, CIEN, GOOG, HAS, HST, JBHT, JPM, KALU, KLAC, KO, KR, LRCX, LSTR, MAR, MAT, NUE, NVLS, PEP, RS, SWY, TIE, TLAB, WFC

Commodity Watch: Stirring the Aluminum Pot (AA, CENX, AWC, KALU, NOR, ACH, KO, GS, RIO, JJU)

247wallst — Wed, 29 Jun 2011 17:40:24 +0000

Aluminum prices climbed by more than 10% from January through April this year, to rise above $1.22/pound before losing all it had gained and returning to about $1.10/pound. At today’s price of around $1.12/pound, about $2,476/metric ton, it remains questionable that the metal will hit an earlier price target of $3,200/metric ton.

With the end of the second calendar quarter on top of us, and a quarterly report on its way from first-out-of-the-gate Alcoa, Inc. (NYSE: AA), it seems like a good time to think about what’s going on with aluminum. For the most part, other aluminum producers, Century Aluminum Co. (NASDAQ: CENX), Alumina Ltd. (NYSE: AWC), Kaiser Aluminum Corp. (NASDAQ: KALU), Noranda Aluminum Holding Corp. (NYSE: NOR), and Aluminum Corp. of China Ltd. (NYSE: ACH), have also done well in the past 12 months. Noranda’s share price has more than doubled and even laggard Chinalco is up about 10%.

But at one time Noranda was up more than 150%, Century was up more than 120%, and Alumina Ltd. was up about 120%. All these high flyers gave a good share of that growth back when commodity prices collapsed in early May. But is something else going on?

Inventories have fallen from a record high of 4.71 million tons in mid-May to 4.53 million tons. A large part of that was due to a collapse in the carry trade, where it became unprofitable for traders to roll contracts forward.

The decline in global stockpiles has not so far lifted aluminum’s price. In fact, it’s just the opposite. Since the end of May the price has fallen about $0.045/pound.

But apparently not every trader is taking the weakness in aluminum lying down. Coca-Cola Co. (NYSE: KO) has filed a complaint with the London Metal Exchange against Goldman Sachs Group Inc. (NYSE: GS) and Goldman-owned warehousing company, Metro International Trade Services LLC. The folks at Coke are accusing Metro of bringing aluminum into its warehouses and then refusing to let the stuff leave, which causes delays in delivery, higher storage charges, and higher prices for aluminum.

Coke claims that Goldman/Metro paid cash incentives to producers like Alcoa and Rio Tinto plc (NYSE: RIO) to store aluminum in Metro’s warehouses during the 2008-2009 recession. Nobody wanted aluminum then, so producers were happy to get money. Since early 2010, Metro’s inventory has reportedly grown from about 850,000 tons of aluminum to 1.15 million tons.

According to Crain’s Detroit Business, “Between its 2010 peak and now, the amount of aluminum waiting to leave Metro International’s Detroit warehouses has risen 97 percent…. That metal’s value has risen 372 percent since its low in 2008.” Add in the cost of renting space at $0.42/ton/day in the Metro warehouses, and Goldman reaps a nice $230 million annually in revenue from the warehouses.

What this could mean is that the tightness thought to exist in the supply of aluminum is really not there. That could put some pressure on share prices of the aluminum producers who face either having to cut production or charge lower prices.

Alcoa, which reports quarterly earnings on July 11th, is expected to post EPS of $0.35 on revenue of $6.32 billion. Alcoa shares are trading up about 0.3% today, at $15.94, in a 52-week range of $9.81-$18.47. The median price target is $21/share, meaning there’s still a lot of room tor growth. But rising aluminum prices what seemed like a certainty just a few months ago might not be as buoyant as everyone thought.

Paul Ausick

Filed under: General Tagged: AA, ACH, AWC, CENX, GS, JJU, KALU, KO, NOR, RIO

Commodities Watch: Gold & Silver Continue Surge; Oil Tops $111; Corn Prices Also Rising Again; Positive Outlook for Aluminum (GLD, SLV, USO, CORN, MOO, AA, JJU, CENX, AWC, KALU, NOR, ACH)

Administrator — Fri, 08 Apr 2011 18:36:59 +0000

Time for our daily look at the world of commodity prices and key developments. This Friday brings gold and silver, corn prices on the rise, and even a positive read on aluminum. Commodities markets seem to be trying to weather a near-perfect storm of a weaker dollar and rising commodity prices feeding inflation. Yesterday’s rate hike by the European Central Bank has pushed the dollar down further, and the drop has been exacerbated by a likely US government shutdown at midnight tonight.

Gold has set a record high today above $1,470/ounce and silver has burst through the $40/ounce level. Demand for gold is rising due to its safe-haven status, and much of the rise in silver prices is due to its perceived value as a long-term investment, if not a safe-haven. The SPDR Gold Shares ETF (NYSE: GLD) is currently posting a 52-week high of $143.69, up nearly 1% from yesterday’s close, and the iShares Silver Trust (NYSE: SLV) has also pegged a 52-week high currently of $39.48.

The weaker dollar lifts the price of all commodities because most are priced in dollars. WTI crude oil is headed toward $112/barrel and Brent crude is on its way to $125/barrel. The United States Oil ETF (NYSE: USO) is up more than 1% today, at $44.52 after setting a new 52-week high of $44.58, and is up about 13% since the beginning of the year.

Corn futures had been sliding slightly since closing at $7.59/bushel yesterday. The grain has turned north at about mid-day, though, currently trading at $7.65/bushel. The USDA today re-iterated its forecast that corn stockpiles in September will total 675 million bushels, less than half the total stockpile in September 2010. The lower price for corn futures early today were almost certainly due to the unchanged USDA forecast. Then reality set in, in the form of lower global stocks of corn and the weaker dollar. The Teucrium Corn Fund (NYSE: CORN) is up marginally today, to $45.66, near the top of its 52-week range of $23.79-$46.25. The Market Vectors Agribusiness ETF (NYSE: MOO) is also up about 0.2%, to $55.97, in a 52-week range of $35.56-$57.93.

A new report from Deutsche Bank notes that aluminum prices could rise to $3,200/metric ton later this year, a rise of about 23% from current prices. The bank believes that rising production costs, particularly the cost of energy, will raise producers’ costs, and those costs will be passed along to customers. Alcoa, Inc. (NYSE: AA) reports first quarter results on Monday, and is expected to post EPS of $0.27 on revenue of $6.14 billion. Alcoa’s shares are up about 14% since January 1st, and analysts expect a solid report based on the company’s pricing power.

The iPath DJ-UBS Aluminum Total Return Sub-Index ETN (NYSE: JJU) set a new 52-week high today of $35.84, currently up about 0.6%. Other aluminum producers include Century Aluminum Co. (NASDAQ: CENX), Alumina Ltd. (NYSE: AWC), Kaiser Aluminum Corp. (NASDAQ: KALU), Noranda Aluminum Holding Corp. (NYSE: NOR), and Aluminum Corp. of China Ltd. (NYSE: ACH). All except Kaiser have posted share price gains of more than 5% since the beginning of the year, with Century leading the pack with a gain of about 30%. For the past 52 weeks, all remain at or near 52-week highs.

Paul Ausick

Filed under: Commodities, Food, Metals, Oil & Gas Tagged: AA, ACH, AWC, CENX, CORN, GLD, JJU, KALU, MOO, NOR, SLV, USO

Alcoa Not Weighing On Aluminum Sector (AA, ACH, RS, CENX, NOR, KALU)

Administrator — Tue, 11 Jan 2011 14:27:28 +0000

Alcoa Inc. (NYSE: AA) was the first component of the Dow Jones Industrial Average to report earnings. Last night’s report was actually above estimates on earnings even if revenues were a tad soft. The company is calling for growth as well in 2011 and is calling for the aluminum sector to double by 2020. The problem is that shares were already up significantly ahead of earnings and we are seeing a “Sell The News” reaction in Alcoa. What is interesting is that the news is actually not weighing on other aluminum players.

Aluminum Corporation Of China Limited (NYSE: ACH) is up 1.2% at $23.42. Reliance Steel & Aluminum Co. (NYSE: RS) is up 0.3% at $53.01 on thin volume against a 52-week range of $34.58 to $55.47. Century Aluminum Co. (NASDAQ: CENX) is actually up 0.3% at $16.60 in very thin trading versus a 52-week trading range of $8.25 to $18.77. Noranda Aluminum Holding Corp. (NYSE: NOR) nor Kaiser Aluminum Corporation (NASDAQ: KALU) have not yet traded.

Alcoa, Inc. (NYSE: AA) shares are indicated down 1.3% at $16.27 before the open and its 52-week range is $9.81 to $17.60.

JON C. OGG

Filed under: Earnings, Metals Tagged: AA, ACH, CENX, KALU, NOR, RS

Alcoa Clears A Very Low Bar (AA, ACH, CENX, KALU)

Administrator — Mon, 12 Jul 2010 20:28:19 +0000

Alcoa, Inc. (NYSE: AA) managed to beat earnings estimates from continuing operations, if you can imagine. The aluminum giant, and first of the DJIA 30 components to report earnings, reported earnings of $0.13 EPS vs. $0.12 EPS expected from Thomson Reuters; revenues were $5.2 billion vs. $5.05 billion expected. Free cash flow in the second quarter of 2010 totaled $87 million.

What is more important than anything here is that the recent lower prices in aluminum is being offset by stronger demand. The company is now looking at global aluminum consumption going up 12% rather than a prior target of 10% growth amid improved global aluminum demand.

After the first half of the year, Alcoa said it is tracking toward its expanded goals for 2010, including: $1.4 billion of the targeted $2.5 billion in procurement savings; $311 million of the targeted $500 million in annual overhead reduction savings; days of working capital at 42, a six-day improvement from the same period last year; and $514 million toward the targeted $1.25 billion in capital spending.

Some other basic data is as follows: $1.34 billion cash on hand; dent decreased $465 million from the year-ago period; debt to capital was 38.4%. The company did see lower average realized metal prices of $22 per metric ton, with an average of $2,309 per ton in the quarter.

Alcoa shares are halted after the close, but investors need to remember that the stock slid from $14 to $10 before recovering to almost $11 in the last week. It is also worth noting that the Thomson Reuters consensus estimate 90-days ago was $0.23 rather than the $0.12 consensus that we had today ahead of its earnings. The bar was set very low here.

It is too soon to start giving grades out on the report, but aluminum shares are rising after this report:

Aluminum Corporation Of China Limited (NYSE: ACH) is up 2% in after-hours;
Century Aluminum Co. (NASDAQ: CENX) is up over 3% after closing down almost 2% in regular trading.
Kaiser Aluminum Corporation (NASDAQ: KALU) is actually flat to lower in the after-hours.

UPDATE AFTER HALT: At 4:47 PM EST Alcoa shares are up 3.5% at $11.25 after closing down 0.64% at $10.87 on almost 700,000 shares since the halt was lifted.

JON C. OGG

Filed under: Earnings, Metals Tagged: AA, ACH, CENX, KALU

Top Analyst Upgrades and Downgrades (AIB, CCE, CSX, GR, HAL, KALU, LVS, NDAQ, NSC, PCLN, UNP, PANL, V)

Administrator — Tue, 01 Jun 2010 12:34:58 +0000

These are some of the top analyst calls seen with upgrades and downgrades in Wall Street research notes this Tuesday morning:

Allied Irish Banks plc (NYSE: AIB) Raised to Buy at Societe Generale.
Coca-Cola Enterprises (NYSE: CCE) Raised to Buy at Stifel Nicolaus.
CSX Corp. (NYSE: CSX) Raised to Outperform at Morgan Keegan.
Goodrich Corporation (NYSE: GR) Cut to Perform at Oppenheimer.
Halliburton Co. (NYSE: HAL) Maintained Buy but removed from Conviction Buy List at Goldman Sachs.
Kaiser Aluminum Corporation (NASDAQ: KALU) Raised to Buy at UBS.
Las Vegas Sands (NYSE: LVS) Raised to Buy at Janney.
Nasdaq OMX Group (NASDAQ: NDAQ) Raised to Outperform at KBW.
Norfolk Southern Corp. (NYSE: NSC) Raised to Outperform at Morgan Keegan.
Priceline.com (NASDAQ: PCLN) Raised to Buy at KeyBanc.
Union Pacific Corporation (NYSE: UNP) Raised to Outperform at Morgan Keegan.
Universal Display Corp. (NASDAQ: PANL) Raised to Buy at Canaccord.
Visa, Inc. (NYSE: V) Raised to Buy at Stifel Nicolaus.

You can join our free daily email distribution list to hear more about dividend trends, analyst upgrades and downgrades, top day trader and active trader alerts, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

Sponsor: 26 Cheap Stocks to Sell – Cheap stocks have been on a tear recently, but nine out of ten stocks are circling the drain!

Filed under: Analyst Calls Tagged: AIB, CCE, CSX, GR, HAL, KALU, LVS, NDAQ, NSC, PANL, PCLN, UNP, V

Secondary Offerings Keep Coming (KALU, SOMX, MEE, VSAT)

Administrator — Mon, 22 Mar 2010 20:55:32 +0000

The secondaries are coming! The secondaries are coming! Actually, that should be that the secondary offering wave is still coming on strong. Early last week we gave a deep review of 16 secondaries and that was only mid-week. We have already seen four secondary offerings by companies raising cash. Among these are Kaiser Aluminum Corporation (NASDAQ: KALU), Somaxon Pharmaceuticals, Inc. (NASDAQ: SOMX), Massey Energy Company (NYSE: MEE), and ViaSat Inc. (NASDAQ: VSAT).

We have outlined the proposed terms or indications, a comparison to the current price, underwriters, and the expectations for each.

Kaiser Aluminum Corporation (NASDAQ: KALU) just announced its intention to offer $130 million aggregate principal amount of convertible senior notes due 2015 in a private offering (144A) to qualified institutional buyers. The notes may be converted into an amount of cash equal under certain circumstances and Kaiser expects to repurchase up to $50 million of its outstanding common stock in privately negotiated, off-market transactions with purchasers of the notes. The market cap here is $742 million.

Somaxon Pharmaceuticals, Inc. (NASDAQ: SOMX) is no surprise at all that the company announced a capital raise. Its shares have effectively doubled since last wee’s FDA approval of Silenor. After the close the company announced it will offer up to 4,000,000 shares of its common stock a public secondary offering. The sole book-runner is Jefferies & Company, and it listed Oppenheimer as the sole co-manager in the deal; simultaneously it will grant the underwriters an overallotment option to purchase up to an additional 600,000 shares. The 4 million shares would come to around $33 million based upon today’s prices and its market cap at the close was $196 million.

Massey Energy Company (NYSE: MEE) also announced after the close that it will sell 8.5 million shares of common stock in a public secondary offering to fund a portion of the cash consideration related to its recently announced $960 million combined cash and stock acquisition of Cumberland Resources Corporation and affiliated companies. It has a large underwriting group. UBS Securities LLC is acting as Sole-Book-Running Manager for the offering. Stifel, Nicolaus & Company, Incorporated and PNC Capital Markets LLC are acting as Joint-Lead Managers for the offering. FBR Capital Markets & Co. and Raymond James & Associates, Inc. are acting as Co-Managers of the offering. Its overallotment option is 1.275 million shares of common stock. The gross proceeds here would be about $430 million, and Massey’s market cap is $4.34 billion.

ViaSat Inc. (NASDAQ: VSAT) has commenced a public secondary offering of 5,500,000 shares of common stock, of which some 3,000,000 shares are being sold by selling stockholders. Morgan Stanley, BofA Merrill Lynch and Credit Suisse are the joint book-running managers, and co-managers are Barclays Capital and Needham & Co.; the total overallotment between the company and selling shareholders is up to an extra 825,000 shares. Based upon Monday’s closing bell, the proceeds would be a gross amount of close to $190 million; its market cap is $1.26 billion before the effects of any offering.

JON C. OGG

Filed under: Secondary Offering Tagged: KALU, MEE, SOMX, VSAT

Major Buybacks This Week (CCOI, FOSL, HIG, KALU, OSG, URI, UTX)

247wallst — Fri, 13 Jun 2008 12:02:33 +0000

As we have pointed out over and over, it appears that buyback announcements are on the decline in a serious way as far as "new buyback plans" being announced. Ultimately we believe that the buyback paces coming to a crawl is for several factors, with the main issues being the need of cash and the embedded insurance policy this gives companies who want to shore up their capital during a weak economy. We did not count the smaller buyback announcements, but these are the larger ones we saw this week (alphabetically rather than chronologically):

Cogent Communication (NASDAQ: CCOI) completed its prior plan and added another $50 million to its buyback machine. The market cap is about $682 million.

Fossil Inc. (NASDAQ: FOSL) announced that it would repurchase some 2 million shares, or roughly 3% of its shares outstanding.

Hartford Financial Services (NYSE: HIG) added $1 Billion to its prior plan, and its market cap is nearly $23 Billion.

Kaiser Aluminum Corp. (NASDAQ: KALU) is one of the old ones that would be easy to overlook or forget about. But the company raised its dividend and announced a $75 million share repurchase program. This is only about 1.1 to 1.2 million shares, but when you compare it to the $1.3 Billion market cap and the 390,000 share average daily volume it large on a percentage basis.

Overseas Shipholding (NYSE: OSG) replaced its prior buyback plan with a $250 million stock buyback announcement, and it raised its dividend too. This represents more than 3 million shares at current prices and compares to about a $2.4 Billion market cap.

The big kahuna buyback came from United Rentals, Inc. (NYSE: URI) announced it was doing a swap and buyback of some 27.16 million shares. This represents close to 31% of its entire outstanding share count.

United Technologies (NYSE: UTX) was perhaps the largest buyback from the largest company this week. The company announced it would buy back up to 60 million shares as a replacement to its prior plan. Based on a near-$70 price, this implies a sum of up to $4.2 Billion if prices remained static. This has roughly 973 million shares outstanding.

Jon C. Ogg
June 13, 2008