24/7 Wall St. » RNOW

24/7 Closing Bell (ORCL, RNOW, CAT, MCD, IVN, PAL, RGLD, MAT, SJM, SLE, CI, HS, ETN, LO, METR, NFLX, TXN, ADLR, MOBI, ASYS, SXCI, DRAM)

Paul Ausick — Mon, 24 Oct 2011 20:12:36 +0000

Stocks opened higher this morning, helped along by a host of merger announcements. Techs got boost when Oracle Corp. (NASDAQ: ORCL) said it would pay $1.5 billion for cloud-based customer service provider RightNow Technologies Inc. (NASDAQ: RNOW). Strong earnings from Caterpillar Inc. (NYSE: CAT) were among quarterly reports that gave markets a push higher as well. Investors are also buying on news from Europe that the EU’s takeover fund will be significantly expanded. Oil prices gained nearly 4% on an improved global economic outlook. The market gave back some gains late in the day on word that another downgrade of US debt may be coming if the Congressional supercommittee fails to deliver a budget agreement.The unofficial closing bells put the DJIA up nearly 106 points to 11,914.75 (0.89%), the NASDAQ rose nearly 62 points (2.35%) to 2,699.44, and the S&P 500 rose 1.29% or nearly 16 points to 1,254.21.There were several analyst upgrades and downgrades today, including a re-iteration of the ‘outperform’ rating for McDonald’s Corp. (NYSE: MCD) at Credit Suisse. The brokerage maintained the company on its Focus List and lifted the stock’s target price to $104. Ivanhoe Mines Ltd. (NYSE: IVN) was started at ‘outperform’ at Credit Suisse, as was North American Palladium Ltd. (NYSE: PAL). Royal Gold, Inc. (NASDAQ: RGLD) was raised to ‘outperform’ at National Bank.

We also want to call out some of the other mergers and acquisitions announced this morning. Mattel Inc. (NYSE: MAT) acquired HIT Entertainment for $680 million. J.M. Smucker Co. (NYSE: SJM) is paying $350 million for the food service coffee and tea business of Sara Lee Corp. (NYSE: SLE). Today’s biggest deal has insurance company CIGNA Corp. (NYSE: CI) paying $3.8 billion for HealthSpring Inc. (NYSE: HS) as the insurance industry keeps on consolidating.

Here are today’s big post-earnings news reactions with prices during the last half-hour of trading: Caterpillar’s shares are up nearly 5%, at $91.66; Eaton Corp. (NYSE: ETN) up about 4.5%, at $44.12; Lorillard, Inc. (NYSE: LO) down less than -0.5%, at $115.16 after missing EPS estimates this morning; Metro Bancorp, Inc. (NASDAQ: METR) down nearly -8% after posting an EPS loss of -$0.41; Netflix Inc. (NASDAQ: NFLX) up more than 1.5% in anticipation of the company’s earnings release after the bell today; and Texas Instruments Inc. (NYSE: TXN) up more than 3.6% on expected earnings after today’s markets close.

Several other standouts from today are as follows…

Adolor Corp. (NASDAQ: ADLR) is up about 132%, at $4.49, on news of its acquisition by Cubist Pharmaceuticals, Inc. (NASDAQ: CBST) for $190 million, or $4.25/share. Adolor’s 52-week trading range is $1.09-$4.53, and the high was set today, anticipating that the company will hit milestones in the acquisition offer that could add up to $35 million to the purchase price.

Sky-mobi Ltd. (NASDAQ: MOBI) is up 42%, at $5.55, on a strategic partnership with SINA Corp. (NASDAQ: SINA). Sky-mobi’s Maopao mobile social network will now be able to offer SINA’s Weibo.com microblog as a downloadable application.

Amtech Systems, Inc. (NASDAQ: ASYS) is up more than 23%, to $11.25. The company, which makes manufacturing equipment for solar makers, is getting boost from today’s rise in solar stocks.

SXC Health Solutions Corp. (NASDAQ: SXCI) is down more than -20%, at $44.98. HealthSpring, which is being acquired by CIGNA, is one of SXC’s biggest customers, accounting for about a third of the company’s sales.

Dataram Corp. (NASDAQ: DRAM) is off more than -10%, at $1.10. Spot prices for dynamic RAM continue to weaken, a trend that caused Micron Technology Inc. (NASDAQ: MU) results to tumble last quarter.

Paul Ausick

Filed under: General Tagged: ADLR, ASYS, CAT, CI, DRAM, ETN, HS, IVN, LO, MAT, MCD, METR, MOBI, NFLX, ORCL, PAL, RGLD, RNOW, SJM, SLE, SXCI, TXN

Endless Mergers… More to Come! (CBST, ADLR, HS, CI, CVH, MAT, RNOW, ORCL, SLE, SJM, ANDS, NYX)

Administrator — Mon, 24 Oct 2011 14:24:45 +0000

Monday is called “Merger Monday” for a reason and this morning is a classic example of its namesake. We have seen multiple deals and news outstanding on pending deals. We recently noted that far too many companies in technology have been rumored as takeover targets, and not a single one of the deals announced was in the most recent technology rumor mill.

Cubist Pharmaceuticals Inc. (NASDAQ: CBST) is pulling a rabbit out of its hat. Cubist was once believed to be a solid acquisition candidate when its share price was much lower, but now the company has come out and announced that it is acquiring Adolor Corporation (NASDAQ: ADLR) for about $190 million in a deal that could rise to $225 million if certain milestones are achieved. Adolor loves the price as the shares are up 129% at $4.40 today. That is above the $4.25 buyout price, but the possible upside for the milestones is why.

HealthSpring Inc. (NYSE: HS) is being acquired for $3.8 billion by CIGNA Corporation (NYSE: CI) in a $55 buyout offer in close to a 35% premium. Insurers continue to consolidate. Elsewhere in healthcare, Coventry Health Care Inc. (NYSE: CVH) was listed as one which could be acquired by Barron’s over the weekend and its shares are up almost 6% at $31.66 in conjunction with healthcare consolidation news and on hopes for more pin action.

Mattel Inc. (NYSE: MAT) is acquiring HIT Entertainment in a $680 million acquisition from Apax Partners and a private equity consortium. Mattel’s market cap is $9.6 billion. The deal locks up the Thomas & Friends toys.

Rightnow Technologies Inc. (NASDAQ: RNOW) is much more well known ”right now” since Oracle Corporation (NASDAQ: ORCL) has announced a buyout of the company. This $1.5 billion purchase comes to $43.00 per share and the stock hit a new all-time high of $42.92. RightNow is in cloud-based customer experience software products and services.

Sara Lee Corporation (NYSE: SLE) is a company that has been a rumored (and hoped for) buyout target for longer than one can easily recall in the food sector. The company is selling off the majority of its food service coffee and tea operations to J.M. Smucker Co. (NYSE: SJM) for about $350 million. Considering it is a $10.5 billion company by market capitalization, this is no real game-changer.

Elsewhere in M&A news, Anadys Pharmaceuticals Inc. (NASDAQ: ANDS) is at a year high of $3.68 and it now has a formal class action suit filed against the merger where Roche is set to pay out $3.70 per share. This was a $10 and higher stock in 2006.

NYSE Euronext, Inc. (NYSE: NYX) and its Deutsche Bourse merger is still hanging in the wind. The merger has a hearing in the European Union on October 27 to address some of the concerns brought up by regulators. At $26.70 today, this is way down from the highs above $41.00 over the last year.

JON C. OGG

Filed under: Healthcare, Mergers and Buy Outs, Software Tagged: ADLR, ANDS, CBST, CI, CVH, HS, MAT, NYX, ORCL, RNOW, SJM, SLE

The Twitter-24/7 Wall St. Market Report (10/24/2011) Caterpillar And Kimberly Earnings, Oracle M&A

247wallst — Mon, 24 Oct 2011 12:44:10 +0000

CNN Money: Some M&A activity this AM: Cigna to acquire HealthSpring in $3.8B deal; Oracle is buying RightNow Tech in $1.5B deal. $CI, $HS, $ORCL, $RNOW

NYT: Sara Lee to Sell Coffee Group to J.M. Smucker

Reuters: Reuters: Caterpillar quarterly earnings rise 44 percent

WSJ: Caterpillar Profit Jumps

WSJ: Kimberly-Clark Cuts Forecast

Yahoo Finance: U.S. firms hold off hiring, but not many layoffs: poll

NYT: Saab Ends Agreements With Chinese Investors

MarketWatch: Oracle to buy RightNow for $1.5 billion; premium works out to about 20%

Yahoo! Finance: Wal-Mart ups the ante in holiday price matching

Douglas A. McIntyre

Filed under: Research Tagged: HS, ORCL, RNOW, SLE

Are You Ready… The Cloud ETF Arrives (SKYY, NFLX, RNOW, OTEX, RAX, TIBX, INFA, APKT, TDC, ARUN, EQIX)

Administrator — Wed, 06 Jul 2011 14:14:33 +0000

The new saying in investing is “There’s an ETF for that!” Now you can count THE CLOUD in there. First Trust has just launched its Cloud-ETF, called the First Trust ISE Cloud Computing Index Fund (NASDAQ: SKYY). The expense ratio is probably not going to be considered outrageous but is higher than many ETF products with its 0.60% expense ratio.

The top components are as follows: NetFlix Inc. (NASDAQ: NFLX) 4.46%; RightNow Technologies Inc. (NASDAQ: RNOW) 4.15%; Open Text Corp. (NASDAQ: OTEX) 4.13%; Rackspace Hosting Inc. (NYSE: RAX) 4.11%; TIBCO Software Inc. (NASDAQ: TIBX) 3.91%; Informatica Corp. (NASDAQ: INFA) 3.89%; Acme Packet Inc. (NASDAQ: APKT) 3.87%; Teradata Corp. (NYSE: TDC) 3.80%; Aruba Networks Inc. (NASDAQ: ARUN) 3.78%; and Equinix Inc. (NASDAQ: EQIX) 3.70%. The classification stresses software at 32.53%, Internet software & services as 22.61%, communications equipment at 16.75%, and computer & peripherals at 11.15%.

The index tracks the ISE Cloud Computing™ Index and is said to be modified in equal-dollar weightings and is meant to track the cumulative performance of companies “actively involved in the cloud computing industry.” Minimum participation requires being engaged in a business activity supporting or utilizing the cloud computing space, as well as a share listing on an index-eligible global stock exchange, and finally a minimum market capitalization rate of $100 million.

The three segments in the index are the following:

pure-play cloud computing companies: direct service providers for the cloud or companies that deliver goods and services that utilize cloud computing technology;
non-pure-play cloud computing companies: companies that focus outside the cloud computing space, but those which provide goods and services in support of the cloud computing space;
Technology Conglomerate Cloud Computing Companies: These are large broad-based companies that indirectly utilize or support the use of cloud computing technology.

The overall weight by segment is 10% allocated to technology conglomerate companies. The rest is stated as, “The index weight that is allocated to non pure play companies is calculated by dividing the non pure play companies’ market capitalization by the sum of the pure play, non pure play and technology conglomerate market capitalizations. The remainder of the index weight is allocated to pure play companies.” Stocks are equally weighted within each of the three classifications and the index is reconstituted semi-annually and rebalanced quarterly.

After looking at the fact sheet, here are more details. The minimum constituent market cap is $863 million, the median market cap is $9.65 billion, and the highest market cap is $321 billion. The average P/E ratio is 33.37, the average price/book ratio is 5.10, the average price-to-cash flow ratio is 17.75, and the average Price/sales ratio is 4.20.

It is up to you as to decide whether or not you are a believer in an ETF with modified weightings such as this. When we hear “There is an ETF for that!” the question that always comes to mind is “Should there be?”

JON C. OGG

Filed under: Business Services, Consumer Electronics, Corporate Governance, Editor's Picks, ETF, Infrastructure, Internet, IPOs, Media, Mutual Funds, PC Companies, Software, Technology Companies Tagged: APKT, ARUN, EQIX, INFA, NFLX, OTEX, RAX, RNOW, SKYY, TDC, TIBX

Top Analyst Upgrades and Downgrades (ALL, CAH, GE, MR, MON, OC, RNOW, SPG)

Administrator — Wed, 29 Dec 2010 13:03:06 +0000

The week between Christmas and New Years is often a quiet week for research. That is the case here. These are some of this Wednesday’s key analyst upgrades, downgrades, and initiations seen in Wall Street research calls.

Allstate Corporation (NYSE: ALL) Reiterated Outperform and $40 target at Credit Suisse.
Cardinal Health Inc. (NYSE: CAH) Reiterated Hold at Argus.
General Electric Co. (NYSE: GE) Maintained Hold at Argus.
Mindray Medical International Limited (NYSE: MR) Started as Buy at Jefferies.
Cardinal Health Inc. (NYSE: MON) Reiterated Hold at Argus.
Owens Corning (NYSE: OC) Maintained Neutral but Target raised to $33 at BofA/ML.
RightNow Technologies Inc. (NASDAQ: RNOW) Raised to Overweight at Piper Jaffray.
Simon Property Group. Inc. (NYSE: SPG) Reiterated Outperform with $122 target at Credit Suisse.

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

Filed under: Analyst Calls Tagged: ALL, CAH, GE, MON, MR, OC, RNOW, SPG

The 52-Week Low Club (CDNS)(ARAY)(RNOW)(CRUS)(HSTX)

247wallst — Thu, 31 Jan 2008 16:00:12 +0000

Cadence Design Systems (CDNS) posts bad numbers and gets downgrades. Falls to $9.90 from 52-week high of $24.90.

Accuray (ARAY) The radiosurgery device maker reported disappointing fiscal second-quarter results. Trades off to $9.26 from 52-week high of $31.90.

Rightnow Technologies (RNOW) Poor financial outlook. Drops to $9.70 from 52-week high $23.38.

Cirrus Logic (CRUS) Market unhappy with profits. Falls to $4 from 52-week high of $9.44.

Harris Stratex Networks (HSTX) Weak results hit stock. Falls to $10.11 from 52-week high of $21.25.

Douglas A. McIntyre