24/7 Wall St. » SPH

24/7 Wall St. Closing Bell (GD, ABB, HOG, COP, S, ALU, MO, PEP, TLAB, XOM, AET, BMY, BG, JBLU, LIZ, MJN, REGN, SWY, SWC, TASR, UPS, YNDX, NRGY, SPH, LEAP, AKAM)

Paul Ausick — Thu, 26 Apr 2012 20:06:31 +0000

Markets opened a few ticks lower this morning after a poor report on new claims for unemployment benefits in the US (our coverage here). The report that pending home sales jumped 4.1% lit a fire under investors and pushed equities higher (our coverage here). The EIA report on natural gas supplies held gas prices higher although they’ve dropped back by late afternoon (our coverage here). Yields on 7-year US Treasury notes were at a record low following Fed Chairman Ben Bernanke’s clarification of what “exceptionally low” interest rates mean (our coverage here). The US dollar index fell today, now down -0.17% at 78.932. The GSCI commodity index is up 0.04% at 677.57, with commodities mixed on the slightly weaker dollar. WTI crude oil closed up 0.4% at $104.55/barrel, and Brent crude trades up 0.65% at $119.89/barrel. Gold settled up 1.1% today, at $1,660.50/ounce.

The unofficial closing bells put the DJIA up nearly 114 points to 13,204.70 (0.87%), the NASDAQ rose nearly 21 points (0.69%) to 3,050.61, and the S&P 500 rose 0.67% or more than 9 points to 1,399.99.

There were several analyst upgrades and downgrades today, including General Dynamics Corp. (NYSE: GD) cut to ‘equal-weight’ at Morgan Stanley; ABB Ltd. (NYSE: ABB) cut to ‘neutral’ at JPMorgan; Harley-Davidson Inc. (NYSE: HOG) raised to ‘overweight’ at Barclays; ConocoPhillips (NYSE: COP) raised to ‘neutral’ at Macquarie; and Sprint Nextel Corp. (NYSE: S) maintained as ‘hold’ at Argus.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: Alcatel-Lucent S.A. (NYSE: ALU) is down -16.9% at $19.71 (our coverage here); Altria Group Inc. (NYSE: MO) is up 0.9% at $31.96 (our story here); Pepsico (NYSE: PEP) is down -0.3% at $66.44 (our story here); Tellabs Inc. (NASDAQ: TLAB) is down -5.1% at $3.83 (our coverage here); Exxon Mobil Corp. (NYSE: XOM) is down -0.8% at $86.13 (our coverage here); Aetna Inc. (NYSE: AET) is down -8.4% at $45.22; Bristol-Myers Squibb Co. (NYSE: BMY) is down -1.7% at $33.72; Bunge Ltd. (NYSE: BG) is down -2.6% at $65.69; JetBlue Airways Corp. (NASDAQ: JBLU) is down -0.1% at $4.64; Liz Claiborne Inc. (NYSE: LIZ) is up 9.4% at $13.87; Mead Johnson Nutrition Co. (NYSE: MJN) is up XX% at $XX; Regeneron Pharmaceuticals Inc. (NASDAQ: REGN) is up 4% at $86.38 after posting a new 52-week high of $87.26n earlier today; Safeway Inc. (NYSE: SWY) is down -2.8% at $21.00; Stillwater Mining Co. (NYSE: SWC) is down -4.6% at $10.69; TASER International Inc. (NASDAQ: TASR) is up 5.7% at $4.39; United Parcel Service Inc. (NYSE: UPS) is down -1.8% at $78.25; and Yandex N.V. (NASDAQ: YNDX) is down -5% at $23.31.

Other standouts from today include the following stocks:

Inergy L.P. (NYSE: NRGY) is up 17% at $19.71. The company is being acquired by Suburban Propane Partners LP (NYSE: SPH). More coverage here.

Leap Wireless International Inc. (NASDAQ: LEAP) is down -20.2% at $6.16. The wireless carrier fell sharply on disappointing quarterly results. More coverage here.

Akamai Technologies Inc. (NASDAQ: AKAM) is down -14.8% at $33.03. The technology provider beat estimates but issued weak guidance.

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

8:30 a.m. – GDP report
8:30 a.m. – Employment cost index
9:55 a.m. – Reuters/University of Michigan consumer sentiment index

Paul Ausick

Filed under: HI/LOW, Market Close Tagged: ABB, AET, AKAM, ALU, BG, BMY, COP, GD, HOG, JBLU, LEAP, LIZ, MJN, MO, NRGY, PEP, REGN, S, SPH, SWC, SWY, TASR, TLAB, UPS, XOM, YNDX

Big Deal in the Propane Business (SPH, NRGY, APU, FGP)

Paul Ausick — Thu, 26 Apr 2012 17:37:56 +0000

There could be a new big dog in the propane distribution business soon, following this morning’s announcement by Suburban Propane Partners LP (NYSE: SPH) that it has reached an agreement to acquire the propane businesses of Inergy L.P. (NYSE: NRGY) in a stock and cash deal worth approximately $1.8 billion. The current market cap leader in the business is AmeriGas Partners L.P. (NYSE: APU) at $3.4 billion, followed by Inergy at $2.5 billion, Suburban at about $1.55 billion, and Ferrellgas Partners LP (NYSE: FGP) at $1.22 billion. Suburban and Inergy will switch places and Suburban could even threaten AmeriGas for the top spot.

Suburban will pay for the deal with $1 billion in new senior notes, $200 million in cash, and $600 million in new common units of Suburban to be distributed primarily to Inergy unitholders. Inergy will retain its midstream operations which include storage and transportation of natural gas and natural gas liquids (NGL) for third parties, NGL fractionation and distribution, processing of natural gas, and the production and sale of salt.

In connection with the acquisition, Suburban will begin an exchange offer for $1.2 billion in Inergy’s outstanding debt in exchange for $100 billion in new Suburban debt and $200 million in cash. The offer is expected to commence about May 3rd.

Suburban will also hold an underwritten offer $250 million in new common units to pay the cash portion of the acquisition price and to pay the costs and fees related to the acquisition. The deal is expected to close in the second half of 2012.

Essentially Suburban is doing the entire deal without spending a real dime. To take some of the sting out of that for current unitholders, Suburban raised its annual distribution from $3.41/common unit to $3.50/common unit, but it won’t be payable until the payment due for the company’s first fiscal quarter of 2013, which ends on December 29, 2012.

Inergy’s common units are up 16.7% at $19.66 in a 52-week range of $15.06-$41.22. Suburban’s common units are also up, but by a more modest 0.3% at $43.73 in a 52-week range of $40.25-$57.89.

Paul Ausick

Filed under: Mergers and Buy Outs, Oil & Gas Tagged: APU, FGP, NRGY, SPH

Cramer Touts Suburban Propane (SPH) as a Play on the Cold Winter Weather

247wallst — Wed, 24 Dec 2008 08:46:08 +0000

From Street Insider

On last night’s Mad Money, Cramer recommended a stock which he called "a play on the cold winter weather", Suburban Propane (NYSE: SPH).

Cramer believes Suburban’s story is a simple one, depending mainly on its margins. Cramer points out that while natural gas prices have fallen about 45% in the last few months, retail prices have only fallen by 12%, meaning that Suburban’s margins have risen by 33