Top 10 News for 8/25 - 8/29: S&P 500's New Record; U.S. Q2 GDP Outpaces Views; Major Mergers Aplenty Aug 29, 2014 03:50PM

1. Following speculation earlier in the week, Tim Hortons Inc. (NYSE: THI) and Burger King Worldwide Inc. (NYSE: BKW) announced Tuesday a definitive agreement under which the two companies will create a new global powerhouse in the quick service restaurant sector. With approximately $23 billion in system sales, over 18,000 restaurants in 100 countries and two strong, thriving, independent brands, the new company will have an extensive international footprint and significant growth potential. Under the terms of the transaction, which has been unanimously approved by the Board of Directors of both companies, Tim Hortons shareholders will receive C$65.50 in cash and 0.8025 common shares of the new company per Tim Hortons share.

2. The S&P 500 index closed above 2,000 points for the first time on Tuesday after reaching above the mark last Monday. It was the 20th record close for the index this year despite having moved up only 8.2 percent in 2014. It took the index 16 years to add 1,000 points since reaching the prior milestone in 1998. Stock valuations have come down since the 1,000 level; stocks in the S&P 500 were trading for 23.1 times expected 12-month earnings as of March 1998, versus 15.5 percent at the close last Friday. The 10-year average is at 13.9 times.

3. Last Sunday, Roche (OTCBB: RHHBY) announced that it agreed to acquire InterMune (Nsdaq: ITMN) $74 per share in cash, or a 38% premium to Friday's market close. The transaction is worth $8.3 billion on a fully diluted basis. The merger agreement has been approved by the boards of InterMune and Roche. Under the terms of the merger agreement, Roche will promptly commence a tender offer to acquire all of the outstanding shares of InterMune's common stock at a price of $74.00 per share in cash. The closing of the tender offer will be subject to the tender of a number of shares that represents a majority of the total number of outstanding shares on a fully diluted basis.

4. Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 4.2 percent in the second quarter of 2014, according to the "second" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 2.1 percent. Consensus estimates were looking for a reading of 3.9 percent growth.

5. Markets were notably weaker towards the end of the week on headlines that Russian troops and military machinery are on the ground inside Ukraine. While Russia denied initial reports, NATO released photos on Thursday showing Russia engaged in military activity inside Ukraine borders. Ukrainain president Petro Poroshenko also told security chiefs that Russia entered the country to support pro-Moscow rebels. The president said the situation was extraordinarily difficult ... but controllable, according to reports. News came as Ukraine lost control of Novoazovsk to the rebels on Thursday. The U.S., for its part, also warned about possible new sanctions against Russia.

6. On Monday night, Amazon.com (Nasdaq: AMZN) announced that it has reached an agreement to acquire Twitch Interactive, Inc., the leading live video platform for gamers. In July, more than 55 million unique visitors viewed more than 15 billion minutes of content on Twitch produced by more than 1 million broadcasters, including individual gamers, pro players, publishers, developers, media outlets, conventions and stadium-filling esports organizations.

7. New orders for manufactured durable goods in July increased $55.3 billion or 22.6 percent to $300.1 billion, the U.S. Census Bureau announced today. (The Street was looking for a gain of just 8 percent.) This increase, up five of the last six months, was at the highest level since the series was first published on a NAICS basis in 1992, and followed a 2.7 percent June increase. Excluding transportation, new orders decreased 0.8 percent. Excluding defense, new orders increased 24.9 percent.

Inventories of manufactured durable goods in July, up fifteen of the last sixteen months, increased $2.1 billion or 0.5 percent to $401.9 billion. This was at the highest level since the series was first published on a NAICS basis and followed a 0.5 percent June increase.

8. Highly anticipated IPO Alibaba (NYSE: BABA) reported Q2 EPS of $0.84 on Wednesday morning, from EPS of $0.31 reported in the same period last year. Revenue was RMB15.77 billion ($2.54 billion), versus RMB10.78 billion in the prior-year period. Operating margins fell from 50 percent down to 43 percent from the prior year. Notably, bottom-line numbers benefited from a one-off re-valation gain, which added $1 billion to net profits. Valuation for the company's IPO dropped by $25 billion to around $200 billion, according to some estimates.

9. Apple (Nasdaq: AAPL) sent out invitations to its September 9 iPhone event, where the company is expected to release two versions of the iPhone 6 and maybe the iWatch. The event will be held on September 9, 2014 at 10AM PST at the Flint Center for the Performing Arts in Cupertino, CA. It's expected that Apple will produce a slew of new iPhones at the end and potentially debut a new wearable device, which could very well be the fabled "iWatch" that has been in discussion for nearly two years. However, shipments of the wearable device might not begin until early 2015.

10. RadioShack (NYSE: RSH) shares ramped higher this week. Standard General LP said to explore potential rescue funding for RadioShack, according to Bloomberg headlines. The plan may include issuance equity, debt, or a combination of both by Standard General. Click here for more color.


Trading Radar for 9/2: Guidewire (GWRE), Conn's (CONN), Paragon Shipping (PRGN) Report Aug 29, 2014 03:30PM

The Trading Radar highlights key earnings and economic announcements for the next trading session:

Before Markets Open:
Earnings:

Conn's, Inc. (Nasdaq: CONN) - consensus EPS $0.75
Paragon Shipping Inc. (Nasdaq: PRGN) - consensus loss $0.20

Intraday or Not Specified:
Economics:
10:00am EDT

  • ISM Index - Street sees 57.0

  • Construction Spending - Street sees 1.0%
After Markets Close:
Earnings:

Aviat Networks, Inc. (Nasdaq: AVNW) - consensus loss $0.07
Guidewire Software (NYSE: GWRE) - consensus EPS $0.28
Kofax (NYSE: KFX) - consensus EPS $0.08

Check out our Earnings Insider for news and updates on earnings as they happen!


Notable 52-Week Highs and Lows of the Day 8/29: (DGLY) (NXPI) (UTHR) High; (CBMX) (FRO) Low Aug 29, 2014 02:09PM

52-Week High:
  • Digital Ally (Nasdaq: DGLY) $19.55. Digital Ally continuing to see strong gains Friday as on-officer camera speculation heats up. The stock has moved over 360 percent higher since August 18th and closed 36 percent better on yesterday's session.

  • NXP Semiconductors NV (Nasdaq: NXPI) $69.50. NXP Semi moving higher on speculation that Apple's next iPhone could come equipped with near-field communications (NFC) capability. NXP could end up being the supplier for Apple, according to recent market chatter.

  • United Therapeutics (Nasdaq: UTHR) $118.00. United Therapeutics gained Friday after a judge ruled that Remodulin patents are not invalid in a case against SANDOZ. Click here for more color.

  • Net 1 UEPS Technologies, Inc. (Nasdaq: UEPS) $13.38. Net 1 UEPS Technologies reported Q4 EPS of $0.91, $0.58 better than the analyst estimate of $0.33. Revenue for the quarter came in at $182.8 million versus the consensus estimate of $142.31 million. The company sees FY15 EPS of $1.92, versus the consensus of $1.56.
52-Week Low:
  • CombiMatrix (Nasdaq: CBMX) $1.81. Seeing a momentum move lower, though CEO Mark McDonough disclosed purchasing an aggregate 12,000 shares of the company on August 27th for prices ranging from $2.01 to $2.02. The company's CFO and Medical Chief also bought shares recently.

  • Frontline (NYSE: FRO) $1.99. Frontline reported Q2 EPS of ($0.23), $0.04 better than the analyst estimate of ($0.27). You can view the company's Q2 presentation here (pdf download).


Unusual 11 Mid-Day Movers 8/29: (IVAN) (NCTY) (UTHR) Higher; (SGOC) (VII) (FRO) Lower Aug 29, 2014 12:45PM

Ivanhoe Energy (Nasdaq: IVAN) 66.9% HIGHER; moving above the 20-day SMA, which has proven to be a resistance point over the last few weeks. Shares also rose above the 50-day SMA and key $2 level today.

The9 Limited (Nasdaq: NCTY) 34.6% HIGHER; announced that Red 5 Singapore Pte. Ltd. ("Red 5 Singapore"), a subsidiary of The9, has entered into a license agreement with System Link Limited for publishing and operating FirefallĀ® for a five-year term in mainland China. Under this license agreement, System Link Limited will pay to Red 5 Singapore at least US$160 million including license fee and royalties during the contract period. FirefallĀ® is a MMO shooter game developed by Red 5 Studios, Inc., a subsidiary of The9. System Link Limited is a joint venture formed by The9 and Qihoo 360 Technology Co., Ltd.

United Therapeutics (Nasdaq: UTHR) 25.0% HIGHER; Remodulin patents found not to be invalid in a case against SANDOZ.

Digital Ally (Nasdaq: DGLY) 19.6% HIGHER; gained 36% Thursday and 366% since August 18th on the 'on-officer' camera potential in the wake of the Ferguson, Missouri events.

Splunk (Nasdaq: SPLK) 19.2% HIGHER; reported Q2 EPS of $0.01, $0.03 better than the analyst estimate of ($0.02). Revenue for the quarter came in at $101.5 million versus the consensus estimate of $93.93 million. Splunk sees Q3 2014 revenue of $105 - $107 million, versus the consensus of $104.3 million. Splunk also sees FY2014 revenue of $423 - $428 million, versus prior guidance of $402-410 million and the consensus of $411.6 million.

SGOCO Group, Ltd. (Nasdaq: SGOC) 14.7% LOWER; pulling back from a 76 percent move higher Thursday. Yesterday, the company announced a new on-line sales platform on JD.com to accelerate the delivery of high quality service and products. SGOCO takes a significant step towards the development of e-commerce through this arrangement. With the sharing of vision and strengths, the agreement will allow both parties to drive new growth opportunities.

Criteo (Nasdaq: CRTO) 25.0% HIGHER; Publicis could buy Criteo, according to Les Echos (here). The reports says Natixis views the rumors as credible.

Vicon Industries Inc. (AMEX: VII) 11.6% LOWER; also seeing some profit taking following a strong trading week. Shares rose 48 percent Tuesday on speculation of increased orders stemming from unrest in Missouri.

Frontline (NYSE: FRO) 10.7% LOWER; seeing another down day from Thursday. The company reported Q2 EPS of ($0.23), $0.04 better than the analyst estimate of ($0.27).

Pacific Sunwear Of California (Nasdaq: PSUN) 9.0% LOWER; reported Q2 EPS of ($0.03), in-line with the analyst estimate of ($0.03). Revenue for the quarter came in at $211.7 million versus the consensus estimate of $208.48 million. Comparable store sales for the second quarter of fiscal 2014 were 0.3%.

Zoe's Kitchen (NYSE: ZOES) 7.0% LOWER; reported Q2 EPS of $0.04, $0.01 better than the analyst estimate of $0.03. Revenue for the quarter came in at $41.9 million versus the consensus estimate of $40.65 million. Comparable restaurant sales increased 7.5%. Zoe's Kitchen sees FY2014 revenue of $167 - $170 million, versus the consensus of $168.5 million.

To get this report daily visit http://www.streetinsider.com/entities/Unusual+11+Mid-Day+Movers.


Streetinsider.com's Hot Lunchtime Reads 8/29: (AAPL) (SYT) (ATVI) (RDEN) Aug 29, 2014 12:05PM

The following is a list of notable articles to help get you through the lunch hour:
  • Apple (AAPL) Wearable May Not Ship Until Early 2015 -> Read this!

  • Options Abound for Syngenta (SYT) as Monsanto (MON) Deal Doesn't Pan Out (DOW) (DD) -> Read this!

  • Potential Activision (ATVI) Acquisition of Take-Two Interactive (TTWO) a 'No-Brainer', Analyst Says -> Read this!

  • RadioShack (RSH) Continues Seeing Big Gains on Cash Infusion Anticipation -> Read this!

  • S&P Places Elizabeth Arden (RDEN) on CreditWatch Negative; FY14 Operating Results Seen as 'Weak' -> Read this!

  • Bancfirst Corp (BANF) Does Not Know Reason for Unusual Trading Activity in Preferred Securities -> Read this!


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