Top 10 for 10/08 - 10/12: Sprint May Be Turning Japanese; UnitedHealth Goes Big in Brazil; Alcoa's Strong Q3; IPOs are Back!
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- Sprint (NYSE: S) popped this week following reports that it was in talks with Softbank over a possible merger. The Company affirmed chatter on Thursday.
News surfaced following expectations that Sprint would make a bid for MetroPCS (NYSE: PCS), which entered into merger talks with Deutsche Bank last week.
Sprint ended the week up over 10 percent from last Friday.
- UnitedHealth Group (NYSE: UNH) entered a deal to acquire Brazil's largest health care company, Amil Participações S.A., in a deal valued at $4.9 billion deal. The transaction includes realizable Brazilian tax benefits worth an estimated present value of $600 million, bringing the effective equity purchase price to approximately $4.3 billion.
According to the release, Amil provides, "health and dental benefits, hospital and clinical services, and advanced care management resources to more than 5 million people." For more on the merger, click here.
Nearly in conjunction with the release, UnitedHealth said it expected third-quarter net earnings of $1.45 per share or better, compared with consensus estimates of $1.25 at the time.
- Alcoa (NYSE: AA) "unofficially" kicked-off the third-quarter 2012 reporting season with a strong performance on Tuesday. Revs were $5.8 billion with adjusted EPS of 3 cents (operating loss of 13 cents per share).
Many will argue what an Alcoa earnings beat indicates for the rest of the season, but one thing is clear: it gets the most hype because it is first component in the Dow to report.
For more color on Alcoa's EPS, click here.
- IPOs were a hot topic this week, with a strong performance recorded all around. Notable companies going public include:
- Diamondback Energy, Inc. (Nasdaq: FANG) - ended flat;
- LinnCo (Nasdaq: LNCO) - ended up 4.8 percent;
- Workday, Inc. (NYSE: WDAY) - up 73.9 percent;
- KYTHERA Biopharmaceuticals, Inc. (Nasdaq: KYTH) - down 3.5 percent;
- Realogy (NYSE: RLGY) - down 2.2 percent;
- Shutterstock, Inc. (NYSE: SSTK) - up 2.3 percent; and
- Ambarella (Nasdaq: AMBA) - down 7.2 percent.
- Diamondback Energy, Inc. (Nasdaq: FANG) - ended flat;
- JPMorgan (NYSE: JPM) reported a third-quarter earnings beat, with EPS either $1.36, $1.40, or $1.46 depending on inclusion or exclusion of one-time changes. In any case, the consensus view was at $1.20, so it was a win for the bank. JPMorgan is the first of the large financials to report, setting up a possible robust earnings season for its peers.
Speaking of peers, Wells Fargo (NYSE: WFC) reported earnings Friday. Although EPS topped expectations, investors were concerned about the sequential slowdown in mortgage activity. For more, click here.
- The University of Michigan Consumer Sentiment index made a welcome tick higher on Friday, rising from 78.3 to 83.1 in October. The number was the highest reading since September 2007 and floored economists, which expected a preliminary reading of 78.5.
"What changed was how (consumers) evaluated economic conditions," survey director Richard Curtin said in a statement. "Economic conditions during the year ahead were expected to be 'good' by more consumers, and more consumers expected 'good' economic times over the next five years."
- Oshkosh Corporation (NYSE: OSK) ended the week better following news Thursday that activist investor Carl Icahn was making a $32.50 per share hostile bid. The move came following Icahn seeking board representation last year and shares, in his opinion, acting lackluster since then.
- European Aerospace and Defense companies BAE Systems plc and EADS N.V. said Wednesday that they terminated discussions related to a possible $45 billion combination after governments in France, Germany and Britain failed to reach an agreement on the deal.
While the two said the merger was based on sound logic, after discussions various governments " it has become clear that the interests of the parties' government stakeholders cannot be adequately reconciled with each other or with the objectives that BAE Systems and EADS established for the merger."
For more, click here.
- Cummins Inc. (NYSE: CMI) lowered its full year revenue outlook for 2012 to approximately $17 billion compared to the Company’s previous guidance of $18 billion. The Street saw revs of $18.1 billion on Tuesday. Actions were being taken to respond to the current macro environment, according to the company.
- Romney took the lead with certain voters following the initial Presidential debate last week. According to Pew Research, Romney had a 4 point lead with 49 percent becoming favorable for the GOP candidate. Further, registered voters by more than 3-to-1 -- or 66 percent to 20 percent -- said Romney did a better job than Obama in their first presidential debate last week in Denver.
With elections just weeks away, debates heating up, economic data becoming favorable, and Joe Biden, who knows what while happen when voters hit the polls on November 6th.
- The People's Bank of China (PBOC) was busy this week, performing its third stimulus action in as many weeks. Wednesday, it was reported that the bank injected 164 billion yuan ($26.03 billion) into China's banking sector.
In a statement from the bank, the PBOC said it offered CNY12 billion of seven-day reverse repos, a short-term lending facility, at 3.35% during its regular open-market operation, unchanged from the rate on the seven-day reverse repos it offered on Tuesday.
For more on the outlook, click here.
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Related EntitiesCarl Icahn, Deutsche Bank, JPMorgan, University of Michigan Consumer Sentiment Index, Barack Obama, Earnings, Wells Fargo
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