Top 10 for 11/19 - 11/23: SAC Capital Grabs Regulator Attention; Otellini Out at Intel; H-P has $8.8 Billion Oversight; France Gov't Debt Downgraded
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1. Earlier in the week, the SEC brought charges against CR Intrinsic Investors LLC, a unit of Cohen's SAC Capital hedge fund, and former portfolio manager Mathew Martoma for their roles in a $276 million insider trading scheme involving a clinical trial for an Alzheimer's drug being jointly developed by Elan (NYSE: ELN) and Wyeth (now a part of Pfizer (NYSE: PFE)).
But, it seemed like the trader needed an edge. An FBI report noted that Martoma was later accused by a boss of being a "one trick pony," suggesting that without insider information he was pretty much worthless as a trader. In 2010 it was recommended that Martoma be fired, and he left the firm later that year.
For more on the inquiry, click here. Or, check out Streetinsider's Hedge Fund Insider for a broader timeline.
2. Shoppers shook off post-Thanksgiving lethargy to hit-up retailers for a post-holiday shopping bonanza. Though many agree that more shopping is expected to happen online, overall sales for the Black Friday weekend are expected to rise at an accelerated rate compared with last year.
This week, comScore said it expected a 17 percent rise in sales, which compares with just a 15 percent rise in the same period last year. Investors will need to wait until Monday (er, Cyber Monday) for final results and analyst comments.
A little more color can be found here.
3. Hewlett-Packard (NYSE: HPQ) took a little bit of a dip this week amid revelation of an $8.8 billion loss stemming from faulty accounting in its acquisition of Autonomy. Fourth-quarter EPS of $1.16 and revs of $30.0 billion were mixed to the consensus.
Much debate has been made on whether or not all the facts were disclosed by autonomy when H-P was conduction due dilligence, but the process to solve the matter will be a months-long ordeal, we suspect.
For more color on the results and charge, click here.
4. On Monday, Intel Corp (Nasdaq: INTC) announced that the company’s president and CEO, Paul Otellini, has decided to retire as an officer and director at the company’s annual stockholders’ meeting in May, starting an orderly leadership transition over the next six months.
Curiously, Intel will still conduct a search for Otellini's successor, examining both internal and external candidates. For the full release, click here.
5. Moody's cut its rating on France this week. The move is notable because France is the second-largest economy in the euro zone behind Germany.
The agency lowered France's bond rating from Aaa down to Aa1 with a Negative outlook. The firm noted that the rating action follows Moody's decision on July 23, 2012, to change to negative the outlooks on the Aaa ratings of Germany, Luxembourg and the Netherlands.
Click here for more on the adjustment.
6. On Wednesday, Schiff Nutrition International, Inc. (NYSE: SHF) and Reckitt Benckiser Group PLC entered into a deal for Reckit to acquire Schiff for $42 per share. The deal was made official following several weeks of speculation that Bayer AG might come in with a higher bid than its $34 per share offer.
Tuesday, Bayer
Hostess at its ends isn't a breaking news story; the company has been expected to go under or seek relief for a while. However, the recent strike by unionized bakery workers was the final straw.
For more on the news, click here.
8. Housing stocks got a little boost again this week from several key data points.
The National Association of Home Builders (NAHB) Housing Markets Index jumped a solid five points to 46 in November. The Street consensus pegged the reading at a much lower 42 for the month.
The National Association of Realtors reported a 2.1 point jump in existing home sales to a seasonally-adjusted run rate of 4.79 million. The number compares with a downwardly-revised 4.69 million annual sales rate reported in September and expectations of 4.70 million.
Housing starts came in at 894,000 units for October, from 863,000 units the prior month and consensus expectations calling for 840,000 units.
9. Farming and industrial equipment giant Deere & Co. (NYSE: DE) slumped this week following a fourth-quarter earnings miss. EPS of $1.75 compared with the consensus of $1.88. Amid stronger sales overall, margins appeared to thin in its Agriculture & Turf.
Deere ended up just over 1.5 percent lower on the shortened week. For more on the numbers, click here.
10. Beaten down mobile device giant Research In Motion (Nasdaq: RIMM) had such a notable week, we're adding it at the end. Nothing specific or life-changing happened at the company, but shares have been insatiable over the last few sessions.
Market data points to RIM closing higher over the last seven sessions and breaking above the $10 level for the first time since last May. In general, many might be pricing in either: a) potential outside investment from a large device maker, b) more lucrative partnerships, or c) BlackBerry 10 really being a game changer for the company.
In any case, traders should keep an eye on RIM as BB10 is unveiled in late January 2013.
But, it seemed like the trader needed an edge. An FBI report noted that Martoma was later accused by a boss of being a "one trick pony," suggesting that without insider information he was pretty much worthless as a trader. In 2010 it was recommended that Martoma be fired, and he left the firm later that year.
For more on the inquiry, click here. Or, check out Streetinsider's Hedge Fund Insider for a broader timeline.
2. Shoppers shook off post-Thanksgiving lethargy to hit-up retailers for a post-holiday shopping bonanza. Though many agree that more shopping is expected to happen online, overall sales for the Black Friday weekend are expected to rise at an accelerated rate compared with last year.
This week, comScore said it expected a 17 percent rise in sales, which compares with just a 15 percent rise in the same period last year. Investors will need to wait until Monday (er, Cyber Monday) for final results and analyst comments.
A little more color can be found here.
3. Hewlett-Packard (NYSE: HPQ) took a little bit of a dip this week amid revelation of an $8.8 billion loss stemming from faulty accounting in its acquisition of Autonomy. Fourth-quarter EPS of $1.16 and revs of $30.0 billion were mixed to the consensus.
Much debate has been made on whether or not all the facts were disclosed by autonomy when H-P was conduction due dilligence, but the process to solve the matter will be a months-long ordeal, we suspect.
For more color on the results and charge, click here.
4. On Monday, Intel Corp (Nasdaq: INTC) announced that the company’s president and CEO, Paul Otellini, has decided to retire as an officer and director at the company’s annual stockholders’ meeting in May, starting an orderly leadership transition over the next six months.
Curiously, Intel will still conduct a search for Otellini's successor, examining both internal and external candidates. For the full release, click here.
5. Moody's cut its rating on France this week. The move is notable because France is the second-largest economy in the euro zone behind Germany.
The agency lowered France's bond rating from Aaa down to Aa1 with a Negative outlook. The firm noted that the rating action follows Moody's decision on July 23, 2012, to change to negative the outlooks on the Aaa ratings of Germany, Luxembourg and the Netherlands.
Click here for more on the adjustment.
6. On Wednesday, Schiff Nutrition International, Inc. (NYSE: SHF) and Reckitt Benckiser Group PLC entered into a deal for Reckit to acquire Schiff for $42 per share. The deal was made official following several weeks of speculation that Bayer AG might come in with a higher bid than its $34 per share offer.
Tuesday, Bayer
Hostess at its ends isn't a breaking news story; the company has been expected to go under or seek relief for a while. However, the recent strike by unionized bakery workers was the final straw.
For more on the news, click here.
8. Housing stocks got a little boost again this week from several key data points.
The National Association of Home Builders (NAHB) Housing Markets Index jumped a solid five points to 46 in November. The Street consensus pegged the reading at a much lower 42 for the month.
The National Association of Realtors reported a 2.1 point jump in existing home sales to a seasonally-adjusted run rate of 4.79 million. The number compares with a downwardly-revised 4.69 million annual sales rate reported in September and expectations of 4.70 million.
Housing starts came in at 894,000 units for October, from 863,000 units the prior month and consensus expectations calling for 840,000 units.
9. Farming and industrial equipment giant Deere & Co. (NYSE: DE) slumped this week following a fourth-quarter earnings miss. EPS of $1.75 compared with the consensus of $1.88. Amid stronger sales overall, margins appeared to thin in its Agriculture & Turf.
Deere ended up just over 1.5 percent lower on the shortened week. For more on the numbers, click here.
10. Beaten down mobile device giant Research In Motion (Nasdaq: RIMM) had such a notable week, we're adding it at the end. Nothing specific or life-changing happened at the company, but shares have been insatiable over the last few sessions.
Market data points to RIM closing higher over the last seven sessions and breaking above the $10 level for the first time since last May. In general, many might be pricing in either: a) potential outside investment from a large device maker, b) more lucrative partnerships, or c) BlackBerry 10 really being a game changer for the company.
In any case, traders should keep an eye on RIM as BB10 is unveiled in late January 2013.
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