MARKET CURRENTS
real-time news and commentary for investors
MARKET CURRENTS
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Today - Tuesday, May 22, 2012
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11:12 AM Shares of Hugoton Royalty Trust (HGT -22.9%) plunge as a Sir Perfluis analysis on Seeking Alpha says "purchasing HGT units at current prices is like buying 60 cents for a dollar... Quite literally, unless natural gas prices stage a rally, a current HGT unit-holder can expect to receive total cash flows of less than the current share price." Comment!
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11:07 AM Shares of Quantum Fuel Systems (QTWW +15.1%) power up a rally after the firm outlines its plans to stick to a core automotive technology focus and make a series of cost-savings initiatives. The news comes in the wake of a big management shakeup at the company earlier this month. Comment!
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10:53 AM Shares of Ralph Lauren (RL) are falling fast - now up only 2.4% after sporting an early 9% gain - as the company explains on a CC that macro concerns remain in place in Europe, Asia, and the U.S. The more execs talk, the more the shine comes off the firm's FQ4 earnings beat. (webcast) Comment!
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10:43 AM Global Hunter fires up Buy ratings on a number of shipping stocks including Diana Shipping (DSX +2.5%), DryShips (DRYS +9.5%), Safe Bulkers (SB +2.1%), and Baltic Trading (BALT +4.5%) - while starting Eagle Bulk Shipping (EGLE -0.9%), Excel Maritime (EXM -1.8%), Genco Shipping (GNK +1.1%) with below-keel Reduce ratings. While individual names in the sector tend to get tied up with momentum trading, the overriding theme has been a moderate bounce back off of a 25-year low in the Baltic Dry Index in February. Guggenheim Shipping ETF (SEA) +8.1% YTD. Comment!
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10:32 AM Humana (HUM +2.4%) gets a boost from an upgrade to Outperform on valuation at Wells Fargo. The firm says the company is well positioned to gain market share from Medicare Advantage, as well as the growing senior demographic. In addition HUM's niche business insulates it from the upcoming Supreme Court ruling on health reform, making it a less risky alternative compared to its peers. Comment!
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10:09 AM Arena Pharmaceuticals (ARNA) +4.7% to $6.24 after it yesterday completed its secondary public offering and underwriters fully exercised their option to purchase additional stock. Arena sold almost 12.65M shares at $5.50 each, raising nearly $70M. Comment!
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10:09 AM EnerNOC (ENOC +12%) shares surge after Needham raises its rating to Buy from Hold, believing the stock has bottomed and should become more attractive to long-term investors. The firm says ENOC isn't another Comverge (now private), "as the company has far more substantial scale, prior history of profitability, and healthier overall capitalization." Comment!
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9:53 AM Cree (CREE -9.3%) plummets after announcing CFO John Kurtzweil has resigned to become the CFO of Extreme Networks (EXTR +4.1%). Corporate controller Michael McDevitt will serve as Cree's interim CFO while a search is conducted for a full-time replacement. At Extreme, Kurtzweil replaces interim CFO Jim Judson. (CREE PR) (EXTR PR) Comment!
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9:43 AM It's happening again. Facebook (FB -7%) dives in early trading to $31.65 - shares are now down 17% from their $38 IPO price, though the company's multiples are still high. If Facebook doesn't soon reverse course, class-action suits over last week's increase in its offering price may just be a matter of time. (also) 9 Comments
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9:15 AM Market preview: Stock futures are mixed and Europe is all green, with neither seeming to be particularly affected by Fitch's downgrade of Japan. S&P Benchmark +0.1%. Best Buy shot up over 8% following earnings but fell just as rapidly and is now just +0.2%. Facebook's (-3.3%) slide continues, while Express plummets 23% following a profit warning. Later: Richmond Fed Mfg., Existing Home Sales Comment!
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9:14 AM Shares of Express (EXPR) nosedive 22.1% premarket after the company issues a lackluster Q1 report and strikes a downbeat tone for Q2. Sales growth is slipping at the company, while it also took on extra costs related to changing its mind over the location of its flagship NYC store. Comment!
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9:01 AM Shares of Benihana (BNHN) come off a trading halt to move up 21.3% premarket after receiving a go-private offer from Angelo, Gordon & Co. Following P.F. Chang's China Bisto own rocket ride after going private earlier this month, a number of other similar-sized restaurant sector names could be on watch. KONA, CHUX, BHRI, TXRH, CASA. Comment!
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8:36 AM Georgia Gulf (GGC) +1.2% premarket after reinstating payment of quarterly dividends for the first time in four years, a reflection of its efforts to pay down debt and generate “substantial free cash flow," CEO Paul Carrico says. The $0.08/share dividend is the same level paid before it was suspended in 2008. Comment!
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8:18 AM Shares of Ralph Lauren (RL) move down 2.4% in premarket trading after the company beats the earnings estimates of analysts with its FQ4 report and doubles its quarterly cash dividend to $0.40 a share. Analysts are already using the report as a possible indication that luxury names have been beaten down too much on Europe sales concerns with Ralph Lauren overcoming its exposure to the continent. As for that share movement, the speculative buzz says the company may have lowballed its guidance intentionally to tee up a beat down the road. Comment!
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8:12 AM Facebook (FB -2.4%) continues to fall as the blame game starts over responsibility for its 11% slump yesterday. Among the chief names are Morgan Stanley (MS), the lead underwriter; Nasdaq (NDAQ), for the tech problems on Friday; and of course Facebook. Among the criticisms: the price was too high and too many shares were sold. 2 Comments
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8:03 AM More on Best Buy (BBY): The company plans to keep a $750M-$1B share repurchase plan percolating right along - a move that NBG's Brain Sozzi calls surprising. Retail analyst Rahul Sharma also remains unconvinced about the Q1 report, saying BBY's malaise is spreading to its international segment. Shares +8.5% premarket in bouncy trading. Comment!
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