The shares of pharmacy benefit manager Express Scripts (ESRX) are falling after Wells Fargo downgraded the shares to Underperform, its equivalent of a sell rating, from Market Perform. The company has numerous potential negative catalysts, the firm warned. ANTHEM DEAL AT RISK: After Anthem’s (ANTM) merger with Cigna (CI) was blocked by a federal judge last month, Express Scripts may lose its contract with Anthem or the price of the deal could be lowered, warned Wells Fargo analyst Peter Costa. Such a development could reduce Express Scripts’ profits by 20%-40%, he warned. OTHER THREATS: Retail pharmacies are increasingly utilizing...
The 2016 report from Danish Bavarian Nordic (BAVA of Copenhagen or BVNRY here) finally landed today and after cutting through the chaff here is its gist. Sales fell to DKK 1.0067 bn from 1.0206 in 2015. Before tax income (BTI) came to DKK 33 mn up from 1.6 mn in 2015 (but below the level of 2013.) Net profit halved to DKK 30.6 mn or 1 kroner per share from 59.4 mn or 2.1/sh last year despite the number of shares outstanding rising by over 10% in 2016. Bavarian also produced guidance for 2017. It expects revenues to hit DKK 1.3 bn and BTI to reach ~350 mn, more than 10x last year’s level. Its guidance for 2016 was pretty much on the na...
Investors looking for exposure to both value and growth stocks, while seeking returns at a lower level of risk, may consider large-cap blend mutual funds. Large-cap funds offer more stability than mid or small caps and are thus safer too. Generally, companies with market capitalization of more than $10 billion are considered large-cap firms. However, due to their significant international exposure, large-cap companies run the risk of being hit by global woes. Blend funds – also called “hybrid funds” – owe their origin to the graphical representation of their equity style box. In addition to diversification, blend funds offer a great m...
Many dividend investors wonder how higher interest rates will impact REITs, and for good reason. Over the past few years, interest rates have fallen to their lowest levels in recorded history. This has created a challenging environment for income investors who previously enjoyed healthy, low-risk returns from money market funds, CDs, and Treasury bonds. In fact, since the darkest days of the financial crisis, many yield-starved investors have been forced to search elsewhere for their income needs, including bond alternatives such as real estate investment trusts (REITs). As a result, the entire real estate industry outperformed the market ev...
Oracle (ORCL) is expected to report earnings on Wednesday, March 15th. The whisper number is $0.61, one cent behind the analysts’ estimate and showing no confidence from the WhisperNumber community. Whispers range from a low of $0.55 to a high of $0.64. Oracle has a 55% positive surprise history (having topped the whisper in 39 of the 67 earnings reports for which we have data). Earnings history: Beat whisper: 39 qtrs Met whisper: 3 qtrs Missed whisper: 29 qtrs Our primary focus is on post earnings price movement. Knowing how likely a stock’s price will move following an earnings report can help you determine the best action to ta...
The oil price crash of 2015-2016 was a huge blow to the oil and gas industry. It created ripple effects that were felt across the entire energy sector. Master Limited Partnerships, or MLPs, were among the hardest hit when commodity prices tumbled. Several oil and gas MLPs cut their dividends. Some went bankrupt altogether. However, it wasn’t all bad news. A select few MLPs not only maintained their distributions through the crash, they actually kept on increasing their payouts. For example, Sunoco Logistics Partners (SXL) and Magellan Midstream Partners (MMP) are both Dividend Achievers, a group of 271 stocks with 10+ years of consecutive d...
Over the past two months, we’ve warned repeatedly that global asset prices may be set up for a correction once the flow of central bank liquidity ebbs. Between the Fed feeling “behind-the-curve-ish,” Draghi pondering a taper and more recently considering hiking ahead of said taper, and rumors that the BoJ’s JGB buying scheduling will leave Kuroda short of his target, it appears increasingly likely that the ~$400 billion/quarter CB liquidity put will soon vanish. As Citi’s Matt King recently wrote: While the scale of CB purchases over the past half-year or so has been close to record highs, it is already diminishing, and set to di...
The Federal Reserve is due to release the statement from their March meeting. Also, general elections are held today in the Netherlands. What can we expect from these two events and how can they affect the gold market? All indicators suggest that the Fed is likely to hike interest rate today. The inflation rate has picked up recently, while the latest data on employment has beaten expectations. The Fed officials have been talking about a rate increase like crazy and the market odds of an upward move are about 90 percent. Even Mario Draghi, the ECB President, was very kind and adopted a more hawkish stance, weakening the U.S. dollar a bit a...
by Doug Short / Jill Mislinski and Steven Hansen According to the BLS, the Consumer Price Index (CPI-U) year-over-year inflation rate was 2.7 % – up from than last month’s 2.5 %. The year-over-year core inflation (excludes energy and food) rate declined 0.1 % to 2.2 %, and remains slightly above the target set by the Federal Reserve. Analyst Opinion of the Consumer Price Index It was the energy sector which caused the increase in the headline CPI, This is the highest rate of inflation seen in over one year. The market expected (from Bloomberg / Econoday): Consensus Range Consensus Actual CPI-U – month-over-month (M...
Retail sales rose the Econoday consensus of 0.1% in February, a weak reading. However, January was revised from a solid 0.4% to a strong 0.6%. Interestingly, auto sales fell in both January and February. Did consumers switch from buying autos to buying more junk? A surprising point in this report is that these headline gains, though less than astonishing, were made despite weakness in the motor vehicle component which had been strong late last year and makes up about 1/5 of total retail spending. Auto sales fell 0.2 percent in February and 1.3 percent in January. Excluding autos, February retail sales rose 0.2 percent with January showing a...