PDUFA date for Genentech, Inc. (NYSE: DNA) and Roche Holding Ltd. (OTC: RHHBY)'s supplemental Biologics License Application for Herceptin for label expansion to include AC followed by docetaxel in treatment of adjuvant HER2+ breast cancer.
PDUFA date for Shire plc (NASDAQ: SHPGY) and New River Pharma's supplemental New Drug Application for Vyvanse (NRP-104) treatment of Attention Deficit Hyperactivity Disordre, or ADHD, in adult patients 18-55 years old; the drug is already approved for pediatric ADHD ages 6-12.
Verizon Communications Inc. (NYSE: VZ) to report Q earnings; conference call at 8:30am.
Tyson Foods, Inc. (NYSE: TSN) to report Q2 earnings; conference call at 9:00am.
Tuesday, April 29
Two-day FOMC meeting beginning at 8:30am.
PDUFA date for Merck & Co., Inc. (NYSE: MRK)'s New Drug Application for Cordaptive (MK-0524A) adjunctive therapy to diet for treating elevated LDL Cholesterol, low HDL Cholesterol and elevated triglycerides levels.
PDUFA date for Sucampo Pharmaceuticals, Inc. (NASDAQ: SCMP)'s supplemental New Drug Application for dose of 8mg treatment of Irritable Bowel Syndrome with Constipation; already approved for Chronic Idiopathic Constipation at 24ug dosage.
BP plc (NYSE: BP) to report Q1 earnings; conference call at 10:15am.
United States Steel Company (NYSE: X) to report Q1 earnings; conference call at 2:00pm.
MOST NOTEWORTHY: UBS AG, Ansys and AstraZeneca were today's noteworthy upgrades:
Deutsche Bank upgraded shares of UBS AG (NYSE: UBS) to Buy from Hold after the company announced further write-downs and plans to boost capital.
Jefferies upgraded shares of Ansys (NASDAQ: ANSS) to Buy from Hold as they like the Ansoft (NASDAQ: ANST) acquisition and feel yesterday's sell-off creates an attractive entry point.
AstraZeneca (NYSE: AZN) was raised to Neutral from Underweight at JP Morgan following the positive Crestor study results.
OTHER UPGRADES:
Piper raised Akamai (NASDAQ: AKAM) to Buy from Neutral.
Goldman upgraded Hansen Natural (NASDAQ: HANS) to Buy from Neutral.
Vertex Pharma (NASDAQ: VRTX) was raised to Market Perform from Underperform at Wachovia and to Outperform from Neutral at Baird.
Some investors/readers probably are not aware that the internet -- critical as it is today for commercial activities and the flow of information -- was not designed to handle the volume and complexity of today's web tasks. Moreover, the appearance of internet traffic jams created an opportunity for Akamai Technologies.
Akamai Technologies (NASDAQ: AKAM) solutions accelerate and improve the delivery of internet content and applications.
Analysts like Akamai's broad 1,800-member customer base, including many blue-chip companies. Further, analysts also like the fact that AKAM has continued to deliver material revenue increases and earnings gains, despite expansion/infrastructure investments.
Further, the consensus among analysts is that 28,000-server Akamai will continue to have a competitive advantage in its key business segments for at least the next two years. The Reuters F2008/F2009 EPS consensus estimates for AKAM are $1.68/$2.04.
MOST NOTEWORTHY: Limelight Networks, Diebold and Charles & Colvard were today's noteworthy upgrades:
Jefferies upgraded shares of Limelight Networks (NASDAQ: LLNW) to Hold from Underperform on valuation and believes it impossible to know what will happen to the company from here. On the downside, Jefferies notes a permanent injunction means the business is nearly worthless, but on the upside, is the possibility of sale to Akamai (NASDAQ: AKAM) or a large telecomm service provider.
Baird raised Diebold (NYSE: DBD) to Outperform from Neutral citing expectations of a higher bid from United Technologies (NYSE: UTX).
Merriman upgraded shares of Charles & Colvard (NASDAQ: CTHR) to Buy from Neutral on valuation, as they believe the current share price does not account for the potential wholesale value of the company's manufactured inventory and method patent. They believe Charles & Colvard is a potential acquisition target.
OTHER UPGRADES:
Goldman raised Eaton (NYSE: ETN) to Conviction Buy from Neutral and added Royal Caribbean (NYSE: RCL) to its Conviction Buy List.
Akamai Technologies (NASDAQ: AKAM) is recently up 89cents to $34.29 on unconfirmed takeover chatter. AKAM offers services for accelerating content and business processes online. AKAM March 35 calls have traded 191 times on transaction volume of 6,671 contracts. AKAM March 40 calls have traded 84 times on transaction volume of 3,233 contracts. AKAM March option implied volatility of 48 is below its 26-week average of 54 according to Track Data, suggesting decreasing price fluctuations.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.
MOST NOTEWORTHY: American Public Education and Micrus Endovascular were today's noteworthy initiations:
William Blair initiated American Public Education (NASDAQ: APEI) with an Outperform rating, as they believe the company is still in the early stages of its growth.
Gabelli believes Micrus Endovascular (NASDAQ: MEND) can sustain its rapid growth in the coming years and does not expect it to remain independent in the medium-to-long term. The firm started shares with a Buy rating.
OTHER INITIATIONS:
Carrizo Oil & Gas (NASDAQ: CRZO) was initiated with a Neutral rating at JP Morgan.
Goldman initiated Akamai (NASDAQ: AKAM) with a Neutral rating.
AKAM offers services for accelerating content and business processes online. AKAM will report Q4 EPS on February 6.
Think Equities says: "Share price more than fully reflects perceived industry risks, and recent levels of pessimism (and speculation) surrounding the company are unwarranted."
AKAM February option implied volatility of 81 is above its 26-wek average of 55 according to Track Data, suggesting larger price fluctuations.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
Level 3 Communications (NASDAQ: LVLT) is one of the most widely traded and widely shorted stocks of any listed on a U.S. exchange. Average daily volume in the shares is over 41 million, and shares sold short as of mid-December were over 167 million. That is tops of all companies listed on the Nasdaq.
Level 3 would appear to be in a good business. It has 50,000 miles of IP backbone to transport voice, data, and video. It provides services to the country's largest cable and telecom companies.
Level 3 has taken a beating in 2007 falling form $6.80 to just above $3. Wall Street has to wonder how it gets back toward $7.
For starters, the company has to stop making an acquisition a month. The company's Level 3's latest 10-Q lists seven deals. It is not unfair for Wall Street to be concerned about the pace of these purchases, especially since Level 3 does not make money. In the September quarter, the company had an operating loss of $53 million on revenue of $1.061 billion. Level 3 also made $138 million in interest payments on its $6.8 billion in long-term debt.
Akamai Technologies Inc. (NASDAQ: AKAM) stock is declining today after an analyst with Cowen & Co. cut his rating of the stock to "Neutral" from "Outperform" this morning on fears of increased competition. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on AKAM.
After hitting a one-year high of $59.69 in February, the stock hit a one-year low of $27.75 in September. This morning, AKAM opened at $36.01. So far today the stock has hit a low of $34.53 and a high of $36.35. As of 11:55, AKAM is trading at $34.68, down $2.42 (-6.5%). The chart for AKAM looks bullish and steady, while S&P gives the stock a negative 2 STARS (out of 5) sell rating.
For a bearish hedged play on this stock, I would consider a February bear-call credit spread above the $45 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 7.5% return in two months as long as AKAM is below $45 at February expiration. Akamai would have to rise by more than 28% before we would start to lose money. Learn more about this type of trade here.
With the credit crunch, it seems that private equity is losing its luster, right? Maybe not. After all, with better valuations, the opportunities may be looking good.
Today we learned that the vice president and chief financial officer of Internap Network Services (NASDAQ: INAP), David Buckel, is leaving. And, yes, he's exploring opportunities in the private equity space.
Buckel has spent four years at the company, which is an operator of a content delivery network (CDN). Basically, this allows for improved distribution of online content and applications. There are more than 3,500 customers and revenues increased 32.7% to $60.9 million in Q3.
No doubt, this is far from good news for Internap. Keep in mind that the company must compete against fierce rivals, such as Akamai Technologies (NASDAQ: AKAM) and Limelight Networks (NASDAQ: LLNW). In fact, there are some signs of a price war.
So far in today's trading, Internap's stock is down nearly 8% to $10.82.
According to the Wall Street Journal's (subscription required) "Heard on the Street" column, content firms such as Akamai Technologies (NASDAQ: AKAM) and Limelight Networks (NASDAQ: LLNW) are getting hammered, and there appears to be no letup in sight because while online traffic is up 60% a year over the last few years, those firm's shares are expensive and, says S&P's Scott Kessler, "There's plenty more room for [Akamai and Limelight] to fall."
TiVo (NASDAQ: TIVO) is looking at a new revenue source -- being paid to give out market research to advertisers, reported the Wall Street Journal. The company plans to announce today that it will add demographic data, including age, income, marital status and ethnicity, about its viewers.
The Financial Times (subscription required) reported that Ford (NYSE: F) is likely to have to pay any buyer of its Jaguar and Land Rover units because of a $2B pension deficit, according to people close to the situation.
OTHER PAPERS:
The New York Times reported that Con Edison (NYSE: ED) was fined $18M for service disruptions in 2006, including the nine-day blackout in western Queens, NY.
The Associated Press reported that Baidu (NASDAQ: BIDU) is considering listing on the Hong Kong and mainland China stock markets, according to the company's CEO.
MOST NOTEWORTHY: GPC Biotech, Akamai, Qwest, Shutterfly and LDK Solar were today's noteworthy downgrades:
GPC Biotech (NASDAQ: GPCB) was downgraded to Sell from Neutral at Goldman, to Sell from Hold at Deutsche Bank and to Underweight from Overweight at Lehman after the company's phase III trial of satraplatin to treat prostate cancer did not meet its primary endpoint.
Deutsche Bank downgraded shares of Akamai Technologies (NASDAQ: AKAM) to Hold from Buy on valuation following the recent rally as they believe concerns around slowing growth, margins and capital efficiency will limit upside.
Qwest Communications (NYSE: Q) was downgraded to Sector Performer from Outperformer at CIBC and to Neutral from Overweight at JP Morgan following the company's disappointing Q3 results.
Jefferies downgraded shares of Shutterfly (NASDAQ: SFLY) following the better-than-expected Q3 results due to valuation.
Piper downgraded shares of LDK Solar (NYSE: LDK) to Market Perform from Outperform, as they expect higher blended poly cost for the company due to tightening scrap poly supply and increased competition.
OTHER DOWNGRADES:
Maxwell Technologies (NASDAQ: MXWL) was downgraded to Underperform from Market Perform at JMP Securities.
UBS downgraded Estee Lauder (NYSE: EL) to Sell from Neutral.
Merrill downgraded CommScope (NYSE: CTV) to Neutral from Buy.
Under Armour (NYSE: UA) was downgraded to Underperform from Market Perform at Raymond James.
RBC Capital downgraded Beckman Coulter (NYSE: BEC) to Sector Perform from Outperform.
MOST NOTEWORTHY: Motorola, Paccar, Pacific Sunwear, Talbots and RightNow Tech were today's noteworthy upgrades:
Oppenheimer upgraded shares of Motorola Inc. (NYSE: MOT) to Buy from Neutral on valuation, and is positive on the company's free cash flow generation.
Wachovia raised Paccar Inc. (NASDAQ: PCAR) estimates to Market Perform from Underperform based on better-than-expected European performance.
Citigroup upgraded shares of Pacific Sunwear (NASDAQ: PSUN) to Buy from Hold as they believe the demo division divestiture and improving product execution in core PacSun stores could drive accelerating EPS growth.
Citigroup also upgraded shares of Talbots Inc. (NYSE: TLB) to Hold from Sell on valuation but remains concerned about the company's long-term outlook.
Roth Capital upgraded RightNow Technologies (NASDAQ: RNOW) to Buy from Hold, as they are encouraged by RNOW's Q3 results and raised guidance and believes the worst is behind the company.
OTHER UPGRADES:
Goldman added Pfizer (NYSE: PFE) to its Conviction Buy List.
Thomas Weisel upgraded Akamai (NADAQ: AKAM) to Overweight from Market Weight.
Lehman upgraded Harley Davidson (NYSE: HOG) to Equal Weight from Underweight.
Akamai (NASDAQ: AKAM), offers services for accelerating content and business processes online, is recently down $1.83 to $32.58. AKAM announced EPS of $0.34. AKAM call option volume of 27,510 contracts compares to put volume of 21,945 contracts. AKAM November option implied volatility of 74 is above its 26-week average of 49 according to Track Data, suggesting larger price fluctuations.
Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.
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Monday, April 28
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