Related AXDX Benzinga's Top Initiations JP Morgan Starts Accelerate Diagnostics, INC Research At Overweight Related INCY Benzinga's Top Initiations Agenus Shares Spike Higher Following Mid-Day Upgrade To Buy From Maxim
Midway through trading Thursday, the Dow traded down 0.34 percent to 17,443.66 while the NASDAQ declined 0.09 percent to 4,764.42. The S&P also fell, dropping 0.39 percent to 2,028.73.
Leading and Lagging Sectors
On Thursday, healthcare shares gained by 0.10 percent. Meanwhile, top gainers in the sector included Accelerate Diagnostics Inc (NASDAQ: AXDX), up 19 percent, and Incyte Corporation (NASDAQ: INCY), up 7 percent.
In trading on Thursday, energy shares dipped by 0.88 percent. Meanwhile, top losers in the sector included Williams Companies Inc (NYSE: WMB), down 7 percent, and Denbury Resources Inc. (NYSE: DNR), down 6 percent.
Best Safest Companies To Buy For 2016: Alimera Sciences, Inc.(ALIM)
Alimera Sciences, Inc., a pharmaceutical company, engages in the research, development, and commercialization of prescription ophthalmic pharmaceuticals in the United States, Germany, Portugal, and the United Kingdom. The company focuses on diseases affecting the back of the eye or retina. The company offers ILUVIEN, an intravitreal implant for the treatment of diabetic macular edema (DME), which is a disease of the retina that affects individuals with diabetes and can lead to severe vision loss and blindness. Its ILUVIEN is inserted in the back of the patients eye in a non-surgical procedure, which allows for a self-sealing wound by delivering a constant micro-dose of the non-proprietary corticosteroid fluocinolone acetonide in the eye. It has license agreement with pSivida US, Inc. for the development and sale of ILUVIEN, and a delivery device to deliver other corticosteroids to the back of the eye for the treatment and pr evention of eye diseases in humans (other than uveitis) or to treat DME. Alimera Sciences, Inc. was founded in 2003 and is headquartered in Alpharetta, Georgia.
- [By Lisa Levin]
On Thursday, the healthcare sector proved to be a source of strength for the market. Leading the sector was strength from Alimera Sciences Inc (NASDAQ: ALIM) and Anthera Pharmaceuticals Inc (NASDAQ: ANTH).
- [By Lisa Levin]
Alimera Sciences Inc (NASDAQ: ALIM) shares shot up 59 percent to $1.69 after the company reported preliminary Q2 revenue. Alimera Sciences announced preliminary revenue of $9.3 million to $9.5 million.
Best Safest Companies To Buy For 2016: Starbucks Corporation(SBUX)
Starbucks Corporation purchases and roasts whole bean coffees. It operates approximately 16,858 stores, including 8,833 company-operated stores and 8,025 licensed stores. The company offers approximately 30 blends and single-origin premium arabica coffees. It also provides handcrafted beverages, such as fresh-brewed coffee, hot and iced espresso beverages, coffee and non-coffee blended beverages, Vivanno smoothies, and Tazo teas; and merchandise products, including home espresso machines, coffee brewers and grinders, coffee mugs and accessories, packaged goods, music, books, and gift items. In addition, it offers fresh food items, which comprise baked pastries, sandwiches, salads, oatmeal, yogurt parfaits, and fruit cups. Further, it also provides VIA ready brew coffee, bottled frappuccino beverages, discoveries chilled cup coffee, doubleshot espresso drinks, iced coffee, whole bean coffee, and ice creams. The company?s brand portfolio includes Tazo tea, Ethos water, Seatt le?s Best Coffee, and Torrefazione Italia Coffee. Starbucks Corporation sells its products in approximately 50 countries worldwide. Starbucks Corporation was founded in 1971 and is based in Seattle, Washington.
- [By Ben Levisohn]
Stifel’s Mark Astrachan and Claire Chamberlin argue that Starbucks’ (SBUX) valuation is to high for a Buy rating despite “a long runway for growth” They explain:
We do so believing consensus forward estimates are sound but that valuation, inline with a group of 15 global consumer brands, implies limited opportunity for multiple expansion. Starbucks is the preeminent global coffee brand with a long runway for growth driven by premiumization of coffee consumption and continued expansion of retail stores, both in the U.S. and abroad, and most particularly, in our view, the companys underpenetrated consumer packaged goods (CPG) business for coffee, tea, and ready-to-drink (RTD) beverages.
Overall, we estimate Starbucks sales and EPS will grow at a 9% and 16% CAGR, respectively, between 2015 and 2018. We estimate fair value in the mid $60s, a mid-teens multiple on forward EBITDA, and would become more constructive on Starbucks shares on weakness from current levels, all else being equal. We believe a premium valuation is warranted given our expectation for continued solid sales and EPS growth driven by sustainable share gains of a favorably growing global coffee category, CPG optionality, and consistent free cash flow.
How do Astrachan and Chamberlin determine Starbucks’ valuation is fair? Not by comparing it to other restaurants, but by comparing it to 15 other consumer stocks with global brands, including Chipotle Mexican Grill (CMG), Colgate-Palmolive (CL), and Nike (NKE). Here’s the list of 15 companies:
At 30.3 times earnings, Starbucks is in line with the average of that group, which stands at 31.1 times, and thus worthy of a Hold rating, Astrachan and Chamberlin say.
Shares of Starbucks have gained 0.8% to $60.02 at 3:26 p.m. today, while Chipotle Mexican Grill has fallen 2.8% to $458.63, Colgate-Palmolive has risen 0.8% to $70.43, and Nike has dipped 0.2% to $63.05.
- [By Ben Levisohn]
Wells Fargo’s Bonnie Herzog and team argue that Starbucks’ (SBUX) partnership withAnheuser-Busch InBev (BUD) to bottle and sell tea will “transform the tea market much like Starbucks did with coffee.” They explain:
StarbucksTo Enter Fast Growing, Premium Ready-to-Drink (RTD) Category withAnheuser Busch Inbev Partnership Starbucks announced late yesterday that it expects to finalize a definitive agreement with Anheuser-Busch by 2H16 to jointly produce, bottle, distribute and market the first RTD version of Teavana in the U.S. with an initial launch expected in the 1H17. We view this as a significant opportunity forStarbucks to extend its reach into one of the fastest growing RTD segments, the premium RTD tea category, which while a small part of the $125B global tea industry, is growing in the mid-teens with annual sales at $1.1B. GivenStarbucks’ expertise in teas and the sheer reach of Anheuser-Buschs distribution network, we estimateStarbucks could take ~25-30% share of the RTD premium tea segment within the first full year (FY18E), driving an incremental $200-250M in revenue and approximately $0.03-0.04 of EPS, or ~1-2% of incremental growth. Bottom line We believeAnheuser-Busch will make an exceptional DSD partner that will expand a valuable route-to-market forStarbucks and transform the tea market much likeStarbucks did with coffee.
Strategic Rationale of Partnership Makes A Lot of Sense We believe with Anheuser-Buschs distribution strength,Starbucks will be able to expedite its plan to double its tea business to $2B by 2019 from ~$1B in FY15, especially given a potential halo effect we anticipate from the sale of Teavana at retail. Although this will beStarbucks’ first foray into retail with teas, the company is by no means a stranger to the channel as its coffees and Frappuccinos have been distributed at retail via a very successful partnership with Pe
- [By Michael Vodicka]
After a highly publicized IPO in April 2000 during the aftermath of the tech bubble, Krispy Kreme Doughnuts (NYSE: KKD) proceeded to surge, climbing from $10 to an all-time high of $49 in the next three years. That fueled massive buzz that the company was well on its way to becoming the next Starbucks (Nasdaq: SBUX) or Dunkin' Brands (Nasdaq: DNKN).
- [By Ben Levisohn]
Goldman Sachs analystKaren Holthouse and team add Starbucks (SBUX) to the firm’s Conviction List following last week’s earnings report, arguing that the coffee purveyor’s comparable-store sales are “not broken.” They explain:
We reiterate our Buy rating and add the shares to the Americas Conviction List given our belief that comps can re-accelerate into F4Q, and favorable valuation vs. the S&P (1.6x relative P/E, when the low end of SBUXs long- term range is 1.67x median S&P 3-year EPS growth) leaves room for multiple expansion as a result. We still view F17 consensus as marginally too high (EPS of $2.18 or 19% growth excl. the 53rd week vs. our estimate of $2.12 or 15% growth); however, we believe commentary regarding at least 15% growth on the F3Q earnings call was sufficient to reset investor expectations for costs associated with incremental partner/technology investments…
Catalyst: (1) Underlying comp algorithm not broken…: Food plus beverage comp contributions were within 1% of the prior peak contribution, while the catch all other or marketing, digital, and loyalty fell to 0%. This supports the view that loyalty was the driver of disruption. (2)… and can reaccelerate post- loyalty: MOAP, in-app suggestive selling, and enhanced 1-1 marketing remain levers to reaccelerate the digital/marketing contribution, with the 1-2% contribution needed for 5-6% comp tracking below historical levels. (3) 12-month path not linear, but compelling PEG vs. the S&P can provide support: We would expect a 7% Americas comp lap in F1Q17 to become a bear thesis for some investors; however, we see valuation providing support. The low-end of Starbuck L/T algorithm (e.g. 15%) offers a 1.67x growth premium to the S&P median vs. a 1.55x multiple premium.
Shares of Starbuck have gained 0.8% to $58.40 at 11:35 a.m. today.
Top 5 Machinery Companies To Invest In Right Now: Xylem Inc.(XYL)
Xylem Inc. engages in the design, manufacture, and application of engineered technologies for the water and wastewater applications. It operates through two segments, Water Infrastructure and Applied Water. The Water Infrastructure segment offers various products, including water and wastewater pumps, treatment and testing equipment, and controls and systems, as well as filtration, disinfection, and biological treatment equipment under the Flygt, WEDECO, Godwin, WTW, Sanitaire, YSI, and Leopold names for the transportation, treatment, and testing of water and wastewater for public utilities and industrial applications. The Applied Water segment provides pumps, valves, heat exchangers, controls, and dispensing equipment systems under the Goulds Water Technology, Bell & Gossett, A-C Fire Pump, Standard Xchange, Lowara, Jabsco, Flojet, and Flowtronex names for residential and commercial building services, industrial water, and ir rigation applications. The company markets and sells its products through a network of direct sales force, resellers, distributors, and value-added solution providers in the United States, Europe, the Asia Pacific, and internationally. Xylem Inc. is headquartered in Rye Brook, New York.
- [By Ben Levisohn]
Flexing the barbell strategy to balance Safe Havens with more cyclical exposures. In our view, industrials investors should be positioning their portfolio with a barbell strategy, with half of the exposure in Safe Havens like General Electric, Xylem (XYL), Danaher, Honeywell International, Roper Technologies (ROP), and AMETEK (AME), and the other half selectively in the cyclical names that are better positioned today, such as Pentair, HD Supply Holdings (HDS),Actuant (ATU), Atkore International Group (ATKR), Ingersoll-Rand, and Eaton (ETN). We still believe risk-reward is mostly balanced and that the macro will remain choppy into 2017, supporting a positioning in the defensive names. But if investor sentiment improves on not-worse news and earnings results, the more cyclical names could fare better.
- [By Ben Levisohn]
Technology and Industrials are our favorite ways to buy cyclical MO. Specifically, we see the Technology Select Sector SPDR ETF (XLK) as an attractive pre-breakout idea and a likely candidate to lead the S&Ps secular advance over the coming years. Buy ideas at the stock level include: Accenture (ACN), Broadcom (AVGO), Microsoft , Texas Instruments (TXN),Visa (V),Yahoo! (YHOO). We also recommend buying the Industrial Select Sector SPDR ETF (XLI) which is reversing its year-long downtrend and in position for new highs over the coming months, in our view. Buy ideas at the stock level include: Honeywell International, Ingersoll-Rand (IR), Illinois Tool Works (ITW), 3M, Southwest Airlines (LUV), Xylem (XYL). Underlined stocks are fundamentally-rated Outperform at Oppenheimer.
Best Safest Companies To Buy For 2016: Celgene Corporation(CELG)
Celgene Corporation discovers, develops, and commercializes therapies to treat cancer and inflammatory diseases worldwide. It markets REVLIMID, an oral immunomodulatory drug for multiple myeloma, myelodysplastic syndromes (MDS), and mantle cell lymphoma; ABRAXANE, a solvent-free chemotherapy product to treat breast, non-small cell lung, pancreatic, and gastric cancers; POMALYST/IMNOVID to treat multiple myeloma; and OTEZLA, a small-molecule inhibitor of phosphodiesterase 4 for psoriatic arthritis, psoriasis, ankylosing spondylitis, Beh莽et’s disease, atopic dermatitis, and ulcerative colitis. The companys products also include VIDAZA, a pyrimidine nucleoside analog to treat intermediate-2 and high-risk MDS, and chronic myelomonocytic leukemia, as well as acute myeloid leukemia (AML); THALOMID for the patients with multiple myeloma and erythema nodosum leprosum; ISTODAX to treat cutaneous and peripheral T-cell lymphoma; and F OCALIN, FOCALIN XR, and RITALIN products. Its clinical stage products include OTEZLA for the treatment of various immune-inflammatory diseases; sotatercept for the treatment of renal anemia, beta-thalassemia and MDS; luspatercept for beta-thalassemia and MDS; CC-486 to treat MDS, AML, and solid tumors; CC-122 and CC-220 to treat hematological and solid tumor cancers, and inflammation and immunology diseases; PDA-002 for the treat diabetic foot ulcers and peripheral neuropathy; and PNK-007 for hematological malignancies treatment. The company has collaborative agreements with Novartis Pharma AG; Acceleron Pharma; Agios Pharmaceuticals, Inc.; Epizyme Inc.; Sutro Biopharma, Inc.; bluebird bio, Inc.; FORMA Therapeutics Holdings, LLC; Acetylon Pharmaceuticals, Inc.; OncoMed Pharmaceuticals, Inc.; NantBioScience, Inc.; AstraZeneca PLC; Lycera Corp.; Juno Therapeutics, Inc.; and Triphase Accelerator Corporation, as well as a strategic collaboration with Nurix, Inc. The company was founded in 1980 and is headquartered in Summit, New Jersey.
- [By Ben Levisohn]
On Tuesday, Baird predicted that Gilead Sciences (GILD) will miss earnings forecasts when it releases its financials on April 28. Barclays’ Geoff Meacham and team, however, foresee an earnings beat from Gilead and Amgen (AMGN) as well, but are more cautious on Biogen (BIIB) and Celgene (CELG). They explain why:
- [By Ben Levisohn]
Catalysts remain significant for the biotech industry: The biotech industry
obviously remains open to swings given the political landscape. That said,
fundamental catalysts for new drugs are also beginning to favor biotech again
with PCSK9 outcomes studies, new drug launches from Regeneron (REGN), Amgen (AMGN) and Biogen (BIIB) possible in 2017 and key PhIII readouts for Celgene (CELG) and Incyte (INCY) in 2017.
Best Safest Companies To Buy For 2016: Tel-Instrument Electronics Corp.(TIK)
Tel-Instrument Electronics Corp. designs, manufactures, and sells avionics test and measurement solutions for the commercial air transport, general aviation, and government/military aerospace and defense markets in the United States and internationally. The company operates through two segments, Avionics Government and Avionics Commercial. It provides instruments to test, measure, calibrate, and repair a range of airborne navigation and communication equipment. The companys products comprise AN/USM-708 and AN/USM-719, which are communications/navigation radio frequency avionics flight line testers; TS-4530, an identification friend or foe test set; and AN/ARM-206, an intermediate level TACAN test set. It also offers calibration and repair services. The company sells its products directly or through distributors. Tel-Instrument Electronics Corp. was founded in 1947 and is headquartered in East Rutherford, New Jersey.
- [By Monica Gerson]
General Mills, Inc. (NYSE: GIS) is expected to report its quarterly earnings at $0.60 per share on revenue of $3.86 billion. Pier 1 Imports Inc (NYSE: PIR) is projected to post a quarterly loss at $0.05 per share on revenue of $420.05 million. Acuity Brands, Inc. (NYSE: AYI) is estimated to report its quarterly earnings at $2.03 per share on revenue of $847.79 million. Monsanto Company (NYSE: MON) is projected to report its quarterly earnings at $2.40 per share on revenue of $4.49 billion. Worthington Industries, Inc. (NYSE: WOR) is expected to report its quarterly earnings at $0.64 per share on revenue of $692.48 million. Progress Software Corporation (NASDAQ: PRGS) is projected to post its quarterly earnings at $0.29 per share on revenue of $94.64 million. UniFirst Corp (NYSE: UNF) is estimated to report its quarterly earnings at $1.34 per share on revenue of $366.28 million. Exfo Inc (NASDAQ: EXFO) is expected to post its quarterly earnings at $0.06 per share on revenue of $60.87 million. OMNOVA Solutions Inc. (NYSE: OMN) is projected to report its quarterly earnings at $0.14 per share on revenue of $205.40 million. 8Point3 Energy Partners LP (NASDAQ: CAFD) is estimated to post a quarterly loss at $0.01 per share on revenue of $11.60 million. Park Electrochemical Corp. (NYSE: PKE) is expected to report its quarterly earnings at $0.22 per share on revenue of $35.30 million. Xplore Technologies Corp. (NASDAQ: XPLR) is projected to post its quarterly earnings at $0.01 per share on revenue of $24.00 million. Investors Real Estate Trust (NYSE: IRET) is expected to post its quarterly earnings at $0.14 per share on revenue of $56.87 million. Tel-Instrument Electronics Corp. (NYSE: TIK) is estimated to post earnings for the latest quarter. Aethlon Medical, Inc. (NASDAQ: AEMD) is expected to post a quarterly loss at $0.20 per share. Ossen Innovation Co Ltd (ADR) (NASDAQ: OSN) is projected to post ea
Best Safest Companies To Buy For 2016: Blue Buffalo Pet Products, Inc.(BUFF)
Blue Buffalo Pet Products, Inc., through its subsidiary, Blue Buffalo Company, Ltd., operates as a pet food company in the United States, Canada, Japan, and Mexico. The company develops, produces, markets, and sells dog and cat food under the BLUE Life Protection Formula, BLUE Wilderness, BLUE Basics, BLUE Freedom, and BLUE Natural Veterinary Diet lines. It also produces and sells cat litter under the BLUE Naturally Fresh line. The company sells its products to retail partners and distributors in specialty channels, including national pet superstore chains, regional pet store chains, neighborhood pet stores, farm and feed stores, ecommerce retailers, military outlets, hardware stores, and veterinary clinics and hospitals. Blue Buffalo Pet Products, Inc. was founded in 2002 and is headquartered in Wilton, Connecticut.
- [By Monica Gerson] Related BUFF Mid-Afternoon Market Update: Crude Oil Rises 3.5%; Zagg Shares Fall Following Weak Q4 Results Mid-Day Market Update: Blue Buffalo Pet Products Rises Following Strong Q4 Results; Ocean Rig UDW Shares Slide Blue Buffalo Pet Products' (BUFF) CEO Kurt Schmidt on Q1 2016 Results – Earnings Call Transcript (Seeking Alpha) Related ARMK Earnings Scheduled For May 11, 2016 Earnings Scheduled For February 10, 2016
Some of the stocks that may grab investor focus today are: