Shares of Terex (TEX) had surged 32% as of the close of trading last Thursday–but dropped 14% the next day after China’s Zoomlion announced that it wouldn’t be pursuing a purchase of the U.S. crane maker after all. In the aftermath of the scuttled deal, Morgan Stanley’s Mili Pothiwala and Nigel Coe cut Terex to Equal Weight from Overweight:
Balint Porneczi/Bloomberg News
On Friday morning, Zoomlion announced it had terminated its bid for its proposed acquisition of Terex for $31/ share. This was a clear negative for Terex shares, which traded down ~15% on Friday to $20, given the absence of an event-driven catalyst (following the sale of MHPS to Konecranes, which we assume will be completed). However, we think that the stock’s current discount to the Machinery group on a P/E basis (20%+) is justified, given a still challenged underlying operating environment for the RemainCo, as well as historically uneven company execution – both of which return to the forefront of the investment debate following the removal of the M&A bull case.
Top Computer Hardware Companies To Buy For 2016: Moneygram International, Inc.(MGI)
MoneyGram International, Inc., together with its subsidiaries, provides money transfer and payment services in the United States and internationally. The company operates in two segments, Global Funds Transfer and Financial Paper Products. The Global Funds Transfer segment provides money transfer and bill payment services primarily to unbanked and underbanked consumers. Its bill payment services allow consumers to make bill payments, pay routine bills, or load and reload prepaid debit cards with cash at an agent location, company-operated locations, or through moneygram.com with a credit or debit card, as well as through kiosks, ATMs, prepaid cards, and direct-to-bank account products. The Financial Paper Products segment provides money orders to consumers through its retail agents and financial institutions; and offers official check outsourcing services for financial institutions. This segment sells its money orders under th e MoneyGram brand and on a private label or co-branded basis with retail and financial institution agents. MoneyGram International, Inc. was founded in 1926 and is headquartered in Dallas, Texas.
- [By Lisa Levin]
Moneygram International Inc (NASDAQ: MGI) shares were also up, gaining 21 percent to $5.74 after the company reported upbeat Q4 earnings.
Equities Trading DOWN
Top Computer Hardware Companies To Buy For 2016: Emerson Electric Company(EMR)
Emerson Electric Co. operates as a diversified manufacturing and technology company. The company engages in appliance solutions, climate technologies, industrial automation, motor technology, network power, process management, professional tools, and storage solutions businesses. Its appliance solutions business provides appliance controls, appliance motors, heating products, and white-rodgers; climate technology business provides heating, ventilation, air conditioning, and refrigeration (HVACR) solutions for residential, industrial, and commercial applications; and industrial automation business offers bearings and power transmission products, electrical power generation products, electric motors, variable speed drives and servos, electrical products, material joining solutions, fluid automation products, and wind turbine systems. The company?s motor technology business provides appliance motors, HVACR motors, DC motors, fractional horsepower motors, integral horsepower a nd larger motors, and drives; network power business provides power, precision cooling, connectivity, and embedded solutions; and process management business provides various wireless related products from self-organizing field networks to wireless asset and people tracking. Its professional tools business offers pipe working and threading equipment, pressing technology, utility locating and visual diagnostics systems, drain maintenance tools, power tools, air tools, general purpose hand tools, wet/dry vacs, job site storage equipment, truck tool boxes and equipment, and van storage equipment; and storage solutions business provides shelving and storage products for residential, commercial, and foodservice needs, as well as offers specialized carts, mobile computer workstations, and cabinet fixtures. The company was founded in 1890 and is headquartered in St. Louis, Missouri.
- [By Ben Levisohn]
Industrial companies like Dover (DOV), Emerson Electric (EMR), Eaton (ETN), 3M (MMM) and Rockwell Automation (ROK) are calling for earnings growth to get better during the second half of the year. Bernstein’s Steven Winoker and team aren’t feeling as confident:
- [By Ben Levisohn]
Bernstein’s Steven Winoker and team contend that Brexit is “bad for all our companies it is just a matter of degree.” They explain why Tyco International (TYC), Idex (IEX), Danaher (DHR),Honeywell International (HON) and Emerson Electric (EMR) could feel some degree of pain:
- [By Rising Dividend Investing]
Pent Up Demand Pushing Cyclical Stocks
We are coming out of a lengthy period of decreased spending in the wake of 2008-09, which has built pent up demand for automobiles, housing and capital expenditures. The average age of vehicles on the road has reached a record high of 11.4 years. Demand for new houses fell off dramatically since the Great Recession. The average U.S. home was built in 1974 and continues to age.
As people have chosen to fix rather than replace their vehicles and homes, we’ve seen the replacement-type industries do very well. Auto Retail’s second quarter sales and earnings per share were up 14.7% and 18.6%, respectively. Home improvement retail grew sales nearly 10% with earnings up 20% from second quarter 2012.
Adding to the pent up demand for housing is the number of young people living with their parents rather than buying or renting on their own. According to real-estate marketplace Trulia, the number of “missing hou seholds” (Americans who would currently be owning or renting a home if pre-recession economic trends had continued) was up to 2.4 million in March. More than half of these missing households are 18 to 34-year-olds.
This pent up demand extends beyond just the immediate products being bought by consumers. Businesses have held off replacing durable goods since the recession. All of this excess demand will have to be released at some point. Eventually, these homes and vehicles will exceed their useful life and need to be replaced. To meet the need for the excess demand, companies will not be able to hold off re-investing in new plant equipment.
We’ve seen the beginning of this demand in 2013 and believe there is more to come. The market is buying into this as well, as more growth and manufacturing oriented sectors – such as Consumer Discretionary and Industrials – have performed well over the near-term.
Share prices for stocks in the Indu strial sectors are mo
5 Best Specialty Retail Stocks To Invest In Right Now: Microsoft Corporation(MSFT)
Microsoft Corporation develops, licenses, and supports a range of software products and services for various computing devices worldwide. The company?s Windows & Windows Live Division segment offers PC operating system that primarily includes Windows 7 and Windows Vista operating systems; Windows live suite of applications and Web services; and Microsoft PC hardware products. Its Microsoft?s Server and Tools segment provides Windows Server operating systems, Windows Azure, Microsoft SQL Server, SQL Azure, Windows Intune, Windows Embedded, Visual Studio, Silverlight, system center products, Microsoft consulting services, and product support services. This segment also offers enterprise consulting services; and training and certification to developers and information technology professionals, as well as builds standalone and software development lifecycle tools for software architects, developers, testers, and project managers. The company?s Online Services Division segment provides online information and content through Bing, MSN portals, and adCenter, as well as Atlas online tools for advertisers. Its Microsoft Business Division segment offers Microsoft office; Microsoft Exchange; Microsoft SharePoint; Microsoft Lync; Microsoft Dynamics ERP and CRM; and Microsoft Office Web Apps, as well as office 365, an online service, offering Microsoft Office, Exchange, SharePoint, and Lync. The company?s Entertainment and Devices Division segment provides Xbox 360 entertainment platform, which includes the Xbox 360 gaming and entertainment console, Kinect for Xbox 360, Xbox 360 video games, Xbox LIVE, and Xbox 360 accessories; Mediaroom, an Internet protocol television software; and Windows Phone that provide Microsoft Office and Xbox LIVE functionality. It markets and distributes its products and services through original equipment manufacturers, distributors, and resellers, as well as through online. Microsoft was founded in 1975 and is headquartered i n Redmond, Washington.
- [By Shauna O’Brien]
According to Jefferies analyst Peter Misek, software company Microsoft Corporation (MSFT) is now more likely to acquire BlackBerry.
On September 2, Microsoft announced that it had agreed to purchase Nokias devices and services business. After this deal is finalized, the analyst sees Microsoft taking a closer look at BlackBerry.
The analyst noted that having both the Nokia business as well as BlackBerry assets, MSFT would be “1) the definitive #3 handset player with better carrier access and production economies of scale; 2) the leader in enterprise mobile devices with support from the U.S. gov’t; 3) a key player in MDM, an area they would love to get into and purchasing private leaders in the space would be pricey.”
Misek also reported that other bidders may include International Business Machines (IBM) and Samsung. He also suggested the possibility of BlackBerry splitting into several pieces.
Top Computer Hardware Companies To Buy For 2016: New York & Company Inc.(NWY)
New York & Company, Inc., together with its subsidiaries, operates as a specialty retailer of women’s fashion apparel and accessories in the United States. The company offers a range of wear-to-work, and casual apparel and accessories, including pants, jackets, knit tops, blouses, sweaters, denim, T-shirts, activewear, handbags, and jewelry. It sells its products under the New York & Company, Lerner, Lerner New York, New York Style, City Stretch, City Style, and NY&C brand names. The company sells its branded merchandise through its network of retail stores and E-commerce store at nyandcompany.com. As of March 15, 2012, it operated 532 stores in 43 states. The company, formerly known as NY & Co. Group, Inc., was founded in 1918 and is headquartered in New York, New York.
- [By Lisa Levin]
Shares of New York & Company, Inc. (NYSE: NWY) got a boost, shooting up 13 percent to $2.31 as the company posted upbeat quarterly results.
The GEO Group Inc (NYSE: GEO) shares were also up, gaining 19 percent to $23.27. Following Thursday’s Department of Justice news regarding privately-managed prisons, GEO Group dropped on Thursday, but rebounded Friday after issuing a response to the DoJ.
- [By Monica Gerson]
New York & Company, Inc. (NYSE: NWY) shares dropped 42 percent to $1.72 after the company reported downbeat Q1 results and issued a weak Q2 forecast.
Top Computer Hardware Companies To Buy For 2016: SodaStream International Ltd.(SODA)
SodaStream International Ltd. develops, manufactures, and markets home beverage carbonation systems and related products. The company operates through four segments: The Americas; Western Europe; Asia-Pacific; and Central and Eastern Europe, Middle East, and Africa. It offers sparkling water makers and exchangeable carbon-dioxide cylinders, which enable consumers to easily transform ordinary tap water into carbonated soft drinks and sparkling water; and consumables, such as carbon-dioxide refills, reusable carbonation bottles, and flavors to add to the carbonated water. The company also sells accessories, including bottle cleaning materials and ice cube trays; and Brita water filtration systems in Israel. It markets its products under the SodaStream and Soda-Club brand names. The company sells its products through individual retail stores and local distributors, as well as directly to customers. The company was formerly known as Soda-Club Holdings Ltd. and changed its name to SodaStream International Ltd. in March 2010. SodaStream International Ltd. was founded in 1903 and is headquartered in Airport City, Israel.
- [By P.I.A.]
There are considerations. The Coca-Cola Company (KO), an outsized peer, has been underperforming, though it maintains one of the highest industry multiples. Its results may not bode well for DPS. It also is not clear how much of an effect Soda Stream International (SODA), which offers homemade carbonated beverages, might have on the future revenues soft drink companies.
- [By David Sterman]
Dubious Plans For Growth
During a meeting with analysts Sept. 10, management ran through a series of new niches the company may pursue. One such rumored move: Products that mimic SodaStream's (Nasdaq: SODA) carbonated beverage dispensers.
Top Computer Hardware Companies To Buy For 2016: Omega Protein Corporation(OME)
Omega Protein Corporation develops, produces, and delivers products to enhance the nutritional integrity of foods, dietary supplements, and animal feeds worldwide. It operates in two segments, Animal Nutrition and Human Nutrition. The Animal Nutrition segment produces animal nutrition products, including fish meal products that are primarily used as a protein ingredient in animal feed for swine, aquaculture, and household pets. This segment also offers fish oil for animal and aquaculture feeds, as well as additives to human food products and dietary supplements; and fish solubles to livestock and aquaculture feed manufacturers, and for use as an organic fertilizer. The Human Nutrition segment produces plant and marine based specialty oils, Omega-3 fish oils, and specialty dairy proteins and other related products. The company sells its products in the United States, Mexico, Europe, Canada, Asia, South and Central America, and others. Omega Protein Corporation was founded in 1913 and is headquartered in Houston, Texas.
- [By Lisa Levin]
Omega Protein Corporation (NYSE: OME) was down, falling around 20 percent to $17.47 after the company reported weaker-than-expected results for its fourth quarter.