Capstone Mining, GP Investments are Third Avenue Manager Faves
Capstone Mining, GP Investments are Third Avenue Manager Faves
What to Watch Wednesday: Constellation Brands May Quench Your Thirst
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Capstone Mining has far lower political risk because its copper fields are in North and South America, said Matthew Fine, portfolio manager for the Third Avenue International Value Fund. Fine added that the Canadian-based miner trades at a substantial discount to its peers, making it a likely take-out candidate. Fine is also bullish on Brazilian-based private equity player GP Investments, saying it sells as a 45% discount to its liquidation value. Finally, Fine is positive on Telefonica Deutschland, despite its drop in earnings last week, due to a spike in consolidation in the industry.
For Wednesday October 7, TheStreet is concentrating on a number of companies slated to release their latest financial data. We kick of the morning with Acuity Brands (AYI), Constellation Brands (STZ) and Monsanto (MON) all reporting before the opening bell. For Constellation Brands' second quarter fiscal 2016 results, analysts are calling for earnings of $1.32 a share on revenue of $1.73 billion. The drinks company owns over a hundred brands in beer, wine and spirits. Strong demand for beer is expected to drive sales along with new product offerings. Overall, the company's top and bottom line are forecasted to grow year-over-year. There are several reports to watch on the economic calendar. The MBA mortgage applications report is due out at 7 a.m. Eastern, which is a leading indicator for single-family home sales and housing construction. Then, the Gallup U.S. job creation index comes out at 8:30. Next, we get the weekly oil inventory data from the Energy Information Administration. Last, we end the day with consumer credit coming out at 3 p.m. TheStreet's U-Jin Lee reports in New York.
Crude oil extended gains achieved since Friday, closing Tuesday’s session at its highest level since August 31st. That triggered a rally in energy, pushing Dow components Chevron (CVX) and Exxon Mobil (XOM) sharply higher. Stocks closed mixed as a surge in the energy sector pulled the Dow higher, while a selloff in biotech weighed on the Nasdaq. Meanwhile, the S&P 500 fell after being caught in the middle of the two for much of the session. EnerSys (ENS) jumped on reports Johnson Controls (JCI) is interested in a takeover. Johnson, which specializes in temperature regulation technology, could be looking at a deal worth more than $3 billion. Global growth is expected to take a hit this quarter on lower commodity prices and increased volatility, according to the IMF.
DNA sequencing company Illumina (ILMN) plummeted in midday trading Tuesday after reporting disappointing preliminary sales for its third quarter. The company said weak instrument sales performance in Europe and the Asia-Pacific was to blame. Stocks moved lower as the biotech sector suffered another selloff. Biotech stocks have suffered from massive declines over the past two weeks after Democratic presidential candidate Hillary Clinton vowed to address industry price gouging. The Container Store (TCS) slumped after missing quarterly estimates on its top- and bottom-lines. Earnings fell 62% over the quarter, weighed on by increased promotional spending. Total revenue increased just over 1%.
In Tuesday's Analysts' Actions, Twitter's (TWTR) outlook seems cheery while CBS (CBS) and Skyworks Solutions (SWKS) have their price targets cut at one Wall Street firm. Twitter was upgraded to BUY from HOLD at Topeka Capital Markets Tuesday morning. Analysts approve Jack Dorsey as its permanent CEO. It appears that Twitter now has the potential to move forward. Another positive is the announcement that Adam Bain is its new Chief Operating Officer. He will help run the microblogging service as Dorsey juggles his CEO roles at two companies. The firm is keeping its $35 price target. Meanwhile, analysts at Topeka trimmed CBS' price target to $65 from $67. The reason for this is that $80 million of revenue will be moved out of its third quarter entertainment line, into its fourth quarter. This reflects the timing of its new streaming deal with Amazon (AMZN). The two recently announced the extension of their current content licensing agreement. The firm is still keeping its BUY rating on the stock. The same firm lowered Skyworks Solutions' price target to $100 from $120, citing near term uncertainty. But, analysts are keeping their BUY rating as the company announced plans to acquire semiconductor company PMC-Sierra (PMCS). The firm added that Skyworks is trying hard to achieve scale. TheStreet’s U-Jin Lee reports in New York.
PepsiCo (PEP) posted 3rd quarter profit that topped analysts' estimates and raised its forecast for the year after the company's North American snack and beverage businesses were helped by higher prices. PepsiCo now anticipates a 9% increase in 2015 core earnings per share growth versus the previous estimate of 8%. Meanwhile, a major scandal is erupting in the multi-billion dollar industry of fantasy sports. The New York Times report the online and unregulated business in which players assemble their fantasy teams with real athletes. Regulators are asking for information from employees of FanDuel and DraftKings about whether they are taking information--that only they know--and using it to make money on other fantasy sports sites. Volkswagen's CEO says massive cost cuts are needed to manage the emissions scandal but promised to limit the impact on jobs.
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