ValueWalk's Raul Panganiban interviews Kirk Du Plessis, Founder and CEO of Option Alpha, and discuss Option Alpha and his general approach to investing. Q1 2021 hedge fund letters, conferences and more The following is a computer generated transcript and may contain some errors. Interview with Option Alpha's Kirk Du Plessis
- US: Dow Futures: 13339.00 (0.35%), S&P 500 Futures: 1436.20 (0.39%), NASDAQ Futures: 2794.50 (0.55%)
- Europe: CAC: 3545.97 (0.24%), DAX: 7342.14 (0.44%), FTSE: 5790.34 (-0.03%).
- Asia-Pacific: Australia: 4361.30 (0.82%), China: 2126.55 (0.28%), Hong Kong: 20075.39 (1.08%) India: 5431.00 (0.76%), Japan: 8959.96 (1.70%).
- Metals: Gold: 1745.40 (0.61%), Silver: 33.84 (0.80%), Copper: 3.70 (0.18%)
- Energy: Crude Oil: 97.30 (0.13%), Natural Gas: 3.00 (0.10%)
- Commodities: Corn: 7.62 (-0.67%), Soya Bean: 16.96 (-1.08%), Wheat: 8.70 (-0.65%)
- Currency: EUR/USD: 1.2897 (0.33%), GBP/USD: 1.6085 (0.09%), USD/JPY: 77.9100 (0.18%)
- 10 year US Treasury: 1.742% (0.042)
Financial and Economic News Update
U.S. stock-index futures gain: U.S. stock-index futures are pointing to a higher open on Wednesday after Germany’s Constitutional Court backed Europe’s latest bailout fund, and ahead of possible stimulus measures from the U.S. Federal Reserve. On the economic front, import prices rose in August for the first time in five months, the Labor Department said today. Import prices increased 0.7 percent last month, against analysts’ expectations of a rise of 1.4 percent. Export prices increased 0.9 percent in August, against expectations for a gain of 0.4 percent. The Dow Jones industrial average, the S&P 500 and the NASDAQ were all trading close to half a percent higher.
European markets trading mostly higher: European markets are up in trade today amid a big rally in banking stocks after the German Constitutional Court ruled in favor of the region’s proposed permanent bailout fund. The German DAX (INDEXDB:DAX) is trading 0.4 percent higher at 7342.14, the FTSE 100 (INDEXFTSE:UKX) was largely unchanged at 5790.34 and the CAC 40 (INDEXEURO:PX1) gained 0.2 percent to 3545.97. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was trading 0.5 percent higher.
Asian markets end higher: Asian markets closed higher on Wednesday, with Japan’s NIKKEI 225 (INDEXNIKKEI:NI225) closing 1.7 percent higher at 8959.96 points. The HANG SENG INDEX (INDEXHANGSENG:HSI) jumped 1.1 percent to end at 20075.39, while the SSE Composite Index (SHA:000001) (Shanghai Composite Index) gained 0.3 percent to 2126.55. The S&P/ASX 200 (INDEXASX:XJO) index closed 0.8 percent higher at 4361.30. The benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index ended up 0.8 percent.
Company News Update
- Facebook Inc (NASDAQ:FB) soared 6 percent in New York pre-market trading after founder Mark Zuckerberg said late yesterday that it will focus on increasing revenue from mobile services.
- Apple Inc. (NASDAQ:AAPL) is expected to unveil the latest version of its best-selling iPhone at a media event scheduled to begin at 1 P.M. ET.
- Chesapeake Energy Corporation (NYSE:CHK) agreed to sell most of its Permian Basin properties, and a majority of its pipeline assets, in a series of transactions for $6.9 billion, the proceeds from which would be used to repay $4 billion of term loans in the fourth quarter.
- General Electric Company (NYSE:GE) is considering a sale of its $2.2 billion stake in Thai lender, Bank of Ayudhya Pcl, Bloomberg reported.
- Real estate investment company Starwood Capital Group, which owns businesses such as Starwood Property Trust, Inc. (NYSE:STWD), Starwood Energy Group Global, and Starwood Real Estate Securities, is planning to sell a minority stake in the company, the Wall Street Journal reported.
- Credit rating agency Moody’s Corporation (NYSE:MCO) raised its full-year profit forecast to $2.70 to $2.80 per share, excluding certain items, from its prior forecast of $2.62 to $2.72 a share. Analysts are expecting earnings of $2.72 a share. The company also raised its share repurchase program to about $300 million.
- John Malone’s Liberty Media Corp (Capital) (NASDAQ:LMCA) has raised its stake in satellite radio operator Sirius XM Radio Inc (NASDAQ:SIRI) to 49.2 percent from 48.8 percent, according to a regulatory filing.
- Paccar Inc (NASDAQ:PCAR), the world’s third largest manufacturer of heavy-duty trucks, has warned that demand for trucks in the U.S. is likely to remain weak, and it now expects third-quarter production to be 15 percent to 20 percent below the second-quarter level.
- Hospitality chain Red Lion Hotels Corporation (NYSE:RLH) said it has received expressions of interest but no formal acquisition offers, as it ended a five month search for a buyer or merger partner.
- Clinical software provider Mediware Info. Systems (NASDAQ:MEDW) has agreed to be taken private by Chicago-based investment firm Thoma Bravo LLC for about $195 million in cash.
- Steel Dynamics, Inc. (NASDAQ:STLD) said third quarter profit will be well short of Wall Street’s expectations due to falling steel shipments. The steel maker now expects earnings excluding certain items of between 9 cents to 14 cents per share, compared to analysts’ estimates of 19 cents per share.
- The board of consumer product company, Jarden Corporation (NYSE:JAH) has authorized a $250 million share repurchase program.
- Network and storage equipment maker Xyratex Ltd. (NASDAQ:XRTX) revised lower its third quarter revenue outlook amid a dip in demand for its data storage products from enterprise customers.
- Phillips 66 (NYSE:PSX) is up 2 percent in early trading after Morgan Stanley upgraded the stock to “overweight” from “equal weight.”
- Payroll processor Paychex, Inc. (NASDAQ:PAYX) was downgraded to “underperform” from “hold” by analysts at Jefferies Group Inc with a target price of $31.
- Banking stocks in Europe were trading higher after the German constitutional court rejected calls to block the ratification of euro zone’s new bailout fund and budget pact. HSBC Holdings plc (ADR) (NYSE:HBC) (LON:HSBA) (HKG:0005) gained 1 percent, Royal Bank of Scotland Group plc (ADR) (NYSE:RBS) (LON:RBS) jumped 3.7 percent and Barclays PLC (ADR) (NYSE:BCS) (LON:BARC) rose 1.6 percent. In Germany, Commerzbank AG (ETR:CBK) (FRA:CBK) soared more than 5 percent. BNP Paribas SA (EPA:BNP) and Societe Generale SA (EPA:GLE) were also trading significantly higher in Paris.
- BT Group plc (ADR) (NYSE:BT) (LON:BT.A) has secured the broadcast rights for Premiership rugby for a four-year period in a 152 million pound ($244 million) deal.
- Europe’s single currency zone will survive the current crisis, Anshu Jain, the co-chairman of Deutsche Bank AG (USA) (NYSE:DB) (ETR:DBK) (FRA:DBK), told CNBC today.
- Kingfisher plc (LON:KGF), Europe’s largest home-improvement retailer, reported first-half pre-tax profit of 371 million pounds ($596 million), missing estimates of 395 million pounds. Sales for the period dropped 3.3 percent to 5.48 billion pounds, while same store sales declined 2.8 percent.
- Danish wind turbine maker Vestas Wind Systems A/S (CPH:VWS) slumped 9 percent after Sanford C. Bernstein & Co. downgraded the stock to “underperform” from “market-perform,” with a target price of 20 kroner.
- Barratt Developments Plc (LON:BDEV), U.K.’s largest homebuilder by volume, reported full year profit of 67.4 million pounds ($108.3 million) compared with a loss of 13.8 million pounds a year earlier. Revenue rose 14 percent to 2.32 billion pounds. The company, however, didn’t pay an annual dividend, which disappointed investors, who were expecting a payout of 0.7 pence a share.
- Alcoa Inc. (NYSE:AA) received a third offer from the Turin-based renewable energy group, KiteGen Research, for its Sardinian smelter, according to a report in Italian daily Il Sole-24 Ore.
- U.K.’s largest software maker, The Sage Group plc (LON:SGE) surged 2.6 percent after the Daily Mail said private-equity firms led by KKR & Co. L.P. (NYSE:KKR) and The Blackstone Group L.P. (NYSE:BX) may bid for the company.
- Vodafone Group Plc (ADR) (NASDAQ:VOD) (LON:VOD) was down 1 percent in London trading after analysts at Nomura downgraded the stock to “neutral” from “buy.”
- ICAP plc (LON:IAP), the world’s largest inter-dealer broker was lowered to “underweight” from “equal weight” by analysts at Morgan Stanley.
- Singapore flag carrier, Singapore Airlines Ltd. (SGX:C6L) has signed an agreement worth nearly $400 million with Panasonic Avionics, a unit of Japan’s Panasonic Corporation (ADR) (NYSE:PC) (TYO:6752), to equip its aircraft with advanced in-flight entertainment and broadband internet services.
- Keith Turner, Chairman of New Zealand’s largest appliance manufacturer, Fisher and Paykel Appliances, has asked shareholders not to accept Haier Electronics Group Co., Ltd. (HKG:1169)’s $705 million offer, till an independent advisor’s valuation report, due to be released in October, suggests the price is right.
- Japanese telecommunications equipment-maker Oki Electric Industry Co., Ltd. (TYO:6703) plunged 11 percent after it said that it will likely make a loss of about 30.8 billion yen ($395 million) due to overstatement of accounts by its Spanish unit over six years.
- China’s largest listed steel maker, Baoshan Iron & Steel Co., Ltd. (SHA:600019) said it would keep October list prices unchanged from September, after three straight months of cuts.
- Hong Kong-listed Italian fashion company Prada S.p.A (HKG:1913) fell 1.9 percent after CIMB downgraded the stock to “neutral” from “outperform” in the wake of a profit warning from British luxury clothing and accessories maker Burberry Group plc (LON:BRBY).
- Chinese telecommunications equipment maker Huawei Technology Co Ltd (SHE:002502) will invest $2 billion in the U.K. by 2017, and will increase its workforce in the country to more than 1,500 from the current 800.
- Tokyo Electric Power Co Incorporated (TYO:9501) slid 1.5 percent after the Nikkei business daily reported that the electric utility has formed two advisory bodies that will monitor the implementation of reforms meant to prevent the reoccurrence of nuclear disasters.
- China Eastern Airlines Corp. Ltd. (ADR) (NYSE:CEA) (HKG:0670) (SHA:600115), the country’s second-largest carrier, jumped 4.3 percent in Hong Kong trading after announcing plans to raise $570 million by selling shares to its state-owned parent to pare debts.
Economic Calendar for Wednesday, September 12, 2012:
07:00 A.M. ET: MBA Purchase Applications (Week ending Friday, September 07)
08:30 A.M. ET: Export Price Index (MoM) (August)
08:30 A.M. ET: Import Price Index (MoM) (August)
08:30 A.M. ET: Export Price Index (YoY) (August)
08:30 A.M. ET: Import Price Index (YoY) (August)
10:00 A.M. ET: Wholesale Inventories (July)
10:30 A.M. ET: EIA Petroleum Status Report (Week ending Friday, September 07)
01:00 P.M. ET: 10-Year Note Auction