Post Market Update
Relying On Old-Fashioned Stock Picking, Lee Ainslie Reports His “Strongest Quarter” Ever
Lee Ainslie's Maverick Fund USA enjoyed its "strongest quarter in the fund's history" during the three months to the end of June. According to a copy of the firm's second-quarter letter to investors, which ValueWalk has been able to review, Maverick Fund USA gained 18% in the second quarter. Following this performance, the fund was Read More
• US: Dow: 13096.50 (-0.08%), S&P 500: 1412.16 (0.02%), NASDAQ: 2977.23 (-0.36%)
• Europe: CAC: 3429.27 (-0.88%), DAX: 7260.63 (-0.33%), FTSE: 5782.70 (-1.16%).
• Asia-Pacific: Australia: 4517.00 (0.70%), China: 2068.88 (0.32%), Hong Kong: 21641.82 (0.99%), India: 5619.70 (0.39%), Japan: 8928.29 (0.97%).
• Metals: Gold: 1719.10 (0.41%), Silver: 32.32 (1.57%), Copper: 3.52 (0.33%)
• Energy: Crude Oil: 86.24 (0.65%), Natural Gas: 3.69 (0.03%)
• Commodities: Corn: 7.55 (1.89%), Soya Bean: 15.48 (0.80%), Wheat: 8.64 (0.90%)
• Currency: Euro (€) / US Dollar ($) (EURUSD): 1.2958 (-0.02%), British Pound Sterling (UK£) / US Dollar ($) (GBPUSD): 1.6131 (0.01%), US Dollar ($) / Japanese Yen (¥) (USDJPY): 79.7900 (0.03%)
• 10 year US Treasury: 1.690% (0.013)
Market and Economy News Update
U.S. markets end largely unchanged: U.S. markets closed flat in a lackluster session on Wednesday following the longest weather-related shutdown since 1888. The Dow Jones Industrial Average (INDEXDJX:.DJI) dipped 10.67 points, or 0.08 percent, to close at 13096.54. The S&P 500 (INDEXSP:.INX) eked out a gain of 0.22 points, or 0.02 percent, to end at 1,412.16, while the NASDAQComposite (INDEXNASDAQ:.IXIC) ell 10.72 points, or 0.36 percent, to finish at 2,977.23.
Oil prices edge higher: Crude prices gained on Wednesday as investors braced for a potentially long-term fuel supply disruptions at the East Coast’s second-biggest refinery after Sandy cut off power to the plant and flooded some low-lying areas. Crude oil for December delivery added 0.7 percent, to settle at $86.24 a barrel on the New York Mercantile Exchange. Brent oil for December settlement lost 0.7 percent to $108.33 a barrel on the London-based ICE Futures Europe exchange.
Stocks in Focus
• Visa Inc (NYSE:V) posted fiscal fourth-quarter earnings excluding one-time items of $1.54 a share, beating Street expectations for $1.50 a share. Operating revenue rose 15 percent to $2.7 billion, in line with estimate of $2.68 billion.
• Metlife Inc (NYSE:MET) said third quarter operating profit rose 47 percent to $1.42 billion, or $1.32 a share, from $965 million, or 91 cents a year earlier, topping the average analysts’ estimate of $1.28 a share.
• Mastercard Inc (NYSE:MA) reported a 7.7 percent rise in third quarter profit to $772 million, or $6.17 a share, from $717 million, or $5.63, a year earlier. Revenue increased 5 percent, to $1.92 billion. Analysts were expecting the company to earn $5.92 a share on $1.94 billion in revenue.
• Home and auto insurer The Allstate Corporation (NYSE:ALL) said third-quarter profit quadrupled to $723 million or $1.48 a share, from $175 million, or 34 cents, in the same period last year. Operating profit rose to $1.46 a share from 16 cents a year earlier, beating the average analysts’ estimate of $1.13 per share.
• Phillips 66 (NYSE:PSX) said third-quarter profit rose 52 percent to $1.6 billion, or $2.51 a share, from $1.05 billion, or $1.65, in the year-ago period. Excluding one-time items, earnings stood at $2.97 a share, topping estimates of $2.35 per share.
• MGM Resorts International (NYSE:MGM) reported third quarter loss of $181.2 million, or 37 cents a share, compared with a year-earlier loss of $123.8 million, or 25 cents a share. Excluding one-time items, the casino operator posted a loss of 23 cents per share. Revenue came in at $2.3 billion. Analysts had projected a loss of 17 cents a share on revenue of $2.28 billion.
• Seagate Technology PLC (NASDAQ:STX) posted first quarter earnings excluding one-rime items of $1.45 per share, on revenue of $3.73 billion. Analysts were expecting the hard drive maker to earn $1.68 per share and $3.75 billion in revenue.
• Cummins Inc. (NYSE:CMI) reported third quarter earnings excluding one-time items of $1.78 per share, below analysts’ projection of $1.83 a share. Revenue fell 11 percent to $4.1 billion, in line with forecast. The engine maker reiterated its recently revised forecast for full-year profit.
• Semiconductor company Cirrus Logic, Inc. (NASDAQ:CRUS) reported second quarter earnings and revenue that beat Wall Street estimates, and provided a better-than-expected current quarter revenue guidance.
• Biogen Idec Inc. (NASDAQ:BIIB) said its experimental treatment for patients with hemophilia A met its goals in a late-state study. The company plans to apply for U.S. regulatory approval next year.
• Waste Management, Inc. (NYSE:WM) reported third quarter earnings excluding one-time items of 61 cents per share, 1 cents above the average analysts’ estimate. Revenue fell 1.7 percent to $3.46 billion, trailing estimates of $3.5 billion. The waste-disposal company cut its full-year earnings outlook.
• Exchange operator Nasdaq OMX Group, Inc. (NASDAQ:NDAQ) has agreed to acquire the index business of Mergent Inc. for an undisclosed amount.
• BMC Software, Inc. (NASDAQ:BMC) reported second quarter earnings excluding one-time items of 88 cents a share, matching expectations, but sales were below estimates.
• HSN, Inc. (NASDAQ:HSNI) said third quarter earnings excluding items dropped to 66 cents per share from 50 cents per share. Sales jumped 7.1 percent to $778.8 million. Analysts had expected the direct-to-consumer retailer to post earnings of 51 cents on revenue of $786 million. The company also raised its quarterly dividend 44 percent to 18 cents per share.
• Computer software company AVG Technologies NV (NYSE:AVG) reported third quarter results that topped forecasts and also provided better-than-expected current-quarter revenue guidance.
Hedge Fund News Update
• Netflix, Inc. (NASDAQ:NFLX) closed 14 percent higher after activist investor Carl Icahn disclosed a 9.98 percent stake in the movie-streaming website in a regulatory filing.
• Hedge fund managers Lansdowne Partners, Odey Asset Management and Blackfish Capital, have slowly acquired stakes in fledgling oil explorers operating off the Falklands, according to a Reuters report.
• Activist hedge fund ValueAct Capital has raised its stake in Motorola Solutions Inc (NYSE:MSI) to 10.3 percent, according to a regulatory filing.
• Pension funds are likely to continue increasing their allocations to hedge funds despite the recent poor performance within the hedge fund industry, according to Don Steinbrugge, Chairman of global consulting firm, Agecroft Partners.
• Tetragon Financial Group has acquired Polygon Management for $98.5 million, to expand its asset management business, according to a Reuters report.
• British hedge fund firm Coupland Cardiff has shut-down its Asia focused event-driven fund after its sole investor pulled out.
Brokerage Upgrades and Downgrades on Wednesday, October 31, 2012
• American Capital Agency Corp. (NASDAQ:AGNC) was lifted to “buy” from “hold” by analysts at Wunderlich with a target price of $34.
• Artio Global Investors Inc. (NYSE:ART) was upgraded to “neutral” from “sell” by analysts at Citigroup.
• Canadian Pacific Railway Limited (USA) (NYSE:CP) was raised to a “market perform” rating from a “underperform” rating by analysts at FBR Capital with a target price of $90.
• Copart, Inc. (NASDAQ:CPRT) was lifted to “outperform” from “neutral” by analysts at Robert W. Baird with a target price of $33.
• Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP) was upgraded to “buy” from “neutral” by analysts at Goldman Sachs.
• Dominion Resources, Inc. (NYSE:D) was raised to “buy” from “hold” by analysts at Argus with a target price of $57.
• DineEquity Inc (NYSE:DIN) was lifted from “outperform” to “strong buy” by analysts at Raymond James.
• Forest Oil Corporation (NYSE:FST) was upgraded to “outperform” from “neutral” by analysts at RBC Capital Markets.
• Nanometrics Incorporated (NASDAQ:NANO) was raised to “overweight” from “neutral” by analysts at JPMorgan Chase.
• News Corp (NASDAQ:NWSA) was lifted to “outperform” from “neutral” by analysts at Macquarie.
• Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB) was upgraded to “buy” from “hold” by analysts at Miller Tabak.
• Stewart Information Services Corp (NYSE:STC) was raised to “outperform” from “market perform” by analysts at FBR Capital.
• Team Health Holdings LLC (NYSE:TMH) was lifted to “overweight” from “neutral” by analysts at Piper Jaffray.
• Advent Software, Inc. (NASDAQ:ADVS) was downgraded to “market perform” from “outperform” by analysts at JMP Securities.
• Clean Energy Fuels Corp. (NASDAQ:CLNE) was lowered to “underweight” from “neutral” by analysts at Piper Jaffray.
• Ceragon Networks Ltd. (NASDAQ:CRNT) was cut to “hold” from “buy” by analysts at Canaccord Genuity.
• EQT Corporation (NYSE:EQT) was downgraded to “market perform” from “outperform” by analysts at Wells Fargo & Co.
• Halcon Resources Corp (NYSE:HK) was lowered by analysts at JPMorgan Chase from an “overweight” rating to a “neutral” rating.
• Integrated Device Technology, Inc. (NASDAQ:IDTI) was cut to “neutral” from “outperform” by analysts at Wedbush.
• QEP Resources Inc (NYSE:QEP) was downgraded to “market perform” from “outperform” by analysts at Raymond James.
• QuinStreet Inc (NASDAQ:QNST) was lowered by analysts at Raymond James from an “outperform” rating to a “market perform” rating.
• The Western Union Company (NYSE:WU) was cut to “market perform” from “outperform” by analysts at Raymond James.
• Weyerhaeuser Company (NYSE:WY) was downgraded to “sell” from “hold” by analysts at McAdams Wright Ragen.