Poor Bill Ackman. Shares of Herbalife (HLF), a stock he loves to short, have soared more than 10% today–putting the stock up 40% for the past 12 months–after the multi-level marketer reported better-than-expected earnings last night and said it was close to reaching a settlement over its business practices with the Federal Trade Commission. S&P Global Market Intelligence’s Joe Agnese has the details:
We lift our 12-month target by $16 to $72, applying a P/E of 15.2X, in-line with Herbalife’s 5-year average, to our 2016 EPS estimate of $4.75, up from $4.50. We lift our 2017 EPS estimate by $0.26 to $5.20. We see valuation benefiting from moderating regulatory risk and improving volumes, despite weakness in Brazil. An FTC deal may be near, in our view, as Herbalife notes talks are in advanced stages which may result in a monetary payment and injunctive relief. Q1 adjusted EPS of $1.36 vs. $1.29 is $0.29 above our estimate on forex-neutral net sales growth of 11%, above our 5.5% estimate
stocks in the news: Repligen Corporation(RGEN)
- [By Jim Robertson]
On Tuesday, our Under the Radar Moversnewsletter suggested going long on small cap bioprocessing stock Repligen Corporation (NASDAQ: RGEN):
As for Repligen, this one’s a bit more speculative than usual; we’re betting the long-term shape of the chart takes hold, and benefits us in the short run.
stocks in the news: Trina Solar Limited(TSL)
- [By Elizabeth Balboa]
The firm has a Sell rating on First Solar, JA Solar Holdings and Trina Solar Limited (ADR) (NYSE: TSL). It maintains a NC rating on SunPower Corporation, Canadian Solar and JinkoSolar Holding.
- [By Spencer Israel]
Axiom Capital Managing Director Gordon Johnson upgraded the entire alternative energy sector from Market Underweight to Market Overweight and upgraded SolarCity Corp (NASDAQ: SCTY) from Sell to Hold and Trina Solar Limited (ADR) (NYSE: TSL), Yingli Green Energy Holding Co Ltd (ADR) (NYSE: YGE) and JA Solar Holdings Co., Ltd. (ADR) (NASDAQ: JASO) from Sell to Buy.
- [By Roberto Pedone]
Another potential earnings short-squeeze candidate is integrated solar-power products maker Trina Solar (TSL), which is set to release numbers on next Monday before the market open. Wall Street analysts, on average, expect Trina Solar to report revenue of $645.68 million on earnings of 15 cents per share.
The current short interest as a percentage of the float for Trina Solar is extremely high at 24.5%. That means that out of the 76.94 million shares in the tradable float, 18.88 million shares are sold short by the bears. If the bulls get the earnings news they’re looking for, then shares of TSL could easily rip sharply higher post-earnings as the bears move to cover some of their positions.
From a technical perspective, TSL is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock recently formed a double bottom chart pattern at $8.67 to $9.04 a share. Shares of TSL have now started to rebound off those support levels and it’s quickly moving within range of triggering a major breakout trade post-earnings above some key near-term overhead resistance levels.
If you’re bullish on TSL, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some near-term overhead resistance levels at $10.72 to $11.19 a share and then above its 50-day moving average of $11.17 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 5.17 million shares. If that breakout materializes post-earnings, then TSL will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $12.49 to $14 a share, or even $14.50 to $15 a share.
I would avoid TSL or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below some near-term support levels at $10 a share to those double bottom support levels at $9.04 to $8
stocks in the news: Fortune Brands Home & Security, Inc.(FBHS)
- [By Lisa Levin]
Benzinga's newsdesk monitors options activity to notice unusual patterns. These large volume (and often out of the money) trades were initially published intraday in Benzinga Professional . These trades were placed during Wednesday’s regular session.
stocks in the news: OncoMed Pharmaceuticals, Inc.(OMED)
- [By Teresa Rivas]
OncoMed Pharmaceuticals (OMED) has lost more than a third of its value Monday, after Bayer decided not to exercise its option to license the firms Phase II-ready WNT pathway inhibitors Vantictumab and Ipafricept, which treat pancreatic cancer.
That wasnt the only bad news, however, as the firms randomized-controlled Phase II “YOSEMITE” trial of pancreatic cancer drug demcizumab also missed its primary endpoint.
Leerinks Michael Schmidt and his team reiterated a Market Perform rating on the stock Monday, and lowered their price target from $10 to $6 on the news, calling it a “double setback” for OncoMed.
More detail from the note:
This is a major setback for OMED and in our view for the cancer stem cell targets more broadly, which have been a difficult area of drug development. We’ve been cautious on the probability-of-success of these agents and see more promise on OMED’s recent efforts in building a second area of focus in immuno-oncology. Going forward, OMED plans to review and prioritize its R&D pipeline after results from the still pending tarextumab Phase II “PINNACLE” trial in small cell lung cancer (SCLC) and data from the demcizumab “DENALI” trial in NSCLC are available in 2Q17. We remain MP rated in light of the uncertainties around OMED’s pipeline and strategy at this point. We previously assigned a 30% probability of success (POS) to demcizumab which we now have removed from our model. We also think chances that CELG will opt-into this program are slim and we have removed associated POS-adjusted milestone payments from our model. OMED has cash to run operations through 3Q18.
OncoMed is down 36.1% to $5.60 this afternoon.
- [By Paul Ausick]
OncoMed Pharmaceuticals Inc. (NASDAQ: OMED) dropped nearly 44% Monday to post a new 52-week low of $4.94 after closing Friday at $8.76. The stock’s 52-week high is $15.49. Volume of about 3.3 million shares was nearly 20 times the daily average of around 182,000. A proposed deal with Bayer AG fell through and one of the company’s drugs failed a phase 2 clinical trial.
- [By Paul Ausick]
OncoMed Pharmaceuticals Inc. (NASDAQ: OMED) dropped about 5.3% Wednesday to post a new 52-week low of $4.69 after closing at $4.95 on Tuesday. The stock’s 52-week high is $15.49. Volume was more than double the daily average of around 270,000 shares. The company had no specific news Wednesday.
stocks in the news: J & J Snack Foods Corp.(JJSF)
- [By Monica Gerson]
J & J Snack Foods Corp (NASDAQ: JJSF) is estimated to post its quarterly earnings at $0.78 per share on revenue of $231.58 million.
Nabors Industries Ltd. (NYSE: NBR) is expected to post a quarterly loss at $0.33 per share on revenue of $630.85 million.