Friday, February 21, 2014

Dollar holds gains ahead of housing, output data

LOS ANGELES (MarketWatch) — The U.S. dollar was largely steady against major rivals Friday, holding to a weekly gain ahead of the release of updates that may show slowing in the U.S. housing market and in industrial output.

The euro (EURUSD)  traded at $1.3615 compared with $1.3619 late Thursday in North America, while the yen also moved sideway, with dollar (USDJPY)  at ¥104.33, little changed from ¥104.29.

The British pound (GBPUSD)   declined modestly to $1.6343 from $1.6359 ahead of a retail-sales report from the Office for National Statistics for December that should provide insight on spending trends during the key holiday-shopping season.

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The ICE dollar index (DXY)  , a gauge of the greenback's strength against six rivals, was at 80.930, up slightly from 80.904 late Thursday. The WSJ Dollar Index (XX:BUXX)  , an alternate measure of dollar strength, was at 74.32 from 74.29.

The ICE dollar index was track for a modest 0.4% gain since last Friday, with support coming in part after a better-than-expected rise in December U.S. retail sales. The Federal Reserve last month determined that the economy could withstand the beginning of stimulus withdrawal and decided to reduce its monthly debt purchases by $10 billion to $75 billion this month.

Bond purchases by the Fed have been seen as putting pressure on the value of the dollar.

Investors will look later Friday for the Commerce Department's report on December housing starts , due at 8:30 am Eastern time. Inclement weather conditions are already factored in by seasonal adjustment of the data, but investors will want to know if the cold weather had a stronger-than-usual impact on building activity. Construction on new homes is expected to reach a seasonally adjusted annual rate of 985,000, down from 1.09 million homes in November.

The unusually severe winter weather also probably curbed a rise in U.S. industrial production last month, limiting it to an increase of 0.2%, Capital Economics said in a Friday note.

"Normally, unusually cold winter weather boosts production, as the extra demand for heating leads to an increase in utilities output," said Capital Economics economist Paul Diggle. "But the weekly electricity-usage figures suggest that this may not have been the case, although it remains an upside risk."

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Investors should hope the San Francisco 49ers make it to the Super Bowl. MarketWatch's Tom Bemis says this is not because he is based in the SF Bay, but because data shows the market tends to do well when the Niners win the NFC. (Photo: Getty Images)

Some economists said unusually poor weather likely hurt the U.S. labor market in December, during which the economy created only 74,000 jobs.

In other forex action, the Australian dollar (AUDUSD) was on par with Thursday's level around 88.15 U.S. cents. The Aussie on Thursday tumbled to a nearly 3 1/2-year low, rocked by speculation of an interest-rate cut by the Reserve Bank of Australia following a disappointing Australian jobs report for December.

If there's a further fall in growth in China — Australia's largest export market — and continued deterioration in Australian economic conditions over the coming months, "the RBA will likely be forced to cut rates to 2% or below," said Rivkin global analyst Tim Radford in a note Friday. "More accommodative policies will likely lend support to the broader Australian share market while dragging the Australian dollar to at least 85 [U.S.] cents."

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Thursday, February 20, 2014

Myriad Genetics (MYGN): The Stars Are Aligning for This Small Cap Cancer Diagnostic Stock (ROSG, GHDX & DGX)

On Tuesday, small cap cancer diagnostic stock Myriad Genetics, Inc (NASDAQ: MYGN) jumped 11.42% in one day, meaning its worth taking a closer look at the stock along with the performance of small cap cancer diagnostic stocks like Rosetta Genomics Ltd (NASDAQ: ROSG) and Genomic Health, Inc (NASDAQ: GHDX) plus mid cap diagnostic stock Quest Diagnostics Inc (NYSE: DGX). I should mention that we have had Myriad Genetics in our SmallCap Network Elite Opportunity (SCN EO) portfolio since February 5th and we are already up 18.50% – a nice return in just two weeks time.

What is Myriad Genetics, Inc?

Small cap is a leading molecular diagnostic company dedicated to making a difference in patient's lives through the discovery and commercialization of transformative tests to assess a person's risk of developing disease, guide treatment decisions and assess risk of disease progression and recurrence. More specifically, Myriad Genetics's hereditary cancer tests provide vital information to help people with a family history of disease understand their own risk of developing the disease while the company's prognostic tests are designed to provide information about the level of aggressiveness of a cancer to a healthcare provider and their patient so that they can make more informed treatment decisions. In addition, Myriad Genetics's personalized products provide valuable information for a healthcare provider to customize medical management plans individually for each patient.

As for diagnostic stock peers, Rosetta Genomics is a leading developer of microRNA-based diagnostic tests and therapeutic tools addressing critical unmet needs in cancer and other disease areas; Genomic Health, Inc is focused on improving the quality of cancer treatment decisions through the research, development and commercialization of genomic-based clinical laboratory services; and Quest Diagnostics is a Fortune 500 company that calls itself the world's leading provider of diagnostic information services.

What You Need to Know or Be Warned About Myriad Genetics

On Tuesday, Myriad Genetics announced it has published data in the Journal of Urology demonstrating that its Prolaris test accurately predicted, based on biopsy specimens, which men would develop biochemical recurrence (BCR) or metastatic disease following radical prostate surgery. The VP of Medical affairs at the company was quoted as saying:

"Men newly diagnosed with prostate cancer are often treated by radical prostatectomy, and about 30 percent of these patients will have metastases or progress even after surgery. The Prolaris test answers an important clinical question for all urologists concerning their surgical candidates...do my patients have an aggressive prostate cancer or not and therefore need more aggressive treatment?"

This is good news for the company because other than skin cancer, prostate cancer is the most common cancer in American men according to the American Cancer Society statistics and its the second leading cause of cancer death in American men, behind only lung cancer (about 1 man in 36 will die of prostate cancer). In fact, about 233,000 new cases of prostate cancer will be diagnosed in the USA this year and about 29,480 men will die of of it. In addition, about 1 man in 7 will be diagnosed with prostate cancer some time during his lifetime.

Earlier in the month, Myriad Genetics rallied twice. First, the stock rallied on strong earnings, a full-year guidance above Wall Street's expectations and the acquisition of a privately held competitor autoimmune diagnostics company called Crescendo Bioscience. Shares then rallied again on news about an agreement to settle a patent infringement lawsuit between it and several other groups regarding BRCA testing. The BRCA1/BRCA2 tests are how Myriad Genetics makes close to 70% of its total revenue.

However, investors should be aware that according to Yahoo! Finance data, insiders have been cashing out:

Insider Transactions Reported - Last Two Years

DateInsiderSharesTypeTransactionValue*
Feb 14, 2014 MARSH RICHARD MOfficer 20,960 Direct Option Exercise at $7.82 per share. 163,907
Feb 14, 2014 MARSH RICHARD MOfficer 20,960 Direct Sale at $31.50 per share. 660,240
Feb 12, 2014 HARRISON ROBERT GARDNEROfficer 13,707 Direct Sale at $30.72 - $30.74 per share. 421,0002
Feb 12, 2014 HARRISON ROBERT GARDNEROfficer 10,506 Direct Option Exercise at $6 - $7.82 per share. N/A
Feb 10, 2014 CAPONE MARK CHRISTOPHEROfficer 87,500 Direct Option Exercise at $16.53 - $18 per share. 1,511,0002
Feb 10, 2014 CAPONE MARK CHRISTOPHEROfficer 87,500 Direct Sale at $32.07 per share. 2,806,125
Feb 7, 2014 MARSH RICHARD MOfficer 4,196 Direct Disposition (Non Open Market) at $0 per share. N/A
Feb 7, 2014 EVANS JAMES SOfficer 35,000 Direct Option Exercise at $7.82 per share. 273,700
Feb 7, 2014 EVANS JAMES SOfficer 35,000 Direct Sale at $33.04 per share. 1,156,400
Feb 5, 2014 MELDRUM PETER DOfficer 123,940 Direct Option Exercise at $7.27 - $8.63 per share. 985,0002
Feb 5, 2014 MELDRUM PETER DOfficer 9,040 Direct Sale at $30.78 per share. 278,251
Feb 5, 2014 MELDRUM PETER DOfficer 114,900 Direct Automatic Sale at $30.78 - $32 per share. 3,607,0002
Nov 8, 2013 MELDRUM PETER DOfficer 31,784 Direct Option Exercise at $5.89 - $6 per share. 189,0002
Nov 8, 2013 MELDRUM PETER DOfficer 31,784 Direct Sale at $26.46 - $26.52 per share. 842,0002
Nov 8, 2013 EVANS JAMES SOfficer 8,072 Direct Sale at $26.50 per share. 213,908

 

Insiders selling will tend to be a less than bullish indicator for a stock.

Share Performance: Myriad Genetics vs ROSG, GHDX & DGX

On Tuesday, small cap Myriad Genetics jumped 11.42% to $35.03 (MYGN has a 52 week trading range of $20.02 to $38.27 a share) for a market cap of $2.56 billion plus the stock is up 14% over the past year and down 19.9% over the past five years. Here is a look at the performance of Myriad Genetics verses that of diagnostic stock peers Rosetta Genomics Ltd, Genomic Health, Inc and Quest Diagnostics:

As you can see from the above chart, only Genomic Health, Inc has put in a decent performance over the long term – something investors need to consider.

Finally, here is a look at the latest technical charts for all three diagnostic stocks:

The Bottom Line. Certainly it looks like the stars are aligning for small cap cancer diagnostic stock Myriad Genetics, but investors might want to keep an eye on all of those insider transactions.

SmallCap Network Elite Opportunity (SCN EO) has an open position in MYGN. To find out what other open positions SCN EO currently has, and to learn why so many traders and investors are relying on this premium subscription service, click here to find out more.

Sunday, February 16, 2014

Time to Talk about Nuance

I want to take advantage of this soft spot in the market to pick up shares of a rare tech stock that is trading at a discount; the company is the market leader in voice-recognition software, suggests Tyler Laundon, editor of Top Stock Insights.

You're probably most aware of Nuance Communications (NUAN) because of its Dragon voice-recognition software, the iPhone's personal assistant known as "Siri," or from that "Swype" technology found on Android phones. Nuance has developed all of these products.

You've also been exposed to the company's software if you've called a company and been directed to an automated answering service. Nuance does a lot of work with call centers.

And if you've been in a newer BMW or Audi, you may have used Nuance's software to relay directions to the car's GPS unit. These are all areas where Nuance's voice-recognition technology is being used today.

The company is also a major player in the healthcare market too. One of its products helps care providers create and manage electronic records. Doctors can dictate details of a patient's visit, and that information will automatically convert into text in the required forms.

Yes, voice-recognition technology still has a way to go before people stop getting frustrated with its shortcomings. Siri isn't exactly perfect. And Dragon certainly requires some careful editing. But the software is still incredibly useful. And it's only going to improve.

The number of new products coming out with voice-recognition features is snowballing. Next on the product list are things like TV, household lighting controls, thermostats, and wearable technologies.

The company is transitioning from a license business to a subscription business model, which makes for messy quarter-over-quarter and year-over-year financial analysis.

The bottom line is that we'll look over most of that noise because the fundamentals of the business suggest NUAN's best days lie ahead. It has valuable voice-recognition technology that is in demand in several large markets (mobile, auto, healthcare).

And while mobile has historically been the largest growth driver, the more diversified markets NUAN expects to serve in the future, along with the subscription business model, should mean more consistent growth. Shares are cheap, but I don't expect they'll remain that way for too long.

Finally, there is a real push inside the NUAN shareholder base to get the company back on track. In mid-December, activist investor Carl Icahn disclosed that he owns a 19.2% stake in the company. That's a hefty vote of confidence in this company.

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Friday, February 14, 2014

4 Internet and Web Service Stocks to Sell Now

RSS Logo Portfolio Grader Popular Posts: 8 Pharmaceutical Stocks to Buy Now4 Pharmaceutical Stocks to Buy Now12 Oil and Gas Stocks to Sell Now Recent Posts: 4 Internet and Web Service Stocks to Sell Now 7 Internet and Web Service Stocks to Buy Now 4 Machinery Stocks to Sell Now View All Posts

For the current week, the overall ratings of four internet and web service stocks are worse, according to the Portfolio Graderdatabase. Each of these rates a “D” (“sell”) or “F” overall (“strong sell”).

Internet Initiative Japan Inc. Sponsored ADR () is on the decline this week, earning a D (“sell”) after receiving a C (“hold”) last week. Internet Initiative Japan develops and operates Internet access services and other Internet-related services in Japan. IIJI also rates an F in Portfolio Grader’s specific subcategory of Sales Growth. .

Internap Network Services Corporation () experiences a ratings drop this week, going from last week’s C to a D. Internap Network Services provides a broad range of scalable information technology infrastructure services for enterprises. .

Spark Networks, Inc. () earns an F (“strong sell”) this week, moving down from last week’s grade of D (“sell”). Spark Networks is a provider of online personals services in the United States and internationally. The stock gets F’s in Equity and Cash Flow. .

Slipping from a D to an F rating, Velti () takes a hit this week. Velti is a global provider of mobile marketing and advertising solutions. The stock gets F’s in Earnings Growth and Earnings Momentum. .

Louis Navellier’s proprietary Portfolio Grader stock ranking system assesses roughly 5,000 companies every week based on a number of fundamental and quantitative measures. Stocks are given a letter grade based on their results — with A being “strong buy,” and F being “strong sell.” Explore the tool here.

Sunday, February 9, 2014

Bond funds give investors a lump of coal in 2013

Most bond investors got a lump of coal this year, and that may be just a taste of what's to come in 2014.

The average core bond fund — one that invests at least 85% of its assets in investment-grade bonds — fell 2% in 2013 through Friday, including reinvested interest.

In contrast, the Standard and Poor's 500 stock index gained 31.9% through Friday, including reinvested dividends.

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Bond prices fall when interest rates rise, which accounts for much of bond funds' suffering. The bellwether 10-year Treasury note closed Friday at 3.01%, 3.00%, which was up from 1.76% at the start of 2013 and the highest since July 2011.

Not all bond funds languished, although none fared as well as the S&P 500. Best bond categories:

• High-yield bond funds, up an average 6.7%, according to Lipper, which tracks the funds. These funds invest in low-quality corporate IOUs, often called junk bonds.

• Loan-participation funds, up an average 5.4%. These funds invest in variable-rate bank loans, which makes them somewhat more resistant to rising interest rates.

• Multi-sector income funds, up 1.6%. The utility outfielders of the bond universe, these funds can invest in many different types of bonds, both in the U.S. and abroad.

A few types of bond funds got hit hard:

• Emerging markets bond funds fell 9.2%. These funds invest in long-term bonds issued by companies or governments in less-developed countries, such as Brazil and Russia. Lower commodity prices put a financial strain on some of these nations, and a higher U.S. dollar pushed prices lower, as well.

• Inflation-protected bond funds fell 7.6%. These funds shield investors from inflation, which didn't occur in the U.S. in 2013. The consumer price index rose just 1.2% the 12 months ended November, according to the Bureau of Labor Statistics.

• General U.S. Treasury funds. Treasury ! yields were kept artificially low by the Federal Reserve in a bid to boost the economy. As the Fed started to take its foot off the monetary gas pedal, rates rose, pushing bond prices down. The bonds paid little interest to offset the price declines.

If the economy continues its weak recovery, interest rates should continue to rise throughout 2014, pushing bond prices down further. Bank of America Merrill Lynch expects the yield on the 10-year Treasury to hit 3.75% by the end of 2014, which will mean more pain for bond-fund investors, but slightly higher yields, as well.

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For most investors, the best way to protect against rising interest rates is to invest in funds that buy short-term bonds, rather than long-term ones. Fund companies typically publish a statistic for bond funds called duration, which measures a fund's sensitivity to rising rates. A fund with a duration of 3, for example, will see its share price fall 3% for every 1 percentage-point gain in interest rates.

Investors have yanked an estimated net $77 billion from bond funds this year, according to the Investment Company Institute, the funds' trade group. But more could be coming out: In the past five years, investors have flooded the funds with $995 billion in new money.

Major bond funds' 2013 performance

How the five largest bond funds, ranked by assets, fared in 2013 by total return (interest, gains reinvested through Friday):

PIMCO Total Return (PTTRX): -2.0%

Vanguard Total Bond Market Index (VBMFX): -2.3%

Templeton Global Bond (TPINX): 2.0%

Vanguard Short-Term Investment-Grade (VFSTX): 1.0%

Vanguard Short-Term Bond Index (VBISX): 0.1%

Source: Lipper

Friday, February 7, 2014

Will Walgreen Company Earnings Outgrow Rite Aid and CVS Caremark?

Walgreen (NYSE: WAG  ) will release its quarterly report on Friday, and investors have been pleased with the drugstore chain's success lately, bidding its shares to all-time record highs within the past month. Yet with Rite Aid (NYSE: RAD  ) having risen from the ashes to become profitable and with CVS Caremark (NYSE: CVS  ) still posing a big obstacle to Walgreen's dominance of the industry, the question investors are asking is whether Walgreen earnings can keep up the pace.

Walgreen has a solid history of leadership among drugstore companies, having made moves to solidify its position in the U.S. market while making aggressive moves to take advantage of opportunities overseas. Yet past mistakes have opened the door to Rite Aid and CVS poaching customers from its doors, and shareholders want reassurances that Walgreen's management won't make those same mistakes again. What will the future hold for Walgreen? Let's take an early look at what's been happening with Walgreen over the past quarter.

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Stats on Walgreen

Analyst EPS Estimate

$0.72

Change From Year-Ago EPS

24%

Revenue Estimate

$18.36 billion

Change From Year-Ago Revenue

6%

Earnings Beats in Past 4 Quarters

2

Source: Yahoo! Finance.

What's next for Walgreen earnings?
In recent months, analysts have gotten a little cautious about Walgreen earnings, trimming November-quarter estimates by about 5% and making smaller reductions to projections for fiscal 2014 and 2015. The stock has kept climbing, posting about a 5% gain since mid-September.

Walgreen's climb to new highs stemmed in large part from its August-quarter earnings report. A 6.1% gain in prescription revenue helped overall sales rise more than 5%, with a greater proportion of generic-drug business helping boost earnings by a whopping 86% from the year-ago quarter. Non-prescription sales had weaker growth but still eked out gains of 1.6%.

But competitors have had success of their own. Rite Aid delivered an unexpected profit last quarter, marking its fourth-straight profitable quarter, and it could well continue its string of good news with a favorable report on Thursday. Just on Wednesday, CVS gave favorable earnings guidance that was in line with fiscal 2014 estimates, and the combination of a 22% boost in its dividend and a $6 billion stock buyback authorization sent the stock soaring today. Walgreen and Rite Aid both rose in sympathy, but until we see their respective reports, investors can only hope that they'll benefit from the same positive trends that CVS experienced.

In making its case for the status of top drugstore chain, Walgreen has done a better job of taking advantage of international opportunities than CVS and Rite Aid. Its acquisition of U.K. drugstore giant Alliance Boots offers geographical diversification at a time in which the U.S. market is in flux, with the Affordable Care Act changing the landscape of health care domestically. Strategic moves like offering its own prepaid card shows the extent to which Walgreen is willing to innovate in order to differentiate itself from its peers, while moving forward with health-care clinics to serve simple health-care needs proves that Walgreen is willing to stand up to competition from CVS Caremark, Rite Aid, and other players in the drugstore industry.

In the Walgreen earnings report, be sure to compare the company's growth to what Rite Aid reports on Thursday. With competition becoming cutthroat, Walgreen needs to make sure it remembers its core values and keeps giving its customers what they want.

Is Walgreen a great stock?
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Thursday, February 6, 2014

Twitter plunges on growth fears; Green Mountain soars

SAN FRANCISCO (MarketWatch) — Twitter Inc. sank Thursday as investors expressed disappointment with the latest earnings report while Green Mountain Coffee Roasters Inc. rallied after announcing a major deal with Coca-Cola Co.

Twitter (TWTR)  disappointed investors with its latest earnings report late Wednesday, sending shares down 22%. The social-media company reported weaker-than-expected user growth and timeline views in the fourth quarter. The firm said it had 241 million monthly active users, missing expectations of 249 million. Revenue and earnings, however, impressed.

The quarterly results spurred a flurry of rating changes from analysts in its wake. J.P. Morgan Analyst Doug Anmouth raised his share-price target to $44 from $40. He wrote in a note: "Twitter reported mixed 4Q results as upside to ad monetization and higher Data Licensing revenue led to better than expected overall revenues and profitability, but user metrics lagged expectations, especially in the U.S., which remains a primary concern."

Green Mountain (GMCR)  shares jumped 26% after the coffee company said it was entering a partnership with beverage behemoth Coca-Cola (KO) to work on an in-home cold-beverage system under the Green Mountain brand Keurig. Coca-Cola shares were up 1%.

Shares of fellow in-home beverage marker SodaStream International Ltd. (SODA)  were also 9.4% higher, after initially dropping on the Coke–Green Mountain news. Investors bid up SodaStream following analyst speculation that PepsiCo Inc. (PEP)  could make a move to buy the company to better compete with Coca-Cola. "Pepsi has no place else to turn," said analysts at Citron Research in explaining why Pepsi might be interested.

Gainers

Akamai Technologies Inc. (AKAM)  shares surged 20% after the technology company said late Wednesday that its fourth-quarter profit rose over 18% as revenue jumped. The company, which runs a network of services and equipment to speed up the delivery of online content, has grown substantially in recent years.

Getty Images Twitter, whose headquarters in San Francisco, Calif. are pictured above, sank Thursday after its earnings disappointed.

"While growth on both sides of the business is strong, long-term price instability remains a meaningful risk," said Raymond James Analyst Michael Turits, in a research note. "With growth in Akamai's Media Delivery business and the stock price both near the high end of what have been highly cyclical historical ranges, we see that risk skewed toward the downside given the difficulty of forecasting MD pricing events."

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Walt Disney Co. (DIS)  advanced 5.2% after the entertainment company beat earnings estimates. The firm earned an adjusted $1.04 per share last quarter, compared with estimates of 92 cents a share, according to analysts polled by FactSet.

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Shares of Yelp Inc. (YELP)  climbed 20% after it reported that it trimmed losses last quarter.

O'Reilly Automotive Inc. (ORLY)  shares advanced 9.2% after it reported fourth-quarter earnings of $1.40 a share, above the $1.33 forecast by analysts. Shares of automotive parts retailer AutoZone Inc. (AZO)  rose 5.5%.

Vulcan Materials Co. (VMC)  shares rose 8.5% after the construction-material company said Thursday its fourth-quarter profit rose to 8 cents a share from 3 cents a share a year ago.

Alliance Data Systems Inc. (ADS)  shares gained 9.3%. The operator of loyalty programs and private-label credit cards reported core earnings of $2.39 in the fourth quarter versus analysts' estimate of $2.33 a share.

Cliffs Natural Resources Inc. (CLF)  shares are up 6.9%, rising for a second day. The stock has been somewhat volatile since Casablanca Capital LP said last week that it has taken a 5.2% stake in the resource company and demanded steps to boost share value.

Wednesday, February 5, 2014

AbbVie Inc (ABBV): What To Watch In Q4 Results?

AbbVie Inc (NYSE: ABBV) will announce its fourth-quarter and full-year 2013 financial results on Jan. 31, 2014. AbbVie will host a live webcast of the earnings conference call at 8 a.m. Central time (9 a.m. Eastern).

Wall Street expects Abbvie to report earnings of 82 cents a share, according to analysts polled by Thomson Reuters. Abbvie's earnings have topped Street view in all of the past three quarters, with upside surprises ranging between 1.5 percent and 5.1 percent. Two analysts have raised their profit view in the past month.

Quarterly revenue is estimated to fall 2 percent to $5.10 billion from $5.21 billion. Abbvie sees fourth-quarter sales of about $5 billion.

[Related -Can Abbvie Inc (NYSE:ABBV) Trump Gilead Sciences, Inc.'S (NASDAQ:GILD) HCV Lead?]

AbbVie, which was spun off from Abbott Labs (NYSE:ABT) in January 2013, gets more than half of its revenues from Humira, a mega-blockbuster drug with sales of $9.3 billion in 2012 and on track to peak at $13 billion in 2017.

Humira is indicated for a broad range of autoimmune diseases such as rheumatoid arthritis and psoriasis, which collectively make up one of the world's largest biopharma markets worth $30 billion. The consensus view calls for Humira to generate sales of $3.06 billion for the fourth quarter.

For the full year, the Street expects Abbvie to earn $3.14 a share on revenue of $18.75 billion. In 2012, the company earned $3.35 a share on revenue of $18.38 billion. The company expects earnings of $3.11 to $3.13 a share and sees revenue "somewhere above" $18.5 billion.

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Humira's growth should continue as biologics gain deeper penetration in autoimmune markets driven by more aggressive treatment strategies.

Other key products that attract investor attention includes Androgel, Kaletra, Lupron and Synthroid. If the company manages to achieve revenue increases in these products, it bodes well for valuation. On the other hand, the Street could focus on the pipeline and new indications of Humira.

Investors focus will be on 2014 guidance and pipeline updates, particularly for the HCV franchise. AbbVie's HCV regimen includes the next-generation program that could be ribavirin free, once daily and pan-genotypic. BMO Capital Markets analyst Alex Arfae estimates the HCV regimen could reach peak sales of $2.8 billion with only 10-13 percent market share

Moreover, due to the strong launch of Gilead Science's (GILD) Sovaldi, the market is heavily discounting the potential for AbbVie's HCV regimen, which is expected to launch in early 2015.

The HCV market is expected to be sustainable for at least 7-10 years as treatment is rationed for more advanced patients. There are roughly 300,000-350,000 HCV patients are estimated to be on treatment in major markets by 2014-2015.

In December, Abbvie demonstrated that 96 percent sustained virologic response in its late stage study of treatment-experienced patients with genotype 1 Hepatitis C at 12 weeks with three direct-acting-antiviral (3D) regimen plus ribavirin.

Investors should be looking for additional updates on ABT-199, a promising drug for chronic lymphocytic leukemia (CLL) that potently achieves antitumor activity while sparing platelets; but need to manage tumor lysis syndrome. ABT-199 is being developed in collaboration with Roche.

In addition, it started the second Phase 3 pivotal trial to evaluate elagolix for the treatment of endometriosis. Based on the strong phase-2 data, analysts cautiously expect approval and launch in 2016, and forecasted sales of $500 million by 2020.

The market would look for updates on studies evaluating daclizumab in patients with relapsing/remitting multiple sclerosis (MS). Daclizumab High-Yield Process (DAC HYP) is believed to target the activated immune cells that can play a key role in MS without causing general immune cell depletion. A second registrational study, the DECIDE trial, is expected to complete in mid-2014, supporting a potential regulatory submission by year-end 2014.

For the third quarter, AbbVie's net earnings fell to $964 million from $1.59 billion in the previous year. Earnings per share dropped to 60 cents from $1.01 last year. Adjusted earnings per share came in at 82 cents. Net sales increased 3.3 percent to $4.66 billion, with Humira sales rising 19.1 percent to $2.77 billion.

AbbVie shares, which trade 15.1 times its forward earnings, have dropped 3 percent since its last quarterly report. During the past 52-weeks, they traded between $35.01 and $54.78 and gained 29 percent in the past year.  

Tuesday, February 4, 2014

Just who is Microsoft's Satya Nadella?

SAN FRANCISCO — Microsoft's search for the heir to CEO Steve Ballmer, a process that dragged for months and touched off the biggest parlor games in tech of Name That CEO, has finally come to and end with an insider selection.

But who is incoming-Microsoft CEO Satya Nadella?

Microsoft's veteran executive — he's been with the software giant for more than two decades — had been running its enterprise and cloud businesses.

Nadella successfully ran the server and tools business until 2013, for which he's gained both internal and external credibility, and before that ran its search engine Bing. Analysts says his technical background bodes well inside Microsoft as someone popular for strong technical chops as a leader.

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"He's well-respected and thought of as a strong leader -- i don't know if he's thought of as visionary," says reDesign analyst Rocky Agrawal, a former Microsoft employee.

Dan Ives, tech industry analyst at FBR Capital Markets, says shareholders who preferred fresh blood will be disappointed."The main issue around Microsoft is its need for innovation and a set of fresh new strategies to drive the next leg of growth," says Ives.

That part in Nadella remains both unclear and untested.

Still, a big area of importance for which he's gained a lot of cred inside the Redmond, Wash.-based software giant is his part in Microsoft's move into the cloud.

"He's recognized for the transition to the cloud," says IDC analyst Al Hilwa. "He's been spearheading this transition to the cloud, which is one of the things that's going right for the company. They have been going toe-to-toe with Amazon on features and price -- he gets a lot of respect for that."

Indeed, it seems quite likely inside Microsoft that Nadella contenders could be few. Nadella should get the respect and intellectual buy-in from longtime employees on day one, says Wes Miller, analyst at independent research firm Directions on Mi! crosoft.

"The time frame required for an external hire to come on-line and really be effective is incredibly lengthy," Miller says. "Microsoft needs leadership that can hit the ground running, rather than hiring someone who has to make brute force guesses to appease the critics outside of Microsoft."

But can he redirect Microsoft to a good position in mobile to gain favor among consumers?

"He gets credit for being transformative in his thinking. He has injected much-needed agility into the company," says Hilwa.

Contributing: Byron Acohido and Jon Swartz

Saturday, February 1, 2014

Top Portfolio Products: New Site Tracks, Compares MLPs

New products introduced over the last week include a website to track master limited partnerships from MLP Data.

In addition, Advisors Asset Management and ISI teamed to launch a unit investment trust, and Litman Gregory started offering model portfolios to advisors.

Here are the latest developments of interest to advisors:

1) MLP Data Launches Content and Analytics Site to Track MLPs

MLP Data LLC has announced the launch of MLPData.com, its content and analytics site dedicated to providing investors with transparency in the publicly traded master limited partnership (MLP) market.

The site offers professionals and investors the ability to compare and analyze the total universe of MLPs by performance, distribution growth and distributable cash flow coverage; to review and select from among MLP funds by yield, performance and premium/discounts, as well as to follow the money flows of funds; track and monitor the real-time yield performance of private lists of funds and MLPs; and find interest rate sensitivity via graphs that indicate historical yields and spreads.

2) U.S. Manufacturing, Energy Growth Powers New Unit Investment Trust 

Advisors Asset Management Inc. has teamed with International Strategy and Investment Inc., the money management arm of International Strategy and Investment Group LLC, to launch a unit investment trust (UIT), the American Renaissance Portfolio, Series 2013-1.

The UIT seeks to achieve above-average total return primarily through capital appreciation. ISI Inc. acts as the UIT’s portfolio consultant, selecting stocks that have the potential to benefit from the firm’s three “American Renaissance” economic growth drivers — resurgence and renewed competitiveness of U.S. manufacturing, U.S. energy independence resulting from growing production of low-cost energy, and favorable long-term labor costs and demographics.

3) Litman Gregory Offers Model Portfolios

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Litman Gregory has announced that it is now offering its proprietary active-core/opportunistic-satellite model portfolios to advisors through Placemark Investments. The model portfolios are available through Placemark’s unified managed account platform, UMA Marketplace.

Advisors have access to four distinct risk-managed global portfolio strategies, each using the Litman Gregory Masters Funds as actively managed core equity and alternative strategies holdings. As portfolio strategist, Litman Gregory will pursue tactical opportunities to add returns, make ongoing risk management decisions, and adjust manager exposure as needed. The models are offered to advisors with no additional strategist fee.

Read the Jan. 24 Portfolio Products Roundup at ThinkAdvisor.