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Hewlett-Packard, Triumph and Valero Get Bullish Analyst Calls
Bullish analyst calls on Hewlett-Packard (HPQ) from Goldman Sachs, Triumph (TGI) and Valero (VLO) from Citi. Goldman Sachs says it is upgrading shares of HP to NEUTRAL from SELL and raising their price target to $32 a share after seeing signs that HP's management is executing beyond expectations on the tech giant's turnaround strategy. Credit Suisse says it is upgrading shares of Triumph to OUTPERFORM from NEUTRAL and raising their price target to $88 a share following the company's analyst day where management boosted 2015 guidance and offered long term target growth ranges for the top and the bottom line. Citi is adding shares of Valero to its' focus list and reiterating their BUY rating and $63 a share target price. Citi says Valero is in a good position to benefit from an increase in North American crude production. Ruben Ramirez reports from Wall Street.
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Staples Rallies on Hopes of Merger With Rival Office Depot
Shares of Staples surged on Tuesday making it TheStreet's Move of the Day. The office supplies chain rallied after Credit Suisse upgraded the stock to outperform, recommending it buy rival Office Depot as a strategy to compete with online retailers such as Amazon. In a research note, analyst Gary Balter said he conservatively estimates synergies $1.44 billion, and that a merger would more than double operating profits of the combined by 2017. In the note, Balter wrote, “We believe that a merger of the remaining office supply superstore chains, Staples and Office Depot, makes significant financial and operational sense."
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Private Equity Distributions to Limited Partners Hit Record Levels
Distributions by private equity firms to limited partners reached record levels last year, and trends have suggested that 2014 could be at least as — if not more — rewarding for those investors, The Deal's Jamie Mason interviewed senior writer Bob O'Brien, about this trend. New data indicates that PE investors received more than $2 for every newly invested dollar last year, with distributions in 2013 running nearly 50% above the levels set in the previous year. In all, general partners returned a never-before-seen $568 billion to their limited partners, industry data shows. And trends suggest 2014 could be even more remunerative. Two factors drove the wave of distributions: the bull market for public equities boosted asset values when PE firms exited their investments, and the recovery in the IPO market gave them another attractive avenue. The only downside for limited partners is that the swell of distributions has thrown the balance of their inflows versus investment outflows out of whack, while the rise in valuations make it tougher for PE firms to find attractively priced new investments.
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Stocks Take a Breather Closing Mixed, Nasdaq Edges in the Green
Stocks took a breather Tuesday despite data showing U.S. manufacturing expanded beyond expectations last month. The S&P 500 pulled back after hitting another intraday record but still held on above 2,000. The Nasdaq did manage to squeeze out a small gain to close in the green. Crude oil for October delivery fell almost $3 to $92.88 a barrel. Energy stocks tumbled with dropping oil prices. Chevron (CVX) and Exxon Mobil (XOM) led the blue chips lower. Wynn Resorts (WYNN) lost 4 percent on news gambling revenue in Macau decreased last month. Home Depot (HD) is the latest retailer to have been hit by a massive credit-card breach. Airlines soared in today's session. Delta (DAL), American (AAL) and United Continental (UAL) all moved higher.
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Small Business Growth Strong in Wisconsin, Mountain Region
Strong small business employment growth in Wisconsin beats out Washington, taking over as the top performing state, while the Mountain regions holds onto the leads. Paychex CEO, Martin Mucci, explains to TheStreet’s Jill Malandrino even though the pace of small business growth slowed slightly, the Paychex HIS Small Business Jobs Index continues to show positive, long-term gains. Wisconsin was a surprise and could be due to some tax changes. Continued outperformance in the Mountain region and Texas metro markets are not a surprise, however, due to the concentration of energy jobs. New Jersey is near the bottom for all indicators and the massive job cuts in Atlantic City will add additional pressure. Mucci believes small business owners remain confident.
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The Winners and Losers of the 2014 Summer Box Office
The movies might have been packed with explosions, but the summer box office ended with more of a whimper. Gross domestic ticket revenue peaked at $4.05 billion to end the Labor Day weekend down 15% from $4.75 billion a year earlier. For the first time since 2001, no single summer hit crossed the $300 million mark, unusual for a season in which studios stuff their big-budget, big-returns tent-pole films. Which studio released the biggest hit? Which suffered the biggest dud? And which generated the most from this limp summer haul?
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Jim Cramer Says Regeneron is a Better Way to Play it Than Sanofi
Regeneron Pharmaceuticals and its partner Sanofi moved higher in Tuesday trading after announcing an experimental cholesterol-lowering drug had reduced the number of heart attacks and strokes by about half in a clinical trial. Jim Cramer says the injectable drug has multi-billion dollar sales potential when it reaches the market next year. The new drug, alirocumab, is from a new class of medicines. Alirocumab will be used along with other cholesterol drugs that are in the statin class to lower "bad" LDL cholesterol. Sanofi is racing against rival Amgen to get the drug out to market first. Cramer says this is a breakout for Regeneron. He likes Regeneron over Sanofi.
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Spectrum CEO: Fusilev Sales Healthy, 'Blockbuster' Announcement Soon
Sales of Spectrum's drug Fusilev for patients with metastatic colorectal cancer remain strong heading into the remainder of 2014, said the company's CEO Rajesh Shrotriya. Total revenue was $46.9 million in Spectrum's second quarter, up 41% from the prior year. Fusilev accounted for $26.6 million of Spectrum's sales in the second quarter, or 56% of total revenue. Outside Fusilev, Shrotriya expects to make a Phase 3 Go/No-Go decision by the end of the year for SPI-2012, a long-acting GCSF drug which he believes could be a 'potential blockbuster'. Finally, Shrotriya said he is seeing a strong sales trajectory for Spectrum's drug Beleodaq for the treatment of patients suffering from peripheral T-cell lymphoma.
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Bank of America Requests Judge Leniency in $1.3B Mortgage Case
Fresh off its $16 billion deal to settle its sub-prime mortgage case, Bank of America is asking for leniency from a federal judge regarding the jury verdict in a separate mortgage fraud ruling. The district judge had ordered the big bank to pay $1.3 billion after a jury found its Countrywide unit guilty of fraudulent mortgage loans to Fannie Mae and Freddie Mac. The ruling was part of the Obama administration’s series of mortgage-fraud lawsuits against banks for their role in the 2008 crisis. However, Bank of America argues these High-Speed Swim Lane mortgages provided to Fannie and Freddie were not misrepresented.
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Hedge Funds Prove 'Smarter' In Study, Follow at Your Own Risk
Stocks with higher levels of hedge fund ownership displayed higher relative returns in a study, said Erin Gibbs, Equity Chief Investment Officer for S&P Capital IQ. Gibbs theorized that hedge fund ownership might lead to outperformance given the larger resources and motivating fee structures versus some other types of institutions like family offices. She added that the growth of ETFs and mutual funds have shifted stock ownership from individuals to institutions. Still, Gibbs advised against individual investors blindly chasing a well known hedge fund manager into a stock due to the high level of volatility and uncertainty involved.