Category: Stock Market News

Shares of GrubHub Inc. surged 5.2% toward a more-than two-year high in morning trade Monday, after Wedbush Securities suggested the online food-ordering company may be Amazon.com Inc.’s next takeover target, following the Whole Foods Market Inc. deal. With Amazon’s focus now “squarely on food delivery,” analyst Aaron Turner said he believes there is a “sound” rationale for Amazon to buy GrubHub. He said Amazon has already tried to launch its restaurant delivery business with Restaurants, with little success. “The company has been unable to capture any significant user traction and restaurant acquisition has been lackluster,” Turner wrote in a note to clients. “During the same time, [GrubHub] has successfully expanded into new markets, reaccelerated user and revenue growth and is rapidly scaling its delivery infrastructure.” He reiterated his outperform rating on GrubHub and his stock price target of $50, which would imply a market capitalization of $4.31 billion. The stock has run up 21% year to date, while the S&P 500 has gained 9.4%.

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Shares of PerkinElmer Inc. ran up 2.6% toward a record high in morning trade Monday, after the diagnostics and life sciences research company said it was buying Germany-based EUROIMMUN Medical Laboratory Diagnostics AG for $1.3 billion in cash. EUROIMMUN, with 2,400 employees, is recognized as a leader in autoimmune testing, and is growing its infectious disease and allergy testing business, with $310 million in revenue this past year. PerkinElmer expects the deal to close in the fourth quarter, and is expected to add 28 cents to 30 cents to 2018 adjusted earnings per share. The company affirmed its 2017 revenue and EPS outlook. “With the acquisition of EUROIMMUN and its talented team of professionals, we are able to leverage our combined advanced detection, imaging and assay development capabilities, along with our strong collective market positions and synergistic commercial activities, to deliver better and more complete solutions to our customers around the world,” said Chief Executive Robert Friel. The stock’s previous record close was $64.88 on June 5. It has now rallied 25% year to date, while the S&P 500 has gained 9.3%.

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Altaba Inc.’s stock surged as it made its debut under a different name and ticker, after Yahoo completed the sale of its operating assets to Verizon Communications Inc. The stock, under the new symbol of “AABA,” traded at $54.83 in morning trade, up 4.3% from Yahoo’s closing price of $52.58 on Friday. Altaba is now registered as an “independent, publicly traded, non-diversified, closed-end management investment company,” with its primary investments being a “substantial” stake in China-based e-commerce giant Alibaba Group Holding Ltd. and Yahoo Japan Corp. Alibaba’s stock rallied 2.9% in morning trade, while the S&P 500 tacked on 0.5% and Verizon shares slipped 0.4%.

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Video game maker Take-Two Interactive Software Inc. is in the midst of a transition to digital distribution that gives the company a positive outlook on future growth, according to Benchmark analyst Mike Hickey. After meeting with Take-Two management at the Electronic Entertainment Expo (E3) Hickey wrote in a note: “We believe player migration toward full game download and an elongated high margin sales curve from a proven but still emerging [micro-transactions] model are significant financial long-term performance tail winds.” Hickey wrote that Take-Two is in the early days of its transition to delivering games digitally, which is the result of a broader industry trend that has impacted retailers of physical games, such as GameStop Inc. . Hickey reiterated his buy rating on Take-Two’s stock and holds an $85 12-month price target, which represents a nearly 15% premium to Friday’s close. Hickey, while viewing Take-Two’s share risk/reward profile balancing positive, expects valuation to benefit from conservative guidance, continued opportunity in digital sales and related margin expansion as the industry transitions to digital, strong 2019 growth potential with two big name game releases and an emerging eSports opportunity. Shares of Take-Two Interactive Software have gained more than 50% in the year to date and have nearly doubled over the last 12 months. By comparison, the S&P 500 index is up nearly 9% in the year and more than 17% over the prior 12-month period.

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Media broadcasting company Tegna Inc. said on Monday it is selling its controlling interest in CareerBuilder LLC to an investor group led by investment funds managed by affiliates of Apollo Global Management and the Ontario Teachers’ Pension Plan Board. Along with Tegna, newspaper and media publishers McClatchy Co. and Tribune Media Co. will sell stakes in CareerBuilder. McClatchy will sell a majority of its 15% ownership. The company expects to receive approximately $76 million from the sale. Tribune Media, which holds a 32% ownership stake, expects to receive $157 million in cash from the deal. Prior to the sale, CareerBuilder has committed to making a normal distribution to current shareholders. McClatchy said in a news release it expects to receive about $8 million from that. And as part of the deal Tegna, McClatchy and Tribune Media will hold on to minority ownership stakes in CareerBuilder. Shares of Tegna have gained more than 10% in the year to date, while Tribune Media shares have gained nearly 17% and shares of McClatchy Co. have dropped close to 15%. By comparison, the S&P 500 index is up more than 9% in year so far.

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U.S. stocks opened firmly in positive territory Monday, with the Dow industrials hitting a fresh record in early trade as technology shares staged a modest rebound after a bout of recent weakness. The Dow Jones Industrial Average [: DJIA] rose 58 points, or 0.3%, at 21,438, briefly logging an intraday record of 21,457.19. The S&P 500 index added 9 points, or 0.4%, to trade at 2,442, while the Nasdaq Composite Index climbed 44 points, or 0.7%, at 6,196. Shares of Amazon.com Inc. , which on Friday announced its blockbuster merger with Whole Foods Market Inc. , and shares of Apple Inc. , led the way higher. The S&P 500’s technology sector was the best early performer among its 11 sectors, up 0.9%, with a popular exchange-traded fund that tracks that sector, the Technology Select Sector SPDR ETF , up 0.9%.

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Hess Corp. announced Monday a deal to sell its stake in enhanced oil recovery assets in the Permian Basin for $600 million to Occidental Petroleum Corp. . The deal includes Hess’s 34.2% interest in the Seminole-San Andres Unit and the 46.6% stake in the Seminole Gas Processing Plant in Texas, the 100% stake in the West Bravo Dome C02 field in New Mexico and the 9.9% interest in the Bravo Dome unit in New Mexico. The deal is expected to close on Aug. 1. Hess’s stock slipped 0.2% and Occidental shares fell 0.3% in morning trade, while the S&P 500 gained 0.4%.

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New York Fed President William Dudley said Monday that the economy is in pretty good shape and he is not paying much attention to signals of concern from bond market, according to news reports. In a roundtable discussion in Plattsburgh, New York, Dudley said the economic outlook was “pretty good.” He said he wasn’t taking too much of a signal from low bond yields. U.S. yields are relatively high compared with Japan and Europe, he noted. The bond market is pricing in much fewer rate hikes over the next two years than the four moves the Fed has penciled in. Dudley said the Fed has to keep raising interest rates to avoid having to move so rapidly in the future that the tightening might cause a recession. The dollar and Treasury yields moved higher on the back on his comments.

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Philip Morris International Inc. said Monday it will spend $320 million for the construction of a new smoke-free product facility in Dresden, Germany that is expected to employ 500 people. Construction is expected to begin in late 2017, with the facility expected to be fully operational in early 2019. The facility will produce HEETS, the tobacco units to be used with the electronic tobacco heating device IQOS. “This investment represents another step towards a future in which smoke-free products replace cigarettes,” said Frederic de Wilde, president of Philip Morris’s European Union region. Philip Morris’s stock has soared 33% year to date through Friday, while the S&P 500 has gained 8.7%.

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Yahoo Inc. has completed its transition to Altaba Inc. , a new company formed after the acquisition of its operating assets by Verizon Communications Inc . Starting with Monday’s session, shares of the entity will trade under the ticker symbol “AABA.” Former Yahoo shareholders do not need to take any action for their shares to convert to and trade as Altaba shares.

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