5 Things You Must Know Before the Market Opens Monday

Here are five things you must know for Monday, June 26:

 

1. -- U.S. stock futures pointed higher on Monday and European shares rose as Wall Street posted a slight rebound to end last week as oil prices stabilized.

 

Asian shares finished Monday, June 26, with gains. Stocks in Shanghai rose 0.9% while Tokyo's Nikkei 225 advanced 0.1%.

 

West Texas Intermediate crude was trading 0.5% higher early Monday to $43.24 a barrel after gaining 0.6% on Friday. Oil prices, however, came off their highs on Friday following another rise in oil-drilling activity in the U.S. Crude prices earlier last week moved into a bear market, after having fallen more than 20% from a late February high.

 

The economic calendar in the U.S. on Monday includes Durable Goods Orders for May at 8:30 a.m. ET

Earnings are expected Monday from Schnitzer Steel Industries Inc. (SCHN) and Novagold Resources Inc. (NG) .

2. -- Japanese airbag maker Takata Corp. (TKTDF) filed for bankruptcy protection in Tokyo and Delaware on Sunday, June 25, after paying out more than $1 billion in fines for the largest auto safety recall in U.S. history. 

Takata, whose faulty airbags led to the recall of 42 million cars, said in a statement that excluding costs related to the recalls, the company has "continued to produce healthy profits and cash flows from its existing businesses." Safety technology company Key Safety Systems Inc. agreed to buy the bulk of Takata's assets for 175 billion yen ($1.588 billion). Japan's Ningbo Joyson Electronics Corp. acquired KSS for $920 million on Feb. 2, 2016.

As of October, 11 American fatalities had been attributed to the airbags, according to the National Highway Traffic Safety Administration. 

So far 100 million inflators have been recalled worldwide. That includes 69 million in the U.S., affecting 42 million vehicles.

3. -- Nestle SA (NSRGY) shares rose 3.8% in Zurich after activist investor Third Point LLC revealed it had built a stake in the world's biggest food company and pressed for asset sales and increased buybacks.

Dan Loeb's Third Point hedge fund said it had built a 1.3% stake in Nestle, worth more than $3.5 billion, making it one of the company's top 10 shareholders. The activist investor is calling for Nestle to shed assets, including the sale of its 23% stake in L'Oreal SA (LRLCY

L'Oreal shares rose 3.8% in Paris to a record high.

Nestle acquired a 29% stake in L'Oreal in 1974 and sold 6% of its stake in 2014, leaving a 23% stake worth more than $25 billion or roughly 10% of Nestle's market capitalization, Third Point said.

"However, having L'Oreal in the portfolio is not strategic and shareholders should be free to choose whether they want to invest in Nestle or some combination of Nestle and L'Oreal," the investor said. "Current conditions make this the right time to exit the remainder and we believe the stake can be monetized with limited tax or other consequences."

4. -- Facebook Inc. (FB) is talking to Hollywood studios and agencies about producing TV-quality shows with a goal of launching original programming by late summer, people familiar with the matter told The Wall Street Journal.

In meetings with major talent agencies including Creative Artists Agency, United Talent Agency, William Morris Endeavor and ICM Partners, Facebook has indicated it is willing to commit to production budgets as high as $3 million per episode, people familiar with the situation told the Journal.

Facebook also is interested in producing shows in the mid-to-high six-figure-per-episode range, the people said. The company will be aggressive about trying to own as much of that content as possible, according to the report.

Facebook is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells FB? Learn more now.

The stock rose slightly in premarket trading on Monday. 

5. -- Pandora Media Inc. (P) co-founder and CEO Tim Westergren plans to step down as the streaming music company's leader, Recode reported, citing people familiar with the company's plans.

Shares of Pandora rose 5% in premarket trading.

Pandora hasn't selected a replacement for Westergren, sources said. He will likely stay on at the company he founded 17 years ago until a new CEO is in place, Recode reported.

Westergren has been running Pandora since 2016.

By Joe Woelfel 

Source: https://goo.gl/GvcbtR

Bluebird Bio shares pop on what CEO calls ‘very exciting’ cancer news

• Bluebird Bio and its partner, Celgene, released positive results from an ongoing study of patients with relapsed/refractory multiple myeloma.
• The patients have had an "incredible response rate," Bluebird CEO Nick Leschly told CNBC.
• "We're really trying to harness the immune system to attack your cancer," he said.

Shares of Bluebird Bio popped on Monday after the announcement of what CEO Nick Leschly called "very exciting data."

The biotech company and its partner, Celgene, released updated clinical results from an ongoing study of patients with relapsed/refractory multiple myeloma, a blood cancer.

In the trial active dose cohorts, 73 percent of evaluable patients received a very good partial response.

Leschly told CNBC's "Closing Bell" the people taking part in the study are "terribly sick."

"They've tried everything in the book and are sort of at the end of the line. And those patients have had an incredible response rate."

The idea is to take cells outside of the patient's body, use technology to "harness and direct it" and then put the cells back into the patient, he explained.

"We're really trying to harness the immune system to attack your cancer," Leschly said.

And while there are multiple drugs that have made a "big difference" for multiple myeloma patients, unfortunately the cancer comes back in a lot of patients, Leschly said.

"Then you have a very shortened lifespan on the order of 6 to 8 months. That's the need that we're talking about."

Bluebird Bio closed 8.5 percent higher at $91.30 on Monday.

By Michelle Fox

Source:https://goo.gl/pZjd54

Opinion: 5 cheap stocks that aren’t value investing traps

While sentiment matters and headlines can change, there are few substitutes for good analysis that compares investment options objectively based on numbers and not narrative.

Lately, I’ve been looking for stocks that offer good value in a market that appears increasingly stretched. And I’ve found five stocks that look cheap — but unlike some of the dogs that have crashed thanks to failure, these picks are decidedly not value traps and have a lot to offer.

Each of these stocks trades at a lower earnings multiple than the market at large — which would be a forward P/E of 17.5 for the S&P 500 SPX, -1.13%  and 19.2 for the Nasdaq COMP, -1.52% These stocks also can be had at an attractive price/sales ratio, at least compared with the 1.8 reading for the S&P.

On top of that, I looked for stability in the form of plenty of cash on the books and a sustainable dividend as a hedge when the market is rocky. The result is a list of five surprising value stocks that look like bargains. Here they are, with the numbers to show my work:

1. Valero Energy

·       Market Cap: $29.6 billion

·       Cash and Investments: $3.7 billion million or, or 13% of market value

·       Price/sales: 0.42 based on a projected $71.2 billion in FY2015 sales

·       P/E ratio: 8.7 based on projected EPS of $6.60 in FY2015

·       Dividend Yield: 2.8%

It seems crazy to chase an energy stock in this environment. But while Valero Energy Corporation VLO, -1.20%   has underperformed in the last year or so, the stock has really been in a groove since its January lows, gaining close to 30% in just three months.

That’s because, in the words of Ben Levisohn at Barron’s, Valero “knows how to take lemons and make lemonade” andposted robust fourth-quarter earnings on strong product margins. Given this recent earnings success and extremely attractive valuation metrics, Valero could be worth a look before its first-quarter numbers hit at the end of the month.

2. Lexmark International Inc.

·       Market Cap: $2.7 billion

·       Cash and Investments: $934 million or, or 35% of market value

·       Price/sales: 0.75 based on a projected $3.6 billion in FY2015 sales

·       P/E ratio: 12.1 based on projected EPS of $3.61 in FY2015

·       Dividend Yield: 3.3%

Lexmark International Inc. LXK, -0.60%   is hardly a sexy name, and is most recognizable to investors from its laser printers. Admittedly, Lexmark stock has seen stagnant revenue in recent years, but profits are quite strong and the company is sitting on a nice pile of cash, with good operating cash flow.

You may be surprised to see that the stock is actually up almost 6% this year, and is up 90% since January 2013 vs. just 50% or so for the S&P 500 in the same period. Take this recent strength with a 3.3% dividend and you’ve got reasons to look at Lexmark. That dividend of 36 cents per share quarterly is sustainable at less than 40% of this year’s projected earnings, and should provide stability no matter what happens in 2015.

Make Any Investment Risk "Free" in One Move

Readers ask me all the time if I can recommend an investment that is 100% risk free.

(If anyone tries to tell you otherwise, take your money and run!)I can't do that. There is no such thing.

By Money Morning

That said, there is one way you can make any investment risk "free" under the right set of circumstances, by using one of my favorite Total Wealth tactics: the free trade.

We've talked about this before, and many of you got a chance to put it into practice with our Human Augmentation target, Ekso Bionics Holdings Inc. (OTCMKTS: EKSO ) - simultaneously doing three things in the process: capturing profits of at least 100%, paying for your initial investment and reducing the risk on your remaining position to almost nothing.

Now, with the markets at new record highs and Greece machinations threatening to cause major corrections in world markets, I want to revisit that tactic. That's because many investors are sitting on solid profits and, in doing so, unwittingly taking on a lot more risk than they should.

Do this instead...

The concept of a "risk free" investment is not new. The allure of risking nothing and gaining everything has been around for centuries. And, as you might suspect, it's almost never ended well.

Case in point...

...the Tulip Bulb Crisis of 1634-1637

...the South Sea Bubble of 1711

...the Florida Real Estate Crash of 1926

...Bernie Madoff's Ponzi scheme

So why is it that you hear the term in widespread use today?

Because Wall Street only associates risk with loss.

That's why they consider U.S. Treasuries and other government paper as "risk free" choices, even though they know full well that there are risks inherent in every investment. It's a game of semantics.

It's a game, incidentally, that they want you to play, because it forces you to implicitly buy off on the most profitable strategy of all (for them) - diversification.

That's the idea that if you spread your risk around in different asset classes and investments - like stocks, bonds, cash, real estate, and the like - you'll be better off. The thinking is that not everything can possibly go down at once.

It's been around a while. In fact, the theory was first noted in the book of Ecclesiastes written around 935 B.C. It's also mentioned in the Talmud. Even Shakespeare picked up on it in "The Merchant of Venice" hundreds of years ago.

But it's absolutely wrong.

Ask anybody who got their portfolio halved twice in the last 15 years - first during the dot-bomb implosion from 2000-2003 and then the ongoing Financial Crisis that kicked off in 2008 with a vengeance. Everything went down at once both times.

And it's not just me who thinks so either. Warren Buffett notably quipped that diversification "makes very little sense for those who know what they are doing."

I believe you've got to think about risk differently in today's highly computerized and interlinked global markets, especially when it comes to your winners.

My logic isn't sophisticated. Put simply, nobody ever went broke taking profits but plenty of people have gone broke taking losses. So it not only makes sense to concentrate your assets using appropriate risk management but also to harvest your winners when the markets are strong. That way you'll have opportunity at hand rather than being forced to run for the hills when the markets are weak.

It doesn't matter whether you've got a lot of money or just a little, the principles driving our discussion today are exactly the same:

• You want to capture profits every chance you get; and,
• You want to take risk off the table at every opportunity.

Preferably, both at the same time.

Here's a Real-Life Example of How This Works

I recommended Raytheon Co. (NYSE: RTN ) to my Money Map Report subscribers in August 2011 because it was closely tied into two of our most important Unstoppable Trends - Technology and War, Terrorism & Ugliness. It was trading at $46.05 a share then.

By November 2013, the company's stock had risen to $85.19, and dividend payouts had reduced the cost basis to $42.51, so subscribers who followed along as directed were sitting on returns of at least 100%. In keeping with what I've just explained, I recommended selling half the position to capture profits and redeploy into subsequent recommendations. I also suggested that they let the remaining shares run.

Pro traders call this a "free trade," because you not only get back your original investment, but you maintain all the upside you can handle, essentially "for free." Even better, because you've now "paid" for your investment, you can stay in the game with not an additional dollar at risk... even if the stock you've just harvested has a sudden reversal in fortune and goes from hero to zero.

The advantages were as clear then as they are now.

By capturing profits when we had the chance, subscribers ensured that their focus was on winning and on new opportunity, exactly as a savvy investor should.

Despite Washington This Medical Device Company Keeps Growing

Free market capitalism is, in theory, about a kind of economic Darwinism. The fittest will survive and thrive while the weakest face a certain, if unpleasant fate. Of course, it doesn't always work that way. As the adoption of TARP and the bailout of the U.S. auto companies during the financial crisis showed, the concept of “too big to fail” crosses ideological and party lines and is a fact of life in the modern world

This leaves the dire consequences of failure as anything but certain. The survival and success of the fittest, however, particularly during difficult times, can still give investors valuable indications as to what may constitute a good long term investment. When medical device company Hologic (HOLX )

 released earnings after yesterday’s market close it was an example of just such a positive indicator.

Conventional wisdom maintains that these are indeed difficult times for the medical device industry, and that they will soon become a little less difficult. It is frequently said that the medical device tax that was a part of Obamacare has put a squeeze on the industry and that the Republican gains in the mid-term elections will result in its repeal. A case can easily be made that neither of these statements is actually relevant to the performance of individual companies, nor even true.

The tax applies across the industry so no individual company is at a particular disadvantage, and medical devices, like many healthcare products, have fairly inelastic demand. If your doctor believes you need one, then a 2.3 percent tax on the device is unlikely to sway that opinion. A Congressional Research Service report published at Modernhealthcare.com came to just that conclusion, that the tax would have a negligible effect on both the producers of medical devices and on overall healthcare costs.

The reality for medical device producers, then, is not as bad as some would suggest. What the advent of the tax has done, though, is to prompt companies to look for improvement efficiencies, which is never a bad exercise for a company in a business with inelastic demand.

That doesn’t mean that the new Republican majority in Congress won’t attempt to repeal the tax, however. It is one part of a law that they oppose that has some bi-partisan opposition. The tax is cast as a tax on jobs and as such an attempt to repeal has too much political appeal to be ignored.

Whether it will pass the President’s veto pen or not depends on whether there is some other way of funding the resultant shortfall in Obamacare funding. If not, the President would see it as a backdoor way to put pressure on his signature achievement and reject any repeal bill.

To Hologic, however, it seems that none of these political shenanigans really matter. They are doing what good companies do when faced with a less than ideal market; going about their business of growing and making money. Yesterday’s results showed a beat on both the top and bottom lines. The 5year chart for HOLX confirms the impression of a company that has continued to grow, even as its industry becoming a political football has caused some volatility in the stock.

There has been a positive reaction to yesterday’s earnings, with the stock indicating gains of around 2-2.5 percent at the opening this morning. That, and the past volatility of the stock, may make a delayed purchase strategy more profitable than an outright buy at these levels. If, as discussed above, any attempt to repeal the medical device tax is vetoed by a President with nothing to lose it is likely that HOLX, along with all medical device companies, would fall quite precipitously.

That said, it would be a shame to miss out on a company that has demonstrated the ability to grow through consistently as you wait for a correction that may not come. It could even be that Obama, concerned about a perception of intransigence would care more about his legacy than any budget implications and not veto a repeal of the tax. In that case all medical device stocks would get a boost. It makes far more sense to adopt a strategy of controlled averaging in a situation like this.

Buy half of your intended total position at market and then set two more orders, even if just in your head. One would be to buy at last month’s low around $23 and the other to buy at around $29 should the stock continue on upward. (Incidentally if you physically place these orders, don’t forget to include the instruction that one cancels the other).

This would leave you with a full position at either $25 or $27.50. Either way you would own stock in a company that has shown the ability to work through whatever Washington throws at it and still make money and continue to grow. That has to be a good thing.

By Martin Tillier,

Source: http://www.nasdaq.com/article/despite-washington-this-medical-device-company-keeps-growing-cm410931#ixzz3IKaa311w