Sunday, July 24, 2016 - 4:14pm
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On CNBC's Options Action, Carter Worth analyzed Amgen, Inc. (NASDAQ: AMGN) from a technical standpoint.

He said that the stock consistently outperformed iShares NASDAQ Biotechnology Index (ETF) (NASDAQ: IBB), which is in his opinion a basis for a bullish setup. Worth believes the stock is going to break out on the upside and reach its highs at $181.

Related Link: Biotech In The Earnings Spotlight: Amgen, Celgene, Gilead Sciences

Mike Khouw thinks the best way to make a bullish bet is by selling the October 165 put for $6.70. The trade starts to lose money below $158.30, or 4.45 percent lower from the current stock price. If Amgen stays above $165 at the October expiration, Khouw is going to collect 4 percent in three months.

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Sunday, July 24, 2016 - 4:11pm
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In a report issued Friday, Barclays analyst Brian A. Johnson shared a look into General Motors Company (NYSE: GM) and asked the question: Is it a disruptor or a dividend play?

In fact, he added, “What is the brand of GM equity?... Is it a mass market carmaker (i.e. Chevy Malibu)? A rugged truck maker (i.e. the GMC Sierra)? A luxury car maker (Cadillac)? Or is it all of the above?”

Having to ask these questions makes one thing clear: GM has an identity issue, and so does its stock.

On the one hand, the company offers a robust earnings growth story. On the other hand, the stock’s 5 percent dividend yield makes it an alluring dividend play. So, which is it?

Related Link: Daiwa Downgrades GM To Neutral, Says Global Performance Is Unstable

Well, “in reality, neither group of investors appears interested in GM, which closed only +1.7 percent (vs. S&P -40bp) despite a big 2Q beat ($1.86 vs. cons. $1.52),” Johnson stated. Growth investors are drawn to “seemingly more exciting visions” like Tesla Motors Inc (NASDAQ: TSLA)’s, while dividend investors seek for either “the stable revenue outlook of consumer packaged goods firms or the family-committed dividend at Ford Motor Company (NYSE: F).”

So, Johnson added, maybe it's time for GM to focus on convincing investors that its dividend will remains stable, no matter what, instead of focusing on selling its ability to continue to post strong earnings growth so far into the cycle.

For now, Barclays maintains an Equal-Weight rating on shares of General Motors.

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Disclosure: Javier Hasse holds no interest in any of the securities or entities mentioned above.


Sunday, July 24, 2016 - 4:06pm
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On CNBC's Options Action, Dan Nathan spoke about a bearish options strategy in iShares iBoxx $ High Yid Corp Bond (ETF) (NYSE: HYG).

Related Link: Scott Bauer's Gilead Sciences Trade

Nathan explained that the ETF is trading close to its resistance and he thinks that it is going lower. He wants to make a bearish bet with a put calendar. Nathan wants to sell the August 84 put for $0.25 and buy the October 84 put for $1.45. The strategy would cost him $1.20. His trade is going to make money if the stock trades below $82.80 at the October expiration, but only if it stays above $84 at the August expiration.

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Sunday, July 24, 2016 - 4:03pm
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  • Three leading biotech companies will step into the earnings spotlight this week.
  • Consensus forecasts from Wall Street analysts call for earnings growth from just two of them.
  • And only one of them has topped estimates by double-digits in recent quarters.

While the biotechnology industry has had a rough time so far this year, three of the leading players may be hoping to turn things around when they take their turns in the earnings spotlight this week.

The consensus Wall Street forecasts indicate that analysts have high hopes for solid to strong results from Amgen, Inc. (NASDAQ: AMGN) and Celgene Corporation (NASDAQ: CELG), on both the top and bottom lines. Shares of both concluded the three months that ended in June not far from where they began.

The expectations for Gilead Sciences, Inc. (NASDAQ: GILD) are different though. The consensus estimates indicate some shrinkage of both earnings and revenue, relative to the same period of last year. Shares drooped in the period, despite the company appointing a new chief operating officer and receiving a key FDA approval in the period.

Below is a quick look at what is expected from the reports of these three, as well as a peek at some of other health care companies that also are on tap to share their quarterly results this week.

Amgen

In its report after Wednesday's closing bell, this human therapeutics company is expected to say that in its second quarter it had earnings of $2.79 per share, according to 32 Estimize respondents. That would be about 8 percent more than in the year-ago period. The Wall Street consensus estimate is $2.74 per share, but note that the analysts underestimated EPS by more than 11 percent in the past three quarters.

The Estimize overestimated revenue in the previous quarter, and this time the respondents are looking for about $5.61 billion. Here too the Wall Street revenue forecast is a little more conservative at $5.58 billion. In the same period of last year, the Thousand Oaks, California-based company reported $5.37 billion in revenue.

Related Link: The Importance Of Phase 1 Trials

Celgene

The consensus Wall Street forecast calls for this biopharma company focused on cancer and inflammatory disorders to post second-quarter earnings of $1.38 per share (which would be 15 cents higher than in the same period of last year) and for revenue to have surged almost 19 percent to $2.71 billion in the period. Note that Celgene beat consensus EPS expectations in the first quarter but fell short on the top line.

Estimize is a bit more optimistic, with the consensus of 31 respondents pegging earnings at $1.40 per share on revenue of $2.72 billion for the three months that ended in June. Estimize also overestimated the revenue back in the first quarter. Celgene is scheduled to share its latest results before Thursday's trading session begins.

Gilead Sciences

The second-quarter profit of this research-based biopharmaceutical company is predicted to have slipped 13 cents per share, according to Wall Street analysts, from the $3.15 reported a year ago. The consensus of 226 Estimize respondents has earnings coming in at $3.06 per share. Note that first-quarter earnings fell short of both forecasts.

In Monday afternoon's report, analysts are looking for $7.77 billion in revenue for the three months that ended in June, which is less than the $7.90 billion that Estimize anticipates. The company posted revenue of $8.24 billion in the same period of last year. And back in the previous quarter, revenue also fell short of both forecasts.

And Others

Other biotech, pharmaceutical and health care companies that Wall Street analysts expect to show at least some earnings growth when they report this week include AbbVie, Anthem, AstraZeneca, Baxter International, Boston Scientific, Bristol-Myers Squibb, Centene, Edwards Lifesciences, Express Scripts, HCA, Merck, Vertex Pharmaceuticals and Zimmer Biomet.

However, the consensus forecasts call for EPS at Alexion Pharmaceuticals, Cigna, Eli Lilly, Illumina and Medivation to be smaller than a year ago. A net loss is anticipated from Seattle Genetics.

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Disclosure: At the time of this writing, the author had no position in the mentioned equities.

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Sunday, July 24, 2016 - 3:55pm
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Back in June, a few Michigan police officers showed up at the lab of Michigan State University professor Anil Jain, requesting the biometric identifiers specialist to help them replicate the finger of a dead man.

While bedazzling at first, the requisition made sense. The rationale was the following: A man had been murdered, and the investigators believed his phone could contain important clues. But they could not unlock it, for it was fingerprint-protected. And, as we’ve seen in the past, asking the phone’s manufacturer for help is not the most efficient or effective way to get into a locked device. So, the police came up with this solution.

Apparently, the police department had a register of the victim’s fingerprints, which was taken while he was alive. Using these scans, PhD student Sunpreet Arora could create 3D printed models of the victim’s ten digits. This comes in particularly handy — no pun intended — since the investigators did not know which finger the victim had used to create the phone passcode.

Related Link: Criminals Using 3D Printers To Cover Up Shipping Heists

However, unlocking a phone is not as simple as printing a finger. The plastics normally used in 3D printing are not conductive, so the circuits in the phone’s security system are not activated. In order to solve this issue, Jain and Arora used a thin layer of metallic particles to coat the printed fingers, making them conductive, and thus recognizable, for the device they needed to unlock.

However, the team is still working on some final details, and has not handed in — again, no pun intended — the fingers to the police. They said they would turn them in in a few weeks.

Legal Issues

Talking about the controversies that arose in the Apple Inc. (NASDAQ: AAPL) vs. FBI saga, Bryan Choi, a researcher focused on technology, privacy and law, told Fusion, “The Fifth Amendment protects against self-incrimination. Here, the fingerprints are of the deceased victim, not the murder suspect. Obviously, the victim is not at risk of incrimination.”

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Disclosure: Javier Hasse holds no interest in any of the securities or entities mentioned above.


Sunday, July 24, 2016 - 3:47pm
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Netflix, Inc. (NASDAQ: NFLX) has had a tough week after the company released its fiscal second-quarter earnings results on Tuesday prior to the opening bell. The shares fell around 14 percent after the company reported weaker-than-expected subscriber growth. On Friday, the stock remained at three-month low levels, holding just above $86.00.

Thus far, the shares have shed around 25 percent in 2016, and the stock is down better than 20 percent over the last 52 weeks, significantly underperforming the broader market. On a long-term basis, however, Netflix shareholders have been richly rewarded for holding the stock through periods of volatility. Consider for example, that as recently as 2012, NFLX traded under $9.00. Could the recent pullback in the stock be another opportunity?

First, it is important to gain an understanding of what went wrong in the most recent quarter. The company reported a significant slowdown in subscriber growth and the numbers for the United States were downright terrible. Netflix had previously said that it expected to add 2.5 million subscribers in the quarter, with 500,000 coming from the United States and the additional 2 million from overseas. The company, however, added only 1.68 million subscribers globally with just 160 thousand in the United States. Currently, Netflix has a total of 83.18 million subscribers.

Related Link: 10 Stock Picks And Flicks From The Market-Savvy "Shark Tank" Stars

These figures compare to 6.74 million total subscriber additions, 2.23 million in the United States and 4.51 million overseas, in the previous quarter. Any long thesis on the shares must assume that the company will be able to change the momentum in its subscriber base. Netflix acknowledged this in a press release that accompanied its earnings release.

"We are growing, but not as fast as we would like or have been. Disrupting a big market can be bumpy, but the opportunity ahead is as big as ever and we continue to improve every aspect of our business," the company said in a press release.

On the bright side, the company's financial results came in better than expected. Netflix reported a second-quarter profit of $40.8 million, or $0.09 per share, compared to $26.3 million, or $0.06 per share, in the year ago quarter. This easily beat Wall Street consensus EPS estimates of $0.02. Revenues of $2.11 billion were in line with expectations and showed strong growth from the $1.64 billion in sales the company reported last year. Looking ahead, Netflix expects that it will add 2.30 million subscribers globally and 500 thousand in the United States in the upcoming quarter.

The key for investors that want to own this stock is to focus on the big picture and understand that the massive returns that the company has produced have always come with significant volatility. Netflix is not a mature company, but it is in a perfect position for continued future growth, particularly when looking at international markets. The most recent results, however, suggest that it may be time for the company to begin focusing less on the bottom line and more on growth once again. If Netflix can do this, look for the long-term gains to continue in this stock.

Netflix closed Friday's trading session down 0.12 percent on the day at $85.89.

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Sunday, July 24, 2016 - 3:42pm
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Artem Vaulin, the alleged owner of the world’s largest torrent-sharing site, Kickass Torrents, was arrested Wednesday in Poland. In addition to charging him with criminal copyright infringement and money laundering, officials seized the site's domains.

However, as has been learned from the Pirate Bay experience, these bans don’t last long. On Friday, Kickass Torrents resurfaced on the world wide web via clone sites.

Related Link: How Apple And Facebook Helped Take Down The Largest Torrent-Sharing Site In The World

So far, only a few clone sites (like http://kat.am) have appeared, but experience tells us many other will show up over the next few days. The creators of KAT.am told The Verge that their site is "hosted on multiple cloud servers to prevent blockade, and the hosting information is well hidden behind Cloudflare,” adding that they had also improved the original site by creating a mobile version of it.

Another major torrent-sharing website, IsoHunt, has also uploaded a mirror of the original Kickass Torrents site, although a few features are missing. Readers might remember IsoHunt from the Pirate Bay saga, as the site was also responsible for bringing the shut-down site back to life.

Interestingly, the mirror http://kickasstorrents.website has published a manifesto asking for Vaulin’s freedom, classifying his arrest as “attack on freedom of rights of internet users globally.”

“In the world of regular terrorist attacks where global corporations are flooded with money while millions are dying of diseases and hunger, do you really think that torrents deserve so much attention? Do you really think this fight worth the money and resources spent on it? Do you really think it's the real issue to care of right now? We don’t! [emphasis omitted],” the manifesto concluded.

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Disclosure: Javier Hasse holds no interest in any of the securities or entities mentioned above.


Sunday, July 24, 2016 - 3:38pm
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Speaking on Bloomberg Markets, Scott Bauer, a senior market strategist at Trading Advantage, suggested that investors should consider buying a call spread in Gilead Sciences, Inc. (NASDAQ: GILD).

Related Link: Gilead Gets European CHMP's Positive Opinion On Its Type II Variation Application For Truvada

Bauer wants to buy the July 29 expiry, 88 strike call and sell the July 29 expiry, 92 strike call for a total of $1.25. The trade breaks even at $89.25 or 3.12 percent higher from the current price and Bauer can maximally make $2.75 if the stock jumps to $92 or higher.

Gilead is set to report earnings July 25, and the options market is currently anticipating a $5 move in either direction.

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Sunday, July 24, 2016 - 3:34pm
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  • This weekend's Barron's cover story takes a closer look what may be putting shares of pharmacy-benefit managers at risk.
  • Other featured stories look at some stocks that could offer earnings surprises and consider whether alternative-asset managers are a value investor's dream.
  • The prospects for mortgage insurers and for a mini-conglomerate are also examined.

"Pharmacy-Benefit Managers Under Pressure" by Bill Alpert points out that shares of Express Scripts Holding Company (NASDAQ: ESRX) and CVS Health Corp (NYSE: CVS) have soared in recent years along with drug prices. But now, several big employers are beginning to ask tough questions, and a day of reckoning may be at hand, says Barron's.

In "6 Stocks That Could Surprise on Earnings," Jack Hough takes a look at whether analysts have underestimated the likes of Activision Blizzard, Inc. (NASDAQ: ATVI) and Facebook Inc (NASDAQ: FB). So far in the current earnings season, analysts have underestimated results of almost two-thirds of the companies that have reported, says the article.

Ben Levisohn's "Chuck Royce Favors KKR, Ares Management, Lazard" is the latest Alternatives Monthly article. See why this mutual fund manager and renowned small-cap investor sees beaten-down shares of alternative-asset managers as a value investor's dream. Royce shares why he currently favors KKR & Co. L.P. (NYSE: KKR), Ares Management LP (NYSE: ARES) and more.

Related Link: Forget Apple, Facebook Could Be A $1 Trillion Company

The revived housing market and more-stringent lending standards have brightened the prospects for mortgage insurers, according to "MGIC, Radian, Essent Could See Fat Gains" by Leslie P. Norton. See why Barron's thinks MGIC Investment Corp. (NYSE: MTG), Radian Group Inc (NYSE: RDN) and their peers could have had much as 50 percent upside potential.

In "CSW Industrials Is on the Right Track," David Englander makes the case for a stronger construction market and improvement in energy to boost the fortunes of mini-conglomerate CSW Industrials Inc (NASDAQ: CSWI). This industrial-oriented growth firm has been public less than a year; see why Barron's thinks investors could benefit from the company's newfound independence.

Also In This Week's Barron's...

  • Whether the market shortchanges Comcast Corporation (NASDAQ: CMCSA), Bristol-Myers Squibb Co (NYSE: BMY) and others
  • Verizon Communications Inc. (NYSE: VZ) and other laggards poised to rebound
  • Whether it is time for investors to dump utilities stocks
  • Whether big financials and fintech can play nice
  • Whether it is time to sell low-volatility exchange traded funds
  • The case for mid-cap dividend payers
  • Why General Electric Company (NYSE: GE) investors should not obsess over the short term
  • How Donald Trump has shaped the policy debate
  • London-based fund managers that are planning to relocate due to Brexit

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Disclosure: At the time of this writing, the author had no position in the mentioned equities.

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Sunday, July 24, 2016 - 3:26pm
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Stars of ABC’s hit reality show “Shark Tank” Mark Cuban and Kevin O’Leary sometimes argue over the merits of an entrepreneur's offer, but one thing they agree on is using stock investing to build portfolio value.

O’Leary, a frequent guest on CNBC, recently celebrated the one-year anniversary of his O’Shares FTSE U.S. Quality Dividend ETF (NYSE: OUSA), which has outperformed many of its peers.

Cuban hasn’t been quite as vocal on his stock picks, but recently gave some exclusive, bullish comments to Benzinga following the release of Q2 earnings from Netflix, Inc. (NASDAQ: NFLX).

Related Link: Exclusive: Mark Cuban Compares Netflix To Amazon, Says It Has Multiple Untapped Levers

Both business mavens are aware that there are investors who follow their market moves closely for trading ideas. Here’s a list of nine of the deal-making duo’s most notable public stock calls from this year.

O'Leary Exits Apple

Starting with January, Kevin O’Leary spoke fondly of his decision to exit Apple Inc (NASDAQ: AAPL) back in September, citing concerns about its debt load and exposure to foreign currency headwinds. It was excellent timing — the stock has fallen 10.5 percent since the last day of September.

Cuban Counting On Netflix

Back in February, Mark Cuban told CNBC that he had a huge position in Netflix and, despite buying puts against his entire position, that he had no intention of selling. Cuban’s view hasn’t changed, as he recently told Benzinga’s newsdesk that “stocks go up and down. Netflix will be fine.”

Cuban Well-Read On Reading International

Later in February, SEC filings revealed that Cuban bought about $2.5 million worth of Reading International, Inc. (NASDAQ: RDIB) exposure, though this was likely meant to simply keep his level of ownership more or less stable following some share dissolutions.

O'Leary, P/E Multiples And Amazon

In April, just ahead of the release of Amazon.com, Inc. (NASDAQ: AMZN)’s Q1 financial results, Kevin O’Leary appeared on CNBC and, in typically cutting fashion, said that he has never owned stock of the company he says has a price to earnings multiple that is “infinite.”

He expects when the stock finally “meets gravity, grown men are gonna weep.” He reiterated much the same sentiment on Amazon in an interview this month.

Related Link: Kevin O'Leary: "Poo-Poo Happens, And It's Not Happening For Twitter"

'Mr. Wonderful' Gives Tesla Some Critique

In May, the man they call “Mr. Wonderful,” Kevin O’Leary, gave a similar critique of Tesla Motors Inc (NASDAQ: TSLA) in an interview, warning that “gravity will visit Tesla one day.”

Cuban's Amazon Disagreements

It’s safe to say the two sharks are of different minds on Amazon. During his recent comments on Netflix, Mark Cuban spoke of Amazon as a company that dominates its space, regardless of quarter to quarter fluctuations. In June, Amazon released a collection of Mark Cuban products based around his “Shark Tank” deals.

A Few Of O'Leary's Favorite Things

O’Leary gave his investing fans of his a glimpse into some names he does like in July, citing Dr Pepper Snapple Group Inc. (NYSE: DPS), Hershey Co (NYSE: HSY) and Northrop Grumman Corporation (NYSE: NOC) as his top picks.

O'Leary Casts Shadow On Twitter

The sun of Mr. O’Leary’s approval fails to shine on Twitter Inc (NYSE: TWTR), however. In comments made during CNBC’s “Halftime Report” segment on July 19, he said the company “doesn’t have a future.” He stated that the only people using Twitter are using it for the aggregation of news.

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