Tag Archives: technology

Technology Sector Update for 04/07/2016: MSFT, AAPL, IBM, CSCO, GOOGL, ICLD

Top Technology Stocks MSFT 0.9% AAPL 1.4% IBM 0.8% CSCO 0.8% GOOG 0.7% Technology shares were weaker in Thursday’s mid day trade. In technology stocks news, Alphabet (GOOGL, GOOG) shares were slightly lower after media, including Reuters, reported that

Valeant Creditors Give Company More Time Before Default; Stock Up

Shares of Valeant Pharmaceuticals International ( VRX ) rose sharply for the third day in a row Thursday, after the company came to an agreement with its creditors to avoid a default. Valeant said lenders had agreed to an amendment extending the filing deadline for its 10-K annual financial report to May 31, and its 10-Q for Q1 to July 31. Previously, both were due at the end of March, though the agreement gave Valeant 30 days after that to file to prevent a default. The amendment also waives the cross-default to Valeant’s indentures, which was set off when the company failed to file its 10-K by March 15. Valeant is late in its filing because of a review of its financial records that it started after a scandal erupted last fall surrounding its relationship with now-defunct pharmacy Philidor. On Tuesday, the company said the review was complete , so it expects to file the 10-K this month. The new agreement gives it a bit more breathing room. Valeant said the amendment also will affect its M&A capabilities. “The terms of the amendment will restrict the company’s ability to make certain acquisitions and other investments and to pay dividends and other restricted payments until the financial statements are filed and the company achieves certain leverage ratios,” Valeant’s statement said. “While these restrictions are in place, the company will also be required to apply substantially all net asset sale proceeds to prepay its term loans.” Valeant has become highly levered through a series of acquisitions that have quickly bulked up the company, but the management put acquisitions on hold after the Philidor scandal broke. No asset sales have been announced, though Wall Street has been speculating that the company will be slimmed down or even broken up. On Wednesday, several analysts and reporters asked Allergan ( AGN ) CEO Brenton Saunders if Allergan might acquire Bausch & Lomb , a business that Valeant bought in 2013 back when Saunders was running it. Valeant stock was up almost 6% in late morning trading on the stock market today , near 36. The stock has risen about 30% this week despite hitting a five-year low on Monday, as investors have been heartened by the completion of the financial review as well as promises of a new CEO in the near future.

Verizon Downgraded; Telecom Stocks Cool Off After Torrid Q1

Jefferies and Bernstein Research each downgraded Verizon Communications ( VZ ) Thursday, citing a lack of near-term catalysts and valuation after shares in the high-dividend phone company jumped 17% during the first quarter. AT&T ( T ) stock rose 14% in Q1, as investors sought safety amid market turmoil and falling global interest rates. Shares of Verizon and AT&T have edged down in April. Verizon stock was down 2.3% on the stock market today , while AT&T was down 0.8%. Still, both have high IBD Relative Strength Ratings, with Verizon at 91 and AT&T at 90. That means both names have performed among the top 10% of all stocks over the past 12 months, with an emphasis on the most recent six months. “We are downgrading Verizon to market perform with a target price of 55, in light of this year’s (largely macro-driven) run-up in its stock price and a refresh of our (valuation) model to reflect recent developments, including fourth-quarter quarterly results, full-year 2016 guidance and last Friday’s close of its divestiture of wireline assets in California, Florida, and Texas to Frontier ( FTR ),” said Paul de Sa, an analyst at Bernstein, in a research report. Frontier Communications paid $9.9 billion for those wireline assets and also took on $600 million in debt. Verizon is due to report earnings April 21; AT&T follows on April 26. “We are downgrading Verizon from buy to hold, but maintain our 53 price target,” Jefferies analyst Mike McCormack said in a report. “Although we continue to believe Verizon is well positioned in the industry long-term, we don’t believe near-term catalysts exist to provide upside to either our estimates, or our view on valuation.” Image provided by Shutterstock .