Featuring JCP’s loses its president to Foot Locker; ZMH cuts benefits to save cash; DPS’ multi-million dollar deal; NCS’ trading activity; LEA to file Chapter 11; and INSM’s muscular dystrophy study.
Today’s Stock Alerts include: The JC Penney Company Inc. (NYSE: JCP), Zimmer Holdings Inc. (NYSE: ZMH), Dr Pepper Snapple Group Inc. (NYSE: DPS), NCI Building Systems Inc. (NYSE: NCS), Lear Corp. (NYSE: LEA) and Insmed Inc. (Nasdaq: INSM).
The JCPenney Company Inc. (NYSE: JCP) Stock Alert – JCP President Leaves the Company to become Foot Locker CEO; Shares Up on JP Morgan’s Upgrade
The JCPenney Company Inc. (NYSE: JCP) announced president and Chief Merchandising Officer Ken C. Hicks has resigned after accepting the top executive spot at Foot Locker Inc. Hicks has held the positions since 2005; he is also on the company’s board of directors.
In a press release, Hicks offered the following statement, “It has been a tremendous privilege to have worked with the great retail team at JCPenney to reclaim its leadership position within the industry. While I am very excited about my new opportunity, I am proud of the strong position that JCPenney is now in for its future success.”
The Plano-based retailer said chairman and CEO Myron E. Ullman III will oversee Hicks’ responsibilities in the interim as it launches an executive search for Hick’s successor.
Meanwhile, the retailer saw its shares up mid-Thursday afternoon after getting an upgrade from JPMorgan.
Despite department stores falling out of the analysts’ favor, JPMorgan upgraded JCPenney to Overweight from Neutral.
According to JP Morgan analyst report, JCPenney was upgraded due to expectations that lower apparel input costs would benefit the retailer. The report added that the company is experiencing lower markdown dollars due to an improved inventory position and stabilization in the home category.
JCPenney is a holding company whose principal operating subsidiary is JCPenney Corp. The company is a retailer, operating 1,093 JCPenney department stores in 49 states and Puerto Rico as of January 31, 2009.
The company’s business consists of selling merchandise and services to consumers through its department stores and Direct (Internet/catalog) channels.
In its recent chart, JCP’s Bollinger Bands indicate a relatively stable condition as reflected by tighter than normal band width. Trading within its Bollinger Bands, the stock reflects neither an overbought nor oversold condition relative to its recent price trend. MACD reflects strong bearish signal, with the indicator below the 9-day moving average signal line, and also below the critical 0 level, indicating that moving averages are trending lower. With share prices currently above the stock’s 13-day moving average, an indication of a bullish trend is generally considered.
Zimmer Holdings Inc. (NYSE: ZMH) Stock Alert – ZMH Cuts Benefits as it Eyes Long-term Growth
Orthopedic company Zimmer Holdings Inc. (NYSE: ZMH), in a meeting outlining new directions for the company, announced it is cutting retiree benefits, a move seen by the company as necessary to sustain long-term growth. Zimmer designs, develops, manufactures and markets orthopedic and dental reconstructive implants, spinal implants, trauma products and related surgical products.
In the report, the company, noting that competitors didn’t offer similar benefits, said it is ending retiree self-funding medical and life insurance benefits for all eligible participants Dec. 31, affecting some 1,700 former employees in the United States and Puerto Rico. The company said these benefits were closed to new enrollments as of May 31. It said it is working with an insurance company to offer a medical plan for current and future retirees.
The company also announced job cuts as part of its plan to go forward. Two weeks ago, company cut less than 5% of its global workforce, including more than 100 Kosciusko County jobs. Zimmer has locations in 25 countries.
Zimmer also provides other healthcare related services. Its primary customers include musculoskeletal surgeons, neurosurgeons, oral surgeons, dentists, hospitals, stocking distributors, healthcare dealers and, in their capacity as agents, healthcare purchasing organizations or buying groups. These customers range from large multinational enterprises to independent surgeons. It has operations in more than 25 countries and market products in more than 100 countries. In October 2008, the company acquired Abbott Spine. It markets and sells products through three channels: direct to healthcare institutions, such as hospitals or direct channel accounts; through stocking distributors and, in the Asia Pacific region, healthcare dealers, and directly to dental practices and dental laboratories.
In its recent chart, ZMH’s Bollinger Bands indicate a relatively stable condition as reflected by tighter than normal band width. Trading within its Bollinger Bands, the stock reflects neither an overbought nor oversold condition relative to its recent price trend. MACD reflects a weak bullish signal, with the indicator trending above the 9-day moving average signal line but still below the 0 level, indicating bearish moving averages. With share prices currently above the stock’s 13-day moving average, an indication of a bullish trend is generally considered.
Dr Pepper Snapple Group Inc. (NYSE: DPS) Stock Alert – DPS, Electronic Arts Ink a Multimillion-dollar Advertising Deal
Dr Pepper Snapple Group Inc. (NYSE: DPS) and video game publisher Electronic Art recently announced a multimillion-dollar partnership that would create gaming experience with exclusive premium downloadable content. The recent announcement has seen Electronic Arts’ move to broaden its focus on revenue streams beyond selling packaged video game software — such as downloadable content and in-game ads. Electronic Arts is a video game publisher behind games such as “Madden” and “The Sims.”
In a press release, the companies said people who buy Dr Pepper products with special codes will be able to access extra content, like downloads or virtual items, for some of Electronic Arts’ games. The Sims™ 3 is the first title to participate in this campaign beginning early next year and will allow gamers to experience a variety of original content, the report said.
“We’re proud to partner with an innovative marketing company like Dr Pepper that has such a rich heritage,” said Elizabeth Harz, senior vice president of Global Media Sales for Electronic Arts. “EA is always looking for new ways to reach its fans, and by aligning with Dr Pepper, we’re able to offer consumers premium content that enhances the gaming experience.”
For its part, Dr Pepper vice president of Market Tony Jacobs stated, “The first-of-its-kind partnership with EA will give Dr Pepper fans an unrivaled experience by adding exclusive value to their games such as new levels and items. EA is the only media company that could reach our target audience with the breadth and depth of titles for gamers on any gaming platform.”
The exact financial terms were not disclosed. Additional details of the relationship is expected to be announced in the future.
Dr Pepper Snapple Group is an integrated brand owner, bottler and distributor of non-alcoholic beverages in the United States, Canada and Mexico with a portfolio of flavored (non-cola) carbonated soft drinks (CSD) and non-carbonated beverages (NCB), including ready-to-drink teas, juices, juice drinks and mixers.
The company also distributes its products in the Caribbean. As of December 31, 2008, the company has four segments: Beverage Concentrates, Finished Goods, Bottling Group, and Mexico and the Caribbean. During the year ended December 31, 2008, 89% of the company net sales were generated in the United States, 4% in Canada, and 7% in Mexico and the Caribbean. DPS sold 1.6 billion equivalent 288 ounce cases in 2008. On May 7, 2008, Cadbury plc transferred its Americas Beverages business to the company.
In its recent chart, DPS is trading within its Bollinger Bands, a normal condition signaling that the stock is neither overbought nor oversold relative to the recent price action. MACD reflects strong bearish signal, with the indicator below the 9-day moving average signal line, and also below the critical 0 level, indicating that moving averages are trending lower. With share prices currently below the stock’s 13-day moving average, the bearish sign is more pronounced with decreasing moving averages.
NCI Building Systems Inc. (NYSE: NCS) Stock Alert NCS Shares Rise on Significantly Above Average Volume
NCI Building Systems Inc. (NYSE: NCS) shares jumped on significantly above average volume despite absence of company-specific news. One report noted that Lennar Corp.’s upbeat second-quarter earnings report, which drove homebuilder shares up, may have boosted buying interest. Lennar posted a 47% increase in sales of completed homes and a 63%- jump in orders from the first quarter.
NCI Building Systems is engaged in manufacturing and supplying of metal coil coating services, metal building components and engineered metal building systems. It serves the low-rise, non-residential construction market. Its range of products is used in repair, retrofit and new construction activities, primarily in North America.
The company operates in three segments: metal coil coating, metal components and engineered building systems. The metal coil coating segment, which paints steel coils, provides the company’s entire metal coil coating requirements for its metal components and engineered building systems business segments. Its metal components segment produces parts and accessories that are sold separately or as part of a solution, the most common of which is a metal building system custom-designed and manufactured in its engineered building systems segment.
In its recent chart, NCS’s MACD reflects strong bearish signal, with the indicator below the 9-day moving average signal line, and also below the critical 0 level, indicating that moving averages are trending lower. With share prices currently below the stock’s 13-day moving average, the bearish sign is more pronounced with decreasing moving averages. Trading within its Bollinger Bands, the stock reflects neither an overbought nor oversold condition relative to its recent price trend.
Lear Corp. (NYSE: LEA) Stock Alert – LEA May File for Chapter 11 Protection by July, Source Says
Shares of Lear Corp. (NYSE: LEA) sank Thursday on word of possible bankruptcy. Lear is a global tier I supplier of automotive seat systems, electrical distribution systems and electronic products with a global footprint that includes locations in 36 countries worldwide.
The Wall Street Journal, citing people familiar with the matter, reported that the Southfield, Michigan-headquartered company is preparing to file for bankruptcy as soon as next week.
According to the report, the troubled company has been exploring alternatives to restructure its debt outside of bankruptcy over the past months. It was in breach of its leverage covenants at the end of 2008 after borrowing all of the $1.2 billion available to it under the primary credit facility during the fourth quarter. The company obtained a waiver through June 30 on some conditions and a 30-day grace period for $38 million in interest payments.
The Journal reported that Lear had been in talks with banks in recent days for debtor-in-possession loans, with JPMorgan Chase (JPM.N) and Citigroup (C.N) providing the bulk of the loan.
Lear spokesman Mel Stephens declined when asked to comment on the news.
Lear has reportedly been hurt by steep production cuts by General Motors Corp (GMGMQ.PK) and Ford Motor Co (F.N). The two carmaker giants accounted for 42% of Lear’s global revenue in 2008.
Lear is focused on providing complete seat systems and the components thereof, as well as electrical distribution systems and electronic products, and the company supplying every automotive manufacturer in the world. In 2008, the company sales were comprised of vehicle categories: 65% cars, including 28% mid-size, 22% compact, 13% luxury/sport and 2% full-size, and 35% light truck, including 21% sport utility/crossover and 14% pickup and other light truck.
The company conducts its business in two product operating segments: Seating and Electrical and Electronic. In April 2009, The Furukawa Electric Co., Ltd. acquired interests in Lear Furukawa Corp. from Lear Corp. As of April 22, 2009, The Furukawa Electric Co. Ltd. owned 80% interest in Lear Furukawa Corp.
In its recent chart, LEA’s MACD reflects strong bearish signal, with the indicator below the 9-day moving average signal line, and also below the critical 0 level, indicating that moving averages are trending lower. With share prices currently below the stock’s 13-day moving average, the bearish sign is more pronounced with decreasing moving averages. Bollinger Bands indicate greater than normal volatility as reflected by an increase in distance between the upper and lower bands. Trading within its Bollinger Bands, the stock reflects neither an overbought nor oversold condition relative to its recent price trend.
Insmed Inc. (Nasdaq: INSM) Stock Alert – INSM Says Iplex Ineffective in Broad Muscular Dystrophy Study
Biopharmaceutical company Insmed Inc. (Nasdaq: INSM) recently announced its myotonic muscular dystrophy treatment Iplex (TM) (mecasermin rinfabate) had disappointing results from a Phase II clinical trial, pushing its shares down 53.65% Thursday.
In its release, the company said the trial indicated that Iplex did not exhibit a statistically significant improvement in the functional measure of endurance by the six-minute walk test, muscle function, muscle strength, or quality of life in any of the tests utilized in this study. Based on the limited number of subjects enrolled with significant impairments in cognitive function, gastrointestinal function or pain, Insmed was unable to reach any conclusions regarding the effects of IPLEX(TM) on these endpoints.
The primary endpoint of the randomized, double-blind, placebo-controlled phase II trial was not pre-defined as it was exploratory, according the report.
On the bright spot, Iplex demonstrated improvements in standard measures of insulin sensitivity and reductions in fasting glucose, fasting insulin, cholesterol and triglycerides, which is consistent with the expected metabolic profile of insulin-like growth factor. The company now intends to evaluate potential initiation of Phase II Trial for Iplex in MMD patients with severe insulin resistance.
Chairman Dr. Melvin Sharoky made the following statement, “We are disappointed that this trial did not meet the majority of its functional endpoints. However, the statistically significant improvement in insulin sensitivity seen in this study suggests that an additional phase II study in MMD patients with severe insulin resistance may be warranted. We appreciate the MDA’s financial support for the completed trial and look forward to the possibility of continuing to work with them.”
Sharoky added that Iplex continues to demonstrate a strong safety profile and the company believes it offers a potential treatment in multiple therapeutic areas, including Amyotrophic Lateral Sclerosis.
Richmond, Virginia – headquartered Insmed specializes in recombinant protein drug development.
In its recent chart, INSM’s Bollinger Bands indicate greater than normal volatility as reflected by an increase in distance between the upper and lower bands. Trading below its lower Bollinger Band, the stock reflects an overextended to the downside condition relative to its recent price action and is due for either a pause or retracement. MACD currently reflects weak bearish signal, with the indicator above the critical level of 0 but has crossed below its 9-day signal line, indicating that positive momentum has begun to slow. With share prices currently below the stock’s 13-day moving average, an indication of a bearish trend is generally considered.
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