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KNOT Offshore Partners LP Prices Initial Public Offering of Common Units

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By Business Wirevia The Motley Fool

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KNOT Offshore Partners LP Prices Initial Public Offering of Common Units

NEW YORK–(BUSINESS WIRE)– KNOT Offshore Partners LP (NYS: KNOP) (“KNOT Offshore Partners” or “KNOP“) today announced that it priced its initial public offering of 7,450,000 common units at a price of $21.00 per unit. KNOT Offshore Partners has granted the underwriters a 30-day option to purchase up to 1,117,500 additional common units, at the same price per unit. The common units being offered to the public are expected to begin trading on April 10, 2013, on the New York Stock Exchange under the symbol “KNOP.” The offering is expected to close on or about April 15, 2013, subject to customary closing conditions.

Following completion of the offering, Knutsen NYK Offshore Tankers AS, a Norwegian private limited liability company (“KNOT“), will own KNOP‘s general partner and a 55.4% limited partner interest in KNOT Offshore Partners. If the underwriters’ option to purchase additional common units is exercised in full, KNOT will own a 49.0% limited partner interest in KNOT Offshore Partners.

KNOT Offshore Partners intends to use the net proceeds from the offering, which are estimated to be approximately $138.4 million, after deducting estimated underwriting discounts and commissions, structuring fees and estimated offering expenses, to repay borrowings outstanding under its vessel financing agreements and for general partnership purposes.

BofA Merrill Lynch and Citigroup are acting as co-structuring agents and joint book-running managers in the transaction. Barclays is acting as a joint book-running manager. DNB and UBS are acting as co-lead managers for the offering. Raymond James and RBC are acting as co-managers for the offering. The offering of the common units will be made only by means of a prospectus. A written prospectus meeting the requirements of Section 10 of the Securities Act of 1933 may be obtained from the offices of:

BofA Merrill Lynch, 222 Broadway, New York, NY 10038, Attention: Prospectus Department, dg.prospectus_requests@baml.com.

Citigroup, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717 (tel: 800-831-9146).

A registration statement relating to KNOT Offshore Partners’ common units has been filed with and declared effective by the U.S. Securities and Exchange Commission (“SEC“). The registration statement is available on the SEC‘s website at www.sec.gov.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the common units described above, nor will there be any sales of these common …read more

Source: FULL ARTICLE at DailyFinance

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Is This Biotech an Undiscovered Gem?

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By David Williamson, The Motley Fool

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Biotech Astex Pharmaceuticals made a huge pop today, after RBC gave the stock an upgrade to “outperform,” calling it an “undiscovered gem” and raising the price target a whopping 40%. In this video, Motley Fool health-care analyst David Williamson tells investors about some potentially very exciting phase 2 data soon to be released by the company and gives us a picture of what it could mean for Astex if its trial data is as good as RBC thinks.

Can Celgene continue to soar?
Despite its exciting pipeline, Astex’s only marketed product at the moment is Dacogen, which is currently in direct competition with Celgene‘s Vidaza. Every in-the-know biotech investor has an eye on Celgene. Shares have skyrocketed this year as the company outlined a plan to almost triple its profits in only a few years. But should you buy the story Celgene is selling? Make sure you understand the key opportunities and risks facing this company by picking up The Motley Fool‘s brand-new premium report on Celgene. To claim your copy today, simply click here now.

var FoolAnalyticsData = FoolAnalyticsData || []; FoolAnalyticsData.push({ eventType: “TickerReportPitch”, contentByline: “David Williamson“, contentId: “cms.29629”, contentTickers: “NYSE:JNJ, NYSE:AZN, NASDAQ:CELG, NASDAQ:ASTX”, contentTitle: “Is This Biotech an Undiscovered Gem?”, hasVideo: “True”, pitchId: “128”, …read more
Source: FULL ARTICLE at DailyFinance

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2 Stories for Netflix, but Only 1 Ending — Rags or Riches?

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By Adam Levine-Weinberg, The Motley Fool

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The gap between the projections of Netflix analysts and the company’s management continues to grow wider. As the Netflix stock price has skyrocketed in the past few months, analysts have raised their price targets to match. However, a closer look at their reports shows that they are not nearly as bullish about Netflix’s business prospects as Netflix CEO Reed Hastings or other insiders.

This combination of low analyst expectations, high management expectations, and high analyst price targets could prove volatile. If Netflix performs up to management expectations in the next year or two, the stock could see another round of upgrades and raised price targets, as the company’s fundamentals would be outperforming the analyst models. However, if analysts are right about Netflix’s growth trajectory — a scenario I believe to be more realistic — the stock could drop precipitously in spite of their high price targets.

New week, new upgrade
On Tuesday, Netflix shares rose by as much as 6% after Pacific Crest analyst Andy Hargreaves raised his price target from $160, to $225. Hargreaves cited “increased margin and subscriber assumptions” for the move. However, his domestic subscriber growth assumptions are actually quite modest. Hargreaves now expects Netflix to grow from 27 million subscribers at the end of 2012, to 36 million domestic subscribers by 2015, with a plateau around 46 million domestic subscribers by 2021.

Hargreaves’ analysis is very similar to a bullish call made by RBC analyst Mark Mahaney earlier this month. Mahaney expects the domestic subscriber base to reach 39 million by 2015, and derived a $210 price target from that analysis. These subscriber estimates dovetail well with my analysis of the market opportunity for Netflix. Premium video leader Time Warner boasts approximately 41 million U.S. subscribers between its HBO and Cinemax services. HBO can attract many subscribers, despite its high price, because it has very high-quality original programming. Netflix is trying to move in that direction with new series like House of Cards. With improving content quality and a low price tag, it seems reasonable to project that Netflix will reach a similar level of market penetration as Time Warner within a few years.

Watch the gap!
However, this is not what Netflix’s management is projecting. Netflix CEO Reed Hastings has stated that the company’s addressable market in the U.S. is 60 million-90 million households. . While I do not think that Netflix management seriously expects to reach the upper end of that range (which would be equivalent to roughly 100% of broadband households), Hastings talks about the 60 million figure as a target for the end of this decade.

To reach 60 million subscribers by 2020, Netflix would have to average more than 4 million net new domestic subscribers per year over the next eight years. By contrast, Tuesday’s bullish call by Pacific Crest assumes just 3 million subscriber additions per year through 2015, and an end-of-decade target of just 46 million domestic subscribers. Clearly, there …read more
Source: FULL ARTICLE at DailyFinance

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Thursday's Top Upgrades and Downgrades

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By Rich Smith, The Motley Fool

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This series, brought to you by Yahoo! Finance, looks at which upgrades and downgrades make sense, as well as which ones investors should act on. Today, it’s “good” news all around as analysts upgrade shares of Avon Products and VMware , while even downgraded Progressive gets a higher price target.

Say what?
Let’s go ahead and tackle that last one right away, because it’s a bit of a puzzler. This morning, analysts at RBC Capital Markets cut their rating on Progressive by one notch, dropping the property and casualty insurer to a “sector perform” rating. However, RBC also raised its price target on the stock, predicting the shares will hit $25 within a year. What’s up with that?

Actually, the answer is pretty simple. Previously, RBC had a $24 price target on Progressive and was encouraging investors to buy the stock. But Progressive shares crossed the $24 line back in mid-February and haven’t looked back since. With Progressive having achieved its target price, it’s only logical that RBC would now cool its enthusiasm on the stock — hence the downgrade. However, with the stock trading north of $25, Progressive had to at least raise its target price to match — or else consider making a sell recommendation. So what to do?

Personally, I probably would have gone ahead and recommended selling the stock. Priced at 17 times earnings yet having a growth rate of less than 9%, the stock looks expensive. Progressive costs more than its peers: The average property and casualty insurer today sells for a P/E of eight. And although Progressive pays a dividend, its 1.1% yield is hardly big enough to make it worth sticking around and owning an overpriced stock.

Avon calling
But after selling Progressive, where do you put the cash? Stifel Nicolaus this morning put a “buy” rating on Avon Products — but honestly, I disagree with this call as well.

Don’t get me wrong; despite being unprofitable today, Avon isn’t quite as bad as it looks. Free cash flow at the firm was a respectable $327 million last year, and Avon’s a pretty consistent cash-producer. The problem is that Avon doesn’t generate enough cash to be worth the $8.9 billion market cap it currently costs (or the whopping $10.5 billion enterprise value it carries, once you factor in debt).

At the more generous price-to-free-cash-flow ratio (let alone the less generous EV/FCF ratio) of 27, Avon’s 20% long-term growth rate fails to measure up. The firm’s dividend, at 1.2% today following a recent cut, isn’t enough to make up the difference. Long story short, the stock is almost as overpriced as Progressive — and unworthy of a buy rating.

A smarter choice: VMware
Fortunately, an investor today has better options, and as it turns out, one of them got recommended this morning by none other than RBC Capital. At the same time RBC was downgrading Progressive, you see, it was upping its rating …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Another Huge Price Target Boost for Google

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By 24/7 Wall St.

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The Internet analyst folly on Wall St. continues. On Monday came yet another higher price target for Google Inc. (NASDAQ: GOOG) as RBC Capital Markets has raised the Google stock price target objective to $950 per share from a prior $840 price target, based on higher earnings growth over the next three-year period.

Also cited were cost-per-click trends, improving trends in the international segment and a real monetization of YouTube. RBC even called Google one of its best ideas from the research team. While RBC has just maintained an Outperform rating, it is not as high as prior price targets.

It was just on February 21 that both Bernstein and CLSA raised their respective Google share price targets up to $1,000. Bernstein previously had been at $820 and CLSA at $900. That being said, this new jump to $950 from $840 sounds high, but relatively speaking it is not as bold nor as wide as it seems.

The closing price before the prior two $1,000 analyst calls was $792.46 for Google stock. Friday’s closing price was $831.52, and the highest close last week was $838.60. Google shares are up more than $7 at $838.55 this morning on the news. Maybe the curse of the $1,000 stock is not as big of jinx as it might seem.

Filed under: 24/7 Wall St. Wire, Analyst Calls, Internet, Technology, Technology Companies Tagged: GOOG

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Source: FULL ARTICLE at DailyFinance

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Netflix Gets a Bizarre "Like" From RBC

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By Adam Levine-Weinberg, The Motley Fool

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On Tuesday, RBC analyst Mark Mahaney resumed coverage of Netflix with a buy rating and a $210 price target. While many investors have become bullish on Netflix recently, Mahaney’s decision to place a buy rating on the stock was odd for two reasons. Most obviously, he’s a little late. Netflix shares have already more than tripled in the past six months! While Mahaney sees another 15% upside, investors who have been waiting on his call missed the real party.

Netflix 6 Month Price Chart, data by YCharts.

However, the rating was also bizarre because the underlying analysis was not very bullish. Mahaney expects the domestic subscriber base to continue growing, but only at a moderate rate. Meanwhile, he expects the international business to lose money for at least two more years. With these parameters, Netflix looks more like a sell.

Slow subscriber growth
In an interview on CNBC on Tuesday, Mahaney stated that Netflix could continue to add around 5 million domestic subscribers per year for the next few years. The main growth driver, in his opinion, is the ongoing shift of video consumption from TV to the Internet. In his research note, Mahaney pinned down his growth expectation further, predicting 39 million domestic streaming subscribers by 2015.

This implies an approximately 15% CAGR in subscriber numbers (and domestic streaming revenue, assuming no price increases), depending on exactly when in 2015 Netflix hits 39 million subscribers. By contrast, Netflix grew its domestic subscriber base by 25% in 2012, and “real” Netflix bulls like my fellow Fool Anders Bylund expect growth to remain above 20% for at least the next few years.

The upshot
I think Mahaney’s subscriber growth estimates are probably on target. Competition from Amazon.com , which seems willing to run its Prime Instant Video service at a loss, will intensify over the next year or two. Furthermore, the streaming service has high churn: Netflix has thrown out numbers like 5% per month previously. As the subscriber base increases, it becomes harder to offset that churn: If churn is still 5%, that means that 1.35 million Netflix users are canceling every month. Even if Netflix’s investments in original and exclusive content eventually reduce churn to 3%, that still becomes a big drag as the subscriber count approaches 40 million or 50 million.

If Mahaney’s relatively modest subscriber growth projections hold true, domestic streaming profit will not replicate its recent growth. Domestic streaming contribution profit more than doubled from fourth-quarter 2011 to fourth-quarter 2012, due to 24% revenue growth offset by a modest 13% increase in costs. I do not expect cost growth to slow significantly in the near future; with competitors like Amazon joining the bidding, content prices will probably continue to rise.  However, if revenue only grows by 15% going forward, the contribution margin will not expand much further. This implies that profit from domestic streaming will only grow at perhaps 20% annually, which is not …read more
Source: FULL ARTICLE at DailyFinance

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Macquarie Announces Senior Hires to Sales and Sales Trading Effort in Boston

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By Business Wirevia The Motley Fool

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Macquarie Announces Senior Hires to Sales and Sales Trading Effort in Boston

  • Two key senior equities hires in Macquarie’s Boston office
  • Strengthens overall US equity sales and sales trading effort

NEW YORK–(BUSINESS WIRE)– Macquarie Securities, the institutional equities arm of Macquarie Group (“Macquarie”) (ASX: MQG; ADR: MQBKY), today announced two senior equities hires in a further enhancement to its Boston-based US equity sales and sales trading team.

These new hires expand on a range of senior leadership appointments the firm made to its US institutional equities business in July 2012.

Ken Savio, Senior Managing Director and Head of Macquarie Securities USA, said: “Ryan and Steven have a proven track record of excellence in servicing top-tier institutional accounts that are important to our firm. The high caliber of their combined experience demonstrates our continued and deliberate effort to recruit outstanding professionals who are able to contribute immediately to Macquarie and enhance our client-focused offering.”

About Macquarie Group

Macquarie Group (Macquarie) is a global provider of banking, financial, advisory, investment and funds management services. Macquarie’s main business focus is making returns by providing a diversified range of services to clients. Macquarie acts on behalf of institutional, corporate and retail clients and counterparties around the world. Founded in 1969, Macquarie operates in more than 70 office locations in 28 countries. Macquarie employs approximately 13,400 people and has assets under management of over $353 billion (as of September 30, 2012). See www.macquarie.us for more information.

About Macquarie Securities Group

Macquarie Securities Group operates as a global institutional securities house covering sales, research, ECM, execution and …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Top Analyst Upgrades and Downgrades (MITT, A, ALTR, APOL, CLF, CBRL, EVEP, FLO, HIIQ, MTG, NFLX, YHOO)

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By 24/7 Wall St.

Bull and Bear

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These are some of this Tuesday’s top analyst upgrades, downgrades and initiations seen from Wall St. research calls.

A.G. Mortgage Investment Trust (NYSE: MITT) started as Neutral at Credit Suisse.

Agilent Technologies Inc. (NYSE: A) started as Outperform with $48 target at Credit Suisse.

Altera Corp. (NASDAQ: ALTR) named bear of the day due to weakening demand for its products and increased competition at Zacks Investment Research.

Apollo Group Inc. (NASDAQ: APOL) raised to Hold at Deutsche Bank.

Cliffs Natural Resources Inc. (NYSE: CLF) cut to Market Perform at BMO.

Cracker Barrel Old Country Store Inc. (NASDAQ: CBRL) reiterated Buy and raised price target by $10 to $88 at Argus.

EV Energy Partners L.P. (NASDAQ: EVEP) raised to Outperform with $57 target at Credit Suisse.

Flowers Foods Inc. (NYSE: FLO) named Bull of the Day because of growing market share and expanding margins at Zacks Investment Research.

Health Insurance Innovations Inc. (NASDAQ: HIIQ) started as Outperform with $17 price target at Credit Suisse.

MGIC Investment Corp. (NYSE: MTG) raised to Overweight from Underweight at Barclays.

Netflix Inc. (NASDAQ: NFLX) started as Outperform at RBC.

Yahoo! Inc. (NASDAQ: YHOO) raised to Buy at Cantor Fitzgerald.

Filed under: 24/7 Wall St. Wire, Analyst Calls Tagged: A, ALTR, APOL, CBRL, CLF, EVEP, FLO, HIIQ, MITT, MTG, NFLX, YHOO

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Source: FULL ARTICLE at DailyFinance

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ScotiaBank Earnings: An Early Look

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By Dan Caplinger, The Motley Fool

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Earnings season is winding down, with most companies already having reported their quarterly results. But there are still some companies left to report, and Bank of Nova Scotia is about to release its quarterly earnings. The key to making smart investment decisions with stocks releasing their quarterly reports is to anticipate how they’ll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you’ll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

Canadian banks have developed a well-deserved reputation for being more stable than their American counterparts, and ScotiaBank has definitely benefited from strong conditions in the Canadian economy. But will the good times last for Canada and ScotiaBank? Let’s take an early look at what’s been happening with ScotiaBank over the past quarter and what we’re likely to see in its quarterly report on Tuesday.

Stats on ScotiaBank

Analyst EPS Estimate

$1.27

Change From Year-Ago EPS

3.2%

Revenue Estimate

$4.89 billion

Change From Year-Ago Revenue

6.8%

Earnings Beats in Past 4 Quarters

4

Source: Yahoo! Finance.

Will ScotiaBank top estimates again?
Analysts have been a bit more cautious on Bank of Nova Scotia over the past few months, pulling in their earnings-per-share calls by a total of $0.06. But that pessimism hasn’t held the stock back, which has risen by about 7% since early December.

The entire Canadian banking industry has enjoyed strong economic tailwinds for a long time. A big rise in prices of natural resources like oil and gold have bolster the nation’s resource-based economy, giving ScotiaBank and its peers huge opportunities to profit from capital-intensive business expansion. ScotiaBank actually stood out from the crowd by winning the Global Bank of the Year award from The Banker magazine.

But as I mentioned in my preview of Bank of Montreal last week, concerns about high levels of household debt led one credit-rating agency to downgrade ScotiaBank and Bank of Montreal, as well as Royal Bank of Canada and Toronto-Dominion . A drop in the country’s hot real-estate market probably wouldn’t hurt the banks as badly as the financial crisis hurt U.S. banks, but it could still put a crimp in earnings for a while.

Unlike Toronto-Dominion, RBC, and Bank of Montreal, ScotiaBank hasn’t focused its international efforts as much on U.S. expansion. Rather, it has worked hard to build a bigger presence in Asia and Latin America. As higher-growth areas with arguably more potential and less competition, those regions may prove to be good picks for ScotiaBank.

In its earnings report, look for ScotiaBank to give hints about the state of the global economy in the regions where it does business. If emerging markets start to heat up again, then the bank could outperform its Canadian peers.

The best investing approach …read more
Source: FULL ARTICLE at DailyFinance