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Early Movers for Wednesday Feb. 13, 2013
Posted by: Alex Garcia (IP Logged)
Date: February 13, 2013 11:30AM
U.S. equity markets are mixed after the president’s State of the Union Address and the coming G20 summit as the euro zone crisis will once again be the focus of the summit.
An early mover today will be shares of Comcast (CMCS.A) which purchased the remaining 49% in NBC Universal from General Electric (GE) for $16.7 billion. The deal is expected to be completed by the end of March and will include assets such as its cable channels, theme parks and the NBC broadcast network. The deal also includes NBC studios, offices at 30 Rockefellar Center and CNBC’s headquarters in New Jersey for an additional $1.4 billion. Combined, the deal values NBC Universal at $39 billion and sets up Comcast as a heavyweight in not only a producer of content but also a distributor.
“It’s been a very smooth couple of years, and the content continues to get more valuable with new revenue streams,”said CEO Brian Roberts in the New York Times.
Comcast has been trading significantly higher since the deal was announced. Gurus have been buyers and sellers of the cable giant with Ken Fisher and Lee Ainslie being bullish recently. Lee Ainslie’s position is more significant as it represents 2.1% of Maverick Capital’s portfolio.
Dow component and farm equipment maker Deere (DE) reported earnings of $1.66 per share versus analysts estimates of $1.40 per share on worldwide sales increasing 10% year over year. The company expects sales to be up 6% for 2013 and is expecting net income of $3.3 billion. The company appears to be firing on all cylinders as it is the 11th consecutive quarter the company posts record earnings.
"As a result, Deere remains well-positioned to earn solid profits in today's fragile global economy and, longer term, to benefit from major trends that we continue to believe hold great promise for the company and its customers and investors."
Two gurus have been bullish on Deere, including Robert Olstein and Warren Buffett. Considering the size of Berkshire Hathaway’s purchase of Deere, it is pretty safe to say the purchase is from one of two appointed portfolio managers, either Ted Weschler or Todd Combs.
Shares of Cliffs Natural Resources (CLF) are down 15% after the company reported EPS of $0.62 versus analyst estimates of of $0.53. While the earnings beat analysts estimates, the shares plunged after the company decided to slash its dividend by 76% due to declining iron ore prices. At the same time, the company announced a secondary offering of 9 million shares of common stock and 20 million depository shares.
Not surprisingly, Gurus have been net sellers of the iron producer. The last buyer was T Rowe Price’s Brian Rogers but he has started to reduce his stake.
Buffalo Wild Wings (BWLD) are down 5% as the company reported fourth quarter EPS of $0.89 per share versus analysts estimates of $0.96 per share. The company did see sales increase but high chicken wing prices continue to impact the company’s bottom line. The company has raised menu prices to offset rising wholesale prices but it doesn’t seem to be enough in the eyes of some Wall Street analysts.
“We’re not worried at all about [the company’s] top line, it’s just wing prices — they’re killing them,” said Mark Smith, a stock analyst at Feltl & Co. who has a “sell” rating on Wild Wings’ stock. (source)
No Gurus own share of the restaurant chain. Shares have traded at a rich valuation.
Guru Discussed: Lee Ainslie: Current Portfolio, Stock Picks
Warren Buffett: Current Portfolio, Stock Picks
Stocks Discussed: CMCS.A, GE, DE, CLF, BWLD,