Jul 18, 2008

Friday, July 18, 2008

Teva Barr buyout, BRL fade update

as usual on a stock deal the two stocks are trading in tandem. teva is unusually strong, this is more than likely because of it being a partial cash deal among other things. do not short brl unless it breaks below the open and teva is still in tandem.

this is not a recommendation for you to trade, merely an example. do not trade on the stockman's info alone. seek professional advice before day trading for suitability etc.

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Teva to buy Barr for $7.46 billion, boost generic lead

We have another cash and stock deal, two this week!!.

BRL is gapping up nicely and could be another great fade opportunity.

NEW YORK (Reuters) - Teva Pharmaceutical Industries (TEVA.O: Quote, Profile, Research) (TEVA.TA: Quote, Profile, Research) said on Friday it would buy rival generic drugmaker Barr Pharmaceuticals Inc (BRL.N: Quote, Profile, Research) for $7.46 billion to expand its leadership in the U.S. market and fortify its presence in Europe.

The deal is the latest in a wave of consolidation in the generic-drug sector that some analysts suspect will result in only a handful of major global players.

Israel-based Teva, the world's largest generic drug company, plans to buy New Jersey-based Barr for $66.50 per share in cash and stock.

The price represents a 42 percent premium to Barr's closing price on Wednesday. Barr shares rose 22 percent on Thursday on reports of a Teva acquisition.

In pre-market trading on Friday, Barr shares rose 6.7 percent to $60.99, while Teva shares fell 4.4 percent to

$39.25.

The combined company would be a generic powerhouse employing about 37,000 people globally and operating directly in more than 60 countries. Together, Barr and Teva had revenue of about $11.9 billion in 2007.

By acquiring Barr, No. 5 in the U.S. in generic prescriptions, Teva would move closer to its stated goal of boosting its U.S. market share to 30 percent of generic prescriptions by 2012, from about 20 percent. Continued...

Teva to buy Barr for $7.46 billion, boost generic lead | Reuters

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Pre Market Trader Talk with Bob Pisani

Is there any doubt that big-cap financials are the key to this market? Despite earnings below expectations for Microsoft

MICROSOFT CORP

MSFT

27.52 UNCH 0

NASDAQ

Quote | Chart | News | Profile

[MSFT 27.52 --- UNCH (0) ] and Google[GOOG 533.44 --- UNCH (0) ], and a large writedown from Merrill Lynch, [MER 30.73 --- UNCH (0)

]it was Citigroup beating expectations that moved futures up almost 15 points this morning.

This is crunch time for this little mini-rally--since the earnings news is mixed, it will be critical for the market to move sideways or up today, and avoid retracing any of the last two days gains.

Options expiration today.

Citi's

CITIGROUP INC

17.97 UNCH 0

NYSE

Quote | Chart | News | Profile

[C 17.97 --- UNCH (0) ] loss of $0.49 was better than the loss of $0.66 expected. Doesn't sound great, but things are getting better: they reported a loss of $1.02 in the first quarter, and a loss of $1.99 in the fourth quarter. Yes, there was $7.2 billion in writedowns, but even that is an improvement. As with Wells Fargo,[WFC 27.83 --- UNCH (0)

] net interest margin was a bit higher than expected. Up 9 percent pre-open.

Elsewhere:

1) Freddie Mac

FREDDIE MAC

FRE

8.33 UNCH 0

NYSE

Quote | Chart | News | Profile

[FRE 8.33 --- UNCH (0) ]still trading up, despite the fact that the WSJ reported they were considering raising up to $10 billion in equity through a sale of common and preferred stock.

2) Meantime, Honeywell

HONEYWELL INTL INC

HON

50.86 UNCH 0

NYSE

Quote | Chart | News | Profile

[HON 50.86 --- UNCH (0)

]beat on topline and revenues, and raised their guidance (it's in-line with estimates).

Aerospace sales (about a third of sales) were strong. Remember, all the aerospace companies got slammed in June on concerns that aerospace sales would be slowing globally. Up 4 percent pre-open.

3) Mattel

MATTEL INC

MAT

18.28 UNCH 0

NYSE

Quote | Chart | News | Profile

[MAT 18.28 --- UNCH (0)

]also beat expectations, up 12 percent.

4) Bank and credit card giant Capital One

CAPITAL ONE FINL CORP

COF

42.80 UNCH 0

NYSE

Quote | Chart | News | Profile

[COF 42.80 --- UNCH (0)

]reported earnings below expectations, down 2 percent pre-open.

5) Barr Labs

Barra Resources Ltd

BAR

0.16 -0.005 -3.03%

ASX National

Quote | Chart | News | Profile

[BAR 0.16

-0.005 (-3.03%)

], which had been a speculated takeover target for a couple days, is being bought by Teva for $7.46 billion, about $66.50 in cash and stock, a 42 percent premium to Barr's closing price on Wednesday. Teva is the largest generic drug maker in the world.

Key To Market? Big Cap Financials - Trader Talk with Bob Pisani - CNBC.com

Opening View: Citigroup Beats Forecast, Merrill Lynch Posts Hefty Loss

Citigroup (C: sentiment, chart, options) , following in the footsteps of Wells Fargo (WFC) and J.P. Morgan Chase (JPM), this morning reported stronger-than-expected earnings. The financial firm reported that it lost $2.5 billion, or 54 cents per share, in the second quarter, better than the 66-cent-per-share loss analysts were expecting. The company reported write-downs of about $8 billion – significantly lower than the write-downs recorded in the first and fourth quarters. However, the banking behemoth said that credit costs jumped to $7.2 billion in the wake of more consumers defaulting on their loans.

Meanwhile, Merrill Lynch (MER: sentiment, chart, options) after the close yesterday reported a second-quarter loss of $4.89 billion, or $4.97 per share. Analysts, on average, were predicting a loss of $1.91 per share. What's more, the company reported nearly $40 billion in write-downs related to failed investments. Since stepping into the earnings spotlight, the firm has been bombarded by analysts. Moody's Investment Services downgraded the senior long-term debt of MER to "A2" from "A1;" Fox-Pitt cut the firm's rating to "underperform" from "in line;" Goldman Sachs cut the company's 6-month price target to $33 from $38; Bernstein reduced its price target on the equity to $30 from $45; and Banc of America cut its price target to $47 from $55, among others.

Rounding out the earnings trifecta is Microsoft (MSFT: sentiment, chart, options) , which reported fiscal fourth-quarter earnings of $4.3 billion, or 46 cents per share – 3 pennies below the average analyst estimate. Revenue, however, jumped 18% to $15.8 billion, just ahead of the Street's forecast for revenue of $15.7 billion. For the fiscal year, earnings rose 26% to $17.7 billion, or $1.87 per share, while sales came in at $60.4 billion. For the current quarter, MSFT predicted earnings of 47 cents to 48 cents per share on revenue of $14.7 billion to $14.9 billion – just shy of the Street's projections for earnings of 49 cents per share on $15.1 billion in sales.

Opening View: Citigroup Beats Forecast, Merrill Lynch Posts Hefty Loss