CHICAGO, April 29, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog includethe Barclays PLC (NYSE:BCS-Free Report), Freddie Mac (OTCBB:FMCC-Free Report), Fannie Mae (OTCBB:FNMA-Free Report), Wells Fargo & Company (NYSE:WFC-Free Report) andPrestige Brands Holdings, Inc. (NYSE:PBH-Free Report).
ADRs of Barclays PLC (NYSE:BCS-Free Report) fell nearly 1% following the announcement of a mortgage settlement deal with the Federal Housing Finance Agency (FHFA), the conservator of Freddie Mac (OTCBB:FMCC-Free Report) and Fannie Mae (OTCBB:FNMA-Free Report). The British banking multinational will pay $280 million to compensate for its faulty mortgage activities during the pre-crisis period.
Of the total settlement amount, Barclays will shell out $227 to Freddie Mac and $53 million to Fannie Mae. The deal resolves claims in two lawsuits pertaining to the same issue filed by the FHFA in the U.S. District Court for the Southern District of New York. Notably, the company assured that this would not affect its 2014 results.
Barclays had allegedly sold risky loans worth $4.9 billion to Freddie Mac and Fannie Mae during 2005-07, thereby resulting in huge losses for investors. However, with the tightening of regulations in 2011, Barclays was one of the 18 institutions sued by the FHFA for selling faulty mortgage-backed securities to Freddie Mac and Fannie Mae.
The FHFA continues with its endeavors to protect investors' interest and provide a secured investment environment for them. Since 2011, the agency has reached settlements with 13 financial organizations (including Barclays) and received nearly $16.0 billion as compensation. Additionally, in Nov 2013, Wells Fargo & Company (NYSE:WFC-Free Report), which was not part of the above-mentioned litigation, agreed to pay $335.2 million to resolve similar charges.
Further, though the latest settlement removes a major legal headwind for Barclays, the company is still facing probes and investigations. This might lead to an increase in legal expenses, thereby weighing on the company's profitability in the quarters ahead.
Currently, Barclays carries a Zacks Rank #5 (Strong Sell).
Prestige Brands Acquires Hydralyte
Prestige Brands Holdings, Inc.'s (NYSE:PBH-Free Report) shares shot up 18.13% after the company announced that it entered into an agreement to acquire Insight Pharmaceuticals Corp. for $750 million in cash. The deal is expected to close by Sep 2014.
As per the terms of the agreement, Prestige Brands stands to gain tax attributes with a present value of approximately $100 million. Thus, the effective purchase price will be approximately $650 million.
The transaction will add Insight Pharma's feminine care and other over-the-counter (OTC) healthcare products including Monistat (leading OTC yeast infection treatment brand) to Prestige Brands' portfolio. The acquisition will expand Prestige Brands' presence in the feminine care market in the U.S. and Canada. The deal will be immediately accretive to the company's earnings.
We note that this is the second agreement announced by the company this month. Earlier, the company revealed that it has signed a purchase agreement with Australia-based The Hydration Pharmaceuticals Trust of Victoria to acquire their OTC oral rehydration brand, Hydralyte. The acquisition is slated to close by Jun 2014.
The upcoming acquisition of Hydralyte will help Prestige Brands expand its business in the Austral-Asia region. With Hydralyte's leading-OTC-brand status for oral rehydration following diarrhea, vomiting, fever, heat and other ailments in Australia and New Zealand, the addition of Hydralyte to Prestige Brands' portfolio will be immediately accretive to its earnings.
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