The Zacks Analyst Blog Highlights: Halliburton, Oceaneering International, Core Laboratories, Activision Blizzard and Subsea 7
CHICAGO, Sept. 23, 2013 /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 include the Halliburton Co. (NYSE:HAL-Free Report), Oceaneering International Inc. (NYSE:OII-Free Report), Core Laboratories NV (NYSE:CLB-Free Report), Activision Blizzard Inc.(Nasdaq:ATVI-Free Report) and Subsea 7 SA (OTC:SUBCY-Free Report).
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Here are highlights from Friday's Analyst Blog:
DoJ Fines Halliburton, Accepts Plea
Leading oilfield service provider Halliburton Co. (NYSE:HAL-Free Report) reported the closure of an investigation by the United States Department of Justice (DOJ) on the company's role in the Gulf of Mexico's Macondo well disaster. The incident claimed 11 lives and spewed more than 4 million gallons of crude -- the worst oil spill ever. Halliburton was in charge of the cementing job at the well.
Moreover, the U.S. district judge has accepted the guilty plea from Halliburton of intentionally removing computer records after the disaster. The court imposed a fine of $200,000 and also forced Halliburton into a probationary period of three years.
Halliburton inked a cooperation plea deal with the DOJ earlier. Additionally, the DOJ disclosed that the company has cooperated extremely well with the court proceedings.
Halliburton believes that the investigation closure will remove an overhang from the stock and benefit its shareholders.
Houston-based Halliburton is one of the largest oilfield service providers in the world. The company operates under two main segments: Completion and Production, and Drilling and Evaluation.
Going forward, Halliburton expects to benefit from its leading position in the North American oilfield services market, improving its international margins, and expanding market penetration in deepwater and underserved international regions. We expect these trends to result in a strong operating environment leading to positive earnings surprises.
Halliburton currently holds a Zacks Rank #2 (Buy), implying that it is expected to significantly outperform the broader U.S. equity market over the next one to three months.
Apart from Halliburton, one can look at other oil field service providers like Oceaneering International Inc. (NYSE:OII-Free Report), Core Laboratories NV (NYSE:CLB-Free Report) and Subsea 7 SA (OTC:SUBCY-Free Report) that offer value. All the stocks sport a Zacks Rank #2 (Buy).
Court Stalls Activision-Vivendi Deal
Activision Blizzard Inc.(Nasdaq:ATVI-Free Report) recently received a setback when a U.S. Court put a hold on Vivendi SA's plan to sell its stake in the company. Vivendi had planned to sell 85.0% of its stake in Activision to the latter for $8.2 billion.
The lawsuit was filed by one of the shareholders of Activision against both the parties, based on which the Delaware Chancery court issued a preliminary injunction to stop the transaction for the time being.
Vivendi had expressed its intent to sell its stake in Activision in Jul 2013, which would enable it to effectively split its Media and Telecom assets. The divestment would bring down Vivendi's stake in Activision to 12.0% while the other investor group would control 24.9%.
As per the terms of the agreement, Activision was supposed to buy the stake from Vivendi in two separate transactions. Activision was supposed to first purchase 429 million shares from Vivendi for $5.83 billion. A separate transaction led by a group including chief executive Bobby Kotick and co-chairman Brian Kelly was supposed to buy another 172 million shares worth $2.34 billion from Vivendi.
Activision's decision to accept Vivendi's proposal indicates that it is trying to increase its controlling stake so that it can take decisions more freely. Vivendi wanted to have access to the $4.3 billion in cash that is reflected in the balance sheet of Activision by way of dividend or share sale. But as Activision wanted to have controlling stake from the French company so it agreed to buy back shares from Vivendi.
Both the parties cannot proceed with the deal further, unless the court modifies its decision and the transaction gets the approval of Activision shareholders. We believe that the court's decision is a temporary setback for both the parties. Activision has already said that it remains committed to the deal and the completion of the deal will boost its stock price going forward.
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