The Zacks Analyst Blog Highlights:Allergan, Valeant Pharmaceuticals International, AstraZeneca, Salix Pharmaceuticals and Applied Micro Circuits
CHICAGO, Aug. 5, 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 include the Allergan (NYSE:AGN-Free Report), Valeant Pharmaceuticals International (NYSE:VRX-Free Report), AstraZeneca (NYSE:AZN-Free Report), Salix Pharmaceuticals (Nasdaq:SLXP-Free Report) and Applied Micro Circuits Corporation (Nasdaq:AMCC-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Monday's Analyst Blog:
Allergan Sues Valeant, Pershing Square on Insider Trading
The proceedings related to the proposed acquisition of Allergan (NYSE:AGN-Free Report) by Valeant Pharmaceuticals International (NYSE:VRX-Free Report) are getting murkier.
Allergan has now filed a lawsuit in the United States District Court for the Central District of California against Valeant, Pershing Square Capital Management, L.P. and its principal shareholder, activist investor Bill Ackman.
In its lawsuit, Allergan alleges that Valeant, Pershing Square and Ackman violated federal securities laws prohibiting insider trading, engaged in other fraudulent practices, and failed to disclose legally required information.
We note that Valeant has been relentlessly pursuing Allergan since Apr 2014. On Jun 18, 2014, Valeant announced that it has commenced an exchange offer for the common stock of Allergan, Inc. after the latter rejected its previous offer a couple of times.
Allergan cited that Valeant's offer substantially undervalues the company, creates significant risks and uncertainties for the stockholders of Allergan, and is not in the best interests of the company and its shareholders.
We note that the tender offer was scheduled to expire on Aug 15, 2014. Pershing Square is expected to hold a special meeting for shareholders in Aug 2014. In response to Allergan's lawsuit, Valeant and Pershing Square Capital Management announced that Allergan's claims were baseless. Both Valeant and Pershing Square Capital Management believe that the lawsuit is a desperate attempt by Allergan to delay or avoid the special meeting.
Allergan currently carries a Zacks Rank #1 (Strong Buy) while Valeant currently has a Zacks Rank #4 (Sell). We expect investor focus to remain on further updates from the transaction.
Some better-ranked stocks in the healthcare sector include AstraZeneca (NYSE:AZN-Free Report) and Salix Pharmaceuticals (Nasdaq:SLXP-Free Report). Both carry a Zacks Rank #1 (Strong Buy).
Applied Micro Circuits (AMCC) Slips to Sell on Weak Earnings
Zacks Investment Research downgraded Applied Micro Circuits Corporation (Nasdaq:AMCC-Free Report) to a Zacks Rank #4 (Sell) from a Zacks Rank #3 (Hold) on Aug 2. This was primarily due to a downward estimate revision in response to soft first-quarter fiscal 2015 results announced on Jul 29.
Why the Downgrade?
Applied Micro Circuits reported first-quarter adjusted earnings at break-even levels. Net revenues of $50.3 million fell 7% year over year, missing the Zacks Consensus Estimate of $52.0 million. A sharp decline in sale of the company's legacy PowerPC embedded products was the main reason behind the drag in revenues. However, the company witnessed some strength in its connectivity sales, and is optimistic regarding its X-Gene server and X-Weave growth initiatives.
On a GAAP basis, Applied Micro Circuits reported a net loss of 17 cents per share, compared with a net income of 30 cents per share in the prior-year quarter. Operating expenses soared 76.8% year over year, hurting the bottom line.
But investors were disappointed by the weak guidance. The company anticipates second-quarter fiscal 2015 revenues in the range of $42–$46 million, as legacy PowerPC sales look set for further decline. Adjusted earnings per share are also expected to lie in the red for the coming quarter.
With estimates going down in the past week, Applied Micro Circuits has witnessed negative estimate revision for the current year. The Zacks Consensus Estimate for second-quarter fiscal 2015 declined to a loss of 10 cents per share from earnings of 3 cents during this period, while for full-year fiscal 2015, it dropped to a loss of 28 cents per share from earnings of 3 cents.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.
Get the full Report on AGN - FREE
Get the full Report on VRX - FREE
Get the full Report on AZN - FREE
Get the full Report on SLXP - FREE
Get the full Report on AMCC - FREE
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Logo - http://photos.prnewswire.com/prnh/20101027/ZIRLOGO
SOURCE Zacks Investment Research, Inc.
Share this article