The Zacks Analyst Blog Highlights:Fiat, JPMorgan Chase, Fuji Heavy Industries, Daimler and Archer Daniels Midland
CHICAGO, Sept. 25, 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 Fiat S.p.A. (AMEX:FIATY-Free Report), JPMorgan Chase & Co. (NYSE:JPM-Free Report), Daimler AG (AMEX:DDAIF-Free Report), Fuji Heavy Industries Ltd. (AMEX:FUJHY-Free Report) and Archer Daniels Midland Company (NYSE:ADM-Free Report).
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Here are highlights from Tuesday's Analyst Blog:
Fiat Files for Chrysler IPO
Chrysler Group LLC, the partly-owned subsidiary of Fiat S.p.A. (AMEX:FIATY-Free Report), has filed a registration statement with the U.S. Securities and Exchange Commission (SEC) for a public offer of its shares. The decision comes under pressure from the minority owner UAW Retiree Medical Benefits Trust (VEBA Trust), which owns 41.5% of Chrysler.
Fiat, which holds a 58.5% stake in Chrysler, has been trying to acquire the remaining shares from the VEBA Trust. However, the two owners have not been able to settle on a purchase price.
This conflict resulted in the trust's demand for an IPO expecting a better price for its stake. J.P. Morgan Securities LLC of JPMorgan Chase & Co. (NYSE:JPM-Free Report) will manage the IPO.
However, the issue price and the number of shares to be offered have not been decided yet, although the IPO is expected to be valued at around $100 million. Only the stake of VEBA Trust will be sold, while Fiat will retain its holding.
According to media reports, Fiat is not pleased with the IPO decision and is reconsidering extending its alliance with Chrysler. If the company decides to forego an extension, it will hurt the profitability and financial position of Chrysler.
Management of Chrysler expects the IPO to take place in the first quarter of 2014, although it does not rule out the possibility of it taking place at the end of this year. However, the filing of Form S-1 by Chrysler need not translate in an IPO if Fiat and the VEBA Trust agree on a purchase price and go ahead with a private transaction.
Chrysler used to trade on the New York Stock Exchange (NYSE) until Nov 1988. Thereafter, it was acquired by Daimler AG (AMEX:DDAIF-Free Report) and later, Cerberus Capital Management purchased an 80% stake in the company. Fiat then acquired Chrysler in 2009 when the latter became bankrupt.
Since then, the parent company has managed to turn the subsidiary profitable. Chrysler has recorded eight consecutive quarters of earnings growth.
Fiat currently carries a Zacks Rank #3 (Hold). Another automobile stock worth considering at present is Fuji Heavy Industries Ltd. (AMEX:FUJHY-Free Report), which carries a Zacks Rank #1 (Strong Buy).
ADM Relocating Global HQ
Recently, food processing giant Archer Daniels Midland Company (NYSE:ADM-Free Report) declared the relocation of its global headquarters from Decatur, IL. However, Decatur will remain the company's North American headquarters.
Archer Daniels is at present negotiating with several public officials and advisers for a new location. Though the company has not revealed any details, the city officials of Chicago have revealed that the city has been shortlisted as a possible location.
Archer Daniels is constantly seeking to expand its footprint and enhance customer services. Due to these, the company needs a more prominent location that will allow it to work more competently with customers and employees across the globe.
Further, the lack of several modern facilities including a big airport has forced Archer Daniels to move out of its longtime headquarter in Decatur. Moreover, Decatur is a comparatively smaller city with a limited skilled workforce.
With the relocation, the company will transfer 100 high profile jobs and simultaneously build an information technology center at its new headquarter that will generate an additional employment for 100 people. The workforce of 4400 at Decatur will continue; the company has not planned any layoffs.
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