Amazon’s Cloud Unit to Partner with Cerner
Posted by Eddy Elfenbein on November 22nd, 2017 at 12:45 pm

Amazon’s cloud unit to partner with Cerner: Sources from CNBC.

From CNBC:

Amazon’s cloud business, in its march toward $20 billion in annual revenue, has nabbed top clients in areas ranging from energy and technology to financial services and government.

Heading into its annual re:Invent conference in Las Vegas next week, Amazon Web Services has found a partner to help the company crack a massive industry that’s been slower to adopt the cloud: health care.

As part of his keynote at re:Invent, AWS CEO Andy Jassy is planning to announce that Amazon is teaming up with Cerner, one of the world’s largest health technology companies, to help health-care providers better use their data to make health predictions about patient populations, according to sources familiar with the matter.

The sources, who asked not to be named because the discussions are still in the final stages, said the partnership is initially focused on Cerner’s so-called population health product — HealtheIntent — which enables hospitals to gather and analyze huge volumes of clinical data to improve patients’ health outcomes and lower treatment costs.

Cerner did not provide a comment for this story, and AWS representatives didn’t respond to requests for comment.

Axalta Confirms Acquisition Discussions with Nippon Paint
Posted by Eddy Elfenbein on November 22nd, 2017 at 8:05 am

Press release:

“Axalta today confirmed that it is engaged in discussions with Nippon Paint regarding a potential acquisition of Axalta. Axalta will pursue such a transaction only if its Board of Directors determines that it is in the best interest of Axalta to do so. There can be no assurances that a definitive agreement between the parties will be reached or on what terms.”

Morning News: November 22, 2017
Posted by Eddy Elfenbein on November 22nd, 2017 at 7:04 am

Oil Climbs to Two-Year High as Stockpiles Fall Before OPEC Meets

NAFTA Talks Hit Wall as Mexico, Canada Push Back on U.S. Demands

Fed Debate Over Rate-Hike Pace in Focus Amid Strong Job Market

FCC Plans Net Neutrality Repeal in a Victory for Telecoms

AT&T Case Vaults Antitrust Chief From Obscurity to Spotlight

Blockchain Makes the World Interested in Finance’s Dullest Parts

Uber Reveals 2016 Data Hacking Affecting 57 Million Accounts

HP CEO Meg Whitman Reveals Why She’s Stepping Down

Samsung, LG Investors Unfazed by U.S. Trade Move on Washers

Ditching `Too Big To Fail’ Tag Only Solves Some Problems

U.S. Bribery Case Sheds Light on Mysterious Chinese Company

Twitter, It’s Time to End Your Anything-Goes Paradise

Ben Carlson: The Emerging Markets Performance Cycle

Cullen Roche: What’s the Yield Curve Really Telling Us?

Michael Batnick: Animal Spirits- Wave Pools and Market Inefficiencies

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Update on Axalta
Posted by Eddy Elfenbein on November 21st, 2017 at 10:53 pm

Here I thought Thanksgiving week was going to be quiet…

After hours today, shares of Axalta Costing System (AXTA) plunged 15% on news that it had ended merger talks with Akzo Nobel. I had warned that they were just talking and that no deal had been announced.

Then we learned that the reason they broke off talks was because Nippon Paint Holdings had made an all-cash offer for Axalta. Yeah, I can see how that would change things.

I think we can assume that Axalta gave Akzo Nobel a chance to beat that offer, and they declined. That’s all we really know at this point. AXTA rallied in the after-hours market and got to $35.29 which is a gain of 4.2% over Tuesday’s closing price. It was a wild ride for the stock and it all happened after regular trading had ended.

I don’t have much to add at this point. I hope to find out soon what price Nippon is offering. I also like the idea of an all-cash deal.

This is going to get interesting.

Reuters: Nippon Makes Deal for Axalta
Posted by Eddy Elfenbein on November 21st, 2017 at 6:18 pm

From Reuters:

Japan’s Nippon Paint Holdings made an all-cash offer on Tuesday to acquire Axalta Coating Systems, a source familiar with the matter said, prompting Axalta to end merger talks with Akzo Nobel.

Nippon’s offer came at a premium to where Axalta shares ended trading on Monday, the source said, asking not to be identified because the matter is confidential.

Nippon did not immediately respond to a request for comment, while Akzo Nobel and Axalta declined to comment.

No Deal for Axalta and Akzo Nobel
Posted by Eddy Elfenbein on November 21st, 2017 at 6:02 pm

From the WSJ:

Akzo Nobel and U.S. rival Axalta Coating Systems said Tuesday they abandoned talks to merge after failing to agree on terms for the proposed tie-up.

The companies didn’t detail reasons for the collapse. The Wall Street Journal first reported that the talks had ended.

The deal would have created a multibillion-dollar paints and coatings giant. Industries ranging from automotive to mining use coatings to prevent corrosion and improve durability.

The combination of the two companies could have boosted profit growth by lowering raw material costs, eliminating overlapping operations, expanding the combined entity’s products and adding new customers.

Now Akzo and Axalta face that challenge as separate companies at a time of rising raw material costs and sluggish demand. In the third quarter, Amsterdam-based Akzo reported a 13% drop in adjusted operating profit, hurt in part by higher raw material costs. Meanwhile, Axalta posted a 20% drop in adjusted net income in the same period, amid lower volumes in North America.

“We remain focused on our strategic options…to improve profitability in the future,” Thierry Vanlancker, Akzo Nobel’s chief executive, said in a statement.

Hormel Earns 41 Cents per Share
Posted by Eddy Elfenbein on November 21st, 2017 at 3:55 pm

This morning, Hormel Foods (HRL) reported fiscal Q4 earnings of 41 cents per share. That beat the Street by a penny.

For the year, Hormel made $1.57 per share which was down from $1.64 in 2016. The company had sales of $2.5 billion, which was down 5%. Organic net sales were up 5%. Cash flow from operations totaled $499 million. That’s up 34%. Operating margins were 13.2%.

For fiscal 2018, Hormel sees earnings between $1.60 and $1.70 per share.

“Fiscal 2018 represents a return to growth with the addition of three strategic acquisitions and contributions from innovative new items such as HORMEL® BACON 1TM fully cooked bacon and SKIPPY® PB BITES,” said Jim Snee, chairman of the board, president and chief executive officer. “The earnings power we are creating with acquisitions, major capital investments in value-added capacity, a supply chain reorganization, the union of the Grocery Products and Specialty Products segments, and an intense focus on strategic cost management sets us up for renewed earnings growth in 2018 and beyond.”

“We expect Refrigerated Foods, Grocery Products, and International to drive growth as Jennie-O Turkey Store continues to navigate difficult industry conditions,” Snee said.

Net Sales Guidance (in billions)
$9.40 – $9.80
Earnings per Share Guidance
$1.60 – $1.70

Fiscal 2018 net sales and earnings per share guidance exclude the pending acquisition of Columbus Craft Meats, which is expected to close in December. Total sales are approximately $300 million and the transaction is expected to be 2-3 cents per share accretive to earnings in fiscal 2018.

Shares of HRL had a very good day. They closed higher by 3.35%. At one point during the day, HRL was up close to 7%.

Morning News: November 21, 2017
Posted by Eddy Elfenbein on November 21st, 2017 at 7:03 am

A Key Indicator Points to a Strong 2018. That’s the Risk.

FCC Rollback of Open-Internet Rules Won’t Settle Divisive Issue

AT&T Lawsuit Over Time Warner Shows Tough U.S. Turn on Antitrust

Bitcoin Falls on $31 Million Hack of Cryptocurrency Peer Tether

Chinese Tech Giant Tencent Has Surpassed Facebook in Market Value

Lowe’s and Home Depot Prove Home Improvement Retailing Is the Place to Be

Hype-y Holidays: ‘Black Friday’ And Other Nonsense

Uber Strikes Deal With Volvo to Bring Self-Driving Cars to Its Network

Uber Targets India Market With Back-to-Basics Features

Amazon Launches New Cloud Storage Service for U.S. Spy Agencies

Ford’s India Partner Mahindra Open to Teaming Up for EVs

Skype Vanishes From App Stores in China, Including Apple’s

Joshua Brown: Rules of Thumb are Worthless

Jeff Carter: Creative Financing-Delayed Cap Notes

Howard Lindzon: Just Another Momentum Monday….

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Hormel Raises Its Dividend
Posted by Eddy Elfenbein on November 20th, 2017 at 11:03 pm

For the 52nd year in a row, Hormel Foods (HRL) has raised its dividend. The quarterly dividend increases from 17 to 18.75 cents per share.

The Board of Directors of Hormel Foods Corporation (NYSE: HRL), a multinational marketer of consumer-branded food and meat products, today announced a 10 percent increase to the annual dividend to shareholders, marking the 52nd consecutive annual dividend increase.

The annual dividend on the common stock of the corporation was raised to $0.75 per share from $0.68 per share.

The Board of Directors authorized the first quarterly dividend of eighteen and three fourths cents (18.75¢) a share to be paid on Feb. 15, 2018, to stockholders of record at the close of business on Jan. 16, 2018.

The Feb. 15 payment will be the 358th consecutive quarterly dividend paid by the company. Since becoming a public company in 1928, Hormel Foods Corporation has paid a regular quarterly dividend without interruption.

The Buy List Takes the Lead…Kinda
Posted by Eddy Elfenbein on November 20th, 2017 at 9:27 am

Thanks to a 9.99% jump from Ross Stores (ROST), our Buy List has taken a tiny lead against the S&P 500 YTD. Through Friday, we’re up 15.32% compared with a gain of 15.19% for the S&P 500.

We had been trailing the S&P 500 since July 20. By September 7, we were trailing by 211 basis points, and we’ve made it all up.

The Q2 earnings season was pretty tough on us. From July 17 to August 7, the S&P 500 gained 0.89% while our Buy List lost 1.95%. That may not sound that bad, but for us, it’s not good.

There is an important footnote to these stats and that is that I haven’t included dividends (I just haven’t had the time). The Buy List’s yield less than the market so I expect that we’re still trailing the market with dividends. However, we have momentum on our side.