What Danaher Gets by Paying $21.4 Billion for GE Biopharma Business

Source: seksan mongkhonkhamsao / iStockMedical equipment and diagnostics firm Danaher Corp. (NYSE: DHR) announced Monday morning that it has agreed to pay $21.4 billion in cash for the biopharma business of the Life Sciences’ division of General Electric Co. (NYSE: GE). The price represents a 17×-multiple to GE Biopharma’s expected 2019 EBITDA.

In 2018, GE’s Healthcare segment generated $19.78 billion in revenues, a year-over-year increase of 4%. For 2019, Danaher reckons the biopharma business will generate $3.2 billion in annual revenues, a year-over-year increase of about 6.7%. GE Biopharma will operate as a stand-alone company within Danaher’s Life Sciences segment. Other companies in that segment are Pall, Beckman Coulter Life Sciences, SCIEX, Leica Microsystems, Molecular Devices, Phenomenex and IDT.

Danaher CEO Thomas P. Joyce said:

Pall, Beckman Coulter Life Sciences, SCIEX, Leica Microsystems, Molecular Devices, Phenomenex, and IDT businesses. We expect GE Biopharma to advance our growth and innovation strategy in an important and highly attractive life science market. We see meaningful opportunities to harness the power of the Danaher Business System to further provide GE Biopharma’s customers with end-to-end bioprocessing solutions that help enable breakthrough development and production capabilities.

The transaction will be financed by a $3 billion equity offering (which may include an offering of mandatory convertible preferred shares), with the remainder financed from available cash and proceeds from the issuance of debt or new credit facilities.

Danaher estimates the acquisition will reduce GAAP diluted net earnings per share (EPS) by approximately $1.15 to $1.20 but will be accretive to adjusted diluted net EPS by about $0.45 to $0.50 in the first full year following completion of the acquisition. The company expects the acquisition to be completed by the fourth quarter of this year.

GE CEO H. Lawrence Culp commented:

Today's transaction is a pivotal milestone. It demonstrates that we are executing on our strategy by taking thoughtful and deliberate action to reduce leverage and strengthen our balance sheet. We are retaining full flexibility for growth and strategic optionality with one of the world's leading healthcare companies…. A more focused portfolio is the right structure for GE, and we have many options for maximizing shareholder value along the way.

Early Monday, GE stock traded up more than 13%, at $11.54 in a 52-week range of $6.66 to $15.59. The current 12-month price target on the stock is $11.91.

Danaher shares traded up more than 7% to $122.26. The 52-week range is $94.59 to $113.63, with that high posted on Friday. The stock’s 12-month price target was $115.29 before this morning’s announcement.

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$25 Billion Quarterly Loss for Berkshire Hathaway as Buffett Abandons Book Value Focus

Animation Vision Cash Reaches Market Capitalization of $0.00 (AVH)

Animation Vision Cash (CURRENCY:AVH) traded up 0.1% against the dollar during the 1-day period ending at 18:00 PM Eastern on February 21st. One Animation Vision Cash token can now be purchased for approximately $0.0005 or 0.00000013 BTC on exchanges including CoinTiger and HitBTC. In the last seven days, Animation Vision Cash has traded up 21.9% against the dollar. Animation Vision Cash has a market capitalization of $0.00 and $45,227.00 worth of Animation Vision Cash was traded on exchanges in the last 24 hours.

Here is how other cryptocurrencies have performed in the last 24 hours:

Get Animation Vision Cash alerts: Maker (MKR) traded down 2.6% against the dollar and now trades at $641.30 or 0.16267611 BTC. IOStoken (IOST) traded 0.3% lower against the dollar and now trades at $0.0396 or 0.00000526 BTC. Pundi X (NPXS) traded up 0.3% against the dollar and now trades at $0.0007 or 0.00000017 BTC. IOST (IOST) traded 5.6% lower against the dollar and now trades at $0.0078 or 0.00000198 BTC. THETA (THETA) traded down 4.7% against the dollar and now trades at $0.0928 or 0.00002354 BTC. MCO (MCO) traded 2.8% higher against the dollar and now trades at $4.39 or 0.00068464 BTC. Huobi Token (HT) traded 3.7% lower against the dollar and now trades at $1.23 or 0.00031278 BTC. Oyster (PRL) traded flat against the dollar and now trades at $0.51 or 0.00008001 BTC. Aurora (AOA) traded down 1.1% against the dollar and now trades at $0.0062 or 0.00000157 BTC. Project Pai (PAI) traded 3.8% lower against the dollar and now trades at $0.0285 or 0.00000722 BTC.

Animation Vision Cash Profile

Animation Vision Cash (AVH) is a token. It launched on January 20th, 2018. Animation Vision Cash’s total supply is 10,000,000,000 tokens. Animation Vision Cash’s official website is www.av.cash. Animation Vision Cash’s official Twitter account is @AvHcommunity.

Animation Vision Cash Token Trading

Animation Vision Cash can be traded on these cryptocurrency exchanges: CoinTiger and HitBTC. It is usually not presently possible to purchase alternative cryptocurrencies such as Animation Vision Cash directly using U.S. dollars. Investors seeking to trade Animation Vision Cash should first purchase Bitcoin or Ethereum using an exchange that deals in U.S. dollars such as Changelly, GDAX or Coinbase. Investors can then use their newly-acquired Bitcoin or Ethereum to purchase Animation Vision Cash using one of the exchanges listed above.

Why Pitney Bowes Stock Just Popped 17%

What happened

Sometimes, it's better to be lucky than to be good.

Last year, seeking to stem a revenue decline, Pitney Bowes (NYSE:PBI) launched a full-frontal attack on Stamps.com's (NASDAQ:STMP) print-postage-on-your-PC business, positioning its SendPro online shipping service as a cheaper service with "3x the benefits" Stamps.com was offering. The new marketing push doesn't seem to have helped it out-compete Stamps.com, though -- Pitney Bowes's revenue was down 10% in its last quarter, and its profit dropped by 50%.

But then, a miracle happened. Last night, in the course of reporting its Q4 earnings, Stamps.com announced that it is terminating its "revenue share partnership" with the U.S. Postal Service.

Pitney Bowes just got some really good news from Stamps.com. Image source: Getty Images.

So what

Stamps.com is shifting its focus toward selling postage for non-USPS shippers such as FedEx, UPS, and Amazon here in the U.S., and toward still other shippers abroad. In so doing, it appears likely to leave a lot of USPS money on the table -- money that Pitney Bowes should now be free to pick up.

Now what

It remains to be seen whether Pitney Bowes will wholly succeed in moving in on turf that Stamps.com has voluntarily vacated, but I'd have to say its chances look good. Recently jilted, the USPS can't be too happy with Stamps.com right about now, and it should be very amenable to giving Pitney Bowes good terms on any agreements it might seek in order to pick up the slack.

With Pitney Bowes' stock trading for a bargain-basement 7 times earnings, Stamps.com shareholders' losses today look like Pitney Bowes investors' gain.

MTNL surges 15% on reports of revival plan, announces voluntary retirement scheme

Cash-strapped Mahanagar Telephone Nigam (MTNL) has submitted a comprehensive revival plan which includes approval for a monetisation scheme, introducing a voluntary retirement scheme (VRS), giving up 3G spectrum, converting its loans into sovereign guarantees and revision of employees' pay.

In a letter to the Department of Telecommunication (DoT), MTNL said loans to the tune of Rs 20,000 crore was taken to clear statutory dues. "The government must convert these with sovereign guarantee and take responsibility for the principal and interest. This would save the company Rs 2,000 crore per annual interest payment," it said.

The company also hopes to garner around Rs 20,000 crore through monetisation of close to 50 assets and get refunds worth of around Rs 4,100 crore on account of interest cost borne for broadband spectrum in 2010 for 4G services. DoT sources have confirmed that the claims are spread over a decade and that the request is currently under consideration.

MTNL is trading below its 50-day moving average and 200-day moving average of 13.98 and 14.19 levels, respectively on the BSE.

Mahanagar Telephone Nigam closed at Rs 13.89, up Rs 1.88, or 15.65 percent. It has touched an intraday high of Rs 14.35 and an intraday low of Rs 12.21. First Published on Feb 21, 2019 04:09 pm

Version (V) Achieves Market Capitalization of $43,847.00

Version (CURRENCY:V) traded up 8.9% against the dollar during the twenty-four hour period ending at 16:00 PM Eastern on February 20th. One Version coin can now be bought for approximately $0.0001 or 0.00000002 BTC on popular cryptocurrency exchanges including YoBit and Cryptopia. During the last week, Version has traded 8.9% higher against the dollar. Version has a market capitalization of $43,847.00 and $40.00 worth of Version was traded on exchanges in the last 24 hours.

Here’s how other cryptocurrencies have performed during the last 24 hours:

Get Version alerts: PetroDollar (XPD) traded 0.1% lower against the dollar and now trades at $0.0159 or 0.00000400 BTC. UniCoin (UNIC) traded flat against the dollar and now trades at $0.18 or 0.00002715 BTC. SproutsExtreme (SPEX) traded flat against the dollar and now trades at $0.0001 or 0.00000001 BTC. Prototanium (PR) traded flat against the dollar and now trades at $0.63 or 0.00009595 BTC. AgrolifeCoin (AGLC) traded flat against the dollar and now trades at $0.0005 or 0.00000006 BTC. Jin Coin (JIN) traded flat against the dollar and now trades at $0.0033 or 0.00000090 BTC. Altcoin (ALT) traded flat against the dollar and now trades at $0.0202 or 0.00000565 BTC. Magnetcoin (MAGN) traded 6.1% higher against the dollar and now trades at $0.0179 or 0.00000465 BTC.

Version Coin Profile

V is a coin. Version’s total supply is 549,882,356 coins. The official website for Version is version2.org. Version’s official Twitter account is @VersionCrypto.

Version Coin Trading

Version can be traded on the following cryptocurrency exchanges: Cryptopia and YoBit. It is usually not possible to purchase alternative cryptocurrencies such as Version directly using U.S. dollars. Investors seeking to trade Version should first purchase Ethereum or Bitcoin using an exchange that deals in U.S. dollars such as Changelly, GDAX or Gemini. Investors can then use their newly-acquired Ethereum or Bitcoin to purchase Version using one of the exchanges listed above.

Hershey Co (HSY) Receives Consensus Recommendation of “Hold” from Brokerages

Hershey Co (NYSE:HSY) has been assigned an average rating of “Hold” from the fifteen ratings firms that are currently covering the firm, MarketBeat Ratings reports. Three research analysts have rated the stock with a sell rating, eleven have issued a hold rating and one has given a buy rating to the company. The average 1-year price target among analysts that have issued ratings on the stock in the last year is $100.82.

HSY has been the subject of several research analyst reports. Credit Suisse Group upgraded Hershey from an “underperform” rating to a “neutral” rating and set a $104.00 price objective for the company in a report on Tuesday, October 30th. ValuEngine upgraded Hershey from a “hold” rating to a “buy” rating in a report on Wednesday, December 12th. Zacks Investment Research downgraded Hershey from a “buy” rating to a “hold” rating in a report on Monday, January 21st. Bank of America upgraded Hershey from an “underperform” rating to a “buy” rating and lifted their price objective for the stock from $92.00 to $120.00 in a report on Wednesday, December 19th. Finally, Susquehanna Bancshares lifted their price objective on Hershey from $109.00 to $114.00 and gave the stock a “neutral” rating in a report on Tuesday, October 23rd.

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In other Hershey news, CEO Michele Buck sold 1,500 shares of the firm’s stock in a transaction dated Thursday, December 20th. The stock was sold at an average price of $106.68, for a total value of $160,020.00. Following the transaction, the chief executive officer now directly owns 167,894 shares of the company’s stock, valued at $17,910,931.92. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Insiders sold 4,500 shares of company stock worth $484,095 over the last three months. Insiders own 0.87% of the company’s stock.

A number of large investors have recently made changes to their positions in the business. Physicians Financial Services Inc. lifted its position in shares of Hershey by 0.9% during the 4th quarter. Physicians Financial Services Inc. now owns 10,532 shares of the company’s stock valued at $1,129,000 after buying an additional 99 shares in the last quarter. Cypress Capital Management LLC lifted its position in shares of Hershey by 0.9% during the 4th quarter. Cypress Capital Management LLC now owns 11,230 shares of the company’s stock valued at $1,204,000 after buying an additional 100 shares in the last quarter. D.A. Davidson & CO. lifted its position in shares of Hershey by 0.7% during the 4th quarter. D.A. Davidson & CO. now owns 13,793 shares of the company’s stock valued at $1,478,000 after buying an additional 101 shares in the last quarter. SPC Financial Inc. lifted its position in shares of Hershey by 3.5% during the 4th quarter. SPC Financial Inc. now owns 3,002 shares of the company’s stock valued at $322,000 after buying an additional 102 shares in the last quarter. Finally, Haverford Trust Co. lifted its position in shares of Hershey by 5.3% during the 4th quarter. Haverford Trust Co. now owns 2,099 shares of the company’s stock valued at $225,000 after buying an additional 105 shares in the last quarter. 51.50% of the stock is currently owned by institutional investors and hedge funds.

Shares of NYSE:HSY traded up $1.15 on Wednesday, hitting $109.35. 2,175,261 shares of the company traded hands, compared to its average volume of 1,283,535. Hershey has a 52 week low of $89.10 and a 52 week high of $110.30. The company has a market capitalization of $22.93 billion, a PE ratio of 20.40, a PEG ratio of 2.27 and a beta of 0.16. The company has a debt-to-equity ratio of 2.31, a current ratio of 0.93 and a quick ratio of 0.60.

Hershey (NYSE:HSY) last released its quarterly earnings data on Thursday, January 31st. The company reported $1.26 EPS for the quarter, missing the consensus estimate of $1.27 by ($0.01). Hershey had a return on equity of 95.97% and a net margin of 15.11%. The business had revenue of $1.99 billion during the quarter, compared to the consensus estimate of $2.01 billion. During the same quarter in the previous year, the business posted $1.03 earnings per share. On average, sell-side analysts anticipate that Hershey will post 5.66 earnings per share for the current fiscal year.

The company also recently announced a quarterly dividend, which will be paid on Friday, March 15th. Shareholders of record on Friday, February 22nd will be given a $0.722 dividend. The ex-dividend date of this dividend is Thursday, February 21st. This represents a $2.89 annualized dividend and a yield of 2.64%. Hershey’s payout ratio is 53.92%.

Hershey Company Profile

The Hershey Company, together with its subsidiaries, manufactures and sells confectionery products. The company operates through two segments, North America; and International and Other. It offers chocolate and non-chocolate confectionery products; gum and mint refreshment products comprising mints, chewing gums, and bubble gums; pantry items, such as baking ingredients, toppings, beverages, and sundae syrups; and snack items, including spreads, meat snacks, bars and snack bites, mixes, popcorn and protein bars, and cookies.

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Canopy Growth Sets High Expectations

Marijuana investors have looked forward to this moment for a long time, as major companies in the cannabis sector are finally telling them how one of the most important events in the budding industry's history has affected their businesses. In particular, Canopy Growth (NYSE:CGC) has drawn a lot of attention because of its high-profile moves to build capacity and its major partnership with beer and spirits giant Constellation Brands.

Coming into Thursday's fiscal third-quarter financial report, Canopy investors were optimistic about how the company would perform in Canada's rollout of recreational cannabis. Canopy's numbers were impressive, but even more encouraging was management's discussion about the company's strategic intentions. Shareholders look excited about the news, and there's plenty of potential for further growth in Canopy's future.

Image source: Canopy Growth.

Canopy gets a big lift

Canopy Growth's fiscal third-quarter results gave investors most of what they were looking for. Revenue net of excise taxes came in at 83 million Canadian dollars ($62.5 million), which was up a whopping 282% from the year-ago quarter and well higher than the CA$23.2 million that Canopy brought in just three months ago. Net income soared to CA$74.9 million, and that translated to earnings per share of CA$0.22, which was well above consensus expectations for a loss of CA$0.17 per share.

Many of Canopy's fundamental business numbers showed amazing growth. The company quadrupled its sales volume for the quarter, selling more than 10,100 kilos of cannabis compared to just 2,330 a year ago. At the same time, Canopy was able to boost its pricing for several of its sales categories, with average selling price for its medical marijuana products in Canada picking up 19% to CA$9.77 per gram. Similar success came internationally, with prices climbing 5% to CA$13.28 per gram. As expected, recreational cannabis pricing was more competitive, and selling prices of CA$6.96 per gram were lower than the corresponding medical marijuana products. That brought Canopy's overall per-gram average selling price down 12%, but given the change of sales mix to incorporate recreational products, the company wasn't unhappy with that result.

Cannabis-derived oils remained a key focus area for Canopy. The company reported that 33% of product revenue came from oils, with its landmark Softgel capsule products faring quite well.

Yet one thing that Canopy investors need to understand is that much of the bottom-line performance for the company came from adjustments related to changes in the value of outstanding financial commitments. In particular, because the fair value of senior convertible notes and other financial assets fell during the most recent measuring period, Canopy reported more than CA$220 million in upward adjustments on its income statement. Without those adjustments, Canopy would've seen substantial losses, as expenses during the period rose dramatically. Total operating expenses rose nearly fourfold from year-earlier levels, as big boosts in sales and marketing, research and development, and overhead costs all hit Canopy's bottom line. Stock-based compensation expenses were also much higher.

Co-CEO Bruce Linton has the long haul in mind. "Our successful first full quarter with recreational sales in Canada," Linton said, "reinforces our long-held strategy of making meaningful investments early in order to secure market share." The CEO went on to note that the company is "capturing consumers' attention" with its first wave of products in Canada to meet recreational demand.

Can Canopy keep dominating?

Canopy has much more ambitious future plans. The legalization of hemp will play a key role, and Linton expects that Canopy "will continue to expand by making strategic production investments in regions with federally permissible paths to market for our cannabis and hemp offerings."

Other strategic moves include the following:

new supply agreements with multiple companies to extract greater quantities of cannabis oil adding the Tokyo Smoke retail channel to complement its existing Tweed brand completing the commissioning of key growing facilities that have been under construction exploration of intellectual property opportunities related to innovative growth techniques

Most importantly, Canopy remains in a great position to consider massive investment in its business for the foreseeable future. Thanks to the big investment that Constellation Brands made, Canopy has more than CA$4.1 billion in cash and equivalents available for potential spending. That puts the marijuana company in a great position to take its pick from investment opportunities available in the industry without fear of getting outspent by less well-capitalized rivals.

Canopy investors were happy with the report, sending the stock price up 5% early Friday following the announcement. With so many opportunities for prosperity, it's not surprising that shareholders are more excited than ever about the potential that Canopy Growth has heading into 2019.

General Dynamics downgraded by Credit Suisse: 2019 forecast is 'well behind defense peers'

Credit Suisse downgraded General Dynamics shares to neutral from outperform on Friday, saying the company is "well behind defense peers" in projected growth this year.

"In the greatest peacetime defense upcycle since the Reagan administration, GD is guiding to topline growth in its defense businesses of just 3.5% in 2019," Credit Suisse analyst Robert Spingarn wrote in a note to investors.

In addition to the "disappointing" forecast, Spingarn said Credit Suisse's downgrade was driven by a re-evaluation of two issues for General Dynamics: The recent acquisition of CSRA and accelerated risks from competitors.

CSRA, a massive IT services firm, was "purchased at a toppy valuation," Spingarn said. The deal is "well short" of Credit Suisse's accretion expectations, he said. Additionally, Spingarn said "this acquisition has significantly reduced GD's balance sheet flexibility and may limit future shareholder returns."

Credit Suisse also sees "rising competitive threats" for General Dynamics to all of its major businesses: Aerospace, information technology and mission systems.

General Dynamics shares were unchanged in premarket trading from Thursday's close of $172.10 a share. Credit Suisse has a price target of $184 on General Dynamics shares.

Energen Co. (EGN) Given Consensus Recommendation of “Hold” by Brokerages

Energen Co. (NYSE:EGN) has been given an average rating of “Hold” by the twenty-one brokerages that are covering the stock, Marketbeat Ratings reports. One equities research analyst has rated the stock with a sell rating, eleven have given a hold rating and eight have assigned a buy rating to the company. The average twelve-month price target among brokerages that have issued a report on the stock in the last year is $82.36.

A number of research firms have recently commented on EGN. Morgan Stanley dropped their price objective on Energen from $83.00 to $74.00 and set a “hold” rating on the stock in a research note on Tuesday, November 20th. TheStreet lowered Energen from a “b-” rating to a “c+” rating in a research note on Thursday, November 8th. ValuEngine lowered Energen from a “buy” rating to a “hold” rating in a research note on Thursday, November 1st. US Capital Advisors lowered Energen from an “overweight” rating to a “hold” rating in a research note on Monday, October 22nd. Finally, Zacks Investment Research upgraded Energen from a “hold” rating to a “buy” rating and set a $91.00 price target on the stock in a research note on Monday, October 22nd.

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Hedge funds have recently added to or reduced their stakes in the company. Alpine Associates Management Inc. bought a new stake in shares of Energen in the 3rd quarter valued at approximately $93,772,000. Deutsche Bank AG grew its stake in shares of Energen by 25.5% in the 3rd quarter. Deutsche Bank AG now owns 826,832 shares of the oil and gas producer’s stock valued at $71,241,000 after purchasing an additional 168,027 shares during the period. Nordea Investment Management AB grew its stake in shares of Energen by 22.8% in the 3rd quarter. Nordea Investment Management AB now owns 59,611 shares of the oil and gas producer’s stock valued at $5,137,000 after purchasing an additional 11,058 shares during the period. Hsbc Holdings PLC grew its stake in shares of Energen by 311.1% in the 3rd quarter. Hsbc Holdings PLC now owns 297,761 shares of the oil and gas producer’s stock valued at $25,659,000 after purchasing an additional 225,335 shares during the period. Finally, Chevy Chase Trust Holdings Inc. grew its stake in shares of Energen by 52.5% in the 3rd quarter. Chevy Chase Trust Holdings Inc. now owns 4,650 shares of the oil and gas producer’s stock valued at $401,000 after purchasing an additional 1,600 shares during the period. Institutional investors own 86.86% of the company’s stock.

Shares of Energen stock traded up $1.49 during trading on Friday, reaching $72.12. The company’s stock had a trading volume of 3,438,082 shares, compared to its average volume of 1,197,372. The company has a debt-to-equity ratio of 0.26, a quick ratio of 0.38 and a current ratio of 0.43. The firm has a market capitalization of $7.03 billion, a PE ratio of 96.16 and a beta of 1.50. Energen has a one year low of $47.81 and a one year high of $89.83.

Energen Company Profile

Energen Corporation, through its subsidiary, Energen Resources Corporation, engages in the exploration, development, and production of oil, natural gas liquids, and natural gas. The company has operations within the Midland Basin, the Delaware Basin, and the Central Basin Platform areas of the Permian Basin in west Texas and New Mexico.

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Top Canadian Stocks To Buy Right Now

tags:SWY,TRP,PTI,CNI,UNS,NG, 1. Trade showdown: The global trade clash is heating up this week.

US tariffs on $34 billion worth of Chinese goods are due to go into effect on Friday, and Beijing is expected to retaliate in equal measure the same day.

Meanwhile, Canada imposed tariffs on US exports worth 16.6 billion Canadian dollars ($12.5 billion) on Sunday, the latest trading partner to hit back against the Trump administration's steel and aluminum tariffs.

For investors, the big fear is further escalation. Trump has threatened more tariffs on hundreds of billions of dollars of additional Chinese goods, and floated the idea of tariffs on European cars.

The European Commission sent written comments to the US Commerce Department on Friday warning that as much as $294 billion worth of US goods could be affected by countermeasures if the Trump administration goes ahead with tariffs on imported cars and car parts.

"The EU is not inclined to give in to bullying by US President Donald Trump," said Holger Schmieding, chief economist at Berenberg.

Top Canadian Stocks To Buy Right Now: Safeway Inc.(SWY)

Advisors' Opinion:

• [By Logan Wallace]

  Stornoway Diamond (TSE:SWY) is scheduled to post its quarterly earnings results before the market opens on Tuesday, August 14th.

  Stornoway Diamond (TSE:SWY) last announced its earnings results on Tuesday, May 15th. The company reported C($0.01) EPS for the quarter. Stornoway Diamond had a negative net margin of 6.15% and a negative return on equity of 1.78%. The business had revenue of C$55.95 million for the quarter.

• [By Jim Robertson]

  Large and small cap junior miners have long been interested in the region due to Goldcorp's Éléonore mine being located in the heart of the territory along with the Troilus mine (which has produced over 2 million ounces of gold from 1997-2010 and is estimated to have another remaining 2 million ounces of reserves). The Otish Mountains area has also attracted attention following the discovery of diamonds by Stornoway Diamond Corporation (TSX: SWY) at their Renard diamond mine (projected to produce 1.5-2 millions carats per year).

• [By Jim Robertson]

  In addition, Goldcorp's (NYSE: GG) Éléonore mine in the heart of the territory along with the Troilus mine (which produced over 2 million ounces of gold from 1997-2010 and is estimated to have another remaining 2 million ounces of reserves) are helping to maintain the interest of junior exploration companies in nearby properties. The same can be said about the Otish Mountains area following the discovery of diamonds by Stornoway Diamond Corporation (TSX: SWY) at their Renard diamond mine which is projected to produce 1.5-2 millions carats per year.

Top Canadian Stocks To Buy Right Now: Transcananda Pipelines Ltd.(TRP)

Advisors' Opinion:

• [By Ethan Ryder]

  Media stories about TC PIPELINES LP Common Stock (NYSE:TRP) (TSE:TRP) have been trending somewhat positive this week, according to Accern Sentiment. Accern scores the sentiment of press coverage by monitoring more than twenty million news and blog sources. Accern ranks coverage of publicly-traded companies on a scale of negative one to positive one, with scores closest to one being the most favorable. TC PIPELINES LP Common Stock earned a media sentiment score of 0.06 on Accern’s scale. Accern also assigned media stories about the pipeline company an impact score of 47.0472930935725 out of 100, indicating that recent press coverage is somewhat unlikely to have an impact on the company’s share price in the next few days.

• [By Reuben Gregg Brewer]

  But the story isn't over. TC Pipelines's units remain down nearly 40% so far this year -- and that's not just bad for unitholders, it's also bad for the partnership's general partner and parent TransCanada Corporation (NYSE:TRP). TC Pipelines is, after all, effectively a funding source for TransCanada.

• [By Garrett Baldwin]

  By following a few simple steps, one IRS directive could help set you up to receive checks of up to $1,795 every single month. Hordes of Americans have already signed their names to the distribution list – and the longer you wait, the greater your risk of missing out on this powerful investment. Click here for more details.

  Stocks to Watch Today: YELP, CSCO, AAPL, NFLX Shares of Yelp Inc. (NASDAQ: YELP) added 5.5% after the consumer platform crushed earnings expectations and hiked its stock buyback program by $250 million. The strong earnings report comes a month after news emerged that one of its largest shareholders – SQN Investors – had launched a proxy fight against the company. SQN wants to see the firm improve financial performance and consider selling. On Wednesday, the company also announced three new board members. Shares of Cisco Systems Inc. (NASDAQ: CSCO) popped more than 3.4% after the tech giant topped Wall Street earnings after the bell Wednesday. The firm reported earnings per share of $0.73, beating expectations by $0.01. The company also issued revenue and a third-quarter forecast in line with analysts' estimates. Cisco will also increase its stock buyback program by a whopping $15 billion. Apple Inc. (NASDAQ: AAPL) is taking dead aim at streaming giant Netflix Inc. (NASDAQ: NFLX) and premium content provider HBO. The tech giant is planning to unveil a new streaming product that will offer free original content to owners of Apple devices. According to reports, neither Netflix nor Hulu are expected to be a part of this new "Channels" service. The platform will be like the application developed by Amazon.com Inc. (NASDAQ: AMZN) for its Prime Video Channels. Look for other earnings reports from Ares Management Corp. (NASDAQ: ARES), Arista Networks Inc. (NASDAQ: ANET), AstraZeneca Plc. (NYSE: AZN), Bloomin' Brands Inc. (NASDAQ: BLMN), CBS Corp. (NYSE: CBS), Coca-Cola Co. (NYSE: KO), Credit Suisse Group AG (NYSE: CS), Duk
• [By Reuben Gregg Brewer]

  Kinder Morgan is a prominent name in the midstream space, so it's easy to see why investors would be interested in Kinder Morgan Canada Ltd (NASDAQOTH:KMLGF). That's especially true after a recent timely move to get out from under a troubled pipeline project. However, there's a wrinkle in this the story because of the Canadian company's relationship with U.S.-based Kinder Morgan, Inc. (NYSE:KMI). Here's why most investors would be better off with TransCanada Corporation (NYSE:TRP) today.

Top Canadian Stocks To Buy Right Now: Patni Computer Systems Limited(PTI)

Advisors' Opinion:

• [By Chris Lange]

  Proteostasis Therapeutics Inc. (NASDAQ: PTI) saw its shares slide early on Thursday after the company reported that it had positive data from its early stage trial in cystic fibrosis (CF). These results come from the firm's ongoing Phase 1 dosing study of PTI-801 in CF patients on background Orkambi (lumacaftor/ivacaftor) therapy.

Top Canadian Stocks To Buy Right Now: Canadian National Railway Company(CNI)

Advisors' Opinion:

• [By Logan Wallace]

  Canadian National Railway (NYSE:CNI) (TSE:CNR) saw some unusual options trading activity on Thursday. Traders acquired 1,956 put options on the company. This is an increase of 1,818% compared to the typical volume of 102 put options.

• [By Motley Fool Staff]

  In this segment, Brendan Mathews -- a member of the Stock Advisor research team, and the portfolio lead for Odyssey 2 and Supernova -- talks about the lessons one can learn from the tale of Canadian National (NYSE:CNI), a Stock Advisor recommendation since 2008. One might expect a railroad company to be a steady, predictable performer, but its stock chart looks more like a roller coaster over that period. (And, as a bonus, they also chat a bit about the story of salesforce.com (NYSE:CRM), so stick around to the end.)

• [By Logan Wallace]

  Canadian National Railway (NYSE:CNI) (TSE:CNR) – Analysts at Seaport Global Securities issued their Q1 2019 EPS estimates for shares of Canadian National Railway in a research note issued to investors on Wednesday, January 30th. Seaport Global Securities analyst M. Levin expects that the transportation company will earn $0.96 per share for the quarter. Seaport Global Securities also issued estimates for Canadian National Railway’s Q2 2019 earnings at $1.26 EPS, Q3 2019 earnings at $1.27 EPS and Q4 2019 earnings at $1.26 EPS.

• [By Eric Volkman]

  The problem is that owning and maintaining rail assets is ferociously expensive, and transporting humans isn't as lucrative as hauling cargo. The major and successful publicly traded rail companies -- Canadian National Railway (NYSE:CNI) and CSX (NASDAQ:CSX), to name two -- all concentrate on moving stuff rather than people.

• [By Max Byerly]

  Compass Capital Management Inc. bought a new position in Canadian National Railway (NYSE:CNI) (TSE:CNR) during the second quarter, according to its most recent 13F filing with the Securities and Exchange Commission. The fund bought 2,535 shares of the transportation company’s stock, valued at approximately $207,000.

Top Canadian Stocks To Buy Right Now: UniSource Energy Corporation(UNS)

Advisors' Opinion:

• [By Max Byerly]

  Uni Select (TSE:UNS)‘s stock had its “hold” rating restated by equities research analysts at TD Securities in a report issued on Friday. They currently have a C$24.00 price objective on the stock. TD Securities’ price target points to a potential upside of 8.21% from the stock’s current price.

• [By Ethan Ryder]

  Uni Select (TSE:UNS) had its price target lifted by investment analysts at Macquarie from C$24.00 to C$25.00 in a report released on Wednesday. Macquarie’s price objective suggests a potential upside of 18.32% from the stock’s current price.

Top Canadian Stocks To Buy Right Now: Natural Gas(NG)

Advisors' Opinion:

• [By Max Byerly]

  NovaGold Resources Inc. (NYSEAMERICAN:NG) (TSE:NG) VP David A. Ottewell sold 60,309 shares of the firm’s stock in a transaction on Wednesday, September 12th. The stock was sold at an average price of $3.73, for a total value of $224,952.57. Following the transaction, the vice president now owns 645,385 shares in the company, valued at $2,407,286.05. The transaction was disclosed in a document filed with the SEC, which can be accessed through the SEC website.

• [By Logan Wallace]

  NovaGold Resources Inc. (TSE:NG) (AMEX:NG) insider David Ottewell sold 60,309 shares of the business’s stock in a transaction dated Wednesday, September 12th. The shares were sold at an average price of C$4.85, for a total value of C$292,498.65.

• [By Stephan Byrd]

  Wells Fargo & Company MN lowered its stake in shares of NovaGold Resources Inc. (NYSEAMERICAN:NG) (TSE:NG) by 5.1% in the first quarter, HoldingsChannel.com reports. The institutional investor owned 1,071,600 shares of the mining company’s stock after selling 57,571 shares during the period. Wells Fargo & Company MN’s holdings in NovaGold Resources were worth $4,640,000 as of its most recent SEC filing.

• [By Shane Hupp]

  JPMorgan Chase set a GBX 870 ($11.80) target price on National Grid (LON:NG) in a research note released on Monday. The brokerage currently has a buy rating on the stock.

• [By Money Morning Staff Reports]

  Canadian gold mining company NovaGold Resources Inc. (NYSE: NG) shows an even starker change in sentiment. In the last 12 months, the volume of short bets on the stock declined 79%, to 522,400.

The Rich Are Costing Social Security Almost $150 Billion a Year

Social Security is arguably our nation's most revered social program. Close to 63 million benefit checks head out to eligible recipients each month, with more than 22 million of these folks being pulled above the federal poverty line as a result of their payout. Without Social Security, poverty rates, especially among the elderly, would be significantly higher.

But as you're probably well aware, it's also a program that's facing what might be its biggest challenge since its inception in 1935.

Image source: Getty Images.

Social Security has a $13.2 trillion problem

The June-released annual report from the Social Security Board of Trustees suggested that the program was nearing a major inflection point. More specifically, following 36 years of net cash surpluses, it's soon expected to spend more annually than it collects in revenue. This switch is occurring because of numerous ongoing demographic changes, such as baby boomers retiring and increased longevity over the long run.

The bright side is that Social Security isn't going bankrupt. No matter how many polls you read about millennials not expecting to receive a cent in benefits when they retire, they're wrong. Social Security has almost $2.9 trillion in asset reserves built up since its inception, and this excess cash will help offset some of the sting of spending more than it's bringing in for a while. By 2034, the report forecasts that this nearly $2.9 trillion in asset reserves will be completely exhausted. Assuming Congress hasn't come to the rescue, then-current and future beneficiaries could be staring down a payout cut of up to 21%. As a reminder, more than three out of five retired workers today lean on Social Security for at least half of their income.

In nominal dollar terms, Social Security is facing a cash shortfall of $13.2 trillion between 2034 and 2092, and it's up to Congress to figure out how best to resolve this cash crunch. Lawmakers could choose to raise revenue, cut expenditures, or implement some combination of revenue raising and cost-cutting to fix America's most important social program.

Yet, what's often overlooked is just how much potential revenue is escaping Social Security's payroll tax each year.

Image source: Getty Images.

The wealthy are costing Social Security a lot of money

The payroll tax is the program's workhorse. In 2017, it was responsible for generating $873.6 billion of the $996.6 billion collected by Social Security. And if the program's asset reserves were to disappear, thus removing interest income as a source of revenue, payroll tax would possibly account for in excess of 90% of all collected revenue per year.

Payroll tax is a 12.4% tax rate on earned income (i.e., wages or salary paid to you) up to the maximum taxable earnings cap, which in 2019 is $132,900. The last part of the previous sentence is very important. What it means is that all earned income between $0.01 and $132,900 for American workers is subject to the payroll tax, but that any earned income above $132,900 is exempted from the tax.

Why on earth would Social Security exempt earned income from being hit with the payroll tax? The simple answer is that the earnings cap more or less aligns with the fact that there's a limit on what the program will pay out on a monthly basis at full retirement age. In 2019, the maximum monthly benefit at full retirement age is $2,861. In other words, lawmakers thought it'd be silly to tax say $5 million in annual income at 12.4% if the most this individual could receive each month is $2,861. Thus, the tax cap is merely a reflection of the benefits cap at full retirement age.

More than nine out of 10 working Americans will make less than $132,900 this year, and will therefore be paying into the system on every dollar they earn. Mind you, only the self-employed will owe the 12.4% rate. If you're employed by someone else, you and your employer split the payroll tax liability down the middle, 6.2% each. This means just a single-digit percentage of the working population will sidestep paying tax on a portion of their earnings. But, in 2016, this "portion" equaled $1.2 trillion in earnings. At the 12.4% rate, that's $148.8 billion (nearly $150 billion) in revenue that Social Security is missing out on each year.

Image source: Getty Images.

The most popular Social Security fix: Lift the cap

Perhaps it's not surprising that the most popular Social Security solution among the public would be to increase or remove the earnings tax cap associated with the payroll tax. Any adjustments to the tax cap would have absolutely no impact on more than 90% of working Americans and, in the view of most workers, it would make the system fairer since the wealthy would be paying tax on more of their earned income.

More importantly, if the payroll tax cap were lifted or eliminated entirely, it would generate a substantial amount of extra income for the program. As time has passed, the amount of earnings escaping taxation has increased dramatically. Back in 1984, "just" $300 billion in earnings was avoiding the payroll tax, but as noted earlier, $1.2 trillion is escaping the tax as of 2016. Removing the cap entirely would conservatively add $1.5 trillion (or more) in revenue to the Social Security program over the next decade -- and that's not including the expectation of wage growth, which would probably push this figure closer to $2 trillion.

So, why aren't we taxing the rich and closing this lost revenue gap? Part of the answer lies with the explanation noted earlier. Since a maximum monthly benefit cap exists, a taxable cap exists, too.

Another reason is because it requires 60 votes in the Senate to amend the Social Security program. Since neither political party has had a supermajority in the Senate in 40 years, increasing the tax cap is going to require bipartisan support. The problem is that Republican lawmakers have no desire to increase the tax cap. Rather, they'd prefer to gradually increase the full retirement age from a peak of 67 to perhaps as high as 70. Without bipartisan cooperation, it's going to be nearly impossible to raise the cap.

Until adjustments are made to the tax cap, the rich are probably going to see a higher percentage of their earnings exempted from the payroll tax over time.

Stock Market Today: Activision Blizzard Braces for 2019 but Twilio Embraces It

Tuesday's optimism over a China trade deal and possibly avoiding a government shutdown carried over to stocks on Wednesday. The Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^GSPC) were also helped by moderate inflation data in the Consumer Price Index.

Today's stock market Index Percentage Change Point Change

Dow	0.46%	117.51
S&P 500	0.30%	8.30

Data source: Yahoo! Finance.

Energy stocks were market leaders today, with the SPDR S&P Oil & Gas Exploration & Production ETF (NYSEMKT:XOP) up 2.2%. Utilities fell on rising long-term interest rates; the Utilities Select SPDR ETF (NYSEMKT:XLU) slipped 0.3%. 

As for individual stocks, Activision Blizzard (NASDAQ:ATVI) announced earnings results and layoffs, while Twilio (NYSE:TWLO) is investing to maintain rapid top-line growth.

Image source: Getty Images.

Activision Blizzard sees a challenging year ahead

Shares of Activision Blizzard have fallen in recent months in the wake of competitive pressure from the likes of Fortnite, but they held up well today, gaining 7% after the company reported fourth-quarter results that beat guidance. Revenue grew 16.5% to $2.38 billion and non-GAAP earnings per share soared 84% to $0.90. Three months ago, the company said to expect earnings of $0.64 on revenue of $2.24 billion.

The company's monthly active users (MAUs) increased 3.2% to 11 million in the quarter, with audience gains in the Activision and King segments offsetting a loss of 2 million MAUs of Blizzard. Despite the decline in users in the quarter, Blizzard still posted 15% growth in revenue year over year and 51% growth in operating income.

Activision Blizzard's outlook for 2019 was lighter than expected, with the company saying it will not improve in-game monetization as quickly as it would like, and it has less new content to release than it should. The forecast was accompanied by news that it will lay off 8% of its workforce while increasing developers on its most successful games by 20%.

Don't expect much profit from Twilio as it invests in expansion

Communications software seller Twilio beat expectations for fourth-quarter revenue growth by a mile but guided to low profits in the near future, and shares fell 7.3%. Revenue of $204.3 million was up 77% from Q4 last year and 21% from last quarter, beating expectations of $185 million. Non-GAAP earnings per share came in at $0.04, about what Wall Street had forecast.

Twilio added 3,133 new active customer accounts in the quarter for a total of 64,286, a 31% increase year over year. The dollar-based net expansion rate, Twilio's metric to measure year-over-year spending by active accounts, was 147%, up from 145% last quarter.

Twilio said there were one-time factors driving up Q4 numbers, including the midterm election and unusual spending by a large customer. That fact and guidance for lower EPS in 2019 as the company invests in top-line growth may have disappointed some investors, but the share price move is but a tiny blip compared with the stock's massive gains in recent months.

Accumulate Emami; target of Rs 524: Prabhudas Lilladher

Prabhudas Lilladher's research report on Emami

We cut our EPS estimate of FY19-21 by 4.7-5.7% on the back of only 3.5% volume growth in the biggest quarter due to delayed winters (45% of sales from winter portfolio). Emami has witnessed some uptick in January sales, however, we believe that any extension of winter is likely to hamper the summer portfolio sales which usually goes in trade from mid-Feb. Emami has given cautiously optimistic outlook for coming quarters led by 1) uptick in rural economy in the run up to elections 2) recovery in wholesale channel 3) good traction in Kesh King post its re-launch in 2Q 4) Strong market share gains in core brands and sustained traction in 7 in 1 hair oil and 5) benefits of corrective steps taken in International business. We believe that softening of Input cost pressures and 4% price increase should enable the company to maintain margins.

Outlook

We estimate 12% PAT CAGR over FY18-21 and value the stock at 33xDec20 EPS and arrive at price target of Rs524. Retain Accumulate.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Read More First Published on Feb 12, 2019 05:10 pm

Is Activision Poised for Layoffs?

Activision Blizzard Inc. (NASDAQ: ATVI) shares dipped on Monday after a report came out that the video game firm plans to announce some job cuts along with its earnings report late on Tuesday.

It's worth pointing out that this report came in the days following disappointing Electronic Arts and Take-Two Interactive earnings reports.

The new report originally came from Bloomberg late on Friday, and it says that this round of job cuts "could number in the hundreds."

The layoffs would be part of a restructuring effort as the company faces sluggish sales, Bloomberg reported, citing unnamed sources familiar with the matter.

Perhaps a big contributor to these video game stocks facing poor results is the up-and-coming video game Fortnite, which has been a smash hit with video gamers across the world and across all platforms.

Back in January, Activision’s stock dropped after it announced a split from game studio Bungie, which created the popular Destiny game franchise and the Halo franchise before that.

This round of layoffs could be in relation to splitting with the Destiny franchise. Activision had employed “an entire team full of Destiny support staff” across functions such as public relations, marketing and social media, according to a report by gaming news site Kotaku.

Shares of Activision Blizzard were last seen down about 4% at $41.74 on Monday, in a 52-week range of $41.70 to $84.68. The consensus analyst price target is $60.54.

ALSO READ: The 15 Best Dividend Stocks for Retirees to Own

Market Ends Lower Amid Concerns About Trade Deal, European Growth

&l;p&g;&l;img class=&q;dam-image ap size-large wp-image-1b9370d5181c4bf8a4f9e3becb09c8d4&q; src=&q;https://specials-images.forbesimg.com/dam/imageserve/1b9370d5181c4bf8a4f9e3becb09c8d4/960x0.jpg?fit=scale&q; data-height=&q;640&q; data-width=&q;960&q;&g; AP Photo/Richard Drew

Geopolitics came back with a bang Thursday.

&a;nbsp;

All those fears many investors seemed to put aside the last few days returned to smack U.S. stocks, sending major indices to their first really negative session since early last week. A CNBC report that President Trump might not meet Chinese President Xi before the March 1 deadline for a trade deal appeared to combine with worries about slower European growth, re-sparking some of the volatility that&a;rsquo;s been missing lately.

&a;nbsp;

It&s;s worth mentioning, though, that stocks finished the day well off the lows, really picking up steam in the last hour of trading. Notably, after holding above 2680, a level seen as a key spot for some chart watchers, the S&a;amp;P 500 Index finished the day just above 2704, another possible key technical point. This could be seen as a bullish sign, but we&s;ll have to wait and see.

&l;/p&g;&l;h2&g;&l;span&g;Brought to You by the Letter V&l;/span&g;&l;/h2&g;

Though the day was marked by a bit of negativity, it&a;rsquo;s important to consider keeping things in context. The market has been in a V-shaped recovery marked by six-straight weeks of gains for the Dow Jones Industrial Average. Nothing ever goes straight up, and none of the news Thursday could really be called a major surprise. Slow European growth isn&a;rsquo;t exactly a new issue, as it&a;rsquo;s been fretted about for many years. The same can be said for Britain&s;s imminent departure from the European Union. Also, the process toward some sort of U.S./China trade agreement is bound to have its bumps and bruises.

&a;nbsp;

Thursday&a;rsquo;s action does point again to how the markets have the propensity to turn on a dime whenever there&a;rsquo;s a headline development concerning the trade situation. That&a;rsquo;s why the low volatility earlier this week, where the VIX fell below 16&a;mdash;and almost dropped below the 15 handle &a;mdash;might have been a bit premature (see more below).

&a;nbsp;

The report by CNBC this morning that Trump and Xi likely won&a;rsquo;t meet before the deadline wasn&a;rsquo;t the only negative China development helping play into the market&a;rsquo;s troubles Thursday. Trump&a;rsquo;s economic advisor Larry Kudlow told Fox Business News that the two sides have a &a;ldquo;pretty sizable&a;rdquo; distance to go. That&a;rsquo;s a bit disconcerting to hear just a few weeks before new U.S. tariffs are threatened.

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&l;strong&g;Losing Energy Amid Trade Fears&l;/strong&g;

The escalation of worry about the U.S.-China trade war pressured oil prices along with stocks as traders and investors apparently took a risk-off approach Thursday. A worry among oil market participants appears to be that a prolonged situation of retaliatory tariffs could dent global economic growth. When that happens, demand for oil products often falls.

The decline in crude helped push energy sector stocks lower, with the S&a;amp;P 500 energy sector the biggest loser on the day, down over 2%. It seems likely that volatility in crude might continue on any news out about the Brexit situation and the U.S.-China trade war.

&a;nbsp;

On the other hand, crude might have gotten some support from news of a smaller U.S. crude and gasoline build last week versus what analysts had expected. This might indicate a boost in consumer demand.

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Meanwhile, with the energy sector sliding on oil prices, all of the other S&a;amp;P 500 sectors were in the red as well, with the exception of utilities and real estate. That looked to be another symptom of the risk-off trading today. Both of those sectors are often thought about as defensive.

&l;h2&g;&l;span&g;A Lack of Fear?&l;/span&g;&l;/h2&g;

With market participants moving away from riskier trades, it wasn&a;rsquo;t that surprising to see Wall Street&a;rsquo;s main fear gauge, the Cboe Volatility Index (VIX) rise above the 17 mark. What has been somewhat surprising is how low the VIX has been recently, trading well under the 20 level where it&a;rsquo;s spent much of its history. And on a day like today, it also seems surprising that the measure wasn&a;rsquo;t up more.

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It&a;rsquo;s possible that market participants aren&a;rsquo;t that worried given all the green days we&a;rsquo;ve seen so far this year. With so much upside, some of today&a;rsquo;s action may be a squaring of positions with some profit taking to refresh some portfolios heading into Friday and the weekend. If traders and investors were just looking for an opportunity to do that, it makes today&a;rsquo;s reaction to the headlines seem less scary. One thing that became evident Wednesday and Thursday was the S&a;amp;P 500&a;rsquo;s&a;nbsp; failure to eclipse its 200-day moving average at about 2740. This key resistance was tested earlier in the week, but selling appeared to pick up when the S&a;amp;P 500 failed to move above that level.

&l;h2&g;&l;span&g;Financials: BBT, STI Pop on Merger Plan; Weakness Prevails&l;/span&g;&l;/h2&g;

The financial sector started the day with a piece of positive news&a;mdash;the announcement by BB&a;amp;T and SunTrust of a $66 billion merger (or is it a buyout?) which helped propel the shares of both firms. If completed, the deal would make the combined company the 6th largest U.S. bank. Though BB&a;amp;T is essentially buying SunTrust in the all-stock deal, the banks&s; executives are calling it a &q;merger of equals.&q; By the end of the day, BB&a;amp;T shares rose nearly 4% &a;nbsp;and shares of SunTrust were higher by over 10%.

&a;nbsp;

Aside from that, however, the sector flagged Thursday, finishing down about 1%. While the BB&a;amp;T/SunTrust deal was a positive for regional banks, big banks such as Wells Fargo, JPMorgan Chase and Bank of America finished the day in the red zone, in large part due to a fall in Treasury yields. The benchmark 10-year yield fell 5 basis points to 2.66. The spread between the 2-year and 10-year narrowed a touch, to 17 basis points. Falling yields and a narrowing yield curve can cut into bank profitability, so many investors have been watching the yield curve closely.

&l;img class=&q;size-large wp-image-8300&q; src=&q;http://blogs-images.forbes.com/jjkinahan/files/2019/02/us-crude-oil-chart-markets-dow-sp500-1200x890.jpg?width=960&q; alt=&q;US Crude Oil chart&q; data-height=&q;890&q; data-width=&q;1200&q;&g;&l;strong&g;OIL SLIPS.&a;nbsp;&l;/strong&g;The chart on U.S. crude oil looked pretty ugly from October through the end of last year. Crude has bounced markedly, along with a 2019 rally in equities, but that strength has been fading. Data Source: CME Group The thinkorswim&a;reg; platform from TD Ameritrade. For illustrative purposes only. Past performance does not guarantee future results.

&l;em&g;TD Ameritrade&a;reg; commentary for educational purposes only. Member SIPC.&l;/em&g;

BB&T, SunTrust to Merge in $66 Billion Deal

Calling it a merger of equals, BB&T Corp. (NYSE: BBT) and SunTrust Banks Inc. (NYSE: STI) announced this morning that they are merging in an all-stock transaction worth $66 billion. The share price of both regional banks is up on the news.

The combined company, which will get a new name and a new corporate headquarters in Charlotte, North Carolina, will become the country’s sixth largest bank holding company, with assets valued at $442 billion, deposits valued at $324 billion and loans valued at $301 billion. The combined company’s market cap will be $76 billion, and it will serve approximately 10 million customers.

BB&T Chair and Chief Executive Officer Kelly S. King said:

This is a true merger of equals, combining the best of both companies to create the premier financial institution of the future. It’s an extraordinarily attractive financial proposition that provides the scale needed to compete and win in the rapidly evolving world of financial services.

William H. Rogers, Jr., board chair and chief executive of SunTrust, added:

By bringing together these two mission- and purpose-driven institutions, we will accelerate our capacity to invest in transformational technologies for our clients. Our shared culture embraces the disruption of technology and we will take this innovative mindset to expand our leadership in the next chapter of these historic brands.

SunTrust shareholders will receive 1.295 shares of BB&T for each SunTrust share, along with a 5% increase in their dividend once the transaction is completed, now expected to occur in the fourth quarter of this year. King will become board chair and CEO of the combined company, a position he will hold until September 12, 2021, at which time he will become the company’s executive chair and Rogers will take over as CEO.

The new company’s board will be split evenly between existing board members of both banks, and David M. Ratcliffe, currently lead director of SunTrust, will become lead director of the combined company until March 12, 2022, at which time the lead directorship will transition to a yet-to-be-named legacy BB&T director.

BB&T shares traded up about 6% in Thursday’s premarket, at $51.38 in a 52-week range of $46.68 to $56.31. The consensus 12-month price target on the stock is $53.51.

SunTrust stock traded up about 9.3% to $64.20, in a 52-week range of $46.05 to $75.08. Its 12-month price target is $68.06.

ALSO READ: Merrill Lynch Adds Top Large Cap Pharmaceutical Leader to US 1 List