Pisani: Primerica IPO Set to Price Tonight
The Greek stock market down 1.8 percent as the sale of the 7 year bond did not go as well as initially thought. Yields are higher, to 6.24 percent.
1) We are waiting to see if the spate of strong IPOs will continue. Expecting Primerica (ticker symbol: PRI) to price 18 million shares between $12-$14, likely tonight (Tuesday night), possibly tomorrow.
(Check ticker when it's live: )
This is the largest financial services marketing organization in North America, selling insurance, annuities, mutual funds...you name it. There are 75 million outstanding pro forma shares, so the company is floating about one-fourth of the shares. Citi is underwriting the deal--no surprise, since it is a spinoff from the company. However, they are also selling $230 million of stock to Warburg Pincus & Co. in a private placement.
In 2009, they did $2.25 billion in revenues with a $495 million profit, a very handsome 22 percent margin. But they have had paltry revenue gains in the past several years.
2) Verizon (VZ) is up 2 percent on a Wall Street Journal report that Apple (AAPL) is developing a CDMA-compatible iPhone. Speculation has been that AT&T (T) would lose its exclusive iPhone agreement with Apple later this year. This would open the door for Apple to make an iPhone that runs on Verizon's network, which has the greatest number of subscribers in the country.
Qualcomm (QCOM) up, AT&T down, while Apple (AAPL) edges 2 percent higher.
3) Shares of Danaher may likely get a boost after the industrial company, which makes everything from bar code readers to medical instruments, significantly raised its Q1 earnings forecast from $0.77-$0.82 to "at or above $0.90." The new forecast exceeds the $0.83 analysts were expecting in the quarter.
4) LDK Solar (LDK) falls 6 percent as Q4 earnings missed estimates ($0.03 vs. $0.12 consensus) as margins shrunk remained poor. Although shipments rose 34 percent, pricing was under pressure - leading to a 27 percent decline in revenues (still better than the Street's expectations for a 29 percent decline).
For the current quarter, the solar wafer maker sees revenues of $310 million-$330 million, inline with the consensus forecast of $321 million.
5) Iron ore makers Vale (VALE) and BHP Billiton have agreed to a record increase in prices of iron ore, the primary metal used in steel. Iron ore will now cost steelmakers up to double what they were charged last year (now $110-120/tonne vs. $60/tonne last year).
Aside from the record price increase, the new contracts are significant since they replace the "benchmark" pricing system that has been around for 40 years. Iron ore prices will no longer be set annually or be based on one benchmark agreement between two firms. Instead, the current prices will only be effective for one quarter, requiring new agreements to be signed every quarter that better reflect more current iron ore spot prices.
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