Health & Fitness
Health and Fitness
Health and Fitness
Tue, June 29, 2010
Mon, June 28, 2010 Spherix, Alcoa, Banco Santander SA, Citigroup and Bank of America
CHICAGO--([ BUSINESS WIRE ])--[ Zacks Equity Research ] highlights Spherix, Inc. (Nasdaq: [ SPEX ]) as the Bull of the Day and Alcoa Inc. (NYSE: [ AA ]) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Banco Santander SA (NYSE: [ STD ]), Citigroup Inc. (NYSE: [ C ]) and Bank of America Corp. (NYSE: [ BAC ]).
Full analysis of all these stocks is available at [ http://at.zacks.com/?id=2678 ].
Here is a synopsis of all five stocks:
[ Bull of the Day ]:
Spherix, Inc. (Nasdaq: [ SPEX ]) announced that it was shifting focus on the company's phase III candidate from type-2 diabetes to triglyceride lowering. This may come as a surprise to some Spherix investors; however, the strategy move makes sense to us considering the bar moved significant higher for approval of new type-2 diabetes drugs following the new FDA guidelines on cardiovascular safety established in March 2008.
This was after Spherix has already designed the current phase III protocol. The new path to market for triglycerides will be cheaper and quicker for the company. In the meantime, Spherix will look to partner D-tagatose for type-2 diabetes with a larger pharmaceutical organization. This partnership becomes more likely after the phase III NEET data is released later this summer.
[ Bear of the Day ]:
Alcoa Inc. (NYSE: [ AA ]) is facing lower aluminum prices and higher input costs. In our view, Alcoa's near- to medium-term profitability is likely to come under pressure from rising energy and caustic-soda costs.
We also believe that the depreciation of the U.S. dollar is likely to translate into higher costs for Alcoa's Australian, Canadian and European operations. Additionally, higher restructuring charges are pressuring margins of the company. Alcoa's share price has declined consistently in the last couple of months after it reported first quarter 2010 results.
We believe Alcoa's weak performance will continue for the rest of 2010. We downgrade the stock to Underperform from our previous Neutral recommendation.
Latest Posts on the Zacks [ Analyst Blog ]:
[ Santander to Buy Citi's $3.2B Auto Loans ]
Banco Santander SA (NYSE: [ STD ]) is on an acquisition spree. Under the latest deal that was announced yesterday, a unit of Santander will purchase a $3.2 billion automobile loan portfolio from Citigroup Inc. (NYSE: [ C ]). The deal is a strategic fit for both the companies.
As per the agreement, Santander's affiliate in the automotive finance sector a' Santander Consumer USA Inc. a' will buy the $3.2 billion automobile loan portfolio of CitiFinancial Auto for a purchase price equal to 99% of the value of the gross receivables. The deal is expected to close in the third quarter of 2010 and is subject to regulatory approvals.
Besides this, Santander and Citi have also struck a deal under whereby the former will service a portfolio of roughly $7.2 billion of auto loans that Citi will retain.
The deal is in line with the strategic reengineering efforts at both Santander and Citi. Santander's home market is experiencing a deep recession and there remain worries over the Spanish sovereign's debt that resulted in tough financing conditions for the Spanish banks. Diversification, therefore, remains an obvious choice for the company.
To boost its market share in Mexico, Santander has recently announced the buying back of its 24.9% stake in its Mexican arm, Grupo Financiero Santander, from Bank of America Corp. (NYSE: [ BAC ]) for $2.5 billion.
Santander expects the deal to have a positive impact of 1.3% on its earnings per share from the first year itself and a 15% return on investments from the third year. The company was also bidding for 318 branches of the Royal Bank of Scotland Group plc.
For Citi, the sale would reduce assets in Citi Holdings by approximately $3.2 billion. The company aims at de-leveraging Citi Holdings, consisting of assets that are non-core to the company, through a number of steps that include joint ventures, dispositions and asset run-offs.
Citi has already announced the sale of a number of its businesses within Citi Holdings. Veering towards a simplified business model, the company wants to allocate its capital to long-term strategic businesses. The latest agreement is a step towards that goal.
Get the full analysis of all these stocks by going to [ http://at.zacks.com/?id=2649 ].
About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
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