option
An option offers its holder the right to buy or sell a particular security at a specific price within a specific time frame. Two kind of options are put options and call options.
GOODYEAR TIRE & RUBBER, $26.37, symbol GT on New York, is the world’s largest tire maker, with 51 plants in 22 countries. This week, the company announced that it will build a new tire plant in either North or South America. The facility will produce six million tires a year and help Goodyear meet rising demand for high-performance tires in both regions. Goodyear expects to spend $500 million on this facility, which could start up in 2017. To put that in context, Goodyear’s 2013 cash flow was $407.0 million....
Myriad Genetics, $36.06, symbol MYGN on Nasdaq (Shares outstanding: 74.8 million; Market cap: $2.7 billion; www.myriad.com), develops and sells genetic tests that can tell if a person has a higher risk of certain conditions, such as breast, colon or uterine cancers, as well as tendencies toward hypertension. In the three months ended March 31, 2014, Myriad’s sales rose 16.9%, to $182.9 million from $156.5 million a year earlier. Earnings per share, excluding one-time items, rose 30.4%, to $0.60 from $0.46. Myriad sells into a rapidly growing market. It’s also a leader, with products like its BRACAnalysis kits for breast cancer and other tools for detecting prostate cancer and other diseases. In addition, it has a promising pipeline of new tests to bring to market over the next three to five years....
BANK OF NOVA SCOTIA, $66.78, Toronto symbol BNS, has agreed to buy 20% of the credit card division of CANADIAN TIRE CORP., $111.29, Toronto symbol CTC.A. This business is Canada’s eighth-largest largest credit card issuer, with 1.8 million clients and $4.4 billion in outstanding loans. Its cardholders spend $1.2 billion annually. Bank of Nova Scotia will pay $500 million for this stake, and Canadian Tire has an option to sell an additional 29% to the bank over the next 10 years....
PLEASE NOTE: Our next Hotline will go out on Friday, April 25, 2014. YAMANA GOLD INC., $8.76, symbol YRI on Toronto, is joining up with Agnico Eagle Mines (symbol AEM on Toronto) to counter the latest $3.6-billion takeover bid for Osisko Mining (symbol OSK) by Goldcorp (symbol G). Agnico Eagle and Yamana are offering a total of $3.9 billion, or $8.15 per Osisko share. Osisko shareholders will receive $2.09 in cash, 0.26471 of a Yamana share, 0.07264 of an Agnico Eagle share and one share of a new company, with a value of $1.20, which will hold Osisko’s current exploration properties, including its Guerrero project in Mexico; a royalty on production from Osisko’s Canadian Malartic mine; and cash of $155 million....
Kodiak Oil & Gas Corp., $11.31, symbol KOG on Nasdaq (Shares outstanding: 266.3 million; Market cap: $3.1 billion; www.kodiakog.com), develops, produces and explores for oil and natural gas in the Williston Basin, in the U.S. Rocky Mountains. Kodiak continues to increase its production and reserves. The oil and gas it’s drilling for is hard to reach, but it is making good use of modern drilling techniques. The company ships about 80% of its oil by rail and 20% by pipeline. Rail is the costlier option, but new pipelines will eventually replace trains and cut Kodiak’s transportation costs. That would push up the company’s cash flow....
VERIZON COMMUNICATIONS INC., $47.56, New York symbol VZ, has completed its purchase of the 45% of Verizon Wireless that it didn’t already own from U.K.-based Vodafone Group (Nasdaq symbol VOD). The company now owns 100% of Verizon Wireless, which sells wireless services to 102.8 million subscribers in the U.S. In 2013, it supplied 67% of Verizon’s revenue and 81% of its earnings. Verizon paid $130 billion in cash and shares for Vodafone’s stake. To put that in context, Verizon’s market cap (or the total value of all its outstanding shares) is $196.7 billion....
Source Exploration, $0.11, symbol SOP on Toronto (Shares outstanding: 60.7 million; Market cap: $6.7 million; www.sourceexploration.com), holds an option on the Las Minas gold, silver and copper exploration project in Mexico’s Las Minas mining district. The stock jumped in early November 2013 after Source appointed David Baker and Earl Terris to its board of directors. From 2003 through March 2012, Baker was the president and CEO of Goldbrook Ventures, which Source says he built from an exploration start-up in Quebec’s Raglan district to its 2012 sale to its Chinese joint venture partners for $100 million....
BCE INC., $46.58, Toronto symbol BCE, reported higher-than-expected earnings and raised its dividend this week. In the three months ended December 31, 2013, the company’s earnings rose 16.4%, to $540 million, or $0.70 a share. These figures exclude unusual items, such as costs to integrate recently acquired broadcaster Astral Media. On that basis, BCE’s earnings beat the consensus estimate of $0.69 a share. A year earlier, it earned $464 million, or $0.60 a share. Revenue rose 4.3%, to $5.4 billion from $5.2 billion. In addition to Astral’s contribution, the company is attracting more wireless, high-speed Internet and digital TV customers. That’s helping offset lower revenue from traditional phones....
DOREL INDUSTRIES $41.21 (Toronto symbol DII.B; TSINetwork Rating: Extra Risk) (514-731-0000; www.dorel.com; Shares outstanding: 31.5 million; Market cap: $1.3 billion; Dividend yield: 3.0%) has agreed to buy 100% of Tiny Love Ltd., a maker of baby products and developmental toys based in Tel Aviv, Israel, for an undisclosed sum.
Tiny Love has won awards in the developmental toy category, which includes products like activity gyms, mobiles and toys for babies and toddlers.
The company sells these products in over 50 countries and had about $45 million U.S....
Tiny Love has won awards in the developmental toy category, which includes products like activity gyms, mobiles and toys for babies and toddlers.
The company sells these products in over 50 countries and had about $45 million U.S....
Legacy Oil + Gas, $6.05, symbol LEG on Toronto (Shares outstanding: 157.2 million; Market cap: $948.1 million; www.legacyoilandgas.com), is steadily increasing its production in Western Canada and North Dakota. Its output is weighted 92% to oil and 8% to natural gas. Legacy has lots of drilling targets and undeveloped exploration acreage. Its production rose 16.5% in the three months ended September 30, 2013, to 19,489 barrels of oil equivalent per day (including gas) from 16,726 a year ago. Cash flow per share gained 30.8%, to $0.51 from $0.39. The stock trades at just 2.6 times Legacy’s forecast 2014 cash flow of $2.33 a share....