takeovers
PFIZER INC. $33 (New York symbol PFE; Income Portfolio, Manufacturing & Industry sector; Shares outstanding: 6.2 billion; Market cap: $204.6 billion; Price-to-sales ratio: 4.1; Dividend yield: 3.4%; TSINetwork Rating: Above Average; www.pfizer.com) has agreed to merge with Irish drug maker Allergan plc (New York symbol AGN). Allergan makes a variety of drugs, including treatments for Alzheimer’s disease, depression, dry eye, enlarged prostate, overactive bladder, cystic fibrosis and bacterial infections. It also makes the anti-wrinkle drug Botox. Under the deal, Allergan shareholders will receive 11.3 Pfizer shares for each share they hold. That will give them a 44% stake in the combined company, which will be the world’s biggest pharmaceutical maker....
Over the past few decades, we’ve built a list of what we call “reasons for wariness”. No single one of these factors is a sure sign of a bad investment. But we watch out for them when analyzing investments, especially where we find more than one. When we spot reasons for wariness in a business model or a growth plan, we want to be sure the company understands the risk. One prominent factor on our list is growth by acquisition. A company can speed up its growth by buying other companies, rather than building on or duplicating its existing operations. But, while acquisitions speed growth, they also accumulate risk. After all, the seller of something always knows more about it than the buyer. When a company focuses on acquisitions for corporate growth, it assumes it can out-perform the current management of what it buys. It assumes it can raise the return by a wide enough margin to increase its earnings, over and above the acquisition’s cost....
PFIZER INC. $33 (New York symbol PFE; Income Portfolio, Manufacturing & Industry sector; Shares outstanding: 6.2 billion; Market cap: $204.6 billion; Price-to-sales ratio: 4.1; Dividend yield: 3.4%; TSINetwork Rating: Above Average; www.pfizer.com) has agreed to merge with Irish drug maker Allergan plc (New York symbol AGN).
Allergan makes a variety of drugs, including treatments for Alzheimer’s disease, depression, dry eye, enlarged prostate, overactive bladder, cystic fibrosis and bacterial infections. It also makes the anti-wrinkle drug Botox.
Under the deal, Allergan shareholders will receive 11.3 Pfizer shares for each share they hold. That will give them a 44% stake in the combined company, which will be the world’s biggest pharmaceutical maker.
...
Allergan makes a variety of drugs, including treatments for Alzheimer’s disease, depression, dry eye, enlarged prostate, overactive bladder, cystic fibrosis and bacterial infections. It also makes the anti-wrinkle drug Botox.
Under the deal, Allergan shareholders will receive 11.3 Pfizer shares for each share they hold. That will give them a 44% stake in the combined company, which will be the world’s biggest pharmaceutical maker.
...
APPLE INC., $119.50, Nasdaq symbol AAPL, reported better-than-expected results this week, thanks to strong demand for new models of its iPhone and Mac computers.
In its fiscal 2015 fourth quarter, which ended September 26, 2015, the company sold 48.0 million iPhones, up 22.3% from 39.3 million a year earlier, mainly due to strong demand in China. Even so, that missed the consensus forecast of 48.7 million.
Overall earnings jumped 31.4% to $11.1 billion from $8.5 billion. Per-share profits gained 38.0%, to $1.96 from $1.42, on fewer shares outstanding, beating the consensus estimate of $1.88.
Sales rose 22.3%, to $51.5 billion from $42.1 billion, also exceeding the consensus forecast of $51.1 billion.
In addition to strong demand for the iPhone (63% of total sales), sales of Mac computers (13%) gained 3.9%, while sales of software, music and movies (10%) rose 10.4%. The company bundles its new Apple Watch with other products, like iPods and Beats headphones. Sales in this category (6%) jumped 60.7%.
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In its fiscal 2015 fourth quarter, which ended September 26, 2015, the company sold 48.0 million iPhones, up 22.3% from 39.3 million a year earlier, mainly due to strong demand in China. Even so, that missed the consensus forecast of 48.7 million.
Overall earnings jumped 31.4% to $11.1 billion from $8.5 billion. Per-share profits gained 38.0%, to $1.96 from $1.42, on fewer shares outstanding, beating the consensus estimate of $1.88.
Sales rose 22.3%, to $51.5 billion from $42.1 billion, also exceeding the consensus forecast of $51.1 billion.
In addition to strong demand for the iPhone (63% of total sales), sales of Mac computers (13%) gained 3.9%, while sales of software, music and movies (10%) rose 10.4%. The company bundles its new Apple Watch with other products, like iPods and Beats headphones. Sales in this category (6%) jumped 60.7%.
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The acquisition of a U.S. packaging firm looks like a perfect fit is for one of our leading value stocks, printer Transcontinental Inc.
Takeovers have helped Canadian beverage maker Cott Corp gain momentum as a growth stock, but the company also faces a number of risks.
Junior energy stock Twin Butte energy has kept its cash flow up with hedging strategies, but its high-yielding dividend may be in doubt.
This Canadian REIT is growing fast by acquisition, which adds risk, but all of its properties are in the fastest-growing part of the U.S.
Microsoft’s Nokia purchase didn’t work out well, but cloud computing helps it remain one of the leading blue chip stocks in the tech world