wall street

PFIZER INC. (New York symbol PFE; www.pfizer.com) is the world’s largest maker of prescription drugs. Its main brands include Lyrica (epilepsy), Celebrex (arthritis), Viagra (erectile dysfunction) and Prevnar (a pneumonia vaccine). Pfizer also makes popular over the-counter drugs, including Advil (pain relief), Centrum (vitamins) and Robitussin (cough syrup)....

HILLSHIRE BRANDS CO., $53.28, New York symbol HSH, jumped 18% this week in response to two hostile takeover offers. The company makes a variety of packaged meat products. Its main brands include Ball Park hot dogs, Jimmy Dean sausages and Hillshire Farm deli meats. Other foods include Sara Lee frozen desserts and Chef Pierre pies. On Tuesday, rival food producer Pilgrim’s Pride Corp. (Nasdaq symbol PPC) offered to acquire Hillshire for $45.00 a share. That was followed by a $50.00-a-share bid by Tyson Foods (New York symbol TSN) on Thursday....

Wells Fargo and J.P. Morgan passed the Federal Reserve’s latest “stress test,” which measures how well financial firms would cope with a sharp jump in unemployment, falling stock prices and other unfavourable conditions. Here is our analysis of the two banks, both of which we cover regularly in our advisory on U.S. stocks, Wall Street Stock Forecaster....

Global X Social Media ETF, $17.72 symbol SOCL on Nasdaq (Units outstanding: 7.8 million; Market cap: $138.2 million; www.globalxfunds.com), invests in companies that provide social networking, file sharing and other web-based media applications. This exchange traded fund holds 27 social media stocks. U.S. social media stocks make up 55.0% of assets. China is next with 25.6%; Japan, 11.0%; the Netherlands, 3.8%; Russia, 2.4%; Taiwan, 1.2%; and Germany, 1.0%. The fund’s MER is 0.65%. It began trading as a new issue on November 14, 2011. Since then, it has been far more volatile than the Standard & Poor’s 500 market index, and has consistently underperformed the index. Since it began trading, the fund has gained around 23%. In the same time, the Standard & Poor’s 500 Index has gained around 57%....

AT&T INC., $35.32, New York symbol T, has agreed to buy DirecTV (Nasdaq symbol DTV), which has 20.3 million satellite TV customers in the U.S. and 18.1 million in Latin America. DirecTV also owns regional sports networks and other cable channels. The company will pay $48.5 billion (70% stock and 30% cash). If you include DirecTV’s debt, the deal is worth $67.1 billion. To put that in context, AT&T’s market cap (the value of all outstanding shares) is $183.5 billion. AT&T expects to close the deal in mid-2015. At that time, DirecTV shareholders will own roughly 15% of the combined company....

Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a beginning or experienced investor, these weekly updates are designed to give you specific investment advice. Each Investor Toolkit update gives you a fundamental piece of investing strategy, and shows you how you can put it into practice right away. Today’s tip: “When you see performance numbers issued by brokers, money managers and newsletter publishers, ask yourself just how hypothetical those figures might be.”...

HILLSHIRE BRANDS CO., $36.62, New York symbol HSH, makes a variety of packaged meat products. Its main brands include Ball Park hot dogs, Jimmy Dean sausages and Hillshire Farm deli meats. Other foods include Sara Lee frozen desserts and Chef Pierre pies. This week, the company agreed to buy rival Pinnacle Foods (New York symbol PF), whose main brands include Duncan Hines baking mixes, Vlasic pickles, Mrs. Butterworth’s table syrup and Birds Eye frozen dinners. Hillshire will pay $4.3 billion in cash and shares, though if you include Pinnacle’s debt, the entire transaction is worth $6.6 billion. Hillshire expects to close the deal in September 2014. At that point, Pinnacle shareholders will own 33% of the combined company....

MONSANTO CO. (New York symbol MON; www.monsanto.com) sells technology-based agricultural products, such as genetically modified seeds, to farmers, grain processors and food producers. The company’s seeds make crops more resistant to pests, diseases and bad weather. Monsanto gets about 70% of its revenue from genetically modified seeds for corn, soybeans and other crops. The remaining 30% comes from selling herbicides, mainly under the Roundup brand....

MONDELEZ INTERNATIONAL INC., $37.96, Nasdaq symbol MDLZ, took its current form on October 1, 2012, when the old Kraft Foods Inc. broke itself into two publicly traded companies: Mondelez, which focuses mainly on snack foods, and Kraft Foods Group, which makes a variety of grocery products. The stock rose 7% this week after Mondelez agreed to merge its packaged coffee business with European coffee maker D.E. Master Blenders. (In June 2012, the old Sara Lee Corp., a former recommendation of ours, spun off D.E. Master. It later accepted a friendly takeover offer from Joh A Benckiser, a privately held German firm.)...

We’ve had great success with companies spun off from larger parent firms in the past few years. That’s mainly because spinoffs let both companies focus on their already well-established businesses. As well, a parent will only hand out a subsidiary’s shares to its own investors if it’s confident the spinoff will benefit both companies. Last week, we covered a spinoff that has been successful so far, Mondelez (see the article here). This week we examine the company that spun it off, Kraft Foods. We cover both of these stocks in our advisory on U.S. investing, Wall Street Stock Forecaster....