Monica Gray

Monica has an undergraduate degree in Accounting and an MBA she earned - with Honors. She has six years of experience in the financial markets and has been an analyst for the past two years.

Weight Watchers International, Inc. (NYSE:WTW)’s Stock Moves Explained

Weight Watchers International, Inc. (NYSE:WTW)

Shares of Weight Watchers International, Inc. (NYSE:WTW) were rising ahead of the release of the company’s Q4 2016 earnings results and continued to rise after the company posted earnings that surpassed expectations.

The gains in Weight Watchers’ stock ahead of the earnings were largely a result of investors anticipating positive outcome from the company’s Q4 2016 after its rival NutriSystem Inc.(NASDAQ:NTRI) posted Q4 results that topped the consensus estimates.

Nutrisystem’s Q4 revenue of $108.9 million rose 21% year-over-year, while EPS of $0.29 increased 123%. Analysts on the average were looking for the company to post EPS of $0.22 on revenue of $100 million.

When its turn to report came, Weight Watchers International, Inc. (NYSE:WTW) largely lived up to market expectations. It posted EPS of $0.20, significantly up from EPS loss of $0.03 a year earlier and above the consensus estimate of $0.18. However, while revenue of $267 million rose from $259.2 million in the year-ago quarter, the figure came short of consensus estimate that called for revenue of at least $274 million.

“We delivered positive member recruitment growth in every quarter of 2016, ending the year with 10 percent more subscribers than the prior year,” said CFO Nick Hotchkin.

The Oprah Winfrey effect

Weight Watchers International, Inc. (NYSE:WTW) has recently benefited from the appearance of billionaire Oprah Winfrey in its commercials, boosting its subscriber recruitment and driving sales. Winfrey is a major shareholder in Weight Watchers.

Shutting of unprofitable arm

In what seems as part of the efforts to reduce cash burn and save more money to reinvest to distribute to shareholders, Weight Watchers announced ending operations of its Spanish subsidiary called Entulinea, saying it has been difficult to bring the business to profitability.

2017 outlook

After posting largely positive results for 4Q2016, Weight Watchers International, Inc. (NYSE:WTW) issued strong earnings guidance for fiscal 2017. The company is expecting EPS in the range of $1.30 – $1.40. Consensus estimate calls for revenue of $1.17.  For fiscal 2016, Weight Watchers posted revenue of $1.2 billion and EPS of $1.03.

Weight Watchers’ rival Nutrisystem guided 2017 revenue in the range of $630 – $650 million and EPS in the band of $1.55 – $1.65. The company reported revenue of $546 million and EPS of $1.19 in 2016.

Stock movements

Shares of Weight Watchers International, Inc. (NYSE:WTW) rose more than 9.9% to $14.39 in the regulator session on Tuesday, and rose a further 10.5% in extended trading after reporting Q4 2016. The stock has gained more than 25% year-to-date, and is up more than 30% over the last 12 months.

2/28/2017
Ticker Symbol WTW
Last Price a/o, 4:02PM EST  $                         14.39
Average Volume (mlns) 1.84
Market Cap (mlns)  $                  933.62
Sales (blns) $1.16
Shares Outstanding (mlns) 64.88
Share Float (mlns) 27.39
Shortable No
Optionable Yes
Inside Ownership 10.90%
Short Float 67.92%
Short Interest Ratio 10.1
Quarterly Return 25.79%
YTD Return 25.68%
Year Return 22.26%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.

What You Ought To Know About Adeptus Health Inc (NYSE:ADPT)’s Earnings

Shares of Adeptus Health Inc (NYSE:ADPT) plunged 10% on Tuesday ahead of the company’s 4Q2016 earnings release on the backdrop of a mixed earnings track record. The company has topped earnings expectations twice and also missed targets twice over the last 12 months.

For 3Q2016, Adeptus posted EPS of $0.06, sharply down from $0.31 a year earlier and significantly below the consensus estimate of $0.56.

Revenue of $85.4 million dipped from $101.3 million a year earlier and came short of consensus estimate of $90 million.

The management admitted that 3Q results were disappointing and promised to take actions that would improve future performance.

Liquidity problem

One of Adeptus Health Inc (NYSE:ADPT)’s major challenges has been cash shortage because the company hasn’t been able to generate enough cash flow from operations. That has forced the company to turn to external financing to help it fund operations and projects such as opening of new hospital facilities.

The company said in the last quarter that it secured $30 million in additional credit facility. Several other investors including Sterling Partners, co-founders and CEO also committed to pump $27.5 million into the business in exchange for prefer stock. The management of Adeptus said it would continue to work with financial advisers to explore additional financing with the aim of enhancing the company’s liquidity.

Stock rating

However, there have been concerns that Adeptus Health Inc (NYSE:ADPT) could be forced into more equity or debt fundraising as long as it consumes more cash than its operation produces. That led Jefferies analysts to downgrade the stock to a HOLD from a BUY on November 2. The analysts further cut their price target on the stock to $13 from $17. They cited concerns about Adeptus’ balance sheet health and cash flow

4Q2016 earnings

Adeptus was scheduled to report 4Q2016 earnings on March 1 after markets close. Internal guidance calls for EPS of $0.22 after it was significantly reduced from $0.83 in the earlier guidance. Consensus estimate calls for EPS of $0.22.

For full-year 2016, Adeptus is looking for EPS of $1.23 after it cut the estimate from $2.28. Fiscal 2017 EPS estimate was also reduced to $1.28 from $3.25.

Stock movements

Shares of Adeptus Health Inc (NYSE:ADPT) fell 10% to $6.75 on Monday, widening its year-to-date and 12-month losses to more than 11% and more than 86%, respectively. The decline in the stock appeared to be linked to investors exhibiting uncertainty ahead of the company’s earnings release.

2/28/2017
Ticker Symbol ADPT
Last Price a/o, 4:02PM EST  $                         6.75
Average Volume 850,610.00
Market Cap (mlns)  $                  145.80
Sales (mlns) $401.70
Shares Outstanding (mlns) 21.6
Share Float (mlns) 8.82
Shortable Yes
Optionable Yes
Inside Ownership 1.50%
Short Float 65.68%
Short Interest Ratio 6.81
Quarterly Return -32.57%
YTD Return -11.65%
Year Return -88.14%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.

Is Billionaire Mario Gabelli Plotting Shakeup Of Hertz Global Holdings, Inc (NYSE:HTZ)?

Hertz Global Holdings, Inc (NYSE:HTZ)

Hertz Global Holdings, Inc (NYSE:HTZ) reported feeble earnings results for both its 4Q2016 and full-year 2016. Financial performance in both periods was dragged by continued trouble in the company’s car-rental operation.

But as Hertz posted downbeat earnings results, Mario Gabelli, the billionaire founder of hedge fund Gamco Investors, disclosed an active stake of about 6.2% in the company. Gabelli’s disclosure of an active stake in Hertz suggests he could push for a shakeup of the company’s management.

Earnings results

Hertz posted adjusted EPS loss of $0.71 in 4Q2016, wider than $0.29 in the comparable quarter in the prior year. Revenue of $2.01 billion for the latest quarter was down 0.9% year-over-year. Analysts on the average were looking for adjusted EPS loss of $0.57 on revenue of $2.01 billion.

For full-year 2016, Hertz posted a loss of $491 million as revenue declined 2.4% to $8.8 billion.

Cash balance

Hertz Global Holdings, Inc (NYSE:HTZ) concluded 2016 with cash of $816 million, down from $1.43 billion in the prior quarter. But the company is carrying a heavy debt load as its debt stood at $13.54 billion at the end of the year, down slightly from $14.86 billion at the end of September quarter.

Asset write-downs

Hertz has struggled to prune costs to stabilize its operations. The company disclosed in the latest report that it wrote down the value of its Dollar Thrift business by about $120 million. It made a similar move in its European rental business where it wrote down the value of the operation by $172 million.

Leadership changes

Hertz Global Holdings, Inc (NYSE:HTZ) has been under three chief executives over the past few years. The current CEO, Kathryn Marinello, was hired in January. She said the disappointing 2016 results were caused by issues related to fleet and services, but promised that Hertz will continue to roll out new services to appeal to US customers as part of the efforts to grow revenue.

If Gabelli is interested in pushing for changes in Hertz, it is unclear what it is likely to focus on as the company only recently hired a new CEO. Perhaps Gabelli could attempt to reorganize Hertz’s board.

Carl Icahn is the largest shareholder in Hertz, and he has expressed confidence in Kathryn’s ability to turn around the company.

Stock movements

Shares of Hertz Global Holdings, Inc (NYSE:HTZ) rose 0.15% to $20 in the regulator session on Monday and continued to rise further by about 2% during after-hour trading. The stock is down more than 7% year-to-date and has retreated more than 97% over the last one year.

2/27/2017
Ticker Symbol HTZ
Last Price a/o, 4:02PM EST  $                         20.00
Average Volume (mlns) 2.19
Market Cap (blns)  $                  1.67
Sales (blns) $9.21
Shares Outstanding (mlns) 83.47
Share Float (mlns) 82.82
Shortable Yes
Optionable Yes
Inside Ownership 0.20%
Short Float 9.12%
Short Interest Ratio 3.45
Quarterly Return -23.55%
YTD Return -7.24%
Year Return

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.

How Did Novavax, Inc. (NASDAQ:NVAX) Fare in Q4?

Novavax, Inc. (NASDAQ:NVAX)

Novavax, Inc. (NASDAQ:NVAX) reported Q4 2016 results after the markets closed on Monday, February 27. It was a mixed report as earnings topped expectations while revenue missed.

The company posted EPS loss of $0.21 for the quarter, narrower than EPS loss of $0.29 in posted in a similar quarter a year earlier. Analysts on the average were looking for EPS loss of $0.23, so Novavax beat expectations on that front.

Revenue of $5.4 million retreated 8% from a year earlier period and also slightly came short of consensus estimate of $5.45 million.

R&D spending and product pipeline

Novavax, Inc. (NASDAQ:NVAX) pumped $51.1 million into research and development activities during Q4, but that was 33% less than R&D spending in the year-ago quarter. Part of the R&D spending went to clinical trials of the company’s product candidate called RSV F vaccine.

Novavax is developing RSV F vaccine as protection for infants and the drug is administered through maternal immunization. The trial of RSV F vaccine has reached Phase 3 stage and it is backed by Bill & Melinda Gates Foundation (BMGF) through a grant of up to $89 million.

RSV F vaccine is also being studied in adults aged 60 years and above. The adult trial is in Phase 2 stage.  Novavax’s pipeline also includes Zika and influenza vaccines.

Cash balance expands

Novavax, Inc. (NASDAQ:NVAX) finished 2016 with cash and equivalents of $235.5 million. Cash and equivalents at the end of the prior year was $230.7 million. However, Novavax burnt more cash in the whole of 2016 than it did in 2015. Cash spending associated with operating activities was $255.5 million in 2016, a sharp increase from $126.1 million in the prior year. The management cited higher staff costs and research and development spending as reasons for the increase in cash burn.

Insider transactions

Several Novavax insiders have recently traded the company’s shares. On February 2, SEC filings shows the company’s SVP of commercial operations, John Trizzino, bought 3,401 shares of the company at the price of $1.12 apiece. On the same date, SEC filing shows SVP and general counsel John A Iii Herrmann bought 4,960 shares in Novavax and paid $1.12 for each share.

The company’s CFO, Barclay A Phillips, also purchased 1,633 shares at the price of $1.12 in a transaction that was completed on February 27.

Stock movements

Shares of Novavax, Inc. (NASDAQ:NVAX) rose more than 18% to close the regulation session at $1.63 on Monday. But the stock fell nearly 10% in the after-hour trading following the release of mixed quarterly earnings results. The stock is up nearly 30% year-to-date, but has retreated more than 65% over the last 12 months.

2/27/2017
Ticker Symbol NVAX
Last Price a/o, 4:02PM EST  $                         1.63
Average Volume (mlns) 6.83
Market Cap (mlns)  $                  442.10
Sales (blns) $15.80
Shares Outstanding (mlns) 271.23
Share Float (mlns) 267.06
Shortable Yes
Optionable Yes
Inside Ownership 0.30%
Short Float 23.89%
Short Interest Ratio 9.34
Quarterly Return 26.36%
YTD Return 29.37%
Year Return -65.39%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.

What’s On Focus As Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) Reports Q4?

Arena Pharmaceuticals, Inc. (NASDAQ:ARNA)

Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) reports Q4 2016 results on March 6. An earlier schedule showed the company would release the results on February 27. Arena has had a mixed track record of quarterly earnings. It has exceeded expectations twice, met expectations once and missed expectations once in the trailing four quarter.

As the company reports Q4, analysts are expecting EPS loss of $0.09. The company posted EPS loss of $0.13 in the same quarter a year earlier, meeting the consensus estimate.  Revenue in the year-ago quarter was $7.8 million, short of consensus estimate of $8.26 million.

For the last quarter, Q3 2016, ARNA produced EPS loss of $0.05, besting consensus estimate of EPS loss of $0.07. Revenue of $19 million also topped the consensus estimate of $13.99 million.

Focus on pipeline

Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) has only one approved product in its portfolio and that is obesity treatment called Belviq. Despite a large addressable market in the US, Belviq sales are yet to impress.

As Arena reports Q4, investors will be looking for clues about how the company intends to improve Belviq sales. Poor Arena sales have been linked to low coverage by third-party insurers, narrow focus on only a certain patients and the tendency of doctors to prescribe drugs for symptoms of obesity instead of the actual disease.

Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) has been working to extend the label of Belviq and a study for the label extension is underway, so positive outcome from the trial would allow Arena to extend the label of the drug. Extended label should expand the drug’s addressable market, potentially yielding more revenue for the company.

In another effort to squeeze more revenue from Belviq, Arena late last year introduced a once-daily formulation of the drug. Because Arena made the move last October, sales of the once-daily Belviq should be reflected in the upcoming 4Q results.

Other product candidates

Other than Belviq, Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) investors will also have their eyes and ears on the company’s pipeline update.

Arena has several candidates in its pipeline. They include ralinepag, which is being developed as a treatment for pulmonary arterial hypertension and is in Phase 2 clinical study. The other is etrasimod, which is also a Phase 2 candidate being developed as a treatment for ulcerative colitis.

Stock movement

Shares of Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) rose 6.8% to $1.57 on Monday. The stock is up more than 10% since the beginning of the year, and has risen about 2% over the last one year.

2/27/2017
Ticker Symbol ARNA
Last Price a/o, 4:02PM EST  $                          1.57
Average Volume (mlns) 1.61
Market Cap (mlns)  $                  381.91
Sales (mlns) $46.40
Shares Outstanding (mlns) 243.25
Share Float (mlns) 242.12
Shortable Yes
Optionable Yes
Inside Ownership 0.59%
Short Float 3.78%
Short Interest Ratio 5.67
Quarterly Return -1.26%
YTD Return 10.56%
Year Return 2.61%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.

What Caused J C Penney Company Inc (NYSE:JCP) Shares To Drop 5.8%

J C Penny Inc (NYSE:JCP)

J C Penny Inc (NYSE:JCP) on Friday became the latest major retail brand to highlight the struggles of retailers. The company reported mixed results for the December quarter, or 4Q2016, and joined the chorus of retail footprint cutting. J C Penney said it will close at least 130 stores in the coming months and send 6,000 workers on early retirement. Those measures are expected to help the company prune costs and achieve more agility, but many investors have decided to distance themselves from the stock as seen the share price movement.

Shares of J C Penney pulled back more than 5.8% to close at $6.46 on Friday. The stock is down more than 22% year-to-date and has declined more than 32% over the last one year.

Investor worries over tough business environment for legacy retailers may have caused shares of J C Penney to tank.

Mixed quarterly earnings

J C Penney Company Inc (NYSE:JCP) generated revenue of $3.96 billion in 4Q2016, missing the consensus estimate of $3.98 billion. Revenue in the year-ago period was $4 billion. Sales at stores that remained opened for at least a year were down 0.7%, steeper than 0.3% decline that analysts expected on the average.

However, adjusted EPS of $0.64 in the latest quarter increased sharply from $0.39 a year ago and easily beat consensus estimate for $0.61.

Weak sales in the women’s category and continued competitive pressure from online retailers hurt J C Penney’s performance in the latest quarter.

Early retirement for workers

J C Penney Company Inc (NYSE:JCP) intends to buy out 6,000 workers as part of the measures to lower its payroll expenses. However, positions left by workers who choose to retire early will be filled by employees affected by the planned store closure. Perhaps that is a way to calm fears over massive job loss at a time when the Trump administration has focused on job creation as one of its signature agendas.

Amazon.com, Inc. (NASDAQ:AMZN), the disruptive online retailer that has caused problems for J C Penney and other legacy retailers, has pledged to add more than 100,000 full-time jobs over the next one and a half years.

Store closure

J C Penney is closing between 130 and 140 stores. The store restructuring is expected to save the company $200 million in annual expenses. However, the restructuring will initially cost $225 million.

In announcing store closure, J C Penney Company Inc (NYSE:JCP) has joined the ranks of Macy’s Inc (NYSE:M), Sears Holdings Corp (NASDAQ:SHLD) and other legacy retailers that are eliminating hundreds of jobs.

2/24/2017
Ticker Symbol JCP
Last Price a/o, 4:02PM EST  $                       6.46
Average Volume (mlns) 19.44
Market Cap (blns)  $                  2.11
Sales (blns) $12.58
Shares Outstanding (mlns) 327.38
Share Float (mlns) 303.26
Shortable Yes
Optionable Yes
Inside Ownership 1.00%
Short Float 23.29%
Short Interest Ratio 3.63
Quarterly Return -33.54%
YTD Return -22.26%
Year Return -22.73%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.

Why Upbeat China Economic Outlook Bodes Well For Coach Inc (NYSE:COH)

Coach Inc (NYSE:COH)

When Coach Inc (NYSE:COH) reported earnings results for the December quarter, which is its fiscal 2Q2017, China was one of the regions in which the company registered strong growth in its international segment. With that the International Monetary Fund (IMF) recently upgrading its economic outlook for China, the move seems to bode well for Coach in the country.

In China, economic stimulus measures by the government are expected to drive GDP expansion in 2017.  The IMF expects the economy to continue growing by 6% in 2018.

Coach’s Chinese sales increased 6% on a constant currency basis in F2Q2017. Strong results in Macau and Hong Kong largely contributed to the gains. The IMF is now projecting that China’s economy will expand 6.5% in 2017, which is 0.3% higher than the fund’s earlier growth projection. A more robust economic expansion rate in China means a larger market for Coach’s products in the country.

European sales up double-digit

Coach Inc (NYSE:COH) also fared well in Europe as sales in the region increased double-digit in F2Q2017. New distribution deals in Europe backed Coach’s gains in the region.

North America sales up

Coach’s business also grew in North America, with sales jumping 2%. Greater conversion and higher prices backed the company’s gains in the region.

F2Q2017 results

Overall, Coach Inc (NYSE:COH) generated revenue of $1.32 billion, up 3.8%. The revenue was in-line with consensus estimate for $1.32 billion. Adjusted EPS of $0.75 increased from $0.68 a year earlier and topped the consensus estimate of $0.74.

Outlook 2017

Coach expects fiscal 2017 revenue to increase at low-single digit pace, largely because of a stronger dollar that is causing international sales to be worth less when converted. However, the company expects fiscal 2017 operating margin to be in the range of 18.5% – 19.0%.

Stock movement

Shares of Coach edged up less than 1% to close at $38.02 on Friday. The stock has remained fairly steady since the beginning of 2017 and over the last one year. Year-to-date, the stock is up more than 8%, and over the last 12 months the stock is down less than 1.5%.

Like other legacy retailers, Coach Inc (NYSE:COH) has been rattled by the online shopping trends. While traditional retailers are trying to catch up with their online rivals such as Amazon.com, Inc. (NASDAQ:AMZN), they still have a long way to go and Coach proven that in its F2Q2017 earnings. The company said its e-commerce comps declined 3% in the latest quarter, driven down by a lack of aggressive promotions during the quarter.

2/24/2017
Ticker Symbol COH
Last Price a/o, 4:02PM EST  $                        38.02
Average Volume (mlns) 3.39
Market Cap (blns)  $                  10.65
Sales (blns) $4.55
Shares Outstanding (mlns) 280.1
Share Float (mlns) 280.02
Shortable Yes
Optionable Yes
Inside Ownership 0.10%
Short Float 2.82%
Short Interest Ratio 2.32
Quarterly Return -0.31%
YTD Return 8.57%
Year Return 1.22%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.

Why Did Shares Of Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) Plunge 9%?

Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN)

What caused shares of Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) to tank nearly 9% on Friday? The stock movement may be linked to a recent securities filing in which the company gave a notice of a plan to raise additional cash through the sale of new securities.

In a filing with the US Securities and Exchange Commission (SEC), Achillion informed the regulator of its intent to raise up to $250 million by securities offering. But it didn’t specify the nature, timing or pricing of the securities fundraiser. However, the market seems to believe the company is planning to dilute its stock, which could destroy value for existing shareholders. That may have sparked the selloff in the stock, which sent the shares down almost 9% on Friday to settle at $3.86.

Shares of Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) have retreated 6% year-to-date and are down more than 47% over the last one year.

Beating earnings

Before the issue of planned securities offering appeared to spoil the party, investors recently warmed up to shares of Achillion following the company’s a little upbeat 4Q2016 earnings. The company posted EPS loss of $0.03, better than EPS loss of $0.20 that analysts were expecting on the average. However, revenue of $15 million declined 52.5% year-over-year.

Though 4Q2016 may not have been the primary reason for investor optimism in Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN), the results offered hope of a bright future as the company continues to develop its pipeline. Additionally, several rating firms have recently commented positively on the prospects of Achillion.

For instance, Ladenburg Thalmann analysts initiated their coverage of Achillion with a BUY rating and 12-month price target of $10 on February 2. The analysts cited the company’s pipeline programs, and the various milestones and royalties bearing collaboration the company has with partners such as Johnson & Johnson (NYSE:JNJ)’s Janssen.

$900 million in potential milestones

The collaboration with Janssen involves development of a HCV drug and could yield more than $900 million in milestones for Achillion, and earn the company royalties in the range of mid-20%.

However, HCV is a highly competitive space and there can be no guarantee that Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) will hit the milestones and unlock the promised payments. The company’s planned securities fundraising could be a measure to raise additional funds that can be used to develop the pipeline so that the company doesn’t fall behind the competition in HCV and other product categories.

2/24/2017
Ticker Symbol ACHN
Last Price a/o, 4:02PM EST  $                       3.86
Average Volume (mlns) 1.57
Market Cap (mlns)  $                   579.50
Sales (mlns) $31.60
Shares Outstanding (mlns) 150.13
Share Float (mlns) 118.17
Shortable Yes
Optionable Yes
Inside Ownership 0.10%
Short Float 9.03%
Short Interest Ratio 6.8
Quarterly Return -8.31%
YTD Return -6.54%
Year Return -43.65%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.

Is Chesapeake Energy Corporation (NYSE:CHK) Going Anywhere?

Chesapeake Energy Corporation (NYSE:CHK)

Chesapeake Energy Corporation (NYSE:CHK) posted largely feeble financial results for Q4 2016, which it reported on February 23. Revenue of $2.02 billion fell 24% from a year earlier quarter and also came short of the average revenue estimate of analysts polled by Reuters. Analysts were expecting the company to generate revenue of $2.08 billion for the quarter. The adjusted EPS of $0.07 that Chesapeake posted in Q4 2016 was in line with expectations.

Chesapeake’s results in the latest quarter were hurt by weaker prices and lower volumes. Unprofitable hedging also caused an adverse impact on the company’s earnings. Oil companies struggled with falling prices of the commodity for nearly two years amid a global supply glut. However, a landmark deal by the OPEC last year brought hope of price recovery in the oil market as members of the cartel agreed to cap their output. However, price recovery has been slow.

The nearly two years of downbeat oil prices not only impacted earnings at Chesapeake, but also left the company deep in the red. The company exited Q4 2016 with net long-term debt of more than $9.9 billion, offset by cash balance of $882 million.

What happens next?

While Chesapeake Energy Corporation (NYSE:CHK) fell short of providing clear assurance that 2017 would be a great year, the management provided several hints that the company is steadily regaining its footing and the coming years should be better. Though investors should be aware that any unexpected developments in the oil market that cause further and prolonged price declines could send the management of Chesapeake back to the drawing board.

As much as Chesapeake struggled with lower volumes and weak prices, it still managed to cut its operating expenses for Q4 2016 by 58.4% from a year earlier to $2.3 billion. That helped the company to narrow its GAAP net loss to $741 million from $2.23 billion a year earlier.

The management also addressed the issue of declining volumes, saying that it will try to reverse the trend starting in the back half of the year.

Production target

Chesapeake Energy Corporation (NYSE:CHK) hopes to produce between 532,000 and 562,000 barrels of oil equivalent per day (boepd) in 2017 despite narrowing its capital budget for the year as part of cost controls.

The management expects to cut the company’s debt by $2 – $3 billion over the next few years. Asset sales are expected to contribute toward the cost reduction.

Stock movement

Chesapeake Energy Corporation (NYSE:CHK)’s feeble quarterly earnings combined with concerns over the company’s huge debt sent the shares down nearly 2.9% to $5.75 in the last session. The stock is down more than 18% so far in 2016, but has gained more than 180% over the last 12 months.

2/23/2017
Ticker Symbol CHK
Last Price a/o, 4:02PM EST  $                       5.75
Average Volume (mlns) 44.58
Market Cap (blns)  $                  5.09
Sales (mlns) $9.93
Shares Outstanding (mlns) 884.48
Share Float (mlns) 878.95
Shortable Yes
Optionable Yes
Inside Ownership 1.00%
Short Float 12.67%
Short Interest Ratio 2.50
Quarterly Return -9.59%
YTD Return -18.09%
Year Return 113.75%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.

Square Inc (NYSE:SQ)’s Stock Break Out Explained

Square Inc (NYSE:SQ)

How did Square Inc (NYSE:SQ) manage to hold on to its Wednesday gains and scale higher to a new 52-week peak on Thursday? The answer can now be provided. The company’s 4Q16 beat expectations and most analysts who have reviewed the results think the company is moving toward more growth.

Shares of Square settled at $17.15 on Thursday, after gaining more than 14%. Earlier, the stock rose to a new 52-week high of $17.75. Square is up more than 25% year-to-date, and has gained more than 72% over the last one year.

Q$ 2016 top expectations

Square Inc (NYSE:SQ) generated revenue of $452 million, up 21% year-over-year. EPS loss of $0.04 narrowed significantly from EPS loss of $0.34 a year earlier. Both the top and bottom line figures beat the consensus estimates that called for EPS loss of $0.09 and revenue of $450 million.

Square’s gains in the quarter were supported by robust growth in the company’s merchant payment processing service. The company processed nearly $50 billion in payments on behalf of merchants, up 39% compared to a similar quarter a year earlier. Square takes a 2.75% cut in payments it processes. The topline growth was also supported by success in newer businesses such as business credit line Square Capital. The company extended $798 million in business loans in 2016.

Upbeat outlook

On top of strong quarterly results for Q4 2016, Square Inc (NYSE:SQ) also issued upbeat guidance for 2017. The company expects revenue of $2.15 billion for the year, suggesting nearly 25% growth from the prior year.

To reach its revenue target in 2017, Square intends to introduce its services to all its customers. New products are also expected to drive growth in the coming years.

More growth awaits Square

Several rating firms have weighed in on Square Inc (NYSE:SQ) since the company reported Q4 2016 results on February 22. While the majority of the analysts think that the company’s prospects are bright, at least one feels that Square’s continued loss-making is dangerous for its future.

RBC Capital Markets analysts maintained their OUTPERFORM rating on Square stock, but raised their price target on the stock from $17 to $18. Pacific Crest analysts made a similar move by keeping their OVERWEIGHT rating but hiking their price target to $18 from $17.

Mizuho Securities analysts are a bit more optimistic, reiterating a BUY rating and hiking their price target to $19 from $16. However, SunTrust analysts are more cautious with their recommendation of Square, choosing to maintain a HOLD rating on the stock at a price target of $16 – up from $13.

2/23/2017
Ticker Symbol SQ
Last Price a/o, 4:02PM EST  $                       17.15
Average Volume (mlns) 4.48
Market Cap (blns)  $            5.80
Sales (blns) $1.63
Shares Outstanding (mlns) 338.02
Share Float (mlns) 162.82
Shortable Yes
Optionable Yes
Inside Ownership 1.00%
Short Float 6.35%
Short Interest Ratio 2.31
Quarterly Return 40.34%
YTD Return 25.83%
Year Return 73.41%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.