Welcome to John Ransom's Stocks In The News, where the headline meets the trendline.
Stocks in the News is produced by Ransom Notes Radio and Goodfellow, LLC. Crista Huff manages Goodfellow LLC, a website that recommends outperforming stocks using fundamental and technical analysis.
Stock number one is:
Sprint Nextel Corp., (SYMBOL: S) and the headline says:
Dish Launches $25.5 Billion Bid For Sprint – Dow Jones
“Satellite-TV provider Dish Network Corp. is making a $25.5 billion bid for Sprint Nextel Corp., in an effort to derail the No. 3 U.S. wireless carrier's acquisition by Softbank Corp. of Japan,” reports Dow Jones. AUDIO
“Dish is offering to pay $4.76 in cash and about $2.24 in Dish stock, based on Friday's closing price, for every share of Sprint. Dish argues that the deal represents a 13% premium to Softbank's complicated proposal to buy 70% of Sprint for $20.1 billion.”
Sprint shares crashed with the 2008 Financial Meltdown, and have never recovered. The company has been taking losses for years, and is projected to continue losing money for the next two years. Shareholders should take advantage of the bidding war by selling into the inflated share price.
Our Ransom Note trendline says: SELL SPRINT NEXTEL.
Stock number two is:
Citigroup Inc. , (SYMBOL: C) and the headline says:
Citi's First Quarter Beats Estimates as Profit Rises 30% to $3.8 Billion – Dow Jones
Citigroup Inc. reported first quarter earnings per share of $1.23, up 30% from a year ago, and beat the consensus estimate of $1.17. Revenue was up 3%, helped by a release of loan loss reserves in the mortgage unit. The report also featured better than expected numbers in fixed income, equities, mortgage origination volume and expense ratios. Audio
Citi is expected to grow earnings per share 19%, 13% and 16% in the next three years. The PE is 10. The share price is on an uptrend, and there’s price resistance at $51.
Our Ransom Note trendline says: HOLD CITIGROUP.
Stock number three is:
Thermo Fisher to Buy Life Technologies for $13.6 Billion – Dow Jones Audio
Thermo Fisher Scientific Inc. and Life Technologies Corp., makers of laboratory equipment, have agreed to merge operations in early 2014. The “move could enable the company to slash costs and reap gains from next-generation genetic-sequencing machines,” reports Dow Jones.
Thermo Fisher will pay $76 per share for Life Technologies. Thermo Fisher is expected to grow earnings 10-11% per year for each of the next three years.
The stock has had a big run-up since it broke past long-term resistance at $65 in January. Shareholders should use stop-loss orders to protect profits.
Our Ransom Note trendline says: SELL LIFE TECHNOLOGIES CORP. and HOLD THERMO FISHER SCIENTIFIC.