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News For CSII From The Last 14 Days
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October 8, 2015
16:41 EDTCSIIOn The Fly: Top stock stories for Thursday
Stocks began the session in negative territory but eventually pared their opening losses and turned mixed. The averages moved in a fairly narrow range from there as investors waited for the release of the minutes from last month's FOMC meeting. The minutes showed that the central bank believed labor market conditions improved since the beginning of the year, but concerns about low inflation, market declines, global growth and the value of the dollar kept the Fed from raising rates. The majority felt it was prudent to wait for additional information on the economy before raising rates. As the market digested the minutes, the averages moved to the upside, with the Dow leading the way. ECONOMIC EVENTS: In the U.S., initial jobless claims dropped to 263,000 in the week ended October 3, versus expectations for 273,00 first-time claims. The FOMC minutes for the September 16-17 policy meeting didn't read very hawkish, as some may have feared would be the case. The minutes showed "many members" thought rate hike conditions had been met or would be met soon. However, "several members" were worried that the downside risks to growth and inflation had increased, leading the committee to feel it was "prudent to wait" for additional information confirming that the economic outlook had not deteriorated and bolstering members' confidence that inflation would gradually move up. In Asia, markets were mixed, with Japan, India and other markets seeing some profit taking following days of strong gains, though mainland China re-opened for the first time after a week long holiday and saw a catch-up rally that pushed the Shanghai composite up about 3%. COMPANY NEWS: EMC (EMC) rose $1.22, or 4.7%, to $27.18 following media reports regarding M&A talks between the IT services and software company and Dell, which is privately owned by founder Michael Dell and private-equity partner Silver Lake. The Wall Street Journal reported that Dell and Silver Lake are in "advanced talks" to buy EMC, noting that one source indicated the deal being discussed calls for the buyers to spin off EMC's VMware (VMW) unit. Then, CNBC's David Faber said, in keeping with the Journal, that Dell is in talks to acquire all of EMC for "above $27 per share," adding that a deal could be announced as soon as a week from now. MAJOR MOVERS: Among the notable gainers were Polycom (PLCM) and Mitel (MITL), which gained 16.7% and 16.5%, respectively, after Elliott Management disclosed stakes in both companies and urged the two to consider a combination. Also higher was Tronox (TROX), which rose 15.9% to $7.66 after Bloomberg reported that Apollo Global (APO) was mulling a takeover of Chemours (CC) as a potential first step in then consolidating titanium-dioxide makers. Shares of Chemours gained 7.12% to $8.43 following the report. Among the noteworthy losers was eBay (EBAY), which was the worst performer on the S&P 500, sliding $1.53, or 5.96%, to $24.15 after ChannelAdvisor (ECOM) estimated that eBay's same-store sales growth decelerated to 1.1% in September from August's 3.4% rate. Also lower were shares of Cardiovascular Systems (CSII), which sunk 18.1% to $13.62 after the company warned of weaker than expected preliminary Q1 results. Spectranetics (SPNC) fell following the news, as the company, which also markets catheters that remedy blockages in arteries, dropped 7.9% to $10.91 in sympathy with its peer. INDEXES: The Dow rose 138.46, or 0.82%, to 17,050.75, the Nasdaq gained 19.64, or 0.41%, to 4,810.79, and the S&P 500 advanced 17.60, or 0.88%, to 2,013.43.
15:49 EDTCSIICardiovascular Systems downgraded to Buy from Strong Buy at Feltl
Feltl downgraded Cardiovascular Systems to Buy from Strong Buy and lowered its price target to $20.75 from $44.25 citing weaker than expected preliminary Q1 results.
11:26 EDTCSIICardiovascular Systems' weak preannouncement weighs on Spectranetics
The shares of Cardiovascular Systems (CSII) are sinking nearly 20% after the company issued a negative preannouncement today. Also down following the news is Spectranetics (SPNC) which, like Cardiovascular Systems, markets catheters that remedy blockages in arteries. WHAT'S NEW: Cardiovascular Systems estimated that its first quarter per share loss would come in at 41c-43c, versus the consensus outlook of 39c. The company preannounced Q1 revenue of $43.9M, versus the consensus outlook of $49.4M. The company's CEO, David Martin, said that the company saw "no change in its multi-billion dollar market opportunity," or in its ability to penetrate the market. ANALYST REACTION: Bank of America/Merrill Lynch responded to the news by lowering its rating on Cardiovascular Systems to Underperform from Neutral, while research firm Leerink downgraded the shares to Market Perform from Outperform. Merrill Lynch analyst Bob Hopkins noted that Cardiovascular Systems lost nearly 10% of its sales force in the second half of last quarter. The company is losing "market share momentum," even as the growth rate of its market declines, he stated. Leerink analyst Danielle Antalffy also attributed the company's miss to the disruption of its sales force. She says that Cardiovascular Systems lacks near-term catalysts, and predicted that the stock would be range-bound "for the next few quarters," until changes it is making to its sales force bear fruit. She slashed her price target on the name to $17 from $45. Suraj Kalia, an analyst at research firm Northland, recommended that investors buy Spectranetics' stock on any weakness. The company's Q3 revenue should be at least in-line with expectations, and its valuation is still "extremely attractive," the analyst stated. PRICE ACTION: In late morning trading, Cardiovascular Systems tumbled 18.5% to $13.57 while Spectranetics dropped 5% to $11.26.
10:00 EDTCSIIOn The Fly: Analyst Downgrade Summary
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07:17 EDTCSIICardiovascular Systems downgraded to Underperform from Neutral at BofA/Merrill
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07:01 EDTCSIICardiovascular Systems downgraded to Market Perform from Outperform at Leerink
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October 7, 2015
19:16 EDTCSIIOn The Fly: After Hours Movers
UP AFTER EARNINGS: Mistras Group (MG), up 16.3%. HIGHER: Lumber Liquidators (LL), up 11% after announcing a settlement related to the Lacey Act investigation... Chemours (CC), up 2.3% after Bloomberg reported that Apollo Global Management may be exploring a buyout of the company... Nivalis Therapeutics (NVLS), up 16.2% after reporting topline Phase 1b data on N91115 for cystic fibrosis... Zumiez (ZUMZ), up 3.8% after reporting September net sales. DOWN AFTER EARNINGS: Deutsche Bank (DB), down 6.5%. ALSO LOWER: Cardiovascular Systems (CSII), down 15.8% after providing first quarter guidance... Ocean Rig UDW (ORIG), down 11.1% after receiving notice of a material breach for the Ocean Rig Mylos contract... Newtek Business Services (NEWT), down 3.4% after filing to sell 2M shares of common stock.
16:01 EDTCSIICardiovascular Systems sees Q1 EPS (43c)-(41c), consensus (39c)
Sees Q1 revenue $43.9M, consensus $49.37M. Figures provided in preliminary earnings report.

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