BetterTrades
(Best) WYNN, ASH, MT (Worst) ACOR, AUXL, AU from Better Trades
April 6, 2009
Coming off the third consecutive week in which the major indices posted gains, March proved to be the best month, with regards to percentage gains, in which the markets have seen since the 1930s. Over the past week, several companies made solid increases in their market share, while others were not as profitable during the markets push higher.
Top 3 Stocks
WYNN – Wynn Resorts Ltd. ($21.37 to $29.74) +39.2%
Leading the way in term of percentage gains for the past week was well-known Wynn Resorts Ltd. (WYNN), which is one of the preeminent luxury hotel and destination casino resort operators in Las Vegas.
Some of the week’s gains came from industry news in which shares of casino operators, WYNN included, jumped after news from Las Vegas Sands Corp. (LVS) confirmed reports that the company was resuming construction on their Macau casino and resort, after curtailing construction back in November due to tightening financial concerns.
Wynn Resorts currently has their own property in Macau that features 600 deluxe hotel rooms and suites, approximately 205,000 square foot casino, casual and fine dining in five restaurants, approximately 46,000 square feet of retail space, a health club, pool and spa, along with lounges and meeting facilities.
Monday's session brought much of the same results that the previous week did in trading. By the close of the markets, shares of AFL were up 18% on the day, adding $3.31, to end the day at $21.69 per share. Over the past year, shares of AFLAC have traded in a range between $10.83 and $68.81 per share.
Over the past five trading sessions, shares of WYNN have posted gains of nearly 40%. Beginning the week at just over $21 a share, the hotel and casino operator ended the week just shy of $30 a share. Although trading miles away from their 52-week high of $119.74, set back in August 2008, Wynn has more than doubled their market share since hitting their yearly low of $14.50 a share back in early March.
Continuing with their upward trek, shares of WYNN added to their price by the close of Monday’s session, gaining 5%, or $1.48, to end the start of the week at $31.13 per share.
ASH – Ashland Inc. ($10.29 to $13.65) +32.7%
During the middle of last week, shares of Ashland Inc. (ASH), which is involved in the business of providing products, services, and customer solutions throughout the world, jumped in trading as analysts upgraded the stock, mainly due to the decrease in systemic risk.
With businesses ranging from road construction, specialty chemicals, lubricants, car-care products, to chemical and plastics distribution and transportation fuels, Ashland has seen their stock’s price plummet steadily since reaching their yearly high of $58.58 late last May.
As consumers continue to tighten their spending, chemical companies have seen a decrease in sales. Ashland, as a result of the company’s $3.3B buyout of Hercules Inc., added massive debt to their balance sheet at the start of the economic recession, causing concerns for investors.
Last Wednesday, analysts at JPMorgan increased their rating on Ashland from “neutral” to “overweight,” which in turn, pushed shares of ASH higher by nearly 13% during the session. JPMorgan cited that the company offers "large capital appreciation potential at reasonable levels of risk."
Over the past week, shares of Ashland increased nearly 33%, closing Friday’s session at $13.65 per share. However, Monday’s session saw the stock’s price reverse course, giving up just under 3%, or $0.40, to close the session at $13.25 per share.
MT – Arcelor Mittal ($21.01 to $26.56) +26.4%
Another stock making a strong push over the past week was Arcelor Mittal (MT), one of the largest steelmakers in the world. MT put together a solid week in trading, as the stock jumped more than 26% on news of securing additional financing.
Within the report, Arcelor made it known that the company secured $1.2B worth of refinancing commitments that would extend their credit lines for new facilities until 2012. Last week’s news comes on the heels of the company’s previous announcement in February, in which the company signed $4.8B worth of agreements to extend other loans through 2012 as well.
"One of the priorities of our financial strategy is to extend debt maturity, which we believe is prudent given the current operating environment and provides added flexibility. This refinancing of 2010 and 2011 maturities represents another important step forward in realizing this strategy and also reflects the strong relationships we have with our banks," proclaimed CFO Aditya Mittal.
Having jumped more than $5 per share over the past week, the start of the new trading week, saw the stock drop nearly 4% by the conclusion of trading. Shares of MT slipped $0.95 to end the day at $24.61 per share. Over the past year, MT stock has ranged between $15.44 and $104.77 per share.
Worst 3 Stocks
ACOR – Acorda Therapeutics Inc. ($25.11 to $19.69) -21.6%
Not able to benefit from the markets’ gains over the past several trading session, Acorda Therapeutics Inc. (ACOR) managed to lose ground, slipping more than $5 per share to close out the week.
Acorda, a commercial-stage biopharmaceutical company dedicated to the identification, development and commercialization of novel therapies that improve neurological functions in people with multiple sclerosis, spinal cord injury and other disorders of the central nervous system, took a hit in their share price on news of rejection from the FDA on the company’s new drug application.
Referring to Fampridine-SR, ACOR’s drug is designed to improve the walking ability in those people that suffer from multiple sclerosis. The FDA brought up three separate concerns regarding the drug’s filing, including a “format issue,” which could be as simple as the wrong type of font or margin settings. The other two issues were not released.
Despite analysts’ continuing to maintain a “hold” rating on the stock, due to the multi-hundred-million dollar potential for Fampridine-SR, the stock’s performance was greatly affected by the denial from the FDA. In that, shares of ACOR dropped nearly 22% over the course of last weeks trading.
Monday’s session brought similar results to shares of ACOR, as the stock declined by $0.84, or 4.3%, by the close of the session, ending the day at $18.85 per share. Over the past 52 weeks, Acorda’s stock has traded between $14.42 and $35.65 per share.
AUXL – Auxilium Pharmaceuticals Inc. ($28.52 to $23.99) -15.9%
Losing nearly 16% of its market value, Auxilium Pharmaceuticals Inc. (AUXL) is a specialty pharmaceutical company that develops and markets products for urology and sexual health. The stock’s performance was affected by a downgrade during the past week, which pushed the shares down more than $4.50 per share.
Analysts from FTN Equity Capital lowered their rating from a “buy” to a “sell” on the stock after further studying the company’s risk factor. The downgrade follows the company’s earlier application, which is waiting for approval, for their drug Xiaflex, which is used in the treatment of Dupuytren’s contracture.
Dupuytren’s contracture is a condition that affects the connective tissue in the hand that limits the movement of the fingers caused by the abnormal thickening of the palm. With no pharmaceutical treatments for this condition, Auxilium is looking to corner the markets with their Xiaflex application.
While ending the past week just below $24 per share, Auxilium’s stock increased by the close of Monday’s session, gaining $0.01 to conclude the day at $24.00 per share. Over the past year, shares of AUXL have traded as high as $42.75 per share, while dipping as low as $15.44 per share.
AU – AngloGold Ashanti Ltd. ($36.89 to $31.38) -14.9%
Lastly, the largest gold producer at 7 million ounces a year, with reserves of 126 million ounces, and operations in six countries on three continents, as well as exploration activities in ten countries, AngloGold Ashanti Ltd. (AU) slipped nearly 15% over last week’s trading period, due largely to the falling price of gold.
During last week’s trading session, the price of gold slipped below $900 per troy ounce to close the week at $897.30. As gold fell, shares of AU followed suit, giving up more than $3 per share on Friday, to a closing price of $31.38 per share. With that close, the stock surrendered more than $5.50 per share
The stock was also affected by news from the company that stated that upcoming 1st quarter production projections were estimated at 1.1 million ounces, 2.5% below the company’s previous guidance of 1.13 million ounces. Nevertheless, the stock was pushed lower at the end of the week, despite the company’s reassurance of full-year production remaining in the estimated range of 4.9 million and 5 million ounces, with average prices ranging from $435 and $450 per ounce.
By the sound of the closing bell on Monday, shares of AngloGold dipped an additional 1.2% from Friday’s closing price, losing $0.39 to end the session at $30.99 per share. During the course of a year, shares of AU have ranged between $13.37 and $40.91 per share.
2009 Better Trades Article
brought to you by
BRIAN MULLIN
