Company Overview and News
While a strong dollar is nice for those looking to travel to Europe, it’s not so great for companies looking to sell goods and services abroad, and for numerous reasons the U.S. dollar has strengthened dramatically over the summer and now into the fall. Plus, with interest rates headed higher, many of the momentum stocks that have led the markets over the past five years could start to crack.
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In an effort to further simplify operations, Bank of America (BAC - Free Report) announced that it will divest its businesses that manage alternative investment feeder funds to a financial-technology firm, iCapital Network. The financial terms of the deal, expected to close in first half 2019, has not been disclosed. This business, which collects client money to invest in hedge funds and private equity, manages nearly $20 billion in client holdings.
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After facing problems in its consumer lending operations, Wells Fargo’s (WFC - Free Report) commercial lending business is also plagued with challenges now. At the Barclays 2018 Global Financial Services Conference, the company’s chief financial officer, John Shrewsberry, revealed a dismal picture for the bank’s loan book. Loan Outlook Shrewsberry pointed out that Wells Fargo’s total loans as of Jun 30, 2018, declined $3 billion sequentially to $944.
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With an aim to expand business in Asia, HSBC Holdings plc (HSBC - Free Report) plans to add nearly 700 people in its Asia private banking unit by 2022. Additionally, the company aims to double its Asia-based client assets in eight years, per Reuters. HSBC’s private banking unit, which caters to the rich, serves clients with more than $5 million of investable assets. On the other hand, those with less than $5 million of assets are served by the bank’s retail banking and wealth management division.
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The Department of Justice ("DoJ") is taking a closer look at Wells Fargo & Company’s (WFC - Free Report) wholesale banking division, after it reported that the unit’s employees had altered or added client’s personal information such as birthdays and social security numbers without their knowledge. The news was first reported by The Walls Street Journal.
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In an effort to provide clients with greater flexibility and choice, Bank of America Corporation (BAC - Free Report) is lifting the ban on commission-based trading in retirement accounts. In 2016, BofA’s Merrill Lynch stopped offering commission-based retirement accounts in order to comply with the Labor Department's fiduciary rule. The Obama-era regulation had been designed to protect investors from conflicted investment advice.
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Moody's Corporation (MCO - Free Report) has agreed to acquire all the outstanding shares of Reis, Inc. (REIS - Free Report) for $278 million in cash. The deal is expected to be completed by fourth-quarter 2018. Being the leader in providing commercial real estate (CRE) data, Reis is a preferred choice for various property developers, managers, investors, lenders and brokers. With nearly 40 years of experience, the company offers analysis and forecasts on almost 275 metropolitan markets and 7,700 submarkets.
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In the Q2 earnings season, the Finance sector turned out to be one of the best performers. Particularly, benefits from a stabilizing economy and improving interest-rate scenario have well positioned the banking industry. Further, lower commercial tax rate are likely to boost banks’ profitability further. In addition, relieving banks from some of the stringent requirements of the Dodd-Frank Act has made the companies optimistic of future earnings growth and raised investors’ sentiments as well.
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Wells Fargo & Company (WFC - Free Report) has laid off another 42 employees who worked in Frederick, MD as its mortgage business continues to witness a slowdown. The news was reported by Baltimore Business Journal.
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Continuing with job cuts, Wells Fargo (WFC - Free Report) is slashing 638 more jobs in its mortgage operations due to subdued activity in the U.S. housing market, per Wells Fargo spokesman Tom Goyda. These layoffs will be in Orlando, FL; Ranch Cordova, CA; Colorado Springs, CO; and Charlotte, NC. The company has provided a 60-day notice to its employees and also notified state-employment offices in the various locations.
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The banking corner of the financial sector is looking solid thanks to strong earnings, rising interest rates, easing of financial regulation and a stronger economy that is driving demand from borrowers, while holding down loan loss rates. This is especially true as U.S. banks delivered a record profit of $60.2 billion in the second quarter, representing an increase of 25% from the year-ago quarter, per the Federal Deposit Insurance Corporation (FDIC).
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The Finance sector turned out to be one of the best performers in the April-June quarter. Specifically, benefits from a stabilizing economy and improving interest-rate scenario have well positioned the banking industry. Also, lower commercial tax rates are likely to boost banks’ profitability further. In addition, relieving banks from some of the stringent requirements of the Dodd-Frank Act has made the companies optimistic of future earnings growth and raised investor sentiment as well.
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As part of its 2018 capital plan (approved by the Federal Reserve), M&T Bank Corporation’s (MTB - Free Report) board of directors has announced a 25% hike in the company’s quarterly common stock dividend. The revised quarterly dividend now comes in at $1.00 per share compared with the previous figure of 80 cents. This dividend will be paid on Sep 28 to shareholders of record as of Sep 4, 2018. Since the 2008 financial crisis, M&T Bank has raised its dividend thrice.
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During the last earnings season, financial stocks put up a decent show. One such major bank — Northern Trust Corporation (NTRS - Free Report) — has rallied 9.1% year to date, significantly outperforming the industry’s growth of nearly 1.4%. This price performance is backed by the gradually improving operating environment and rate hike scenario, which is beneficial for banks. Moreover, lower commercial tax rate are likely to boost banks’ profitability further.
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Moody’s Corporation (MCO - Free Report) recently completed the acquisition of Omega Performance, which was announced in July. The company made the acquisition with an objective to integrate Omega’s learning platform with its own services to provide clients with better solutions. Omega Performance, a business unit of TwentyEighty Inc, provides a variety of online credit training courses to at least 300 clients across the globe.
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2018-09-18 - Asif
Overview Rigel Pharmaceuticals is a biotechnology company dedicated to discovering, developing and providing novel small molecule drugs that significantly improve the lives of patients with immune and hematologic disorders, cancer and rare diseases. The company's pioneering research focuses on signaling pathways that are critical to disease mechanisms. The company's first FDA-approved product is TAVALISSE™ (fostamatinib disodium hexahydrate), an oral spleen tyrosine kinase (SYK) inhibitor, for the treatment of adult patients with chronic immune thrombocytopenia who have had an insufficient response to a previous treatment. The company's current clinical programs include Phase 2 studies of fostamatinib in autoimmune hemolytic anemia and IgA nephropathy, and a Phase 1 study for its IRAK program. In addition, Rigel Pharmaceuticals has product candidates in development with partners BerGenBio AS, Daiichi Sankyo, and Aclaris Therapeutics. Since inception, Rigel Pharmaceuticals h...
2018-09-18 - Asif
Overview The company design, develop and sell exoskeleton technology to augment human strength, endurance and mobility. The company's exoskeleton technology serves multiple markets and can be used both by able-bodied users as well as by persons with physical disabilities. Ekso Bionics has sold, rented or leased devices that (a) enable individuals with neurological conditions affecting gait (stroke and spinal cord injury) to rehabilitate and to walk again and (b) allow industrial workers to perform heavy duty work for extended periods. Today, its medical exoskeleton, Ekso GT, is used as a rehabilitation tool to allow physicians and therapists to rehabilitate patients who have suffered a stroke or spinal cord injury. With its unique features designed specifically for hospitals and its proprietary SmartAssist software, Ekso GT allows for the early mobilization of patients, with high step count and high dosage treatments. The intent is to allow the patient’s central nervous syst...
2018-09-18 - Asif
Overview Agile Therapeutics is a forward-thinking women’s healthcare company dedicated to fulfilling the unmet health needs of today’s women. Twirla® and its other current potential product candidates are designed to provide women with contraceptive options that offer greater convenience and facilitate compliance. The company's lead product candidate, Twirla, also known as AG200-15, is a once-weekly prescription contraceptive patch that is at the end of Phase 3 clinical development. Since its inception in 1997, Agile Therapeutics has devoted substantial resources to developing Twirla, building its intellectual property portfolio, business planning, raising capital and providing general and administrative support for these operations. The company incurred research and development expenses of $14.4 million, $20.9 million and $25.6 million during the years ended December 31, 2017, 2016 and 2015, respectively. The company incurred research and development expenses of $2.4 milli...
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