For Immediate Release
Chicago, IL – November 30, 2011 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Wal-Mart (WMT - Analyst Report), Best Buy (BBY - Analyst Report), Macy's (M - Analyst Report), Amazon (AMZN - Analyst Report) and AGCO Corporation (AGCO - Analyst Report).
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Here are highlights from Tuesday’s Analyst Blog:
Europe Sets the Table Again
Optimism about the European situation is keeping market sentiment high even as Italian bond yields remain in dangerous territory. In another bond auction today, Italy was forced to pay record yields to attract investors. The country paid 7.89% on 3-year bonds and 7.56% on 10-year paper, both new Euro-era highs. At these yield levels, Greece, Ireland and Portugal had already asked for outside help.
The stock market optimism is at odds with how the bond market is behaving at present. With continued flight-to-safety trades in the U.S. treasuries and no let-up in Italian bond yields, the bond market appears to be a lot less impressed with the noise coming out of Euro-zone leaders than is the case with the stock market.
What appears to have raised the stock market's hopes are reports that the Euro-zone leaders are getting ready to institute greater budgetary integration in the currency union. Reports of implementing such changes without going through lengthy negotiations and treaty amendments are highly desirable, but seem to be too good to be true. It is hard to envision that Euro-zone countries will let go of their fiscal sovereignty and cede budgetary control to Brussels (read: Germany) without asking their electorates. The bond market doesn't seem to be buying into this 'hopey' stuff, but we will know soon which asset class had a better read on the fast-evolving European picture.
Europe aside, we will get home price data courtesy of the S&P/Case-Shiller and consumer confidence reading from the Conference Board. Judging from their behavior on the Thanksgiving weekend and on Cyber Monday, consumers appear to be in better shape than has been the case in the last few years. It will be interesting to see whether their responses to survey questions from the Conference Board were any different from how they behaved in the shopping aisle at Wal-Mart (WMT - Analyst Report), Best Buy (BBY - Analyst Report) and Macy's (M - Analyst Report). Amazon (AMZN - Analyst Report) reported very strong numbers for the weekend as well.
AGCO Issues Debt to Fund Purchase
AGCO Corporation (AGCO - Analyst Report) has priced an offering of $300 million of its 5.875% Senior Notes due 2021 to partly finance the acquisition of GSI Holdings Corp.
The notes were priced at 100% of par value and the offering is expected to close on December 5, 2011, subject to customary closing conditions. The net proceeds are estimated at approximately $297 million after expenses. The notes will be sold to qualified institutional buyers pursuant to Rule 144A of the Securities Act of 1933.
In October, the company struck a deal to acquire GSI Holdings Corp. from affiliates of New York-based Centerbridge Partners, L.P. for $940 million. Assumption, Illinois based GSI Holdings is a leading global manufacturer of grain storage and protein production systems with annual revenues of over $700 million. The transaction is expected to close this year.
As of September 30, 2011, the company had total debt outstanding of $535.8 million compared with $727.6 million as of June 30, 2011. AGCO’s debt-to-capitalization ratio was 16% compared with 19% as of June 30, 2011. With this note offering AGCO’s debt-to-capitalization ratio will rise by approximately 690 basis points.
The GSI acquisition will propel farm equipment maker AGCO into the grain storage and livestock industries. This endeavor is integral to its new vision of expanding its product offerings and entering new markets. The company emerged in the early 1990s through a spree of acquisitions and after a lull of acquisition related activities the company is again looking for fresh targets to grow and expand.
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