Thursday, September 16, 2010

Day Trader's Alert: GME, COV, NPSP

Shares of GameStop Corp. (NYSE: GME) surged as much as 6% a day after it announced that its Board of Directors has authorized $500 million in additional repurchase funds. $300 million of the additional funds will be used in the company's share repurchase plan and $200 million will be used to retire the company's Senior Notes. This program is incremental to the initial $300 million stock repurchase plan announced in January 2010 and completed in the company's second fiscal quarter of 2010.

Shares of Covidien plc (NYSE: COV) soared as much as 3% after it today outlined the strengths, strategies and innovations that are expected to drive the Company's growth in 2011 and beyond at a meeting held here for the investment community. Chairman, President and CEO Richard J. Meelia spoke about the Company's accomplishments in 2010, the current market environment for medical devices and the key initiatives which will drive the Company's growth over the next few years. The Company estimates that net sales in the 2011 fiscal year will increase 6% - 9% versus 2010 net sales. Net sales are expected to increase 10% - 13% versus 2010 in the Medical Devices segment and be flat to up 3% in Medical Supplies. The Company expects sales in Pharmaceuticals to be down 5% to even with 2010 net sales. All sales growth rates assume current foreign exchange rates. Excluding the impact of one-time items, operating margin is expected to be in the 21% - 22% range. Covidien anticipates the effective tax rate will be in the 20% - 21% range for fiscal 2011, excluding the impact of one-time items. Free cash flow is expected to be in excess of $1.6 billion in 2011.

Shares of NPS Pharmaceuticals, Inc. (NASDAQ: NPSP) slumped more than 5% after it announced today the pricing of an underwritten public offering of 6,880,000 shares of its common stock at a price to the public of $6.00 per share, for an aggregate public offering price of $41.3 million. The net proceeds from the sale of the shares, after underwriting discounts and commissions and other offering expenses, are expected to be approximately $38.6 million. The offering is expected to close on or about September 21, 2010, subject to customary closing conditions.

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