Hot Stocks: Lam Research, Rio Tinto, Alere, Prudential Financial and ArcelorMittal
Lam Research Corporation (NASDAQ:LRCX) added 2.40% to US$41.42 on over 4.99 million shares, compared to its average volume of 2.58 million shares. Lam Research Corp. and Novellus Systems, Inc. announced that matters relating to the December 14, 2011 merger agreement were approved at the respective meetings of the Lam Research stockholders and the Novellus shareholders held on May 10, 2012. Lam Research stockholders approved the issuance of shares required to complete the acquisition of Novellus. Novellus shareholders approved the merger and merger agreement, and also approved, on an advisory basis, the merger-related executive compensation for Novellus' named executive officers. At the special meeting of Lam Research stockholders, approximately 99.9% of the votes were cast in favor of the proposal to issue shares of Lam Research common stock to Novellus shareholders in connection with the merger.
Rio Tinto plc (ADR) (NYSE:RIO) fell 1.80% to US$50.05 on over 4.95 million shares, compared to its average volume of 3.52 million shares. Rio Tinto defended plans to continue to spend heavily on its iron ore operations in Australia but cautioned the country's attraction as an investment destination has deteriorated and operations such as coal are being hit with sharply higher costs. Cost inflation coupled with global economic uncertainty has heightened the mining company's caution when it comes to stepping up investment and capital returns, and as a result, some growth opportunities may not be developed, Rio's board told shareholders at an annual meeting in Brisbane last Thursday. The bulk of Rio's investment in the coming few years is aimed at the expansion of its Pilbara iron ore operations in Western Australia, reinforcing the company's position as Australia's largest supplier of the steelmaking ingredient and the world's number two after Vale SA. Stronger prices for iron ore and other products helped lift cash flow last year to a record USUS$27.4 billion, and Rio has said it will spend at least US$16 billion on its operations in 2012.
Alere Inc. (NYSE:ALR) plunged 14.71% to US$19.02 05 on over 5.27 million shares, compared to its average volume of 941,000 shares after revealing talks with the FDA related to concerns about quality testing and performance characteristics on Alere Triage products. The maker of medical diagnostics equipment expects a resolution will involve a recall of unexpired lots of Triage products that don’t satisfy a quality control release method. Canaccord Genuity maintained buy rating on the stock and the price target from US$30 to US$35. The company received a subpoena from the Department of Health and Human Services related to quality testing and performance characteristics on Alere Triage products. Alere Inc. is engaged in developing capabilities in near-patient diagnosis, monitoring and health management. The company’s products and services, as well as its new product development efforts, focuses on cardiology, infectious disease, toxicology, diabetes, oncology and women’s health.
Prudential Financial Inc. (NYSE:PRU) fell 0.25% to US$51.51 on over 4.77 million shares, compared to its average volume of 3.79 million shares. Morgan Stanley analyst Nigel Dally and Evercore Partners' Mark Finkelstein both raised their recommendations to overweight from equal weight, though Finkelstein reduced his price target to US$65 from US$71, according to Bloomberg data. Dally's price target is US$66. His previous target could not be determined. Prudential shares, which closed at US$51.06 last Wednesday and have fallen nearly 17% over the last five days, were up more than 2% in pre-market trading. Finkelstein argues Prudential's "now lower valuation, more favorable long term growth characteristics, and the strength and stability of its international business" warrant an upgrade, despite the prospect of Prudential being subjected to stricter regulatory oversight if regulators decide its failure could pose a threat to the financial system. Prudential Financial Inc., the second- largest U.S. life insurer, sued Morgan Stanley over the purchase of US$1 billion in residential mortgage-backed securities.
ArcelorMittal (ADR) (NYSE:MT) fell 2.20% to US$16.01 on over 7.06 million shares, compared to its average volume of 7.53 million shares. The company plans to restart a second production unit in the coming weeks to boost its output. The company said it seeks to restart a second plate mill to increase flexibility and avoid bottlenecks at the other mill as the procedure may increase the production capacity of the Galati unit to 1 million tons per year, according to the statement. Earlier this week, the company reported a first-quarter 2012 net income of US$11 million or US$0.01 per share from last year’s US$1.07 billion or US$0.69 per share. Quarterly sales were US$22.70 billion, compared with US$22.18 billion in the prior-year period. Analysts expected earnings per share of US$0.22 for the quarter. Looking forward, the company expects second quarter steel shipments to be similar to 2012 first quarter levels while the Mining segment is expected to benefit from seasonally higher iron ore shipments. All segments are expected to show improved underlying profitability in the second quarter as compared with the 2012 first quarter.