A report released this week revealed that Watson Pharmaceuticals Inc. is working on the acquisition of Actavis Group hf, a Swiss generic drug manufacturing company. The purchase could cost Watson Pharmaceuticals up to 5.5 billion euros, or $7.3 billion. Shares in Watson Pharmaceuticals jumped 8.8 percent following the news of this potential acquisition. This is the largest one day increase in three and a half years. Watson currently manufacturers a generic version of Pfizer’s drug Lipitor, one of the most commonly prescribed drugs to lower cholesterol.
The purchase of Actavis would boost Watson’s presence in Europe and create additional exposure opportunities in the U.S. as well. This information was relayed to JPMorgan Chase & Co. clients by one of the company’s analysts, Chris Schott. Schott believes that Watson Pharmaceuticals’ stock will outperform its peers over the next six months to a year.
Watson Pharmaceuticals has been in the market for either a brand name or generic drug manufacturing company since January. CEO Paul Bisaro stated that he’s interested in expanding Watson’s reach on an international level along with increasing the company’s portfolio of brand name drugs.
Last year, Activis CEO Claudio Albrecht said he was considering either going public and offering an IPO or perhaps looking at a merger some time within the next three years. The company currently manufacturers approximately 850 drugs, including injectables, creams, tablets and capsules, and has about 350 additional products in development. They reported approximately 1.9 billion euros in sales and had more than 300 million euros in earnings for 2011, according to Schott
Schott also stated that antritrust laws should not be a problem during this acquisition because there is very little overlap between Watson and Actavis’s European business and although their U.S. business does overlap, it should not pose a problem. There are currently no other interested parties, so an agreement could be reached in a matter of weeks.
Online app creator Zynga Inc. is set to acquire OMGPOP Inc., another application development company for $200 million. OMGPOP is the creator of the popular Draw Something app in which players draw a word or phrase and their friends try to guess what it is they drew using a bank of letters. The game currently has 22.4 million Facebook users who play at least once a month and is available as an app for iPhone and Android smart phone users. The mobile app is currently the most popular app in Apple’s App Store.
After raising $1 billion in December for their IPO, Zynga is increasing acquisitions even more in an effort to lessen its reliance on Facebook, which takes 30 percent of all virtual goods sold through Zynga’s apps. Zynga also launched Zynga.com, an online hub for its games that does not rely on Facebook, earlier this month. The company spent nearly $150 million in 2010 and 2011 to acquire 22 separate companies.
Goldman Sachs Group’s market value plummeted more than $2 billion following an employee’s criticism of CEO Lloyd C. Blankfein’s management. This accusation, as well as one regarding the how the firm treats clients, was revealed by Greg Smith in an op-ed New York Times piece. Shortly after the article was released, shares dropped 3.4 percent. Even after the ending the day $4.17 lower, shares are still up a total of 33 percent for the year. Smith also stated that he was leaving the company after 12 years because of the “decline in the firm’s moral fiber,” that he blames on Blankfein and Goldman Sachs President Gary D. Cohn.
Blankfein and Cohn released a memo to both current and former employees stating that Smith’s accusations are untrue. An e-mail was also sent out stating that the firm disagrees with Smith’s views. Other than these two correspondences, David Wells, spokesman for Goldman Sachs, declined to add any further comments. The company was recently ordered to pay $550 million for the settlement of a fraud lawsuit with the SEC.
The article has spread through the investing community like wildfire, although employers are telling their employees not to forward this information on to clients. Despite this inflammatory op-ed piece and the SEC lawsuite, Goldman Sachs has won more business than of its competitors last year, according to data compiled by Bloomberg.
Claims that Goldman Sachs is becoming increasingly profit-driven were met with indifference. Founder of T2 Partners LLC, Whitney Tilson, stated that it isn’t a surprise that the bank is profit-driven and some of its employees use vulgar and sometimes disrespectful language, but adds that the news is far from headline material. Several former Goldman Sachs managing directors and partners agreed with Smith’s accusations regarding client treatment under the current management, but added that as a junior employee, Smith may have been upset about his career or his pay.
The price of stock in Anthera Pharmaceuticals Inc. fell 52 percent after the company announced the cancellation of late-stage trials for an experimental treatment for heart disease. Anthera’s treatment, called Varespladib, was supposed to work in conjunction with cholesterol-lowering medications to prevent the recurrence of acute coronary syndrome, however, in a statement released on March 9th, Anthera instructed investigators to remove all patients from the therapy.
Stock prices rose 2.4 percent in the past year, but fell quickly following this news. By 12:45 EST on Monday, Anthera’s stock was down 47 percent to $3.41, although it dropped to $3.08 earlier in the day. Anthera has a second drug, Blisibimod, currently undergoing clinical trials. Blisibimod is a treatment for systemic lupus erythematosus and is currently in the second stage of testing. Even if this drug is successful, it may not be enough to boost Anthera’s stocks significantly because the market for lupus treatments is much smaller than the market for heart-related conditions.
There are no one size fits all tips for investing. Each aspect of an individual’s life needs to be taken into consideration when developing an investment plan to ensure the best results for that individual or family. Although the investing tips are not universal, the questions everyone should ask to develop the investment plan that is right for them are.
You’ll want to set goals for your life before you develop an investing plan. Determine where you want to be and start working toward that goal every day. Once you’ve established your goals, take a look at where your income is going each month. Develop a spending plan so you can start saving and investing some of your income. The goal here is to spend less than you make, so if you are consistently overspending, consider switching to a higher paying job if possible or cut expenses.
A final tip for those wishing to invest is to make the most of your employer’s contribution. Many employers will match at least a portion of the money you put into your retirement plan, so find out what your company’s cap is and invest at least that much to take advantage of the free money your employer is offering.
If you’ve never considered investing in commodities before, you may want to think about it. Investing in these tangible goods, including oil, gold and corn, will diversify your portfolio and could protect you against inflation. While it’s highly impractical to buy barrels of oil or hundreds of ears of corn and store them somewhere, there’s a new option for individual investors who want to break into the commodities market.
Exchange traded products (abbreviated ETFs) work in one of three ways. The first type of ETF purchases commodities and stores them for its investors. They provide the necessary security and storage space for the commodities so you odn’t have to.
The second type of ETF buys future contracts for commodities. These contracts promise a specific amount of a certain commodity at a future date for a specific price. The price is what the commodity is predicted to be worth at that future date, not what the commodity is worth today. When investing in commodity futures, it’s important to keep in mind that the price is the future commodity worth and not the spot price, or what the commodity is worth today.
The final type of ETF invests in companies that are focused on commodities. This type of commodity investing is indirect, as there are no commodities of any time involved in the investing. ETFs that invest in commodity-focused companies allow investors to gain exposure to gold prices without actually getting involved in the spot prices or future prices of gold.
Anyone that is considering investing in commodities needs to keep in mind that while the reward has the potential to be substantial, commodity investing is a gamble. Commodities are only worth what other investors will pay for them, which means you could invest in a specific commodity only to find out that investors aren’t even willing to pay what you did.
Although the recession is far from over, plenty of positive indicators show the U.S. economy is on the road to recovery. If you find yourself with some extra cash and you’re unsure what to do with it, you may want to invest all or some of it in the stock market. The various stock indexes have displayed a steady, albeit sluggish, rise in recent month and as the economy continues to improve, the indexes will rise even higher.
While not all stocks are performing equally, many retail stocks have shown considerable growth in the last year. Clothing sales increased by 6 percent in 2011 and mail order sales rose by more than 12 percent. Keep in mind that all retail stocks are not responding equally, some stocks, including Abercrombie & Fitch and Coach are still in a slump, while others, including Dollar Tree, Macy’s, Ralph Lauren and Limited Brands have all increased by at least 25 percent since the beginning of 2011.
Bank of America Merrill Lynch (BAML) maintains a sophisticated investment and trading platform. Charlie Ditkoff, the firm’s Vice Chairman of Corporate and Investment Banking, can offer clients a vast array of products, services, and approaches to investing and trading, enabling them to build portfolios customized to their needs. With the company’s state-of-the-art technology, Mr. Ditkoff also can provide mobile investing and trading and online access to BAML’s global research, which garnered the company a number one ranking from Institutional Investor magazine in 2011.
Charlie Ditkoff and BAML assist clients in identifying their financial goals and in creating investment strategies to pursue them. The Merrill Edge Advisory Center offers access to diversified portfolios, top research and insights, and a range of products. The firm’s pricing structure includes no annual fee and 30 monthly ETF and online equity trades at no cost in most circumstances. In addition to cash management and custodial accounts, products include retirement and college accounts, stocks, mutual and exchange-traded funds, fixed income products, options, and annuities.
Through the Merrill Edge Advisory Center, users can invest and trade on their own or with professional guidance from BAML advisors. Once an individual opens and funds an account, he gains access to the various products as well as detailed research on each item. Clients also can get quotes; monitor watch lists; and research Roth IRAs, annuities, and other offerings online or with a mobile device. Those utilizing advisory services receive assistance in tweaking their portfolios to remain in line with their goals, time restrictions, and risk tolerance.
Ben Bernanke, Fed chairman, delivered his semiannual report on monetary policy earlier today. Bernanke implied that the central bank is not contemplating any additional measures to bolster the economy, stating that the Fed “expected the subdued level of inflation to persist beyond this year.” Although some people are worried about the recent spike in oil prices, Bernanke states the increase is most likely temporary, though it could affect consumer spending in the short term.
Bernanke added that the decline in unemployment from 9.1 percent in August to 8.3 percent in January was a bit incongruous with the pace of current economic growth. He believes continued growth in the job market will be dependent on spending and consumer demand for products. Many people were expecting Bernanke to report plans for additional stimulus packages even though the economy is slowly improving.
Following this news, gold futures for April delivery fell to $1,730 an ounce — a drop of 3.3 percent. If gold futures close at or below this price, it will mark the largest drop in more than two months. Silver prices also declined more than 5 percent to prices last seen two months ago in response to Bernanke’s testimony before Congress. Prior to Bernanke’s report, gold prices rose 2.8 percent and silver prices were up 12 percent in February.
The stock market was not affected as strongly, however several stocks fell slightly this afternoon once news of Bernanke’s report reached the U.S. The Standard & Poor’s 500 fell one tenth of a percent, though the index is still 4.5 percent higher for the month. The Dow Jones Industrial Average also fell one tenth of a percent, or 9.35 points as did the Nasdaq Composite Index.
These declines are not catastrophic, nor are they indicative of how trading will close out today, but they are a reflection of the general population’s reaction to Bernanke’s news.
Tax lien certificates sometimes offer as high as an 18 percent return, but anyone choosing to invest in them as a way to earn easy money should be cautious. Counties levy tax liens on properties that have outstanding property taxes. The liens are auctioned off to investors and the money raised is used to pay the past-due taxes. Once the owner can afford to pay the taxes, as well as interest and any fines or penalties due on the property, the money is sent to the holder of the tax lien certificate.
The tax lien certificate system is a win-win as far as the county and the homeowner are concerned, because the homeowner has additional time to gather the money needed to pay the taxes and the county gets its tax money, which is used to fund schools, emergency services and roadwork.
In the event the homeowner can’t pay the back taxes, the investor who holds the lien certificate can chose to foreclose on the property or may end up owning the property himself. Herein lies the risk when investing in tax lien certificates. The value and condition of the home is not guaranteed in any way, so the investor may end up with a property that isn’t worth what he paid on the lien.