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The Conservatorships of Fannie Mae and Freddie Mac: Actions Violate HERA and Established Insolvency Principles
By Michael Krimminger and Mark A. Calabria
February 9, 2015
When the Federal Housing Finance Agency (“FHFA”) was appointed conservator for Fannie Mae and Freddie Mac, it was the first use of the conservatorship authority under the Housing and Economic Recovery Act of 2008 (“HERA”), but it was not without precedent. For decades, the Federal Deposit Insurance Corporation (“FDIC”) has successfully and fairly resolved more than a thousand failing banks and thrifts using the virtually identical sections of the Federal Deposit Insurance Act (“FDIA”). While the FDIC most often uses its receivership authority to resolve failing banks and thrifts, it rehabilitated dozens of weak financial institutions through open bank assistance and conservatorships by returning the banks and thrifts to full compliance with regulatory capital and other requirements, recouping the FDIC’s investments in the institution, if possible, and treating stakeholders fairly. If the bank or thrift could not meet regulatory requirements, it was resolved through the FDIC’s well-established receivership powers with statutory protections for all stakeholders. This approach has been recognized by the courts, Congress, and the public as providing invaluable predictability, fairness, and stability. The success of the FDIC’s approach to rehabilitating or resolving failing banks and thrifts has led it to become the principal international model used by the Financial Stability Board and national regulators.
https://www.cato.org/publications/working-paper/conservatorships-fannie-mae-freddie-mac-actions-violate-hera-established?utm_source=twitterfeed&utm_medium=twitter
The Conservatorships of Fannie Mae and Freddie Mac: Actions Violate HERA and Established Insolvency Principles
By Michael Krimminger and Mark A. Calabria
February 9, 2015
When the Federal Housing Finance Agency (“FHFA”) was appointed conservator for Fannie Mae and Freddie Mac, it was the first use of the conservatorship authority under the Housing and Economic Recovery Act of 2008 (“HERA”), but it was not without precedent. For decades, the Federal Deposit Insurance Corporation (“FDIC”) has successfully and fairly resolved more than a thousand failing banks and thrifts using the virtually identical sections of the Federal Deposit Insurance Act (“FDIA”). While the FDIC most often uses its receivership authority to resolve failing banks and thrifts, it rehabilitated dozens of weak financial institutions through open bank assistance and conservatorships by returning the banks and thrifts to full compliance with regulatory capital and other requirements, recouping the FDIC’s investments in the institution, if possible, and treating stakeholders fairly. If the bank or thrift could not meet regulatory requirements, it was resolved through the FDIC’s well-established receivership powers with statutory protections for all stakeholders. This approach has been recognized by the courts, Congress, and the public as providing invaluable predictability, fairness, and stability. The success of the FDIC’s approach to rehabilitating or resolving failing banks and thrifts has led it to become the principal international model used by the Financial Stability Board and national regulators.
https://www.cato.org/publications/working-paper/conservatorships-fannie-mae-freddie-mac-actions-violate-hera-established?utm_source=twitterfeed&utm_medium=twitter
Trump Expected to Nominate Fannie, Freddie Critic to Oversee Mortgage-Finance Giants
main points:
White House officials separately have told industry groups they are fleshing out a proposal for how the administration plans to overhaul the companies. Mr. Calabria would likely have the power to implement parts of that plan administratively if Congress doesn’t act with legislation to revamp the companies. Congressional efforts to overhaul housing finance have repeatedly sputtered, most recently this year, and split control of Congress next year makes a deal unlikely.
Mr. Calabria also has questioned the legality of the current arrangement by which the Treasury Department collects the profits of Fannie and Freddie in exchange for its nearly open-ended support of the mortgage-finance giants since the 2008 crisis. That position sides with shareholders of the firms who have challenged in court the FHFA’s administration of the companies.
https://www.wsj.com/articles/white-house-expected-to-nominate-pence-aide-to-lead-fhfa-1544457677?redirect=amp#click=https://t.co/mnnz7yqqss
Mark Calabria: Trump administration "committed" to ending conservatorship
During a wide-ranging discussion about the government’s role in housing, Vice President Mike Pence’s chief economist Mark Calabria revealed Wednesday that the Trump administration is "committed" to ending the conservatorship of Fannie Mae and Freddie Mac
https://www.housingwire.com/articles/41714-mark-calabria-trump-administration-committed-to-ending-conservatorship
FIRM ADVISING GSE INVESTORS UPDATES DEVISE TO FINISH CONSERVATORSHIPS
The revised plans by Moelis Co. LLC, that serves as a financial confidant to some Fannie and Freddie shareholders, incorporates a devise by a debt companies’ regulator for them to adopt risk-based collateral requirements. The strange Moelis devise expelled in Jun 2017 had drawn mixed reviews from a industry.
Bloomberg News
But a updated plans expelled Friday incorporates a Federal Housing Finance Agency’s post-conservatorship regulatory collateral framework for a GSEs, that is now in a rulemaking stages. In correspondence with a FHFA proposal, a Moelis plans calls for a “payment of an ongoing market-based joining fee” to a Treasury Department for a pithy guarantee.
“One year after a release, a Safety and Soundness Blueprint continues to yield a usually mathematically credible, detailed, and practicable trail brazen for a GSEs,” a new plans reads. “It relies on existent infrastructure, as opposite to new and untested systems, to safeguard fortitude and liquidity in a debt markets
But a Independent Community Bankers of America upheld a Moelis proposal, observant it would emanate a financially sound complement with plenty capital.
MBA pronounced Friday it welcomes a updated offer and agrees with some of a points, though eventually believes that GSE remodel should come before recapitalization.
https://newstowatch.com/mortgage-realestate/mortgage/firm-advising-gse-investors-updates-plan-to-end-conservatorships.html
Hedge Funds Are Manuevering to Loot Fannie and Freddie from the U.S Taxpayer
Main Points:
Blackstone, the world’s largest private equity group, and the hedge fund Paulson & Co, run by Trump Wall Street supporter John Paulson, last year reportedly hired the investment bank Moelis & Co. to develop proposals to overhaul the two agencies. Blackstone is headed by Stephen Schwarzman, an adviser to President Donald Trump.
Hensarling, however, chose not to run for re-election and the chair of the committee will now be occupied by leftwing Democrat Maxine Waters of California.
government control of Fannie and Freddie somehow benefits the big banks. Wells Fargo, the California based megabank and a frequent target of Waters’ criticism.
The divided Congress is also seen as an opening for the Trump administration to take action on its own, since it appears unlikely serious housing reform legislation will pass the Democratic House and the Republican Senate. The Trump administration is expected to at least implicitly reveal its plans for Fannie and Freddie when it nominates a successor to current FHFA Director Mel Watt sometime in the next few weeks.
Lobbyists and political operators have been pushing the plan on Capitol Hill and inside the Trump administration. It has garnered support among some Treasury Department officials, including very high-ranking advisers to Treasury Secretary Steven Mnuchin. Most of the officials who have taken a favorable view of the Moelis plan have close ties to Wall Street firms themselves
This year, Mnuchin said that he expects Congress to enact housing finance reform in 2019 and that the administration could take action on its own if Congress does not act. Some inside the Trump administration fear that could wind up as a push to adopt the Moelis plan.
Mick Mulvaney, the White House’s budget director and the acting head of the Bureau of Consumer Financial Protection, is also viewed as a potential ally of those pushing the Moelis plan. As a Congressman, Mulvaney sponsored a bill that offered “a bonanza for hedge funds seeking to cash in on their investments in Fannie Mae Mae and Freddie Mac
The Moelis plan stands out as a strikingly bold grab for control of the companies and their profits. It calls for the dividend payments to the Treasury to cease so that the companies can rebuild capital.
Hedge funds argue that the companies should be released from their obligations to pay dividends because they have paid more than their original bailout.
https://www.breitbart.com/economy/2018/11/21/carney-hedge-funds-are-manuevering-to-loot-fannie-and-freddie-from-the-u-s-taxpayer/
The Conservatorships of Fannie Mae and Freddie Mac: Actions Violate HERA and Established Insolvency Principles
By Michael Krimminger and Mark A. Calabria
February 9, 2015
When the Federal Housing Finance Agency (“FHFA”) was appointed conservator for Fannie Mae and Freddie Mac, it was the first use of the conservatorship authority under the Housing and Economic Recovery Act of 2008 (“HERA”), but it was not without precedent. For decades, the Federal Deposit Insurance Corporation (“FDIC”) has successfully and fairly resolved more than a thousand failing banks and thrifts using the virtually identical sections of the Federal Deposit Insurance Act (“FDIA”). While the FDIC most often uses its receivership authority to resolve failing banks and thrifts, it rehabilitated dozens of weak financial institutions through open bank assistance and conservatorships by returning the banks and thrifts to full compliance with regulatory capital and other requirements, recouping the FDIC’s investments in the institution, if possible, and treating stakeholders fairly. If the bank or thrift could not meet regulatory requirements, it was resolved through the FDIC’s well-established receivership powers with statutory protections for all stakeholders. This approach has been recognized by the courts, Congress, and the public as providing invaluable predictability, fairness, and stability. The success of the FDIC’s approach to rehabilitating or resolving failing banks and thrifts has led it to become the principal international model used by the Financial Stability Board and national regulators.
https://www.cato.org/publications/working-paper/conservatorships-fannie-mae-freddie-mac-actions-violate-hera-established?utm_source=twitterfeed&utm_medium=twitter
Trump Expected to Nominate Fannie, Freddie Critic to Oversee Mortgage-Finance Giants
main points:
White House officials separately have told industry groups they are fleshing out a proposal for how the administration plans to overhaul the companies. Mr. Calabria would likely have the power to implement parts of that plan administratively if Congress doesn’t act with legislation to revamp the companies. Congressional efforts to overhaul housing finance have repeatedly sputtered, most recently this year, and split control of Congress next year makes a deal unlikely.
Mr. Calabria also has questioned the legality of the current arrangement by which the Treasury Department collects the profits of Fannie and Freddie in exchange for its nearly open-ended support of the mortgage-finance giants since the 2008 crisis. That position sides with shareholders of the firms who have challenged in court the FHFA’s administration of the companies.
https://www.wsj.com/articles/white-house-expected-to-nominate-pence-aide-to-lead-fhfa-1544457677?redirect=amp#click=https://t.co/mnnz7yqqss
Mark Calabria: Trump administration "committed" to ending conservatorship
Pence’s chief economist renews commitment for GSE reform
https://www.housingwire.com/articles/41714-mark-calabria-trump-administration-committed-to-ending-conservatorship
Housing Sentiment Up Slightly on Reported Household Income Gains
WASHINGTON, Dec. 7, 2018 /PRNewswire/ -- The Fannie Mae Home Purchase Sentiment Index® (HPSI) increased slightly in November, rising 0.5 points to 86.2. The increase can be attributed primarily to an increase in the net share of Americans who reported significantly higher income, which hit a new survey high after jumping 5 percentage points. The net share of Americans who said it is a good time to buy a home rose 2 percentage points, while the net share who said it is a good time to sell a home remained unchanged. Meanwhile, the net share of survey respondents who expect home prices to go up fell 4 percentage points, and the net share who expressed greater job confidence fell 1 percentage point. Finally, the net share who expect mortgage rates to go down increased 1 percentage point
https://finance.yahoo.com/news/housing-sentiment-slightly-reported-household-133000325.html
FNMA GERMAN MARKET UP 1.87%
https://www.bloomberg.com/quote/FNM:GR
Parkwood Llc, which manages about $635.63M US Long portfolio, upped its stake in Mastercard Inc (NYSE:MA) by 22,675 shares to 53,918 shares, valued at $10.60 million in 2018Q2, according to the filing. It also increased its holding in Fannie Mae (FNMA) by 350,500 shares in the quarter, for a total of 1.09M shares, and has risen its stake in Adr.
https://endigest.com/2018/12/05/sterling-investment-management-has-increased-philip-morris-intl-pm-holding-by-660480-parkwood-lowered-its-holding-in-raymond-james-financial-rjf-as-share-value-declined/#!/history
fnma stock price fourth day after thanksgiving last year
Date Open Close Change Change (%) Low High Volume
Nov 30 2017 3.031 3.02 0.06 +2.03% 2.91 3.09 6,645,594
Nov 29 2017 2.82 2.96 0.22 +8.03% 2.81 3.04 8,270,209
Nov 28 2017 2.71 2.74 0.04 +1.48% 2.63 2.75 3,794,823
Nov 27 2017 2.69 2.7 0.00 +0.00% 2.67 2.71 2,625,639
Nov 24 2017 2.745 2.7 -0.05 -1.82% 2.7 2.75 1,050,749
Nov 23 2017 2.745 2.75 0.00 +0.00% 2.74 2.82 0
Nov 22 2017 2.745 2.75 -0.01 -0.36% 2.74 2.82 1,960,234
Nov 21 2017 2.685 2.7599999 0.06 +2.22% 2.68 2.7823 3,318,751
Nov 20 2017 2.775 2.7 -0.08 -2.88% 2.68 2.7799999 3,867,923
Nov 17 2017 2.795 2.7799999 -0.03 -1.07% 2.77 2.85 3,031,121
Nov 16 2017 2.91 2.81 -0.12 -4.1% 2.8 2.92 4,457,842
Nov 15 2017 2.925 2.93 -0.01 -0.34% 2.88 2.95 2,939,756
Nov 14 2017 2.91 2.94 0.00 +0.00% 2.9 2.98
Regulator for Fannie Mae, Freddie Mac lifts mortgage loan limits
A federal regulator on Tuesday raised the dollar amount of mortgages that can be backed by Fannie Mae FNMA, -0.86% or Freddie Mac FMCC, +0.00% as home prices continue to surge. Despite recent deceleration, prices of homes backed by the two government-sponsored enterprises rose 6.9% on average between the third and fourth quarters. That means that the base home loan limit will increase the same amount. In most of the U.S., that maximum will become $484,350, up from $453,100 in 2018. The cap for higher-cost areas will be $726,525
https://www.marketwatch.com/story/regulator-for-fannie-mae-freddie-mac-lifts-mortgage-loan-limits-2018-11-27
Mark Calabria: Trump administration "committed" to ending conservatorship
During a wide-ranging discussion about the government’s role in housing, Vice President Mike Pence’s chief economist Mark Calabria revealed Wednesday that the Trump administration is "committed" to ending the conservatorship of Fannie Mae and Freddie Mac
https://www.housingwire.com/articles/41714-mark-calabria-trump-administration-committed-to-ending-conservatorship
FIRM ADVISING GSE INVESTORS UPDATES DEVISE TO FINISH CONSERVATORSHIPS
The revised plans by Moelis Co. LLC, that serves as a financial confidant to some Fannie and Freddie shareholders, incorporates a devise by a debt companies’ regulator for them to adopt risk-based collateral requirements. The strange Moelis devise expelled in Jun 2017 had drawn mixed reviews from a industry.
Bloomberg News
But a updated plans expelled Friday incorporates a Federal Housing Finance Agency’s post-conservatorship regulatory collateral framework for a GSEs, that is now in a rulemaking stages. In correspondence with a FHFA proposal, a Moelis plans calls for a “payment of an ongoing market-based joining fee” to a Treasury Department for a pithy guarantee.
“One year after a release, a Safety and Soundness Blueprint continues to yield a usually mathematically credible, detailed, and practicable trail brazen for a GSEs,” a new plans reads. “It relies on existent infrastructure, as opposite to new and untested systems, to safeguard fortitude and liquidity in a debt markets
But a Independent Community Bankers of America upheld a Moelis proposal, observant it would emanate a financially sound complement with plenty capital.
MBA pronounced Friday it welcomes a updated offer and agrees with some of a points, though eventually believes that GSE remodel should come before recapitalization.
https://newstowatch.com/mortgage-realestate/mortgage/firm-advising-gse-investors-updates-plan-to-end-conservatorships.html
Hedge Funds Are Manuevering to Loot Fannie and Freddie from the U.S Taxpayer
Main Points:
Blackstone, the world’s largest private equity group, and the hedge fund Paulson & Co, run by Trump Wall Street supporter John Paulson, last year reportedly hired the investment bank Moelis & Co. to develop proposals to overhaul the two agencies. Blackstone is headed by Stephen Schwarzman, an adviser to President Donald Trump.
Hensarling, however, chose not to run for re-election and the chair of the committee will now be occupied by leftwing Democrat Maxine Waters of California.
government control of Fannie and Freddie somehow benefits the big banks. Wells Fargo, the California based megabank and a frequent target of Waters’ criticism.
The divided Congress is also seen as an opening for the Trump administration to take action on its own, since it appears unlikely serious housing reform legislation will pass the Democratic House and the Republican Senate. The Trump administration is expected to at least implicitly reveal its plans for Fannie and Freddie when it nominates a successor to current FHFA Director Mel Watt sometime in the next few weeks.
Lobbyists and political operators have been pushing the plan on Capitol Hill and inside the Trump administration. It has garnered support among some Treasury Department officials, including very high-ranking advisers to Treasury Secretary Steven Mnuchin. Most of the officials who have taken a favorable view of the Moelis plan have close ties to Wall Street firms themselves
This year, Mnuchin said that he expects Congress to enact housing finance reform in 2019 and that the administration could take action on its own if Congress does not act. Some inside the Trump administration fear that could wind up as a push to adopt the Moelis plan.
Mick Mulvaney, the White House’s budget director and the acting head of the Bureau of Consumer Financial Protection, is also viewed as a potential ally of those pushing the Moelis plan. As a Congressman, Mulvaney sponsored a bill that offered “a bonanza for hedge funds seeking to cash in on their investments in Fannie Mae Mae and Freddie Mac
The Moelis plan stands out as a strikingly bold grab for control of the companies and their profits. It calls for the dividend payments to the Treasury to cease so that the companies can rebuild capital.
Hedge funds argue that the companies should be released from their obligations to pay dividends because they have paid more than their original bailout.
https://www.breitbart.com/economy/2018/11/21/carney-hedge-funds-are-manuevering-to-loot-fannie-and-freddie-from-the-u-s-taxpayer/
Carney: Hedge Funds Are Manuevering to Loot Fannie and Freddie from the U.S Taxpayer
https://www.breitbart.com/economy/2018/11/21/carney-hedge-funds-are-manuevering-to-loot-fannie-and-freddie-from-the-u-s-taxpayer/
Seven contenders to become next FHFA chief
https://www.americanbanker.com/list/seven-contenders-to-become-next-fhfa-chief
Rep. Hensarling: Why Ginnie Mae is better than Fannie and...
https://finance.yahoo.com/video/rep-hensarling-why-ginnie-mae-111700621.html
Fannie, Freddie profit sweep affirmed in appeal
According to Bloomberg's Elliott Stein, a D.C. Circuit court appears to have rejected most Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC) shareholder claims, except contract-based arguments regarding liquidation preferences and dividend rights, both of which have been remanded to district court for further hearings.
http://seekingalpha.com/news/3244836-fannie-freddie-profit-sweep-affirmed-appeal
Hedge Funds Can't Sue Over Investments in Fannie and Freddie
Hedge funds largely failed in their legal challenge to the U.S. government’s capture of billions of dollars in profits generated by Fannie Mae and Freddie Mac after their bailout, sending shares of the mortgage guarantors plunging.
Perry Capital LLC, the Fairholme Funds and other big investors lost a bid to overturn a judge’s ruling that said they can’t sue the government over the dividend change. The change known as the “net-worth sweep” forced the companies to send almost all their profits to the U.S. Treasury, leaving shareholders with nothing. The companies have been under government control since being bailed out during the 2008 financial crisis.
https://www.bloomberg.com/news/articles/2017-02-21/fannie-freddie-net-worth-sweep-case-affirmed-in-part-on-appeal
Sahm Adrangi, founder and chief investment officer of Kerrisdale Capital, was reportedly arrested early Saturday on charges of drunken driving and cocaine possession after a two-car smashup in the Hamptons.
http://www.cnbc.com/2016/08/15/hedge-funder-in-hot-water-sahm-adrangi-arrested-for-dui-cocaine-possession-in-hamptons.html
Xplore Fulfills Initial $1.3M Order to Enable World’s First Android™ Tablet-Based Vehicle Safety and Emissions System
AUSTIN, Texas, Feb. 13, 2017 (GLOBE NEWSWIRE) -- Xplore Technologies Corp. (XPLR) today announced that it has fulfilled an initial $1.3 million order for its XSLATE D10 tablet PCs and is in the process of deploying them as part of the first rugged tablet-based vehicle safety and emissions system ever built for a public or private-sector emissions safety program. The completely mobile system, which is also the first to leverage an Android™ device, exclusively relies on Xplore XSLATE D10 fully rugged tablet PCs to power the field and back-office workflows of vehicle safety and emissions programs across the United States.
By April, inspection stations will be equipped with the D10-powered system in the first statewide deployment of this transformative new Automated Vehicle safety and emissions Program, which was engineered – and is being implemented – in cooperation with North America’s largest provider of decentralized and hybrid inspection program services. In addition, State Patrol officers will be utilizing the D10 rugged tablets to conduct their routine audits of the inspection stations and ensure compliance with government-mandated vehicle safety testing practices.
http://finance.yahoo.com/news/xplore-fulfills-initial-1-3m-133448963.html
Xplore Rugged Tablets Become First Mobile PC Platform to Improve Beer Delivery Process for Largest Distributor in Caribbean
AUSTIN, Texas, Feb. 07, 2017 (GLOBE NEWSWIRE) -- Xplore Technologies Corp.? (XPLR), manufacturer of the world’s most complete line of high quality rugged tablet computers, today announced that the largest beer distributor in the Caribbean has begun using Motion F5m by Xplore rugged tablets to track and schedule beer shipments among its 600 delivery trucks in the Dominican Republic. The company is also using F5m tablets to run an inventory control management application on its bottling lines and storage areas for the 20 brands it sells on behalf of its parent company, which is currently the largest beer distributor in Latin America and the fifth largest beer distributor in the world.
The Caribbean beer distributor, with the support of its parent company, first conducted a 30-day trial period to evaluate the performance of several manufacturers’ rugged tablet and handheld PC platforms across a series of distribution system workflows. Not only did the 10.4” F5m tablet meet the customer’s mandatory computer specifications – such as portability; a resilient, outdoor-viewable display; built-in barcode reader; and hot-swappable batteries – but it exceeded all rugged durability and connectivity technical requirements.
As a result, the parent company placed an order for F5m rugged tablets, along with carrying cases, extra batteries, and multi-bay chargers. Within just 60 days, their investment in Xplore’s solution delivered a 60 percent overall efficiency improvement across the Caribbean distributor’s six regional depots: Simply because they used the F5m tablets to automate the work order process and access real-time data shared between the trucks and the distribution centers.
http://finance.yahoo.com/news/xplore-rugged-tablets-become-first-140000988.html
Xplore Technologies Corp (XPLR) to Post Q1 2018 Earnings of ($0.05) Per Share, Roth Capital Forecasts
Xplore Technologies Corp (NASDAQ:XPLR) – Stock analysts at Roth Capital issued their Q1 2018 EPS estimates for Xplore Technologies Corp in a research report issued to clients and investors on Thursday. Roth Capital analyst W. Gibson anticipates that the firm will earn ($0.05) per share for the quarter. Roth Capital has a “Hold” rating and a $2.00 price target on the stock. Roth Capital also issued estimates for Xplore Technologies Corp’s Q2 2018 earnings at $0.00 EPS, Q3 2018 earnings at $0.08 EPS and Q4 2018 earnings at $0.00 EPS.
Separately, Zacks Investment Research lowered Xplore Technologies Corp from a “buy” rating to a “hold” rating in a research note on Wednesday, October 12th.
Institutional investors have recently modified their holdings of the company. AWM Investment Company Inc. raised its position in shares of Xplore Technologies Corp by 268.9% in the third quarter. AWM Investment Company Inc. now owns 368,902 shares of the company’s stock worth $885,000 after buying an additional 268,902 shares during the period. Vanguard Group Inc. raised its position in Xplore Technologies Corp by 21.7% in the second quarter. Vanguard Group Inc. now owns 354,429 shares of the company’s stock worth $851,000 after buying an additional 63,200 shares during the last quarter. G2 Investment Partners Management LLC raised its position in Xplore Technologies Corp by 16.8% in the third quarter. G2 Investment Partners Management LLC now owns 282,707 shares of the company’s stock worth $676,000 after buying an additional 40,737 shares during the last quarter. Emerald Acquisition Ltd. bought a new position in Xplore Technologies Corp during the second quarter worth $398,000. Finally, Russell Investments Group Ltd. bought a new position in Xplore Technologies Corp during the fourth quarter worth $142,000. Institutional investors own 25.80% of the company’s stock.
https://www.americanbankingnews.com/2017/02/06/xplore-technologies-corp-xplr-to-post-q1-2018-earnings-of-0-05-per-share-roth-capital-forecasts.html
Volatility Spiking as Shares Ride the Wave: Xplore Technologies Corp. (NASDAQ:XPLR)
Recent action on shares of Xplore Technologies Corp. (NASDAQ:XPLR) lands the stock on today’s most volatile list. In the current trading session, the stock has seen a change of -10.51% recently hitting $1.96.
Share prices are capable of moving sharply higher or lower in a very short amount of time. Keeping an eye on the volatile stocks may help spot market abnormalities.Based on data provided from analysts polled by Thomson Reuters, Xplore Technologies Corp. has a current consensus target price of 4.20. The current consensus analyst recommendation is sitting at 2.50 on company shares. Investors will likely be tracking any consensus estimate changes heading into the next earnings period.
After a recent spot-check, Xplore Technologies Corp. (NASDAQ:XPLR)’s ATR is 0.17. The Average True Range (ATR) is a measure of stock volatility. The Average True Range is an exponential moving average (14-days) of the True Range. The range of a day’s trading is high-low, and True Range expands into yesterday’s close when it lands outside of today’s range.
Taking a closer look into the volatility on shares of Xplore Technologies Corp. (NASDAQ:XPLR), we notice that the stock is -16.38% off of the 20-Day Simple Moving Average. Zooming out to the 50-Day Simple Moving Average, we can see a difference of -13.15% from current stock levels.
Going out even further, the 200-Day Simple Moving Average is recorded -21.82% away from the current share price. Company shares were recently noted -24.62% off of the 50-day high and -2.00% away from the 50-day low. Let’s also take a quick peek at the 52 week highs/lows. At present, the stock is -55.91% separated from the 52 week high and 7.69% from the low.
https://davidsonregister.com/volatility-spiking-as-shares-ride-the-wave-xplore-technologies-corp-nasdaqxplr/23426/
FireEye has pledged to play nicely with others as it continues to reshape its business to be more channel friendly, according to CTO Grady Summers.
Despite this FireEye's losses narrowed in Q4 and speaking to CRN, Summers claimed FireEye is now in a position to have a positive 12 months.
http://www.channelweb.co.uk/crn-uk/news/3004059/fireeye-cto-well-play-nicely-with-others-in-2017
2017 Could Be A Breakout Year For Neos Therapeutics
Dec. 29, 2016 1:00 PM ET|35 comments| About: Neos Therapeutics (NEOS)
ONeil Trader ONeil TraderPremium Research »Follow(3,281 followers)
Growth, momentum, small-cap, mid-cap
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Summary
Adzenys continued to grow in November.
Adzenys on track to reach my 2H 2016 net sales estimate.
Q1 2017 should be a strong quarter considering favorable seasonal trends.
Taking a look at a growth scenario through 2020.
2017 could be a breakout year for Neos considering the expected launches of two additional products, Adzenys' continued growth and pipeline expansion.
Neos Therapeutics (NASDAQ:NEOS) updated its presentation to include the November scripts last week. Growth was solid for most of November, with the exception of the Thanksgiving week, which probably reduced the total number of scripts by 200-300 for the whole month. The Thanksgiving week was followed by a strong rebound and weekly scripts reached a new all-time high on December 2.
Source: Neos investor presentation
The growth rate is behind my expectations, but nothing to be concerned about. If the upward trajectory continues in December, total scripts should be in the 7,500-8,000 range, assuming some disruption in late December (due to holidays).
The total number of prescribers has exceeded 3,500 as of late November. There is still significant room for improvement since this number represents a little over 25% of physicians Neos is targeting.
Source: Neos investor presentation
Adzenys' launch is still significantly ahead of the two comparable launches in 2016.
Source: Neos investor presentation
Based on the growth rates in November, Adzenys is on track to meet my $3 million revenue estimate (see previous article) for 2H 2016, as I expect Q4 net sales to be in the $2.3-2.5 million range (Q3 net sales were around $0.7 million). The underlying net sales growth trends are still masked by aggressive couponing and given the improving commercial coverage, gross to net discounts should be lower in the following quarters (and net sales per script higher). Assuming normalized gross to net discounts (Neos expects them to be in the mid-40s to mid-50s), Adzenys' annualized net sales run rate is already around $15 million based on late November weekly scripts. That's not too bad for a company with no prior launches under its belt.
Management was asked about this heavy discounting at the BMO conference two weeks ago, and the answer was that they looked at previous drug launches and found that coverage was the main negative issue. They decided to take away those hassles and said that the uptake early in the launch validates that hypothesis. And reimbursement should be less of an issue in 2017 since Adzenys now has 83% of commercial lives covered, which is in line with competing brands and a pretty good place to be when it comes to next year's growth prospects.
Management also noted on the Q4 call that they are ramping up for January: "The first quarter in ADHD is traditionally a big quarter, so to make sure that where to go and start the year off right, so strategically where we are looking at right now." Additionally, the company is going to focus more on newly diagnosed patients (since almost 80% of prescriptions are switches). Q1 should be a strong quarter for Adzenys and based on the growth rates since launch, Neos seems to be doing the right things when it comes to promotion.
The company also managed to submit the Cotempla and NT-0201 NDAs on schedule, and if all goes well, the sales force should have three products to sell in 2H 2017. I believe Cotempla will have a robust launch (probably better than Adzenys assuming it is approved before the back to school season) since Neos' sales reps will have established relationships with a lot of physicians by then, which should speed up the product's uptake.
Thoughts on valuation
Neos' market cap is roughly $100 million at the moment. The company had $60 million in cash and equivalents at the end of Q3 and $60 million in long-term debt, which means that the enterprise value is currently the same as the market cap. However, based on my projections, the cash on hand should run out in Q3 or Q4 2017 and the company will likely need to raise at least $50-60 million in additional debt (because of the low share price), which would mean that net debt will be around $100 million sometime in 2018, which is the time I think Neos will reach cash flow breakeven. I expect that $50-60 million in new debt will be sufficient to get there. So, assuming the share price stays the same, Neos' EV in early 2018 will be close to $200 million ($100m market cap plus $75-80 million in net debt).
Since the majority of its pharma peers are trading at an EV/sales ratio in the 3-4 range, we can get some idea about Neos' share price over the next few years.
Source: Ycharts.com
I added Supernus (NASDAQ:SUPN) to this group to point out the potential valuation a company with a promising pipeline could have. Neos will announce its next pipeline candidate in 1H 2017 and the company may get recognition for its pipeline too, which would translate into a higher multiple.
Assuming a growth trajectory laid out below, Neos' price could be between $10 and $14 by late 2017 (assuming it trades in the 3-4 EV/sales range on a forward basis) and between $19 and $25 by late 2018. The stock could eventually trade in mid- to high 30's, which I think is not unrealistic in the long run since Neos' share price was close to $30 last year. And these targets are without assuming a growth premium over its peers (which will probably be deserved) and the potential added value from the pipeline.
Source: author's estimates and calculations
This trajectory is one of the reasons Neos is one of my core long-term holdings. If the company can successfully raise cash over the next few months and continue to grow Adzenys' prescriptions, I think the stock could be well on its way to the $10-14 range over the next 6-12 months (assuming stable or mildly positive sector conditions).
Conclusion
Neos continues to execute its growth strategy. Adzenys prescriptions are still growing and should accelerate in Q1 2017 which is a seasonally strong quarter for the ADHD market. 2017 could be a breakout year for Neos with some important catalysts:
Continued growth for Adzenys. We should see growth acceleration in Q1 2017 based on positive seasonal trends in the ADHD market.
New product candidate should be announced in 1H 2017. Management noted that they are open to partnerships.
Removal of the financing overhang through a debt or equity offering (depending on share price movements) in 1H 2017. This is still my main concern and the largest risk apart from Adzenys' uptake (and probably for most current and/or potential investors).
Approval and launch of Cotempla and NT-0201 in 2H 2017.
Author's note: Growth Stock Forum subscribers had an early look at this article, and have access to regular exclusive updates on every stock I am covering. Readers are invited to take a two-week free trial in the Seeking Alpha Marketplace.
http://seekingalpha.com/article/4033276-2017-breakout-year-neos-therapeutics
Neos Therapeutics, Inc. (NEOS) Stock Rating Upgraded by Zacks Investment Research
January 12th, 2017 - By Scott Moore - 0 comments
Neos Therapeutics logoNeos Therapeutics, Inc. (NASDAQ:NEOS) was upgraded by Zacks Investment Research from a “sell” rating to a “hold” rating in a report issued on Tuesday.
According to Zacks, “Neos Therapeutics, Inc. is engaged in developing, manufacturing and commercializing products for the treatment of attention deficit hyperactivity disorder using drug delivery technologies. Its product candidates include NT-0102 methylphenidate XR orally disintegrating tablet for the treatment of ADHD; NT-0202 amphetamine XR orally disintegrating tablet for the treatment of ADHD; NT-0201 amphetamine XR liquid suspension for the treatment of ADHD and Generic Tussionex, which are in different clinical development stage. Neos Therapeutics, Inc. is headquartered in Grand Prairie, Texas. “
Separately, BMO Capital Markets reissued a “buy” rating and issued a $15.00 target price on shares of Neos Therapeutics in a research report on Tuesday, September 20th. One research analyst has rated the stock with a hold rating and four have issued a buy rating to the company’s stock. Neos Therapeutics currently has an average rating of “Buy” and an average price target of $20.94.
https://www.thecerbatgem.com/2017/01/12/neos-therapeutics-inc-neos-stock-rating-upgraded-by-zacks-investment-research.html
As Neos Therapeutics, Inc. trades currently, 4 analysts have their eyes on the stock whilst 2 of which rate it “Buy”, 2 “Outperform”, 0 “Underperform”, 0 “Sell”, while 0 “Hold”.
http://www.desotoedge.com/stocks/as-neos-therapeutics-inc-trades-do-analysts-recommend-you-sell-7/417460
Xplore Technologies Invests in Customer Service, Expands Worldwide Service Organization
GlobeNewswire•January 24, 2017
AUSTIN, Texas, Jan. 24, 2017 (GLOBE NEWSWIRE) -- Xplore Technologies Corp. (XPLR) today announced that it has completed a significant expansion of its global support and service organization in line with its growing global customer base. Over the last 12 months, the company has added four new Service Depots, three new Authorized Service Providers, and more than 10 toll-free numbers to connect rugged tablet customers in every region with the Customer Care Center for technical support and warranty processing.
http://finance.yahoo.com/news/xplore-technologies-invests-customer-expands-140000345.html
Xplore Technologies to Present at Source Capital Disruptive Growth Conference on February 16
AccesswireJanuary 31, 2017
AUSTIN, TX / ACCESSWIRE / January 31, 2017 / Xplore Technologies Corp. (XPLR), a global leader in rugged computing announced today that Philip Sassower, Chairman and CEO, and Tom Wilkinson, CFO, will present at the 2017 Disruptive Growth Conference on Thursday, February 16, 2017, at 10:00 am Eastern Time. The event will be held at Convene in New York, NY.
http://finance.yahoo.com/news/xplore-technologies-present-source-capital-140000382.html
Xplore Technologies Reports Profitable Fiscal Third Quarter 2017
GlobeNewswire•February 2, 2017
Revenue Increases 22% Sequentially, $0.2 Million GAAP Net Income, $5.7 Million Positive Cash Flow
Strong Backlog at $5.6 Million
AUSTIN, Texas, Feb. 02, 2017 (GLOBE NEWSWIRE) -- Xplore Technologies Corp. (XPLR), a global leader in rugged computing, today reported results for its fiscal 2017 third quarter ended December 31, 2016.
Fiscal Third Quarter and Recent Highlights:
• Reported revenue of $24.5 million, reflecting increased demand for multiple Xplore platforms, offset slightly by production capacity constraints caused by orders weighted heavily toward XSLATE D10 and Bobcat devices;
• Achieved gross margin of 27.4% for the quarter, and 28.2% year to date, which is in line with expectations;
• Held operating costs to $6.3 million, a decline of more than $1.3 million from the prior year quarter, in line with the company’s focus on increased operating efficiency;
• Reported GAAP net income of $219,000, or $0.02 per share, and adjusted EBITDA of positive $770,000;
• Announced multiple large follow-on orders, including a second follow on order in the past six months from a major telecommunications customer using Xplore’s XSLATE B10 platform and the second follow on order this year from a top-10 US electric utility provider
http://finance.yahoo.com/news/xplore-technologies-reports-profitable-fiscal-210100697.html
FireEye’s Recommendations: What Are the Analysts Saying?
By Anne Shields | Feb 1, 2017 1:49 pm EST
Wall Street analysts’ views on FireEye stock
So far in this series, we’ve discussed the factors that impacted FireEye (FEYE) in 2016 as well as the factors that could determine its position in cybersecurity in 2017.
Notably, FireEye, Symantec (SYMC), Palo Alto Networks (PANW), Barracuda (CUDA), and Fortinet (FTNT) are prominent players in the cybersecurity space, while Cisco Systems (CSCO) dominates the security appliance market.
Of the 31 analyst recommendations for FireEye stock, there are two “sell” recommendations. As you can see in the chart above, more than 60% of analysts recommended a “hold” for FireEye stock, and the remainder offered “buy” recommendations.
In the preceding parts of this series, we highlighted various financial factors and initiatives that could give investors some assurance that FireEye is moving in the right direction with respect to growth, as well as the technical areas we feel it should focus on.
http://marketrealist.com/2017/02/fireeyes-recommendations-what-are-the-analysts-saying/
FireEye’s Value Proposition in the Cybersecurity Space
By Anne Shields | Feb 1, 2017 1:49 pm EST
FireEye’s scale in cybersecurity
Previously in this series, we discussed FireEye’s (FEYE) recent offerings and the company’s focus on SaaS (software-as-a-service) to generate revenue growth. In this part, we’ll look at FireEye’s value proposition among select US cybersecurity companies.
On January 30, 2017, Cisco Systems (CSCO) was the largest global player by market capitalization in the security space. Cisco Systems (CSCO) is considered a leader in the overall security appliance market, but IDC recently stated that Palo Alto, with its 17.1% market share, currently leads the security market.
Symantec (SYMC), Palo Alto Networks (PANW), FireEye, Barracuda (CUDA), and Fortinet (FTNT) join Cisco at the top of cybersecurity.
FireEye’s enterprise value multiples
Now let’s look at the EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiples of FireEye’s peers. FireEye has a negative EBITDA, so we haven’t included it here.
The forward EV-to-EBITDA multiple for Palo Alto Networks most recently stood at ~28.81x. Cisco Systems had a multiple of ~7.07x, and Symantec had a multiple of 11.5x on November
http://marketrealist.com/2017/02/fireeyes-value-proposition-in-the-cybersecurity-space/
Why FireEye’s Focus on SaaS Space Is Good News
By Anne Shields | Feb 1, 2017 1:49 pm EST
SaaS is the most highly deployed global cloud service
FireEye (FEYE), a leading name in cybersecurity, is making a rapid transition toward the cloud, which means that its subscription offerings could dominate its future billings. FireEye expects its subscriptions and SaaS (software-as-a-service) offerings to comprise 75% of its overall billings by 2020. SaaS is expected to be the fastest-growing segment in the cloud space.
According to Cisco Systems’ (CSCO) Global Cloud Index, SaaS (software-as-a-service) workloads are expected to have the largest share. They are expected to grow at a CAGR (compound annual growth rate) of 30% and to have 74% of cloud workloads by 2020.
According to Barrons blog, Morgan Stanley (MS) analyst Keith Weiss stated: “Within applications, the focus of enterprises and CIOs today is the front office, and in particular front office SaaS-based applications.
FireEye’s focus on the SaaS space has thus generated hope among investors. The rapid growth in SaaS has also attracted Microsoft (MSFT), Salesforce (CRM), and Oracle (ORCL) to SaaS and CRM (customer relationship management), a rapidly growing sub-segment in the overall SaaS space.
http://marketrealist.com/2017/02/why-fireeyes-focus-on-saas-space-is-good-news/
Can FireEye Stock’s Upward Journey in 2017 Continue?
By Anne Shields | Feb 1, 2017 1:49 pm EST
2017 has been good to FireEye
So far in 2017, FireEye (FEYE) stock has been on an upward journey, primarily because the cybersecurity space is considered “hot” under the new Trump administration. FireEye stock has risen nearly 9% YTD (year-to-date).
This is especially good news for the company’s shareholders and investors because the stock lost more than 40% value in 2016.
http://marketrealist.com/2017/02/can-fireeye-stocks-upward-journey-in-2017-continue/