US HOT STOCKS: Chico's, Genzyme, Hovnanian, Sanderson Farms -2

26th Jul 2010 18:07

Goldman Sachs added Chico's FAS Inc. (CHS, $10.02, -$0.22, -2.15%) to its conviction sell list, saying it sees the retailer's shares vulnerable to high expectations and a sharper-than-expected deceleration in momentum. Delta Petroleum Corp. (DPTR, $0.89, +$0.09, +10.68%) agreed to sell some non-core assets in Colorado, Wyoming, Nebraska and Texas to privately held Wapiti Oil & Gas LLC for $130 million as the energy company continues its effort to reduce its debt and shifts its focus to its Vega properties in Colorado. FMC Technologies Inc.'s (FTI, $61.22, -$2.52, -3.95%) second-quarter earnings fell a less-than-feared 9.2% as revenue dropped but backlog increased sequentially at the maker of oil-and-gas drilling equipment. France's Sanofi-Aventis SA (SNY, $29.74, +$0.39, +1.33%) may not be the only large drug maker to set its eyes on struggling biotechnology company Genzyme Corp. (GENZ, $66.92, +$4.40, +7.04%). After news of Sanofi's interest in the U.S. company became public Friday, investors and bankers are scrambling to find out whether Sanofi's rivals could also be interested in making a play for Genzyme, which makes drugs for rare, inherited disorders. Britain's GlaxoSmithKline PLC (GSK, $36.44, -$0.06, -0.16%) and New Jersey-based Johnson & Johnson (JNJ, $57.65, +$0.02, +0.03%) are seen as the most logical suitors for Genzyme, bankers and analysts said. Shares of home builders rose after a better-than-expected report on the ailing housing sector showed home buying surged in June after a May plunge caused by the end of a government tax credit. Hovnanian Enterprises Inc. (HOV, $4.61, +$0.32, +7.46%) and PulteGroup Inc. (PHM, $9.13, +$0.47, +5.43%) were among the biggest gainers. Standard Pacific Corp. (SPF, $3.98, +$0.17, +4.50%) and Toll Brothers Inc. (TOL, $17.99, +$0.52, +2.98%) also climbed. Deutsche Bank cut its stock-investment rating on ITT Educational Services Inc. (ESI, $83.76, -$1.68, -1.97%) to hold from buy, saying the Department of Education's gainful employment proposal will restrict a significant proportion of ITT's programs. The firm added it believes ITT will have to increase its admission criteria over time to increase its repayment rates. The restrictions, plus the need to raise admission criteria, will make it difficult for ITT to grow, the firm said. Luxury eye wear company Luxottica SpA (LUX, $26.66, +$0.59, +2.26%) Monday said net profit in the second quarter rose 30% on strong sales of its Ray-Ban and Oakley brands, the rebounding U.S. market and improved profitability in both wholesale and retail channels. Jefferies boosted its rating on Patterson-UTI Energy Inc. (PTEN, $16.07, +$0.41, +2.62%) to buy from hold, saying the company should see better upside than many of its land-rig peers due to the changing quality of its active asset base. PCTEL Inc. (PCTI, $5.92, +$0.12, +2.07%) posted second-quarter results that topped Street estimates as the provider of wireless network optimization solutions saw strong growth in some of its key vertical markets. Roper Industries Inc. (ROP, $63.60, +$1.59, +2.56%) has agreed to buy iTradeNetwork Inc., a food industry supply-chain-management and solutions company, from technology-focused private-equity firm Accel-KKR for $525 million. Roper, which makes engineered products used in the water, energy and transportation industries, said iTradeNetwork is "an excellent addition" and complements its existing software-services platforms. Morgan Stanley cut its stock-investment rating on chicken processor Sanderson Farms Inc. (SAFM, $48.80, -$1.95, -3.84%) to underweight from equalweight, saying it expects grains prices to continue their recent rally but chicken price increases to, at best, materially lag grain. Sohu.com Inc.'s (SOHU, $45.77, +$0.73, +1.62%) second-quarter profit fell 0.2% as the Chinese Internet portal reported record revenue on strength in its brand-ads and online-game businesses. Results topped expectations, and the company which generates essentially all of its online-gaming revenue through Changyou.com Inc. (CYOU, $28.45, +$1.80, +6.75%) projected strong third-quarter results. Volt Information Sciences Inc. (VOL, $8.12, -$0.27, -3.22%) said the New York Stock Exchange has extended its deadline to file its annual report for the year ended Nov. 1, 2009 in order for the information-services company to keep trading on the NYSE. -By Dow Jones Newswires; write to [email protected] (END) Dow Jones Newswires July 26, 2010 13:07 ET (17:07 GMT)