MASSDEVICE WALL STREET ROUNDUP | One of Wall Street’s most notorious names raised its view of Covidien plc (NYSE:COV) today, setting a price target that’s 15 percent above yesterday’s closing price.
Although Goldman Sachs analysts stood pat on their “Buy” rating of the stock, which ended Monday at $52, they raised their price target to $60 and boosted the stock’s earnings estimate, ahead of the company’s plan to buy back up to 5 million shares of its own stock.
COV shares closed up 0.2 percent today at $52.08.
Nygren dumps JNJ, adds BAX
“We eliminated our position in Johnson & Johnson after the company announced a stock-financed acquisition that we believe will decrease its per-share value,” Nygren wrote, referring to J&J’s blockbuster, $23.1 billion buyout of Synthes Inc.
Oakmark sold its JNJ shares at prices ranging from $59.46 to $67.29, for an estimated average price of $64.80; shares closed today at $65.77, down 0.1 percent.
Nygren also bolstered his holdings in Baxter 33.3 percent, buying shares at $53.65 to $60.33, for an estimated average price of $57.61. BAX shares closed at $55.43 today, up 0.3 percent.
The mutual fund manager makes a habit of sniffing out stocks that are trading at a discount relative to what he believes their real value is. After the recent U.S. credit downgrade sent The Street into a selloff, Nygren pointed out that U.S. Treasury actually rallied on the news. And because hard economic times are already baked into stock prices, there’s never been a better time to snap up undervalued shares.
“We believe that stock prices had already discounted a no-growth economy,” Nygren wrote, citing market conditions that allow investors to purchase “a diversified basket of large-cap stocks with a current yield that is as high as a bond.”
“Stocks today are achieving that unusually high yield despite paying out only 25 percent of their earnings. We believe that investment of retained earnings will allow EPS growth to match historical growth rates even if GDP growth is disappointing,” he wrote. “For that reason, we think it is reasonable for stocks to attain their long-term average P/E of about 15x, which would mean a 50 percent price increase if it is achieved over two years.”
CardioFocus drums up some VC backers
CardioFocus drummed up a round of venture capital investment from the likes of The Aurora Funds, SV Life Sciences, KBL Healthcare Investors, Manatuck Hill Partners and Kestrel Management, according to ChubbyBrain.com.
The Marlborough, Mass.-based firm is developing a visually guided balloon catheter that uses a rotating laser to ablate the tissue surrounding the pulmonary artery’s entrance into the heart. The technology is intended to reduce atrial fibrillation.
CardioFocus added $14 million to its coffers back in February, from backers including KBL and SV, as well as Oxford Biosciences Partners and HIG Ventures.
The bank agreed to raise the limit on Varian’s borrowing facility from $225 million to $300 million and will take $250 million of it back immediately, in return for about 3.8 million shares of VAR stock, according to a press release.
The deal also extends the end of the credit line from November 20 to June 30, 2012.
It’s not the first time Varian has repurchased shares from Bank of America. Back in February, the company inked a deal with BofA to buy back about $280 million worth of its common stock, reducing the amount of outstanding shares by almost 3 percent.
Lantos Technologies, a Cambridge, Mass.-based ear scanning firm, drummed up $4.1 million from a group of 17 investors and kicked founder Shahid Azim downstairs to a lesser role.
Existing backers Catalyst Health Ventures, Excel Venture Management and Mass Medical Angels all participated in the round, according to a press release. Lantos said it plans to use the infusion to further development of what it bills as “the world’s first real-time 3D ear canal scanning technology,” designed to facilitate custom-made hearing aids, earphones and noise-canceling devices via minimally invasive digital mapping of the human ear canal.
Lantos also said Azim will assume the role of senior vice president for new market development. He’ll be replaced by new chairman and CEO Jeffrey Leathe, formerly the chief executive at Biocius Life Sciences.
Aura Biosciences reeled in $2.9 million in an equity round to help develop its Nanosmart drug-coating treatment.
The Cambridge, Mass.-based company raised the money from 23 un-named investors, according to a regulatory filing.
Its technology is designed to coat drugs with a nano-scale protein that helps deliver it to a targeted tumor. The proteins are meant to ape the structure of viruses, helping the drug molecules to evade the immune system, among other advantages. The company has now raised more than $4.4 million, according to regulatory filings.
Conceptus Inc. (NSDQ:CPTS) took out a $50 million credit line with Wells Fargo Bank”to be used for working capital and general corporate purposes,” according to a regulatory filing.
The loan, secured by capital stock in the Mountain View, Calif.-based female sterilization therapy maker and its subsidiaries, is set to bear interest at LIBOR plus 2.75 percent.