At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (see why hell is coming). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. […]

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Yahoo Finance’s Adam Shapiro and Julie Hyman break down Monday’s trending headlines.

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(Bloomberg Opinion) — The boring part of the chip market is getting more interesting. For Texas Instruments Inc., that means stiffer competition from a stronger rival. Early Monday, Analog Devices Inc. announced a definitive agreement to acquire Maxim Integrated Products Inc. for about $21 billion in an all-stock deal that works out to a 22% premium to Maxim’s close on Friday. Maxim shareholders will get 0.63 share of Analog stock for each share they own, resulting in 31% ownership of the combined company. The transaction is expected to be completed in the summer of 2021 and is subject to regulatory and shareholder approvals.The deal would combine the No. 2 and No. 3 players in analog chips, one of the less sexy and more workaday corners of the semiconductor market. According to Bernstein, the category accounted for 13%, or about $54 billion, of the global $412 billion chip market last year. Analog chips have the specific function of converting physical world signal — including sound, temperature and pressure — into digital data. Compared to microprocessors — which are updated annually, cost up to hundreds of dollars per unit and require the latest bleeding-edge expensive chip manufacturing technologies — analog chips are very different. A typical analog product design can have a shelf life of many years, and they are inexpensive, often selling for less than a dollar each. And because they are also easier to make, they have high profit margins.But there are downsides for this segment of late. Analog-chip companies have faced growth challenges and have under-performed as a result. Shares of Texas Instruments, Analog and Maxim have risen less than 5% this year through July 10, versus a double-digit gain for the Philadelphia Semiconductor Index. The main problem is analog’s end markets are broad-based and account for the “nuts and bolts” basic chips used in all industry sectors – such as automotive and industrial. As such, they are beholden more to general economic trends. Wall Street analysts estimate fiscal 2020 sales declines of 14%,  12% and 7% for Texas Instruments, Analog and Maxim, respectively. In contrast, analysts forecast Nvidia Corp. – which makes digital chips for the surging growth applications of gaming, cloud-computing and artificial intelligence – will generate 33% revenue growth this year. Investors have taken note, bidding up Nvidia’s stock price roughly 80% this year.Given all that, it’s not surprising that a secondary player in the market such as Analog would feel compelled to do something to improve its fortunes. The classic consolidation playbook of  expense savings will have to do. The company said it will be able generate $275 million of cost synergies by the end of the second year following the deal’s close, adding the merger will be accretive to earnings within 18 months.More importantly, ADI-Maxim would create a stronger No. 2 player in the “standard linear,” or non-customized, analog chip market behind Texas Instruments. The new merged company would get scale benefits to spread out its chip design expenditures to a larger revenue base, improving profitability. To illustrate the potential, Texas Instruments, which generates more than double the sales of its rival, spent just 11% of its revenue for research & development last year, versus 19% for Analog. Further, a combined company would have more pricing power with customers.On a financial basis a deal makes sense. What about the regulatory risk? Amid the heightened political environment surrounding the technology industry, there will be some antitrust scrutiny. But as the deal would make a No. 2 player stronger, versus adding to Texas Instrument’s pole position, and because the end consumer likely won’t directly see price hikes, approval from Western regulators shouldn’t be difficult. The main barrier could be China. If geopolitical tensions between the U.S. and Asian country escalate in the coming months, the approval process for U.S. corporate deals may get arduous.But except for that risk, shareholders in the two companies should rejoice over the prospect of this merger.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tae Kim is a Bloomberg Opinion columnist covering technology. He previously covered technology for Barron's, following an earlier career as an equity analyst.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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Big banks such as Goldman Sachs, JPMorgan and Wells Fargo are all set to report earnings this week. Yahoo Finance’s Brian Cheung joins the On the Move panel to break down what to expect.

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Baron Asset Fund recently published its second-quarter commentary – a copy of which can be downloaded here. During the second quarter of 2020, the Baron Asset Fund returned 28.02% (institutional shares). In comparison, the benchmark S&P 500 Index was up 20.54%, while the Russell Midcap Growth Index was up 30.26%. You should check out Baron […]

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At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (see why hell is coming). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. […]

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Shares in ElectroCore, Inc. (ECOR) more than doubled after the U.S. Food and Drug Administration (FDA) issued an Emergency Use Authorization (EUA) for the use of its gammaCore Sapphire device to treat adult patients with COVID-19 who are experiencing exacerbation of asthma-related dyspnea and reduced airflow.The stock surged to $2.20 in Monday’s morning market trading after the U.S. medical device maker announced that the EUA was granted for acute use of the the hand-held device at home or healthcare settings for COVID-19 patients for whom approved drug therapies are not tolerated or provide insufficient symptom relief.The stimulation device is applying a mild electrical signal to the vagus nerve through the skin on either side of the patient’s neck. The company said that the FDA decision was based on available scientific evidence showing that it is “reasonable to believe that the device meets certain criteria for safety, performance, and labeling,” and that it may be effective in treating patients with COVID-19.“Needless to say, we are very pleased to have received this EUA, and we intend work vigorously to make this novel therapy available to physicians treating known or suspected COVID 19 patients who are experiencing exacerbation of asthma-related breathing difficulty,” said ElectroCore CEO Dan Goldberger.ElectroCore shares, which have plunged 47% this year, have a cautious Moderate Buy analyst consensus.Meanwhile, Noble Financial analyst Ahu Demir reiterated a Buy rating on the stock with a $4 price target (83% upside potential), saying that the indications for gammaCore therapy represent a large commercial opportunity for the company.“We believe the shares are poised to gain value upon revenue ramp up and the release of clinical data from patients with coronavirus and migraine (prevention),” Demir wrote in a note to investors.Indeed, the $2.75 average analyst price target implies shares have 27% upside potential in the coming 12 months. (See ECOR stock analysis on TipRanks)Related News: Equillium Explodes 260% On Positive Covid-19 Results; India Approval Gilead Reveals Covid-19 Treatment Remdesivir Reduces Mortality Risk Moderna Inks Deal With Rovi To Supply Potential Covid-19 Vaccine Outside US More recent articles from Smarter Analyst: * Google To Invest $10 Billion For Digital Push In India * Pfizer, BioNTech Score Fast Track Status For Covid-19 Vaccine Candidates * Disney World Cautiously Reopens; Analyst Optimistic On Outlook * Equillium Explodes 260% On Positive Covid-19 Results; India Approval

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Yahoo Finance’s Ines Ferre joins the First Trade to discuss the latest activity in the auto market.

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We know that hedge funds generate strong, risk-adjusted returns over the long run, which is why imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, professional investors have to conduct complex analyses, spend many resources and use tools that are not […]

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