Two Ways: Pulte, Centex Join Hands
Strengthen your portfolio in good times and bad.
A surprise M&A announcement this morning: Pulte Homes (PHM) said it will acquire Centex Corp (CTX) in an all-stock deal worth $1.3 billion. Under the terms of the agreement, Centex shareholders will receive 0.975 shares of Pulte stock for each share they own. This would bring the value of Centex shares to $10.50, representing a 38% premium to yesterday's closing price.
Pulte president and chief executive officer Richard J Dugas, Jr said the combination allows the new company to capitalize on Centex's entry-level and move-up categories and Pulte's move-up and active adult segments. Further, Pulte will gain access to Centex's sizable holdings in both Texas and the Carolinas, 2 areas that continue to exhibit strength despite the housing downturn.
From the Bull Pen: Bulls can look elsewhere like Agnico-Eagle Mines (AEM). One can set a sell stop near $47-$48.
From the Bear Cave: Real estate plays may get a lift from this announcement, but if you believe these stocks will need to retest their lows, consider a play in MDC Holdings (MDC); a buy stop can be set above $31.
Quick Check Around the World
Asian trading closed with the Hang Seng -3.04%, Nikkei -2.69%, India 1.97%, Shanghai -3.76% and Taiwan -2.39%.
Glancing towards Europe, we see the CAC -0.33%, DAX -0.50%, FTSE -0.66%
As of 8:00 AM EST, S&P Futures are trading -5 to 808.00, and Nasdaq futures are -0.25 to 1280.00.
A Look at Commodities
Over in commodities, crude oil is trading -1.06 to 48.09 while gold is +1.00 to 884.30 this morning. Silver is +0.100 to 12.220 and copper -1.50 to 197.50.
The dollar index is +0.045 to 85.7100.
On the Radar
07:00 MBA Mortgage Applications
10:00 Wholesale Inventories -0.6%
02:00 FOMC Minutes
Before: STZ, FDO, GBX
After: PBY, WDFC
Click here for the full trading radar.
Good luck today, Minyans!
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