Why These 5 Stocks Are Making Headlines Today

It’s been a rather quiet morning on Wall Street, at least in terms of the performance of the overall market. In contrast to previous sessions, the S&P 500 is flat and the NASDAQ is off by only a few tenths of a point. Although the broader market may be inactive, five stocks in particular are making headlines, some with potentially far reaching ramifications. In this article we’ll examine the latest news on Allergan plc Ordinary Shares (NYSE:AGN), Pfizer Inc. (NYSE:PFE), Wynn Resorts, Limited (NASDAQ:WYNN), Constellation Brands, Inc. (NYSE:STZ), and Cree, Inc. (NASDAQ:CREE), and analyze what the smart money thinks of these companies.

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The big merger between Allergan plc Ordinary Shares (NYSE:AGN) and Pfizer Inc. (NYSE:PFE) is officially dead. Pfizer and Allergan originally planned to merge in what would have been a record-setting $160 inversion billion deal, one that would have saved Pfizer a substantial amount in taxes. The Treasury Department put an end to those benefits on Monday however, issuing new rules to curb the advantages of tax inversions, and in particular as they related to this particular merger. Pfizer will pay Allergan a $150 million breakup fee for its troubles. The latter company’s CEO Brent Saunders said the following in regards to the quashed deal:

“While we are disappointed that the Pfizer transaction will no longer move forward, Allergan is poised to deliver strong, sustainable growth built of a set of powerful attributes. Our pipeline is one of the strongest in the industry, loaded with 70 mid-to-late-stage programs including 14 expected approvals and 16 regulatory submissions in 2016 alone.”

Allergan plc Ordinary Shares (NYSE:AGN) is the most widely held stock among the funds in our database, with 159 elite firms holding Allergan shares as of the end of the fourth quarter. Meanwhile, 109 funds held Pfizer Inc. (NYSE:PFE) at the end of December, up from 97 funds at the end of September. Ken Fisher‘s Fisher Asset Management was among the funds that held shares in both stocks, including a holding of 32.3 million shares of Pfizer. Both stocks are up by around 3% this morning as investors begin to reassess and value the two companies on their stand-alone merits.

On the next page, we examine the latest developments surrounding Wynn Resorts Limited, Constellation Brands Inc, and Cree Inc.
Wynn Resorts, Limited (NASDAQ:WYNN) shares are off by around 5% this morning after the company issued its preliminary first quarter results yesterday. According to the company’s press release, it expects to reach net revenue of $603 million-to-$613 million and adjusted property EBITDA of $187 million-to-$195 million for its Macau segment. Those numbers would be down from first quarter 2015 revenue of $705.4 million and adjusted property EBITDA of $212.3 million. When combined with its Las Vegas operations, Wynn Resorts expects to report overall revenue of $987 million-to-$1.00 billion and adjusted EBITDA of $292 million-to-$308 million for the first quarter of 2016. Analysts were expecting $998.33 million in revenue and given the drop in the stock, the market was expecting more adjusted EBITDA. The number of elite shareholders of Wynn Resorts, Limited (NASDAQ:WYNN) in our database dropped to 30 from 34 quarter-over-quarter during the December quarter. Those 30 elite funds held 19.8% of the company’s float at the end of 2015. Mason Hawkins‘ Southeastern Asset Management owned 12.58 million Wynn shares at the end of December.

It’s been a good day for Constellation Brands, Inc. (NYSE:STZ) shareholders, as shares have risen by over 4.50% following the company reporting its fourth quarter of fiscal year 2016 financial results this morning. For the fiscal quarter, the company earned $1.19 per share on revenue of $1.54 billion. Its profit jumped by 12% year-over-year, while revenue rose by 14%. For the full 2016 fiscal year, Constellation Brands earned $5.18 per share. Management expects even better things for fiscal year 2017, providing an EPS estimate of $6.00-to-$6.30 for the fiscal year. Stephen Mandel‘s Lone Pine Capital was one of the 67 elite funds that owned shares of Constellation Brands, Inc. (NYSE:STZ) at the end of 2015.

Cree, Inc. (NASDAQ:CREE) shares are 15% in the red today due to the company issuing dissapointing preliminary financial results for its third quarter of fiscal year 2016. For the quarter, the company expects non-GAAP EPS of $0.13-to-$0.15 and revenue of $367 million versus expectations of $0.24 per share and $414.35 million, respectively. Cree also expects its gross margins to come in below its previously guided target of 29.7%-to-30.5%. Management cited lower Lighting Products revenue as the root cause of the revenue miss. The number of elite funds with shares in Cree, Inc. (NASDAQ:CREE) rose by one to 15 during the December quarter.

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