Under Armour (UA) Stock Split, The Fed Announces Production Increase

Bourbon & Bayonets / Monday, March 17th, 2014

Markets were headed higher on Monday morning as manufacturing output posted the largest gains in nearly six months. The Federal Reserve announced that production was up 0.9% in February, a gain not seen since last August. This surpassed economists expectations of a 0.2% gain for the index. In January there was a 0.9% drop for the index, this happened to be the largest decline since May 2009. This adds to the mounting data, such as retail sales and employment numbers, that the economy is rebounding after a particularly harsh winter put a damper on the economy. There was a gain of 0.3% in mining production which helped to balance out the 0.2% drop in utilities output. The categories posting the largest gains were motor vehicles, gaining 4.8% after falling 5.2% in January, along with gains in machinery and fabricated metal production. Gennadiy Goldberg, an economist with TD Securities, said, “Manufacturers are becoming more optimistic about the impending rebound in economic activity, suggesting improving prospects for economic growth after weather-inspired first-quarter weakness.”

Shares of Under Armour, Inc (UA) were trading up over 2.5% after the company announced that their board approved a 2-for-1 stock split. This will mark the second split in the company’s history since going public in November of 2005. The last stock split occurred in July 2012. UA company chairman and chief executive, Kevin Plank, said, “Our team is proud of the value we have delivered to our stockholders over the long-term, and we believe this stock split may broaden our investor base and improve the trading liquidity of our stock.” Under Armour (UA) currently holds a market value of $12.7 billion and there are about 105.6 million shares outstanding. Since the last stock split shares are up about 150%. As of last Friday, shares of UA were up 34.4% for the year.

Vodaphone announced on Monday morning that they would be buying Grupo Corporativo Ono S.A. for $10 billion as they take steps to help expand their presence throughout Europe. Vodaphone is a British telecommunications company while Ono is cable operator based in Spain. Ono has about 1.9 million customers in Spain. This is not the first acquisition to help Vodaphone on their quest to become more prevalent in Europe. Last year the company purchased Kabel Deutschland Holding AG, based in Germany. The company is purchasing more Internet and TV services as a way to help offset the drop in mobile revenue. Robin Bienenstock, an analyst with Sanford C. Bernstein, said, “It’s the start of a whole new set of M&A stories, pan-European. You start to see cross-border stuff.”

That’s all for the day.

All the best,

Jack Aubrey
Oakshire Financial

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