What do an Asian brewery acquisition and a deal for the distribution of a Cannabis-based anti-aging cream have in common?
They both helped to boost the share volume of two active stocks for different reasons.
Expansion Strategy
Anheuser-Busch Inbev SA (OTCQB: AHBIF) stock volume skyrocketed Feb. 4, with 326,267 shares changing hands, more than 13 times its three-month average of 24,718.
The surge in volume comes on the heels of the Belgium-based brewer's Jan. 20 announcement that it is taking steps to aggressively strengthen its position in the fast-growing Asia Pacific Region.
$5.8-Billion Acquisition Bolsters Asian Pacific Presence
In the release, Anheuser-Busch said it had reacquired Oriental Brewery ("OB"), the leading brewer in South Korea, from KKR and Affinity for 5.8 billion.
This agreement returns OB to the Anheuser-Busch portfolio, after the brewer had sold the company in July 2009, following the combination of InBev and Anheuser-Busch, in support of the company's deleveraging target. Anheuser-Busch will reacquire OB earlier than July 2014, as it was originally entitled to under the 2009 transaction.
Since KKR and Affinity entered into partnership with OB in 2009, OB has grown to become the largest brewer in South Korea, driven by strong growth of the Cass brand, according to the release. OB and AB InBev also remained long-term partners through OB's exclusive license to distribute select AB InBev brands in South Korea such as Budweiser, Corona and Hoegaarden.
On Feb. 4, AHBIF's share price closed at $94.26, down 56 cents from its close of $ 93.70 the previous day.
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Distributor Found for Cannabis Anti-Aging Cream
On Jan. 28, Medical Marijuana Inc. (OTC PINK: MJNA) share volume continued to soar, with 37,202,720 shares changing hands, significantly higher than its 3-month average of 22,141,396 shares.
The continuing surge in volume was probably triggered by a Jan. 31 announcement made by the San Diego holding company that it had entered into an agreement with an unnamed company to sell Medial Marijuana;s anti-aging cream through the unnamed company’s in-home sales force.
According to the release, the first purchase order from the home-based business organization will be $1,072,251 in products that will ship before the end of the first quarter.
This positive news come on the only two days after Medical Marijuana announced its newly-formed subsidiaries would be providing armored transport services for companies in the cannabis industry.
Marijuana Inc.'s subsidiary, Wellness Managed Services, has gained this capability by purchasing a 50% stake in MPS International.
Cannabis Security Issue
In a written statement, MPS International's CEO Mike Roberts outlined some specifics about the new armored marijuana transport service.
"Large amounts of product will be moved from grow to wholesaler, warehouse, testing facilities, bakeries, infusion laboratories and finally to retail locations," Roberts said. "Post transaction, and especially right now with federal regulations prohibiting FDIC insured banks from offering financial services to cannabis industry businesses, large amounts of cash will need to be transported between parties securely as this creates an easy target for predators and competing businesses," he added.
Potentially Lucrative Opportunity
In the release, Roberts went on to outline the potential opportunity that existed for providing armor transportation for currently legal cannabis businesses. He pointed out that there are now about 448 dispensaries in Colorado alone, while in California there are an estimated 2,700 dispensaries, co-operatives, wellness clinics, and taxi delivery services.
"Using an average of one armed security officer working 10 hour shifts, 7 days per week billing at the industry standard of $25/hour armed, 52 weeks per year, annual gross revenue created by just 11 locations is more than $1,000,000 for just static physical security," Roberts explained.
Once the company establishes this footprint, it says it will evaluate other cannabis markets such as those in Canada.
MJNA share price closed at 32 cents, down 2 cents from its closing price of 30 cents the previous day.
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Long Anticipated Housing Recovery Fuels Volume
Pier 1 Imports Inc. (NYSE: PIR) volume soared Feb. 4, with 1,929,542 shares changing hands, significantly higher than it three-month average volume of 1,421,666.
The one-time penny stock's uptick in volume could be connected to an anticipated housing recovery.
The recent mortgage meltdown cratered the Fort Worth, Texas-based retailer's stock value that had reached $25 in November 2003. On March 13, 2009, Pier 1 shares hit a low of 11 cents. Despite this, the company never filed for bankruptcy and an improving economy, housing market and a rising stock market have sent its stock surging to its old highs again.
But during the holiday selling season, Pier 1 did poorly. Its CEO Alex W. Smith blamed continued slow traffic caused by wintry weather for the pitiful 1.3% increase in same store sales for the five-week period ended Jan. 4, 2014, compared to the five-week period ended Jan. 5, 2013.
That’s why it's increasingly critical that the 2014 housing recovery becomes the real deal.
So far, there are some good market indicators. Here are just three of them:
- Fannie Mae's positive outlook for the 2014 housing market in a Jan. 13 statement by its Chief Economist Doug Duncan: "Despite the rise in mortgage rates since the spring, many housing indicators posted strong gains at the end of 2013 and consumer housing attitudes are strengthening, all of which bodes well for continued but measured housing recovery in 2014," Duncan said in a written statement.
- New homes are staying on the market for an average of 3.1 months before being sold, far less time than the average 5.5-month average for the last 30 years.
- A recent report by Wash.-D.C. financial publisher Kiplinger is forecasting that new-home sales are likely to soar by a solid 15% or 500,000 in 2014.
E-Commerce Growth Anticipated and Needed
An increasingly stronger online presence could also help turbocharge Pier 1's sluggish sales. The company witnessed the growing importance of its popular Web site Pier1.com when the ecommerce site ended up accounting for about 4% of the company's total December sales.
The good news is that the outlook for online sales is much better than it was in 2013. In 2014, ecommerce sales will soar to nearly $250 billion, up from $155 billion in 2009, according to Cambridge-Mass research firm Forrester. Last year, online retail sales were up a healthy 11 percent, compared to 2.5 percent for all retail sales.
On Feb. 4, PIR's share price closed at $18.42, down 4 cents from its close of $18.38 the previous day.
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Good News on Multifamily Loans
Fannie Mae (OTC Bulletin Board: FNMA) shares also experienced robust stock volume on Feb 4, with 9,234,901 shares changing hands.
On Feb 3, 2014 Fannie Mae announced that it and its lenders financed $28.8 billion in multifamily loans in 2013.
Working with its lender partners to finance 507,000 units of multifamily housing, about 99 percent, or $28.5 billion of the loans that Fannie Mae financed in 2013 were delivered through MBS execution. Fannie Mae met the Federal Housing Finance Agency's goal to reduce multifamily volumes by 10 percent relative to 2012 levels, achieving 95 percent of its total volume capacity.
"The need for quality, affordable rental housing is greater today than it's ever been, and we will continue to do our part by providing liquidity, stability and affordability to the multifamily market and maintaining our credit standards," Senior Fannie Mae Senior Vice President Jeffery Hayward said, in a written statement.
This is just the latest piece of positive news about the government-sponsored enterprise, charged with stabilizing the secondary mortgage market in the last few days.
On Jan. 29, Judge James Peck approved Lehman Brothers Holdings Inc.'s settlement with Fannie Mae over $18.9 billion in mortgage claims. Under the settlement, Fannie Mae will receive a general unsecured claim of $2.15 billion against Lehman. Under Lehman's Chapter 11 payment plan, this amounts to a recovery of about 25 cents on the dollar, or about $537.5 million.
In addition, Fannie Mae and others' optimistic outlook for the 2014 housing market is fueling its spike in volume. In a Jan. 13 statement, Fannie Mae's Chief Economist Doug Duncan said that despite the rise in mortgage rates since the spring, many housing indicators posted strong gains at the end of 2013 and consumer housing attitudes are strengthening, "all of which bodes well for continued but measured housing recovery in 2014."
In addition, Fannie Mae’s sister company Freddie Mac (FMCC), is planning to sell $1 billion of securities tied to the risk of homeowner defaults, almost matching the amount issued since the deals began last year. This is according to a person with knowledge of the transaction.
FNMA shares closed at $3.04 down 4 cents from its closing price of $3.08 the previous day.
Find out what could be the best investor's move when it comes to FNMA by getting the complete report here, or by cutting and pasting the following link in your Web browser:
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