Markets

Consumer Sector Update for 05/03/2016: DLHC,FN,FWM

Top Consumer Stocks

WMT -0.70%

MCD +0.28%

DIS -0.75%

CVS +2.53%

KO -0.56%

Consumer stocks were broadly lower, with shares of consumer staples companies in the S&P 500 slipping just 0.3% while shares of consumer discretionary firms in the S&P 500 were posting a 0.9% retreat.

In company news, DLH Holdings Corp. ( DLHC ) shares were rising Tuesday after the shipping and logistics company today announced a $38.75 million cash purchase of privately held Danya International, saying the strategic acquisition will immediately increase its earning and cash flow.

The deal consists of $36.25 million in cash and $2.5 million in restricted stock. DLH said Danya generated over $100 million in revenue and $10 million in adjusted earnings before interest, taxes, depreciation and amortization last year and has a backlog totaling over $300 million.

DLH is funding much of the transaction with a new loan agreement with Fifth Third Bank providing for a $25 million term loan as well as $10 million revolving line of credit, with the company drawing down $5 million on the line of credit at closing.

DLHC shares were up more than 10% at $4.38 apiece, or just 2 cents under their session high and stopping within 9 cents of the stock's 52-year high.

In other sector news,

(+) FN, Q3 EPS of $0.56 beats Capital IQ consensus by $0.03 per share. Revenue rises 32.4% over last year to $250.9 mln, exceeding estimates by $8.1 mln. Projected Q4 earnings of $0.59 to $0.61 per share top estimates by at least $0.04.

(-) FWM, Initiates prepackaged Chapter 11 reorganization eliminating $140 mln of debt and supported by lenders holding over 70% of its senior debt. Receives $55 mln super-priority secured debtor-in-possession credit facility.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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