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Sunday, August 14, 2022

Hot Stocks: NCR rises on deal report; SI jumps on earnings; CNK upgrade; NVTA falls

A potential M&A deal took a share of the spotlight in Tuesday’s midday trading. NCR (NYSE:NCR) rallied on reports that it has entered exclusive talks with a private equity firm.

Meanwhile, earnings news remains a key driver as well. Silvergate Capital (SI) represented one of the standouts, expanding its value by nearly a fifth following a Street-beating earnings report.

Among other notable gainers, Cinemark (CNK) climbed after receiving an analyst’s upgrade. On the other side of the spectrum, disappointing guidance and a major restructuring plan spurred selling in Invitae (NVTA).

Gainers

Reports of takeover talks sparked buying in NCR (NCR). Shares climbed around 14% after the Wall Street Journal reported that private equity firm Veritas has entered exclusive discussions to buy the company.

According to the WSJ, talks are not guaranteed to end in a deal and any agreement may still take weeks to work out. Late last month, Dealreporter issued a similar report, saying NCR could be acquired by Veritas.

Meanwhile, Cinemark (CNK) represented another substantial midday gainer, rising almost 14% on a bullish turn by Morgan Stanley. The firm raised its rating on the movie theater chain to Overweight, pointing to a return of audiences to movies.

“Beginning in late ’21, the N. American box office has been trending steadily upward as consumers have become more comfortable with going to theaters,” analyst Benjamin Swinburne said in a note.

Elsewhere, earnings news prompted gains in Silvergate Capital (SI). The crypto-focused bank easily topped expectations with its Q2 earnings, bolstered by strong results for its Silvergate Exchange Network, which enables U.S. dollar transfers between participating Silvergate account holders.

Bolstered by the quarterly results, SI surged almost 20% in midday trading.

Decliner

Invitae (NVTA) lost ground in intraday trading after the company issued disappointing guidance and revealed a cost-cutting plan. The biotech firm will streamline operations, including enacting layoffs, aiming to save a total of $326M a year by 2023. Following the announcement, NVTA dropped 12%.

NVTA said the expense reduction will extend its cash runway into 2024. The company also announced a major leadership change, with COO Kenneth Knight stepping in as CEO. Former CEO Sean George will serve as a consultant and remain a board member.

For more of Wall Street’s best- and worst-performing stocks, head over to Seeking Alpha’s On The Move section.

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