Action Alerts PLUS senior analyst Jeff Marks and research analyst Zev Fima are breaking down everything you need to know about the markets from AbbVie's (ABBV - Get Report) $63 billion takeover of Allergan (AGN - Get Report) to Warren Buffett's comments on Kraft Heinz (KHC - Get Report) and Micron's (MU - Get Report) earnings after the bell.
Jim Cramer and Katherine Ross have the morning off.
AbbVie Buys Allergan
Wall Street woke up to news of yet another major corporate takeover. AbbVie will pay $188.24 per share in cash and stock for Allergan in a $63 billion takeover, marking a 45% premium over Allergan's most recent closing price.
While Abbvie said the deal will add 10% to the combined group in the first year with products including Botox, it's certainly paying quite the price for Allergan; is it too much? Jeff Marks breaks it down.
"I don't think AbbVie over paid...When you have one stock, AbbVie, which was in a downtrend and Allergan, which was in the downtrend for a while, putting them together, I think there's going to be some skepticism there. So I think that's what you're seeing today in AbbVie. But, again I think that the numbers kind of create a compelling case, but we'll have to, we'll have to wait and see there."
How to Avoid Paying Too Much for a Stock
The Oracle of Omaha is in the headlines again after making comments on Kraft Heniz to CNBC. While pledging his confidence in incoming CEO Miguel Patricio, Warren Buffett conceded that he paid too much for Kraft and acknowledged the difficulties stemming from his 26.7% stake in the group.
Even Buffett makes mistakes and it's important to learn from them. Marks breaks down 3 signs you could be overpaying for a stock. The first of which being:
"If the catalysts already happened. Catalysts being like an event that could really sway the way that the stock is kind of perceived. And it could be earnings, it could corporate M&A, something like that. If that catalyst event already happened in the past, you know, you're in on the tougher money now."
Watch the video to see the other signs you may be overpaying.
What to Expect from Micron Earnings
Micron (MU - Get Report) is set to report earnings after the bell June 25. On average, analysts polled by FactSet expect Micron to report revenue of $4.69 billion and non-GAAP earnings per share of $0.79.
Having shed nearly all of its 2019 gains over the past two months on trade concerns and declining memory prices, investors will be going through the report with a fine-toothed comb.
Marks said that while a "subpar" report is expected, investors should keep a close eye on pricing and inventory levels.
A Bit About Today's Host, Zev Fima