U.S. Movers: Bank of America, Calavo Growers and Dollar Financial

Mukesh Buch
03 Jan, 2011
New York City

Bank of America agreed to pay more than $2.6 billion Freddie Mac and Fannie Mae to settle the claims. Calavo Growers revenue soared 32% to $107.2 million. Dollar Financial agreed to acquire Purpose U.K. Holdings and Sefina Finance AB. Torchmark closed sale of wholly owned subsidiary at $648 million.

[R]12:00 PM New York – Bank of America agreed to pay more than $2.6 billion Freddie Mac and Fannie Mae to settle the claims. Calavo Growers revenues soared 32% to $107.2 million. Dollar Financial agreed to acquire Purpose U.K. Holdings and Sefina Finance AB. Torchmark closed sale of wholly owned subsidiary at $648 million.[/R]

Of the stocks in the Dow, 27 increased, 3 decreased and none were unchanged.

Of the 30 stocks in the Dow Jones Industrial Average, Bank of America Corporation led the gainers with a rise of 4.72% followed by increase in Alcoa Inc. of 4.68%, in Hewlett-Packard Company of 2.95%, in JPMorgan Chase & Co. of 2.55% in Johnson & Johnson of 2.05%.

The Coca-Cola Company led the decliners with a fall of 0.76%, followed by decline in Intel Corporation of 0.71%, in The Procter & Gamble Company of 0.08%.

Other Movers

Bank of America Corporation ((BAC)) surged 4.8% or 65 cents to $13.99 after the bank holding company resolved disputes with Freddie Mac and Fannie Mae by agreeing to pay more than $2.6 billion to settle claims to resolve repurchase claims involving certain residential mortgage loans sold to them by entities related to Countrywide Financial Corporation.

The agreements with Freddie Mac and Fannie Mae do not cover loan servicing obligations, other contractual obligations or loans contained in private label securitizations.

Agreement with Freddie Mac resolves outstanding and potential repurchase claims for Legacy Countrywide loans sold to Freddie Mac through 2008

The agreement provides for a cash payment to Freddie Mac of $1.28 billion, which was made on December 31, 2010. Bank of America also expects to record non-cash, non-tax deductible goodwill impairment charge of approximately $2 billion in the fourth quarter of 2010 in its Home Loans and Insurance business segment.

Calavo Growers, Inc. ((CVGW)) increased 3.6% or 85 cents to $23.90 after the avocado products sellers reported fourth quarter revenues soared 32% to $107.2 million from $80.9 million in the comparable period a year ago. Net income in the quarter increased 106% to $4.8 million or 32 cents per diluted share, compared to $2.3 million or 16 cents per share a year earlier.

For the fiscal year 2010, revenue surged 16% to $398.4 million in from $344.8 million last year. Same store sales decreased by 1.4% from fiscal 2009. Net income was $17.8 million or $1.22 per diluted share compared to $13.6 million or $0.94 per share a year earlier.

Dollar Financial Corp. ((DLLR)) soared 8.3% or $2.40 to $31.03 after the financial services company announced that its U.K. based subsidiary, Dollar Financial U.K. Ltd. has agreed to acquire Purpose U.K. Holdings Limited, a provider of online payday loans in the United Kingdom operates since 2003. The purchase price of the acquisition is about $195.0 million. Stephens Inc. has served as the Company''s financial advisor.

The company has also completed the acquisition of Sefina Finance AB, a leading Scandinavian pawn lending business with headquarters in Stockholm, Sweden, which has more than 125 year operating history. The total cash acquisition is approximately $73 million of which $58 million was cash paid at closing with the remaining approximately $15 million of additional cash to be paid in installments during calendar year 2011.

The company anticipates to immediately update accretive to earnings and expects to update its earnings outlook for fiscal 2011.

Torchmark Corporation ((TMK)) gained 1.2% or 72 cents to $60.46 after the holding company announced that subsidiary closed the sale of its wholly owned subsidiary at about $648 million. The sale of United Investors will provide additional free cash flow to the parent company, “Torchmark” of approximately $250 to $320 million in 2011. Bank of America Merrill Lynch acted as financial advisor to Torchmark.