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Global Stocks Trending in the News for January 14th, 2019

Jan 14, 2019

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Global Consumer Stocks Trending in the News

  • Amazon’s (AMZN) IMDb will launch a free video streaming service that is ad supported.  This will be Amazon’s first ad supported video service and it will be called IMDb Freedive.  Amazon is looking to grab more of the USD$210 billion digital ad market with this service, a market where it had already risen to #3.  Amazon is hiring new ad sellers as it seeks to grow its advertising business.  Amazon is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Anheuser-Busch Inbev (ENXTBR: ABI) is considering an IPO of its Asian unit, according to a report from Bloomberg.  Anheuser-Busch Inbev is talking to advisers about the potential deal that could raise up to USD$5 billion.  Anheuser-Busch Inbev has been looking for ways to unlock value for shareholders and this could be an obvious choice.  Anheuser-Busch Inbev would look to value to business at USD$70 billion, according to the report.  Anheuser-Busch Inbev is rated “Top Short” in our European Large-Cap Global Top Stock Ideas.
  • AO World (LSE: AO) updated 3Q sales, saying they are growing at 8.2%, slowing down from its first half run rate of 9.9%.  AO World maintained its recently lowered guidance.   Shore Capital noted that it is positive there was not another cut in guidance and reiterated its sell rating.  AO World is not rated is rated in our Global Top Stock Ideas.
  • Archer Daniels Midland (ADM) is acquiring Florida Chemical Company for USD$175 million from Flotek Industries (FTK).  Florida Chemical Company is a leading provider of citrus oils and fragrances and ADM is adding this acquisition to its stable of natural flavor solutions.  ADM commented that citrus is one of the fastest growing flavor categories.  ADM is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Consumer Staples Global Top Stock Ideas.  Flotek is rated “Top Short” in our US Large-Cap Global Top Stock Ideas.
  • Autoliv (ALV) was upgraded at UBS to buy from hold.  UBS upgraded Autoliv in the wake of the departure of its CEO earlier this week.  Autoliv is not rated is rated in our Global Top Stock Ideas.
  • MNG Enterprises has offered to buy Gannett Corp (GCI) for USD$1.36 billion.  MNG Enterprises is offering USD$12 per share, a 23% premium to Friday’s close.  MNG Enterprises owns over 90 newspapers and is looking to add scale to its operations.  Gannett is rated “Attractive” in our US Large-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas. 
  • Gymboree (GYMB) is close to a bankruptcy filing, according to the Wall Street Journal.  Gymboree is lining up bankruptcy financing in anticipation of a filing, the paper is reporting.  Gymboree will close all of its 900 stores, it is being reported.  Gymboree is not rated in our Global Top Stock Ideas.
  • Nike (NKE) is the focus of a EU tax investigation of companies that use Dutch law to lower their tax payments.  The EU alleges Nike and others have used the Netherlands to set up structure that “unduly reduce their tax burden”, and that is unfair.  The EU probe will focus on the structure of royalty payments and how they are taxed.  Nike is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.

Global Information Technology and Communication Services Stocks Trending in the News

  • Activision Blizzard (ATVI) is cutting ties to Bungie Inc, the developer of one of its most successful titles “Destiny”.  The Wall Street Journal is reporting that Activision Blizzard was not happy with the most recent version of the game and had decided to end a collaboration that began in 2008.  Neither company would comment on the story.  Activision Blizzard is rated  “Neutral” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Alibaba (BABA) backed Megvii is considering an IPO that would value the company at up to USD$1 billion.  Megvii is the owner of Face++, the AI-powered facial recognition software.  Megvii hopes to raise USD$500 million, according to press reports.  Alibaba is rated “Unattractive” in our China All-Cap Global Top Stock Ideas.
  • Infosys (NSEI:INFY) was upgraded today at Susquehanna to neutral from negative.  Susquehanna raised the Infosys price target to USD$11 from USD$7.50.  Infosys raised guidance for 2019 and announced its second share buy back in 13 months.  Infosys is rated “Attractive” in our India All-Cap Global Top Stock Ideas.
  • Sharp Corp (TSE: 6753) had its price target cut to 1200 yen from 1400 yen by Morgan Stanley, sending the stock on a 10%+ rally.  Morgan Stanley raised the rating of Sharp Corp to equal weight from underweight.  Morgan Stanley believes its challenges will continue and that Sharp will struggle to hit its own targets.  Sharp is not rated is rated in our Global Top Stock Ideas. 
  • Snap (SNAP) was upgraded today at Citi to neutral from sell with a USD$7 reiterated.  Citi sees growth potential and an attractive valuation and cited both in its upgrade.  Snap will introduce an upgrade to its app shortly and that should improve user engagement, the report highlights.  Snap is rated “Unattractive” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas
  • Viacom (VIAB) is in talks to sell a majority stake in its China operations, according to a report in Bloomberg today.  Viacom is in talks with a Chinese entity to purchase the stake, without citing the potential buyer.  The sale talk comes as Viacom struggles to scale its operations in China.  Viacom is rated “Unattractive” in our US Large-Cap and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Xiaomi (SEHK:1810) will invest USD$1.48 billion in areas related to AI and Internet of Things (IoT) over the next 5 years, its CEO said.  Xiaomi’s CEO said AI and IoT will become parts of its “core development strategy over that time.  Xiaomi will also introduce its first 5G wireless phone in the second half of 2019.  Xiaomi is rated “Neutral” in our China All-Cap Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • Continental AG (DB: CON) provided guidance a bit below consensus estimates.  Continental expects 2019 sales of 45-47 billion euros while consensus is 46.6 billion euros.  Continental sees 2019 ebitda margin 8-9% while present consensus is for 9.5%.  Continental is rated “Top Short” in our European Large-Cap Global Top Stock Ideas.
  • Delta Airlines (DAL) had its rating cut at Merrill Lynch to neutral from buy.   Merrill Lynch cut its Delta Airlines rating because it does not sees any near term earnings catalysts.   The near-term wind headwinds for Delta Airlines make it unlikely to see any margin expansion any time soon.  Delta Airlines’ price target was cut to USD$51 from USD$62.  Delta Airlines is rated “Top Buy” in our US Large-Cap and “Top Buy” in our US Industrials Global Top Stock Ideas. 
  • Embraer (ERJ) said part of the proceeds from the sale of its commercial aviation business to Boeing (BA) will be paid as a special dividend.  Embraer expects to yield ~US$3 billion from the sale, net of transaction costs.  Embraer has not decided how much of the USD$3 billion will be paid as a dividend and how much will be retained as working capital.  Embraer is rated “Neutral” in our Brazil All-Cap Global Top Stock Ideas.  Boeing is rated “Top Buy” in our US Large-Cap and “Neutral” in our US Industrials Global Top Stock Ideas.
  • Northrop Grumman (NOC) was upgraded to outperform from neutral by Credit Suisse today.  Credit Suisse sees improving margins this year and cited this as a reason for the upgrade.  Northrop Grumman should see organic sales growth 2-3% in the coming quarter.  Northrop Grumman is rated “Top Buy” in our US Large-Cap and “Top Buy” in our US Industrials Global Top Stock Ideas.
  • PG&E(PCG) has informed employees it will seek bankruptcy protection on or about January 29th.  PG&E must inform with a 15-day notice which it is doing.  PG&E’s CEO quit over the weekend and its CFO will take over for now.  PG&E is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.

Global Financials Stocks Trending in the News

  • BlackRock (BLK) announced it is laying off 500 employees, or 3% of its workforce, according to Bloomberg.  The cuts will be worldwide and the first since 2016.  BlackRock said in a note to employees “market uncertainty is growing…and the ecosystem we operate in is becoming increasingly complex” without detailing where the cuts would be.  BlackRock is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Citigroup (C ) reported weak 4Q18 results, with fixed-income trading  revenue dropping 21% y/y to USD$1.94 billion while USD$2.4 billion was expected.  Citigroup’s largest trading unit saw its weakest revenue quarter since 2011.  Citigroup net income came at USD$4.3 billion, total revenue of USD$17.1 billion came below consensus of USD$17.5 billion.    CEO Michael Corbat said that after the volatile 4Q and its weak results, the main focus for 2019 will be to boost profitability.  Citigroup is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.

Global Commodities Stocks Trending in the News

  • Newmont Gold (NEM) will acquire its rival Goldcorp (TSX: G) in a USD$10 billion deal.  The deal will create a gold mining behemoth.  A statement from Newmont Gold said, “The combination will create the world’s leading gold business.”   The combination of Newmont Gold and Goldcorp will be a company producing 7.9 million ounces of gold per year.  Goldcorp is rated “Top Short” in our Canada All Cap Global Top Stock Ideas.  Newmont Gold is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas. 

 

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