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Global Stocks Trending in the News for January 15th, 2019

Jan 15, 2019

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Global Consumer Stocks Trending in the News

  • Boohoo Group (LSE: BOO) increased full-year guidance after a strong holiday season.  Boohoo as previously said revenue would rise 38-43%, now it has upped that to 43-45% growth.  Boohoo’s social media strategy has paid off handsomely.  Boohoo is rated “Attractive” in our United Kingdom All-Cap 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.
  • Volkswagen (DB: VOW) is announcing an expanded alliance with Ford (F) tomorrow, according to a report from Bloomberg.  The companies are discussing expanding collaboration in a number of areas with the Volkswagen board due to vote on moving ahead today.  Volkswagen’s CEO said today that they company is not, however, committed to joining with Ford to work on electric cars.  Volkswagen is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.  Ford is rated “Neutral” in our US Large-Cap and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Yeti (YETI) delivered preliminary 2018 results well above estimates, saying 2018 EPS will come 88-90 cents; previously Yeti guided 79-82 cents.   Yeti said it expects total sales to grow over 19%, well above consensus ~15%, with preliminary sales of USD$241.2 million versus USD$226.6 million estimate.  Yeti is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas.

Global Information Technology and Communication Services Stocks Trending in the News

  • Facebook (FB) said it is going to invest USD$300 million in local news over the next 3 years.  Facebook will offer grants to local newsrooms and invest in local news non-profits.  Facebook is making the efforts as local news programs continue to suffer.  Facebook is rated is rated “Attractive” in our US Large-Cap and is rated “Top Buy” in our US Information Technology 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.
  • Vocera (VCRA) was downgraded today at Dougherty & Company to neutral from buy.  In its downgrade report, Dougherty & Company said clients should “move to the sidelines”. Vocera’s 2019 EPS estimate was cut to 78 cents from 85 cents on a lack of clarity in forecasts for its wearable communications device.  Vocera is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas
  • Western Digital (WDC) was downgraded today by Evercore ISI to underperform from in-line.  Evercore ISI also cut its price target to USD$30 from USD$35.  Evercore sees risk to its dividend with its USD$11 billion debt load, saying Western Digital would be “hard pressed” to maintain its dividend at current levels, if at all.  Western Digital is rated “Unattractive” in our US Large-Cap and “Attractive” in our US Information Technology 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.
  • Zix Corp (ZIXI) has agreed to acquire AppRiver in an effort to create a cloud-based email security provider to small and medium-sized businesses.  Zix secured a total of USD$300 million in convertible financing to complete the deal.  The new combined company will have ~USD$180 million in revenue.  Zix is rated is rated “Attractive” in our US SMID-Cap and is rated “Neutral” in our US Information Technology 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) reported 4Q EPS of USD$1.30, a touch above USD$1.28 expected.  For the coming quarter, Delta Airlines sees revenue growing 4-6% while expecting costs to grow below inflation.  Delta expects 1Q revenue of USD$10.4 billion, up 5% y/y.  For full-year 2019, Delta Airlines expects EPS of USD$6-7.  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.
  • XPO Logistics (XPO) was downgraded by KeyBanc to sector weight from overweight.  KeyBanc cited the increased competition in the last mile of deliveries as well as continuing uncertainty in Europe in its downgrade of XPO.  XPO Logistics is rated “Neutral” in our US Large-Cap and “Attractive” in our US Industrials Global Top Stock Ideas.

Global Financials Stocks Trending in the News

  • 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.
  • JP Morgan (JPM) reported 4Q results that missed estimates, with fixed income trading revenue missing estimates significantly.  4Q EPS of USD$1.98 was well below USD$2.21 and came below the lowest estimate.  Fixed income trading revenue of USD$1.86 billion was well below USD$2.29 billion expected.  Equity sales and trading revenue of USD$1.32 billion was in-line.  JP Morgan reported USD$2 trillion in assets under management.  JP Morgan is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.

Global Commodities Stocks Trending in the News

  • Glencore (LSE: GLEN) is being described as “Far, far too cheap” by Bernstein in a note.  Bernstein says the stock is trading at 4.8x EV/ebitda versus its historical average of 8.0x.  Bernstein reiterates it outperform rating at 500 pence price target.  Glencore is rated is rated “Neutral” in our European Large-Cap and is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas.
  • 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. 

Global Healthcare Stocks Trending in the News

  • United Healthcare (UNH) reported fourth quarter results that beat estimates.  Adjusted earnings came at USD$3.28, beating the USD$3.21 average consensus.  United Healthcare saw it medical care ratio decline 50 basis points to 81.6%.  United Healthcare maintained 2019 revenue guidance of USD$243-245 billion.  United Healthcare is rated is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.

 

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