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Global Stocks Trending in the News for February 25th, 2019

Feb 25, 2019

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Global Consumer Stocks Trending in the News

  • Alibaba (BABA) CEO Daniel Zhang said the company has no plans for any layoffs.  Alibaba intends to keep up its recruitment efforts.  There has been a wave of layoffs at Chinese fintech companies and Alibaba, with over 100,000 employees, wants to keep growing.  Alibaba is rated “Top Buy” in our China All-Cap Global Top Stock Ideas.
  • Anheuser Busch (ENXTBR: ABI) and other European food & beverage companies shares slid in sympathy with Kraft Heinz (KHC) Friday. Kraft Heinz shares tanked after it wrote down the value of some of its largest brands by USD$15.4bn in its most recent quarter. Anheuser Busch is rated “Top Short” in our European Large-Cap Global Top Stock Ideas. Kraft Heinz is rated “Unattractive” in our US Large-Cap and “Attractive” in our US Consumer Staples Global Top Stock Ideas.
  • Caesars Entertainment (CZR) reported fourth quarter EPS of USD$0.25 well above consensus of 9 cents per share loss.  Caesars Entertainment reported fourth quarter adjusted revenue of USD$2.12 billion in line with consensus of USD$2.11 billion.  Caesars Entertainment is rated “Unattractive” in our Large-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Kraft-Heinz (KHC) wrote down the value of its existing brands by USD$15.4 billion when it reported results Friday, leading to a quarterly loss of USD$12.6 billion or USD$10.34 per share.  Kraft-Heinz also disclosed a probe from the Securities and Exchange Commission relating to its procurement practices.  Fourth quarter earnings also came below expectations, but it is the write-down that is the focus of investors’ attention.  Kraft-Heinz is rated “Unattractive” in our US Large-Cap and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas. 
  • Warren Buffet said this morning he was “wrong in a couple of ways” about Kraft Heinz Corp. (KHC), which he insists is still a “wonderful” business.  Buffet said “we overpaid for Kraft”, a statement not normally heard from him.  Kraft Heinz Corp took at USD$15.4 billion write-down as part of its most recent results last week, surprising the market.  Kraft Heinz Corp is rated “Unattractive” in our US Large-Cap and “Attractive” in our US Consumer Staples Global Top Stock Ideas.
  • Magna International (TSX: MG) was downgraded Friday at TD Ameritrade to neutral from buy.  TD Ameritrade highlighted slowing sales and a weaker outlook in its downgrade.  Magna International is not rated on our Global Top Stock Ideas.
  • Nike (NKE) has been the subject of ridicule in the social media realm after a basketball player sprained his knee when his Nike sneakers split open in the middle of a game.  The player from Duke University limped off the court and immediately Nike became the butt of endless jokes about the poor quality of its products.  Nike is rated “Unattractive” in our Large-Cap and “Top Buy” in our US Consumer Staples Global Top Stock Ideas
  • Persimmon (LSE: PSN) shares slipped notably lower after a weekend report from the Financial Times indicates that the homebuilder could be banned from the United Kingdom’s Help to Buy program. The report cites that Housing Secretary James Brokenshire is concerned that the company requires buyers to pay annual rent for their new home. Persimmon is rated “Attractive” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Roku (ROKU) reported fourth quarter pro-forma EPS of USD$0.05 above consensus of USD$0.03.  Roku reported fourth quarter adjusted revenue of USD$275.7 million beating consensus of USD$262.4 million.  Roku gave first quarter 2019 revenue guidance of USD$185-190 million.  Roku is rated “Top Short” in our Large-Cap Global Top Stock Ideas.
  • Stamps.com (STMP) fell over 50% Friday after the company said it was ending its exclusive relationship with the US Postal Service.  Stamps.com also said it is facing aggressive pricing tactics from Amazon (AMZN) and this news particularly weighed on the stock Friday.  Stamps.com is rated “Neutral” in our Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.  Amazon is rated “Neutral” in our Large-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  Amazon is rated “Unattractive” in our Large-Cap and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Wayfair (W) shares are soaring after the company reported y/y retail sales growth of 41%. In the 5-day stretch that includes Block Friday and Cyber Monday, Wayfair sales grew 58% from the same period a year earlier. Wayfair’s net losses are still deep, however, despite the online retailer’s robust sales growth. Wayfair is rated “Neutral” in our US Large-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.

Global Information Technology and Communication Services Stocks Trending in the News

  • Altice USA (ATUS) reported fourth quarter EPS of USD$0.30.  Altice USA reported fourth quarter adjusted revenue of USD$2.45 billion in line with consensus of USD$2.46 billion.  Altice USA gave 2019 revenue growth guidance of 2.5-3%.  Altice USA is rated “Top Short” in our Large-Cap Global Top Stock Ideas.
  • ASM International NV (ENXTAM: ASM) shares traded higher by double digits after the company announced stronger than expected CY4Q2018 earnings and positive CY1Q2019 guidance. The guidance issued by ASM International was, “fine,” according to NIBC analyst Edwin de Jong, who also said that the guidance makes the company the, “odd one out.” ASM International is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas.
  • Baidu Inc. (BIDU) expects to report 18% y/y revenue growth for the current quarter, the company told analysts. CEO Robin Li also double downed on the company's plan to increase spending to drive new user growth and ramp up its advertising business. Baidu issued revenue guidance of 23.5bn yuan for the 3-month period ending March. Baidu is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
  • Infrastrutture Wireless Italiane S.p.A. (BIT: INW) shares soared to record highs after Telecom Italia (BIT: TIT) and Vodafone (LSE: VOD) announced they will undertake building 5G wireless networks through a joint venture.  Morgan Stanley said that, as a result of the deal, “Inwit would become a more independent TowerCo.” Infrastrutture Wireless Italiane is rated “Top Buy” in our European SMID-Cap Global Top Stock Ideas. Telecom Italia is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas. Vodafone is rated “Unattractive” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Microsoft (MSFT) is dropping the price of its augmented reality goggles HoloLens 2.  The goggles will be cut to USD$3,500 from USD$5,000.  The HoloLens 2 goggles are targeting commercial applications and not consumers at this point, things such as teaching industrial processes or other educational applications.  Microsoft is rated “Attractive” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas. 
  • Nintendo Co. (TSE: 7974) announced that it will buyback 33bn yen (USD$298mm) worth of stock to offset the effect of 84bn yen worth of stock sales by shareholders, most of which are financial institutions. The Bank of Yuoto Ltd., Nomura Trust & Banking Co., Mitsubishi UFJ Financial Group, and some other financial institutions will sell up to 2.79mm Nintendo shares. Nintendo is not rated in our Global Top Stock Ideas.
  • Zillow Group Inc. (ZG) shares popped by more than 21% after the US home-search website said Rich Barton would return to the company as a top executive. Barton co-founded Zillow in 2005 and initially served as CEO -- he will replace Spencer Rascoff. Zillow is not rated in our Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • Senvion SA (DB: SEN) shares fell to record lows after the company postponed the publication of its FY2018 financial results. Senvion told investors on Sunday that it is seeking a, “restructuring opinion,” the first step required in Germany to begin negations with banks. Stephan Lienert, a credit analyst with Jefferies, wrote, “We believe delaying results and commissioning solvency reports simply means the cash issues is more acute than even we estimate.” Senvion is not rated in our Global Top Stock Ideas.

 

 

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Global Financials Stocks Trending in the News

  • Ping An Insurance Co. (SEHK:2318) is planning an IPO of its fintech unit that could value it at up to USD$8 billion.  Ping An Insurance plans an IPO of its OneConnect unit in Hong Kong that could see it reap up to USD$1 billion in the offering.  The IPO could happen as soon as the second half of 2019.  Ping An Insurance is rated “Neutral” in our China All-Cap Global Top Stock Ideas. 
  • Provident Financial Plc (LSE: PFG) shares soared after Non-Standard Finance (LSE: NSF) offered to buy the company via an all-stock reverse takeover. The all-stock reverse takeover is priced at 511p/share equivalent as of Thursday’s close. Providential Financials shareholders will receive 8.88 shares of Non-Standard Finance shares for each share owned. Provident Financial is rated “Top Short” in our United Kingdom All-Cap Global Top Stock Ideas. Non-Standard Finance is not rated in our Global Top Stock Ideas.
  • Societe Generale SA (ENXTPA: GLE) is planning to cut thousands of jobs at its investment bank, according to a Bloomberg report citing people familiar with the matter. Societe Generale is seeking to cut 500mm euros (USD$567mm) in costs and review its less profitable investment banking activities following its abysmal CY4Q2018. Societe Generale is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.

Global Commodities & Power Stocks Trending in the News

  • Barrick Gold (TSX:ABX) has made a hostile bid for Newmont Mining (NEM) in a USD$19.4 billion deal.  The deal offers Newmont at its market price as Barrick attempts its second acquisition in the last 6 months.  Barrick and Newmont have had on and off talks about linking up for the last few years.  The gold sector has seen a number of recent deals as its consolidation ramps up.  Barrick Gold is rated “Neutral” in our Canada All-Cap Global Top Stock Ideas.  Newmont Mining is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Covestro (DB:1COV) gave guidance well below market consensus.  Covestro said it sees ebitda of 1.5-2 billion euros, well below the 2.07 billion euros consensus.  Covestro said the glut of advanced polymers and plastics in the market will weigh on its results this year.  Covestro cited Chinese companies undercutting its pricing.  Covestro is rated “Unattractive” in our European Large-Cap Global Top Stick Ideas. 

Global Healthcare Stocks Trending in the News

  • Allscripts Healthcare Solutions (MDRX) shares slipped after the company announced weaker than expected FY2019 guidance that prompted Citi to cut its recommendation for the company from buy to neutral. Citi also slashed its price target for Allscripts from USD$14/share to USD$12/share. Allscripts is rated “Attractive” in our US SMID-Cap Global Top Stock Ideas.
  • Ipsen SA (ENXTPA:IPN) has agreed to acquire Clementia Pharmaceuticals (CMTA) in a USD$1.3 billion deal.  Ipsen will pay USD$25 per share up front and an additional right value of USD$6 per share.  This is a 77% premium to the last close for the Canadian company.  The acquisition of Clementia will expand the rare disease portfolio of Ipsen, an area of biotech that has seen a lot of deal focus recently.  Ipsen is rated “Unattractive” in our US SMID-Cap Global Top Stock Ideas.  Clementia is not rated in our Global Top Stock Ideas.
  • Roche (SWX:ROG) is acquiring Spark Therapeutics (ONCE) in a USD$4.8 billion deal.  Roche is paying a 122% premium for Sparks which will transform it from a laggard to a leader in gene therapy, paying USD$114.50 or share for Spark.  Spark will give Roche a stable of experimental drugs that it is presently lacking.  Roche is rated “Attractive” in our European Large-Cap Global Top Stock Ideas.  Spark Therapeutics is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.

Global REITs Trending in the New

  • Hammerson Plc (LSE: HMSO) shares edged higher following reports that the company is in discussions to sell 900mm pounds (USD$1.2bn) worth of properties. The discussions come following increased pressure from activist shareholder Elliott Advisors after the value of the company’s portfolio dropped 5.9% in 2018. Hammerson is rated “Top Short” in our United Kingdom All-Cap Global Top Stock Ideas.

 

 

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Global Top Stock IdeasTOP LONG & TOP SHORT STOCK IDEAS FOR GLOBAL MARKETSMONTHLY TOP IDEAS FROM OUR MULTI-FACTOR QUANTITATIVE MODELS