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Global Stocks Trending in the News for February 26th, 2019

Feb 26, 2019

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Global Consumer Stocks Trending in the News

  • Amazon (AMZN) said its thoughts are with the crew after one of its 767 cargo planes crashed in Texas on Saturday.  The plane had a crew of three and upon descent to land it crashed.  Debris from the crash was strewn over a mile-long stretch.  The cargo jet was owned and operated by Atlas Air Worldwide (AAWW).  Amazon is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.  Atlas Air Worldwide is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas.  Danaher is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Etsy (ETSY) reported fourth quarter EPS of USD$0.32 well above consensus of USD$0.25.  Etsy reported fourth quarter adjusted revenue of USD$200 million beating consensus of USD$194.9 million.  Etsy reported fourth quarter adjusted ebitda of USD$51.4 million.  Etsy sees 2019 revenue growth of 29-32% while consensus is 30%. Etsy is rated “Top Short” in our Large-Cap Global Top Stock Ideas and “Neutral” in our Information Technology Global Top Stock Ideas.
  • Home Depot (HD) reported fourth quarter adjusted EPS of USD$2.22 beating consensus of USD$2.16.  Home Depot reported fourth quarter adjusted revenue of USD$26.49 billion in line with consensus of USD$26.58 billion.  Home Depot reported fourth quarter same store sales growth of 3.2% while consensus was for a 4.5% rise.  Home Depot gave same store sales growth guidance in 2019 of 5% with revenue growth of 3.3%.  Home Depot is rated “Unattractive” in our Large-Cap Global Top Stock Ideas and “Neutral” in our Consumer Discretionary Global Top Stock Ideas.  Home Depot is rated “Attractive” in our Large-Cap Global Top Stock Ideas and “Top Buy” 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 Global Top Stock Ideas and “Attractive” 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.
  • Puma (DB:PUM) was cut to underperform from neutral at Credit Suisse while its price target was cut to 417 euros from 445 euros.  Credit Suisse made the cut due to its valuation, calling it a bit expensive at these levels while highlighting that Credit Suisse’s EPS expectations are below consensus for the coming years.  Puma is rated “Attractive” in our European SMID-Cap Global Top Stock Ideas.
  • Shake Shack (SHAK) reported fourth quarter adjusted EPS of USD$0.06 beating consensus of USD$0.03.  Shake Shack reported fourth quarter adjusted revenue of USD$124.3 million beating consensus of USD$119.2 million.  Shake Shack reported fourth quarter same store sales growth of 2.3% while consensus was for a drop of 1.2%.  Shake Shack is rated “Unattractive” in our Large-Cap Global Top Stock Ideas and “Neutral” in our Consumer Discretionary Global Top Stock Ideas.
  • Tesla (TSLA) CEO Elon Musk should be held in contempt of court, according to the Securities and Exchange Commission (SEC).  The SEC has asked a judge to hold Mr. Musk in contempt for tweets he recently sent that the SEC claims breached the agreement he has signed.  The tweet in questions said Tesla would reach production of 500,000 cars in 2019, a tweet that was quickly corrected to say daily production at the annual rate of 500,000 cars.  The tweet was not approved beforehand, violating the agreement with the SEC.  Tesla is rated “Top Short” in our Large-Cap Global Top Stock Ideas and “Neutral” in our Consumer Discretionary Global Top Stock Ideas. 
  • Vitamin Shoppe (VSI) reported fourth quarter adjusted loss of 19 cents per share beating consensus of 25 cents loss per share.  Vitamin Shoppe reported fourth quarter adjusted revenue of USD$248.5 million missing consensus of USD$254.5 million with same store sales dropping 5.4% in the quarter.  Vitamin Shoppe expects to close 60-80 stores in 2019.  Vitamin Shoppe is rated “Unattractive” in our SMID-Cap Global Top Stock Ideas and “Top Short” in our US Consumer Discretionary Global Top Stock Ideas

Global Information Technology and Communication Services Stocks Trending in the News

  • Aixtron SE (DB: AIXA) shares fell after the company reported a revenue forecast for FY2019 that was 1.1% below the average analyst estimate. Aixtron expects revenue between 260mm euros and 290mm euros in FY2019 while analyst consensus was for 278.1mm euros. For CY4Q2018, Aixtron generated revenue of 87.9mm euros, surpassing consensus of 81.9mm euros. Aixtron is rated “Attractive” in our European SMID-Cap Global Top Stock Ideas.
  • Apple (AAPL) will reportedly include a sleep monitor feature on its next Apple Watch.  Apple is presently testing the feature at its headquarters in California.  If testing goes as planned the feature will be added to the Apple Watch in 2020.  The feature will give Apple the ability to better compete with other wearable health devices.  Apple is rated “Neutral” in our Large-Cap Global Top Stock Ideas and “Neutral” in our Information Technology 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 Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas. 
  • Sykes Enterprises (SYKE) reported fourth quarter adjusted EPS of USD$0.58 missing consensus of USD$0.66.  Sykes Enterprises reported fourth quarter adjusted revenue of USD$415.2 million missing consensus of USD$417.5 million.  Sykes Enterprises gave first quarter 2019 revenue guidance of USD$403-408 million, below present consensus of USD$.  Sykes Enterprises is rated “Attractive” in our SMID-Cap Global Top Stock Ideas and “Neutral” in our Information Technology Global Top Stock Ideas.
  • Telefonica (BME:TEF) said it has “all possibilities open, organically or inorganically, in Mexico”, according to its CEO.  The business in Mexico has underperformed though it is improving, he said.  Telefonica is looking at and questioning every unit where the capital employed is not meeting target returns.  Telefonica is rated “Attractive” in our European Large-Cap Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • General Electric (GE) is selling its biopharma unit to Danaher (DHR)  in a USD$21.4 billion deal.  GE will receive USD$21.4 billion in cash from the sale while also transferring certain pension liabilities to Danaher.  GE CEO Larry Culp ran Danaher for 10 years until 2014.  GE will halt the spinoff of its broader healthcare unit to focus on the transaction.  General Electric is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Top Short” in our US Industrials Global Top Stock Ideas.
  • Hertz (HTZ) reported fourth quarter loss of 53 cents per share beating consensus of an 82 cents per share loss.  Hertz reported fourth quarter adjusted revenue of USD$2.3 billion beating consensus of USD$2.1 billion.  Hertz posted 10% revenue growth in the fourth quarter.  Hertz is rated “Unattractive” in our Large-Cap Global Top Stock Ideas and “Unattractive” in our Industrials Global Top Stock Ideas.
  • 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.
  • Travis Perkins (LSE: TPK) shares rose the most intraday since 2009 after the company announced FY2018 pretax profit of 348mm pounds, notably beating the consensus estimate of 327mm pounds. Travis Perkins generated y/y revenue of 6.9% for CY4Q2018 and 4.9% revenue growth for the full year. Travis Perkins is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas.

 

 

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Global Financials Stocks Trending in the News

  • Bank of America (BAC) announced it will drop the Merrill Lynch name from its investment bank.  Bank of America acquired Merrill Lynch at the height of the financial crisis and has told employees it will remove  “Merrill Lynch” from the investment bank completely and rebrand its wealth management unit businesses with the “Merrill” name.  An era has ended.  Bank of America is rated “Attractive” in our SMID-Cap Global Top Stock Ideas.
  • 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. 
  • Piper Jaffray (PJC) announced it will acquire Weeden & Co., an execution broker-dealer.  Piper Jaffray will pay USD$42 million with USD$24.5 million in cash and USD$17.5 million in retention stock.   Weeden’s owners also have a change to earn an additional USD$31.5 million in non-equity compensation if certain sales and trading revenue targets are hit.  Piper Jaffray is rated “Attractive” in our US SMID-Cap Global Top Stock Ideas.
  • Standard Chartered Plc (LSE: STAN) CFO Andy Halford confirmed in an interview that the bank will push forward with plans to create two new hubs for its Asian operations in Singapore and Hong Kong. Halford discussed that the move will save Standard Chartered in the “low” hundreds of millions of dollars in costs. Standard Chartered is rated “Neutral” in our United Kingdom All-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 sees 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. 
  • Fresnillo PLC (LSE: FRES) shares fell by double-digits after the company reported CY2H2018 revenue that missed consensus due to lower revenue and higher costs. Fresnillo’s costs increased 14% y/y in CY2H2018 while its Ebitda came 9% below consensus. Citi noted that Fresnillo’s EPS was offset by a lower tax rate. Fresnillo is rated “Unattractive” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Royal Dutch Shell (ENXTAM:RDSA) said today it expects Europe to be the fastest growing LNG (liquified natural gas) next year.  Royal Dutch Shell controls 22% of the LNG market in Europe.   Russia is expected to increase its exports significantly to Europe next year and Shell expects the market to easily absorb it all.  Royal Dutch Shell is rated “Attractive” in our European Large-Cap Global Top Stock Ideas and “Attractive” in our United Kingdon All-Cap Global Top Stock Ideas.

Global Healthcare Stocks Trending in the News

  • 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.

 

 

 

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