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Global Stocks Trending in the News for March 8th, 2019

Mar 08, 2019

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Global Consumer Stocks Trending in the News

  • Amazon (AMZN) said it is closing its pop-up electronics stores as it adjusts its bricks and mortar strategy.    Amazon had opened 87 pop-up stores in malls and some larger retailers and expects to close them all within a month, calling it an experiment that will no longer continue.  Amazon will continue with its book stores and 4-star stores, where it sells only items rated 4 stars or more on its site.  Amazon is rated “Neutral” in our US Large-Cap and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • American Eagle’s (AEO) weak first quarter guidance is a temporary situation that will revert by the second quarter, according to Telsey Advisory.  American Eagle’s spending in the first quarter will deliver better EPS for the remainder of 2019.  Telsey highlights a number of positives for the stock that far outweigh the temporary weakness expected in the first quarter, including continued strength in denim and the Aerie brand.  American Eagle is rated “Neutral” in our US Large-Cap and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Berry Group (BERY) has agreed to acquire RPC Group Plc (LSE:RPC) for 3.34 billion pounds (USD$4.4 billion) which will create one of the largest plastic packaging companies in the world.  Berry Group beat out a rival bid from Apollo Management (APO).  Berry Group was a holding of Apollo in the past only to be a competitor for acquisition targets now.  Berry Group is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas.  RPC Group is rated “Attractive” in our United Kingdom All-Cap Global Top Stock Ideas.  Apollo Management is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas.
  • Big Lots (BIG) reported fourth quarter adjusted EPS of USD$2.68, beating consensus of USD$2.30.  Fourth quarter revenue of USD$1.6 billion came in line with USD$1.6 billion consensus.  Same store sales growth of 3.1% came well above 1% consensus.  Big Lots gave first quarter EPS guidance of USD0.65-0.75, below present consensus of USD$0.95.  Big Lots is rated “Attractive” in our US Large-Cap and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Burlington Stores (BURL) reported fourth quarter EPS of USD$2.83, beating consensus of USD$2.77.  Fourth quarter revenue of USD$2 billion came in line with USD$2.05 billion consensus.  Merchandise inventory of USD$954 million is well above the USD$752 million consensus.  Burlington gave first quarter EPS guidance of USD$1.21-1.31 while below present consensus of USD$1.36 and same store sales growth of 0-2%.  Burlington Stores is rated “Attractive” in our US Large-Cap and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Continental AG (DB:CON) said it is seeing a “muted” start to the year, saying it expects 2019 to see lower vehicle production as compared to 2018.  Continental is the largest maker of auto parts in the world.  Continental sees a slowdown in China in the first half and expects margins to drop to 8-9%, down from 9.3% in 2018.  Continental is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • Costco Wholesale (COST) reported second quarter 2019 adjusted EPS of USD$2.01 beating the USD$1.69 consensus.  Costco Wholesale reported second quarter 2019 revenue was USD$35.04 billion in line with consensus of USD$35.68 billion.  Second quarter 2019 total sales grew 5.4%, below consensus of 5.7%.  Costco Wholesale is rated “Neutral” in our US Large-Cap and “Attract ive” in our US Consumer Staples Global Top Stock Ideas.
  • Dollar Tree (DLTR) announced it is closing or rebranding almost 600 Family Dollar Stores.  Dollar Tree took a USD$2.73 billion charge in its most recent results on an asset it paid USD$9 billion for in 2015. Dollar Tree's Family Dollar stores have lagged in performance and are weighing on Dollar Tree’s results.  Dollar Tree is rated “Attractive” in our US Large-Cap and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas. 
  • Kroger (KR) reported fourth quarter adjusted EPS of 48 cents missing the 53 cents consensus.  Kroger fourth quarter revenue was USD$28.09 billion in line with consensus of USD$26.37 billion.  Fourth quarter same store sales grew at 1.9%.  Kroger gave 2019 EPS guidance of USD$2.15-2.25 below consensus of USD$2.28, with same store sales growth of 2%-2.25%.  Kroger's lackluster fourth quarter results have weighed on the stock with analysts highlighting its turnaround initiative is not going so smoothly.  Kroger is in the midst of a program that is overhauling how it uses shelf space in its stores.  Kroger is also working to build out its delivery service at the same time so disruptions to its results are not such a surprise to many.  Kroger is rated “Neutral” in our US Large-Cap and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Quiz Plc (AIM:QUIZ) issued its third profit warning in the last six months.  Quiz shares have fallen 92% from the July peak as Quiz battles intense online competition.  Analysts have commented that is it unlikely to see growth in the near term from Quiz as management has not come up with a turnaround strategy.  Quiz is not rated in our Global Top Stock Ideas.
  • Tesla (TSLA) has secured up to USD$521 million in a syndicated loan for its new Chinese factory.  Tesla CEO Elon Musk previously said Telsa would need about USD$500 million to open its factory in China and this announcement should be sufficient to build the car and battery manufacturing facilities planned.  Tesla broke ground on the factory on January 7th and plans to start production before the year-end.  Tesla is rated “Top Short” in our US Large-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.

Global Information Technology & Communication Services Stocks Trending in the News

  • Alibaba (BABA) and Ant Financial, one of its units, will create a joint steering committee, according to a report in Bloomberg.  The committee will be headed by Alibaba and will be tasked with finding joint ventures for the 2 to work together on.  The committee will also ensure both companies long-term interests are aligned.  The committee will hold executives accountable in the event that is not the case.  Alibaba is rated “Top Buy” in our China All-Cap Global Top Stock Ideas
  • Care.com (CRCM) fourth quarter revenue was USD$49.9 million matching consensus of USD$49.8 million.  Fourth quarter ESP of 26 cents beat 21 cents consensus.  Care.com gave first quarter EPS guidance of 8 cents below consensus of 17 cents and revenue of USD$52.5-52.8 million while consensus is USD$53.3 million.  Care.com is rated “Neutral” in our US SMID-Cap and “Top Short” in our US Information Technology Global Top Stock Ideas.
  • Facebook (FB) said it intends to focus on private communications and not as much on shareable content.  Facebook will encrypt its messaging service and is working to combine its messenger, Whatsapp and Instagram platforms to give users 1 integrated platform for messaging.  Facebook said it sees the future of social media as small chat groups and not public sharing of content.  Facebook is rated “Neutral” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Fitbit (FIT) announced the release of 4 new or updated models today.  Fitbit will release a cheaper version of its Versa and Inspire smartwatches.  A version of the Versa with Sp02 sensor for sleep apnea will also be released.  Fitbit also intends to redesign its app to allow for more personalization.  Fitbit is rated “Neutral” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas. 
  • International Game Technology (IGT) reported fourth quarter EPS of USD0.24, missing consensus of USD$0.35.  Fourth quarter revenue of USD$1.27 billion came in line with USD$1.26 billion consensus.  International Game Technology gave 2019 adjusted ebitda guidance of USD$1.70-1.76 billion while present consensus is USD$1.75 billion.  International Game Technology is rated “Attractive” in our US Large-Cap and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas. International Game Technology is not rated in our Global Top Stock Ideas.
  • Micron (MU) has its revenue outlook cut at Cleveland Research to USD$24 billion from USD$25.5 billion for 2019.  Micron will continue to see pricing headwinds and competition remains strong.  Cleveland also highlights that numerous clients have a high level of inventory, contributing to the weak end-demand.  Micron will report second quarter results March 20th.  Micron is rated “Unattractive” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Samsung (KOSE:A005930) denied reports from earlier today that it is making a bid for NXP Semiconductors (NXPI).  The report was in the Asian press earlier today and NXP initially rose on the news.  The report stated there were internal discussions over a potential bid.  Neither Samsung nor NXP Semiconductors are is not rated in our Global Top Stock Ideas.
  • Xerox (XRX) said its board has approved a reorganization of its corporate structure into a holding company.  The change will allow Xerox greater strategic, operational and financial flexibility. Holders of Xerox will receive an equal number of shares in the holding company with the change being implemented mid-2019.  Xerox is rated “Attractive” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.

 

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We Crunch the Numbers, You Make the Trade.We Crunch the Numbers, You Make the Trade.

Global Financials Stocks Trending in the News

  • Deutsche Bank (DB:DBK)  and Commerzbank (DB:CBK) have intensified their merger talks, according to a report in Bloomberg.  The report says the talks are still informal at this point and the boards have not given the mandate to start the process, yet.  The Finance Ministry has previously indicated its desire to see the two banks merge for the benefit of its small and mid-sized clients that are the backbone of the German economy, the report adds.  Deutsche Bank is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.  Commerzbank is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • Futu Holding (FHL), an online Chinese broker backed by Tencent (TCEHY, SEHK: 700), completed its IPO raising USD$90 million.  Futu priced its IPO at USD$12, the top of the range it mentioned during pre-pricing meetings.  Futu helps Chinese investors trade overseas and is the fourth largest broker in Honk Kong.  Tencent is rated “Neutral” in our China All-Cap Global Top Stock Ideas.  Futu Holdings is not rated in our Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • Fedex (FDX) had its price target cut to USD$210 from USD$225 at Citi ahead of reporting results on March 19th.  Fedex has seen “one of the rockiest periods in memory” according to Citi while maintaining its buy rating.  Citi is looking for clarity on progress on the integration of TNT that it acquired.  Fedex is rated “Unattractive” in our US Large-Cap and “Top Buy” in our US Industrials Global Top Stock Ideas.
  • Navistar (NAV) reported first quarter 2019 adjusted EPS of USD$0.11, beating consensus of USD$2.30.  First quarter 2019 revenue of USD$2.43 billion beating USD$2.18 billion consensus.  Navistar gave full year revenue guidance of USD$10.75-11.25 billion while above present consensus of USD$10.74.  Navistar is rated “Attractive” in our US SMID-Cap and “Attractive” in our US Industrials Global Top Stock Ideas.

Global Commodities Stocks Trending in the News

  • Vale (VALE) is likely to see more senior executives depart in the wake of the recent dam disaster, according to Andressa Lanchotti, the prosecutor leading the task-force investigating the dam collapse.  Lanchotti did not go into any specifics of the case but she said the government will be holding executives personally responsible for the tragedy.  Vale is rated “Neutral” in our Brazil 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