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

Mar 14, 2019

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Global Consumer Stocks Trending in the News

  • Adidas (DB:ADS) gave growth guidance for 2019 that disappointed investors.  Adidas said sales growth will be no more than 5% in the coming year, down from 8% in 2018.  Sales in Europe will be flat with the popularity of its retro styles waning in 2019.  Adidas will have trouble supplying North America and expects sales growth of 1-2% in the region.  Adidas is rated “Attractive” in our European Large-Cap Global Top Stock Ideas.
  • Carnival Corp. (CCL) was upgraded to buy from hold at Goldman Sachs.   Goldman cited an attractive valuation as compared to the S&P 500 as it raised the price target to USD$65 from USD$63.  Goldman said it sees accelerating net unit growth” that should “propel fundamentals.”  Carnival is rated “Unattractive” in our US Large-Cap and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Inditex (BME:ITX), owner of Zara, reported operating profit that rose only 1% to 4.36 billion euros for 2018, coming below the 4.41 billion consensus.  Inditex was targeting same store sales growth of 4-6%.  Inditex saw greater competition in the fourth quarter and was forced to cut prices significantly to clear inventory.  Inditex is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Juventus (BIT:JUVE) soccer team saw its shares soar after it beat Spain’s Atletico Madrid to advance to the Champion’s Cup quarter final.  Cristiano Ronaldo scored 3 goals in the team’s 3-2 aggregate win.  Juventus rose 30% on news of the win.  Juventus is rated “Unattractive” in our European SMID-Cap Global Top Stock Ideas.
  • Lumber Liquidators (LL) announced it has resolved the outstanding securities fraud investigation by the SEC and US Department of Justice.  Lumber Liquidators agreed to pay USD$33 million for filing a misleading statement to investors regarding its laminate flooring from dryer.  Lumber Liquidators is rated “Neutral” in our US SMID-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Meituan Dianping (SEHK: 3690) and other Chinese food delivery companies shares slipped after Chinese regulators summoned executives from top food delivery companies in the country. Chinese food delivery companies will be required to improve their monitory and supervision systems of restaurants registered through their platforms. Chinese food delivery companies are also being prompted to deal with customer complaints and pay compensation in a more timely manner in the future. Meituan is rated “Top Short” in our China All-Cap Global Top Stock Ideas.  
  • Pindoudou Inc. (PDD) shares slid after the company reported an increased quarterly loss due to heavy spending on advertising and technology necessary to enter Chinese e-commerce. Despite the bottom-line loss, Pindoudou reported sales for CY4Q2018 that increased fourfold from a year earlier. Pindoudou is rated “Top Short” in our China All-Cap Global Top Stock Ideas.
  • Rite-Aid (RAD) announced its CEO is leaving the company as are 2 other senior executives amid poor performance for the company.  Rite-Aid also announced the closure of 400 stores, over a fifth of its stores.  Rite-Aid has struggled in recent years and the changes are designed to jump-start the company’s turnaround.  Rite-Aid is rated “Attractive” in our US Large-Cap and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Salvatore Ferragamo SpA (BIT: SFER) shares rose after Intermonte upgraded the stock from underperform to neutral. Intermonte also increased its price target for Salvatore Ferragamo from 12 euros/share to 16 euros/share, although this target still implies a 16% downside as of Tuesday’s closing price. Salvatore Ferragamo currently maintains no buy recommendations across 25 analyst ratings. Salvatore Ferragamo is rated “Attractive” in our European SMID-Cap Global Top Stock Ideas.
  • Volkswagen (XTRA:VOW3) increased its electric vehicle (EV) sales guidance by 50%.  On March 12th Volkswagen said it will launch 70 EV models and produce 22 million vehicles by 2028, up from 50 models and 15 million vehicles from its previous guidance.  For comparison, Volkswagen sold 80,000 EVs in 2018.  Volkswagen is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.

Global Information Technology & Communication Services Stocks Trending in the News

  • Apple (AAPL) was rated buy at Cowen in its initiation report on the stock.  Apple’s growth in services should propel it higher, with that unit being described as “an annuity.”   While acknowledging there exist challenges around its mature iPhone business Cowen sees many opportunities to grow revenue with value-added services.  Apple is rated “Neutral” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Microsoft (MSFT) announced it is working with Oxford Biomedica Plc (LSE:OXB) on developing better ways to repair genes in those with life-threatening diseases.  Microsoft will contribute its Azure cloud and machine learning software to help Oxford increase the productivity and purity of the viruses it uses in the repair of malformed genes.  The initial collaboration is for 2 years with the option to extend it.  Microsoft is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas.  Oxford Biomedica Plc is not rated in our Global Top Stock Ideas.
  • Momo (MOMO) was upgraded to overweight from equal-weight at Morgan Stanley.  Momo also had its price target hiked to USD$44 from USD$33.  In the wake of Momo’s recent results, Morgan Stanley sees significant upside for average revenue per user in the coming year.   Average user time is at record levels in the first quarter and is expected to rise further.  Momo is rated “Top Buy” in our China All-Cap Global Top Stock Ideas.
  • Roku (ROKU) was downgraded at Loop Capital to sell from hold.  Loop writes that the run-up in Roku has given it an “excessive valuation.”  Roku’s price target was maintained at USD$45.  Loop notes that while Roku could go from expensive to more expensive, it can no longer justify its hold rating, resulting in the downgrade to sell.  Roku is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Spotify (SPOT) has filed an anti-trust complaint with the European Union against Apple (AAPL).  Spotify is alleging that Apple is constantly changing the rules for third-party apps as well as charging a 30% tax on all third-party music apps that compete with Apple’s iTunes.  Spotify calls it an “untenable” situation and cites this as its reason for the complaint.  Spotify is not rated in our Global Top Stock Ideas.  Apple is rated “Neutral” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.

 

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Global Financials Stocks Trending in the News

  • Brookfield Asset Management Inc. (TSX: BAM.A) has agreed to purchase a majority stake in Oaktree Capital Group LLC (OAK), a combination that will rival Blackstone Group LP (OAK) as the world’s largest alternative asset manager. Brookfield will pay USD$4.7bn for a ~62% stake in Oaktree Capital Group. Combined, the firms will have roughly USD$475bn of assets under management that generates about USD$2.5bn of fee-related revenue. Brookfield Asset Management is rated “Unattractive” in our Canada All-Cap Global Top Stock Ideas. Oaktree Capital Group is rated “Attractive” in our US SMID-Cap Global Top Stock Ideas.  Blackstone Group LP is rated “Unattractive” in our US SMID-Cap Global Top Stock Ideas.
  • Commerzbank’s (DB:CBK) potential merger with Deutsche Bank (DB:DBK) is opposed by the top employee representative at Commerzbank.  The deputy chairman of the board at Commerzbank made the comment about how the workers’ council at the bank is opposed to any merger.  Earlier in the week labor leaders at Deutsche Bank expressed the same opposition to any merger with Commerzbank.   Commerzbank is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.  Deutsche Bank is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • Wells Fargo (WFC) CEO Tim Sloan spent 4 hours in front of Congress today testifying in front of the House Financial Services Committee.   Lawmakers grilled him on the state of Wells Fargo with many expressing concern that the bank has not rectified all its problems.  Some even suggested Wells Fargo should be broken up, describing the bank as “too big to manage.”  Wells Fargo is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • Boeing’s (BA) continues to suffer as its 737 Max jet has been grounded around the world.  President Trump announced that the US would ground the plane, one of the last countries to ground them.    Boeing has seen billions in market cap evaporate this week as the crisis has grown.  The 737 Max is its best seller and accounts for one-third of the company's profit.  Boeing is rated “Attractive” in our US Large-Cap and “Neutral” in our US Industrials Global Top Stock Ideas.
  • Embraer (ERJ) reported fourth quarter revenue of USD$1.67 billion, matching consensus; with ebitda of USD$1.8.1 million.  Embraer reaffirmed 2019 guidance and said 2019 will be a year of operational break-even.  Embraer added that Boeing’s (BA) problems with the 737 Max will not affect Embaer’s JV with Boeing.  Embaer is rated “Unattractive” in our Brazil All-Cap Global Top Stock Ideas.  Boeing is rated “Attractive” in our US Large-Cap and “Neutral” in our US Industrials Global Top Stock Ideas.
  • General Electric (GE) said it will burn through USD$2 billion in cash over the coming year as it works to turnaround the company.  CEO Larry Culp said the “Challenges are complex but clear” and highlighted that performance in 2020 and 2021 will be noticeably better than 2019.  GE has seen USD$170 billion in market cap evaporate since its problems started.  General Electric is rated “Neutral” in our US Large-Cap and “Unattractive” in our US Industrials Global Top Stock Ideas.

Global Health Care Stocks Trending in the News

  • Akorn (AKRX) rose sharply on speculation Baxter (BAX) would make a bid for the company amid the M&A activity in the sector recently.  Baxter, however, put out a statement saying it is not in talks with Akorn.  It added that it has no plans to make an offer for Akorn as had been reported.  Akorn is rated “Top Short” in our US SMID-Cap Global Top Stock Ideas.  Baxter is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Aurora Cannabis Inc. (TSX: ACB) shares soared following reports that billionaire investor Nelson Peltz will join the company as a strategic advisor. Stock options that are part of the deal could one day make Peltz the second-largest Aurora Cannabis shareholder. Nelson’s role with Aurora Cannabis will mainly focus on advising the company in potential partnerships. Aurora Cannabis is rated “Unattractive” in our Canada All-Cap Global Top Stock Ideas.  
  • Natera (NTRA) shares spiked as much as 20% after Canaccord reiterated its buy recommendation for the company and increased its price target from USD$25/share to USD$26/share. Natera delivered FY2019 guidance that topped Canaccord’s forecasts and the company, “appears poised for another break out to the upside,” according to analyst Mark Massaro. Natera is rated “Neutral” in our US SMID-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