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Global Stocks Trending in the News for March 21st, 2019

Mar 21, 2019

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Global Consumer Stocks Trending in the News

  • Altria (MO) shares suffered in the wake of San Francisco announcing a proposal to ban e-cigarette companies from occupying city-owned property.  There is also a proposal to ban the shipment of e-cigarettes to San Francisco stores.   For the time, these are just proposals.  Altria is rated “Neutral” in our US Large-Cap and “Attractive” in our US Consumer Staples Global Top Stock Ideas.
  • BMW (DB:BMW) issued another profit warning, saying earnings will fall “well below” last year.  BMW has launched a 12 billion euros efficiency drive to battle the effects of trade conflicts and greater electric vehicle use.  BMW will cut down its model offerings, cut development time on new models and hold its employee count steady.  BMW expects pre-tax profit to fall more than 10% this year.  BMW is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • Conagra (CAG) reported fiscal third quarter 2019 EPS from continuing operations of 51 cents, beating the 49 cents consensus.  Conagra reported fiscal third quarter 2019 revenue of USD$2.71 billion in line with USD$2.75 billion.  Conagra CEO said the integration of Pinnacle if going well, after initial indication, a couple of months ago, were less positive.  Conagra is rated “Neutral” in our US Large-Cap and “Attractive” in our US Consumer Staples Global Top Stock Ideas.
  • General Mills (GIS) reported fiscal third quarter adjusted EPS of 83 cents, beating consensus of 69 cents.  General Mills reported fiscal third quarter revenue of USD$4.20 billion in line with USD$4.19 billion consensus.  General Mills reported organic volume growth of 5% and sees full year EPS growing 0-1%, up from a drop in sales of up to 3% originally expected.  General Mills is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Consumer Staples Global Top Stock Ideas.
  • Kingfisher Plc (LSE: KGF) shares fell after analysts were disappointed with the home-improvement retailer's financial results, which included the worst annual profits since the 2008 financial recession. Kingfisher also announced the resignation of CEO Veronique Laury, although it was not enough to signal a turnaround of the company for analysts. Kingfisher is rated “Unattractive” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Levi Strauss & Co (LEVI) is returning to the public markets today pricing shares at USD$17 and raising USD$623 million.  Levi Strauss was founded over 145 years ago and was taken private in 1985.  The IPO values the company at USD$6.6 billion.  Levi pitched investors on its opportunity in China, today it only gets 3% of its revenue from China.  Levi Strauss is not yet rated in our Global Top Stock Ideas.
  • Monster Beverage (MNST) was downgraded at Goldman Sachs to neutral from buy.  Monster Beverage also said its price target cut to USD$59 from USD$67.  Goldman sees a 2019 “softer than expected” for Monster Beverage which it expects to pressure earnings, saying he has been “a meaningful deceleration” in sales trends internationally.  Monster Beverage is rated “Neutral” in our US Large-Cap and “Attractive” in our US Consumer Staples Global Top Stock Ideas.
  • Ted Baker (LSE:TED) issued another profit warning, saying it sees “very difficult trading conditions.”  Ted Baker said it is facing heavy discounting from other retailers.  “Trading continues to be impacted by ongoing consumer uncertainty,” the company added.  Ted Baker sees a bright spot in e-commerce where it is seeing a 20% rise in sales.  Ted Baker is not rated in our Global Top Stock Ideas.
  • Walt Disney (DIS) has completed its acquisition of the major asset of 21st Century Fox (FOXA) in a USD$71.3 billion transaction.  In the wake of the deal, Disney will control Fox’s movie and television production studios, the FX cable channel, Fox Searchlight and National Geographic properties.   The combination of these assets is designed to provide the heft needed to effectively compete in the new media landscape.  Walt Disney is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.  21st Century Fox is not rated in our Global Top Stock Ideas.

Global Information Technology and Communication Services Stocks Trending in the News

  • Alphabet’s (GOOG.L) Google launched a new video game streaming service called Stadia.  Stadia is a platform upon which developers can develop streaming games that can be accessed over the web, bypassing gaming consoles.  Google also introduced its own gaming controller.  Alphabet is rated “Unattractive” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Facebook (FB) announced it will no longer include age, gender and zip code targeting with ads on its site, as part of a settlement to settle five discrimination lawsuits filed by advocacy groups.  Facebook will also pay just under USD$5 million.  Facebook COO Cheryl Sandberg said, “There is a long history of discrimination in the areas of housing, employment and credit, and this harmful behavior should not happen through Facebook ads.”  Facebook is rated “Neutral” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Inmarsat Plc (LSE: ISAT) shares traded higher by double-digits after it received a takeover offer worth roughly USD$3.3bn from a consortium of private equity and pension funds. The group led by Apa Partners and Warburg Pincus and supported by the Canada Pension Plan Investment Board and the Ontario Teachers’ Pension Plan offered a non-binding cash bid equal to about USD$7.21/share. Inmarsat received a slightly lower takeover offer worth about USD$7.07/share in July 2018. Inmarsat is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Nvidia (NVDA) said it is on track to clear out the inventory it built up anticipating cryptocurrency mining demand that did not materialize.  Nvidia maintained guidance for flat revenue in fiscal 2020 as it completes its inventory draw down, delivering guidance better than the 4% drop in revenue expected by analysts.  Nvidia is rated “Top Short” in our US Large-Cap and “Unattractive” in our US Information Technology Global Top Stock Ideas.
  • Sony Corp. (TSE: 6758) and Nintendo Co. (TSE: 7974) shares slipped after Alphabet’s (GOOG.L) Google announced its new game streaming venture, Stadia. Stadia will allow game developers to design games capable of being streamed over an Internet connection, which effectively cuts out traditional gaming consoles. “There is no doubt this service makes life even more difficult for established platforms,” said market strategist Amir Anvarzadeh on the news. Sony Corp. is rated “Attractive” in our Japan Large-Cap Global Top Stock Ideas. Nintendo is not rated in our Global Top Stock Ideas. Alphabet is rated “Unattractive” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Tencent Music Entertainment Group (TME) shares slid after investors were disappointed with the company’s debut financials release. Although Tencent Music Entertainment Group reported 50% revenue growth and an EPS beat in CY4Q2018, analysts harped on the firm’s measly user metrics. Specifically, Social Entertainment, the largest operating segment for Tencent Music Entertainment Group, observed only mild monthly active user growth. Tencent Music Entertainment Group is rated “Unattractive” in our China All-Cap Global Top Stock Ideas.
  • Viacom Inc. (VIAB) and AT&T Inc. (T) shares slid as the former’s looming blackout on DirecTV, who is now owned by AT&T, nears. BTIG analyst Richard Greenfield discussed that he does not see the logic in AT&T risking further detonation by holding out. Greenfield also discussed when DirecTV dropped Viacom networks in 2012, which did not end well for DirecTV and resulted in lost market share. Viacom is rated “Neutral” in our US Large-Cap Global Top Stock Ideas. AT&T is rated “Unattractive” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Wirecard (XTRA:WDI) senior executives oversaw and approved USD$2 million in transfers to Singapore that are the focus of the fraud investigation there, according to an FT report.  The transfers were familiar to Wirecard’s COO according to documents FT has seen, it notes.  Wirecard said the allegations are old and a final report on the allegations should be ready shortly.  Wirecard is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • UBS’ (SWX:UBSG) CEO said the first quarter of 2019 has been dismal, one of the toughest environments he has ever seen.  With little M&A activity or IPOs outside of the US, investment banking revenue is down over a third in the first quarter.  His comments indicate the situation is getting even worse than what he described in recent comments.  Global wealth management revenue is down 9% so far this year.  UBS is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.

 

 

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Global Financials Stocks Trending in the News

  • Fedex (FDX) issued its second profit warning in the last three months.  Fedex is seeing slowing economic activity globally and is dealing with the digestion of its most recent acquisition in Europe.  Fedex has expected a softer start to the year but sees things developing even worse than initially expected.  Fedex is rated “Unattractive” in our US Large-Cap and “Top Buy” in our US Industrials Global Top Stock Ideas.
  • Osram Licht AG (XTRA: OSR) shares slumped after CEO Olaf Berlien told investors that the company will have difficulty reaching its annual targets. Berlien explained that weaker demand from car makers and smartphone providers for components is driving the weaker-than-expected performance this year. Osram Licht is rated “Top Short” in our European Large-Cap Global Top Stock Ideas.
  • Rockwell Automation (ROK) was downgraded to neutral from buy at UBS.  Rockwell Automation also had its price target cut to USD$182 from USD$190.  UBS sees a decelerating growth environment for Rockwell Automation and at this point sees a balanced risk/reward scenario, a primary reason for the downgrade.  Rockwell Automation is rated “Attractive” in our US Large-Cap and “Neutral” in our US Industrials Global Top Stock Ideas.

Global Commodities & Energy Stocks Trending in the News

  • Murphy Oil (MUR) in exiting Malaysia, selling its assets there to PTT (PTTEP) of Thailand for USD$2.13 billion.  Murphy Oil is exiting Malaysia to focus on opportunities in the United States.  Murphy said it will use USD$750 million of the proceeds to fund expansion of its activities in the US.  Murphy Oil is rated “Top Short” in our US Large-Cap Global Top Stock Ideas.
  • Vale (VALE) received a favorable court decision in its quest to restart some of its shuttered mining operations in Brazil.  A judge has ruled Vale can restart its Brucutu mine, which would restore 30 million of the 80 million tons of production it was ordered to shutter in the wake of its dam disaster.  Vale still needs the OK from the environmental authorities in the state of Minas Gerais and Vale said inform investors when it has that.  Vale is rated “Neutral” in our Brazil All-Cap Global Top Stock Ideas.

Global Healthcare Stocks Trending in the News

  • Bayer (DB:BAYN) lost the first phase of its most recent court case alleging its RoundUp weed killer causes cancer.  Analysts are describing the loss as a major blow, as the company was confident it would win the case.  Analysts commented there should remain a significant overhang on the stock given the loss in the case and the chance for further losses.  Bayer is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • Nevro (NVRO) shares soared after Wall Street praised the companies, “new beginning,” as it hired Keith Grossman as CEO. At least four Wall Street firms upgraded their rating for the stock, sending Nevro shares higher by as much as 36% in intraday trading. Analysts across Wall Street highlighted Grossman’s proven ability to lead turnarounds in their upgrades. Nevro is rated “Top Short” in our US Large-Cap Global Top Stock Ideas.

Global REITs Trending in the New

  • Henderson Land Development Company Limited (SEHK: 12) Chairman Lee Shau Kee may be considering stepping down from his position, according to reports. Lee who is 91 years of age, is the second-richest man in the city of Hong Kong. Henderson Land has reportedly proposed that Lee’s sons, Lee Ka Kit and Lee Ka Shing, take his place as joint chairmen and managing directors. Henderson Land is rated “Attractive” in our China 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