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Global Stocks Trending in the News for March 29th, 2019

Mar 29, 2019

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Global Consumer Stocks Trending in the News

  • Amazon (AMZN) announced it will hire 800 tech engineers in Austin, Texas.  This is Amazon’s first big expansion since cancelling its planned headquarters in New York.  These 800 hires are part of the 25,000 jobs that were to go to New York and now will be distributed among other Amazon sites in the US.  Amazon will hire software and hardware engineers to work with the research staff there.  Amazon is rated “Neutral” in our US Large-Cap and “Attractive” in our US Consumer Staples Global Top Stock Ideas.
  • Alibaba (BABA) provided Qutoutiao (QTT) with a convertible loan valued at $171 million.  The loan from Alibaba to the news and video aggregator Qutoutiao makes strong strategic sense, according to analysts.  Citi called the deal a “win-win” as it will help Alibaba penetrate into new users in lower-tier cities,” especially given Qutoutiao’s effective user-acquisition strategy.  Alibaba is rated “Top Buy” in our China All-Cap Global Top Stock Ideas.  Qutoutiao is rated “Top Short” in our China All-Cap Global Top Stock Ideas.
  • CarMax (KMX) reported fourth quarter results that beat consensus.  Fourth quarter EPS of $1.13 beat $1.03 consensus. CarMax fourth quarter revenue of $4.32 billion trailed $4.37 billion consensus.  CarMax plans to have its omni-channel roll-out to the majority of its customers by the end of fiscal 2020.  CarMax will open 13 stores over the coming year.  CarMax is rated “Neutral” in our US Large-Cap and “Attractive” in our US Consumer Staples Global Top Stock Ideas.
  • Daimler (DB:DAI) and Geely Automotive (SEHK:175) announced they are deepening their cooperation with a new joint venture focused on electric vehicles.  The idea is to take Daimler’s Smart brand into a global all electric model.  This JV is the first fruit to come from the companies closer cooperation in the wake of Geely acquiring 10% of Daimler.  Daimler said the 2 will work to create the next generation of electric cars.  Daimler is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.  Geely Automotive is rated "Neutral" in our China All-Cap Global Top Stock Ideas.
  • Five Below (FIVE) reported fourth quarter EPS of USD$1.59 in line with USD$1.58 consensus.  Five Below posted fourth quarter revenue of USD$602.7 million in line with USD$601.4 million consensus.  Five Below gave first quarter EPG guidance of 32-35 cents, below 39 cents consensus.  Full year sales are expected to be USD$1.87-1.89 billion, in line with consensus.  Five Below is rated “Attractive” in our US Large-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • H&M ( HMB) reported first quarter pre-tax profit that handily beat consensus, 1.04 billion Swedish kroner came well above consensus of 638 million Swedish kroner.  This was its weakest profit in 18 years.  H&M’s CEO said the company will close “somewhat more” than 50 stores and put some limits on free deliveries.  There will be more closing than openings in 2019.  H&M is rated “Top Short” in our European Large-Cap Global Top Stock Ideas.
  • Haier Electronics (SEHK: 1169) shares slid by double-digits, the most since July 2015, following FY2018 financials that missed consensus expectations. HSBC downgraded Haier Electronics from neutral to reduce on the news. Haier Electronics also announced that CEO Li Hua Gang stepped down from his role -- he will be succeeded by Xie Ju Zhi, according to a statement. Haier Electronics is rated “Neutral” in our China ALl-Cap Global Top Stock Ideas.
  • Lululemon (LULU) reported bullish EPS guidance for 2019, saying it expects them to come in the range of USD$4.48-4.55, above present consensus of USD$4.41.  Lululemon expects 2019 revenue of USD$3.7-3.74 billion, in line with consensus.  Lululemon reported fourth quarter adjusted EPS of USD$1.85, beating consensus of USD$1.74.  Same store sales grew 7%, trailing the 8.3% consensus.  Lululemon is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas.
  • Manchester United Plc (MANU) has decided to give its caretaker manager Ole Gunnar Solskjaer the job full-time.  Solskjaer was appointed manager in December after the team ousted Jose Mourinho.  Solskjaer then went on to win 14 of his first 19 games.  Manchester United is not rated in our Global Top Stock Ideas.
  • RH (RH) reported fourth quarter EPD of USD$3.00 beating consensus of USD$2.86.  RH gave 2019 guidance that trailed the market by a wide margin-EPS of USD$8.41-9.08 is well below the $10.00 consensus.  Revenue is expected to come in the range of USD$2.59-2.64 billion, well below USD$2.75 billion.  RH expects revenue growth of 3-5%.  RH is rated “Neutral” in our US Large-Cap and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Sony Corp. (TSE: 6758) and Nintendo Co. (TSE: 7974) shares both edged lower today as analysts are highlighting that the gaming industry is becoming increasingly crowded with tech giants. The last week has seen Alphabet’s (GOOG.L) Google announce Stadia, a new video game streaming platform, and Apple (APPL) announce a subscription-based mobile game bundle. Microsoft (MSFT) also appears set to launch a revamped gaming service by year’s end. Sony is rated “Attractive” in our Japan Large-Cap Global Top Stock Ideas. Nintendo is not rated in our Global Top Stock Ideas.
  • PVH Corp. (PVH), the parent company of popular fashion brands Tommy Hilfiger and Calvin Klein, shares soared the most in 6 years after the company reported strong CY4Q2018 financial results while some analysts feared the impact of a tough macroeconomic environment. Shares of PVH Corp. surged as much as 17% in trading Thursday. PVH Corp. is rated “Attractive” 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

  • Accenture (ACN) shares touched an all-time high after the technology consulting firm increased its FY2019 revenue guidance following a FY2Q2019 earnings beat. As a result of its earnings beat and guidance increase, Cantor Fitzgerald’s Joseph D. Foresi reiterated his overweight rating for Accenture shares with a price target of USD$185. Accenture is not rated in our Global Top Stock Ideas.
  • BlackBerry (TSX:BB) reported fourth quarter EPS of 11, beating consensus of 6 cents.  BlackBerry reported fourth quarter revenue of $257 million, beating consensus of $252 million.  Revenue grew 8% in the quarter.  BlackBerry results were helped by its recent artificial intelligence acquisition.  BlackBerry is rated “Neutral” in our Canada All-Cap Global Top Stock Ideas.
  • Facebook (FB) said it would start blocking content on its site that praises or represents white nationalism and white separatism.  The efforts will begin next week.  Facebook is taking the action in the wake of global criticism for allowing this type of content on its platforms.  The pressure on Facebook grew in the wake of the massacre in New Zealand by a white nationalist that was live-streamed on Facebook.  Facebook is rated “Neutral” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Infineon Technologies AG (XTRA: IFX) shares were downgraded today by Bryan Garnier & Co. from buy to neutral. Bryan Garnier & Co. also pulled-back its price target for Infineon Technologies from 22.50 euros/share to 20 euro/share. Infineon Technologies currently maintains 22 buy recommendations, 6 hold recommendations, and 2 sell recommendations across analyst forecasts. Infineon Technologies is rated “Neutral” in our European Large-Cap Global Top Stock Ideas. 
  • Pareteum (TEUM) shares traded higher after reports that it was awarded a contract to power a new customer’s digital content and services launch in the Middle East and Africa to residents in the UK and US. The initial contract is valued more than USD$50mm. Parenteum is rated “Unattractive” in our US SMID-Cap and “Top Short” in our US Information Technology Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • Fedex (FDX) was downgraded at Susquehanna to neutral from positive.  Susquehanna cuts the price target on Fedex to USD$192 from USD$211.  Susquehanna sees a challenging near-term scenario for Fedex and cited that a main reason for the downgraded.  Fedex is rated “Unattractive” in our US Large-Cap and “Top Buy” in our US Industrials Global Top Stock Ideas.
  • Hawaiian Airlines (HA) saw its price target cut at Imperial Capital to $36 from $40.  Its outperform rating was maintained for Hawaiian Airlines.  The entrance of Southwest Airlines (LUV) into the Hawaiian market is the main reason for the lower price target.  While Hawaiian Airlines has adjusted prices lower in anticipation of Southwest there is still expected to be intense pricing competition near-term.  Imperial expects 2019 is “likely to represent trough earnings.”   Hawaiian Airlines is rated “Neutral” in our US SMID-Cap and “Neutral” in our US Industrials Global Top Stock Ideas.  Southwest Airlines Southwest Airlines
  • Lyft (LYFT) has increased its price range for its IPO.  Lyft upped the range to USD$70 to USD$72, up from USD$62 to USD$68.  Rest assured, the bankers are smiling.  The hike is indicative of strong demand for the shares as the IPO approaches.  The new range values Lyft at USD$23 billion.  The IPO is set to price this Friday and aims to raise USD$2.2 billion.  Lyft is not yet rated in our Global Top Stock Ideas.
  • Osram Licht AG (XTRA: OSR) shares fell the most in 9 months after the company announced a pullback in its FY2019 guidance, citing weak demand in the car and mobile phone industry. Osram Licht now projects revenue to fall between 11% and 14% in FY2019, largely down from the projected 3% revenue growth originally provided. Osram Licht is rated “Top Short” in our European Large-Cap Global Top Stock Ideas.
  • ZF Friedrichshafen (known simply as ZF), of Germany,  announced it will acquire Wabco (WBC) of the US in a USD$7 billion deal.  ZF is paying USD$136.50 per share for Wabco, a 6.5% discount to yesterday’s close.  Wabco shares have risen recently on news of talks with ZF.  ZF is a private company.  ZF acquired TRW in 2015, thrusting it into the global club of giant auto parts manufacturers.  Wabco is not rated in our Global Top Stock Ideas.

 

 

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Global Financials Stocks Trending in the News

  • Deutsche Bank (DB:DBK) may raise 3-10 billion euros in fresh equity as part a of deal with Commerzbank (DB:CBK), FT reports.  Deutsche Bank responded to the report saying, “it’s much too early at this stage of the credible assessment to know if there is any capital need at all.”  FT reports that the German government wants Deutsche to raise as much capital as it needs to avoid returning to the market for more after any deal closes.  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.
  • Jefferies (JEF) reported fiscal first quarter EPS of 14 cents, matching consensus. Jefferies first quarter revenue of USD$828.2 million also matched consensus.  Revenue included a 1% rise in trading revenue which management termed exceptional, given the challenging conditions in January.  Jefferies said in the present quarter business has “resumed its more normal pace.”  Jefferies is rated “Unattractivel” in our US Large-Cap Global Top Stock Ideas.
  • JPMorgan Chase & Co. (JPM) and Nomura (TSE: 8604) will both cut jobs, according to reports. Specifically, JPMorgan will dismiss hundreds of workers in its asset and wealth management divisions while Nomura will cut a few dozen jobs in its trading and investment banking business units. JPMorgan is rated “Neutral” in our US Large-Cap Global Top Stock Ideas. Nomura is rated “Top Buy” in our Japan Large-Cap Global Top Stock Ideas.
  • Swedbank AB (OM: SWED A) shares slipped after the company announced it fired CEO Birgitte Bonnesen as the bank faces allegations of billions of dollars laundered in Russian money. Swedbank CFO Anders Karlsson will fill the CEO position on an interim basis. The announcement comes shortly after 3 of Swedbank’s largest investors became vocal of their disapproval in Bonnesen, who they believe misled the public about the seriousness of the case. Swedbank is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.

Global Commodities & Energy Stocks Trending in the News

  • Vale (VALE) gave the market its much anticipated iron-ore production guidance for 2019, saying it expects to produce between 307 and 322 million tons.  93 million tons of production has been shuttered in the wake of its dam disaster.  Previous estimates were for Vale to produce 382 million tons of iron ore this year.  Vale said it is focused on safety issues now, not on restoring production.  Vale said it could take up to 3 years to reopen some of the shuttered mines, longer for those already closed.  Analysts estimate there is a 29 million ton deficit in the market this year. Vale is rated “Neutral” in our Brazil All-Cap Global Top Stock Ideas

Global Healthcare Stocks Trending in the News

  • Bayer (DB: BAYN) suffered a significant loss in court as a jury in California awards USD$80 million in a case claiming that Roundup caused cancer in the plaintiff.  The jury ruled that Monsanto-now part of Bayer-was negligent when it failed to adequately warn customers of the danger associated with Roundup.  Analysts expected a large jury award in this case after already finding that the weedkiller caused the plaintiff’s non-Hodgkin’s lymphoma.  Bayer is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • Johnson & Johnson (JNJ) settled its most recent talc-asbestos case in Oklahoma.  The suit involved allegations from a 77 year old woman related to her rare cancer.  Johnson & Johnson was cleared in a New Jersey case yesterday that involved very similar allegations.  2 weeks ago a jury in California awarded a woman USD$29 million in another talc case.  The most recent case ended with a confidential settlement sealed to the public.  Johnson & Johnson is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.

Global REITs Trending in the New

  • Aroundtown (DB: AT1) shares fell the most intraday since April 2016 after JPMorgan its recommendation for the company from overweight to neutral. JPMorgan cited net asset value growth in 2018 that lagged behind competitors as reasoning for the decline. Despite the rating downgrade, JPMorgan held Aroundtown’s price target at 8.75 euros/share. Aroundtown is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • A consortium comprised of Henderson Land Development (SEHK: 12), Wheelock Properties (SEHK: 49), New World Development (SEHK: 17), and China Overseas Land & Investment (SEHK: 688) was awarded a residential land plot by Hong Kong for HK$9.89bn. The consortium comprised of the aforementioned companies was awarded the plot of land over 5 other bidders. Development of the site is estimated to cost between HK$15bn and HK$17bn. Henderson Land is rated “Attractive” in our China All-Cap Global Top Stock Ideas. Wheelock Properties is not rated in our Global Top Stock Ideas. New World Development is rated “Attractive” in our China All-Cap Global Top Stock Ideas. China Overseas Land & Investment is rated “Neutral” in our China 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