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Global Stocks Trending in the News for April 1st, 2019

Apr 01, 2019

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Global Consumer Stocks Trending in the News

  • 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 Global Top Stock Ideas and “Attractive” in our US Consumer Staples Global Top Stock Ideas.
  • Coty (COTY) was dubbed a top short idea at JP Morgan today, saying the tender offer from majority share owner JAB will continue to put downward pressure on the shares.  JP Morgan does not see any good news for the stock near-term as passive funds rebalance, selling the shares.  Coty is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Staples Global Top Stock Ideas.
  • Galaxy Entertainment (SEHK:27) shares surged after China’s Gaming Inspection & Coordination Bureau said Macau’s casinos’ revenue fell just 0.4% in March, coming much better than the 3% drop that was expected.   While better, casino revenue remains subdued as high rollers have yet to return to the casinos in strength.  The soft revenue is expected to persist.  Galaxy Entertainment is rated “Neutral” in our China All-Cap 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.
  • 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 Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.

Global Information Technology and Communication Services Stocks Trending in the News

  • Altice Europe NV (ENXTAM: ATC) shares traded higher by the most in 10 months after the phone carrier predicted higher growth in France for FY2019. Altice told analysts that it expects to report French revenue of between 4.0bn euros and 4.1bn euros, largely beating consensus for 3.65bn euros. Altice Europe NV is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas.
  • Apple (AAPL) announced the cancellation of its AirPower wireless charging mat, in a rare move for the tech giant.  Apple announced the AirPower in late 2017 with its iPhone X, with it set to go no sale in 2018.   Apple has almost never simply cancelled a product it already announced.  Apple is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology 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.
  • Comcast Corp. (CMCSA) and Charter Communications (CHTR) shares both edged lower after RBC Capital Markets downgraded each stock as the company is, “taking a more cautious view on cable fundamentals.” Comcast saw its price target lowered to USD$42/share from USD$45/share while Charter saw its price target lowered to USD$375/share from USD$400/share. Comcast is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas. Charter is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretinary Global Top Stock Ideas.
  • Deutsche Telekom (DB: DTE) shares edged lower after Credit Suisse analyst Jakob Bluestone downgraded the stock from outperform to neutral. Despite the downgrade, Credit Suisse maintained its price target of 17 euros/share for Deutsche Telekom, implying a 15% upside from the stock’s prior close. Deutsche Telekom currently maintains an average price target of 16.47 euros/share across 19 buy recommendations, 7 hold recommendations, and 3 sell recommendations. Deutsche Telekom is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • EasyJet (LSE:EZJ) warned investors that the holiday season is not likely to be as strong as the company has expected.   Brexit and the associated uncertainty is dampening demand for air travel, the company advised.  “We had hoped for a little more clarity and certainty at this point,” said CEO Johan Lundgren.  The combination of Brexit woes plus a slowing economy is taking its toll on EasyJet shares recently.  EasyJet is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Facebook (FB) CEO Mark Zuckerberg called for additional regulation and oversight of the internet.  Critics of Facebook got a chuckle from Zuckerberg’s comments given the multitude of missteps Facebook has made on this subject.  Zuckerberg called for regulation of four broad areas-harmful content, election integrity, privacy and data portability.  Facebook is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Lyft (LYFT) saw the debut of its shares open 21% higher than the pricing today.  Lyft saw very strong demand for its shares in the offering and closed 12% higher than pricing on its first full day of trading.  Lift raised $2.34 billion in the IPO.  The company closes the first day of a public company with a market valuation of over $25 billion.  Lyft is not yet rated in our Global Top Stock Ideas.
  • Versum Materials (VSM) has opened the possibility for a deal with Merck KGaA (DB:MRK) of Germany after initially rejecting its $5.9 billion bid.  Members of both companies met this week to discuss a potential deal.  Merck’s initial offer was for $48 per share.   In this meeting the CEO of Merck indicated there is room to increase its offer.  Versum Materials is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.  Merck KGaA is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.  
  • Wirecard AG (XTRA: WDI) shares slid following reports that Royston Ng, head of Wirecard regulatory compliance in Asia, left the company. Although the exact reasoning behind Ng’s departure is unknown, his resignation comes just days after the company published an external report into fraud allegations that contains several irregularities within the company. Wirecard is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • Boeing’s (BA) suspect flight control feature was activated before the Ethiopian Airline 737 Max crash, Ethiopian investigators are saying.  This is the first finding for the data on the plane’s flight recorder.  The MCAS, as the suspect system is known, was somehow triggered just before the plane went into a nose dive, killing all on board.  An initial report from investigators is due within days.  This information was shared during a briefing at the FAA on Thursday.  is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials 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

  • China Galaxy Securities (SEHK: 6881) shares traded higher after China International Capital Corporation upgraded the stock from hold to buy. China International Capital Corporation also set a price target of HK$6.31/share, implying a 22% upside from the stock’s prior closing price. China Galaxy Securities currently maintains an average price target of HK$5.05/share across 5 buy recommendations, 6 hold recommendations, and 2 sell recommendations. China Galaxy Securities is rated “Unattractive” in our China All-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 “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Morgan Stanley's (MS) President Colm Kelleher announced he will be retiring.  Kelleher was one of the key executives that helped Morgan Stanley successfully navigate the financial crisis over 10 years ago.  He was viewed a the company’s next CEO but has decided, at this point, to retire after over three decades at the firm.  He will remain as a senior adviser to the company after retirement.  Morgan Stanley is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Wells Fargo (WFC)  was downgraded to market perform from outperform at KBW.  Wells Fargo’s price target was cut to $50 from $58.  Wells Fargo will have “tough sailing” without a CEO and finding a new one will not be easy.  Senator Elizabeth Warren, however, is smiling.  KBW fears it is not clear where Wells Fargo is headed.  Wells Fargo is rated “Neutral” in our US 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

  • Astra Zeneca (LSE AZN) has announced a joint venture with Daiichi Sankyo (TSE:4568) to develop new cancer treatments.  Astra Zeneca will pay $1.35 billion up-front to develop and commercialize its trastuzumab deruxtecan drug with Daiichi Sankyo, then up to $5.6 billion over time depending on hitting milestones.  Astra Zeneca is pursuing this deal in its effort to become a global cancer powerhouse.  Astra Zeneca is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas.  Daiichi Sankyo is rated “Unattractive” in our Japan Large-Cap Global Top Stock Ideas.
  • Celgene Corp. (CELG) shares jumped after shareholder advisory firms Institutional Shareholder Services Inc. and Glass Lewis & Co. dealt a blow to an activist investor’s efforts to break up a takeover by Bristol-Myers Squibb Co. (NYSE: BMY) of the USD$71mm drugmaker. Both aforementioned shareholder advisory firms came out in public support of the takeover with ISS commenting on its reasonable valuation and Glass Lewis saying the takeover is strategically compelling. Celgene is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas. Bristol-Myers Squibb is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Galapagos NV (ENXTAM: GLPG) shares surged after reporting that its experimental rheumatoid arthritis drug developed in partnership with Gilead Sciences Inc. (GILD) hit its main goal in a late-stage study. The treatment, which combines medicine filgotinib with another drug, methotrexate, showed notably higher response rates relative to the latter treatment by itself. Galapagos is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas. Gilead Sciences is rated “Unattractive” in our US Large-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