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Global Stocks Trending in the News for April 4th, 2019

Apr 04, 2019

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Global Consumer Stocks Trending in the News

  • Constellation Brands (STZ) is selling a group of wine brands to E&J Gallo.  Constellation is selling about 30 brands to Gallo, all of which sell for less than $11.   The brands being sold represented about 40% of Constellation’s wine sales.  Constellation has been looking to sell its low margin brands after reporting weak earnings in the last quarter.  Constellation Brands is rated “Attractive” in our US Large-Cap and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas 
  • Target (TGT) is boosting the minimum wage it pays employees to $13 per hour, a $1 hike, that will take effect in June.  The hike is part of Target’s announced goal of getting to $15 by the end of 2020.  Target did not say how many employees would see a raise from the move.  Wages at retailers have been rising amid a tight labor market.  Retailers are the largest private employer in the US.  Target is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Tesla (TSLA) has sold almost as many cars as Porsche (DB:PAH3) in its second month of sales in Germany.  Tesla sold 2,367 cars in March in Germany while Porsche sold 2,744.  Porsche saw a 9% sales drop due to new emissions standards while Tesla saw a five-fold jump from its first month to second.  Tesla is rated “Top Short” in our US Large-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  Porsche is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas

Global Information Technology and Communication Services Stocks Trending in the News

  • Facebook (FB) data is still being found online.  Cybersecurity firm UpGuard found a large stash of Facebook user data stored on Amazon’s (AMZN) cloud service.  UpGuard found a digital platform that used the Facebook data has personal information of 540 million Facebook users in plain sight for anyone who knew how to look closely, according to a Bloomberg report.  Facebook has been able to remove the data in each case but the fact that they are there in the first place concerns security specialists.  Facebook is rated “Neutral” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas.  Amazon is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Micron Technology (MU) was downgraded to equal-weight from overweight at Morgan Stanley.  Micron’s $32 price target was maintained but the recent move up of the stock makes Morgan Stanley cut the rating, Micron has rallied 51% since December.  Morgan Stanley reiterated that it sees too much optimism in the semiconductor sector.  Micron is rated “Unattractive” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.  
  • Tencent (TCEHY, SEHK:700) closed Asia’s largest bond placement in over a year, placing $6 billion in bonds.  Tencent placed five, seven, ten and 30-year bonds in the sale.  The largest chunk was #3 billion of 10-year bonds and Tencent looked to lock in low rates for its borrowing.  These priced at 1.45% above US 10-year Treasuries.  Most if the bonds were sold without any yield premium, showing the strong demand for these bonds.  Tencent is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
  • Twitter (TWTR) saw its price target hiked to $41 from $33 at Guggenheim while its buy rating was maintained.  Guggenheim says Twitter is “well positioned to exceed investor expectations over the next several years.”  Guggenheim sees this for Twitter given the steps they have taken to improve the health of the platform.  Twitter is rated “Neutral” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas
  • Verizon (VZ) launched the 5G era in the US Wednesday, launching a week ahead of schedule in Chicago and Minneapolis.  South Korea also launched its 5G and it is not clear who was first.  Verizon launched first as a show of technological prowess.  5G networks can provide connections that are up to 100 times faster than present connections.  Verizon is rated “Attractive” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas

Global Industrials Stocks Trending in the News

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Global Industrials Stocks Trending in the News

  • Boeing’s (BA) flight control system was to blame for the crash of the most recent 737 Max, according to a preliminary report from Ethiopian investigators.  The report says pilots followed Boeing’s emergency procedures but were unable to save the jet.  The report puts the spotlight on Boeing to come up with a fix.  Press reports are that a fix from Boeing should come shortly.  Boeing is rated “Top Buy” in our US Large-Cap and “Neutral” in our US Industrials Global Top Stock Ideas
  • Caterpillar (CAT) was downgraded to hold from buy at Deutsche Bank today.  Deutsche cut Caterpillar’s price target significantly, to $128 from $152.  Deutsche said it is “becoming increasingly clear” that Caterpillar’s backlog growth is about to turn negative, an ominous sign.  Caterpillar faces the prospect of collapsing global growth, Deutsche warns.  The Chinese land cycle is rolling over and there is a glut of equipment in the US.  Caterpillar is rated  is rated “Neutral” in our US Large-Cap and “Neutral” in our US Industrials Global Top Stock Ideas
  • Cosco Shipping Energy Transportation Co. (SEHK: 1138) shares soared after an announced agreement to strategically cooperate with Seaspan Corp. (TCK). According to early reports, both companies have committed to strengthen their exchange and collaboration on opportunities that relate to liquified natural gas investments, projects, transportations, and more. Cosco Shipping Energy Transportation is rated “Attractive” in our China All-Cap Global Top Stock Ideas.  
  • Delta Air Lines (DAL) shares appreciated after renewing its 23-year long partnership with American Express (AXP) for an additional 11 years, increasing the likelihood that Berkshire Hathaway (BRK.B) will purchase the airline. Stifel analyst Joseph DeNardi wrote in a note to clients, “While we had suspected that Delta could announce an extension with AmEx at some point this year, this is earlier than we had thought and the improvement in revenue and economics are significantly better than we were expecting.” Delta Air Lines is rated “Attractive” in our US Large-Cap and “Top Buy” in our US Industrials Global Top Stock Ideas. American Express is rated “Attractive” in our US Large-Cap Global Top Stock Ideas. Berkshire Hathaway is not rated in our Global Top Stock Ideas.  
  • Embraer (ERJ) won an order from Africa’s Peace Air worth $2.1 billion.  Peace air ordered 10 Embraer 195 E2 planes with options for another 20 planes.  This will be the first sale of 195 jets in Africa.  Peace Air will use the new planes to expand service as part of its “no city left behind” initiative of expansion.  Embraer is rated “Unattractive” in our Brazil All-Cap Global Top Stock Ideas.

Global Financials Stocks Trending in the News

  • Ameriprise Financial Inc. (AMP) shares moved higher after the company announced the sale of its auto and home unit to American Family Insurance Mutual Holding Co. for USD$1.05bn in gross cash proceeds. Ameriprise CEO Jim Cracchiolo sees the deal as a way for the company to increase focus on its financial advice, wealth management, and asset management operations. Ameriprise is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas.  
  • Blackstone Group (BX) has raised $22 billion for its flagship buyout fund and it is not done.  Analysts expect Blackstone could raise $25 billion for the fund amid a strong fundraising environment.  Blackstone has not yet set a limit on the pool but is seeking to raise a total of $100 billion this year.  $566 billion was raised by private equity funds in 2017 with $432 billion raised last year.  Blackstone Group is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • UBS Group AG (SWX: UBSG) is considering several options for its asset management unit, including a partial sale or merger of the unit, according to people familiar with the matter. According to reports, UBS is considering the acquisition of Deutsche Bank AG’s asset manager, DWS Group (TCK), to combine with its own asset management business and spin off the two as their own entity. UBS is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.  

Global Commodities & Energy Stocks Trending in the News

  • PG&E (PCG) has chosen the head of the Tennessee Valley Authority as its next CEO.  Bill Johnson will take over as its new CEO and a completely new board will be installed.  PG&E is facing $30 billion in liabilities and is trying to steer out of bankruptcy.  Mr Johnson is being chosen for his safety and operational expertise.  PG&E is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  
  • Tellurian Inc.’s (TELL) planned USD$28bn liquefied natural gas plant moved a step closer to being started after Total SA (ENXTPA: FP) announced intentions to commit more funding to the project. Total SA will invest USD$500mm in the project in exchange for receiving about 1mm tons of liquefied natural gas annually and to increase its stake in Tellurian. Tellurian is rated “Unattractive” in our US SMID-Cap Global Top Stock Ideas. Total SA is rated “Attractive” in our European 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