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Global Stocks Trending in the News for April 11th, 2019

Apr 11, 2019

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Global Consumer Stocks Trending in the News

  • Canada Goose (TSX:GOOS) announced it is opening 6 more stores around this world.  Canada Goose will open stores in Milan and Paris, in the US it will open a store in Minneapolis and in Canada it will open stores in Toronto, Edmonton and Banff.  Canada Goose presently operates 11 company stores.  Canada Goose is rated “Attractive” in our Canada All-Cap Global Top Stock Ideas.
  • Coty (COTY) commented on allegations against it, saying that plaintiff’s claims that Coty omitted certain information from its Schedule 14D-9 lack merit.  Coty said the legal analysis underlying the opinion is faulted and it intends to file the allegation in court.  Coty said similar suits will not be commented on if presented.  Coty is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas. 
  • Levi Strauss (LEVI) reported first quarter revenue growth of 7%, delivering $1.44 billion in revenue.  Levi Strauss reported first quarter EPS of 37 cents compared with a loss of 7 cents a year earlier.  Levi sees margins to remain flat or improve slightly.  Levi Strauss is not rated in our Global Top Stock Ideas.
  • Lyft (LYFT) shares continued their descent on news that Uber’s IPO could be $10 billion, dwarfing Lyft’s $2.3 billion deal.  Uber is targeting a $100 billion valuation, also dwarfing Lyft’s $17.5 billion.  When Lyft started trading it was greeted with fanfare as the only listed ride-sharing company.  Lyft’s shares are down 12% since going public.  Lyft is not yet rated in our Global Top Stock Ideas.  
  • Nordstrom (JWN) was upgraded to overweight from sector weight at KeyBanc.  Nordstrom shares have fallen 30% since November’s peak and KeyBanc thinks its weakness was “transient” and it “is undervalued at current levels.”  KeyBank notes the demand environment has improved since mid-March and it notes the strong growth in e-commerce expected.  Nordstrom is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas. 
  • Rite-Aid (RAD) reported fiscal fourth quarter revenue of $5.38 billion, trailing consensus of $5.56 billion.  Rite-Aid reported a loss of 1 cent per share compared with a 2 cents loss expected.  Rite-Aid provided fiscal 2020 revenue guidance of $21.5-$21.9 billion, below the $22.09 billion average expectation.   Rite-Aid expects same stores sales growth of 0%-1% in fiscal 2020.  Rite-Aid is rated “Attractive” in our US SMID-Cap Global Top Stock Ideas and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas
  • Sony Corporation (TSE: 6758) shares regressed in Wednesday’s trading after the company told CNBC that it has had no talks, “whatsoever,” regarding its US entertainment unit. After the NY Post reported on Monday that there was, “chatter,” of Amazon Inc. (AMZN) approaching Sony last year about a potential acquisition or partnership, Sony refuted the rumors. Sony is rated “Attractive” in our Japan Large-Cap Global Top Stock Ideas. Amazon is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Tesla (TSLA) may receive a boost after a group of Senators proposed extended the tax credit that will expire for Tesla vehicles soon.  The $7500 credit will expire once their production exceeds 200,000 EVs, which will happen in the near future.  The legislation would increase the threshold for its expiration to 400,000 vehicles.  Tesla is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Tesco (LSE:TSCO) updated guidance, saying it is on track to hit an operating margin of 3.5-4% for the current year.  Tesco is nearing the end of a 5-year turnaround plan in which it managed to cut $2 billion in costs from its operations.  Tesco is using its growing buying power to hold down costs and bolster profitability.  Tesco is rated “Neutral” in our United Kingdom All-Cap Global top Stock Ideas.
  • Under Armour (UAA) shares suffer after B. Riley FBR published a report saying the company fell in its annual athletic survey.  Under Armour continues to be a laggard behind larger competitors in the sector.  Under Armour got some good news when Texas Tech advanced to the NCAA finals (but lost), the first team sponsored by Under Armour in the tournament to do that.  Under Armour is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.

Global Information Technology and Communication Services Stocks Trending in the News

  • Alphabet’s Google (GOOGL) will be focused now on better monetizing Google Maps.  Maps is often called the least monetized asset in Google stable of units and they are looking to change that.  Maps is used regularly by over 1 billion people and Google is looking for ways to increase advertising there.  Analysts agreed there is a large opportunity and Google is committed to tapping it further.  Alphabet is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.  
  • Baidu (BIDU) was downgraded to perform from outperform at Oppenheimer while its $205 price target was removed.  Baidu will be weighed down by higher spending this year and Oppenheimer expects the stock to be range-bound until the end of the year.  The higher spending will benefit revenue only in 2020 and 2021, hence the reason for the downgrade.  Baidu is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
  • Facebook (FB) announced a host of new measures to control false, extreme and violent content.  Facebook will expand its use of the Associated Press as its fact-checker.  Facebook will also make Group administrators more responsible for removing content and allow users to remove posts even after they are no longer members.  Facebook has made progress but this type of harmful content persists, it acknowledges.  Facebook is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
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  • G4S Plc (LSE: GFS) shares soared by more than 20% after Canadian security company Garda World said that it is considering an offer for its UK counterpart. The comments from Garda World confirm earlier rumors in the media and sent the price of G4S shares up the most intraday in their history. Garda World said that a further announcement regarding an offer will be made, “if and when appropriate.” G4S is rated “Top Short” in our United Kingdom All-Cap Global Top Stock Ideas.  
  • IBM (IBM) was initiated at Credit Suisse with an outperform rating.  Credit Suisse gave IBM a market-high price target of $173.  IBM’s acquisition of Red Hat has positioned itself as a dominant player in the fast growing hybrid cloud computing sector.  IBM is expected to return to revenue-driven EPS growth in the near future.  IBM is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Lenovo (SEHK: 992) shares traded notably higher in Hong Kong following a media report that cited CEO Yang Yuanqing saying the company plans to grow every one of its business segments into, “a cash cow.” The article also cites Yuanqing explaining that Lenovo’s mobile segment has turned to profit, and bottom-line growth will likely outpace that of its top-line. Lenovo is rated “Top Buy” in our China All-Cap Global Top Stock Ideas.  
  • Zayo Group Holdings (ZAYO) shares traded higher by more than 7% after Reuters reported that a consortium, which includes Digital Colony Partners, EQQT AB, and Stonepeak Infrastructure Partners, secured exclusive rights to negotiate a purchase of the company. Although Reuters did not detail an exact offer in its report, a deal could value Zayo Group between USD$8bn and USD$9bn, excluding the company’s USD$5.9bn in long-term debt. Zayo Group is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.  

Global Financials Stocks Trending in the News

  • Goldman Sachs (GS) is returning to a business it has not touched in a decade-collateralized loan obligations (CLOs).  Goldman’s asset management unit GSAM has a platform called Battery Park to distributes deals to clients and is presently working on its first.  Demand has grown for CLOs and Goldman intends to increase its exposure there.  Goldman Sachs is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas

 

 

 

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Global Industrials Stocks Trending in the News

  • American Airlines (AAL) issued a profit warning for the first quarter, saying the grounding of its 737 max fleet, as well as the government shutdown, is weighing on results.  American Airlines said revenue per seat will grow only 1%, down from 2% guidance.  Pre-tax margin will come between 2% and 4%, down from 2.5% to 4.5% guidance previously.  American Airlines is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas
  • Boeing (BA) saw the first month without an order for its 737 aircraft in over seven years.  The 737 Max is grounded worldwide in the wake of its second crash.  There are other models of the 737 for sale and none of them were bought by any airline this past month.  Boeing has accepted that its sensor caused the crash and has vowed to resolve the issue with the 737 Max.  Boeing is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Industrials Global Top Stock Ideas
  • Delta Airlines (DAL) reported first quarter EPS of 96 cents, beating consensus of 90 cents and beating its own guidance of 85-95 cents.  Adjust revenue grew 7.5% to $10.4 billion.  Delta sees second quarter EPS $2.05-$2.35 while consensus is $2.13.  Delta expects total adjusted revenue to grow 6-8% in the second quarter with adjusted TRASM up 1.5%-3.5%.  Delta Airlines is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Industrials Global Top Stock Ideas
  • Snap-On Inc. (SNA) shares extended their losses for a third-straight day after David Manthey, a Baird analyst and long-term bull for the stock, downgraded his recommendation from outperform to neutral. Manthey also lowered his price target for Snap-On from USD$186/share to USD$160/share, sending shares lower by as much as 4% in Wednesday’s trading. Manthey explained to clients that he sees signals of a more challenging competitive environment that will weigh on performance in the near-term. Snap-On is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Industrials Global Top Stock Ideas.  

Global Commodities & Energy Stocks Trending in the News

  • Dominion Energy (D) suffered an explosion on one of its gas lines after a contactor struck the line.  The line struck was under a sidewalk and the explosion rocked downtown Durham where it happened.  One person was killed and injured 15 in the accident.  The explosion happened in a building adjacent to a warehouse that houses the largest collection of vintage Porsches in the world, which were damaged in the blast.  Dominion Energy is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas
  • Duke Energy (DUK) issued a formal response to the state of North Carolina’s demand that is excavate ash basins.  Duke is arguing that the process used by the North Carolina Dept of Environmental Quality was not scientifically sound and lacked full consideration of the science and engineering required.  Duke will lay out details on the engineering needed and the costs to its customers when it formally appeals the decision with the state of North Carolina soon.  Duke Energy is rated “Top Buy” ” in our US SMID-Cap Global Top Stock Ideas.
  • Indivior Plc (LSE:INDV) has been charged by the US with hiding the danger of the drug.  Indivior deceived doctors in the process, fueling the opioid epidemic in the US.  Indivior told doctors and US government health plans that its Suboxone Film was safe and not addictive, the lawsuit charges.  Indivior lost 75% of its value on the news  Indivior is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas and “Neutral” in our United Kingdom All-Cap Global top Stock Ideas. 

Global Healthcare Stocks Trending in the News

  • Sibanye Gold Ltd. (JSE: SGL) shares slid by double-digits Wednesday after the company sold about USD$120mm worth of shares in a move to bolster its own balance sheet. The move by Sabanye Gold comes as it readies for an intensifying conflict with one of South Africa’s most militant labor unions. Members of the Association of Mineworkers and Construction Union that work for Sibanye have been on strike for 4 months and has dragged output at the company's mines in South Africa. Sibanye is not rated in our Global Top Stock Ideas.  
  • Vale (VALE) executives will be charged in connection with its recent dam collapse, Brazilian prosecutors said.  Prosecutors said they have evidence that Vale employees knew the dam was unsafe.  Prosecutors explained that charges could include murder, manslaughter and environmental damage.  Prosecutors said they need 2-3 months to discover if senior executives knew of the unsafe conditions.  Vale is rated “Neutral” in our Brazil 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