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Global Stocks Trending in the News for April 15th, 2019

Apr 15, 2019

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Global Consumer Stocks Trending in the News

  • Alibaba (BABA) founder Jack Ma told employees he does not need workers looking for a 9 to 5 workday.  Jack Ma endorsed the 996 work culture-9am to 9pm, 6 days a week.  “To be able to work 996 is huge bliss,” Ma told employees.  He added, “If you want to join Alibaba, you need to be prepared to work 12 hours a day otherwise why even bother.”  Alibaba is rated “Top Buy” in our China All-Cap Global Top Stock Ideas
  • Campbell Soup (CPB) is preparing to sell its fresh food division Bolthouse Farms to a group led by the executive that ran the unit, according to the WSJ.  Campbell will fetch $500 million for the unit, much less than it paid for the division 7 years ago.    Fresh food is ending up being much more difficult to deal with than the packaged food Campbell is known for, and Campbell is refocusing on packaged food as it seeks to turn around its business.  Campbell is rated “Neutral” in our US Large-Cap and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Geely Automotive (SEHK:175) said its Volvo Cars division will start to build its XC40 SUV in Luqiao, China.  Volvo will build the cars in a facility that already builds a model from Lynk, its sister company.  Polestar, another sister company focused on EVs and performance cars, will start production of its first EV model at the same plant, in the coming months.  Shortly, Geely will be building 3 models from 3 different brands on the same production line, using the same architecture underpinning all of them.  Geely Automotive is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
  • Jumia Technologies (JMIA) debuted today and rose 54%.  Jumia is called the Amazon (AMZN) of Africa though is based in Berlin.  Jumia is a 7-year old online retailer that raised $196 million in its IPO.  Jumia has 4 million customers in 14 countries and hopes to expand aggressively post-IPO.  Jumia is not rated on our Global Top Stock Ideas.
  • Lawson Inc. (TSE: 2651) shares fell by double-digits as investors showed their distaste for a decision by the company to focus on growth over a dividend payment. Lawson lowered its target payout ratio to 50% so it can allocate retained earnings to support affiliated stores and other purposes, according to Goldman Sachs. The dividend cut also spurred a 16% slash to Goldman Sachs’ price target for Lawson shares. Lawson is not rated in our Global Top Stock Ideas.
  • Weight Watchers International Inc. (WTW) shares slid after JPMorgan pulled-back its earnings forecast for the company as the number of daily active users using the company’s application has, “tracked even worse,” than expected. According to JPMorgan analyst Christina Brathwaite, the decline in app users during the first 3 months of 2019 suggest that overall subscribers will fall 18% y/y. Weight Watchers is rated “Unattractive” in our US Large-Cap and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas.

Global Information Technology and Communication Services Stocks Trending in the News

  • SoftBank Group Corp. (TSE: 9984) shares traded higher today, touching their highest level in 19 years, as investors speculate that the company could at least double the return from its investment in Uber Technologies Inc. (UBER). Uber Technologies officially filed IPO documents earlier this week and is expected to IPO at a valuation of between USD$90bn and USD$120bn in May. SoftBank is rated “Attractive” in our Japan Large-Cap Global Top Stock Ideas.
  • Walt Disney (DIS) announced that its new streaming service will launch November 12th with a $7 monthly cost, a bet that it can undermine Netflix will a considerably cheaper charge.  Netflix’s most popular plan costs $11.  Disney’s service will be full of its original movies, plus content from its Star Wars, Marvel and Pixar franchises.  Disney expects the service to break even within 5 years.  Wal Disney is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • Adecco (SWX: ADEN) and Randstad (ENXTAM: RAND) both saw their recommendations raised by Bank of America Merrill Lynch due to an improvement in the economy that may provide a boost to European staffing companies. Both staffing companies saw their stock recommendations raised to buy at Bank of America Merrill Lynch from underperform. Adecco is rated “Top Short” in our European Large-Cap Global Top Stock Ideas. Randstad is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas.
  • Fastenal (FAST) delivered first quarter EPS of 68 cents, beating the 67 cents consensus.  Fastenal first quarter sales of $1.31 billion matched consensus.  Fastenal saw daily sales growth of 12.2% in the quarter and a gross margin of 47.7%.  Analysts note Fastenal has been able to execute in a challenging environment for industrial distributors.  Fastenal is rated “Attractive” in our US Large-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  
  • General Electric (GE) is finalizing its agreement to pay $1.5 billion to settle claims related to its now shuttered sub-prime lending business.  GE will make the payment to settle civil claims with the US Justice Department that is misrepresented the quality of the mortgage-backed securities it was offering for sale.  The final agreement does not require GE to admit liability.  General Electric is rated “Unattractive” in our US Large-Cap and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Northrop Grumman (NOC) was chosen to develop prototypes of sensing capabilities using undersea organisms.  The US Defense Advanced Research Projects Agency (DARPA) Biological Technology Office chose Northrop Grumman for its PALS-Persistent Aquatic Living Sensors-program that would detect threats under water.  Northrop Grumman will develop the hardware that will use artificial intelligence to detect threats using living organisms.  Northrop Grumman is rated “Attractive” in our US Large-Cap and “Attractive” in our US Industrials Global Top Stock Ideas

 

 

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Global Financials Stocks Trending in the News

  • Commonwealth Bank of Australia (ASX: CBA) is said to be working on a plan to cut more than 10,00 jobs and save about AUD$2bn in costs, according to an Australian newspaper. Commonwealth Bank of Australia, the national’s largest lender, may also close up to 300 of its 1,000 branches. The report says that CEO Matt Comyn may want to keep the plan a secret until after Australian elections in May. Commonwealth Bank of Australia is rated “Unattractive” in our Australia Large-Cap Global Top Stock Ideas.
  • JP Morgan (JPM) reported first quarter results that beat consensus pretty much across the board.  Revenue of $29.85 billion beat $28.36 expectation adjusted EPS of $2.60 beat the $2.35 consensus.  First quarter stock trading revenue of $1.74 billion beat $1.73 billion consensus while investment banking revenue of $1.75 billion beat the $1.63 billion expectation.  JP Morgan reported assets under management of $2.1 trillion.  JP Morgan provided full year guidance of $58 billion for interest income, sees adjusted expenses of $66 billion with net charge-offs of $5.5 billion.  JP Morgan is rated “Neutral” in our US Large-Cap Global Top Stock Ideas
  • PNC Financial (PNC) reported first quarter results that matched consensus.  First quarter EPS of $2.61 matched consensus of $2.61.  First quarter loans of $323.3 billion compares to $226.3 a year earlier.  NIM on a tax equivalent basis came at 2.98%, in line with 2.97% consensus.  PNC Financial is rated “Neutral” in our US Large-Cap Global Top Stock Ideas
  • Wells Fargo (WFC) reported a solid first quarter result with revenue of $21.6 billion beating consensus.  First quarter EPS of $1.20 beat $1.09 consensus.  Expenses fell 7.3% to $13.9 billion, proof that the cost-cutting program is bearing fruit.  The first quarter efficiency ratio came at 64.4%, worsening from 63.6%.  Analysts have reacted positive to the results.  Wells Fargo is rated “Neutral” in our US Large-Cap Global Top Stock Ideas

Global Commodities & Energy Stocks Trending in the News

  • Chevron (CVX) has agreed to acquire all of Anadarko Petroleum (APC) in a $33 billion deal.  Chevron will pay a 39% premium, $65 per share for Anadarko, to acquire all of the company.  The acquisition will give Chevron acreage in the Permian Basin plus access to the LNG market which is expected to see strong export led growth.  Chevron expects the deal to add to free cash flow and earnings within a year.  Chevron is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  Anadarko Petroleum is rated “Top Short” in our US Large-Cap Global Top Stock Ideas.
  • Newmont Mining (NEM) shareholders approved the $10 billion acquisition of Canada-based Goldcorp (TSX:G).  Newmont shareholders had to approve 2 measures, the first allows for the increase in common shares.  The second measure allows for the issuance of those shares to complete the deal.  The measures passed with 75% and 98% approval, respectively.  Newmont shareholders will receive a special dividend of 88 cents per share on May 1st.  Newmont Mining is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.  Goldcorp is rated “Top Short” in our Canada All-Cap Global Top Stock Ideas.
  • Petrobras (PBR) said it is reversing a previously announced diesel price hike.  The Brazilian government has been under pressure from truckers who have been protesting about the diesel price hike coming. Officially, Petrobras said it reviewed its hedge position and decided it did not need to hike the price of diesel, saying it is maintaining parity with international prices.  As Petrobras is a government-controlled company, most don’t buy that story.  Petrobras is rated “Attractive” in our Brazil All-Cap Global Top Stock Ideas.

Global Healthcare Stocks Trending in the News

  • GN (CPSE: GN) shares traded notably higher today after Martin Munk, a senior account manager at Jyske Bank, said that preliminary results for the firm's audio unit in CY1Q2019 were, “extremely strong,”. Munk also said that he and the company, “expect that the market will have to raise estimates.” GN is rated “Attractive” in our European SMID-Cap Global Top Stock Ideas. 

Global REITs Trending in the New

  • Daiwa House Industry (TSE: 1925) shares fell after the company found that some of its residential buildings are non-compliant with architectural standards and fire protection requirements. Specifically, Daiwa House Industry found problems related to the foundations of its buildings. Daiwa House Industries expects to incur about 100mm yen worth of repairs to 73 apartment buildings due to the issues. Daiwa House Industries is rated “Unattractive” in our Japan Large-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