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Global Stocks Trending in the News for April 16th, 2019

Apr 16, 2019

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Global Consumer Stocks Trending in the News

  • Compass Group Plc (LSE: CPG) shares fell after the stock was downgraded from overweight to equal-weight by Barclays. Barclays analyst Vicki Stern also lowered her price target for Compass Group from 18.50 pounds/share to 17.70 pounds/share, implying a 3.2% premium from its last closing price. Compass currently maintains 10 buy recommendations, 12 hold recommendations, and 2 sell recommendations across Street forecasts. Compass Group is rated “Attractive” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Jumia Technologies (JMIA) debuted Friday 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.
  • Tesla (TSLA) CEO Elon Musk tweeted another production forecast while he is in the middle of negotiation with the SEC over his tweeting of relevant company information.  Musk tweeted that Tesla will produce 500,000 cars over the next 12 months,  2 months ago a similar tweet started his problems with the SEC.  Analysts have commented he chose a strange time to tweet this information out given his ongoing talks with the SEC.  Tesla is rated “Top Short” 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

  • YouTube, part of Alphabet’s (GOOGL) Google unit, mistakenly labeled live streaming video of the Notre Dame Cathedral fire with a text box as it were footage of the 9/11 attack.  YouTube algorithms assign text boxes to some video clips on YouTube and the machines made a mistake with the Cathedral fire.  YouTube introduced these text boxes in an effort to dispel conspiracy theories related to many things, including 9/11.  Alphabet is rated “Neutral” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas.  
  • Publicis Groupe (ENXTPA:PUB) Is acquiring Alliance Data System’s (ADS) Epsilon unit for $4.4 billion.  Epsilon is said to add 13% to Publicis’ earnings in the first year.  Epsilon is focusing on data management, identity resolution on loyalty programs.  Publicis expects to see $60 million in cost savings by 2022.  Publicis expects to expand the reach of Epsilon upon its acquisition.  Publicis Groupe is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.  Alliance Data Systems is rated “Neutral” in our US Large-Cap and “Neutral” in our US Information Technology 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 Financials Stocks Trending in the News

  • Bank of America (BAC) reported solid first quarter, with increased income from its consumer unit being offset by lower trading volume.  Net interest income climbed 9.7% in the quarter while trading revenue fell 13%.  Net interest margin rose to 2.51% from 2.42% a year ago.  Consumer loans rose 5% as Bank of America’s CFO said the bank sees no signs of a recession in the near future.  Bank of America is rated “Neutral” in our US Large-Cap Global Top Stock Ideas
  • Charles Schwab (SCHW) reported first quarter EPS of 69 cents beating 66 cents consensus.  First quarter revenue of $2.72 billion beat consensus of $2.68 billion.  Charles Schwab reported a return on equity in the first quarter of 20%.  Charles Schwab has 3.59 trillion client assets in accounts, 11.8 million active brokerage accounts with 418k revenue trades per day.  Charles Schwab is rated “Attractive” in our US Large-Cap Global Top Stock Ideas
  • Citigroup Inc. (C) shares slumped after announcing quarterly financials that disappointed investors. Citigroup reported little-changed revenue from its global consumer bank while the number of open accounts for Citigroup’s US retail banking division remained stagnant. Average deposits for Citigroup’s US retail banking division rose just 1% in its most recent quarter. Citigroup is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Comerica (CMA) reported first quarter results that beat consensus.  Comerica reported first quarter adjusted EPS of $2.08, beating consensus of $1.93.  Comerica’s NIM on a tax-equivalent basis was 3.79% with an efficiency ratio of 50.8%.  Comerica provided guidance of 2-4% loan growth, 1-2% deposit growth and a 3% decline in non-interest expenses.  Comerica is rated “Attractive” in our US Large-Cap Global Top Stock Ideas
  • Goldman Sachs (GS) reported first quarter results that beat expectations, with investment banking coming better and trading trailing a bit.  First quarter EPS of $5.71 handily beat $4.97 consensus.  Net income of $2.25 billion came in line while revenue for the quarter fell 13% to $8.81 billion.  Investment banking revenue of $1.84 billion came above the $1.7 billion expected.  Fixed income trading revenue of 1.84 billion beat the $1.78 billion expected.  Stock trading revenue of $1.77 billion trailed the $1.83 billion expected.  Goldman increased its quarterly dividend to 85 cents per share, up from 80 cents.  Goldman Sachs is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Progressive (PRG) reported first quarter results that handily beat expectations.  First quarter EPS of $1.83 was well above the $1.36 consensus.  Progressive first quarter net premiums earned was $8.46 billion while net premiums written was $9.24 billion.  Progressive’s combined ratio was 88.8% in the first quarter.  Personal policies in force grew 11% in the quarter.  Progressive is rated “Attractive” in our US Large-Cap 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 Industrials Stocks Trending in the News

  • American Airline (AAL) has joined Southwest Airline (LUV) in canceling its 737 Max flights into the summer.  American canceled all flights with the 737 Max until August 19th.  The 2 airlines are canceling 275 flights per day until mid-August.  Southwest Airlines operates the largest 737 fleet in the US with American the second largest.  Airlines had hoped for a quick return of the jet but now they are anticipating being without it for most of the summer.  American Airlines is rated “Neutral” in our US Large-Cap and “Neutral” in our US Industrials Global Top Stock Ideas.  Southwest Airline is rated “Neutral” in our US Large-Cap and “Attractive” in our US Industrials Global Top Stock Ideas
  • JB Hunt (JBHT) reported first quarter EPS of $1.09 matching consensus.  JB Hunt first quarter revenue of $2.09 billion trailing consensus of $2.2 billion.  JB Hunt operating income of $169 million was flat year-on-year due to a number of higher costs.  JB Hunt is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Industrials Global Top Stock Ideas
  • Lyft Inc. (LYFT) shares continued their decline today as the stock is trading roughly 22% below its IPO price and short bets continue to pile up. Investors continue to have doubts about Lyft’s ability to grow market shares against rival Uber (UBER), who is set to go public in May. According to data from financial analytics firm S3 Partners LLC, 75% of the free float Lyft shares are held short. Lyft Inc. Is not yet rated in our Global Top Stock Ideas.
  • Suzuki Motor Corp. (TSE: 7269) shares fell by the most in almost 6 months after the car and motorcycle manufacturer announced it will incur an extraordinary loss of 80bn yen (USD$714mm) for the most recent quarter related to improper auto-inspection procedures. Suzuki shares dipped as much as 8.7%, although the stock pared its losses to close about 2.3% lower. According to Suzuki, the carmaker discovered in August that roughly half of its automobiles in sampling tests did not comply with national standards. Suzuki is rated “Top Buy” in our Japan Large-Cap Global Top Stock Ideas.
  • Waste Management (WM) is nearing a deal to buy its rival Advanced Disposal Service (ADSW) in a $2.9 billion deal, according to the WSJ.  It is being reported that Waste Management will pay $33.15 per share for its rival, paying a 22.1% premium to Friday’s close. Including debt, the deal is worth about $5 billion.  Waste Management is rated “Neutral” in our US Large-Cap and “Attractive” in our US Industrials Global Top Stock Ideas.  Advanced Disposal Service is rated “Attractive” in our US SMID-Cap and “Attractive” in our US Industrials Global Top Stock Ideas.  

Global Commodities & Energy Stocks Trending in the News

  • Entergy (ETR) has agreed to a post-shutdown sale of its 3 nuclear power plants Indian Point 1, 2 and 3 to Holtec International for decommissioning.  Entergy had committed to close the plants after NY State Governor Andrew Cuomo insisted on their closure.  The 3 plants provide 30% of metro New York City’s power.  With the closure, Entergy will have retired all of its nuclear power plants.  Entergy is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas
  • Nyrstar NV (ENXTBR: NYR) shares lost more than half their value after Trafigura Group Ltd. announced a deal that will see it take control of Europea’s largest zinc smelter through a debt restructuring. As a part of the deal, Trafigura, Nyrstar’s main shareholder, top supplier, customer, and financier, will offer a package of its own debt securities to creditors in exchange for writing off debt. Nyrstar is not rated in our Global Top Stock Ideas.

Global Healthcare Stocks Trending in the News

  • CVS Health (CVS) is attractive and it is time to buy, according to Barron’s.  Barron’s says despite the recent weakness in the stock, CVS’ assets leave it well-positioned for a future when consumers have more control over their own healthcare decisions.  CVS Healthcare is rated “Neutral” in our US Large-Cap Global Top Stock Ideas
  • HCA (HCA) could suffer after Jefferies warned on the name.  “Investors should be a bit more cautious around HCA from here and through 2020,” Jefferies wrote in a note to clients.  The comments were made after seeing HCA run 33% over the last 33%, the best performer in the sector.  HCA is among the most owned hospital stocks and with the growing talk of a single-payer system they could see weakness near-term.  HCA is rated “Neutral” 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