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Global Stocks Trending in the News for May 6th, 2019

May 06, 2019

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Global Consumer Stocks Trending in the News

  • Berkshire Hathaway (BRK) has taken a stake in Amazon (AMZN).  CEO Warren Buffet announced the stake in an interview on CNBC.  Buffet said it was not he but one of his colleagues that decided to make the investment.  Buffett has said in the past he missed investing in Amazon early on in its history.  Buffett has said he was extremely impressed with CEO Jeff Bezos when they met.  Berkshire had its annual meeting this weekend and CEO Warren Buffett found himself on the defensive.  Berkshire Hathaway has trailed the S&P 500 for 10 years, a stretch that has never happened before.   Buffett is a big supporter if index investing and many were wondering if it might be better to buy an index fund as opposed to Berkshire Hathaway given the underperformance.  Buffett assured investors they should stick with him, assuring investors that performance will return.  Berkshire Hathaway is not rated in our 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  
  • Beyond Meat (BYND) soared 163% in its first day of trading.  Beyond Meat debuted Thursday was bid up all day long.  Beyond Meat is a maker of meat substitute products.  Beyond Meat raised $241 million in its IPO as it seeks to capitalize on demand for vegan products.  Beyond Meat is not yet rated in our Global Top Stock Ideas
  • Chesapeake Lodging Trust (CHSP) will be acquired by Park Hotels & Resorts (PK) in a $2.7 billion cash and stock deal.  Park Hotels is paying a combined $31 per share for Chesapeake, an 8% premium to Friday’s close.   The deal will make Park Hotels the second largest lodging investment trust in the market.  Chesapeake will sell 5 hotels before the deal complete, leaving the new company with 66 hotels in 17 states.  Chesapeake Holdings is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.  Park Hotels & Resorts is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas
  • Kraft Heinz (KHC) said it will need to restate its financial results for 2016, 2017 and 2018 after finding employee misconduct in the procurement process.  The misconduct caused the cost of goods to be inflated.  Kraft Heinz said the restatements will results in adjustments of less than 2%.  Kraft Heinz said its investigation is complete and there was no evidence that senior managers were involved.  Kraft Heinz is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas
  • MercadoLibre (MELI) reported first quarter revenue that beat consensus.  MercadoLibre reported first quarter revenue $473.8 million, well above the $421 million consensus.  MercadoLibre reported total payment volume of $5.64 billion benefiting from its recent push into payments.  Gross merchandise volume in the quarter was $3.09 billion.  MercadoLibre is rated “Neutral” in our US Information Technology Global Top Stock Ideas.  
  • Newell Brands (NWL) reported earnings that beat consensus with net sales that came in line.  Newell Brands reported first quarter normalized EPS of 14 cents, well above 3 cents expected.  First quarter net sales of $1.7 billion, in line with $1.69 billion.  Newell’s CEO commented that the company has gotten off to a good start to the year.  Newell Brands is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas  
  • Shake Shack (SHAK) reported sales growth that beat expectations and upped guidance.  Shake Shack first quarter same store sales grew 3.6%, well ahead of the 0.8% growth expected.  Revenue of $132 million beat $127 million expected.  Second quarter revenue guidance was hiked to $576 million to $582 million, up from $570 million.  Shake Shack is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Sysco (SYY) reported fiscal third quarter adjusted earnings that beat consensus.  Sysco reported fiscal third quarter adjusted EPS of 79 cents, beatings consensus of 70 cents.  Fiscal third quarter revenue of $14.7 billion trailed $14.77 billion.  Sysco 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 Inc. (TSLA) shares traded higher after the company announced plans to raise roughly $2 billion of capital through debt and stock offerings. Tesla filed on Thursday to sell $1.35 billion in convertible debt notes and $650 million in equity shares. Dan Ives of Wedbush Securities explained that, “We view this as a clear net positive for Tesla.” Tesla is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Walt Disney (DIS) saw another strong weekend for its latest Avengers movie, “Averngers: Endgame.”  Disney saw total ticket sales pass the $2 billion mark, the first for a film in such a short amount of time.  It took just 11 days to hit that mark.  The last film to hit that mark took 47 days, it was “Avatar.”  This is the fifth movie to surpass $2 billion is ticket sales.  Walt Disney is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.  
  • Weight Watchers (WW) reported results much better than expected.  Weight Watchers first quarter revenue of $363 million came in line with $365 million consensus.  The loss of 16 cents per share came much better than the 26 cents loss expected.  Weight Watchers raised its full year EPS guidance to $1.35  to $1.55 while consensus is $1.34.  Weight Watchers is not rated in our Global Top Stock Ideas. 

Global Information Technology and Communication Services Stocks Trending in the News

  • Activision Blizzard (ATVI) delivered first quarter earnings that beat expectations.  Activision Blizzard posted first quarter adjusted EPS of 31 cents versus 26 cents expected.  Adjusted revenue of $1.26 billion slightly beat consensus of $1.23 billion.  Activision Blizzard gave EPS guidance for the second quarter of 23 cents well below consensus of 37 cents.  Full year EPS guidance given was ~$2.10, below consensus of $2.19.  Activision Blizzard is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Alphabet’s (GOOGL) Google is planning to add product prices and recommendations underneath videos on its YouTube.  It will rebrand Google Express as Google Shopping and promote it this way.  The report appeared in The Information, Google has no comment.  Alphabet is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.  
  • Cognizant (CTSH) cut guidance and reported weak results, leading to 9 downgrades in a single day.  Cognizant reported a 14% decline in EPS to 91 cents.  Cognizant reduced guidance by 7-9% in constant currency, surprise to most investors.  Clients are cutting spending and Cognizant changes CEO and President recently, a mix that has left the company in turmoil.  Cognizant is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.  
  • Facebook (FB) announced it is creating a payment system based on cryptocurrencies.  The system will be built on top of the backbone of Facebook’s network.  If completed, the system would be the most mainstream application of cryptocurrencies.  Facebook is trying to recruit financial institutions to participate in the system.  The project is called Project Libra and would use a coin that could be use both on the Facebook system and outside it.
  • Softbank (TSE: 9984) is considering an IPO for its $100 billion Vision Fund, according to a report in the WSJ today.  The report also says Softbank is considering launching a second fund of the same size.  Softbank is looking to capitalize on the red-hot start-up interest that exists today.  Softbank has been spending $7 billion per quarter on deals and needs more funding soon to be able to maintain that pace.  SoftBank Chief Executive Masayoshi Son has said he does not see an immediate need for fundraising.  Softbank is rated a “Top Buy” in our Japan Large-Cap Global Top Stock Ideas 

 

 

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Global Healthcare Stocks Trending in the News

  • Immunogen (IMGN) reported results that came worse than expected.  Immunogen reported a loss per share of 30 cents while consensus was for a 21 cents per share loss.  Immunogen posted revenue of $8.58 billion, well below $9.2 billion expected.  Immunogen said its operational review is underway with the goal of extending cash position.  Immunogen is rated “Top Short” in our US Large-Cap Global Top Stock Ideas is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.  

Global Commodities & Energy Stocks Trending in the News

  • Dominion Energy (D) reported first quarter operating revenue that missed consensus.  Dominion Energy first quarter operating revenue of $3.86 billion trailed $4.84 billion expected.  First quarter EPS of $1.10 came in line with $1.12.  Dominion Energy gave second quarter EPS guidance of 70 to 80 cents.  Full year EPS guidance is $4.05 to $4.40 while $4.21 is consensus.  Dominion Energy is rated “Attractive” in our US Large-Cap Global Top Stock Ideas
  • Occidental Petroleum (OXY) increased the cash portion of its bid for Anadarko Petroleum (APC) to 78% from 50% as it seeks to sweeten its offer.   Occidental Petroleum is looking to break up the deal Anadarko agreed to with Chevron (CVX).  Occidental said agreed to pay the $1 billion break-up fee that Anadarko will have to pay if it breaks off its deal with Chevron.  Anadarko said it will review the revised offer, but it reaffirmed its recommendation to shareholders to accept the Chevron offer. Anadarko Petroleum is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.  Occidental Petroleum is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  Chevron is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • Boeing (BA) engineers found problem with the angle-of-attack sensor in the 737 Max within a couple of months of its first delivery.  Engineers did not inform anyone-not superiors or upper management, Boeing said over the weekend.  Critics argue that Boeing still has not been 100% clear on all the facts surrounding the sensor and the crashes involved.  Boeing is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Industrials Global Top Stock Ideas
  • Embraer (ERJ) confirmed its backlog at the end of the first quarter totaled $16 billion, down from $16.3 billion.  Embraer said it delivered 11 commercial jets were delivered in the quarter, 10 E175s and 1 E-190-E2s.  11 business jets were delivered as well, 8 were light and 3 were large.  Embraer 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