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Global Stocks Trending in the News for May 9th, 2019

May 09, 2019

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Global Consumer Stocks Trending in the News

  • Amazon (AMZN) is being accused of violating kids’ privacy right with its smart speakers.  A child advocacy group filed a complaint with federal authorities complaining that Amazon records conversations of kids on its Echo Dot Kids devices.  The complaint alleges that Amazon records the conversations and then stores them in the cloud, even after parents delete it.   The complaint states the actions violates federal online privacy rules.  Amazon is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • American Eagle (AEO) was downgraded by both RBC Capital and Wedbush.  RBC Capital cut American Eagle to neutral from buy while Wedbush cut to sector perform from outperform.  In both cases the downgrade was based on valuation.  American Eagles has had an impressive string of results and at this point trades at 14x forward earnings.  That valuation captures most of the anticipated improvements, both downgrades highlight.  American Eagle is rated “Unattractive” in our US Large-Cap and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Coty (COTY) reported net revenue that missed consensus.  Coty fiscal third quarter net revenue of $1.99 billion trailed $2.06 billion.  Fiscal third quarter adjusted EPS of 13 cents came a touch ahead of 12 cents consensus.  Coty reaffirmed guidance for fiscal 2019 of adjusted operating income moderately below fiscal 2018.  Coty is rated “Unattractive” in our US Large-Cap and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Imperial Brands Plc (LSE: IMB) shares slipped to a 5-year low after the tobacco company reported a slowdown in US vape sales and weaker-than-expected revenue during the first half of FY2019. In order for Imperial Brands to meet is FY2019 sales guidance, the company’s revenue growth would need to double from its first half pace. Imperial Brands’ US vaping business has suffered as it continues to lose market share to vaping upstart Juul. Imperial Brands is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Office Depot (ODP) reported full year adjusted ebitda that beat consensus.  Office Depot sees full year adjusted ebitda of $525 million to $550 million while consensus is $525 million.  Full year sales are expected to be between $10.8 billion and $10.9 billion.  Office Depot reported first quarter adjusted EPS of 7 cents, beating 6 cents consensus.  Office Depot suffered a 2-notch downgrade from Bank of America Merrill Lynch, cutting it to underperform from buy.  Office Depot’s price target was cut to $2 from $4.  Merrill Lynch has been bullish on the stock and was anticipating a turnaround.  Merrill is now doubting if a turnaround will ever come.  Office Depot is rated “Neutral” in our US SMID-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas Office Depot is rated “Neutral” in our US SMID-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  
  • The Wendy’s Company (WEN) shares moved higher after the company published strong-than-expect profit during the first quarter. Wendy’s observed earnings of $0.14/share during the first quarter, up 27% y/y and beat analyst consensus that called for $0.12/share. The profit beat published by Wendy’s was aided by 3% growth in the company’s North American sales that offset a slowdown from in international sales from 13.7% a year prior to 10.1%. Wendy’s is rated “Neutral” in our US Large-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Toyota Motor Corp. (TSE: 7203) and Honda Motor Co. (TSE: 7267) became the latest in a string of auto manufacturers to warn investors of weaker profit and sales. Both companies in their warnings cited that the trade war between the US and China threatens already-waning demand for their products. Despite the profit warning, Toyota announced plans to buy back up to 300 billion yen worth of common shares. Toyota is rated “Attractive” in our Japan Large-Cap Global Top Stock Ideas. Honda Motor is rated “Top Buy” in our Japan Large-Cap Global Top Stock Ideas. 

Global Information Technology and Communication Services Stocks Trending in the News

  • Alphabet’s (GOOGL) Google is struggling to convert its music customers to paying customers.  Google’s YouTube was revamped about a year ago and its YouTube Music service is a paid subscription that Google is trying to convert its free users to.  More people listen to music on YouTube than any other streaming service.  Users, however, have grown accustomed to its free price and have been resistant to signing up for paid subscriptions.  Alphabet cited this as part of the reason for its $1 billion revenue miss.  Alphabet is rated “Top Buy” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Electronic Arts (EA) reported profit that beat consensus.  Electronic Arts fiscal fourth quarter adjusted EPS of $1.31 beat consensus of 96 cents.  Revenue of $1.36 billion beat consensus of $1.21 billion.  Electronic Arts gave fiscal first quarter guidance of a 5 cents per share loss, much better than the 23 cents per share loss that is present consensus.  Electronic Arts Arts gave fiscal full year EPS guidance of $5.37, well above $4.51 consensus.  Electronic Arts is rated “Neutral” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas.  
  • Facebook (FB) COO Sheryl Sandberg spent today meeting with Senators on Capitol Hill as the company awaits news on up to a $5 billion fine from the Federal Trade Commission.  The meetings were set up a long time ago, Facebook said, and have nothing to do with the impending fine.  Sandberg is meeting with members of both parties and Congress discusses whether new privacy and data regulations.  Facebook is rated “Unattractive” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Intel (INTC) provided updated guidance to investors that was not well received.  Intel said it expects revenue growth in the low single digits over the next 3 years.  Intel expects EPS to grow in line with revenue during the same period.  Intel expects its PC revenue to be flat or fall while data centric revenue will grow in the high single digits.  Intel is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • MoneyGram International Inc. (MGI) shares fell by more than 25% after the company announced an unexpected loss in the first quarter. MoneyGram generated a loss per share of $0.06 during the first quarter that fell notably short of consensus that called for earnings of $0.15/share. MoneyGram’s revenue of $315.4 million also trailed analyst expectations of $380.0 million. MoneyGram is rated “Unattractive” in our US SMID-Cap and “Unattractive” in our US Information Technology Global Top Stock Ideas.
  • New York Times (NYT) reported adjusted earnings that beat consensus.  NY Times first quarter adjusted EPS of 20 cents beat consensus of 9 cents.  Revenue in the quarter was $439 million, in line with $436 million consensus.  NY Times saw 2323,000 net new digital subscribers, with a total of 4.5 million subscribers.  NY Times is rated “Unattractive” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas. 
  • Oracle (ORCL) is alleging that Amazon (AMZN) offered 2 Department of Defense employees jobs while they were working on the $10 billion cloud contract, these allegations are included in its lawsuit.  Oracle says these employees designed the project to be favorable to Amazon’s chances of winning the contract and later were offered a lucrative employment and bonus package.  Oracle has since been eliminated from the competition the winner of which is expected to be announced in July.  Oracle is rated “Attractive” in our US Large-Cap and “Top Buy” 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.  
  • Softbank (TSE:9984) stands to reap a huge windfall in the wake of Uber’s IPO due this week.  Softbank could see up to a $3 billion gain in just a matter of 16 months, WSJ highlights.  Softbank bought 15% of Uber for $7.7 billion in early 2018 with its Vision Fund when Uber was valued at $48 billion, it is expected to seek a valuation between $80 billion and $90 billion in its IPO.  This would be Softbank’s Vision Fund’s biggest gain yet.  Softbank is rated “Top Buy” in our Japan Large-Cap Global Top Stock Ideas
  • TripAdvisor (TRIP) shares tumbled by double-digits after the company’s first quarter revenue trailed analyst expectations. TripAdvisor’s revenue of $376.00 million missed consensus of $387.3 million, representing weakness in its hotels and auction businesses. TripAdvisor’s adjusted EPS of $0.36 during the first quarter still managed to beat analyst consensus of $0.31. TripAdvisor is rated “Neutral” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Walt Disney (DIS) reported fiscal second quarter adjusted earnings and revenue that beat consensus.  Disney first quarter adjusted EPS of $1.61 beat consensus of $1.58.  Fiscal second quarter revenue of $14.92 billion beat $14.54 billion expectations.  Disney saw media networks operating income grow to $2.19 billion from $1.3 billion q/q.  Disney CEO Robert Iger said he was “very pleased” with fiscal second quarter results.  Walt Disney is rated “Attractive” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Wendy’s (WEN) reported first quarter adjusted earnings that beat consensus.  Wendy’s first quarter adjusted EPS of 14 cents beat consensus of 12 cents.  First quarter revenue of $408.6 million beat consensus of $398.9 million.  Wendy’s reported same store sales of 1.3%, a touch below consensus of 1.4%.  Wendy’s is rated “Neutral” in our US Large-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Wirecard AG (XTRA: WDI) shares traded higher after the company upped its earnings guidance for FY2019. The hike in FY2019 ebit guidance from between 740 million euros and 800 million euros to between 760 million euros and 810 million euros comes after Wirecard announced stronger-than-expected profit in the first quarter, driven by higher transaction volume. Wirecard is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Zayo Group Holdings (ZAYO) shares soared after the owner of fiber networks announced that it’s agreed to be acquired by Digital Colony Partners and EQT Partners. The deal to acquire Zayo Group would take the company private and values it at more than $8 billion. Digital Colony Partners and EQT Partners will pay $35/share while taking on $5.9 billion of debt to execute the acquisition. Zayo Group Holdings is rated “Neutral” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • Boeing (BA) convinced federal regulators that pilot new training for the new 737 Max, when introduced, was kept to a minimum, ex-employees allege.  Boeing convinced regulators the new version of the plane only required Level B training, which is a couple of hours on an iPad, and no time in a simulator.  Boeing wanted to limit the need for Level D training-which include extensive simulator time-so airlines could deploy the plane more quickly.  Boeing engineers convinced the FAA official in charge-someone with limited flight time-that the Level B training was sufficient.  Critics allege this may have contributed to the 737 Max crashed.  Boeing is rated “Top Short” in our US Large-Cap and “Unattractive” in our US Consumer Staples Global Top Stock Ideas.  
  • Lyft (LYFT) reported a 95% growth in revenue when it reported its first quarterly results.  Lyft reported $776 million in revenue in the first quarter of the year, a 95% hike that was greater than many analysts expected.  Lyft posted a $1.1 billion loss due to heavy stock-based compensation.  Its adjusted loss was $211.5 million, much better than the $274 million loss expected.  Lyft also announced an expanded partnership with Alphabet’s (GOOGL) Google unit Waymo to work more closely on self-driving cars.  Alphabet is rated “Top Buy” in our US Large-Cap and “Top Buy” in our US Information Technology 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 Commodities & Energy Stocks Trending in the News

  • Chevron (CVX) is walking away from its $33 billion bid to acquire Anadarko Petroleum (APC).  Chevron will collect its $1 billion breakup fee after Occidental Petroleum (OXY) beat it in the competition for Anadarko.  Chevron is five times larger than Occidental.  Chevron will use the breakup fee to increase share buyback by 25%.  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.
  • Duke Energy (DUK) reported first quarter results that came in line with consensus.  Duke Energy first quarter EPS of $1.24 matched consensus of $1.24.  Duke reported first quarter operating revenue of $6.16 billion, trailing $6.31 billion consensus.  Duke Energy provided full year EPS guidance of $4.80 tp $5.20 while consensus is presently $4.94.  Duke Energy is rated “Attractive” in our US Large-Cap Global Top Stock Ideas
  • Exelon (EXC) confirmed it is moving forward with closing the Three Mile Island nuclear power plant in Pennsylvania.  Exelon is making the move given that a bill to provide subsidies to keep them open has not moved forward in Pennsylvania’s legislature.  Exelon confirmed previously announced plans.  The plant will be closed by September 30th of this year.  Exelon is rated “Neutral” in our US Large-Cap Global Top Stock Ideas
  • Marathon Petroleum (MPC) said its MPLX LP is buying Andeavor Logistics in a $9 billion deal.  Marathon Petroleum also said it is not going ahead with the expansion of the Garyville Coker 3 project.  Marathon reports a 1 cent per share loss in the first quarter.  Revenue of $28.82 billion trailed $29.5 billion consensus.  First quarter refinery utilization as at 95%, up from 93% a year ago.  Marathon Petroleum is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas
  • Vale (VALE) reported a steep drop in iron ore production in the first quarter.  Vale saw iron ore production drop to 72.9 million tons from 82 million tons a year ago.  The drop reflects the sharp curtailing of production in the wake of its tailings dam disaster.  Vale removed 93 million ton of annual production to focus on safety, most of which has not fully returned.  Vale is rate “Attractive” in our Brazil All-Cap Global Top Stock Ideas.
  • Weatherford (WFT) shares plunged by more than 20% after the oilfield service company delayed the release of its quarterly earnings until May 10th. According to Bloomberg Intelligence analysts Spencer Cutter and Leon Huang, the delay, “may be driven by negotiations with lenders to extend the maturity date of $543 million of credit-line commitments that expire this summer.” Weatherford is not rated in our Global Top Stock Ideas.

Global Health Care Stocks Trending in the News

  • Becton Dickinson (BDX) reported fiscal second quarter results that came in line while guidance trailed.   Becton Dickinson fiscal second quarter EPS of $2.59 came a touch ahead of $2.58 consensus.  Revenue of $4.20 billion trailed $4.23 billion expectation.  Becton Dickinson cut full year EPS guidance to $11.65 to $11.75, from $12.05 to $12.15;  and below present consensus of $12.07.  Becton Dickinson is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas
  • Inogen (INGN) lost more than a quarter of its total market value after the company forecasted FY2019 revenue below the lowest analyst estimate. Inogen told investors that it now expects revenue of between $405 million and $415 million in FY2019, down from previously offered guidance of between $430 million and $440 million. The missed revenue guidance comes just 3 months after Muddy Waters issued a new short report on Inogen, citing in the report that sales were likely nearing a peak. Inogen is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Regeneron Pharmaceuticals (REGN) reported a huge miss with first quarter adjusted earnings.  Regeneron reported first quarter adjusted EPS of $4.45 while consensus was $5.71.  Revenue of $1.71 billion trailed $1.79 billion consensus.  Regeneron’s CEO said the company will continue to invest in a broad immune-oncology portfolio.  Regeneron Pharmaceuticals is rated “Top Buy” 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