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

May 15, 2019

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Global Consumer Stocks Trending in the News

  • Coca-Cola (KO) has a “clearly superior” growth outlook when compared to other consumer packaged goods companies, according to Morgan Stanley.   Coca-Cola was upgraded to overweight from equal-weight while its price target was hiked to $55 from $52.  Coca-Cola has “morphed into a structurally higher growth company” compared with its peers, Morgan Stanley adds.  Coca-Cola is rated “Attractive” in our US Large-Cap and “Top Buy” in our US Consumer Staples Global Top Stock Ideas
  • Macy’s (M) reported total same store sales growth of +0.7% beating consensus of +0.3%.  Macy’s reported same stores sales growth at company owned stores of +0.6% while consensus was for a drop of 0.1%.  Macy’s adjusted EPD of 44 cents beat 32 cents consensus.  Total sales of $5.5 billion matched consensus.  Macy’s is rated “Unattractive” in our US Large-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas
  • Restaurant Brands (QSR) is under pressure from investors to improve performance, the WSJ is highlighting today.   Restaurant Brands, the owner of Burger King, Popeyes, and Tim Hortons, saw years of strong growth after Brazil’s 3G Capital acquired it.  But growth is stalling and recent promotions have failed to spark sales growth, irking investors seeking better performance.  Restaurant Brands is rated “Top Buy” in our Canada All-Cap Global Top Stock Ideas.
  • Ralph Lauren (RL) reported fiscal fourth quarter earnings that beat consensus.  Ralph Lauren reported fiscal fourth quarter adjusted EPS of $1.07, beating consensus of 90 cents.  Ralph Lauren boosted its quarterly dividend to 68.75 cents, up from 62.5 cents.  Total sales rose 1% in the quarter.  Ralph Lauren sees sales growth for fiscal 2020 of 2% to 3% in constant currency.  Ralph Lauren is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas
  • Tesla (TSLA) is suffering in the US-China trade spat.  While cars are not on the list if imports being slapped with tariffs by China, many fear the day that will happen is getting close.  Analysts fear the next move on tariffs by China will include cars.  China broke ground on a battery factory in China early in the year any disruption between the countries is already negative, tariffs on their imports of cars would be disastrous.  Tesla is rated “Unattractive” in our US Large-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Walmart (WMT) announced it will offer 1-day delivery on many of its most popular items, matching Amazon’s (AMZN) new offering.  Walmart said going to a 1-day service will actually save it money by streamlining shipping.  Amazon, in contrast, said it will spend $800 million to completely roll out its 1-day delivery.  Walmart’s service starts in Phoenix and will be rolled out to the rest of the country.  Walmart is rated “Attractive” in our US Large-Cap and “Attractive” in our US Consumer Staples 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

Global Information Technology and Communication Services Stocks Trending in the News

  • Alphabet’s (GOOGL) Google is opening the Google Safety Engineering Center in Munich.  Google is creating a $10 million grant fund to hand out grants to groups focused on tackling hate and extremism.  Google will double the number of privacy engineers at the center to 200 making Munich a hub for privacy engineering.  Alphabet is rated “Top Buy” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas.  
  • Apple (AAPL) suffered a setback at the Supreme Court today.  The Supreme Court ruled that consumers can move ahead with their case against Apple alleging that it used its market dominance to artificially inflate prices at its App Store.  Apple will now be under further pressure to cut its 30% commission it charges sellers on its App Store.  Consumers are seeking hundreds of millions of dollars in damages in the case.  Apple is rated “Attractive” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Alibaba (BABA) reported earnings and revenue that beat consensus.  Alibaba posted revenue of 93.5 billion yuan, beating consensus of 91.7 billion yuan.  Adjusted earnings per share of 8.57 yuan well above consensus of 6.50 yuan.  Alibaba provided revenue guidance for the year of 500 billion yuan, trailing the 509 billion yuan.  Alibaba said its recommendation-based advertising is working well and driving revenue growth.  Full year revenue grew 51% to 376.8 billion yuan.  Core commerce business grew 54% to 78.9 billion yuan and cloud revenue grew 76% to 7.7 billion.  Alibaba is rated “Top Buy” in our China All-Cap Global Top Stock Ideas
  • Applied Materials (AMAT) was upgraded at Susquehanna to positive from neutral.  Applied Materials saw its price target hiked to $60 from $34.  Susquehanna said through its channel checks it sees “major wins” for Applied Materials in memory design and that should put it on track for EPS of $5 in the second half of 2019.  Applied Materials is rated “Neutral” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.  
  • Bilibili Inc. (BILI) saw its American depository receipts upgraded from outperform to buy at Daiwa Securities. Bilibili currently maintains 16 buy, 1 hold, and 0 sell recommendations across analyst forecasts. Over the last 3 months, analyst have raised their consensus price target for Bilibili shares by 16%. Bilibili is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
  • Facebook (FB) said it will not allow people who recently posted terrorist propaganda to use its live streaming service.  Facebook said it will have a “one strike” rule with these types of infractions.  This is the most concrete move Facebook has made to potentially limit use of its live stream service since the massacre in New Zealand that was streamed live on Facebook.  Facebook is rated “Attractive” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.  
  • Microsoft (MSFT) warned a bug in an older version of Windows that it has patched could be used as super-bug.  Microsoft said it could be used globally to wreak havoc much in the way the WannaCry worm did 2 years ago.  Microsoft added it has not seen anyone use the flaw maliciously yet but now that it has brought it to the public’s attention it expects someone will.  Microsoft is rated “Top Buy” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas.  
  • Scout24 AG (XTRA: G24) shares traded lower after shareholders rejected the 4.9 billion euro ($5.5 billion) bid for the German classified company from private equity companies. Only 42.8% of Scout24 investors holding company shares approved the acquisition offer while the minimum threshold for the deal to be approved was 50%. The deal would have seen Scout24 AG be acquired by private equity firms Blackstone Group LP (BX) and Hellman & Friedman. Scout24 is rated “Attractive” in our European SMID-Cap Global Top Stock Ideas. Blackstone is rated “Neutral” in our US Large-Cap Global Top Stock Ideas. 
  • STMicroelectronics (ENXTPA: STM) shares jumped higher after CEO Jean-Marc Chery said at the investor day conference that the company is targeting $12 billion in revenues and an operating margin, “in the high teens,”. Chery also noted that market conditions in the second half in 2019 will be stronger than those of the first half. STMicroelectronics is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Take-Two Interactive (TTWO) reported fiscal fourth quarter earnings that beat consensus.  Take-Two reported fiscal fourth quarter of 78 cents, beating consensus of 74 cents.  Take-Two gave full year EPS guidance of $3.75 to $4.00, well below consensus of $4.84 and full year adjusted revenue of $2.5 billion to $2.6 billion, below consensus of $2.76 billion.  Take-Two Interactive is rated “Attractive” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas.  
  • Tencent Music Entertainment Group (TME) shares slid after the China-centric online music streaming business announced earnings in the first quarter that beat analyst expectations, although a member of senior management unexpectedly departed the company. Tencent generated a net profit of 987 million yuan in the first quarter, or about $0.09/share, while analyst had expected earnings of $0.08/share. Tencent Music’s Guomin Xie, a former board member and Co-President of the company, unexpectedly left the company. Tencent Music is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
  • Tencent (TCEHY, SEHK:700) reported quarterly earnings that beat expectations.  Tencent reported net income of 27.21 billion yuan well above 19.4 billion consensus.  Net income included 11.1 billion yuan in gains from investee companies.  Tencent’s fintech unit saw sales grow 44% to 21.8 billion yuan, this is the first time the company is breaking out those results.  Revenue from its online games and messaging unit grew just 4.5% given the lack of approvals for new games from Chinese authorities over the last year.  Tencent is rated “Top Buy” in our China All-Cap Global Top Stock Ideas
  • Walt Disney (DIS) confirmed that the next installments of “Star Wars,” after the Skywalker installments, will be scripted by the creators of “Game of Thrones.”  David Benioff and DB Weiss, creators of “Game of Thrones,” will lead the effort for a film to debut in 2022.  With the last season of “Game of Thrones” being met with mixed reviews, the decision to choose them for the next Star Wars films seems like less of a good idea that it would have a few months ago.  The last Skywalker-themed film will be released this December.  Walt Disney is rated “Attractive” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas.  

Global Financial Stocks Trending in the New

  • Citigroup (C) is joining with India’s digital payments start-up Paytm to issue the start-up’s first physical credit card.  Paytm has 350 million users and is the leader in digital payments in India.  Citigroup has been looking for ways to boost its consumer business and partnering with digital start-ups is key to its strategy.  Citigroup is rated “Neutral” in our US Large-Cap Global Top Stock Idea

 

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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

  • Bayer (DB:BAYN) suffered a huge defeat in a Roundup case in California.  A jury in California awarded $2.055 billion when it ruled Bayer’s Roundup was responsible for the couple’s cancer.  This is the third defeat for Bayer in court and shareholders are revolting over its acquisition of Monsanto that brought with it 13,400 Roundup cases.  Bayer Interactive is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas
  • Boeing (BA) was left to do the final safety assessment of the flight control systems on the 737 Max certification, it has been learned.  It is the flight control system that has been implicated in the 2 crashes of the 737 Max.  Boeing did not include the MCAS flight control system in the list of critical systems that could cause a catastrophic failure on the plane.   Boeing is rated “Top Short” in our US Large-Cap and “Unattractive” in our US Industrials Global Top Stock Ideas.
  • Deere & Co (DE) was downgraded to underweight from neutral at JP Morgan.  Deere also saw its price target dropped to $132 from $154 at the same time.  The new price target implies a 10% downside to the last price.  JP Morgan said the fundamentals of the US agro-business is rapidly deteriorating.  Deere & Co. is rated “Top Short” in our US Large-Cap and “Attractive” in our US Industrials Global Top Stock Ideas.  
  • General Electric (GE) won the most orders in the first quarter for its gas-fired power plants.  GE won 6 orders for its advanced HA-class turbines, according to a Reuters report.  No other manufacturer won as many in the quarter.  GE also won three additional orders that were not included in earnings.  General Electric is rated “Top Short” in our US Large-Cap and “Top Short” in our US Industrials Global Top Stock Ideas.  
  • Navistar (NAV) shares traded notably higher following speculation from DealReporter in a morning flash that Volkswagen (XTRA: VOW3) could use the proceeds from the IPO of its trucking unit to acquire the remainder of Navistar. Prior to the report from DealReporter, Volkswagen acquired a 16.79% stake in Navistar back in April 2018. Navistar is rated “Neutral” in our US SMID-Cap and “Top Buy” in our US Industrials Global Top Stock Ideas. Volkswagen is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.

Global Commodities & Energy Stocks Trending in the News

  • Fortescue Metals Group Ltd. (ASX: FMG) shares surged higher after the world’s fourth largest exporter of iron ore announced a surprise AUD$1.85 billion of dividends. The extra AUD$0.60/share dividend payout by the iron ore supplier was possible due to price spikes in iron ore due to supply outages in Brazil. Fortescue Metals Group is rated “Attractive” in our Australia Large-Cap Global Top Stock Ideas.
  • Gazprom PJSC (MISX: GAZP) shares surged by double digits and the most intraday in over a decade after the Russian gas giant announced a proposal to increase its dividend payment by 59%. Gazprom announced it would pay a total 16.61 billion rubles dividend to investors, up from 10.43 billion rubles a year prior. Gazprom is rated “Attractive” in our European Large-Cap Global Top Stock Ideas.

Global Health Care Stocks Trending in the News

  • Insys Therapeutics (INSY) saw its price target slashed to $1 from $11 at Janney Montgomery.  Insys said it may need to file for bankruptcy in the wake of so many settlements for its sale of opioids.  Insys said it may not be able to complete the $150 million settlement it agreed to with the US Justice Department.  Insys is rated “Unattractive” in our SMID-Cap Global Top Stock Ideas
  • Mylan NV (MYL) is poised to bounce back after it hit a 7-year low, according to a note from Bernstein.  Mylan should be able to hit its guidance for 2019.  Bernstein noted the first quarter is normally a seasonally weak time so the weakness seen in its results is not the main concern.  A lack of strategic direction for Mylan is the main concern.   Mylan is rated “Unattractive” in our Large-Cap Global Top Stock Ideas
  • Tilray (TLRY) reported first quarter revenue that beat consensus.  Tilray reported first quarter revenue of $23 million, beating consensus of $21.4 million.  Tilray reported a first quarter loss of 32 cents per share.  Tilray sold 3,012 total kilograms in the first quarter.  Tilray is not rated in our 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