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Global Stocks Trending in the News for May 17th, 2019

May 17, 2019

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Global Consumer Stocks Trending in the News

  • Amazon (AMZN) is becoming one of the biggest investors in UK delivery company Deliveroo.  Amazon led the most recent $575 million round of financing.  Deliveroo competes with Uber’s (UBER) Eats delivery service in London and a number of other European markets.  Deliveroo has raised a total of $1.53 billion but did not disclose a valuation.  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.  Uber is not yet rated on our Global Top Stock Ideas.
  • Beyond Meat (BYND) has seen its share price rally strongly post-IPO.  Beyond Meat is trading over $88 while the highest price target in the market is $81.  Beyond Meat has surged over 250% since its recent IPO as investors bet the demand for meat alternatives will grow strongly.  Beyond Meat is not yet rated in our Global Top Stock Ideas
  • Children’s Place (PLCE) shares plunged after management said revenue in May is facing “a vacuum.”  Children’s Place at the same time increased full-year EPS guidance to $5.75 to $6.25, consensus is presently $5.58.  Children’s Place is citing poor weather for the sudden drop in revenue it is seeing this Spring.  Children’s Place is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas
  • Dillard’s (DDS) reported first quarter net sales that trailed consensus.  Dillard’s posted first quarter net sales of $1.47 billion while consensus was for $1.5 billion.  First quarter EPS of $2.99 beat consensus of $2.89.  Dillard’s delivered same store sales growth of 0%, behind the 2% expected, while total sales grew 1%, also trailing consensus of 2%.  Dillard’s is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas
  • Farfetch Ltd. (FTCH) shares fell after the company announced a wider-than-expected loss in the first quarter. Farfetch observed an adjusted loss of $0.22/share during the first quarter while analysts expected an adjusted loss of $0.15/share. Still, analysts who cover Farfetch remained upbeat on the online retail platform. Farfetch is not rated in our Global Top Stock Ideas.
  • Jack in the Box (JACK) reported fiscal second quarter adjusted earnings that beat consensus.  Jack in the Box reported fiscal second quarter adjusted EPS of 99 cents, beating consensus of 80 cents.  Second quarter revenue of $215.7 million beat consensus of $209.8 million.  Jack in the Box posted same store sales growth of 0.2% beating consensus of a 0.1% drop.  Jack in the Box is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas
  • Kering Group (KER) announced it will no longer work with models under 18 years of age.  Kering said this will apply to both live fashion shows and photos.  Kering had announced last year that it would no longer work with models under 16.  The effort is part of a movement to improve the treatment of models across the industry.  Kering (ENXTPA:KER) is rated “Top Buy” in our European Large-Cap Global Top Stock Ideas
  • Nestle (SWX:NESN) has entered exclusive talks to sell its skin-health business to private-equity firm EQT and the Abu Dhabi Investment Authority, the WSJ is reporting.  This is the first concrete move from Nestle since it announced in September its plans to reshape its portfolio of products in an effort to spur growth.  The general plan is to focus more on coffee, pet care, and consumer health.  Nestle said it expects to close a deal in the second half of 2019.  Nestle in rated “Attractive” in our European Large-Cap Global Top Stock Ideas.
  • Sony (SNE) announced its second share buyback this year.  Sony approved a buyback of up to 200 billion yen.  Sony could buy back up to 4.8% of its outstanding shares if fully implemented.  Sony is responding to activist investors who have demanded buybacks.  Sony is rated “Attractive” in our Japan Large-Cap Global Top Stock Ideas.
  • Tesla (TSLA) CEO Elon Musk sent an email to all Tesla employees saying that he and its new CFO will now personally examine all expense in a “hardcore” effort to cut costs.  The aggressive moves come in the wake of huge losses last quarter.  Musk noted that the $2.2 billion cash balance Tesla has will only last 10 months at its current burn rate requiring a focus on containing costs like never before.  Tesla is rated “Unattracative” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  Uber is not yet rated on our Global Top Stock Ideas.
  • Thomas Cook Group Plc (LSE: TCG) shares fell by double-digits after the debt-ridden travel group warned investors that it will face another tough summer. Thomas Cook also told investors of a 300 million pound ($385 million) recue loan that it will receive, but only if the company makes progress with the sale of its airline. Thomas Cook is rated “Top Short” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Walmart (WMT) reported earnings that beat consensus.  Walmart reported first quarter adjusted EPS of $1.13, ahead of $1.02 expectation.  Revenue of $123.9 billion trailed $124.9 billion consensus.  Comparable sales grew 3.4% y/y matching consensus.  Walmart saw e-commerce sales grow 37% y/y.  Walmart  was upgraded to accumulate from hold at Gordon Haskett.  Walmart’s price target was raised to $115 from $99.  Walmart is executing well with an e-commerce strategy that is showing results. Walmart is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Staples Global Top Stock Ideas

Global Information Technology and Communication Services Stocks Trending in the News

  • Applied Materials (AMAT) was upgraded to buy from neutral at B. Riley FBR.  Applied Materials saw its price target hiked to $54 from $46 as well.   B. Riley sees increased confidence that near-term stability for Applied Materials has arrived and that the overall situation is improving.  Applied Materials is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.  
  • Baidu (BIDU) reported its first quarterly loss since its IPO in 2005.  Baidu posted a 327 million yuan loss in the quarter.  Baidu also provided guidance that trails consensus, saying it expects revenue in the coming quarter to be 25.1 billion to 26.6 billion yuan, well below consensus of 29.3 billion yuan.  Baidu is facing multiple headwinds as it faces a slowing China.  Baidu is rated “neutral” in our China All-Cap Global Top Stock Ideas
  • Cisco Systems (CSCO) reported solid fiscal third quarter revenue earnings, a touch above consensus.  Cisco reported fiscal third quarter EPS of 78 cents, beating consensus of 77 cents.  Revenue of $12.96 billion beat consensus of $12.87 billion.  Cisco gave bullish guidance, saying fiscal fourth quarter revenue should grow 4.5% to 6.5%, to $13.2 billion to $`3.5 billion; consensus is $13.3 billion.  Cisco Systems is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.  
  • Hewlett Packard Enterprise (HPE) announced it agreed to acquire Cray Inc in a $1.4 billion deal.  Cray (CRAY) shareholders will receive $35 per share, a 17% premium to yesterday’s close.  Cray is a maker of supercomputers that Hewlett Packard Enterprise is acquiring to bolster its position in the market as it focuses on artificial intelligence and distributed computing.  This is Hewlett Packard Enterprise’s biggest deal since it was created in 2015 from the breakup of Hewlett Packard.  Hewlett Packard Enterprise is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.  Cray Inc is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.  
  • Nvidia (NVDA) reported first quarter revenue and earnings that beat consensus.  Nvidia reported first quarter EPD of 88 cents, beating 81 cents consensus.  Revenue of $2.22 billion came ahead of $2.19 billion.  Nvidia provided second quarter revenue guidance of $2.5 billion to $2.6 billion while consensus is presently $2.53 billion.  Nvidia is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Information Technology Global Top Stock Ideas.  
  • Netease (NTES) reported first quarter earnings that beat the highest estimate.  Netease reported first quarter adjusted earnings per ADR of $3.48, beating consensus of $2.42.  Revenue in the first quarter of $2.74 billion trailed consensus of $2.67 billion.  Netease saw its stock upgraded at buy at China Renaissance with its price target hiked to $330.  Netease is rated “Top Buy” in our China All-Cap Global Top Stock Ideas.
  • Ubisoft Entertainment (ENXTPA: UBI) shares tanked after the video game maker missed its own sales projections as its highly anticipated Division 2 console video game faced difficult competition in the quarter. Ubisoft observed net bookings of 676.7 million euros ($757 million) during its fiscal fourth quarter that missed the company’s prior forecast of 698.0 million euros. Ubisoft’s Division 2 game faced tough competition both from free-to-play and tradition paid-for games. Ubisoft Entertainment is rated “Attractive” in our European Large-Cap Global Top Stock Ideas.
  • Wix.com (WIX) shares fell after announcing adjusted earnings of $0.03/share in the first quarter that trailed analyst expectations for adjusted earnings of $0.05/share. Wix.com also offered second quarter revenue guidance of between $182.0 million and $184.0 million, the midpoint of which misses consensus of $183.6 million. Wix.com is not rated in our Global Top Stock Ideas.

 

 

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Global Industrials Stocks Trending in the News

  • Air Canada (TSX:AC) announced that it is in exclusive talks to acquire Transat Airlines (TSX:TRZ) for $387 million.  Air Canada said it is offering a 23% premium for Transat.  Air Canada’s offer is over twice the price that Transat was trading at no April 30th when it announced it was in talks with a potential suitor.  Air Canada is rated “Neutral” in our Canada All-Cap Global Top Stock Ideas.  Transat Airlines is not rated in our Global Top Stock Ideas.
  • AO Smith (AOS) shares slid by double-digits and the most intraday in more than 3 years after J Capital published a short report for the stock. J Capital’s short report includes a price target of $22.68 for AO Smith shares while the stock closed at $48.19/share on Wednesday. J Capital believes that AO Smith’s revenue in 2019 will disappoint analyst expectations. AO Smith is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Industrials Global Top Stock Ideas.
  • Boeing (BA) has completed the software development and updated the software used on the 737 Max.  Boeing has flown 207 flights for a total of 360 hours of flight time.  Boeing is providing the FAA with additional requested data as the FAA reviews updated training materials.  Boeing is hoping to schedule certification flights soon with the FAA.  Boeing is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Industrials Global Top Stock Ideas.  
  • Deere & Co. (DE) reported earnings that missed consensus and cut its guidance as trade tension starts to be felt further.   Fiscal second quarter EPS of $3.52 trailing consensus of $3.62.  Deere net sales in the second quarter was $11.34 billion, ahead of $10.18 billion.  Deere provided full year sales growth guidance of 5%, a cut from previous 7% guidance.  Deere sees full year net income of $3.3 billion, down from $3.56 billion.  Deere & Co. is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Industrials Global Top Stock Ideas.  
  • InterGlobe Aviation Limited (NSEI: INDIGO) shares fell the most intraday in a year following reports that the billionaire founders of the company are hiring law firms to settle differences between the two. Raul Bhatia and Rakesh Gangwal, the founders of India's largest airline, are reportedly facing disagreements in relation to the airline's future strategy and clauses in the company’s shareholder agreement. InterGlobe Aviation Limited is rated “Neutral” in our India All-Cap Global Top Stock Ideas.

Global Financials Stocks Trending in the News

  • Citigroup (C) was fined 310.8 million euros by the EU for its traders’ participation in an F/X collusion scheme.  Citigroup’s traders colluded in chat rooms over F/X trading strategies to the detriment of investors.  The EU called the traders a “cartel” who illegally manipulated the F/X market for their own gain.  Citigroup is rated “Neutral” in our US Large-Cap Global Top Stock Ideas
  • New York Community Bancorp (NYCB) is trading lower on proposals in the New York State Legislature to strengthen rent control laws in favor of tenants.  The New York State Legislature is not completely controlled by Democrats who have made clear their plans to make life harder for building owners.  New York Community Bancorp is the most exposed bank in New York state to multi-family building lending, according to Wedbush, as is likely to suffer from lower loan and re-financing demand.  New York Community Bancorp is rated “Neutral” in our US Large-Cap Global Top Stock Ideas

Global Commodities & Energy Stocks Trending in the News

  • Lukoil PJSC (MISX: LKOH) shares surged the most intraday in more than a year after the firm’s board of directors approved the cancellation of millions of shares related to its current buyback program. According to the company, Lukoil will eliminate 35 million shares after purchasing them for 5,450 rubles/share. Lukoil’s charter capital also intends to reduce to 715 million shares, however, the plan requires shareholder approval at the company’s annual meeting in June. Lukoil is rated “Top Buy” in our European Large-Cap Global Top Stock Ideas.
  • Vale (VALE) alerted authorities that another of its tailings dams could collapse as soon as next week.  Vale informed that a tailings dams at a mine in Barao de Cocais in southeast Brazil could collapse due to instability at a nearby inactive mine.  Vale said residents in the vicinity of the 280-foot high dam have been evacuated.  This comes in the wake of Vale’s dam collapse a few months ago in which 270 people were killed.  Vale 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