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Global Stocks Trending in the News for May 23rd, 2019

May 23, 2019

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Global Consumer Stocks Trending in the News

  • Advanced Auto Parts (AAP) reported first quarter adjusted EPS that beat consensus.  Advanced Auto Parts reported first quarter adjusted EPS of $2.46 beating consensus of $2.37.  First quarter revenue came in line at $2.95 billion.  Advanced Auto Parts saw same store sales growth of 2.7% in the first quarter, trailing consensus of 2.9% growth.  Advanced Auto Parts gave full year revenue guidance of $9.65 billion to $9.8 billion.  Advanced Auto Parts is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Amazon (AMZN) is working on a wearable device that can read your emotions, Bloomberg is reporting.  Amazon is developing the wearable together with Lab126 which is the development group behind its Fire phone and Echo speakers.  The wearable is designed to work with an app and uses your voice to read emotions.  The project is code named Dylan and it is not clear if it will ever become commercially viable.  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.  
  • Avon Products (AVP) came to a final agreement with Brazil’s Natura (NATU3) that will see it acquired in a deal valued at more that $2 billion.  Natura will own about 76% of the resultant company with Avon shareholders owning the rest.  A formal announcement is expected during Wednesday’s trading session.  Natura previously acquired The Body Shoppe chain.  Natura is rated “Attractive” in our Brazil All-Cap Global Top Stock Ideas.  Avon is not rated in our Global Top Stock Ideas
  • Best Buy (BBY) reported first quarter earnings and same store sales that beat consensus.  Best Buy reported first quarter same stores sales growth of 1.1%, beating 0.9%.  First quarter adjusted EPS of $1.02 beat consensus of 87 cents.  Revenue in the first quarter was $9.14 billion matching consensus.  Best Buy provided second quarter EPS guidance of $0.95 to $1.00 on revenue of $9.5 billion to $ 9.6 billion.  Best Buy is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Ford (F) hopes to be testing delivery robots being deployed from self-driving cars within the next year.  Ford is partnering with robotic start-up Agility Robots developing walking robots that can deliver packages to homes.  The companies will run a test program with Agilent’s robots and Ford vans.  The program is part of Ford’s push into autonomous vehicles.  Ford is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Harley-Davidson (HOG) is starting to use loans to drive sales, a more aggressive move for Harley.  Harley will introduce about 100 new models by 2027 and will use loans to drive sales to new customers it anticipates will be younger and less well-off than its stable of aging customers.  The risk for Harley is an uptick in delinquencies that could hamper results.  Harley-Davidson is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  
  • L Brands (LB) reported first quarter earnings that beat consensus.  L Brands reported first quarter EPS of 14 cents, beating consensus of $0.  Net sales of $2.63 billion beat consensus of $2.56 billion.  Flat sales growth in the first quarter beat an expected drop of 1.2%.  L Brands provided EPS guidance for the second quarter of 15-20 cents and for the year of $2.30 to $2.60.  L 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.  
  • Lowes (LOW) cut guidance, raising doubts about its turnaround efforts.  Lowes cut full-year EPS guidance to $5.54 to $5.74, down from previous $6.00 to $6.10.  Lowes said, “The consumer is healthy” and that its plan is in its early stages.  Lowes anticipates cutting next years earnings guidance too.  Lowes is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Nike (NKE) has called the recently enacted tariffs on Chinese imports “catastrophic” in an open letter to President Trump.  Tariffs on footwear would be part of the next round of tariffs and Nike with 173 other companies pleaded with the President to not act further.  There is much less production of shoes in China than was the case a few years ago, but the companies argue it would still be terrible if fully implemented.  Nike is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Nordstrom Inc. (JWN) shares fell to their lowest level since 2010 after the retailer cut its FY2019 outlook, citing declining sales that resulted from changes to its loyalty program and merchandising misses. The guidance slash invoked a series of price target cuts on Nortdstrom shares.  Tesley Advisory Group told clients, however, that it believes Nordstrom’s well-earned reputation for service will help the company to overcome short-term setbacks. Nordstrom is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Target (TGT) was upgraded to overweight from neutral by JP Morgan.  Target saw its price target hiked to $100 from $81.  In the upgrade report, JP Morgan notes the shares are undervalued, saying Target deserves a best in class valuation.  Target has been delivering strong performance and JP Morgan expects that to continue.  Target 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 (TSLA) senior managers and directors (excluding CEO Elon Musk) are on pace sell more insider Tesla shares than ever before, according to a report from Bloomberg. Five insiders have raked in $52.2 million from selling Tesla shares this year, which appears on pace to eclipse the 2013 peak when $111.2 million worth of shares were sold. Tesla is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global top Stock Ideas.
  • Vivendi (ENXTPA:VIV) has been trying to sell a minority stake in its Universal Music Group for some time and is now focused on strategic buyers, Bloomberg reports.  The report says private buyers, Vivendi’s initial focus, have balked and the foot-dragging by Vivendi and the rich price being sought for a minority stake.  Despite talks and pitches, Vivendi still had no hired any bankers or advisers for the deal, so some question how serious Vivendi is.  Vivendi is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.

Global Information Technology and Communication Services Stocks Trending in the News

  • Facebook (FB) should hire a new CEO and get rid of stock compensation, according to its ex-chief security officer, Alex Stamos.  Facebook has too much power, he argues, and the company should be broken into pieces to limit its power.  Stamos adds that a breakup would not fix Facebook’s broken culture which he sees at the root cause of most of its problems.  Facebook is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas
  • NetApp (NTAP) reported fiscal fourth quarter adjusted EPS that trailed consensus.  NetApp reported fiscal fourth quarter EPS of $1.22, trailing consensus of $1.26.  NetApp reported fourth quarter revenue of $1.59 billion, also trailing consensus of $1.64 billion.  NetApp hiked its quarterly dividend 20% to 48 cents per share.  NetApp is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas
  • Qualcomm (QCOM) violated anti-trust law with its business practices, a federal judge has ruled.  Qualcomm used its dominant market position to charge excessive licensing fees.  “Qualcomm’s practices have strangled competition,” the judge wrote in a ruling that agreed with FTC findings.  Qualcomm charges a percentage of the sale price of the phone, a practice the judge found excessive.  Qualcomm is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas
  • Sprint (S) and T-Mobile US Inc. (TMUS) shares both slid today following a report from Reuters that the US Justice Department staff is recommends suing in order to block the merger of the two telecommunications giants. The report follows the approval of the acquisition by the Federal Communications Commission (FCC) earlier this week. Many speculated that the US Justice Department would approve the deal because the regulator has never diverged from the initial recommendation of the FCC. Sprint is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas. T-Mobile is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Weibo (WB) reported first quarter adjusted EPS that beat consensus.  Weibo posted first adjusted quarter EPS of 56 cents, ahead of 53 cents consensus.  First quarter revenue came in line with consensus at $399.2 million.  Weibo posted first quarter MAUs of 54 million.  Weibo provided second quarter revenue guidance of $427 million to $437 million, a rise of 7-10% on a constant currency basis.  Weibo is rated “Neutral” in our China All-Cap Global Top Stock Ideas

 

 

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Global Financials Stocks Trending in the News

  • Canadian Imperial Bank of Commerce (TSX: CM) shares fell the most in nearly three months following fiscal second quarter financials that missed the average analyst estimate. CIBC generated adjusted earnings of CAD$2.97/share that fell 2.4% y/y and trailed consensus of CAD$2.99. RBC Capital Markets analyst Darko Mihelic wrote to clients following the financials, “Overall, we have a mildly negative to neutral view,” on the results. CIBC is rated “Unattractive” in our Canada All-Cap Global Top Stock Ideas.
  • China CITIC Bank (SEHK:998) and Baidu (BIDU) are seeking up to 7 billion yuan in private funding in its first round of funding for its digital bank, aiBank.  China CITIC and Baidu launched the online bank in 2015 and are seeking funding to drive growth.  aiBank provides personal loans of up to 300,000 yuan with no collateral.   China CITIC Bank is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
  • Commerzbank’s (DB:CBK) CEO indicated the bank may be open to a merger with another bank after its attempts at a tie-up with Deutsche Bank (DB:DBK) collapsed.  Commerzbank will unveil a new plan for strategy plan in the fall but its CEO made clear one option is a merger with another German or European bank.   A number of other European bank have shown interest so that option exists if management thinks it makes sense.  Commerzbank is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.  Deutsche Bank is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • Boeing’s (BA) 737 Max may not be returning to service as quickly as the industry is expecting.  The acting head of the FAA said he cannot predict when the plane will return to service.  It was assumed the aircraft would return by summer’s end and Boeing has expressed the same hopes.  But the FAA, suffering from a lack of credibility, still needs to convince other global regulators that the plane is air worthy.  Boeing is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Industrials Global Top Stock Ideas

Global Health Care Stocks Trending in the News

  • Thermo Fisher (TMO) shares edged higher after the company reaffirmed its guidance for FY2019. Thermo Fisher also told investors that it expects to generate revenue between $29 billion and $30.4 billion in FY2022 with operating income of between $7.3 billion and $7.7 billion in the same fiscal year. Thermo Fisher 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