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Global Stocks Trending in the News for May 29th, 2019

May 29, 2019

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Global Consumer Stocks Trending in the News

  • Abercrombie & Fitch (ANF) reported same store sales that missed consensus with a loss that came better than expected.  Abercrombie & Fitch reported same store sales growth of 1% while consensus was for 1.4%.  First quarter adjusted loss per share of 29 cents came better than the 43 cents expected.  Abercrombie & Fitch sees second quarter same store sales growth of 0% to 2%.  Abercrombie & Fitch 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) shares could be worth $3,000 according to a new report from Piper Jaffray.  Amazon could reach that level in two to three years, which would be a 65% rise from current levels, the report notes.  Amazon could reach this level without any acquisition and at that level, its market cap would approach $1.5 trillion.  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.  
  • Capri Holdings (CPRI) reported fiscal fourth quarter margins and Kors same store sales both missed consensus.  Capri Holdings reported fiscal fourth quarter total operating margin of ~3% while its own forecast was for 10.3%, the main reason for the miss was the Jimmy Choo unit.  Kors same store sales fell 1%, worse than the 0.6% drop expected.  Capri cut 2020 revenue guidance to $6 billion from $6.1 billion.  Capri Holdings is not rated in our Global Top Stock Ideas.
  • Casino (ENXTPA:CO) of France has decided to cancel its dividend in the wake of S&P cutting their credit rating by 2 notches to B.   Casino entered into “safeguard” during which it has 6 months to come up with a restructuring plan.  S&P said it has significant concerns about the governance at Casino and cited that a main reason for the cut to its rating.   Casino is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas.
  • Constellation Brands (STZ) was downgraded at Morgan Stanley today to equal weight from overweight.   Constellation Brands saw its price target cut to $220 from $230 at the same time.  The risk-reward for the stock has tilted away from its favor at this point and better options exist at this point.  Constellation Brands is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Staples Global Top Stock Ideas.  
  • Costco (COST) was downgraded to hold from buy at Gordon Haskett.  Costco’s price target was cut to $255 at the same time.  Costco’s recent price rise makes its present risk/reward scenario less compelling.  The average price target in the market today is $255.  Costco is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Dick’s Sporting Goods (DKS) reported first quarter adjusted EPS that beat while increasing guidance.  Dick’s reported first quarter adjusted EPS of 62 cents, beating consensus of 59 cents.  First quarter adjusted same store sales were flat, beating consensus of a 1.2% drop.  Dick’s hiked full-year EPS guidance to $3.20 to $3.40, up from $3.15 to $3.35.  Full year same store sale are expected to grow 0% to 2%.  Dick’s Sporting Goods is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Fiat Chrysler (BIT:FCA) is in talks with Renault (ENTXPA:RNO) to merge operations.  Both companies have struggled recently and combining the two would create the world’s third largest manufacturer of automobiles.  The proposed deal has generally been well received by the market, with most agreeing each needed to make a move to short up their respective positions.  Fiat Chrysler is not rated in our Global Top Stock Ideas.  Renault Group is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • General Mills (GIS) was downgraded to sell from neutral at Goldman Sachs.  General Mills was downgraded due to “mounting deceleration concerns among investors.”  Goldman added that the benefits General Mills is seeing from management initiatives is peaking now, making the coming quarters questionable.  General Mills is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Kraft Heinz Co. (KHC) stock was among the worst performers in the S&P 500 Consumer Staples Index today after Consumer Edge Research’s Jonathan Feeny told clients that scanner trends for the US Foods segment for the 4-week period ending May 19th worsened from the prior week. Specifically, Feeny said that Kraft’s sales were down 1.3% in the period. Four out of five of Kraft’s largest categories also lost dollar share in the period. Kraft Heinz is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Staples Global Top Stock Ideas.
  • Nio Inc. (NIO) shares surged after the clean energy automobile manufacturer posted better-than-expected loss during the first quarter. Nio generated an adjusted loss of 2.42 yuan/share that was ahead of the 2.89 yuan/share expected by analysts. Nio’s revenue of 1.63 billion yuan in the first quarter was also ahead of consensus expectations for 1.54 billion yuan. Nio expects to deliver between 2,800 and 3,200 vehicle units in the upcoming quarter. Nio is rated “Top Short” in our China All-Cap Global Top Stock Ideas. 
  • Walgreens Boots Alliance (WBA) is considering closing up to 200 stores in the UK, Skynews in reporting.  The plan being consider by Walgreens would see it close some stores when the lease us up and in other cases closes Boots stores in town with more than one.  Walgreens had no comment.  Walgreens Boots Alliance is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  

Global Information Technology and Communication Services Stocks Trending in the News

  • Advanced Micro Drives (AMD) shares surged by double digits after CEO Lisa Su announced an array of new products during a keynote presentation at Taiwan’s Computex show. Among the new products announced by Advanced Micro Drives is a new generation of Ryzen desktop processors. According to Cowen, the announced products, “will drive above-consensus growth, [market] share gains, margin expansion, and AMD share appreciation.” Advanced Micro Drives is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Apple (AAPL) is launching a $199 iPod touch this week.  The new iPod features better performance using its A10 fusion chip.  The improved performance allows for immersive augmented reality and group facetime.  Apple is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas        
  • FireEye (FEYE) announced it is acquiring Verodin, a leader in cyber security validation procedures.  FireEye is paying $250 million in cash and stock.  The acquisition is expected to be accretive immediately.  FireEye is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas     
  • Global Payments (GPN) has agreed to acquired Total Systems Services (TSS) in a deal valued at $21.5 billion.  Total Systems holders will receive 0.8101 shares of Global Payments, with Global Payments holders holding 52% of the new company.  This is the third large merger in the payments industry this year.  The deal will combine the country’s largest merchant processor with the largest issuer processor.  Global Payments is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.  Total System Services is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas        
  • Momo (MOMO) reported first quarter revenue and earnings that beat consensus.  Momo reported first quarter revenue of $554.7 million, beating consensus of $517.5 million.  First quarter adjusted EPS of 62 cents, beating 54 cents consensus.  Momo posted 114.4 million monthly active users.   Momo gave full year revenue guidance of 4 billion to 4.1 billion yuan.  Momo is rated “Attractive” in our China All-Cap Global Top Stock Ideas.
  • Netflix (NFLX) said it will pull its production out of the state of Georgia if its recently passed abortion law goes into effect.  The legislation will become law in 2020 if it survives and in the meantime,  Netflix will continue filming there.  Netflix said it will work with the ACLU and other groups to fight the law in court.  Netflix is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Information Technology Global Top Stock Ideas     
  • Roku (ROKU) was downgraded to equal-weight from overweight at Stephen inc.  Roku saw its price target cut to $84 at the same time.  Stephens sees 12% downside for Roku from its present level.  Roku’s average price target is $78.33.  Roku is rated “Top Short” in our US Large-Cap Global Top Stock Ideas.
  • Yandex (YNDX) shares slid the most in 3 months following a newly proposed draft law in Russia that could make taxi businesses less profitable. According to Renaissance Capital analyst David Ferguson, “the proposed measures can affect the profitability of Yandex’s taxi business,”. The legislation proposes for taxi aggregators to only employ drivers with Russian citizenship and use cars no more than 7 years old. Yandex is rated “Neutral” in our European SMID-Cap Global Stock Ideas.

 

 

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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

  • Boeing’s (BA) 737 Max problems were known to Ethiopian Airlines pilots well before the crash, Bloomberg reports.  Documents from the crash investigation show one pilot had commented “it will be a crash for sure” unless there is additional training for pilots to deal with multiple system warnings that can come with the new MCAS system that was implicated in the recent crashes.  Boeing is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Industrials Global Top Stock Ideas
  • Lockheed Martin (LMT) got good news from both Japan and Poland as both want to buy F-35 fighter planes.  Japan wants to buy 105 F-35s, a move highlighted by President Trump while visiting Japan this weekend.  Poland also indicated a desire to acquire 32 F-35s to replace aging Soviet planes.  Lockheed Martin is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Industrials Global Top Stock Ideas

Global Commodities & Energy Stocks Trending in the News

  • ArcelorMittal (ENXTAM:MT) said it will cut steel production across Europe to cope with sagging demand and growing imports to Europe.  Arcelor is cutting production in Spain, France and Germany.  Arcelor said this would be a temporary measure to cope with weak demand.  ArcelorMittal is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Lonmin Plc (LSE: LMI) shared edged higher as investors are backing the platinum producer’s plan to takeover Sibanye Gold Ltd. (JSE: SGL) to form a platinum industry giant. 99% of votes casted at Sibanye backed the planned takeover of the company -- the required threshold was 75% of votes. Lonmin is not rated in our Global Top Stock Ideas. Sibanye is not rated in our Global Top Stock Ideas.
  • Vale’s (VALE) Brucutu mine will not open anytime soon, Brazilian prosecutors said.  Vale has not hired an external auditor yet to review safety concerns, prosecutors informed.  As such, the mine does not have any potential reopening data at this time.  Additionally, at its Gongo Seco mine, the tailings dam wall is moving much more than expected, and is likely to collapse soon.  Residents in the area have already been evacuated.  Vale has a total of 93 million tons of production out of service due to concerns over the safety of tailings dams.  Vale is rated “Attractive” in our Brazil All-Cap Global Top Stock Ideas.

Global Health Care Stocks Trending in the News

  • Centene (CNC) now has Third Point as a major shareholder.  Activist investor Third Point has a position worth $300 million, according to Bloomberg report.    The report adds that Third Point thinks that Centene should explore a sale of itself.  There are 2 other activist funds with positions in Centene that support the Third Point position.  Centene is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas 
  • Pfizer (PFE) was initiated at Goldman Sachs with a buy rating.  Goldman writes that the convergence of large-cap pharma with the biotech sector is in its later stages.  Goldman expects Pfizer and other large-cap players do bolt-on deals and not mega-deals going forward.  Goldman is positive on the pharma sector overall.  Pfizer is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas
  • Teva Pharmaceuticals (TEVA) was downgraded to neutral from buy at UBS.  Teva saw its price target cut to $23 from $31 at the same time.  UBS sees heightened litigation risk with its price-fixing and opioid cases, saying to will likely take years for both to play out, weighing on the stock in the meantime.  Teva 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