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Global Stocks Trending in the News for May 31st, 2019

May 31, 2019

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Global Consumer Stocks Trending in the News

  • Amazon (AMZN) is considering acquiring the pre-paid wireless service Boost Mobile from T-Mobile (TMUS) and Sprint (S), according to Reuters.  The news is being described as negative for national carriers given Amazon’s tendency to lower prices in general when it enters a new market.  Boost has a long-term contract for access to T-Mobile and Sprint’s network, making it a very attractive target.  None of the companies would comment on the report.  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.  
  • Big Lots (BIG) reported first quarter earnings that beat consensus and upped full year guidance.  Big Lots reported first quarter adjusted EPS of 92 cents, above consensus of 70 cents.  Revenue of $1.3 billion matched consensus of $1.29 billion.  Big Lots upped full-year adjusted EPS guidance to $3.70 to $3.85, $3.55 to $3.75.  Big Lots is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Canada Goose (TSX:GOOS) shares plunged 31% on Wednesday after reporting its first miss as a public company.  Canada Goose reported revenue of $156.2 million, missing consensus of $158.9 million.  Canada Goose has been growing at 40% but  has slowed to ~20%, still impressive but giving some investors reason to bail out.  Canada Goose is rated “Neutral” in our Canada All-Cap Global Top Stock Ideas.
  • Dollar General (DG) reported first quarter net sales and earnings that beat consensus.  Dollar General reported first quarter EPS of $1.48 beating consensus of $1.39.  Net sales of $6.62 billion beat consensus of $6.57 billion.  Dollar General posted same store sales growth of 3.8% beating 2.8% expected.  Dollar General reaffirmed full year EPS guidance of $6.30 to $6.50.  Dollar General is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Dollar Tree (DLTR) reported first quarter EPD that matched consensus and provided guidance that trailed.  Dollar Tree reported first quarter adjusted EPS of $1.14, matching consensus.  Dollar Tree cut full year EPS guidance to $4.77 to $5.07 from $4.85 from $5.25.  Dollar Tree sees second quarter EPS coming at 64 to 73 cents.  Dollar Tree is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Gap (GPS) reported first quarter same store sales that missed consensus.  Gap reported first quarter same stores sales of a 4% drop, trailing the 1.2% expected.  Gap first quarter adjusted EPS of 24 cents trailed consensus of 32 cents.  First quarter revenue of $3.71 billion came a touch below $3.75 billion consensus.  Gap provided full year EPS guidance of $2.04 to $2.14, well below consensus of $2.46.  Gap is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Kraft Heinz (KHC) had its price cut farther at Credit Suisse to a market-low of $26, down from $33.  Credit Suisse floated a theory that the SEC could find further problems at Kraft Heinz as it investigates the company’s internal controls.  Kraft Heinz has lost 36% this year so far as the bad news keeps coming.  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.  
  • Tesla (TSLA) is starting to take order in China for its locally build Model 3s.  Tesla is pricing the locally built model well below the price of those that are imported to China from the US.  Tesla is pricing it at $47,500 which is well below the $59,800 it was charging for the imported cars.  Tesla’s strategy in China could be key to its survival, analysts argue.  Tesla is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary 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.  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.  

Global Information Technology and Communication Services Stocks Trending in the News

  • Apple (AAPL) has a near-term floor of $160, according to a report from Morgan Stanley.  The report highlights Apple losing 7% since the US limited Huawei from US technology.  Apple’s biggest near-term risk is the Chinese consumer, the report adds.  Morgan says Apple could see a 23% hit to 2020 earnings in a worst case scenario.  Apple is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Cypress Semiconductor (CY) said it considering strategic options, including a sale of itself, after receiving takeover interest, Bloomberg reports.  Cypress soared on the news.  Cypress manufactures and designs flash memory chips and is trying to expand into automobiles where it sees 8-10% growth in revenue.  It is also expanding into the Internet-of-things chips.  Cypress Semiconductor is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas
  • Dell (DELL) reported first quarter earnings that beat consensus but revenue that trailed.  Dell first quarter adjusted EPS of $1.45 beating consensus of $1.20.  Dell first quarter revenue of $21.9 billion, trailing consensus of $23.9 billion.  Weakness in server sales, which dropped 8.6%, was the main reason for the miss.  Dell provided full year revenue guidance of $92.7 billion to $95.7 billion, indicating revenue growth of 2.3% to 5.6%, well below the 15% growth posted last week.  Dell is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.  
  • Facebook (FB) is being criticized for not removing bogus vaccine content on its site that it promised to remove.  There are still paid ads claiming vaccines unethical doctors have conspired to hide evidence that vaccines are harmful to children.  Facebook officials have said they are not where they want to be and are working to remove all that content.  Facebook is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.  
  • Micron (MU) had its price target lowered at Stifel due to the Chinese tariffs.  32% of Micron’s revenue comes from shipments into China.  Given all the uncertainties with China, Micron saw its price target at Stifel cut to $54 from $60.  Expected declines in DRAM prices also was cited in the target price cut.  Micron is rated “Top Short” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.  
  • Momo (MOMO) was upgraded to buy from hold at Haitong International.  Momo saw its price target lowered to $33.70 from $38.30.  Haitong does not see any negative regulatory actions affecting Momo and expects growth to remain robust.  Momo is rated “Attractive” in our China All-Cap Global Top Stock Ideas.
  • NXP Semiconductors (NXP) has agreed to buy the Wi-Fi connectivity unit of Marvell Technology Group (NRVL).  NXP is paying $1.76 billion for the Marvell unit in an all-cash deal.  NXP is the largest supplier of chips to automobiles and the acquisition will expand its offerings to auto manufacturers.  After the sale, Marvell expects to see an improvement in margins.  Neither NXP Semiconductor nor Marvell is rated in our Global Top Stock Ideas
  • Palo Alto Networks (PANW) reported fiscal third quarter earnings that beat consensus but guidance that trailed.  Palo Alto Networks posted fiscal third quarter EPS of $1.31 beating consensus of $1.25.  Revenue grew 28% to $726.6 million.  Palo Alto Networks provided EPS guidance for fiscal fourth quarter of $1.41 to $1.42, trailing consensus of $1.44m sending the stock lower.  Palo Alto Networks is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas     
  • Tech Data Corp (TECD) reported first quarter adjusted EPS that beat expectations.  Tech Data reported first quarter adjusted EPS of $2.04 beating consensus of $1.96.  Revenue of $8.41 billion came in line with $8.45 billion consensus.  Tech Data sees second quarter adjusted EPS of $2.15 to $2.45.  Tech Data Corp is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Uber (UBER) reported its first quarterly results as a public company.  Uber reported a first quarter loss of $1.03 billion which was in line with what Uber said in its IPO documents.  Revenue grew just 10% to $2.62 billion, fueling critics claims that competition is hurting Uber’s growth prospects.  A year earlier that growth was 80%.  Uber is not yet rated in our Global Top Stock Ideas.
  • Verizon (VZ) was downgraded to neutral from buy at UBS.  UBS maintained its $59 price target.  Verizon will see the fundamentals of its wireless business remain positive though it is unlikely to see any acceleration in growth.  Valuation has returned to historical levels and UBS believes the risk/reward now is not in Verizon’s favor.  Verizon is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.  

 

 

 

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Global Financials Stocks Trending in the News

  • Citigroup (C) said it is seeing lower trading revenue this quarter amid the market uncertainties.  Citigroup CEO Michael Corbat said, “In periods of uncertainty, things tend to become pretty muted.”  Corbat said the trade war, Brexit and Middle East tension are all reasons they are seeing less trading from clients.  Citigroup is rated “Neutral” in our US Large-Cap Global Top Stock Ideas

Global Industrial Stocks Trending in the News

  • FedEx (FDX) announced it will offer Sunday delivery service to most homes in the US.  FedEx’s President said, “Online shopping is seven days a week.”  FedEx said with so much online shopping and customers expecting deliveries quickly, the move to seven days of delivery looks to answer that demand.  Deliveries on Sunday will start next year as FedEx looks to capture more e-commerce business.  FedEx is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Industrials Global Top Stock Ideas

Global Commodities & Energy Stocks Trending in the News

  • American Tower Corp (AMT) agreed to acquire Eaton Towers in deal valued at $1.85 billion including debt.  American Tower is making the acquisition to fuel its growth in Africa where both companies have towers.  The combination will allow American Tower to expand farther in Africa where tower growth in the highest.  The deal will give American Tower $260 million in property revenue in the first year after closing the deal.  American Tower is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas
  • International Paper (IP) said it is exiting its Indian-based paper business.  International Paper will sell its controlling stake to West Coast Paper Mills of India for 275 rupeees per share.   International Paper said this is a strategic decision as it focuses on its packaging and cellulose businesses.  International Paper is rated “Neutral” in our US Large-Cap Global Top Stock Ideas
  • Nucor (NUE) was downgraded today at Merrill Lynch to underperform from buy, a 2 notch downgrade.  Nucor is being pressured by the trade war with China.  Steel price estimates for the coming year have been slashed by analysts, hurting Nucor’s outlook.  Merrill cut Nucor’s price target to $50 from $68.  Nucor is rated “Attractive” 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