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Global Stocks Trending in the News for June 3rd, 2019

Jun 03, 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 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 and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Constellation Brands (STZ) suffered greatly after the US announced potential tariffs on imports from Mexico.  Constellation Brands’ imports Corona and Modelo products and hiking tariffs on its products is sure to cause it pain.  Two-thirds of Constellation Brands’ revenue come from beer and alcohol it produce in Mexico.  Constellation Brands is rated “Neutral” in our US Large-Cap and “Neutral” in our US Consumer Staples 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 and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Johnson & Johnson (JNJ) was ordered by a NYC jury to pay an additional $300 million in punitive damages to a woman who blamed her rare cancer on its talc powder.  The actual damages verdict in the trial was $25 million, so with the punitive damages award the total is $325 million that Johnson & Johnson has been ordered to pay.  The lawsuit is one of thousands that Johnson & Johnson faces over its talc powder alleging causing cancer.  Johnson & Johnson is rated “Neutral” in our US Large-Cap 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 and “Attractive” in our US Consumer Staples Global Top Stock Ideas.  
  • Lyft (LYFT) shares rose sharply in the wake of JP Morgan reiterating its buy rating and $86 price target.  JP Morgan sees 50+% upside for Lyft and recommended the present price level, ~$40, as a good entry point.  Lyft has a number of high-growth, high-margin opportunities in its business and expects the market to reward it for them.  Lyft is not rated in our 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 and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  T-Mobile is rated “Attractive” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas.  Sprint is rated “Top Short” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas.  
  • Williams-Sonoma (WSM) reported first quarter adjusted EPS of 81 cents, handily beating consensus of 69 cents.    Same store sales growth of 3.5% also beating consensus of 1.6%.   Williams-Sonoma hiked full-year adjusted EPS guidance to $4.55 to $4.75, up from $4.50 to $4.70.  Shares rose 16% on Friday.  Williams-Sonoma is rated “Neutral” in our US Large-Cap and “Attractive” 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 gearing up for a legal battle with the US Justice Department.  The US government has indicated it is preparing to investigate the company over potential anti-trust concerns.  As Google has grown larger and more powerful in the age of data, many critics think it’s too powerful, especially with its internet search dominating the market.  No idea how long this could last.  Alphabet is rated “Top Buy” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • AT&T (T) is making its plans to take on Netflix (NFLX) clear, Bloomberg reports, and it will be “more.”  AT&T’s media properties will produce considerably more content than they do presently.  AT&T is trying to unify the various media assets that it has in order to effectively attack Netflix’s position in the market.  AT&T is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas.  Netflix is rated “Unattractive” in our US Large-Cap and “Attarctive” in our US Information Technology Global Top Stock Ideas.
  • Cree Inc (CREE) was downgraded to neutral from buy at BMO Capital Markets.  Cree has its price target maintained at $55.  Cree shares has run up 60% since October and BMO notes that the shares are fairly valued at this point, hence the downgrade.  Cree continues to execute well on its transformation, BMO adds.  Cree is rated “Top Short” in our US Large-Cap 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 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 and “Neutral” in our US Information Technology Global Top Stock Ideas.  
  • Infineon Technologies AG (XTRA:IFX) agreed to acquire Cypress Semiconductor (CY) in a deal valued at $10.1 billion.  Infineon said after completing the deal it will be a the largest supplier of chips to the automotive sector.  Infineon said the acquisition will also give it new growth avenues in industrial and consumer devices.   Infineon Technologies AG is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.  Cypress Semiconductor is rated “Neutral” in our US Large-Cap 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 and “Neutral” in our US Information Technology Global Top Stock Ideas.  
  • Softbank (TSE:9984) is having trouble raising a second $100 billion for a second Vision Fund.  Softbank is looking to maintain its torrid pace if deal making and needs fresh investments to be able to continue.  WSJ reports the fundraising is being met with a chilly reception in an environment of choppy markets.  WSJ adds that many investors approached plan zero or very limited investments.  Softbank is rated “Top Buy” in our Japan Large-Cap 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 and “Top Buy” in our US Information Technology Global Top Stock Ideas.  

 

 

 

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We Crunch the Numbers, You Make the Trade.We Crunch the Numbers, You Make the Trade.

Global Financial Stocks Trending in the News

  • Blackstone Group (BX) has agreed to acquire $18.7 billion in logistics assets from GLP Pte (SGX:MC0) of Singapore.   Blackstone seeks to leverage the growing e-commerce business’ needs for logistics services.  Blackstone will double its industrial footprint in the US with the acquisition.  Blackstone will gain 179 million square feet of warehouse space in the deal.  Blackstone Group is rated “Neutral” in our US Large-Cap Global Top Stock Ideas

Global Industrials Stocks Trending in the News

  • Boeing (BA) suffered fresh bad news after US regulators said up to 150 parts in Boeing’s 737 Max aircraft’s wing may be defective.  Regulators said the parts do not pose an imminent crash threat.  Regulators said Boeing altered a manufacturing process that may make the parts weaker than they should be.  Boeing said it has yet to be notified of any problems with a batch of parts in questions.  Boeing is rated "Top Short" in our US Large-Cap and "Unattractive" in our US Industrials Global Top Stock Ideas. 
  • FedEx (FDX)  is being investigated by the Chinese government for “wrongful delivery of packages” in what is being considered the start of targeted retaliations against US companies as the trade war rages on.  Chinese state media made clear the actions are part of its blacklisting efforts against US companies active in China.  FedEx is rated "Unattractive" in our US Large-Cap and "Top Buy" in our US Industrials Global Top Stock Ideas. 
  • Johnson Controls (JCI) announced the results of its modified Dutch auction tender offer.  Johnson Controls expects to accept for payment about 102.32 million shares.  Johnson Control said its aggregate cost will be about $4.02 billion for the shares tendered.  Johnson Controls is not rated on our Global Top Stock Ideas

Global Commodities & Energy Stocks Trending in the News

  • American Tower Corp (AMT) agreed to acquire Eaton Towers in a 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
  • El Paso Electric (EE) has agreed to be acquired by an investment vehicle of JP Morgan (JPM) in a deal valued at $2.78 billion.  JP Morgan is paying $68.25 per shares, a 17% premium to Friday’s closing price.  With the economy in Texas booming and the grid operator warning of a lack of supply, the El Paso acquisition looks to benefit from that strength.  El Paso Electric Alphabet is rated “Neutral” in our US SMID-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