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Global Stocks Trending in the News for June 11th, 2019

Jun 11, 2019

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Global Consumer Stocks Trending in the News

  • Beyond Meat (BYND) was downgraded to hold from buy at JP Morgan after its 572% rise in price.  JP Morgan was the lead underwriter in the IPO of Beyond Meat.  JP Morgan said in its downgrade that Beyond Meat shares are getting overvalued, with a $10 billion enterprise value and trading at 27 times 2020 sales.  JP Morgan insisted its call is just a valuation call.  Beyond Meat is not rated in our Global Top Stock Ideas.
  • Caesars Entertainment Group (CZR) in talks and close to a deal to combine with rival Eldorado Resorts Inc (ERI), according to press reports.  Caesars and Eldorado are trying to finalize a cash and stock offer that would result in Eldorado running the combined entity.  Caesars is one of the largest casino operators with over 50 casinos in 13 states.  Caesars has a market cap of $6 billion with $9 billion in debt while Eldorado has a market cap of $4 billion with debt of $3 billion.  No comment from either company.  Caesars is rated “Neutral” in our US Large-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.   Eldorado Resorts Inc is rated “Neutral” in our US Large-Cap and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Crocs (CROX) said it does not anticipate that the US-China trade war will have a material effect on its business.  Crocs said if the 25% tariffs were put in place it would take about a $5 million hit.  Crocs is working to reduce its exposure to China, it presently imports 30% of its production from China and that is expected to drop to 10% in 2020.  Crocs is rated “Neutral” in our US Large-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Hudson’s Bay (TSX:HBC), owner of Saks Fifth Ave, received a proposal from a group of its shareholders including its Chairman, to take the company private.  The group is offering C$9.45 per share, a 48% premium to Friday’s close, for a total value of about C$1.74 billion.  The group of shareholder represents 57% of outstanding shares of the Hudson’s Bay.  Hudson’s Bay has struggled to improve performance in recent years and has shed a number of assets.  Hudson’s Bay is rated “Attractive” in our Canada All-Cap Global Top Stock Ideas
  • Kraft Heinz (KHC) rose sharply after the company published its long-delayed 10-K and its restatements of results came in line.  Kraft Heinz completed its internal investigation over procurement issues and there were no additional surprises.  Its write-down of $15.4 billion did not change.  Kraft Heinz is rated “Attractive” in our US Large-Cap and “Neutral” in our US Consumer Staples Global Top Stock Ideas.
  • Tyson Foods (TSN) has recalled more than 190,000 pounds of chicken fritter products, according to the USDA.   The chicken in questions was shipped to food service institutions and not sold through retail outlets.  Customers reported finding pieces of plastic in some chicken fritter bags.  Tyson Foods is rated “Attractive” in our US Large-Cap and “Neutral” in our US Consumer Staples Global Top Stock Ideas.
  • Whirlpool (WHR) saw Italy scarp all its incentives after it announced it would close its plant in Naples, Italy.  The Italian government complained the Whirlpool has not lived been faithful to its agreement with the factory.  Italy will rescind the 15 million in incentives remaining, complaining the company already received 50 million euros of incentives since 2014.  Whirlpool is rated “Attractive” in our US Large-Cap and “Top Buy” in our US Consumer Staples Global Top Stock Ideas.

Global Information Technology and Communication Services Stocks Trending in the News

  • Alibaba (BABA) has chosen China International Capital Corporation (SEHK:3908) and Credit Suisse Group (SWX:CSGN) to lead its listing in Hong Kong, Bloomberg reports.  Alibaba has not finalized a fundraising target and press reports are that it could reach $20 billion.  A listing that size would be the largest in Hong Kong since 2010.  Alibaba is said to be preparing a formal listing filing for the next few weeks.  Alibaba is rated “Attractive” in our China All-Cap Global Top Stock Ideas.  China International Capital Corporation is rated “Unattractive” in our China All-Cap Global Top Stock Ideas.  Credit Suisse Group is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • Analog Devices (ADI) was upgraded 2 notches by Goldman Sachs to buy from sell.  Analog Devices saw its price target hiked to $114 from $101.  Analog Devices will see rising gross margins from the $100 million in cost synergies expected from its cost reduction efforts.  Goldman sees the end of the cyclical correction approaching.  Analog Devices is rated “Neutral” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas
  • Apple (AAPL) said it has a back-up plan in the event the trade war with China drags on.  Apple’s primary manufacturer, Foxconn  (TSEC:2354), said it has capacity outside of China to produce all the iPhones that are destined for the United States.  China is where most of Apple’s products are made presently.  Foxconn said it is ready to support Apple in whatever move it needs to make.  Apple is rated “Neutral” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas.  Foxconn is not rated in our Global Top Stock Ideas.
  • Cree (CREE) cut its revenue and earnings guidance in the wake of the restrictions on Huawei exports.  Cree said it does not anticipate shipping any added products for Huawei’s build out and cannot say when shipments will resume.  Cree cut fiscal fourth quarter revenue guidance to $245 million to $252 million, down from $263 million to $272 million.  Cree now expects fiscal fourth quarter adjusted EPS of 8 to 12 cents, down from 12 to 16 cents.  Cree is rated “Top Short” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Dish Network (DISH) and AT&T’s (T) DirecTV are opening to a merger, according to a Bloomberg report.  Dish and DirecTV tried to combine 17 years ago but the FCC and Justice Dept would not approve the deal.  Since then a flood of competitors have sprouted and the concentration of market share of a proposed merger would be a shadow of what it was 17 years ago.  Both are losing subscribers in droves.  Neither has made a comment on the report.  Dish Network is rated “Top Short” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.  AT&T is rated “Neutral” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas
  • Insys Therapeutics (INSY) filed for bankruptcy under the weight of opioid-related liabilities.  Insys recently agreed to a large settlement with the government over its probe into its sales practices.  Insys said the move will allow it to devise a plan to pay its liabilities and maximize value for shareholders.  Insys is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas.
  • Microsoft (MSFT) will test its new videogame-streaming project in October.  Microsoft said the testing phase will allow users to stream any X-Box game to a mobile device, though Microsoft did not say which device(s).  At a press conference Microsoft showed 60 games it said will initially be able to be streamed.  Microsoft is rated “Top Buy” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas
  • Salesforce.com (CRM) has agreed to acquire Tableau (DATA) in an all-stock deal valued at $15.3 billion.  Salesorce.com is making the acquisition to bolster its data analytics offerings.  Salesforce.com is paying a 42% premium to Tableau’s Friday closing.  Tableau will continue to be run separately and remain based in Seattle.  Salesforce.com said the deal will cut earnings this year by 37 to 39 cents to $2.51 to $2.53.  Salesforce.com is rated “Neutral” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.  Tableau is rated “Neutral” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • American Airlines (AAL) is considering acquiring Airbus’ (ENXTPA:AIR) proposed A321XLR as its long-haul single-aisle aircraft.  American would replace its fleet of aging 757-200s in what would be a blow to Boeing (BA).  American is evaluating the plane and as the largest airline in the world carries a lot of weight with its decisions.  Boeing is focused on getting the 737 Max back in the air and has not made any 757 related product decisions.  American Airlines is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.   Airbus is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  Boeing is rated “Unattractive” in our US Large-Cap and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas.   
  • FedEx (FDX) said it would not renew its air cargo contract with Amazon (AMZN) and instead focus on “serving the broader e-commerce market.”  FedEx makes the move as Amazon moves farther into FedEx’s market.  Amazon has created Amazon Air to serve its own needs.  The contract with Amazon expires at the end of this month.  The move by FedEx was a surprise for the market.  FedEx is rated "Unattractive" in our US Large-Cap and " Top Buy" in our US Industrials Global Top Stock Ideas.  Amazon is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Intel (INTC) is acquiring networking startup Barefoot Networks.  Barefoot Networks is focused on networking chips, a part of the chip market where Intel does not presently compete.  Intel plans to scale up production at Barefoot to better compete in the market for managing traffic over ethernet.  Intel is rated “Attractive” in our US Large-Cap and “Unattractive” in our US Information Technology Global Top Stock Ideas.
  • Symantec (SYMC) was downgraded to equal-weight from overweight at Morgan Stanley.  Symantec will see “increased competition and management turnover represent risks to Symantec’s turnaround.”  Symantec saw its price target cut to $14 from $23, its new price target is a market low.  Morgan sees further downside for the stock.  Symantec is rated “Attractive” in our US Large-Cap and “Unattractive” in our US Information Technology Global Top Stock Ideas.
  • Thermo Fisher Scientific (TMO) and Roper Technologies (ROP) announced they have terminated the deal in which Thermo Fisher was due to acquire Gatan, Inc, a subsidiary of Roper.  Thermo Fisher and Roper said they terminated the deal given the challenges in getting the deal approved by regulators in the UK.  The supply contract that was already in place in which Gatan supplies Thermo Fisher will remain intact.  Thermo Fisher Scientific is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.  Roper Technologies is rated “Top Buy” in our US Large-Cap and “Neutral” in our US Industrials Global Top Stock Ideas.      
  • United Technologies (UTX) and Raytheon (RTN) are merging in what will create the world’s second largest aerospace and defense company.  The deal will be an all-stock merger.  United Technologies recently existed the elevator business and is fully focused on defense now.  The combined company will have a market cap of over $100 billion. With annual revenue of over $74 billion.  United Technologies is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Industrials Global Top Stock Ideas.  Raytheon is rated “Attractive” in our US Large-Cap and “Top Buy” in our US Industrials 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 Financials Stocks Trending in the News

  • Apollo Global Management (APO) is in the lead to acquire Shutterfly (SFLY), according to a report in Reuters.   Reuters said the deal values Shutterfly at more than $2 billion though did not mention an acquisition price.  Reuters added that a deal could be announced as early as next week.  Apollo Global Management is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas.  Shutterfly is rated “Neutral” in our US Large-Cap and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Fannie Mae (FNMA) and Freddie Mac (FMCC) shares both slid today after US Treasury Secretary Steven Mnuchin indicated that the companies will not be freed from US control without an overhaul to the country’s housing finance system. The comments by Mnuchin eliminated any hopes among investors to make a quick gain from their stakes in the mortgage companies. Fannie Mae is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas. Freddie Mac is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas.

Global Commodities & Energy Stocks Trending in the News

  • Ferrellgas Partners (FGP) shares surged by double digits after the company announced financial in the third quarter that were mostly in line with analyst estimates. Ferrellgas generated an adjusted EBITDA of $88.6 million during the fiscal third quarter that was in line with consensus. Ferrelgas also reported earnings in the fiscal third quarter of $0.21/unit that came ahead of consensus of $0.18/unit. Ferrellgas is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas.
  • PG&E (PCG) cut electric to a resort area this weekend to avoid wildfires from its transmission lines.  PG&E had warned it would cut electric when the National Weather Service issues a red-flag warning that indicates a high chance of a wildfire due to dry conditions.  PG&E cut power to 22,000 customers who were forced to rely on generators.  PG&E is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas

Global Health Care Stocks Trending in the News

  • CVS Health Corp. (CVS) may be about to see its acquisition of Aetna (AET) rejected by a federal judge, the NY Post is reporting.  The reports says the judge in the case appears to be leaning towards not approving the merger due to its effects on competition in the market.  Oral arguments are to be heard July 17th and ruling is expected shortly thereafter.  The report cites individuals close to the case as its source.  CVS is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  Aetna is not rated in our Global Top Stock Ideas.
  • Tandem Diabetes (TNDM) shares slid by double digits after data from the American Diabetes Association meeting failed to reach expectations that was heightened heading into the meeting. Data indicated a primary endpoint with time in range of 71%, which was better than the control of 59% but lower than expectations for the mid 70s. Tandem Diabetes is rated “Top Short” in our US Large-Cap Global Top Stock Ideas.
  • Tilray (TLRY) shares traded higher by double digits after the company’s largest shareholder agreed to merge with the cannabis company. Privateer Holdings signed a non-bind letter of intention with Tilray to also extend the lockup of its stake in the company for two years, eradicating any concern that the company could flood the market of Tilray shares with 75 million currently held. Tilray 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