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Global Stocks Trending in the News for June 12th, 2019

Jun 12, 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.
  • 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.
  • Dave & Buster’s (PLAY) reported first quarter earnings in line with revenue that trailed.  Dave & Buster’s posted first quarter EPS of $1.13, matching consensus.  First quarter revenue of $363.6 million, trailing consensus of $371.6 million.  Dave & Buster’s sees full year revenue of $1.3 billion to $1.39 billion, below consensus of $1.4 billion.  Dave & Buster’s is rated “Neutral” in our US Large-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • GrubHub Inc. (GRUB) shares surged higher after a report from GeekWire indicates that Amazon (AMZN) will shut down its restaurant food delivery service Amazon Restaurants. The report finds that Amazon Restaurants will be discontinued on June 24th and that its workplace lunch delivery service Daily Dish will close on June 14th. Still, Bloomberg analyst Andrew Eisenson believes, “GrubHub will likely continue to lose share amid intense competition from Uber Eats and DoorDash.” GrubHub is rated “Top Short” in our US Large-Cap 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.
  • H&R Block (HRB) shares edged higher after the company reported revenue in the fiscal fourth quarter that was in line with analyst estimates. H&R Block generated revenue of $2.33 billion while analysts expected $2.32 billion. H&R Block also reported earnings from continuing operations of $4.32/share in the fiscal fourth quarter that was accompanied by a $0.26/share dividend payment, which also met analyst expectations. H&R Block is rated “Attractive” in our US Large-Cap and “Attractive” 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.
  • Lyft (LYFT) was upgraded to positive from neutral at Susquehanna.  Lyft saw its price target hiked to $80 from $57, implying a 41% upside for the stock.  Susquehanna sees a more rational competitive environment for Lyft going forward.  Lyft is not rated in our Global Top Stock Ideas.
  • Mattel (MAT) continues to be in the sights of MGA Entertainment, its closely held rival.  MGA has been trying to merge with Mattel for some time and MGA’s CEO said he may consider a hostile takeover if Mattel does not respond to his latest moves.  Mattel recently launched a film division as part of its turnaround and does not seem to be interested in any tie up with MGA and rejected its latest overtures.  Mattel is rated “Unattractive” in our US Large-Cap and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • National Beverage (FIZZ) shares tanked after Business Insider reported on a new lawsuit that the company may be facing.  The new lawsuit claims that National Beverage’s president claimed its sparkling water cans were free of BPA months before that was, in fact, the case to create positive buzz for the company.   National Beverage had no comment on the story.  National Beverage is rated “Attractive” in our US SMID-Cap and “Neutral” in our US Consumer Staples Global Top Stock Ideas.
  • Tesla (TSLA) shareholders rejected new corporate governance measures that were put to a vote.  Tesla’s board had proposed measures in April to give shareholders a greater say in company decisions.  The moves came in the wake of the SEC accusing CEO Elon Musk of making misleading statements above Tesla’s plans to go private.  The measures would have shortened directors’ terms and made it easier for shareholders to pass corporate measures.  Tesla is rated “Top Short” in our US Large-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Volkswagen (XTRA:VOW3) and Ford (F) are near to completing an agreement to collaborate on self-driving cars, Bloomberg reports.  The report notes that the majority of the points have been agreed to and a formal announcement could come as soon as July.  The companies envision a comprehensive agreement that would create a global powerhouse in self-driving cars.  Volkswagen is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.  Ford is rated “Neutral” in our US Large-Cap and “Attractive” in our US Consumer Discretionary 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

  • Apple (AAPL) is in talks to acquire Intel’s (INTC) modem unit, according to the website The Information.   The news comes 2 months after Apple said it would stop using Intel’s modem in its products.  Intel in turns said it would quit the business.  Intel spent over a billion dollars trying to develop modems, to no avail.  The last generation of iPhones used Intel modems but the next will not.  Apple is rated “Neutral” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas.  Intel is rated “Unattractive” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Cisco (CSCO) was downgraded to market perform from outperform at William Blair.  Cisco will see increasing competition in the coming year and the tailwinds that helped this past year will disappear.  William Blair sees “signs of tightening demand,” especially when compared to 2019.  Cisco is rated “Attractive” in our US Large-Cap and “Top Buy” in our US Information Technology 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.
  • Facebook (FB) announced a new paid research effort called Study.  Facebook will compensate users who download the Study app and it will record what apps you use and how you use them.  Facebook wants the data on its competitors and is willing to pay users for it.  Facebook did not yet say exactly what the compensation would be.  Facebook is rated “Neutral” in our US Large-Cap and “Neutral” in our US Information Technology 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.
  • NXP Semiconductors (NXPI) was upgraded to overweight from equal-weight at Morgan Stanley.  NXP saw its price target hiked to $114 from $99 as well.  Morgan cites NXP’s attractive valuation and lower inventory levels.  NXP’s valuation discount to its rivals is the biggest in its history, Morgan notes.  NXP Semiconductors is not rated in our 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.
  • T-Mobile Inc. (TMUS) and Sprint Corp. (S) shares both slid following a group of states set to sue in order to block a proposed takeover of the T-Mobile by Sprint. The increased pressure from state attorney generals, led by New York’s Letitia James, comes just prior to the Justice Department’s final decision on the proposed takeover. The takeover is being challenged by 10 total states and the District of Columbia. T-Mobile is rated “Neutral” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas. Sprint is rated “Top Short” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.

 

 

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Global Financials Stocks Trending in the News

  • CBOE Global Markets (CBOE) shares slid slightly lower after shares were cut from outperform to market perform by Raymond James analyst Patrick O’Shaughnessy. O’Shaughnessy cited an expensive valuation and a struggle by the company to find new long-term growth drivers as reasoning for the downgrade. CBOE Global Markets is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Deutsche Bank (DB: DBK) has told about 1,000 of its investment banking clients that they must provide more detailed information on ownership.  Deutsche Bank is trying to close gaps in its compliance practices that were recently uncovered.  Deutsche Bank has told these clients that failure to provide the requested documents will result in those clients being cut off.  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 aircraft should be flying again by December, according to a senior FAA official.  The comments were made in an interview at a safety conference in Germany.  It is not possible to give an exact date given the nature of the work Boeing is doing but the official said December is very probable for the 737 Max return.  Boeing is rated “Unattractive” in our US Large-Cap and “Unattractive” in our US Industrials Global Top Stock Ideas.   
  • JetBlue Airways Corp. (JBLU) shares traded higher following an upgrade from neutral to buy at Citigroup. Citigroup also raised its price target for JetBlue Airways from $19.50/share to a Street-high $26/share. Citigroup analyst Kevin Crissey wrote in a note to clients that JetBlue’s new cost trajectory, “would likely lead to a strong stock appreciation.” JetBlue Airways is rated “Unattractive” in our US Large-Cap and “Top Buy” in our US Industrials 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.      

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.  Reports say 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.

 

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