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Global Stocks Trending in the News for June 14th, 2019

Jun 14, 2019

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Global Consumer Stocks Trending in the News

  • Amazon (AMZN) responded to presidential candidate Joe Biden’s complaint about the taxes it pays by saying his complaints should be with the tax code, not with Amazon.  Amazon pointed out that it has paid $2.6 billion in corporate taxes since 2016, saying it pays “every penny” it owes.  Amazon said the US tax code is designed to encourage companies to reinvest and it has reinvested $200 billion into the American economy.  Amazon is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Callaway Golf Co. (ELY) shares soared by double-digits after activist investor Jana Partners urged the sporting goods company to initiate a strategic review of the company, including the exploration of a possible sale. Barry Rosenstein, who runs the NY-based hedge fund, also explained that Jana Partners bought 9.5% of Callaway because shares are undervalued. Callaway is rated “Attractive” in our US SMID-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Hertz Global (HTZ) announced it will distribute subscription rights to shareholders to buy almost 58 million shares.  Each right entitles holders to purchase 0.688285 shares at $12.95.  Carl Icahn and his affiliates, holders of 28.8% of outstanding shares, plan to fully subscribe.  Proceeds will be used to pay down debt.  Hertz Global is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Industrials Global Top Stock Ideas.   
  • Hudson’s Bay Co. (TSX:HBC) said it is moving production away from China due to the tariffs.  Hudson’s Bay has limited exposure since 70% of its revenue comes from luxury goods retailer Saks Fifth Avenue and those products are not made in China.  Hudosn’s Bay said it is confident it can mitigate any other negative effects.  Hudson’s Bay Co. is rated “Attractive” in our Canada All-Cap Global Top Stock Ideas
  • Lululemon (LULU) reported first quarter earnings that beat consensus.  Lululemon reported first quarter EPS of 74 cents, beating consensus of 70 cents.  First quarter same store sales in constant currency grew 8%, above 5.2% consensus.  Net revenue in the quarter of $782.3 million, beating $756.3 million consensus.   Lululemon gave full year revenue guidance of $3.73 billion to $3.77 billion.  Lululemon is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Red Robin (RRGB) shares jumped by more than 30% after Vintage Capital disclosed that it’s prepared to bid $40/share for the company. Stephens analyst Will Slabaugh wrote to clients that Red Robin could be a good candidate for a private equity takeout. Red Robin is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • RH (RH), previously known as Restoration Hardware, upped guidance for the year and said it is mitigating the costs of the tariffs on China.  RH had imported 41% of its products from China and said it has renegotiated prices lower from suppliers to reduce the effects of the tariffs.  RH said full year sales will be $2.64 billion to $2.66 billion, up from $2.59 billion to $2.64 billion.  RH is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Target (TGT) announced a same-day delivery option is no available for online orders.  Target said it will offer $9.99 same-day delivery service using Shipt’s delivery service.  Target touts the options as it does not require any subscription to be bought.  Target said 65,000 items can now be delivered using the service.  Target is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Tyson Foods (TYS) is entering the veggie protein market with a hybrid burger.  Tyson is set to introduce a burger patty that is half pea protein, half angus beef.  Tyson expects its patties to be a “billion-dollar brand.”  Tyson’s CEO said he expects to be a leader in the space.  Tyson Foods is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Consumer Staples Global Top Stock Ideas.
  • Volkswagen (XTRA:VOW3) plans to offer up to 15% of its truck unit Traton AG in its upcoming IPO.  Traton will be offered between 27 and 33 euros.  Volkswagen hopes to raise up to 1.9 billion euros in the IPO.  Volkswagen is valuing Traton at about 16.5 billion euros.  Traton is the first of a number of divestitures Volkswagen is likely to undertake to unlock value.  Volkswagen is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.

Global Information Technology and Communication Services Stocks Trending in the News

  • Alibaba (BABA) has confidentially filed for its Hong Kong share listing, according to Bloomberg.  Alibaba is expected to raise up to $20 billion with its Hong Kong listing.  Alibaba has chosen China International Capital Corporation (SEHK:3908) and Credit Suisse Group (SWX:CSGN) to lead its listing in Hong Kong, Bloomberg previously reported.  A listing that size would be the largest in Hong Kong since 2010.  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.
  • Broadcom (AVGO) cut its revenue forecast for the full year as the trade war with China will negate the rebound it has hoped for in the second half of the year.  Broadcom ow expects full-year revenue of $22.5 billion, down from $24.5 billion.  The higher estimate was given just three months ago.  Broadcom’s CEO said customers are drawing down inventory amid the uncertainty.  Broadcom is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas
  • IBM (IBM) demonstrated its debating program that used artificial intelligence and crowd sourced response to provide pro and con arguments about a subject.  IBM collected over 1,000 opinions on whether or not marijuana should be legalized.  Within an hour IBM’s Debater Program correlated them into coherent pro and con arguments.  The project is not ready for commercial use yet and is intended to help corporations in decision making.  IBM is rated “Attractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas
  • Juniper Networks (JNPR) was upgraded at Rosenblatt Securities to neutral from sell.  Juniper’s target price was hiked to $27 from $24.   Juniper should see growing margins on increased spending to upgrade its installed MX routers ahead of the 5G roll-out.  Anti-Chinese sentiment will also help Juniper.  Juniper Networks is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Lam Research (LRCX) was downgraded to in-line from outperform at Evercore ISI.  Lam Research’s price target was cut  to $195 from $225 as well.  Evercore sees a slower recovery in memory demand which will only come in the second half of 2020.  Lam Research will have trouble moving higher any time soon, Evercore notes.  Lam Research is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Netflix (NFLX) is experimenting with turning its shows into video games as it seeks to further leverage its media content.  Netflix will release a Stranger Things video game in conjunction with the release of its show by the same name.  Netflix does not develop the games itself but licenses the names for others to create the games.  Other games are planned in the near future.  Netflix is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Sony (SNE) is being called upon to break itself up once again by activist hedge fund Third Point.  Third Point is again complaining that Sony’s stock is undervalued and breaking up the company could unlock value.  Third Point has a $1.5 billion position in the stock and said in a letter that Sony needs a less complex structure and should spin off its semiconductor unit.  Sony is rated “Attractive” in our Japan Large-Cap Global Top Stock Ideas.
  • Walt Disney Co (DIS) saw its price target hiked to $165 from $140 at Loop Capital.  Disney saw its buy rating reiterated.  Disney should see strong performance from its Disney+ streaming service and Loop expects its to perform better than the market is expecting.  Loop writes that it believes Disney will be successful in transforming itself into a direct-to-consumer video provider and will be revalued higher by the market.  Walt Disney is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas

Global Industrials Stocks Trending in the News

  • American Airlines (AAL) said its managers will fly on test flights of the Boeing (BA) 737 Max before any passengers do.  American is trying to build confidence in the aircraft before it returns to service.  Executives at American plus other employees will.  American announced the move at its annual shareholders meeting.  American Airlines is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Industrials Global Top Stock Ideas.  Boeing is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Unattractive” in our US Industrials Global Top Stock Ideas.   

 

 

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Global Financials Stocks Trending in the News

  • AllianceBernstein (AB) is laying off 200 people in New York as it prepares to move all of its operations to Nashville, TN.  AllianceBernstein had previously announced its move.  Jobs in New York City in White Plains, NY, will be lost.   The move should be completed by 2022 and a total of 1,050 jobs will be lost in New York in the end.  AllianceBernstein has a total of 3,657 employees.  AllianceBernstein is rated “Attractive” in our US SMID-Cap Global Top Stock Ideas
  • BB&T (BBT) and SunTrust (STI) have chosen the name Truist for the new bank that will result from the merger of the two.  For months BB&T and SunTrust have been asked what the new name would be and it has arrived at underwhelming praise.  When the merger is complete, Truist will be the sixth largest bank in the US.  BB&T is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  SunTrust is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.

Global Commodities & Energy Stocks Trending in the News

  • Ashland Global (ASH) was downgraded to neutral from overweight at JP Morgan.  Ashland saw its price target cut to $82, implying just 2.4% upside.  Eminence Capital has taken an 8.3% stake in Ashland and is seeking talks with the board to discuss “operational and strategic opportunities,” according to a 13-D filling.  They apparently do not include a merger or attempt to acquire a controlling stake.  Ashland Global is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas
  • Frontline (FRO) shares surged by double-digits today following attacks on two oil tankers in the Strait of Hormuz. Investors anticipate that the attacks could drive up shipping rates, which would lead to higher profitability, especially if a longer-term conflict ensues. Analyst Frode Morkedal of Clarksons Platou wrote to clients on the matter, “We suspect that the narrative is that a conflict in the region, and a possible closure of the Strait of Hormuz, would be good for tanker rates in the short term.” Frontline is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas.
  • Summit Materials (SUM) shares surged as much as 30% following a report from Reuters that the company was approached by Columbia’s Grupo Argos regarding a merger. The report cites individuals familiar with the matter and cautions that there is no guarantee that Summit will field negotiations. Summit Materials is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Transocean (RIG) was downgraded to neutral from buy at Citi.  Citi cites intense cash burn at Transocean as well as the potential for an oversupplied market in 2020.  Citi is cautious on offshore drillers overall with all expected to see cash burn continuing into 2021.  Transocean is not rated in our Global Top Stock Ideas.
  • Vale (VALE) often did not have all the required stability certificates for its dams, a WSJ report highlights today.  Vale often did not have the full documentation for years and is presently investigating the stability of one of its dams in Canada.  In January, a dam collapsed at a Vale mine in Brazil, killing 270 people, a leading it to review all of its dams.  Vale is rated “Neutral” in our Brazil All-Cap Global Top Stock Ideas

Global Health Care Stocks Trending in the News

  • Johnson & Johnson (JNJ) has a sales strategy with opioids similar to that of a drug dealer, a pharmaceutical industry critic claimed in court testimony.  The critic said J&J’s use of coupons for free pain patches was improper and contributed to the opioid epidemic.  J&J objected to that characterization in court and the judge said he will not consider that testimony.  Johnson & Johnson is rated “Top Buy” 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