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Global Stocks Trending in the News for June 17th, 2019

Jun 17, 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 and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Beyond Meat (BYND) shares soared on a report one of its competitors is unable to meet surging demand for its meatless products.  Bloomberg reported multiple fast food chains that sell Impossible Burgers, a Beyond Meat rival, were experiencing shortages.  Beyond Meat is the best performing IPO of 2019, having risen more than 500%.  Beyond Meat is not rated in our Global Top Stock Ideas
  • General Motors (GM) is considering a plan to produce an electric version of its Hummer SUV, according to Bloomberg.  The idea being considered would see GM bring the Hummer name back as a way to tap into the demand for rugged SUVs but avoid the gas-guzzling complaints of the past.  The Hummer plan would be part of CEO Mary Barra’s plan to transform GM into a “all-electric future.”  General Motors is rated “Neutral” in our US Large-Cap and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Great Wall Motor (SEHK: 2333)Guangzhou Auto (SEHK: 2238), and other Chinese automobile manufacturers slid today after poor sales data in Hong Kong dragged on investor sentiment. This follows data from the Chinese mainland on Wednesday that showed a decline in car sales. Chinese May car sales of 1.91 million vehicles sold represents a 16.4% y/y decline. Great Wall Motor is rated “Neutral” in our China All-Cap Global Top Stock Ideas. Guangzhou Auto is not rated in our 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
  • 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 and “Unattractive” in our US Consumer Discretionary 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.
  • Walt Disney (DIS) continues to dominate the summer box-office in 2019, will not other studios able to match its success.  There have already been a number of sequel or prequel releases that have flopped while Disney enjoys success.  Sequels are generally a reliable generator of ticket sales but this season it is only Disney that has been able to spark interest in sequel releases.   The one exception was the X-Men sequel that Disney released but was developed by Fox (FOXA) and was acquired in the recent deal with Disney.  Walt Disney is rated “Unattractive” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.  Fox is not rated in our Global Top Stock Ideas 

Global Information Technology and Communication Services Stocks Trending in the News

  • Alibaba (BABA) plans to split its stock 8-for-1 as it prepares to list its shares in Hong Kong.  The plan will be proposed and put to a shareholders vote on July 15.  Alibaba is said to have already filed confidentially for a $20 billion stock sale in connection with its Hong Kong listing, though it has yet to confirm that publicly.  If confirmed, it would be one of the largest listings ever in Hong Kong.  Alibaba is rated “Attractive” in our China All-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 and “Attractive” in our US Information Technology Global Top Stock Ideas
  • Corning (GLW) laid out a new growth strategy for investors today for 2020-2023.  Corning is targeting 6% to 8% compound annual sales growth focused on organic growth.  Corning is also targeting 12% to 15% compound annual EPS growth with strong sales growth, improving margins.  Corning expects dividends per share to grow 10% annually over the same period.  Corning is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Dish Network (DISH) is in the lead to scoop up asset from Sprint (S) and T-Mobile (TMUS).  Both carriers need to shed assets in order to gain approval for their merger from the US Justice Department, WSJ reports.  Dish has been the biggest critic of the merger and now its CEO is saying the best way for it to happen is by Dish acquiring some of the assets the regulators want it to shed.  Dish is looking to acquire the prepaid mobile unit as well as spectrum to go with it.  Dish Network is rated “Top Short” in our US Large-Cap and “Neutral” 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.  T-Mobile is rated “Neutral” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas
  • F5 Networks (FFIV) shares fell as much as 6.5% after Piper Jaffray said that VMWare’s (VMW) acquisition of Avi Networks may create challenges for the company. In a note to clients, Piper Jaffray analyst James E. Fish wrote, “We are concerned Avi Networks’ already fast shares gains will only accelerate under VMWare, and as such, negatively impact F5.” F5 Networks is rated “Top Buy” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas. VMWare is rated “Neutral” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Facebook (FB) shares rose following a report from the Wall Street Journal that the company plans to launch a digital currency to be unveiled next week. According to the Wall Street Journal report, about a dozen notables such as Visa, Mastercard, PayPal, and Uber have all agreed to back the company, each investing roughly $10 million. The companies that invested will all join a consortium responsible for governing the cryptocurrency, which is expected to be a stablecoin pegged to a basket of fiat coins. Facebook is rated “Neutral” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • IBM (IBM) demonstrated its debating program that used artificial intelligence and crowdsourced 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 and “Top Buy” 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.
  • Sprint (S) and T-Mobile (TMUS) are close to seeing their proposed merger approved by US authorities, with conditions, according to a report in the New York Times.  The main condition is the sales of certain assets that would permit the creation of a rival carrier.  Critics see the merger of Sprint and T-Mobile as bad for consumers as it would cut the number of national carriers to 3 from 4.  Sprint is rated “Top Short” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.  T-Mobile is rated “Neutral” in our US Large-Cap and “Attractive” in our US Information Technology 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 and “Neutral” in our US Information Technology Global Top Stock Ideas

 

 

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Global Industrial Stocks Trending in the News

  • Airbus (ENXTPA:AIR) announced plans to develop its longest range single-aisle jet, matching Boeing’s (BA) plans to develop the same type of plane.  Airbus made the announcement as Boeing remain distracted with its 737 Max problems.  Airbus will call the new model the A321XLR, which would be an upgrade to its A321 Neo.  The A321XLR would replace Boeing 757s that are soon to exit service.  The new plane should arrive in 2023.   Airbus is rated “Neutral” in our European Large-Cap Global Top Stick Ideas.  Boeing is rated “Unattractive” in our US Large-Cap and “Unattractive” in our US Industrials Global Top Stock Ideas.   
  • American Airlines (AAL) mechanics must stop their work slowdown, according to a judge’s ruling from Friday.  The judge ruled that the mechanics’ union must stop slow-walking repairs as a way to gain leverage in its negotiations with American.  The mechanics’ union is the only union to not have an updated contract since American merged with US Airways in 2013.  American Airlines is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Industrials Global Top Stock Ideas.   

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
  • Goldman Sachs (GS) announced that it will be combining 4 units that invest in private equity, real estate and hard-to-access deals.  The new unit is expected to hold about $140 billion in assets as Goldman tries to create a unit of the steady, income generating businesses that investors like.  This is the first signature move of Goldman’s new CEO.  Goldman Sachs is rated “Neutral” in our European Large-Cap Global Top Stick Ideas.
  • UBS Group AG (SWX: UBSG) has reportedly asked Chief Economist Paul Donovan to take a leave of absence as the Swiss bank reviews controversial comments made by Donovan. Donovan reportedly made a reference to “Chinese pig” in an inflation report that sparked controversy on Chinese social media. Both UBS and Donovan have since apologized for the comments. UBS is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.

Global Healthcare Stocks Trending in the News

  • Pfizer (PFE) announced it is acquiring Array BioPharma (ARRY) in a deal valued at $10.6 billion.  Pfizer is paying $48 per share, a 62% premium to Friday’s close, to expand farther into cancer care.  Array focuses on drugs that target a mutation in genes that cause cancer.  Pfizer will get drugs already in use plus a strong pipeline of potential new drugs.  Pfizer is rated “Attractive” in our European Large-Cap Global Top Stick Ideas.  Array BioPharma is rated “Top Short” in our European Large-Cap Global Top Stick 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
  • Keane Group Inc (FRAC) and C&J Energy Services (CJ) agreed to merge in an all-stock deal valued at $746 million.  The deal between the 2 oil-services companies is being described as a merger of equals.  Both companies have slumped over 60% this year amid an oversupply of pumping capacity.  Keane Group is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas.  C&J Energy Services is rated “Neutral” in our US SMID-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 REITs Trending in the New

  • Ashford Hospitality Trust (AHT) shares slid the most intraday in nearly a decade after cutting its dividend in half from $0.12/share to $0.06/share. CEO Douglas A. Kessler said in regards to the dividend cut, “For some time, our dividend has significantly exceeded what we would have needed to distribute form a taxable income standpoint. This adjustment effectively preserves capital for more advantageous purposes.” Ashford Hospitality Trust is rated “Neutral” in our US SMID-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