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Global Stocks Trending in the News for June 19th, 2019

Jun 19, 2019

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Global Consumer Stocks Trending in the News

  • Amazon (AMZN) said it will lease an additional 15 Boeing 737-800 cargo aircraft from GE Capital Aviation Services.  Amazon continues to expand its Amazon Air fleet of planes and expects to have 70 planes in its fleet by 2021.  Amazon needs the planes to make more of its own deliveries after it instituted 1-day deliveries for its Prime customers.  Amazon is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Lennar (LEN) saw its stock downgraded to market perform from outperform at Raymond James.  Lennar also saw its price target cut to $55 which implies just 4% upside.  The unexpected drop in homebuilders sentiment on Monday was cited in the downgrade of Lennar.  Lennar is rated “Attractive” in our US Large-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Manchester United (MANU) was reiterated as a buy a Jefferies and its $26 price target was also reiterated.  Manchester management recently visited the US and Jefferies sent clients a note reiterating its call.  Jefferies said Manchester’s coach Ole Gunnar Solskjaer “can bring the team back to championship caliber play” and investors should keep the faith.  Manchester United is not rated in our Global Top Stock Ideas.
  • Sotheby’s (BID) is being acquired and taken private by media billionaire Patrick Drahi in a $2.7 billion deal.  Drahi is paying $57 to acquire the 275-year-old firm.  The offer for Sotheby’s is a 60% premium to Friday’s close.  Sotheby’s will now join auction house Christie’s as a private company, with both in the hands of French billionaires.  Sotheby’s is rated “Attractive” in our US SMID-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Tesla (TSLA) is revamping its Asian structure to focus more on China.  Tesla will get rid of its Asia Pacific unit and create a new division focused on greater China.  China is key to Tesla’s future as it prepares to start manufacturing cars in China.  Tesla’s factory in Shanghai is due to start production later in the year.  Tesla is rated “Top Short” in our US Large-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.

Global Information Technology and Communication Services Stocks Trending in the News

  • Adobe (ADBE) reported fiscal second quarter adjusted earnings that beat consensus.  Adobe posted fiscal second quarter EPS of $1.83, beating consensus of $1.78.  Revenue beat by a touch at $2.7 billion while $2.74 billion was expected.  Adobe gave fiscal third quarter EPS guidance of $1.95, below consensus of $2.05.  Adobe is rated “Neutral” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.  
  • Apple (AAPL) would take 2-3 years to move just 15% of its production out of China, Wedbush said in a note to clients.  Apple would risk production disruptions and higher costs with such a move.  The note was in response to press reports that Apple is considering moving 15% to 30% of production out of China.  Wedbush reiterates how important a long-term deal with China is for Apple.  Apple is rated “Neutral” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas.  
  • Dish Network (DISH) is preparing a $6 billion bid for assets from Sprint (S) and T-Mobile (TMUS) as the two look to shed assets to win approval to merge from regulators.  Dish is hoping to acquire spectrum and Sprint’s Boost Mobile prepaid service as part of a deal.  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.
  • Facebook (FB) officially unveiled plans for its own cryptocurrency called Libra.  Facebook is promising a secure blockchain-based system backed by hard assets and designed for mainstream use.  Facebook has teamed up with a number of large companies to launch the coin.  Facebook will create a regulated subsidiary called Clariba for this new business, separating the social and financial data within the company.  Calibra will create a crypto wallet to pay for things and send money using Libra.  Facebook is rated “Neutral” 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.
  • MoneyGram International (MGI) saw blockchain-technology company Ripple take a stake in it with options to buy more.  Ripple invested $30 million with warrants to buy $20 million more.  MoneyGram will use Ripple’s xRapid as part of its cross-border international payment system.  The initial contract is for a two-year term.  MoneyGram is rated “Neutral” in our US SMID-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.  
  • Oracle (ORCL) saw its stock downgraded at Macquarie to neutral from outperform ahead of reporting results Wednesday.  Macquarie said that through its channel checks it sees softening demand toward the end of the quarter.  Also, Oracles’s $10 billion per quarter stock buybacks are due to end within a quarter or two and it is not clear how much in buybacks there will be after that.  Oracle is rated “Attractive” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas.  
  • Snap Inc. (SNAP) shares surged by double digits as analysts continue to grow more confident of a turnaround in the social media company. From its December low, Snap shares have now gained more than 190%. Snap’s latest breakout was driven by a price target hike from BTIG from $5/share to $20/share. Snap is rated “Top Short” in our US Large-Cap and “Unattractive” in our US Information Technology Global Top Stock Ideas.
  • SunPower Corp (SPWR) surged the most in 6-years in the wake of an upgrade from Goldman Sachs.  SunPower was upgraded to buy and its price target was hiked 83% to $11.  The upgrade started the rally and then short sellers covering continued it as 28% of outstanding shares have been shorted.  SunPower is rated “Neutral” in our US SMID-Cap and “Unattractive” in our US Information Technology Global Top Stock Ideas.  
  • Telephone & Data Systems (TDS) and United States Cellular (USM) both had their best days since 2008 after Morgan Stanley upgraded the stocks from equal-weight to overweight. In a note to clients, Morgan Stanley wrote that the telecommunication stocks, “are now very attractively valued following recent underperformance.” Worth noting that Telephone & Data Systems owns more than 70% of outstanding US Cellular shares. Telephone & Data Systems is rated “Attractive” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas. US Cellular is rated “Top Buy” in our US SMID-Cap and “Top Buy” in our US information Technology Global Top Stock Ideas.
  • Trip Advisor (TRIP) was upgraded to buy from hold at SunTrust.  Trip Advisor Experiences business has reached critical mass and should see robust revenue growth over the new few years.  SunTrust does not believe this is reflected in its valuation but should be.  Trip Advisor is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas.  

Global Industrials Stocks Trending in the News

  • Boeing (BA) exited its plane order drought with a new order for 787s.  Korean Air (KOSE:A003490) placed an order for 20 787s at the Paris Air Show ending Boeing’s 2-month dry spell for orders.  Boeing has not received any orders as it dealt with its 737 Max grounding over the last 2 months.  Boeing is rated “Unattractive” in our US Large-Cap and “Unattractive” in our US Industrials Global Top Stock Ideas.   
  • Embraer (ERJ) announced a $1.9 billion jet order from United Airlines (UAL) at the Paris Air Show.  United is buying 20 firm aircraft with the option for 19 more.  United is replacing older regional jets with this order and expects to start receiving deliveries soon.  Embraer has won over 80% of all orders in the 70-76 seat category since 2013.  Embraer is rated “Neutral” in our Brazil All-Cap Global Top Stock Ideas.  United Airlines is rated “Attractive” in our US Large-Cap and “Top Buy” in our US Industrials Global Top Stock Ideas
  • FedEx (FDX) will offer package drop-off services at Dollar General (DG) stores starting late summer.  FedEx will initially offer the service at 1,500 Dollar General stores and later expand it to all 8,000 stores.  Once in all Dollar General stores, 90% of Americans will be within 5 miles of a FedEx retails location.  FedEx is rated “Attractive” in our US Large-Cap and “Top Buy” in our US Industrials Global Top Stock Ideas.  Dollar General is rated “Attractive” in our US Large-Cap and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Southwest Airlines (LUV) cut its capacity outlook to a decrease of 3.5%, lower than the 2-3% decrease it originally expected.  Southwest said the revision was primarily due to lower-than-expected completion factor as well as the grounding of the 737 Max.  Southwest said it continues to see strong demand and positive passenger yield trends.  Southwest Airlines is rated “Neutral” 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 Power & Commodity Stocks Trending in the News

  • ExxonMobil Corp (XOM) suffered a rocket attack in Iraq near its oil workers’ field camp.  Bloomberg reports there were no injuries in the attack.  The attack in Basra injured 3 workers from an Iraqi oil company.  Exxon evacuated to 20 workers at the camp over fear of more attacks.  ExxonMobil is rated “Neutral” in our US Large-Cap Global Top Stock Ideas
  • US Steel (X), a huge beneficiary of US sanctions, has said it is idling 2 blast furnaces in the US and one in Europe.  US Steel has planned outages for maintenance and said it will leave the furnaces idle due to an expected glut in capacity next year.  The decision by US Steel comes as steel prices are falling in the US.  US Steel is rated “Top Short” in our US Large-Cap Global Top Stock Ideas
  • Vale (VALE) won a decision from Brazil’s Superior Court of Justice allowing it to resume production at its Brucutu mine.  The decision allows for the use of the Laranjeiras dam which is required to resume production.  With resumption, the average quality of Vale’s ore will improve.  Vale expects to produce 307 million to 332 million tons of iron ore in 2019.  Vale is rated “Neutral” in our Brazil All-Cap Global Top Stock Ideas.

Global Financials Stocks Trending in the News

  • Prosperity Bancshares (PB) has agreed to acquire LegacyTexas Financial Group (LTXB) in a cash and stock transaction valued at $2.1 billion.  LegacyTexas has 42 locations in Texas and the deal will create the second largest bank in Texas.  Prosperity said its greater size will allow it to better serve customers.  Prosperity’s CEO said the bank is very much in the “M&A game” now and that could see it sitting on either side of the table, meaning acquirer or acquiree.  Prosperity Bancshares is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  LegacyTexas Financial Group is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas.

Global Health Care Stocks Trending in the News

  • Allergan (AGN) shares advanced after Evercore ISI analyst Umer Raffat wrote to clients that he expects a stock split coming soon. Following a call with Allergan’s general counsel, Raffat told clients that he, “walked away with the sense that Allergan is heading towards a split and may likely lay out timelines.” Allergan is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Ambu A/S (CPSE: AMBU B) shares sold off after CEO Juan-Jose Gonzalez issued a profit warning after just a month in the position. After the stock fell by double-digits as a direct result of the profit warning, Gonazlez and CFO Michael Hojgaard each bought shares of the company on the relative discount. Prior to the profit warning, hedge funds had built up a record-level of short bets against Ambu. Ambu is rated “Attractive” in our European SMID-Cap Global Top Stock Ideas.
  • Teva Pharmaceuticals (TEVA) had its price target cut at Bernstein to $11 from $17.  Bernstein writes that there is no reason to own the stock at this point.  Teva needs to resolve its legal issues first before investors should consider owning the stock, at 13x FCF the stock is not cheap, in Bernstein’s view.  Teva 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