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With A -15% Earnings Drop, Is Powerlong Real Estate Holdings Limited's (HKG:1238) A Concern? Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at Powerlong Real Estate Holdings Limited's (HKG:1238) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. Check out our latest analysis for Powerlong Real Estate Holdings 1238's trailing twelve-month earnings (from 31 December 2018) of CN¥2.8b has declined by -15% compared to the previous year. Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 19%, indicating the rate at which 1238 is growing has slowed down. Why is this? Well, let’s take a look at what’s transpiring with margins and whether the whole industry is feeling the heat. In terms of returns from investment, Powerlong Real Estate Holdings has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. Furthermore, its return on assets (ROA) of 2.5% is below the HK Real Estate industry of 3.3%, indicating Powerlong Real Estate Holdings's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Powerlong Real Estate Holdings’s debt level, has increased over the past 3 years from 5.9% to 7.2%. Though Powerlong Real Estate Holdings's past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have unpredictable earnings, can have many factors influencing its business. I suggest you continue to research Powerlong Real Estate Holdings to get a more holistic view of the stock by looking at: 1. Future Outlook: What are well-informed industry analysts predicting for 1238’s future growth? Take a look at ourfree research report of analyst consensusfor 1238’s outlook. 2. Financial Health: Are 1238’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out ourfinancial health checks here. 3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore ourfree list of these great stocks here. NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2018. This may not be consistent with full year annual report figures. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
With A Return On Equity Of 12%, Has Allcargo Logistics Limited's (NSE:ALLCARGO) Management Done Well? Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! One of the best investments we can make is in our own knowledge and skill set. With that in mind, this article will work through how we can use Return On Equity (ROE) to better understand a business. To keep the lesson grounded in practicality, we'll use ROE to better understand Allcargo Logistics Limited (NSE:ALLCARGO). Allcargo Logistics has a ROE of 12%, based on the last twelve months. One way to conceptualize this, is that for each ₹1 of shareholders' equity it has, the company made ₹0.12 in profit. Check out our latest analysis for Allcargo Logistics Theformula for return on equityis: Return on Equity = Net Profit ÷ Shareholders' Equity Or for Allcargo Logistics: 12% = ₹2.4b ÷ ₹20b (Based on the trailing twelve months to March 2019.) Most know that net profit is the total earnings after all expenses, but the concept of shareholders' equity is a little more complicated. It is all the money paid into the company from shareholders, plus any earnings retained. The easiest way to calculate shareholders' equity is to subtract the company's total liabilities from the total assets. Return on Equity measures a company's profitability against the profit it has kept for the business (plus any capital injections). The 'return' is the profit over the last twelve months. That means that the higher the ROE, the more profitable the company is. So, as a general rule,a high ROE is a good thing. That means it can be interesting to compare the ROE of different companies. Arguably the easiest way to assess company's ROE is to compare it with the average in its industry. However, this method is only useful as a rough check, because companies do differ quite a bit within the same industry classification. The image below shows that Allcargo Logistics has an ROE that is roughly in line with the Logistics industry average (12%). That's not overly surprising. ROE doesn't tell us if the share price is low, but it can inform us to the nature of the business. For those looking for a bargain, other factors may be more important. If you like to buy stocks alongside management, then you might just love thisfreelist of companies. (Hint: insiders have been buying them). Virtually all companies need money to invest in the business, to grow profits. The cash for investment can come from prior year profits (retained earnings), issuing new shares, or borrowing. In the first and second cases, the ROE will reflect this use of cash for investment in the business. In the latter case, the debt used for growth will improve returns, but won't affect the total equity. In this manner the use of debt will boost ROE, even though the core economics of the business stay the same. Although Allcargo Logistics does use debt, its debt to equity ratio of 0.25 is still low. I'm not impressed with its ROE, but the debt levels are not too high, indicating the business has decent prospects. Conservative use of debt to boost returns is usually a good move for shareholders, though it does leave the company more exposed to interest rate rises. Return on equity is useful for comparing the quality of different businesses. Companies that can achieve high returns on equity without too much debt are generally of good quality. All else being equal, a higher ROE is better. But ROE is just one piece of a bigger puzzle, since high quality businesses often trade on high multiples of earnings. It is important to consider other factors, such as future profit growth -- and how much investment is required going forward. So you might want to take a peek at thisdata-rich interactive graph of forecasts for the company. Of course,you might find a fantastic investment by looking elsewhere.So take a peek at thisfreelist of interesting companies. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Sony and Microsoft's New Consoles Will Be Big Loss Leaders Sony(NYSE: SNE)andMicrosoft(NASDAQ: MSFT)both recently pulled back the curtains on their next-gen video game consoles, set for release in late fall of 2020. They'll both sport solid-state drives (SSDs), use ray-tracing technology, and support 8K resolution graphics. However, both companies stayed mum about their launch prices. In a recent interview atGamingBolt, Wedbush analyst Michael Pachter suggested that Sony's PS5 and Microsoft's "Xbox Scarlett" will both launch at $399. However, Pachter noted that their hardware specs suggested price tags of "$500 or so," indicating that both companies will likely take losses on each console sold. Image source: Getty Images. That loss-leading strategy for gaming consoles isn't new. At its launch in 2013, Microsoft's Xbox One had a production bill of $471 for manufacturing and materials according to IHS, compared to its launch price of $499. Sony's PS4, which launched at $399, cost $381 to make. After factoring in marketing, shipping, and other operating costs, Microsoft and Sony likely lost money on each console sold. Both companies also subsequently lowered the prices of their consoles several times. Sony and Microsoft don't mind selling their consoles at a loss since they recoup the costs through software and subscription sales. For every $60 game sold, Microsoft and Sony retain about $7 in platform royalties. They also retain about $27 in publishing fees for first-party games. Sony and Microsoft are also launching more subscription services to squeeze out more revenue per gamer. Microsoft offers Xbox Live Gold, which costs $60 per year; Game Pass, its unlimited gaming option for $10 per month; and the new Xbox Game Pass Ultimate, which combines Xbox Live Gold and Game Pass for $15 per month. It also plans to launch its new cloud gaming service, Project xCloud, with the new Xbox next year. Sony's PlayStation Plus, its answer to Xbox Live, also costs $60 per year. Its cloud gaming platform, PS Now, costs $100 per year and lets gamers stream over 750 PS2, PS3, and PS4 games to PS4 consoles and Windows PCs. To set up the anchor for those subscription sales, it wouldn't be surprising if Sony and Microsoft launched their new consoles at $400 -- even if the devices cost $500 to make. Sony and Microsoft might be aiming at $400 as a "sweet spot" for console sales, but the arrival of new subscription-based services -- likeAlphabet's(NASDAQ: GOOG)(NASDAQ: GOOGL)cloud gaming platform Google Stadia andApple(NASDAQ: AAPL)Arcade -- could throttle demand for dedicated gaming consoles. Google Stadia. Image source: Google. Google Stadiawill run on a wide range of devices, including phones, PCs, and Chromecasts, whileApple Arcadewill run on all current-gen iOS devices. These single subscription services could be more attractive alternatives to Sony and Microsoft's platforms, which rely on customers buying both dedicated consoles and subscriptions. Microsoft is aware of that threat. That's why it might launch two versions of the Scarlett in 2020: a cheaper "Lockhart" version for streamed games, and a pricier "Anaconda" version for high-fidelity gaming on locally installed software. Sony hasn't revealed any plans for a cheaper PS5 yet, but it plans to move some of its media and gaming assets to Microsoft's Azure cloud platform. That move, which was part of a broadercloud partnershipbetween the two companies, could be aimed at countering Google's aggressive moves into the gaming market. Meanwhile, sluggish sales of PCs could force computer makers to sell cheaper gaming PCs, which would narrow the gap between high-performance PCs and cheap gaming consoles. Microsoft and Sony both reported slower gaming hardware sales in their most recent quarters. Those declines were partly offset by stronger software and subscription revenues, but demand for current-gen consoles has clearly peaked. That's why the jump to next generation consoles next year is crucial. If Sony and Microsoft price their consoles poorly and gamers flock to other decentralized platforms like Stadia or Apple Arcade, both companies could see their thriving gaming units wither into money pits. More From The Motley Fool • 10 Best Stocks to Buy Today • The $16,728 Social Security Bonus You Cannot Afford to Miss • 20 of the Top Stocks to Buy (Including the Two Every Investor Should Own) • What Is an ETF? • 5 Recession-Proof Stocks • How to Beat the Market Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors.Leo Sunowns shares of Apple. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Apple, and Microsoft. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has adisclosure policy.
Kaveri Seed Company Limited (NSE:KSCL) Is Yielding 0.6% - But Is It A Buy? Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! Could Kaveri Seed Company Limited (NSE:KSCL) be an attractive dividend share to own for the long haul? Investors are often drawn to strong companies with the idea of reinvesting the dividends. Yet sometimes, investors buy a popular dividend stock because of its yield, and then lose money if the company's dividend doesn't live up to expectations. Investors might not know much about Kaveri Seed's dividend prospects, even though it has been paying dividends for the last nine years and offers a 0.6% yield. While the yield may not look too great, the relatively long payment history is interesting. The company also bought back stock equivalent to around 6.7% of market capitalisation this year. Some simple analysis can reduce the risk of holding Kaveri Seed for its dividend, and we'll focus on the most important aspects below. Explore this interactive chart for our latest analysis on Kaveri Seed! Dividends are usually paid out of company earnings. If a company is paying more than it earns, then the dividend might become unsustainable - hardly an ideal situation. Comparing dividend payments to a company's net profit after tax is a simple way of reality-checking whether a dividend is sustainable. In the last year, Kaveri Seed paid out 8.9% of its profit as dividends. Given the low payout ratio, it is hard to envision the dividend coming under threat, barring a catastrophe. Consider gettingour latest analysis on Kaveri Seed's financial position here. One of the major risks of relying on dividend income, is the potential for a company to struggle financially and cut its dividend. Not only is your income cut, but the value of your investment declines as well - nasty. Looking at the last decade of data, we can see that Kaveri Seed paid its first dividend at least nine years ago. Although it has been paying a dividend for several years now, the dividend has been cut at least once by more than 20%, and we're cautious about the consistency of its dividend across a full economic cycle. During the past nine-year period, the first annual payment was ₹0.40 in 2010, compared to ₹3.00 last year. Dividends per share have grown at approximately 25% per year over this time. The dividends haven't grown at precisely 25% every year, but this is a useful way to average out the historical rate of growth. It's not great to see that the payment has been cut in the past. We're generally more wary of companies that have cut their dividend before, as they tend to perform worse in an economic downturn. With a relatively unstable dividend, it's even more important to evaluate if earnings per share (EPS) are growing - it's not worth taking the risk on a dividend getting cut, unless you might be rewarded with larger dividends in future. Earnings have grown at around 2.1% a year for the past five years, which is better than seeing them shrink! As we saw above, earnings per share growth has not been strong. However, the payout ratio is low, and some companies can deliver adequate dividend performance simply by increasing the payout ratio. Dividend investors should always want to know if a) a company's dividends are affordable, b) if there is a track record of consistent payments, and c) if the dividend is capable of growing. It's great to see that Kaveri Seed is paying out a low percentage of its earnings and cash flow. Unfortunately, earnings growth has also been mediocre, and the company has cut its dividend at least once in the past. Kaveri Seed has a number of positive attributes, but it falls slightly short of our (admittedly high) standards. Were there evidence of a strong moat or an attractive valuation, it could still be well worth a look. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 5 analysts we track are forecasting for Kaveri Seedfor freewith publicanalyst estimates for the company. We have also put together alist of global stocks with a market capitalisation above $1bn and yielding more 3%. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Samsung's Galaxy Note 10 launch reportedly planned for August 7th While we're waiting for news on thefoldable Galaxy phone, Samsung is still planning its usual big event to launch the next Galaxy Note. According toCNET, we should expect the company's annual Unpacked event to take place on August 7th at the Barclays Center in Brooklyn. Along with 5G devices and the Galaxy Fold, the device we're expecting to see arrive as the Galaxy Note 10 is supposed tohelp Samsung strengthen its leadership in premium phones. This is the device that led the way for super-sized smartphones, and it will be interesting to see how it evolves as so many competitors get bigger, and foldable devices eventually take over the size crown. We liked theGalaxy Note 9when itlaunched last year, but we weren't thrilled about the version of Android it shipped with. Hopefully any software issues are resolved this time around, and it includes improved support for AI assistants other than Bixby.
Does Beijing Digital Telecom Co., Ltd.'s (HKG:6188) -2.6% Earnings Drop Reflect A Longer Term Trend? Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! Assessing Beijing Digital Telecom Co., Ltd.'s (HKG:6188) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess 6188's recent performance announced on 31 December 2018 and evaluate these figures to its long-term trend and industry movements. View our latest analysis for Beijing Digital Telecom 6188's trailing twelve-month earnings (from 31 December 2018) of CN¥314m has declined by -2.6% compared to the previous year. Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 2.6%, indicating the rate at which 6188 is growing has slowed down. Why could this be happening? Well, let’s take a look at what’s occurring with margins and whether the whole industry is feeling the heat. In terms of returns from investment, Beijing Digital Telecom has fallen short of achieving a 20% return on equity (ROE), recording 8.0% instead. Furthermore, its return on assets (ROA) of 5.7% is below the HK Specialty Retail industry of 6.5%, indicating Beijing Digital Telecom's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Beijing Digital Telecom’s debt level, has declined over the past 3 years from 18% to 13%. While past data is useful, it doesn’t tell the whole story. Usually companies that experience a drawn out period of reduction in earnings are going through some sort of reinvestment phase in order to keep up with the latest industry growth and disruption. I suggest you continue to research Beijing Digital Telecom to get a more holistic view of the stock by looking at: 1. Future Outlook: What are well-informed industry analysts predicting for 6188’s future growth? Take a look at ourfree research report of analyst consensusfor 6188’s outlook. 2. Financial Health: Are 6188’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out ourfinancial health checks here. 3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore ourfree list of these great stocks here. NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2018. This may not be consistent with full year annual report figures. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
With EPS Growth And More, Clean Seas Seafood (ASX:CSS) Is Interesting Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! It's only natural that many investors, especially those who are new to the game, prefer to buy shares in 'sexy' stocks with a good story, even if those businesses lose money. Unfortunately, high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. So if you're like me, you might be more interested in profitable, growing companies, likeClean Seas Seafood(ASX:CSS). While that doesn't make the shares worth buying at any price, you can't deny that successful capitalism requires profit, eventually. Conversely, a loss-making company is yet to prove itself with profit, and eventually the sweet milk of external capital may run sour. Check out our latest analysis for Clean Seas Seafood In the last three years Clean Seas Seafood's earnings per share took off like a rocket; fast, and from a low base. So the actual rate of growth doesn't tell us much. As a result, I'll zoom in on growth over the last year, instead. Like a firecracker arcing through the night sky, Clean Seas Seafood's EPS shot from AU$0.018 to AU$0.034, over the last year. Year on year growth of 86% is certainly a sight to behold. I like to take a look at earnings before interest and (EBIT) tax margins, as well as revenue growth, to get another take on the quality of the company's growth. Clean Seas Seafood shareholders can take confidence from the fact that EBIT margins are up from 3.4% to 6.6%, and revenue is growing. That's great to see, on both counts. In the chart below, you can see how the company has grown earnings, and revenue, over time. To see the actual numbers, click on the chart. Since Clean Seas Seafood is no giant, with a market capitalization of AU$77m, so you shoulddefinitely check its cash and debtbeforegetting too excited about its prospects. Like standing at the lookout, surveying the horizon at sunrise, insider buying, for some investors, sparks joy. That's because insider buying often indicates that those closest to the company have confidence that the share price will perform well. Of course, we can never be sure what insiders are thinking, we can only judge their actions. In the last twelve months Clean Seas Seafood insiders spent AU$34k on stock; good news for shareholders. While this isn't much, we also note an absence of sales. We also note that it was the Independent Non-Executive Chairman, Terrence O’Brien, who made the biggest single acquisition, paying AU$24k for shares at about AU$0.97 each. Clean Seas Seafood's earnings have taken off like any random crypto-currency did, back in 2017. If you're like me, you'll find it hard to ignore that sort of explosive EPS growth. And in fact, it could well signal a fundamental shift in the business economics. If that's the case, you may regret neglecting to put Clean Seas Seafood on your watchlist. Of course, just because Clean Seas Seafood is growing does not mean it is undervalued. If you're wondering about the valuation, check outthis gauge of its price-to-earnings ratio, as compared to its industry. As a growth investor I do like to see insider buying. But Clean Seas Seafood isn't the only one. You can see aa free list of them here. Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Jeopardy! champion donates in honor of Alex Trebek James Holzhauer , the Jeopardy! champion who dominated an incredible 32 games and won $2,462,216, donated to a Naperville, Ill. pancreatic cancer walk in Alex Trebek's name. Trebek, who broke the news of his illness in March while filming the same season Holzhauer appeared in, is currently battling stage 4 pancreatic cancer . During what would be Holzhauer's final episode, Trebek thanked Holzhauer's daughter for a handmade card. "I want to express my thanks to your beautiful little daughter, Natasha, for having made this get well card for me," Trebek said. "That was very sweet of her." Meanwhile, Ann Zediker had become a fan of Holzhauer both are from Naperville and started to follow him on social media. However, it wasn't until his final game that Zediker was inspired to reach out, according to the Chicago Tribune . After hearing about the get well card, Zediker emailed Holzhauer and asked him if he would be interested in participating in the 2019 Naperville Pancreatic Cancer Reach Walk on July 14. "My gut told me it was the right thing to do," said Zediker, whose father lost his life to pancreatic cancer in 2010, just five months after being diagnosed. "It couldn't hurt." Holzhauer, who isn't going to be in Naperville for the walk, donated $1,109.14, representing the birthday of his daughter, Natasha, who made Trebek the card. On the donation website, he wrote, "For Alex Trebek and all the other survivors." In May , Trebek revealed that he was responding well to treatment and is in "near remission" something that, in the past, has often been unheard of when it came to pancreatic cancer. "Pancreatic cancer is one of the worst cancers out there. Most people aren't diagnosed until the latter stages," Zediker explained. She believes that research made possible by foundations such as the Lustgarten Foundation , which operates the walk and is the largest private funder of pancreatic cancer research is helping people diagnosed with the cancer have a better chance at living longer. Story continues Read more from Yahoo Lifestyle: Emotional video shows moment color blind high school graduate sees color for the first time: 'It's so pretty' Special-needs teacher dies rock climbing in Yosemite: It 'went horribly wrong' 'All 3 of us unanimously felt compassion': First responders pay for homeless, disabled woman's hotel to get her out of the rain Follow us on Instagram , Facebook and Twitter for nonstop inspiration delivered fresh to your feed, every day.
Electric dreams in danger as funding dwindles for China's Tesla challengers By Kane Wu, Yilei Sun and Julie Zhu HONG KONG/BEIJING (Reuters) - Last year, Wei Qing and his private equity investment team visited more than 20 Chinese electric vehicle manufacturing startups. The end result? They decided not to invest in any. "There are too many uncertainties from when a company tells a story in the early stage, to when it produces a sample car and raises funds, to the eventual mass production," said Wei, managing director at Shanghai-based Sailing Capital. Wei, who declined to name the EV makers his team visited, said he thinks only a few of them will survive. Sailing instead decided to invest in an EV parts supplier, he added. His concerns reflect what bankers describe as increasingly tough funding times for Chinese EV makers which must jostle for attention in a crowded sector and produce convincing arguments about future profitability despite government cuts to EV subsidies and plans to phase them out. Numerous setbacks plaguing Tesla Inc in its quest for sustained profitability as well as a dramatic slide in sales and problems with some cars at Chinese startup Nio Inc have also put investors on their guard. This year, Chinese EV makers have raised just $783.1 million as of mid-June compared with $6 billion for the same period a year earlier and $7.7 billion for all of 2018, according to data provider PitchBook. One Hong Kong-based banker said he had been approached by at least a dozen EV makers seeking new funds but had to pass on most of them as they were not able to set themselves apart from the crowd. Even fundraising efforts that have gotten off the ground are not moving as fast as EV makers would like. "It is challenging," said the banker who began working on one fundraising this year. "If you can get a meeting with investors, you can always tell a story, but some don't even reply to your requests for a meeting." He declined to be identified as the negotiations were not public. (For a graphic on 'Fundraising by Chinese EV Companies' click https://tmsnrt.rs/2IjAjYt) SUBSIDY WOES Eager to curb smog and jump-start its own auto industry, China has said it wants so-called new energy vehicles (NEVs) - which also include hybrids, plug-in hybrids and fuel cell cars - to account for a fifth of auto sales by 2025 compared with 5% now. Those ambitions have spawned a plethora of EV startups competing not just with each other, but also global automakers and Tesla, which plans to start production in China this year. About 330 EV firms are registered for some sort of subsidy, government data shows, although the number of more well established startups is much smaller, at around 50. But amid criticism that some firms have become overly reliant on government funds, Beijing has reduced subsidies, raised the standards needed for vehicles to qualify and flagged they will end altogether after 2020. That has led to sharp slowdown as vehicle prices rise. Sales of NEVs in May rose just 1.8% from a year earlier compared with 18.1% in April, and 62% growth for 2018. Surviving in the current funding environment, requires much cost discipline, Daniel Kirchert, CEO at Nanjing-based EV maker Byton, told Reuters. "Given the current situation, it is not enough for any startup to come up with good products and be fast to market. At least it’s equally important to manage cost. Not only fixed costs but variable cost," he said. Byton, which is backed by state-owned automaker FAW Group and battery supplier Contemporary Amperex Technology Co (CATL) is one of a few EV makers with a fundraising round in train, seeking $500 million. Others include Leap Motor, backed by state-owned Shanghai Electric Group Corp and Sequoia Capital China, which is seeking $372 million as well as CHJ Automotive, founded by serial entrepreneur Li Xiang, which wants to raise as much as $500 million. Those with successful funding under their belts this year include Baidu Inc-backed WM Motor Technology Co Ltd which closed a $446 million round in March, according to PitchBook. Some have obtained money outside private equity. E-Town Capital, a Beijing government investment firm, will invest 10 billion yuan ($1.4 billion) in a joint venture with Nio, which could help Nio build its own plant. TESLA, NIO WEIGH But overall, industry funding prospects are much bleaker, particularly as Tesla and Nio struggle. Founder Elon Musk told Tesla employees last month the $2.7 billion the company recently raised would give it just 10 months to break even at the rate it burned cash in the first quarter. Shares in the industry pioneer have slid 32% in the year to date. Nio's shares have been hit harder, down 60% this year on a cut to its delivery outlook, a halving in first-quarter sales from the previous quarter, increased competition and reduced subsidies. Its reputation has also been hurt after three vehicles caught on fire and by the inadvertent shutting down of a car on Beijing's prestigious Changan Avenue after the driver initiated a software update. Nio declined to comment. "Some of the listed EV industry leaders are currently underperforming in the secondary trading market and that has created pressures for the sector's short-term outlook," said Brian Gu, president of EV startup Xpeng Motors and a former senior JP Morgan banker. "We are seeing investors become more cautious, selective and keenly focused on the frontrunners. I think this trend is likely to persist," he said. An investor in WM Motor was more downbeat about the willingness of private equity investors to fund the industry. "Nio is probably the best among Chinese EV start-ups. Look where it stands now - how can that make us comfortable about writing cheques for other EV start-ups?" said the investor who also held Nio shares but sold them this year. (Reporting by Kane Wu and Julie Zhu in Hong Kong and Yilei Sun in Beijing; Additional reporting by Norihiko Shirouzu in Beijing; Editing by Jennifer Hughes and Edwina Gibbs)
What Kind Of Shareholder Appears On The Kam Hing International Holdings Limited's (HKG:2307) Shareholder Register? Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! The big shareholder groups in Kam Hing International Holdings Limited (HKG:2307) have power over the company. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.' Kam Hing International Holdings is not a large company by global standards. It has a market capitalization of HK$531m, which means it wouldn't have the attention of many institutional investors. Taking a look at our data on the ownership groups (below), it's seems that institutions don't own shares in the company. Let's take a closer look to see what the different types of shareholder can tell us about 2307. See our latest analysis for Kam Hing International Holdings Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them. There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Kam Hing International Holdings's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely. Hedge funds don't have many shares in Kam Hing International Holdings. As far I can tell there isn't analyst coverage of the company, so it is probably flying under the radar. The definition of company insiders can be subjective, and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it. I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions. It seems that insiders own more than half the Kam Hing International Holdings Limited stock. This gives them a lot of power. That means they own HK$266m worth of shares in the HK$531m company. That's quite meaningful. It is good to see this level of investment. You cancheck here to see if those insiders have been buying recently. The general public, with a 50% stake in the company, will not easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies. I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. I always like to check for ahistory of revenue growth. You can too, by accessing this free chart ofhistoric revenue and earnings in thisdetailed graph. Of course,you might find a fantastic investment by looking elsewhere.So take a peek at thisfreelist of interesting companies. NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Japan exports slide for sixth month as trade troubles knock demand, weaken outlook By Tetsushi Kajimoto and Daniel Leussink TOKYO (Reuters) - Japan's exports fell for a sixth straight month in May as China-bound shipments of semiconductor manufacturing equipment and car parts weakened, in a sign of a deteriorating outlook for growth as the trade-reliant economy faces persistent pressure from slowing external demand. Sluggish exports have been a source of concern among Japanese policymakers, especially as a bruising U.S.-China tariff war has upended supply chains and hit global growth, trade and investment. "The business sentiment of Japanese firms, and in particular exporters, is falling depending on the extent of U.S.-China trade tensions, and that will suppress exporters' capital expenditure," said Hiroshi Miyazaki, senior economist at Mitsubishi UFJ Morgan Stanley Securities. "I think that will be a negative for Japan's economy." Ministry of Finance (MOF) data showed on Wednesday that exports declined 7.8% in May from a year earlier, down for the sixth straight month. The fall in shipments compared with a 7.7% annual decrease expected by economists in a Reuters poll, and followed a 2.4% year-on-year fall in April. The trade data comes on the heels of a Reuters poll of Japanese companies showing the economy is likely to stop expanding this year and into next as the Sino-U.S. trade war and a planned sales tax hike are expected to crimp activity. "Although export volumes are unlikely to be as weak as they were in the last quarter, a likely rebound in import volumes means that net trade should turn into a drag on GDP (gross domestic product) growth in Q2," said Darren Aw, Asia economist at Capital Economics in Singapore. Indeed, Japan's first quarter GDP growth was partly boosted by a statistical quirk of imports falling more than exports, meaning overall trade provided a boost to the economy even as the underlying picture showed weakness. Earlier this month, Group of 20 finance leaders warned that intensifying trade and geopolitical tensions raised risks to global growth, but they stopped short of calling for a resolution of the deepening U.S.-China trade conflict. The slowdown in exports in May was also likely caused by suspension of factory activity due to the 10-day break as the Golden Week holiday was extended this year to mark the enthronement of a new emperor, analysts say. Overall, however, weak global demand poses risks for the world's third-biggest economy, and faltering earnings at Japan Inc. suggests little respite in the months ahead especially if domestic demand fails to offset frail exports. At the two-day meeting that ends on Thursday, the Bank of Japan is expected to keep monetary policy steady but signal its readiness to ramp up stimulus if growing overseas risks threaten the economy's modest expansion. Weak economic growth could prompt Prime Minister Shinzo Abe to postpone a planned sales tax hike to 10% for the third time. The previous sales tax hike to 8%, from 5%, in 2014 hit consumption and was blamed for a slump in the Japanese economy. By region, U.S.-bound exports rose 3.3% in the year to May, driven by a 9.9% rise in car shipments, while imports fell 1.6%, led by crude oil. It marked the eight straight month of exports growth to the U.S. following a 9.6% increase in April. As a result, Japan's trade surplus with the United States grew 14.8% in May from a year earlier to 395 billion yen ($3.64 billion), rising for three months in a row - a worrying signal for bilateral trade talks as Tokyo is under pressure from Washington to fix what it says is an unfair trade imbalance. Exports to China - Japan's biggest trading partner - fell 9.7% in the year to May, posting a third straight month of declines, the trade data showed. Many Japanese firms, tapped into China's market and their supply chains, face growing pressure on margins as the world's second biggest economy slows. "If the economic expansion in the United States and China comes under pressure, it will weaken growth of the world economy as a whole, and that will lead to a deceleration of the global economy, including Japan," said Mitsubishi UFJ's Miyazaki. Shipments to Asia, which accounts for more than half of Japan's overall exports, fell 12.1% year-on-year in May. Japan's overall imports fell 1.5% in the year to May, compared with the median estimate for a 0.2% annual increase. The trade balance came to a deficit of 967.1 billion yen, versus the median estimate for a 979.2 billion yen shortfall and marked the fourth straight month in the red. ($1 = 108.5600 yen) (Reporting by Tetsushi Kajimoto and Daniel Leussink; Editing by Shri Navaratnam)
Does The Lung Kee (Bermuda) Holdings Limited (HKG:255) Share Price Fall With The Market? Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! Anyone researching Lung Kee (Bermuda) Holdings Limited (HKG:255) might want to consider the historical volatility of the share price. Modern finance theory considers volatility to be a measure of risk, and there are two main types of price volatility. The first type is company specific volatility. Investors use diversification across uncorrelated stocks to reduce this kind of price volatility across the portfolio. The other type, which cannot be diversified away, is the volatility of the entire market. Every stock in the market is exposed to this volatility, which is linked to the fact that stocks prices are correlated in an efficient market. Some stocks are more sensitive to general market forces than others. Some investors use beta as a measure of how much a certain stock is impacted by market risk (volatility). While we should keep in mind that Warren Buffett has cautioned that 'Volatility is far from synonymous with risk', beta is still a useful factor to consider. To make good use of it you must first know that the beta of the overall market is one. A stock with a beta greater than one is more sensitive to broader market movements than a stock with a beta of less than one. See our latest analysis for Lung Kee (Bermuda) Holdings Zooming in on Lung Kee (Bermuda) Holdings, we see it has a five year beta of 0.86. This is below 1, so historically its share price has been rather independent from the market. This means that -- if history is a guide -- buying the stock would reduce the impact of overall market volatility in many portfolios (depending on the beta of the portfolio, of course). Share price volatility is well worth considering, but most long term investors consider the history of revenue and earnings growth to be more important. Take a look at how Lung Kee (Bermuda) Holdings fares in that regard, below. Lung Kee (Bermuda) Holdings is a noticeably small company, with a market capitalisation of HK$1.8b. Most companies this size are not always actively traded. It is not unusual for very small companies to have a low beta value, especially if only low volumes of shares are traded. Even when they are traded more actively, the share price is often more susceptible to company specific developments than overall market volatility. The Lung Kee (Bermuda) Holdings doesn't usually show much sensitivity to the broader market. This could be for a variety of reasons. Typically, smaller companies have a low beta if their share price tends to move a lot due to company specific developments. Alternatively, an strong dividend payer might move less than the market because investors are valuing it for its income stream. In order to fully understand whether 255 is a good investment for you, we also need to consider important company-specific fundamentals such as Lung Kee (Bermuda) Holdings’s financial health and performance track record. I urge you to continue your research by taking a look at the following: 1. Future Outlook: What are well-informed industry analysts predicting for 255’s future growth? Take a look at ourfree research report of analyst consensusfor 255’s outlook. 2. Past Track Record: Has 255 been consistently performing well irrespective of the ups and downs in the market? Go into more detail in the past performance analysis and take a look atthe free visual representations of 255's historicalsfor more clarity. 3. Other Interesting Stocks: It's worth checking to see how 255 measures up against other companies on valuation. You could start with thisfree list of prospective options. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Imagine Owning A2B Australia (ASX:A2B) While The Price Tanked 56% Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! In order to justify the effort of selecting individual stocks, it's worth striving to beat the returns from a market index fund. But in any portfolio, there will be mixed results between individual stocks. So we wouldn't blame long termA2B Australia Limited(ASX:A2B) shareholders for doubting their decision to hold, with the stock down 56% over a half decade. And some of the more recent buyers are probably worried, too, with the stock falling 28% in the last year. Shareholders have had an even rougher run lately, with the share price down 12% in the last 90 days. View our latest analysis for A2B Australia There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement. Looking back five years, both A2B Australia's share price and EPS declined; the latter at a rate of 33% per year. This fall in the EPS is worse than the 15% compound annual share price fall. So the market may previously have expected a drop, or else it expects the situation will improve. The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers). We know that A2B Australia has improved its bottom line lately, but is it going to grow revenue? If you're interested, you could check thisfreereport showing consensus revenue forecasts. When looking at investment returns, it is important to consider the difference betweentotal shareholder return(TSR) andshare price return. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, A2B Australia's TSR for the last 5 years was -28%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted thetotalshareholder return. While the broader market gained around 11% in the last year, A2B Australia shareholders lost 26% (even including dividends). However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 6.3% per year over five years. We realise that Buffett has said investors should 'buy when there is blood on the streets', but we caution that investors should first be sure they are buying a high quality businesses. Before spending more time on A2B Australiait might be wise to click here to see if insiders have been buying or selling shares. If you are like me, then you willnotwant to miss thisfreelist of growing companies that insiders are buying. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU exchanges. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Need To Know: NagaCorp Ltd. (HKG:3918) Insiders Have Been Buying Shares Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sellNagaCorp Ltd.(HKG:3918), you may well want to know whether insiders have been buying or selling. It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market. Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.' See our latest analysis for NagaCorp In the last twelve months, the biggest single purchase by an insider was when Founder Lip Chen bought HK$30m worth of shares at a price of HK$7.41 per share. That means that an insider was happy to buy shares at around the current price of HK$9.12. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. In this case we're pleased to report that the insider bought shares at close to current prices. The only individual insider to buy over the last year was Lip Chen. Lip Chen bought 11.3m shares over the last 12 months at an average price of HK$7.32. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction! NagaCorp is not the only stock that insiders are buying. For those who like to findwinning investmentsthisfreelist of growing companies with recent insider purchasing, could be just the ticket. Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. NagaCorp insiders own 62% of the company, currently worth about HK$25b based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders. The fact that there have been no NagaCorp insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. It would be great to see more insider buying, but overall it seems like NagaCorp insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check thisfreereport showing analyst forecasts for its future. Of courseNagaCorp may not be the best stock to buy. So you may wish to see thisfreecollection of high quality companies. For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Jabil Inc. (JBL) Q3 2019 Earnings Call Transcript Image source: The Motley Fool. Jabil Inc.(NYSE: JBL)Q3 2019 Earnings CallJun 18, 2019,4:30 p.m. ET • Prepared Remarks • Questions and Answers • Call Participants Operator Greetings, and welcome to the Jabil Third Quarter Fiscal Year 2019 Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions) Please note, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Adam Berry, Vice President, Investor Relations. Thank you, sir. You may begin. Adam Berry--Vice President, Investor Relations Good afternoon, and welcome to Jabil's Third Quarter of Fiscal 2019 Earnings Call. Joining me on today's call are Chief Executive Officer, Mark Mondello; and Chief Financial Officer, Mike Dastoor. Please note that today's call is being webcast live, and during our prepared remarks, we will be referencing slides. To follow along with the discussion and view the slides, you will need to be logged in to our webcast on jabil.com. At the end of today's call, both the presentation and the replay of the call will be available on Jabil's Investor Relations website. Please note that during today's conference call we will be making forward-looking statements, including among other things, those regarding our outlook for business and our expected fourth quarter and fiscal '19 net revenue and earnings. These statements are based on current expectations, forecasts and assumptions involving risks and uncertainties that could cause actual outcomes and results to differ materially. An extensive list of these risks and uncertainties are identified in our Annual Report on Form 10-K for the fiscal year ended August 31st, 2018 and other filings. Jabil disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. With that it's now my pleasure to turn the call over to CEO, Mark Mondello. Mark? Mark T. Mondello--Chief Executive Officer Thanks, Adam. Good afternoon. I appreciate everyone taking time to join our call today. As usual I'll begin by offering our people a warm thanks for their hard work and continued dedication. I'm proud of the fact that keeping our people safe is the top priority for all of us here at Jabil. Before I get into our financial results, I'll offer a few thoughts around what we're seeing in terms of trade and tariffs. Today, very few customers are moving existing production out of China. I believe this decision made by those customers is based on three factors. One, the deep-rooted mature supply chain that's foundational to China. Two, many of our customers don't see a reasonable payback associated with such a move. And three, a decent percentage of our China revenue is for final consumption in geographies other than United States. With that said if the landscape shifts and customers change their mind Jabil is well position to author and implement safe and practical solutions, which best serve the needs of our customers. In fact, I believe JBL is positioned better than most especially when considering the commonality of our IT systems embedded throughout our seamless network of factories around the globe. Now turning to slide four. Let's take a look at our third quarter results. The team generated core operating income of $186 million on revenues of $6.1 billion and core earnings per share of $0.57. This was in line with our guidance and 24% higher than last year Q3 to Q3. Within our EMS segment, we saw 26% revenue growth year-on-year, which is driven by cloud, point-of-sale, 5G and wireless and our industrial sector. Our DMS segment delivered a core operating margin of 2.6% for the quarter, representing a 130 basis point improvement year-on-year. When I step back and I look at the first nine months of the year. I see further demonstration of our financial stability. All-in-all another fine quarter. Michael will provide more detail around our quarter and speak to our forward guidance during his prepared remarks. So, moving to slide five, you'll find the specific areas that currently have management's attention. These priorities are the foundation from which we serve our customers and our shareholders. With that let's take a look at slide six where you will find the first area of focus, which is market and product diversification. This colorful pie chart represents a wonderful building block of our story. Within the company, we speak frequently about the importance of diversifying our business, but diversification for the sake of diversification has little relevance. What is relevant is knowing that as we become less dependent on any single product or product family, we realize much improved reliability around our cash flows. With this improved reliability comes greater simplification of the business. Enhancing our ability to execute. Our results in fiscal '18 and thus far in '19 gives us confidence that our approach is working. I'll now turn your attention to slide seven where a key element of our strategy is the natural growth of our new business wins. Today, our execution has been sound and our performances ahead of plan. This gives us a high degree of confidence that this $2.4 billion new business will have a favorable financial outlook in fiscal year '20. Just as we committed at the beginning of the year. For today's call I want to provide an update on our collaboration with Johnson & Johnson medical device company. But before I speak to the slide, I'm pleased to welcome our new team members from the cities of Elmira, Brandywine and Monument. The three J&J factory locations we transferred over to Jabil during the quarter. These new colleagues now join their peers from Torres and Albuquerque and becoming an integral part of our team and again welcome to all. In terms of the collaboration itself, I'm happy to report that both Wave 1 and Wave 2 are now complete and completed on time. Wave 3 will be next and we trust that will also be very successful and completed on time. Our revenue forecast for this business remains in the range of $800 million to $1 billion for fiscal year '20. Thanks to everyone involved. The teamwork between Jabil and J&J has been sensational. Now turning to slide eight. If you consider the midpoint of our Q4 guidance provided today. Fiscal year '19 remains intact and consistent with the commitments we made at the beginning of the fiscal year. Specifically, revenue looks to be $25.3 billion for the year. Core operating income would expand to $875 million at the midpoint of guidance, up 14% from a year ago. And we're on target to deliver $400 million of adjusted free cash flow, an uplift of 60% when compared to fiscal year '18. Altogether fiscal '19 is shaping up to be another nice year. As we move through the fourth quarter, our goals remain unchanged, putting us in good light for next year. Speaking of fiscal year '20, let's jump to my final slide, slide nine. When I think about the tremendous progress we've made, I conclude that our business is solid and on firm ground, financially, operationally and commercially. Much like last September, we plan to have another investor briefing as we head into fiscal year '20. This briefing will be held on September 24th via webcast. We'll open the session by reporting our fourth quarter and full year results. Followed by a review of our priorities and highlighting how they will positively impact fiscal '20. Add to this a discussion on end-markets and observations specific to the macro environment as it presents itself at that time. Michael conclude the September session by offering a fiscal '20 financial outlook. As we prioritize margins and cash flows, Michael layout how we plan to increase free cash flow roughly 25% year-on-year fiscal '19 to '20. Expand core operating margins and provide another year of double digit core EPS growth. Mike will also break down the shape of the year by quarter in terms of expected core EPS contribution. Finally, we'll wrap up the September session by sharing a well-balanced capital return framework for which we remain fully committed. In closing, I like our strategy. We're clear on our mission and our priorities and what we're doing is working. Our team is experienced and the discipline we're showing is reflective in our results. I'd like to once again extend my thanks to everyone here at Jabil and all our new employees from J&J and to all of those on the call today. With that I'll now turn the call over to Mike. Michael Dastoor--Executive Vice President and Chief Financial Officer Thank you, Mark, and good afternoon. I'm very pleased with the performance in both segments during Q3. During the quarter our teams executed extremely well delivering solid year-over-year core operating margin expansion on strong double-digit revenue growth. Our solid Q3 results are yet another proof point that our diversification strategy is working. Net revenue for the third quarter was $6.1 billion, an increase of 13% year-over-year. GAAP operating income was $140.9 million and our GAAP diluted earnings per share was $0.28. Core operating income came in $11 million better than the midpoint of our guidance during the quarter at $185.8 million, an increase of 24% year-over-year, representing a core operating margin of 3%. Turning to interest and tax. Net interest expense during the quarter was approximately $58 million above previous expectations driven mainly by the timing and scale of our ongoing new business awards. Our core tax rate for the quarter was 30.4%, approximately 300 basis points above expectations driven by the geographical mix of earnings. In summary, core operating income came in stronger-than-expected offset by higher interest and tax expense, which negatively impacted the quarter by approximately $0.04. Altogether, this resulted in core diluted earnings per share of $0.57 in line with expectations. Now turning to our third quarter segment results. Revenue for our DMS segment was $2.1 billion down 6% year-over-year. This was mainly due to continued weakness in mobility demand offset by strength in our healthcare and packaging businesses. In Q3, core operating income for the segment nearly doubled on a year-over-year basis to $54.9 million and as a percentage of sales improved 130 basis points to 2.6%. These impressive results highlight our improved business mix and once again underscores the tremendous progress we've made in our diversification efforts. Revenue for our EMS segment increased by 26% year-over-year to $4 billion. We continue to see exceptional growth in EMS associated with our new business wins in 5G wireless, cloud, and automotive. Core margins for the segment declined 50 basis points year-over-year to 3.3% due primarily to continued softness in the semi-cap space and cost associated with our new business awards. Next I'd like to outline our updated expectations for revenue in fiscal year '19 by end-market. Within DMS, we now expect slightly higher growth within edge devices and accessories. Our expectations for mobility and healthcare and packaging remain consistent with our outlook in March. Given our updated outlook, we now expect core operating margin for DMS to come in at 3.9%, a 20 basis point improvement from a quarter ago on slightly lower revenue of $9.9 billion. Turning to EMS, we anticipate stronger revenue in our print, point of sale, 5G wireless and cloud end-markets. Within our semi-cap business we now anticipate the weakness to persist into the second half of calendar year '20. Given our updated outlook, we now expect core operating margins of 3.2% on slightly higher revenues of $15.4 billion. Turning now to our cash flows and balance sheet. During the quarter, our days and inventory remained elevated mainly due to timing differences and came in below expectations at 64 days, a decline of only one day sequentially. I am confident as we move into Q4 and beyond inventory levels will contract to below 60 days as growth moderates and the component market continues to normalize. Cash flows provided by operations were $5 million in Q3 and net capital expenditures totaled $229 million. Core return on invested capital for Q3 was 14.7%, an improvement of 180 basis points over the prior year. We exited the quarter with the total debt to core EBITDA level of approximately 1.9 times and cash balances of $694 million. Turning now to our capital return framework. Since the inception of our capital return framework in June of 2016, we have returned approximately $1.4 billion to shareholders including repurchases and dividends. We remain committed to balanced capital returns and look forward to outlining a capital allocation framework for FY'20 in September. Turning now to our fourth quarter guidance. DMS segment revenue is expected to increase 4% on a year-over-year basis to $2.5 billion, while the EMS segment revenue is expected to increase 22% on a year-over-year basis to $4.1 billion. We expect total company revenue in the fourth quarter of fiscal 2019 to be in the range of $6.3 billion to $6.9 billion for an increase of approximately 14% at the midpoint of the range. Core operating income is estimated to be in the range of $215 million to $275 million with core operating margin in the range of 3.4% to 4%. GAAP operating income is expected to be in the range of a $169 million to $235 million. Core diluted earnings per share is estimated to be in the range of $0.76 to $0.96. GAAP diluted earnings per share is expected to be in the range of $0.47 to $0.71. The tax rate on core earnings in the fourth quarter is estimated to be in the range of 27% to 29%. As we move into the final quarter of FY'19, I am confident in our team's ability to execute and efficiently manage working capital and generate strong cash flows. Working capital improvements will come mainly to the combination of improved inventory levels as growth moderates and the component market continues to normalize. These factors give me confidence in our ability to deliver adjusted free cash flows of $400 million for the year. In summary fiscal '19 is shaping up to be a great year and we hope to build upon this positive momentum in FY'20. Moving forward, I expect growth in both earnings and free cash flow will come through meaningful margin expansion and improved working capital efficiency. I'll now turn the call back over to Adam to begin Q&A. Adam Berry--Vice President, Investor Relations Thanks, Mike. Before we begin the Q&A session, I'd like to remind our call participants that per our customer agreements, we will not address any customer or product-specific questions. We appreciate your cooperation. Operator we're now ready for Q&A. Operator Thank you. At this time we will be conducting a question-and-answer session. (Operator Instructions) Our first question comes from the line of Adam Tindle with Raymond James. Please proceed with your question. Adam Tindle--Raymond James -- Analyst Okay. Thanks, and good afternoon. I just wanted to start, Mark. It looks like you're on track for the $3 EPS target that you talked about around three years ago based on this quarter and guidance. At the end of last fiscal year you gave a navigational beacon of $4 of EPS and a free cash flow number per share that implied a similar amount. So, the question is, I'm just hoping that maybe you can reflect on the obstacles related to the $3 that looks like you're on track to achieve and how the path to that $4 navigational beacon may be similar or different. It sounds like Mike kind of mentioned obviously margin improvement and cash flow improvement for the $4 whereas the $3 was more revenue growth. So, if you could just touch on those dynamics to start that would be helpful? Mark T. Mondello--Chief Executive Officer All right. Well, good multi-question for question one. I think the best way to think about it Adam is as follows. I think all year back starting in September we've been talking about $400 million of free cash flow margins at about 3.5%, core EPS in the neighborhood of three bucks. If you take the midpoint of our guidance, sum everything together, I think, it sums it like $2.97 or $2.98, which I think puts us squarely in the neighborhood of three bucks. So, check the bucks to that. What I'm pleased with is, at the beginning of the year, we thought operating income would be about $850 million. I think we took that up either in the second quarter call, first or second quarter, December or March call, we took it up to like $865. And now if you take the midpoint of our guidance it's all the way up at $875. So, one of the things I'm really pleased with is, is the operational earnings power of the company is stronger than we thought, and I thought we had some pretty aggressive numbers at the beginning of the year. As I think about where the company is headed in fiscal '20 and '21, maybe a really simplistic way to think about the company financially. Our tax rate overall for this year is higher than I'd like. That's just a direct calculation in which both geographies, jurisdictions incomes generated, I think, that will normalize back to a more normalized level as we move forward to '20 and '21. In addition to that our interest expense is a little more fluffy for lack of a better word than we thought it would be beginning of the year, we thought interest expense would be in the $210 million maybe $215 million range, it's probably going to be more like $225 million for the year that will normalize as well, if I think of one of the reasons -- one of the ways I look at interest expense for the company is kind of as a percentage of EBITDA we're probably 150, 200 basis points higher than what I'd call normal. But that's a bit intentional and what I mean by that is, we've taken on what I think is very, very good new business wins that's come very naturally to us. I use the term in the slides this time kind of natural growth it wasn't forced and so what I think of is very short-term it's a bit of trade-off of interest expense on a temporary basis being a little higher than we thought. But it really sets the foundation nicely for fiscal '20 and '21. If I think back to the navigational beacon, I think, I shared two slides back in September. One was a navigational beacon where I thought we'd get to or on a path to 4% operating margins. And then I showed kind of a fiscal '21 outlay where I thought we'd get to about $3.80 in earnings also with very good margins. So, I think, what we'll be able to share with you in September is our plan is a little bit ahead of schedule and I think we'll be able to share with you that by taking on a little bit more interest expense in '19 as you start seeing where we're going in 20 and then '21. As I said in my prepared remarks, one is as I think you're going to see -- continue to see double-digit growth on the core EPS line. I think free cash flow next year will be in the range of about $500 million. And again we'll continue to press on margins. So, again all-in-all if I think about what we said we do at the beginning of the year where we're at today really, really pleased with the earning power on a core up-line and certainly the journey for us is to get the company to $4 a share in earnings as well as 4% margins. Adam Tindle--Raymond James -- Analyst Okay, that's helpful. And I'll keep it to one part on a quick follow-up more near-term on EMS revenue guidance for the Q4 quarter. You've had a number of customers experiencing weakness in the old E&I segment. So, just maybe hoping that you can talk about the build up for EMS revenue in Q4 because it looks still fairly healthy obviously year-over-year is benefiting from ramps. But I'm just thinking on a normal seasonal sequential basis, it seems pretty stable versus the customers who are experiencing some weakness. So, helping, just trying to understand where the delta lies in terms of the strength you're seeing? Thanks. Mark T. Mondello--Chief Executive Officer Yes, I think, one thing that's really cool is, we are seeing weakness in legacy EMS business. We kind of have our EMS business broken up into two sectors kind of enterprise infrastructure and then our engineering solutions group. I think we'll confirm that we're seeing some weakness in legacy E&I customers and yet if I look at the numbers and I'd have to go back and check this out. I might could have this wrong, but I think the midpoint to where we guided you and shown down the slides where EMS revenue is going to be midpoint of guidance for 4Q. Again I'd want to go check it, but I think that might be a record quarter in terms of revenue for EMS. And in fact you roll that in with DMS, I think, it might be a record revenue for the company overall midpoint of guidance. So, I think, that just speaks to what we're up to which is we've got deep pockets of weakness we've been talking about semi-cap on the EMS side we've been talking about mobility on the DMS side. And then we've got kind of this dither of different pockets of divots and weakness scattered through as you framed it some of the legacy customers and yet revenue for Q4 both on the EMS segment as well as the company you're going to be at record levels. So, again, I think it speaks volumes for what we're up to in terms of the diversification of the business. Adam Tindle--Raymond James -- Analyst Yes. Thank you very much. Mark T. Mondello--Chief Executive Officer Yes. Operator Our next question comes from the line of Steven Fox with Cross Research. Please proceed with your question. Steven Fox--Cross Research -- Analyst Thanks. Good afternoon. Two questions please. First of all, Mark, the outlook for 5G and cloud has increased significantly since the beginning of the year. Can you maybe just provide a little bit more of a detailed walk on why you're having so much success there and what you would attributed to? And then secondly, you guys seem to be operating from a different playbook than the rest of the industry. There's a couple of competitors that are seeing their stock price incredibly depressed versus just a year ago. And I'm curious as to how that may affect you going forward if it does at all it seems like the model is developed over the last few years to be a lot different than maybe a lot of the competitors? Thanks. Mark T. Mondello--Chief Executive Officer Thanks, Steve. So, on the 5G cloud, I think, there's a couple of catalysts there. One is if I could start with 5G there's tons of being -- tons in the media. 5G is pushing to the left. No, it's not. Maybe it is. 5G is coming. I think it's going to be transformational. There's lots being written about the tensions between Huawei and the US. I can tell you just in general our legacy wireless business is about as planned maybe a little bit stronger. On the 5G side, we're really, really pleased with our partners. I think they position quite well in the overall infrastructure rollout for the US and Europe, and we're fortunate to be right in the middle of that. So, today we've taken, I think, a reasonably slightly conservative outlook for our 5G business, but all-in-all we feel pretty good on how we're positioned and we'll see where that goes. On the cloud side our team has built good partnerships with the hyper-scale folks as well as some of the smaller folks. And our solution is we've talked about it before. It's an asset light solution. I think the main thesis around it is, rapid configuration, significant reduction in overall network invested capital for all parties involved. And it seems to have been adopted embraced. And as we sit today in relatively good shape, I think, you're correct again I don't have the exact numbers in front of me, but 5G and cloud, I think, at the beginning of the year combined we said we'd be in the range of $3 billion. And I think today -- it's in the range of closer to $4 billion. So, that's just illustrative of a lot of hard work success in terms of generating some new business and then winning some market share from maybe a few other players on the 5G side. In terms of what we're doing. I appreciate the compliments. I think what we're doing is working, I think, it's a combination of our structure, our approach. I think we're on to something here with this diversification strategy. Again, you think about our company, we've got some deep pockets of softness and yet we're able to take our core operating income and grow at 14%, 15% year-on-year on the operating line and again, I think, it's due to the hard work of the team. But, again, I also think it's a fundamental to our overall strategy. So, at a high level, I suggest, we've got a lot of hard work to do. We've got to keep our nose down and serve our customers. But I think a lot of it has to do with our structure and our solutions and at least for now it seems to be working. So, we'll take it. Steven Fox--Cross Research -- Analyst Great. That's very helpful. Thank you. Mark T. Mondello--Chief Executive Officer Yes. Have a good day. Operator Our next question comes from the line of Paul Coster with JPMorgan. Please proceed with your question. Paul Coster--JPMorgan -- Analyst Yes. Thanks for taking my questions. I've got two questions, Mark. First up the revenue guidance for the fourth quarter is quite a wide range. I'm just wondering what assumptions have gotten into that? And the second question is notwithstanding your quite reassuring comments on China. I'm just wondering, if there's any vulnerabilities or component shortages or other issues that have arisen that you're navigating for yourself or on behalf of your customers? Mark T. Mondello--Chief Executive Officer Yes. Thanks, Paul. On the revenue guidance -- we kind of used -- Paul we kind of used a standard range plus or minus 10% to 12%. I think, it's -- I think it's been that way for a while, we haven't really changed it much. In the fourth quarter -- we've got to be careful because in the mobility sector we're always -- we're always ramping new products and things could go bump and then we don't anticipate that here. If we wanted to, I guess, we could probably narrow the range a bit, but I kind of like the safety of a little bit of a wide range. If you look at our performance in the last 12 quarters or so, we've been -- we've been pretty close to the center points of the range and haven't been in the outer limits certainly not on the downside. So, there's not a whole lot to that other than kind of consistency for the last 20 quarters or so in the range as we said especially the fourth quarter again where we're going to ramps. In terms of China, I think, back to my prepared remarks there's just been a lot of questions and we felt like we'd get out in front of it early on and in some commentary. And again truth be told today, we have lots and lots of scenario planning going on with customers. I feel really good because we've got some of the greatest brands on the planet that really, really trust us to run lead for them on their scenario planning and what if scenarios. But even with all the scenario planning going on, I just -- we're just not seeing a lot of customers moving existing production. There is some customers where they've made some choices maybe to ramp some of their new products and other geographies. I think that's really healthy. It's really good for us because it continues to help us balance factories and factory loading. We're not seeing a lot of component shortages and certainly component shortages get any worse than they were two, three quarters ago. If I had to scope that out for you Paul, I'd say that the components stress and strain and shortages probably peaked about two to three quarters ago. We're actually seeing the overall supply chain globally start to normalize. I think we -- if things stay the same, I think, the supply chain normalizes fully by the fall time-frame of 2019, which might be earlier than we had anticipated. And I think the other thing for us is all-in-all not too many customers picking up moving out of China, but I said in my prepared remarks, if that happens, if things were to worsen. Jabil, I think, is one of the best companies on the planet to help these brands largely around the fact that we've got an excellent global footprint. We've got about 50 million square feet of manufacturing space, but I think the real interesting thing in all that Paul is our factories are all weaved together with a very common IT system and that's really, really beneficial to the customer. So, again, we'd like things to get settled and settle this soon as possible between the US and China. But again I think we're in relatively good shape either way. I would close out that comment to say if things got really, really bad either short-term or long-term, I think, it's going to be tough on everybody us included, but let's hope that doesn't occur. Paul Coster--JPMorgan -- Analyst Very good. Thank you. Mark T. Mondello--Chief Executive Officer Yes. Thanks, Paul. Operator Our next question comes from the line of Ruplu Bhattacharya with Bank of America. Please proceed with your question. Ruplu Bhattacharya--Bank of America Merrill Lynch -- Analyst Hi, thanks for taking my questions. I have one on DMS and one on EMS. The first one on the diversified manufacturing services. I was just wondering if you can just comment on the revenue and margin performance. I mean revenues were better-than-expected and margins significantly improved. So, what drove the outperformance. Any color there would be beneficial and do you have any revenue shift from 4Q into 3Q? Mark T. Mondello--Chief Executive Officer That question was surely around DMS, correct? Ruplu Bhattacharya--Bank of America Merrill Lynch -- Analyst Right, only on DMS. Mark T. Mondello--Chief Executive Officer Okay. I heard you say two. So, let me address that and then we can come back to your EMS question, Ruplu. Yes, I'm pretty excited about the results in DMS. So, we expanded margins. Q3 is always a little bit of a soft quarter for us. We have product ramps going on in the mobility space. This year is no different. But I've got to tell you the current team we have in place running that business today is doing an outstanding job on cost management, some factory relayouts, the ability to maybe to ramp product a little bit more efficiently, more cost effectively. And then the other part on the DMS space is, you take a look at our packaging and healthcare growth, even if you took it back say 3Q of '18 versus 3Q of '19 the growth in healthcare and packaging has been substantial on a percentage basis. And when you think about the margin structure and the overall business in that area that certainly was a contributor. So, again, the revenue being up, it was I think DMS revenue for the quarter was up a little over $100 million not immaterial, but not substantial not all that uncommon. But what's really exciting for me is the margins on DMS. We're starting to get a better blend quarter-on-quarter and not so much volatility, and again I think that's a good statement to our strategy. Ruplu Bhattacharya--Bank of America Merrill Lynch -- Analyst Yes. That makes sense, and thanks for the color on that. Then from my second question on EMS. I guess you have a lot of new programs that are ramping. I think the slide on fiscal '19 core operating margins suggested 3.2%, which is slightly lower than what you had before. I know you're not giving guidance for fiscal '20, but just conceptually as these programs ramp. Is there any reason to think that EMS margins in fiscal '20 can't be higher than what the 3.2% that you're projecting for fiscal '19. So, any puts and takes there would be helpful? Thank you. Mark T. Mondello--Chief Executive Officer Okay. I'll try to get myself not wrapped up or get myself in trouble or too far ahead of everything. So, I think, we're going to roll that out with quite a bit of detail in September. But I'd be highly disappointed if our EMS margins aren't higher than 3.2% next year, and I think we'll show you a path that you'll be pleased with September. But again remember at the beginning of the year, I showed a chart, it was something along the lines of our base business in the company for fiscal '19 would be in the margin range of about 3.7%. And then the new business wins, and at the time, Ruplu, we thought across the company the new business that we were taken on would be in the $2 billion range of which the vast majority of that was in EMS. I think if you look at the numbers today the new business platforms are going to be bumping up against $2.5 billion. So, decent growth there. Very select growth, intentional growth, and growth that we've been very selective in kind of letting the leash out on. And we said at the beginning of the year, that business would generate about 1%. I think Mike either the last call or the December call that kind of framed out and said look we're going to have a lot of investment in the front half of the year on a lot of this business growth, and then it's going to start to normalize in the back half of the year. And again it's rough numbers if you take a look at the EMS margins, Ruplu. I think blended for Q1, Q2 first half of '19 EMS blended out at about 2.3%, 2.4% back half of the year for EMS is going to be blended probably closer to 4%. So, again, I think, we're on -- an appropriate trajectory and again, I think, you and your peers will be pleased with what you hear in September in terms of our EMS margins for '20. Ruplu Bhattacharya--Bank of America Merrill Lynch -- Analyst Okay, great. Thank you so much for the color. I appreciate it. Mark T. Mondello--Chief Executive Officer Yes. You're welcome. Operator Our next question comes from the line of Matt Sheerin with Stifel. Please proceed with your question. Matthew Sheerin--Stifel Nicolaus & Company -- Analyst Yes, thanks, and good afternoon. Just following up on the questions related to the strong growth you're seeing in EMS and specifically on the cloud area. I know there's been some big share gains you've made some big investments in that space, but I know that there's -- it's lumpy in terms of a limited number of very big players particularly the hyper-scale players. How diversified are you within that space in terms of your customer base? Mark T. Mondello--Chief Executive Officer Yes, Matt. So, this question came up in kind of a similar format last call. Not going to get into the number of brands we serve and then it was asked about brands and then we're asked about hyper-scale versus the small folks. We won't get into any of that, we may get into that more in the September call. The one thing though that is pretty cool about that business is we've made lots of investments on a variable basis in terms of engineering and process. But in terms of fixed cost, if I was going to contrast that say with our mobility business that is heavily fixed cost weighted, our fixed cost investments and for that matter working capital investments on the cloud business is what maybe for lack of a better word statement whatever it's very, very asset light. So, it's very flexible, we can ebb and flow as volumes go up and down. We don't have the stress and strain of the load of large fixed assets in that business which by the way is a gem in terms of our solution and the potential variability that business going forward. Matthew Sheerin--Stifel Nicolaus & Company -- Analyst So, the swing factors there would be really working capital then and then maybe some variable labor costs or assembly related costs? Mark T. Mondello--Chief Executive Officer That's right. I would characterize it as that business is -- as a high degree of a variable cost infrastructure, which we can ebb and flow quite quickly. So, I feel comfortable with our solution being well matched with that marketplace. Matthew Sheerin--Stifel Nicolaus & Company -- Analyst Okay, great. And then your commentary on free cash flow improving 25% or so next year. Is that also kind of a function of working capital coming down? I mean, I know, you're going to, you plan to grow your operating profits, but you also talked about the component environment being more favorable and plans to bring down inventory your working capital. Is that how we get there and also I guess CapEx? Mark T. Mondello--Chief Executive Officer Hey, Matt, I'll take, I'll catch my breath for a minute and let Mike take that one. Michael Dastoor--Executive Vice President and Chief Financial Officer Hey, Matt. So, the increase in free cash flow for next year is a combination of improvement in margin, obviously, our EBIT goes up and working capital normalizes. I think I mentioned in the past that inventory is at a higher level than we'd like it to be. Each day of working capital, each day of inventory is about $60 million. So, you see improvements coming through on an annualized basis of just one or two days and you're getting there. We're about -- I'd expect a completely normalized inventory run rate to be around 55 days, right now we're at 64. I think we'll be down to 60 relatively soon in Q4 and going forward, if we take a day or two out the free cash flow number 25% sounds highly achievable. Matthew Sheerin--Stifel Nicolaus & Company -- Analyst Okay. And Just quickly did -- have you given CapEx guide for next year yet? I may have missed that. Mark T. Mondello--Chief Executive Officer No, you didn't miss it. We haven't given it. But we'll be talking about that in September for sure. Matthew Sheerin--Stifel Nicolaus & Company -- Analyst Okay. Very good, and congratulations. Mark T. Mondello--Chief Executive Officer Thanks, Matt. Operator Our next question comes from the line of Steve Milunovich with Wolfe Research. Please proceed with your question. Steven Milunovich--Wolfe Research -- Analyst Thank you. Well, many of the semiconductor companies had predicted a second half bounce-back this year. You guys had pushed out your semi-cap improvements to 2020. And now you're pushing it out to the second half. So I guess what are you seeing that's causing you to do that and how much confidence do you have in that? Mark T. Mondello--Chief Executive Officer I don't know that we have a high degree of confidence in it. We have as much competence, Steve, as our market intelligence would tell us we've got great relationships with big brands there, and again remember our capital equipment both front-end and back-end. So, we pay a lot of attention to both. I actually think that we're starting to frame-out time-frame and period for recovery is pretty consistent with the overall marketplace. So, I think, I'd be surprised if people are going to start seeing a big recovery in semi-cap by this fall. I think our take anyway has been that the market there was a small probability that we'd see some degree of modest recovery in the fall in '19 that probably won't happen, I think, the modest recovery is a start if anything very late in calendar '19 and we'll start picking momentum up for recovery in early '20 and into the say late spring early summer. The nice thing is, I think, the snap back on that business isn't going to be a step function. I think it will be a improvement over time. So I would hope to see our semi-cap business start to perform better in our 1Q of '20 and then see the gradual progression from there. Michael Dastoor--Executive Vice President and Chief Financial Officer Hey Steven when Mark mentioned EPS growth rates of 10% plus and free cash flow plus 25% in FY'20 the semi-cap issue is already being considered in that. Steven Fox--Cross Research -- Analyst Okay, excellent. Thank you. Mark T. Mondello--Chief Executive Officer Yes. Operator Our next question comes from the line of Mark Delaney with Goldman Sachs. Please proceed with your question. Mark Delaney--Goldman Sachs -- Analyst Yes, good afternoon. Thanks for taking the questions. First was on healthcare, if I recall, properly this year the J&J business was supposed to be about $200 million and the slides have it for $800 million to $1 billion for next year. I think it supposed to go from around EBIT break-even to 2.5% to 3% EBIT margins next year and I was hoping to just better understand what needs to be done in order to get the margins up to the targeted range and what kind of linearity there maybe that's achieved? Mark T. Mondello--Chief Executive Officer Okay. Thanks, Mark. Yes, I think, the one thing I feel very good about is, we came out with the announcement of the deal very, very early in the year. And if anything I was going to say nothing's changed, but actually there has been change and it's all been changed to the positive. There's different waves of transference of capability leadership people and insights. Those are all to plan or ahead of plan. And the difference between this year and next year is, so I think you're spot on. I think revenue this year for the overall relationship will be in the $250 million to $300 million range. I think that next year we'll still be in the $800 million to $1 billion range. I think this year will be close to break-even maybe a hair above, but I think it's fair to say break-even all around. And the next year, I think, your numbers of 2.5% to 3% makes sense. And again I would see that as a natural slope up from there as we move to fiscal '21 and beyond. And the biggest issue is again the complexity and just the overall magnitude of the business in terms of IT systems bringing the teams over payroll administrative types of things. The safety part of it is we've acquired an excellent team. So, unlike other transactions where we have to scramble around add headcount, train inexperienced. We acquired a fabulous group of people. On my prepared remarks today, I talked about the second wave of three sites coming on board. Those teams are every bit as exceptional as the first two factories in Torres and Albuquerque. And then the other thing that's just kind of amazing to me is we felt like we were going to gather really, really good marketable capabilities as part of this deal and those capabilities and what we plan to do with them are well ahead of expectations. So, it's pretty exciting. Steven Milunovich--Wolfe Research -- Analyst Yes, thanks. Thanks for that. And my follow-up on the free cash flow guidance for next -- for this year, but what's implied for next quarter. Mike I know you talked about taking an inventory days down to 60 or below. I think with the higher revenue that doesn't drop that much of a change in inventory dollars quarter-to-quarter given the higher volumes that are projected. So, maybe just a little bit more detail on what drives the increased working capital from a dollars perspective for next quarter to get to the free cash flow guidance? Thank you. Michael Dastoor--Executive Vice President and Chief Financial Officer It's just a combination of all working capital metrics. If you go back last couple of years, Q4 has been an extremely strong quarter from a cash flow perspective. If you take that as a percentage of revenues Q4 of this year is extremely consistent with those trends. I feel really good it's a combination of all working capital, it's a combination of the EBITDA that we'll be generating and all of the metrics that make up the free cash flow number. Operator Our next question comes from the line of Jim Suva with Citi. Please proceed with your question. Jim Suva--Citi -- Analyst Thank you. I only have one question. But I just certainly hope the answer is not both. And the question is and you have clearly honorably and impressively outperformed your peers for revenue growth. So, the question is, is that mostly come from your partnership with customers who had seen their new product ramps and share gains or has there been execution issues by some of your competitors that you've been more agile to take advantage of again congratulations on the great growth, which is clearly stronger than your peers. Mark T. Mondello--Chief Executive Officer Well thanks, Jim. I appreciate the compliment. I don't want to comment on our peers. I think we have, I think, we have plenty in front of us to focus on. I do think, Jim, there's a differentiation with our IT systems. I said in my prepared remarks and I put it in there intentionally. Our team has really experienced and sometimes with experienced people get a little tired. You know what our team is experienced and fully wound-up, clear on the mission, clear on what our priorities are. I think our structure is outstanding in terms of decisions. We're making speedy decisions. I would tell you that even with the uplift and operating margins this year going from $850 to $875 again a 14% or 15% growth and in core operating income year-on-year. With the growth we've put on top of the company. One of the things we pride ourselves on is our factories run really, really, really efficiently and really well. I think we've got a little bit of creaking going on with some of our factories because of the growth. I bring that up because the good news is our factories performance is only going to get better next year because growth won't be as great. And then you add to it the fact that the growth that we've taken on and again we've said this over and over and over again it was really good selective growth that adds great capabilities to the company and the growth that we have is growth rate in our sweet spot that we can execute on. So, again, I don't have an opinion or maybe I have opinions, but not opinions I'd want to share with our competition. I got a lot of respect for the challenges they have, but I really like what we're up to and I like our path forward. Jim Suva--Citi -- Analyst Thank you so much for the details and clarifications. It's greatly appreciated. Mark T. Mondello--Chief Executive Officer Yes. Thanks, Jim. Operator Ladies and gentlemen we have reached the end of our question-and-answer session. And I would like to turn the call back over to Mr. Adam Berry for any closing remarks. Adam Berry--Vice President, Investor Relations Thank you for joining us today. This now concludes our event. Thank you. Operator This concludes today's teleconference. You may now disconnect your lines at this time. Thank you for your participation and have a wonderful day. Duration: 54 minutes Adam Berry--Vice President, Investor Relations Mark T. Mondello--Chief Executive Officer Michael Dastoor--Executive Vice President and Chief Financial Officer Adam Tindle--Raymond James -- Analyst Steven Fox--Cross Research -- Analyst Paul Coster--JPMorgan -- Analyst Ruplu Bhattacharya--Bank of America Merrill Lynch -- Analyst Matthew Sheerin--Stifel Nicolaus & Company -- Analyst Steven Milunovich--Wolfe Research -- Analyst Mark Delaney--Goldman Sachs -- Analyst Jim Suva--Citi -- Analyst More JBL analysis All earnings call transcripts More From The Motley Fool • 10 Best Stocks to Buy Today • The $16,728 Social Security Bonus You Cannot Afford to Miss • 20 of the Top Stocks to Buy (Including the Two Every Investor Should Own) • What Is an ETF? • 5 Recession-Proof Stocks • How to Beat the Market This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see ourTerms and Conditionsfor additional details, including our Obligatory Capitalized Disclaimers of Liability. Motley Fool Transcribershas no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has adisclosure policy.
Adobe Inc. (ADBE) Q2 2019 Earnings Call Transcript Image source: The Motley Fool. Adobe Inc.(NASDAQ: ADBE)Q2 2019 Earnings CallJun 18, 2019,5:00 p.m. ET • Prepared Remarks • Questions and Answers • Call Participants Operator Good afternoon. I would like to welcome you to the Adobe Second Quarter Fiscal Year 2019 Earnings Conference Call. Today's conference is being recorded. During today's presentation, all lines will be muted, and we will take questions following the prepared remarks. At this time, I would like to turn the call over to Mike Saviage, Vice President of Investor Relations. Please go ahead, sir. Mike Saviage--Vice President of Investor Relations Good afternoon, and thank you for joining us today. Joining me on the call are Adobe's President and CEO, Shantanu Narayen; and John Murphy, Executive Vice President and CFO. In our call today, we will discuss Adobe's second quarter fiscal year 2019 financial results. By now, you should have a copy of our earnings press release, which crossed the wire approximately one hour ago. We've also posted PDFs of our earnings call prepared remarks and slides, and an updated investor datasheet on adobe.com. If you would like a copy of these documents, you can go to Adobe's Investor Relations page and find them listed under Quick Links. Before we get started, we want to emphasize that some of the information discussed in this call, particularly our revenue and operating model targets, and our forward-looking product plans, is based on information as of today, June 18, 2019, and contains forward-looking statements that involve risk and uncertainty. Actual results may differ materially from those set forth in such statements. For a discussion of these risks and uncertainties, you should review the Forward-Looking Statements Disclosure in the earnings press release we issued today, as well as Adobe's SEC filings. On this call, we will discuss GAAP and non-GAAP financial measures. A reconciliation between the two is available in our earnings release and on Adobe's Investor Relations website. Call participants are advised that the audio of this conference call is being webcast live, and is also being recorded for playback purposes. An archive of the webcast will be made available on Adobe's Investor Relations website for approximately 45 days, and is the property of Adobe. The call audio and the webcast archive may not be rerecorded, or otherwise reproduced or distributed without prior written permission from Adobe. I will now turn the call over to Shantanu. Shantanu Narayen--Chairman, President and Chief Executive Officer Thanks, Mike, and good afternoon. Q2 was another strong quarter for Adobe, with record revenue and continued growth across Adobe Creative Cloud, Adobe Document Cloud, and Adobe Experience Cloud. We delivered $2.74 billion in revenue in Q2, representing 25% year-over-year growth. GAAP earnings per share for the quarter was $1.29, and non-GAAP earnings per share was $1.83. Adobe's solutions have become the standard for creating and managing the world's Digital Experiences. Millions of consumers depend on brands like Photoshop and PDF for their personal and professional pursuits. Thousands of enterprises the world over are turning to Adobe every day to help them transform their businesses. The power of our brand, the continuous innovation in our products and services, the deep investment we're making in our technology platforms and a robust ecosystem of partners are enabling us to serve millions of customers around the globe. We are creating large, addressable markets in the creativity, document and customer experience management categories. Our opportunity has never been greater. In our Digital Media business, we drove strong revenue growth in both Creative Cloud and Document Cloud in Q2. Net new Digital Media annualized recurring revenue, or ARR, was $406 million, and total Digital Media ARR exiting Q2 grew to $7.47 billion. Q2 Creative revenue was $1.59 billion, which represents 22% year-over-year growth. Mobile is a tailwind in our Digital Media business and we're driving significant increases in mobile traffic and member sign-ups for our offerings. This is the golden age of creativity and our vision for Creative Cloud is to be the creativity platform for all. Whether you're a student, an experience designer, a YouTuber, or a marketer, storytelling is central to the way you communicate and connect. A key part of our Creative Cloud growth strategy is appealing to new segments of users. Adobe Spark, our offering for easily turning ideas into compelling stories, graphics and webpages, is rapidly gaining popularity among creators from the classroom to the boardroom. Spark traffic on web and mobile has more than doubled year-over-year. In Q2, we expanded Spark's global footprint with support for five new languages: Brazilian-Portuguese, French, German, Italian and Spanish. We've expanded our vision of platforms to include social media channels like Facebook, Instagram and YouTube. Premiere Rush is rapidly becoming the solution of choice for YouTubers and social video creators. Premiere Rush is now available on Android in addition to iOS, Mac and Windows. Experience design is one of the most explosive creative categories and we continue to innovate in this space with Adobe XD, our design system for UX and UI. We released a major update to Adobe XD in May, enabling teams to create and share designs to enhance both productivity and collaboration. In Q2, we drove strong subscription growth across our flagship photography and digital video offerings. At NAB in Las Vegas, we unveiled new innovations across Premiere Pro, Audition, Character Animator, and After Effects. One exciting announcement was the availability of the Content-Aware Fill feature in After Effects, powered by Adobe Sensei, which magically enables editors to seamlessly remove unwanted objects from video, saving hours of tedious manual work. It won five awards at the show, including the NAB Show Product of the Year Award. We continue to expand Creative Cloud with value-added services. Adobe Stock, our fast-growing service for stock images, videos, and millions of additional creative assets, grew greater than 25% year-over-year. We're proud of the role our solutions play in inspiring the global creative community and shaping popular culture. This quarter, we launched a creative campaign with 17-year-old music sensation Billie Eilish, which inspired significant participation among our important student segment. With Adobe Document Cloud, we're reinventing how people scan, edit, collaborate, sign and share documents in the cloud and mobile era. Document Cloud revenue in Q2 was a record $296 million and we grew Document Cloud ARR to $921 million, driven by continued strength in Acrobat subscription adoption. Mobile is the next frontier for digital documents and our flagship apps. Adobe Reader for mobile and Adobe Scan continue to gain traction. Adobe Scan, which allows you to capture everything from documents to forms, whiteboard sketches or business cards, and turn them into picture-perfect, high-quality PDFs, is now the leading scanning app on iOS and Android. We're driving adoption for Adobe Sign, our cloud-based electronic signature solution, with customers including Merck, Hitachi, and Iowa State University. They're using Adobe Sign to provide a better customer experience, close contracts, and win business. In our Digital Experience business, we achieved record Experience Cloud revenue of $784 million for the quarter, which represents 34% year-over-year growth. To win in today's competitive landscape, businesses must become more customer-centric and data-driven. Our vision for Adobe Experience Cloud is to enable businesses to reimagine the entire customer journey using data to understand and drive their business from discovery through trial, purchase, use and renewal. At the core of Adobe's own transformation has been our use of Adobe Experience Cloud. B2B and B2C companies across every country and industry are choosing Adobe Experience Cloud, the only end-to-end solution for marketing, advertising, analytics and commerce, to master the art and science of Customer Experience Management. Key Experience Cloud customer wins in Q2 include Amazon, Rite Aid, Vodafone and Wyndham Hotels. The acquisitions of Magento and Marketo have significantly increased our value to existing customers, helped us attract new logos, and expanded Adobe's addressable opportunity. Magento adds to our Experience Cloud vision by allowing us to make every moment personal, and every experience shoppable in addition to attracting a large and vibrant developer community to Adobe. This quarter we announced the availability of Adobe Commerce Cloud, built on the Magento Commerce platform, with deep integrations across Adobe Analytics Cloud, Marketing Cloud and Advertising Cloud. We announced a new partnership with Amazon, creating Magento Commerce branded stores for Amazon sellers, which will give merchants a more seamless way to manage their business across both Amazon.com and their own storefront. With the addition of Marketo, Adobe provides the leading marketing engagement platform for both B2B and B2C customers. We've deepened the integration between Adobe Marketing Cloud and Marketo Engage. We are leveraging Adobe Sensei, so companies can deliver the right experiences to the right people at the right time. This quarter, we announced our partnership with LinkedIn, empowering B2B marketers and sellers to easily identify, understand and engage B2B customer buying teams. At Summit, we announced the global availability of Adobe Experience Platform, the industry's first real-time platform for Customer Experience Management. Adobe Experience Platform provides real-time CDP and DMP capabilities, and stitches together data from across the enterprise, creating real-time customer profiles and enabling the activation and delivery of hyper-personalized experiences. Some of the world's leading brands are already using Adobe Experience Platform in beta, including Best Buy, Sony Interactive Entertainment, The Home Depot and Verizon Wireless. We've built a strong ecosystem of global partners. Recently, we announced new partnerships with ServiceNow and Software AG. We will deliver integration between Adobe Experience Platform and the ServiceNow Platform as well as with Software AG's webMethods platform. Adobe and Marketo were both positioned as Leaders by Gartner in the Magic Quadrant for Multichannel Marketing Hubs. Among the 21 companies evaluated, Adobe achieved the strongest position for Completeness of Vision. Adobe Experience Cloud was recently named a leader in the Gartner Magic Quadrant for Digital Experience Platforms. Adobe Marketing Cloud, Advertising Cloud and Analytics Cloud were reviewed and successfully validated by TrustArc, making Adobe the first company in the Digital Experience space to receive TRUSTe GDPR Privacy Practices Compliance Validation. Our mission to change the world through Digital Experiences gives purpose to the work we do. We're proud Adobe was honored with a Hope Award from the National Center for Missing and Exploited Children. For more than a decade, Adobe has been partnering with NCMEC, through software contributions and technical expertise in service of its important mission: to find missing children and prevent child exploitation and victimization. At Adobe, our employees are our greatest asset and we continue to invest in our future talent. This summer, we're pleased to welcome more than a thousand interns and new grads to Adobe from more than 150 schools around the world. Our strategy of empowering people to create and transforming how businesses compete offers a unique value-proposition in the market, and large addressable opportunities to grow our business. FY19 is expected to be another record year. We expect the first half momentum to continue in the second half. Our revenue growth, cash flow, and operating profit differentiates us among SaaS companies at scale. John? John Murphy--Executive Vice President and Chief Financial Officer Thanks, Shantanu. As with last quarter, we are reporting results based on our adoption of ASC 606 this fiscal year. As a reminder, our results in the year ago fiscal period were reported based on ASC 605. We have not adjusted our prior fiscal year reported numbers for comparison purposes under ASC 606. In Q2 FY19, Adobe achieved record revenue of $2.74 billion, which represents 25% year-over-year growth. GAAP diluted earnings per share in Q2 was $1.29 and non-GAAP diluted earnings per share was $1.83. Business and financial highlights in Q2 included record Digital Media revenue of $1.89 billion, including Creative revenue of $1.59 billion and Adobe Document Cloud revenue of $296 million; strong net new Digital Media ARR of $406 million; record Digital Experience revenue of $784 million; Remaining Performance Obligation, or RPO, grew to $8.37 billion; cash flow from operations of $1.11 billion; repurchasing 2.5 million shares of our stock through stock buyback; and approximately 91% of our revenue in Q2 was from recurring sources. In our Digital Media segment, we achieved record revenue of 22% year-over-year growth. The addition of $406 million net new Digital Media ARR during the quarter grew the total to $7.47 billion. Within Digital Media, we achieved another strong quarter with our Creative business. Creative revenue grew 22% year-over-year in Q2 and we increased Creative ARR by $341 million. Notable growth drivers in Q2 across conversion, upsell and retention included new user growth, driven by numerous global initiatives to generate demand, including targeted campaigns and promotions, leveraging the funnel of users coming to Creative Cloud through mobile apps and online engagement; and continued focus on new categories including immersive media and new segments such as social media creators; Creative Cloud Photography plan subscriptions; Adobe Premiere Pro single app subscriptions in the video category; Creative Cloud enterprise, including customer acquisition, seat expansion and services adoption; and adoption of Adobe Stock, where revenue and subscription growth rates remain strong. We achieved record Document Cloud revenue of $296 million in Q2, which represents 22% year-over-year growth, and we added $65 million of net new Document Cloud ARR during the quarter. The growth in the Document Cloud business was driven by strong demand on adobe.com, the continued migration of Acrobat perpetual customers to subscriptions, enterprise services adoption, and monetization of mobile app use. In addition, Adobe Sign achieved another strong quarter of growth. In our Digital Experience segment, we achieved record quarterly Experience Cloud revenue of $784 million, which represents 34% year-over-year growth. Experience Cloud subscription revenue was a record $654 million. Business performance in Digital Experience during the quarter was driven by strength in Adobe Marketing Cloud, including Adobe Experience Manager, Adobe Target and Adobe Campaign; multi-solution digital transformation engagements; and traction with cross-selling Magento and Marketo in the enterprise. During Q2, we continued to focus on driving Magento and Marketo synergies, including organizational, product and go-to-market alignment. Both Magento and Marketo were prominently featured at Summit events in the US and Europe, and we also held Magento Imagine and Marketo Marketing Nation events during Q2. The depth and breadth of our enterprise partner ecosystem remains a competitive advantage contributing to pipeline generation, customer success as well as financial performance. We had another successful quarter of selling alongside Microsoft, where our combined value proposition is resonating with enterprise customers. Our overall financial results were negatively affected by currency rate movements. Total Adobe Q2 year-over-year revenue growth would have been 27% if measured in constant currency; and year-to-date, total first half FY19 year-over-year revenue growth would have been 26% if measured in constant currency. More specifically in Q2, from a quarter-over-quarter currency perspective, FX decreased revenue by $4.9 million. We had $9 million in hedge gains in Q2 FY19 versus $8.5 million in hedge gains in Q1 FY19. Thus, the net sequential currency decrease to revenue considering hedging gains was $4.4 million. From a year-over-year currency perspective, FX decreased revenue by $45.3 million. The $9 million in hedge gains in Q2 FY19 versus $0.3 million in hedge gains in Q2 FY18 resulted in a net year-over-year currency decrease to revenue considering hedging gains of $36.6 million. In Q2, Adobe's effective tax rate was 11% on a GAAP and non-GAAP basis. Our trade DSO was 42 days, which compares to 44 days in the year-ago quarter, and 46 days last quarter. Remaining Performance Obligation, or RPO, was approximately $8.37 billion exiting Q2, which compares to $8.13 billion exiting Q1. Deferred revenue exiting Q2 was $3.13 billion. The sequential decline in deferred revenue was a result of timing rather than business performance due to fewer billing cycles in our second quarter. The impact was more than offset by an increase in unbilled backlog. Our ending cash and short-term investment position exiting Q2 was $3.48 billion, and cash flow from operations was $1.11 billion in the quarter. In Q2, we repurchased approximately 2.5 million shares at a cost of $659 million. We currently have $6.6 billion remaining of our $8 billion repurchase authority granted in May 2018, which goes through 2021. Now we will discuss our financial targets. As a reminder, our Q3 includes the summer months of June, July and August, and we expect normal seasonality to influence our results during the quarter. In Q3 FY19, we are targeting revenue of approximately $2,800 million; Digital Media segment year-over-year revenue growth of approximately 20%; Net new Digital Media ARR of approximately $360 million; Digital Experience segment year-over-year revenue growth of approximately 34%; Other Expense of approximately $22 million; Tax rate of approximately 11% on a GAAP and non-GAAP basis; share count of approximately 491 million shares; GAAP earnings per share of approximately $1.40; and non-GAAP earnings per share of approximately $1.95. As usual, we are not updating annual targets at this time of the year. We are pleased with our first half performance and we expect our first half momentum to continue in the second half, with typical seasonality in Q3 and strength in Q4. We continue to expect sequential operating margin growth as we move through the second half of the year. I'll now turn the call back over to Mike. Mike Saviage--Vice President of Investor Relations Thanks, John. Adobe MAX, our user conference focused on our Digital Media solutions, will occur during the first week of November this year in Los Angeles. On day one, at MAX, on Monday, November 4th, we plan to host a Financial Analyst Meeting. Invitations, including discounted registration information, will be sent to our analyst and investor email list later this summer. More information about the event can be found online at max.adobe.com. If you wish to listen to a playback of today's conference call, a webcast archive of the call will be available on our IR site later today. Alternatively, you can listen to a phone replay by calling 888-203-1112; use conference ID number 2843011. International callers should dial 719-457-0820. The phone playback service will be available beginning at 5 pm Pacific Time today and ending at 5 pm Pacific Time on June 25th, 2019. We would now be happy to take your questions, and we ask that you limit your questions to one per person. Operator? Operator Thank you. (Operator Instructions) We'll take our first question from Brent Thill with Jefferies. Please go ahead. Brent Thill--Jefferies -- Analyst Thanks. Good afternoon. Shan, just on Magento and Marketo, just curious if you could give us your updated thoughts on the integration? How you're doing in the field? And some of the customer traction on both those acquisitions, that would be helpful? Thank you. Shantanu Narayen--Chairman, President and Chief Executive Officer Sure, Brent. Both of them are actually big picture going really well. We have, as you saw, started to integrate the products, the delivery of the Adobe Commerce Cloud that was based on Magento Commerce. We announced some good partnerships there as well as it relates to what we're doing with Amazon to allow multiple small and medium businesses to be able to deliver their storefronts based on this combined technology. We did some good work as it related to integration between the Adobe Experience Manager as well as the Adobe Commerce Cloud, so you can now have in a single digital foundation the ability to do web content management, analytics, as well as commerce. So product integration with Magento is going well. I think on the market -- go-to-market efforts, the enterprise motion that we have, which is clearly a strength of Adobe, we are putting the Magento solutions through that enterprise go-to-market motion, we've also done a good job, I think, of integrating the mid-market, small and medium business, whatever you want to call it of Magento and Marketo, because the combination of both of them give us a little bit more heft in the marketplace. And on Marketo as well, I mean, it's clearly a fabulous SaaS platform for engagement as it relates to B2B marketing, the focus there has been on both integration with Adobe Analytics as well as making sure that the combination of Campaign and Marketo will be the best B2E, which is what we call sort of the business to everyone engagement platform. So pleased with it, results are good, continued focus and I think that's one of the reasons why we are aligning the organizations more rapidly to make sure that we get the appropriate alignment. Brent Thill--Jefferies -- Analyst Thank you. Operator And we'll take our next question from Jennifer Lowe with UBS. Please go ahead. Jennifer Lowe--UBS -- Analyst Great. Thank you. It was nice to see the net new ARR out-performance this quarter. So it sounds like it was a few different things there, but just any more color on what drove the upside would be great. In particular, I know last quarter there were some unusual items in there. I just want to check was there anything unusual this quarter, maybe just around it out as we think about seasonality into Q3, it looks like the guide implies a bit more seasonality than what we saw last year, anything to keep in mind there as well? Thanks. Shantanu Narayen--Chairman, President and Chief Executive Officer Yeah. I think big picture, Jennifer, Digital Media, we continue to do really well. We had, as you point out, a great Q2 achieving I think $406 million in net new ARR, which is a record for Q2. Certainly, I think in terms of the different offerings, as John mentioned in his prepared remarks, we are seeing traction on the video offerings, we're seeing traction with enterprise adoption, services, both Stock and Sign, are continuing to perform quite well, international expansion continues to be an area of opportunity as well as new customer acquisition through the marketing campaigns that we have. And if you think about, as you pointed out again, the $360 million target that we're putting for Q3, which would be a record for a Q3 and then you add to that what the $750 million plus in ARR for the first half, I mean it's clear that the momentum continues in the business, I think to your question around seasonality and color. I think it's our expectation that net new DM ARR in Q4 would be similar to what we had last year in Q4. And so if you add that all up it implies that we will have record new ARR again in 2019. And I think underlying all of that, as we've outlined to you, is the DDOM model that we have, it allows us to optimize our marketing spend, it allows us to engage better with customers and MAX should be another great show for that business. One thing I should also mention, sorry, is that, Acrobat continues to, as you clearly saw from the results, do really well. Jennifer Lowe--UBS -- Analyst Great. Thank you. Operator And we'll take our next question from Keith Weiss with Morgan Stanley. Please go ahead. Hi, Keith, your line is open. You may be on mute. Keith Weiss--Morgan Stanley -- Analyst Sorry about that, I was on mute. Thank you for taking the question and very nice quarter. I wanted to touch base on kind of leadership on the Digital Experience side of the equation. I'm kind of -- what the current thought process is, I'm sure Shantanu, you're doing a great job sort of with leadership there, but are we planning on replacing Brad and kind of what's the sort of the game plan for rolling out new leadership and how sort of the new assets are going to sit under that new leadership plan? Shantanu Narayen--Chairman, President and Chief Executive Officer Thanks, Keith, for the question. It's such a large opportunity that we're completely convinced, I am that the focus on the aligned organization was the right choice. It's been great. I focus a lot of time on the customer, just I think over the last 10 days three Fortune 100 CEOs have come into talk to us about our view and our vision for digital transformation, spent a lot of time on the product to make sure that we get great alignment. You've seen the general availability of the Adobe Experience Platform, the Artificial Intelligence features that we're now in beta attribution and customer journey. We've signed some great partnerships with its Software AG and ServiceNow. And really I've been trying to focus also the organization on a lot more with respect to customer centricity. I think as we've aligned the two acquisitions of Magento and Marketo, which we've outlined to you, Keith, was a priority. We brought the same rigor that we have in DDOM for creating that cadence and customer centricity for pipeline progression, for marketing demand generation, as well as for the software delivery lifecycle. And so, I'm really also pleased with how the current management team, which is extremely strong and has stepped up and is executing an alignment. So while the search continues, we haven't missed a beat and I've been spending a lot of time, which just continues to give me a lot of faith in the long-term opportunity associated with the business and it's not hampering the progress at all in terms of what we need to do. Keith Weiss--Morgan Stanley -- Analyst Excellent. Sounds great. Shantanu Narayen--Chairman, President and Chief Executive Officer Thanks. Operator And we will take our next question from Brad Zelnick with Credit Suisse. Please go ahead. Brad Zelnick--Credit Suisse -- Analyst Excellent. Thanks so much, and congrats as well on a great quarter. Shantanu, on customer data platforms, there's been a lot of recent news from Adobe as well as some of your competitors launching their own CDP offerings. How will Adobe Experience Platform differentiate from peers? And why is your product going to be better and wining the market? Shantanu Narayen--Chairman, President and Chief Executive Officer It's a good question, Brad. And I think fundamentally it stems from the fact that when you have the leading content management platform, we have the data and I think that continues to differentiate us in terms of the customer interaction across different channel points. We've been talking to you for a couple of years of the investment that we've made in the Adobe Experience Platform, the vision there has always been not only to integrate all of our existing solutions, so we have a platform across content and data to win it but to frankly stitch together all that customer profile in real-time. And when you have all that customer interaction that's happening as a result of mobile access to the website or website access or as customers are giving us access to the other channel data, that's just as unique differentiator that no other company has. So we start off from that being a huge advantage. I think the effort that we've put into an ecosystem of partnerships there in terms of ingesting that data, the common taxonomy that we've agreed to the partnership with SAP and Microsoft on ODI, and, frankly, the credibility that we just continue to get associated with the fact that when you're processing these hundreds of trillions of transactions on an annual basis that we have more insight to be able to activate it. I think, all of that gives us hope. I think with the whole Experience Cloud, I will continue to reinforce that when we talk about it being north of a $70 billion addressable market, you should look at this as it's not a win/loss kind of situation, there's just so much opportunity. But starting with what we had with Audience Manager and DMP that we had with Demdex combined with what we are doing in CDP and making sure that that all operates in real-time, I think that is just a unique combination for Adobe. Brad Zelnick--Credit Suisse -- Analyst Very helpful. Thank you. Operator And we'll take our next question from the Saket Kalia with Barclays Capital. Please go ahead. Saket Kalia--Barclays Capital -- Analyst Hey, thanks for taking my question here. Maybe for you, Shantanu, just to dig into one of the prior questions on Creative, Adobe Spark seems to be doing very well. So can you just talk a little bit about why you think that's doing so well? And maybe more specifically talk about what you've seen in the last couple of years that Spark has been available? What you've seen in terms of lifetime value and customer acquisition cost qualitatively? Shantanu Narayen--Chairman, President and Chief Executive Officer Saket, I mean, I think it stems from this fundamental assertion and hypothesis that we have -- beliefs that we have that everyone has a story to tell. And when you have K through 12 student all the way to the largest enterprise in the world wanting to use social media, wanting a quick template-based approach to start to be able to express themselves and then grow that expertise into using our products, it's just a fantastic on-ramp. And so the millions of customers that we have, the penetration in the education segment is both an opportunity in itself, but frankly great brand building and awareness of what the Adobe Solutions can do across the spectrum. And so, I think it really -- we've been talking about this for a while, but it's the golden age of creativity and design and it doesn't matter whether you're studying history or geography, I mean, the ability to express yourself visually and graphically and to do that across social channels is just such an intrinsic part of what it is and I think we've really struck a chord with the great, great product across both mobile. I think the fact that we're exploring different platforms and previously we used to look at print and web as a platform, now we look at even channels like YouTube as a platform. It's just a great in addition to Mobile where to attract new customers. So I think that's why it really resonates with customers and why it'll continue to be both from an ARR perspective of growth as well as from overall brand and awareness, just a significant ability for us to continue to keep Digital Media ARR momentum going. Saket Kalia--Barclays Capital -- Analyst Thank you. Operator And we'll take our next question from Sterling Auty with JP Morgan. Please go ahead. Sterling Auty--JP Morgan -- Analyst Yeah. Thanks. Hi, guys. Maybe I can bring John into the conversation here. Kind of curious as you look at the growth in Creative Cloud for the quarter, is there a way to disaggregate how much that growth has actually come from, the price changes that you've made over X number of quarters versus how much that growth is actually coming from your volume? John Murphy--Executive Vice President and Chief Financial Officer Yeah. Sure. It's really coming from both. And when you think about the North America price increase that we did last year in Q2 that, as we said, was going to be accretive and certainly through the year as we now anniversary that price increase. And then earlier this year, in February, we did a price increase for a Dark Cloud and also in EMEA for Creative. And so, all these things are accretive. But one of the things that we've talked about for a long time now is, attracting new users to the platform is really our biggest growth opportunity and we're able to do that through the various new products that are attracting folks to our platform, because some of these newer products are easier to use and then as they get comfortable with those, they end up -- we're able to upsell them into full suite of products for multiple applications. So we had this opportunity to really kind of tack load from many different ways. And we've been successful now in growing the number of users across the platform and also leveraging the mobile app on ramp. Shantanu Narayen--Chairman, President and Chief Executive Officer But if you think of it in terms of material, it's primarily new user growth and new subscriptions, Sterling, is how you should think about it. I think the value that we're providing enables us to keep driving at the anniversary of people moving over to the new pricing, keep them as loyal customers and improve their engagement. But it's -- as you -- as it relates to the photography and video, it's primarily new user growth that's driving the Digital Media ARR. Sterling Auty--JP Morgan -- Analyst Sounds good. Thank you. Operator We'll take our next question from Kash Rangan with Bank of America. Please go ahead. Kash Rangan--Bank of America Merrill Lynch -- Analyst Hi. Thank you very much. Congratulations. I'm curious given the strength in the quarter, you had a very nice quarter on net new ARR. And on the Experience Cloud side, you had very good bookings as well. But when I look at the guidance, you didn't change the guidance for the year but Q3 numbers look a little bit like relative to the Street, it's just a function of conservatism given, maybe, a questionable macro environment, or is it just that the seasonality of the business? We've had the firsthand chance to model the seasonality, the business, including the acquisitions and that we may have been a little off relative to what is the new seasonality of Adobe? Just wondering what your thoughts are there. Thank you so much, and congrats. Shantanu Narayen--Chairman, President and Chief Executive Officer Yeah. I think, Kash, thanks first. I mean, big picture, it's clear, we're having another record year and great execution against both growth opportunities across all of the three marketing clouds, Creative, Document and Experience. And as you point out, the results, revenue growth of 25%, the significant cash flow as well as the strong EPS, while we're increasing margins. I think on Digital Media, I gave some color as it related to what will certainly be a record Digital Media ARR year and I think we factor in seasonality, and so that's I think part of how you should be thinking about Q3 versus Q4. And in DX as well. I mean, the subscription revenue growth, if you look at that, when you see the revenue growth of 34%, the subscription revenue growth certainly has exceeded that and it's closer to 39%. And so I think that also reflects the success that we continue to have and the fact that we have the leading SaaS enterprise platform for enterprises to engage digitally with their customers. And so, I think big picture, the two opportunities continue to be significant tailwinds. We're executing well against it. I think we'll give you more color as it relates to Q4 in September as well as 2020 at MAX. But continue to be really optimistic, and I think where we are in the quarter, just updating annual numbers for a year is akin to giving Q3 and Q4 targets and that's why, as you know, typically we don't do that. But that should not change the fact that we have momentum in the business and optimism for the future. Kash Rangan--Bank of America Merrill Lynch -- Analyst Congrats, Shantanu and team. Thank you. Shantanu Narayen--Chairman, President and Chief Executive Officer Thanks. Operator We'll take our next question from Mark Moerdler with Bernstein Research. Please go ahead. Mark Moerdler--Sanford C. Bernstein & Co. -- Analyst Thank you so much. I really appreciate, and congrats also on the quarter. So you've guided to 34% digital marketing growth for the back half of the year. What's the more difficult set of compares as you lap Magento's acquisition and lap a bit of the Marketo? Can you give us a bit more color on what's driving that strength? I appreciate. Shantanu Narayen--Chairman, President and Chief Executive Officer Yeah. I think as it relates to the Digital Experience business, we've always outlined, Mark, that the focus has been on driving subscription bookings. I think you know as the deferred revenue also starts to taper off, that's certainly going to factor into what happens. But it's just a large addressable opportunity. We have the market leading products and we continue to be excited about how we execute against that. So that's how I would think about that particular business. Mark Moerdler--Sanford C. Bernstein & Co. -- Analyst Appreciate it. Thank you. Operator And we'll take our next question from Jay Vleeschhouwer from Griffin Securities. Please go ahead. Jay Vleeschhouwer--Griffin Securities -- Analyst Yeah. Thank you, and good evening. Shantanu, a technology strategy question. I was hoping we could pass through the plethora of three-letter acronyms that Adobe has been sharing with us at Summit and on other occasions. We now have CDP, CXM, CXP, XPM and so forth. The question is, ultimately does Adobe have a single underlying data model that is the Adobe Data Model, or could you foresee two or more principal data models, particularly in DX? I ask in part because at Summit in EMEA last month, there was some mention in one of the sessions about you are having a new purpose built B2B data model and so maybe you could put this in the context of the complexity of the architecture or the technology as it might relate to any implications for R&D and sales efficiency? Shantanu Narayen--Chairman, President and Chief Executive Officer Yeah. You forgot ODI and maybe a couple of other TLAs, Jay, but it's a good question. And I think as it relates to how we think about the technology underpinnings, we think about it from two strategic points of view. The first is, are we able in our own products to have a common way in which people can really provide integration for our existing applications better than any other individual point product vendor can provide. And I think our track record, as you know better than most, in terms of what we have done on the Digital Media side of having colors and types and font faces work well, that is the reason why the underlying data model allows us to have things like Campaigns or Segments or Audiences work better across our applications than anybody else. And so, we did that heavy lifting associated with having a common way to define the taxonomy, the customer journey across our products. We clearly saw that that was not going to be adequate in terms of the aspirations we had to actually being the underlying sort of infrastructure for how all companies deal with digital transformation and the reasons for the partnership with both Microsoft as well as with SAP is to actually through ODI and make that true not just for customer behavioral data where we clearly have access to all of that data, but also to extend that to financial data, to transactional data over time to IoT data. And so, the way I would think about it is it's a common taxonomy, it's a common way for people to extend it, but we don't have to do the heavy lifting of defining everything. The beauty of the model is that actually we defined the framework, we defined the API, we defined the services and other people can actually extend and augment that. And so, it enables the entire ecosystem to partner. So, it's exciting. We delivered that through the Adobe Experience Platform. I talked in the prepared remarks about how we have early beta customers who are starting to see it, certainly Adobe is using it in our own offering, but I think it's really going to be the underlying infrastructure for our next generation enterprise who wants to engage with their customers. So, we're excited about that. Jay Vleeschhouwer--Griffin Securities -- Analyst Thanks, Shantanu. Operator And we'll take our next question from Kirk Materne with Evercore ISI. Please go ahead. Kirk Materne--Evercore ISI -- Analyst Thanks very much. Shantanu, I want to ask a little bit about Sensei in the context of, is that coming up at all and it's under conversations on the Experience Cloud side, I know there's a lot of factors that go into those decisions from a product portfolio perspective. I was just kind of curious, if Sensei is adding to the conversation if you view that as sort of a needle mover for you all at this point? Thanks. Shantanu Narayen--Chairman, President and Chief Executive Officer I'm really glad you asked that question, because we talk a lot about the Adobe magic that we've had in the Digital Media products and we certainly touched on what we've done with Content-Aware Fill, which is magic as it relates to being able to do that across frames and reduce a whole bunch of complexity for the video products. We are investing very heavily in the same technology Sensei in the Experience Cloud. Let me maybe give you a couple of examples to make it more tangible. I mean, the first is when you're doing search. The way you do search when you're doing it in Digital Media trying to find an object in Stock where we have the best technology is still substantially different from the way you would do search in Commerce where you're looking for an object maybe based on a color or based on a type of preference. So I think in Commerce, that's one area where Sensei and the ability to do search and find the right shopping good that you're interested in, that's a game changer in targeting and in what we can do around how we can optimize targets and recommendations, that's another area where AI is certainly beneficial. When you're talking about a subscription model and customer preference and a prediction score of who's likely to churn and what are the best way to engage with them across channels, that's another area where we have AI technology. But in addition to that, as part of the experience platform, we actually now have modules. I talked a little bit about Attribution.AI and things like that, which are AI modules and frameworks for people to actually augment the Experience Cloud. So, I think, unlike other companies, we believe that the AI is best built in into each of the existing solutions and through frameworks, but we -- our track record of delivering against that has been strong and it's only getting better. Kirk Materne--Evercore ISI -- Analyst Thanks very much. Operator And we'll take our next question from Tom Roderick with Stifel. Please go ahead. Thomas Roderick--Stifel, Nicolaus & Company -- Analyst Hi. Good afternoon. Thanks for taking my question. John, let me throw this one at you, just looking at the Digital Experience segment itself, we saw a nice bounce back in the segment gross margins and part of that, of course, came into scale and some of the deferred revenue writedowns rolling off, but the other part, of course, is realizing some of the integrations between the components and thus hoping you could speak to what you're seeing with some of the leverage between the properties of Magento and Marketo, and the core of Digital Experience, in particular on the COGS side? Are there other elements of architectural leverage that are starting to show up and then even below that line are you seeing much sales leverage between the acquired properties? Thank you. John Murphy--Executive Vice President and Chief Financial Officer Yeah. No -- absolutely. For sure, we're seeing the ability in both properties that we acquired for us to be able to unify development across the platform and that in and of itself will provide some efficiencies. In addition, from the go-to-market perspective, as we've talked about, we've unified and aligned our go-to-market strategy with the existing Adobe Enterprise sales organization under Matt and so that's been able to bring a lot more efficiency as we cross-sell not only the existing Digital Experience products but also Magento and Marketo. Not to mention then our partner ecosystem where we are selling alongside Microsoft, for example, and being successful in having multi-solution sales with them as well. So it's been something that through scale and through continued focus on the integration that we're able to get some leverage out of that. Thomas Roderick--Stifel, Nicolaus & Company -- Analyst Excellent. Thank you. Shantanu Narayen--Chairman, President and Chief Executive Officer The one thing, maybe, I'd like to add to that, I know there was some question around seasonality and while this question was specifically around operating margins, I think cash Adobe. So, maybe, we'd give you color on how we think about our investment as well as what's happening as it relates to margins. I think, it's clear that despite the revenue growth and investment that the operating margin of the company has improved throughout the year and I think we remain very focused on profitability. If you look at seasonally how that should play out over the second half of the year, our guide for Q3 shows EPS increasing by approximately, I think, $0.12 despite seasonality. And we certainly expect Q4 to be a strong seasonally finish to the year. And I think, to give you some color on that why we are not updating our annual targets, we would expect that sequential EPS growth from Q3 to Q4 to be about three times the growth from Q2 to Q3. So, hopefully, that gives you some color on how we think about the investments. We certainly continue to believe in investing for the revenue growth that we're seeing and it also clearly gets us back to north of 40% margin. So, hopefully, that gives you some color on seasonality as well as while the question was on gross margins how we think about operating margins and expenses. Thomas Roderick--Stifel, Nicolaus & Company -- Analyst Really helpful, Shantanu. Thank you. Mike Saviage--Vice President of Investor Relations Operator, I think we'll take one more question, please. Operator Thank you. We'll take our final question from Walter Pritchard with Citi. Please go ahead. Walter Pritchard--Citigroup -- Analyst Hi. Thanks. Question on the Digital Experience side. You've talked in the past about a 25% growth in the book of business, including the two acquisitions. I'm wondering, sort of, how things are tracking so far this year and what you've learned in terms of first half growth as that trend progresses in the second half? Shantanu Narayen--Chairman, President and Chief Executive Officer Yeah. As you know, Walter, we don't update how we're doing against the bookings during the year as we think about the underlying dynamics of the industry and the need for Digital Experience solution, nothing diminishes the belief that we have that that continues to be a large growth opportunity. I think, as you could see from the subscription revenue growth that we see, we continue to focus on executing against that. And so, we'll certainly provide more color as we've said on that on an annual basis. But I just big picture the -- available opportunity, I think, continues to be large. And given Mike said that that was the last question, maybe just as a quick summary again, it's clear that we have the right strategy and the focus on delivering great customer value. We're pleased with the first half financial results, so we expect that momentum to continue in the second half. The strategy of empowering people to create and helping businesses transform. We believe that continues to be a north of hundred billion addressable market opportunity. And we're really pleased with the attendance that we saw at the customer events in the DX, and whether it was the Summit in the US and Europe, whether it was Marketo Marketing Nation, whether it was a Magento Imagine, I think that just reflects both the leadership that we have in product strategy and vision, as well as the strength of the customer and partner community. And FY19 is shaping up again and we expect it to be another record year for revenue and I think the innovation roadmap and opportunity positions us really well for future growth. We appreciate all of you joining us today. Thank you. Mike Saviage--Vice President of Investor Relations And this concludes our call. Thanks everybody for joining us. Duration: 52 minutes Mike Saviage--Vice President of Investor Relations Shantanu Narayen--Chairman, President and Chief Executive Officer John Murphy--Executive Vice President and Chief Financial Officer Brent Thill--Jefferies -- Analyst Jennifer Lowe--UBS -- Analyst Keith Weiss--Morgan Stanley -- Analyst Brad Zelnick--Credit Suisse -- Analyst Saket Kalia--Barclays Capital -- Analyst Sterling Auty--JP Morgan -- Analyst Kash Rangan--Bank of America Merrill Lynch -- Analyst Mark Moerdler--Sanford C. Bernstein & Co. -- Analyst Jay Vleeschhouwer--Griffin Securities -- Analyst Kirk Materne--Evercore ISI -- Analyst Thomas Roderick--Stifel, Nicolaus & Company -- Analyst Walter Pritchard--Citigroup -- Analyst More ADBE analysis All earnings call transcripts More From The Motley Fool • 10 Best Stocks to Buy Today • The $16,728 Social Security Bonus You Cannot Afford to Miss • 20 of the Top Stocks to Buy (Including the Two Every Investor Should Own) • What Is an ETF? • 5 Recession-Proof Stocks • How to Beat the Market This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. 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Facebook’s Calibra: Initial thoughts on payment opportunities and challenges This free preview of The Block Genesis is offered to our loyal readers as a representation of the valuable research our Genesis members receive daily. If you’d like to receive all Genesis content on our site and via daily newsletter,join today. “When I think about all the different ways that people interact privately, I think payments is one of the areas where we have an opportunity to make it a lot easier. I believe it should be as easy to send money to someone as it is to send a photo."– Mark Zuckerberg, F8 Conference April 2019 Calibra, Facebook's new subsidiary, aims to provide financial services on top of the Libra network. Calibra's first product will be a digital wallet that stores the Libra cryptocurrency, and can connect to the Libra blockchain. According to Facebook, the wallet will be available in both Messenger and WhatsApp, with a standalone app expected as well. Facebook plans to launch Calibra sometime in 2020. Marketed as a way to "bank the unbanked," Facebook - and the initial Libra Association founding members - are hoping the service can help bridge the gap for the billions in the world shut out of the banking system, leveraging a permissioned-blockchain based network to enable low-cost payments and faster cross-border transactions, like remittances. [video width="259" height="525" mp4="https://www.theblockcrypto.com/wp-content/uploads/2019/06/Phone-Animation-ReadyForDev-EN.mp4"][/video] Other Calibra details to note include: • As a provider of financial services, Calibra will be regulated accordingly - which is one of the reasons for structuring as a subsidiary • The Libra Association is separate from Calibra and Facebook • An emphasis on privacy (are we surprised?), Calibra won't share account information or financial data with Facebook or third parties, without consent - aside from "limited cases" • Those limited cases may include: regulatory compliance, AML and fraud prevention, performance data, and data sharing with payment processing and other service providers to complete the transaction • Regardless of whether local governments apply AML laws to crypto wallets, Calibra intends to perform AML/CFT wherever the product is available - Calibra won't be available in jurisdictions that have banned cryptocurrencies • Calibra will require ID verification and KYC to gain access to a wallet • Calibra will release a comprehensive data policy prior to launch Source: The Block,Venture Beat,The New York Times,AOL It's been just over a decade since Facebook's last foray into digital payment solutions, with its former attempt known as Facebook Credits. Credits was a program that allowed the purchase of an in-platform token with a credit card/PayPal ($1 = 10FB credits) in order to use as a currency for paid applications and in-game items. Over time the virtual currency transitioned to direct $1:$1 digital fiat. The business model of this product mirrored Apple or Google’s App developer revenue share where the distribution platform of the applications took a percentage of the total purchase. In FB Credits’ case, Facebook took 30% of the developer revenue. Facebook Credits met with initial success in a pre-mobile environment where Facebook could still maintain hold of its desktop platform (vs. mobile application running on iOS or Android). FB Credits generated ~16% of the company's revenue in 2012 and $0.80 in global payment Average Revenue Per User (ARPU), Barclays Internet Analyst Ross Sandler wrote in a research note released in March. By the end of its Alpha roll-out,The New York Timesreported that Facebook was eyeing ~$835 million worth of virtual items purchased via Credits and that "the social network company is laying the groundwork for its second act: a virtual currency system that some day could turn into a multibillion-dollar business." Media was on-board with the narrative, touting that Facebook Credits would enable micro-payments and fuel its application developer ecosystem. While FB credits generated strong top-line revenue, one of the core problems with the product was the fact that Facebook had to give back a majority of that revenue to cover payment processing fees, largely interchange fees or the cost of running transactions over debit and credit networks like Visa and MasterCard. Considering fees charged by networks start anywhere from $0.10 minimum with an additional tack-on percentage of the total purchase value, and because the majority of in-game transactions were higher volume “micro-payments,” the profitability of the business never truly took off, and Credits was removed from Facebook by 2013. Source: The Block, Autonomous Research The analog between Credits and Libra stops at an underlying desire for lower-cost payments within a closed-loop stack. In fairness to the Libra Association — and by extension Facebook's positioned asset Calibra — the ambitions of these projects are much grander than the ability to buy items for your Farmville character. Unlike Credits "marquee" partnership to place pre-loaded cards within Targets, the Libra Association has backing from the likes of some of the world's most prominent payment names, VC funds, E-commerce, non-profits, and recently IPO'd ride hailing companies Uber and Lyft. Source: The Block, Libra Association Forgetting Facebook's 2.3 billion-plus monthly active user base for a moment, the impact of bringing on Founding Members with user bases that collectively add up to over 3 billion globally strengthens the user side of payments' two-sided market. Facebook maintaining just 1% of voting power once the network is live should also help alleviate the concern of this being just "Facebook's coin". Whether the $10 million entrance fee to have skin in the network (members will receive Libra to use to drive adoption) is enough of an incentive for these initial partners to actively push for merchant acceptance within their own organizations remains to be seen. At the very least you'd have to imagine the VC partners like a16z and USV will push Libra within their portfolio companies where applicable. It'll also be interesting to see if some of these members on the payments side decide to explore servicing opportunities either via on-ramps or on the payment processing side. While fee structures are not explicit in the whitepaper and FAQs, it's implied that Libra is welcoming businesses to explore building on top of the network with the potential to take some fees (separate from validators' fees) along the value chain. Judging who has the most to gain from a lower-cost payment play within this consortium (which to me, has visions inspired by the original payment interbank alliances that were formed in the late 60s/early 70s that would be becomeVisa and Mastercard today), at first glance I'd have to side with Uber and Lyft, given how large of an impact credit card processing fees are on both businesses. Uber last year had more than $43 billion worth of card volume processed (according to the S1), which likely translates to over $1 billion in card processing fees in 2018. Lyft also mentioned in itslisting documentsthe intention to lower payment processing fees and the possibility of creating their own payment product. "We believe that global, open, instant, and low-cost movement of money will create immense economic opportunity and more commerce across the world." ~Libra Whitepaper According to the World Bank, in 2018 remittances to low- and middle-income countries reached record highs of ~$530 billion, a 10% increase from the year prior. Grouping in transactions to include high-income countries, global remittances saw just under $690 billion in volume in 2019. Given the global average cost of sending $200 was an estimated 7% in the first quarter of 2019 (World Bank), while banks charged an average 11% in fees, Facebook and the Founding Members of the Libra association believe the potential is there to service this function at a significantly lower cost point. The market seems to have taken notice, as the world's largest global remittance company Western Union saw its shares open down 3% on the news of Libra targeting cross-border remittance use-cases, and is still trading 2% below yesterday's close as of writing. Interesting to note, while the Libra network is encouraging outside wallet providers to develop services for the network, Facebook's Calibra has noted that its digital wallet will not be available in jurisdictions where cryptocurrency is currently banned by regulators. That would imply that last year's top-two remittance recipients corridors,India ($79 billion) and China ($67 billion), would be blocked off from Calibra's rails. "Any consumer, developer, or business can use the Libra network, build products on top of it, and add value through their services."Facebook in a conversation with The Block Another opportunity set that jumps out from the Calibra announcement is the ability for Facebook to boost digital wallet adoption both in the US market and abroad. Digital wallets can offer traditional consumer-banking functionality, such as checking and savings type offerings, payments, lending, asset management, and even insurance, all bundled into a low-cost offering at scale. From the perspective of the company offering the product, digital wallets offer a highly attractive customer acquisition cost; asset managerARK Investassumes digital wallets can acquire new customers for as little as $20. While digital wallets have exploded in popularity in China via Alipay and WeChat, and in emerging markets, usage in the U.S. has been relatively muted due to the presence of well-established banking franchises and infrastructure. However, more recent product entrants in the U.S. such as Square's Cash App and Venmo have begun to see significant digital wallet growth acceleration. The two payments applications combined had ~20 million users in 2017, and has doubled that number to 40+ million active users. Looking ahead to Calibra, the ability to leverage a 2.3+ billion monthly user base with a product that has proven to be a hyper-efficient and cheap customer acquisition tool (e.g. cash tag, payment feeds, etc.) could position Facebook's Calibra to become one of the top financial services by number of U.S. digital users (mobile banking, or digital wallets). Assuming a U.S. active user base of ~170 million people, a 5% penetration rate in 2020 would put Calibra at #7 largest by active digital users, right behind Cash App. Open that 5% penetration to its ~2.3 billion monthly active global user base and its over 110 million digital wallet accounts (more comparable to the ~130 million Apple Pay wallets, which are installed and counted on every phone sold). Source:ARK Invest, Corporate reports; note PayPal which own Venmo not included. Active users defined as active in past 12 months As for product offerings within the Calibra wallet,the announcementgives examples of other feature-sets Facebook is exploring on top of the payment wallet, including lending opportunities, portfolio management tools (PFMs), QR purchase capabilities, and even contactless payment solutions for metro cards. What's interesting about these given examples is the hint that the walletcouldhave access to Level 3 transactional level data (assuming the merchant on the other side of the transaction has the same wallet), or visibility into not just where and how much you purchased, but also an itemized receipt of the items that you purchased at a specific merchant. To be clear, Facebook hasn't confirmed that this is the case or the intention to leverage this level of data. In fact, the Calibra data policy says they won't share data with Facebook or third parties, nor will they use data to improve on ad targeting (outside of "limited cases" - more on that later). However, it's not that hard to imagine a true digital wallet that offers you these capabilities, and in turn provides the user value-additive services such as personal finance tools, smart coupons and discounts, and even ad-driven rewards that send a small amount of Libra to your wallet after watching (see a16z video: the future of the mobile wallet) - even if the data is getting stored somewhere. Source: The Block, a16z:"The Future of the Mobile Wallet" Pulling up, I'm curious to see what other businesses look to build services on top of Libra, and whether those businesses end up being crypto-native, consortium members, or a mixture of both. Within Calibra, Facebook told The Block that it "look[s] forward to making Calibra interoperable with other apps and financial service providers that offer complementary services." One clear complementary opportunity I see is for lending services to explore the ecosystem, whether that's integrating directly into Calibra or another Libra digital wallet and offering loans at the PoS, or even just facilitating loans denominated in Libra. BlockFi, a NY lending company that takes deposits and lends on crypto, told The Block that it is bullish on asset backed stablecoins in general, and "would look to support Libra in the same way we currently support GUSD: as an asset you can earn interest on, as a loan disbursement mechanism, and as accepted collateral for crypto loans." "We believe this may prove to be one of the most important initiatives in the history of the company to unlock engagementand revenue streams." RBC Internet Analyst, Mark S.F. Mahaney in a June 13 note In theThompsonian sense,aggregating your billions of users' financial data really is a checkmate from a value standpoint as a leading advertising-based business. The core issue, however, from a revenue monetization standpoint, is can they get away with it? Based on initial messaging, the company has (to be fair what else are they supposed to say?) repeatedly expressed the separation of its subsidiary Calibra from the legacy Facebook assets. But you can't help but wonder if there are loopholes to their commitments on no sharing of data back to Facebook or third parties - like this weird clause in theirCommitment Statementthat states they share data with all payment processors and service providers when you authorize a payment. Source:Facebook Calibra Commitment of Traders Outside of monetization of data, the next best option for Facebook would be to position Calibra to be THE mobile wallet for the Libra system, and leverage the financial services that could be enabled within. Outside of targeting global cross-border remittances, prioritizing Asia-Pacific seems to be the next best low-hanging fruit, given: almost 4x as many Monthly Active Users (MAUs) as North America, larger demographics already comfortable with digital wallets, and more than double the amount of annual purchase volumes still runs through card networks (~13 trillion). Source:Facebook 1Q19 Earnings Presentation Source:Nilson Report, The Block From a payments cost perspective, will this actually be cheaper to transact on vs. other p2p options?Payments are already relatively low-cost, you pay for value-added services like rewards, insurance, chargebacks for fraud, etc. Encouraging service and business providers to come to the network and mentions in the Data Commitment report of sharing data with payment processors and service providers suggest Facebook expects these businesses (that take fees for their service) to be on the network. Factor in the cost to on-board into the system through crypto exchanges and there's a chance that the costs for larger-ticket items via the card networks vs. Libra network could actually be comparable. Granted, leaving off the flat $.10+ fee no matter the ticket size that comes with the major networks could allow for affordable micro-payments. Assuming fees are lower than the networks', how will the Association fund rewards?From our understanding with conversations with Facebook, the funds the association has raised from both Founding Members and additional accredited investors, both of which will receive Libra Investment Tokens (an STO) which will generate interest on the reserve assets, and will be paid out to those that hold the Libra Investment Token. Additionally, money raised from this sale of LIT will be converted to Libra, and used by the association to fund incentive rewards, and social impact grant-making initiatives. According to Facebook the amount of incentives any one wallet or merchant can receive will be capped, and these merchants can keep or pass these rewards to the consumer if they so choose. The question is, what happens when the set Libra funds used for incentive programs get used up? Will the network then look to use transaction fees (similar to interchange) to fuel future rewards? Given the open-source of the Libra Blockchain, will Calibra compete against other wallet providers?Facebook has reiterated that any company will be free to build business and wallet services on the network. From this perspective, we wonder if you could see one of the payments players (like Paypal) look to develop a wallet or service that can store and process the Libra cryptocurrency. What regulatory issues are at play?FinCEN's recentlyissued guidancein May on Application of FinCEN’s Regulations to Certain Business Models Involving Convertible Virtual Currencies, reiterates that a cryptocurrency business might be engaged in money transmission, which is defined as receiving value and transmitting that value to another person or location. While Calibra filed for inclusion as MSB registrant, we wonder if there are other regulatory compliance issues (GDPR, PSD2, etc.) they have yet to work out. Could Facebook look to insure funds custodied in the wallets? And then there'sthis that just hit the tape: U.S Rep. Maxine Waters calling for a halt in Facebook's development of its cryptocurrency. Source:FinCEN MSB Registrant Search: # 31000141265767 What are the logistics of the unbanked getting on-ramped into the system?Presumably, the majority of unbanked don't have access to the banking system due to a lack of proper state issued ID. Given Calibra will have to KYC all users into the system, how will they work around this issue? Facebookpubliclyannounced that it had formed a new team dedicated to blockchain technology in May 2018, led by David Marcus, the former head of Facebook Messenger. Facebook played an instrumental leadership role in the build out of the Libra Association and the Libra Blockchain, working with other Founding Members leading up to the initial announcement. While association governance is spread across its members, Facebook expects to maintain its core leadership role through 2019, and up until the Libra network officially launches. We've analyzed the number of Facebook employees working on 'Blockchain' via LinkedIn profiles. Of note, the average duration for working at Facebook on the blockchain team is 2.1 years, while the average age of blockchain employees is 36.7 years. The bulk of the Blockchain sits within Engineering, Business Development, and Research roles. Source: The Block, LinkedIn The Facebook Blockchain Leadership Team David Marcus is the vice president of blockchain at Facebook. In May 2018, Facebook publicly announced that David Marcus would lead its blockchain efforts. Prior to leading the Facebook blockchain team, Marcus was the head of Facebook Messenger. Before joining Facebook, Marcus was president at PayPal. Marcus also founded Zong, a mobile payments company in 2008, which was acquired by PayPal for $240 million. Kevin Weil is the vice president of product at Facebook’s blockchain team. Prior to joining the Facebook blockchain team in May 2018, he was vice president of product at Instagram. Weil also held senior roles at Twitter, where he was responsible for product, product marketing and design for Vine and Periscope, as well as Coolris, where he was its engineering lead. Tomer Barel is vice president of risk & operations at Facebook’s blockchain team. Prior to joining the Facebook blockchain team in May 2018, he was an executive vice president at PayPal. Barel was also the vice president of business development at 3DV Systems, a video imaging technology firm, and an associate at McKinsey & Company, a consulting firm. James Everingham is the head of engineering at Facebook’s blockchain team. Prior to joining the Facebook blockchain team in May 2018, he was the head of engineering at Instagram. Everingham also held senior roles at Yahoo and Luminate. Christina Smedley is the head of brand & marketing at Facebook’s blockchain team. Prior to joining the Facebook blockchain team in May 2018, she managed communications for Facebook Messenger. Smedley also held senior roles at PayPal and Edelman, a marketing and advertising firm. Morgan Beller is the head of strategy at Facebook’s blockchain team. Prior to joining Facebook, Beller led corporate development & strategy at Medium. Beller was also a partner at Andreessen Horowitz and a product manager at eBay.
FAA Says Boeing to Revise Its Analysis of Max Software Fix (Bloomberg) -- The U.S. Federal Aviation Administration says Boeing Co. will likely have to revise its analysis of the fixes proposed for the grounded 737 Max before the jet can be returned to service. Boeing has prepared a draft “integrated system safety analysis” for the 737 Max’s fixes, but the FAA expects the planemaker will have to make changes before it will be approved, according to an emailed memo to Congressional staff obtained by Bloomberg News. The memo helps shed light on why the fix, which Boeing initially said would be completed months ago, still hasn’t been formally submitted to FAA for approval. “Based on our initial review, we expect that Boeing will need to revise this document prior to formal FAA submittal,” said the memo written Tuesday by Philip Newman, the agency’s assistant administrator for government and industry affairs. Testing of new software designed to prevent the two fatal crashes on Boeing’s best-selling jet is also still underway with FAA oversight, according to the memo. In a statement, Chicago-based Boeing said it was “committed to providing the FAA and global regulators the information needed to support their approval to return the 737 Max to service safely.” The 737 Max family of jetliners was grounded March 13 after the second fatal crash within five months. In both accidents, which killed a combined 346 people, a malfunctioning safety system was repeatedly driving down the plane’s nose and pilots couldn’t respond. Boeing is redesigning the Maneuvering Characteristics Augmentation System, or MCAS, to prevent it from activating repeatedly and is adding inputs from a second sensor to make it less prone to failure. The manufacturer and FAA will also suggest new pilot training and emergency procedures. In addition to FAA’s review of the Boeing work on the 737 Max, a separate panel of experts known as the Technical Advisory Board is conducting its own assessment of the fix. (Updates with Boeing comment in sixth paragraph.) To contact the reporters on this story: Shaun Courtney in Washington at scourtney19@bloomberg.net;Alan Levin in Washington at alevin24@bloomberg.net To contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net, Susan Warren For more articles like this, please visit us atbloomberg.com ©2019 Bloomberg L.P.
Do Insiders Own Lots Of Shares In Sheng Siong Group Ltd (SGX:OV8)? Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! A look at the shareholders of Sheng Siong Group Ltd (SGX:OV8) can tell us which group is most powerful. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.' With a market capitalization of S$1.6b, Sheng Siong Group is a decent size, so it is probably on the radar of institutional investors. Our analysis of the ownership of the company, below, shows that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about OV8. View our latest analysis for Sheng Siong Group Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index. Sheng Siong Group already has institutions on the share registry. Indeed, they own 15% of the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone, since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Sheng Siong Group, (below). Of course, keep in mind that there are other factors to consider, too. Hedge funds don't have many shares in Sheng Siong Group. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too. The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO. Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group. Our most recent data indicates that insiders own a reasonable proportion of Sheng Siong Group Ltd. It has a market capitalization of just S$1.6b, and insiders have S$448m worth of shares in their own names. That's quite significant. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You canclick here to see if those insiders have been buying or selling. With a 27% ownership, the general public have some degree of sway over OV8. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run. We can see that Private Companies own 30%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company. While it is well worth considering the different groups that own a company, there are other factors that are even more important. I like to dive deeperinto how a company has performed in the past. You can findhistoric revenue and earnings in thisdetailed graph. If you would prefer discover what analysts are predicting in terms of future growth, do not miss thisfreereport on analyst forecasts. NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Global Policy Makers Are Up in Arms About Facebook’s Libra Coin ByCCN Markets:Facebookis already under fire from regulators less than a day after officially revealing itscryptocurrency whitepaper. Based on three separate talks, it’s clear top government and bank officials from around the world are preparing to regulate Facebook Libra. Cryptocurrencies likebitcointranscend national borders, and project Libra is looking to cash in on this edge that no other central bank can lay claim to. Regulators are on high alert as Facebook ambitiously aims to be the first global central bank. In Portugal at the ECB’s annual symposium, Bank of England Governor Mark Carney earlier today called on G7 countries to heavily scrutinize the Libra launch. He iscited in Bloombergas saying: “Anything that works in this world will become instantly systemic and will have to be subject to the highest standards of regulation. We will look at it very closely and in a coordinated fashion at the level of the G-7, the BIS, the FSB and the IMF. So open mind, but not open door.” Last year, thegovernor openly dismissed cryptocurrencybut appears to be coming round now as project Libra finally moves forward. Read the full story on CCN.com.
Oil prices little changed despite U.S. crude stock draw By Laila Kearney NEW YORK (Reuters) - Oil futures were mostly steady on Wednesday as price support from a larger-than-expected decline in U.S. crude inventories was countered by a lull in equities. Brent crude futures settled at $61.82 a barrel, shedding 32 cents, or 0.5%. U.S. West Texas Intermediate (WTI) crude futures settled at $53.76 a barrel, falling 14 cents, or 0.26%. On Tuesday, WTI had recorded its biggest daily rise since early January. After swelling to near two-year highs, U.S. crude stocks fell 3.1 million barrels last week, compared with analysts' expectations for a draw of 1.1 million barrels, the Energy Information Administration (EIA) said. Refined products also posted surprise drawdowns due to a rise in refining and crude exports, as well as a drop in crude production. Oil prices briefly turned positive after the EIA report. "I think, overall, it was a positive report," said Phil Flynn, analyst at Price Futures Group in Chicago. "Even with the bullish report, after the big run-up yesterday, the market is hesitant to drive a lot higher." A nearly flat day on Wall Street also limited oil prices, which often follow equities. [.N] Equities held steady after the U.S. Federal Reserve's decision to hold interest rates steady, as expected, after concluding a two-day policy meeting on Wednesday. "The crude oil market is correlating to that," said Bob Yawger, director of energy futures at Mizuho in New York. "I don't think it's more than a sentiment thing along those lines." Tensions remain high in the Middle East after last week's tanker attacks, which boosted oil prices. Fears of a confrontation between Iran and the United States have mounted, with Washington blaming Tehran, which has denied any role. Trump said he was prepared to take military action to stop Iran having a nuclear bomb but left open whether he would approve the use of force to protect Gulf oil supplies. Story continues Oil markets, however, largely shrugged off a rocket attack on a site in southern Iraq used by foreign oil companies, including U.S. energy giant ExxonMobil. Three people were wounded in the attack, which threatened to further escalate U.S.-Iran tensions in the region. Members of the Organization of the Petroleum Exporting Countries agreed to meet on July 1, followed by a meeting with non-OPEC allies on July 2, after weeks of wrangling over dates. OPEC and its allies will discuss whether to extend a deal on cutting 1.2 million barrels per day of production that runs out this month. (Additional reporting by Shadia Nasralla in London and Aaron Sheldrick in TOKYO; Editing by Marguerita Choy and Alistair Bell)
Here's What We Think About MNF Group Limited's (ASX:MNF) CEO Pay Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! In 2012 Rene Sugo was appointed CEO of MNF Group Limited (ASX:MNF). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO. View our latest analysis for MNF Group Our data indicates that MNF Group Limited is worth AU$250m, and total annual CEO compensation is AU$684k. (This is based on the year to June 2018). We think total compensation is more important but we note that the CEO salary is lower, at AU$517k. When we examined a selection of companies with market caps ranging from AU$146m to AU$583m, we found the median CEO total compensation was AU$757k. So Rene Sugo is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context. The graphic below shows how CEO compensation at MNF Group has changed from year to year. Over the last three years MNF Group Limited has grown its earnings per share (EPS) by an average of 5.0% per year (using a line of best fit). It saw its revenue drop -6.8% over the last year. I generally like to see a little revenue growth, but it is good to see EPS growth. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Shareholders might be interested inthisfreevisualization of analyst forecasts. Since shareholders would have lost about 11% over three years, some MNF Group Limited shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation. Remuneration for Rene Sugo is close enough to the median pay for a CEO of a similar sized company . We would like to see somewhat stronger per share growth. And it's hard to argue that the returns over the last three years have delighted. So many would argue that the CEO is certainly not underpaid. CEO compensation is one thing, but it is also interesting tocheck if the CEO is buying or selling MNF Group (free visualization of insider trades). Important note:MNF Group may not be the best stock to buy. You might find somethingbetterinthis list of interesting companies with high ROE and low debt. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Does Deccan Cements Limited's (NSE:DECCANCE) Past Performance Indicate A Stronger Future? Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! For long-term investors, assessing earnings trend over time and against industry benchmarks is more beneficial than examining a single earnings announcement at a point in time. Investors may find my commentary, albeit very high-level and brief, on Deccan Cements Limited (NSE:DECCANCE) useful as an attempt to give more color around how Deccan Cements is currently performing. See our latest analysis for Deccan Cements DECCANCE's trailing twelve-month earnings (from 31 March 2019) of ₹461m has jumped 19% compared to the previous year. Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 19%, indicating the rate at which DECCANCE is growing has accelerated. How has it been able to do this? Let's see whether it is merely attributable to an industry uplift, or if Deccan Cements has seen some company-specific growth. In terms of returns from investment, Deccan Cements has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. However, its return on assets (ROA) of 8.7% exceeds the IN Basic Materials industry of 5.8%, indicating Deccan Cements has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Deccan Cements’s debt level, has declined over the past 3 years from 23% to 14%. While past data is useful, it doesn’t tell the whole story. While Deccan Cements has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I recommend you continue to research Deccan Cements to get a better picture of the stock by looking at: 1. Future Outlook: What are well-informed industry analysts predicting for DECCANCE’s future growth? Take a look at ourfree research report of analyst consensusfor DECCANCE’s outlook. 2. Financial Health: Are DECCANCE’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out ourfinancial health checks here. 3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore ourfree list of these great stocks here. NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 2019. This may not be consistent with full year annual report figures. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Global stocks gain, dollar weakens after Fed signals possible rate cuts By Lewis Krauskopf NEW YORK (Reuters) - A gauge of global stock markets strengthened on Wednesday, bolstered by gains on Wall Street, and benchmark U.S. Treasury yields and the dollar dropped after the Federal Reserve signaled possible interest rate cuts over the rest of this year. The U.S. central bank held interest rates steady, as expected, but said it "will act as appropriate to sustain" the country's economic expansion as it approaches the 10-year mark and dropped a promise to be "patient" in adjusting rates. The market expects the Fed could cut rates as soon as its next meeting, in July. "I think it’s right in line with market expectations, puts a July cut in play,” said Brett Ewing, chief market strategist at First Franklin Financial Services in Tallahassee, Florida. Nearly half of the Fed's policymakers now show a willingness to lower borrowing costs over the next six months. Even policymakers who did not write down a forecast for a rate cut this year believe "that the case for somewhat more accommodative policy has strengthened," Fed Chairman Jerome Powell said in a news conference following the meeting. Investors' hopes that the Fed would soon cut interest rates were fueled on Tuesday when European Central Bank President Mario Draghi hinted at economic stimulus, comments that drove up stocks and weakened yields. "You have global central banks in a nearly orchestrated positioning, prepared to act if respective economies falter," said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey. "Clearly the market is embracing it." MSCI's gauge of stocks across the globe gained 0.70%. The index rose to its highest point in six weeks. On Wall Street, the Dow Jones Industrial Average rose 38.46 points, or 0.15%, to 26,504, the S&P 500 gained 8.71 points, or 0.30%, to 2,926.46 and the Nasdaq Composite added 33.44 points, or 0.42%, to 7,987.32. The pan-European STOXX 600 index ended little changed ahead of the Fed decision. Investors will now turn attention to U.S.-China trade relations, with a meeting between U.S. President Donald Trump and his Chinese counterpart Xi Jinping set for next week's G20 meeting in Japan. “You have the G20 summit coming up in a week and a half, said Eric Donovan, managing director, OTC FX-interest rates at INTL FCStone in New York. "It’s kind of ridiculous to think that the Fed was going to cut today." Benchmark 10-year U.S. notes last rose 8/32 in price to yield 2.0302%, from 2.058% late on Tuesday. The dollar index, which measures the greenback against a basket of currencies, fell 0.41%, with the euro up 0.31% to $1.1226. U.S. crude settled down 0.3% at $53.76 a barrel, and Brent settled at $61.82 a barrel, down 0.5%. (Reporting by Lewis Krauskopf; Additional reporting by Sinéad Carew, Herb Lash, Gertrude Chavez-Dreyfuss in New York and Sujata Rao in London; Editing by Lisa Shumaker and Leslie Adler)
Can Ryder Ride Out a Recession? Its Management Thinks So. Investors are making a pretty big statement aboutRyder System(NYSE: R). Simply put, given the nearly 40% decline in its stock price since the start of 2018, Wall Street appear unimpressed with the truck rental and logistics company's prospects. The thing is, over that span, Ryder's trailing 12-month revenues have actually been trending higher. And while its earnings fell significantly in 2018, that was largely due to a major one-time benefit it booked in 2017 due to the tax code overhaul. Pull that impact out, and Ryder's earnings were up 28% in 2018. They rose another 16% year over year in the first quarter of 2019, as well. Are investors missing something here? It looks like they may be. Trucking tends to be a highlycyclicalindustry. That makes sense: Trucks move goods from where they are made or enter a country to where they are used or sold to end customers. If economic activity is declining, then it's likely that fewer trucks will be making deliveries because the products simply aren't needed. Such downturns can happen pretty quickly as well, leading to swift and material swings on the top and bottom lines for trucking companies. Image source: Getty Images With 90% of its revenues coming from North America, Ryder's health is tied closely to the continent's broader economy. Since the current U.S. expansion is getting a little long in the tooth, it makes sense that investors would be a bit worried about the company's outlook -- especially as headwinds including theU.S./China trade warcontinue to mount. In fact, looking back to the Great Recession, it appears that there's a pretty good reason to worry. Over that two year span, the company's revenues fell roughly 20% and earnings declined around 70%. The recent slump in Ryder's stock price suggests that investors expect the next recession to begin soon, and think it could hit the trucker pretty hard. R Revenue (TTM)data byYCharts But there's another side to this story. For example, although the last recession hurt Ryder, its results quickly bounced back. And when you look at the company's business today, it appears to be well prepared for a downturn. The company breaks its business down into three segments: fleet management solutions (roughly 60% of revenues); supply chain solutions (25%); and dedicated transportation solutions (the rest). It basically covers everything from operating trucks on behalf of others to route scheduling to warehousing (including serving giant companies such asCVSandAnheuser-Busch InBev). All in all, management believes it has a roughly $1.3 trillion addressable market. And it estimates it only currently serves around 1% of that market. That's an interesting figure, because Ryder's management also believes there are a number of factors (such as driver shortages, and technological advances like lower-emission vehicles) that favor increased outsourcing in the trucking space. With such a broad portfolio of offerings, it can step in to help just about anyone. So while the company's revenues may decline during a downturn, an economic rough patch could actually be a great time for it to expand its reach. Such growth might come from buying weaker competitors (it acquired six companies between 2007 and 2009) or from acquiring new customers that conclude that handling their own trucking needs isn't worth the cost and effort. Ryder is in pretty good shape to execute such an expansion strategy in a downturn. Its debt-to-equity ratio is around 2.2, and its debt-to-EBITDAratio is around 3.1. Both are higher than they were through the 2007 to 2009 recession, but not outlandishly high. Perhaps more important, the company's debt is investment-grade rated and well within key debt covenants. Based on that, it doesn't appear that access to capital will be a problem. Given the condition of itsbalance sheet, Ryder should both be able to handle a downturn and take advantage of any opportunities it creates. But here's the more important piece. The company's business, as management has been trying to highlight lately, is built on long-term contracts. Today, roughly 86% of revenues are tied to contracts with average lengths of between five and seven years. Generally, recessions are much shorter than the company's normal contract agreement. So Ryder might take a hit during a recession, but given that so much of its revenue is contracted, the hit probably won't be as bad as investors now appear to expect. And, with those customers locked in, the company's rebound should track pretty closely with the subsequent economic uptick. In short, Ryder is likely to come out of the next recession a better company. R Dividend Yield (TTM)data byYCharts Ryder's stock price decline, meanwhile, has pushed its dividend yield up above 4% -- a level it hasn't hit since the last recession. However, the company has increased its dividend annually for 14 consecutive years, and the payout ratio is a reasonable 40% or so. With a business and business model built to survive economic downturns, that's not surprising. But it is important to remember as you look at the recent steep share price drop. To be sure, a recession would hurt Ryder's short-term results, but it appears unlikely that one would completely derail the trucker's business. In fact, a downturn would probably benefit the company over the long run. So if you are an income-focused investor who can handle some near-term uncertainty, this stock's tumble could be a good opportunity for you to pick it up at a high yield. More From The Motley Fool • 10 Best Stocks to Buy Today • The $16,728 Social Security Bonus You Cannot Afford to Miss • 20 of the Top Stocks to Buy (Including the Two Every Investor Should Own) • What Is an ETF? • 5 Recession-Proof Stocks • How to Beat the Market Reuben Gregg Brewerhas no position in any of the stocks mentioned. The Motley Fool recommends CVS Health. The Motley Fool has adisclosure policy.
Did Business Growth Power Huhtamaki PPL's (NSE:PAPERPROD) Share Price Gain of 107%? Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But on the bright side, you can make far more than 100% on a really good stock. Long termHuhtamaki PPL Limited(NSE:PAPERPROD) shareholders would be well aware of this, since the stock is up 107% in five years. It's also good to see the share price up 40% over the last quarter. See our latest analysis for Huhtamaki PPL While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time. During five years of share price growth, Huhtamaki PPL actually saw its EPS drop 2.7% per year. By glancing at these numbers, we'd posit that the decline in earnings per share is not representative of how the business has changed over the years. Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics. We doubt the modest 1.1% dividend yield is attracting many buyers to the stock. In contrast revenue growth of 13% per year is probably viewed as evidence that Huhtamaki PPL is growing, a real positive. It's quite possible that management are prioritizing revenue growth over EPS growth at the moment. Depicted in the graphic below, you'll see revenue and earnings over time. If you want more detail, you can click on the chart itself. Balance sheet strength is crucual. It might be well worthwhile taking a look at ourfreereport on how its financial position has changed over time. When looking at investment returns, it is important to consider the difference betweentotal shareholder return(TSR) andshare price return. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of Huhtamaki PPL, it has a TSR of 119% for the last 5 years. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted thetotalshareholder return. Investors in Huhtamaki PPL had a tough year, with a total loss of 2.4% (including dividends), against a market gain of about 0.6%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Longer term investors wouldn't be so upset, since they would have made 17%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. Before forming an opinion on Huhtamaki PPL you might want to consider these3 valuation metrics. For those who like to findwinning investmentsthisfreelist of growing companies with recent insider purchasing, could be just the ticket. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on IN exchanges. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Dollar near two-week high before Fed as dovish ECB supports By Shinichi Saoshiro TOKYO (Reuters) - The dollar held near a two-week high early on Wednesday ahead of the Federal Reserve's closely-watched policy decision later in the day, supported by a surprisingly dovish European Central Bank and bearish eurozone economic data. The dollar index versus a basket of six major currencies was steady at 97.615 after climbing to 97.766 on Tuesday, its highest level since June 3. Focus was on whether the greenback can retain its strength after the Fed's two-day policy meeting ends later on Wednesday. The Fed is widely expected to stand pat on monetary policy this time but open the door for an interest rate cut at the next meeting in July. "The market has mostly priced in a July rate cut and unless there is a big dovish surprise at the FOMC (Federal Open Market Committee) meeting it is hard to imagine the dollar coming under downward pressure," said Takuya Kanda, general manager at Gaitame.Com Research Institute. "But there will be a lot to digest at this FOMC, such as the Fed's views on the economy and prices and Chair (Jerome) Powell's comments. It is hard to tell which of these factors the market decides to latch on and react to." The prospect of the U.S. central bank lowering rates has also driven benchmark Treasury yields to near two-year lows while boosting equity prices. The euro was steady at $1.1198 after shedding 0.2% overnight, when it brushed a 15-day trough of $1.1181. The common currency dropped along with a decline in German government bond yields, which hit a new record low on Tuesday, after ECB chief Mario Draghi said the bank will need to ease policy again if inflation doesn't head back to its target. A closely watched survey by the ZEW Institute showing that the mood among German investors had deteriorated sharply in June also weighed on the euro. The Australian dollar was a shade higher at $0.6884 after mounting a rebound the previous day, when it pulled away from a 5-1/2-month low of $0.6832 set on growing expectations that the Reserve Bank of Australia may have to cut rates again. The Aussie, along with the Chinese yuan, got a lift on Tuesday as China and the United States rekindled trade talks ahead of a meeting next week between Presidents Donald Trump and Xi Jinping. The Chinese yuan extended overnight gains in offshore trade to reach 6.8953 per dollar, its strongest since May 14. The dollar gained 0.1% to 108.555 yen after losing modest ground overnight. (Editing by Shri Navaratnam) View comments
Investors Who Bought Sunflag Iron and Steel (NSE:SUNFLAG) Shares Three Years Ago Are Now Up 53% Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! Sunflag Iron and Steel Company Limited(NSE:SUNFLAG) shareholders might be concerned after seeing the share price drop 23% in the last quarter. But don't let that distract from the very nice return generated over three years. In the last three years the share price is up, 53%: better than the market. See our latest analysis for Sunflag Iron and Steel To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time. Sunflag Iron and Steel was able to grow its EPS at 27% per year over three years, sending the share price higher. This EPS growth is higher than the 15% average annual increase in the share price. Therefore, it seems the market has moderated its expectations for growth, somewhat. This cautious sentiment is reflected in its (fairly low) P/E ratio of 6.01. The image below shows how EPS has tracked over time (if you click on the image you can see greater detail). Thisfreeinteractive report on Sunflag Iron and Steel'searnings, revenue and cash flowis a great place to start, if you want to investigate the stock further. Investors in Sunflag Iron and Steel had a tough year, with a total loss of 44% (including dividends), against a market gain of about 0.6%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 4.8%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. Most investors take the time to check the data on insider transactions. You canclick here to see if insiders have been buying or selling. Of course,you might find a fantastic investment by looking elsewhere.So take a peek at thisfreelist of companies we expect will grow earnings. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on IN exchanges. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
San Francisco moves closer to nation's 1st e-cigarette ban SAN FRANCISCO (AP) — San Francisco supervisors moved a step closer Tuesday to becoming the first city in the U.S. to ban all sales of electronic cigarettes to crack down on youth vaping. Supervisors unanimously approved a ban on the sale and distribution of e-cigarettes. They also endorsed a ban on manufacturing of e-cigarettes on city property. The measures will require a subsequent vote before becoming law. "We spent the '90s battling big tobacco, and now we see its new form in e-cigarettes," Supervisor Shamann Walton said. The supervisors acknowledged that the legislation would not entirely prevent youth vaping, but they hoped it would be a start. "This is about thinking about the next generation of users and thinking about protecting the overall health and sending a message to the rest of the state and the country: Follow our lead," Supervisor Ahsha Safaí said. City Attorney Dennis Herrera said young people "have almost indiscriminate access to a product that shouldn't even be on the market." Because the Food and Drug Administration has not yet completed a study to assess the public health consequences of e-cigarettes and approved or rejected them, he said, "it's unfortunately falling to states and localities to step into the breach." Most experts agree that e-cigarettes are less harmful than the paper-and-tobacco variety because they do not produce all the cancer-causing byproducts found in cigarette smoke. But researchers say they are only beginning to understand the risks of e-cigarettes, which they think may damage the lungs and blood vessels. Since 2014, e-cigarettes have been the most commonly used tobacco product among young people in the country. Last year, 1 in 5 U.S. high school students reported vaping in the previous month, according to a government survey . FDA spokesman Michael Felberbaum said in a statement that the agency will continue to fight e-cigarette use, including preventing youth access to the products, acting against manufacturers and retailers who illegally market or sell the products to minors and educating young people about health risks. Leading San Francisco-based e-cigarette company Juul frames vaping as a healthier alternative to smoking tobacco. Juul has said it has taken steps to deter children from using its products. The company said in a statement that it has made its online age-verification process more robust and shut down its Instagram and Facebook accounts to try to discourage vaping by those under 21. "But the prohibition of vapor products for all adults in San Francisco will not effectively address underage use and will leave cigarettes on shelves as the only choice for adult smokers, even though they kill 40,000 Californians every year," Juul spokesman Ted Kwong said. Story continues Tuesday's vote also sets the stage for a November ballot fight over e-cigarettes. Juul has already contributed $500,000 to the Coalition for Reasonable Vaping Regulation, which is set to gather signatures to put an initiative on the issue before voters. The American Vaping Association opposed San Francisco's proposal as well, saying adult smokers deserve access to less hazardous alternatives. "Going after youth is a step that you can take before taking these out of the hands of adults," said the association's president, Gregory Conley. Groups representing small businesses also opposed the measures, which they said could force stores to close. "We need to enforce the rules that we have in place already," said Carlos Solórzano, CEO of the Hispanic Chamber of Commerce of San Francisco. Walton said he would establish a working group to support small businesses and address their concerns. Although San Francisco's ban is unlike any other in the country, the Public Health Law Center at Mitchell Hamline School of Law reports that all but two states have at least one law restricting youth access to e-cigarettes. City voters last year approved a ban on sales of candy and fruit-flavored tobacco products. Stanton Glantz, a professor of medicine at the University of California San Francisco Center for Tobacco Control and Research and a supporter of the measures, said e-cigarettes are associated with heart attacks, strokes and lung disease. The presence of e-cigarettes, he said, has "completely reversed the progress we've made in youth smoking in the last few years." View comments
PG&E to pay $1 billion to governments for wildfire damage SACRAMENTO, Calif. (AP) — A California utility agreed Tuesday to pay $1 billion to 14 local governments to cover damages from a series of deadly wildfires caused by its downed power lines. The settlement is a sliver of the more than $30 billion in potential damages Pacific Gas & Electric is facing in lawsuits filed by local governments, insurance companies and private property owners. More than half of the $1 billion in the agreement would go to four governments impacted by a 2018 fire that killed 85 people and destroyed nearly 14,000 homes in Northern California. A total of $270 million would go to Paradise, which was mostly destroyed in the blaze. The town had 26,000 residents before the fire and now has less than 3,000 people. It has lost more than 90% of its tax revenue. "There is some relief and hope in knowing that we will have some financial stability," Paradise Town Manager Lauren Gill said. "We can't do disaster recovery and rebuild the town if we don't have people to do it." The settlement also covers a 2015 fire in Calaveras County and a series of 2017 fires in wine country. PG&E filed for bankruptcy in January. The agreement would resolve claims from some local governments, but it still must be approved by a bankruptcy court. That likely won't happen until lawsuits by insurance companies and private property owners are resolved. "The bankruptcy court approval is not trivial," said Mike Danko, part of a group of attorneys who represent about 2,800 wildfire victims in a lawsuit against PG&E. Danko said they are "definitely not" close to resolving the lawsuit. PG&E spokesman Paul Doherty called the settlement "an important first step toward an orderly, fair and expeditious resolution of wildfire claims." "We remain focused on supporting our customers and communities impacted by wildfires and helping them recover and rebuild," he said. Story continues High winds knocking down power lines during hot, dry weather have been blamed for starting several of the state's most destructive wildfires. Last month, regulators agreed to let utilities temporarily cut off electricity to possibly hundreds of thousands of customers during peak fire conditions to avoid starting more wildfires. The outages could mean multiday blackouts for cities as large as San Francisco and San Jose, Northern California's major power provider warned in a recent filing with the utilities commission. "Nobody who lives in the wildfire zone should consider themselves to have reliable electricity. They should prepare accordingly," Mike Picker, president of the California Public Utilities Commission, told the Sacramento Press Club on Tuesday. California's other two investor-owned utilities have also warned that wildfire liabilities could force rate increases later this year. State lawmakers are considering legislation that would set up a fund to help utility companies pay damages related to wildfires caused by their equipment. California state Sen. Bill Dodd, a Democrat from Napa, said the fund could total anywhere between $24 billion and $50 billion, mostly paid for by utilities and their shareholders. "It's important that we put together a program that ratepayers aren't the victims once again," he said.
Bitcoin Falls as Facebook’s Plan to Launch New Crypto Faces Privacy Concerns Investing.com - Bitcoin and other major cryptocurrency dropped on Wednesday in Asia following reports that the U.S. House Financial Services Committee asked the company to halt development of its crypto coin. Bitcoin dropped 1.0% to $9,159.5 by 12:30 AM ET (04:30 GMT). Ethereum fell 1.5% to $266.26, while XRP was down 4.1% to 0.42885. Litecoin outperform its peers today and gained 1.4% to $134.595. The fall in prices came after Maxine Waters, chairwoman of the U.S. House Financial Services Committee, requested Facebook (NASDAQ:FB) to stop development of its new cryptocurrency Libra until lawmakers and regulators have properly reviewed the project. "With the announcement that it plans to create a cryptocurrency, Facebook is continuing its unchecked expansion and extending its reach into the lives of its users," Waters said in a statement. “Given the company’s troubled past, I am requesting that Facebook agree to a moratorium on any movement forward on developing a cryptocurrency until Congress and regulators have the opportunity to examine these issues and take action,” she added. The news came after the social media giant officially revealed details of its cryptocurrency plans. The company said it has linked with 28 partners in a Geneva-based entity called the Libra Association, which will govern the new digital coin, while Facebook itself created a subsidiary called Calibra to offer digital wallets for the cryptocurrency. The new digital coin is expected to launch in the first half of 2020. Reports earlier said France has urged G7 central bankers to prepare a report on the project, while a German member of the European Parliament warned that regulators should be on high alert. Related Articles Euroclear to press ahead with blockchain pilot for commercial paper Bitcoin Climbs Above 9,174.3 Level, Up 0.69% TRON Announces MainNet Upgrade Designed to Enhance Security and Convenience
Former Gearbox employee provides proof Randy Pitchford diverted funds to personal company Mike Futter,Wed, 19 Jun 2019 00:45:00 A new filing in the ongoing legal struggle between former Gearbox corporate counsel Wade Callender and studio president Randy Pitchford provides evidence for one of the suit’s most damning accusations. In late 2018, Pitchford sued Callender over a series of financial matters that include allegations that Callender misused company credit cards for personal expenses and destroyed evidence related to a home loan funded by the studio. Callender countersued a month later, in December 2018, presenting a salacious account of a USB drive full of pornography and sensitive corporate documents left by Pitchford at a Medieval Times restaurant. One of many allegations included in the suit indicates that Pitchford syphoned $12 million inBorderlandsbonuses intended for the studio. At the time this came to light, in January 2019, Gearbox vehemently denied the entirety of Callender’s accusations. “The allegations made by a disgruntled former employee are absurd, with no basis in reality or law,” the studiotold Kotaku. “We look forward to addressing this meritless lawsuit in court and have no further comment at this time.” On June 12, 2019, Callender’s attorneys submitted a new 76-page filing that includes an amendment to theBorderlands 3contract between Gearbox and 2K (originally dated November 29, 2016) that references the $12 million (plus another $3 million for remaining Gearbox co-founder and chief financial officer Stephen Bahl). This contract amendment includes a clause titled “Bonus for satisfaction of dedicated executive requirement.” This clause states that the Developer (Gearbox Software, LLC, as defined by the contract) is eligible for a “recoupable” $15 million bonus. In other words, upon satisfaction of the terms, publisher 2K Games would pay out $15 million to Gearbox split into three payments of $5 million each. These are funds earned by Pitchford and Bahl in their roles as Gearbox employees. 2K Games very much wanted Pitchford and Bahl involved in the project, and the clause ties the $15 million to three key development milestones (including “release to master” or what is commonly called “going gold”), their “attentions toward the development and success of”Borderlands 3,and their personal engagement for 30 hours per week. The word “recoupable” is important, because it indicates that the bonus was part of 2K’s funding ofBorderlands 3’sdevelopment and, like most publisher expenses, must be paid back by way of royalties after the game ships. In Callender’s original complaint, he alleged the misappropriation of funds. In his most recent amended petition, he and his attorneys have provided both the original contract clause and an amendment to the “Bonus for satisfaction of dedicated executive requirement” clause. The March 1, 2017 amendment authorizes 2K Games to divert Pitchford’s $12 million recoupable bonus to his personal company, Pitchford Entertainment, Media, and Magic. The document, which is redacted, does clearly bear signatures for both Gearbox and 2K representatives. In addition, the latest amendment specifically points to Gearbox’s repeated insistence that “Callender was lying so egregiously” that the studio threatened to take action against Callender by filing a grievance against him with the State Bar of Texas. Gearbox has not followed through on this threat. While we now have proof that funds were originally intended to be paid to Gearbox have since been diverted to Pitchford’s company, there are factors that we still don’t fully understand. Pitchford is a 50% owner of Gearbox Software LLC and has 51% operational control (with Bahl controlling the rest). According to attorney Richard Hoeg of The Hoeg Law Firm, the ownership situation could confound the matter. “If the royalty were just owed to Gearbox on the whole and then Randy diverted it, it would look very much like stealing,” Hoeg told GameDaily via email. “As an officer or director you owe a duty to protect the assets of the company. That’s usually divided into a duty of loyalty and a duty of care. Here the duty of loyalty is very much implicated, as one could argue—as they are in fact arguing—that Randy took a business opportunity directly out of the hands of the company he owes this duty towards." However, because the clause is written to specifically name Pitchford and Bahl, a case could be made that he earned those funds directly. “It was likely Randy negotiating the agreement directly, so that brings up its own concerns, especially if the plan was always for Randy to receive this $12 million,” Hoeg continued. “In fact, if he weren’t in functional control of the company, I wouldn’t doubt that if such a provision were in an agreement of this type, that he could go to his board and CEO and say, I deserve a portion—or perhaps even all—of such bonus amount. The issue is that he is in control of the company, and I’m not sure they went through the proper corporate processes to ‘cleanse’ any such decision to divert the funds to his magic company. Such a cleansing action would ordinarily take place through the approval of “disinterested” directors and/or stockholders. In other words, if the folks that are not directly benefiting from the contract or payment approve of it, generally, the law is going to be okay with it. It’s the kind of thing a general counsel would recommend.” With the new documents coming to light, Pitchford’s attorneys filed a motion to enforce a protective order the parties previously agreed upon to protect confidential documents between Gearbox and 2K Games. That motion was denied, as Callender’s counsel pointed out that these documents were not part of discovery and, therefore, could not be included in the protective order. We reached out to Gearbox to offer the studio a chance to update its categorical denial of Callender’s allegations. The studio declined. However, publisher 2K did share a statement on the matter. “We don’t publicly discuss the details of confidential business terms between 2K and our partners,” a company representative told GameDaily via email. “In addition, it is our practice not to comment on our business partners’ legal matters.” A jury trial is currently set for January 7, 2020. However, a settlement may preclude the need for a public brawl. This is an emotionally charged feud between two childhood friends and former business partners amid an enormous marketing rollout for one of this fall’s most anticipated games. No matter who wins in front of a judge, Gearbox is losing in the court of public opinion. Each new element of this story that comes to lightovershadows the work of the studio’s developersand the long-awaitedBorderlands 3. • Gamedev.world aims to be the first global developers' conference • Ustwo head of studio Dan Gray steps down as CEO to focus on studio's creative projects • Magic Leap files lawsuit against former employee for 'breach of contract' and 'unfair competition' • Watch: The Secret Sauce of Living Games
Do Insiders Own Shares In Tirupati Forge Limited (NSE:TIRUPATIFL)? Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! Every investor in Tirupati Forge Limited (NSE:TIRUPATIFL) should be aware of the most powerful shareholder groups. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Warren Buffett said that he likes 'a business with enduring competitive advantages that is run by able and owner-oriented people'. So it's nice to see some insider ownership, because it may suggest that management is owner-oriented. Tirupati Forge is a smaller company with a market capitalization of ₹271m, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it's seems that institutions don't own shares in the company. Let's delve deeper into each type of owner, to discover more about TIRUPATIFL. Check out our latest analysis for Tirupati Forge Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them. There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. Alternatively, there might be something about the company that has kept institutional investors away. Tirupati Forge might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely. Tirupati Forge is not owned by hedge funds. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known. The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board; and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board, themselves. I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions. Our information suggests that insiders own more than half of Tirupati Forge Limited. This gives them effective control of the company. That means they own ₹186m worth of shares in the ₹271m company. That's quite meaningful. It is good to see this level of investment. You cancheck here to see if those insiders have been buying recently. With a 32% ownership, the general public have some degree of sway over TIRUPATIFL. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run. While it is well worth considering the different groups that own a company, there are other factors that are even more important. Many find it usefulto take an in depth look at how a company has performed in the past. You can accessthisdetailed graphof past earnings, revenue and cash flow. Of coursethis may not be the best stock to buy. Therefore, you may wish to see ourfreecollection of interesting prospects boasting favorable financials. NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
If You Had Bought Novatti Group (ASX:NOV) Stock A Year Ago, You'd Be Sitting On A 29% Loss, Today Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! Investors can approximate the average market return by buying an index fund. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. That downside risk was realized byNovatti Group Limited(ASX:NOV) shareholders over the last year, as the share price declined 29%. That's disappointing when you consider the market returned 11%. On the other hand, the stock is actuallyup21% over three years. The share price has dropped 32% in three months. View our latest analysis for Novatti Group Given that Novatti Group didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit. Novatti Group grew its revenue by 108% over the last year. That's well above most other pre-profit companies. The share price drop of 29% over twelve months would be considered disappointing by many, so you might argue the company is getting little credit for its impressive revenue growth.Prima facie, revenue growth like that should be a good thing, so it's worth checking whether losses have stabilized. Our monkey brains haven't evolved to think exponentially, so humans do tend to underestimate companies that have exponential growth. You can see how revenue and earnings have changed over time in the image below, (click on the chart to see cashflow). You can see how its balance sheet has strengthened (or weakened) over time in thisfreeinteractive graphic. Investors should note that there's a difference between Novatti Group's total shareholder return (TSR) and its share price change, which we've covered above. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Novatti Group hasn't been paying dividends, but its TSR of -29% exceeds its share price return of -29%, implying it has either spun-off a business, or raised capital at a discount; thereby providing additional value to shareholders. Over the last year, Novatti Group shareholders took a loss of 29%. In contrast the market gained about 11%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Fortunately the longer term story is brighter, with total returns averaging about 7.8% per year over three years. Sometimes when a good quality long term winner has a weak period, it's turns out to be an opportunity, but you really need to be sure that the quality is there. You might want to assessthis data-rich visualizationof its earnings, revenue and cash flow. If you like to buy stocks alongside management, then you might just love thisfreelist of companies. (Hint: insiders have been buying them). Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU exchanges. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Must Capital Announces Shares for Debt Transaction Toronto, Ontario--(Newsfile Corp. - June 18, 2019) - Must Capital Inc. (TSXV: MUST.H) (the "Company") announces that it intends to settle up to $500,000 of indebtedness (the "Debt Settlement") through the issuance of common shares of the Company (the "Shares"). Pursuant to the Debt Settlement, the Company would issue up to 6,349,206 Shares at a deemed price of $0.07875 per Share to companies controlled by certain directors and officers of the Company (the "Creditors") on account of management and consulting fees and accrued interest. The Company is choosing to settle the indebtedness through the issuance of Shares to preserve cash and improve the Company's balance sheet. The Company will be seeking disinterested shareholder approval for the Debt Settlement at its upcoming annual and special meeting currently scheduled for Friday, July 19, 2019. The issuance of the Shares to the Creditors is subject to board approval and the approval of the TSX Venture Exchange (the "TSXV"). All securities issued will be subject to a four month hold period which will expire on the date that is four months and one day from the date of issue. As certain insiders intend to participate in the Debt Settlement, it may be considered a "related party transaction" under Multilateral Instrument 61-101 -Protection of Minority Security Holders in Special Transactions("MI 61-101") and the TSXV. The Company intends to rely on the exemption from the formal valuation requirement of MI 61-101 contained in Section 5.5(g) on the basis that the Company is insolvent or in serious financial difficulty and the transaction is designed to improve the financial position of the Company. For further information contact: Must Capital Inc.Michele (Mike) MarrandinoPresident and Chief Executive OfficerTelephone #: (604) 722-5225 Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. The securities referred to in this news release have not been and will not be registered under the United States Securities Act of 1933, as amended, or any applicable state securities laws and may not be offered or sold in the United States absent such registration or an applicable exemption from such registration requirements. This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction. Any public offering of securities in the United States must be made by means of a prospectus containing detailed information about the Company and management, as well as financial statements. Forward-Looking Statements Certain statements contained in this press release constitute "forward-looking information" as such term is defined in applicable Canadian securities legislation. The words "may", "would", "could", "should", "potential", "will", "seek", "intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions as they relate to the Company, including the closing of the transactions contemplated herein, are intended to identify forward-looking information. All statements other than statements of historical fact may be forward-looking information. Such statements reflect the Company's current views and intentions with respect to future events, and current information available to the Company, and are subject to certain risks, uncertainties and assumptions. Material factors or assumptions were applied in providing forward-looking information, including the Company receiving approval of the transactions from the NEX trading board of the TSX Venture Exchange. Many factors could cause the actual results, performance or achievements that may be expressed or implied by such forward-looking information to vary from those described herein should one or more of these risks or uncertainties materialize. Should any factor affect the Company in an unexpected manner, or should assumptions underlying the forward-looking information prove incorrect, the actual results or events may differ materially from the results or events predicted. Any such forward-looking information is expressly qualified in its entirety by this cautionary statement. Moreover, the Company does not assume responsibility for the accuracy or completeness of such forward-looking information. The forward-looking information included in this press release is made as of the date of this press release and the Company undertakes no obligation to publicly update or revise any forward-looking information, other than as required by applicable law. To view the source version of this press release, please visithttps://www.newsfilecorp.com/release/45727
Has Remsons Industries Limited (NSE:REMSONSIND) Improved Earnings In Recent Times? Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! After reading Remsons Industries Limited's (NSE:REMSONSIND) most recent earnings announcement (31 March 2019), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is a crucial aspect. Below is a brief commentary on my key takeaways. See our latest analysis for Remsons Industries REMSONSIND's trailing twelve-month earnings (from 31 March 2019) of ₹34m has declined by -0.1% compared to the previous year. Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 55%, indicating the rate at which REMSONSIND is growing has slowed down. What could be happening here? Well, let’s take a look at what’s occurring with margins and whether the whole industry is feeling the heat. In terms of returns from investment, Remsons Industries has fallen short of achieving a 20% return on equity (ROE), recording 16% instead. Furthermore, its return on assets (ROA) of 7.0% is below the IN Auto Components industry of 7.9%, indicating Remsons Industries's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Remsons Industries’s debt level, has increased over the past 3 years from 8.5% to 21%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 131% to 121% over the past 5 years. While past data is useful, it doesn’t tell the whole story. Companies that are profitable, but have unpredictable earnings, can have many factors impacting its business. You should continue to research Remsons Industries to get a better picture of the stock by looking at: 1. Future Outlook: What are well-informed industry analysts predicting for REMSONSIND’s future growth? Take a look at ourfree research report of analyst consensusfor REMSONSIND’s outlook. 2. Financial Health: Are REMSONSIND’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out ourfinancial health checks here. 3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore ourfree list of these great stocks here. NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 2019. This may not be consistent with full year annual report figures. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Modern Dental Group Limited’s (HKG:3600) Investment Returns Are Lagging Its Industry Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! Today we'll evaluate Modern Dental Group Limited (HKG:3600) to determine whether it could have potential as an investment idea. Specifically, we'll consider its Return On Capital Employed (ROCE), since that will give us an insight into how efficiently the business can generate profits from the capital it requires. First up, we'll look at what ROCE is and how we calculate it. Then we'll compare its ROCE to similar companies. Last but not least, we'll look at what impact its current liabilities have on its ROCE. ROCE measures the amount of pre-tax profits a company can generate from the capital employed in its business. In general, businesses with a higher ROCE are usually better quality. Ultimately, it is a useful but imperfect metric. Renowned investment researcher Michael Mauboussinhas suggestedthat a high ROCE can indicate that 'one dollar invested in the company generates value of more than one dollar'. The formula for calculating the return on capital employed is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) Or for Modern Dental Group: 0.062 = HK$173m ÷ (HK$3.1b - HK$305m) (Based on the trailing twelve months to December 2018.) Therefore,Modern Dental Group has an ROCE of 6.2%. Check out our latest analysis for Modern Dental Group One way to assess ROCE is to compare similar companies. We can see Modern Dental Group's ROCE is meaningfully below the Medical Equipment industry average of 9.8%. This performance is not ideal, as it suggests the company may not be deploying its capital as effectively as some competitors. Aside from the industry comparison, Modern Dental Group's ROCE is mediocre in absolute terms, considering the risk of investing in stocks versus the safety of a bank account. Readers may find more attractive investment prospects elsewhere. When considering this metric, keep in mind that it is backwards looking, and not necessarily predictive. ROCE can be deceptive for cyclical businesses, as returns can look incredible in boom times, and terribly low in downturns. ROCE is, after all, simply a snap shot of a single year. How cyclical is Modern Dental Group? You can see for yourself by looking at thisfreegraph of past earnings, revenue and cash flow. Current liabilities are short term bills and invoices that need to be paid in 12 months or less. The ROCE equation subtracts current liabilities from capital employed, so a company with a lot of current liabilities appears to have less capital employed, and a higher ROCE than otherwise. To check the impact of this, we calculate if a company has high current liabilities relative to its total assets. Modern Dental Group has total assets of HK$3.1b and current liabilities of HK$305m. As a result, its current liabilities are equal to approximately 9.8% of its total assets. Modern Dental Group reports few current liabilities, which have a negligible impact on its unremarkable ROCE. Modern Dental Group looks like an ok business, but on this analysis it is not at the top of our buy list. You might be able to find a better investment than Modern Dental Group. If you want a selection of possible winners, check out thisfreelist of interesting companies that trade on a P/E below 20 (but have proven they can grow earnings). If you like to buy stocks alongside management, then you might just love thisfreelist of companies. (Hint: insiders have been buying them). We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Is Magnificent Hotel Investments Limited (HKG:201) Excessively Paying Its CEO? Want to participate in a short research study ? Help shape the future of investing tools and you could win a $250 gift card! William Cheng is the CEO of Magnificent Hotel Investments Limited ( HKG:201 ). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels. Check out our latest analysis for Magnificent Hotel Investments How Does William Cheng's Compensation Compare With Similar Sized Companies? According to our data, Magnificent Hotel Investments Limited has a market capitalization of HK$1.5b, and pays its CEO total annual compensation worth HK$7.0m. (This is based on the year to December 2018). That's a fairly small increase of 0.01% on year before. While we always look at total compensation first, we note that the salary component is less, at HK$5.9m. We examined companies with market caps from HK$783m to HK$3.1b, and discovered that the median CEO total compensation of that group was HK$2.1m. It would therefore appear that Magnificent Hotel Investments Limited pays William Cheng more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business. The graphic below shows how CEO compensation at Magnificent Hotel Investments has changed from year to year. SEHK:201 CEO Compensation, June 19th 2019 Is Magnificent Hotel Investments Limited Growing? Over the last three years Magnificent Hotel Investments Limited has grown its earnings per share (EPS) by an average of 36% per year (using a line of best fit). It achieved revenue growth of 11% over the last year. Story continues This demonstrates that the company has been improving recently. A good result. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. Although we don't have analyst forecasts, you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow. Has Magnificent Hotel Investments Limited Been A Good Investment? Magnificent Hotel Investments Limited has generated a total shareholder return of 9.9% over three years, so most shareholders wouldn't be too disappointed. But they would probably prefer not to see CEO compensation far in excess of the median. In Summary... We compared the total CEO remuneration paid by Magnificent Hotel Investments Limited, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group. However, the earnings per share growth over three years is certainly impressive. We also think investors are doing ok, over the same time period. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn't call the CEO pay problematic. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Magnificent Hotel Investments. If you want to buy a stock that is better than Magnificent Hotel Investments, this free list of high return, low debt companies is a great place to look. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com . This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
With A 10% Return On Equity, Is Turners Automotive Group Limited (NZSE:TRA) A Quality Stock? Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! Many investors are still learning about the various metrics that can be useful when analysing a stock. This article is for those who would like to learn about Return On Equity (ROE). By way of learning-by-doing, we'll look at ROE to gain a better understanding of Turners Automotive Group Limited (NZSE:TRA). Our data showsTurners Automotive Group has a return on equity of 10%for the last year. Another way to think of that is that for every NZ$1 worth of equity in the company, it was able to earn NZ$0.10. View our latest analysis for Turners Automotive Group Theformula for ROEis: Return on Equity = Net Profit ÷ Shareholders' Equity Or for Turners Automotive Group: 10% = NZ$23m ÷ NZ$226m (Based on the trailing twelve months to March 2019.) It's easy to understand the 'net profit' part of that equation, but 'shareholders' equity' requires further explanation. It is all earnings retained by the company, plus any capital paid in by shareholders. The easiest way to calculate shareholders' equity is to subtract the company's total liabilities from the total assets. Return on Equity measures a company's profitability against the profit it has kept for the business (plus any capital injections). The 'return' is the amount earned after tax over the last twelve months. That means that the higher the ROE, the more profitable the company is. So, all else equal,investors should like a high ROE. Clearly, then, one can use ROE to compare different companies. One simple way to determine if a company has a good return on equity is to compare it to the average for its industry. The limitation of this approach is that some companies are quite different from others, even within the same industry classification. If you look at the image below, you can see Turners Automotive Group has a lower ROE than the average (14%) in the Specialty Retail industry classification. Unfortunately, that's sub-optimal. We'd prefer see an ROE above the industry average, but it might not matter if the company is undervalued. Still,shareholders might want to check if insiders have been selling. Most companies need money -- from somewhere -- to grow their profits. That cash can come from retained earnings, issuing new shares (equity), or debt. In the case of the first and second options, the ROE will reflect this use of cash, for growth. In the latter case, the use of debt will improve the returns, but will not change the equity. Thus the use of debt can improve ROE, albeit along with extra risk in the case of stormy weather, metaphorically speaking. Turners Automotive Group clearly uses a significant amount of debt to boost returns, as it has a debt to equity ratio of 1.38. The company doesn't have a bad ROE, but it is less than ideal tht it has had to use debt to achieve its returns. Debt does bring extra risk, so it's only really worthwhile when a company generates some decent returns from it. Return on equity is useful for comparing the quality of different businesses. A company that can achieve a high return on equity without debt could be considered a high quality business. If two companies have around the same level of debt to equity, and one has a higher ROE, I'd generally prefer the one with higher ROE. But ROE is just one piece of a bigger puzzle, since high quality businesses often trade on high multiples of earnings. The rate at which profits are likely to grow, relative to the expectations of profit growth reflected in the current price, must be considered, too. So you might want to take a peek at thisdata-rich interactive graph of forecasts for the company. Of courseTurners Automotive Group may not be the best stock to buy. So you may wish to see thisfreecollection of other companies that have high ROE and low debt. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
What Kind Of Shareholder Owns Most Gabriel India Limited (NSE:GABRIEL) Stock? Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! A look at the shareholders of Gabriel India Limited (NSE:GABRIEL) can tell us which group is most powerful. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. Companies that used to be publicly owned tend to have lower insider ownership. With a market capitalization of ₹17b, Gabriel India is a small cap stock, so it might not be well known by many institutional investors. In the chart below below, we can see that institutions own shares in the company. Let's take a closer look to see what the different types of shareholder can tell us about GABRIEL. Check out our latest analysis for Gabriel India Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing. Gabriel India already has institutions on the share registry. Indeed, they own 7.4% of the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone, since institutions make bad investments sometimes, just like everyone does. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Gabriel India's earnings history, below. Of course, the future is what really matters. Gabriel India is not owned by hedge funds. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too. The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board; and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board, themselves. Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group. Our most recent data indicates that insiders own some shares in Gabriel India Limited. As individuals, the insiders collectively own ₹740m worth of the ₹17b company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checkingif those insiders have been selling. The general public, with a 31% stake in the company, will not easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders. We can see that Private Companies own 51%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company. We can see that public companies hold 5.5%, of the GABRIEL shares on issue. We can't be certain, but this is quite possible this is a strategic stake. The businesses may be similar, or work together. While it is well worth considering the different groups that own a company, there are other factors that are even more important. I always like to check for ahistory of revenue growth. You can too, by accessing this free chart ofhistoric revenue and earnings in thisdetailed graph. If you would prefer discover what analysts are predicting in terms of future growth, do not miss thisfreereport on analyst forecasts. NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Oil Prices Inch Up as OPEC Edges Closer to Agreeing on Meeting Date Investing.com - Oil prices edged up on Wednesday in Asia following reports that OPEC and its allies are close to agreeing on a date for their next meeting. U.S. Crude Oil WTI Futures gained 0.3% to $54.28 by 12:57 AM ET (04:57 GMT). International Brent Oil Futures rose 0.2% to $62.23. Citing Venezuela’s oil minister, Bloomberg said the OPEC+ group would likely meet in Vienna on July 1-2 to discuss production policy for the latter half of this year. Meanwhile, reports that China and the U.S. would resume trade talks after a stalemate were also cited as supportive for the oil markets. In a tweet overnight, U.S. President Donald Trump said he would meet China’s Xi Jinping at the G-20 summit next week, adding that he had a “very good” phone conversation with Xi. His tweets boosted investor sentiment, as some were skeptical if the two leaders would meet this month. Looking ahead, traders’ attention will turn to the weekly crude inventories report from the government's Energy Information Administration, which is due later in the day. Related Articles Gold Prices Unchanged Ahead of Fed Meeting; Sino-U.S. Trade Development in Focus Oil gains amid Middle East tensions, U.S.-China trade deal hopes Scientists amazed as Canadian permafrost thaws 70 years early
Adobe Systems Offers Another Earnings Beat Adobe Systems(NASDAQ: ADBE)released stronger-than-expected fiscal second-quarter 2019 results on Tuesday after the market close. The creative software specialist credited its expanding product portfolio and a global "explosion in creativity" for driving record revenue -- though it certainly helps that more of that revenue is coming from Adobe's recurring cloud-based subscriptions with each passing quarter. With shares up around 4% in after-hours trading as of this writing, let's take a closer look at what Adobe Systems had to say. IMAGE SOURCE: ADOBE SYSTEMS. [{"Metric": "Revenue", "Fiscal Q2 2019": "$2.744 billion", "Fiscal Q2 2018": "$2.195 billion", "Year-Over-Year Growth": "25%"}, {"Metric": "GAAP net income", "Fiscal Q2 2019": "$632.6 million", "Fiscal Q2 2018": "$663.2 million", "Year-Over-Year Growth": "(4.6%)"}, {"Metric": "GAAP earnings per share (diluted)", "Fiscal Q2 2019": "$1.29", "Fiscal Q2 2018": "$1.33", "Year-Over-Year Growth": "(3%)"}] DATA SOURCE: ADOBE SYSTEMS. FOR THE PERIOD ENDED May 31, 2019. • On an adjusted (non-GAAP) basis, which excludes items like acquisition costs and stock-based compensation, net income was $900.6 million, or $1.83 per share, up from $825.4 million, or $1.66 per share in the same year-ago period. • By comparison, Adobe'sguidance from Marchcalled for lower adjusted earnings of $1.77 per share on revenue of $2.7 billion. • Digital media segment revenue grew 22% year over year to $1.89 billion -- also above guidance for 20% growth -- including Creative revenue of $1.59 billion and Document Cloud revenue of $296 million. • Digital experience segment revenue grew 34% to $784 million, above guidance for 32% growth. • 91% of Adobe's revenue this quarter came from recurring sources, consistent with last quarter. • Digital media annualized recurring revenue (ARR) grew $406 million sequentially from last quarter to $7.47 billion, including Creative ARR of $6.55 billion and Document Cloud ARR of $921 million. • Deferred revenue declined sequentially to $3.13 billion from $3.22 billion last quarter, driven by timing with fewer billing cycles in Adobe's fiscal second quarter. • The company generated operating cash flow of $1.11 billion, and repurchased 2.5 million shares this quarter for $659 million. That left $6.6 billion remaining of Adobe's original $8 billion repurchase program (authorized just over a year ago), which is valid through 2021. "Adobe's continued momentum is being fueled by the explosion of creativity across the globe and the widespread business transformation agenda to deliver engaging customer experiences," stated Adobe Systems CEO Shantanu Narayen. "With an innovative technology platform, exciting product roadmap and strong ecosystem of partners, we are well positioned for the second half of FY19 and beyond." For the current (fiscal third) quarter, Adobe sees revenue arriving at approximately $2.8 billion, assuming steady 20% growth in digital media segment revenue and 34% growth from the digital experience side. The company also expects net new digital media ARR of $360 million. On the bottom line, Adobe expects adjusted earnings of roughly $1.95 per share. By comparison -- and while we don't lend much credence to Wall Street's demands -- consensus predictions called for higher fiscal third-quarter 2019 earnings of $2.05 per share on revenue closer to $2.83 billion. Adobe also optednotto update its annual guidance (though management typically doesn't do so at this point in the year), which most recently contained targets for full fiscal-year 2019 revenue of $11.15 billion, and adjusted earnings per share of $7.80. Rather, during the subsequent conference call, CFO John Murphy clarified that the company expects its "first-half momentum to continue in the second half, with typical seasonality in Q3 and strength in Q4." Fair enough. Besides, if the market's initial positive reaction to this report is any indication -- and given Adobe's habit of under-promising and over-delivering -- it seems investors are astutely seeing through the noise of Adobe's seemingly light near-term outlook. More From The Motley Fool • 10 Best Stocks to Buy Today • The $16,728 Social Security Bonus You Cannot Afford to Miss • 20 of the Top Stocks to Buy (Including the Two Every Investor Should Own) • What Is an ETF? • 5 Recession-Proof Stocks • How to Beat the Market Steve Symingtonhas no position in any of the stocks mentioned. The Motley Fool recommends Adobe Systems. The Motley Fool has adisclosure policy.
How Much Are The Phoenix Mills Limited (NSE:PHOENIXLTD) Insiders Taking Off The Table? Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares inThe Phoenix Mills Limited(NSE:PHOENIXLTD). It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market. We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia Universitystudyfound that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'. View our latest analysis for Phoenix Mills Over the last year, we can see that the biggest insider sale was by the , Haresh Morajkar, for ₹6.0m worth of shares, at about ₹600 per share. That means that even when the share price was below the current price of ₹641, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling on market, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 25% of Haresh Morajkar's stake. Over the last year, we note insiders sold 58500 shares worth ₹37m. Phoenix Mills insiders didn't buy any shares over the last year. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction! If you are like me, then you willnotwant to miss thisfreelist of growing companies that insiders are buying. Over the last three months, we've seen significant insider selling at Phoenix Mills. In total, insiders dumped ₹28m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all. I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Phoenix Mills insiders own 5.9% of the company, worth about ₹5.8b. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment. Insiders haven't bought Phoenix Mills stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. But it is good to see that Phoenix Mills is growing earnings. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. Of course,the future is what matters most. So if you are interested in Phoenix Mills, you should check out thisfreereport on analyst forecasts for the company. But note:Phoenix Mills may not be the best stock to buy. So take a peek at thisfreelist of interesting companies with high ROE and low debt. For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Marijuana industry sets environmental, ethical goals LOS ANGELES (AP) — An alliance of large marijuana businesses had a message for the public Tuesday: We're good corporate citizens. The 45-member Global Cannabis Partnership, which includes Canopy Growth Corp. and other companies operating in the sector, issued guidelines aimed at minimizing greenhouse gas emissions and promoting ethical conduct and responsible pot use. The emerging legal industry is "in a unique position to set a new bar for socially responsible practices," the group's executive director, Kim Wilson, said in a statement. As the once-illegal marijuana economy evolves into a multibillion-dollar industry backed by a flood of investment dollars, the guidelines appeared aimed at assuring consumers that those companies are operating with public interests in mind, not just the bottom line. The cannabis marketplace "is Wall Street now," said Adlai Wertman, a professor of social entrepreneurship at the USC Marshall School of Business. The group is "saying that even though we are Wall Street, we are still aligned with the values our customers have." And it could have other payoffs, including potentially luring a broader range of investors for pot companies. "Anything the industry does to show responsibility — both as an operator and to their community — is in their benefit," said Adam Spiker, executive director of the Southern California Coalition, a cannabis industry group. "Things like this can narrow the gap of trust between industry, community and policymakers. With more trust should come less of a perceived need to overregulate and overtax," Spiker added. The goal of the five-page "social responsibility framework" is for the industry to be recognized for practices in good corporate citizenship. It outlines guiding principles that include transparency and responsibility, such as prohibiting illicit sales to minors. The group said its members have agreed to adhere to the guidelines that will set "a standard for the new and rapidly growing cannabis industry worldwide." While light on specifics, the document said members will develop polices to manage greenhouse gas emissions, package materials that reduce the consumption of raw materials and follow farming practices that reduce environmental effects. Other guidelines seek to promote responsible use, education and scientific research. Wertman noted that the guidelines steered around sticky matters like labor practices and mentioned only lightly a touchstone issue in the industry: repairing the damage from decades of tough marijuana enforcement, even for minor infractions, which hit black and other minority communities hard. The guidelines also could help businesses gain mainstream acceptance and shake off a lingering stoner stereotype the industry has sought to escape. Morgan Fox, a spokesman for the National Cannabis Industry Association, said the industry has an opportunity "to set the standard for corporate responsibility and build an emphasis on ethical environmental, business, and social practices into its foundation."
Should Motilal Oswal Financial Services Limited (NSE:MOTILALOFS) Be Part Of Your Dividend Portfolio? Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! Could Motilal Oswal Financial Services Limited (NSE:MOTILALOFS) be an attractive dividend share to own for the long haul? Investors are often drawn to strong companies with the idea of reinvesting the dividends. Yet sometimes, investors buy a stock for its dividend and lose money because the share price falls by more than they earned in dividend payments. With a 1.3% yield and a nine-year payment history, investors probably think Motilal Oswal Financial Services looks like a reliable dividend stock. A 1.3% yield is not inspiring, but the longer payment history has some appeal. Before you buy any stock for its dividend however, you should always remember Warren Buffett's two rules: 1) Don't lose money, and 2) Remember rule #1. We'll run through some checks below to help with this. Explore this interactive chart for our latest analysis on Motilal Oswal Financial Services! Dividends are usually paid out of company earnings. If a company is paying more than it earns, then the dividend might become unsustainable - hardly an ideal situation. As a result, we should always investigate whether a company can afford its dividend, measured as a percentage of a company's net income after tax. In the last year, Motilal Oswal Financial Services paid out 42% of its profit as dividends. This is a middling range that strikes a nice balance between paying dividends to shareholders, and retaining enough earnings to invest in future growth. Besides, if reinvestment opportunities dry up, the company has room to increase the dividend. Consider gettingour latest analysis on Motilal Oswal Financial Services's financial position here. From the perspective of an income investor who wants to earn dividends for many years, there is not much point buying a stock if its dividend is regularly cut or is not reliable. Looking at the last decade of data, we can see that Motilal Oswal Financial Services paid its first dividend at least nine years ago. Although it has been paying a dividend for several years now, the dividend has been cut at least once by more than 20%, and we're cautious about the consistency of its dividend across a full economic cycle. During the past nine-year period, the first annual payment was ₹1.20 in 2010, compared to ₹8.50 last year. Dividends per share have grown at approximately 24% per year over this time. Motilal Oswal Financial Services's dividend payments have fluctuated, so it hasn't grown 24% every year, but the CAGR is a useful rule of thumb for approximating the historical growth. Motilal Oswal Financial Services has grown distributions at a rapid rate despite cutting the dividend at least once in the past. Companies that cut once often cut again, but it might be worth considering if the business has turned a corner. With a relatively unstable dividend, it's even more important to see if earnings per share (EPS) are growing. Why take the risk of a dividend getting cut, unless there's a good chance of bigger dividends in future? It's good to see Motilal Oswal Financial Services has been growing its earnings per share at 48% a year over the past 5 years. Earnings per share have rocketed in recent times, and we like that the company is retaining more than half of its earnings to reinvest. However, always remember that very few companies can grow at double digit rates forever. To summarise, shareholders should always check that Motilal Oswal Financial Services's dividends are affordable, that its dividend payments are relatively stable, and that it has decent prospects for growing its earnings and dividend. We're glad to see Motilal Oswal Financial Services has a low payout ratio, as this suggests earnings are being reinvested in the business. We were also glad to see it growing earnings, but it was concerning to see the dividend has been cut at least once in the past. Motilal Oswal Financial Services has a number of positive attributes, but falls short of our ideal dividend company. It may be worth a look at the right price, though. Now, if you want to look closer, it would be worth checking out ourfreeresearch on Motilal Oswal Financial Servicesmanagement tenure, salary, and performance. Looking for more high-yielding dividend ideas? Try ourcurated list of dividend stocks with a yield above 3%. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Does PanTerra Gold Limited's (ASX:PGI) CEO Pay Reflect Performance? Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! The CEO of PanTerra Gold Limited (ASX:PGI) is Brian Johnson. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO. See our latest analysis for PanTerra Gold According to our data, PanTerra Gold Limited has a market capitalization of AU$3.6m, and pays its CEO total annual compensation worth US$402k. (This number is for the twelve months until December 2018). That's actually a decrease on the year before. It is worth noting that the CEO compensation consists almost entirely of the salary, worth US$402k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$246k. It would therefore appear that PanTerra Gold Limited pays Brian Johnson more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business. You can see, below, how CEO compensation at PanTerra Gold has changed over time. PanTerra Gold Limited has reduced its earnings per share by an average of 103% a year, over the last three years (measured with a line of best fit). Its revenue is up 2.3% over last year. Few shareholders would be pleased to read that earnings per share are lower over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but shareholders might want to examinethis detailed historical graphof earnings, revenue and cash flow. With a three year total loss of 81%, PanTerra Gold Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation. We compared the total CEO remuneration paid by PanTerra Gold Limited, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group. Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years. Just as bad, share price gains for investors have failed to materialize, over the same period. This analysis suggests to us that the CEO is paid too generously! So you may want tocheck if insiders are buying PanTerra Gold shares with their own money (free access). Arguably, business quality is much more important than CEO compensation levels. So check out thisfreelist of interesting companies, that have HIGH return on equity and low debt. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
NBA draft: Coach K predicts Zion could be a rookie All-Star Zion Williamson emerged from Instagram highlights and onto the American basketball scene with Bunyan-esque force, tomahawking his way into the mainstream with an elegant violence. During his lone season at Duke, his searing energy, incandescent smile and, of course, more dunks, raised his profile to one of the country’s most recognizable athletes. Williamson’s coronation as the No. 1 pick in the NBA draft arrives this week, as he’s poised to enter the league as one of its highest-profile players. Zion already has 3.3 million Instagram followers — the same as Draymond Green and a half-million more than NFL star Ezekiel Elliott — and Bono-like one-name recognition. Not coincidentally, he also projects as a generational marketing juggernaut, as early estimates of his first shoe deal are in the neighborhood of $100 million. Simply put, there’s been no more anticipated player to enter the NBA since LeBron James in 2003 — few American athletes have received this much attention before turning professional. When Williamson inevitably arrives in New Orleans as a rebuilding cornerstone of the post-Anthony Davis era, there remains an aura of mystery: How will his game translate to the NBA on the court? All season long, NBA types have struggled to come up with comparisons for Williamson, as there are not a lot of 6-foot-7, 285-pound wrecking balls with the dexterity to pirouette before dunking. Duke coach Mike Krzyzewski drilled down on what Zion could be like as an NBA player with Yahoo Sports last week. He didn’t hold back in projecting Williamson’s career arc. “He may be an All-Star right away,” Krzyzewski said in a phone interview. He added: “There’s no ceiling, really. He doesn’t have a weakness. He may not shoot it as well as he will, but he shoots it well.” Duke forward Zion Williamson is seen prior to the 2019 NBA Draft Lottery at the Hilton Chicago. (Photo credit: USAT) In interviews with a half-dozen college coaches and NBA scouts, the consistent unknown variable that comes up in Williamson’s game is his jump shot. Williamson finished the season averaging 22.6 points and 8.9 rebounds while sweeping all of the National Player of the Year honors. His 72 dunks in 33 games became the season’s persistent backdrop. (Former Duke star Marvin Bagley actually had 26 more dunks in the same amount of games, but Williamson’s raw power is likely the difference in attention.) Story continues There are flaws, however. Williamson showcased a jump shot in which his feet barely left the ground. His left-handed stroke has decent mechanics, but the ability to refine those and evolve as a jump shooter remain the final key to unlocking the full matrix of his boundless potential. Williamson shot just 33.8 percent from 3-point range and 64 percent from the free-throw line, both pedestrian numbers that should rise once he reaches the NBA. Krzyzewski had no doubt that Williamson would put in the requisite work to grow those areas, which for prospects often dictates their career arc. “He wants to be special,” Krzyzewski said. “He’s a gift from God, really, for a coach. I loved every second that I coached him. He has to be given the freedom to be himself and learn to play against men.” Krzyzewski said he’s expressed to Williamson that he’d like him to attend the USA Basketball training camp in August to learn the habits and receive the advice of NBA pros. Krzyzewski said Williamson has a head start on a few aspects of adjusting to the NBA. On the floor, he says Zion’s background in high school and AAU of playing point guard before a growth spurt has afforded him patience, decision making and unselfishness that’s beyond his years. Off the floor, the media circus and Beatles-like environment for road games gave him a window into what life will be like in the NBA. “He needs to have room to grow to the greatness he deserves to grow to,” Krzyzewski said. “He has all the intangibles and is extremely intelligent. He’s way ahead maturity-wise. He’s humble and a great teammate. He can affect the environment around him in a really unbelievable way.” Krzyzewski gave a bit of insight into the touchstone moment of Williamson’s regular season at Duke. Zion sprained his left knee in February after his Nike sneaker blew out against North Carolina. The moment redefined the reach of a viral video for college basketball and prompted an unintentional referendum for amateurism. “We basically just said, ‘You don’t have to play,’ I understand,” Krzyzewski said. “He wanted to play. I was amazingly conservative in keeping him out. The big picture is too big for him.” Zion Williamson is expected to be the first overall pick in the 2019 NBA draft on Thursday. (Getty) Krzyzewski was just as effusive of RJ Barrett, the presumptive No. 3 pick in the NBA draft. Krzyzewski predicted Barrett “will be an All-Star” and said Barrett and Williamson are the only two players in this draft who are essentially sure things. “The basketball Gods gifted me them,” he said. Just how Williamson will be used came more into focus over the weekend, as the Pelicans added point guard Lonzo Ball, wing Brandon Ingram and shooting guard Josh Hart . The Pelicans already have stalwart guard Jrue Holiday, who averaged 21.2 points and 7.7 assists last year. Former Celtics assistant coach Micah Shrewsberry, who recently left to become associate head coach at Purdue, pointed out that the Pelicans have consistently played at a breakneck pace under coach Alvin Gentry. New Orleans finished in the NBA’s top three in points the past two seasons, which should accentuate some of the skill set that Williamson showcased in college. “The Pelicans are pushing the ball on makes and misses,” Shrewsberry said. “[Williamson] being able to get out and run will allow him to take advantage of his speed and athleticism.” The halfcourt is where things will be trickier for Williamson, at least until he develops more consistency from the outside. The Pelicans should put a premium on surrounding him with shooters, because it will likely be a few years before Williamson becomes a reliable option from the outside. Georgia coach Tom Crean said Krzyzewski hasn’t gotten enough credit for how much Williamson developed while at Duke, pointing to nuances like “process poise,” as he’d often wait until the third time touching the ball during a possession to initiate his own offense. Crean pointed out there’s often more open jump shots for players in the NBA, which is why that aspect of his game remains crucial to his development. “He’s going to translate huge, as long as his development stays really, really strong,” Crean said. “He’s so young, and he’s going to keep getting better.” Shrewsberry predicted that NBA teams won’t put smaller players on Williamson, as they’ll be too much of a liability in attempting to keep him off the offensive glass. The likely result will be bigger guys who play a step off him and dare him to shoot. Playing off Williamson is a Catch-22 as well — it could be an invitation for him to generate momentum and blow past the defender. But the development of a jump shot will leave defenses even more compromised. “He’s going to be a force to be reckoned with,” Syracuse coach Jim Boeheim said in a phone interview. “He’s a lot like Charles [Barkley], except that he’s bigger and stronger. People compare him to Rodney Rogers or Charles, but he’s so much more dynamic and physical.” More from Yahoo Sports: Goodwill: Relationship between CP3, Harden seems doomed Golfer gets Stanford diploma at Pebble Beach after U.S. Open Bushnell: Mexican fans' homophobic chant wrongfully going strong Brett Favre IG post causes brief hysteria about a comeback
Can Kirloskar Brothers Limited (NSE:KIRLOSBROS) Improve Its Returns? Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. By way of learning-by-doing, we'll look at ROE to gain a better understanding of Kirloskar Brothers Limited (NSE:KIRLOSBROS). Over the last twelve monthsKirloskar Brothers has recorded a ROE of 0.3%. One way to conceptualize this, is that for each ₹1 of shareholders' equity it has, the company made ₹0.0034 in profit. View our latest analysis for Kirloskar Brothers Theformula for return on equityis: Return on Equity = Net Profit ÷ Shareholders' Equity Or for Kirloskar Brothers: 0.3% = ₹35m ÷ ₹9.1b (Based on the trailing twelve months to March 2019.) It's easy to understand the 'net profit' part of that equation, but 'shareholders' equity' requires further explanation. It is all the money paid into the company from shareholders, plus any earnings retained. The easiest way to calculate shareholders' equity is to subtract the company's total liabilities from the total assets. Return on Equity measures a company's profitability against the profit it has kept for the business (plus any capital injections). The 'return' is the amount earned after tax over the last twelve months. That means that the higher the ROE, the more profitable the company is. So, all else being equal,a high ROE is better than a low one. Clearly, then, one can use ROE to compare different companies. Arguably the easiest way to assess company's ROE is to compare it with the average in its industry. The limitation of this approach is that some companies are quite different from others, even within the same industry classification. If you look at the image below, you can see Kirloskar Brothers has a lower ROE than the average (11%) in the Machinery industry classification. Unfortunately, that's sub-optimal. We prefer it when the ROE of a company is above the industry average, but it's not the be-all and end-all if it is lower. Nonetheless, it might be wise tocheck if insiders have been selling. Virtually all companies need money to invest in the business, to grow profits. The cash for investment can come from prior year profits (retained earnings), issuing new shares, or borrowing. In the first two cases, the ROE will capture this use of capital to grow. In the latter case, the debt used for growth will improve returns, but won't affect the total equity. Thus the use of debt can improve ROE, albeit along with extra risk in the case of stormy weather, metaphorically speaking. Kirloskar Brothers has a debt to equity ratio of 0.40, which is far from excessive. Its ROE is certainly on the low side, and since it already uses debt, we're not too excited about the company. Careful use of debt to boost returns is often very good for shareholders. However, it could reduce the company's ability to take advantage of future opportunities. Return on equity is useful for comparing the quality of different businesses. In my book the highest quality companies have high return on equity, despite low debt. If two companies have around the same level of debt to equity, and one has a higher ROE, I'd generally prefer the one with higher ROE. But ROE is just one piece of a bigger puzzle, since high quality businesses often trade on high multiples of earnings. It is important to consider other factors, such as future profit growth -- and how much investment is required going forward. So you might want to check this FREEvisualization of analyst forecasts for the company. If you would prefer check out another company -- one with potentially superior financials -- then do not miss thisfreelist of interesting companies, that have HIGH return on equity and low debt. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
U.S. Steel to idle three blast furnaces, hurt by lower prices and soft demand June 18 (Reuters) - United States Steel Corp on Tuesday said it would idle two blast furnaces in the United States and a third in Europe, as lower steel prices and softening demand led the steel producer to forecast current-quarter earnings below the Wall Street estimates. Steel producers in the United States have brought old capacity online after President Donald Trump's imposed tariffs on imported steel from countries including China, resulting in a surplus supply of steel at a time when manufacturing demand has weakened, suppressing prices. U.S. Steel said it will also idle one of its blast furnaces in Europe where increasing levels of imports and higher raw material costs are hurting the company's operations. "We are idling two blast furnaces in the United States and one blast furnace in Europe to better align our global production with our order book," U.S. Steel said in a statement. U.S. Steel will idle a blast furnace at the company's Gary Works facility in Indiana, where early this year it was negotiating a $47 million tax break package from the city and state in return for promises of modernization. The Gary Works facility has four blast furnaces with an annual raw steel production capability of 7.5 million tons. The second furnace to be idled is in the company's Great Lakes Works facility, located in Ecorse and River Rouge, Michigan, which has three blast furnaces with annual raw steel production capability of 3.8 million tons. The company forecast second-quarter adjusted earnings before interest, tax, depreciation and amortization (EBITDA) to be about $250 million, below the average analysts' expectation of $291.1 million, according to IBES data from Refinitiv. Shares of steel producers rose earlier in the day after Steel Dynamics Inc's better-than-feared results, signaling of rate cuts by the European Central Bank and news of Trump and Chinese President Xi Jinping getting together to restart trade talks. (Reporting by Ankit Ajmera in Bengaluru)
Jobs, Veterans, Taxes: Fact Checking Trump's Speech at Orlando Rally President Donald Trump boasted with abandon in launching his 2020 re-election campaign, overreached in excoriating his critics and promised progress on his border wall and health care that is improbable at best. In those respects, his latest campaign rally was much like any other by the president. Here’s a look at his rhetoric from Orlando, Florida, on Tuesday night: TRUMP:“Almost 160 million people are working. That’s more than ever before.” THE FACTS:Yes, but that’s not a feather in a president’s cap. More people are working primarily because there are more people. Population growth drives this phenomenon. Other than during recessions, employment growth has been trending upward since 1939, when the Labor Department started counting. The annual rate of job growth is 1.6% through May. That rate has been within the same range since roughly 2011. Another measure is the proportion of Americans with jobs, and that is still below record highs. According to Labor Department data, 60.6 percent of people in the United States 16 years and older were working in May. That’s below the all-time high of 64.7 percent in April 2000 during Bill Clinton’s administration, though higher than the 59.9 percent when Trump was inaugurated in January 2017. TRUMP:“Women’s unemployment is now the lowest it’s been in 74 years.” THE FACTS:The jobless rate for women was 3.1% in April, the lowest in 66 years — not Trump’s 74 years. It ticked up in May to 3.2%. TRUMP:“It’s soaring to incredible new heights. Perhaps the greatest economy we’ve had in the history of our country.” THE FACTS:The economy is not one of the best in the country’s history. The economy expanded at an annual rate of 3.2 percent in the first quarter of this year. That growth was the highest in just four years for the first quarter. In the late 1990s, growth topped 4 percent for four straight years, a level it has not yet reached on an annual basis under Trump. Growth even reached 7.2 percent in 1984. While the economy has shown strength, it grew 2.9% in 2018 — the same pace it reached in 2015 under President Barack Obama — and simply hasn’t hit historically high growth rates. Trump has legitimate claim to a good economy but it’s not a record-breaker and it flows from an expansion that began in mid-2009. TRUMP:“We’re going to have over 400 miles of wall built by the end of next year. It’s moving very rapidly.” THE FACTS:That’s highly unlikely, and even if so, the great majority of the wall he’s talking about would be replacement barrier, not new miles of construction. Trump has added strikingly little length to barriers along the Mexico border despite his pre-eminent 2016 campaign promise to get a wall done. Even to reach 400 miles or 640 kilometers, he would have to prevail in legal challenges to his declaration of a national emergency or get Congress to find more money to get anywhere close. So far, the administration has awarded contracts for 247 miles (395 km) of wall construction, but that initiative has been constrained by court cases that are still playing out. In any event, all but 17 miles (27 km) of his awarded contracts so far would replace existing barriers. TRUMP:“We’ve done so much … with the biggest tax cut in history.” THE FACTS:His tax cuts are nowhere close to the biggest in U.S. history. It’s a $1.5 trillion tax cut over 10 years. As a share of the total economy, a tax cut of that size ranks 12th, according to the Committee for a Responsible Federal Budget. President Ronald Reagan’s 1981 cut is the biggest, followed by the 1945 rollback of taxes that financed World War II. Post-Reagan tax cuts also stand among the historically significant: President George W. Bush’s cuts in the early 2000s and President Barack Obama’s renewal of them a decade later. TRUMP:“Our air and water are the cleanest they’ve ever been by far.” THE FACTS:Not true about air quality, which hasn’t gotten better under the Trump administration. U.S. drinking water is among the best by one leading measure. After decades of improvement, progress in air quality has stagnated. Over the last two years the U.S. had more polluted air days than just a few years earlier, federal data show. There were 15% more days with unhealthy air in America both last year and the year before than there were on average from 2013 through 2016, the four years when America had its fewest number of those days since at least 1980. The Obama administration, in fact, set records for the fewest air polluted days, in 2016. On water, Yale University’s global Environmental Performance Index finds 10 countries tied for the cleanest drinking water, the U.S. among them. On environmental quality overall, the U.S. was 27th, behind a variety of European countries, Canada, Japan, Australia and more. Switzerland was No. 1. TRUMP on the nomination of federal judges:“President Obama was very nice to us. He didn’t fill the positions.” THE FACTS:Trump’s sarcasm aside, he does have a better success rate than Obama in filling judicial vacancies. The Republican-controlled Senate in Obama’s last two years avoided taking action on many of his nominees. Republicans still control the Senate and have been able to confirm many of Trump’s picks despite their slim majority. Of the 71 people whom Obama nominated to the district courts and courts of appeals in 2015 and 2016, only 20 were voted on and confirmed, said Russell Wheeler, an expert on judicial nominees at the Brookings Institution. Trump entered office in January 2017 with more than 100 vacancies on the federal bench, about double the number Obama had in 2009. The Heritage Foundation has tracked 119 judges confirmed for Trump as of last week. This compares with 86 for Obama and 132 for George W. Bush at the same point in their presidencies. Republicans limited the debate time on nominees this year so now they move through judicial confirmations faster than before. Such maneuverings have nothing to do with Obama being “very nice.” TRUMP on his tariffs:“We are taking in billions and billions of dollars into our treasury. … We had never taken 10 cents from China.” THE FACTS:Tariff money coming into the treasury is mainly from U.S. businesses and consumers, not from China. Tariffs are primarily if not entirely a tax paid domestically. A study in March by economists from the Federal Reserve Bank of New York, Columbia University and Princeton University, before Trump raised tariffs even more, found that the public and U.S. companies were paying $3 billion a month in higher taxes from the trade dispute with China, suffering $1.4 billion a month in lost efficiency and absorbing the entire impact. It’s also false that the U.S. never collected a dime in tariffs before he took action. Tariffs on goods from China are not remotely new. They are simply higher in some cases than they were before. TRUMP:“We will always protect patients with pre-existing conditions. Always.” THE FACTS:He’s not protecting current legal safeguards for patients with pre-existing medical conditions, which are part of “Obamacare.” His administration instead is pressing in court for full repeal of Obama’s health care law, including other popular provisions such as coverage for young adults on their parents’ insurance, Medicaid expansion, health insurance subsidies and preventive care at no additional charge to the patient. Trump and other Republicans say they’ll have a plan to preserve protections for people with pre-existing conditions, but the White House has provided no details. Obama’s law requires insurers to take all applicants, regardless of medical history, and patients with health problems pay the same standard premiums as healthy ones. Bills supported in 2017 by Trump and congressional Republicans to repeal the law would have undermined those protections by pushing up costs for people with pre-existing conditions. TRUMP:“Leading Democrats have even opposed measures to prevent the execution of children after birth.” THE FACTS:Executing children is already a crime. Trump is offering here a somewhat toned down version of a distorted story he’s been telling for months that falsely suggests Democrats are OK with murder. His account arises from extremely rare instances when babies are born alive as a result of an attempted abortion. When these cases occur, “execution” is not an option. When a baby is born with anomalies so severe that he or she would die soon after birth, a family may choose what’s known as palliative care or comfort care. This might involve allowing the baby to die naturally without medical intervention. Providing comfort without life-extending treatment is not specific to newborns. It may happen with fatally ill patients of any age. TRUMP:“We passed VA Choice. …They’ve been trying to get that passed also for about 44 years.” THE FACTS:No, Congress approved the private-sector Veterans Choice health program in 2014 and Obama signed it into law. Trump signed an expansion of it. —2020Democratic primary debates: Everything you need to know —The campaign finance power behindTrump impeachment efforts —Not every state is restrictingabortion rights—some are expanding them —Richard Nixon‘s “Western White House” is back on the market—at a discount —Trump administration to use former Japanese internment camp to housemigrant children Get up to speed on your morning commute withFortune’sCEO Dailynewsletter.
Could Multi Commodity Exchange of India Limited's (NSE:MCX) Investor Composition Influence The Stock Price? Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! If you want to know who really controls Multi Commodity Exchange of India Limited (NSE:MCX), then you'll have to look at the makeup of its share registry. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. Companies that have been privatized tend to have low insider ownership. Multi Commodity Exchange of India is not a large company by global standards. It has a market capitalization of ₹40b, which means it wouldn't have the attention of many institutional investors. Taking a look at our data on the ownership groups (below), it's seems that institutions own shares in the company. Let's delve deeper into each type of owner, to discover more about MCX. See our latest analysis for Multi Commodity Exchange of India Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices. We can see that Multi Commodity Exchange of India does have institutional investors; and they hold 46% of the stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Multi Commodity Exchange of India, (below). Of course, keep in mind that there are other factors to consider, too. Hedge funds don't have many shares in Multi Commodity Exchange of India. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future. The definition of company insiders can be subjective, and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. The company management answer to the board; and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board, themselves. I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions. We can see that insiders own shares in Multi Commodity Exchange of India Limited. In their own names, insiders own ₹1.6b worth of stock in the ₹40b company. This shows at least some alignment. You canclick here to see if those insiders have been buying or selling. With a 35% ownership, the general public have some degree of sway over MCX. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run. It appears to us that public companies own 15% of MCX. It's hard to say for sure, but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership. While it is well worth considering the different groups that own a company, there are other factors that are even more important. I like to dive deeperinto how a company has performed in the past. You can accessthisinteractive graphof past earnings, revenue and cash flow, for free. Ultimatelythe future is most important. You can access thisfreereport on analyst forecasts for the company. NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Does Speedcast International Limited's (ASX:SDA) CEO Salary Reflect Performance? Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! In 2004 PJ Beylier was appointed CEO of Speedcast International Limited (ASX:SDA). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels. View our latest analysis for Speedcast International Our data indicates that Speedcast International Limited is worth AU$885m, and total annual CEO compensation is US$1.0m. (This number is for the twelve months until December 2018). That's a modest increase of 0.09% on the prior year year. We think total compensation is more important but we note that the CEO salary is lower, at US$512k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$400m to US$1.6b. The median total CEO compensation was US$1.0m. So PJ Beylier is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context. You can see, below, how CEO compensation at Speedcast International has changed over time. Speedcast International Limited has reduced its earnings per share by an average of 27% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 21% over the last year. Few shareholders would be pleased to read that earnings per share are lower over three years. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for me to put aside my concerns around earnings. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to checkthis free visual depiction ofwhat analysts expectfor the future. With a total shareholder return of 11% over three years, Speedcast International Limited shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size. PJ Beylier is paid around what is normal the leaders of comparable size companies. The company isn't growing earnings per share, and nor have the total returns inspired us. We wouldn't say the CEO pay is too high, but we'd venture the company should look to improve its business metrics (and share price) before paying any more. So you may want tocheck if insiders are buying Speedcast International shares with their own money (free access). If you want to buy a stock that is better than Speedcast International, thisfreelist of high return, low debt companies is a great place to look. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Stepdad brought to tears by daughter's Father's Day gift A stepfather was brought to tears when his stepdaughter gifted him all of the handwritten notes he wrote to her for Father's Day. (Photo: Twitter via @Sophia_Kallie) Middle school is a daunting time for adolescents; beyond puberty, the age brings added pressures of trying to fit in and a more serious focus on school assignments. It's equally challenging to parent a child at this age. In an effort to be a supportive parent during that time, Brian Sandusky showed he cared by leaving an inspirational message on stepdaughter Sophia Wilcox’s door every single day during middle school. Sophia, now 20 years old and visiting from college, surprised her stepfather with a Father's Day gift on Sunday: all of his handwritten notes framed around a picture of them together. She shared the heartwarming footage on Twitter . during middle school, my stepdad used to leave me a note on my door each day to inspire me. well, I kept those notes & It’s been 6 years since then. today I gave him those notes back🥰 #HappyFathersDay pic.twitter.com/ftT3sjQEH5 — soph (@Sophia_Kallie) June 17, 2019 "I kept those notes & It's been 6 years since then," Sophia tweeted. "Today I gave him those notes back." Brian was brought to tears by the gesture. He can be heard saying in the video, "These are all your notes." "Yeah," Sophia responded. "I kept them all. Love you." "I love you, too," Brian said. "Thank you." Sophia told the Press Association : "He was so shocked when I gave it to him because he hadn't known that I kept all the notes. He told me later that he was beyond moved. He's been in my life for about 10 years now. He's a very supportive man and always tries to make me laugh, even on a bad day." Many on social media were not only moved by Sophia keeping all of the notes but also by the fact her stepfather had written them in the first place. I don’t know if I’m crying harder at the fact that he wrote you all of those notes or at the fact that you kept them all 😭😭😭😭 — 🄲🄷🄴🄻🅂🄴🄰 (@chelsea_c7) June 17, 2019 What you did was super dope. Stepfather’s don’t get the credit they deserve. While it seems like something small. Those notes mean the world and to know you saved them mean even more — Cole_World (@nyk_smile) June 18, 2019 As the dad of two amazing adult daughters--you are awesome. That was just wonderful to see. Thanks! Loved the dog making sure he was ok, too. 😊 — Rob (@RobW521) June 17, 2019 "He's changed how I see the world and I'm very grateful for that," Sophia said. Story continues Sophia was not immediately available to respond to Yahoo Lifestyle's requests for comment. Read more from Yahoo Lifestyle: Mother says she was attacked in Starbucks for wearing a hijab: 'America, do better' Students slam school dress code: 'It tells guys if she's wearing short shorts she's asking for it' Teen who vows to cook and clean for future husband offends Twitter with 'old-fashioned' views Follow us on Instagram , Facebook , and Twitter for nonstop inspiration delivered fresh to your feed, every day.
Better Buy: CenturyLink vs. Frontier Communications The past few years have been unkind to wireline telecom operators likeCenturyLink(NYSE: CTL)andFrontier Communications(NASDAQ: FTR). Both companies are dealing with multiple problems, including cord-cutting, declining legacy technologies such as landline phones, and high debt loads -- the after-effect of past acquisitions. As you can see, the trends have led to declining customer and revenue numbers, which have punished both stocks: CTL 1 Year Total Returns (Daily)data byYCharts As both have declined so much, is either a potential turnaround play? Both stocks are dirt cheap by traditional equity metrics, so investors will have to parse whether either stock is a bargain or avalue trap. Let's take a look at both. CenturyLink is currently much larger than Frontier. It has 450,000 route miles of fiberoptic cable across the U.S., connecting 150,000 on-net buildings and serving 60 countries with its global footprint. After itsmerger of equals with Level 3 Communicationsin 2017, the company is now mostly focused on enterprise, international, and small business customers, which makes up about 75% of revenue, as opposed to 25% in consumer broadband, video, and voice. Frontier is smaller, but by no means small: It serves both consumers and businesses across 29 states. However, Frontier is a bit more evenly split between consumer and commercial wireline services, with just over 50% of its business in consumer services and just under 50% in commercial services. Image source: Getty Images. Under current industry stresses, both companies are cutting costs and selling off non-core assets. CenturyLink, for its part, has already cut a fair amount of costs since the 2017 merger, but expects to achieve another $800 million to $1 billion in annualized run rate savings over the next three years. Last quarter, the company announced it was considering the sale of its consumer business, but would only do so if it were value-accretive. Meanwhile, Frontier is also embarking on an aggressive cost-cutting plan, as it aims to cut $200 million over the next year in a bid to stave off declining revenue and profit. Frontier also just sold its operations in Washington, Oregon, Idaho, and Montana for $1.35 billion, which will help the company make a dent in its $16.9 billion debt load. Both companies are challenged right now, especially in their landline phone and cable video segments, yet CenturyLink actually managed to eke out 1% broadband revenue growth last quarter, which helped mitigate the effects of lost phone and video revenue. Frontier, however, showed declines across all segments, even broadband. While Frontier's overall revenue declines were more modest, CenturyLink's retention of higher-margin broadband customers, along with merger synergies, allowed it to actually grow adjusted EBITDA even as revenue declined: [{"Q1 2019": "CenturyLink", "RevenueYOY Growth": "(5%)", "Adjusted EBITDAYOY Growth": "3.6%"}, {"Q1 2019": "Frontier Communications", "RevenueYOY Growth": "(4.5%)", "Adjusted EBITDAYOY Growth": "(3.9%)"}] Data source: CenturyLink and Frontier Communications earnings presentations and supplements. Table by author. YOY= year over year. Operationally, choosing between the two companies is difficult, but CenturyLink's ability to grow broadband revenue and adjusted EBITDA puts it ahead of Frontier for me. Unfortunately for each company, fellow regional telecom peerWindstream(Nasdaq: WIN) recently filed for bankruptcy, making the investing community very nervous about the sector. Investors should be highly aware of each company's leverage ratio and interest coverage to see if a similar fate could be possible: [{"Q1 2019": "CenturyLink", "Net Debt to Adjusted EBITDA": "3.9x", "EBITDA Interest coverage": "4.3x"}, {"Q1 2019": "Frontier Communications", "Net Debt to Adjusted EBITDA": "4.8x", "EBITDA Interest coverage": "2.3x"}] Data source: CenturyLink and Frontier Communications Q1 earnings releases and presentations. Chart by author. Interest coverage = Q1 EBITDA/interest expense. On both counts, it's no contest: CenturyLink has lower leverage ratios and better interest coverage, meaning it's by far the less risky stock. In terms of valuation, neither company was profitable on a GAAP basis last quarter, though CenturyLink would have been profitable if not for a large non-cashgoodwillimpairment. In fact, CenturyLink trades at just 8.6 times next year's earnings estimates, whereas Frontier is not expected to have positive earnings next year. Therefore CenturyLink seems the "cheaper" of the two here. However, on an EV/EBITDA basis, CenturyLink currently trades at about a 5.7 times EV/adjusted EBITDA ratio, whereas Frontier trades at just 4.8 times EV/adjusted EBITDA, making Frontier the lower-priced stock on that basis. When assessing beaten-down and out-of-favor stocks with a high amount of risk, it's usually better to go with a "safety first" attitude. In this case, that definitely means CenturyLink, thanks to its increasing EBITDA and much better debt situation. Frontier is far too risky. More From The Motley Fool • 10 Best Stocks to Buy Today • The $16,728 Social Security Bonus You Cannot Afford to Miss • 20 of the Top Stocks to Buy (Including the Two Every Investor Should Own) • What Is an ETF? • 5 Recession-Proof Stocks • How to Beat the Market Billy Dubersteinowns shares of CenturyLink. His clients may own shares of the companies mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has adisclosure policy.
The Boeing 737 MAX Lives: Boeing Rings Up a Big Day 2 at the Paris Air Show The first day of the 2019 Paris Air Show went pretty much as expected.Boeing(NYSE: BA)failed to receive a single order, as the 737 MAX grounding encouraged airlines tohold off on new commitmentsto the struggling aircraft family. Meanwhile,Airbus(NASDAQOTH: EADSY)landed several orders and commitmentstotaling more than 100 jets, mainly from aircraft leasing companyAir Lease. However, Boeing turned things around in a big way on Tuesday. Stunningly, British Airways parentInternational Airlines Group(IAG) announced its intent to buy 200 737 MAX jets. Boeing also landed two orders for its popular 787 Dreamliner widebody family. This catapulted Boeing ahead of Airbus in the Paris Air Show order race. IAG owns several European airlines spanning the full-service and low-cost segments. Aside from British Airways, its airlines include Aer Lingus, Iberia, LEVEL, and Vueling. One thing all of those carriers have in common is that they operate Airbus A320 family jets. While some of them used to operate prior-generation Boeing 737s, IAG's airlines don't have any Boeing 737s in their current fleets. International Airlines Group plans to order 200 Boeing 737 MAX 8 and 737 MAX 10 jets. Image source: Boeing. This made the company's decision to buy 737 MAX jets all the more shocking. It would have been easy to stick with Airbus' upgraded A320neo family, both to simplify pilot training and to avoid customer unease about the Boeing 737 MAX. Instead, IAG has decided to tackle the complexity of adding another fleet type to the mix, with Boeing's single-aisle jet set to become a major part of the fleet at some of its subsidiaries. (IAG will continue to operate a large number of current-generation A320 family aircraft and also has some orders for A320neo family jets.) The Boeing-IAG deal is just a letter of intent at this point, not a firm order. But IAG is a large, reputable company. As long as Boeing gets the 737 MAX back in the air later this year, there is little risk that this order will fall through. The 787 Dreamliner was Boeing's best-selling aircraft family in the first five months of 2019, with 28 net firm orders, including a20-aircraft dealwithLufthansa. Prior to announcing the IAG order, Boeing reeled in a pair of new deals for this popular widebody aircraft family. Image source: Boeing. First, Korean Air Lines made a commitment to quadruple the size of its 787 fleet from 10 aircraft today to 40 in the future. The airline plans to order 20 additional Dreamliners from Boeing, split evenly between the 787-9 and 787-10 models. It will also lease another 10 787-10s from Air Lease. This order will significantly increase Boeing's share of the Korean Air Lines widebody fleet. While the airline did not specify its plans for the new 787s, it's likely that some will be used for growth and some will replace the carrier's older A330s. (Of Korean's 29 A330s, 18 were built between 1997 and 2003 and will be ripe for replacement a few years from now.) Second, Boeing received a separate commitment for five additional 787-9s from Air Lease. When these two orders are finalized, they will boost Boeing's 2019 net order total for the 787 family to 53 aircraft. Still, the U.S. aerospace giant will need many more such orders to sustain its current 787production pace of 14 per monthfor any length of time. In announcing the IAG order, Boeing noted, "IAG CEO Willie Walsh has said the group would consider the 737 MAX as part of diversifying its future fleet to spur competition." Indeed, given the hurdles to winning this order, it's likely that Boeing offered IAG massive discounts on the 737 MAX. Thus, this particular sale may come with an unusually low profit margin. However, it's a masterstroke for Boeing. Winning a huge order from one of the world's leading airline groups before the Boeing 737 MAX has even returned to service could go a long way in reassuring other airlines and restarting the flow of 737 MAX orders. If this gambit succeeds, it could pave the way for more than a decade of strong profits from the Boeing 737 MAX program. More From The Motley Fool • 10 Best Stocks to Buy Today • The $16,728 Social Security Bonus You Cannot Afford to Miss • 20 of the Top Stocks to Buy (Including the Two Every Investor Should Own) • What Is an ETF? • 5 Recession-Proof Stocks • How to Beat the Market Adam Levine-Weinberghas no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has adisclosure policy.
How Fire Rock Holdings Limited (HKG:8345) Can Impact Your Portfolio Volatility Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! If you own shares in Fire Rock Holdings Limited (HKG:8345) then it's worth thinking about how it contributes to the volatility of your portfolio, overall. In finance, Beta is a measure of volatility. Volatility is considered to be a measure of risk in modern finance theory. Investors may think of volatility as falling into two main categories. The first category is company specific volatility. This can be dealt with by limiting your exposure to any particular stock. The other type, which cannot be diversified away, is the volatility of the entire market. Every stock in the market is exposed to this volatility, which is linked to the fact that stocks prices are correlated in an efficient market. Some stocks mimic the volatility of the market quite closely, while others demonstrate muted, exagerrated or uncorrelated price movements. Beta can be a useful tool to understand how much a stock is influenced by market risk (volatility). However, Warren Buffett said 'volatility is far from synonymous with risk' in his 2014 letter to investors. So, while useful, beta is not the only metric to consider. To use beta as an investor, you must first understand that the overall market has a beta of one. A stock with a beta greater than one is more sensitive to broader market movements than a stock with a beta of less than one. View our latest analysis for Fire Rock Holdings Zooming in on Fire Rock Holdings, we see it has a five year beta of 0.90. This is below 1, so historically its share price has been rather independent from the market. This suggests that including it in your portfolio will reduce volatility arising from broader market movements, assuming your portfolio's weighted average beta is higher than 0.90. Many would argue that beta is useful in position sizing, but fundamental metrics such as revenue and earnings are more important overall. You can see Fire Rock Holdings's revenue and earnings in the image below. Fire Rock Holdings is a noticeably small company, with a market capitalisation of HK$1.9b. Most companies this size are not always actively traded. Very small companies often have a low beta value because their share prices are not well correlated with market volatility. This could be because the price is reacting to company specific events. Alternatively, the shares may not be actively traded. The Fire Rock Holdings doesn't usually show much sensitivity to the broader market. This could be for a variety of reasons. Typically, smaller companies have a low beta if their share price tends to move a lot due to company specific developments. Alternatively, an strong dividend payer might move less than the market because investors are valuing it for its income stream. In order to fully understand whether 8345 is a good investment for you, we also need to consider important company-specific fundamentals such as Fire Rock Holdings’s financial health and performance track record. I highly recommend you dive deeper by considering the following: 1. Future Outlook: What are well-informed industry analysts predicting for 8345’s future growth? Take a look at ourfree research report of analyst consensusfor 8345’s outlook. 2. Past Track Record: Has 8345 been consistently performing well irrespective of the ups and downs in the market? Go into more detail in the past performance analysis and take a look atthe free visual representations of 8345's historicalsfor more clarity. 3. Other Interesting Stocks: It's worth checking to see how 8345 measures up against other companies on valuation. You could start with thisfree list of prospective options. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
A Close Look At I G Petrochemicals Limited’s (NSE:IGPL) 24% ROCE Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! Today we are going to look at I G Petrochemicals Limited (NSE:IGPL) to see whether it might be an attractive investment prospect. Specifically, we'll consider its Return On Capital Employed (ROCE), since that will give us an insight into how efficiently the business can generate profits from the capital it requires. Firstly, we'll go over how we calculate ROCE. Next, we'll compare it to others in its industry. Then we'll determine how its current liabilities are affecting its ROCE. ROCE measures the amount of pre-tax profits a company can generate from the capital employed in its business. Generally speaking a higher ROCE is better. Overall, it is a valuable metric that has its flaws. Author Edwin Whitingsaysto be careful when comparing the ROCE of different businesses, since 'No two businesses are exactly alike.' The formula for calculating the return on capital employed is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) Or for I G Petrochemicals: 0.24 = ₹2.0b ÷ (₹12b - ₹3.3b) (Based on the trailing twelve months to March 2019.) So,I G Petrochemicals has an ROCE of 24%. See our latest analysis for I G Petrochemicals ROCE is commonly used for comparing the performance of similar businesses. Using our data, we find that I G Petrochemicals's ROCE is meaningfully better than the 17% average in the Chemicals industry. We would consider this a positive, as it suggests it is using capital more effectively than other similar companies. Independently of how I G Petrochemicals compares to its industry, its ROCE in absolute terms appears decent, and the company may be worthy of closer investigation. Remember that this metric is backwards looking - it shows what has happened in the past, and does not accurately predict the future. Companies in cyclical industries can be difficult to understand using ROCE, as returns typically look high during boom times, and low during busts. This is because ROCE only looks at one year, instead of considering returns across a whole cycle. Since the future is so important for investors, you should check out ourfreereport on analyst forecasts for I G Petrochemicals. Liabilities, such as supplier bills and bank overdrafts, are referred to as current liabilities if they need to be paid within 12 months. The ROCE equation subtracts current liabilities from capital employed, so a company with a lot of current liabilities appears to have less capital employed, and a higher ROCE than otherwise. To counter this, investors can check if a company has high current liabilities relative to total assets. I G Petrochemicals has total assets of ₹12b and current liabilities of ₹3.3b. As a result, its current liabilities are equal to approximately 29% of its total assets. Low current liabilities are not boosting the ROCE too much. This is good to see, and with a sound ROCE, I G Petrochemicals could be worth a closer look. I G Petrochemicals looks strong on this analysis,but there are plenty of other companies that could be a good opportunity. Here is afree listof companies growing earnings rapidly. I will like I G Petrochemicals better if I see some big insider buys. While we wait, check out thisfreelist of growing companies with considerable, recent, insider buying. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Imagine Owning China Leon Inspection Holding (HKG:1586) And Wondering If The 13% Share Price Slide Is Justified Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! It's easy to feel disappointed if you buy a stock that goes down. But often it is not a reflection of the fundamental business performance. So while theChina Leon Inspection Holding Limited(HKG:1586) share price is down 13% in the last year, the total return to shareholders (which includes dividends) was -12%. And that total return actually beats the market return of -13%. China Leon Inspection Holding may have better days ahead, of course; we've only looked at a one year period. Check out our latest analysis for China Leon Inspection Holding In his essayThe Superinvestors of Graham-and-DoddsvilleWarren Buffett described how share prices do not always rationally reflect the value of a business. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price. Unfortunately China Leon Inspection Holding reported an EPS drop of 61% for the last year. This fall in the EPS is significantly worse than the 13% the share price fall. So despite the weak per-share profits, some investors are probably relieved the situation wasn't more difficult. The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image). Dive deeper into China Leon Inspection Holding's key metrics by checking this interactive graph of China Leon Inspection Holding'searnings, revenue and cash flow. Having lost 12% over the year, including dividends, China Leon Inspection Holding has generated a return within the same ballpark as the broader market. Unfortunately, last year's performance may indicate unresolved challenges, and the share price has continued to drop, down 5.0% over the last three months. It's not uncommon to see companies without long term track records disappoint shareholders. Most investors take the time to check the data on insider transactions. You canclick here to see if insiders have been buying or selling. For those who like to findwinning investmentsthisfreelist of growing companies with recent insider purchasing, could be just the ticket. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HK exchanges. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Do Insiders Own Shares In Tambla Limited (ASX:TBL)? Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! Every investor in Tambla Limited (ASX:TBL) should be aware of the most powerful shareholder groups. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.' Tambla is a smaller company with a market capitalization of AU$9.9m, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutional investors have bought into the company. Let's take a closer look to see what the different types of shareholder can tell us about TBL. Check out our latest analysis for Tambla Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index. Tambla already has institutions on the share registry. Indeed, they own 20% of the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone, since institutions make bad investments sometimes, just like everyone does. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Tambla's earnings history, below. Of course, the future is what really matters. We note that hedge funds don't have a meaningful investment in Tambla. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held. While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board; and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board, themselves. I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions. Our information suggests that insiders maintain a significant holding in Tambla Limited. It has a market capitalization of just AU$9.9m, and insiders have AU$2.5m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checkingif those insiders have been buying recently. The general public holds a 24% stake in TBL. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders. Private equity firms hold a 18% stake in TBL. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere. It seems that Private Companies own 13%, of the TBL stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company. While it is well worth considering the different groups that own a company, there are other factors that are even more important. I always like to check for ahistory of revenue growth. You can too, by accessing this free chart ofhistoric revenue and earnings in thisdetailed graph. If you would prefer check out another company -- one with potentially superior financials -- then do not miss thisfreelist of interesting companies, backed by strong financial data. NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Introducing AK Medical Holdings (HKG:1789), The Stock That Dropped 22% In The Last Year Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! The simplest way to benefit from a rising market is to buy an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. Unfortunately theAK Medical Holdings Limited(HKG:1789) share price slid 22% over twelve months. That's well bellow the market return of -13%. Because AK Medical Holdings hasn't been listed for many years, the market is still learning about how the business performs. The falls have accelerated recently, with the share price down 12% in the last three months. However, one could argue that the price has been influenced by the general market, which is down 10% in the same timeframe. View our latest analysis for AK Medical Holdings To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement. During the unfortunate twelve months during which the AK Medical Holdings share price fell, it actually saw its earnings per share (EPS) improve by 0.5%. Of course, the situation might betray previous over-optimism about growth. By glancing at these numbers, we'd posit that the the market had expectations of much higher growth, last year. But looking to other metrics might better explain the share price change. With a low yield of 0.8% we doubt that the dividend influences the share price much. AK Medical Holdings's revenue is actually up 61% over the last year. Since we can't easily explain the share price movement based on these metrics, it might be worth considering how market sentiment has changed towards the stock. Depicted in the graphic below, you'll see revenue and earnings over time. If you want more detail, you can click on the chart itself. Thisfreeinteractive report on AK Medical Holdings'sbalance sheet strengthis a great place to start, if you want to investigate the stock further. AK Medical Holdings shareholders are down 21% for the year (even including dividends), even worse than the market loss of 13%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. With the stock down 12% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. If you would like to research AK Medical Holdings in more detail then you might want totake a look at whether insiders have been buying or selling shares in the company. Of courseAK Medical Holdings may not be the best stock to buy. So you may wish to see thisfreecollection of growth stocks. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HK exchanges. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Have Insiders Been Selling Eros International Media Limited (NSE:EROSMEDIA) Shares? Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares inEros International Media Limited(NSE:EROSMEDIA). Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required. Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.' Check out our latest analysis for Eros International Media There wasn't any very large single transaction over the last year, but we can still observe some trading. Over the last year, we note insiders sold 16763 shares worth ₹1.9m. In the last year Eros International Media insiders didn't buy any company stock. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction! For those who like to findwinning investmentsthisfreelist of growing companies with recent insider purchasing, could be just the ticket. I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. From looking at our data, insiders own ₹42m worth of Eros International Media stock, about 1.5% of the company. I generally like to see higher levels of ownership. It doesn't really mean much that no insider has traded Eros International Media shares in the last quarter. Our analysis of Eros International Media insider transactions leaves us cautious. But we do like the fact that insiders own a fair chunk of the company.I like to dive deeperinto how a company has performed in the past. You can accessthisinteractive graphof past earnings, revenue and cash flow for free. If you would prefer to check out another company -- one with potentially superior financials -- then do not miss thisfreelist of interesting companies, that have HIGH return on equity and low debt. For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
‘Bitcoin Inventor’ Craig Wright’s Satoshi Lawsuit Mediation at ‘Impasse’ ByCCN Markets: Self-proclaimed “bitcoin inventor”Craig Wrightattended a mediation conference in Miami related to his $10 billion lawsuit against the estate of deceased computer genius Dave Kleiman. In a federal court filing dated June 18, the mediator noted that the parties were unable to resolve their lawsuit at mediation. “This case did not settle at the mediation. As a result, we are at an impasse.” Final mediation report. \| Source: U.S. District Court, SD Florida Canadian crypto entrepreneurCalvin Ayretweeted about the mediation moments after it ended. The conference occurred one day after ajudge sealed evidencethat Wright was ordered to produce over his claims that he’s Satoshi Nakamoto. Read the full story on CCN.com.
Does Gas2Grid Limited's (ASX:GGX) CEO Pay Reflect Performance? Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! Dennis Morton became the CEO of Gas2Grid Limited (ASX:GGX) in 2008. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO. Check out our latest analysis for Gas2Grid At the time of writing our data says that Gas2Grid Limited has a market cap of AU$2.3m, and is paying total annual CEO compensation of AU$145k. (This number is for the twelve months until June 2018). It is worth noting that the CEO compensation consists almost entirely of the salary, worth AU$145k. We examined a group of similar sized companies, with market capitalizations of below AU$292m. The median CEO total compensation in that group is AU$359k. A first glance this seems like a real positive for shareholders, since Dennis Morton is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you'll need to understand the business better before you can form an opinion. You can see a visual representation of the CEO compensation at Gas2Grid, below. Over the last three years Gas2Grid Limited has grown its earnings per share (EPS) by an average of 76% per year (using a line of best fit). Its revenue is down -94% over last year. This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts, you might want to assessthis data-rich visualizationof earnings, revenue and cash flow. With a three year total loss of 33%, Gas2Grid Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously. It appears that Gas2Grid Limited remunerates its CEO below most similar sized companies. Since the business is growing, many would argue this suggests the pay is modest. Unfortunately, some shareholders may be disappointed with their returns, given the company's performance over the last three years. We're not critical of the remuneration Dennis Morton receives, but it would be good to see improved returns to shareholders before the remuneration grows too much. This sort of circumstance certainly justifies further research, because the investment returns might still come in the future. If you think CEO compensation levels are interesting you will probably really likethis free visualization of insider trading at Gas2Grid. If you want to buy a stock that is better than Gas2Grid, thisfreelist of high return, low debt companies is a great place to look. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
After Hours: Adobe Beats on Cloud Performance, CBS Reportedly Making a New Play for Viacom We're seeing plenty of trading action across various sectors in the after market this evening. One particularly hot stock is IT sector mainstayAdobe(NASDAQ: ADBE), which just released its latest set of quarterly figures. In the media sphere, it looks as ifCBS(NYSE: CBS)is about to open its wallet for a big buy... although this is hardly the first episode in that particular soap opera. Image source: Adobe. Adobe is one of the most actively traded issues in the post-market space tonight, and it's no wonder -- it released Q2 of fiscal 2019 figures after market close that were not only above expectations, they set new records. For its Q2, the company drew revenue of $2.74 billion. This was 25% higher on a year-over-year basis, and set a new record for Adobe. Net income came in at just over $900 million ($1.83 per share), against $825 million ($1.66) in the same period a year ago. On average, analysts had been projecting $2.70 billion on the top line and per-share earnings of $1.78. Adobe has enjoyed success withits shift to a cloud-based subscription model, as opposed to the classical method of charging high "one and done" prices for boxed software. The company believes it can continue to grow through a combination of price raises and the addition of new customers. Adobe proffered guidance for Q3. It believes it will post revenue of around $2.8 billion for the quarter and EPS of $1.95. These numbers, alas, are a bit below the analyst consensus of $2.85 billion and $2.05, respectively. Nevertheless, investors are impressed by this earnings report. Adobe shares are up by over 4% in post-market trading. In the latest installment of what often seems like a long-running TV drama series, CBS is apparently preparing an offer to acquire its sister companyViacom(NASDAQ: VIA)(NASDAQ: VIAB). That's according to an article published after market hours tonight inThe Wall Street Journal, citing "people familiar with the situation." The article's sources said that the two companies have held preliminary talks on a deal. According to them, major challenges to a deal include agreeing on a price and determining who will fill the key C-suite positions in the merged entity. If all this sounds like a rerun, it should. Assuming theJournal's reporting is accurate, this is the third timeCBS and Viacom have attempted to combine forces. The two have a long history -- Viacom was spun off from what is now CBS in 2006. Most likely, the two companies will end up merging in some way, although when that might happen is anyone's guess. Entertainment is an increasingly competitive industry these days thanks to streaming services, and the more scale a company has, the more content it can offer consumers. The market seems cautiously optimistic about a merger's prospects. The shares of both companies -- including both classes of Viacom's stock -- are up marginally tonight. More From The Motley Fool • 10 Best Stocks to Buy Today • The $16,728 Social Security Bonus You Cannot Afford to Miss • 20 of the Top Stocks to Buy (Including the Two Every Investor Should Own) • What Is an ETF? • 5 Recession-Proof Stocks • How to Beat the Market Eric Volkmanhas no position in any of the stocks mentioned. The Motley Fool is short shares of CBS. The Motley Fool recommends Adobe Systems. The Motley Fool has adisclosure policy.
Most SoftBank Vision Fund investors want to join second fund: CEO Son By Sam Nussey TOKYO (Reuters) - Most investors in SoftBank Group Corp's $100 billion Vision Fund want to join the group's forthcoming second fund, and discussions with those investors will begin soon, SoftBank founder and Chief Executive Masayoshi Son said on Wednesday. The comment came at the Japanese group's first annual general meeting since it listed telecommunications firm SoftBank Corp in December, in a move widely considered as completing its transformation into a tech-focused investor. Reflecting that shift, Son said he wants to be the conductor in an artificial intelligence-driven technological revolution. "The conductor doesn't play anything but actually he plays everything," he told investors on Wednesday. With the first Vision Fund having spent much of its capital in its two years of life, Son in May said a second fund would launch "soon" even if SoftBank was initially the only investor. Investors in the first fund include the sovereign wealth funds of Saudi Arabia and Abu Dhabi, U.S. tech giant Apple Inc and Taiwanese electronic device assembler Foxconn, formally known as Hon Hai Precision Industry Co Ltd. The Vision Fund has pumped money into late-stage startups worldwide such as U.S. ride-hailing company Uber Technologies Inc and shared office space firm, The We Company. It has become SoftBank Group's biggest driver of profit growth, with much of its investment gains unrealized and driven by upward valuations of its portfolio companies. To extend the investment spree, the group needs more funds. At the meeting on Wednesday, Son said the fund's headcount would eventually reach 1,000 from 400, and the fund's head, Rajeev Misra, said the number of portfolio firms would rise to 100-150 in a year or two from around 80 at present. Internet firms now dominate rankings of the world's largest companies but have transformed just two industries, advertising and retail, which make up only a small part of the economy, Son said. While SoftBank has invested in those industries in less mature markets - in, for example, South Korean e-commerce firm Coupang and Indonesian peer Tokopedia - its tech bets have been focused on startups looking to disrupt other industries like insurance, healthcare and transport. Portfolio companies Uber and Didi Chuxing, for instance, control 90% of the ride-hailing industry globally. Outside the meeting venue in Tokyo, Japan's taxi lobby protested Son's support for ride-hailing, though the industry remains strictly regulated domestically. Inside, the atmosphere was more cordial. One shareholder asked Son to take care of his health, another expressed concern over the number of injuries at the Fukuoka SoftBank Hawks baseball team, and a father said he had taken his son to SoftBank's headquarters in the hope of glimpsing the founder. Son harkened back to the founders of major corporations like Panasonic Corp, Honda Motor Co Ltd and Sony Corp, which he said blustered with big promises and vitalized Japan's economy. That attitude is now lacking in "withdrawn" Japan, Son said. (Reporting by Sam Nussey; Editing by Christopher Cushing)
Did Hedge Funds Drop The Ball On US Concrete Inc (USCR) ? Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 750 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds' 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about US Concrete Inc (NASDAQ:USCR) in this article. IsUS Concrete Inc (NASDAQ:USCR)a great stock to buy now? The best stock pickers are becoming less confident. The number of bullish hedge fund positions retreated by 1 lately. Our calculations also showed that USCR isn't among the30 most popular stocks among hedge funds.USCRwas in 17 hedge funds' portfolios at the end of the first quarter of 2019. There were 18 hedge funds in our database with USCR holdings at the end of the previous quarter. Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. [caption id="attachment_746830" align="aligncenter" width="473"] Matthew Hulsizer of PEAK6 Capital[/caption] Let's take a peek at the new hedge fund action surrounding US Concrete Inc (NASDAQ:USCR). At the end of the first quarter, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of -6% from the fourth quarter of 2018. The graph below displays the number of hedge funds with bullish position in USCR over the last 15 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves. The largest stake in US Concrete Inc (NASDAQ:USCR) was held byLomas Capital Management, which reported holding $26 million worth of stock at the end of March. It was followed by GMT Capital with a $16.6 million position. Other investors bullish on the company included ACK Asset Management, Red Cedar Management, and Point72 Asset Management. Judging by the fact that US Concrete Inc (NASDAQ:USCR) has witnessed falling interest from the aggregate hedge fund industry, it's safe to say that there lies a certain "tier" of hedge funds who sold off their full holdings in the third quarter. At the top of the heap, Doug Gordon, Jon Hilsabeck and Don Jabro'sShellback Capitaldumped the largest position of all the hedgies followed by Insider Monkey, comprising close to $5.6 million in call options, and Steve Cohen's Point72 Asset Management was right behind this move, as the fund dumped about $3.5 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 1 funds in the third quarter. Let's go over hedge fund activity in other stocks - not necessarily in the same industry as US Concrete Inc (NASDAQ:USCR) but similarly valued. These stocks are EMC Insurance Group Inc. (NASDAQ:EMCI), Organogenesis Holdings Inc. (NASDAQ:ORGO), Casa Systems, Inc. (NASDAQ:CASA), and Echo Global Logistics, Inc. (NASDAQ:ECHO). This group of stocks' market caps are similar to USCR's market cap. [table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position EMCI,6,27213,1 ORGO,4,19046,-4 CASA,19,29235,7 ECHO,13,23188,-2 Average,10.5,24671,0.5 [/table] View table hereif you experience formatting issues. As you can see these stocks had an average of 10.5 hedge funds with bullish positions and the average amount invested in these stocks was $25 million. That figure was $77 million in USCR's case. Casa Systems, Inc. (NASDAQ:CASA) is the most popular stock in this table. On the other hand Organogenesis Holdings Inc. (NASDAQ:ORGO) is the least popular one with only 4 bullish hedge fund positions. US Concrete Inc (NASDAQ:USCR) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Hedge funds were also right about betting on USCR as the stock returned 12.2% during the same period and outperformed the market by an even larger margin. Hedge funds were rewarded for their relative bullishness. Disclosure: None. This article was originally published atInsider Monkey. Related Content • How to Best Use Insider Monkey To Increase Your Returns • Billionaire Ken Fisher’s Top Dividend Stock Picks • 30 Stocks Billionaires Are Crazy About: Insider Monkey Billionaire Stock Index
Is National CineMedia, Inc. (NCMI) A Good Stock To Buy? We at Insider Monkey have gone over 738 13F filings that hedge funds and famous value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of March 31st. In this article we look at what those investors think of National CineMedia, Inc. (NASDAQ:NCMI). National CineMedia, Inc. (NASDAQ:NCMI)has seen a decrease in activity from the world's largest hedge funds recently.NCMIwas in 18 hedge funds' portfolios at the end of the first quarter of 2019. There were 19 hedge funds in our database with NCMI positions at the end of the previous quarter. Our calculations also showed that NCMI isn't among the30 most popular stocks among hedge funds. Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. We're going to take a peek at the latest hedge fund action regarding National CineMedia, Inc. (NASDAQ:NCMI). At the end of the first quarter, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a change of -5% from the fourth quarter of 2018. On the other hand, there were a total of 17 hedge funds with a bullish position in NCMI a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves. Among these funds,Greenhouse Fundsheld the most valuable stake in National CineMedia, Inc. (NASDAQ:NCMI), which was worth $17 million at the end of the first quarter. On the second spot was Renaissance Technologies which amassed $7.5 million worth of shares. Moreover, Arrowstreet Capital, Citadel Investment Group, and Two Sigma Advisors were also bullish on National CineMedia, Inc. (NASDAQ:NCMI), allocating a large percentage of their portfolios to this stock. Because National CineMedia, Inc. (NASDAQ:NCMI) has faced bearish sentiment from the entirety of the hedge funds we track, we can see that there exists a select few hedgies that elected to cut their full holdings last quarter. At the top of the heap, Peter Algert and Kevin Coldiron'sAlgert Coldiron Investorssaid goodbye to the biggest stake of all the hedgies followed by Insider Monkey, valued at about $0.5 million in stock. Michael Platt and William Reeves's fund,BlueCrest Capital Mgmt., also dropped its stock, about $0.2 million worth. These transactions are intriguing to say the least, as total hedge fund interest dropped by 1 funds last quarter. Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as National CineMedia, Inc. (NASDAQ:NCMI) but similarly valued. We will take a look at Hemisphere Media Group Inc (NASDAQ:HMTV), Arcus Biosciences, Inc. (NYSE:RCUS), ObsEva SA (NASDAQ:OBSV), and First Mid Bancshares, Inc. (NASDAQ:FMBH). All of these stocks' market caps resemble NCMI's market cap. [table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position HMTV,8,46712,2 RCUS,8,72854,-1 OBSV,11,76483,0 FMBH,3,8537,-1 Average,7.5,51147,0 [/table] View table hereif you experience formatting issues. As you can see these stocks had an average of 7.5 hedge funds with bullish positions and the average amount invested in these stocks was $51 million. That figure was $34 million in NCMI's case. ObsEva SA (NASDAQ:OBSV) is the most popular stock in this table. On the other hand First Mid Bancshares, Inc. (NASDAQ:FMBH) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks National CineMedia, Inc. (NASDAQ:NCMI) is more popular among hedge funds. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately NCMI wasn't nearly as popular as these 20 stocks and hedge funds that were betting on NCMI were disappointed as the stock returned -3.5% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market in Q2. Disclosure: None. This article was originally published atInsider Monkey. Related Content • How to Best Use Insider Monkey To Increase Your Returns • Billionaire Ken Fisher’s Top Dividend Stock Picks • 30 Stocks Billionaires Are Crazy About: Insider Monkey Billionaire Stock Index
What Does Gale Pacific Limited's (ASX:GAP) Balance Sheet Tell Us About It? Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! While small-cap stocks, such as Gale Pacific Limited (ASX:GAP) with its market cap of AU$92m, are popular for their explosive growth, investors should also be aware of their balance sheet to judge whether the company can survive a downturn. Understanding the company's financial health becomes crucial, since poor capital management may bring about bankruptcies, which occur at a higher rate for small-caps. Let's work through some financial health checks you may wish to consider if you're interested in this stock. However, these checks don't give you a full picture, so I recommend youdig deeper yourself into GAP here. GAP's debt levels surged from AU$32m to AU$43m over the last 12 months – this includes long-term debt. With this rise in debt, the current cash and short-term investment levels stands at AU$18m , ready to be used for running the business. Moreover, GAP has produced cash from operations of AU$5.2m over the same time period, leading to an operating cash to total debt ratio of 12%, signalling that GAP’s operating cash is less than its debt. At the current liabilities level of AU$47m, it seems that the business has maintained a safe level of current assets to meet its obligations, with the current ratio last standing at 2.26x. The current ratio is calculated by dividing current assets by current liabilities. For Consumer Durables companies, this ratio is within a sensible range since there's a sufficient cash cushion without leaving too much capital idle or in low-earning investments. GAP is a relatively highly levered company with a debt-to-equity of 49%. This is a bit unusual for a small-cap stock, since they generally have a harder time borrowing than large more established companies. No matter how high the company’s debt, if it can easily cover the interest payments, it’s considered to be efficient with its use of excess leverage. A company generating earnings before interest and tax (EBIT) at least three times its net interest payments is considered financially sound. In GAP's case, the ratio of 8.11x suggests that interest is appropriately covered, which means that lenders may be willing to lend out more funding as GAP’s high interest coverage is seen as responsible and safe practice. Although GAP’s debt level is towards the higher end of the spectrum, its cash flow coverage seems adequate to meet obligations which means its debt is being efficiently utilised. Since there is also no concerns around GAP's liquidity needs, this may be its optimal capital structure for the time being. I admit this is a fairly basic analysis for GAP's financial health. Other important fundamentals need to be considered alongside. I recommend you continue to research Gale Pacific to get a better picture of the small-cap by looking at: 1. Future Outlook: What are well-informed industry analysts predicting for GAP’s future growth? Take a look at ourfree research report of analyst consensusfor GAP’s outlook. 2. Valuation: What is GAP worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? Theintrinsic value infographic in our free research reporthelps visualize whether GAP is currently mispriced by the market. 3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore ourfree list of these great stocks here. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Here’s What Hedge Funds Think About e.l.f. Beauty, Inc. (ELF) The market has been volatile in the last 6 months as the Federal Reserve continued its rate hikes and then abruptly reversed its stance and uncertainty looms over trade negotiations with China. Small cap stocks have been hit hard as a result, as the Russell 2000 ETF (IWM) has underperformed the larger S&P 500 ETF (SPY) by nearly 9 percentage points. SEC filings and hedge fund investor letters indicate that the smart money seems to be paring back their overall long exposure since summer months, though some funds increased their exposure dramatically at the end of Q4 and the beginning of Q1. In this article, we analyze what the smart money thinks of e.l.f. Beauty, Inc. (NYSE:ELF) and find out how it is affected by hedge funds' moves. e.l.f. Beauty, Inc. (NYSE:ELF)has seen an increase in activity from the world's largest hedge funds lately. Our calculations also showed that ELF isn't among the30 most popular stocks among hedge funds. Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. Let's take a gander at the new hedge fund action surrounding e.l.f. Beauty, Inc. (NYSE:ELF). At the end of the first quarter, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a change of 6% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in ELF over the last 15 quarters. With hedgies' sentiment swirling, there exists a few notable hedge fund managers who were upping their holdings substantially (or already accumulated large positions). More specifically,Marathon Partnerswas the largest shareholder of e.l.f. Beauty, Inc. (NYSE:ELF), with a stake worth $46.9 million reported as of the end of March. Trailing Marathon Partners was Bares Capital Management, which amassed a stake valued at $23.1 million. Portolan Capital Management, Balyasny Asset Management, and Millennium Management were also very fond of the stock, giving the stock large weights in their portfolios. As one would reasonably expect, specific money managers have jumped into e.l.f. Beauty, Inc. (NYSE:ELF) headfirst.Balyasny Asset Management, managed by Dmitry Balyasny, initiated the most valuable position in e.l.f. Beauty, Inc. (NYSE:ELF). Balyasny Asset Management had $6.1 million invested in the company at the end of the quarter. Peter Algert and Kevin Coldiron'sAlgert Coldiron Investorsalso initiated a $0.7 million position during the quarter. The other funds with brand new ELF positions are Jim Simons'sRenaissance Technologies, Mike Vranos'sEllington, and Michael Price'sMFP Investors. Let's check out hedge fund activity in other stocks - not necessarily in the same industry as e.l.f. Beauty, Inc. (NYSE:ELF) but similarly valued. These stocks are EZCORP Inc (NASDAQ:EZPW), Transenterix Inc (NYSE:TRXC), pdvWireless Inc (NASDAQ:PDVW), and McEwen Mining Inc (NYSE:MUX). This group of stocks' market valuations match ELF's market valuation. [table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position EZPW,20,116774,0 TRXC,13,10958,5 PDVW,13,252859,1 MUX,5,4852,0 Average,12.75,96361,1.5 [/table] View table hereif you experience formatting issues. As you can see these stocks had an average of 12.75 hedge funds with bullish positions and the average amount invested in these stocks was $96 million. That figure was $118 million in ELF's case. EZCORP Inc (NASDAQ:EZPW) is the most popular stock in this table. On the other hand McEwen Mining Inc (NYSE:MUX) is the least popular one with only 5 bullish hedge fund positions. e.l.f. Beauty, Inc. (NYSE:ELF) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Hedge funds were also right about betting on ELF, though not to the same extent, as the stock returned 0.9% during the same time frame and outperformed the market as well. Disclosure: None. This article was originally published atInsider Monkey. Related Content • How to Best Use Insider Monkey To Increase Your Returns • Billionaire Ken Fisher’s Top Dividend Stock Picks • 30 Stocks Billionaires Are Crazy About: Insider Monkey Billionaire Stock Index
Did Hedge Funds Drop The Ball On FactSet Research Systems Inc. (FDS) ? We at Insider Monkey have gone over 738 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds' and investors' portfolio positions as of March 31st. In this article, we look at what those funds think of FactSet Research Systems Inc. (NYSE:FDS) based on that data. IsFactSet Research Systems Inc. (NYSE:FDS)going to take off soon? Prominent investors are taking a bearish view. The number of long hedge fund positions shrunk by 2 lately. Our calculations also showed that fds isn't among the30 most popular stocks among hedge funds.FDSwas in 18 hedge funds' portfolios at the end of March. There were 20 hedge funds in our database with FDS positions at the end of the previous quarter. In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to. Let's take a look at the new hedge fund action encompassing FactSet Research Systems Inc. (NYSE:FDS). At Q1's end, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a change of -10% from the fourth quarter of 2018. By comparison, 23 hedge funds held shares or bullish call options in FDS a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves. More specifically,Renaissance Technologieswas the largest shareholder of FactSet Research Systems Inc. (NYSE:FDS), with a stake worth $146.9 million reported as of the end of March. Trailing Renaissance Technologies was Markel Gayner Asset Management, which amassed a stake valued at $28.8 million. Echo Street Capital Management, Millennium Management, and GLG Partners were also very fond of the stock, giving the stock large weights in their portfolios. Since FactSet Research Systems Inc. (NYSE:FDS) has witnessed declining sentiment from the aggregate hedge fund industry, it's safe to say that there is a sect of fund managers who sold off their full holdings by the end of the third quarter. Intriguingly, Peter Seuss'sPrana Capital Managementsold off the biggest position of all the hedgies tracked by Insider Monkey, valued at about $11.4 million in stock. John Overdeck and David Siegel's fund,Two Sigma Advisors, also cut its stock, about $7.4 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 2 funds by the end of the third quarter. Let's also examine hedge fund activity in other stocks similar to FactSet Research Systems Inc. (NYSE:FDS). These stocks are Tapestry, Inc. (NYSE:TPR), Packaging Corporation Of America (NYSE:PKG), PG&E Corporation (NYSE:PCG), and Erie Indemnity Company (NASDAQ:ERIE). This group of stocks' market valuations resemble FDS's market valuation. [table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TPR,29,372102,-9 PKG,26,212243,-7 PCG,72,4787090,14 ERIE,17,98634,6 Average,36,1367517,1 [/table] View table hereif you experience formatting issues. As you can see these stocks had an average of 36 hedge funds with bullish positions and the average amount invested in these stocks was $1368 million. That figure was $251 million in FDS's case. PG&E Corporation (NYSE:PCG) is the most popular stock in this table. On the other hand Erie Indemnity Company (NASDAQ:ERIE) is the least popular one with only 17 bullish hedge fund positions. FactSet Research Systems Inc. (NYSE:FDS) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. A small number of hedge funds were also right about betting on FDS as the stock returned 12.4% during the same time frame and outperformed the market by an even larger margin. Disclosure: None. This article was originally published atInsider Monkey. Related Content • How to Best Use Insider Monkey To Increase Your Returns • Billionaire Ken Fisher’s Top Dividend Stock Picks • 30 Stocks Billionaires Are Crazy About: Insider Monkey Billionaire Stock Index
Here’s What Hedge Funds Think About Graco Inc. (GGG) How do you pick the next stock to invest in? One way would be to spend hours of research browsing through thousands of publicly traded companies. However, an easier way is to look at the stocks that smart money investors are collectively bullish on. Hedge funds and other institutional investors usually invest large amounts of capital and have to conduct due diligence while choosing their next pick. They don't always get it right, but, on average, their stock picks historically generated strong returns after adjusting for known risk factors. With this in mind, let’s take a look at the recent hedge fund activity surrounding Graco Inc. (NYSE:GGG). Hedge fund interest inGraco Inc. (NYSE:GGG)shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as Black Knight, Inc. (NYSE:BKI), Jazz Pharmaceuticals plc (NASDAQ:JAZZ), and Booz Allen Hamilton Holding Corporation (NYSE:BAH) to gather more data points. So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio. [caption id="attachment_745225" align="aligncenter" width="473"] Noam Gottesman, GLG Partners[/caption] Let's analyze the fresh hedge fund action surrounding Graco Inc. (NYSE:GGG). At the end of the first quarter, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards GGG over the last 15 quarters. With hedgies' capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions). When looking at the institutional investors followed by Insider Monkey,GAMCO Investors, managed by Mario Gabelli, holds the largest position in Graco Inc. (NYSE:GGG). GAMCO Investors has a $116.6 million position in the stock, comprising 0.9% of its 13F portfolio. The second largest stake is held byGLG Partners, led by Noam Gottesman, holding a $22.5 million position; 0.1% of its 13F portfolio is allocated to the company. Some other members of the smart money that hold long positions consist of Chuck Royce'sRoyce & Associates, D. E. Shaw'sD E Shawand Ken Griffin'sCitadel Investment Group. Because Graco Inc. (NYSE:GGG) has experienced declining sentiment from the smart money, logic holds that there was a specific group of fund managers that slashed their entire stakes by the end of the third quarter. Intriguingly, John Overdeck and David Siegel'sTwo Sigma Advisorsdropped the biggest investment of the 700 funds followed by Insider Monkey, comprising an estimated $1.4 million in stock, and Benjamin A. Smith's Laurion Capital Management was right behind this move, as the fund sold off about $0.9 million worth. These transactions are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience). Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Graco Inc. (NYSE:GGG) but similarly valued. We will take a look at Black Knight, Inc. (NYSE:BKI), Jazz Pharmaceuticals plc (NASDAQ:JAZZ), Booz Allen Hamilton Holding Corporation (NYSE:BAH), and West Pharmaceutical Services Inc. (NYSE:WST). All of these stocks' market caps are closest to GGG's market cap. [table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BKI,40,991316,4 JAZZ,27,772683,-4 BAH,19,230572,-7 WST,21,290123,1 Average,26.75,571174,-1.5 [/table] View table hereif you experience formatting issues. As you can see these stocks had an average of 26.75 hedge funds with bullish positions and the average amount invested in these stocks was $571 million. That figure was $181 million in GGG's case. Black Knight, Inc. (NYSE:BKI) is the most popular stock in this table. On the other hand Booz Allen Hamilton Holding Corporation (NYSE:BAH) is the least popular one with only 19 bullish hedge fund positions. Compared to these stocks Graco Inc. (NYSE:GGG) is even less popular than BAH. Hedge funds dodged a bullet by taking a bearish stance towards GGG. Our calculations showed that the top 15 most popular hedge fund stocks returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately GGG wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); GGG investors were disappointed as the stock returned -3.4% during the same time frame and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in the second quarter. Disclosure: None. This article was originally published atInsider Monkey. Related Content • How to Best Use Insider Monkey To Increase Your Returns • Billionaire Ken Fisher’s Top Dividend Stock Picks • 30 Stocks Billionaires Are Crazy About: Insider Monkey Billionaire Stock Index
Hedge Funds Have Never Been More Bullish On Bright Horizons Family Solutions Inc (BFAM) Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that's why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an individual investor’s stock selection process, as it may offer great insights of how the brightest minds of the finance industry feel about specific stocks. After all, these people have access to smartest analysts and expensive data/information sources that individual investors can't match. So should one consider investing in Bright Horizons Family Solutions Inc (NYSE:BFAM)? The smart money sentiment can provide an answer to this question. Bright Horizons Family Solutions Inc (NYSE:BFAM)was in 18 hedge funds' portfolios at the end of the first quarter of 2019. BFAM has experienced an increase in activity from the world's largest hedge funds in recent months. There were 16 hedge funds in our database with BFAM positions at the end of the previous quarter. Our calculations also showed that bfam isn't among the30 most popular stocks among hedge funds. If you'd ask most investors, hedge funds are seen as underperforming, outdated financial tools of yesteryear. While there are over 8000 funds in operation at present, Our researchers look at the top tier of this group, approximately 750 funds. These money managers shepherd the majority of the hedge fund industry's total asset base, and by keeping track of their finest investments, Insider Monkey has unearthed various investment strategies that have historically outpaced the market. Insider Monkey's flagship hedge fund strategy outrun the S&P 500 index by around 5 percentage points per annum since its inception in May 2014 through the end of May. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 30.9% since February 2017 (through May 30th) even though the market was up nearly 24% during the same period. We just shared a list of 5 short targets in ourlatest quarterly updateand they are already down an average of 11.9% in less than a couple of weeks whereas our long picks outperformed the market by 2 percentage points in this volatile 2 week period. [caption id="attachment_746893" align="aligncenter" width="473"] Paul Marshall of Marshall Wace[/caption] Let's take a look at the new hedge fund action surrounding Bright Horizons Family Solutions Inc (NYSE:BFAM). At the end of the first quarter, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a change of 13% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards BFAM over the last 15 quarters. With hedgies' capital changing hands, there exists an "upper tier" of notable hedge fund managers who were boosting their stakes considerably (or already accumulated large positions). Among these funds,Select Equity Groupheld the most valuable stake in Bright Horizons Family Solutions Inc (NYSE:BFAM), which was worth $129.5 million at the end of the first quarter. On the second spot was Marshall Wace LLP which amassed $89.7 million worth of shares. Moreover, D E Shaw, Bishop Rock Capital, and AQR Capital Management were also bullish on Bright Horizons Family Solutions Inc (NYSE:BFAM), allocating a large percentage of their portfolios to this stock. With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves.Citadel Investment Group, managed by Ken Griffin, initiated the most outsized position in Bright Horizons Family Solutions Inc (NYSE:BFAM). Citadel Investment Group had $2.8 million invested in the company at the end of the quarter. John Overdeck and David Siegel'sTwo Sigma Advisorsalso initiated a $2 million position during the quarter. The following funds were also among the new BFAM investors: Chuck Royce'sRoyce & Associates, Andrew Feldstein and Stephen Siderow'sBlue Mountain Capital, and Peter Rathjens, Bruce Clarke and John Campbell'sArrowstreet Capital. Let's check out hedge fund activity in other stocks similar to Bright Horizons Family Solutions Inc (NYSE:BFAM). We will take a look at Masimo Corporation (NASDAQ:MASI), CDK Global Inc (NASDAQ:CDK), Service Corporation International (NYSE:SCI), and Xerox Corporation (NYSE:XRX). This group of stocks' market values resemble BFAM's market value. [table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MASI,34,485427,1 CDK,23,548582,-2 SCI,20,527994,3 XRX,33,1378808,-11 Average,27.5,735203,-2.25 [/table] View table hereif you experience formatting issues. As you can see these stocks had an average of 27.5 hedge funds with bullish positions and the average amount invested in these stocks was $735 million. That figure was $294 million in BFAM's case. Masimo Corporation (NASDAQ:MASI) is the most popular stock in this table. On the other hand Service Corporation International (NYSE:SCI) is the least popular one with only 20 bullish hedge fund positions. Compared to these stocks Bright Horizons Family Solutions Inc (NYSE:BFAM) is even less popular than SCI. Hedge funds clearly dropped the ball on BFAM as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. A small number of hedge funds were also right about betting on BFAM as the stock returned 7% during the same period and outperformed the market by an even larger margin. Disclosure: None. This article was originally published atInsider Monkey. Related Content • How to Best Use Insider Monkey To Increase Your Returns • Billionaire Ken Fisher’s Top Dividend Stock Picks • 30 Stocks Billionaires Are Crazy About: Insider Monkey Billionaire Stock Index
Is Universal Display Corporation (OLED) A Good Stock To Buy? Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of March. At Insider Monkey, we follow nearly 750 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Universal Display Corporation (NASDAQ:OLED), so let’s take a closer look at the sentiment that surrounds it in the current quarter. IsUniversal Display Corporation (NASDAQ:OLED)a worthy stock to buy now? The smart money is in an optimistic mood. The number of bullish hedge fund bets improved by 8 lately. Our calculations also showed that oled isn't among the30 most popular stocks among hedge funds.OLEDwas in 18 hedge funds' portfolios at the end of March. There were 10 hedge funds in our database with OLED holdings at the end of the previous quarter. Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. Let's take a gander at the recent hedge fund action encompassing Universal Display Corporation (NASDAQ:OLED). At Q1's end, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 80% from the fourth quarter of 2018. By comparison, 24 hedge funds held shares or bullish call options in OLED a year ago. With hedgies' capital changing hands, there exists a select group of notable hedge fund managers who were increasing their stakes considerably (or already accumulated large positions). More specifically,Polar Capitalwas the largest shareholder of Universal Display Corporation (NASDAQ:OLED), with a stake worth $48.7 million reported as of the end of March. Trailing Polar Capital was Citadel Investment Group, which amassed a stake valued at $47.9 million. Kayak Investment Partners, D E Shaw, and Highbridge Capital Management were also very fond of the stock, giving the stock large weights in their portfolios. With a general bullishness amongst the heavyweights, key hedge funds have been driving this bullishness.Kayak Investment Partners, managed by Daryl Smith, initiated the biggest position in Universal Display Corporation (NASDAQ:OLED). Kayak Investment Partners had $20.9 million invested in the company at the end of the quarter. Glenn Russell Dubin'sHighbridge Capital Managementalso initiated a $12.3 million position during the quarter. The other funds with brand new OLED positions are David Harding'sWinton Capital Management, Larry Chen and Terry Zhang'sTairen Capital, and Israel Englander'sMillennium Management. Let's go over hedge fund activity in other stocks similar to Universal Display Corporation (NASDAQ:OLED). We will take a look at Sealed Air Corporation (NYSE:SEE), Liberty Property Trust (NYSE:LPT), Exelixis, Inc. (NASDAQ:EXEL), and Mobile TeleSystems Public Joint Stock Company. (NYSE:MBT). This group of stocks' market values are closest to OLED's market value. [table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SEE,29,1118989,-2 LPT,19,215440,0 EXEL,24,788343,0 MBT,13,321821,1 Average,21.25,611148,-0.25 [/table] View table hereif you experience formatting issues. As you can see these stocks had an average of 21.25 hedge funds with bullish positions and the average amount invested in these stocks was $611 million. That figure was $133 million in OLED's case. Sealed Air Corporation (NYSE:SEE) is the most popular stock in this table. On the other hand Mobile TeleSystems Public Joint Stock Company. (NYSE:MBT) is the least popular one with only 13 bullish hedge fund positions. Universal Display Corporation (NASDAQ:OLED) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately OLED wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); OLED investors were disappointed as the stock returned -2.3% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2. Disclosure: None. This article was originally published atInsider Monkey. Related Content • How to Best Use Insider Monkey To Increase Your Returns • Billionaire Ken Fisher’s Top Dividend Stock Picks • 30 Stocks Billionaires Are Crazy About: Insider Monkey Billionaire Stock Index
Here’s What Hedge Funds Think About Perrigo Company plc (PRGO) Is Perrigo Company plc (NYSE:PRGO) a good bet right now? We like to analyze hedge fund sentiment before doing days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds' picks don't beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk. Perrigo Company plc (NYSE:PRGO)investors should pay attention to a decrease in activity from the world's largest hedge funds recently. Our calculations also showed that prgo isn't among the30 most popular stocks among hedge funds. In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to. Let's take a glance at the new hedge fund action encompassing Perrigo Company plc (NYSE:PRGO). At Q1's end, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -22% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards PRGO over the last 15 quarters. With hedgies' capital changing hands, there exists a few noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions). The largest stake in Perrigo Company plc (NYSE:PRGO) was held byStarboard Value LP, which reported holding $483.6 million worth of stock at the end of March. It was followed by Camber Capital Management with a $101.1 million position. Other investors bullish on the company included D E Shaw, Two Sigma Advisors, and Citadel Investment Group. Judging by the fact that Perrigo Company plc (NYSE:PRGO) has experienced falling interest from hedge fund managers, it's safe to say that there is a sect of hedgies that slashed their entire stakes last quarter. Interestingly, Peter Muller'sPDT Partnerssaid goodbye to the biggest stake of all the hedgies watched by Insider Monkey, valued at about $10.2 million in stock. Dmitry Balyasny's fund,Balyasny Asset Management, also said goodbye to its stock, about $4.6 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 5 funds last quarter. Let's go over hedge fund activity in other stocks similar to Perrigo Company plc (NYSE:PRGO). These stocks are American Campus Communities, Inc. (NYSE:ACC), Logitech International SA (NASDAQ:LOGI), Aqua America Inc (NYSE:WTR), and Pool Corporation (NASDAQ:POOL). This group of stocks' market caps resemble PRGO's market cap. [table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ACC,19,322439,3 LOGI,15,239756,1 WTR,15,138874,-4 POOL,16,248823,-1 Average,16.25,237473,-0.25 [/table] View table hereif you experience formatting issues. As you can see these stocks had an average of 16.25 hedge funds with bullish positions and the average amount invested in these stocks was $237 million. That figure was $662 million in PRGO's case. American Campus Communities, Inc. (NYSE:ACC) is the most popular stock in this table. On the other hand Logitech International SA (NASDAQ:LOGI) is the least popular one with only 15 bullish hedge fund positions. Perrigo Company plc (NYSE:PRGO) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately PRGO wasn't nearly as popular as these 20 stocks and hedge funds that were betting on PRGO were disappointed as the stock returned -10.1% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2. Disclosure: None. This article was originally published atInsider Monkey. Related Content • How to Best Use Insider Monkey To Increase Your Returns • Billionaire Ken Fisher’s Top Dividend Stock Picks • 30 Stocks Billionaires Are Crazy About: Insider Monkey Billionaire Stock Index
Here’s What Hedge Funds Think About Ingredion Inc (INGR) Like everyone else, elite investors make mistakes. Some of their top consensus picks, such as Amazon, Facebook and Alibaba, have not done well in Q4 due to various reasons. Nevertheless, the data show elite investors' consensus picks have done well on average over the long-term. The top 20 stocks among hedge funds beat the S&P 500 Index ETF by more than 6 percentage points so far this year. Because their consensus picks have done well, we pay attention to what elite funds think before doing extensive research on a stock. In this article, we take a closer look at Ingredion Inc (NYSE:INGR) from the perspective of those elite funds. Ingredion Inc (NYSE:INGR)shareholders have witnessed a decrease in activity from the world's largest hedge funds in recent months. Our calculations also showed that ingr isn't among the30 most popular stocks among hedge funds. To most investors, hedge funds are viewed as unimportant, outdated investment vehicles of yesteryear. While there are greater than 8000 funds trading at present, Our researchers hone in on the masters of this group, about 750 funds. Most estimates calculate that this group of people oversee the majority of all hedge funds' total capital, and by keeping track of their best picks, Insider Monkey has found various investment strategies that have historically outstripped the broader indices. Insider Monkey's flagship hedge fund strategy outstripped the S&P 500 index by around 5 percentage points a year since its inception in May 2014 through the end of May. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 30.9% since February 2017 (through May 30th) even though the market was up nearly 24% during the same period. We just shared a list of 5 short targets in ourlatest quarterly updateand they are already down an average of 11.9% in less than a couple of weeks whereas our long picks outperformed the market by 2 percentage points in this volatile 2 week period. Let's check out the recent hedge fund action surrounding Ingredion Inc (NYSE:INGR). At the end of the first quarter, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -14% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in INGR over the last 15 quarters. With hedge funds' positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their holdings considerably (or already accumulated large positions). Of the funds tracked by Insider Monkey,AQR Capital Management, managed by Cliff Asness, holds the biggest position in Ingredion Inc (NYSE:INGR). AQR Capital Management has a $74.8 million position in the stock, comprising 0.1% of its 13F portfolio. The second most bullish fund manager isFisher Asset Management, led by Ken Fisher, holding a $62.3 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other professional money managers that are bullish contain John Overdeck and David Siegel'sTwo Sigma Advisors, Israel Englander'sMillennium Managementand Jim Simons'sRenaissance Technologies. Judging by the fact that Ingredion Inc (NYSE:INGR) has faced falling interest from the aggregate hedge fund industry, it's easy to see that there exists a select few hedgies who sold off their full holdings heading into Q3. At the top of the heap, David Harding'sWinton Capital Managementsaid goodbye to the largest stake of the "upper crust" of funds watched by Insider Monkey, comprising close to $11.2 million in call options. Matthew Hulsizer's fund,PEAK6 Capital Management, also cut its call options, about $4.8 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 3 funds heading into Q3. Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Ingredion Inc (NYSE:INGR) but similarly valued. We will take a look at RenaissanceRe Holdings Ltd. (NYSE:RNR), Park Hotels & Resorts Inc. (NYSE:PK), Starwood Property Trust, Inc. (NYSE:STWD), and New Residential Investment Corp (NYSE:NRZ). This group of stocks' market valuations resemble INGR's market valuation. [table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RNR,20,500624,-2 PK,14,503382,-3 STWD,15,144343,-2 NRZ,18,187262,-7 Average,16.75,333903,-3.5 [/table] View table hereif you experience formatting issues. As you can see these stocks had an average of 16.75 hedge funds with bullish positions and the average amount invested in these stocks was $334 million. That figure was $295 million in INGR's case. RenaissanceRe Holdings Ltd. (NYSE:RNR) is the most popular stock in this table. On the other hand Park Hotels & Resorts Inc. (NYSE:PK) is the least popular one with only 14 bullish hedge fund positions. Ingredion Inc (NYSE:INGR) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately INGR wasn't nearly as popular as these 20 stocks and hedge funds that were betting on INGR were disappointed as the stock returned -17.5% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2. Disclosure: None. This article was originally published atInsider Monkey. Related Content • How to Best Use Insider Monkey To Increase Your Returns • Billionaire Ken Fisher’s Top Dividend Stock Picks • 30 Stocks Billionaires Are Crazy About: Insider Monkey Billionaire Stock Index
A Spotlight On Vimta Labs Limited's (NSE:VIMTALABS) Fundamentals Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! I've been keeping an eye on Vimta Labs Limited (NSE:VIMTALABS) because I'm attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe VIMTALABS has a lot to offer. Basically, it is a company with great financial health as well as a a strong history of performance. Below, I've touched on some key aspects you should know on a high level. If you're interested in understanding beyond my broad commentary, read the fullreport on Vimta Labs here. VIMTALABS's strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This suggests prudent control over cash and cost by management, which is an important determinant of the company’s health. VIMTALABS's has produced operating cash levels of 1.97x total debt over the past year, which implies that VIMTALABS's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings. For Vimta Labs, I've compiled three essential aspects you should further research: 1. Future Outlook: What are well-informed industry analysts predicting for VIMTALABS’s future growth? Take a look at ourfree research report of analyst consensusfor VIMTALABS’s outlook. 2. Valuation: What is VIMTALABS worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? Theintrinsic value infographic in our free research reporthelps visualize whether VIMTALABS is currently mispriced by the market. 3. Other Attractive Alternatives: Are there other well-rounded stocks you could be holding instead of VIMTALABS? Exploreour interactive list of stocks with large potentialto get an idea of what else is out there you may be missing! We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Trump Fires Up Orlando Crowd With 2020 Campaign Re-Election Speech It took President Donald Trump more than 30 minutes into his speech—that included bashing his Democratic rivals and the “fake news” media—before telling more than 20,000 people what they came to hear. “I stand before you to officially launch my campaign for a second term as President of the United States,” Trump said Tuesday to a raucous crowd at the Amway Center arena in Orlando, Florida. “I promise you I will never, never let you down.” During his nearly 90-minute speech, Trump said his 2016 campaign was more than a political campaign. It was a “defining moment” and historic movement made up of people who “love their country, love their flag, love their children, and believe that a nation must care for its own citizens first.” With chants of “USA” and “Make America Great,” Trump’s speech in the battleground state of Florida comes nearly 24 hours after he said ina pair of tweetsthat he will double down on his tough stance on immigration promise, including threatening to deport millions of immigrants living in the United States illegally. Immigration has been a critical theme of Trump since his initial presidential run in 2016 and remains a consistent go-to move to rally his base. It didn’t take long for him to reiterate a similar message on Tuesday. Trump said a Democratic president and Democratic-led Congress “would strip Americans of their constitutional rights while flooding the country with illegal immigrants.” To a chorus of boos, the president further said to his supporters that Democrats want them “splintered” and “divided.” His supporters then began chanting: “Build that wall! Build that wall!” “We are building the wall,” Trump said, adding that some 400 miles of the new wall will be built by the end of 2020. Trump also said the U.S. is finally making “America First” and creating a “nation that must care for its own citizens first.” The president took numerous shots at his Democratic critics saying that the U.S. is a much more respected country across the globe under his watch. “They wanted to deny you the future that you demanded and the future that America deserves and now is getting,” Trump told the crowd. “They want to destroy you and … destroy our country as we know it. It’s not acceptable, and it’s not going to happen.” Trump said if he’s reelected, his administration will do things that no one else has ever attempted before. “Wait until you see some of the things you’ll hear about in the next few months,” Trump teased to the partisan crowd with cheers of “Four more years! Four more years! Four more years!” Trump also called drew cheers when he zinged off one-liners at Democrats, calling them “depraved,” “radical,” “extreme,” and “unhinged.” “They would shut down your free speech and use the power of the law to punish their opponents,” he said. Meanwhile, Trump’s official relaunch speech also arrives as he is trailing innumerous pollsas Democratic challengers, including former vice president Joe Biden and Sens. Bernie Sanders and Elizabeth Warren, have significant leads over the president. He called Biden “Sleepy creepy Uncle Joe,” taking more shots at him and his predecessor, President Barack Obama. Biden responded to the president’s speech ina series of tweets, including saying “This is truly the most important election of our lifetime.” In anothertweet, Biden said, “Trump continues to undermine our standing in the world,” Our core values of inclusivity, diversity, respect for the rule of law, freedom of speech, freedom of the press, and freedom of religion are under attack here at home and abroad. Trump said two and a half years into his tenure, he sees plenty of positive signs, buoyed by a surging economy, tax cuts, trade deals, and low unemployment. As for Sanders, Trump said America will not stop fighting for the values that “keep us as one.” The president also said Americans don’t believe in socialism, “they believe in freedom.” In response, Sanders tweeted that “Trump is living in a parallel universe. He is way out of touch with ordinary people. He must be defeated.” Sanders alsotweeted a videoon how he plans to beat Trump. Duringan interview withTimethat ran online Tuesday, Trump said that while he believes a 449-page investigation by special counsel Robert Mueller hurt his job approval rating, which has never been above 50%, it also strengthened his connection with his supporters. Whilethe 22-month investigation found no evidence of a conspiracyinvolving the Trump campaign and Russia, the president said he believes his base is even angrier than him about the probe. “The witch hunt has made our base stronger,” Trump toldTimeon Monday. “It’s made our people more resilient.” During Tuesday’s rally, Trump said the Democrats were hoping for a “do-over” with the investigation mentioning his 2016 opponent Hillary Clinton. He called the investigation an “illegal attempt to overturn the results of the election, spy on our campaign, which is what they did, and subverts our democracy.” The crowd soon broke into chants of “lock her up.” Later in his speech, Trump asked the crowd to decide which slogan he should use during his campaign: “Make America Great Again,” or “Keep America Great.” “Keep America Great,” said Trump. “Well, we’re going to keep on fighting for every man, woman, and child across this great land…and we will indeed Keep America Great better than ever before.” —2020Democratic primary debates: Everything you need to know —The campaign finance power behindTrump impeachment efforts —Not every state is restrictingabortion rights—some are expanding them —Richard Nixon‘s “Western White House” is back on the market—at a discount —Trump administration to use former Japanese internment camp to housemigrant children Get up to speed on your morning commute withFortune’sCEO Dailynewsletter.
Genes Tech Group Holdings (HKG:8257) Shareholders Have Enjoyed A 26% Share Price Gain Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! If you want to compound wealth in the stock market, you can do so by buying an index fund. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). For example, theGenes Tech Group Holdings Company Limited(HKG:8257) share price is up 26% in the last year, clearly besting than the market return of around -16% (not including dividends). If it can keep that out-performance up over the long term, investors will do very well! Note that businesses generally develop over the long term, so the returns over the last year might not reflect a long term trend. View our latest analysis for Genes Tech Group Holdings To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price. During the last year Genes Tech Group Holdings grew its earnings per share (EPS) by 216%. This EPS growth is significantly higher than the 26% increase in the share price. Therefore, it seems the market isn't as excited about Genes Tech Group Holdings as it was before. This could be an opportunity. You can see how EPS has changed over time in the image below (click on the chart to see the exact values). It might be well worthwhile taking a look at ourfreereport on Genes Tech Group Holdings's earnings, revenue and cash flow. It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Genes Tech Group Holdings the TSR over the last year was 32%, which is better than the share price return mentioned above. This is largely a result of its dividend payments! It's nice to see that Genes Tech Group Holdings shareholders have gained 32% over the last year, including dividends. A substantial portion of that gain has come in the last three months, with the stock up 24% in that time. Demand for the stock from multiple parties is pushing the price higher; it could be that word is getting out about its virtues as a business. Before forming an opinion on Genes Tech Group Holdings you might want to consider the cold hard cash it pays as a dividend. Thisfreechart tracks its dividend over time. Of course,you might find a fantastic investment by looking elsewhere.So take a peek at thisfreelist of companies we expect will grow earnings. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HK exchanges. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Have Insiders Been Selling Wonderla Holidays Limited (NSE:WONDERLA) Shares? Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares inWonderla Holidays Limited(NSE:WONDERLA). It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information. Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard Universitystudyfound that 'insider purchases earn abnormal returns of more than 6% per year.' View our latest analysis for Wonderla Holidays The , Sheela Kochouseph, made the biggest insider sale in the last 12 months. That single transaction was for ₹189m worth of shares at a price of ₹270 each. That means that an insider was selling shares at slightly below the current price (₹292). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 9.9% of Sheela Kochouseph's holding. Over the last year we saw more insider selling of Wonderla Holidays shares, than buying. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date! If you like to buy stocks that insiders are buying, rather than selling, then you might just love thisfreelist of companies. (Hint: insiders have been buying them). Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Wonderla Holidays insiders own 60% of the company, worth about ₹9.9b. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders. There haven't been any insider transactions in the last three months -- that doesn't mean much. While we feel good about high insider ownership of Wonderla Holidays, we can't say the same about the selling of shares. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check thisfreereport showing analyst forecasts for its future. But note:Wonderla Holidays may not be the best stock to buy. So take a peek at thisfreelist of interesting companies with high ROE and low debt. For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
A Closer Look At HGL Limited's (ASX:HNG) Uninspiring ROE Want to participate in a short research study ? Help shape the future of investing tools and you could win a $250 gift card! One of the best investments we can make is in our own knowledge and skill set. With that in mind, this article will work through how we can use Return On Equity (ROE) to better understand a business. By way of learning-by-doing, we'll look at ROE to gain a better understanding of HGL Limited ( ASX:HNG ). Over the last twelve months HGL has recorded a ROE of 3.6% . One way to conceptualize this, is that for each A$1 of shareholders' equity it has, the company made A$0.036 in profit. View our latest analysis for HGL How Do I Calculate ROE? The formula for return on equity is: Return on Equity = Net Profit ÷ Shareholders' Equity Or for HGL: 3.6% = AU$550k ÷ AU$26m (Based on the trailing twelve months to March 2019.) It's easy to understand the 'net profit' part of that equation, but 'shareholders' equity' requires further explanation. It is the capital paid in by shareholders, plus any retained earnings. The easiest way to calculate shareholders' equity is to subtract the company's total liabilities from the total assets. What Does ROE Signify? ROE measures a company's profitability against the profit it retains, and any outside investments. The 'return' is the amount earned after tax over the last twelve months. A higher profit will lead to a higher ROE. So, as a general rule, a high ROE is a good thing . Clearly, then, one can use ROE to compare different companies. Does HGL Have A Good Return On Equity? One simple way to determine if a company has a good return on equity is to compare it to the average for its industry. The limitation of this approach is that some companies are quite different from others, even within the same industry classification. If you look at the image below, you can see HGL has a lower ROE than the average (11%) in the Trade Distributors industry classification. Story continues ASX:HNG Past Revenue and Net Income, June 19th 2019 That's not what we like to see. It is better when the ROE is above industry average, but a low one doesn't necessarily mean the business is overpriced. Still, shareholders might want to check if insiders have been selling . How Does Debt Impact Return On Equity? Most companies need money -- from somewhere -- to grow their profits. That cash can come from retained earnings, issuing new shares (equity), or debt. In the first and second cases, the ROE will reflect this use of cash for investment in the business. In the latter case, the use of debt will improve the returns, but will not change the equity. Thus the use of debt can improve ROE, albeit along with extra risk in the case of stormy weather, metaphorically speaking. HGL's Debt And Its 3.6% ROE HGL has a debt to equity ratio of 0.16, which is far from excessive. Its ROE is quite low, and the company already has some debt, so surely shareholders are hoping for an improvement. Conservative use of debt to boost returns is usually a good move for shareholders, though it does leave the company more exposed to interest rate rises. The Bottom Line On ROE Return on equity is one way we can compare the business quality of different companies. A company that can achieve a high return on equity without debt could be considered a high quality business. All else being equal, a higher ROE is better. Having said that, while ROE is a useful indicator of business quality, you'll have to look at a whole range of factors to determine the right price to buy a stock. The rate at which profits are likely to grow, relative to the expectations of profit growth reflected in the current price, must be considered, too. You can see how the company has grow in the past by looking at this FREE detailed graph of past earnings, revenue and cash flow . But note: HGL may not be the best stock to buy . So take a peek at this free list of interesting companies with high ROE and low debt. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com . This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Singular Research Director's Letter: June performance 2019 June 2019 Director’s Letter Major market indices recover from May sell off. Singular Coverage List continues to lead. A dovish Fed signals rate cuts to stimulate stalling economic growth. The Singular Research Coverage list continued to lead the S&P500 & Russell 2000 YTD, although the major indices slightly outperformed bouncing back from the May correction. Although, the small caps and unweighted indices have not kept pace, we will wait to see if this lag becomes a divergence. Our top performers in June were led by Geospace Technologies Corp. (GEOS), Management announced strong second quarter results with revenue up 36% YOY driven by OBX rental demand. Our next chart topper was Salem Media Group (SALM). Total revenues declined 5.2% YOY to $60.5 million in q1 19 as a result of drops in Broadcast, Digital Media and Publishing revenues. At a significant discount to book value at $8, SALM looks to have found some fans. Acme United Corp (ACU) gave positive forward guidance after a difficult TTM outlook, Management reiterated its sales guidance for CY 2019 of ~$140-$143 million, net income of $5.0-$5.3 million and earnings per share of $1.41-$1.50. Our worst performers were led by Floor & Décor Holdings Inc(FND), a short call that suffered both from profit taking and covering as the June rally in the overall equity markets gained traction. Harvard Bioscience, Inc. (HBIO) continued to fall in June, GAAP revenues improved 5% in Q119, but organic revenues fell 4% and adjusted EPS declined YOY from $0.03 from $0.02. HBIO expects a challenging H119 and improving results in H219. Daktronics, Inc. (DAKT) reported fourth quarter fiscal 2019 results below our projections.Management guided for slightly higher sales for Q1:20. However, we expect near-term EPS growth to remain muted amid trade tensions. We cut our rating to Buy/Long Term and lower our target price to $6.50. In June, we initiated coverage on LB Foster (FSTR) LB Foster Co. engages in the manufacture, fabrication, and distribution of products and services for the transportation and energy infrastructure. We caught a nice move up powered by strong Q1:19 results with EBITDA increasing ~92% YOY driving FSTR up 11% and into our top five for June. At Singular Research we wish to thank our clients and followers for their continued commitment and support of our unbiased, independence research model as we strive to consistently deliver Alpha generated from the lack of coverage out- performance anomaly. Thank You Singular research Staff Free subscription offer research@singularresearch.com 818-222-6234
With A 8.0% Return On Equity, Is Zota Health Care Limited (NSE:ZOTA) A Quality Stock? Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! Many investors are still learning about the various metrics that can be useful when analysing a stock. This article is for those who would like to learn about Return On Equity (ROE). To keep the lesson grounded in practicality, we'll use ROE to better understand Zota Health Care Limited (NSE:ZOTA). Zota Health Care has a ROE of 8.0%, based on the last twelve months. One way to conceptualize this, is that for each ₹1 of shareholders' equity it has, the company made ₹0.080 in profit. See our latest analysis for Zota Health Care Theformula for ROEis: Return on Equity = Net Profit ÷ Shareholders' Equity Or for Zota Health Care: 8.0% = ₹55m ÷ ₹689m (Based on the trailing twelve months to March 2019.) It's easy to understand the 'net profit' part of that equation, but 'shareholders' equity' requires further explanation. It is all the money paid into the company from shareholders, plus any earnings retained. The easiest way to calculate shareholders' equity is to subtract the company's total liabilities from the total assets. ROE measures a company's profitability against the profit it retains, and any outside investments. The 'return' is the amount earned after tax over the last twelve months. A higher profit will lead to a higher ROE. So, all else being equal,a high ROE is better than a low one. That means ROE can be used to compare two businesses. One simple way to determine if a company has a good return on equity is to compare it to the average for its industry. However, this method is only useful as a rough check, because companies do differ quite a bit within the same industry classification. As is clear from the image below, Zota Health Care has a lower ROE than the average (11%) in the Pharmaceuticals industry. That certainly isn't ideal. It is better when the ROE is above industry average, but a low one doesn't necessarily mean the business is overpriced. Still,shareholders might want to check if insiders have been selling. Most companies need money -- from somewhere -- to grow their profits. That cash can come from retained earnings, issuing new shares (equity), or debt. In the case of the first and second options, the ROE will reflect this use of cash, for growth. In the latter case, the use of debt will improve the returns, but will not change the equity. That will make the ROE look better than if no debt was used. Zota Health Care is free of net debt, which is a positive for shareholders. It's hard to argue its ROE is much good, but the fact that no debt was used is some comfort. At the end of the day, when a company has zero debt, it is in a better position to take future growth opportunities. Return on equity is useful for comparing the quality of different businesses. In my book the highest quality companies have high return on equity, despite low debt. If two companies have the same ROE, then I would generally prefer the one with less debt. But when a business is high quality, the market often bids it up to a price that reflects this. The rate at which profits are likely to grow, relative to the expectations of profit growth reflected in the current price, must be considered, too. So I think it may be worth checking thisfreethisdetailed graphof past earnings, revenue and cash flow. Of courseZota Health Care may not be the best stock to buy. So you may wish to see thisfreecollection of other companies that have high ROE and low debt. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
NBA notebook: Lakers hope to add third star The Los Angeles Lakers, with LeBron James in place and Anthony Davis on the way, reportedly are attempting to clear enough salary-cap space to make a run at a third star player this summer. According to ESPN's Adrian Wojnarowski and Bobby Marks, the Lakers are looking to expand the agreed-upon trade that would bring in Davis from the New Orleans Pelicans, hoping to add other teams who might take fringe players off their hands. It's all part of the Lakers' efforts to boost their available money from the current $23.8 million up to $32.5 million. Those who could be on their way out of Los Angeles, according to the report, are Moritz Wagner, Jemerrio Jones and Isaac Bonga. The Lakers also would need Davis to waive the $4 million trade bonus that he is contractually due to receive in order for his new team to reach its desired salary-cap level. --Kawhi Leonard is ready to head home and is reportedly focusing on signing with the Los Angeles Clippers. ESPN's Adrian Wojnarowski dispelled reports that Leonard might be interested in joining the Lakers, who will add Anthony Davis when trades can become official next month. Per Wojnarowski's report, it's the Clippers that Leonard wants to join. Leonard attended San Diego State and is an L.A. native. He had almost an entire section of Oracle Arena filled with family in Oakland to watch the Toronto Raptors claim Game 6 against the Warriors and win the NBA Finals last week. --Boston forward Al Horford will turn down his 2018-19 option of $30.1 million and no longer intends to re-sign with the Celtics, multiple media outlets reported. After he opts out, the 33-year-old will be able to discuss contracts with other teams starting June 30. Players can sign or re-sign contracts beginning July 6. Horford has spent the last three years in Boston since arriving on a free agent deal from Atlanta, where he played the first nine seasons of his career. The nine-time All-Star averaged 13.6 points, 6.7 rebounds and 4.2 assists in 68 games for the Celtics last season. Story continues --Rockets All-Star point guard Chris Paul wants out of Houston, and his relationship with MVP candidate James Harden is "unsalvageable." According to Yahoo Sports, Paul approached management to demand a trade following the season-ending loss to the Golden State Warriors in the Western Conference semifinals. Moving Paul and his three-year, $124 million contract will not be easy, though general manager Daryl Morey has been open about having trade discussions involving all of his players other than Harden this offseason. --Should you know the whereabouts of Kyrie Irving, the Celtics would like a word. Irving, who can opt out of his contract and become a free agent June 30, has reportedly gone silent and given president Danny Ainge and head coach Brad Stevens no choice but to assume he will move on to another team. Reports last week indicated Irving was "preparing to sign" with the Brooklyn Nets not long after splitting from his only professional agent to join the stable of Roc Nation. Because Irving has no active agent -- his change from Jeff Wechsler cannot be official until June 29 -- the Celtics have no conduit to the six-time All-Star. --The Pelicans picked up the 2020-21 option for head coach Alvin Gentry, who is now under contract for the next two seasons. "We couldn't be happier to extend our relationship with Alvin," executive vice president of basketball operations David Griffin said in a statement. Gentry, 64, has spent the past four seasons coaching the Pelicans, going 145-183. --Harrison Barnes is set to opt out of his contract with the Sacramento Kings and become an unrestricted free agent. Barnes' agent, Jeff Schwartz, told ESPN of the pending move that will allow the 27-year-old to pursue his fourth NBA team since entering the league with the Golden State Warriors in 2012. Traded from the Dallas Mavericks to the Kings in February, Barnes averaged 16.4 points per game between the two clubs. --A sheriff's deputy sustained serious injuries and is considering a lawsuit against Masai Ujiri after an altercation with the Raptors president following Thursday's title-clinching victory in Oakland, the deputy's attorney said. David Mastagni, the deputy's attorney, told Bay Area CBS affiliate KPIX late Monday that his client has a "serious concussion" and a "serious jaw injury" after an "unprovoked, significant hit to the jaw" caused by Ujiri. "No options are being ruled out as to how to rectify the situation," Mastagni added. --Field Level Media
Did You Manage To Avoid Silver Base Group Holdings's (HKG:886) Painful 65% Share Price Drop? Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! The truth is that if you invest for long enough, you're going to end up with some losing stocks. But long termSilver Base Group Holdings Limited(HKG:886) shareholders have had a particularly rough ride in the last three year. Sadly for them, the share price is down 65% in that time. And the ride hasn't got any smoother in recent times over the last year, with the price 48% lower in that time. Shareholders have had an even rougher run lately, with the share price down 21% in the last 90 days. But this could be related to the weak market, which is down 10% in the same period. View our latest analysis for Silver Base Group Holdings Because Silver Base Group Holdings is loss-making, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth. In the last three years, Silver Base Group Holdings saw its revenue grow by 35% per year, compound. That's well above most other pre-profit companies. The share price has moved in quite the opposite direction, down 30% over that time, a bad result. This could mean hype has come out of the stock because the losses are concerning investors. But a share price drop of that magnitude could well signal that the market is overly negative on the stock. Depicted in the graphic below, you'll see revenue and earnings over time. If you want more detail, you can click on the chart itself. We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. Dive deeper into the earnings by checking this interactive graph of Silver Base Group Holdings'searnings, revenue and cash flow. While the broader market lost about 13% in the twelve months, Silver Base Group Holdings shareholders did even worse, losing 48%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 17% over the last half decade. We realise that Buffett has said investors should 'buy when there is blood on the streets', but we caution that investors should first be sure they are buying a high quality businesses. It is all well and good that insiders have been buying shares, but we suggest youcheck here to see what price insiders were buying at. Silver Base Group Holdings is not the only stock insiders are buying. So take a peek at thisfreelist of growing companies with insider buying. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HK exchanges. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Donald Trump 2020: US president launches re-election campaign at Orlando rally vowing political 'earthquake' Donald Trump vowed to deliver another “earthquake at the ballot box” in 2020 as he formally launched his re-election campaign in front of 20,000 cheering supporters in Orlando, Florida. The US president warned that “the swamp” he had vowed to drain during his 2016 campaign was “fighting back so viciously and violently” that he needed another four years in office. Mr Trump boasted of his presidential achievements including creating a US economy that was “the envy of the world”, declaring: “The American dream is back.” He also painted the Democratic Party, his political opponents, as “radical socialists”, warning: "They want to destroy you, they want to destroy our country as we know it." The rally in a key swing state was well received among supporters in the stadium, who cheered and jeered at Mr Trump’s punch lines - including repeatedly booing the “fake news” media. President Donald Trump speaks to supporters where he formally announced his 2020 re-election bid on Tuesday in Orlando, Florida Credit: AP Yet the president’s speech was largely devoid of new policy pledges, instead often repeating lines delivered on the 2018 midterm elections campaign trail. Mr Trump made only passing reference to Joe Biden and Bernie Sanders, the two front-runners in the race for the Democrat 2020 presidential nomination. The president claimed 120,000 people had applied for tickets for his launch at Orlando's Amway Center. Certainly some had queued overnight and faced torrential rain on Tuesday. The speech was Mr Trump’s chance to frame the argument for the election, still more than a year away but increasingly beginning to dominate the US media narrative. Mr Trump picked a familiar overarching theme to his 2016 bid - that he was the best person to stand up for the "forgotten" men and women of America. “Together we faced down a corrupt and broken political establishment and created a government by, of and for the people,” Mr Trump said. At another point he said: “Since the very first day I walked through the doors of the White House I have never forgotten who sent me there. You did.” Story continues A supporter holds a placard during a campaign rally for U.S. President Donald Trump formally kicking off his re-election bid in Orlando Credit: Reuters Mr Trump said that every day in his office he thinks about "how the American people are going to win, win, win today". Large chunks of the speech were dedicated to spelling out how Americans had benefited during his first two-and-a-half years in office and warning what could follow if he left. “Our future has never, ever looked brighter and sharper,” Mr Trump said. “The American dream is back. It’s bigger and better and stronger than ever before.” He listed how Americans had benefited from the booming US economy, which has reached annual growth rates of more than 2 per cent under his presidency. He said the unemployment rate was at its lowest for 51 years, the average household had saved $3,000 a year from his tax cut and more than 16,000 manufacturing jobs were being created every month. Mr Trump also named leaving the Iran nuclear deal and Paris climate change agreement, squaring off with China over trade and standing up against socialist regimes in Cuba and Venezuela as accomplishments. Jared Kushner (L) and Ivanka Trump arrive for the official launch of the Trump 2020 campaign Credit: AFP There was mention of the need to build a wall along the US-Mexico border and stop immigrants “pouring” into the country but the topic was less prominent than in many previous speeches. Mr Trump also repeatedly cast the Democratic Party as a whole as “radical socialists”, an apparent attempt to jump on the surge of left-wing energy among party activists for political gain. He said the Democrats had been “inflicted with an ideological sickness” and that they were “more radical, more dangerous and more unhinged than at any time in our history”. "They want to destroy you, they want to destroy our country as we know it. It's not acceptable, it's not going to happen," Mr Trump said. "No matter what label they use, a vote for any Democrat in 2020 is a vote for the rise of radical socialism and the destruction of the American dream.” Early Democratic front-runner Joe Biden said on Tuesday that Mr Trump's politics are "all about dividing us" in ways that are "dangerous - truly, truly dangerous." Another leading Democratic contender, Vermont Sen. Bernie Sanders, said Mr Trump had delivered "an hour-and-a-half speech of lies, distortions and total, absolute nonsense." The speech was preceeded with addresses by Mike Pence, the vice president, as well as Mr Trump’s sons Eric and Donald Jr. Throughout supporters appeared to be enjoying themselves, shouting familiar chants including “build the wall” and “four more years”. The rally in total lasted more than three hours. Want the best of The Telegraph direct to your email and WhatsApp? Sign up to our free twice-daily Front Page newsletter and new audio briefings .
Is Thiz Technology Group Limited's (HKG:8119) CEO Salary Justified? Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! The CEO of Thiz Technology Group Limited (HKG:8119) is Albert Wong. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels. See our latest analysis for Thiz Technology Group At the time of writing our data says that Thiz Technology Group Limited has a market cap of HK$84m, and is paying total annual CEO compensation of HK$1.0m. (This number is for the twelve months until March 2018). Notably, the salary of HK$1.0m is the vast majority of the CEO compensation. We took a group of companies with market capitalizations below HK$1.6b, and calculated the median CEO total compensation to be HK$1.7m. This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it's important we delve into the performance of the actual business. You can see a visual representation of the CEO compensation at Thiz Technology Group, below. Thiz Technology Group Limited has increased its earnings per share (EPS) by an average of 99% a year, over the last three years (using a line of best fit). Its revenue is up 86% over last year. This demonstrates that the company has been improving recently. A good result. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. Although we don't have analyst forecasts, you could get a better understanding of its growth by checking outthis more detailed historical graphof earnings, revenue and cash flow. Given the total loss of 61% over three years, many shareholders in Thiz Technology Group Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously. It appears that Thiz Technology Group Limited remunerates its CEO below most similar sized companies. Considering the underlying business is growing earnings, this would suggest the pay is modest. Unfortunately, some shareholders may be disappointed with their returns, given the company's performance over the last three years. So while we don't think, Albert Wong is paid too much, shareholders may hope that business performance translates to investment returns before pay rises are given out. When I see fairly low remuneration, combined with earnings per share growth, but without big share price gains, it makes me want to research the potential for future gains. If you think CEO compensation levels are interesting you will probably really likethis free visualization of insider trading at Thiz Technology Group. If you want to buy a stock that is better than Thiz Technology Group, thisfreelist of high return, low debt companies is a great place to look. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Nikkei surges to 4-week highs on hopes for trade talks and U.S. rate cut * Nomura Holdings jumps on share buyback announcement * Japan Display soars on report Apple may help By Ayai Tomisawa TOKYO, June 19 (Reuters) - Japan's Nikkei surged to four-week highs on Wednesday morning on news that the United States and China will rekindle talks on trade, while ongoing expectations that the U.S. Federal Reserve will cut rates this year supported sentiment. The Nikkei share average jumped 1.7% to 21,320.80 in midmorning trade, after rising to a high as 21,352.22 to hit the highest level since May 22. U.S. President Donald Trump said he would meet with Chinese President Xi Jinping at the G20 summit later this month, and said talks between the two countries would restart after a recent lull. "Investors are taking heart from the new development. The two countries will at least be talking (after a lull), so the market thinks there is little chance that talks get broken off soon after they meet," Shoji Hirakawa, chief global strategist at Tokai Tokyo Research Institute. Hirakawa also said support for risk appetite came from hopes and expectations of monetary easing in both the United States and Europe. The Fed started a two-day policy meeting on Tuesday that analysts expect will result in interest rates being left unchanged, while setting the stage for possible easing later this year. On Tuesday, European Central Bank President Mario Draghi hinted at more stimulus if regional inflation fails to pick up toward its target, sending global yields lower. The broader Topix gained 1.5% to 1,550.98, with all but one of its subsectors in positive territory. Companies with large exposure in China such as tech shares and electric component makers outperformed, with Advantest Corp , Taiyo Yuden, TDK Corp all adding more than 4%. Machinery shares gained ground, with Fanuc Corp rising 2.3%, Yaskawa Electric Corp adding 2.8% and Keyence Corp jumping 4%. Nomura Holdings leapt 8.4% after it said it would buy back up to 8.6% or its shares outstanding, or up to 150 billion yen. Elsewhere, Japan Display Inc surged 16% after the Wall Street Journal reported that Apple Inc may consider helping the company. Reuters has not verify the report. (Editing by Simon Cameron-Moore)
New Jersey man confirmed dead at Dominican Republic resort A New Jersey man mysteriously died in the Dominican Republic last Thursday, bringing the total number of American tourists who have suspiciously passed away on the island in the past year to nine, NBC News reports. Joseph Allen, 55, of Avenel, was found unresponsive in his room at the Terra Linda Resort in Sosua, his family said. At the time, he was celebrating his friend's birthday. The family said that Allen, who had checked into his hotel on June 9, complained to his friends about being hot in the pool three days after his arrival. The man reportedly told them that he would take a shower and rest for the night. Unfortunately, they did not hear from him the next day. "The maid opened the door, screamed, slammed the door," Jason Allen, Joseph's brother, told WNBC . "My brother is on the floor dead between his room and the bathroom." Joseph's 23-year-old son had also purportedly flown to the island to celebrate Father's Day with him only to learn of his father's tragic passing. Jason said the family has since had unresolved questions surrounding his brother's death. "I'm fine with the passing, but we do want some answers," he said. "We want some closure to figure out what's going on and why this is happening. And we don't want anyone to feel how we're feeling right now." On Tuesday, however, Dominican authorities publicized preliminary findings of Joseph's autopsy. According to the report, a medical examiner had apparently concluded that Joseph who was found to have prior heart issues that included hardening of the arteries may have died of cardiac arrest. Still, the man's family has remained skeptical and is determined to get his body back to the U.S. in order to get a second opinion. "I don't know who to blame," Jason told WNBC. "I'd rather not guess because you will drive yourself crazy with that but I do think something is off and I think it needs to be investigated no matter how much money or how much time it is." Story continues Since June 2018 , nine cases of troubling deaths have taken place at resorts throughout the Caribbean island. Last year, at least two Americans notably Pennsylvania woman Yvette Monique Sport and Maryland resident David Harrison reportedly died as a result of heart attacks, although family members of both victims claim the two were healthy prior to their passing. This year, multiple deaths at resorts in Punta Cana and La Romana some of which involved the consumption of questionable alcohol have occurred. The victims include Ohio resident Jerry Curran , California resident Robert Turlock , Pennsylvania psychotherapist Miranda Schaup-Werner , Maryland couple Edward Nathaniel Holmes and Cynthia Day , and New York resident Leyla Cox . In most of the cases, authorities asserted that the victims of respiratory failure and pulmonary edema. The FBI is currently looking into several of the incidents. Since then, Dominican officials have attempted to calm fears over their country's safety. At a press conference earlier this month, Francisco Javier Garcia, the island's minister of tourism, suggested that the recent spate of deaths was coincidental. "Sometimes in life there can be a law of sequences," he said. "Sometimes, nothing may happen to you in a year. But in another week, three things might happen to you."
What Type Of Shareholder Owns Autolite (India) Limited's (NSE:AUTOLITIND)? Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! The big shareholder groups in Autolite (India) Limited (NSE:AUTOLITIND) have power over the company. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.' With a market capitalization of ₹286m, Autolite (India) is a small cap stock, so it might not be well known by many institutional investors. Our analysis of the ownership of the company, below, shows that institutions are not really that prevalent on the share registry. Let's delve deeper into each type of owner, to discover more about AUTOLITIND. Check out our latest analysis for Autolite (India) Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices. Institutions own less than 5% of Autolite (India). That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees. Autolite (India) is not owned by hedge funds. As far I can tell there isn't analyst coverage of the company, so it is probably flying under the radar. The definition of company insiders can be subjective, and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it. I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions. Our most recent data indicates that insiders own a reasonable proportion of Autolite (India) Limited. Insiders own ₹135m worth of shares in the ₹286m company. I would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You canclick here to see if those insiders have been buying or selling. The general public holds a 37% stake in AUTOLITIND. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders. We can see that Private Companies own 13%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company. It's always worth thinking about the different groups who own shares in a company. But to understand Autolite (India) better, we need to consider many other factors. Many find it usefulto take an in depth look at how a company has performed in the past. You can accessthisdetailed graphof past earnings, revenue and cash flow. If you would prefer check out another company -- one with potentially superior financials -- then do not miss thisfreelist of interesting companies, backed by strong financial data. NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Some Ballarpur Industries (NSE:BALLARPUR) Shareholders Have Taken A Painful 89% Share Price Drop Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! Long term investing is the way to go, but that doesn't mean you should hold every stock forever. It hits us in the gut when we see fellow investors suffer a loss. Anyone who heldBallarpur Industries Limited(NSE:BALLARPUR) for five years would be nursing their metaphorical wounds since the share price dropped 89% in that time. And some of the more recent buyers are probably worried, too, with the stock falling 80% in the last year. The falls have accelerated recently, with the share price down 27% in the last three months. We really feel for shareholders in this scenario. It's a good reminder of the importance of diversification, and it's worth keeping in mind there's more to life than money, anyway. See our latest analysis for Ballarpur Industries Ballarpur Industries isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size. In the last five years Ballarpur Industries saw its revenue shrink by 16% per year. That puts it in an unattractive cohort, to put it mildly. So it's not that strange that the share price dropped 35% per year in that period. This kind of price performance makes us very wary, especially when combined with falling revenue. Of course, the poor performance could mean the market has been too severe selling down. That can happen. The chart below shows how revenue and earnings have changed with time, (if you click on the chart you can see the actual values). You can see how its balance sheet has strengthened (or weakened) over time in thisfreeinteractive graphic. Ballarpur Industries shareholders are down 80% for the year, but the market itself is up 0.6%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 35% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. You could get a better understanding of Ballarpur Industries's growth by checking outthis more detailed historical graphof earnings, revenue and cash flow. But note:Ballarpur Industries may not be the best stock to buy. So take a peek at thisfreelist of interesting companies with past earnings growth (and further growth forecast). Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on IN exchanges. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Here's How P/E Ratios Can Help Us Understand Pilani Investment and Industries Corporation Limited (NSE:PILANIINVS) Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! This article is for investors who would like to improve their understanding of price to earnings ratios (P/E ratios). We'll show how you can use Pilani Investment and Industries Corporation Limited's (NSE:PILANIINVS) P/E ratio to inform your assessment of the investment opportunity.Pilani Investment and Industries has a price to earnings ratio of 7.93, based on the last twelve months. That is equivalent to an earnings yield of about 13%. See our latest analysis for Pilani Investment and Industries Theformula for price to earningsis: Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS) Or for Pilani Investment and Industries: P/E of 7.93 = ₹2320.1 ÷ ₹292.46 (Based on the trailing twelve months to March 2019.) The higher the P/E ratio, the higher the price tag of a business, relative to its trailing earnings. All else being equal, it's better to pay a low price -- but as Warren Buffett said, 'It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.' Probably the most important factor in determining what P/E a company trades on is the earnings growth. When earnings grow, the 'E' increases, over time. That means even if the current P/E is high, it will reduce over time if the share price stays flat. And as that P/E ratio drops, the company will look cheap, unless its share price increases. In the last year, Pilani Investment and Industries grew EPS like Taylor Swift grew her fan base back in 2010; the 94% gain was both fast and well deserved. And earnings per share have improved by 187% annually, over the last three years. So you might say it really deserves to have an above-average P/E ratio. The P/E ratio essentially measures market expectations of a company. The image below shows that Pilani Investment and Industries has a lower P/E than the average (16) P/E for companies in the capital markets industry. Its relatively low P/E ratio indicates that Pilani Investment and Industries shareholders think it will struggle to do as well as other companies in its industry classification. Since the market seems unimpressed with Pilani Investment and Industries, it's quite possible it could surprise on the upside. If you consider the stock interesting, further research is recommended. For example, I often monitordirector buying and selling. It's important to note that the P/E ratio considers the market capitalization, not the enterprise value. So it won't reflect the advantage of cash, or disadvantage of debt. The exact same company would hypothetically deserve a higher P/E ratio if it had a strong balance sheet, than if it had a weak one with lots of debt, because a cashed up company can spend on growth. Such expenditure might be good or bad, in the long term, but the point here is that the balance sheet is not reflected by this ratio. Pilani Investment and Industries's net debt is 13% of its market cap. This could bring some additional risk, and reduce the number of investment options for management; worth remembering if you compare its P/E to businesses without debt. Pilani Investment and Industries trades on a P/E ratio of 7.9, which is below the IN market average of 15.8. The company does have a little debt, and EPS growth was good last year. The low P/E ratio suggests current market expectations are muted, implying these levels of growth will not continue. When the market is wrong about a stock, it gives savvy investors an opportunity. If it is underestimating a company, investors can make money by buying and holding the shares until the market corrects itself. Although we don't have analyst forecasts, you could get a better understanding of its growth by checking outthis more detailed historical graphof earnings, revenue and cash flow. You might be able to find a better buy than Pilani Investment and Industries. If you want a selection of possible winners, check out thisfreelist of interesting companies that trade on a P/E below 20 (but have proven they can grow earnings). We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Is Lifestyle Communities Limited's (ASX:LIC) High P/E Ratio A Problem For Investors? Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! This article is written for those who want to get better at using price to earnings ratios (P/E ratios). We'll look at Lifestyle Communities Limited's (ASX:LIC) P/E ratio and reflect on what it tells us about the company's share price.What is Lifestyle Communities's P/E ratio?Well, based on the last twelve months it is 11.86. That is equivalent to an earnings yield of about 8.4%. Check out our latest analysis for Lifestyle Communities Theformula for P/Eis: Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS) Or for Lifestyle Communities: P/E of 11.86 = A$6.66 ÷ A$0.56 (Based on the trailing twelve months to December 2018.) The higher the P/E ratio, the higher the price tag of a business, relative to its trailing earnings. That isn't a good or a bad thing on its own, but a high P/E means that buyers have a higher opinion of the business's prospects, relative to stocks with a lower P/E. Generally speaking the rate of earnings growth has a profound impact on a company's P/E multiple. If earnings are growing quickly, then the 'E' in the equation will increase faster than it would otherwise. That means even if the current P/E is high, it will reduce over time if the share price stays flat. A lower P/E should indicate the stock is cheap relative to others -- and that may attract buyers. Lifestyle Communities's earnings made like a rocket, taking off 86% last year. The cherry on top is that the five year growth rate was an impressive 38% per year. So I'd be surprised if the P/E ratio wasnotabove average. The P/E ratio indicates whether the market has higher or lower expectations of a company. The image below shows that Lifestyle Communities has a P/E ratio that is roughly in line with the real estate industry average (11.7). Its P/E ratio suggests that Lifestyle Communities shareholders think that in the future it will perform about the same as other companies in its industry classification. If the company has better than average prospects, then the market might be underestimating it. Further research into factors such asmanagement tenure, could help you form your own view on whether that is likely. The 'Price' in P/E reflects the market capitalization of the company. That means it doesn't take debt or cash into account. The exact same company would hypothetically deserve a higher P/E ratio if it had a strong balance sheet, than if it had a weak one with lots of debt, because a cashed up company can spend on growth. While growth expenditure doesn't always pay off, the point is that it is a good option to have; but one that the P/E ratio ignores. Lifestyle Communities has net debt worth just 9.0% of its market capitalization. The market might award it a higher P/E ratio if it had net cash, but its unlikely this low level of net borrowing is having a big impact on the P/E multiple. Lifestyle Communities's P/E is 11.9 which is below average (16.2) in the AU market. The EPS growth last year was strong, and debt levels are quite reasonable. If it continues to grow, then the current low P/E may prove to be unjustified. When the market is wrong about a stock, it gives savvy investors an opportunity. If the reality for a company is not as bad as the P/E ratio indicates, then the share price should increase as the market realizes this. So thisfreevisual report on analyst forecastscould hold the key to an excellent investment decision. Of courseyou might be able to find a better stock than Lifestyle Communities. So you may wish to see thisfreecollection of other companies that have grown earnings strongly. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Over $1 Billion Worth of Cocaine Seized in Philadelphia — the Largest Drug Bust in City History One of the largest drug busts in United States history occurred on Tuesday after authorities seized more than 30,000 pounds of cocaine from a Philadelphia ship port. The U.S. Attorney’s office in the Eastern District of Pennsylvania announced the city’s historic seizure at the Packer Marine Terminal on Tuesday afternoon, noting that the hefty amount of cocaine has an approximate street value of over $1 billion . “Federal authorities have seized approximately 16.5 TONS of cocaine from a large ship at the Packer Marine Terminal in Philadelphia,” the U.S. Attorney EDPA tweeted . “This is the largest drug seizure in the history of the Eastern District of Pennsylvania.” In a separate tweet , the attorney’s office revealed that several members of the ship’s crew had been arrested and federally charged, with an investigation currently underway. BREAKING NEWS Members of the ship’s crew have been arrested and federally charged, and the investigation is on-going. @ICEgov @CBPMidAtlantic @PhillyPolice @USCG https://t.co/sSkGBZXJGT — U.S. Attorney EDPA (@USAO_EDPA) June 18, 2019 An officer with a drug-sniffing dog \| Matt Rourke/AP/Shutterstock RELATED: Nearly $18 Million Worth of Cocaine — More than 500 Packages — Found Hidden in Donated Bananas U.S. EDPA Attorney William M. McSwain also confirmed the findings on his Twitter and explained that the massively dangerous bust also served as a historic seizure in the country’s history. “This is one of the largest drug seizures in United States history. This amount of cocaine could kill millions – MILLIONS – of people,” McSwain wrote . “My Office is committed to keeping our borders secure and streets safe from deadly narcotics.” Story continues The attorney also gave a special shoutout to the investigators who have been helping with the incident. “While the investigation is ongoing, I want to thank all of our federal, state, and local partners for your incredible work so far in this investigation,” he added. “@ICEgov @CBPMidAtlantic @PhillyPolice @USCG.” According to a U.S. Drug Enforcement Agency official who spoke with CBS News, the drug find comes in as the third largest in U.S. history — behind a 1989 downtown Los Angeles bust where nearly 43,000 pounds of cocaine was recovered. Representatives at the U.S. Drug Enforcement Agency did not immediately respond to PEOPLE’s request for comment. While the investigation is ongoing, I want to thank all of our federal, state, and local partners for your incredible work so far in this investigation. @ICEgov @CBPMidAtlantic @PhillyPolice @USCG https://t.co/bduiRyphFs — US Attorney William M. McSwain (@USAttyMcSwain) June 18, 2019 Authorities searching the ship • Want to keep up with the latest crime coverage? Click here to get breaking crime news, ongoing trial coverage and details of intriguing unsolved cases in the True Crime Newsletter. Court documents obtained by Fox News indicate that the drug bust began on Monday afternoon, hours after the ship had arrived from Liberia, but it wasn’t until Tuesday when drug agents searched the MSC Gayane with dogs. Two of the ship’s crew members, Fonofaavae Tiasage and second mate Ivan Durasevic, were charged with conspiracy to possess cocaine aboard a ship, according to the outlet. According to a government affidavit submitted to the court, crew members allegedly stated that they helped load the cocaine onto the large ship while at sea off the west coast of South America. Authorities who spoke to one of the crew members said on two separate occasions, 14 boats came into contact with the ship and that several ship employees helped transfer the bales of cocaine. It is not yet clear if Tiasage and Durasevic have obtained attorneys or whether any other crew members will face charges. CBS Philadelphia also reported that the 33,000 pounds of cocaine were transported to an undisclosed federal facility to be investigated and that there is a possibility more drugs may be discovered in other containers. Authorities searching the ship The MSC Gayane’s parent company, MSC Mediterranean Shipping Co., issued a statement to Fox News and CBS News and said it was “aware” of the incident and taking the “matter very seriously.” “Mediterranean Shipping Company is aware of reports of an incident at the Port of Philadelphia in which U.S. authorities made a seizure of illicit cargo. MSC takes this matter very seriously and is grateful to the authorities for identifying any suspected abuse of its services,” their statement reads. “Unfortunately, shipping and logistics companies are from time to time affected by trafficking problems. MSC has a longstanding history of cooperating with U.S. federal law enforcement agencies to help disrupt illegal narcotics trafficking and works closely with U.S. Customs and Border Protection (CBP),” the company added. Representatives at MSC Mediterranean Shipping Co. did not immediately respond to PEOPLE’s request for comment. RELATED VIDEO: Turtle Found by U.S. Coast Guard with $53 Million Worth of Cocaine Attached to It Prior to the ship’s stop in Philadelphia, MSC Gayane’s ports of call were in the Bahamas on June 13, Panama on June 9, Peru on May 24 and Colombia on May 19, according to online ship tracking records . Federal authorities claim Colombia is one of the primary suppliers of cocaine to the U.S., Fox News reports. The cocaine discovery comes three months after agents seized 1,185 pounds of the drug in Philadelphia, with an estimated street value of $38 million, according to the outlet. At the time, it was the city’s largest seizure in more than 20 years.
The Crypto Daily – The Movers and Shakers 19/06/19 Bitcoin slid by 2.75% on Tuesday. Partially reversing a 4.1% gain from Monday, Bitcoin ended the day at $9,095.0. A relatively choppy day saw Bitcoin slide from a start of a day intraday high $9,376.8 to a late intraday low $8,945.0. Falling well short of the major resistance levels, Bitcoin fell through the first major support level at $9,063.47. Support from the broader market led to a final hour recovery to $9,000 levels. The Tuesday sell-off brought to an end a run of 6 consecutive days in the green. Across the rest of the top 10 cryptos, it was another mixed bag for the major cryptos. Binance Coin and Litecoin bucked the trend on the day. While Litecoin eked out a 0.67% gain, Binance Coin rose by 1.45%. The rest of the pack saw red. Leading the way down was Stellar’s Lumen, which slid by 5.48%. EOS (-5.13%), Ripple’s XRP (-4.83%) and Bitcoin Cash ABC (-4.48%) were not far behind on the day. The reversal on the day came in spite of a lack of news events, with the Bitcoin bulls continuing to grab the headlines. News of Facebook’s cryptocurrency Libra also did the rounds on the day, but would unlikely have had any material influence. The jury is still out on whether Facebook will be able to successfully launch a cryptocurrency and compete with the likes of Bitcoin. In spite of the Tuesday reversal, the total crypto market cap avoided a pullback to sub-$280bn levels. At the time of writing, the total crypto market cap stood at $283.6bn. Trading volumes eased back, however, falling back from $75bn levels on Sunday to sub-$60bn levels. At the time of writing, Bitcoin was up by 0.69% to $9,157.5. A bullish start to the day saw Bitcoin rise from an early morning low $9,062.0 to a high $9,198.0. In spite of the early moves, Bitcoin left the major support and resistance levels untested. Elsewhere, Bitcoin Cash SV and Litecoin bucked the trend early, with declines of $1.24% and 0.58% respectively. Leading the pack at the time of writing was Bitcoin. Binance Coin was close behind, up by 0.53%. Bitcoin would need to avoid a pullback to sub-$9,140 levels through the day to support a move back through to $9,300 levels. Support from the broader market would be needed, however, for Bitcoin to break through the first major resistance level at $9,332.87. In the event of a broad-based crypto rally, Bitcoin could take a run at Sunday’s high $9,490 and $9,500 levels before any pullback. Failure to steer clear of sub-$9,140 levels could see Bitcoin hit reverse. A fall back through the morning low $9,062.0 would bring sub-$9,000 levels into play. A broad-based crypto sell-off would likely see Bitcoin test the first major support level at $8,901.07 before any recovery. Barring a crypto meltdown, however, Bitcoin should steer clear of sub-$8,900 levels on the day. For those looking to see if there’s any correlation between the cryptos and monetary policy, today could be the day. With the FED expected to signal monetary policy easing later in the year will a more dovish FED deliver a boost to the majors? Get Into Cryptocurrency Trading Today Thisarticlewas originally posted on FX Empire • Stellar’s Lumen Technical Analysis – Support Levels in Play – 20/06/19 • Forex Daily Recap – USD Index Slipped -0.57% over Unchanged Fed Interest Rates • US Stock Market Overview – Stocks Rise on Fed Dot Plot Change • US Stock Traders Cautious Since July Rate Cut is Still Data Dependent • Natural Gas Price Forecast – Natural gas markets continue to lower value • Small Caps May Lead a Market Rally
Does HPL Electric Power Limited (NSE:HPL) Have A Good P/E Ratio? Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! Today, we'll introduce the concept of the P/E ratio for those who are learning about investing. We'll look at HPL Electric & Power Limited's (NSE:HPL) P/E ratio and reflect on what it tells us about the company's share price. Looking at earnings over the last twelve months,HPL Electric & Power has a P/E ratio of 11.52. In other words, at today's prices, investors are paying ₹11.52 for every ₹1 in prior year profit. View our latest analysis for HPL Electric & Power Theformula for P/Eis: Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS) Or for HPL Electric & Power: P/E of 11.52 = ₹58.3 ÷ ₹5.06 (Based on the trailing twelve months to March 2019.) The higher the P/E ratio, the higher the price tag of a business, relative to its trailing earnings. That is not a good or a bad thingper se, but a high P/E does imply buyers are optimistic about the future. When earnings fall, the 'E' decreases, over time. That means unless the share price falls, the P/E will increase in a few years. A higher P/E should indicate the stock is expensive relative to others -- and that may encourage shareholders to sell. It's great to see that HPL Electric & Power grew EPS by 19% in the last year. In contrast, EPS has decreased by 3.7%, annually, over 5 years. One good way to get a quick read on what market participants expect of a company is to look at its P/E ratio. We can see in the image below that the average P/E (13) for companies in the electrical industry is higher than HPL Electric & Power's P/E. HPL Electric & Power's P/E tells us that market participants think it will not fare as well as its peers in the same industry. While current expectations are low, the stock could be undervalued if the situation is better than the market assumes. If you consider the stock interesting, further research is recommended. For example, I often monitordirector buying and selling. Don't forget that the P/E ratio considers market capitalization. In other words, it does not consider any debt or cash that the company may have on the balance sheet. In theory, a company can lower its future P/E ratio by using cash or debt to invest in growth. Spending on growth might be good or bad a few years later, but the point is that the P/E ratio does not account for the option (or lack thereof). HPL Electric & Power has net debt worth a very significant 116% of its market capitalization. If you want to compare its P/E ratio to other companies, you must keep in mind that these debt levels would usually warrant a relatively low P/E. HPL Electric & Power trades on a P/E ratio of 11.5, which is below the IN market average of 15.7. The company has a meaningful amount of debt on the balance sheet, but that should not eclipse the solid earnings growth. If it continues to grow, then the current low P/E may prove to be unjustified. Investors have an opportunity when market expectations about a stock are wrong. As value investor Benjamin Graham famously said, 'In the short run, the market is a voting machine but in the long run, it is a weighing machine.' Although we don't have analyst forecasts, shareholders might want to examinethis detailed historical graphof earnings, revenue and cash flow. But note:HPL Electric & Power may not be the best stock to buy. So take a peek at thisfreelist of interesting companies with strong recent earnings growth (and a P/E ratio below 20). We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Qantas orders 10 A321XLRs, converts 26 more to model from prior order By Jamie Freed SINGAPORE (Reuters) - Australia's Qantas Airways Ltd said on Wednesday it would order 10 Airbus SE A321XLR jets and convert another 26 from a prior order to the new long-range model. That will take its total A320neo family order to 109 planes, from 99 previously. The A321XLR jets, to be delivered from mid-2024, have a 4,700 nautical mile range that will allow Qantas or its low-cost arm Jetstar to perform longer-range flights in narrowbody jets. "It can fly routes like Cairns-Tokyo or Melbourne-Singapore, which existing narrow-bodies can't, and that changes the economics of lots of potential routes into Asia to make them not just physically possible but financially attractive," Qantas Chief Executive Alan Joyce said in a statement. Jetstar operates an A320 narrowbody fleet, but Qantas uses the rival Boeing 737. Joyce said the A321XLR had plenty of potential uses across both airlines and it would decide closer to the date on where they would be deployed and if they would be used for growth or to replace older jets. Jetstar is due to receive 18 A321LR jets from 2020 to 2022 and plans to deploy them on domestic and international routes. The additional 10 jets are valued at more than $1 billion at Airbus list prices, although airlines typically receive substantial discounts. Qantas said it retained flexibility around the timing and structure of the deliveries depending on market conditions. "All fleet decisions we make are ultimately guided by our financial framework, which balances our capital expenditure and need to invest for the future with our debt levels and ongoing returns to shareholders," Joyce said. Qantas is expected to decide next year on a replacement for its 75 737 jets, which comprise the backbone of its domestic fleet, Joyce said in February. Contenders include the A320neo family, the 737 MAX and Boeing's proposed new mid-sized airplane. (Reporting by Jamie Freed; Editing by Himani Sarkar)
IMP Powers Limited (NSE:INDLMETER) Has Got What It Takes To Be An Attractive Dividend Stock Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! Could IMP Powers Limited (NSE:INDLMETER) be an attractive dividend share to own for the long haul? Investors are often drawn to strong companies with the idea of reinvesting the dividends. Yet sometimes, investors buy a popular dividend stock because of its yield, and then lose money if the company's dividend doesn't live up to expectations. With a 1.6% yield and a seven-year payment history, investors probably think IMP Powers looks like a reliable dividend stock. A 1.6% yield is not inspiring, but the longer payment history has some appeal. Some simple analysis can offer a lot of insights when buying a company for its dividend, and we'll go through this below. Explore this interactive chart for our latest analysis on IMP Powers! Companies (usually) pay dividends out of their earnings. If a company is paying more than it earns, the dividend might have to be cut. So we need to form a view on if a company's dividend is sustainable, relative to its net profit after tax. IMP Powers paid out 21% of its profit as dividends, over the trailing twelve month period. Given the low payout ratio, it is hard to envision the dividend coming under threat, barring a catastrophe. As IMP Powers has a meaningful amount of debt, we need to check its balance sheet to see if the company might have debt risks. A rough way to check this is with these two simple ratios: a) net debt divided by EBITDA (earnings before interest, tax, depreciation and amortisation), and b) net interest cover. Net debt to EBITDA measures a company's total debt load relative to its earnings (lower = less debt), while net interest cover measures the company's ability to pay the interest on its debt (higher = greater ability to pay interest costs). With net debt of 2.84 times its EBITDA, IMP Powers's debt burden is within a normal range for most listed companies. We calculated its interest cover by measuring its earnings before interest and tax (EBIT), and dividing this by the company's net interest expense. Interest cover of less than 5x its interest expense is starting to become a concern for IMP Powers, and be aware that lenders may place additional restrictions on the company as well. Consider gettingour latest analysis on IMP Powers's financial position here. Before buying a stock for its income, we want to see if the dividends have been stable in the past, and if the company has a track record of maintaining its dividend. IMP Powers has been paying a dividend for the past seven years. Although it has been paying a dividend for several years now, the dividend has been cut at least once by more than 20%, and we're cautious about the consistency of its dividend across a full economic cycle. During the past seven-year period, the first annual payment was ₹1.00 in 2012, compared to ₹0.50 last year. The dividend has shrunk at around 9.4% a year during that period. IMP Powers's dividend has been cut sharply at least once, so it hasn't fallen by 9.4% every year, but this is a decent approximation of the long term change. When a company's per-share dividend falls we question if this reflects poorly on either the business or management. Either way, we find it hard to get excited about a company with a declining dividend. With a relatively unstable dividend, and a poor history of shrinking dividends, it's even more important to see if EPS are growing. Strong earnings per share (EPS) growth might encourage our interest in the company despite fluctuating dividends, which is why it's great to see IMP Powers has grown its earnings per share at 24% per annum over the past five years. The company is only paying out a fraction of its earnings as dividends, and in the past been able to use the retained earnings to grow its profits rapidly - an ideal combination. To summarise, shareholders should always check that IMP Powers's dividends are affordable, that its dividend payments are relatively stable, and that it has decent prospects for growing its earnings and dividend. It's great to see that IMP Powers is paying out a low percentage of its earnings and cash flow. We were also glad to see it growing earnings, but it was concerning to see the dividend has been cut at least once in the past. Overall we think IMP Powers scores well on our analysis. It's not quite perfect, but we'd definitely be keen to take a closer look. Are management backing themselves to deliver performance? Check their shareholdings in IMP Powers inour latest insider ownership analysis. Looking for more high-yielding dividend ideas? Try ourcurated list of dividend stocks with a yield above 3%. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Trade tensions kick Asian business confidence to 10-year low: Thomson Reuters/INSEAD By Sachin Ravikumar MUMBAI (Reuters) - Confidence among Asian companies in the June quarter fell to its lowest since the 2008-09 financial crisis, as a U.S.-China trade war disrupts global supply chains and shows little sign of easing soon, a Thomson Reuters/INSEAD survey found. The Thomson Reuters/INSEAD Asian Business Sentiment Index tracking companies' six-month outlook worsened in the three months ended June to 53, versus 63 in the previous two quarters. A reading above 50 means optimistic respondents outnumbered pessimists, but worries about the threat of a prolonged trade war drove the index to its lowest since the June quarter of 2009, when the first edition of the survey was released. "There was a big dip (in the index) three quarters ago, and we felt it was the uncertainty about the trade war and people were worried about the future," said Antonio Fatas, a Singapore-based economics professor at global business school INSEAD. "We get a sense after four quarters of low numbers that now, it's not just uncertainty. This is a true slowdown in growth. We see activity declining — it's not just the expectation that activity will decline," Fatas added. For a fourth straight quarter, survey participants cited the global trade war as the chief risk to business, followed by Brexit and a slowdown in the Chinese economy. The survey interviewed 95 companies in 11 Asia-Pacific countries that together contribute about a third of global gross domestic product and are home to 45% of the world's population. It was conducted from May 31 to June 14. RISING CAUTION The index staying above the neutral point of 50 suggests companies in the region are not expecting an imminent global recession, but the decade low indicates caution was rising as trade tensions mount. The United States and China have been embroiled in a trade standoff since last year, marked by tit-for-tat import tariffs, as Washington looks to force Beijing to make changes to its business policies. Talks between the two to reach a detente ended last month without a deal. Washington's move to put Huawei, the world's No.2 maker of smartphones, on an export blacklist that bars U.S. companies from doing business with the Chinese firm without special approval further ratcheted up tensions. Still, U.S. President Donald Trump has said that a deal would "eventually" be struck. BNP Paribas, however, does not expect a resolution to the trade war this year, said Hong Kong-based Manishi Raychaudhuri, Asia-Pacific equity strategist at the banking group. The trade tensions are hurting supply lines, especially that for higher-end smartphones, with many manufacturers looking to move production out of China and into countries such as Vietnam, Taiwan and Bangladesh, Raychaudhuri noted. These changes, however, "can't be made overnight", he added. U.S.-based Broadcom Inc, which makes radio-frequency chips used in Apple's iPhones and iPads, last week forecast a $2 billion hit to annual sales from the trade tensions and the U.S. ban on Huawei. Huawei has acknowledged a harder-than-expected hit from the ban and slashed its revenue forecast for the year. China's economy is also feeling the heat, with industrial output growth sliding to a 17-year low in May. Respondents to the survey included Japan's Nikon Corp, South Korea's Samsung Electronics, India's Tata Consultancy Services and Reliance Industries Ltd, as well as Thailand's PTT PCL. Note: Companies surveyed can change from quarter to quarter. (Reporting by Sachin Ravikumar; Editing by Himani Sarkar)
How Many Hong Lai Huat Group Limited (SGX:CTO) Shares Did Insiders Buy, In The Last Year? Want to participate in a short research study ? Help shape the future of investing tools and you could win a $250 gift card! It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Hong Lai Huat Group Limited ( SGX:CTO ). What Is Insider Buying? It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market. We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.' See our latest analysis for Hong Lai Huat Group The Last 12 Months Of Insider Transactions At Hong Lai Huat Group Over the last year, we can see that the biggest insider purchase was by Executive Deputy Chairman & CEO Bee Ong for S$402k worth of shares, at about S$0.25 per share. That means that even when the share price was higher than S$0.21 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares is very important. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. The only individual insider to buy over the last year was Bee Ong. Story continues Bee Ong bought a total of 8.7m shares over the year at an average price of S$0.24. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction! SGX:CTO Recent Insider Trading, June 19th 2019 Hong Lai Huat Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying. Insider Ownership Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It appears that Hong Lai Huat Group insiders own 31% of the company, worth about S$15m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders. So What Does This Data Suggest About Hong Lai Huat Group Insiders? It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. Insiders likely see value in Hong Lai Huat Group shares, given these transactions (along with notable insider ownership of the company). To put this in context, take a look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow . Of course Hong Lai Huat Group may not be the best stock to buy . So you may wish to see this free collection of high quality companies. For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com . This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
Should You Worry About Chanhigh Holdings Limited’s (HKG:2017) ROCE? Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card! Today we are going to look at Chanhigh Holdings Limited (HKG:2017) to see whether it might be an attractive investment prospect. To be precise, we'll consider its Return On Capital Employed (ROCE), as that will inform our view of the quality of the business. First up, we'll look at what ROCE is and how we calculate it. Then we'll compare its ROCE to similar companies. Last but not least, we'll look at what impact its current liabilities have on its ROCE. ROCE measures the 'return' (pre-tax profit) a company generates from capital employed in its business. All else being equal, a better business will have a higher ROCE. Ultimately, it is a useful but imperfect metric. Renowned investment researcher Michael Mauboussinhas suggestedthat a high ROCE can indicate that 'one dollar invested in the company generates value of more than one dollar'. The formula for calculating the return on capital employed is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) Or for Chanhigh Holdings: 0.038 = CN¥33m ÷ (CN¥1.9b - CN¥1.0b) (Based on the trailing twelve months to December 2018.) Therefore,Chanhigh Holdings has an ROCE of 3.8%. View our latest analysis for Chanhigh Holdings When making comparisons between similar businesses, investors may find ROCE useful. In this analysis, Chanhigh Holdings's ROCE appears meaningfully below the 13% average reported by the Construction industry. This performance could be negative if sustained, as it suggests the business may underperform its industry. Independently of how Chanhigh Holdings compares to its industry, its ROCE in absolute terms is low; especially compared to the ~2.0% available in government bonds. It is likely that there are more attractive prospects out there. Chanhigh Holdings's current ROCE of 3.8% is lower than 3 years ago, when the company reported a 37% ROCE. So investors might consider if it has had issues recently. When considering this metric, keep in mind that it is backwards looking, and not necessarily predictive. ROCE can be misleading for companies in cyclical industries, with returns looking impressive during the boom times, but very weak during the busts. ROCE is only a point-in-time measure. If Chanhigh Holdings is cyclical, it could make sense to check out thisfreegraph of past earnings, revenue and cash flow. Current liabilities include invoices, such as supplier payments, short-term debt, or a tax bill, that need to be paid within 12 months. Due to the way the ROCE equation works, having large bills due in the near term can make it look as though a company has less capital employed, and thus a higher ROCE than usual. To counteract this, we check if a company has high current liabilities, relative to its total assets. Chanhigh Holdings has total assets of CN¥1.9b and current liabilities of CN¥1.0b. Therefore its current liabilities are equivalent to approximately 54% of its total assets. Chanhigh Holdings has a fairly high level of current liabilities, boosting its ROCE. Chanhigh Holdings's ROCE is also pretty low (in absolute terms), making the stock look unattractive on this analysis. You might be able to find a better investment than Chanhigh Holdings. If you want a selection of possible winners, check out thisfreelist of interesting companies that trade on a P/E below 20 (but have proven they can grow earnings). If you are like me, then you willnotwant to miss thisfreelist of growing companies that insiders are buying. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.

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