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Above $300: Ether Price Clocks 10-Month High
The price of ethereum’s native cryptocurrency ether (ETH) surpassed $300 today to hit ten-month highs.
The world’s second largest cryptocurrency by market capitalization climbed above the psychological hurdle at 01:10 UTC and extended gains further to $306 – a level last seen on August 19, 2018.
As of writing, ETH is changing hands at $304, representing 9.7 percent gains on a 24-hour basis and 129 percent gains on a year-to-date basis, according to data sourceCoinMarketCap.
Related:Bitcoin Price Tops $10K for First Time Since 2018
Ether has more than doubled this year with the price currently reporting more than 260 percent gains on the low of $82.00 seen in December. The price, however, is still down 78 percent from the record high of $1,431 registered in January 2018.
Further, the cryptocurrency has retraced meager 16 percent of the sell-off from $1,431 to $82. On the other hand, BTC has retraced more than 40 percent of the bear market slide and is currentlytrading ata 15-month high of $10,800.
Looking forward, ether looks set to extend the ongoing rally, as technical charts are biased bullish.
Related:Ethereum Devs Approve First Code Changes for ‘Istanbul’ Hard Fork
The 50- and 100-candle price averages on the three-day chart have produced a bullish crossover for the first time since in two years. It is worth noting that prices had rallied by more than 900 percent in three months following the confirmation of the bull cross in May 2017.
So, if history is a guide, then the cryptocurrency looks set to challenge the April 2018 low of $364 in the next couple of months. A break higher would expose resistance at $401 – 23.6 percent Fibonacci retracement of the bear market drop.
Supporting the bullish case is the solid rise in ether’s non-price or on-chain metrics in the last few months. For instance, ETH volumes on decentralized applications (DApps) registered record highs in April, according to crypto analytics firmDiar.
Meanwhile, network activity, as represented bydaily gas usage, rose to lifetime highs in May. Gas is the fuel of the ethereum blockchain. The token is required to conduct a transaction on etherum’s network.
Disclosure:The author holds no cryptocurrency at the time of writing
Ethervia Shutterstock; charts byTradingView
• Bitcoin Price Eyes $10K After Erasing 40% of Bear Market Drop
• Meet Alternateth: A ‘Friendly Fork’ of the Ethereum Blockchain |
Does The Glaston Oyj Abp (HEL:GLA1V) Share Price Fall With The Market?
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Anyone researching Glaston Oyj Abp (HEL:GLA1V) 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 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 are more sensitive to general market forces than others. 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 Glaston Oyj Abp
Glaston Oyj Abp has a five-year beta of 1.08. This is reasonably close to the market beta of 1, so the stock has in the past displayed similar levels of volatility to the overall market. Using history as a guide, we might surmise that the share price is likely to be influenced by market voltility going forward but it probably won't be particularly sensitive to it. 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 Glaston Oyj Abp's revenue and earnings in the image below.
Glaston Oyj Abp is a rather small company. It has a market capitalisation of €60m, which means it is probably under the radar of most investors. Companies this small are usually more volatile than the market, whether or not that volatility is correlated. Therefore, it's a bit surprising to see that this stock has a beta value so close to the overall market.
It is probable that there is a link between the share price of Glaston Oyj Abp and the broader market, since it has a beta value quite close to one. However, long term investors are generally well served by looking past market volatility and focussing on the underlying development of the business. If that's your game, metrics such as revenue, earnings and cash flow will be more useful. This article aims to educate investors about beta values, but it's well worth looking at important company-specific fundamentals such as Glaston Oyj Abp’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 GLA1V’s future growth? Take a look at ourfree research report of analyst consensusfor GLA1V’s outlook.
2. Past Track Record: Has GLA1V 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 GLA1V's historicalsfor more clarity.
3. Other Interesting Stocks: It's worth checking to see how GLA1V 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. |
$10,915: Bitcoin Price Destroys Key Milestone to New 2019 High, What’s Next?
ByCCN Markets: On major crypto exchanges in the likes of Bitstamp and Coinbase, the bitcoin price has achieved a new 2019highat $10,915 in an overnight rally.
The bitcoin price is up moer than $20,000 in the past week (source: coinmarketcap.com)
As the bitcoin price surpassed the $10,000 mark, a level that has been regarded as a key psychological level by prominent investors and analysts including Tyler Winklevoss and Thomas Lee, the sentiment around the near term trend of the crypto market has significantly improved.
Technical analysts anticipate bitcoin to move past its current all-time high at $20,000 in the upcoming months, possibly by 2020.
Read the full story on CCN.com. |
NGO's softly-softly tactics tackle labor abuses at Malaysia factories
The 18-month investigation unearthed serious abuses at five apparel factories in Malaysia – hundreds of migrant workers had paid illegal recruitment fees that sometimes exceeded a year’s pay, while four of the factories retained the workers’ passports, turning them into forced laborers unable to quit.
Some migrant workers – many from Bangladesh, Nepal and Indonesia – said recruiters had promised wages twice what the Malaysian factories paid them. Some complained their companies had them sleep 28 to a single bedbug-infested room while sharing one toilet.
But in an unusual twist, when the investigators forTransparentem, a New York-based non-profit that investigates labor and environmental abuses, uncovered these problems, it didn’t rush to publicize them and shame those factories’ western customers, which included Target, Nike and Fruit of the Loom. Instead, Transparentem’s founder, Benjamin Skinner, adopted an unorthodox strategy: reaching out privately at first.
Transparentem’s leaders had seen in the past that when investigators uncovered horrible conditions in Asia, the embarrassed western customers often hurried to terminate their relationship with the suppliers and then did little to fix the abuses.
So when Transparentum uncovers serious problems, instead of rushing to publicize them and spotlight those factories’ western customers, the group quietly informs those companies and asks them to work with the factories to fix the problems. Behind this is the knowledge that Transparentem will disclose its investigative findings and how companies responded – and western companies know they will look bad if they don’t act.
Transparentem presented its findings on the Malaysian apparel factories to 23 western companies, and 15 of them agreed to help remediate the five factories: Honsin Apparel, Whitex Garments, Perindustrian Shunhon, SP Garments and Knit Textile Manufacturing.
We’re not trying to take a blowtorch to the apparel industry. We’re trying to say to brands you have a real responsibility here. You have real power here
The western companies got four of the factories to stop using recruiters who demanded illegal fees. They also got them to repay nearly $1.8m in recruitment fees to more than 2,500 workers. Transparentem said SP Garments didn’t respond to its findings.
In an important victory for Transparentem, soon after it sent its Malaysia report to companies last October, the American Apparel and Footwear Association – which includes Nike, Gap, Ralph Lauren and 120 other companies – announceda new policy on “responsible recruitment”that requires “supply chain partners” to make sure no workers pay recruitment fees and “workers retain control of their travel documents and have full freedom of movement”.
“There’s the traditional name-and-shame model – the tradition that you expose as soon as you have the evidence,” said Skinner, who used to work as a journalist whose focus was investigating human trafficking.
“We’re not trying to take a blowtorch to the apparel industry. We’re trying to say to brands you have a real responsibility here. You have real power here. We want to give you a real opportunity to use that power when you’re under intense pressure to stop doing business with a supplier that has problems. We want to give brands a grace period that gives them an opportunity to do the right thing.”
The International Labor Organization says that Malaysia has up to 4 million migrant workers, representing 20% to 30% of the nation’s workforce. In 2017, Malaysia exported $3.6bn in textiles and apparel, with the United States Department of Labor placing Malaysia-made garments on its list of goods produced with forced labor.
Skinner said Transparentem decided to investigate Malaysia’s apparel industry because other investigations had already uncoveredforced labor in its electronics industryandits palm oil industry.
Transparentem found the recruitment fees for the Malaysian factories ranged from $745 to $4,356. Many migrants said they borrowed from banks or relatives, mortgaged land or sold their homes or livestock to pay the fees. Transparentem wrote: “Some workers said it took years for them to repay loans, placing them at risk of debt bondage.”
Some factories gave passports back to workers only if workers first put down a deposit of three months’ pay. “The company fears that we will run away if we get to keep our passports,” one worker said. Sixty percent of the workers Transparentem interviewed said recruiters had deceived them about their future pay and the nature of the work promised.
Transparentem praised two athletic wear companies, Brooks Sports and Tracksmith, for their role at Perindustrian, where some workers said recruitment fees were so high it took two years to pay off any loans. Brooks paid a portion of the costs to reimburse Perindustrian’s workers even though it had stopped buying from those companies. Tracksmith, a customer of Perindustrian at the time of Transparentem’s investigation, also contributed to the reimbursements. Transparentem’s report said: “Despite having no authorized sourcing relationship with Perindustrian Shuhan, Brooks Sports took a leadership role in organizing buyers” to fix the factory’s problems and reimburse workers.
Dan Sheridan, Brooks’ chief operating officer, said: “After Transparentem’s work revealed unacceptable findings in a factory which was not authorized to produce our product, we took action to improve conditions for workers there.” Sheridan added. “It is our hope that this investigation can be a catalyst for change, not only in Malaysia, but for any country that receives foreign migrant labor.”
Transparentem also praised Primark and Target, noting that even though they had stopped sourcing from the Whitex factory, those two companies took leadership roles in assuring improvements there, including illegal recruitment fees and retaining passports. Primark commissioned an audit of the factory, and both helped make sure Whitex ended recruitment fees and stopped withholding passports.
Transparentem wrote that Nike had helped address recruitment fees and other problems at the Honsin factory, but it faulted Nike for not doing more at SP Garments and its Hing Yiap factory, which a Nike sublicensee had used. Nike insisted that it didn’t even use any of SP’s factories and that the sublicensee used the Hing Yiap without its authorization or knowledge. Nonetheless Nike said it had approached SP’s owner about making improvements.
Cimarron Nix, Nike’s director of labor, sustainable manufacturing and sourcing, said Nike had identified the problems at the Honsin factory months before Transparentem did. Nix said: “We have no relations with SP Garments” and “we are not in a position to have legal or other leverage.” “We are deeply engaged in respecting human rights across our supply chain,” Nix continued. “It is a journey of continuous improvement.”
But Skinner asked why Nike was still using Malaysian factories, like Honsin – where workers had to pay recruitment fees and where passports were confiscated – a decade after a 2008 exposé found thatNike was using a Malaysian factory that withheld passports, had illegal recruiting fees and had horrid housing conditions.
Transparentem’s report also criticized Variety Wholesalers – the retailing chain is headed by Art Pope the North Carolina multimillionaire and politician – for doing little to fix problems at Whitex, from which it had ordered garments through a middleman.
Templeton Blackburn, Variety Wholesalers’ general counsel, said Variety has never purchased goods from Whitex, but did buy “a very limited amount of goods from a New York vendor”. Variety said it didn’t “decline” to participate in remediation efforts, but had worked with its vendor and Transparentem to correct problems.
Transparentem also criticized Wolverine Worldwide, a footwear manufacturing based in Rockford, Michigan, saying that company should discuss with Perindustrian how it could do more to support reimbursement and that Wolverine “should assess whether its auditing” procedures “are thorough enough to detect suppliers’ risks of using forced labor”.
Wolverine responded that it takes “allegations of human rights violations” very seriously and said the factory has passed a “rigorous third-party audit” that didn’t find forced labor or other violations “claimed by Transparentem”. Wolverine says it was waiting for Transparentem to report back on audits before it took additional action. |
UAE civil aviation authority instructs airlines to take necessary safety measures - WAM
CAIRO (Reuters) - The United Arab Emirates' General Civil Aviation Authority on Saturday instructed airlines registered in the country to take necessary measures given current risks in the region, Emirates News Agency (WAM) said. Operators should "evaluate the affected flying zones and ...put in place the necessary measures to avoid operating in areas that may subject civil aviation operations to danger," the authority said. (Reporting by Nayera Abdallah; ; editing by John Stonestreet) |
Is Toys R Us making a comeback? A year after stores closed, there's talk of new locations
Toys R Us is poised to make a comeback under a new name and with a much smaller footprint.
Almost exactly a year after the remaining Toys R Us stores closedin late June 2018,Bloombergis reporting that a new e-commerce site and half dozen stores could open later ahead of holiday shopping.
Richard Barry, who previously served as global chief merchandising officer for Toys R Us and is president and CEO of the new Tru Kids Inc., has been pitching his vision to toymakers to revive the chain, Bloomberg reported citing people familiar with the plans.
The new vision includes smaller stores about 10,000 square feet that will reportedly offer more experiences, like play areas. Many of the Toys R Us stores that closed last year were around 30,000 square feet.
Store closings 2019:CVS, Payless and Victoria's Secret are just some of the brands closing stores
Life after Babies R Us:Walmart and Target expand baby options and toys
In February, the new company announced in a statement that it started doing business on Jan. 20 as Tru Kids Brands and was the "proud parent of Toys"R"Us, Babies"R"Us, Geoffrey and more than 20 established consumer toy and baby brands."
On June 5, the new company announced it was returning to Australia and making its debut in New Zealand.
Digital update:Mattel revs up Hot Wheels to new digital generation
Tru Kids will be based in New Jersey, and its workforce includes a team of former Toys R Us employees.
"We have a once-in-a-lifetime opportunity to write the next chapter of Toys R Us by launching a newly imagined omni-channel retail experience for our beloved brands here in the U.S.," Barry said inFebruary's statementannouncing the plans.
A Tru Kids spokeswoman told Bloomberg that it wasn’t ready to publicly share details on its U.S. strategy.
Contributing: Melanie Anzidei, North Jersey Record
Follow USA TODAY reporter Kelly Tyko on Twitter:@KellyTyko
This article originally appeared on USA TODAY:Is Toys R Us making a comeback? A year after stores closed, there's talk of new locations |
'Strictly's Pasha Kovalev fears for 'personal' photos of Rachel Riley after phone stolen
File photo dated 06/09/16 of Rachel Riley and Pasha Kovalev, who are expecting their first child together. (Credit: PA) Strictly Come Dancing star Pasha Kovalev has had his mobile phone stolen after becoming the victim of a mugging. The 39-year-old professional dancer is thought to be concerned for the safety of personal pictures of his pregnant girlfriend, Countdown star Rachel Riley, which were saved on the phone. According to The Sun newspaper Kovalev was robbed by a gang of moped thieves outside a theatre in North London, who snatched his phone from his hands. Read more: Rachel Riley 'moved to tears' over support in fighting back at anti-semitic trolls A source said: “One second he was outside on the phone, the next moment the moped pair drove at him aggressively and totally disorientated him. “They mounted the pavement and in a flash his phone was out of his hand. He was knocked off balance and very upset. As soon as it dawned on him what had happened he told people around him ‘The mobile is unlocked’.” Kovalev was leaving Sadler’s Wells Theatre in North London on Thursday where he had been to see fellow Strictly stars Katya and Neil Jones’ live show Somnium: A Dancer's Dream . He is said to have run back into the theatre to check if the attack had been caught on CCTV. Footage has been handed over to police. The Metropolitan police confirmed officers were called at 10.10pm. A spokesman said: “It is alleged that two men on mopeds stole a phone from a man as he walked down the road. No arrests have been made, enquiries continue.” Kovalev - a very private person who rarely uses social media - fears he will never recover pictures of 33-year-old Riley stored on the phone. View this post on Instagram A post shared by Rachel Riley (@rachelrileyrr) on Jun 21, 2019 at 12:00pm PDT The dancer quit the BBC show in February and the he and Riley are currently appearing on Celebrity Gogglebox on Channel 4. Read more: Pasha Kovalev leaves 'Strictly Come Dancing' after eight years They met when they were paired up on the show in 2013 and Riley split from husband Jamie Gilbert, after falling victim to what has now been dubbed the ‘Strictly Curse’ which has seen many celebrity contestant’s relationships ended after they appear on the show. Story continues Riley confirmed her romance with Kovalev in 2014 and last month they announced they are expecting their first child. View this post on Instagram A post shared by Rachel Riley (@rachelrileyrr) on May 24, 2019 at 8:16am PDT Last year sports presenter Ore Oduba, who competed on Strictly in 2016, revealed he had been the victim of a moped mobile phone mugging. Professional dancer AJ Pritchard was attacked in a nightclub in Cheshire last year and Strictly pro Gorka Marquez claimed he was beaten up by a gang on the streets of Blackpool in 2016. |
Do Institutions Own Shares In Cargotec Corporation (HEL:CGCBV)?
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Every investor in Cargotec Corporation (HEL:CGCBV) should be aware of the most powerful shareholder groups. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Companies that used to be publicly owned tend to have lower insider ownership.
With a market capitalization of €2.2b, Cargotec is a decent size, so it is probably on the radar of institutional investors. In the chart below below, we can see that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about CGCBV.
View our latest analysis for Cargotec
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.
As you can see, institutional investors own 50% of Cargotec. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Cargotec's earnings history, below. Of course, the future is what really matters.
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. We note that hedge funds don't have a meaningful investment in Cargotec. 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. 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 some shares in Cargotec Corporation. The insiders have a meaningful stake worth €48m. Most would see this as a real positive. It is good to see this level of investment by insiders. You cancheck here to see if those insiders have been buying recently.
The general public, with a 24% 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.
We can see that Private Companies own 23%, 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 Cargotec better, we need to consider many other factors.
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. |
What does Epiroc AB (publ)'s (STO:EPI A) Balance Sheet Tell Us About Its Future?
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Investors seeking to preserve capital in a volatile environment might consider large-cap stocks such as Epiroc AB (publ) (STO:EPI A) a safer option. Doing business globally, large caps tend to have diversified revenue streams and attractive capital returns, making them desirable investments for risk-averse portfolios. But, the key to their continued success lies in its financial health. I will provide an overview of Epiroc’s financial liquidity and leverage to give you an idea of Epiroc’s position to take advantage of potential acquisitions or comfortably endure future downturns. Remember this is a very top-level look that focuses exclusively on financial health, so I recommend a deeper analysisinto EPI A here.
View our latest analysis for Epiroc
EPI A's debt levels surged from kr4.7b to kr8.7b over the last 12 months – this includes long-term debt. With this growth in debt, the current cash and short-term investment levels stands at kr6.5b , ready to be used for running the business. Moreover, EPI A has generated kr3.9b in operating cash flow during the same period of time, leading to an operating cash to total debt ratio of 45%, indicating that EPI A’s current level of operating cash is high enough to cover debt.
At the current liabilities level of kr10b, it appears that the company has been able to meet these obligations given the level of current assets of kr28b, with a current ratio of 2.69x. The current ratio is the number you get when you divide current assets by current liabilities. Usually, for Machinery companies, this is a suitable ratio since there is a bit of a cash buffer without leaving too much capital in a low-return environment.
EPI A is a relatively highly levered company with a debt-to-equity of 42%. This is common amongst large-cap companies because debt can often be a less expensive alternative to equity due to tax deductibility of interest payments. Accordingly, large companies often have lower cost of capital due to easily obtained financing, providing an advantage over smaller companies. We can test if EPI A’s debt levels are sustainable by measuring interest payments against earnings of a company. As a rule of thumb, a company should have earnings before interest and tax (EBIT) of at least three times the size of net interest. For EPI A, the ratio of 57.02x suggests that interest is amply covered. High interest coverage is seen as a responsible and safe practice, which highlights why most investors believe large-caps such as EPI A is a safe investment.
EPI A’s high cash coverage means that, although its debt levels are high, the company is able to utilise its borrowings efficiently in order to generate cash flow. This may mean this is an optimal capital structure for the business, given that it is also meeting its short-term commitment. This is only a rough assessment of financial health, and I'm sure EPI A has company-specific issues impacting its capital structure decisions. You should continue to research Epiroc to get a better picture of the large-cap by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for EPI A’s future growth? Take a look at ourfree research report of analyst consensusfor EPI A’s outlook.
2. Valuation: What is EPI A 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 EPI A 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. |
Nine dead in Hawaii plane crash
June 22 (Reuters) - Nine people died in a plane crash in Hawaii on Friday, the Hawaii Department of Transportation said. The twin-engine King Air plane went down near Dillingham Airfield. There appeared to be no survivors, it said in a statement. The cause of the crash was not immediately clear. (Reporting by Kanishka Singh in Bengaluru; editing by John Stonestreet) |
Could dormakaba Holding AG (VTX:DOKA) Have The Makings Of Another Dividend Aristocrat?
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Dividend paying stocks like dormakaba Holding AG (VTX:DOKA) tend to be popular with investors, and for good reason - some research suggests a significant amount of all stock market returns come from reinvested 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.
A slim 2.1% yield is hard to get excited about, but the long payment history is respectable. At the right price, or with strong growth opportunities, dormakaba Holding could have potential. The company also bought back stock equivalent to around 1.3% of market capitalisation this year. Some simple analysis can reduce the risk of holding dormakaba Holding for its dividend, and we'll focus on the most important aspects below.
Explore this interactive chart for our latest analysis on dormakaba Holding!
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. Looking at the data, we can see that 48% of dormakaba Holding's profits were paid out as dividends in the last 12 months. This is medium payout level that leaves enough capital in the business to fund opportunities that might arise, while also rewarding shareholders. Plus, there is room to increase the payout ratio over time.
We also measure dividends paid against a company's levered free cash flow, to see if enough cash was generated to cover the dividend. Of the free cash flow it generated last year, dormakaba Holding paid out 35% as dividends, suggesting the dividend is affordable. It's positive to see that dormakaba Holding's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.
We update our data on dormakaba Holding every 24 hours, so you can always getour latest analysis of its financial health, 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. dormakaba Holding has been paying dividends for a long time, but for the purpose of this analysis, we only examine the past 10 years of payments. The dividend has been cut by more than 20% on at least one occasion historically. During the past ten-year period, the first annual payment was CHF4.70 in 2009, compared to CHF15.00 last year. This works out to be a compound annual growth rate (CAGR) of approximately 12% a year over that time. dormakaba Holding's dividend payments have fluctuated, so it hasn't grown 12% every year, but the CAGR is a useful rule of thumb for approximating the historical 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. dormakaba Holding has grown its earnings per share at 7.4% per annum over the past five years. Earnings per share have been growing at a credible rate. What's more, the payout ratio is reasonable and provides some protection to the dividend, or even the potential to increase it.
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 dormakaba Holding 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. Overall we think dormakaba Holding is an interesting dividend stock, although it could be better.
Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 10 analysts we track are forecasting for dormakaba Holdingfor freewith publicanalyst estimates for the company.
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. |
Mitie Group plc (LON:MTO): Will The Growth Last?
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In June 2019, Mitie Group plc (LON:MTO) announced its most recent earnings update, which revealed that the business turned profitable again after experiencing negative earnings in the last financial year. Below is my commentary, albeit very simple and high-level, on how market analysts predict Mitie Group's earnings growth trajectory over the next few years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
See our latest analysis for Mitie Group
Analysts' outlook for the coming year seems optimistic, with earnings rising by a significant 60%. This strong growth in earnings is expected to continue, bringing the bottom line up to UK£74m by 2022.
Even though it is useful to understand the rate of growth year by year relative to today’s level, it may be more beneficial to gauge the rate at which the company is moving on average every year. The benefit of this approach is that we can get a bigger picture of the direction of Mitie Group's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I put a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 28%. This means, we can expect Mitie Group will grow its earnings by 28% every year for the next few years.
For Mitie Group, I've put together three important aspects you should look at:
1. Financial Health: Does it have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Valuation: What is MTO 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 MTO is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of MTO? Exploreour interactive list of stocks with large growth 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. |
Tracking Drugs on Blockchain: How Significant Is Walmart and IBM's New Collaboration?
Walmart is no stranger to distributed ledger technology (DLT). Back in October 2016, the multinational food retailerbegan collaboratingwithIBMon a blockchain-based system that could identify and flag recalled foods. Since then, it has dived into a number of patents and trials — e.g.,tracking meatinChina,tracking delivery drones, patentingsmart deliveriesandtracking live foodin the United States.
And in addition to several other U.S.patentsand globalinitiatives,Walmarthas recently announced its latest foray into applyingblockchaintechnology. This is itscollaborationwith the Food and Drug Administration, which — in conjunction with IBM, Merck andKPMG— will see it working on the development of a proof-of-concept blockchain for identifying and tracking prescriptiondrugs.
As with Walmart's other blockchain-focused experiments, there's a chance that this latest endeavor won't progress beyond the trial stage and that the parties involved could move onto other things once the pilot has been completed.
However, given that the pilot has been initiated under the terms of theDrug Supply Chain Security Act(DSCSA) and that it calls for the creation of "an electronic, interoperable system to identify and trace certain prescription drugs" by 2023, there's every chance that blockchain technology will be involved to some degree in the final system that's eventually established.
In February, the Food and Drug Administration (FDA)announcedthe DSCSA Pilot Project Program and also invited interested companies to submit applications to participate. As the accompanyingpress releasemakes clear, the aim of the program is to improve the tracing and authentication of prescription drugs, and to ensure that counterfeit or illegal drugs don't enter the supply chain. FDA Commissioner Scott Gottlieb said in February:
"Using new innovations, we believe we can improve the overall security of our closed system and improve our ability to prevent the introduction of illegitimate products, better detect the introduction of illegitimate products, and enable stakeholders and the FDA to respond more rapidly when such products are found.”
At the time of the initial announcement, the FDA was open to a variety of proposals involving several new technologies. But it would appear that proposals focusing on blockchain-based technology must have been particularly convincing — because in June, the likes of Merck, Walmart, KPMG and IBM began announcing that they would jointly be working with the FDA on a trial revolving around the use of blockchain.
As pharmaceutical giant Merck stated in apress release, each participant will contribute their respective skills and expertise to the new pilot, which "will create a shared permissioned blockchain network that allows real-time monitoring of products." Asked why blockchain is likely a better proposition for tracking drug supplies than other new technologies, Merck's director of global communications, Charles McCurdy, told Cointelegraph:
"A permissioned blockchain network has the potential to create greater transparency, reduce the time needed to track and trace inventory, help determine the integrity of products (such as whether they are kept at the correct temperature), prevent and remove counterfeit drugs, and more."
KPMG — another participant in the pilot — is equally enthused by the promise shown by blockchain in the context of drug supply chains, and its U.S. blockchain leader, Arun Ghosh, explained to Cointelegraph via the email that DLT will help simplify such chains, which can sometimes operate in a convoluted manner.
“Pharmaceutical supply chains are complex given the numerous entities involved and increased reliance on the use of contracted manufacturers/packagers, re-packagers, and 3rd Party Logistics (3PL) providers. Additionally, joint-collaborations and co-licensing partnerships between Marketing Authorization Holders (MAHs) result in the need to share information and operate from an immutable record. Blockchain is a good fit for tracking the supply of prescription drugs because it provides a private, permissioned network and immutable database. In other words, multiple parties can access the same data in their secured, respective environments (i.e. their ‘node’).”
Moving beyond the actual participants in the DSCSA Pilot Project Program, figures within the blockchain and logistics industry also agree that DLT is an ideal fit for tracking the movement of pharmaceuticals, largely because of its immutability and interoperability. Raja Sharif — the CEO of medical blockchain company FarmaTrust, told Cointelegraph that:
“Blockchain provides the characteristics of immutability and incorruptibility which acts as an important safeguard against tampering with the chain. Which is all important to prevent counterfeits and substandard drugs entering the pharmaceutical supply chain. Another characteristic of blockchain is the ability for it to aggregate data from different systems efficiently.”
Of course, the word “blockchain” is being used in an increasingly wide variety of contexts, often when DLT doesn't play a central or even a significant role in a system or a platform with which it's being associated (e.g., in the case of Visa's new”blockchain-based” system).
Related:Visa Set to Join the Expanding Field of Blockchain-Based International Payment Providers
However, in the case of the FDA's latest pilot, the platform being built will indeed be a (private) blockchain, rather than some other system that tangentially uses only one or two features of blockchain technology. In this case, however, the project does focus on using DLT, as confirmed by McCurdy, who added that the ledger being developed would record such information as "the time and dates a product or products pass through certain checkpoints, temperatures at which they are stored during transport, etc."
Not only would the new ledger record important info for confirming authenticity and quality, but McCurdy explained that it would do so in accordance with distributed, cryptographically secure principles:
"It would store information such as the above in an immutable format (a permissioned, distributed, networked 'ledger') that would guarantee to those who have permission to use the system that the information is connected to the specified product. Specific uses are to track medicines and vaccines through the supply chain from manufacturer to customer."
Also, according to KPMG’s Ghosh, the pilot will focus specifically on using blockchain tech to make the whole process of tracking pharmaceuticals more efficient and more reliable:
“The pilot is intended to explore how blockchain technology can help reduce the amount of time needed to track a product, make it faster to retrieve more accurate drug distribution information, increase accuracy of information shared among network members and prevent illegitimate products from entering the supply chain. Location information, in the form of a Global Location Number (GLN), the serialized product identifier, and the event (for example, shipping, receiving, dispensing, destroying) would be stored on the blockchain and viewable based on permission.”
As a concrete example, the pilot would involve newly manufactured drugs being given registration numbers and recorded on the blockchain. From there, they would be shipped to distributors and retailers, and at each point in the supply chain, all movement would be registered on the ledger, while receivers of the drugs would be able to check the incoming drugs against records kept on the distributed database.
As Sharif explained, such a system would make it very hard to surreptitiously pass off counterfeit drugs as the real thing:
“Since in the US all new labels need to be registered and in Europe they are issued by the central authorities, it's going to be difficult for criminals to infiltrate the pharmaceutical supply chain. Not only that, but if two unique labels are found in the system then automatic alerts will go to the designated authorities or personnel. A further protection is that if a particular batch or label should be in Sweden but appears in Canada, for instance, then this will also be suspicious.”
In fact, things don’t stop there, because not only would counterfeiters have to duplicate the packaging and registered info of legitimate drugs, but they would need to gain access to the permissioned ledger in order to do this. On top of that, they would also have to take the legitimate drugs out of the supply chain, because, as Sharif warned, the existence of drugs with duplicate info would likely be noticed by those with access to the ledger.
In the context of drug supply chains, the potential shown by blockchain technology is evidently large. That said, there's no guarantee that anything permanent will come out of the FDA-led pilot. because, as McCurdy informed Cointelegraph, the blockchain-focused project is only one of 20 that the FDA has greenlighted as part of the Drug Supply Chain Security Act program. There is, then, a chance that the FDA ends up favoring a pilot that doesn't harness blockchain technology in any appreciable way.
Indeed, as the FDA explained to Cointelegraph, it has been — and continues to be — resolutely open to other technological means of tracking the supply of prescription medicines, including those that don't make any use of blockchain. FDA spokesperson clarified that:
"The FDA is actively exploring all potential technologies that will help supply chain trading partners trace drugs as they move through the supply chain, enhancing the agency’s ability to help protect consumers from exposure to drugs that may be counterfeit, stolen, contaminated or otherwise harmful. Blockchain is one of many technologies that is being researched for product tracing and verification. FDA is open to considering all viable technologies and methods through the DSCSA Pilot Project Program."
Nonetheless, it's worth pointing out that the Drug Supply Chain Security Act necessitates that the FDA implements an interoperable system for tracing drugs by 2023. Because of this need for interoperability, the final system has to be open to all parties working within the drug supply chain, a requirement that a blockchain-based platform would fulfill very well. This, at least, is what Mersk and KPMG believe:
"The main objective of the project is to explore how blockchain technology can be used to identify, track, and trace prescription medicines and vaccines as they enter and move throughout the U.S. supply chain."
Ghosh is also hopeful that the new pilot will demonstrate the power of blockchain, because while he accepts that the trial will be relatively small in scale, he also affirms that DLT is just the thing the pharmaceutical industry has been waiting for:
“In this case, creating interoperability within the pharmaceutical supply chain is a challenge where blockchain is extremely well-suited. However, like any emerging technology, we must start with what I call ‘controlled explosions,’ or small projects with a limited blast radius that allow us to measure and test the real business impact before scaling.”
In other words, even if there's no guarantee that the FDA won't end up going with a nonblockchain-based system, the early signs indicate that the platform being developed by IBM, Walmart, KPMG and Merck has a good chance of satisfying the criteria the FDA is likely to employ in choosing its winning candidate. And the fact that such names have signed on to the new pilot would suggest that they really believe in its potential.
• US FDA Partners With IBM and Walmart to Improve Drug Supply Chain Using Blockchain
• Russian Authorities Sign MoU With Maersk to Officially Launch TradeLens in Russia
• A Blockchain System for Azerbaijan’s Digital Economy
• Microsoft and Ethereum Foundation Swell the Hyperledger Ranks Amid Growing Cross-Industry Blockchain Collaboration |
UPDATE 7-Iran says it will confront any U.S. threat, Trump eyes new sanctions
* Tensions high after Iran downed unmanned US drone
* Trump says aborted retaliatory strike to avoid any deaths
* Iran says won't allow its borders to be violated
* British minister to visit Iran on Sunday (Adds Trump quotes, Pentagon spokeswoman)
By Parisa Hafezi and Lisa Barrington
DUBAI, June 22 (Reuters) - Iran said on Saturday it would respond firmly to any U.S. threat, the semi-official Tasnim news agency reported, amid escalating tension between Tehran and Washington over the shooting down of an unmanned U.S. drone by the Islamic Republic.
On Thursday, an Iranian missile destroyed a U.S. Global Hawk surveillance drone. Tehran repeated on Saturday that the drone was shot down over its territory. Washington said the incident happened in international airspace.
U.S. President Donald Trump said on Friday he called off a military strike to retaliate because it could have killed 150 people, and signalled he was open to talks with Tehran.
"Regardless of any decision they (U.S. officials) make ... we will not allow any of Iran's borders to be violated. Iran will firmly confront any aggression or threat by America," Foreign Ministry spokesman Abbas Mousavi told Tasnim.
Speaking in Washington on Saturday before heading to the U.S. presidential retreat at Camp David, where he said he would deliberate on Iran, Trump said the U.S. government was imposing new sanctions on Tehran.
"We are putting additional sanctions on Iran," Trump told reporters. "In some cases we are going slowly, but in other cases we are moving rapidly."
Military action was "always on the table," the president added, but he said he was open to reversing the escalation and could quickly reach a deal with Iran that he said would bolster the country's flagging economy.
"We will call it 'Let's make Iran great again,'" Trump said.
Worries about a confrontation between Iran and the United States have mounted despite Trump saying he has no appetite to go to war with Iran. Tehran has also said it is not seeking a war but has warned of a "crushing" response if attacked.
"Any mistake by Iran's enemies, in particular America and its regional allies, would be like firing at a powder keg that will burn America, its interests and its allies to the ground," the senior spokesman of Iran's Armed Forces, Abolfazl Shekarchi, told Tasnim on Saturday.
A senior commander of the elite Revolutionary Guards struck a similarly defiant note, in comments quoted by the Islamic Republic News Agency (IRNA).
"This is our response to a violation of Iranian space and if the violation is repeated then our response will be repeated," said Brigadier General Amirali Hajizadeh, head of the Guards' aerospace division.
"It's possible that this infringement of the Americans was carried out by a general or some operators."
A Pentagon spokeswoman, Commander Rebecca Rebarich, said on Saturday: "We stand by where we said the aircraft was operating in international airspace."
Iran's Foreign Ministry summoned a diplomatic representative of the United Arab Emirates on Saturday because the UAE allowed the drone that was shot down to be launched from a U.S. military base on its territory, the Fars news agency reported.
FLIGHTS REROUTED
Tensions in the region began to worsen significantly when Trump pulled out of a 2015 nuclear deal between Iran and six powers and reimposed sanctions on the country. The sanctions had been lifted under the pact in return for Tehran curbing its nuclear programme.
Over the past weeks the United States and Iran's main regional rival Saudi Arabia have also blamed Iran for attacks on two oil tankers last week in the Gulf of Oman and on four tankers off the United Arab Emirates on May 12.
Both incidents happened near the strategic Strait of Hormuz, a major conduit for global oil supplies.
Iran has denied any involvement in those incidents, but world powers are calling for calm and sending in envoys for talks to try to lower the temperature of a dispute that is already helping push up the price of oil.
A senior Arab diplomat said the sharply increased tensions would further harm the crisis-hit Middle East region.
"Confrontation, whatever we think about Trump or Iran, will be disastrous for everyone," the diplomat told Reuters on condition of anonymity.
The U.S. Federal Aviation Administration on Thursday issued an emergency order prohibiting U.S. operators from flying in an oversea area of Tehran-controlled airspace over the Strait of Hormuz and Gulf of Oman. Some other international airlines are taking related precautions.
But Iran said on Saturday its airspace was "safe and secure" for all planes to cross, Tasnim reported.
German Chancellor Angela Merkel called on Saturday for a political resolution of the crisis, adding: "That is what we are working on."
Britain's Foreign Office said Middle East minister Andrew Murrison would raise concerns about "Iran's regional conduct and its threat to cease complying with the nuclear deal" during a visit to Tehran on Sunday. France sent an envoy to Iran earlier in the week.
Iran has threatened to breach the deal if the European signatories to the agreement fail to salvage it by shielding Tehran from U.S. sanctions.
"The Europeans will not be given more time beyond July 8 to save the deal," Mousavi said, referring to Iran's deadline of 60 days that Tehran announced in May.
Separately, Iran has executed a former contract employee for the aerospace organisation of the Ministry of Defence on charges of spying for the U.S. Central Intelligence Agency, the IRIB news agency reported on Saturday.
Jalal Hajizavar had left his post nine years ago and was convicted by a military court after an investigation which discovered documents and spying equipment at his home, the report said. (Additional reporting by John Irish in Paris, Alistair Smout in London, Babak Dehghanpisheh in Geneva, and Nandita Bose and Idrees Ali in Washington; Writing by Parisa Hafezi; Editing by Alison Williams and Chizu Nomiyama) |
Is There An Opportunity With Mitie Group plc's (LON:MTO) 44% Undervaluation?
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Does the June share price for Mitie Group plc (LON:MTO) reflect what it's really worth? Today, we will estimate the stock's intrinsic value by estimating the company's future cash flows and discounting them to their present value. This is done using the Discounted Cash Flow (DCF) model. It may sound complicated, but actually it is quite simple!
We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in theSimply Wall St analysis model.
View our latest analysis for Mitie Group
We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
Generally we assume that a dollar today is more valuable than a dollar in the future, so we need to discount the sum of these future cash flows to arrive at a present value estimate:
[{"": "Levered FCF (\u00a3, Millions)", "2019": "\u00a3-7.79", "2020": "\u00a313.08", "2021": "\u00a341.14", "2022": "\u00a352.18", "2023": "\u00a361.02", "2024": "\u00a368.48", "2025": "\u00a374.60", "2026": "\u00a379.54", "2027": "\u00a383.51", "2028": "\u00a386.74"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x5", "2020": "Analyst x4", "2021": "Analyst x6", "2022": "Analyst x4", "2023": "Est @ 16.94%", "2024": "Est @ 12.23%", "2025": "Est @ 8.93%", "2026": "Est @ 6.62%", "2027": "Est @ 5%", "2028": "Est @ 3.87%"}, {"": "Present Value (\u00a3, Millions) Discounted @ 7.66%", "2019": "\u00a3-7.24", "2020": "\u00a311.28", "2021": "\u00a332.97", "2022": "\u00a338.84", "2023": "\u00a342.19", "2024": "\u00a343.98", "2025": "\u00a344.50", "2026": "\u00a344.07", "2027": "\u00a342.98", "2028": "\u00a341.46"}]
Present Value of 10-year Cash Flow (PVCF)= £335.03m
"Est" = FCF growth rate estimated by Simply Wall St
After calculating the present value of future cash flows in the intial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 10-year government bond rate of 1.2%. We discount the terminal cash flows to today's value at a cost of equity of 7.7%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = UK£87m × (1 + 1.2%) ÷ (7.7% – 1.2%) = UK£1.4b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= £UK£1.4b ÷ ( 1 + 7.7%)10= £652.42m
The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is £987.45m. In the final step we divide the equity value by the number of shares outstanding.This results in an intrinsic value estimate of £2.73. Compared to the current share price of £1.54, the company appears quite good value at a 44% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent.
Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Mitie Group as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.7%, which is based on a levered beta of 0.967. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Valuation is only one side of the coin in terms of building your investment thesis, and it shouldn’t be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. What is the reason for the share price to differ from the intrinsic value? For Mitie Group, I've put together three essential factors you should further research:
1. Financial Health: Does MTO have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Future Earnings: How does MTO's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with ourfree analyst growth expectation chart.
3. Other High Quality Alternatives: Are there other high quality stocks you could be holding instead of MTO? Exploreour interactive list of high quality stocksto get an idea of what else is out there you may be missing!
PS. Simply Wall St updates its DCF calculation for every GB stock every day, so if you want to find the intrinsic value of any other stock justsearch 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. |
Bitcoin hits $10,000 and heads for all time highs
Bitcoin has broken $10,000 for the first time in over a year, according to Coin360 . Kudos to regular Coin Rivet contributor Jon Walsh for calling this one in early June. Call me mental, but I can feel a sharp parabolic style price increase to $10k for BTC in the next four weeks. Lets see
Jon Walsh (@walshjonwalsh) June 4, 2019 At the time of writing, it is up 9.91% on the day and trading at $10,693. And it gets better
FOMO could take Bitcoin from $9,000 to $20,000 within months, Fundstrat Global Advisors Co-founder Tom Lee told CNBC this week. I think it is easily going to take out its all time highs, he declared. Not everyone is getting out the party balloons and champagne, however. Im still not sold on the idea that its up, up, up from here, says Simon Peters, Analyst at eToro. Were due a significant correction still and prices could fall back to as low as $6,500 before the next major rise. That said, you cant ignore the continuing price surge weve seen this year. As for the latest rise, global politics could be one reason, Peters reckons. Its busy out there with the US-China trade war rumbling on, a new Prime Minister on the way in Britain and protests in Hong Kong. Some investors will naturally be spooked and are seeking a safe haven in assets like crypto. Bitcoins price may have also been boosted by Tether printing another $150 million, which has historically been associated with a bump in crypto prices, he concludes. George McDonaugh, CEO and Co-Founder of KR1, also advises caution, On the long way up to $20,000 there were five moments where there was a 40% decrease in price. These shake-outs test your staying power and many new entrants will hand their precious coins back to the market, he says. We will see huge corrections again, and passing 10k may well be the catalyst that drives us back down, but whatever happens, weve been clearly shown that the interest, adoption and money has not in any way left this new asset class. The post Bitcoin hits $10,000 and heads for all time highs appeared first on Coin Rivet . |
Cantargia AB (publ) (STO:CANTA) Insiders Have Been Selling
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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 inCantargia AB (publ)(STO:CANTA).
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.
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. 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 Cantargia
The Founder, Thoas Fioretos, made the biggest insider sale in the last 12 months. That single transaction was for kr4.3m worth of shares at a price of kr17.04 each. That means that an insider was selling shares at below the current price (kr17.10). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent 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. This single sale was just 34.1% of Thoas Fioretos's stake. Thoas Fioretos was the only individual insider to sell over the last year.
Over the last year, we can see that insiders have bought 11001 shares worth kr195k. But they sold 250k for kr4.3m. 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!
I will like Cantargia better if I see some big insider buys. While we wait, check out thisfreelist of growing companies with considerable, recent, insider buying.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. From looking at our data, insiders own kr21m worth of Cantargia stock, about 1.7% of the company. But they may have an indirect interest through a corporate structure that we haven't picked up on. We prefer to see high levels of insider ownership.
An insider sold stock recently, but they haven't been buying. And our longer term analysis of insider transactions didn't bring confidence, either. Insiders own shares, but we're still pretty cautious, given the history of sales. So we'd only buy after careful consideration. Therefore, you should should definitely take a look at thisFREEreport showing analyst forecasts for Cantargia.
But note:Cantargia 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. |
CEO Daily: From Beijing to Osaka, via Pyongyang
Good morning. Eamon Barrett, filling in for Clay.
President Xi Jinping concluded atwo-day state visitto North Korea yesterday – the first state visit from a Chinese leader in 14 years. Analysts didn’t expect Xi to visit North Korea until later this year, if at all, so the timing of Xi’ssurprise sojourn, a week before the Chinese president holds an “extended meeting” with President Trump at the G20 summit in Osaka, is no coincidence. Xi wants to remind the U.S. that China is vital for applying pressure on Kim Jong-un’s wayward regime.
However, Lu Kang, a spokesperson for China’s Foreign Ministry, denies the visit was a message to Trump. “I must say, people with such an idea are just overthinking…It has been over a year since the China-U.S. trade friction started…I don’t see why the present is any more sensitive than any time between then and now,” Lu said.
Of course, now is a more sensitive timebecauseit’s been over a year since the friction began. Prolonged uncertainty hasspooked businesses; tariffs haverattled economies; thethreat of further tariffslooms; and meanwhile, the U.S. has turnedHong Kong’s political turmoilintoanother pressure pointon Beijing. Xi Jinping has a growing number of headaches and little in the way of relief.
Before flying to Pyongyang, Xifiled an op-edin North Korea’s state newspaper where he pledged Beijing would create a “grand plan” to secure peace on the Korean peninsula. After landing on Thursday, China’s state mediareportedXi told Kim he hoped the U.S. and North Korea could continue talks.
But Stephen Biegun, the U.S. Special Representative to North Korea, said China wasn’t making the trip for the benefit of the U.S. “This is China’s national interest, and in this case Chinese national interests and American national interests coincide,”he said
Denny Roy, a senior fellow at U.S. think tank East-West Center, toldtheJournalthat Washington shouldn’t be “comfortable” with the idea of China as a mediator. “A lot of hopes on various issues about North Korea from 2018 have been dashed in 2019,” Roy said.
In February, President Trump blamed Xi for scuttling the second U.S.-North Korea summit, where Trump walked away from meetings with Kim. The North Korean leader had visited Beijing before heading to meet Trump in Vietnam. “There was a difference when Kim Jong-un left China the second time,” Trumptold reporters.
After bluffing in the past, North Korea might no longer be a strong bargaining chip for Xi.
More China news below.
Eamon Barrett@eamonbarrett49eamon.barrett@fortune.com
1. Economy and TradeGoing into shutdown.The Commerce Department blacklisted five more Chinese entities yesterday, all of which are involved in the production of supercomputers. By total number of units, China is the world leader in supercomputing, with 227 supercomputers compared to 109 in the U.S. – however the U.S. has theworld’s two fastestunits. Supercomputers can perform over a billion-billion computations a second and are used in weapon design and advanced encryption. Like much China tech, China’s supercomputers are built using U.S. components from suppliers like AMD, Advanced Micro, Intel and Nvidia.Wall Street JournalBusiness against tariffs.The U.S. Chamber of Commerce has petitioned the Office of the U.S. Trade Representative to revoke tariffs imposed on Chinese imports over the past two years and warned the White House against implementing further levies. “Tariffs are hidden, regressive taxes that are being paid by U.S. businesses and consumers,” the Chamber said. Last week,600 U.S. companiesurged President Trump not to proceed with threats to submit another tranche of tariffs.Financial TimesChina’s poker face.Guo Shuqing, chairman of the China Banking Regulatory Commission, said that even if the U.S. did increase tariffs on China it would have a “very limited impact on the Chinese economy” and might even “backfire.”South China Morning PostPremier pledge.A group of foreign CEOs, including the heads of Dow, Pfizer and Hyatt Hotels, met with Chinese premier Li Keqiang this week. During the powwow, Li pledged that China would continue to open up its economy to foreign businesses. Business leaders from other multinationals, including Volkswagen AG and Nokia attended too.Bloomberg
2. Innovation and TechThe age of Libra.Facebook’s cryptocurrency,Libra, launched to applause in the U.S. but to some yawns in China. “The technologies are all very mature, it’s not hard,” saidTencent CEO Pony Ma. Tencent runs China’s paramount messenger app, WeChat, and launched a digital coin in 2002. Although Tencent’s coin isn’t backed by blockchain, mobile payments have been a WeChat feature for years.Wall Street JournalShaking the tree.Apple is exploring moving 15-30% of production outside of China,Nikkeireports. The Cupertino company has asked suppliers to review costs of shifting location to Southeast Asia and Mexico. Foxconn. Apple’s primary manufacturerpreviously saidit had capacity to move iPhone production out of China butwalked backits comments this week, to allay fears the Taiwanese company would divest from China.Nikkei Asia ReviewSome Young blood.Foxconn has picked Liu Young, the head of its semiconductor unit, to succeed founder Terry Gou as chairman of the board, as the latter steps down to continue his run for Taiwan’s presidency.Reuters
3. In Case You Missed ItAround 85% of China’s peer-to-peer lending platforms have perishedWeek In ChinaImpact of further U.S. tariffs on Chinese economy likely limited: regulator in People’s DailyReutersForeign Companies Can List on a Chinese Stock Exchange for the First TimeFortuneUBS faces a China backlash because of a quip about pigsThe Economist
4. Politics and PolicyPolicing the police.The former chief of Interpol, Meng Hongwei, pleaded guilty to accepting over $2 million worth of bribes. Meng was arrested during a trip to China last year but Chinese authorities only revealed as much when his wife reported him missing. Meng was serving as Interpol’s president at the time but the charges brought against him relate to his service as a Chinese minister.NPRRewriting history.Beijing is banning certain AP History tests provided by a U.S. non-profit, starting from 2020. China’s Ministry of Education didn’t provide a reason for the suspension but it comes as Beijing clamps down on educational material it deems unfriendly.ReutersProtestingthe Law.Thousands in Hong Kong continued to protest against an extradition bill this week. Turnout was lower than at mass demonstrations convened the past two Sundays but groups still managed to surround police headquarters, shut down Inland Revenue headquarters and close off major roads. The protests have already pressured Hong Kong leader Carrie Lam to suspend the bill’s passage and issue an apology to citizens, but a body of protestors demand further action, including the complete withdrawal of the bill and an investigation into police violence.TimeThis edition of CEO Daily was edited by Eamon Barrett. Findprevious editions here, andsign up for other Fortune newsletters here. |
Have Insiders Been Buying FM Mattsson Mora Group AB (publ) (STO:FMM B) Shares This Year?
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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 before you buy or sellFM Mattsson Mora Group AB (publ)(STO:FMM B), you may well want to know whether insiders have been buying or selling.
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 FM Mattsson Mora Group
There wasn't any very large single transaction over the last year, but we can still observe some trading.
The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at thisfreelist of companies. (Hint: insiders have been buying them).
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that FM Mattsson Mora Group insiders own 14% of the company, worth about kr180m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest FM Mattsson Mora Group insiders are well aligned, and quite possibly think the share price is too low. Nice!I like to dive deeperinto how a company has performed in the past. You can findhistoric 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.
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. |
Estimating The Intrinsic Value Of Mordovia Energy Retail Company Public Joint-Stock Company (MCX:MRSB)
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How far off is Mordovia Energy Retail Company Public Joint-Stock Company (MCX:MRSB) from its intrinsic value? Using the most recent financial data, we'll take a look at whether the stock is fairly priced by taking the expected future cash flows and discounting them to their present value. I will use the Discounted Cash Flow (DCF) model. Don't get put off by the jargon, the math behind it is actually quite straightforward.
We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. Anyone interested in learning a bit more about intrinsic value should have a read of theSimply Wall St analysis model.
See our latest analysis for Mordovia Energy Retail Company
We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company's cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. To start off with, we need to estimate the next ten years of cash flows. Seeing as no analyst estimates of free cash flow are available to us, we have extrapolate the previous free cash flow (FCF) from the company's last reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, and so the sum of these future cash flows is then discounted to today's value:
[{"": "Levered FCF (RUB, Millions)", "2019": "RUB49.92", "2020": "RUB52.67", "2021": "RUB56.03", "2022": "RUB59.96", "2023": "RUB64.42", "2024": "RUB69.40", "2025": "RUB74.91", "2026": "RUB80.98", "2027": "RUB87.62", "2028": "RUB94.86"}, {"": "Growth Rate Estimate Source", "2019": "Est @ 4.25%", "2020": "Est @ 5.51%", "2021": "Est @ 6.39%", "2022": "Est @ 7%", "2023": "Est @ 7.43%", "2024": "Est @ 7.74%", "2025": "Est @ 7.95%", "2026": "Est @ 8.1%", "2027": "Est @ 8.2%", "2028": "Est @ 8.27%"}, {"": "Present Value (RUB, Millions) Discounted @ 15.98%", "2019": "RUB43.04", "2020": "RUB39.15", "2021": "RUB35.91", "2022": "RUB33.13", "2023": "RUB30.69", "2024": "RUB28.51", "2025": "RUB26.53", "2026": "RUB24.73", "2027": "RUB23.07", "2028": "RUB21.53"}]
Present Value of 10-year Cash Flow (PVCF)= RUB306.30m
"Est" = FCF growth rate estimated by Simply Wall St
The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 10-year government bond rate of 8.4%. We discount the terminal cash flows to today's value at a cost of equity of 16%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = RUруб95m × (1 + 8.4%) ÷ (16% – 8.4%) = RUруб1.4b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= RUBRUруб1.4b ÷ ( 1 + 16%)10= RUB309.53m
The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is RUB615.83m. To get the intrinsic value per share, we divide this by the total number of shares outstanding.This results in an intrinsic value estimate of RUB0.46. Relative to the current share price of RUB0.37, the company appears about fair value at a 20% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent.
Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Mordovia Energy Retail Company as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 16%, which is based on a levered beta of 0.800. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Whilst important, DCF calculation shouldn’t be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. For Mordovia Energy Retail Company, There are three fundamental factors you should further examine:
1. Financial Health: Does MRSB have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Other High Quality Alternatives: Are there other high quality stocks you could be holding instead of MRSB? Exploreour interactive list of high quality stocksto get an idea of what else is out there you may be missing!
PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the MCX every day. If you want to find the calculation for other stocks justsearch 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. |
Financial Sector Paints A Clear Picture For Trading Profits
After the incredible week we’ve seen, with the Fed leaving rates unchanged and precious metals rocketing higher above their previous five-year highs, it’s time we pay attention to what’s happening in the financial sector and theUS stock market majors. Closing out this week, we heard all traders and investors pay very close attention to the US dollar, precious metals, and the US major indexes.
There are a number of major factors taking place throughout the world that will likely drive future price trends over the next 30 to 60 days. Tensions in the Middle East, debt issues in China and Europe, central bank actions throughout the world and the US, and the ultimate driver of price moves – fear and greed. We’ve mentioned to a number of associates recently that our research focuses on the transition of traders from fear into greed. Our belief is that as traders begin to fear certain events or price trends, the price action tends to become more volatile. As this volatility increases and trends accelerate, traders transition this fear into greed where they attempt to take advantage of opportunities generated by large price swings.
We believe the global markets are entering a fear cycle populated by many of the issues and uncertainties we mentioned above. The fact that a number of unsettled, and potentially dangerous, global economic and political issues are taking place increases the fear component in the markets. This increased fear, and combination with increased volatility, will transition into increased greed as price trends accelerate.
Eric Sprott ofSprottMoney.com talked about our recent gold and silver predictionin his recent weekly wrap-up radio show.
This XLF weekly chart, below, highlights a price pattern formation, the Pennant/Flag formation, that we believe is nearly complete. This price formation is setting up an apex pattern that should complete near July 12 through July 20. It is very likely that a breakout or break down price reaction will take place before July 20. Our researchers believe the dominant price trend of the breakout will be to the downside and that a possible 15 to 25% downside price move in the financial sector is likely.
This type of downside price rotation would likely push price lower, towards the November/December 2018 lows before finding support.
This Goldman Sachs weekly chart highlights a similar price pattern as the XLF above. When we see these types of patterns across multiple charts, it lends credibility to the overall analysis and research we are conducting. In other words, when we see the same thing setting up across multiple charts it becomes almost impossible to misinterpret. Please pay special attention to the Fibonacci projected target levels, the extended lines, and colored squares to the right of prices, to understand the type of volatility that is currently within the markets.
When volatility is narrow, price expansion or contraction is also fairly narrow. When volatility is excessive, price expansion or contraction is also labeled as excessive. Currently, in all of these charts, we are seeing price volatility, based on our proprietary Fibonacci price modeling system, in the range of 10% to 20% or more.
Our researchers believe the markets are setting up for a breakdown price swing, potentially retesting lows near November/December 2018, and shaking out the markets. It is very common for the US stock market to experience price volatility and downwards price trends 8 to 20 months prior to a US Presidential election. We’ve authored a number of articles regarding this phenomenon. As we move closer to the actual election date, prices tend to stabilize an advance as outcomes and policies become more clear.
We believe a breakdown in the financial sector, as well as the US stock market, could only be a few weeks away. Our longer-term super cycle analysis suggests a possible peak in August or early September 2019. You can see from this SPY weekly chart, below, the SPY has already reached new all-time high again.
Given the dates of our super cycle research and the near completion of these pennant/flag formations, we believe the next 4 to 7 weeks of trading could be extremely volatile and attempt to create a very short term sideways flag formation on the daily charts that will prompt our price peak near the end of August or early September.
Any price breakdown in the US stock market will prompt a price anomaly pattern to set up where the price will move away from historical and predictive price ranges, base after finding support, then rally back towards new all-time highs again. Therefore, much like November/December 2018, we believe the downside rotation we are expecting after the breakout of the pennant/flag formation will react in a similar manner. We believe the next 3 to 5 weeks could be full of volatile sideways price rotation, ultimately attempting a new washed out price high in the SPY, ES, and DOW (possibly above the psychological level of $300, $3000 or $30,000) followed by an immediate -12 to -18% downside price move.
Ultimately, based on our research, the downside price move could be in excess of -20 to -25% or more. We believe the December 2018 lows will likely hold as ultimate support. Yet the reality of price volatility is that any fear/greed price swing could move well beyond these lows while attempting to hammer out a bottom.
We urge all traders to be very cautious over the next 3 to 5 weeks. Ultimately, this upside price swing will likely end near the psychological levels we’ve suggested and, as fear turns into greed, price rotation will likely push the global markets dramatically lower starting sometime in August or September 2019. This means we have about 5 to 7 weeks of volatile sideways trading near a pennant/flag apex that will likely result in large price rotation and the set up of a shorter-term pennant/flag formation on Daily charts. We believe this short-term pennant/flag formation set up will create the ultimate peak in late August or early September and prompt the larger downside move we are expecting.
Skilled traders will not get married to their long positions or short positions until this washout volatility is completed and tends really begin to take shape. Our advice to skilled traders is to expect some increased volatility, some wild price rotation, and a shakeout new-high, new-low type price formation (setting up the new short-term pennant/flag pattern) over the next few weeks. This is really becoming more of a traders market where short-term targets and trades will be keys to success. Longer-term trends and trend following systems will likely get chewed up over the next 45 to 65+ days.
Our super cycle researchhas given us a very clear picture as to what to expect over the next 24 months or longer.
Chris Vermeulenwww.TheTechnicalTraders.com
Thisarticlewas originally posted on FX Empire
• GBP/JPY Price Forecast – British pound rolls over slightly
• USD/CAD Bearish Order Block and POC Zone Should Motivate Fresh Sellers to Join the Trend
• Gold Price Futures (GC) Technical Analysis – June 24, 2019 Forecast
• Futures Rise Alongside Bonds and Oil Prices
• USD/JPY Price Forecast – US dollar still look soft
• Gold Price Forecast – Gold markets continue to grind higher |
Is Mordovia Energy Retail Company Public Joint-Stock Company's (MCX:MRSB) 34% ROE Better Than Average?
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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). We'll use ROE to examine Mordovia Energy Retail Company Public Joint-Stock Company (MCX:MRSB), by way of a worked example.
Mordovia Energy Retail Company has a ROE of 34%, based on the last twelve months. Another way to think of that is that for every RUB1 worth of equity in the company, it was able to earn RUB0.34.
Check out our latest analysis for Mordovia Energy Retail Company
Theformula for return on equityis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for Mordovia Energy Retail Company:
34% = RUруб43m ÷ RUруб129m (Based on the trailing twelve months to December 2018.)
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. Shareholders' equity can be calculated by subtracting the total liabilities of the company from the total assets of the company.
ROE looks at the amount a company earns relative to the money it has kept within the business. 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 ROE can be used to compare two businesses.
By comparing a company's ROE with its industry average, we can get a quick measure of how good it is. The limitation of this approach is that some companies are quite different from others, even within the same industry classification. Pleasingly, Mordovia Energy Retail Company has a superior ROE than the average (9.9%) company in the Electric Utilities industry.
That's clearly a positive. We think a high ROE, alone, is usually enough to justify further research into a company. For example,I often check if insiders have been buying shares.
Virtually all companies need money to invest in the business, to grow profits. That cash can come from issuing shares, retained earnings, 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 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.
It seems that Mordovia Energy Retail Company uses a lot of debt to fund the business, since it has a high debt to equity ratio of 3.98. Its ROE is clearly quite good, but it would probably be significantly lower without all the debt.
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. Profit growth rates, versus the expectations reflected in the price of the stock, are a particularly important to consider. Check the past profit growth by Mordovia Energy Retail Company by looking at thisvisualization of past earnings, revenue and cash flow.
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. |
Should You Be Concerned About Midsona AB (publ)'s (STO:MSON B) Historical Volatility?
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If you own shares in Midsona AB (publ) (STO:MSON B) 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. First, we have company specific volatility, which is the price gyrations of an individual stock. Holding at least 8 stocks can reduce this kind of risk across a portfolio. The second sort is caused by the natural volatility of markets, overall. For example, certain macroeconomic events will impact (virtually) all stocks on the market.
Some stocks are more sensitive to general market forces than others. Beta is a widely used metric to measure a stock's exposure to market risk (volatility). Before we go on, it's worth noting that Warren Buffett pointed out in his 2014 letter to shareholders that 'volatility is far from synonymous with risk.' Having said that, beta can still be rather useful. The first thing to understand about beta is 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 Midsona
Zooming in on Midsona, we see it has a five year beta of 0.85. This is below 1, so historically its share price has been rather independent from the market. If history is a good guide, owning the stock should help ensure that your portfolio is not overly sensitive to market volatility. 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 Midsona's revenue and earnings in the image below.
Midsona is a rather small company. It has a market capitalisation of kr2.3b, which means it is probably under the radar of most investors. 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 Midsona 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 MSON B is a good investment for you, we also need to consider important company-specific fundamentals such as Midsona’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 MSON B’s future growth? Take a look at ourfree research report of analyst consensusfor MSON B’s outlook.
2. Past Track Record: Has MSON B 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 MSON B's historicalsfor more clarity.
3. Other Interesting Stocks: It's worth checking to see how MSON B 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. |
11 dead as plane crashes in Hawaii, believed during skydiving trip
(Reuters) - Eleven passengers and crew were killed on Friday evening when their plane crashed near an airfield in Hawaii, authorities said, during what broadcaster CNN said was a skydiving trip. The twin-engine King Air plane, with eleven people onboard, went down soon after takeoff from Dillingham Airfield and there were no survivors, the Hawaii Department of Transportation (HDOT) said. The fire service said the aircraft was engulfed in flames when fire crews arrived. "We are still gathering information as to the intent of the flight and what they were doing," Honolulu Fire Department Chief Manuel Neves told a news conference. CNN said the plane was on a skydiving excursion and the Federal Aviation Administration would investigate the crash. The HDOT said Federal inspectors are continuing to investigate the cause of the crash. Dillingham is a joint-use airfield operated by the HDOT under a 25-year lease from the U.S. army, according to its website. (Reporting by Kanishka Singh and Ishita Chigilli Palli in Bengaluru; editing by John Stonestreet) View comments |
Has Koninklijke Ahold Delhaize N.V. (AMS:AD) Improved Earnings In Recent Times?
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When Koninklijke Ahold Delhaize N.V.'s (AMS:AD) announced its latest earnings (31 March 2019), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Koninklijke Ahold Delhaize's average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not AD actually performed well. Below is a quick commentary on how I see AD has performed.
View our latest analysis for Koninklijke Ahold Delhaize
AD's trailing twelve-month earnings (from 31 March 2019) of €1.8b has declined by -1.2% 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 23%, indicating the rate at which AD is growing has slowed down. Why could this be happening? Let's examine what's occurring with margins and whether the whole industry is experiencing the hit as well.
In terms of returns from investment, Koninklijke Ahold Delhaize has fallen short of achieving a 20% return on equity (ROE), recording 13% instead. However, its return on assets (ROA) of 5.0% exceeds the NL Consumer Retailing industry of 4.8%, indicating Koninklijke Ahold Delhaize has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Koninklijke Ahold Delhaize’s debt level, has declined over the past 3 years from 14% to 8.9%.
Koninklijke Ahold Delhaize's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that are profitable, but have capricious earnings, can have many factors impacting its business. I recommend you continue to research Koninklijke Ahold Delhaize to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for AD’s future growth? Take a look at ourfree research report of analyst consensusfor AD’s outlook.
2. Financial Health: Are AD’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. |
Why Targovax ASA's (OB:TRVX) CEO Pay Matters To You
Want to participate in a short research study ? Help shape the future of investing tools and you could win a $250 gift card! Øystein Soug became the CEO of Targovax ASA ( OB:TRVX ) in 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels. See our latest analysis for Targovax How Does Øystein Soug's Compensation Compare With Similar Sized Companies? Our data indicates that Targovax ASA is worth øre404m, and total annual CEO compensation is øre3.2m. (This is based on the year to December 2018). We note that's an increase of 13% above last year. While we always look at total compensation first, we note that the salary component is less, at øre2.6m. We looked at a group of companies with market capitalizations under øre1.7b, and the median CEO total compensation was øre2.7m. So Øystein Soug is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance. You can see a visual representation of the CEO compensation at Targovax, below. OB:TRVX CEO Compensation, June 22nd 2019 Is Targovax ASA Growing? Over the last three years Targovax ASA has grown its earnings per share (EPS) by an average of 24% per year (using a line of best fit). In the last year, its revenue is down -27%. Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. You might want to check this free visual report on analyst forecasts for future earnings . Has Targovax ASA Been A Good Investment? Given the total loss of 23% over three years, many shareholders in Targovax ASA are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously. Story continues In Summary... Øystein Soug is paid around what is normal the leaders of comparable size companies. We like that the company is growing EPS, but we find the returns over the last three years to be lacking. Considering the improvement in earnings per share, one could argue that the CEO pay is appropriate, albeit not too low. So you may want to check if insiders are buying Targovax shares with their own money (free access). Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list 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 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. |
Is Bechtle AG's (ETR:BC8) Balance Sheet Strong Enough To Weather A Storm?
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While small-cap stocks, such as Bechtle AG (ETR:BC8) with its market cap of €4.1b, 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 vital, as mismanagement of capital can lead to bankruptcies, which occur at a higher rate for small-caps. The following basic checks can help you get a picture of the company's balance sheet strength. Nevertheless, this is just a partial view of the stock, and I recommend youdig deeper yourself into BC8 here.
BC8's debt levels surged from €84m to €392m over the last 12 months , which includes long-term debt. With this growth in debt, the current cash and short-term investment levels stands at €192m , ready to be used for running the business. Additionally, BC8 has generated €104m in operating cash flow in the last twelve months, resulting in an operating cash to total debt ratio of 27%, indicating that BC8’s operating cash is sufficient to cover its debt.
At the current liabilities level of €667m, the company has been able to meet these commitments with a current assets level of €1.3b, leading to a 2.02x current account ratio. The current ratio is the number you get when you divide current assets by current liabilities. Generally, for IT companies, this is a reasonable ratio as there's enough of a cash buffer without holding too much capital in low return investments.
With a debt-to-equity ratio of 43%, BC8 can be considered as an above-average leveraged company. This is somewhat unusual for small-caps companies, since lenders are often hesitant to provide attractive interest rates to less-established businesses. 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 BC8's case, the ratio of 76.28x suggests that interest is comfortably covered, which means that debtors may be willing to loan the company more money, giving BC8 ample headroom to grow its debt facilities.
Although BC8’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. This may mean this is an optimal capital structure for the business, given that it is also meeting its short-term commitment. This is only a rough assessment of financial health, and I'm sure BC8 has company-specific issues impacting its capital structure decisions. You should continue to research Bechtle to get a better picture of the small-cap by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for BC8’s future growth? Take a look at ourfree research report of analyst consensusfor BC8’s outlook.
2. Valuation: What is BC8 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 BC8 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 Eurocell plc's (LON:ECEL) ROCE Can Tell Us
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Today we are going to look at Eurocell plc (LON:ECEL) 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 of all, we'll work out how to calculate ROCE. Then we'll compare its ROCE to similar companies. Finally, we'll look at how its current liabilities affect 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. 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 Eurocell:
0.25 = UK£23m ÷ (UK£137m - UK£43m) (Based on the trailing twelve months to December 2018.)
So,Eurocell has an ROCE of 25%.
Check out our latest analysis for Eurocell
ROCE can be useful when making comparisons, such as between similar companies. Using our data, we find that Eurocell's ROCE is meaningfully better than the 12% average in the Building industry. We consider this a positive sign, because it suggests it uses capital more efficiently than similar companies. Putting aside its position relative to its industry for now, in absolute terms, Eurocell's ROCE is currently very good.
As we can see, Eurocell currently has an ROCE of 25%, less than the 43% it reported 3 years ago. So investors might consider if it has had issues recently.
It is important to remember that ROCE shows past performance, and is 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, after all, simply a snap shot of a single year. Future performance is what matters, and you can see analyst predictions in ourfreereport on analyst forecasts for the company.
Short term (or current) liabilities, are things like supplier invoices, overdrafts, or tax bills that 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 counteract this, we check if a company has high current liabilities, relative to its total assets.
Eurocell has total assets of UK£137m and current liabilities of UK£43m. As a result, its current liabilities are equal to approximately 31% of its total assets. A medium level of current liabilities boosts Eurocell's ROCE somewhat.
Despite this, it reports a high ROCE, and may be worth investigating further. There might be better investments than Eurocell out there,but you will have to work hard to find them. These promising businesses withrapidly growing earningsmight be right up your alley.
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. |
Why We Like Eurocell plc’s (LON:ECEL) 25% Return On Capital Employed
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Today we are going to look at Eurocell plc (LON:ECEL) to see whether it might be an attractive investment prospect. Specifically, we're going to calculate its Return On Capital Employed (ROCE), in the hopes of getting some insight into the business.
Firstly, we'll go over how we calculate ROCE. 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 is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. All else being equal, a better business will have a higher ROCE. In brief, it is a useful tool, but it is not without drawbacks. 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'.
Analysts use this formula to calculate return on capital employed:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
Or for Eurocell:
0.25 = UK£23m ÷ (UK£137m - UK£43m) (Based on the trailing twelve months to December 2018.)
Therefore,Eurocell has an ROCE of 25%.
Check out our latest analysis for Eurocell
ROCE can be useful when making comparisons, such as between similar companies. In our analysis, Eurocell's ROCE is meaningfully higher than the 12% average in the Building industry. We consider this a positive sign, because it suggests it uses capital more efficiently than similar companies. Setting aside the comparison to its industry for a moment, Eurocell's ROCE in absolute terms currently looks quite high.
Eurocell's current ROCE of 25% is lower than 3 years ago, when the company reported a 43% ROCE. Therefore we wonder if the company is facing new headwinds.
When considering ROCE, bear in mind that it reflects the past and does not necessarily predict the future. 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, after all, simply a snap shot of a single year. What happens in the future is pretty important for investors, so we have prepared afreereport on analyst forecasts for Eurocell.
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 ROCE is calculated, a high level of current liabilities makes a company look as though it has less capital employed, and thus can (sometimes unfairly) boost the ROCE. To check the impact of this, we calculate if a company has high current liabilities relative to its total assets.
Eurocell has total liabilities of UK£43m and total assets of UK£137m. Therefore its current liabilities are equivalent to approximately 31% of its total assets. A medium level of current liabilities boosts Eurocell's ROCE somewhat.
Despite this, it reports a high ROCE, and may be worth investigating further. There might be better investments than Eurocell out there,but you will have to work hard to find them. These promising businesses withrapidly growing earningsmight be right up your alley.
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. |
What Should You Know About GB Group plc's (LON:GBG) Growth?
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As GB Group plc (LON:GBG) announced its earnings release on 31 March 2019, it seems that analyst forecasts are substantially optimistic, with profits predicted to ramp up by an impressive 60% next year, relative to the historical 5-year average growth rate of 22%. Presently, with latest-twelve-month earnings at UK£12m, we should see this growing to UK£19m by 2020. Below is a brief commentary around GB Group's earnings outlook going forward, which may give you a sense of market sentiment for the company. Investors wanting to learn more about other aspects of the company shouldresearch its fundamentals here.
See our latest analysis for GB Group
Longer term expectations from the 8 analysts covering GBG’s stock is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of GBG's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
By 2022, GBG's earnings should reach UK£29m, from current levels of UK£12m, resulting in an annual growth rate of 26%. EPS reaches £0.14 in the final year of forecast compared to the current £0.077 EPS today. Margins are currently sitting at 8.5%, which is expected to expand to 12% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For GB Group, there are three relevant factors you should further examine:
1. Financial Health: Does it have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Valuation: What is GB Group 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 GB Group is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of GB Group? Exploreour interactive list of stocks with large growth 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. |
Metro Bank PLC (LON:MTRO) Insiders Increased Their Holdings
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We often see insiders buying up shares in companies that perform well over the long term. 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 inMetro Bank PLC(LON:MTRO).
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 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.'
See our latest analysis for Metro Bank
In the last twelve months, the biggest single purchase by an insider was when Founder & Chairman Vernon Hill bought UK£5.0m worth of shares at a price of UK£34.22 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being UK£5.25). It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Over the last year, we can see that insiders have bought 281k shares worth UK£7.6m. Metro Bank may have bought shares in the last year, but they didn't sell any. The average buy price was around UK£27.18. These transactions suggest that insiders have considered the current price attractive. 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!
Metro Bank 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 4.0% of Metro Bank shares, worth about UK£36m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
The fact that there have been no Metro Bank insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Metro Bank and their transactions don't cause us concern. 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 courseMetro Bank 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. |
Know This Before Buying Netgem SA (EPA:NTG) For Its Dividend
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Is Netgem SA (EPA:NTG) a good dividend stock? How would you know? Dividend paying companies with growing earnings can be highly rewarding in the long term. If you are hoping to live on your dividends, it's important to be more stringent with your investments than the average punter. Regular readers know we like to apply the same approach to each dividend stock, and we hope you'll find our analysis useful.
In this case, Netgem likely looks attractive to investors, given its 9.6% dividend yield and a payment history of over ten years. We'd guess that plenty of investors have purchased it for the income. The company also bought back stock during the year, equivalent to approximately 6.7% of the company's market capitalisation at the time. Some simple research can reduce the risk of buying Netgem for its dividend - read on to learn more.
Click the interactive chart for our full dividend analysis
Companies (usually) pay dividends out of their earnings. If a company is paying more than it earns, the dividend might have to be cut. 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. Looking at the data, we can see that 108% of Netgem's profits were paid out as dividends in the last 12 months. Unless there are extenuating circumstances, from the perspective of an investor who hopes to own the company for many years, a payout ratio of above 100% is definitely a concern.
In addition to comparing dividends against profits, we should inspect whether the company generated enough cash to pay its dividend. Netgem paid out 200% of its free cash flow last year, which we think is concerning if cash flows do not improve. Paying out more than 100% of your free cash flow in dividends is generally not a long-term, sustainable state of affairs, so we think shareholders should watch this metric closely. As Netgem's dividend was not well covered by either earnings or cash flow, we would be concerned that this dividend could be at risk over the long term.
Remember, you can always get a snapshot of Netgem's latest financial position,by checking our visualisation of its financial health.
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. Netgem has been paying dividends for a long time, but for the purpose of this analysis, we only examine the past 10 years of payments. This dividend has been unstable, which we define as having fallen by at least 20% one or more times over this time. Its most recent annual dividend was €0.10 per share, effectively flat on its first payment ten years ago.
Modest growth in the dividend is good to see, but we think this is offset by historical cuts to the payments. It is hard to live on a dividend income if the company's earnings are not consistent.
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. Over the past five years, it looks as though Netgem's EPS have declined at around 17% a year. If earnings continue to decline, the dividend may come under pressure. Every investor should make an assessment of whether the company is taking steps to stabilise the situation.
To summarise, shareholders should always check that Netgem'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 a concern to see that the company paid out such a high percentage of its earnings and cashflow as dividends. Earnings per share have been falling, and the company has cut its dividend at least once in the past. From a dividend perspective, this is a cause for concern. There are a few too many issues for us to get comfortable with Netgem from a dividend perspective. Businesses can change, but we would struggle to identify why an investor should rely on this stock for their income.
Now, if you want to look closer, it would be worth checking out ourfreeresearch on Netgemmanagement tenure, salary, and performance.
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. |
Do You Know What Koninklijke Philips N.V.'s (AMS:PHIA) P/E Ratio Means?
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This article is for investors who would like to improve their understanding of price to earnings ratios (P/E ratios). We'll apply a basic P/E ratio analysis to Koninklijke Philips N.V.'s (AMS:PHIA), to help you decide if the stock is worth further research.Koninklijke Philips has a price to earnings ratio of 25.37, based on the last twelve months. That is equivalent to an earnings yield of about 3.9%.
View our latest analysis for Koninklijke Philips
Theformula for P/Eis:
Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS)
Or for Koninklijke Philips:
P/E of 25.37 = €38.05 ÷ €1.5 (Based on the trailing twelve months to March 2019.)
A higher P/E ratio means that investors are payinga higher pricefor each €1 of company 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.
P/E ratios primarily reflect market expectations around earnings growth rates. Earnings growth means that in the future the 'E' will be higher. And in that case, the P/E ratio itself will drop rather quickly. So while a stock may look expensive based on past earnings, it could be cheap based on future earnings.
In the last year, Koninklijke Philips grew EPS like Taylor Swift grew her fan base back in 2010; the 72% gain was both fast and well deserved. And earnings per share have improved by 56% annually, over the last three years. So we'd absolutely expect it to have a relatively high P/E ratio.
We can get an indication of market expectations by looking at the P/E ratio. The image below shows that Koninklijke Philips has a lower P/E than the average (32.6) P/E for companies in the medical equipment industry.
This suggests that market participants think Koninklijke Philips will underperform other companies in its industry. Many investors like to buy stocks when the market is pessimistic about their prospects. You should delve deeper. I like to checkif company insiders have been buying or selling.
The 'Price' in P/E reflects the market capitalization of the company. So it won't reflect the advantage of cash, or disadvantage of debt. Theoretically, a business can improve its earnings (and produce a lower P/E in the future) by investing in growth. That means taking on debt (or spending its cash).
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.
Koninklijke Philips has net debt worth just 7.7% of its market capitalization. So it doesn't have as many options as it would with net cash, but its debt would not have much of an impact on its P/E ratio.
Koninklijke Philips trades on a P/E ratio of 25.4, which is above the NL market average of 17.2. The company is not overly constrained by its modest debt levels, and its recent EPS growth is nothing short of stand-out. So to be frank we are not surprised it has a high P/E ratio.
When the market is wrong about a stock, it gives savvy investors an opportunity. If the reality for a company is better than it expects, you can make money by buying and holding for the long term. 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 Koninklijke Philips. 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. |
Should You Be Adding Koninklijke Philips (AMS:PHIA) To Your Watchlist Today?
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Some have more dollars than sense, they say, so even companies that have no revenue, no profit, and a record of falling short, can easily find investors. But as Peter Lynch said inOne Up On Wall Street, 'Long shots almost never pay off.'
If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested inKoninklijke Philips(AMS:PHIA). While that doesn't make the shares worth buying at any price, you can't deny that successful capitalism requires profit, eventually. In comparison, loss making companies act like a sponge for capital - but unlike such a sponge they do not always produce something when squeezed.
See our latest analysis for Koninklijke Philips
If you believe that markets are even vaguely efficient, then over the long term you'd expect a company's share price to follow its earnings per share (EPS). Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. Who among us would not applaud Koninklijke Philips's stratospheric annual EPS growth of 56%, compound, over the last three years? That sort of growth never lasts long, but like a shooting star it is well worth watching when it happens.
I like to see top-line growth as an indication that growth is sustainable, and I look for a high earnings before interest and taxation (EBIT) margin to point to a competitive moat (though some companies with low margins also have moats). While we note Koninklijke Philips's EBIT margins were flat over the last year, revenue grew by a solid 3.6% to €18b. That's progress.
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.
Fortunately, we've got access to analyst forecasts of Koninklijke Philips'sfutureprofits. You can do your own forecasts without looking, or you cantake a peek at what the professionals are predicting.
We would not expect to see insiders owning a large percentage of a €35b company like Koninklijke Philips. But we are reassured by the fact they have invested in the company. To be specific, they have €35m worth of shares. That's a lot of money, and no small incentive to work hard. Despite being just 0.1% of the company, the value of that investment is enough to show insiders have plenty riding on the venture.
Koninklijke Philips's earnings per share have taken off like a rocket aimed right at the moon. That sort of growth is nothing short of eye-catching, and the large investment held by insiders certainly brightens my view of the company. At times fast EPS growth is a sign the business has reached an inflection point; and I do like those. So to my mind Koninklijke Philips is worth putting on your watchlist; after all, shareholders do well when the market underestimates fast growing companies. If you think Koninklijke Philips might suit your style as an investor, you could go straight to its annual report, or you could first checkour discounted cash flow (DCF) valuation for the company.
Although Koninklijke Philips certainly looks good to me, I would like it more if insiders were buying up shares. If you like to see insider buying, too, then thisfreelist of growing companies that insiders are buying, could be exactly what you're looking for.
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. |
What Can We Expect From System1 Group PLC's (LON:SYS1) Earnings Over The Next Year?
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On 31 March 2019, System1 Group PLC (LON:SYS1) announced its latest earnings update. Overall, the consensus outlook from analysts appear bearish, with earnings expected to decline by 2.1% in the upcoming year. However, this is still an improvement on its past 5-year earnings growth rate of -11%, on average. With trailing-twelve-month net income at current levels of UK£1.3m, the consensus growth rate suggests that earnings will decline to UK£1.2m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you canresearch its fundamentals here.
View our latest analysis for System1 Group
Longer term expectations from the 1 analysts covering SYS1’s stock is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To get an idea of the overall earnings growth trend for SYS1, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
From the current net income level of UK£1.3m and the final forecast of UK£4.4m by 2022, the annual rate of growth for SYS1’s earnings is 46%. EPS reaches £0.34 in the final year of forecast compared to the current £0.10 EPS today. In 2022, SYS1's profit margin will have expanded from 4.7% to 13%.
Future outlook is only one aspect when you're building an investment case for a stock. For System1 Group, I've put together three key factors you should look at:
1. Financial Health: Does it have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Valuation: What is System1 Group 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 System1 Group is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of System1 Group? Exploreour interactive list of stocks with large growth 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. |
Exxon Mobil seeks bids for Norwegian offshore assets
OSLO (Reuters) - Exxon Mobil is considering selling all of the stakes it holds in oil and gas fields off the Norwegian coast, a spokeswoman said.
Two years ago the U.S. major - the world's largest oil company - sold its operated assets in the area. But it has retained stakes in more than 20 other fields, including Equinor-operated Snorre and Shell-operated Ormen Lange.
"Following interest expressed by several parties, Exxon Mobil has decided to open a data room to test the market interest for the upstream portfolio in Norway," Anne Fougner said, adding that no decision to sell had yet been made.
A number of private-equity backed firms, including Okea, and independent oil firms Aker BP and DNO, have this year said they were looking to buy more assets on the Norwegian continental shelf.
Fougner's remarks confirmed a report in local newspaper Dagens Naeringsliv. She declined to comment on the value of the assets, which the business daily quoted an unnamed industry expert as saying could be worth $3-4 billion.
In 2017, Exxon Mobil's net production from fields off Norway was around 170,000 barrels of oil equivalent per day, according to its website.
Erik Haugane, Okea's chief executive, told Reuters this week he expected all oil majors except Norway's Equinor to exit the Norwegian continental shelf in a decade.
Another Norwegian oil firm, Det norske - controlled by billionaire Kjell Inge Roekke - bought BP's Norwegian assets in 2016, with BP getting a 30% stake in the new company, Aker BP.
U.S. major Chevron transferred its last stake in a Norwegian offshore license last year, while ConocoPhillips still operates Ekofisk, the first major oil discovery off Norway.
(Reporting by Nerijus Adomaitis; editing by John Stonestreet) |
Is Gecina's (EPA:GFC) ROE Of 8.6% Impressive?
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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. We'll use ROE to examine Gecina (EPA:GFC), by way of a worked example.
Our data showsGecina has a return on equity of 8.6%for the last year. That means that for every €1 worth of shareholders' equity, it generated €0.086 in profit.
View our latest analysis for Gecina
Theformula for ROEis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for Gecina:
8.6% = €1.0b ÷ €12b (Based on the trailing twelve months to December 2018.)
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. Shareholders' equity can be calculated by subtracting the total liabilities of the company from the total assets of the company.
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. The higher the ROE, the more profit the company is making. So, as a general rule,a high ROE is a good thing. 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. You can see in the graphic below that Gecina has an ROE that is fairly close to the average for the REITs industry (8.0%).
That's neither particularly good, nor bad. ROE can give us a view about company quality, but many investors also look to other factors, such as whether there are insiders buying shares. I will like Gecina better if I see some big insider buys. While we wait, check out thisfreelist of growing companies with considerable, recent, insider buying.
Companies usually need to invest money to grow their profits. That cash can come from issuing shares, retained earnings, or debt. 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. That will make the ROE look better than if no debt was used.
While Gecina does have some debt, with debt to equity of just 0.64, we wouldn't say debt is excessive. I'm not impressed with its ROE, but the debt levels are not too high, indicating the business has decent prospects. 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 one way we can compare the business quality of different companies. 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.
But note:Gecina may not be the best stock to buy. So take a peek at thisfreelist 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. |
With A Return On Equity Of 8.6%, Has Gecina's (EPA:GFC) Management Done Well?
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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). We'll use ROE to examine Gecina (EPA:GFC), by way of a worked example.
Over the last twelve monthsGecina has recorded a ROE of 8.6%. One way to conceptualize this, is that for each €1 of shareholders' equity it has, the company made €0.086 in profit.
Check out our latest analysis for Gecina
Theformula for ROEis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for Gecina:
8.6% = €1.0b ÷ €12b (Based on the trailing twelve months to December 2018.)
Most readers would understand what net profit is, but it’s worth explaining the concept of shareholders’ equity. It is the capital paid in by shareholders, plus any retained earnings. You can calculate shareholders' equity by subtracting the company's total liabilities from its total assets.
ROE measures a company's profitability against the profit it retains, and any outside investments. The 'return' is the yearly profit. 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. 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. If you look at the image below, you can see Gecina has a similar ROE to the average in the REITs industry classification (8.0%).
That isn't amazing, but it is respectable. ROE can give us a view about company quality, but many investors also look to other factors, such as whether there are insiders buying shares. If you like to buy stocks alongside management, then you might just love thisfreelist of companies. (Hint: insiders have been buying them).
Companies usually need to invest money to grow their 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. In this manner the use of debt will boost ROE, even though the core economics of the business stay the same.
Although Gecina does use debt, its debt to equity ratio of 0.64 is still low. Its ROE isn't particularly impressive, but the debt levels are quite modest, so the business probably has some real potential. Judicious use of debt to improve returns can certainly be a good thing, although it does elevate risk slightly and reduce future optionality.
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. 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. So you might want to check this FREEvisualization of analyst forecasts for the company.
But note:Gecina may not be the best stock to buy. So take a peek at thisfreelist 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. |
Factbox: International airlines' response to FAA on Iran airspace
(Reuters) - The U.S. Federal Aviation Administration (FAA) issued an emergency order on Thursday prohibiting U.S. air carriers from flying in Iran-controlled airspace over the Strait of Hormuz and Gulf of Oman due to heightened tensions.
Some international airlines are taking precautions following the FAA order.
Here are some statements from non-U.S Airlines:
* Gulf Air said it was evaluating flight path changes andworking with authorities on contingency plans should thesituation escalate further. * Etihad Airways, which was flying over the area earlier onFriday, said it had agreed "to change a number of the flightpaths we operate to and from the Arabian Gulf" after closeconsultation with the UAE General Civil Aviation Authority. * Cathay Pacific said on Friday its flights will not fly inthe airspace above the Strait of Hormuz and will review areas ofconcern to ensure all flight routes remain safe. * Emirates Airline is re-routing all flights away from areasof possible conflict in the Gulf, a spokeswoman said on Friday. * Emirates' sister carrier flydubai said it has adjustedsome of the existing flight paths in the region and will makefurther changes when necessary. * British Airways said it would adhere to FAA guidance,avoiding Iranian airspace. It said flights will continue tooperate using alternative routes. * Netherlands flag carrier KLM was no longer flying over theStrait of Hormuz, a spokesman said on Friday. * Australia's Qantas said on Friday it was adjusting flightpaths over the Middle East to avoid the Strait of Hormuz andGulf of Oman until further notice. * French flag-carrier Air France said it did not fly overthe Strait of Hormuz and that it was in constant contact withthe French and European civil aviation authorities to analyseany potential risks. * A Norwegian Air spokesman said the carrier had no departures planned to fly over Iran on Friday "but we aremonitoring the situation closely and will reroute if necessary." * Sweden's SAS: A spokesman for the airline said it wasfollowing the situation closely although it did not fly in thatterritory. * Singapore Airlines will take slightly longer routes toavoid the affected Strait of Hormuz area due to the ongoingtension, a spokesman said on Friday. * German carrier Lufthansa said it has stopped flying overparts of Iran, but was still serving flights to Tehran. * Malaysia Airlines said it had avoided the airspace overthe Strait of Hormuz on its flights to and from London, Jeddahand Medina. * Polish airline LOT said it decided to change routes to andfrom Singapore due to the tense situation over the Strait ofHormuz and in the Gulf of Oman.
(Compiled by Tommy Lund and Jagoda Darlak; editing by Emelia Sithole-Matarise and Richard Chang) |
Is Bourbon Corporation SA (EPA:GBB) Trading At A 29% Discount?
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Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Bourbon Corporation SA (EPA:GBB) as an investment opportunity by estimating the company's future cash flows and discounting them to their present value. I will use the Discounted Cash Flow (DCF) model. It may sound complicated, but actually it is quite simple!
Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in theSimply Wall St analysis model.
See our latest analysis for Bourbon
We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, so we discount the value of these future cash flows to their estimated value in today's dollars:
[{"": "Levered FCF (\u20ac, Millions)", "2019": "\u20ac-205.70", "2020": "\u20ac-173.70", "2021": "\u20ac83.67", "2022": "\u20ac86.86", "2023": "\u20ac89.37", "2024": "\u20ac91.38", "2025": "\u20ac93.02", "2026": "\u20ac94.39", "2027": "\u20ac95.57", "2028": "\u20ac96.61"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x1", "2020": "Analyst x1", "2021": "Analyst x1", "2022": "Est @ 3.82%", "2023": "Est @ 2.89%", "2024": "Est @ 2.24%", "2025": "Est @ 1.79%", "2026": "Est @ 1.47%", "2027": "Est @ 1.25%", "2028": "Est @ 1.1%"}, {"": "Present Value (\u20ac, Millions) Discounted @ 14.03%", "2019": "\u20ac-180.39", "2020": "\u20ac-133.58", "2021": "\u20ac56.43", "2022": "\u20ac51.37", "2023": "\u20ac46.35", "2024": "\u20ac41.56", "2025": "\u20ac37.10", "2026": "\u20ac33.01", "2027": "\u20ac29.31", "2028": "\u20ac25.99"}]
Present Value of 10-year Cash Flow (PVCF)= €7.15m
"Est" = FCF growth rate estimated by Simply Wall St
The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 10-year government bond rate of 0.7%. We discount the terminal cash flows to today's value at a cost of equity of 14%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = €97m × (1 + 0.7%) ÷ (14% – 0.7%) = €732m
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= €€732m ÷ ( 1 + 14%)10= €196.81m
The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is €203.96m. To get the intrinsic value per share, we divide this by the total number of shares outstanding.This results in an intrinsic value estimate of €2.64. Relative to the current share price of €1.86, the company appears a touch undervalued at a 29% discount to where the stock price trades currently. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind.
Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Bourbon as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 14%, which is based on a levered beta of 2. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Whilst important, DCF calculation shouldn’t be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. What is the reason for the share price to differ from the intrinsic value? For Bourbon, There are three further aspects you should look at:
1. Financial Health: Does GBB have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Future Earnings: How does GBB's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with ourfree analyst growth expectation chart.
3. Other High Quality Alternatives: Are there other high quality stocks you could be holding instead of GBB? Exploreour interactive list of high quality stocksto get an idea of what else is out there you may be missing!
PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the EPA every day. If you want to find the calculation for other stocks justsearch 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. |
Kerry Katona: Truancy claims are b******s - I'm not a bad mum
Kerry Katona has addressed why she pled guilty to keeping her children absent from school (Credit: Antony Thompson for The Hygrove via Getty Images) Kerry Katona has said the truancy claims against her children are b******s adding, “they do f*** all at the end of term anyway. The 38-year-old bankrupt, single-mother-of-five has explained why she decided to plead guilty to failing to send one of her children to school at Brighton Magistrates’ Court last month. Katona told the Daily Mirror: “We’re a one-parent family with one car. “So we think because they’ve been a few minutes late for registration they’ve been marked for a full day absent when they’ve been in school. Read more: Kerry Katona reveals she's having breast surgery for a third time after claiming they look like 'spaniel's ears' “I let my child off school three days before Christmas last year because I was up north doing panto and wanted all my kids to join me. “They do f*** all at the end of term anyway. “There were around another three days off sick. But 45 days off? No way. Pure b******s. “And on those very few sick days, I forgot to pick up the phone to report the absence because I was so busy doing all this.” Last month Katona plead guilty to East Sussex County Council’s claim one of her child’s school attendance fell as low as 48% between April and November last year. She was fined £500 and ordered to pay a further £425 in costs. Persistent absence in the UK is classed as when attendance falls below 90%. Katona is mother to daughters, Molly, 17, and Lilly-Sue, 16, by first husband, Westlife’s Brian McFadden, a daughter Heidi, 12, and 11-year-old son Max by second husband Mark Croft, and five-year-old daughter Dylan-Jorge by her third, George Kay. View this post on Instagram A post shared by Kerry Katona (@kerrykatona7) on Apr 29, 2019 at 12:37pm PDT The former Atomic Kitten star was declared bankrupt in 2008 and revealed how she now lives of freebies in order to maintain any semblance of her former celebrity lifestyle. Katona explained: “I lost everything. I’m a single mum and constantly working. But people think because my name’s in the papers I’m minted. Read more: Kerry Katona fined £500 for not sending her child to school “If a firm sends me on holiday in return for reviews, I’ll go – I could never afford it on my own. All my clothes I get sent to me for free. “My car’s in my agent’s name. I’ve never paid for any of my surgery. It’s done on the agreement that I advertise for them. I’m not on any benefits. “I rarely go out and never drink in the house. I work my arse off. But life is different from when I was a millionaire with a Lamborghini and Ferrari. “I’m not on my arse, but my social life consists of doing a food shop in Morrisons. At times I worry about putting enough food on the table.” View comments |
What Investors Should Know About De'Longhi S.p.A.'s (BIT:DLG) Financial Strength
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Small-caps and large-caps are wildly popular among investors, however, mid-cap stocks, such as De'Longhi S.p.A. (BIT:DLG), with a market capitalization of €2.7b, rarely draw their attention from the investing community. However, generally ignored mid-caps have historically delivered better risk adjusted returns than both of those groups. This article will examine DLG’s financial liquidity and debt levels to get an idea of whether the company can deal with cyclical downturns and maintain funds to accommodate strategic spending for future growth. Remember this is a very top-level look that focuses exclusively on financial health, so I recommend a deeper analysisinto DLG here.
View our latest analysis for De'Longhi
DLG has built up its total debt levels in the last twelve months, from €432m to €454m , which includes long-term debt. With this rise in debt, DLG currently has €542m remaining in cash and short-term investments , ready to be used for running the business. Moreover, DLG has produced €78m in operating cash flow in the last twelve months, leading to an operating cash to total debt ratio of 17%, signalling that DLG’s current level of operating cash is not high enough to cover debt.
At the current liabilities level of €541m, it appears that the company has been able to meet these commitments with a current assets level of €1.3b, leading to a 2.46x current account ratio. The current ratio is the number you get when you divide current assets by current liabilities. Generally, for Consumer Durables companies, this is a reasonable ratio since there is a bit of a cash buffer without leaving too much capital in a low-return environment.
With debt reaching 41% of equity, DLG may be thought of as relatively highly levered. This is not unusual for mid-caps as debt tends to be a cheaper and faster source of funding for some businesses. We can test if DLG’s debt levels are sustainable by measuring interest payments against earnings of a company. Ideally, earnings before interest and tax (EBIT) should cover net interest by at least three times. For DLG, the ratio of 110x suggests that interest is comfortably covered, which means that lenders may be less hesitant to lend out more funding as DLG’s high interest coverage is seen as responsible and safe practice.
Although DLG’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. This may mean this is an optimal capital structure for the business, given that it is also meeting its short-term commitment. This is only a rough assessment of financial health, and I'm sure DLG has company-specific issues impacting its capital structure decisions. I recommend you continue to research De'Longhi to get a more holistic view of the mid-cap by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for DLG’s future growth? Take a look at ourfree research report of analyst consensusfor DLG’s outlook.
2. Valuation: What is DLG 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 DLG 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. |
Are Investors Undervaluing Infotel SA (EPA:INF) By 20%?
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How far off is Infotel SA (EPA:INF) from its intrinsic value? Using the most recent financial data, we'll take a look at whether the stock is fairly priced by taking the foreast future cash flows of the company and discounting them back to today's value. I will use the Discounted Cash Flow (DCF) model. Don't get put off by the jargon, the math behind it is actually quite straightforward.
We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. Anyone interested in learning a bit more about intrinsic value should have a read of theSimply Wall St analysis model.
Check out our latest analysis for Infotel
We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. To begin with, we have to get estimates of the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
Generally we assume that a dollar today is more valuable than a dollar in the future, so we discount the value of these future cash flows to their estimated value in today's dollars:
[{"": "Levered FCF (\u20ac, Millions)", "2019": "\u20ac15.78", "2020": "\u20ac18.03", "2021": "\u20ac20.90", "2022": "\u20ac21.60", "2023": "\u20ac22.16", "2024": "\u20ac22.61", "2025": "\u20ac22.98", "2026": "\u20ac23.29", "2027": "\u20ac23.57", "2028": "\u20ac23.81"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x4", "2020": "Analyst x4", "2021": "Analyst x2", "2022": "Est @ 3.37%", "2023": "Est @ 2.58%", "2024": "Est @ 2.03%", "2025": "Est @ 1.64%", "2026": "Est @ 1.37%", "2027": "Est @ 1.18%", "2028": "Est @ 1.04%"}, {"": "Present Value (\u20ac, Millions) Discounted @ 7.45%", "2019": "\u20ac14.68", "2020": "\u20ac15.61", "2021": "\u20ac16.85", "2022": "\u20ac16.21", "2023": "\u20ac15.47", "2024": "\u20ac14.69", "2025": "\u20ac13.90", "2026": "\u20ac13.11", "2027": "\u20ac12.35", "2028": "\u20ac11.61"}]
Present Value of 10-year Cash Flow (PVCF)= €144.49m
"Est" = FCF growth rate estimated by Simply Wall St
We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 10-year government bond rate of 0.7%. We discount the terminal cash flows to today's value at a cost of equity of 7.4%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = €24m × (1 + 0.7%) ÷ (7.4% – 0.7%) = €357m
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= €€357m ÷ ( 1 + 7.4%)10= €174.17m
The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is €318.65m. The last step is to then divide the equity value by the number of shares outstanding.This results in an intrinsic value estimate of €47.89. Relative to the current share price of €38.3, the company appears a touch undervalued at a 20% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent.
We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Infotel as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.4%, which is based on a levered beta of 1.01. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Whilst important, DCF calculation shouldn’t be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. What is the reason for the share price to differ from the intrinsic value? For Infotel, There are three relevant factors you should further examine:
1. Financial Health: Does INF have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Future Earnings: How does INF's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with ourfree analyst growth expectation chart.
3. Other High Quality Alternatives: Are there other high quality stocks you could be holding instead of INF? Exploreour interactive list of high quality stocksto get an idea of what else is out there you may be missing!
PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the EPA every day. If you want to find the calculation for other stocks justsearch 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. |
Dovish Federal Reserve Greenlights Stock Market Rally
The major U.S. stock indexes finished higher for the third straight week, with the cash S&P 500 Index and cash Dow Jones Industrial Average closing at fresh record highs. Treasury instruments also surged with the benchmark 10-year Treasury note hitting a multi-month high. The primary catalyst behind the rally was the Federal Reserve opening the door to rate cuts this year.
In the cash market last week, the benchmarkS&P 500 Indexsettled at 2950.00, up 2.2%. For the year, it’s up 17.7%. The blue chipDow Jones Industrial Averageclosed at 26719.00, up 2.4%. For the year, it’s up 14.5%. The technology-basedNASDAQ Composite Indexfinished at 8,032.00, up 3.0%. It is up 21.0% so far this year.
Although central bank policymakers decided to leave rates unchanged in June, investors became convinced it was poised to cut rates in July and September when the Federal Open Market Committee changed the language in previous monetary policy statements.
The FOMC removed “In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes.” And added, “but uncertainties about this outlook have increased. In light of these uncertainties and muted inflation pressures, the Committee will closely monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion, with a strong labor market and inflation near its symmetric 2 percent objective.”
Also supporting the possibility of a rate cut were remarks from Federal Reserve Chair Jerome Powell in his post-meeting press conference. Powell said some officials believe the case has strengthened for interest rate cuts ahead. He further added that policymakers are concerned about some of the recent economic developments and see a growing case for easier policy.
“Overall, our policy discussion focused on the appropriate response to the uncertain environment,” he said. “Many participants believe that some cut to the fed funds rate would be appropriate in the scenario they see as most likely.”
But it may have been the Fed’s “dot plot” that finally convinced a rate cut was coming this year. A “dot plot” chart of individual members’ expectations for rate showed division about where rates go through the remainder of 2019.
The median “dot” indicated no change in rates this year, but the full chart showed eight members in favor of staying put, eight expecting to cut and one projecting a quarter-point increase.
Thisarticlewas originally posted on FX Empire
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How Does COLTENE Holding AG (VTX:CLTN) Affect Your Portfolio Volatility?
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If you're interested in COLTENE Holding AG (VTX:CLTN), then you might want to consider its beta (a measure of share price volatility) in order to understand how the stock could impact your portfolio. Modern finance theory considers volatility to be a measure of risk, and there are two main types of price volatility. First, we have company specific volatility, which is the price gyrations of an individual stock. Holding at least 8 stocks can reduce this kind of risk across a 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. 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 COLTENE Holding
Looking at the last five years, COLTENE Holding has a beta of 0.86. The fact that this is well below 1 indicates that its share price movements haven't historically been very sensitive to overall market volatility. If history is a good guide, owning the stock should help ensure that your portfolio is not overly sensitive to market volatility. 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 COLTENE Holding fares in that regard, below.
With a market capitalisation of CHF534m, COLTENE Holding is a small cap stock. However, it is big enough to catch the attention of professional investors. Small companies can have a low beta value when company specific factors outweigh the influence of overall market volatility. That might be happening here.
The COLTENE Holding 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. This article aims to educate investors about beta values, but it's well worth looking at important company-specific fundamentals such as COLTENE Holding’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 CLTN’s future growth? Take a look at ourfree research report of analyst consensusfor CLTN’s outlook.
2. Past Track Record: Has CLTN 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 CLTN's historicalsfor more clarity.
3. Other Interesting Stocks: It's worth checking to see how CLTN 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. |
Before You Buy COLTENE Holding AG (VTX:CLTN), Consider Its Volatility
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If you own shares in COLTENE Holding AG (VTX:CLTN) 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 type is company specific volatility. Investors use diversification across uncorrelated stocks to reduce this kind of price volatility across the portfolio. The second type is the broader market volatility, which you cannot diversify away, since it arises from macroeconomic factors which directly affects all the stocks on the market.
Some stocks see their prices move in concert with the market. Others tend towards stronger, gentler or unrelated price movements. Beta is a widely used metric to measure a stock's exposure to market risk (volatility). Before we go on, it's worth noting that Warren Buffett pointed out in his 2014 letter to shareholders that 'volatility is far from synonymous with risk.' Having said that, beta can still be rather useful. The first thing to understand about beta is 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 COLTENE Holding
Looking at the last five years, COLTENE Holding has a beta of 0.86. The fact that this is well below 1 indicates that its share price movements haven't historically been very sensitive to overall market volatility. If history is a good guide, owning the stock should help ensure that your portfolio is not overly sensitive to market volatility. 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 COLTENE Holding's revenue and earnings in the image below.
COLTENE Holding is a small company, but not tiny and little known. It has a market capitalisation of CHF534m, which means it would be on the radar of intstitutional investors. Small cap stocks ofthen have a higher beta than the overall market. However, small companies can also be strongly impacted by company specific developments, which can move the share price in ways that are unrelated to the broader market. That could explain why this one has a low beta value.
The COLTENE Holding 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 CLTN is a good investment for you, we also need to consider important company-specific fundamentals such as COLTENE Holding’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 CLTN’s future growth? Take a look at ourfree research report of analyst consensusfor CLTN’s outlook.
2. Past Track Record: Has CLTN 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 CLTN's historicalsfor more clarity.
3. Other Interesting Stocks: It's worth checking to see how CLTN 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. |
Three Things You Should Check Before Buying NTR Holding A/S (CPH:NTR B) For Its Dividend
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Could NTR Holding A/S (CPH:NTR B) 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. If you are hoping to live on your dividends, it's important to be more stringent with your investments than the average punter. Regular readers know we like to apply the same approach to each dividend stock, and we hope you'll find our analysis useful.
In this case, NTR Holding likely looks attractive to dividend investors, given its 5.5% dividend yield and nine-year payment history. We'd agree the yield does look enticing. Some simple research can reduce the risk of buying NTR Holding for its dividend - read on to learn more.
Explore this interactive chart for our latest analysis on NTR Holding!
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. So we need to form a view on if a company's dividend is sustainable, relative to its net profit after tax. Looking at the data, we can see that 70% of NTR Holding's profits were paid out as dividends in the last 12 months. A payout ratio above 50% generally implies a business is reaching maturity, although it is still possible to reinvest in the business or increase the dividend over time.
Remember, you can always get a snapshot of NTR Holding's latest financial position,by checking our visualisation of its financial health.
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 NTR Holding paid its first dividend at least nine years ago. It's good to see that NTR Holding has been paying a dividend for a number of years. However, the dividend has been cut at least once in the past, and we're concerned that what has been cut once, could be cut again. During the past nine-year period, the first annual payment was ø5.00 in 2010, compared to ø2.00 last year. This works out to be a decline of approximately 9.7% per year over that time. NTR Holding's dividend hasn't shrunk linearly at 9.7% per annum, but the CAGR is a useful estimate of the historical rate of change.
A shrinking dividend over a nine-year period is not ideal, and we'd be concerned about investing in a dividend stock that lacks a solid record of growing dividends per share.
Given that dividend payments have been shrinking like a glacier in a warming world, we need to check if there are some bright spots on the horizon. NTR Holding has grown its earnings per share at 3.8% per annum over the past five years. Growth of 3.8% is relatively anaemic growth, which we wonder about. When a business is not growing, it often makes more sense to pay higher dividends to shareholders rather than retain the cash with no way to utilise it.
To summarise, shareholders should always check that NTR Holding's dividends are affordable, that its dividend payments are relatively stable, and that it has decent prospects for growing its earnings and dividend. NTR Holding's payout ratios are within a normal range for the average corporation, and we like that its cashflow was stronger than reported profits. Second, earnings growth has been ordinary, and its history of dividend payments is chequered - having cut its dividend at least once in the past. While we're not hugely bearish on it, overall we think there are potentially better dividend stocks than NTR Holding out there.
Now, if you want to look closer, it would be worth checking out ourfreeresearch on NTR Holdingmanagement tenure, salary, and performance.
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. |
UK PM candidate Boris Johnson avoids questions about police visit
By Alistair Smout LONDON (Reuters) - Boris Johnson, the favourite to be the next British Prime Minister, said on Saturday that party members were not interested in why police were called to investigate concerns for the welfare of a woman in his home. Early on Friday, British police were called to Johnson's home after neighbours heard a loud altercation between him and his girlfriend. Johnson to declined to answer questions about the incident at a hustings event in Birmingham, in central England, saying that party members would rather hear about his plans for Britain than about the incident. "I don't think (audience members) want to hear about that kind of thing, unless I'm wrong," Johnson said when asked about the incident, to applause from the audience. "I think what they want to hear is what my plans are for the country and for my party." Police had been called to an address in south London where Johnson is living with his girlfriend, Carrie Symonds. Johnson is currently divorcing his second wife. "The caller was concerned for the welfare of a female neighbour," the police said in a statement on Friday evening. "Police attended and spoke to all occupants of the address, who were all safe and well." "There were no offences or concerns apparent to the officers and there was no cause for police action," the statement said. Symonds could not be reached for comment. "GET OFF ME" The Guardian newspaper, which first reported the story, said an unidentified neighbour had heard a woman screaming followed by "slamming and banging". At one point Symonds could be heard telling Johnson to "get off me" and "get out of my flat". Despite a series of scandals in the past and criticism about his attention to detail, Brexit supporter Johnson has dominated the race to replace Prime Minister Theresa May. After a series of ballots to whittle down the race to two candidates, 160,000 Conservative Party members will now chose either Johnson and Foreign Secretary Jeremy Hunt as their next leader - and thus the next prime minister. Story continues At the event in Birmingham, Johnson said that people had a right to ask questions about his character, said that his record in office showed he had the right character to be prime minister. Johnson, 55, who served as London mayor for eight years, has cast himself as the only candidate who can deliver Brexit on Oct. 31 while fighting off the electoral threats of Nigel Farage's Brexit Party and Jeremy Corbyn's Labour. A neighbour of Johnson told the Guardian newspaper that they had recorded the altercation from inside their flat out of concern for Symonds. The Guardian said it had reviewed the recording and that Johnson could be heard refusing to leave the flat and using a swear word to tell Symonds to get off his laptop. Crashing sounds can also be heard, the newspaper said. Reuters has not reviewed the audio. Symonds is heard saying Johnson had ruined a sofa with red wine, according to the Guardian's account. "You just dont care for anything because youre spoilt. You have no care for money or anything," Symonds is quoted as saying by the newspaper. (Additional reporting by Hannah McKay in Birmingham, England; Editing by Guy Faulconbridge, Gareth Jones and Alison Williams) |
Here's How We Evaluate NTR Holding A/S's (CPH:NTR B) Dividend
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Is NTR Holding A/S (CPH:NTR B) a good dividend stock? How would you know? Dividend paying companies with growing earnings can be highly rewarding in the long term. On the other hand, investors have been known to buy a stock because of its yield, and then lose money if the company's dividend doesn't live up to expectations.
In this case, NTR Holding likely looks attractive to dividend investors, given its 5.5% dividend yield and nine-year payment history. We'd agree the yield does look enticing. When buying stocks for their dividends, you should always run through the checks below, to see if the dividend looks sustainable.
Explore this interactive chart for our latest analysis on NTR Holding!
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. NTR Holding paid out 70% of its profit as dividends, over the trailing twelve month period. This is a healthy payout ratio, and while it does limit the amount of earnings that can be reinvested in the business, there is also some room to lift the payout ratio over time.
We update our data on NTR Holding every 24 hours, so you can always getour latest analysis of its financial health, 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 NTR Holding paid its first dividend at least nine years ago. It's good to see that NTR Holding has been paying a dividend for a number of years. However, the dividend has been cut at least once in the past, and we're concerned that what has been cut once, could be cut again. During the past nine-year period, the first annual payment was ø5.00 in 2010, compared to ø2.00 last year. The dividend has shrunk at around 9.7% a year during that period. NTR Holding's dividend has been cut sharply at least once, so it hasn't fallen by 9.7% 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. Earnings have grown at around 3.8% a year for the past five years, which is better than seeing them shrink! 3.8% per annum is not a particularly high rate of growth, which we find curious. If the company is struggling to grow, perhaps that's why it elects to pay out more than half of its earnings to shareholders.
When we look at a dividend stock, we need to form a judgement on whether the dividend will grow, if the company is able to maintain it in a wide range of economic circumstances, and if the dividend payout is sustainable. First, we think NTR Holding has an acceptable payout ratio and its dividend is well covered by cashflow. Second, earnings growth has been ordinary, and its history of dividend payments is chequered - having cut its dividend at least once in the past. Ultimately, NTR Holding comes up short on our dividend analysis. It's not that we think it is a bad company - just that there are likely more appealing dividend prospects out there on this analysis.
Are management backing themselves to deliver performance? Check their shareholdings in NTR Holding 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. |
Did Carr's Group plc (LON:CARR) Insiders Sell Shares?
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We often see insiders buying up shares in companies that perform well over the long term. 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 inCarr's Group plc(LON:CARR).
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, 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 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.'
See our latest analysis for Carr's Group
Over the last year, we can see that the biggest insider sale was by the Non-Executive Chairman, Christopher N. Holmes, for UK£51k worth of shares, at about UK£1.70 per share. So what is clear is that an insider saw fit to sell at around the current price of UK£1.46. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive). Christopher N. Holmes was the only individual insider to sell shares in the last twelve months. Notably Christopher N. Holmes was also the biggest buyer, having purchased UK£19k worth of shares.
Christopher N. Holmes sold a total of 51000 shares over the year at an average price of UK£1.65. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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).
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. From looking at our data, insiders own UK£1.8m worth of Carr's Group stock, about 1.4% of the company. However, it's possible that insiders might have an indirect interest through a more complex structure. We consider this fairly low insider ownership.
The fact that there have been no Carr's Group insider transactions recently certainly doesn't bother us. Our analysis of Carr's Group insider transactions leaves us unenthusiastic. We also note that, as far as we can see, insider ownership is fairly low, compared to other companies. Therefore, you should should definitely take a look at thisFREEreport showing analyst forecasts for Carr's Group.
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. |
Baskerville Capital (LON:BASK) Shareholders Booked A 12% Gain In The Last Year
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Passive investing in index funds can generate returns that roughly match the overall market. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). To wit, theBaskerville Capital PLC(LON:BASK) share price is 12% higher than it was a year ago, much better than the market return of around -3.8% (not including dividends) in the same period. 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.
See our latest analysis for Baskerville Capital
Baskerville Capital didn't have any revenue in the last year, so it's fair to say it doesn't yet have a proven product (or at least not one people are paying for). So it seems that the investors focused more on what could be, than paying attention to the current revenues (or lack thereof). It seems likely some shareholders believe that Baskerville Capital will significantly advance the business plan before too long.
Companies that lack both meaningful revenue and profits are usually considered high risk. There is usually a significant chance that they will need more money for business development, putting them at the mercy of capital markets. So the share price itself impacts the value of the shares (as it determines the cost of capital). While some companies like this go on to deliver on their plan, making good money for shareholders, many end in painful losses and eventual de-listing.
Baskerville Capital has plenty of cash in the bank, with cash in excess of all liabilities sitting at UK£1.5m, when it last reported (December 2018). This gives management the flexibility to drive business growth, without worrying too much about cash reserves. And with the share price up 12% in the last year, the market is focussed on that blue sky potential. You can see in the image below, how Baskerville Capital's cash levels have changed over time (click to see the values).
It can be extremely risky to invest in a company that doesn't even have revenue. There's no way to know its value easily. One thing you can do is check if company insiders are buying shares. If they are buying a significant amount of shares, that's certainly a good thing. You canclick here to see if there are insiders buying.
Baskerville Capital boasts a total shareholder return of 12% for the last year. A substantial portion of that gain has come in the last three months, with the stock up 9.1% 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. You could get a better understanding of Baskerville Capital's growth by checking outthis more detailed historical graphof 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 GB 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. |
Everybody is buying these AirPods rivals for under $65
Why spend a fortune on the hottest earbuds on the market when you can get a great pair for a fraction of the price!
These wireless and sleek earbudsare the pinnacle of technology. Thanks to theAirSounds True Wireless Earbuds, you can take calls while you're on a run, and you'll never have to worry about wires getting tangled again. We have to admit the charging case may be our favorite part. And oh, did we mention they are on sale for just $39.99 (from $109.99)!
While most of the wireless earbuds on the market may break the bank, we found a stellar deal on agreat paironly costing about $65. TheBrio True Wireless Earbudscome in a sleek chrome color and a compatible charging case. Whether you are looking for a new pair of headphones for the beach or your morning commute, spend a fraction of the cost and shop these affordable style above!
AOL.com has partnered with Joyus to bring you the best deals on some of our favorite products. |
These wireless earbuds made from 100% recycled plastic are on sale
TL;DR:The eco-friendlyBrio Phantom wireless headphonesnot only sound great, but they also reduce your carbon footprint — pick up a pair in the Mashable Shop for just $74.99.
At this point, watching your impact on the environment is no longer a trend — it's a responsibility.
Not to alarm you or anything, butsome are predicting that the world will meet its doom in 2050, and the only way to prevent that from happening is a global mobilization effort to mitigate the effects of climate change. While taking small steps likedoing away with single-use plasticand carpooling get a thumbs up from Mother Nature, you should also start looking into other ways to reduce your carbon footprint.Read more...
More aboutSocial Good,Earbuds,Wireless Headphones,Eco Friendly, andMashable Shopping |
Crypto Hackers Have Targeted 20% of Users on Bitcoin Exchanges: Kaspersky
ByCCN Markets: 19 percent of survey participants have reported that they had experienced hacking attacks on cryptocurrency exchanges while 15 percent of consumers have become victims of crypto fraud,Kaspersky says.
An excerpt from the cybersecurity firm’s report read:
“Cryptocurrency certainly has its benefits but, as we can see, many consumers are still unaware of what they are due to concerns over security and how the technology works. It is an exciting industry to be involved in but it is one that is built upon trust. It is, therefore, imperative that cryptocurrency businesses do all they can to protect their networks and ensure their customers’ finances are safe and secure.”
The Moscow-based anti-virus and cybersecurity company concluded in its survey that – despite the growing interest among consumers – only one in ten people fully understand how cryptocurrencies work with 29 percent of the participants stating that they have “some knowledge” of digital currencies.
According to Kaspersky, the lack of knowledge on the consumer side is slowing down the adoption rate of cryptocurrencies, even though celebrities like Johnny Depp and PewDiePie are embracing the technology.
Read the full story on CCN.com. |
Take That's Howard Donald sports eye patch on stage after freak eye injury
Take That's Howard Donald on stage in Berlin sporting an eyepatch (Credit: Howard Donald/Instagram) Take That star Howard Donald has started wearing an eyepatch while performing - after being poked in the eye by a fan. The 51-year-old How Deep Is You Love? singer appeared to be channeling Madonna by wearing the patch on stage in Berlin and Denmark alongside bandmates Gary Barlow and Mark Owen. But an insider told The Sun: “Howard was leaving his hotel in Amsterdam on Monday where he had been staying during the tour and a big crowd of fans jumped on him in the hope of getting some pictures and giving him a hug. Read more: Howard Donald makes bowels 'Shine' with colonic irrigation before huge tour View this post on Instagram A post shared by Howard Donald (@howarddonald) on Jun 21, 2019 at 1:59pm PDT “In the melee someone accidentally poked him right in the eyeball and it’s still pretty sore, even now. One of the team then went out and bought him an eye patch which he could wear on stage to make sure he could keep it protected.” I know it’s early and I’m very tired but I think I have @officialgarybarlow eye disease! Decided to go home as I miss my family. Leaving the heat of berlin for shite uk weather,I must love them!! #eye #eyeeye #berlin #germany #tt30 #tteurope pic.twitter.com/zLh2M47DQJ — Howard Donald (@HowardDonald) June 19, 2019 A scratched eyeball, or corneal abrasion to give it its correct medical terms can lead to infection if not properly treated. Symptoms can include tearing, light sensitivity, headache, blurred vision, eye twitching and even nausea. Medical advice is to seek treatment and keep the eye covered. Story continues Madonna has taken to wearing an eyepatch emblazoned with a jewelled ‘X” as part of her new Madame X persona. View this post on Instagram A post shared by Madonna (@madonna) on Jun 13, 2019 at 11:26am PDT Spice Girl Mel B was recently treated at Moorfields eye hospital in London for a serious eye infection just days before the band were due to begin their reunion tour. She lost vision in her right eye and suffered blurred vision in her left, amid reports she had run into Accident and Emergency shouting, “I’m blind!” View this post on Instagram A post shared by Scary Spice Mel b (@officialmelb) on May 21, 2019 at 4:43am PDT Scary Spice joked she would have to wear an eyepatch on stage for the Spice World tour, but in her eye appeared to have recovered in time for the opening show in Dublin. |
Update: Baskerville Capital (LON:BASK) Stock Gained 12% In The Last Year
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These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But if you pick the right individual stocks, you could make more than that. To wit, theBaskerville Capital PLC(LON:BASK) share price is 12% higher than it was a year ago, much better than the market return of around -3.8% (not including dividends) in the same period. 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.
Check out our latest analysis for Baskerville Capital
Baskerville Capital hasn't yet reported any revenue yet, so it's as much a business idea as an actual business. As a result, we think it's unlikely shareholders are paying much attention to current revenue, but rather speculating on growth in the years to come. Investors will be hoping that Baskerville Capital can make progress and gain better traction for the business, before it runs low on cash.
Companies that lack both meaningful revenue and profits are usually considered high risk. There is almost always a chance they will need to raise more capital, and their progress - and share price - will dictate how dilutive that is to current holders. While some such companies do very well over the long term, others become hyped up by promoters before eventually falling back down to earth, and going bankrupt (or being recapitalized).
When it last reported its balance sheet in December 2018, Baskerville Capital could boast a strong position, with cash in excess of all liabilities of UK£1.5m. This gives management the flexibility to drive business growth, without worrying too much about cash reserves. And with the share price up 12% in the last year, the market is focussed on that blue sky potential. The image below shows how Baskerville Capital's balance sheet has changed over time; if you want to see the precise values, simply click on the image.
It can be extremely risky to invest in a company that doesn't even have revenue. There's no way to know its value easily. However you can take a look at whether insiders have been buying up shares. It's often positive if so, assuming the buying is sustained and meaningful. You canclick here to see if there are insiders buying.
Baskerville Capital boasts a total shareholder return of 12% for the last year. A substantial portion of that gain has come in the last three months, with the stock up 9.1% in that time. This suggests the company is continuing to win over new investors. You might want to assessthis data-rich visualizationof its earnings, revenue and cash flow.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss thisfreelist of companies that have proven they can grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on GB 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. |
Is Bioventix PLC (LON:BVXP) Overpaying Its CEO?
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Peter Harrison is the CEO of Bioventix PLC (LON:BVXP). 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 process should give us an idea about how appropriately the CEO is paid.
View our latest analysis for Bioventix
Our data indicates that Bioventix PLC is worth UK£194m, and total annual CEO compensation is UK£358k. (This figure is for the year to June 2018). We think total compensation is more important but we note that the CEO salary is lower, at UK£165k. We examined companies with market caps from UK£79m to UK£315m, and discovered that the median CEO total compensation of that group was UK£540k.
A first glance this seems like a real positive for shareholders, since Peter Harrison 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 Bioventix, below.
Over the last three years Bioventix PLC has grown its earnings per share (EPS) by an average of 22% per year (using a line of best fit). In the last year, its revenue is up 4.6%.
This demonstrates that the company has been improving recently. A good result. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Shareholders might be interested inthisfreevisualization of analyst forecasts.
Boasting a total shareholder return of 343% over three years, Bioventix PLC has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
It looks like Bioventix PLC pays its CEO less than similar sized companies. Since the business is growing, many would argue this suggests the pay is modest. The pleasing shareholder returns are the cherry on top; you might even consider that Peter Harrison deserves a raise!
It is relatively rare to see a modestly paid CEO when performance is so impressive. But it is even better if company insiders arealsobuying shares with their own money. So you may want tocheck if insiders are buying Bioventix shares with their own money (free access).
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. |
China needs nearly $440 billion to clean up rural environment: report
SHANGHAI (Reuters) - China will need to spend 3 trillion yuan ($440 billion) over three years to improve village sanitation and clean up its heavily polluted rural environment, the official People's Daily reported on Saturday, citing government officials.
The funds would be required to meet state targets to build clean rural toilets, treat household waste, and construct village sewage treatment plants, said the Communist Party journal, citing An Xiaoning, an official with China's Ministry of Agriculture and Rural Affairs.
The state has allocated 7 billion yuan to promote China's rural "toilet revolution" this year, and another 3 billion yuan to spend on improving the living environment of villagers in western and central China, An said.
China's "war on pollution", now in its sixth year, has up to now focused primarily on improving air quality in industrialised cities along the east coast.
It has made little inroads so far in improving the rural environment, where large amounts of land and water have been contaminated as a result of negligible waste treatment infrastructure, the overuse of fertilisers and pesticides, and the construction of substandard backyard industrial plants.
The agricultural ministry vowed last year to take action to tackle rural pollution, promising to improve village infrastructure and the "bad habits" of rural residents. However, it conceded that there was still a considerable funding gap.
China is desperate to bring more of its scarce farmland back into use to maximise agricultural production, especially as the country continues to urbanise. It plans to make around 90% of its contaminated farmland fit for crops by the end of 2020.
($1 = 6.8686 yuan)
(Reporting by David Stanway; Editing by Tom Hogue) |
Right-wing militia threat shuts down Oregon Capitol as Republicans flee climate bill vote
The Oregon Capitol will be closed on Saturday due to a "possible militia threat" from right-wing protesters as a walkout by Republican lawmakers over landmark climate change legislation drags on. Republican state senators fled the legislature and some, the state earlier this week to deny the majority Democrats enough votes to take up the climate bill, which would dramatically reduce fossil fuel emissions by 2050. It would be the second programme of its kind in the nation after California if passed. Governor Kate Brown then dispatched the state police to round up the rogue lawmakers, but none appeared in the Capitol on Friday and the stalemate seemed destined to enter its third day with a week left in the legislative session. Right-wing groups posted their support for the GOP lawmakers on social media on Friday in one instance offering to provide escorts to them should the state police come for them. A group of local Republicans were set to protest inside the Capitol on Saturday when lawmakers were present, and anti-government groups threatened to join, prompting the statehouse shutdown. One of the groups, the Oregon Three Percenters, joined an armed takeover of the Malheur National Wildlife Refuge in 2016. Dozens of people occupied the remote Oregon refuge for more than a month to protest federal control of Western lands. The standoff began to unravel when authorities fatally shot the group's spokesperson and arrested key leaders as they headed to a community meeting. "The Oregon State Police has recommended that the Capitol be closed tomorrow due to a possible militia threat," Carol Currie, spokesperson for Senate president Peter Courtney, said in an e-mail to The Associated Press late on Friday. The governor's office also confirmed the threats. Oregon State Police, in a statement, said it has been "monitoring information throughout the day that indicates the safety of legislators, staff and citizen visitors could be compromised if certain threatened behaviours were realised." Story continues Also late on Friday, Mr Courtney and House speaker Tina Kotek, both Democrats, condemned comments made by senator Brian Boquist, a Republican from Dallas, Oregon, that urged the state police to "send bachelors and come heavily armed" when they come to bring him back to the Capitol. "His comments have created fear among employees in our workplace," the leaders said in a joint statement. "We will always defend free speech and welcome frank policy discussions, but threats like these are unacceptable." Mr Boquist has not responded to multiple requests for comment. A spokesperson for Senate Republicans did not respond to queries about the statehouse closure. Democrats have an 18 to 12 majority in the chamber, but they need 20 members present for a quorum. One GOP senator recently died and has not yet been replaced. Under the proposed cap-and-trade bill, Oregon would put an overall limit on greenhouse gas emissions and auction off pollution "allowances" for each tonne of carbon industries plan to emit. The legislation would lower that cap over time to encourage businesses to move away from fossil fuels: The state would reduce emissions to 45 per cent below 1990 levels by 2035 and 80 per cent below 1990 levels by 2050. Those opposed to the cap-and-trade plan say it would exacerbate a growing divide between the liberal, urban parts of the state and the rural areas. The plan would increase the cost of fuel, damaging small business, truckers and the logging industry, they say. Democrats say the measure is an efficient way to lower emissions while investing in low-income and rural communities' ability to adapt to climate change. It has the support of environmental groups, farmworkers and some trade unions. California has had an economy-wide cap and trade policy like the one Oregon is considering for a decade. Nine northeastern states have more limited cap-and-trade programmes that target only the power sector. Associated Press |
Staking Isn’t Just a Way to Earn Crypto Money – And It Shouldn’t Be
Jake Yocom-Piatt is the project lead for Decred and the creator of btcsuite — an alternative full-node Bitcoin implementation written in go whose source code has been used in several notable projects.
Staking is money you don’t want to miss out on — simple as that, right?
While most cryptos today are trading 70 -90 percent below their all-time highs, staking is making what looks like easy money, scoring coin holders up to30 percent rewards. More and more people are paying attention, with staking touted as the best way to make semi-passive returns in a bear market.
Related:Staking-as-a-Service Startup Raises $2 Million From DHVC, Plug and Play
Coinbase is launchingstaking support, and new staking coins are cropping up to compete with the established players like Tezos,DashandDecred.
It’s not really that simple. Staking is getting attention for all the wrong reasons, and it’s time to re-examine its role.
Misconceptions around how it works and why it exists will have lasting consequences if expectations aren’t set now. Projects that implement any form of proof-of-stake (PoS) need to plan for long-term sustainability, not just the immediate future.
Staking is evolving from being a semi-passive reward, to becoming a powerful incentive for participating in governance. Projects that plan for the future will figure out how to incentivize active participation, while those who elect a set of governors based on the quality of their kickbacks won’t last.
Related:Vitalik Proposal Could Turn Ethereum Staking Into $160 Million Industry
Choosing to stake on the right projects for the right reasons is the best way to earn rewards.
Proof-of-Work (PoW) was introduced on bitcoin as a block validation method to timestamp transactions without the need for a trusted third party. PoW has an established track record with bitcoin securing its network using energy. People began exploring PoS as a way to use less energy to do validation “work.”
PoS is more accessible and decentralized, empowering coin holders, who “stake” coins to “forge” blocks by maintaining an online wallet or node.
Staking started as just another method for recording transactions securely, but it’s constantly evolving. Some implementations are a hybrid with PoW, while others add delegates who either receive votes from, or are empowered to act on behalf of, the group.
As Zaki Manian, co-creator of Cosmos, pointed out in an interviewwith CoinDesk, “[P]art of the dynamics of proof-of-stake is how frequently do people just vote to give themselves more money?”
In this scenario, coin holders collect exorbitant rewards without putting in any work.
Staking has been erroneously portrayed as the crypto version of a bond. While there are projects that don’t require any more work than staking funds for a reward, this approach is ultimately unsustainable and will get participants who thought they could “park and earn” into trouble.
It’s not unusual for projects to employ a toothless charade for centralized parties to claim they’re not in control. These systems are often overly complicated and characterized by confusing procedures and non-binding voting, which in practice discourage voter participation and lead to voter apathy.
When it comes to participation, several staking projects have voting on treasury spending — projects like Dash, Decred and PIVX are paving the way in governance where the community participates in project-level decision making. Decred’s participatory voting feature, for example, allows token holders to vote on everything from protocol decisions to choosing to hire its PR firm.
Today, staking spans a gamut of implementations beyond locking up funds, from ensuring the security of a blockchain to changes in consensus rules. PoS doesn’t necessarily imply governance, but its incentive structure combined with governance has radical implications for participation.
With the right incentives, staking can not only return rewards, but also give you input on a project’s future direction. When staking your coins, they usually go through a lock-up period while voting — rules on this vary from project to project.
After voting, you get your coins back as well as a staking reward.
If you vote against the project’s interests, while you’ll still get the immediate staking reward, over time you’ll feel the negative market effects of bad decisions like an all-expenses-paid stakeholder’s ski trip to Switzerland. In a system that gamifies decision-making and other processes, voting on decisions has a longer-lasting effect beyond earning an immediate staking reward.
Staking governance is powerful because it embodies a philosophical underpinning of the crypto movement: the belief humanity’s accepted forms of large-scale decision-making aren’t working well.
Staking aims to put that into practice — in crypto in the near term and on a societal scale in the distant future. This means eliminating corrupt intermediaries in favor of peer-to-peer interaction, and shirking representative democracy in favor of direct voting.
Individual sovereignty is tantamount; if you have skin in the game (i.e. are financially invested), you should help determine the direction of that game. But with that comes the responsibility of making informed decisions, and not necessarily trusting anyone else is going to make them for you. If you want to participate in staking long-term, you need to understand a project well enough to stake it.
If you want to have a say in how a project is run, you need to stake one that incorporates your sovereignty as a user. To participate, you need to keep up on changes to its consensus rules and actively vote for what you believe is best for it.
Staking can yield significant rewards, but to simply receive compensation for voting sets up a poor alignment structure. Coin holders must understand the responsibility that comes with locking up their coins and use it wisely — and only then enjoy the fruits of their labor.
Poker chipsvia Shutterstock
• Crypto Exchange Binance Is Setting Up Shop in Singapore This Month
• Staking Startup Claims ‘Up to 30%’ Returns for Just Holding Crypto |
I Built A List Of Growing Companies And Record (LON:REC) Made The Cut
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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. But as Warren Buffett has mused, 'If you've been playing poker for half an hour and you still don't know who the patsy is, you're the patsy.' When they buy such story stocks, investors are all too often the patsy.
If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested inRecord(LON:REC). Even if the shares are fully valued today, most capitalists would recognize its profits as the demonstration of steady value generation. In comparison, loss making companies act like a sponge for capital - but unlike such a sponge they do not always produce something when squeezed.
See our latest analysis for Record
If you believe that markets are even vaguely efficient, then over the long term you'd expect a company's share price to follow its earnings per share (EPS). That makes EPS growth an attractive quality for any company. We can see that in the last three years Record grew its EPS by 8.6% per year. That's a good rate of growth, if it can be sustained.
One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. Record maintained stable EBIT margins over the last year, all while growing revenue 4.8% to UK£25m. That's a real positive.
The chart below shows how the company's bottom and top lines have progressed over time. Click on the chart to see the exact numbers.
While we live in the present moment at all times, there's no doubt in my mind that the future matters more than the past. So why not checkthis interactive chart depicting future EPS estimates, for Record?
Personally, I like to see high insider ownership of a company, since it suggests that it will be managed in the interests of shareholders. So as you can imagine, the fact that Record insiders own a significant number of shares certainly appeals to me. Actually, with 49% of the company to their names, insiders are profoundly invested in the business. I'm always comforted by solid insider ownership like this, as it implies that those running the business are genuinely motivated to create shareholder value. With that sort of holding, insiders have about UK£33m riding on the stock, at current prices. That should be more than enough to keep them focussed on creating shareholder value!
As I already mentioned, Record is a growing business, which is what I like to see. If that's not enough on its own, there is also the rather notable levels of insider ownership. The combination sparks joy for me, so I'd consider keeping the company on a watchlist. Of course, just because Record 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.
Although Record certainly looks good to me, I would like it more if insiders were buying up shares. If you like to see insider buying, too, then thisfreelist of growing companies that insiders are buying, could be exactly what you're looking for.
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. |
SoftBank's Son Aims to Re-List Chipmaker ARM Within 5 Years
(Bloomberg) -- SoftBank Group Corp. founder Masayoshi Son says he wants to re-list ARM Holdings Plc within five years, re-introducing stock markets to the British chipmaker his company bought for $32 billion in 2016.
SoftBank has not yet decided where the public offering will be held, Son said in Taipei Saturday.
Founded in 1990, ARM quietly grew into the U.K.’s largest listed tech company before SoftBank’s takeover. It designs chips that are licensed to the world’s largest technology companies. As a result, just about every smartphone, mobile phone, and tablet runs on an ARM chip.
On ARM’s relationship with China’s Huawei Technologies Co. in the face of U.S. restrictions on the Chinese telecommunications giant, Son said ARM respects both the U.S. and its own links with China. The British chipmaker is complying with U.S. restrictions on Huawei and is currently seeking clarification on them, Son said.
To contact the reporter on this story: Debby Wu in Taipei at dwu278@bloomberg.net
To contact the editors responsible for this story: Shamim Adam at sadam2@bloomberg.net, Stanley James, Finbarr Flynn
For more articles like this, please visit us atbloomberg.com
©2019 Bloomberg L.P. |
Does St. Modwen Properties PLC's (LON:SMP) CEO Salary Reflect Performance?
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Mark Allan became the CEO of St. Modwen Properties PLC (LON:SMP) in 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for St. Modwen Properties
According to our data, St. Modwen Properties PLC has a market capitalization of UK£964m, and pays its CEO total annual compensation worth UK£2.4m. (This number is for the twelve months until November 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at UK£579k. When we examined a selection of companies with market caps ranging from UK£788m to UK£2.5b, we found the median CEO total compensation was UK£1.3m.
It would therefore appear that St. Modwen Properties PLC pays Mark Allan 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. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at St. Modwen Properties has changed over time.
St. Modwen Properties PLC has reduced its earnings per share by an average of 42% a year, over the last three years (measured with a line of best fit). Its revenue is up 36% over last year.
The reduction in earnings per share, over three years, is arguably concerning. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Shareholders might be interested inthisfreevisualization of analyst forecasts.
Most shareholders would probably be pleased with St. Modwen Properties PLC for providing a total return of 70% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We examined the amount St. Modwen Properties PLC pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
While we generally prefer to see stronger EPS growth, there's no arguing with the strong returns to shareholders, over the last three years. So, considering these tasty returns, the CEO compensation may be quite appropriate. CEO compensation is one thing, but it is also interesting tocheck if the CEO is buying or selling St. Modwen Properties (free visualization of insider trades).
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. |
UPDATE 1-British minister to visit Iran on Sunday for talks on tensions
(Adds context, detail)
LONDON, June 22 (Reuters) - Britain's Middle East minister Andrew Murrison will visit Iran on Sunday for "frank and constructive" talks, the Foreign Office said, amid escalating tension between Tehran and Washington after the downing of an unmanned U.S. drone.
U.S. President Donald Trump said on Friday he aborted a military strike to retaliate for the drone incident because it could have killed 150 people, and signaled he was open to talks with Tehran.
Iran responded on Saturday by saying it would respond firmly to any threat against it, the semi-official Tasnim news agency reported.
"At this time of increased regional tensions and at a crucial period for the future of the nuclear deal, this visit is an opportunity for further open, frank and constructive engagement with the government of Iran," the Foreign Office said in a statement.
Murrison, a junior minister in the Foreign Office, will call for urgent de-escalation in the region and raise concerns about "Iran's regional conduct and its threat to cease complying with the nuclear deal to which the UK remains fully committed," the statement said.
Britain is one of six foreign signatories to the 2015 deal with Iran in which the Islamic Republic agreed to suspend its nuclear programme in return for a lifting of economic sanctions.
But Trump pulled the United States out of that deal and reimposed sanctions on Tehran. The three European signatories, which also include Germany and France, have been trying along with Russia and China to salvage the deal.
Iran has said it will not give the European powers more time beyond July 8 to save the nuclear deal. It has said it is ready to go through with a threat to enrich uranium to a higher level if Europe cannot shield Tehran from the U.S. sanctions. (Reporting by Alistair Smout; editing by John Stonestreet and Gareth Jones) |
Don't expect big tax breaks on losses from flooding, storms
High winds, flash flooding, wildfires, tornadoes, deadly storms and hurricanes keep us glued to the Weather Channel and leave many fearful of what's next. Most of us, frankly, aren't stopping to think: What will all the storm damage mean for my taxes ? But the next calamity could hit when you file your 2019 tax return if you're expecting a big break relating to a severe storm or natural disaster. Under the Tax Cuts and Jobs Act, the rules relating to such deductions have changed dramatically as of Jan. 1, 2018. What's important to know: You cannot claim a casualty or disaster loss on your federal income tax return unless you're in a federally declared and designated disaster area. Watch out for word from the Federal Emergency Management Agency. See www.fema.org/disasters . "We really look to the FEMA declaration," said Amy Wang, CPA and senior manager on the tax policy and advocacy team for the American Institute of CPAs. Preparing for tax season: You might get these 4 tax breaks back if Congress reinstates deductions New, confusing W-4 form is coming: What to do now to get bigger tax refund Dwight Miles, an employee from the City of Detroit General Services Department, tosses sandbags in front of a flooded house in the Jefferson Chalmers neighborhood in Detroit, Wednesday, May 1, 2019. "It can be a challenge," Wang said. Taxpayers in a "hard-hit" area for flooding or tornadoes, for example, would not be allowed a deduction for losses unless the area is declared a federal disaster area and their specific county is included, said Mark Steber, chief tax officer for Jackson Hewitt in Sarasota, Florida. "Disasters and casualties, especially for taxes, are a hot and developing topic," Steber said. "Tax changes are continually being suggested by Congress. Currently, there are no new rules coming but that can change quickly." So far this year through early June, FEMA has declared disasters in Louisiana, Oklahoma, Arkansas, Kansas, Montana, selected areas in the Navajo Nation, Missouri, California, Guam, Oregon, California, Kentucky, Tennessee, Alabama, Ohio, Iowa, Nebraska and elsewhere. Story continues In the past 18 months, the Internal Revenue Service said it responded to disasters in 15 states and U.S. territories. The IRS offered tax relief and assistance to victims of hurricanes, typhoons, earthquakes, volcanoes, fires, tornadoes, severe storms, high winds and floods. The IRS will let you know if a federal disaster has been declared. When there is a federally declared disaster, a special IRS toll-free hotline at 866-562-5227 is open so affected taxpayers can speak with specialists trained to handle disaster-related tax issues. But remember, even though a county executive, mayor or governor may declare an event to be a disaster, it doesn’t mean it is a disaster for federal tax purposes, Steber said. In Michigan, for example, FEMA has begun doing preliminary assessments in flooded areas of Wayne County after weather disasters in the spring. But the review does not guarantee a federal disaster declaration. On April 30 and May 1, heavy rainfall caused widespread flooding in parts of Wayne County, damaging infrastructure and private property. Michigan Gov. Gretchen Whitmer announced a state of emergency for Wayne County. Outer Drive at 94 has been shut down due to heavy flooding in Allen Park on Wednesday, May 1, 2019. Wayne County Executive Warren Evans issued a similar declaration, noting that about 3,000 homes in the county including Detroit were damaged. Again, we'd have to wait for further word on whether a tax break will be part of the picture, too. Here's what you need to know about claiming casualty losses on your 1040: Take time to prepare for storms or flooding Ask anyone who went through a significant flood, such as the historic flooding that took place nearly five years ago in metro Detroit communities along I-696, and they will tell you that they wish they had done more to protect family treasures and documents. If you have old tax returns and other financial paperwork stored in a file cabinet in the basement, watch out because you could see soggy paperwork ahead. You might want to reconsider that strategy. The IRS notes that taxpayers should try to make sure that bank statements, tax returns and insurance policies are stored securely in a waterproof container. Have a duplicate set of key documents stored safely away from the originals. Many financial institutions provide statements and documents electronically, making retrieval of that information easier. Original paper documents can be scanned and downloaded to an external hard drive, flash drive, CD or DVD. It's also a good idea to gather some photos and keep those in a safe place, too. "Photographs can help prove the fair market value of property when filing insurance or casualty loss claims," the IRS stated in its disaster readiness tips. "Photos should be stored with backup files outside the area that may be affected by a disaster." Talk to your insurance agent first If you're hit by a bad storm, you may not take an income tax deduction for casualty and theft losses already covered by insurance. So you must file a claim with your insurance first before you'd consider taking any tax deductions relating to storm damage, Steber said. Some roadblocks will stop any tax breaks In order to claim a deduction, you must subtract 10% of your adjusted gross income from all the disasters claimed. Say, for example, your income is $100,000. Your losses would need to exceed $10,000 and then you'd only claim what's in excess of that amount. You also must subtract $100 from each disaster. So if you had $30,000 in losses, you'd claim $19,900 in deductions. If you had $9,000 in losses, there would be no deduction. You'd file IRS Form 4684 for "Casualties and Thefts" in order to claim a loss. You're going to need a FEMA disaster declaration number to enter on your Form 4684. Individuals are required to claim their casualty and theft losses as an itemized deduction on Schedule A. Internal Revenue Service Publication 584 details the rules for Casualty, Disaster, and Theft Loss. If you take the standard deduction, you won't be able to claim losses relating to major storms. Headlines don't guarantee a tax break Being hit by a big storm that gained some coverage on TV isn't quite enough for a tax break. "It has to be in a federally declared disaster area," said Russell Schneidewind, lead tax researcher at the H&R Block Tax Institute. "It's an important deduction because it helps people rebuild their lives." But it's a deduction that no longer applies to many situations involving severe storms or other disasters. If you lost your home in a big fire, for example, it won't trigger a tax break under the new rules that are part of the Trump tax reform unless that fire is part of a federally declared disaster, such as the wildfires in California. The rules are so complicated – and could even be changing down the road – that your best bet is to work with a tax professional when you face damages from severe storms. Contact Susan Tompor at 313-222-8876 or stompor@freepress.com . Follow her on Twitter @ tompor . Read more on business and sign up for our business newsletter . This article originally appeared on Detroit Free Press: Don't expect big tax breaks on losses from flooding, storms |
Amazon tells customers: No crypto for you!
Amazon has no current plans for a cryptocurrency like Facebook’s Libra (aka GlobalCoin) . Speaking at Fortune’s Brainstorm Finance 2019 event earlier this month, Patrick Gaulthier, Vice President of Amazon Pay, said: “It’s fresh, it’s speculative; at Amazon, we don’t really deal with the speculative, in the now.” The e-commerce giant might, however, consider such an option later on down the line. “We deal with data a lot, so I’ll be happy to have that conversation two or three years from now,” Gaulthier commented. Have no fear, crypto fans It is now possible to buy stuff on Amazon with Bitcoin et al, thanks to US startup Moon . It recently announced that any Lightning Network-enabled wallet could now be used through its Chrome browser extension. Prior to this, a small group of beta users used Moon to spend crypto on e-commerce sites by connecting the browser extension to exchange accounts like Coinbase. “[The extension] will pop up a QR code and it will have the Lightning invoice, which you could also copy and paste if you can’t use the QR code for some reason, and you’ll be able to pay with your favourite Lightning wallet,” Moon CEO Ken Kruger explained. The post Amazon tells customers: No crypto for you! appeared first on Coin Rivet . View comments |
The Single-Best Reason for Boomers and Gen Xers to Take Social Security at Age 62
We're tasked with making a number of big decisions throughout our lifetimes, but perhaps none is as important as deciding when to begin taking Social Security benefits.
Today, more than 63 million people, of which roughly7 out of 10 are retired workers, receive a Social Security benefit each month. Of these retirees, 62% lean on their monthly payout to account for at least half of their income, and an estimated 15.3 million are lifted out of poverty each month as a result of their Social Security stipend. Suffice it to say, the data suggests more seniors than not will lean on their payout, at least in some capacity, to make ends meet.
Image source: Getty Images.
But deciding when to begin that payment is the hard part. While there aresuggestions that can aid in the decision-making process, there's no one-size-fits-all guide for when a person should begin taking their benefit.
Yet for baby boomers and Generation Xers -- especially those born in the latter half of the boom and early part of Gen X -- their choice might be simple: Claim early, at age 62.
Before I get into the plain-as-day reason why age 62 might be the smartest claiming age for these late-born boomers and early-born Gen Xers, let me begin with a disclaimer:No two situations are alike. Everyone's financial, marital, and health situations differ when examined as a whole, which means that no broad-based idea will ever encapsulate the best claiming scenario for everyone. You'll need to sit down and decide how these various factors affect you when making your claiming decision.
With that being said, let's get to the topic at hand: Filing for benefits at age 62.
Image source: Getty Images.
The general reason claiming benefits as early as possible for a retired worker is discouraged is because it means a remaininglifetime of permanently reduced monthly payouts. A retired worker will receive 100% of their monthly payout when reaching their full retirement age, which for most folks will be age 66, 67, or somewhere in between. This means that claiming at any age prior to your full retirement age will result in a permanently reduced payout. This reduction, depending on your birth year, could be as much as 25% to 30%.
The trade-off for a big reduction in your monthly payout is that you'll begin receiving money sooner than the folks who choose to wait longer to receive their benefits. Sure, all things being equal -- work history, earnings history, and birth year -- a person claiming at age 70 can earn up to 76% more per month than a person claiming at age 62. But that individual at age 62 will be netting a check from the Social Security Administration for eight years before the 70-year-old claimant even sees a dime.
Generally speaking, the thesis has been that if you're in excellent health and expect to live longer than age 80, waiting until after your full retirement age to take benefits will net you the highest amount of lifetime benefits. Meanwhile, if you're in poor health, claiming early is your best bet.
But there's an even bigger reason why late-born boomers and early-born Gen Xers may want to consider taking their benefits early, and it has little to do with their health. Rather, it has to do with a lack of progress in fixing Social Security's imminent cash shortfall at the federal level.
Image source: Getty Images.
According to the latest Social Security Board of Trustees report, released in early April, the program is expected to hit an inflection point in 2020 that sees it expend more than it collects for the first time since 1982. This net cash outflow, while small in 2020, is expected to grow with each subsequent year, leading to a completeexhaustion of the program's $2.9 trillion in asset reservesby 2035.
To make sense of the previous statement, this doesn't mean that Social Security is going bankrupt or is insolvent. In fact, thiscouldn't be further from the truth. Social Security's recurring sources of revenue -- the 12.4% payroll tax on earned income and the taxation of benefits -- ensure that it can never go bankrupt, short of Congress completely changing how the program is funded. No matter when you retire, as long as you've earned enough lifetime credits to receive a retired worker benefit, you'll be receiving a payout from the program.
It does, however, signify that the existing payout schedule is not sustainable. The Trustees report estimates that the program will currently be short $13.9 trillion between 2035 and 2093, assuming the existing payout schedule, including cost-of-living adjustments, were to continue. Without a big infusion of revenue or serious expenditure cuts, the report calls for anup-to-23% benefit cut to retired workersby 2035 to sustain payouts through 2093.
Image source: Getty Images.
This is where the claim-early strategy may come in handy. If you have little faith in Congress to enact a fix to Social Security and fully expect a benefit cut at some point in the future, then claiming early, even at a reduced rate, will allow a beneficiary a greater chance to maximize their lifetime payout.
Think about this for a moment. If you were born in 1964, the last year of the baby boomer generation, you could begin taking benefits in 2026 at age 62 or any point thereafter, with monthly benefits being maximized at age 70 in 2034. Sure, waiting until your full retirement age (67) in 2031 or even maxing out your payout in 2034 could net 100% or up to 124% of your monthly payout.
But keep in mind that a 23% across-the-board benefits cut may await in 2035. Thus, the individual who decides to claim at age 62 will get nine full years of payouts that, while permanently reduced, aren't impacted by a possible across-the-board cut (until 2035), whereas those folks who wait could almost immediately get a 23% haircut to their payout for their patience.
Understandably, this strategy is founded on two pretty substantial uncertainties:
1. Wedon't know our own expiration dateand therefore can never know if we've made the best possible claiming decision.
2. We don't know what Congress will do.
Our only source of precedence on the lawmaking front comes from 1983, which was thelast time Congress passed a bipartisan overhaulof Social Security in order to strengthen the program. Had lawmakers not acted in 1983, the program's asset reserves would have run out within a matter of months.
In other words, betting on politicians to bail out retired workers via Social Security is a dicey proposition at best, which is why late-born boomers and early-born Gen Xers may benefit from claiming early and generating as many monthly payouts as possible before an across-the-board reduction is enacted.
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Only 15% of Older Workers Are Taking Advantage of This 401(k) Perk
Preparing for retirement is hard work, and it takes decades of dedicated saving to grow a nest egg worth hundreds of thousands of dollars. But when most people have so many other financial priorities competing for their limited cash, retirement saving often takes a backseat to more immediate needs.
Before you know it, you could be quickly approaching retirement age with little to nothing saved. If that situation sounds familiar, you're not alone. Forty-five percent of baby boomers have nothing saved for retirement, a survey from the Insured Retirement Institute found, and a third of workers have postponed retirement because they lacked enough savings to retire comfortably.
Image source: Getty Images
As you get closer to retirement age, it can be more difficult to save a lot of money in a relatively short period of time. Yet few workers are taking advantage of a 401(k) perk that's designed to help older employees supercharge their savings: catch-up contributions.
Catch-up contributions allow workers age 50 and over to contribute more each year to their 401(k) or IRA. And although nearly all 401(k) plans offer catch-up contributions, only 15% of workers who are eligible actually take advantage of them, a study from Vanguard discovered.
Most 401(k)s,traditional IRAs, and Roth IRAsoffer catch-up contributions, but exactly how much extra you're allowed to contribute depends on what type of account you have. With 401(k) plans, you're allowed to contribute up to $19,000 per year, according to the IRS's 2019 guidelines, but those who are age 50 and over can contribute an additional $6,000 per year. IRAs have contribution limits of just $6,000 per year for 2019, with those age 50 and over eligible to contribute an extra $1,000 per year.
Because 401(k)s have larger contribution limits and allow workers to save more per year than IRAs, maxing out your 401(k) account and taking advantage of catch-up contributions can help you save a significant amount of money in just a few years.
For example, say you're 50 years old with no retirement savings, and you'd like to retire at age 65. If you were to max out your 401(k) -- along with catch-up contributions -- by saving $25,000 per year, you'd have around $628,000 saved in 15 years, assuming you're earning a 7% annual rate of return on your investments.
While that may sound well and good, $25,000 per year is alotof money, and it boils down to around $2,083 per month. For those who are struggling to save as it is, socking away that kind of money simply isn't feasible. If that's the case, you have options.
If you don't have an extra $2,000 per month you can put toward your savings to max out your 401(k) and take full advantage of catch-up contributions, there are a couple things you can do: Make some drastic financial changes, or rethink your retirement expectations.
To start saving $2,000 per month, you'll likely need to do more than make simple budget cuts. You may choose todownsize your home, for example, to potentially save hundreds of dollars each month on your housing expenses, as well aspick up a side hustleto bring in some extra income. In addition, you'll probably need to significantly cut some of your other expenses and live as frugally as possible.
If you're not in the position to make those lifestyle changes, your other option is to scale back your retirement expectations so you can live on less. That's not to say you shouldn't save anything before retirement; even saving a little is better than saving nothing. But if you're doing all you can and are still unable to max out your 401(k) and make catch-up contributions, you may not be able to save as much as you'd hoped by retirement age.
In that case, one potential solution is tomove somewhere less expensivewhere your money will go further. You'll still have Social Security benefits as additional income, but considering the average check comes out to just $1,400 per month, that's not much to live on when your personal savings run dry. Housing is one of the biggest expenses you'll face in retirement, so moving to a more affordable city in retirement can help stretch every dollar.
You may also choose to work a few years longer than you'd anticipated if you're short on savings. Postponing retirement by even four or five years can boost your total savings by thousands of dollars, even if you're not maxing out your retirement account. While working longer than you expected may not be the ideal way you'd picture spending your golden years, it will help you live a more comfortable and enjoyable retirement when you do ultimately leave your job.
Maxing out your retirement account and taking advantage of catch-up contributions is a great way to save a lot of money in only a few short years. If you can swing it, you can go from an empty retirement fund to hundreds of thousands of dollars even if you're late to the saving game. That said, even if you can't afford to max out your 401(k), simply saving as much as you can is better than nothing when it comes to planning for a comfortable retirement.
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Your College Grad's Guide to Good Money Management
Consumer Reports has no financial relationship with advertisers on this site. Consumer Reports has no financial relationship with advertisers on this site. Congratulations! Your student has made it through two, four, or more years of college and is finally ready to enter the workforce. No doubt he or she has learned a lot along the way. But leaving college raises a whole new set of challenges, not the least of which is financial. If you're still looking for a graduation present, you may want to check out our " Money-Smart Gifts for College Grads " for ideas to help the recipient get a good financial footing. But knowledge may be the best gift of all. What follows is financial advice from CR that you can pass along to a new grad. Whether it's about paying off student loans, buying a first car, or navigating job benefits, we're here to help you and your child with these info-packed articles. Financial Advice to Give New Grads Paying Off Student Debt Chances are your kid will be facing some heavy student debt. About two-thirds of students who graduate from a four-year college have loans to repay, and on average they borrowed nearly $30,000, according to a report from the Institute for College Access & Success. That can be especially daunting for those still looking for a job. Here's good news for you both. Millions of grads qualify for loan forgiveness programs. But many don't take advantage of them. Be sure to send your grad CR's guide to getting student loans forgiven for important information about the more than 100 programs that pay back some or all of an ex-student's loans. And even if your grad isn't eligible for loan forgiveness, the right plan to repay loans can make a big difference. Check out the options in " How to Choose a Student Loan Repayment Plan " to find one that will fit your child's needs. Growing a Great Credit Score Your grad probably hasn't had the time or purchasing power to develop a strong credit history yet. You can help him or her get off on the right foot. Story continues A good credit score can mean your child gets better rates on things like car loans and credit cards. Having a bad one may count against him or her with potential employers who do a background check. So be sure to show your grad how college grads can boost their credit . Your grad may also benefit from knowing exactly what ranges to aim for, as we explain in " What's a Good Credit Score? " Plus, it's important for every new college grad to get comfortable with the credit-rating format, which CR details in " How to Read Your Credit Report "—and know how to correct any errors. Getting a Credit Card Part of building good credit is having a good credit card. You can help your child pick one after reading " Best Ways to Help Your Kid Build Credit ." You can also help him or her find the right one with CR's credit card buying guide or use our reward card buying guide to find cards with extra benefits. Choosing a Bank Account Everyone needs a bank account, but they're not all created equal. Online banks, for example, typically offer higher interest rates than walk-in institutions, but they might not offer as much customer service. It can be challenging to find banks that offer decent growth on savings. Help your grad find a good option with these places to put your cash now . Saving for Retirement It's never too early to start putting away money for retirement. Starting young lets a consumer accumulate a lot more over time. Your grad is likely to be offered a 401(k) with his or her first job—and typically matching contributions, which are basically free money. Contributing to a target-date retirement fund is a simple and smart way to start out. Share CR's " How to Choose the Right Target-Date Retirement Fund " to help your grad choose the right one. But if your child's employer doesn't offer this retirement benefit, read " How to Save for Retirement When You Don't Have a 401(k) ." Navigating Health Insurance Children can stay on their parents' health insurance until age 26. But if your grad does have a job, he or she may be getting health insurance through their employer, and learning how to deal with its complexities for the first time. CR's video " Understanding Your Health Insurance Costs " can help, as can the tips in " 6 Ways Workers Can Save on Healthcare in 2019 ." Buying a Car More than 7 million Americans were 30 days or more behind in car payments at the end of 2018. Keep your grad from joining those ranks by sharing " 7 Costly Misconceptions About Car Loans ." And share CR's used car buying guide to make sure the one your grad gets is safe and reliable. More from Consumer Reports: Top pick tires for 2016 Best used cars for $25,000 and less 7 best mattresses for couples Consumer Reports is an independent, nonprofit organization that works side by side with consumers to create a fairer, safer, and healthier world. CR does not endorse products or services, and does not accept advertising. Copyright © 2019, Consumer Reports, Inc. |
Electric Planes, Flying Taxis, Supersonic Jets: Paris Air Show Gives Us a Peek at the Future of Flight
The rivalry between Airbus andBoeingmay have grabbed most attention at the 2019 Paris Air Show this week, but it was new technology that dominated behind the scenes.
Aviation currently accounts for around 2.5% of global carbon emissions and with the industry has pledged to halve its 2005-level footprint by 2050 through an offsetting program. Therefore engineering firms were keen to showcase a range of eco-friendly inventions such as hybrid engines, urban mobility vehicles, and autonomous flight systems at the annual event, the largest for the aerospace industry.
“The Paris Air Show is an exhibition essentially oriented towards the future, which it helps to shape. This is why innovation is one of the main themes of this 53rd edition,” said the Paris organizers.
It’s not just environmental considerations driving the research: UBS estimates sales of hybrid engines will be worth $178 billion by 2040, while the electric vertical take-off and landing (eVTOL) market will be a $285 billion business by 2030.
For these reasons, major players such as Airbus, Boeing, Bell, and Embraer are hooking up with tech firms such asIntel,Amazon, and Siemens to explore new possibilities, with much of the focus being directed at hybrid engines that provide an electric boost during take-off and climb. Should the engineers crack hybrid propulsion, then airlines can hope for a 30% fuel saving, making air travel cheaper and more eco-friendly for everyone.
“We’ve got to make aviation grow and be sustainable,” Rolls-Royce CTO Paul Stein told reporters in Paris, where the British engineering giant announced its takeover of Siemens’ electric aerospace division.
“The consumer is probably going to demand an acceleration in this space,” added Celine Fornaro, head of industrials research at UBS. “It’s starting to be more present in everyone’s conscience.”
Here is a brief sampling of the key civilian technology displayed at the Paris Air Show:
Billed as the world’s first full-sized, all-electric aircraft, the Israeli-made Alice is designed to fly up to 650 miles at a cruising speed of 240 knots (276 mph) while producing zero emissions, potentially making it the world’s most eco-friendly city-hopper. Eviation Aircraft also claims it will have 70% fewer running costs than conventional jets, thanks to a propulsion system that relies on three electric motors and a 3,500kg battery.
“This aircraft is not some future maybe. It is there, ready and waiting,” Eviation CEO, Omer Bar-Yohay, told reporters in Paris, before explaining that the aircraft will be test flighted in Arizona later this year. If all goes well, the Alice will be submitted for Federal Aviation Administration certification in 2020, with manufacturing beginning in the U.S. by 2021. Deliveries of the $4 million eco-plane are scheduled to start in 2022, with U.S. regional airline Cape Air already signed up to buy 92 models.
The auto industry has made electric and hybrid-electric transport a reality on the ground. Now,United Technologieswants to take it to the skies, through “Project 804,” which adds new battery technology and a 2-megawatt hybrid-electric propulsion system to an existing aircraft.
“We’re basically taking a commuter regional turboprop airplane and we’re making it such that during take-off and climb, about half the energy is supplied electrically and about half of the supply is maintained by the engine,” United Technologies Chief Technology Officer Paul Eremenkotold CNBC in Paris. If successful, UT believes Project 804 will reduce fuel costs on a typical one-hour flight by 30% and significantly lower carbon emissions. The firm aims to have a demonstration aircraft flying by 2022.
Airbus describes its skunkworks Project Vahana as an “electric, self-piloted vertical take-off and landing (VTOL) passenger aircraft.” To everyone else, however, it will always be known as a “flying taxi”.
The 8-engined Vahana first flew in the U.S. in January 2018, and in May 2019 proved it’s tandem tilt-wing can ably transition from vertical take-off to forward flight. With an estimated range of 31 miles and cruise speed is 100 knots (115mph), Airbus estimates the Vahana is up to four times faster than traveling by car. Being all-electric, it’s also far more environmentally-friendly.
The Vahana might not appeal to nervous fliers: It’s a single-seater and entirely self-piloted, so there’s no pilot pulling a joystick or flight attendant bringing food—or booze. Instead, it relies on a series of highly-sophisticated detect-and-avoid systems to sidestep any birds, drones, or other flight hazards that happen to cross its path. You needn’t lose any sleep though: Airbus—which is also developing a second electric flier called the CityAirbus—doesn’t plan to put the Vahana into production; it is purely an experimental vehicle that Airbus is using to develop its technology.
Colorado-based Boom Supersonic (Boom) used Paris to showcase the engineering milestones in the creation of its two-seat supersonic jet, the XB-1, a plane it hopes will lay the foundations for the creation of a supersonic passenger jet called Overture. Thanks to the use of composite materials and new engine technology, Boom believes the Overture will be the fastest, cleanest and cheapest supersonic passenger aircraft in history—although that’s not to say it’s going to be exactly eco-friendly.
“Today, we have the advanced technology to realize faster air travel, and our teams have been working tirelessly over the past few years to build the first civil supersonic plane since Concorde,” Blake Scholl, CEO of Boom told reporters in Paris.
Boom—which has a strategic partnership with Japan Airlines (JAL)—aims to roll out the XB-1 in December 2019, with supersonic flight planned for 2020. According to the FAA, it is one of four commercial firms seeking to certify supersonic passenger jets in the U.S. To encourage the development of the aircraft, the FAA is altering testing rules to allow for supersonic flight. The agency is working to “enable the return of civil supersonic travel while ensuring the environmental impacts are understood and properly addressed,” Acting FAA Administrator Dan Elwell said in Paris on Monday.
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NASA's Multibillion-Dollar Bet on the Moon: Good News for Space Companies, and for Taxpayers Too
In as little as five years' time --nine years, tops-- NASA wants to put American astronauts back on the moon. And that's probably prudent. After all, it's been nearly 50 years since the last time anyone visited it. If NASA is ever to successfullysend humans to Mars, it should probably brush up on its extraterrestrial landing skills first -- and the moon is a convenient place to practice.
But how much is it going to cost?
Image source: Getty Images.
Initially, not a lot. Earlier this year, NASA announced plans to award up to $40 million in contracts to private space contractors to jump-start efforts to develop the technology needed to return mankind to the moon. Last month, the agency upped the ante with a single $375 million contract award toMaxar Technologiesto begin building aLunar Gateway space stationto orbit the moon.
Things kicked into higher gear earlier this month, when the space agency awarded a further$253.5 million in contractsto three private companies to develop lunar landers to deliver cargo payloads to the moon's surface, and$45.5 million moreto be split among 11 other companies developing spaceships capable of carrying humans from lunar orbit to the lunar surface. Still, if you add up all the awards announced so far, the total comes in well below $1 billion.
It's about to get a lot bigger, though.
Last week, CNN interviewed NASA Administrator Jim Bridenstine about the Artemis project to return to the moon, and asked him straight out: "Can you put a dollar amount on [the all-in cost for Artemis]?"
"We're looking at between $20 billion and $30 billion," said Bridenstine, "spread over five years."
Notably, this sum does not include the $12 billion or so that already spent on NASA's over-budget and behind-scheduleSpace Launch System(SLS) project -- only one of several potential rocket options for sending astronauts to the moon, but the one NASA's spent the most money backing thus far. The "$20 billion to $30 billion" quote is also additional toNASA's base budget of approximately $20 billion annually.
Thus, to pay for Artemis, NASA will have to hit up Congress for a budget increase -- something on the order of $4 billion to $6 billion annually for a minimum of five years. (There's still some skepticism about the agency's ability to get back to the moon in less than a decade, no matter how much money Congress throws at the task.) To which point, Bridenstine admits: "We're negotiating within the administration" to get the necessary funds added to NASA's budget, and will also need to ensure "that our members of Congress are interested and willing to support that effort."
That being said,ifNASA is able to secure the funding required, this will mean billions of dollars in added revenue for America's space companies -- something on the order of a 20% to 30% boost to current NASA spending levels.
To put that in investing terms, a company likeBoeing(NYSE: BA)for example -- prime contractor on the SLS rocket-- earns 6.8% profit margins on revenues from its defense, space and security business.Lockheed Martin(NYSE: LMT), in charge of building the Orion space capsule that will fly atop the SLS, earns an even more robust 10.5% operating profit margin onitsspace business (according to data fromS&P Global Market Intelligence). So depending on precisely how much Artemis ends up costing, and which specific companies win the contracts, it's likely Artemis could be worth an additional $272 million to $630 million in space industry profits ... every year ... for the next five to nine years, or longer.
Even for a company like Lockheed, with $5.6 billion in annual profits, or Boeing, with $10.1 billion, these are not insignificant sums.
And yet, there's good news here for taxpayers as well as for investors. While there's little doubt that America's space companies will profit mightily from their participation in returning humanity to the moon, it's worth remembering that when we first did it in the 1960s and 1970s, the total cost of the Apollo Space Program was approximately $150 billion (in present-day dollars ).
Even if you max out Bridenstine's cost estimate for Artemis, spending $30 billion to go to the moon today still gets us to the moon for an 80% discount to what it cost us to go there last time around. When you look at it that way, Artemis seems like a good deal for both investorsandtaxpayers.
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These 3 Moves Could Make You Richer in Retirement
How much money should you aim to retire with? It depends on your lifestyle and goals. But one thing's for sure: You're better off having access to more income during your later years than less. And if you make these important moves, there's a good chance that's what'll happen.
Many peoplefear the stock marketbecause it's volatile and unpredictable. But actually, if we examine its history, there are some pretty clear patterns that pop out -- namely, that the stock market has a tendency to recover from downturns and reward investors who keep their money tucked away for the long haul.
IMAGE SOURCE: GETTY IMAGES.
If you're able to get on board with the idea of investing heavily in stocks during your working years, you stand to retire with quite a bundle of cash. Historically, the market has delivered around a 9% average annual return. If you were to contribute $500 a month to a retirement plan over 40 years and invest it heavily in stocks, you might easily score a 7% return over that period (keeping in mind that you'll probably havesomeof your investments in safer vehicles, like bonds). And that 7% return would give you an ending savings balance of about $1.2 million. On the other hand, if you were to play it safer with your investments and score a 4% average annual return, you'd wind up with around $570,000, all other things being equal.
The takeaway? Loading your portfolio with stocks could help you retire with a substantial amount of cash, which is reason enough to work past whatever trepidations you may be harboring.
Saving in any type of tax-advantaged retirement account is a good way to secure a solid income stream down the line. But if you're looking to get more money for retirement, it pays to house your savings in a Roth-style account, whether it's a Roth IRA or aRoth 401(k).
Some people shy away from Roth accounts because, unlike traditional IRAs and 401(k)s, they don't offer immediate tax savings on contributions. But when you save in a traditional retirement plan, your withdrawals during retirement are subject to taxes. When you save in a Roth, your withdrawals are yours to keep in full -- the IRS isn't entitled to a portion.
Keep in mind that if you're a higher earner, you're barred from funding a Roth IRA directly. Roth 401(k)s, on the other hand, don't haveincome limits, so if your employer's plan offers this option, you can sign up regardless of your earnings level. If that option is not available, you can still contribute money to a traditional IRA and thenconvert itto a Roth after the fact.
Your Social Security benefits are calculated based on your 35 highest-paid years of earnings, and you're entitled to claim your benefits in full upon reachingfull retirement age, which is either 66, 67, or somewhere in between, depending on your year of birth. If youdelay benefitspast full retirement age, however, you'll boost them by 8% a year up until age 70. And that increase in benefits will remain in effect for the rest of your life.
Imagine that, based on your earnings record, you're entitled to a monthly benefit of $1,600 at a full retirement age of 67. Waiting until 70 to file will increase each individual payment you get to $1,984. That's an additional $4,608 a year of income throughout your retirement, which certainly makes the case for holding off on benefits as long as you can.
The more money you have access to in retirement, the more options you'll have to enjoy your life and do the things you've always dreamed of. Investing heavily in stocks, saving in a Roth-style retirement plan, and waiting to start Social Security benefits could substantially boost your income at a time in your life when you're sure to appreciate it.
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Weekly Commodity Rundown: Gold Rockets, Crude Soars, Natural Gas Dives
Blame it on global warming. With the start of summer in the U.S., crude oil and gold were hot, but the weather was not, leading to a steep plunge in natural gas prices. Of course, the crude oil was helped by escalating tensions in the Middle East and gold was aided by a suddenly dovish Federal Reserve. Not even the hot air blowing from its monetary policy meeting could raise temperatures enough in the U.S. to drive up demand for natural gas.
U.S. West Texas Intermediate and international-benchmark Brent crude oil soared last week as a number of bullish factors combined to drive prices to levels not seen in nearly a month. The rally was strong enough to change the trend to up on both the WTI and Brent daily charts, while bringing the 200-day moving average back into the picture.
Last week,August WTI crude oilsettled at $57.43, up $4.66 or +8.83% andAugust Brent crude oilfinished at $65.20, up $3.19 or +4.89%.
The buying started early in the week on the hope that a meeting between U.S. President Trump and China President Xi Jinping would lead to an eventual trade deal between the two economic powerhouses. It continued early Wednesday following the release of a better-than-expected government inventories report.
A weaker U.S. Dollar also helped boost foreign demand for dollar-denominated crude oil. The greenback weakened when the Federal Reserve hinted at an interest rate cut. Buyers also reacted to reports that OPEC and its allies would extend the deal to cut production, trim the excess supply and stabilize prices.
The biggest story of the week is the escalation of tensions in the Middle East after a U.S. official said one of the country’s military drones was shot down by an Iranian missile. Additionally, the New York Times reported late Thursday that President Donald Trump approved military strikes on several Iranian targets, but surprisingly pulled back the order to launch the attacks.
Gold prices rose to a multi-year high after the U.S. Federal Reserve signaled the possibility of a rate cut later this year. The response in the financial markets was even stronger with the benchmark 10-year U.S. Treasury yield dropping below 2-percent as investors priced in a 100% chance of a rate cut in late July. This drove down the U.S. Dollar while increasing demand for dollar-denominated gold.
For the week,August Comex goldsettled at $1400.10, up $55.60 or +4.14%.
The Fed did not cut rates at the June meeting and did not specify exactly when it would, but its “dot plots” indicated that nearly half of its policymakers now predict rates will fall by the end of the year. The Fed also removed the word “patient” from its monetary policy statement. Furthermore, Fed Chair Jerome Powell said, “The case for somewhat more accommodative policy has strengthened.”
Natural gas futures fell last week to multi-year lows, led by a plunge in spot gas prices, a spotty weather forecast and a greater-than-expected weekly storage build. Prices hit a four-year low last week. According to Mobius Risk Group, on a national level, the first 20 days of June have been 1.5% cooler than three-year norms and 20.5% cooler than the same 20 days last year.
Last week,August natural gassettled at $2.169, down $0.212 or -8.90%.
Mobius Risk Group went on to say that six out of the eight prior years have ranked in the top 10 warmest Junes over the past 69 years, while June is on track to rank a lowly 34thwarmest. “Weather is, and will remain, the most dominant force affecting near-term prices,” the Houston-based firm said.
Finally, the U.S. Energy Information Administration (EIA) reported a 115 Bcf injection. This was above the consensus estimate of 105 Bcf. Inventories as of June 14 are now at 2,203 Bcf, 209 Bcf above last year and 100 Bcf below the five-year average.
Thisarticlewas originally posted on FX Empire
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Maggie Gyllenhaal gets 'really valuable' artistic input from brother Jake Gyllenhaal (Exclusive)
Maggie and Jake Gyllenhaal have had the unique experience of navigating Hollywood, Broadway and other artistic endeavors together -- and they value one another's feedback more so than anyone else's.
At the Josh Cellars Father's Day Pop Up at Grand Central Station last week,Maggie opened up to AOL's Gibson Johnsabout the "really valuable" input that she gets from her brother on her various projects and vice versa.
SEE ALSO:Maggie Gyllenhaal almost missed her own house tour because of her Tesla
"There are only a few people in my life whose comments and feelings about my work deeply, deeply impact me, you know?" Gyllenhaaltold AOL. "There are people who hate something I do or love something I do and, of course, I feel both of those things. But, if someone I have the deepest respect for as an artist is moved by it, it makes a difference."
And to say that the "The Deuce" actress respects her brother as an artist who be an understatement.
"My brother has come to see things I’ve been struggling in and seen the beauty in it -- therealbeauty in it, even when a lot of other people were full of judgement," she explained. "That’s also really valuable. I also know how much my reaction to his work affects him, and that’s such a beautiful thing to go in curious and loving and warm to watching someone you love do their work."
"I feel that way about just a few people, and he’s one of them," the actress added.
SEE ALSO:Jake Gyllenhaal opens up about 'significant changes' to upcoming Broadway play
While Maggie's currently filming "The Homecoming: A Musical," her brother is gearing up to bring his critically-acclaimed play, "Sea Wall/A Life," co-starring Tom Sturridge, to Broadway later this summer for a 9-week limited engagement.
During arecent interview with AOL, Jake opened up about his love of theater and his willingness to embrace the different experience that it brings him as an actor in comparison to film and television work.
"I’ve learned how much love there is when people decide to come to the theater and that the love of the theater is a very particular kind of thing," he explained. "It's the love for that live experience. It’s a commitment, and I consider it to be an honor every night when I get out there to perform for a large group of people who have gathered and paid for that specific thing. It’s something you don’t get when you do television or film."
Read our full interview with Jake Gyllenhaalhere. |
Libra’s Dirty Secret: Blockchain Firm Claims Facebook Stole its Crypto Model
ByCCN Markets: Blockchain companyHederatook an ad out in this morning’sWall Street Journalthanking Facebook for flattering them with their copycat governance model.
Blockchain outfit Hedera thanked Facebook with a full-page ad this morning in the Wall Street Journal. Source: Hedera/Wall Street Journal
The ad reads:
“Thank you Facebook Libra. Imitation is the sincerest form of flattery.”
The move brings to mindApple’s 1981 Wall Street Journal jabat IBM:
Read the full story on CCN.com. |
'Upskilling' Your Workforce? Start by Measuring the Skills They Have Now
Charles Field, a network planning engineer atAT&Tin Alieso Viejo, Calif., has been picking up new skills since his teens, when he taught himself how to code. He joined AT&T as a technician in 1989 and, after a series of promotions and lateral jumps inside the company, he’s now using a combination of A.I. and human insights to develop analytical forecasting tools for his team. Along the way, Field has kept learning, with in-house AT&T courses, certifications, and nanodegrees from outside sources like Coursera and Udacity, and training from LinkedIn Learning on “everything from programming to leadership,” he says. All that studying, Field adds, “has put me exactly where I want to be.”
As technology keeps racing ahead, putting the right people in the right jobs gets tougher—especially since, in this job market, there just isn’t enough skilled talent to go around. That’s why the number of companies striving to train their current employees is climbing from 55% in 2018 to 76% by next year, according to aManpowerGroupstudy of 1,050 U.S. enterprises called “Humans Wanted: Robots Need You“.
Great, but there’s a catch: Without a clear idea of the skills people have now that might be a great fit in a different job—and which ones they need to gain or develop—simply putting everyone through the same training is unlikely to work well. Manpower’s research shows that assessing employees’ current capabilities, so each person can get the most relevant and useful training, “increases the likelihood of placing the right person in the right role from 50% to 80%.” Yet fewer than half (48%) of U.S. employees in a recent Manpower poll said their skills have actually been assessed.
Mindful of that gap, AT&T set out to design a company-wide assessment program that Field says “really helps you keep track of your career goals and choose the right training.” Launched in early 2018, the effort has two main parts. One, called Personal Learning Experience (PLE), is an online tool that lets employees search for jobs at AT&T based on their current skills, and find out which training they’ll need for their next move.
Someone might, for instance, identify 20 job openings for which he or she is already at least 50% qualified, pick out the ones that look most interesting, and link directly to the training each job will require. Last year, more than 200,000 AT&T employees logged in to PLE more than 7 million times.
One example of how PLE is working is in A.I. and machine learning, where more than 4,600 people so far have had their skills assessed, gone after the appropriate training, and moved from their old jobs into new roles.
The second part, myCareer Profile (mCP), is a tool that’s a bit like an internal LinkedIn page, where employees highlight their job histories, special skills, and which training they’ve pursued so far. Managers search mCP to quickly spot promising candidates for current job openings inside AT&T. The company also uses mCP to get a real-time snapshot of the company’s talent supply, and identify gaps that call for targeted training in specific hard-to-find skills.
Clearly, none of this, with its billions of constantly shifting data points, would be remotely thinkable without artificial intelligence. But human input is critical, too, in at least three ways. First, there’s basic human nature. To be effective, online assessment tools should be “easy to use, so people will keep using them,” says Jennifer Fitzmaurice, an AT&T vice president in human relations who helped develop the assessments and now oversees them. PLE and mCP, like most of the training they lead to, are available 24/7 on any device “so people can fit this into their busy schedules.”
Then too, the whole effort begins and ends with individual humans, starting with the employees who look for ways to turn their career daydreams into particular goals, and who envision which training will take them furthest in the direction where they want to go.
“People are still responsible for outcomes,” notes Fitzmaurice. “So you need leaders who encourage and inspire people to keep learning and developing.” Encouraging and inspiring are things that algorithms just can’t do.
Rather than using mCP and PLE to make career decisions entirely on their own, and far from letting the online assessments dictate their next steps, the company’s staffers are asked to talk with their managers about their goals, including which training makes the most sense for them.
“We want to make sure employees understand how their current skills can be applied to other jobs,” says Fitzmaurice. “The systems can show you your options. But you always have a choice about what you want to do. It’s still up to you and your manager.”
A third essential role is for humans only: Tweaking the machines’ behavior so they deliver the results the company needs. AT&T’s learning-and-development team, made up of humans, “takes the lead in determining what kinds of assessments and training to offer,” says Fitzmaurice. “But we also gather and use information and opinions from managers in all the business units.”
The process never ends. AT&T experimented with some earlier versions of PLE and mCP in 2015 and 2016 that were themselves extensions of skills-assessment efforts the company had had in place for a decade or more. “We’re still constantly adding and modifying things, partly because the available technology is changing all the time,” says Fitzmaurice. For example, there’s been a recent addition: A self-assessment tool, which more than 200,000 employees have used so far this year.
There’s an added bonus to assessing employees before training them (or even before suggesting what kind of training they might take next): People are creatures of habit and, once they get used to adding new skills they’ve chosen themselves, based on their own goals, they may not want to stop.
Even after 30 years of constant training, Charles Field, for one, doesn’t plan to move to a different job anytime soon—but he’s signing up for more courses to continually broaden his knowledge in machine learning and A.I.
“Machine learning could turn out to be bigger than the Internet,” he says. “I decided years ago I want to be driving the steamroller, rather than standing in front of it.”
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9 Nonfiction Page-Turners to Bring to the Beach This Summer
Whether it’s hours spent waiting in an airport terminal because of an unexpected (but really, expected) delay or hours under the sun (with sunscreen) on the beach,a good bookis a welcome companion. And a page-turner at that is necessary to keep you entertained and pass the time enjoyably.Thus, here’s a list of nonfiction works you should consider packing away while traveling for business or pleasure this summer, taking you from theWhite HousetoHollywood, with billionaires, movie stars, and one truly outrageous and now-infamous scammer.
There will never be anyone quite like Robin Williams, and there may never be another celebrity profile or biography quite like this again either. It’s not hyperbole to say thatNew York Timescorrespondent Dave Itzkoff’s engrossing and all-encompassing biography of one of the most beloved actors of the second half of the 20th century will change you. It will hurt you. It will make you laugh. It will make you cry. And after you are done, you will not be sure what to do with yourself. And, much like how many of us (Williams fans) felt after his death in 2014, the world will feel a bit emptier. ButRobinis worth it—every single page.
In stark contrast to Itzkoff’s approach to covering Robin Williams,Vanity Faircorrespondent Lili Anolik is an active (if not obsessive) participant in her reporting of onetime Los Angeles “It Girl” and published author Eve Babitz. Normally, journalists aren’t the story—and shouldn’t let themselves become so. And yet, in this case, it works. That could be for a few reasons. For one, Anolik is transparent in her fascination with Babitz, and learning about her reporting journey (or battle, at times) is just as engrossing as parts of Babitz’s own wild history. Relatedly, given Babitz’s eventful life (putting it lightly), Anolik’s unrelenting inquiry into her life is just one more unusual tale following the rest—much like Babitz’s long string of lovers or long string of jobs and careers. Those not familiar with Babitz herself might be drawn in for the insane stories about some of their favorite stars, writers, and icons during the 1960s and 1970s, including but not limited to Jim Morrison, Joan Didion, Harrison Ford, and Steve Martin, among many—many—others. But Anolik, as a devoted fan but responsible biographer in this unique case study, stays true to her subject as Babitz is always the sun around which everyone else in L.A. revolves—at least in this retelling.
Is there anything more meta (in literature) than a book about a building that houses books? A history of a library might not seem like the most obvious choice for a fun read—but this is no ordinary library in no ordinary city. Throw in a suspected case of arson, and you have both a mystery and a tragedy—on multiple fronts. Finding a healthier balance of inserting herself as the narrator as well as a character in the story, Susan Orlean offers a fresh yet in-depth recap of the history of the Los Angeles Central Library, which serves as a mirror for the city itself as the Southern California metropolis grew from a Western outpost to the urban sprawl we know now. Gender politics, economic inequality, technology’s takeover—it’s all there, and the Central Library has gone through it all. (And some of the patron resources the Central Library offered in pre-Internet days are beyond wild.) Interwoven among it all is the story of one young man, hoping to strike it big and make a name for himself in Hollywood, and yet his own life was more Shakespearean than anything in which he could have been cast.
No one does Hollywood history better than Karina Longworth. Formerly aVanity Fairfilm critic and also the host of a long-running (and outstanding) podcast,You Must Remember This, Longworth dived deep into one of the subjects who frequently popped up in her podcast seasons covering the early years—some would say “Golden Age”—of Hollywood: Howard Hughes. Maybe it seems “Golden” through a lens years later, although even pre-#MeToo, Hughes’s antics and those of other Hollywood (and all white male) executives would make your stomach churn and your face cringe. And post-#MeToo, the book serves as a reminder of just how bad it has been for women in the film industry—and how far we all have to go to rectify the sins of the past.
Speaking of sins of the past (and present, and most definitely the future), there is nowhere in Hollywood more synonymous with infamy and intrigue than the Chateau Marmont. It’s almost unbelievable how much has happened in one hotel and cluster of bungalows on Sunset Boulevard—how many A-listers have stayed there, how many A-listers have died there, and how the place has stayed open for more than 90 years despite it all. (Can you imagine the insurance bills?) And this is all based on public knowledge.New York Timesbestselling author Shawn Levy promises readers even more behind-closed-doors details, all of which are so wild that even Hollywood’s best screenwriters couldn’t make this stuff up. And if they did, it was probably inspired by something that transpired at the Chateau Marmont.
Perhaps now all but forgotten after the presidential election swallowed 2016, there was another whale of a story that rocked the finance and entertainment worlds simultaneously. That was1MDB, a fraudulent web spun by a social-climbing con artist that would make Jay Gatsby blush. This isn’t just crisscrossing the globe on private jets and yachts (although, naturally, there are those, too), but this young Wharton graduate is now credited with swindling $5 billion fromGoldman Sachs, a money-laundering link to the financing of Martin Scorsese’sWolf of Wall Street,and even taking down the Prime Minister of Malaysia with him in the fallout.
Given how fast the news cycle runs these days, this title was almost outdated by the time of its release late last year—and it’s practically historical narrative in a post–Mueller Reportworld. But never mind all that givenWashington Postreporter Greg Miller’s deft and sharp storytelling in fleshing out secret back channels, cyber-espionage, and corrupt officials on both sides—and that’s just in the opening pages. Covering the period from the hacking of the DNC to Trump’s disastrous appearance alongside Putin in Helsinki, the amount of material unearthed and laid out clearly for the reader here would make someone from the future assume this all happened over the course of a decade (or two) rather than a few years.
These days, reading a book from the Obama era might seem like something out of ancient history (if not another planet), but former White House stenographer Beck Dorey Stein’s memoir of her tenure at the White House is a fun throwback. It might be a bit odd for someone under the age of 35 to already be writing a memoir, but Stein’s book is quite compelling, thanks to the thorough explanation of day-to-day activity at the White House and among the President’s core team. This is as close to a sequel toThe West Wingas you’re going to get. (There is no reboot; get over it.) And for those of you who like to read about traveling while traveling, there are plenty of domestic and international trips that you might recall as a headline long ago, and that you can learn about from behind-the-scenes now, from Vietnam to Martha’s Vineyard. There’s romance, too, although for Stein’s sake, you almost wish there wasn’t. More intriguingly, for the political readership, as a White House stenographer, Stein was not employed as part of the Obama administration but rather as a permanent member of the White House staff. Thus, she was one of the few employees left behind to continue working through the transition to the Trump administration. While that in of itself is something worth reading (and will also make you cringe), Stein’s book is as light a political read as you’re going to get these days. To characterize it as “breezy” might be too simple, as it is rare to hear about the inner workings of the Oval Office from a younger and female voice—and based on the current administration’s demographics, we won’t hear anything similar for some time.
Picture an organized gang of burglars, speeding away in getaway cars along tree-lined roads in the dead of night as the local police scramble to catch the culprits. But these thieves haven’t stolen jewels, artwork, or even drugs. They’ve poached truffles.
This isn’t the truffle salt or truffle oil you find on brunch menus, aiming to make your mac and cheese sound more posh. These are the real deal, straight from the ground, fresh tubers only found in parts of southeastern France and northwestern Italy—some species of which can sell for thousands of euros per kilo.
Who knew mushrooms could cause so much drama? But as investigative reporter Ryan Jacobs unearths, the truffle supply chain is a dangerous—if not lethal—business involving fraud, sabotage, and downright cruelty. What started out as a long read forThe Atlanticis a full-fledged mystery and exposé about a luxurious delicacy that comes at a far higher price than you ever imagined.
A fair warning (without spoilers): There are some gruesome scenes of animal treatment revealed in this book, which will be particularly disturbing to dog owners and dog lovers.
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3 Growth Stocks for In-the-Know Investors
Your investing philosophy doesn't have to ruthlessly focus on growth in order for your portfolio to benefit from businesses on a promising trajectory. Whether you're content owning income stocks or prefer to go bargain hunting, stuffing a growth stock or three into your mix of holdings can make all the difference when it comes to long-term performance. You just have to know where to look.
With that in mind, we asked three contributors at The Motley Fool for growth stocks they're watching for reasons that might not be so obvious from headlines and press releases alone. Here's why they choseAntero Midstream(NYSE: AM),Diamondback Energy(NASDAQ: FANG), andlululemon athletica(NASDAQ: LULU).
Image source: Getty Images.
Maxx Chatsko(Antero Midstream):This business officially formed in mid-March when twomaster limited partnerships(MLPs) combined into a single corporation. Unfortunately, that means investors have to wade through complicated pro forma financial comparisons and carefully pore over various adjusted results until the second quarter of 2020. While that can be annoying and might make it easier to focus your attention elsewhere, the extra squinting and head tilting could be well worth it.
Antero Midstream handles the midstream logistics ofAntero Resources, which is one of the largest natural gas producers in Appalachia. The region is home to 36% of the nation's total natural gas supply, and the industry expects the region to increase production by 7 billion cubic feet per day by 2023 -- enough to grow America's output 10%. That figures to provide a healthy tailwind for the fee-based business.
In the first quarter of 2019, Antero Midstream grew natural-gas gathering volume 40% and compression volume 60% versus the prior year. That should continue to increase as new long-haul pipelines -- heading toward Gulf Coast export terminals and gas-fired power plants in the Southeast -- open their taps. Freshwater delivery volumes shrank by 31%, but that was driven by anexpected decrease in completion activitiesfor new wells at Antero Resources.
Perhaps the most important opportunity for the business and investors resides in natural gas liquids (NGLs). Unlike natural gas pulled up in the Permian Basin, Appalachian gas is rich in NGLs, which are increasingly being used in petrochemical manufacturing. That provides an important backstop against volatility in the natural gas markets. Antero Midstream is just beginning to enjoy the benefits of a 50/50 joint venture focused on NGLs, which just doubled its fractionator capacity (read: equipment needed to separate NGLs) to 40,000 barrels per day and could soon add another 27,000.
Considering the ample growth opportunities on the horizon, including one that insulates the business from persistent volatility in natural gas markets, Antero Midstream is a growth stock to watch. That's especially true given shares trade at just 11 times future earnings, aPEG ratioof 0.29, and sport an annual dividend yield of 9.9%.
Image source: Getty Images.
Matt DiLallo(Diamondback Energy):Little-known oil stock Diamondback Energy has delivered prodigious growth since its IPO in late 2012. Thanks to its voracious appetite for mergers and acquisitions, the oil driller's output has risen by a jaw-dropping 785% on a per-share basis over that time frame. And its underlying earnings per share have increased by an even more impressive 850% despite a 37% decline in oil prices. That high-octane earnings growth has helped drive Diamondback Energy's stock up nearly 500% over that period, which has crushed the market's more than 130% total return.
Thanks to the prime position it built up in the low-cost Permian Basin, Diamondback Energy has plenty of fuel to continue growing. The oil producer currently expects to increase its output by another 30% this year. Meanwhile, it has enough high-return drilling locations to grow at a fast pace for the next several years.
The company's resource base is so good that it's on track to produce enough cash flow at $55 oil next year to fully fund a high-octane growth program while generating a gaudy $750 million in excess cash. It intends on using that money to pay itsrapidly growing dividendandbuy back its attractively priced stock.
Those dual fuels of fast-paced production growth and increasing cash returns to shareholders should enable Diamondback Energy to continue generating market-crushing total returns. So, while most investors are still avoiding oil stocks due to the continued volatility in that market, those who dig a little deeper can see that Diamondback Energy has a proven ability to prosper despite all the turbulence.
Image source: Getty Images.
Demitri Kalogeropoulos(lululemon athletica):Its shares have more than doubled in the past three years, which means most of Wall Street is well aware of Lululemon's bright growth outlook. But I think investors still might not fully appreciate this retailer's potential.
Sales in the most recent quarterblew past management's targets, with soaring digital orders and robust customer traffic driving a 27% spike, versus the 20% forecast. It easily navigated some significant competitive challenges, including a new threat fromNike, to continue soaking up market share in its core yoga niche while pushing into new areas like outerwear and menswear.
The finances are looking even better thanks to the combination of operating leverage and a continued shift toward online selling, all supported by a packed pipeline of innovative product releases. Together, these trends generated an almost 40% spike in adjusted EPS over the holiday season.
Lululemon might post similarly impressive numbers when it announces first-quarter results in mid-June. Yet even if growth comes in a little light to start the year, the chain appears well positioned to ride its increasing brand strength intonew apparel nichesand new geographies over the next few years. After passing its $4 billion annual sales goal in 2020, this wider business could deliver a far larger revenue base by the start of the next decade.
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Demitrios Kalogeropoulosowns shares of Nike.Matthew DiLalloowns shares of Lululemon Athletica.Maxx Chatskohas no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Lululemon Athletica and Nike. The Motley Fool has adisclosure policy. |
Is Align Technology a Buy?
You can safely putAlign Technology(NASDAQ: ALGN)in the category of winning stocks. It's up around 2,760% over the last 10 years and was thebest-performing stock in theS&P 500in 2017. Even though 2018 was a down year, it still beat the S&P 500. And so far in 2019, the stock is up 35%.
I doubt that investors have gotten tired of all the winning. But there are different dynamics at play for Align Technology than there have been in previous years. Is the stock still a smart buy for long-term investors?
Image source: Getty Images.
Align arguably faces the biggest challenges now since its early days. The company continues to generate strong growth, but it's slowing compared with the past few years.
One key factor is that several patents on its Invisalign clear aligners have expired, with more patents expiring over the next few years. This has opened the door for competitors in the clear-aligner market.
Some of those competitors already have strong relationships with dental professionals, includingDanaher(NYSE: DHR),Dentsply Sirona(NASDAQ: XRAY), andHenry Schein(NASDAQ: HSIC). In some cases, they offer more attractive pricing than Align does with Invisalign.
There is also some potentially disruptive competition. Privately held SmileDirectClub (SDC), for example, is pioneering what the company calls "the doctor-directed at-home invisible aligner industry." Instead of going to the offices of dentists or orthodontists for clear aligners, patients use a kit at home to make dental impressions. All interaction with dental professionals is done remotely.
Align Technologyhasn't seemed too worried about the potential threat from SDC, which it views as operating in a completely different segment. There is some overlap between the two companies' markets already, though. And SDC is growing rapidly, making a more-direct battle with Align a real possibility down the road.
The emergence of new competitors underscores just how big the opportunities are in clear aligners. Align remains the clear leader in this market (no pun intended), but with only a 16% share of the orthodontic cases for which Invisalign can be used. In the teen market, its share is only 6.7%.
Still, at the end of 2017, Align's total market share was even lower: 10%, with a 4% share in the teen market. So the company knows the secret to increasing market share -- promote directly to consumers. Its direct-to-consumer efforts include advertising on TV, digital outlets, and social media; event marketing, and offering patient concierge services. These initiatives build brand awareness and drive patients to contact their dentists and orthodontists about Invisalign.
Align Technology also has been successful at expanding the addressable market by introducing new products that can treat tougher orthodontic cases. In 2017, the company estimated that its addressable market was around 6 million orthodontic cases per year. Thanks to the launches of new versions of Invisalign, it now thinks that its addressable market is 8 million orthodontic cases per year. And the company has more room to grow through innovation, since the total orthodontic market is close to 12 million cases annually.
The overall market is also expanding as the middle-class populations in developing nations increase. Align already has a significant presence in international markets, particularly in Europe. Roughly 40% of Invisalign shipments are to international markets. But there's still a tremendous growth opportunity in countries including China and India.
My view is that Align Technology still appears to be a great pick for long-term investors. Although the company does face increased competition, it's been able to continue generating impressive revenue growth by aggressive marketing and introducing innovative new products.
There's no question that the stock is pricey, with shares trading at nearly 41 times expected earnings. But premium valuations have been a reality for Align for years -- with the stock rising anyway. While its high earnings multiples could make it more volatile than less expensive stocks, I don't see the valuation as a reason to stay away.
I think that Align will continue to increase its market share and expand the overall addressable market. This winning stock should keep on winning for a long time.
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Keith Speightsowns shares of Align Technology. The Motley Fool owns shares of and recommends Align Technology. The Motley Fool is short shares of Dentsply Sirona. The Motley Fool has adisclosure policy. |
How to Get a Degree in Gelato
Don’t get Italy’sGelato Museumconfused with the Instagram-baitMuseum of Ice Creamthat has toured the U.S. for the past few years—not in the least because one of the focal points of the former is defining the difference between gelato and ice cream.
A 20-minute drive from central Bologna (and a short train ride from Florence orMilan), off the usual tourist path, sits the imposingly large, industrial building housing global food-service supplier Carpigiani’s corporate headquarters along with its Gelato Museum and Gelato University.
There are a few photo-friendly displays—a gelato pedal-cart and human-size stuffed gelato bar—but this museum and the attached school, funded by gelato-machine company Carpigiani, are serious about the sweet stuff: hard-core history lessons and hands-on gelato workshops. Given the obsession of nearly every tourist to the country with stopping into the tinygelateriasdotting Italy’s central plazas and stone streets, the opportunity to learn about the history and making of the country’s favorite frozen treat is worth the trip—like visiting the mothership for scoop shops.
Entry to the museum requires a guided tour, which brings you through the bright, modern interior and also through the history of frozen dessert, starting with its origins as a luxury only the wealthy could afford, when it required dragging ice from faraway mountains. Exhibits include depictions and passages from literature and letters about frozen desserts, eventually zeroing in on Italy as the birthplace of gelato—where, in the 17th century, the first machine for making gelato was invented. By the 18th century, a doctor first declared it a contributor to human happiness.
After the history section, visitors turn the corner into collections of gelato-related artifacts, including colorful arrays of tins, advertising posters, vintage freezers, dessert cups, various gelato conveyances including a tricycle and truck, and a timeline of gelato-making equipment running straight up to the present.
By the time visitors finish the one-hour guided tour of the museum, they’ve got a pretty good grasp on what the dessert is and how it’s made. From the tour alone, visitors will be better prepared to identify gelato imposters: artificially flavored or additive-infused to make the product look better or last longer. But with just a little more time and money, people can attend gelato classes for deeper knowledge.
Gelato Universityis the education branch ofCarpigiani, with 15 campuses teaching 400 courses in 10 languages. The headquarters next to the museum also offers mini-courses in tasting, gelato making, and a master class that includes developing your own recipe. In a corner of what is essentially an ice cream parlor, students sit down to learn about gelato while behind them, an arching, stainless-steel counter holds a veritable world of flavors, and a busy kitchen makes even more.
One thing you won’t leave the museum complex without having learned is the difference between gelato and ice cream. Because gelato is made with milk instead of cream, it has much less butterfat (zero to 8%, while ice cream has 10% to 18%, according to Carpigiani). Gelato is also churned at a slower speed, which means that there’s less air incorporated, giving you a sweeter, denser dessert—which still tastes creamier despite having less fat. Another bonus: Gelato is served at a slightly warmer temperature than ice cream, so it won’t melt as fast.
Other lessons seem a bit oversimplified: In Italy, it might be construed that gelato is seen as “artisanal” and ice cream is “commercial.” That isn’t always the case in the United States, wheresmall-batch ice creammakers (see:Salt & Straw, Big Gay Ice Cream, Jeni’s Ice Cream—the list goes on) are flourishing.
But for frozen dessert aficionados, learning to hand-make gelato and understanding the way different types of fruits and flavors change textures (and thus recipes) can be inspiring. And for the full-on gelato nerds (and aspiring ice cream entrepreneurs), understanding the differences in fat percentages and how freezing temperatures affect texture is critical. And with plenty of samples throughout, the sessions don’t bog down the folks who just want a glimpse into why the passion for melting sweets is so long-lasting.
While graduates from the gelato classes won’t collect the kind of selfies the Museum of Ice Cream flaunts, they do leave with their own gelato “degree” (more like a certificate of participation), a full belly, and a rigorous understanding of what gelato is—and why it’s not ice cream.
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3 Top Fintech Stocks to Buy Now
Financial technology, or fintech, is one of the biggest long-term growth opportunities in the market, but not all of the companies that operate in this space are great investments. We turned to three of our Fool.com contributors for investing ideas, and here's why they likeDocuSign(NASDAQ: DOCU),Global Payments(NYSE: GPN), andAlibaba Group(NYSE: BABA)right now.
Matt Frankel, CFP(DocuSign):While it's not technically a fintech company, DocuSign is a technology company that stands to benefit tremendously from growth in the fintech industry. The electronic signature specialist is used by mortgage companies, banks, credit unions, real estate agencies, and more to expedite long-distance document processing and ensure compliance.
Image source: Getty Images.
And it's fair to say that as fintech continues to evolve, the use case for Docusign's products will improve. According to a report by the American Bankers Association (ABA), digital lending is a $1 trillion addressable market, and only about half of larger banks and 38% of smaller banks currently have a digital loan origination channel.
To be clear, DocuSign isn't a cheap stock. Even after a recentpost-earnings pullback, it trades for roughly 10 times its expected full-year sales (surprisingly, this ischeaperthan many other cloud software companies). However, the growth numbers are impressive. Revenue grew 37% year over year in thefirst quarter, and customer count increased by 26%, The company is also profitable and free-cash-flow positive, something that several other recent IPOs can't say.
Finally, DocuSign has been investing heavily in new products, and these efforts aren't yet reflected in the company's numbers yet. Management claims that its addressable market could be as high as $50 billion now, and with just over $750 million in revenue over the past 12 months, it's fair to say that DocuSign's growth story could still be in its early innings.
Matthew Cochrane(Global Payments):Last month, Global Payments agreed toacquireTotal System Services(NYSE: TSS)for about $22 billion, joining the ranks of several otherblockbuster fintech dealsthis year. The deal combines Global Payments' strength of processing card and digital payments for merchants with Total System's skill of handling the payments with card-issuing financial institutions. Combined, the company will be responsible for a customer base consisting of 3.5 million merchants and 1,300 financial institutions and will facilitate about $50 billion of payments per year.
Even before the merger was announced, however, Global Payments was a payments powerhouse. The company has been successfully shifting to a moresoftware-centric business model, by embedding itself in industry-specific software vertical stacks through acquisitions, partnerships, and internal development. The result is something much more than a commoditized payment processing service; it creates a sticky payments platform with high switching costs for clients that will be reluctant to change payment processing providers if it means giving up a business-critical software platform.
In Q1, adjusted revenue rose to $1.04 billion, a 12.9% increase year over year, and adjusted earnings per share (EPS) grew 18.6% to $1.34. Before the merger was announced, Global Payments shares were trading at a forward P/E ratio of about 25. With the deal expected to create $300 million in cost savings and $100 million in revenue synergies, as well as be immediately accretive to EPS, that seems to be a relative bargain in a bull market that might be getting long in tooth.
Dan Caplinger(Alibaba Group Holding):When you hear Alibaba's name, financial technology might not be the first thing that comes to mind. The Chinese giant has become a huge leader in e-commerce, with a shopping search engine to go with plenty of exposure to the cloud computing services industry. Like many of its counterparts in the U.S., Alibaba has taken a scattershot approach to the internet realm, sticking its fingers into every niche in the hope of building a competitive edge and adding to its overall success.
But Alibaba has exposure to fintech through its one-third stake inAnt Financial, which runs a mobile payments platform that's extremely popular throughout much of the greater China region. Ant was once known as Alipay, and it's grown so large that some believe it could command a market capitalization of greater than $100 billion in its own right if it were spun off as a separate company.
Moreover, Alibaba is still looking at making investments in small upstart companies in a wide variety of areas, which could include fintech. As Alibaba spreads its influence across Southeast Asia and becomes an even more dominant player in e-commerce, the Chinese internet giant has plenty of opportunity to wield even more power in pushing fintech forward. The stock also comes at a bargain price right now thanks to trade-related tensions, offering an unparalleled value for those willing to think outside the U.S. box.
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Dan Caplingerhas no position in any of the stocks mentioned.Matthew Cochraneowns shares of Alibaba Group Holding Ltd. and Global Payments.Matthew Frankel, CFPhas no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends DocuSign. The Motley Fool has adisclosure policy. |
Jim Plack Advises on Options in Alternative Lending for Small Business Owners
ANNAPOLIS, MD / ACCESSWIRE / June 22, 2019 / Following the 2008 financial crisis, the recession spelled the end of the business line for countless small enterprises and decimated the profitability of others. With their credit lines depleted and income battered, many existing companies struggled to remain afloat, let alone expand, while businesses planning to grow often found themselves impeded by the reluctance of banks and credit unions to resume lending after the crisis. In many cases, companies surviving the recession have faced the threat of withering away in the recovery due to the lack of new credit, veteran financial industry executive Jim Plack points out. However, he notes further that small enterprises can still realize their dreams of growth since they have access to quality alternative sources of capital in the shape of non-traditional lending institutions. Historically, the ability of small businesses to secure growth funding has largely depended on local community banks lending them money. Data released by the US Federal Deposit Insurance Corporation at the height of the financial crisis revealed that small and mid-sized lenders (defined as those with assets of up to $10 billion) controlled just 22% of all bank assets but accounted for 54% of small business lending. Meanwhile, the 20 largest banking institutions in the country held 57% of all assets, but their share of total small business lending was 28%, with a mere 18% of their commercial loan portfolios allocated to this segment versus 56% for small banks and 33% for mid-sized lenders. According to Jim Plack , one solution for business owners is to start building relationships with non-traditional credit providers such as specialty lenders or factoring companies that extend loans based on outstanding receivables or invoices. Jim Plack is quick to note that one has to be realistic: a battered enterprise will not be able to dictate terms. Initially, it may have to settle for higher-cost credit facilities, but once it has a proven track record, it can re-establish its overall creditworthiness. A company owner needs to reach out to a specialty lender and start with a small accounts receivable line or a heavily collateralized loan, graduating over time to more traditional, less costly funding. Another alternative is to use strong guarantors when taking out credit. It is also essential to keep business and personal credit histories separate to minimize the effect that negative events for one might have on the other. Jim Plack also advises small companies to open a business credit file with all three reporting agencies (Experian, Equifax, and TransUnion) and obtain at least one corporate credit card which is not personally linked to the business owner(s). It is also prudent to establish a relationship with minimum five vendors to create credit that the company can use when purchasing from them. Last but not least, timely payments are critical for avoiding a negative impact on the business credit even before the organization can transition to better rates. Story continues Jim Plack assumed the leadership role at South River Capital in 2016 after two decades of serving in CEO roles for both Sports Capital Lending and American Bank. Plack brings his extensive industry expertise to a company focused on niche real estate loans, bridge financing, and credit for professional athletes and small to medium sized businesses. Jim Plack - CEO of South River Capital: http://jimplacknews.com Jim Plack On Benefits of Specialized Advice in Business Investment Situations: https://finance.yahoo.com/news/jim-plack-stresses-importance-specialized-214000514.html Jim Plack Stresses the Importance of Specialized Advice in Business Investment Situations: https://finance.yahoo.com/news/jim-plack-stresses-importance-specialized-214000514.html Contact Information: JimPlackNews.com jim@southrivercapital.com http://jimplacknews.com SOURCE: Jim Plack View source version on accesswire.com: https://www.accesswire.com/549426/Jim-Plack-Advises-on-Options-in-Alternative-Lending-for-Small-Business-Owners |
Centra Tech co-founders may claim advice of counsel defense in ongoing criminal case
Disclaimer: These summaries are provided for educational purposes only byNelson RosarioandStephen Palley. They are not legal advice. These are our opinions only, aren’t authorized by any past, present or future client or employer. Also we might change our minds. We contain multitudes.
As always, Rosario summaries are “NMR” and Palley summaries are “SDP".
[related id=1] United States v. Sohrab Sharma et al., Case №18-cr-340-LGS (S.D.N.Y. filed June 14, 2019)[NMR]
We’ve got a real wacky Centra Tech related update. For those that need a refresher, Centra Tech was the ICO out of Florida that had celebrity endorsements from none other than DJ Khaled and Floyd Mayweather. The idea behind Centra Tech was to use the ICO proceeds to build a crypto-backed debit card, and, well, that allegedly didn’t really happen, and now the two co-founders have been indicted for securities fraud and other related offenses.
This most recent filing in this criminal case is a motion to compel filed by the U.S. Attorney’s office handling the case. In particular, the U.S. Attorney is asking the judge to force the two defendants to “disclose whether they intend to assert any defense based on alleged advice of counsel to any of the crimes charged in the Indictment, and if so, to produce all discovery relating to such a defense.”
What is an “advice of counsel” defense? You can probably guess at the gist. It’s the argument you make that you were relying upon advice that your attorney gave you, and as such you shouldn’t be held accountable for your alleged criminal activity. Generally, there are a couple of catches to the defense. You have to give the attorney in question all the material facts related to your question, and you have to rely on said advice in good faith. If you don’t do those things than you can’t later claim “legal cleared it!” Additionally, as the prosecution in this case argues to the judge in their motion, if you are going to assert this defense you are probably going to have to give up communications with the attorney that would normally be covered by attorney-client privilege, because how else can a determination be made as to whether you were justified in relying on that advice?
That brings us to our Centra Tech co-founders. The SEC began an investigation of the duo in Q4 of 2017, at the same time as the criminal investigation. Discovery commenced in 2018, and has continued into 2019. During the discovery process multiple contacts to an attorney in New York, and a purported attorney in New York were discovered.
At multiple times in the discovery process the defendants said they relied on the advice of the attorney, and the purported attorney. Who is the attorney in question? Turns out it was an attorney who had been disciplined by the NY state bar a month before providing the alleged above to the founders. As for the purported attorney, that is where things get nutty. The purported attorney is allegedly a former college student who gained prominence as a student organizer promoting the 2016 Trump campaign. Allegedly, as the individual in question has a co-pending criminal prosecution, the student in question attempted to parlay their success in politics into a fake law career at a fake law firm as a fake lawyer. If I pitched that in Hollywood I’d be thrown out on my you know what.
The U.S. attorney’s office seeing this happening during discovering made multiple requests of the defendants for all relevant documents and communications between the defendants and the attorney and fake attorney. Those requests were not fulfilled, because the defendants claimed they were still going through the relevant documents. Now, not wanting to be caught off guard at trial, the U.S. attorney’s office is asking the judge to force the defendants to disclose if they plan to assert the defense and disclose anything relevant to the potentially asserted defense.
There is a lot going on here. If the defendants plan to assert the advice of counsel defense it’s hard to see how the judge doesn’t grant discovery. Assuming the defendants do wish to assert the defense and end up having to produce the alleged communications at issue, that will be some interesting reading.
The Block is pleased to bring you expert cryptocurrency legal analysis courtesy of Stephen Palley (@stephendpalley) and Nelson M. Rosario (@nelsonmrosario). They summarize three cryptocurrency-related cases on a weekly basis and have given The Block permission to republish their commentary and analysis in full. Part II of this week's analysis, Crypto Caselaw Minute, is above. |
Can You Imagine How Magenta Therapeutics's (NASDAQ:MGTA) Shareholders Feel About The 12% Share Price Increase?
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It hasn't been the best quarter forMagenta Therapeutics, Inc.(NASDAQ:MGTA) shareholders, since the share price has fallen 13% in that time. But that doesn't change the fact that the returns over the last year have been pleasing. After all, the share price is up a market-beating 12% in that time.
View our latest analysis for Magenta Therapeutics
Magenta Therapeutics didn't have any revenue in the last year, so it's fair to say it doesn't yet have a proven product (or at least not one people are paying for). As a result, we think it's unlikely shareholders are paying much attention to current revenue, but rather speculating on growth in the years to come. For example, they may be hoping that Magenta Therapeutics comes up with a great new product, before it runs out of money.
Companies that lack both meaningful revenue and profits are usually considered high risk. There is usually a significant chance that they will need more money for business development, putting them at the mercy of capital markets. So the share price itself impacts the value of the shares (as it determines the cost of capital). While some companies like this go on to deliver on their plan, making good money for shareholders, many end in painful losses and eventual de-listing.
When it last reported its balance sheet in March 2019, Magenta Therapeutics had cash in excess of all liabilities of US$114m. While that's nothing to panic about, there is some possibility the company will raise more capital, especially if profits are not imminent. With the share price up 12% in the last year, the market is seems hopeful about the potential, despite the cash burn. You can see in the image below, how Magenta Therapeutics's cash levels have changed over time (click to see the values).
In reality it's hard to have much certainty when valuing a business that has neither revenue or profit. However you can take a look at whether insiders have been buying up shares. If they are buying a significant amount of shares, that's certainly a good thing. You canclick here to see if there are insiders buying.
It's nice to see that Magenta Therapeutics shareholders have gained 12% over the last year. We regret to report that the share price is down 13% over ninety days. Shorter term share price moves often don't signify much about the business itself. Investors who like to make money usually check up on insider purchases, such as the price paid, and total amount bought.You can find out about the insider purchases of Magenta Therapeutics by clicking this link.
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 US 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. |
Jeremy Clarkson and co recreate classic album cover on streets of Cambodia
LONDON, ENGLAND - JANUARY 15: Richard Hammond, Jeremy Clarkson and James May attend a screening of 'The Grand Tour' season 3 held at The Brewery on January 15, 2019 in London, England. (Photo by Stuart C. Wilson/Getty Images) Theres always been something a little rocknroll about the original Top Gear crew and now Jeremy Clarkson, Richard Hammond and James May are releasing their inner rocker once more, by paying homage to one of the greatest bands of all The Beatles. It looks like Clarkson and co are in Cambodia filming the new series of The Grand Tour. While in the town of Siem Reap they posed for a picture with the infamous Pub Street sign in the background. The photo is highly reminiscent of The Beatles cover for their iconic Abbey Road album. View this post on Instagram A post shared by Jeremy Clarkson (@jeremyclarkson1) on Jun 22, 2019 at 2:03am PDT It looks like the trio are off filming the fourth season of the show, which said goodbye to its studio audience at the end of the third series. Other destinations on their next round of adventures include Thailand, Laos, Myanmar, Vietnam, Malaysia, and Singapore. Read more: Jeremy Clarkson emotional as he says goodbye to The Grand Tour studio audience They are not the first and they will not be the last to emulate George, Paul, Ringo and Johns slow walk across the pedestrian crossing. The site has become a London tourist attraction. In fact, back in 2014, fans gathered to play music and take pictures to commemorate the taking of the original photograph. A man holds a copy of the Beatles album "Abbey Road" as the cast of the musical "Let It Be" prepare to perform near famous Abbey Road zebra crossing in London, England on August 8, 2014, the 45th anniversary of the day that the iconic Beatles album cover photograph was taken. LEON NEAL/AFP/Getty Images But there is something about Clarkson, Hammond and Mays stance that suggests it might not just be the classic Abbey Road cover that the men are paying homage to. Their outstretched arms are very reminiscent of Genesis dance routine in the 1999 hit I Cant Dance . The original Top Gear team have history with Genesis. Clarkson used the bands music repeatedly to torture Hammond during a trip through India. Read more: The Grand Tour Presenter Richard Hammond Goes Big! for Discovery Clarkson is also a big fan of the band and has previously revealed that the first CD he plays in any new car is Selling England by the Pound, Genesis 1973 studio album. |
Get Ready for More Hulu Originals
Hulu has a growing slate of originals, but now that it's under full control ofDisney(NYSE: DIS), subscribers and investors can expect the number of original productions to grow even faster.
"Investment in original programming will increase significantly," Hulu CEO Randy Freer said in an interview withCNBC. "We are going to be able to invest more and invest more upstream and find the best stories and the best creators to make shows for the company,"
Freer is trying to paint the picture that Hulu now has the luxury of investing in original content supported by Disney's great trove of intellectual property and deep bench of production assets. In fact, Hulu finds itself in a position similar to whereNetflix(NASDAQ: NFLX)was about four or five years ago, when it started ramping up its own original productions.
Image source: Hulu.
Hulu's ownership structure has quickly changed following Disney's acquisition of Fox.AT&T(NYSE: T)sold back its 9.5% stake in the streaming company it acquired with Time Warner, and Disneyinked a dealto buy outComcast's(NASDAQ: CMCSA)30% share of the company in 2024.
Disney now has full operational control over the company, but its incentives no longer align with AT&T's or Comcast's. Both companies license a lot of content for both Hulu's on-demand and live TV products. As part of their deals to sell their stakes, both agreed to ongoing licensing agreements. AT&T's WarnerMedia agreement is undisclosed, but Comcast only has to license most of its content to Hulu for the next three years before it has the option to pull it off the service.
Importantly, both WarnerMedia and Comcast plan to launch their own streaming services, which will compete head-to-head to Hulu. It's very likely the companies will retain as much content as their contracts allow to attract users to their respective services.
As a result, owning a slate of original series that subscribers love will become extremely important for Hulu in the relatively near future.
Netflix currently finds itself in the same situation as Hulu will in about three years or so. It was once an important partner to media companies, providing a high-margin source of revenue in the form of licensing agreements. But as Disney, WarnerMedia, and Comcast prepare to launch their own streaming services, Netflix has seen the content available to license dwindle. What is available has becomeextremely expensive.
Netflix saw the writing on the wall relatively early that these big media companies with valuable brands and content could easily take the Netflix model and use it themselves. That's why it started investing in original content -- content for which it has exclusive and irrevocable streaming rights.
Over time, originals have become a bigger and bigger piece of Netflix's content budget. Today, about85% of Netflix's incremental content spendinggoes toward originals.
While Netflix certainly produces some duds, or some content that only appeals to a small niche of viewers, it's by and large hada lot of successwith its original series. Netflix originals are a key reason the company has been able to successfully increase its prices over the past few years and still grow its subscriber base. People will sign up or stay subscribed just for its originals.
Hulu now finds itself in a very good position to copy that exact strategy, as it will probably see a lot of valuable content leave the service in a few years. If it can leverage the creative resources of the combined Disney-Fox to create more original content subscribers love, it should be able to easily meet Disney's goal of 40 million to 60 million subscribers by 2024.
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Adam Levyhas no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Netflix and Walt Disney. The Motley Fool recommends Comcast. The Motley Fool has adisclosure policy. |
Here's How Much Salary the Average Worker Saves for Retirement
How much should you be saving for retirement? It's a question most people can't answer, with more than 80% of Americans reporting they don't know how much money they'll need to last through retirement, a survey fromBank of America Merrill Lynchand Age Wave found.
The truth is there's no easy answer for what you should be saving each month or how much you should be saving by retirement age. There are dozens of factors to consider, such as how many years you expect to spend in retirement, whattype of lifestyle you want to live, whether you have any other sources of retirement income, etc.
Image source: Getty Images
That said, saving a certain percentage of your salary can be a good benchmark to get a general sense of whether you're on track with your saving. Experts generally recommend setting aside around 10% to 15% of your salary for retirement, so if you're only saving 2% to 3% of your income, that probably won't be enough to retire comfortably.
So how much is the average worker saving for retirement? Between personal contributions and any additional contributions from an employer, the average worker is contributing around 10% of his or her salary to a 401(k), according to a study from Vanguard.
That might sound like most employees are on track with their retirement savings, but it's not as clear-cut as it may seem. Although saving 10% of your salary is a good general goal, you may need to save more depending on a few factors.
Saving 10% to 15% of your salary is a good rule of thumb, but it assumes you've been saving consistently throughout your entire career starting at an early age. In reality, though, most people haven't been saving thousands of dollars every year since their early 20s.
If you've gotten off to a late start, you'll need to jump-start your savings to make up for lost time. Exactly how much you need to increase your saving rate, though, depends on your age.
By beginning to save at age 25, you should aim to save 10% to 17% of your salary every year to retire by age 65, a study from the Stanford Center on Longevity found. If you were to wait until age 35 to start saving, though, you'd need to save around 15% to 20% of your salary. Wait until you're 45 years old, and you'd have to stash away roughly 25% to 27% of your income to retire by 65.
So if you're late to the game and postpone saving until your 30s or 40s, saving just 10% of your salary likely won't cut it. The 10% rule of thumb also assumes that your salary is increasing as you get older, and therefore you're consistently saving more as you earn more money. So if you receive a pay cut or take a few years off working, you may need to save more than 10% of your income to make up for it.
Saving a set percentage of your salary is an easy way to ensure you're saving a consistent amount, and it also helps you increase your savings over time as your income increases. But instead of saving a percentage of your income every paycheck and hoping it's enough to retire on, it's a good idea to calculate what you expect to need in retirement and then work backward to see what you'd need to save to reach that goal.
There are a few different ways you candetermine your retirement number, or the amount you should have saved by the time you retire. One method is to use the Rule of 25, which says you can multiply the amount you expect to need each year in retirement by 25 to calculate what you should save by retirement age. So if you expect to need, say, $50,000 to live comfortably in retirement, multiply that by 25 to determine a retirement number of $1.25 million.
If you knowwhat you'll likely be receiving in Social Security benefits, you can add those to the equation, too. So if you think you'll need $50,000 per year but $20,000 of that will come from Social Security, only $30,000 will need to come from your personal savings. Multiply $30,000 by 25 to see that your updated retirement number is $750,000.
This calculation is fairly rudimentary, but it's a good way to get a ballpark goal in mind. You can also use aretirement calculatorfor a more precise answer, but because most calculators use slightly different inputs to come up with an answer, you'll likely see a range of results. There's no "correct" answer for how much you should be saving, so when in doubt, save more than you think you'll need.
Once you have an idea of what you'll need to save to reach your goal, you can determine what percentage of your salary that is. So if, for instance, you learn you should be saving $500 per month, and you're earning $50,000 per year, that comes out to around 12% of your salary.
Also, don't forget aboutemployer matching contributions. If your 401(k) plan offers them, they count toward your total savings. So if you aim to 12% of your income but your employer will match your savings up to 3% of your salary, you really only need to save 9% of your salary on your own.
Planning for retirement can sound complicated, and it's true that there's no easy answer for what you should be saving. But once you have a retirement number in mind and know what percentage of your salary you should be setting aside to reach it, you're already well on your way to achieving your goal.
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Katie Brockmanhas 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. |
Here's Why This REIT Could Be the Best Cannabis Stock You've Never Heard Of
Over the past 12 months, the amount of search traffic driven byInnovative Industrial Properties(NYSE: IIPR)barely registered when compared to large cannabis producers likeAurora Cannabis(NYSE: ACB). You might be surprised to learn that over the same period, IIP's stock price has soared 252% because it has something all the popular cannabis companies don't: rising profits.
If you're surprised to see shares of a dull landlord business outperforming marijuana stocks that receive heaps more attention, there are a few things about this real estate investment trust (REIT) that you should know.
Image source: Getty Images.
In the U.S., cannabis cultivators and processors have a hard time finding banks willing to deposit the piles of cash their businesses generate. That's because, at the moment, serving customers engaged in federally illegal activity means risking their license to operate in the country, which would equal a death sentence for nearly any financial institution.
At the beginning of 2017, IIP owned just one property, but banking restrictions have brought a steady stream of cannabis cultivators right to IIP's doorstep. As of May 7, 2019, the REIT owned 19 properties -- and they're all occupied by state-licensed medical marijuana cultivators that have signed long-term leases.
Nearly all the cannabis industry giants, Aurora Cannabis included, have been issuing new shares of their stock to continue growing at any cost. For example, Aurora has increased its outstanding share count by a whopping 176% over the past two years, which means it needs to earn that much more in order to provide the same return investors were expecting when they bought the stock.
Assuming IIP's customers continue paying the rent for 15 straight years, this company can look forward to a steadily rising bottom line. Once you adjust for annual rent increases and management fees, IIP's yield on capital invested in its first 19 properties will work out to around 14.8%.
During the first three months of 2019, IIP collected $6.6 million in rent, which was 146% more than a year earlier. Since tenants are responsible for maintenance and other variable costs, a great deal of that money flows to the bottom line. In the first quarter, adjusted funds from operations (FFO) reached $5.3 million.
Image source: Getty Images.
As a REIT, IIP doesn't have to pay any corporate taxes as long as it distributes at least 90% of earnings directly to its shareholders in the form of dividends.
Thanks to surging rental revenue, IIP's quarterly dividend payment is growing by leaps and bounds. Recently, IIP declared a second-quarter dividend that was 33% higher than the first-quarter payout and 140% higher than a year earlier.
At $0.60 per share, IIP's dividend offers a meager 1.9% yield that could grow significantly. The current payout exceeds FFO generated in the first quarter by $0.05 per share, but adjusted FFO during the first quarter rose 275% compared with the previous year.
In the second quarter, IIP acquired and entered long-term leases with tenants in California and Pennsylvania. With rent checks from new tenants that signed leases in April added to the company's reliable revenue stream, the company should have no problem meeting its latest obligation, and committing to further increases.
Since businesses keep paying the rent until they're done circling the drain, REIT profits can keep growing through temporary bouts of trouble. Unfortunately, one of IIP's larger tenants has a problem that's been developing for an entire decade.
Recently, IIP expanded its investment in Green Peak Innovations (GPI), Michigan's largest purveyor of licensed cannabis, by $18 million, to $31 million. Sadly for GPI, inside Michigan's busiest provisioning centers "licensed cannabis" is a four-letter word because it's generally more expensive, and of much lower quality than what they're used to.
Image source: Getty Images.
Ever since Michigan's medical marijuana program began in 2008, patients have been able to buy their medicine from caregivers, and there aren't many hoops to jump through to earn a caregiver license. As a result, there are thousands of small operations growing their products in basements, garages, and pole barns that they already own instead of spending eight-figure sums on giant greenhouses that produce mediocre cannabis.
Provisioning centers in Michigan tend to carry licensed cannabis, but they don't sell very much. That's because they haven't stopped selling products produced by basic caregivers who don't have any overhead. As a result, GPI is sitting on a ton of ready-for-sale product that it can't sell at a profit.
GPI thinks it can produce a steady profit if given a chance to sell mass-produced cannabis at a price of around $45 for an eighth of an ounce, or 3.5 grams. Different dispensaries take different markups, but those with the best ratings on Weedmaps charge between $25 and $40 for the same amount of carefully curated cannabis that mass-produced marijuana can't compete with at any price.
Most states with new medical marijuana programs have erected huge barriers that will keep big companies from competing with the cottage industry that they're surrounded by. Of course, strict regulations aren't very effective if rarely enforced. In California, licensed dispensaries that play by all the rules at great expense are currentlygetting squeezedby unlicensed storefronts and delivery services that local authorities have little motivation to shut down.
While IIP has what it takes to deliver huge gains, it's probably best to wait and see if tenants in Michigan and California are still able to pay their bills a year from now.
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Cory Renauerhas no position in any of the stocks mentioned. The Motley Fool recommends Innovative Industrial Properties. The Motley Fool has adisclosure policy. |
3 Stocks That Could Double Your Money
Doubling your money isn't as difficult as it might seem. You just need the right stocks and enough time. I'm not talking about 50 years. There are plenty of stocks with the potential to at least double in five years or less.
Three stocks that I think could double your money in a relatively short time frame areGuardant Health(NASDAQ: GH),The Trade Desk(NASDAQ: TTD), andVertex Pharmaceuticals(NASDAQ: VRTX). Here's why I'm especially optimistic about the prospects for these three stocks.
Image source: Getty Images.
I don't own Guardant Health yet, but it'sat the top of my list for buying next. The stock began trading in October 2018 and is already up more than 170%. My view is that there's still plenty of room to run for Guardant Health.
The company is a pioneer in developing liquid biopsies to detect cancer. You don't have to understand all of the complicated science behind Guardant Health's technology to know that there's a huge potential for its products. Currently, many types of cancer can't be detected until tumors have grown large enough to cause health issues. Liquid biopsy offers the ability to detect cancer at very early stages by finding tiny fragments of DNA that have broken away from tumors and sometimes fully intact tumor cells that have split off from the tumor.
Guardant Health already has two liquid biopsy products on the market. One helps physicians match cancer patients with the best treatment for the type of cancer that they have. Another helps drugmakers screen patients in clinical trials to make sure they're a good fit for specific therapies. The company estimates that the total market for its current liquid biopsies in the U.S. alone is close to $39 billion.
Even after its big run, Guardant Health's market cap stands at around $8.4 billion. Investors are clearly betting that the company will generate tremendous growth. I think that's a pretty good bet and think that this stock could double and perhaps a lot more over the next few years.
I was a little late to the party with The Trade Desk. But I bought shares earlier this year and haven't regretted it one bit. The stock has more than doubled so far in 2019 and is up over 700% in the last three years.
The Trade Desk bills its core product as "the future of advertising." That's not just spin, in my opinion. The company provides a platform that ad buyers use to purchase and manage digital advertising campaigns. In the past, buyers negotiated contracts for advertising in a process that could take weeks to wrap up. The Trade Desk enables immediate placements of targets ads across the entire spectrum of digital outlets, including social media platforms and websites.
Perhaps the greatest growth opportunity for The Trade Desk isconnected TV (CTV)-- TV connected to the internet, like streaming services. Sure, some streaming services are subscription-only with no advertising. But with so many streaming services now available and on the way, it seems highly likely that companies will offer ad-supported versions to hold down costs for subscribers.
The Trade Desk sports a market cap of nearly $11 billion with the stock trading at around 68 times expected earnings. That might seem like such an inflated price that there's nowhere to go but down. But with Wall Street analysts projecting the company will grow its earnings by 29% annually, I think this high-flying stock could double investors' money relatively quickly.
My view is that Vertex Pharmaceuticals isthe best biotech stock on the marketright now. Although Vertex hasn't delivered awe-inspiring gains so far in 2019, the stock as more than doubled over the last three years. And I predict great things ahead for the company.
Vertex already claims a virtual monopoly in treating the underlying cause of genetic disease cystic fibrosis (CF). Its three approved CF drugs are currently used by less than half of the patients that could be treated by the therapies. Vertex thinks that it can pick up additional indications for younger patients to push its growth prospects up another 50% or so.
But Vertex will soon file for approval of a triple-drug combo for treating CF that could add a lot more to its addressable market. The biotech is also developing drugs to treat several other diseases outside of CF and recently acquired Exonics Therapeutics to expand even further into other rare genetic diseases.
Vertex's forward earnings multiple of 29 might look a little pricey. However, the company could easily grow earnings by 45% annually over the next five years. I think Vertex's chances of at least doubling investors' money during that period appear to be very good.
There's one downside to these three stocks that investors should know about. All three definitely have the potential for high growth, but they also could experience high volatility.
It's possible that Guardant Health, The Trade Desk, and Vertex will see big price swings both up and down over short periods. But I wouldn't worry if the stocks go down for a while. Give them a few years and I suspect you'll be happy you held on to what, in my opinion, are high-probability winners.
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Keith Speightsowns shares of The Trade Desk and Vertex Pharmaceuticals. The Motley Fool owns shares of and recommends Guardant Health and The Trade Desk. The Motley Fool recommends Vertex Pharmaceuticals. The Motley Fool has adisclosure policy. |
The Self-Employed Worker's Guide to Social Security
Self-employed workers face some unique financial challenges, including extra hoops to jump through at tax time and no employer to match their retirement fund contributions. The rules surrounding Social Security are also a little different for these workers, and it's crucial that you understand them so you don't accidentally cost yourself benefits. Here's a look at how being self-employed impacts how much you pay into Social Security and how much you get out.
Every worker pays some Social Security tax, but for most people, the 12.4% tax is split evenly between employee and employer. The same goes with the 2.9% Medicare tax. But when you're self-employed, you're both employee and employer, so you have to pay the full amount. Because you don't have regular paychecks the government can withhold money from, you need to set aside this money on your own in a savings account and pay it as part of your quarterlyestimated taxes.
Image source: Getty Images.
The good news is, you get to write off half of what you pay in Social Security and Medicare taxes, which reduces the amount of income tax you owe. So if you earned $50,000 this year and 15.3%, or $7,650, was for Social Security and Medicare, you could write off half of this -- $3,825 -- so you'd only pay income tax on the remaining $46,175. You could reduce this amount further with additional deductions and possibly move yourself into a lower income tax bracket.
Social Security qualification requirements are the same for self-employed and traditional workers. You must earn 40 credits. You receive one credit for every $1,360 you earn in 2019 with a maximum of four credits per year. This means you must work 10 years in order to qualify, though these 10 years do not have to be consecutive. The dollar amount required to earn one credit may change from year to year.
Your Social Security benefit is based on your average monthly income during your 35 highest-earning years, adjusted for inflation. If you haven't worked for 35 years, your calculation will include zeros that bring down your average. The Social Security Administration (SSA) keeps track of your annual earnings, and you can view them by creating amy Social Security account. For traditional workers, the income listed on your W-2 is the amount that the SSA records, but it's more complicated for the self-employed.
Independent workers can claimtax deductionsfor things like office supplies, business travel, a home office, or any other work-related expense. All of these reduce your taxable income this year, saving you money in income taxes. But the catch is that the SSA looks at your taxable income for the year when calculating your Social Security benefits. So by taking advantage of the tax breaks today, you could be reducing the amount of Social Security benefits you're entitled to in the future.
This raises the question of whether it's smarter to take the tax deductions now or skip them and potentially increase your Social Security checks later. There isn't a clear-cut answer, but in most cases, you're probably better off taking the deductions this year. It's difficult to predict how much more you'll actually get from Social Security by reporting a higher taxable income this year, especially with thefuture of Social Securityso uncertain right now. You're probably better off taking the sure money-saving bet with the tax deductions than gambling on a possible future benefit with Social Security.
Claiming Social Security benefits works the same way for all workers. You become eligible at 62, but you won't receive your full scheduled benefit per check unless you wait until yourfull retirement age-- 66 or 67, depending on your birth year. If you start early, you'll receive a reduced amount per check to account for the extra months you're receiving benefits. Starting at 62 will get you 70% or 75% of your scheduled benefit per check, depending on your full retirement age. You can also delay benefits past your full retirement age, and your checks will increase until you reach the maximum benefit at 70. This is 124% or 132% of your scheduled benefit per check.
There isn't an easy answer to when you should begin claiming Social Security. If you don't expect to live long, starting earlier will probably get you more benefits, but if you believe you'll live into your mid-80s or 90s, delaying benefits can get you larger checks that will cover more of your living expenses in retirement. Ultimately, it's up to you to decide when you want to start taking benefits. Think about how long you expect your retirement to last andwhich agewill give you the most benefits overall. You can estimate your benefits at 62, full retirement age, and 70 in your my Social Security account.
Social Security is there for traditional and self-employed workers alike, but self-employed workers have to face some extra hurdles. By understanding the differences in how Social Security is taxed and how benefits are calculated, you can avoid running into any issues at tax time or when you file for Social Security benefits.
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Canopy Growth may have just made its most ambitious claim yet — can it deliver?
Answering questions on Canopy Growth’s (CGC) earnings calla day after the company reported disappointing results sending shares tumbling 8%, CEO Bruce Linton shared one particularly eye-catching goal for the world’s largest cannabis company.
In response to a question about what results investors should expect in the first year of Canopy Growth’s CBD push, Linton answered, “We think with what we're doing we should end up with a leading market share.” The response shouldn’t come as a surprise, given Canopy Growth’s growing investment in cultivating hemp across multiple U.S. states with the plan of offering CBD products, but Linton set the bar very high for what that effort could amount to since the company is doing zero in CBD sales now.
Months followingthe passing of the farm bill, which made hemp and CBD legal on a federal levelin the U.S., multiple companies have jumped on the opportunity to capitalize on the touted health benefits of the non-psychoactive cannabis compound to quickly grow sales. Some of those leading companies, like Boulder, Colorado-based CW Hemp and Las Vegas-based CV Sciences have maintained their leading market share despite newer entrants. Combined, the two companies control more than 20% of total CBD sales, according to data from cannabis research firm Brightfield Group.
Undeterred, Linton explained how Canopy Growth is well positioned to bull compete CBD companies aside bymassively investing in supply chainand quality control.
“Our platform is designed so that if a big box or a large [convenience] store wants to actually have something that’s going to stay in stock, be certain to be true in terms of its branding, efficacy and its dosage, then we’re the choice,” he told Yahoo Finance. “What we looked at when we sat down with the big players [was] what success would look like if you’re running a big chain. Success looks like a diversified set of SKUs that would be maintained in stock and actually have research to produce the outcome you want.”
Meanwhile, some CBD-focused companies have already landed contracts with big retailers. CV Sciences, for example, revealed itsleading line of CBD products would be sold through limited Kroger branded stores. Curaleaf (CURLF), a cannabis company that also sells marijuana products, announced it notched a deal in March to sell CBD products through more than 800 CVS locations.
So, if competitors are already on big box retailers’ shelves, Canopy Growth will have to differentiate itself and its products at least in some way to deliver on Linton’s ambitious promise of taking top CBD market share within the next year. Part of that process is already underway with Canopy Growth paying more than $50 million for British cosmetics company This Works with plans to add CBD to certain lotions and sleep products. The company also partnered with Martha Stewart to develop CBD-infused lines of animal products, foods and cosmetics. Either effort could be enough to differentiate Canopy Growth in a crowded field, according to Brightfield Group Managing Director Bethany Gomez.
“Coming in out of nowhere and being able to hit a leading market share is definitely ambitious,” Gomez told Yahoo Finance. “Strong brand positioning, celebrity endorsements, things like that will benefit them, certainly … There’s very weak consumer brand awareness in the market right now, so it is possible.”
Along the same line, getting on the shelf at a large retailer is not the final inning. Provided Canopy Growth can ink similar deals with big box stores, provide a better price point or have fewer supply issues could be enough to yank shelf space from competitors.
The fact that Canopy Growth is licensed to cultivate CBD from hemp at scale in seven states across the country could be an added secret weapon that could help the company compete, especially if regulatory changes spook retailers into working exclusively with larger, individually state-licensed operators.
“My position is I think the big guys are on the sidelines until a competent large company can deliver to them the certainty they want,” Linton said. “What we’re doing is we’re state licensing — I’m not sure most are. And we’re trying to follow the federally intended rules and we’re doing it at scale where we can actually confirm the source origin and controls on CBD.”
In the end, to reach the level of the established CBD companies, Canopy Growth will need to ramp sales quickly from zero to more than $50 million a year. In 2018, CW Hemp posted $69.5 million in total annual revenue as the mark to beat.
Considering there continues to be a reordering of market share for the players in the CBD industry, Gomez said there’s a good chance Linton can deliver on his promise.
“In this industry I think anything’s possible,” she said.
Zack Guzman is the host ofYFi PMas well as a senior writer and on-air reporter covering entrepreneurship, startups, and breaking news at Yahoo Finance. Follow him on Twitter@zGuz.
Read the latest financial and business news from Yahoo Finance
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Alcohol-Free Bars Caught on in the U.S. and U.K. But Can They Go Global?
In the United States, there’s the salad bar. In Italy, you take your espresso at the bar. In Japan, standing sushi bars are popular destinations. Cafés and restaurants—institutions at the core of human interaction—take divergent shapes within different cultures.
A bar provides patrons with a universally accepted environment: Walk in, sit down, and order an item from the menu—food or drink—that almost always tastes the same, no matter where you are. So what exactly is a bar, and what makes it a constant, reliable experience in each corner of the world?
Purveyors of a new trend that has recently enveloped London and New York—and seems to be making a mark in other major cities—believe that the bar’s magnetism goes beyond the chemical addictiveness involved in drinking cocktails. These aspiring trendsetters argue that the bar’s atmosphere is what renders it a timeless and successful institution—especially in the age of social media.
“[The trend] is a logical extension of the current wellness revolution,” says Ruby Warrington, the author ofSober Curious, a book exploring the culture of the nondrinking masses with the goal of normalizing it. Warrington argues that attitude changes in America—our new focus on meditation and yoga, healthy food, and generally mindful practices—have evolved into an awareness of the detrimental effects that alcohol can have on the body. Are countries that pride themselves on a healthy relationship with alcohol, then, not ideal breeding grounds for liquor-free establishments? Are these new bars replicable concepts outside the likes of New York and London, cities renowned for excessive drinking? Is the fad here to stay?
According to Sam Thonis and Regina Dellea, co-owners of the new alcohol-freeGetaway barin Brooklyn’s Greenpoint neighborhood, the appeal of their venture goes beyond theneedto stay sober. “We have the same comforts that a bar would,” says Thonis. “The lighting, the music, the layout. It’s just a place where everyone is on the same boat, and you don’t really have to explain yourself.”
When asked whether a traditional drinking den with amocktailmenu would tackle the same need, Dellea points out that “there is a difference between having a drink that was designed to have alcohol in it and removing [it], and then a drink that was designed without the intention of having alcohol.”
Lorelei Bandrovschi, the mastermind behind Listen Bar, a monthly alcohol-free pop-up bar whose first iteration landed in New York in October 2018, echoes Dellea’s sentiments: “I don’t think it’s about whatever percent of alcohol is in your Coors Light when you’re going to a bar. If the crowd is right, the music is right, the vibe is right, it’s been a revelation [to people, saying] ‘Wow, it reallyisa bar.’”
All three business owners stress the importance of well-prepared cocktails—with or without liquor in them—hence their investments in relatively expensive fresh ingredients, a cost that replaces pricey liquor licenses.
Working with a variety of award-winning bartenders and mixologists,Listen Barproposes a menu specifically designed to be prepared sans liquor yet still boasting the complexity and creativity usually reserved for high-end cocktail bar offerings. “Nondrinkers have been made to feel like the odd ones out,” Bandrovschi says. “We are here to say that [they] deserve their own space and to be the star of the show. Making great alcohol-free drinks is actually much more complex than making decent cocktails.”
According to Bandrovschi, the people that flock to Listen Bar’s monthly residency atVonin New York are not exclusively sober. “Only a third of our guests define themselves as nondrinkers,” she says. “Two-thirds of people who come are either occasional drinkers or regular drinkers.” Following a successful first round of crowdfunding, Bandrovschi plans to open a brick-and-mortar shop. She believes that what attracts people to her concept is the idea of being able to go out without “taxing the body” the next day.
We circle back to the viability of the concept: Are alcohol-free bars only practical options in cities of excess, where folks can’t control their drinking unless surrounded by liquor-free facilities?
It is interesting to note that both New York establishments were born out of an avoidance of excess: Listen Bar is the result of a dare that required Bandrovschi not to drink for a month, whereas Thonis began thinking of Getaway while hearing about his sober brother’s discomfort when visiting traditional imbibing spots.
A look at the recent uptick in liquor-free, distilled spirits that are being produced and shipped all across the world may actually point to the fact that this is, indeed, a global trend that’s here to stay. Sure, it might have first sprouted across cities with an unusually high number of alcoholics, but it surely speaks to the sober, pregnant, and not-in-the-mood-for-a-drink-tonight people of the world who still want to go out and enjoy human company without having to order a meal, go to a museum, or sit through a movie.
Blended and bottled in England,Seedlip, for example, is the first-ever distilled nonalcoholic spirit. It comes in three different flavors and is served in 100 Michelin-starred restaurants across 15 different international cities with plans to expand further.Heineken 0.0, the brand’s alcohol-free beer, first launched in Barcelona and then rolled out in the U.S. in time for “dry January” with a $50 million investment.Athletic Brewing Companyproduces nonalcoholic craft beers that even appeal toOlympians seeking recovery drinks.
The worldwide market for nonalcoholic beer is projected to double to about $25 billion by 2024, according to market research firmGlobal Market Insights. And Heineken’sown researchsays that nearly 30% of 21- to 25-year-olds haven’t had a beer in the past month, a stat inferring the need and demand for liquor-free options that still remind consumers of alcohol.
When queried about the longevity of their business model and its potential for replicability outside the likes of New York and London, the owners of Getaway and Listen Bar exude positivity. “We had some people here from Abu Dhabi the other night,” recalls Thonis. “They were saying that there are lots of bars [there] but nothing like this, where they are doing interesting cocktails with no alcohol. They were enthusiastic about it and thought it would be a great idea in Abu Dhabi.”
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Ripple CEO sounds off on Bitcoin, Libra and blockchain balderdash
Bitcoin and XRP are not competitors, Ripple CEO Brad Garlinghouse said in a Fortune interview this week . The former is a store of value or “digital gold,” while XRP is a “bridge currency” that enables an efficient solution for fiat-to-fiat transfers, he argued. “I own Bitcoin, I’m long Bitcoin. I think Bitcoin is a store of value and people hold it.” Garlinghouse went on to state that there will not be one single cryptocurrency to “rule them all”. And he also noted that there is “a lot of bullshit in the blockchain and crypto market.” By way of example, he flagged up a recent CNBC article entitled ‘Facebook Launches Cryptocurrency’. Facebook has done nothing of the sort, Garlinghouse pointed out. Rather the social media giant has announced plans to do so in a year from now. Be afraid, Ripple, be very afraid Ripple should be losing sleep over Facebook’s Libra currency as it will do away with the need for hundreds of altcoins, including XRP, according to crypto analyst Max Keiser. In a tweet dated 7th June, he said: “The altcoin apocalypse is nigh. This will drive Bitcoin higher as BTC competes with gold, not fiat”. Crypto payments ventures could also be wiped out, he added. The $FB global stable coin… FaceCoin obviates need for hundreds of alt-cons including XRP. The alt-coin apocalypse is nigh. This will drive Bitcoin higher, as BTC competes with Gold, not fiat. (Also, crypto ‘payments’ companies likely to wiped out). https://t.co/w38jmtn7RN — Max Keiser, tweet poet. (@maxkeiser) June 7, 2019 The post Ripple CEO sounds off on Bitcoin, Libra and blockchain balderdash appeared first on Coin Rivet . |
As More Products Are Made for Single People, a Waste Conundrum Emerges
Living aloneis increasingly common. In 2018, 28% of U.S. households were home to just one person, according to the Census Bureau. That’s more than double the proportion of single-person residences in 1960, when the nuclear family peaked.
For several years now, businesses in the real estate, home improvement, and jewelry sectors have been marketing to this growing solo demo. Enter the consumer packaged-goods industry.
Procter & Gamble’s Charmin brand, for example, is capitalizing on this paradigm shift with its newly marketed long-lasting Forever Roll of toilet paper—available in 8.7- or 12-inch diameter. The idea is to free up storage space, a concept that caters to single dwellers because they’re especially concentrated in dense urban areas.
Other products for singles aim to minimize food waste. Bread brand Arnold now sells 10-slice Simply Small loaves for consumers who can’t bear to throw away moldy slices—or freeze bread for later use. Other examples: Jimmy Dean Simple Scrambles breakfast cups and Betty Crocker Mug Treats microwaveable desserts for one.
A common thread here is the idea that millennials exhibit “a lack of wanting to commit to anything in general,” says Mintel senior trend analyst Diana Kelter. “Maybe they don’t know whether they’re going to go out to eat or end up cooking.” They aren’t tied down to what’s on their calendars, or in their cabinets and closets. See also: retailers offering clothing rentals and beauty brands embracing trial sizes.
One problem: Packaging waste from individually wrapped products quickly mounts. Now brands face a new challenge: how to bundle essentials in a way that’s good for pocketbooks, the planet, and spontaneous schedules.
A version of this article appears in the July 2019 issue of Fortune with the headline “Small Loaves and Forever Rolls.”
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ICE Raids: This Is How Immigration Authorities Make Arrests
Immigrant advocates and sympathizers are warning about arrests around the country as early as Sunday.
The anticipated sweep is expected to be similar to operations that authorities have regularly done since 2003. They often produce hundreds of arrests.
This one is different because President Donald Trump announced Monday on Twitter that it would be the start of an effort to deport millions of people in the country illegally, a near-impossibility given limited resources of U.S. Immigration and Customs Enforcement, which makes the arrests and carries out deportation orders.
It’s also slightly unusual to target families — as opposed to immigrants with criminal histories — but not unprecedented. The Obama and Trump administrations have targeted families in previous operations.
Here are some questions and answers about how ICE operates:
Immigration and Customs Enforcement is in charge of arresting and deporting immigrants who lack legal status.
One common method of finding and arresting people who are known to be in the country illegally is agreements between ICE and local jails around the country to hold people arrested on crimes past their release date so that ICE can look into their status. These are known as “detainers,” but they’ve become increasingly unpopular among local governments, many who say they risk legal action and that they shouldn’t be doing the work of federal authorities.
The agency also arrests people the old-fashioned way, by tracking people down and showing up at their homes or workplaces.
But the amount of resources and staff limit their ability to make multiple large-scale arrests at a time.
Last fiscal year, ICE’s Enforcement and Removal Operations unit arrested over 158,500 immigrants in the country illegally, an 11% increase over the prior year and the highest number since 2014. The agency says 66% of those arrested are convicted criminals.
Last month, ICE officers arrested 900 people during a three-week sting in California.
The agency announced last week that it arrested 140 people, including 45 in Illinois, during a sting in the Midwest that lasted five days.
Although ICE arrests people a variety of ways, it’s the larger enforcement operations such as a workplace sting that draw the most attention.
In Texas, ICE’S Homeland Security Investigations unit, which enforces immigration laws at workplaces, arrested 280 employees at a company in Allen, Texas, in April, saying it was their biggest worksite operation in a decade.
“I think what people forget is these operations go on on a regular basis,” said Art Acevedo, the police chief in Houston, one of the cities believed to be targeted in an upcoming sweep.
Authorities typically have a list of people they are targeting in any operation. They visit a targeted person’s known addresses, usually a home or workplace, and seek to detain that person. They may ask family members, neighbors, co-workers, or managers about the whereabouts of the person they want to arrest.
Authorities typically obtain an administrative warrant giving them permission to detain a person for violating immigration law.
ICE agents can arrest people they discover to be in the U.S. illegally while searching for people on their target list. People who answer ICE agents’ questions about someone else sometimes end up arrested themselves. In one case in Houston last year, a young father of five was arrested in the parking lot of his apartment building after ICE agents asked him about people who lived nearby, then demanded his identification and eventually detained him.
These “collateral” arrests can comprise a large portion of the arrests in any operation. In one December 2017 operation in northern Kentucky, just five of the 22 arrests ICE made were of people it originally targeted, according to agency documents released under the Freedom of Information Act.
The Washington Post and Miami Herald reported that 10 cities are expected to be targeted in raids starting Sunday. The Herald reported those cities are Atlanta, Baltimore, Chicago, Denver, Houston, Los Angeles, Miami, New Orleans, New York, and San Francisco.
ICE officials said this week that they had sent about 2,000 letters in February to people in “family units” who had already received final orders to leave the country. The people who received those letters may be the targets of the enforcement operation.
Acevedo, the Houston chief, said ICE officials this week declined to provide him with any information about the expected weekend operation besides saying they had ongoing enforcement operations. He criticized President Donald Trump’s tweets Monday saying that agents would begin removing “millions of illegal aliens.”
“It instills fear,” Acevedo said. “We rely on the cooperation of that population to keep all Americans safe, all residents safe, and all members of society safe. … When you say you’re going to go arrest millions of people, that has a chilling effect on the cooperation.”
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Get up to speed on your morning commute withFortune’sCEO Dailynewsletter. |
AP FACT CHECK: The silent partner in Trump's boasts
WASHINGTON (AP) President Donald Trump has a silent partner behind several of the accomplishments he likes to boast about: Barack Obama. Despite assailing his Democratic predecessor for waging a "cruel and heartless war on American energy," for example, Trump can brag about U.S. energy supremacy thanks to the sector's growth in the Obama years. And the Obama-Trump decade is soon to yield an economic record if things stay on track a little longer the most sustained expansion in U.S. history. Though Trump claims all the credit, the expansion started in Obama's first year, continued through his presidency and has been maintained under Trump. There are no fist bumps in the offing, however. The past week saw the kickoff of Trump's 2020 campaign with a rally in Florida. That and other events provided Trump a platform that he used to exaggerate what he's done, take some factually challenged swipes at Obama and Democrats at large, and make promises that will be hard to keep. A sampling: MIGRANTS TRUMP, on separating children from adults at the Mexican border: "When I became president, President Obama had a separation policy. I didn't have it. He had it. I brought the families together. I'm the one that brought 'em together. Now, I said something when I did that. I'm the one that put people together. ... They separated. I put 'em together.' interview with Telemundo broadcast Thursday. JOSE DIAZ-BALART, interviewer: "You did not." THE FACTS: Trump is not telling the truth. The separation of thousands of migrant children from their parents resulted from his "zero tolerance" policy. Obama had no such policy. After a public uproar and under a court order, Trump ceased the separations. Zero tolerance meant that U.S. authorities would criminally prosecute all adults caught crossing into the U.S. illegally. Doing so meant detention for adults and the removal of their children while their parents were in custody. During the Obama administration, such family separations were the exception. They became the practice under Trump's policy, which he suspended a year ago. Story continues Before Trump's zero-tolerance policy, migrant families caught illegally entering the U.S. were usually referred for civil deportation proceedings, not requiring separation, unless they were known to have a criminal record. Then and now, immigration officials may take a child from a parent in certain cases, such as serious criminal charges against a parent, concerns over the health and welfare of a child or medical concerns. ___ TRUMP on detention centers at the border: "President Obama is the one that built those prison cells." Telemundo interview. THE FACTS: He has a point. Whether they are called prison cells or something else, Obama held children in temporary, ill-equipped facilities and built a large center in McAllen, Texas, that is used now. Democrats routinely and inaccurately blame Trump for creating "cages" for children. They are actually referring to chain-link fencing inside the McAllen center Obama's creation. Conditions for detained migrants deteriorated sharply during a surge of Central American arrivals under Trump, particularly in El Paso, Texas. ___ TRADE TRUMP: "This will be the largest trade deal ever made, and it won't even be close. If you take a look at the numbers, second is so far away, you don't even call it second. So it's very exciting. And very exciting for Mexico; very exciting for Canada." remarks Thursday with Canadian Prime Minister Justin Trudeau. THE FACTS: That's wrong, simply by virtue of the number of trade partners involved. The proposed new agreement, replacing the North American Free Trade agreement, covers the same three countries. The Trans-Pacific Partnership, negotiated by the Obama administration, included the three NAFTA partners United States, Canada and Mexico plus Japan and eight other Pacific Rim countries. Trump withdrew the United States from the pact on his third day in office. Even the Pacific deal pales in comparison with one that did go into effect with the U.S. on board, the Uruguay Round. Concluded in 1994, the round of negotiations created the World Trade Organization and was signed by 123 countries. The Federal Reserve Bank of Boston said the WTO's initial membership accounted for more than 90 percent of global economic output. ___ TRUMP on his tariffs: "We are taking in billions and billions of dollars into our treasury. ... We have never taken 10 cents from China." rally Tuesday in Orlando, Florida. THE FACTS: It's false to say the U.S. never collected a dime in tariffs on Chinese goods before he took action. They are simply higher in some cases than they were before. It's also wrong to suggest that the tariffs are being paid by China. 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. ___ IRAN TRUMP: "President Obama made a desperate and terrible deal with Iran - Gave them 150 Billion Dollars plus I.8 Billion Dollars in CASH! Iran was in big trouble and he bailed them out. Gave them a free path to Nuclear Weapons, and SOON. Instead of saying thank you, Iran yelled ... Death to America. I terminated deal." tweet Friday. TRUMP, on his accomplishments: "And then terminating one of the worst deals ever made, the Iran deal that was made by President Obama paid $150 billion. Paid $1.8 billion in cash. I terminated that and Iran is a much different country." Fox News interview Wednesday. THE FACTS: There was no $150 billion payout from the U.S. treasury. The money he refers to represents Iranian assets held abroad that were frozen until the international deal was reached and Tehran was allowed to access its funds. The payout of about $1.8 billion is a separate matter. That dates to the 1970s, when Iran paid the U.S. $400 million for military equipment that was never delivered because the government was overthrown and diplomatic relations ruptured. That left people, businesses and governments in each country indebted to partners in the other, and these complex claims took decades to sort out in tribunals and arbitration. For its part, Iran paid settlements of more than $2.5 billion to U.S. citizens and businesses. The day after the nuclear deal was implemented, the U.S. and Iran announced they had settled the claim over the 1970s military equipment order, with the U.S. agreeing to pay the $400 million principal along with about $1.3 billion in interest. The $400 million was paid in cash and flown to Tehran on a cargo plane, which gave rise to Trump's dramatic accounts of money stuffed in barrels or boxes and delivered in the dead of night. The arrangement provided for the interest to be paid later, not crammed into containers. ___ ENERGY TRUMP: "We've ended the last administration's cruel and heartless war on American energy. What they were doing to our energy should never be forgotten. The United States is now the No. 1 producer of oil and natural gas anywhere in the world." Orlando rally. TRUMP: "We're now No. 1 in the world in energy." Fox News interview Wednesday. THE FACTS: As he's done many times before, Trump is crediting himself with things that happened under Obama. Here's what the government's U.S. Energy Information Administration says: "The United States has been the world's top producer of natural gas since 2009, when U.S. natural gas production surpassed that of Russia, and the world's top producer of petroleum hydrocarbons since 2013, when U.S. production exceeded Saudi Arabia's." ___ JOBS TRUMP: "Almost 160 million people are working. That's more than ever before." Orlando rally. THE FACTS: True but that's a tribute to Americans making babies and immigrants coming to the country. Population growth, in other words. Other than during recessions, employment growth has been trending upward since 1939, when the Labor Department started counting. The phenomenon is not a marker of leadership; it has spanned successful and failed presidents. More on point, the annual rate of job growth has been within the same range since roughly 2011. It was 1.6% through May. Another measure is the proportion of Americans with jobs, and that is still below record highs. The Labor Department says 60.6 percent of people in the U.S. 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." Orlando rally. THE FACTS: No, the jobless rate for women of 3.1% in April was the lowest in 66 years, not 74, and it ticked up in May to 3.2%. ___ ECONOMY TRUMP: "It's soaring to incredible new heights. Perhaps the greatest economy we've had in the history of our country." Orlando rally. THE FACTS: The economy is not one of the best in the country's history. It 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. The economy grew 2.9% in 2018 the same pace it reached in 2015 under Obama and simply hasn't hit historically high growth rates. Trump has legitimate claim to a good economy but when it comes to records, there's one he will have to share with Obama. The economy is on track to achieve its longest expansion ever, in July. Much of that decade-long growth came during Obama's presidency, an achievement that Trump so far has largely sustained. Other than in its durability, the economy is far from the finest in history. __ THE WALL TRUMP: "We'll have over 400 miles built by the end of next year." Fox News interview Wednesday. TRUMP: "We're going to have over 400 miles of wall built by the end of next year. It's moving very rapidly." Orlando rally. 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. ___ TAXES TRUMP: "We've done so much ... with the biggest tax cut in history." Orlando rally. 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 Obama's renewal of them a decade later. ___ ENVIRONMENT TRUMP: "Our water and our air today is cleaner than it ever was. ... Our air it's the best it ever was." Fox News interview Wednesday. TRUMP: "Our air and water are the cleanest they've ever been by far." Orlando rally. 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 stalled. 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. ___ JUDGES TRUMP on the confirmation of federal judges: "President Obama was very nice to us. He didn't fill the positions." Orlando rally. 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 about 120 of Trump's picks despite their slim majority. That's about 35 more than Obama had confirmed at this point in his presidency. ___ HEALTH CARE TRUMP: "We will always protect patients with pre-existing conditions. Always." Orlando rally. THE FACTS: His administration's actions say otherwise. It is pressing in court for full repeal of Obama's health law, which requires insurers to take all applicants, regardless of medical history, and charge the same standard premiums to healthy people and those who had medical problems before or when they signed up. 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. ___ ABORTION TRUMP: "Leading Democrats have even opposed measures to prevent the execution of children after birth." Orlando rally. 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. ___ VETERANS TRUMP: "We passed VA Choice. ...They've been trying to get that passed also for about 44 years." Orlando rally. 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. ___ RUSSIA INVESTIGATION TRUMP: "I'm the most transparent president in history. I let Mueller have everything they wanted." Fox News interview Wednesday. THE FACTS: It's highly questionable to say Trump was fully cooperative in the Russia investigation. Trump declined to sit for an interview with Robert Mueller's team, gave written answers that investigators described as "inadequate" and "incomplete," said more than 30 times that he could not remember something he was asked about in writing, and according to the report tried to get aides to fire the special counsel or otherwise shut or limit the inquiry. In the end, the Mueller report found no criminal conspiracy between the Trump campaign and Russia but left open the question of whether Trump obstructed justice. According to the report, Mueller's team declined to make a prosecutorial judgment on whether to charge partly because of a Justice Department legal opinion that said sitting presidents shouldn't be indicted. The report instead factually laid out instances in which Trump might have obstructed justice, specifically leaving it open for Congress to take up the matter. ___ Associated Press writers Josh Boak, Christopher Rugaber, Matthew Daly, Seth Borenstein, Ricardo Alonso-Zaldivar and Colleen Long in Washington and Elliot Spagat in San Diego contributed to this report. ___ Find AP Fact Check http://apne.ws/2kbx8bd Follow @APFactCheck on Twitter: https://twitter.com/APFactCheck |
What Are Analysts Expecting From The Kroger Co. (NYSE:KR) In Next 12 Months?
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Based on The Kroger Co.'s (NYSE:KR) recently announced earnings update on 25 May 2019, analyst consensus outlook seem bearish, with profits predicted to drop by 0.2% next year against the past 5-year average growth rate of 13%. Presently, with latest-twelve-month earnings at US$3.1b, we should see this fall to US$3.1b by 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Kroger in the longer term. Investors wanting to learn more about other aspects of the company shouldresearch its fundamentals here.
View our latest analysis for Kroger
The longer term expectations from the 24 analysts of KR is tilted towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To get an idea of the overall earnings growth trend for KR, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
From the current net income level of US$3.1b and the final forecast of US$3.3b by 2022, the annual rate of growth for KR’s earnings is 4.1%. However, if we exclude extraordinary items from net income, we see that earnings is projected to fall over time, resulting in an EPS of $2.75 in the final year of forecast compared to the current $3.8 EPS today. However, the expansion of the current 2.5% margin is not expected to be sustained, as it begins to contract to 2.5% by the end of 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Kroger, there are three key factors you should look at:
1. Financial Health: Does it have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Valuation: What is Kroger 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 Kroger is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of Kroger? Exploreour interactive list of stocks with large growth 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. |
Nicki Minaj brands Miley Cyrus a "chicken" for siding with Cardi B in ongoing feud
Nicki Minaj in the Press Room during the 2018 MTV Europe Music Awards at Bilbao Exhibition Centre in Bilbao, Spain. (Photo by DPPA/Sipa USA) Nicki Minaj has thrown down the gauntlet to Miley Cyrus calling her a “Perdue chicken”. The Bang Bang rapper hit out at Cyrus on a new episode of her Queen Radio show, for disrespecting her. Minaj, 36, said: “Perdue chickens can never talk s**t about queens... “She disrespected me in a magazine article for no reason.” Read more: Nicki Minaj pulls out of BET concert after network's tweet Perdue is a US brand of organic chicken. Miley Cyrus attends The Metropolitan Museum of Art's Costume Institute benefit gala in New York. (Photo by Evan Agostini/Invision/AP) Minaj continued her jibes, claiming Cyrus’s Black Mirror character Ashley O is copying her. She said: “Now you coming out with pink wigs, all you b***hes wanna be Nicki.” Minaj’s anger was sparked by Cyrus apparently siding with her longtime enemy Cardi B in her new song Cattitude with the line: “I love you Nicki but I listen to Cardi.” Cyrus, 26, denied she was taking sides in a recent interview, saying: “Anytime you want to feel powerful and strong, that's my go-to, Cardi and Nicki.” Minaj and Cardi B, 26, have been embroiled in a public feud since 2017, which came to a head at a New York Fashion Week party last year when they were reported to have had a physical catfight. Cardi B performs at the Bonnaroo Music and Arts Festival on Sunday, June 16, 2019, in Manchester, Tenn. (Photo by Amy Harris/Invision/AP) Minaj and Cyrus first clashed in 2015 when Cyrus sided with Taylor Swift over their Twitter spat regarding the MTV VMA nominations. Cyrus said: “What I read sounded very Nicki Minaj, which, if you know Nicki Minaj is not too kind.” Read more: Miley Cyrus Pokes Fun at Liam Hemsworth Breakup Rumors on 10-Year Anniversary Accepting Best Hip-Hop Video at the MTV VMA's, Minaj hit back: “Back to this b***h that had a lot to say about me the other day in the press. Miley, what’s good?” Cyrus has not yet addressed Minaj’s latest comments. |
Is EnerSys's (NYSE:ENS) CEO Overpaid Relative To Its Peers?
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Dave Shaffer became the CEO of EnerSys (NYSE:ENS) in 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. 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.
See our latest analysis for EnerSys
According to our data, EnerSys has a market capitalization of US$2.8b, and pays its CEO total annual compensation worth US$5.2m. (This figure is for the year to March 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$850k. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO total compensation of that group was US$5.2m.
So Dave Shaffer 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 a visual representation of the CEO compensation at EnerSys, below.
EnerSys has increased its earnings per share (EPS) by an average of 4.8% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 8.8%.
I would argue that the improvement in revenue isn't particularly impressive, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. You might want to checkthis free visual report onanalyst forecastsfor future earnings.
EnerSys has served shareholders reasonably well, with a total return of 14% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
Remuneration for Dave Shaffer is close enough to the median pay for a CEO of a similar sized company .
The company isn't showing particularly great growth, and shareholder turns haven't been particularly inspiring in the last few years. While there is room for improvement, we haven't seen evidence to suggest the pay is too generous. Whatever your view on compensation, you might want tocheck if insiders are buying or selling EnerSys shares (free trial).
If you want to buy a stock that is better than EnerSys, 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. |
Bitcoin Price Hits $11K Less Than 24 Hours After Breaking $10K Mark
June 22 — bitcoin (BTC) has crossed the $11,000 line for the first time since March last year today, according toCoin360. The leading cryptocurrency hadsurgedpast the $10,000 mark less than 24 hours ago.
Market visualization courtesy ofCoin360
Bitcoin is currently already approaching $11,100, up a notable almost 13 percent in the past 24 hours to press time. Meanwhile, major alts have also surged, with ETH seeing a multi-month high over $300.
Bitcoin 7-day price chart. Source:Coin360
Yesterday, on June 21, professional trader Peter Brandttweetedthat bitcoin’s price is currently taking aim at $100,000 target.
In his tweet, Brandt noted that bitcoin is on its fourth parabolic growth phase and is a market like no other:
“Bitcoin takes aim at $100,000 target. $btcusd is experiencing its fourth parabolic phase dating back to 2010. No other market in my 45 years of trading has gone parabolic on a log chart in this manner. Bitcoin is a market like no other.”
Attached to the tweet, Brandt also published a table containing data about the price growth of bitcoin. According to the data contained in the image, from October 2011 to December 2017, bitcoin increased its value 9,765-fold.
Among the responses to the post there are numerous scam attempts, publicizing fake BTC and ETH giveaways from Brandt. At leastoneof the scams is promoted through verified Twitter profiles.
In late May, the co-founder ofblockchaininvestmentfirm Keneticpredictedthat the price of bitcoin will rally as high as $30,000 by the end of this year.
Earlier this month, the founder and CEO of Digital Currency Grouparguedthat it “looks like, perhaps, we are coming out of a crypto winter and we’ve entered a crypto spring,” in an interview with Bloomberg.
However, in an interview with Cointelegraph the same week, another industry commentator — ex-Wall Streetexecutive and current blockchain researcherTone Vaysexpressedskepticism about the fact that crypto winter is over.
Earlier this week,cybersecurityfirmKaspersky Labreleasedthe results of a survey showing that 19% of people globally have purchased cryptocurrency.
• Key Bitcoin Price Indicator Suggests $21,000 ‘Fair Value’ By End Of 2019
• Fundstrat’s Tom Lee: Bitcoin Is Easily Going to Reach New Highs
• CEO of Major American VC Firm Digital Currency Group: Crypto Winter Is Ending
• Former Wall Street Exec Tone Vays: There Is No Evidence That the Crypto Winter Is Now Over |
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