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EnerSys's (NYSE:ENS) Earnings Grew 34%, Did It Beat Long-Term Trend?
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Understanding how EnerSys (NYSE:ENS) is performing as a company requires looking at more than just a years' earnings. Today I will run you through a basic sense check to gain perspective on how EnerSys is doing by comparing its latest earnings with its long-term trend as well as the performance of its electrical industry peers.
Check out our latest analysis for EnerSys
ENS's trailing twelve-month earnings (from 31 March 2019) of US$160m has jumped 34% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -3.6%, indicating the rate at which ENS is growing has accelerated. What's the driver of this growth? Let's see if it is solely owing to industry tailwinds, or if EnerSys has seen some company-specific growth.
In terms of returns from investment, EnerSys has fallen short of achieving a 20% return on equity (ROE), recording 12% instead. Furthermore, its return on assets (ROA) of 6.1% is below the US Electrical industry of 7.8%, indicating EnerSys's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for EnerSys’s debt level, has declined over the past 3 years from 15% to 11%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 26% to 81% over the past 5 years.
While past data is useful, it doesn’t tell the whole story. While EnerSys has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I recommend you continue to research EnerSys to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for ENS’s future growth? Take a look at ourfree research report of analyst consensusfor ENS’s outlook.
2. Financial Health: Are ENS’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. |
What Kind Of Share Price Volatility Should You Expect For Jubilee Gold Exploration Ltd. (CVE:JUB)?
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Anyone researching Jubilee Gold Exploration Ltd. (CVE:JUB) might want to consider the historical volatility of the share price. Modern finance theory considers volatility to be a measure of risk, and there are two main types of price volatility. The first type is company specific volatility. Investors use diversification across uncorrelated stocks to reduce this kind of price volatility across the portfolio. The 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 Jubilee Gold Exploration
Given that it has a beta of 1.22, we can surmise that the Jubilee Gold Exploration share price has been fairly sensitive to market volatility (over the last 5 years). Based on this history, investors should be aware that Jubilee Gold Exploration are likely to rise strongly in times of greed, but sell off in times of fear. 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 Jubilee Gold Exploration's revenue and earnings in the image below.
With a market capitalisation of CA$5.0m, Jubilee Gold Exploration is a very small company by global standards. It is quite likely to be unknown to most investors. It has a relatively high beta, suggesting it is fairly actively traded for a company of its size. Because it takes less capital to move the share price of a small company like this, when a stock this size is actively traded it is quite often more sensitive to market volatility than similar large companies.
Since Jubilee Gold Exploration tends to moves up when the market is going up, and down when it's going down, potential investors may wish to reflect on the overall market, when considering the stock. In order to fully understand whether JUB is a good investment for you, we also need to consider important company-specific fundamentals such as Jubilee Gold Exploration’s financial health and performance track record. I highly recommend you dive deeper by considering the following:
1. Financial Health: Are JUB’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.
2. Past Track Record: Has JUB 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 JUB's historicalsfor more clarity.
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. |
US Traders Beware: IRS Prepares Notices after Identifying Crypto Tax Evaders
ByCCN Markets: U.S. citizens who have failed to report their income from crypto transactions or underreported such income now have every reason to worry.
According toBloomberg, the Internal Revenue Service has identified a couple of taxpayers who underreported their earnings from crypto income or completely failed to report such earnings. Taxpayers who have been identified can now expect to receive notices in the near future.
The tax body employed itsdocument matching program– a tool used on a mass scale to detect unreported or underreported income – to identify these individuals.
Additionally, the IRS is starting to undertake audits of taxpayers who hold crypto assets. Per the IRS commissioner for the Small Business/Self-Employed Division, Mary Beth Murphy, the tax body’s exam teams are now focusing on cryptocurrency-owning taxpayers:
Read the full story on CCN.com. |
Is Kelso Technologies Inc.'s (TSE:KLS) 17% 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). By way of learning-by-doing, we'll look at ROE to gain a better understanding of Kelso Technologies Inc. (TSE:KLS).
Kelso Technologies has a ROE of 17%, based on the last twelve months. Another way to think of that is that for every CA$1 worth of equity in the company, it was able to earn CA$0.17.
See our latest analysis for Kelso Technologies
Theformula for ROEis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for Kelso Technologies:
17% = US$1.6m ÷ US$9.3m (Based on the trailing twelve months to March 2019.)
Most know that net profit is the total earnings after all expenses, but the concept of shareholders' equity is a little more complicated. It is all the money paid into the company from shareholders, plus any earnings retained. 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. That means that the higher the ROE, the more profitable the company is. So, all else equal,investors should like a high ROE. That means ROE can be used to compare two businesses.
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. Pleasingly, Kelso Technologies has a superior ROE than the average (9.0%) company in the Machinery 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 case of the first and second options, the ROE will reflect this use of cash, for growth. In the latter case, the debt required for growth will boost returns, but will not impact the shareholders' equity. Thus the use of debt can improve ROE, albeit along with extra risk in the case of stormy weather, metaphorically speaking.
Kelso Technologies is free of net debt, which is a positive for shareholders. Its solid ROE indicates a good business, especially when you consider it is not using leverage. After all, when a company has a strong balance sheet, it can often find ways to invest in growth, even if it takes some time.
Return on equity is one way we can compare the business quality of different companies. In my book the highest quality companies have high return on equity, despite low debt. 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. Check the past profit growth by Kelso Technologies by looking at thisvisualization of past earnings, revenue and cash flow.
But note:Kelso Technologies 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. |
Is Liberty SiriusXM Group a Buy?
Liberty SiriusXM Group(NASDAQ: LSXMA)(NASDAQ: LSXMB)(NASDAQ: LSXMK)is a tracking stock that representsLiberty Media Corp-Liberty Formula One's(NASDAQ: FWONA)(NASDAQ: FWONK)ownership of SiriusXM. Liberty Media is, of course, the investment vehicle of famed media investor John Malone, who has delivered market-smashing returns throughout his career making deals in the cable industry during the 1980s and 1990s, and now through Liberty Media.
As of April 22, Liberty SiriusXM owned 68.6% of SiriusXM. The main reason to consider buying Liberty SiriusXM over investing in SiriusXM stock directly is that the market is significantly undervaluing Liberty's ownership of the satellite radio company.
Image source: Getty Images.
Investors who like thegrowth prospects of SiriusXMcould indirectly buy the stock at a substantial discount by buying the tracking stock. Liberty SiriusXM's ownership of SiriusXM is worth about $18 billion, but the market value (total shares outstanding times the stock price) of Liberty's tracking stock is currently at $11.8 billion -- a 34% discount to the value of Liberty's holding in the satellite radio company.
Liberty SiriusXM is the right stock for investors who not only like SiriusXM, but also like the investment strategy of betting on the jockey (in this case, John Malone).
But there are two reasons not to buy Liberty SiriusXM. First, Liberty has no access to SiriusXM's cash. The controlling interest in the company requires Liberty to include SiriusXM's operating results in its financial reporting, but Liberty is just along for the ride as a passive investor.
Second, tracking stocks have a history of trading for discounts to the underlying stock. The discount between Liberty SiriusXM's market value and its stake in SiriusXM has been getting wider over time. It was as low as 10.6% three years ago but gradually increased to over 30% by 2018, where it still sits.
The widening discount means that the performance of the tracking stock has not kept up with the performance of the stock it's supposed to track. Over the last three years, Liberty SiriusXM has returned 23% compared to 47% for SiriusXM -- a significant underperformance. That performance gap might be enough of a reason for investors to take a pass on the tracking stock and buy shares of SiriusXM instead.
Even with the downsides of owning a tracking stock discussed above, there are a few reasons why Liberty SiriusXM might be a buy at these levels.
The most important reason to own Liberty SiriusXM is John Malone. Since 2006, Liberty Media has acquired and spun off its various interests in media companies, including DIRECTV (now owned byAT&T) and SiriusXM. The combined compound annual return of owning Liberty Media and all of its spinoffs and tracking stocks is 24% from May 2006 through Oct. 2018. That's an incredible record compared to the 6% annual return from theS&P 500index and speaks to theinvesting prowess of John Malone.
Another reason to consider buying Liberty SiriusXM is that Liberty Media sometimes uses its tracking stocks as currency to make other deals, and by owning shares of one, you can hitch your wagon to one of the best dealmakers in the business.
Also, it's important to note that Liberty Media isn't helpless if one of its tracking stocks trades at a discount to the value of its holding. Liberty Media has been actively repurchasing shares of Liberty SiriusXM to help alleviate the discount. But ultimately, it's up to investors to see the value and bid up the share price to narrow the discount, and that's not a guarantee.
Those are the pros and cons of buying Liberty SiriusXM. If it were trading at a smaller discount to SiriusXM, I would say forget the tracking stock and buy SiriusXM directly. But at a 34% discount, and with Liberty Media's track record of generating phenomenal returns for its shareholders, I think Liberty SiriusXM is worth considering at these levels.
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John Ballardhas 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. |
Is Now The Time To Put Mechel PAO (NYSE:MTL) On Your Watchlist?
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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. And in their study titledWho Falls Prey to the Wolf of Wall Street?'Leuz et. al. found that it is 'quite common' for investors to lose money by buying into 'pump and dump' schemes.
So if you're like me, you might be more interested in profitable, growing companies, likeMechel PAO(NYSE:MTL). Now, I'm not saying that the stock is necessarily undervalued today; but I can't shake an appreciation for the profitability of the business itself. Loss-making companies are always racing against time to reach financial sustainability, but time is often a friend of the profitable company, especially if it is growing.
Check out our latest analysis for Mechel PAO
Even modest earnings per share growth (EPS) can create meaningful value, when it is sustained reliably from year to year. So EPS growth can certainly encourage an investor to take note of a stock. Like the last firework on New Year's Eve accelerating into the sky, Mechel PAO's EPS shot from RUруб54.81 to RUруб99.32, over the last year. You don't see 81% year-on-year growth like that, very often.
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 Mechel PAO did well to grow revenue over the last year, EBIT margins were dampened at the same time. So if EBIT margins can stabilize, this top-line growth should pay off for shareholders.
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 profitability drives the upside, prudent investors alwayscheck the balance sheet, too.
I like company leaders to have some skin in the game, so to speak, because it increases alignment of incentives between the people running the business, and its true owners. As a result, I'm encouraged by the fact that insiders own Mechel PAO shares worth a considerable sum. Indeed, they have a glittering mountain of wealth invested in it, currently valued at RUруб123m. Coming in at 26% of the business, that holding gives insiders a lot of influence, and plenty of reason to generate value for shareholders. Very encouraging.
Mechel PAO's earnings per share growth has been so hot recently that thinking about it is making me blush. 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 yes, on this short analysis I do think it's worth considering Mechel PAO for a spot on your watchlist. Another important measure of business quality not discussed here, is return on equity (ROE).Click on this linkto see how Mechel PAO shapes up to industry peers, when it comes to ROE.
Although Mechel PAO 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. |
Is PACCAR a Buy?
If you ever want to know the difference between a long- and short-term investment perspective, just open up a conversation about trucking stocks. The earnings of stocks like truck makersPACCARare highly volatile as they depend on the cyclicality of truck sales and production, and short-term investors will constantly fret about the near-term trends in truck sales data. A long-term investor, however, will understand the cyclicality and focus on the underlying development of the business. Let's take a look at what you need to know from both perspectives before deciding to buy PACCAR stock.
As you can see in the following chart, U.S. heavy-truck sales are highly cyclical and so investing in the industry can be very tricky. Furthermore, inthe topsy-turvy world of cyclical investing, it often happens that valuations are at the highest when truck sales are bottoming and at their lowest just as truck sales are peaking.
The trucking industry is highly cyclical. Image source: Getty Images.
This is because investors are pricing in the dramatic improvement in earnings when the cycle turns upwards (they bid up the stock in anticipation) and sell off the stock when earnings are about to decline in line with falling truck sales. Truck engine makerCummins --a supplier to PACCAR andNavistar --is included in order to demonstrate industry fundamentals
PCAR EV to EBITDA (TTM). Data byYCharts.
In this sense, it becomes very important to play a kind of guessing game over when truck sales hit a peak or a trough and every subtle adjustment in guidance is followed. Thus, the fact that all three trucking companies above have raised their forecast for industry sales and production through 2019 is a large part of the reason why the stocks are up around 22% (Cummins and PACCAR) and 32% (Navistar) so far this year.
Class 8 trucks are defined by the Department of Transport as heavy duty single-trailer trucks with three or four axles.
[{"Company": "PACCAR(NASDAQ: PCAR)", "Definition": "Class 8 industry sales (thousands of units)", "2018 Actual": "285", "Original 2019 Guidance": "285-315", "Current 2019 Guidance": "295-315"}, {"Company": "Cummins(NYSE: CMI)", "Definition": "Class 8 group 2 production (thousands)", "2018 Actual": "286", "Original 2019 Guidance": "292", "Current 2019 Guidance": "300"}, {"Company": "Navistar(NYSE: NAV)", "Definition": "Class 8 production (thousands)", "2018 Actual": "277", "Original 2019 Guidance": "265-295", "Current 2019 Guidance": "290-310"}]
Data source: Company presentations.
That said, a peak will surely come and most investors have focused on the outlook for industrial production in the U.S. and internationally. With most market commentators expecting U.S. economic growth and industrial production growth to slow in the next couple of years, it's likely that truck sales/production will fall at some point.
As we've seen above, short-term investors might want to anticipate the peak and then bail out, and that's their prerogative, but what about the long view over a stock like PACCAR?
One way to do this would be to normalize PACCAR's growth rate on its long-term trend line -- this helps to avoid pricing the stock in during the peak or trough periods of sales, after which you might apply the average margin during the last cycle in order to calculate what the underlying trend-line sales and earnings actually are.
PCAR EV to EBIT (TTM). Data byYCharts.
Based on previous calculations, the long-term revenue growth rate is 3.3% per annum -- this looks reasonable when compared with nominal US GDP growth in the last decade. Projecting forward and using the last trough in 2013 as a base means that trend line sales for PACCAR in 2019 are around $20.8 billion -- compare this with the market forecast for $23.6 billion and remember that we are not using this figure as it probably represents a peak.
Applying the 11% earnings before interest and taxes (EBIT) margin to the $20.8 billion figure gives a trend-line EBIT of $2.29 billion. With the current enterprise value (market cap plus net debt) at around $30.5 billion, it implies a theoretical EV/EBIT multiple of around 13.3 times.
Putting all this together, the theoretical EV/EBIT multiple of 13.3 times -- recall that is an attempt to normalize its earnings across the cycle -- implies that PACCAR is a good value. The way to think about the 13.3 times multiple is that it's the valuation with the cyclical highs and lows stripped out of it. In other words, it's comparable to what a consumer staple or a defensive healthcare stock -- whose earnings are far less cyclical -- might trade at.
Given that some of those companies trade at high teens EV/EBIT multiples right now then PACCAR looks good value for investors who want to take a long-view and also believe in the future of the trucking industry.
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Lee Samahahas no position in any of the stocks mentioned. The Motley Fool owns shares of Paccar. The Motley Fool recommends Cummins. The Motley Fool has adisclosure policy. |
Do Institutions Own Boxlight Corporation (NASDAQ:BOXL) Shares?
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The big shareholder groups in Boxlight Corporation (NASDAQ:BOXL) have power over the company. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.'
Boxlight is not a large company by global standards. It has a market capitalization of US$30m, which means it wouldn't have the attention of many institutional investors. Our analysis of the ownership of the company, below, shows that institutional investors have not yet purchased much of the company. We can zoom in on the different ownership groups, to learn more about BOXL.
See our latest analysis for Boxlight
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
Since institutions own under 5% of Boxlight, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.
Boxlight is not owned by hedge funds. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our most recent data indicates that insiders own a reasonable proportion of Boxlight Corporation. Insiders have a US$8.3m stake in this US$30m business. It is great to see insiders so invested in the business. It might be worth checkingif those insiders have been buying recently.
The general public holds a 31% stake in BOXL. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
We can see that Private Companies own 36%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
Public companies currently own 3.0% of BOXL stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too.
I like to dive deeperinto how a company has performed in the past. You can accessthisinteractive graphof past earnings, revenue and cash flow, for free.
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can checkthis free report showing analyst forecasts for its future.
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. |
3 Reasons to Delay Social Security Until 70
Most seniors can't wait to get their hands on their Social Security benefits, which explains why so many file at the earliest possible age of 62. But if you don't hold off on filing untilfull retirement age, you'll face a reduction in the monthly payments you collect. Full retirement age is either 66, 67, or somewhere in between, depending on your year of birth, and if you'd rather not face a lifelong cut in benefits, it pays to wait until at least that point to claim Social Security.
But there's another option to consider as well -- delaying your benefits past full retirement age. For each year you do, you'll accruecreditsthat boost your benefits by 8% up until age 70, at which point that incentive runs out.
Image source: Getty Images.
Of course, the downside of delaying benefits until 70 is having to wait a long time to get your money. But here are three good reasons to hold out.
Though we're told we're supposed to save independently for retirement, many workers let their nest eggs fall by the wayside. The result? An alarming 22% of Americans have less than $5,000 saved for retirement,according to Northwestern Mutual. If you're nearing your golden years without much in the way of savings, and you don't have a ton of time to play catch-up, then it pays to delay Social Security as long as possible and raise your benefits as much as you can.
Imagine you're looking at retiring with $4,000 in your nest egg -- that sum could easily run out within a year. Even if you're approaching retirement with $100,000, that's still not a ton of money over the course of what could be a 30-year period. Delaying your benefits is therefore a good way to boost what could end up being your single largest source of monthly income.
If you wind up living a long life, delaying Social Security won't just boost your monthly income; it could also boost yourlifetimeincome. Therefore, if your health is solid, you stand to come out ahead financially by waiting on benefits as long as possible.
Imagine you're entitled to $1,500 a month at a full retirement age of 67. Holding off until 70 will increase each monthly payment you collect to $1,860. Now if you live until age 82 1/2, you'll wind up with the same lifetime amount by filing at full retirement or by waiting -- $279,000. But once you live a month past 82 1/2, you're already getting a greater amount of lifetime income by delaying until 70, which is why it pays to wait when your health is great.
Many seniors file for Social Security and immediately quit their jobs, since their benefits, coupled with savings, are enough to replace their paycheck. If you decide to file at full retirement age and quit your job simultaneously, doing so may not hurt you financially. But leaving your job might leave you without a social outlet and result in a scenario where you're not getting any type of physical exercise, neither of which is healthy.
If your job is offering more than just financial benefits, it pays to hold off on filing for Social Security and stick with it longer. Of course, youcanwork and collect benefits simultaneously, but you may feel silly dragging yourself to work when you don't need the money from your earnings. But if you delay those benefits, you might effectively force yourself to keep plugging away, which is a good thing under the aforementioned circumstances.
Some people can't afford to delay Social Security -- namely, those who areforced into retirementsooner than expected and need the money. But if the above scenarios apply to you, it pays to wait as long as possible and grow that critical income stream.
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Need To Know: Chatham Lodging Trust (NYSE:CLDT) Insiders Have Been Selling Shares
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We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares inChatham Lodging Trust(NYSE:CLDT).
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. 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 Chatham Lodging Trust
Over the last year, we can see that the biggest insider sale was by the , C. Goldsmith, for US$65k worth of shares, at about US$19.67 per share. So we know that an insider sold shares at around the present share price of US$19.20. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern. C. Goldsmith was the only individual insider to sell shares in the last twelve months.
C. Goldsmith ditched 5100 shares over the year. The average price per share was US$20.37. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love thisfreelist of companies. (Hint: insiders have been buying them).
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 2.3% of Chatham Lodging Trust shares, worth about US$21m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
An insider hasn't bought Chatham Lodging Trust stock in the last three months, but there was some selling. And even if we look to the last year, we didn't see any purchases. While insiders do own shares, they don't own a heap, and they have been selling. We'd think twice before buying! Of course,the future is what matters most. So if you are interested in Chatham Lodging Trust, you should check out thisfreereport on analyst forecasts for the company.
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. |
How Carter's, Inc. (NYSE:CRI) Can Impact Your Portfolio Volatility
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Anyone researching Carter's, Inc. (NYSE:CRI) might want to consider the historical volatility of the share price. Modern finance theory considers volatility to be a measure of risk, and there are two main types of price volatility. The first type is company specific volatility. Investors use diversification across uncorrelated stocks to reduce this kind of price volatility across the portfolio. The 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 mimic the volatility of the market quite closely, while others demonstrate muted, exagerrated or uncorrelated price movements. Some investors use beta as a measure of how much a certain stock is impacted by market risk (volatility). While we should keep in mind that Warren Buffett has cautioned that 'Volatility is far from synonymous with risk', beta is still a useful factor to consider. To make good use of it you must first know that the beta of the overall market is one. Any stock with a beta of greater than one is considered more volatile than the market, while those with a beta below one are either less volatile or poorly correlated with the market.
Check out our latest analysis for Carter's
Given that it has a beta of 0.81, we can surmise that the Carter's share price has not been strongly impacted by broader market volatility (over the last 5 years). If history is a good guide, owning the stock should help ensure that your portfolio is not overly sensitive to market volatility. Beta is worth considering, but it's also important to consider whether Carter's is growing earnings and revenue. You can take a look for yourself, below.
With a market capitalisation of US$4.3b, Carter's is a pretty big company, even by global standards. It is quite likely well known to very many investors. When large companies like this one have a low beta value, there is usually some other factor that is having an outsized impact on the share price. For example, a business with significant fixed regulated assets might earn a reasonably predictable return, regardless of broader macroeconomic factors. Alternatively, lumpy earnings might mean minimal share price correlation with the broader market.
Since Carter's is not heavily influenced by market moves, its share price is probably far more dependend on company specific developments. It could pay to take a closer look at metrics such as revenue growth, earnings growth, and debt. In order to fully understand whether CRI is a good investment for you, we also need to consider important company-specific fundamentals such as Carter's’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 CRI’s future growth? Take a look at ourfree research report of analyst consensusfor CRI’s outlook.
2. Past Track Record: Has CRI 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 CRI's historicalsfor more clarity.
3. Other Interesting Stocks: It's worth checking to see how CRI 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. |
MorphoSys Presents Primary Analysis Data from L-MIND Study of Tafasitamab (MOR208) in combination with Lenalidomide in r/r DLBCL at ICML 2019
PLANEGG and MUNICH, GERMANY / ACCESSWIRE / June 22, 2019 / MorphoSysPresents Primary Analysis Data from L-MIND Study of Tafasitamab (MOR208) in combination with Lenalidomide in r/r DLBCL at ICML 2019.
MorphoSys AG(FSE: MOR; Prime Standard Segment; MDAX & TecDAX; Nasdaq: MOR) today presented data from the primary analysis (cut-off date November 30, 2018) of the ongoing single-arm phase 2 clinical trial known as L-MIND in an oral presentation at the 15thInternational Conference on Malignant Lymphoma (ICML) in Lugano, Switzerland.
The L-MIND study enrolled patients with relapsed or refractory diffuse large B cell lymphoma (r/r DLBCL), who are ineligible for high-dose chemotherapy (HDC) and autologous stem cell transplantation (ASCT). The primary analysis data reported today included 80 patients enrolled into the trial who had receivedtafasitamaband lenalidomide and had been followed-up as per protocol for at least one year. Efficacy results in this update are based on response rates assessed by an independent review committee for all 80 patients. Patients enrolled had a median age of 72 years and had received a median of two prior treatment lines.
The primary endpoint, defined as best objective response rate (ORR) compared to published data on the respective monotherapies, has been met. The ORR was 60% (48 out of 80 patients), and the complete response (CR) rate was 43% (34 out of 80 patients). 82% of the CRs were PET (positron emission tomography)-confirmed. The median progression-free survival (mPFS) was 12.1 months with a median follow-up of 17.3 months. Responses were durable with a median duration of response (mDoR) of 21.7 months. Median overall survival (mOS) was not reached (NR) (95% CI 18.3 months - NR) with a median follow-up time of 19.6 months. The 12-month OS rate was 73.3%.
Efficacy parameters, such as response rates, showed comparable results in most patient subgroups of interest, including rituximab refractory versus non-refractory and primary refractory versus non-primary refractory, amongst others.
The L-MIND treatment combination was generally well tolerated in this study; infusion-related reactions (IRRs) fortafasitamabwere reported for only 6% of the patients and were limited to grade 1. The most frequent treatment-emergent adverse events (TEAEs) with a toxicity grading of 3 or higher were neutropenia in 48%, thrombocytopenia in 17%, and anemia in 7% patients each. Treatment-related serious adverse events (SAEs) occurred in 15 (18.5%) patients, the majority of which were infections or neutropenic fever. 37 (43%) patients required dose reduction with lenalidomide, 62 patients (78%) could stay on a daily lenalidomide dose of 20 mg or higher.
"We are very pleased by the results from the primary analysis of the L-MIND study and are especially encouraged by the durability of the responses and the OS that we are seeing," commented Dr. Malte Peters, Chief Development Officer of MorphoSys AG. "If approved, we believe that with tafasitamab in combination with lenalidomide we can offer a chemo-free treatment option to patients with r/rDLBCL who are ineligible for HDC and ASCT. We remain highly committed to completing the submission of a BLA to the FDA by end of this year."
"The results from the L-MIND study presented today at the ICML meeting in Lugano are very encouraging. We are particularly pleased to see such a high complete response rate and a prolonged response duration, which is unusual in this population of relapsed or refractory DLBCL. The number of patients on this study with a complete remission was 43%; the probability that these patients remain in remission 21 months after they started treatment was 93% based on Kaplan Meier analysis of DoR," commented Professor Gilles Salles, Chair of the Clinical Hematology Department at the University of Lyon, France, and lead investigator of L-MIND.
L-MIND is designed to investigate the antibodytafasitamabin combination with lenalidomide in patients with r/r DLBCL who are not eligible for high-dose chemotherapy and autologous stem cell transplantation. Tafasitamab is an investigational humanized Fc-enhanced monoclonal antibody directed against CD19 and is currently in clinical development in blood cancer indications.
Details about the presentation on L-MIND data at ICML 2019:
Abstract publication number: 124Session name: Session 11 - New Drug CombinationsSession date and time: Saturday, June 22, 2019, 08:30am-10:00am CESTPresentation time: 08:30am CESTVenue: Lugano Convention Centre (Palazzo dei Congressi), Room A and B; Lugano, Switzerland
MorphoSys will host a "Meet the Team" event in New York on June 25, 2019, 10:00am EDT (3:00pm BST, 4:00pm CEST). The presentation, a live webcast and a replay of the webcast will be made available athttp://www.morphosys.com.
About MorphoSys
MorphoSys (FSE & NASDAQ: MOR) is a clinical-stage biopharmaceutical company dedicated to the discovery, development and commercialization of exceptional, innovative therapies for patients suffering from serious diseases. The focus is on cancer. Based on its leading expertise in antibody, protein and peptide technologies, MorphoSys, together with its partners, has developed and contributed to the development of more than 100 product candidates, of which 29 are currently in clinical development. In 2017, Tremfya(R), marketed by Janssen for the treatment of plaque psoriasis, became the first drug based on MorphoSys's antibody technology to receive regulatory approval. The Company's most advanced proprietary product candidate, tafasitamab (MOR208), has been granted U.S. FDA breakthrough therapy designation for the treatment of patients with relapsed/refractory diffuse large B-cell lymphoma (DLBCL). Headquartered near Munich, Germany, the MorphoSys group, including the fully owned U.S. subsidiary MorphoSys US Inc., has approximately 330 employees. More information athttps://www.morphosys.com.
HuCAL(R), HuCAL GOLD(R), HuCAL PLATINUM(R), CysDisplay(R), RapMAT(R), arYla(R), Ylanthia(R), 100 billion high potentials(R), Slonomics(R), Lanthio Pharma(R)and LanthioPep(R)are registered trademarks of the MorphoSys Group. Tremfya(R)is a trademark of Janssen Biotech, Inc.
MorphoSys forward looking statements
This communication contains certain forward-looking statements concerning the MorphoSys group of companies, including the expectations regarding the clinical development of tafasitamab in combination with lenalidomide in the L-MIND study in r/r DLBCL, the further clinical development of tafasitamab as well as interactions with regulatory authorities and expectations regarding regulatory filings and possible approvals for tafasitamab. The forward-looking statements contained herein represent the judgment of MorphoSys as of the date of this release and involve known and unknown risks and uncertainties, which might cause the actual results, financial condition and liquidity, performance or achievements of MorphoSys, or industry results, to be materially different from any historic or future results, financial conditions and liquidity, performance or achievements expressed or implied by such forward-looking statements. In addition, even if MorphoSys' results, performance, financial condition and liquidity, and the development of the industry in which it operates are consistent with such forward-looking statements, they may not be predictive of results or developments in future periods. Among the factors that may result in differences are MorphoSys' expectations regarding the clinical development of tafasitamab in combination with lenalidomide in the L-MIND study in r/r DLBCL, the further clinical development of tafasitamab as well as interactions with regulatory authorities and expectations regarding regulatory filings and possible approvals for tafasitamab, MorphoSys' reliance on collaborations with third parties, estimating the commercial potential of its development programs and other risks indicated in the risk factors included in MorphoSys's Annual Report on Form 20-F and other filings with the US Securities and Exchange Commission. Given these uncertainties, the reader is advised not to place any undue reliance on such forward-looking statements. These forward-looking statements speak only as of the date of publication of this document. MorphoSys expressly disclaims any obligation to update any such forward-looking statements in this document to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements, unless specifically required by law or regulation.
For more information, please contact:
MorphoSys AG
Dr. Sarah FakihHead of Corporate Communications & IRDr. Julia NeugebauerDirector Corporate Communications & IRDr. Verena KupasManager Corporate Communications & IRTel: +49 (0) 89 / 899 27-404investors@morphosys.com
SOURCE:MorphoSys AGView source version on accesswire.com:https://www.accesswire.com/549537/MorphoSys-Presents-Primary-Analysis-Data-from-L-MIND-Study-of-Tafasitamab-MOR208-in-combination-with-Lenalidomide-in-rr-DLBCL-at-ICML-2019 |
Why You Should Visit Southern India on Your Next Vacation
Floodwaters charted the destiny of Kochi, the centuries-old port city in the Indian state of Kerala—a sliver of land stretching some 360 miles along the country’s southwestern Malabar Coast—nearly 700 years ago. The seaside enclave would likely never have become the bastion of multiculturalism it is today if not for a major flood in 1341, which threw open its estuary to the Arabian Sea, transforming it into one of the finest natural harbors in the East and an alluring destination for an esteemed succession of conquerors and visitors alike.
Last August, nature again tried to dictate Kerala’s fate, this time to its detriment. Unusually heavy monsoon rains spurred the state’s most devastating flooding in nearly a hundred years, swamping its coastal regions and killing nearly 500 people while displacing hundreds of thousands more. The floodwaters closed Cochin International Airport—Kerala’s largest—for two weeks, caused roughly $2.5 billion in losses, and damaged tens of thousands of homes across its 15,000 square miles. Predictably, the accompanying worldwide media coverage detailing the devastation decimated Kerala’s tourism industry—which accounts for 12% of its economy and 20% of its jobs—for months after the roiling waters receded.
While it may take years for the handful of areas that bore the brunt of the damage to fully recuperate, the less-reported news is that Kerala is squarely back on its feet and arguably more eager than ever to welcome tourists to its lush and storied shores. A sojourn in this resort state—and in its enchanting neighbors of Tamil Nadu and Goa—offers both an unforgettable immersion in southern India’s myriad charms and a prime opportunity to support its ongoing recovery.
No place in Kerala captures the state’s enticing mix of history and exoticism more dynamically than Fort Kochi, its oldest fishing village and Kochi’s historic heart, where the city’s complex cultural amalgam comes to life. Stroll along its tree-lined avenues to the breezy seaside to view a horizon studded with its iconic Chinese fishing nets, living monuments still in use and first brought here in the 14th century, when Kochi—the only place in the world ruled successively by three European colonial powers—became the center of the brisk Indian spice trade. Then visit St. Francis Church—the oldest European church in India—to see the original grave site of Portuguese explorer Vasco de Gama, whose maiden voyage here in 1498 portended Kochi’s christening five years later as the first European settlement on Indian soil.
Nearby stands a large weathered gate marked with the initials “VOC,” the monogram of the Dutch East India Company, a former trading titan that was once the richest private company in the world during the 17th century. It testifies to the once-vital trade links between Kochi and the Netherlands. The Dutch, keen to capitalize on the enormous strategic value of “the Queen of the Arabian Sea” (as the city was often called), wrested it away from the Portuguese in 1663. Stand before the gate facing Parade Ground, the largest open green in town, and you can seeCochin Club, a formerly all-male British bolt-hole founded in the early 20th century and a vestige of the final chapter in Kochi’s colonial history, which began in 1795 (when Great Britain officially changed the city’s name to Cochin) and lasted until India’s independence in 1947.
Overlooking Parade Ground from its prime perch on the green’s north side sitsThe Malabar House, Fort Kochi’s first boutique hotel. India’s inauguralRelais & Chateauxproperty, the artfully designed hideaway, dating back to 1755, is a casually elegant retreat with top-notch service in a peerless location. Its 17 spacious and colorful rooms all boast verandas or terraces, while the inviting central courtyard buzzes quietly in the evening with the festive din of guests and visitors.
The hotel’s lively destination restaurant,Malabar Junction, serves up some of the best cuisine in Fort Kochi, melding Keralan and Mediterranean influences in flavorful dishes like prawns stewed in coconut milk and turmeric broth, and Indian Ocean sea bass with cauliflower velouté, fennel, and plum, while its Divine wine bar celebrates India’s burgeoning wine industry.
The hotel’s dual role as an exceptional art showcase underscores its unique character. Guest rooms and common spaces brim with a dazzling array of antique and contemporary objets d’art, thanks to the vision of husband-and-wife owners Joerg Drechsel and Txuku Iriarte Solana, passionate collectors and Keralan hospitality pioneers. The German-born Drechsel, a former exhibition designer, was first seduced by Kerala’s charms in 1972 after driving there from Europe across countries including Iran, Afghanistan, and Pakistan—“unthinkable today,” he says—and was especially inspired by its melting pot of religions and cultures. (Some 32 communities speaking at least 16 languages live in Old Kochi, the collective name given to Fort Kochi and neighboring Mattancherry.)
“As a lifetime traveler, many places I’ve visited have become victims of ethnic and religious conflicts,” Drechsel says. “Kerala’s Hindu, Muslim, Christian, and Jewish communities have grown side by side over many centuries, creating an umbrella culture with a common language and a shared way of life. It’s a shining example that there is another way.”
Returning to Kerala some two decades later with Iriarte Solana and thoughts of starting a new life chapter, they happened upon the Malabar House property, then dilapidated and overgrown, and snatched it up in 1995. The hotel opened two years later and is now the flagship of a small circuit of Keralan hotels that compriseMalabar Escapes.
The Malabar House’s reputation as Fort Kochi’s leading art hotel dovetails with the enclave’s emergence as one of India’s artistic hotbeds, thanks in part to the Kochi-Muziris Biennale, now South Asia’s largest art show. (The state of Kerala is a major sponsor—noteworthy in a country with virtually no government support for the fine arts.)
Founded eight years ago, the exhibition’s international profile is growing steadily; the fourth edition, which wrapped in March, featured the work of 100 artists from India and 30 other countries. A visit to the pioneeringGallery OEDandURU Art Harbour, an exhibition space in a hauntingly atmospheric waterfront location in Mattancherry, is another must for art buffs, as is the privateKerala Folklore Museum. With thousands of pieces ranging from sculptures to paintings to jewelry, it’s a fascinating journey through the astonishing artistic legacy of southern India, housed in a remarkable building, a high temple of Keralan architecture completed over nearly eight years with the help of 62 traditional carpenters. Meanwhile, decor enthusiasts will want to spend days rummaging through Mattancherry’s awe-inspiring antique shops likeHeritage ArtsandCrafters, whose cavernous, old spice warehouses are filled floor to ceiling with treasures.
After a few days spent peeling back Fort Kochi’s myriad layers, it’s time to unwind in the seemingly boundless greenery of Kerala’s famous backwaters. A 90-minute drive from Fort Kochi, along roads lined with rice paddies and swaying palms, liesPurity at Lake Vembanad, the Malabar House’s sister property.
Presiding over the widest part of the lake—India’s longest at nearly 60 miles—from its western shore, the resort offers a serene sanctuary perfect for unplugging, where you can lounge endlessly by the lakefront infinity pool, enjoy an open-air Ayurvedic oil massage at thespa, and dine by torchlight at the water’s edge on scrumptious dishes of fresh lake-caught crab and fish. Like The Malabar House, Purity showcases an eclectic mix of modern and antique Indian art throughout its common areas and 14 rooms, all with lake views and some with en suite spa facilities.
While the hotel can arrange outings to nearby points of interest, such as the Mararikulam Mahadeva Temple or a local coir factory (one of Kerala’s top industries), a day (at a minimum) boating through Kerala’s fabled backwaters—the palm-lined inland network of lagoons, lakes, rivers, and canals that parallel the Kerala coast from Kochi 86 miles south to Kollam—aboard the Malabar EscapesDiscoveryhouseboatis a must-do.
A converted rice barge outfitted with a roomy suite that sleeps four on cruises that range from one to three nights,Discoverywill chauffeur you through this labyrinth of lush waterways lined with modest villages and flotillas ofkettuvallams,Kerala’s traditional thatched-roof houseboats. The eager waves of swimming children and grizzled fishermen in wooden canoes in this distinct water-world—where deadly floodwaters surged for weeks less than a year ago—will remind you of the meaning of resilience.
Home to one of the world’s most ancient civilizations, the southern state of Tamil Nadu, Kerala’s neighbor to the east, boasts a richly textured history dating back 4,000 years. Often called “the Land of Temples”—its borders encompass some 33,000 of them—its illustrious artistic heritage owes largely to an array of disparate rulers—notably the Chola dynasty, one of the wealthiest in southern India, whose reign spanned from 850–1279 AD. The Cholas’ avid patronage of pursuits including painting, sculpture, bronze casting, and architecture—which later conflated with the subsequent Vijayanagara and Maratha dynasties’ own artistic leanings—left an indelible aesthetic imprint that resonates most distinctly in the eastern town of Thanjavur, Tamil Nadu’s cultural capital.
There’s no better base for exploring Thanjavur’s bounty of treasures thanSvatma, an exquisite boutique hotel (and fellow Relais & Chateaux member) and the city’s preeminent address for discerning visitors. A decade in the works before its 2015 debut, the 38-room hideaway is the passion project of Indian architect and designer Krithika Subrahmanian, who created it partially in response to Tamil Nadu’s dearth of luxury accommodations. A trained Bharatanatyam dancer—a classical style that originated in Tamil Nadu’s Hindu temples—she painstakingly restored the 150-year-old, colonial-style building—once home to a British trader—to reflect both her own exacting standards of hospitality and Thanjavur’s formidable artistic legacy.
Teeming with locally sourced antiques and furnishings, Svatma has the rarefied air of an unusually inviting museum crossed with a luxe heritage home, replete with galleries that beautifully showcase enduring aspects of Tamil history like the vina, an ancient Indian string instrument whose dulcet strains are said to soothe both body and mind. (Some 15 families still make vinas in Thanjavur. Svatma can arrange a visit to their sawdust-strewn workshops, where barefoot artisans methodically craft the musical masterpieces from jackfruit wood, adorning them with intricate carvings of peacocks and Hindu deities.) Serving only Tamil Nadu’s tasty vegetarian cuisine in its two restaurants—don’t miss the delicious and colorfulthali, a traditional Indian lunch—the hotel boasts a deftly designed pool painted with trompe l’oeil imagery and a rooftop cocktail bar overlooking bustling streets lined with ornate, pastel-hued temples, many crosshatched by telephone wires and sandwiched between cinder-block buildings in a startling mélange of old and new.
While you’re there, pay a visit to Brihadisvara Temple—Thanjavur’s prodigious centerpiece and the jewel in the crown of the Unesco-inscribedGreat Living Chola Templestriumvirate—is a requisite first stop. Built by the legendary Chola ruler Rajaraja I (“king of kings”) to commemorate his triumphant tenure and completed in 1010 AD, it’s a literal marvel of engineering and aesthetic achievement: carved entirely in interlocking granite and dedicated to Shiva, one of the most important gods in the Hindu pantheon, itsvimana(tower) soars over 200 feet skyward, while legend says its 80-ton cupola was set in place by elephants. At dusk, the temple’s honey-hued stone seems to glow the warm shades of sunset, a shifting palette of pink and orange ablaze against the violet sky.
Meanwhile, the nearbyThanjavur Royal Palace Museumhouses a priceless (and peerless) collection of bronze statues spanning the ninth to 19th centuries AD. Just outside the palace lies theSaraswati Mahal Library, arguably the most acclaimed in India, stuffed with tens of thousands of books and documents. One of the few medieval manuscript libraries in the world, its rarest holdings can be viewed by appointment.
Architectural showstoppers aside, a Svatma-arranged tour of the local studios that continue to nurture Thanjavur’s age-old artistic traditions provides a memorable glimpse into the Tamil people’s prolific creative gifts. In the humblest thatch-roofed homes tucked away on quiet dirt lanes, you’ll observe the disciplined creation of Thanjavur paintings—one of southern India’s most iconic art forms since the 16th century—wherein gold leaf, glass beads, and semiprecious stones are used to accent colorful portraits of Hindu gods and goddesses. A trip to one of Thanjavur’s local bronze-casting factories reveals the singular process—from the sculpting of the initial wax model to the final polishing—of transforming molten metal into exuberantly detailed depictions of deities that mirror those of bygone centuries.
For textile aficionados,Sri Sagunthalai Silksproduces some of the most stunning saris in the country through the disappearing art ofkorvaiweaving. This prized southern Indian technique—whereby the border andpallu,the loose end that drapes over the shoulder, are hand-woven separately first and later seamlessly into the garment’s body—was practiced in Thanjavur by the owners’ forefathers more than 400 years ago.
Back at the hotel, a range of inspiring on-site activities—including chamber music concerts, Vedic chanting classes, and Bharatanatyam dance performances—further immerse visitors in Thanjavur’s cultural potpourri, while a sound therapy session at the hotel’s pristinespa—where a therapist performs an “acoustic massage” using a massage table underpinned by 50 strummable strings and instruments like rattles and gongs to compose a “full-body listening experience”—may compel you to extend your stay.
Arguably no journey to southern India would be complete without a visit to Goa, the tiny western state bordering Karnataka and a favorite festive resort destination of both Indians and foreigners. Thanks to the 450-year reign of the Portuguese—which ended only in 1961, 14 years after the anniversary of the rest of India’s independence—the country’s influence is everywhere, from the colonial buildings painted electric hues of blue, yellow, and green in Fontainhas, the old Latin quarter of Goa’s capital city of Panjim, to the 17th-centuryBasilica of Bom Jesus, famous throughout the Roman Catholic world for housing the tomb of St. Francis Xavier, the so-called Apostle of the Indies, immortalized for his legendary missionary voyages throughout the East.
Portuguese influence—along with Chinese, Balinese, and African ones, among others—converge to utterly enchanting affect atAhilya by the Sea, an exquisite nine-room jewel box that opened in 2015 on the shores of Dolphin Bay in Nerul, a sleepy fishermen’s village at the southern tip of North Goa. Owned by the granddaughter of Antonio Xavier Trindade, the late 19th-century Goan portrait artist nicknamed the “Rembrandt of the East,” and the sister property of the celebratedAhilya Fortin Maheshwar, Madhya Pradesh, it’s a self-contained paradise with innumerable charms, from the astonishing array of worldly treasures artfully spread throughout its three sumptuous Balinese-Portuguese-style villas, to its peerless service and spectacular cuisine. (Besides world-class Indian dishes, the hotel’s pastas are as good as any you’ll find in Italy.)
At breakfast, you’ll feast on freshly composed fruit salad sprinkled with pomegranate seeds, eggs scrambled with green chilies, and warm house-baked local breads on a breezy terrace facing the sea toward Panjim—the hotel is built on the former site of the customhouses that guarded its entrance—while in the evening, the lovingly manicured grounds surrounding the infinity pool become an impossibly atmospheric, candlelit alfresco dining room, where you won’t sit in the same spot twice.
The unfailingly charming staff will happily coordinate day trips to the North Goan beaches of Morjim, Ashvem, and Mandrem, a visit to Old Goa’s renowned churches, or a tour of Goa’s chicest boutiques, including Sacha’s Shop in Panaji and Panjim’sTarini, an Indian-textile wonderland. But don’t be surprised if you find yourself counting the minutes until you return to this incomparable Eden.
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Have Insiders Been Buying RosCan Gold Corporation (CVE:ROS) Shares?
Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card!
We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares inRosCan Gold Corporation(CVE:ROS).
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a 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 RosCan Gold
President Gregory Isenor made the biggest insider purchase in the last 12 months. That single transaction was for CA$138k worth of shares at a price of CA$0.05 each. We do like to see buying, but this purchase was made at well below the current price of CA$0.20. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
Over the last year, we can see that insiders have bought 3.3m shares worth CA$176k. On the other hand they divested 1.5m shares, for CA$75k. In total, RosCan Gold insiders bought more than they sold over the last year. 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 plenty of other companies that have insiders buying up shares. You probably donotwant to miss thisfreelist of growing companies that insiders are buying.
There has been significantly more insider buying, than selling, at RosCan Gold, over the last three months. In total, Gregory Isenor bought CA$146k worth of shares in that time. On the other hand, insiders netted CA$52k by selling. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. From our data, it seems that RosCan Gold insiders own 13% of the company, worth about CA$2.9m. We do generally prefer see higher levels of insider ownership.
The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that RosCan Gold insiders are expecting a bright future.I like to dive deeperinto how a company has performed in the past. You can findhistoric revenue and earnings in thisdetailed graph.
Of courseRosCan Gold 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. |
India asks scooter, bike makers to draw up plan for EVs - sources
By Aditi Shah
NEW DELHI, June 22 (Reuters) - India's federal think-tank has asked scooter and motorbike manufacturers to draw up a plan to switch to electric vehicles, days after they publicly opposed the government's proposals saying they would disrupt the sector, two sources told Reuters.
Niti Aayog officials met with executives from companies including Bajaj Auto, Hero MotoCorp and TVS late on Friday, giving them two weeks to come up with the plan, according to one of the executives.
The think-tank, which is chaired by Prime Minister Narendra Modi and plays a key role in policymaking, had recommended that only electric models of scooters and motorbikes with engine capacity of more than 150cc must be sold from 2025, sources have told Reuters.
Automakers opposed the proposal and warned that a sudden transition, at a time when auto sales have slumped to a two-decade low, would cause market disruption and job losses.
India is one of the world’s largest two wheeler markets with sales of more than 20 million scooters and motorbikes last year.
During Friday's meeting government officials argued that switching to EVs is of national importance so India does not miss out on the global drive towards environmentally cleaner vehicles, one of sources said.
But industry executives responded that a premature switch with no established supply chain, charging infrastructure or skilled labour in India, could result in India losing its leadership position in scooters and motorbikes, the second source said.
“There were clearly drawn out positions,” said the source, adding there were "strong opinions" at the meeting.
Bajaj, Hero and Niti Aayog did not respond to a request for comment, while TVS declined to comment.
ELECTRIFICATION
Niti Aayog is working with several other ministries on the recommendations, which are part of an electrification effort to help India reduce its fuel import bill and curb pollution.
The proposal also includes incentives for local production of batteries, an increase ownership cost of gasoline cars and forming a policy to scrap old vehicles, according to records of government meetings seen by Reuters.
The panel has also suggested measures such as directing taxi aggregators like Uber and Ola to convert 40% of their fleets to electric by April 2026, Reuters has reported.
Executives from EV start-up Ather Energy, ride-sharing firm Ola and officials from the Society of Indian Automobile Manufacturers (SIAM), an industry trade body, also attended the meeting, the sources said.
The proposals are India's second attempt for a switch to EVs. In 2017 it proposed an ambitious plan mainly for electric cars but rowed back after facing resistance from car makers.
The current push could disrupt the market order for two-wheelers and open up avenues for local start-ups, analysts say.
Scooter and bike start-ups like Ather, 22Motors and Okinawa are already making in-roads in India.
“It is extremely critical that we make the transition to electric quickly lest we get wiped out by another global wave,” Tarun Mehta, CEO and co-founder at Ather said. (Reporting by Aditi Shah, additional reporting by Aftab Ahmed, editing by Alasdair Pal and Clelia Oziel) |
Imagine Owning Monster Uranium (CVE:MU.H) While The Price Tanked 51%
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Even the best stock pickers will make plenty of bad investments. And there's no doubt thatMonster Uranium Corp.(CVE:MU.H) stock has had a really bad year. In that relatively short period, the share price has plunged 51%. Even if you look out three years, the returns are still disappointing, with the share price down (the share price is down 37%) in that time. Furthermore, it's down 27% in about a quarter. That's not much fun for holders. This could be related to the recent financial results - you can catch up on the most recent data by readingour company report.
View our latest analysis for Monster Uranium
With zero revenue generated over twelve months, we don't think that Monster Uranium has proved its business plan yet. You have to wonder why venture capitalists aren't funding it. So it seems that the investors focused more on what could be, than paying attention to the current revenues (or lack thereof). For example, investors may be hoping that Monster Uranium finds some valuable resources, before it runs out of money.
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). It certainly is a dangerous place to invest, as Monster Uranium investors might realise.
Our data indicates that Monster Uranium had CA$333,475 more in total liabilities than it had cash, when it last reported in March 2019. That puts it in the highest risk category, according to our analysis. But since the share price has dived -51% in the last year, it looks like some investors think it's time to abandon ship, so to speak. You can see in the image below, how Monster Uranium's cash levels have changed over time (click to see the values).
Of course, the truth is that it is hard to value companies without much revenue or profit. Given that situation, would you be concerned if it turned out insiders were relentlessly selling stock? It would bother me, that's for sure. You canclick here to see if there are insiders selling.
While the broader market gained around 0.8% in the last year, Monster Uranium shareholders lost 51%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 11% over the last half decade. We realise that Buffett has said investors should 'buy when there is blood on the streets', but we caution that investors should first be sure they are buying a high quality businesses. You might want to assessthis data-rich visualizationof its earnings, revenue and cash flow.
We will like Monster Uranium better if we see some big insider buys. While we wait, check out thisfreelist of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA 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. |
Did You Manage To Avoid Monster Uranium's (CVE:MU.H) Painful 51% Share Price Drop?
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Taking the occasional loss comes part and parcel with investing on the stock market. Unfortunately, shareholders ofMonster Uranium Corp.(CVE:MU.H) have suffered share price declines over the last year. The share price is down a hefty 51% in that time. We note that it has not been easy for shareholders over three years, either; the share price is down 37% in that time. Furthermore, it's down 27% in about a quarter. That's not much fun for holders. We note that the company has reported results fairly recently; and the market is hardly delighted. You can check out the latest numbers inour company report.
See our latest analysis for Monster Uranium
With zero revenue generated over twelve months, we don't think that Monster Uranium has proved its business plan yet. We can't help wondering why it's publicly listed so early in its journey. Are venture capitalists not interested? 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. It seems likely some shareholders believe that Monster Uranium will find or develop a valuable new mine 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 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). Monster Uranium has already given some investors a taste of the bitter losses that high risk investing can cause.
Monster Uranium had liabilities exceeding cash by CA$333,475 when it last reported in March 2019, according to our data. That puts it in the highest risk category, according to our analysis. But with the share price diving 51% in the last year, it's probably fair to say that some shareholders no longer believe the company will succeed. You can click on the image below to see (in greater detail) how Monster Uranium's cash levels have changed over time.
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. Given that situation, would you be concerned if it turned out insiders were relentlessly selling stock? I'd like that just about as much as I like to drink milk and fruit juice mixed together. You canclick here to see if there are insiders selling.
Investors in Monster Uranium had a tough year, with a total loss of 51%, against a market gain of about 0.8%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 11% over the last half decade. We realise that Buffett has said investors should 'buy when there is blood on the streets', but we caution that investors should first be sure they are buying a high quality businesses. Shareholders might want to examinethis detailed historical graphof past 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 CA 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. |
An Intrinsic Calculation For Nine Energy Service, Inc. (NYSE:NINE) Suggests It's 50% Undervalued
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Does the June share price for Nine Energy Service, Inc. (NYSE:NINE) reflect what it's really worth? Today, we will estimate the stock's intrinsic value by taking the expected future cash flows and discounting them to today's 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 Nine Energy Service
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.
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 ($, Millions)", "2019": "$46.87", "2020": "$70.88", "2021": "$82.90", "2022": "$92.66", "2023": "$101.06", "2024": "$108.29", "2025": "$114.61", "2026": "$120.23", "2027": "$125.34", "2028": "$130.09"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x3", "2020": "Analyst x4", "2021": "Analyst x1", "2022": "Est @ 11.77%", "2023": "Est @ 9.06%", "2024": "Est @ 7.16%", "2025": "Est @ 5.83%", "2026": "Est @ 4.9%", "2027": "Est @ 4.25%", "2028": "Est @ 3.79%"}, {"": "Present Value ($, Millions) Discounted @ 11.34%", "2019": "$42.09", "2020": "$57.17", "2021": "$60.06", "2022": "$60.29", "2023": "$59.05", "2024": "$56.84", "2025": "$54.02", "2026": "$50.90", "2027": "$47.66", "2028": "$44.43"}]
Present Value of 10-year Cash Flow (PVCF)= $532.51m
"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. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 10-year government bond rate (2.7%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 11.3%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = US$130m × (1 + 2.7%) ÷ (11.3% – 2.7%) = US$1.6b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= $US$1.6b ÷ ( 1 + 11.3%)10= $529.90m
The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is $1.06b. In the final step we divide the equity value by the number of shares outstanding.This results in an intrinsic value estimate of $34.6. Compared to the current share price of $17.47, the company appears quite undervalued at a 50% 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. If you don't agree with these result, have a go at the calculation yourself and play with the 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 Nine Energy Service 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 11.3%, which is based on a levered beta of 1.445. 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 Nine Energy Service, I've put together three fundamental aspects you should further research:
1. Financial Health: Does NINE 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 NINE'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 NINE? 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 US 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. |
What You Must Know About MGIC Investment Corporation's (NYSE:MTG) Beta Value
Want to participate in a short research study ? Help shape the future of investing tools and you could win a $250 gift card! If you're interested in MGIC Investment Corporation ( NYSE:MTG ), 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. Volatility is considered to be a measure of risk in modern finance theory. Investors may think of volatility as falling into two main categories. The first category is company specific volatility. This can be dealt with by limiting your exposure to any particular stock. The 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 MGIC Investment What we can learn from MTG's beta value Given that it has a beta of 1.77, we can surmise that the MGIC Investment share price has been fairly sensitive to market volatility (over the last 5 years). If the past is any guide, we would expect that MGIC Investment shares will rise quicker than the markets in times of optimism, but fall faster in times of pessimism. 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 MGIC Investment fares in that regard, below. Story continues NYSE:MTG Income Statement, June 22nd 2019 Could MTG's size cause it to be more volatile? With a market capitalisation of US$4.8b, MGIC Investment is a pretty big company, even by global standards. It is quite likely well known to very many investors. It has a relatively high beta, suggesting it may be somehow leveraged to macroeconomic conditions. For example, it might be a high growth stock with lots of investors trading the shares. It's notable when large companies to have high beta values, because it usually takes substantial capital flows to move their share prices. What this means for you: Since MGIC Investment tends to moves up when the market is going up, and down when it's going down, potential investors may wish to reflect on the overall market, when considering the stock. This article aims to educate investors about beta values, but it's well worth looking at important company-specific fundamentals such as MGIC Investment’s financial health and performance track record. I urge you to continue your research by taking a look at the following: Future Outlook : What are well-informed industry analysts predicting for MTG’s future growth? Take a look at our free research report of analyst consensus for MTG’s outlook. Past Track Record : Has MTG 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 at the free visual representations of MTG's historicals for more clarity. Other Interesting Stocks : It's worth checking to see how MTG measures up against other companies on valuation. You could start with this free 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 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. |
Why AKT founder Anna Kaiser isn't afraid of Peloton
AKT is one of the fastest-growing luxury boutique fitness franchises, and has celebrity fans including Karlie Kloss, Shakira, and Kelly Ripa.
Founded in 2013 by celebrity trainer Anna Kaiser, AKT offers curated dance and fitness routines designed to create unity among class members. Kaiser, the company’s CEO, formulates weekly exercise classes that are then distributed to AKT studios nationwide.
“Nationally, there’s tons of room for expansion,” Kaiser told Yahoo Finance. While densely populated cities like New York and Los Angeles are inundated with workout studios vying for consumers’ attention, the rest of the nation is, according to Kaiser, “just getting an introduction to boutique fitness.”
AKT currently has locations in New York, California, and Connecticut, but plans to open studios in Colorado, Michigan, Florida, Ohio, New Jersey and elsewhere.
Kaiser says her company’s focus on community allows it to grow even in the agePelotonand other of fitness innovations in tech.
“I think the market has space for both [Peloton and AKT],” she said.
Peloton, sometimes called the ‘Netflix of exercise,’ allows people to take live and on-demand studio cycling classes at home, via an Internet-connected screen. The company has attracted over a million customers with its on-demand workouts, and boasted $400 million in sales as of 2017.
Kaiser thinks people get more out of classes. “On a bike, regardless of whether the screen is interactive, it’s still a screen.”
Olivia Balsamo is a writer and producer at Yahoo Finance. Follow her on Twitter@BalsamoOlivia.
Follow Yahoo Finance onTwitter,Facebook,Instagram,Flipboard,SmartNews,LinkedIn,YouTube, andreddit. |
How Does MGIC Investment Corporation (NYSE:MTG) Affect Your Portfolio Volatility?
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If you're interested in MGIC Investment Corporation (NYSE:MTG), 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. Some investors use beta as a measure of how much a certain stock is impacted by market risk (volatility). While we should keep in mind that Warren Buffett has cautioned that 'Volatility is far from synonymous with risk', beta is still a useful factor to consider. To make good use of it you must first know that the beta of the overall market is one. A stock with a beta greater than one is more sensitive to broader market movements than a stock with a beta of less than one.
View our latest analysis for MGIC Investment
Zooming in on MGIC Investment, we see it has a five year beta of 1.77. This is above 1, so historically its share price has been influenced by the broader volatility of the stock market. If the past is any guide, we would expect that MGIC Investment shares will rise quicker than the markets in times of optimism, but fall faster in times of pessimism. 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 MGIC Investment fares in that regard, below.
MGIC Investment is a fairly large company. It has a market capitalisation of US$4.8b, which means it is probably on the radar of most investors. It has a relatively high beta, suggesting it may be somehow leveraged to macroeconomic conditions. For example, it might be a high growth stock with lots of investors trading the shares. It's notable when large companies to have high beta values, because it usually takes substantial capital flows to move their share prices.
Since MGIC Investment has a reasonably high beta, it's worth considering why it is so heavily influenced by broader market sentiment. For example, it might be a high growth stock or have a lot of operating leverage in its business model. In order to fully understand whether MTG is a good investment for you, we also need to consider important company-specific fundamentals such as MGIC Investment’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 MTG’s future growth? Take a look at ourfree research report of analyst consensusfor MTG’s outlook.
2. Past Track Record: Has MTG 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 MTG's historicalsfor more clarity.
3. Other Interesting Stocks: It's worth checking to see how MTG 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. |
16 beach reads you won't be able to put down this summer
There are a few things that you just can't forget to pack when you're heading out on a summer vacation:sunscreen, abeach bagand, of course, a new book!
From atwisting family dramato anunexpected love story, we have rounded up 16 new books that are worth a read this summer. Keep scrolling to find your perfect beach read. |
What Kind Of Shareholders Own Seres Therapeutics, Inc. (NASDAQ:MCRB)?
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The big shareholder groups in Seres Therapeutics, Inc. (NASDAQ:MCRB) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. We also tend to see lower insider ownership in companies that were previously publicly owned.
Seres Therapeutics is a smaller company with a market capitalization of US$181m, so it may still be flying under the radar of many institutional investors. In the chart below below, we can see that institutions are noticeable on the share registry. Let's delve deeper into each type of owner, to discover more about MCRB.
See our latest analysis for Seres Therapeutics
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
Seres Therapeutics already has institutions on the share registry. Indeed, they own 31% of the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Seres Therapeutics's historic earnings and revenue, below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in Seres Therapeutics. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 less than 1% of Seres Therapeutics, Inc.. It appears that the board holds about US$1.4m worth of stock. This compares to a market capitalization of US$181m. Many investors in smaller companies prefer to see the board more heavily invested. You canclick here to see if those insiders have been buying or selling.
The general public, with a 39% stake in the company, will not easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private equity firms hold a 19% stake in MCRB. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.
It appears to us that public companies own 10% of MCRB. It's hard to say for sure, but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.
While it is well worth considering the different groups that own a company, there are other factors that are even more important.
I like to dive deeperinto how a company has performed in the past. You can accessthisinteractive graphof past earnings, revenue and cash flow, for free.
But ultimatelyit is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look atthis free report showing whether analysts are predicting a brighter future.
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. |
How Do Personal Loans Work?
Breaking down how personal loans work and how to go about finding the best option for your situation.
Image source: Getty Images.
Whether you’re facing an unexpected expense you can’t cover, longing to buy something you just don’t have the money for, or hoping toconsolidate existing debt, personal loans can be a useful financial tool.
However, nothing in life is free. If you’re not careful, a personal loan can cost you thousands in interest and leave you with monthly payments you can’t afford. Keep reading to understand what personal loans are, how they work, and whether or not they’re right for you, so that you can find thebest personal loanfor your needs.
A personal loan is money lent by a bank or credit union to a borrower in a lump sum. The loan plus interest fees, which are determined by the your credit score, are paid back in monthly installments over a predetermined period of time, called the loan term. Unlike other loans meant to be used for a specific type of purchase, such as a home or car loan, personal loans can be used for a variety of purposes.
Personal loans can be used for almost anything. The most common uses for personal loans are medical expenses, debt consolidation, and home renovations. They’re often used for small business purchases, unexpected expenses, vacations, and weddings.
It’s up to the lender to determine whether or not they want to approve a loan for a given purpose, and most do have a few restrictions when it comes to the use of the loan. You typically can’t use a personal loan to pay your college tuition, although they can be used for personal expenses while in school, such as rent or textbooks. Many lenders won’t let you use a personal loan to pay off your student loans, either. Gambling is typically restricted.
The higher your credit score, the lower your interest rate. Most traditional banks require good or excellent credit in order to qualify for a personal loan. Thanks to online lenders, there are options for people with fair and bad credit who need personal loans as well. However, these loans will come with high interest rates, so they might not be worth the cost.
If your FICO® Score is at 740 or higher, you’ll likely qualify for thebest low-interest personal loans. Even with a score between 700 and 740, you’re likely to get approved for a personal loan with most lenders, although your interest rate may be a little higher.
Once your FICO® Score falls below 700, it becomes more difficult to qualify for a personal loan with a traditional bank. However, it is possible to get apersonal loan with fair credit. Most online lenders only require a credit score of 640 or 670, and some will even approve applicants in the low 600s and high 500s. That being said, you won’t get a good interest rate, and if your score is closer to 600 than 700, you’ll likely have to pay a high premium for any loan you’re approved for, so it’s probably wise to focus on increasing your score before you borrow money.
While there are options forpersonal loans with bad credit, it’s rarely wise to take advantage of them unless you’re truly in an emergency. Payday lenders and online lenders catering to people with bad credit often charge interest rates in the hundreds, which could easily land you in unmanageable debt and even lead to bankruptcy.
It’s important to read the fine print when taking out a personal loan. Rather than go with the first lender that approves you, pay attention to the following key features.
Credit and income requirements-- Applying for dozens of personal loans until you’re finally approved will cause your credit score to drop. Instead, read through each lender’s minimum credit score requirements to make sure you qualify before applying. Some lenders also have income requirements.
Interest rate-- This is arguably the most important feature to pay attention to, as it’s the main determinant of how much your loan is going to cost you over time. You want to secure the lowest interest rate possible.
Loan term-- Your loan term is how long you have to pay off the loan. You want to pay off your loan as quickly as possible to save money on interest, but remember that shorter loan terms do mean bigger monthly payments. You never want to accept a loan with a monthly payment you can’t afford.
Loan amount-- Personal loans can range from $1,000 to $50,000. Take out enough to cover the cost of your purchase, but never borrow more than you need.
Origination fee-- Some lenders charge an origination fee, which is essentially a loan processing fee. These are typically a percentage of the total loan amount. Look for loans with minimal or no origination fee.
Prepayment penalty-- A prepayment penalty is a fee that a lender can charge you if you repay your loan early, or before the loan term ends. You should avoid loans with prepayment penalties as it’s always best to pay off your loan ahead of schedule when you can.
Choosing the right personal loan for you involves careful deliberation and a lot of research. Here are some tips to help you find thebest personal loans.
• Shop around.Check the rates and credit requirements for all major lenders, including online lenders, traditional banks, and credit unions.
• Evaluate your budget.Decide how much you can afford to pay each month so that you know ahead of time what your monthly payments should be. This will also impact how much you can afford to borrow.
• See if you prequalify.Most lenders have a prequalification process that allows you to see what kinds of personal loans you might qualify for before applying. As long as this process doesn’t involve a hard pull on your credit report, it won’t impact your credit score.
• Complete an application.Based on your prequalification results, apply for a personal loan with a lender that is likely to approve you and offers the lowest interest rate. Pay attention to other fees and make sure the lender’s loan amounts and loan terms fit your needs.
• Accept an offer.If you’re approved for a personal loan, read through the terms fully before agreeing to the offer. Once you’ve accepted the offer, you should receive your funds shortly.
If you need to borrow money, it’s worth considering credit cards in addition to personal loans. The table below compares the benefits of each option.
[{"Personal loans": "Lower interest rates for good creditFixed interest rateLess likely to damage your creditHigher loan amounts", "Credit cards": "Interest can be avoided by paying your bill in full each monthImmediate access to cashLower monthly payments0% APR credit cards let you borrow interest-free for a period of time"}]
In most cases, personal loans are a more affordable way to borrow money than credit cards. However, if you can pay your credit card bill in full each month, credit cards allow you to borrow money for a short period of time without paying interest. Furthermore, if you can qualify for thebest 0% APR credit cards, you can borrow money without paying any interest at all -- as long as you pay it back before the introductory period ends, which is usually 12 to 18 months.
If you need to borrow a large amount, or if it will take you more than a year and a half to repay the amount borrowed, you should opt for a personal loan. If you’re certain you can repay the amount borrowed in less than a year and a half, and you have good credit, consider a 0% APR credit card. Finally, it’s hard to find personal loans for under $1,000, so if you’re simply finding yourself short a few hundred dollars now and then, consider applying for agood low-interest credit cardor a credit card from your local credit union.
Taking out a personal loan is a decision that should be made carefully, as it puts you in debt, which costs money and impacts your credit. Here are some examples ofgood reasons to take out a personal loan, as well asreasons not to get a personal loan.
When you should consider a personal loan:
• To pay for emergency expenses, such as medical bills or car repairs.
• To cover purchases that will provide a return in the future, such as home improvements or small business expenses.
• To pay off existing high-interest debt, such as credit card debt, but only if you qualify for a lower interest rate or better loan terms.
• You have good credit, can qualify for a low interest rate, and you’re sure you can afford your monthly payments.
When a personal loan might be a bad idea:
• You need extra money to pay your college tuition -- personal loans can’t be used for this.
• You want to treat yourself with an unnecessary purchase, like a vacation or a new suit -- save up the money instead.
• You can only qualify for loans with high interest rates -- work on improving your credit score first.
• You’re already struggling to pay your bills -- adding another bill into the mix won’t make your financial situation any easier.
• You’re borrowing a small amount and could pay it off in a year and a half -- most lenders don’t offer personal loans in amounts under $2,000 or $1,000, and a 0% APR credit card with an introductory period of 18 months is a better deal if you can pay it off in time.
Debt should never be taken lightly. By understanding the benefits and consequences of taking out a personal loan, you can make an informed decision about whether or not a personal loan is right for you.
The Motley Fool owns and recommends MasterCard and Visa, and recommends American Express. We’re firm believers in the Golden Rule. If we wouldn’t recommend an offer to a close family member, we wouldn’t recommend it on The Ascent either. Our number one goal is helping people find the best offers to improve their finances. That is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team. |
How giving up one thing can put you on the path to 'live rich now'
Would you give up a latte a day to become a millionaire?
David Bach, a personal finance expert and author of “The Latte Factor: Why You Don’t Have to Be Rich to Live Rich” recently broke down three principles that he believes will lead financial freedom.
To start, pay yourself first. In an interview on Yahoo Finance’s “YFi PM” Bach said taking one hour of your daily income—and putting it aside for yourself — is “the secret formula to becoming a millionaire.”
“The Latte Factor” follows the story of Zoey Daniels — a fictional twenty-something professional working in New York City that struggles with her finances. Daniels faces a growing burden of student loans and credit card debt.
That being said, Bach has a solution that could really pay off for millennials like Zoey. “If she gives up her latte, or she makes her lunch and doesn’t eat out everyday or she skips having one drink after work,” Bach said. “If she took that $10 a day, she could become a multi-millionaire.”
Bach’s story— whichechoed other prominent experts warning about the perils of frivolous spending— may be fictional, but it represents a real-life struggle that many millennials encounter when it comes to their finances.
Only 24% of that age cohort demonstrate basic financial literacy, according to a study from theNational Endowment for Financial Education.
According to data from theNew York Federal Reserve, millennials racked up over $1 trillion of debt, a 22% increase over the last five years –– more than any other generation in history.
Despite all these factors, Bach believes people, especially millennials, can benefit from putting their money into two different buckets: the future (retirement) and what he calls as a “dream account.”
“When you’re in your 20’s or 30’s, you can’t even visual yourself at 60. But if I asked you something you want to do right now, or in the next 12 months that takes money, you’ve got something,” he added.
Putting money aside automatically for those dreams starts with your own paycheck, according to Bach. “Whatever you earn [at work] in an hour, you keep the first hour a day of your income,” Bach said.
“That’s 12.5% of your gross income. The average person goes to work and if they have a 401k plan, and if they use it, they’re only saving 3% to 6%, which is half of what they need to save.”Bach added.
Sarah Smith is a Segment Producer/Booker at Yahoo Finance. Follow her on Twitter:@sarahasmith
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Wyndham Destinations preps for record summer as US vacationers eye local travel
Summer holidays just around the corner and hotels are expecting record occupancy.
Despite the strong U.S. dollar, most Americans are planning to keep most of their travel domestic. In fact, according to Vacasa’s Summer Travel Trends report, 33% plan on traveling cross-country, 28% will explore their own region, and 22% will stay within their home state.
The number of people planning to stay within U.S. shores could mean big business for some domestic hotels — something some major operators are banking on as the summer travel season kicks off.
“We’re expecting extremely strong summer demand, in fact, the first quarter for Orlando was 5% up, and as we got into the 2nd quarter in April, it moved up 6%,” said Michael Brown, CEO of Wyndham Destinations (WYND) on Yahoo finance’sYFi PM.
“So we’re preparing for record occupancy for this upcoming summer for the leisure traveller,” he added.
Brown added that “90% of our owners are North American, and they’re choosing to stay domestically,” said Brown, adding that currency fluctuations aren’t playing a role in where people are choosing to vacation.
When Airbnb disrupted the hospitality market offering alternative home-share accommodation, hotels and booking sites scrambled looking for solutions to compete.
But a decade in, even Airbnb sees the need to move into the hotel space. Recently, the companyannounced its intention to acquire last-minutebooking application HotelTonight.
“Airbnb is clearly a hot topic, it’s a great business, but it’s a different business than what we’re in and we’re not seeing a direct impact from it,” said Brown.
For hotels fearing the home-sharing company chipping away their revenue, Brown has advice for them: Just offer vacationers experience and space.
“What Wyndham offers and where our niche space is, we offer amenities at the resort, so feature pool, activities program for the family, fitness rooms, and also the consistency of traveling with the brand,” he added.
Trouble in the Caribbean
It’s possible that Americans may be choosing to stay home because of uncertainty abroad. In the Caribbean — a vacation hotspot —another U.S. touristhas died in the Dominican Republic, bringing the total deaths to nine over the past year.
Wyndham Destinations does not have resorts in Dominican Republic, but their properties in St. Thomas and Puerto Rico were devastated by the hurricanes last year.
Brown told Yahoo Finance that, from their experience, travelers will go back when the time is right.
“What we’ve seen for our travelers is by having 220 different resorts to choose from, they simply tend to choose a different destination until the time is right to go back,” he said.
Last year, Wyndham Destinations spun off from Wyndham Worldwide (WH) and became an independent company listed on the stock exchange. The Orlando-based company announced itsplanto invest more than $1 billion over the next five years on resort developments, upgrades, digital experience enhancements.
Grete Suarez is producer at Yahoo Finance for YFi PM and The Ticker. Follow her on Twitter:@GreteSuarez
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Sorry Google—Funding More Homes Won’t Solve the Bay Area Housing Crunch
I respectGooglefor trying.
The technology giant announced earlier this week a$1 billion commitmentto help offset the San Francisco Bay Area housing shortage. It’s a noble overture. But even that sizable amount is a very small drop in a very large ocean. And it doesn’t recognize the reality that building more houses won’t fundamentally solve the Bay Area housing crisis.
In fact, this approach perpetuates the antiquated notion that when your company expands, you build additional offices, add nearby housing to support all the new workers you bring to town, and fund more mass transit. And while alleviating burdens on existing infrastructure is wise, this approach ignores the fact that most work can be done remotely in the digital age, and we can spread opportunity more broadly as a result. (My company, Upwork, runs a digital platform that helps remote workers connect with clients.)
Year after year, the refusal to consider flexible work scenarios as a solution for housing woes results in more and more people crowding into urban areas. High-wage tech workers are driving up the cost of nearby real estate, forcing many workers to commute hundreds of hours each year to their jobs. Our roads are clogged, local infrastructure is strained, and quality of life is diminishing.
If we don’t enable more people to work where they choose, such tensions will only grow. Local housing prices will continue to skyrocket so long as the economy is booming. Themedian price of a single-family Bay Area home hit a whopping $990,000 in May. And every time workers from elite high-tech companies move into a neighborhood, prices rise—a lot. A Zillow report, for example, looked at how Facebook’s May 2012 IPOaffected Bay Area housing pricesbetween March 2012 and March 2013. “Home values where likely Facebook employees lived grew 20.9%, compared with 16.8% for the rest of the Bay Area. That translates to a $29,800 difference in appreciation in that first year after Facebook went public,” reads a press release that accompanied the report.
Commute times,already among the longest in the nationfor many Bay Area communities, will also worsen if we cling to outdated urban planning approaches. When companies grow, they make their mark on the world by expanding the number of buildings they control. They start with one, then two, then four, then eight, and so on, doubling their space every few years. These campuses bring thousands of workers into areas that often lack the local infrastructure to adequately support them. We saw this with Salesforce’s skyscraper in San Francisco, with the moves by Facebook and Google to gobble up existing buildings or create their own all around the world, and with Amazon’s aborted HQ2 effort in New York City.
None of this resembles smart urban planning, and Bay Area residents are suffering because of it. According to one recent survey, the housing crunch, bad traffic, and deteriorating quality of life have44% of residents planning to leave the region. A separate Bay Area Council study, meanwhile, found more than half of millennials—the most represented generation in the workforce—areconsidering leaving.
It doesn’t have to be this way. Younger generations are more than amenable to the idea of remote work. They’ve grown up in a digital world and almost see it as their right to connect to corporate networks where, when, and how they choose. As this generation rises in managerial ranks and begins to assert more influence over workforce planning, it’s likely workplaces will become more flexible anyway. In fact,our researchfinds that 69% of Gen Z and millennial managers already allow team members to work outside the office. Among those that allow remote work, 74% say this happens frequently.
While it’s fine to commit funds for local housing, as Google has done, such efforts do not go far enough. We should embrace the inevitability of the remote work movement rather than holding fast to outdated urban planning approaches. Companies should also expand their remote work programs for workers who do not need to be on corporate campuses every day of the week.
In addition, government leaders should make it easier for people to work remotely. Waiting patiently for companies to do it or for it to happen by osmosis will not solve our infrastructure and affordability problems. We need action now through incentives. This is a problem that affects everyone. And the only way to create meaningful incentives is through public-private partnerships.
Strong incentives to encourage remote work already exist in some places. Vermont, for instance, has aRemote Worker Grant Programthat pays workers up to $10,000 over two years to move, live, and work there, while Utah’sRural Employment Expansion Programoffers grants of$4,000 to $6,000 for new full-time employees.
California can look at similar moves to distribute the opportunities fueled by the Bay Area and Silicon Valley’s explosive growth more broadly throughout the state. Remote work provides an important first step toward that growth, and the state should do what it can to incentivize and promote remote options. This could have the dual impact of alleviating short-term burdens and creating long-term gains for more people in more places—all while increasing the revenue base for the state across the board.
There are many possible solutions to the lack of affordability in our communities. But no matter what, we must evaluate approaches other than building more housing.
A firm and strategic commitment to flexible work can jumpstart that search for solutions. By starting there, and quickly adding incentives driven through public-private sector collaboration, we can begin slowing and even reversing the ill effects of decades of urban expansion that have exacerbated inequality—and begin building a brighter future for the Bay Area.
Stephane Kasriel is the CEO ofUpwork.
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First $10k, then $11k as Bitcoin enjoys super Saturday
After breaking $10,000 for the first time in over a year, Bitcoin has now sped past the $11k mark, according to Coin360 . Trading #Bitcoin – FOMO is Upon Us, $10k Gone in Blink of an Eye… Now at $11k… What do Charts Say… & should have Q&A time from @PorcFest https://t.co/4dbbCRLcUc — Tone Vays [#UnderstandBit] (@ToneVays) June 22, 2019 “We’re due a significant correction” At the time of writing, it is up 12.81% on the day and trading at $11,063. 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. “I’m still not sold on the idea that it’s up, up, up from here,” says Simon Peters, Analyst at eToro. “ We’re due a significant correction still and prices could fall back to as low as $6,500 before the next major rise. That said, you can’t ignore the continuing price surge we’ve seen this year.” As for the latest rise, global politics could be one reason, Peters reckons. “It’s 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. Bitcoin’s 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, we’ve been clearly shown that the interest, adoption and money has not in any way left this new asset class.” The post First $10k, then $11k as Bitcoin enjoys super Saturday appeared first on Coin Rivet . |
Gin Sales Are Booming and It Could Be Thanks to the Growing Plant Craze
In 2018, global consumption of gin grew faster than any other beverage alcohol category. Brandy Rand thinks she knows why, and she calls it her “plant theory.”
“If you look at consumption trends over the past few years, there is a high growth rate in people eating more plants. We have been told it is better for the environment and for our diets,” says Rand, chief operating officer for the Americas for global alcohol-industry tracker IWSR. The power of plants is changing consumption behavior across many food and beverage categories: There are plant-based burgers, chicken, seafood, and milk products—and even cannabis is soaring in popularity.
All this talk of plants may be giving gin a lift too. With a botanical base, gin has an herbaceous vibe that fits neatly into the plant craze.
Gin makers are experimenting with surprising flavors like basil, rhubarb, orange, and cinnamon, and in the process they’re bringing new drinkers into the fold. The trend toward these natural ingredients has become so buzzy that vodka brand Ketel One last yearlauncheda botanicals line that’s gin-ish.
Globally, sales of gin jumped 8.3% last year versus 2017, IWSRdata shows, bolstered in part by trendy pink gins, to lift the spirit’s sales to more than 72 million nine-liter cases. Growth has been explosive in European markets like the United Kingdom and Spain, where much of the innovation is occurring. IWSR forecasts gin will hit 88 million cases by 2023.
Bartenders are embracing gin in funky cocktails that shine on—you guessed it—Instagram. And even the tonic side of the equation is seeing innovation. Stateside, brands like Fever-Tree, Navy Hill, and Fentimans are giving gin drinkers new ways to experiment.
“Gin is an interesting drink,” says Ed Pilkington, liquor giant Diageo’s North America chief marketing officer. “The different flavor types that exist in gin align with our food culture.”
Pilkington says the gin renaissance in Europe has unfolded because it was a drink once preferred by people who are older but is now consumed by all legal age groups and more evenly by both genders. Diageo has focused on innovation within the category, launching Gordon’s Pink and hitting over 1 million cases just a year after that gin’s debut.
In 2018, Diageo launched an orange-flavored variant of Tanqueray called Flor de Sevilla. It is bringing the spirit stateside for the first time with a limited launch in Florida. And just last month, Diageodebuteda new super-premium Italian gin called Villa Ascenti, which it will sell in 14 European countries.
The world’s largest spirits makers are also placing bets on gin with acquisitions. In the past few years, Gruppo CampariboughtBulldog London Dry Gin, Pernod Ricardscooped upItalian Malfy and Germany’sMonkey 47, and Corona makerConstellation Brandsbought a stakein craft spirits maker Black Button Distilling, which sells lilac- and citrus-forward gins.
Gin is so trendy that even actor Ryan ReynoldsboughtPacific Northwest–based craft brand Aviation Gin.
“Competitors are investing in gin, and that’s good for the category,” says Pilkington.
In America, gin hasn’t yet emerged as a superstar. Last year, the spirit’s volumedipped1.1% as growth for the priciest gins couldn’t fully offset declines for the cheapest stuff, according to data from the Distilled Spirits Council.
To put things further in perspective: Gin volume soared 52% in the U.K. versus a slim 1.5% gain in America for the 52-week period ending February 23, 2019, according to Nielsen.
Part of what has held gin back in the U.S. is the misconception that gin must always have a juniper taste, and that’s because many London-style gins feature that flavor profile. And because the most popular cocktail was a gin and tonic, many drinkers find the floral notes overpowering.
Gin isn’t alone in fending off such misinterpretations. Rum often gets pegged as being too sweet, Scotch as having too much peat, and mezcal as too smoky. All of those spirits brands and their makers need to work on educating bartenders and consumers about their unappreciated versatility.
Popular cocktails like the Negroni have helped introduce gin to more Americans in a more subtle way. Craft gin brands are among those aiming to bring new flavors to the market. Ohio-based Watershed Distillery is selling gins with notes like rose petals and citrus, and even a gin that sits in a bourbon barrel for a year.
“A lot of people had a bad experience with gin in college,” says Greg Lehman, Watershed’s founder. “But gin isn’t a one-note category. And there is a new gin consumer that is open to new flavors.”
On the trendy side, Beefeater Pink came to the U.S. last year, apink-hued ginthat balances juniper with strawberry and citrus. Hendrick’s Gin, meanwhile, gets a lot of credit for elevating the gin experience in the U.S., though other brands are adding excitement. Monkey 47, for example, has classic botanicals like juniper and coriander but also lingonberries and spruce. Pernod Ricard says that it has invested behind Monkey 47 in the U.S. and has been rewarded with exponential growth.
“If you start from the idea that American spirits consumers have always and will always look for flavorful experiences, and you layer on the trend of authenticity, craftsmanship, and health and wellness—it sets the stage for the reemergence of gin,” says Jeff Agdern, senior vice president of New Brand Ventures at Pernod Ricard. “Gin offerings today are wildly different than what was available 20 years ago.”
“I am not sure if we are ready to call gin the next big category [in the U.S.],” adds Agdern. “But more brands are coming in, and there’s more retail and consumer interest. We are betting on it.”
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The NL Industries (NYSE:NL) Share Price Is Down 60% So Some Shareholders Are Wishing They Sold
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NL Industries, Inc.(NYSE:NL) shareholders should be happy to see the share price up 12% in the last month. But that's not enough to compensate for the decline over the last twelve months. Specifically, the stock price slipped by 60% in that time. So the bounce should be viewed in that context. You could argue that the sell-off was too severe.
See our latest analysis for NL Industries
NL Industries isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
In the last year NL Industries saw its revenue grow by 9.5%. While that may seem decent it isn't great considering the company is still making a loss. It's likely this muted growth has contributed to the share price decline of 60% in the last year. Like many holders, we really want to see better revenue growth in companies that lose money. Of course, the market can be too impatient at times. Why not take a closer look at this one so you're ready to pounce if growth does accelerate.
You can see how revenue and earnings have changed over time in the image below, (click on the chart to see cashflow).
Thisfreeinteractive report on NL Industries'sbalance sheet strengthis a great place to start, if you want to investigate the stock further.
Investors in NL Industries had a tough year, with a total loss of 60%, against a market gain of about 6.1%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 17% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. If you would like to research NL Industries in more detail then you might want totake a look at whether insiders have been buying or selling shares in the company.
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 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. |
U.S. Silica Has an Unlikely Growth Opportunity: Cool Roofs
If investors browsed through a catalogue of all 1,500 products manufactured byU.S. Silica(NYSE: SLCA), white granules intended to be used in asphalt roofing shingles probably wouldn't spark much interest. In fact, the engineered materials weren't even part of the $750 million acquisition of EP Minerals in 2018 that has been responsible for the overnight expansion of the industrial segment; that distinction goes to the comparatively small $18.6 million acquisition of White Armor the year before.
Nonetheless, those little white granules represent a tantalizing growth opportunity for the industrial segment. That's because a growing number of contractors, homeowners, and even politicians are warming up to the idea of money-saving cool roofs built withenergy-efficient materials. Here's why investors should pay closer attention to the under-the-radar growth catalyst being overlooked by Wall Street.
Image source: Getty Images.
A confluence of headwinds has torpedoed shares of U.S. Silica in recent years. Weak oil prices, a soaring count of drilled but uncompleted wells in major shale energy regions, and a preference for new types of drilling aids have all worked against the frack sand supplier in its core market. Case in point: Average selling prices (ASP) to oil and gas customers dropped 30% year over year in the first quarter of 2019.
That stat helps to explain why shares have receded 38% since the end of March. However, an obsession with oil and gas markets means Wall Street is failing to acknowledge that the business is increasingly relying on industrial applications of its vast sand and mineral reserves for revenue and profits. After all, the industrial segment contributed 31% of total revenue in Q1 2019, compared to only 15% in the year-ago period. It also boasts an ASP per ton that's81% higher than the oil and gas segment.
Wall Street's failure to value the growing diversification under way suggests analysts are missing the significant industrial opportunity in cool roofs. Investors with a long-term mindset might want to avoid the same mistake.
Image source: Getty Images.
Anyone who's ever made the mistake of walking barefoot across asphalt on a hot summer day knows that dark-colored surfaces are efficient at absorbing solar energy. Unfortunately, that's exactly what makes most roofs incredibly energyinefficient.
Black rubber roofs atop commercial buildings or dark-colored asphalt shingles on residential buildings only reflect about 5% of solar rays back into space, leaving most absorbed by the building itself. White- or light-colored materials can boost the amount of solar reflectance to 70%. The exact numbers can vary, but the temperature of a white roof is typically 40% lower than that of a dark roof. That's why the former is called a "cool roof."
A cooler roof translates to a cooler building and less energy used for air conditioning, in some cases as much as 20%. It also means the roofing materials will last longer, since they aren't transitioning through such large temperature swings throughout the day or year. Additionally, cooler roof temperatures increase the longevity and energy output of solar panels -- the latter by as much as 12%.
Pairing a cool roof with a rooftop solar module creates a one-two punch of energy efficiency: Less electricity is required for air conditioning, which allows the same-sized solar array to power more of a building's energy needs. In other words, a solar module that might otherwise meet just 70% of a building's electricity consumption could power the entire structure.
Image source: Getty Images.
The reality is that replacing dark roofing materials isn't so simple. A lot of materials science goes into engineering granules that are truly white, can resist staining and algae growth, repel water, are strong enough to withstand decades of direct sun exposure, and are produced with consistent size and shape to be used seamlessly in existing manufacturing processes for, say, asphalt shingles. That's where the White Armor brand of white granules from U.S. Silica comes into play.
The company has retooled a recently acquired manufacturing facility in Millen, Georgia, to churn out the product in significant commercial quantities by the end of 2019. That could be enticing for building materials leaderOwens-Corning(NYSE: OC). The company's top cool-roof product manages a solar reflectance of only 30%. By comparison, White Armor granules boast a market-leading real-world-tested 70% solar reflectance.
Even after coatings and treatments that reduce reflectivity, White Armor will be comfortably above the minimum solar reflectance rating of 20% for most cool roofs. With estimated net savings of $0.50 per square foot per year, the average American home would save $1,000 annually with a cool roof enabled by U.S. Silica's engineered materials.
That helps to put the potential of White Armor granules into perspective, but the opportunity is still difficult to quantify -- and that's a good thing. The fast-changing regulations mandating cool roofs from California to Eastern Europe to Japan are creating a multibillion-dollar market opportunity, with some estimates approaching $30 billion by 2025.
The growth potential of White Armor granules illustrates how seriously management is taking diversification efforts. For the company to escape the perpetual volatility of its core oil and gas market and remain comfortably profitable in any pricing environment, it will need to continue growing its industrial product offerings -- and perhaps score a big win here and there. If White Armor granules can capitalize on the coming opportunity in cool roofs and show early signs of progress in the next year or two, then Wall Street might be a little more forgiving when it comes to U.S. Silica stock.
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Maxx Chatskohas 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. |
Do Directors Own Seres Therapeutics, Inc. (NASDAQ:MCRB) Shares?
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Every investor in Seres Therapeutics, Inc. (NASDAQ:MCRB) should be aware of the most powerful shareholder groups. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. We also tend to see lower insider ownership in companies that were previously publicly owned.
With a market capitalization of US$181m, Seres Therapeutics is a small cap stock, so it might not be well known by many institutional investors. In the chart below below, we can see that institutions own shares in the company. Let's take a closer look to see what the different types of shareholder can tell us about MCRB.
View our latest analysis for Seres Therapeutics
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
As you can see, institutional investors own 31% of Seres Therapeutics. This suggests some credibility amongst professional investors. But we can't rely on that fact alone, since institutions make bad investments sometimes, just like everyone does. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Seres Therapeutics's earnings history, below. Of course, the future is what really matters.
We note that hedge funds don't have a meaningful investment in Seres Therapeutics. 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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our data suggests that insiders own under 1% of Seres Therapeutics, Inc. in their own names. It appears that the board holds about US$1.4m worth of stock. This compares to a market capitalization of US$181m. Many tend to prefer to see a board with bigger shareholdings. A good next step might be totake a look at this free summary of insider buying and selling.
The general public holds a 39% stake in MCRB. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
With a stake of 19%, private equity firms could influence the MCRB board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.
Public companies currently own 10% of MCRB stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.
While it is well worth considering the different groups that own a company, there are other factors that are even more important.
I like to dive deeperinto how a company has performed in the past. You can accessthisinteractive graphof past earnings, revenue and cash flow, for free.
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can checkthis free report showing analyst forecasts for its future.
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. |
80 per cent of women do not know that alcohol intake increases risk of cancer
New research has found that as many as 80 per cent of women don't know that drinking alcohol increases risk of breast cancer. [Photo: Getty] New research has discovered that 80 per cent of us dont know that drinking alcohol can increase a womans risk of breast cancer . Researchers surveyed UK women about their knowledge when they attended breast clinics or screenings. Just one in five people in the group knew that there were cancer risks associated with alcohol. Although the survey covered a relatively small amount of people, it could indicate a greater need for nationwide awareness. READ MORE: A 10-minute prostate scan might soon be available Alcohol is a risk factor for seven types of cancer, according to Cancer Research UK. This includes breast, mouth and bowel cancer. Breast cancer is the most common in the UK and is responsible for 11,000 deaths and 54,000 cases each year. Cancer Research UK attributes around 8 per cent of breast cancer cases to alcohol each year and even low levels of drinking can increase the risk. READ MORE: Heart disease deaths have halved in the last decade Compared with other organs, breast appears to be more susceptible to carcinogenic effects of alcohol. A Washington University School of Medicine study suggested. Previous studies have found that the risk of breast cancer increases between 7 and 10 per cent for each 10mg of alcohol consumed daily. Thats roughly one drink per day. READ MORE: Two common diet-related cancer mistakes Breast Cancer Now suggests that one of the reasons for this link is due to the way alcohol alters our hormone levels. However, the exact reason isnt known. There are a number of ways to begin cutting down your alcohol intake. Breast Cancer Now suggests tracking the amount you drink by writing it down or using an app, trying to have 1-2 alcohol days a week and having evenings with nice soft drinks or mocktails. If youre concerned about this link and want to learn more, the NHS offer a lot of support as well as clear alcohol intake guidelines to follow. Watch the latest videos from Yahoo Style UK: View comments |
13 States Expected to Sell at Least $1 Billion in Cannabis by 2024
The marijuana industry is growing like gangbusters, and both investors and cannabis enthusiasts couldn't be happier. According toBank of Americaanalyst Christopher Carey, legal pot could one day become an industry capable of$166 billion in annual salesand could disrupt a number of other industries as it expands.
But when talking about global sales, we're really discussing the important role legal cannabis could play in the United States -- a market that's second to no other. Carey's projection pegs the U.S. as generating more than a third of his firm's peak sales estimate, which is why the country is often viewed as the crown jewel of the marijuana movement.
The big question is: Which states will play a big role in generating legal U.S. cannabis sales?
For that answer, we'll turn to the newly released "State of the Legal Cannabis Market" report from the duo ofArcview Market ResearchandBDS Analytics.
Image source: Getty Images.
According to Arcview and BDS Analytics, legal cannabis spending in the United States is set to soar from $9.84 billion in 2018 to $30.03 billion by 2024. This suggests that, along with Canada, North America will account for practically 87% of all legal channel marijuana dollars by 2024.
In a detailed state-by-state breakdown, the report finds 13 states that offer billion-dollar sales potential by as soon as 2024, up from the three states that racked up more than $1 billion in legal spending in 2018 (California, Colorado, and Washington). Here are the states Arcview and BDS Analytics foresee contributing the most to legal cannabis sales in the U.S. by 2024:
1. California:$7.23 billion in annual sales in 2024
2. Colorado:$2.05 billion
3. Florida:$1.9 billion
4. New York:$1.66 billion
5. Michigan:$1.48 billion
6. Arizona:$1.47 billion
7. Nevada:$1.41 billion
8. Washington:$1.27 billion
9. Massachusetts:$1.21 billion
10. Illinois:$1.14 billion
11. New Jersey:$1.04 billion
12. Oregon:$1.02 billion
13. Maryland:$1.02 billion
Combined, these 13 states are expected to generate $23.9 billion, or nearly 80% of the $30 billion in full-year legal marijuana sales by 2024.
Image source: Getty Images.
Recreationally legal established states, such as Colorado, Washington, and Oregon, should see growth in the coming years, according to the report, though their rate of growth will slow substantially from years past. Instead, it's states like California, which hasstruggled with supply issues and regulatory red tape, and Arizona, which isn't even a recreationally legal state at the moment, that could see legal cannabis spending roughly triple between 2018 and 2024.
Also noteworthy is that the adult population of a state isn't necessarily indicative of its spending potential. Colorado is forecast to have 6.5 million adults living in the state by 2024, yet is projected to outpace both Florida and New York, with respective adult populations of 22.5 million and 20.1 million, in legal pot sales.
On the basis of spending per capita in 2024, Nevada is the highest, with $1.41 billion in legal sales spread across just 3.4 million people (almost $416 per person). A large influx of tourism keeps Nevada's economy chugging along, and this looks to be the case with its burgeoning pot industry. Colorado slots in as the fourth-highest state on per-capita spending, also benefiting from being a popular tourist destination.
Now that you have a better idea of which states will be contributing the most to the United States' fast-growing marijuana industry, let's take a closer look at some of the companies primed to benefit from this expansion.
Image source: Getty Images.
The most obvious beneficiaries would be any cannabis companies with a major focus on the California market. After all, California could account for nearly a quarter of all legal U.S. marijuana spending by 2024. AlthoughMedMen Enterpriseshas laid the groundwork to see substantial top-line growth in the Golden State, I believe it's the combination ofCresco Labs(NASDAQOTH: CRLBF)andOrigin House(NASDAQOTH: ORHOF)that might be best-positiohned to benefit.
At the beginning of April, Cresco Labs announced what was, at the time, an$823 million all-stock offerto acquire Origin House. With shareholders overwhelmingly voting in favor of the combination earlier this month, it's simply a matter ofgetting the thumbs-up from the U.S. Justice Departmentbefore the combination can be complete. Origin House possesses one of a very few cannabis distribution licenses in California. Thus, Cresco Labs' acquisition of Origin House will allow the vertically integrated dispensary operator the ability to place its in-house-grown pot products into more than 500 licensed Californian dispensaries.
This data also looks very encouraging for a focused dispensary operator likeTrulieve Cannabis(NASDAQOTH: TCNNF). With legal cannabis spending in Florida projected to nearly triple to $1.9 billion by 2024, up from $626 million in 2018, Trulieve, which has28 of its 30 dispensaries located in the Sunshine State, looks to be a clear winner.
Instead of spreading itself thin and moving into as many legalized states as possible, which has been the modus operandi of many of its peers, Trulieve has kept its operations mostly confined to Florida, and in the process has gobbled up a good chunk of the state's market share while keeping its operating costs reasonably low. Although recreational legalization, which could happen as early as 2020, would require Trulieve to further defend its turf from increased competition, thehighly profitable dispensary operatorhas shown little, if any, weakness thus far.
Image source: Planet 13.
Don't sleep on the small players, either. Small-capPlanet 13 Holdings(NASDAQOTH: PLNHF)currently operates the largest marijuana dispensary in the U.S., and will soon hold the top two spots, following the announcement of its plans toopen a 40,000-square-foot dispensaryin Santa Ana, California, just 10 minutes from Disneyland.
Planet 13's flagship112,000-square-foot SuperStorein Las Vegas, Nevada, and its California store focus on the experience for the consumer, and just so happen to be in some of the busiest cannabis markets in the entire United States. With Planet 13 already seeing its visitor count nearly double at its SuperStore between November 2018 and May 2019, it looks to have a hit on its hands (pun intended). That makes it a potentially under-the-radar winner as legal spending expands, assuming it can translate the success of its SuperStore to other locations.
If you're looking to invest in the cannabis industry, U.S. pot stocks simply must be on your radar.
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Sean Williamsowns shares of BAC. The Motley Fool recommends Origin House. The Motley Fool has adisclosure policy. |
What are the Advantages of Using One Car Insurance Company to Insure Multiple Vehicles?
LOS ANGELES, CA / ACCESSWIRE / June 22, 2019 /Compare-autoinsurance.org has launched a new blog post that explains how insuring multiple vehicles at the same insurer can save car insurance money.
For more info and free quotes, please visithttps://compare-autoinsurance.org/the-benefits-of-using-one-insurer-for-multiple-car-insurance/.
It's not uncommon for a household to have more than one vehicle. To save money on car insurance, drivers can choose to insure all the vehicles from a household to one insurance company in order to obtain a multi-car insurance discount.
Multiple-car insurance policies have the following benefits:
• Less paperwork to deal with. Policyholders can save time by having to meet with just one insurance agent and completing one insurance policy. Drivers should ensure they choose enough coverage to protect the value of the most expensive vehicle in the policy. Drivers should contact their insurers and seek advice regarding a proper level of liability coverage.
• Cheaper premiums and deductibles. Drivers that have more vehicles will pay more on individual policies than compared to the premiums of a multi-car policy. Also, drivers will have to pay for deductibles when filling for a claim. On a multi-car policy, all claims will have the same deductibles. Depending on the insurer, in the event of filing a claim for two vehicles at once, it is possible to pay only one deductible. For example, if two vehicles that are insured on the same policy got damaged in a fire or a flood, drivers will only have to pay one deductible.
• Reduced risk of lapses. With a multi-car policy, drivers will have to pay one monthly policy bill at the same location and at the same time. In the case of individual policies, drivers that own multiple cars will have to remember the due dates of each policy and pay them at different locations.
• Cheaper rates for high-risk drivers. Teen drivers, DUI convicted drivers, senior drivers are considered high-risk by insurance companies and have to pay high insurance premiums. The multi-car insurance policy premiums will increase if a high-risk driver is added to the policy. However, the overall policy premiums increase would be lowered when compared to the premiums paid by the high-risk driver on a separate policy.
For additional info, money-saving tips and free car insurance quotes, visithttps://compare-autoinsurance.org/
Compare-autoinsurance.org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc.
"Multi-car insurance policies will help drivers saveprecious time and money," said Russell Rabichev,Marketing Director of Internet Marketing Company.
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SOURCE:Internet Marketing Company
View source version on accesswire.com:https://www.accesswire.com/549539/What-are-the-Advantages-of-Using-One-Car-Insurance-Company-to-Insure-Multiple-Vehicles |
Does Nuance Communications, Inc. (NASDAQ:NUAN) Have A High Beta?
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If you're interested in Nuance Communications, Inc. (NASDAQ:NUAN), 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. The first category is company specific volatility. This can be dealt with by limiting your exposure to any particular stock. 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 mimic the volatility of the market quite closely, while others demonstrate muted, exagerrated or uncorrelated price movements. Beta can be a useful tool to understand how much a stock is influenced by market risk (volatility). However, Warren Buffett said 'volatility is far from synonymous with risk' in his 2014 letter to investors. So, while useful, beta is not the only metric to consider. To use beta as an investor, you must first understand that the overall market has a beta of one. A stock with a beta greater than one is more sensitive to broader market movements than a stock with a beta of less than one.
View our latest analysis for Nuance Communications
Nuance Communications has a five-year beta of 1.02. 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. 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 Nuance Communications fares in that regard, below.
With a market capitalisation of US$4.8b, Nuance Communications is a pretty big company, even by global standards. It is quite likely well known to very many investors. It's not overly surprising to see large companies with beta values reasonably close to the market average. After all, large companies make up a higher weighting of the index than do small companies.
It is probable that there is a link between the share price of Nuance Communications 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. In order to fully understand whether NUAN is a good investment for you, we also need to consider important company-specific fundamentals such as Nuance Communications’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 NUAN’s future growth? Take a look at ourfree research report of analyst consensusfor NUAN’s outlook.
2. Past Track Record: Has NUAN 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 NUAN's historicalsfor more clarity.
3. Other Interesting Stocks: It's worth checking to see how NUAN 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. |
Is Hamilton Thorne Ltd. (CVE:HTL) Trading At A 40% Discount?
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Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Hamilton Thorne Ltd. (CVE:HTL) as an investment opportunity by taking the expected 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!
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.
Check out our latest analysis for Hamilton Thorne
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 ($, Millions)", "2019": "$5.11", "2020": "$6.44", "2021": "$7.65", "2022": "$8.71", "2023": "$9.60", "2024": "$10.34", "2025": "$10.96", "2026": "$11.48", "2027": "$11.93", "2028": "$12.33"}, {"": "Growth Rate Estimate Source", "2019": "Est @ 36.37%", "2020": "Est @ 26.04%", "2021": "Est @ 18.81%", "2022": "Est @ 13.75%", "2023": "Est @ 10.21%", "2024": "Est @ 7.73%", "2025": "Est @ 6%", "2026": "Est @ 4.78%", "2027": "Est @ 3.93%", "2028": "Est @ 3.34%"}, {"": "Present Value ($, Millions) Discounted @ 7.63%", "2019": "$4.75", "2020": "$5.56", "2021": "$6.14", "2022": "$6.49", "2023": "$6.64", "2024": "$6.65", "2025": "$6.55", "2026": "$6.37", "2027": "$6.15", "2028": "$5.91"}]
Present Value of 10-year Cash Flow (PVCF)= $61.21m
"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 1.9%. We discount the terminal cash flows to today's value at a cost of equity of 7.6%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = US$12m × (1 + 1.9%) ÷ (7.6% – 1.9%) = US$221m
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= $US$221m ÷ ( 1 + 7.6%)10= $105.96m
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 $167.17m. The last step is to then divide the equity value by the number of shares outstanding. This results in an intrinsic value estimate in the company’s reported currency of $1.39. However, HTL’s primary listing is in United States, and 1 share of HTL in USD represents 1.321 ( USD/ CAD) share of TSXV:HTL,so the intrinsic value per share in CAD is CA$1.84.Compared to the current share price of CA$1.1, the company appears quite undervalued at a 40% 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. 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 Hamilton Thorne 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 7.6%, which is based on a levered beta of 0.954. 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.
Although the valuation of a company is important, 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 Hamilton Thorne, I've put together three fundamental aspects you should look at:
1. Financial Health: Does HTL 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 HTL'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 HTL? 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 CA 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. |
Want To Invest In OraSure Technologies, Inc. (NASDAQ:OSUR)? Here's How It Performed Lately
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When OraSure Technologies, Inc. (NASDAQ:OSUR) released its most recent earnings update (31 March 2019), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were OraSure Technologies's average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not OSUR actually performed well. Below is a quick commentary on how I see OSUR has performed.
View our latest analysis for OraSure Technologies
OSUR's trailing twelve-month earnings (from 31 March 2019) of US$19m has jumped 18% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 42%, indicating the rate at which OSUR is growing has slowed down. Why could this be happening? Well, let’s take a look at what’s transpiring with margins and if the whole industry is feeling the heat.
In terms of returns from investment, OraSure Technologies has fallen short of achieving a 20% return on equity (ROE), recording 6.9% instead. Furthermore, its return on assets (ROA) of 6.0% is below the US Medical Equipment industry of 6.8%, indicating OraSure Technologies's are utilized less efficiently. However, its return on capital (ROC), which also accounts for OraSure Technologies’s debt level, has increased over the past 3 years from 6.6% to 10%.
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as OraSure Technologies gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research OraSure Technologies to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for OSUR’s future growth? Take a look at ourfree research report of analyst consensusfor OSUR’s outlook.
2. Financial Health: Are OSUR’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. |
Fox News’ Sean Hannity and convicted Trump campaign manager Paul Manafort secretly shared information about Mueller investigation, text messages reveal
He has been called the shadow White House chief of staff, but Sean Hannity also sought to assist Paul Manafort as he defended himself from the special counsel’s investigation , according to court documents unsealed on Friday. Mr Hannity, a Fox News host who is a close ally of Donald Trump , advised Manafort on how to fight his prosecution in the court of public opinion and also pressed for confidential details about the case, according to a compilation of hundreds of text messages exchanged between the men, made public as part of the winding down of the case. Mr Hannity at times appeared to try to gauge whether Manafort, a former Trump campaign aide, might be poised to cooperate with investigators and, if so, what he might tell them about Mr Trump and his inner circle. After Manafort’s former deputy, Rick Gates , pleaded guilty last year and agreed to cooperate with investigators, Mr Hannity asked why Manafort did not “get a sweetheart deal like Gates.” Manafort responded that prosecutors “would want me to give up” the president or his family, especially his son-in-law and White House adviser, Jared Kushner . “I would never do that.” The messages underscore the outsize role Mr Hannity has played in Mr Trump’s orbit. On his daily syndicated radio programme and nightly Fox News show, he serves as a top supporter, leading the charge against Mr Trump’s enemies. But Mr Hannity also speaks regularly to the president about strategy and messaging, and the messages suggest he sought to play a similar role for Manafort, raising the spectre that he may have helped the two parties coordinate their strategies or at least given him real-time visibility into both sides’ thinking. Days before Manafort and Gates were indicted in October 2017, Mr Hannity suggested he had information. Manafort responded within 10 minutes, and the subsequent messages suggest they spoke on the phone, after which Manafort thanked Mr Hannity for “the news,” adding, “You are the best!” Story continues A few months later, Manafort arranged for Mr Hannity to speak with his lawyer Kevin Downing, then quickly followed up, asking how the call went. “Good,” Mr Hannity said. “I asked him to feed me everyday,” adding, “He has to SEND ME STUFF.” “He will,” Manafort responded. “Every day,” Mr Hannity demanded. Later, they speculated on the fate of Mr Kushner, with Manafort positing that the special counsel, Robert Mueller , might be targeting the president’s son-in-law as a way of pressuring Mr Trump into an interview. “He won’t agree,” Mr Hannity said. “The lawyers will fight tooth and nail. Proffered agreement. All pre-planned.” In a statement responding to the release of the text messages, Mr Hannity said, “My view of the special counsel investigation and the treatment of Paul Manafort were made clear every day to anyone who listens to my radio show or watches my TV show.” Neither Mr Downing nor a spokesperson for Manafort responded to a request for comment. The messages began in July 2017 as prosecutors ramped up their investigations into Manafort and Gates, but months before the men were indicted on charges related to their unregistered lobbying work for Russia -aligned Ukrainian interests. The messages ended in June 2018, the day after Manafort was charged with additional counts on witness tampering. Two months later, he was found guilty on tax and banking violations. He subsequently pleaded guilty to additional charges and was sentenced in March to 7 1/2 years in prison. Mr Hannity and Manafort seemed to have developed a bond, sharing misplaced confidence that Manafort would beat the charges against him, as well as a disdain for Mr Mueller and his investigators. In one text, Manafort compared Mr Mueller to the Gestapo. Both men expressed raw animosity for Andrew Weissmann, a member of the special counsel’s team who helped lead the prosecution of Manafort. He called Mr Weissmann a “slime ball,” “unethical” and “illegal” while Mr Hannity concurred with the dismal view of Mr Weissmann. They thought little of former attorney general Jeff Sessions , expressing disappointment that he did not appoint a second special counsel to investigate the Clinton Foundation . “Sessions is totally worthless,” Manafort wrote in April 2018. Mr Hannity responded, “Worthless.” Mr Hannity, who has repeatedly attacked the special counsel and the investigation into the president, regularly exchanged messages with Manafort about Fox News segments defending him and assailing his critics. After an episode in October 2017, Manafort messaged to compliment Mr Hannity and to complain about the lack of attention towards a dossier of research, which included claims about Manafort, that had been compiled for Democrats by a former British spy. “It’s really important that this doesn’t fade,” Manafort wrote. “Congress must engage.” Mr Hannity responded, “I mentioned that!! Congress is finally engaging.” Later, Manafort, who professed to be a regular viewer, wrote to Mr Hannity: “In a fair world you would get a Pulitzer for your incredible reporting.” After another broadcast, Manafort told the Fox host that he loves him. At one point early in their correspondence, Mr Hannity indicated he would do “anything I can” to aid Manafort, adding, “I’m NOT a fair weather friend.” But there was a limit to their relationship. Mr Hannity deflected on multiple occasions when Manafort asked for help drawing attention to efforts to raise money for his legal defence, initially suggesting he might allow Manafort to highlight the fund if he appeared on Mr Hannity’s show. Manafort repeatedly begged off, citing his gag order. He made a final urgent appeal to Mr Hannity for fundraising assistance in May 2018, writing: “Do you think you can do a tweet or a like to the site? I need to draw traffic to it quickly.” Mr Hannity responded, “Paul it may be problematic with Fox. I need to get the ok. Hope u understand.” The New York Times |
Interested In OraSure Technologies, Inc. (NASDAQ:OSUR)? Here's What Its Recent Performance Looks Like
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For investors with a long-term horizon, assessing earnings trend over time and against industry benchmarks is more valuable than looking at a single earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on OraSure Technologies, Inc. (NASDAQ:OSUR) useful as an attempt to give more color around how OraSure Technologies is currently performing.
View our latest analysis for OraSure Technologies
OSUR's trailing twelve-month earnings (from 31 March 2019) of US$19m has jumped 18% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 42%, indicating the rate at which OSUR is growing has slowed down. Why could this be happening? Well, let's examine what's transpiring with margins and whether the whole industry is experiencing the hit as well.
In terms of returns from investment, OraSure Technologies has fallen short of achieving a 20% return on equity (ROE), recording 6.9% instead. Furthermore, its return on assets (ROA) of 6.0% is below the US Medical Equipment industry of 6.8%, indicating OraSure Technologies's are utilized less efficiently. However, its return on capital (ROC), which also accounts for OraSure Technologies’s debt level, has increased over the past 3 years from 6.6% to 10%.
Though OraSure Technologies's past data is helpful, it is only one aspect of my investment thesis. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? You should continue to research OraSure Technologies to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for OSUR’s future growth? Take a look at ourfree research report of analyst consensusfor OSUR’s outlook.
2. Financial Health: Are OSUR’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. |
Calculating The Fair Value Of Group 1 Automotive, Inc. (NYSE:GPI)
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In this article we are going to estimate the intrinsic value of Group 1 Automotive, Inc. (NYSE:GPI) by projecting its future cash flows and then discounting them to today's value. I will be using 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. 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 Group 1 Automotive
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. 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.
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 ($, Millions)", "2019": "$136.37", "2020": "$161.65", "2021": "$162.18", "2022": "$163.88", "2023": "$166.43", "2024": "$169.60", "2025": "$173.26", "2026": "$177.29", "2027": "$181.63", "2028": "$186.23"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x3", "2020": "Analyst x2", "2021": "Est @ 0.33%", "2022": "Est @ 1.05%", "2023": "Est @ 1.55%", "2024": "Est @ 1.91%", "2025": "Est @ 2.15%", "2026": "Est @ 2.33%", "2027": "Est @ 2.45%", "2028": "Est @ 2.53%"}, {"": "Present Value ($, Millions) Discounted @ 14.57%", "2019": "$119.03", "2020": "$123.16", "2021": "$107.86", "2022": "$95.13", "2023": "$84.33", "2024": "$75.01", "2025": "$66.88", "2026": "$59.74", "2027": "$53.42", "2028": "$47.81"}]
Present Value of 10-year Cash Flow (PVCF)= $832.37m
"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. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 10-year government bond rate (2.7%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 14.6%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = US$186m × (1 + 2.7%) ÷ (14.6% – 2.7%) = US$1.6b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= $US$1.6b ÷ ( 1 + 14.6%)10= $414.99m
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 $1.25b. 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 $70.04. Compared to the current share price of $77.68, the company appears around fair value at the time of writing. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out.
The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the 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 Group 1 Automotive 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 14.6%, which is based on a levered beta of 1.986. 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 Group 1 Automotive, There are three additional factors you should look at:
1. Financial Health: Does GPI 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 GPI'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 GPI? 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 US 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. |
Can We See Significant Institutional Ownership On The Peyto Exploration & Development Corp. (TSE:PEY) Share Register?
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The big shareholder groups in Peyto Exploration & Development Corp. (TSE:PEY) have power over the company. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. Companies that have been privatized tend to have low insider ownership.
Peyto Exploration & Development is a smaller company with a market capitalization of CA$668m, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutional investors have bought into the company. Let's delve deeper into each type of owner, to discover more about PEY.
See our latest analysis for Peyto Exploration & Development
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
We can see that Peyto Exploration & Development does have institutional investors; and they hold 65% of the stock. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Peyto Exploration & Development's historic earnings and revenue, below, but keep in mind there's always more to the story.
Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Hedge funds don't have many shares in Peyto Exploration & Development. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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.
Shareholders would probably be interested to learn that insiders own shares in Peyto Exploration & Development Corp.. It has a market capitalization of just CA$668m, and insiders have CA$18m worth of shares, in their own names. It is good to see some investment by insiders, but it might be worth checkingif those insiders have been buying.
The general public, with a 33% 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.
It's always worth thinking about the different groups who own shares in a company. But to understand Peyto Exploration & Development 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.
Ultimatelythe future is most important. You can access thisfreereport on analyst forecasts for the company.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
How Should Investors React To GMS Inc.'s (NYSE:GMS) CEO Pay?
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Mike Callahan has been the CEO of GMS Inc. (NYSE:GMS) since 2015. 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
View our latest analysis for GMS
Our data indicates that GMS Inc. is worth US$745m, and total annual CEO compensation is US$1.2m. (This is based on the year to April 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$750k. We looked at a group of companies with market capitalizations from US$400m to US$1.6b, and the median CEO total compensation was US$2.7m.
Most shareholders would consider it a positive that Mike Callahan takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. 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 GMS, below.
On average over the last three years, GMS Inc. has grown earnings per share (EPS) by 35% each year (using a line of best fit). It achieved revenue growth of 19% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. It could be important to checkthis free visual depiction ofwhat analysts expectfor the future.
Given the total loss of 14% over three years, many shareholders in GMS Inc. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
It looks like GMS Inc. pays its CEO less than similar sized companies. Considering the underlying business is growing earnings, this would suggest the pay is modest. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. So while we would not say that Mike Callahan is generously paid, it would be good to see an improvement in business performance before too an increase in pay.
When I see fairly low remuneration, combined with earnings per share growth, but without big share price gains, it makes me want to research the potential for future gains. Whatever your view on compensation, you might want tocheck if insiders are buying or selling GMS shares (free trial).
Arguably, business quality is much more important than CEO compensation levels. So check out thisfreelist of interesting companies, that have HIGH return on equity and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Medtronic (MDT) Up 8.5% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Medtronic (MDT). Shares have added about 8.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Medtronic due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Solid Overall Growth Drives Medtronic's Q4 Earnings
Medtronic reported fourth-quarter fiscal 2019 adjusted earnings per share (EPS) of $1.54, beating the Zacks Consensus Estimate by 5.5%. Adjusted earnings also rose 8.5% year over year.Adjustments in the quarter primarily included the impact of restructuring charges, intangible asset amortization and impairment of in-process research and development (IPR&D) assets among others. After adjusting the foreign exchange headwind of 1 cent, adjusted EPS increased 9% year over year.Without the adjustments, net earnings were 87 cents per share, reflecting an 18.7% decline from the year-ago quarter.For the full year, adjusted EPS came in at $5.22, representing a 9.4% rise from the year-earlier period. The number also exceeded the Zacks Consensus Estimate by 1.4%.Total RevenuesWorldwide revenues in the reported quarter grossed $8.15 billion, up 3.6% on an organic basis (flat on a reported basis). The top line exceeded the Zacks Consensus Estimate by 0.46%. Organic revenues in the quarter include adjustments for a $289-million negative impact from foreign currency.Fiscal 2019 worldwide revenues were $30.56 billion, up 5.5% on an organic basis (up 2% on a reported basis). Organic revenues in the year include adjustments for a $455-million negative effect from foreign currency. The annual figure also exceeded the Zacks Consensus Estimate of $30.52 billion.In the quarter under review, U.S. sales (52% of total revenues) inched up 2.3% year over year on a reported basis to $4.28 billion. Non-U.S. developed market revenues totaled $2.57 billion (32% of total revenues), depicting a 5.3% decrease reportedly (up 1.7% at constant exchange rate or CER). Emerging market revenues (16% of total revenues) amounted to $1.29 billion, up 3.9% reportedly (up 12% at CER).Segment DetailsThe company currently generates revenues from four major groups, viz. Cardiac and Vascular Group (CVG), Minimally Invasive Therapies Group (MITG), Restorative Therapies Group (RTG) and Diabetes Group.CVG comprises Cardiac Rhythm & Heart Failure (CRHF), Coronary & Structural Heart (CSH) and Aortic & Peripheral Vascular divisions (APV). MITG includes the Surgical Innovations (SI) and the Respiratory, Gastrointestinal & Renal (RGR) divisions. RTG comprises the Spine, Brain Therapies, Specialty Therapies and Pain Therapies segments while the Diabetes Group incorporates the Intensive Insulin Management (IIM), Non-Intensive Diabetes Therapies (NDT) and Diabetes Service & Solutions (DSS) divisions.In the fourth quarter, CVG revenues improved 1.1% at CER (down 2.7% as reported) to $3.05 billion, driven by mid-single digit growth in APV and CSH, offset by a low-single digit decline in CRHF, all at CER.CRHF sales totaled $1.55 billion, down 1.4% year over year at CER (down 4.8% as reported). The mid-single digits’ growth in Arrhythmia Management was offset by low-double digit fall in Heart Failure including high-thirties’ decline in sales of left ventricular assist devices.CSH revenues were up 3.6% at CER (down 1.1% as reported) to $994 million, driven by low-double digit growth in transcatheter aortic valves. The company reported low-single digits’ year-over-year deterioration in coronary sales in the quarter.APV revenues registered 4.4% growth at CER (up 1% as reported) to $502 million, boosted by high-single digits growth in Venous, mid-single digits’ rise in Aortic and low-single digits’ improvement in Peripheral, all on comparable CER basis.In MITG, worldwide sales totaled $2.26 billion, marking a 5.1% year-over-year increase at CER (up 0.8% on a reported basis) in mid-single digit growth in both SI (Surgical Innovations) and RGR (Respiratory, Gastrointestinal & Renal).In RTG, worldwide revenues of $2.22 billion were up 6.5% year over year at CER (up 4.1% as reported) on low-double digit growth in Brain Therapies, high-single digit growth in Specialty Therapies, mid-single digit growth in Pain Therapies and low-single digit growth in the Spine business.Moreover, revenues at the Diabetes group were nudged up 0.6% at CER (down 2.9% as reported) to $626 million. In the quarter under consideration, Medtronic suffered year-over-year difficult comparisons in pump sales.MarginsGross margin in the reported quarter contracted 104 basis points (bps) to 69.5% on a 3.2% rise in cost of revenues to $2.48 billion. Adjusted operating margin improved 105 bps year over year to 30.3% despite a 0.3% increase in research and development expenses (to $594 million) and a 0.9% uptick in selling, general and administrative expenses (to $2.62 billion). Other income in the quarter under discussion totaled $20 million as compared to the $175-million expense a year ago.Fiscal 2020 GuidanceThe company has initiated its fiscal 2020 revenue and EPS outlook.For the full year, organic revenue growth is expected to be 4%. Currency fluctuation is projected to affect the top line by 1-1.5%. The current Zacks Consensus Estimate for revenues is pegged at $31.63 billion.Fiscal 2020 adjusted EPS view is estimated in the range of $5.44-$5.50. Currency fluctuation is expected to have a 10-cent adverse impact on the full-year adjusted EPS. The Zacks Consensus Estimate of $5.44 for the metric falls at the lower end of the guided range.
How Have Estimates Been Moving Since Then?
Fresh estimates followed a downward path over the past two months.
VGM Scores
At this time, Medtronic has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Medtronic has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportMedtronic PLC (MDT) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
Autodesk (ADSK) Up 0.8% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Autodesk (ADSK). Shares have added about 0.8% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Autodesk due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Autodesk Q1 Earnings Miss Estimates, Revenues Up Y/YAutodesk reported first-quarter fiscal 2020 non-GAAP earnings of 45 cents per share that missed the Zacks Consensus Estimate by a couple of cents. However, the figure was much better than earnings of 6 cents posted in the year-ago quarter.Revenues of $735.5 million lagged the Zacks Consensus Estimate of $741 million but increased 31.4% year over year. At constant currency (cc), revenues grew 30%.Recurring revenues represented 96% of Autodesk’s first-quarter fiscal 2020 revenues compared with 95% in the year-ago quarter.The results were driven by higher subscription revenues, gross margin expansion and lower operating expenses.Autodesk stated that portfolio strength is helping it steer past competition and win customers. The company won 15 head-to-head bids against competitors in recent times.Top-Line DetailsSubscription revenues (81% of revenues) soared 70% year over year to $595.8 million. However, maintenance revenues (15.2% of revenues) declined 38.2% to $112 million.Revenues were also negatively impacted by a 2.1% year-over-year decrease in other revenues (3.8% of revenues), which totaled $27.7 million in the reported quarter.Direct revenues rallied 36% year over year and accounted for 36% of revenues. eStore revenues jumped 45%.Geographically, revenues from Americas (40.2% of revenues) increased 26.7% from the year-ago quarter to $295.8 million. Europe, Middle East and Africa (EMEA) revenues (40.4% of revenues) rallied 34.5% to $297.2 million. Revenues from Asia-Pacific (19.4% of revenues) increased 35.1% to $142.5 million.Product wise, AEC (41.4% of revenues) revenues went up 37.2% year over year to $304.3 million. AutoCAD and AutoCAD LT (29% of revenues) revenues rose 37% to $213.2 million. MFG (22.8% of revenues) revenues increased 23.7% to $167.5 million. M&E (6.2% of revenues) climbed 8.9% to $45.5 million. However, other revenues (0.7% of revenues) declined 5.7% to $5 million.Manufacturing revenues were up 24% year over year, driven by strength across all products and geographies. Fusion 360 adoption accelerated with more than 100% growth in Fusion commercial Monthly Active Users (MAU).Billings of $798 million, adjusting for adoption of ASC 606, surged 40% year over year.Annualized Recurring Revenues (ARR) in DetailARR was $2.83 billion, up 33% year over year (32% at cc). Latest acquisitions contributed $83 million to ARR.Notably, BIM 360 ARR growth accelerated in the reported quarter. Autodesk stated that introduction of PlanGrid BIM generated 5 times more customer interest than past PlanGrid launches. Further, BuildingConnected user base grew from almost 700K to more than 800K since acquisition.Subscription plan ARR of $2.38 billion surged 70% (69% at cc). The figure includes $505 million related to the maintenance-to-subscription (M2S) program.Autodesk stated that M2S conversion rate was consistent with prior quarters. Almost one-third of maintenance renewal opportunities migrated to product subscriptions. Of these, upgrade rates among eligible subscriptions were within the historical range of 25-35%.However, maintenance plan ARR of $448 million declined 38% (40% at cc) from the year-ago quarter.Core ARR rallied 29% to $2.65 billion. Cloud ARR skyrocketed 164% to $181 million, driven by strong performance in construction. Organic Cloud ARR, which primarily comprises BIM 360 and Fusion 360, surged 43%.Net revenue retention rate was within the fiscal 2019 range of 110-120%.Operating ResultsNon-GAAP gross margin expanded 130 basis points (bps) from the year-ago quarter to 90.7%.Research & development, sales & marketing and general & administrative expenses as percentage of revenues declined 340 bps, 690 bps and 120 bps year over year, respectively.As a result, non-GAAP operating expenses, as percentage of revenues, declined to 72.7% from 84.2% reported in the year-ago quarter.The lower operating expenses reflected disciplined cost management in the reported quarter.Autodesk reported non-GAAP operating income of $131.9 million compared with the year-ago quarter’s income of $29 million.Balance Sheet & Cash FlowAs of Apr 30, 2019, Autodesk had cash and cash equivalents (including marketable securities) of $972.1 million compared with $953.6 million as of Jan 31, 2019.Deferred revenues increased 19% to $2.15 billion. The growth was driven by increase in subscription plan billings and recent acquisitions.Unbilled deferred revenues at the end of the first quarter were $589 million, down $2 million sequentially due to the normal seasonality of EBA billings.Total deferred revenues (deferred revenue plus unbilled deferred revenue) were $2.74 billion, up 24% year over year.Cash flow from operating activities was $221 million, increasing $238 million year over year. Free cash flow was $207 million, rising $240 million from the year-ago quarter.Autodesk repurchased 582K shares for $100 million.GuidanceFor second-quarter fiscal 2020, Autodesk expects revenues between $782 million and $792 million.Non-GAAP earnings are anticipated in the range of 59-63 cents per share.For fiscal 2020, Autodesk expects revenues between $3.25 billion and $3.3 billion, indicating growth of 26-28% from the year-ago quarter’s reported quarter.Billings are projected to be $4.05-$4.15 billion, implying growth of 50-53% from the figure reported in the year-ago quarter.Total ARR is still expected between $3.5 billion and $3.55 billion, indicating year-over-year growth in the range of 27-29%.Non-GAAP spend is expected to increase 9%.Non-GAAP earnings are still expected between $2.71 and $2.90 per share.Free cash flow is expected to be almost $1.35 billion. Autodesk anticipates almost three-fourth of the free cash flow to be generated in the second half of the year.
How Have Estimates Been Moving Since Then?
Fresh estimates followed a flat path over the past two months. The consensus estimate has shifted -12.02% due to these changes.
VGM Scores
Currently, Autodesk has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Autodesk has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Sina (SINA) Up 0.1% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Sina (SINA). Shares have added about 0.1% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Sina due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Ad Revenues Growth Aid SINA in Q1SINA Corporation reported first-quarter 2019 non-GAAP earnings of 40 cents per share that missed the Zacks Consensus Estimate by 4 cents and declined 14.9% from the year-ago quarter.Non-GAAP net revenues grew 8% year over year to $472.5 million. However, the figure missed the Zacks Consensus Estimate of $479 million.The year-over-year increase was driven by growth in Weibo revenues and non-advertising revenues.Quarter DetailsAdvertising revenues (81.7% of total revenues) increased 5.7% year over year to $388 million, primarily driven by an increase of $38.2 million in Weibo advertising and marketing revenues. However, the decline in portal advertising revenues partially offset the increase.Non-advertising revenues (18.3% of total revenues) increased 18.2% year over year to $87.1 million. The increase was primarily attributed to revenues generated from Weibo’s live broadcasting platform and higher revenues from SINA’s fin-tech businesses.Revenues from Weibo business grew 14.1% year over year to $399.2 million.Weibo’s VAS revenues increased 23.7% to $58 million and ad and marketing revenues grew 12.6% to $341.1 million in the reported quarter. Moreover, Weibo’s online advertising revenues increased 13% year over year to $341.1 million due to the FMCG sector, which adopted the company’s marketing tools. Weibo’s SME revenues increased 5% year over year.However, softness in the gaming sector due to “macro challenges, regulations and competition in the ad inventory supply” hurt growth.Portal revenues declined 10% year over year to $81.8 million. Portal advertising revenues declined 26.9% year over year to $46.9 million. Decline in Small Medium Enterprise (SME) customers’ ad budget negatively impacted growth.Portal non-ad revenue revenues increased 34% to $32.3 million. This increase was driven by growth in micro loan facilitation business.Operating DetailsSINA reported gross profit of $359.6 million, up 8.3% year over year. Gross margin of 75.7% expanded 40 basis points (bps) from the year-ago quarter. This increase was driven by a 100 bps increase in advertising platform gross margin.Operating expenses (57.4% of total revenues) were $272.7 million, up 5.4% year over year. Sales and marketing expenses were $145.5 million, up 4.1% year over year. Product development expense was $94.1 million, reflecting an increase of 10.5%. However, general and administrative expenses fell 2.3% to $33.2 million.Operating income in the reported quarter was $86.9 million, up 18.6% year over year.Balance Sheet and Cash FlowSINA exited the quarter with cash, cash equivalents and short-term investments of $2.1 billion compared with $2.3 billion in the fourth-quarter of 2018.Cash provided by operating activities in the quarter was $93.5 million compared with $138.9 million in the prior quarter. Capital expenditure was $10 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -75% due to these changes.
VGM Scores
Currently, Sina has a subpar Growth Score of D, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise Sina has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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Why Is Hormel (HRL) Up 5.8% Since Last Earnings Report?
It has been about a month since the last earnings report for Hormel Foods (HRL). Shares have added about 5.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Hormel due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Hormel Foods Q2 Earnings Beat, View Trimmed
Hormel Foods posted second-quarter fiscal 2019 results. Quarterly earnings of 46 cents per share came a penny ahead of the Zacks Consensus Estimate of 45 cents. Further, the bottom line rose 4.5% from 44 cents reported in the year-ago period. This can be attributable to improved sales, lower interest expenses and reduced tax rate.Net sales came in at $2,344.7 million, which missed the Zacks Consensus Estimate of $2,368 million. Nevertheless, the top line inched up 0.6% year over year backed by sales growth in three out of four segments.Hormel Foods witnessed roughly 1% advancement in volumes. The upside can be mainly attributed to improved volumes in the Grocery Products segment.Segment DetailsSales in theGrocery Productsunit climbed 2.2% to $635.3 million, owing to gains from Wholly Guacamole dips, Herdez salsas and sauces, and Skippy peanut butter. These were countered by reduced sales from CytoSport products. Volumes in this unit improved 3%. Further, operating profit rallied 12.1% to $104.5 million.Revenues in theJennie-O Turkey Storesegment moved up 0.5% to $305.3 million, as gains from foodservice and whole-bird sales were countered by retail declines. Volumes in the segment grew 2%. Operating profit slumped 45% to $17.7 million. This was accountable to greater-than-expected plant startup costs, elevated feed costs and soft retail sales.The company’sRefrigerated Foodssegment generated sales of $ 1,257.9 million, up roughly 1% year over year. The upside was fueled by foodservice sales of products like Hormel Bacon 1, Hormel Fire Braised and Austin Blues as well as retail sales of Hormel pepperoni, Hormel Black Label, Hormel prepared foods and Hormel Natural Choice products. Further, volumes in the unit remained flat. Operating profit fell 5.3% to $158.1 million, owing to a decline in commodity profits and escalated operational costs.International & Otherrevenues were down 8.6% to nearly $146.3 million. The downside can be blamed on continued tariff impacts on fresh pork exports. Further, volumes in the unit declined 7%. Operating profit decreased 31.3% to nearly $14.3 million on account of tariffs and increased freight costs.Costs/MarginsSelling, general and administrative expenses totaled $170.1 million, down from $204.5 million in the year-ago quarter. This can be partly accountable to reduced selling costs.Operating income came in at $312.4 million, up 3.5%. Operating margin increased 40 bps to 13.3%.Balance Sheet/Cash FlowThe company ended the quarter with cash and cash equivalents of $639.3 million and long-term debt of $250 million (excluding current maturities).In the first six months of fiscal 2019, Hormel Foods generated cash of $365.6 million from operating activities. Capital expenditure summed $48 million during the second quarter. The company expects capital expenditures to be roughly $310 million for fiscal 2019.During the quarter, the company repurchased 0.6 million shares for nearly $23 million. On May 15, the company paid dividend at an annual rate of 84 cents per share.OutlookWhile the company witnessed record sales, results were hampered by input cost inflation. This in turn stemmed from the African swine fever in China, which weighed on the hog and pork markets during the second quarter. Though the company has announced strong pricing actions across all its segments, except Jennie-O Turkey Store, these actions are likely to lag the input cost inflation. Further, the company reduced its expectations for the Jennie-O Turkey Store segment, as it continues to invest in the segment to regain retail distribution.These factors along with expectations of volatile pork prices in the domestic market compelled management to lower its fiscal 2019 guidance.Hormel Foods now expects net sales of $9.5-$10 billion compared with the previous outlook of $9.7-$10.2 billion. Further, it now envisions earnings of $1.71-1.85 per share, down from the old guidance of $1.77-$1.91.
How Have Estimates Been Moving Since Then?
Fresh estimates followed a downward path over the past two months. The consensus estimate has shifted -10.74% due to these changes.
VGM Scores
At this time, Hormel has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Hormel has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Lions Gate (LGF.A) Down 24.8% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Lions Gate Entertainment (LGF.A). Shares have lost about 24.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Lions Gate due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Lionsgate Q4 Earnings and Revenues Miss, Down Y/YLionsgate reported fourth-quarter fiscal 2019 adjusted earnings of 11 cents per share, which missed the Zacks Consensus Estimate of 18 cents and plunged 56% from the year-ago quarter.Revenues declined 12.2% year over year to $913.7 million and lagged the Zacks Consensus Estimate of $939 million. Decline in Motion Picture and Television Production revenues negatively impacted the top line.Quarter DetailsMotion Pictures (39.1% of revenues) revenues declined 15.8% year over year to $357.6 million. The segment logged profit of $20.9 million, down 28.4% from the year-ago quarter due to “the timing of pre-release PNA spend on first-quarter titles.”However, Lionsgate noted that its recently released movie, John Wick 3, did really well as it opened as the number one movie globally.Television Production (29.9% of revenues) revenues were down 7.4% year over year to $272.8 million as the release of a few episodes were pushed beyond fiscal 2019. Segment profits totaled $19.5 million compared with $21.8 million in the prior-year quarter.However, Lionsgate is ramping up its television content slate to become the primary content provider to streaming platforms. In a first deal, the company’s romantic comedy, Love Life, will be made available on AT&T’s Warner Media’s streaming platform.The Media Networks segment (39.6% of total revenues), formed after the acquisition of Starz, reported revenues of $362 million, up 2.4% year over year driven by over-the-top (OTT) subscriber growth. However, segment profit was $90.9 million, down 20.7% due to the ongoing investments in STARZPLAY.Starz Networks revenues (98% of media revenues) increased 1.2% year over year to $354.8 million.Domestic subscribers grew 1.2 million year over year, taking the total domestic subscriber count to 24.7 million at the end of the fourth quarter owing to sequential growth in OTT subscribers (4 million). Notably, growth in OTT subscribers was driven by solid performance of American Gods and Now Apocalypse. Moreover, Lionsgate’s total international subscribers came at 3 million in the reported quarter.STARZPLAY International revenues summed $1.2 million in the reported quarter. Notably, STARZPLAY has subscribers from 42 countries, courtesy of the company’s international expansion strategy.Strength in Starz premium content along with international launches on strong platforms like Apple and Amazon Prime helped Lionsgate accelerate international growth. Additionally, management noted that the count will increase to 51 countries by Jul 1, 2019.While management anticipates the international subscription video on-demand market to be about $45 billion, it expects to on board 15-25 million new subscribers by 2025.Streaming services (1.7%) surged 106.9% year over year to $6 million.Meanwhile, adjusted OIBDA plunged 24% from the year-ago quarter to $103.3 million. Adjusted OIBDA margin contracted 180 basis points (bps) to 11.3%.Operating loss was $34 million in the reported quarter against the operating income of $48.4 million in the year-ago period.Balance Sheet & Cash FlowAs of Mar 31, 2019 cash and cash equivalents were $184.3 million compared with $106.2 million as of Dec 31, 2018. Total film obligations and production loans amounted to $512.6 million compared with $441.2 million in the prior quarter.Net cash flow from operating activities was $171.8 million in the reported quarter, much higher than $17 million in the year-ago quarter.Adjusted free cash flow was $150.8 million against the free cash outflow of $46 million in the year-ago quarter.Fiscal 2020 GuidanceManagement expects three-year CAGR of “mid-to-high single digits.” Adjusted OIBDA is anticipated to be $250-$700 million, excluding the losses relating to STARZPLAY. Notably, Lionsgate expects STARZPLAY international losses to be about $125-$150 million.Management anticipates STARZPLAY to become profitable by 2023.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportLions Gate Entertainment Corp. (LGF.A) : Free Stock Analysis ReportTo read this article on Zacks.com click here. |
Why Is ViaSat (VSAT) Down 4.9% Since Last Earnings Report?
A month has gone by since the last earnings report for ViaSat (VSAT). Shares have lost about 4.9% in that time frame, underperforming the S&P 500. Will the recent negative trend continue leading up to its next earnings release, or is ViaSat due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers. Viasat Q4 Earnings & Revenues Top Estimates, Up Y/Y Viasat delivered solid fourth-quarter fiscal 2019 results, wherein both revenues and adjusted earnings surpassed the respective Zacks Consensus Estimate, and increased year over year. Net Income On a GAAP basis, net income for the quarter was $2.5 million or 4 cents per share against net loss of $19.9 million or loss of 34 cents per share in the year-ago quarter. The year-over-year improvement was primarily driven by higher product and service revenues. For fiscal 2019, net loss was $67.6 million or loss of $1.13 per share compared with net loss of $67.3 million or loss of $1.15 per share in fiscal 2018. Non-GAAP net income was $20.4 million or 33 cents per share against net loss of $3.1 million or loss of 5 cents per share in the prior-year quarter. The bottom line beat the Zacks Consensus Estimate of loss of 25 cents. Revenues Quarterly total revenues increased 26.7% year over year to $557.2 million, primarily driven by double-digit top-line growth in all three operating segments. The top line surpassed the consensus estimate of $549 million. For fiscal 2019, revenues increased 29.7% year over year to $2,068.3 million on the back of solid execution across the company’s diversified business lines. Quarterly Segmental Performance Revenues from Satellite Services increased 31% year over year to $190 million on the back of higher ARPUs, up 15% year over year. The company continues to execute on its premium service strategy across its residential and enterprise markets. It witnessed higher customer satisfaction, lower churn rate and improved operating efficiencies, which contributed to adjusted EBITDA improvement. The segment’s operating profit was $0.7 million against loss of $21.1 million in the year-ago quarter. Adjusted EBITDA was $65.2 million, up 116.6% year over year, reflecting operating leverage inherit in Viasat’s fixed and mobile broadband service businesses. Commercial Networks revenues were up 20.5% year over year to $91.8 million, as the company continued its in-flight connectivity (IFC) terminal delivery activities based on strong customer demand. The performance also reflected revenue growth across Viasat’s antenna systems infrastructure businesses and other satellite networking areas. The segment’s operating loss was $49.2 million compared with loss of $50.1 million in the year-ago quarter. Adjusted EBITDA was negative $34.3 million compared with negative $32.9 million a year ago. R&D expenses were down $7 million year over year, as Viasat progressed through final module test and validation for its first two ViaSat-3 class satellite payloads. Revenues from Government Systems increased 25.9% year over year to $275.3 million, with most of this growth spread across the segment’s product lines. In services, strong gains were also witnessed as Viasat’s high capacity secure mobile broadband expanded operational capabilities across geographies and platforms. The segment’s operating profit was $60.2 million, up 48.3% year over year. Adjusted EBITDA was $77.3 million, up 32.4% year over year, reflecting the flow through top-line performance along with lower G&A and R&D as a percentage of revenues. Cash Flow & Liquidity During fiscal 2019, Viasat generated $327.6 million of cash from operations compared with $358.6 million in fiscal 2018. As of Mar 31, 2019, the satellite and wireless networking technology provider had $261.7 million in cash and equivalents with $110 million of long-term debt compared with the respective tallies of $71.4 million and $287.5 million a year ago. Story continues How Have Estimates Been Moving Since Then? It turns out, fresh estimates flatlined during the past month. The consensus estimate has shifted 21.57% due to these changes. VGM Scores Currently, ViaSat has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy. Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in. Outlook ViaSat has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Viasat Inc. (VSAT) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research |
Why Is DXC (DXC) Up 4.7% Since Last Earnings Report?
A month has gone by since the last earnings report for DXC Technology (DXC). Shares have added about 4.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is DXC due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
DXC Technology Reports Mixed Q4 ResultsDXC Technology reported fourth-quarter fiscal 2019 results wherein the bottom line beat the Zacks Consensus Estimate but the top line missed the same.The company delivered non-GAAP earnings of $2.19 per share, which surpassed the consensus estimate of $2.07. However, the figure declined from $2.28 reported a year ago.At $5.28 billion, revenues lagged the prior-year quarterly number by 5.4% and also slipped 1% on constant currency basis. Moreover, the metric fell short of the Zacks Consensus Estimate of $5.31 billion.The quarterly results were mainly driven by demand strength in the company’s digital solutions. However, continued headwinds in traditional application services business affected revenues.Quarter in DetailSegment wise, revenues from Global Business Services (GBS) fell 7.2% on a year-over-year basis to $2.19 billion, reflecting downsides in the traditional applications business including the completion of several contracts.Accelerated cloud adoption also shifted revenues away from the traditional business. This is because the cloud offers more flexibility with workloads and eliminates the need to use services associated with upgrading applications.Notably, during the quarter, the company won $2.86 billion worth of new business awards for the GBS segment.Global Infrastructure Services revenues during the fiscal fourth quarter came in at $3.09 billion, declining 4.2% yearoveryear.During the quarter, the company won $2.97 billion worth of new business awards for the GBS segment.Digital revenues jumped 22% year over year at constant currency, driven by growth in enterprise and cloud applications, cloud infrastructure and digital workplace offerings. The company continued to make strategic investments in digital assets and capabilities including increased hiring.Notably, about 2,000 people were hired in the fiscal fourth quarter to enhance DXC Technology’s digital capabilities. The company inked a deal with DreamWorks Animation to develop a cloud-based pipeline for digital content creation.Digital pipeline soared 50% year over year, backed by strong demand for digital solutions.Cloud infrastructure business increased 25% at constant currency. Moreover, security business inched up 1.3% year over year on constant currency basis due to weakness in demand from Northern Europe and the United Kingdom. Asia and Southern Europe displayed a strong traction, partly offsetting this downtrend.Year-over-year growth of 20% in enterprise cloud applications and consulting was another tailwind. The company won a SAP deal from a South American utility provider.Even though analytics revenues fell 4.9% year over year in constant currency, the momentum in bookings was strong, particularly in the automotive sector.DXC Technology continued to expand its digital transformation centers and capabilities and build on its collaborations with partners, namely AWS and Microsoft Azure.At constant currency, industry IP and BPS revenues dipped 1.4% year over year due to softness in the company’s generic BPS business, especially in the United Kingdom and Europe where minimal clients in-sourced the work.However, DXC Technology continues to ramp up revenues on the back of some of its large insurance BPS contracts. Bookings in the fourth quarter surged 59% year over year including a major deal with The California Department of Health Care Service.MarginsAdjusted EBIT margin was 15.7%, flat year over year. Additional investments in the digital business include digital transformation centers, talent acquisitions and enhancements to Platform DXC and its automation program Bionix.Non-GAAP income from continuing operations was $778 million during the quarter compared with $812 million a year ago.Balance Sheet and Other Financial MetricsThe company exited the reported quarter with $2.9 billion in cash and cash equivalents compared with $2.5 billion sequentially. Long-term debt balance (net of current maturities) was $5.5 billion.Adjusted free cash flow was $917 million compared with $503 million in the prior quarter.During the fiscal fourth quarter, the company returned $142 million to shareholders through share buybacks and dividend payments.Full-Fiscal HighlightsThe company reported fiscal 2019 non-GAAP earnings of $8.34 per share compared with $6.75 reported for fiscal 2018.Revenues generated came in at $20.75 billion, down from $21.73 billion a year ago.Fiscal 2020 OutlookFor fiscal 2020, DXC Technology estimates revenues of $20.7-$21.2 billion. The company expects to witness currency headwinds.DXC Technology expects its full-fiscal non-GAAP earnings in the range $7.75-$8.50.In the first quarter of fiscal 2020, the company expects adjusted EBIT margin to decrease sequentially to around 14%.Moreover, with the acquisition of Luxoft, which is likely to be completed by this June end, the company expects to boost its digital business further, particularly penetrating the key markets of Eastern Europe with workforce expansion in the zone.
How Have Estimates Been Moving Since Then?
Fresh estimates followed a downward path over the past two months. The consensus estimate has shifted -21.61% due to these changes.
VGM Scores
At this time, DXC has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
DXC has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportDXC Technology Company. (DXC) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
Why Is HP Enterprise (HPE) Up 4.3% Since Last Earnings Report?
It has been about a month since the last earnings report for Hewlett Packard Enterprise (HPE). Shares have added about 4.3% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is HP Enterprise due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
HPE Reports Q2 Results
Hewlett Packard Enterprise Company reported second-quarter fiscal 2019 non-GAAP earnings of 42 cents per share, beating the Zacks Consensus Estimate by 6 cents. The figure rallied 31.3% on a year-over-year basis.
However, net revenues of $7.15 billion declined 4.3% on a year-over-year basis and missed the Zacks Consensus Estimate of $7.44 billion. At constant currency (cc), revenues slid 2% year over year.
Excluding Tier-1 server sales, revenues inched up 1%. Notably, Tier 1 revenues declined 64% and accounted for 1.9% of revenues, much lower than 5% in the year-ago quarter.
Quarterly Details
Segment wise, Hybrid IT revenues of $5.64 billion declined 4.4% year over year (down 3% at cc).
Coming to Hybrid IT Products, Compute Value revenues slipped 5.2% (down 4% at cc) to $3.09 billion. However, the figure grew 4% excluding the impact from the company’s strategic exit of certain Tier-1 customer segments.Hewlett Packard Enterprise’s Value Compute portfolio revenues increased nearly 8% at cc, aided by strong growth in high-performance compute, and hyper-converged and composable cloud offerings.
Storage revenues climbed 3.3% (5% at cc) to $942 million, with strength particularly in Nimble, XP and Entry Storage. Big data also witnessed a strong quarter, recording 25% year-over-year improvement. The company expects the recently announced acquisition of BlueData to ramp up the metric further.
HPE Pointnext revenues declined 6.8% (3% at cc) from the year-ago quarter to $1.60 billion. HPE Pointnext operational services orders, including Nimble, were up 1% at cc.Moreover, HPE Greenlake orders grew 39% year over year at cc.
Revenues from the Intelligent Edge declined 5.7% to $666 million. Aruba Services revenues were up 15.6% (18% at cc). Revenues from Aruba Product decreased 8.3% (7% at cc).
Hewlett Packard Enterprise’s Financial Services segment revenues decreased 2.2% (up 2% at cc) to $896 million. Net portfolio assets were down 2% year over year (up 1% at cc). Financing volumes declined 10% year over year (6% at cc).
Geographically, Hewlett Packard Enterprise’s revenues in the Americas (37% of revenues) declined 7% at cc. Both EMEA (38% of revenues) and APJ revenues increased 1% each at cc. Non-U.S. net revenues were 69% of net revenues.
Operating Results
Hewlett Packard Enterprise’s gross margin expanded 200 basis points (bps) on a year-over-year basis, driven by favorable portfolio mix and cost efficiencies. Non-GAAP operating expenses were up 1% year over year.
Hybrid IT segment operating margin expanded 140 bps to 11.4%. Financial Services operating margin expanded 190 bps to 13.3%. However, Intelligent Edge operating margin contracted 490 bps to 3%. Hewlett Packard Enterprise’s non-GAAP operating margin expanded 70 bps to 8.9%.
Balance Sheet and Cash Flow
The company ended the second quarter of fiscal 2019 with $3.59 billion in cash and cash equivalents compared with $3.78 billion at the end of the previous quarter.
During the quarter under review, Hewlett Packard Enterprise generated $987 million in cash flow from operational activities compared with $382 million in the prior quarter. The company’s free cash flow was $402 million in the quarter under review. Additionally, the company repurchased $814 million worth of shares and paid $157 million in dividends.
Guidance
For fiscal 2019, Hewlett Packard Enterprise expects non-GAAP earnings of $1.62-$1.72 per share compared with the earlier projection of $1.56-$1.66. Management reiterated the free cash flow guidance of $1.4-$1.6 billion, indicating more than 35% growth from the figure reported in fiscal 2018.
For third-quarter fiscal 2019, Hewlett Packard Enterprise forecasts non-GAAP earnings between 40 cents and 44 cents.
How Have Estimates Been Moving Since Then?
Fresh estimates followed a downward path over the past two months.
VGM Scores
Currently, HP Enterprise has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
HP Enterprise has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is HP (HPQ) Up 7.9% Since Last Earnings Report?
A month has gone by since the last earnings report for HP (HPQ). Shares have added about 7.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is HP due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
HP Q2 Earnings Beat, Revenues Lag EstimatesHP reported second-quarter fiscal 2019 non-GAAP earnings from continuing operations of 53 cents per share that beat the Zacks Consensus Estimate by couple of cents. The figure increased 10.4% on a year-over-year basis.HP’s net revenues of $14.04 billion lagged the Zacks Consensus Estimate of $14.06 billion, but inched up 0.2% year over year. At constant currency (cc), revenues increased 2%.Region wise, at cc, revenues from Americas (42% of net revenues) were down 1%. The same from Europe, the Middle East and Africa (EMEA) climbed 2%, and the Asia-Pacific and Japan (APJ) region improved 11% year over year. Non-U.S. revenues accounted for 67% of net revenues.HP’s second-quarter results were negatively impacted by the CPU supply shortage, which is expected to continue. Moreover, macroeconomic, geopolitical and tariff related uncertainties are likely to negatively impact growth in the rest of the fiscal.Quarter in DetailPersonal Systems (63.6% of net revenues) revenues were $8.92 billion, up 1.8% year over year. While commercial revenues increased 7%, consumer revenues were down 9%. Muted PC growth across the industry negatively impacted consumer revenues.HP’s total units sold fell 1% from the year-ago quarter. While Notebooks registered a 5% dip, desktop units increased 6% year over year.Desktop (33% of Personal Systems revenues) and workstation (6.4% of Personal Systems revenues) revenues increased 6.8% and 5.8%, respectively. However, revenues from Notebooks fell 1% in the reported quarter.HP expanded its AMV portfolio, which is aimed at small and medium sized businesses, through the launch HP ProBooks. The company’s new EliteBook 800 is a premium offering and includes HP Sure Sense. This new software uses AI to detect and prevent malware threats.The company also announced HP DaaS proactive security, an extension to its DaaS solution, which provides the most advanced Windows 10 Security service for files and browsing.Moreover, HP Engage, the company’s retail point of sale solution, was selected by one of the world's largest office product retailers to power 2000 stores in the quarter.Printing business revenues (36.4% of net revenues) were down 2.4% year over year to $5.12 billion.HP’s total hardware units sold declined 4%. While Consumer Hardware unit fell 4%, Commercial Hardware unit declined 3% on a year-over-year basis.Commercial Hardware revenues increased 3% year over year. However, revenues from Consumer Hardware and Supplies declined 8.5% and 3%, respectively.HP launched a new generation of OfficeJet Pro products that provide improved security during the quarter. The printer is 39% smaller than the previous generation.Moreover, HP won several large managed print service contracts, including a multi-million dollar deal with Petrobras to provide solutions and services like A3, DesignJet and page-wide products.Further, with the launch of HP Stitch portfolio, the company has extended its footprint to digital textile printers’ space. The introduction of Jet Fusion 5200 also expanded the company’s 3D printing portfolio.Operating DetailsIn second-quarter fiscal 2019 gross margin was 19.4%, up 10 basis points (bps) on a year-over-year.Non-GAAP operating expenses increased 1.1% on a year-over-year basis to $1.69 billion due to 1.6% increase in selling, general and administrative (SG&A) expenses. Research & development (R&D) expenses declined 0.8%.Segment wise, Personal Systems operating margin expanded 60 bps to 4.3%, driven by improved mix. Printing operating margin expanded 40 bps to 16.4%, driven by stringent cost control.Non-GAAP operating margin from continuing operations of 7.4% was flat year over year.Balance Sheet and Cash FlowHP ended second-quarter fiscal 2019 with net debt (gross cash minus gross debt) of $1.5 billion, higher than $1.2 billion reported in the previous quarter.The company generated cash flow of $861 million from operational activities and $747 million free cash flow during the quarter under review.HP returned nearly $0.9 billion to shareholders in the form of stock repurchases ($691 million) and cash dividends ($245 million).GuidanceFor the third quarter of fiscal 2019, HP predicts non-GAAP earnings between 53 cents and 56 cents.HP expects CPU shortage to continue to dent Personal Systems revenues.Management expects supplies revenues to decline nearly 3% at cc for fiscal 2019. Further, currency headwinds are expected to aggravate in the second half of the fiscal.Moreover, HP now expects non-GAAP earnings between $2.14 and $2.21 per share compared with the previous guidance of $2.12-$2.22.HP still expects to return approximately 75% of free cash flow to shareholders in fiscal 2019.
How Have Estimates Been Moving Since Then?
Fresh estimates followed an upward path over the past two months.
VGM Scores
Currently, HP has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
HP has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportHP Inc. (HPQ) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
RBC Bearings (ROLL) Up 15.3% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for RBC Bearings (ROLL). Shares have added about 15.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is RBC Bearings due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
RBC Bearings Q4 Earnings & Revenues Top Estimates
RBC Bearings pulled off a positive earnings surprise of 9% in the fourth quarter of fiscal 2019 (ended Mar 30, 2019). This was the company’s fourth consecutive quarter of impressive results.
This machinery company’s adjusted earnings were $1.33 per share, surpassing the Zacks Consensus Estimate of $1.22. Also, the bottom line increased 23.1% from the year-ago quarter’s figure of $1.08 on the back of healthy sales growth, margin improvement and lower taxes.
Notably, RBC Bearings reported adjusted earnings of $4.84 for fiscal 2019, an increase of 25.1% from the prior year.
Organic Sales Drive Revenues
In the quarter under review, RBC Bearings’ revenues totaled $182.2 million, reflecting year-over-year growth of 1.3%. Organic sales jumped 4% on the back of 10.2% growth in aerospace markets, partially offset by 5% decrease in industrial markets.
Moreover, the top line surpassed the consensus estimate of $179.97 million by 1.2%.
For fiscal 2019, RBC Bearings generated revenues of $702.5 million compared with $674.9 million in fiscal 2018.
Exiting the reported quarter, the company had backlog of $445.1 million, up 13.5% year over year.
RBC Bearings reports net sales under four heads/segments. The segmental results are briefly discussed below:
Revenues fromPlain bearingstotaled $87.9 million, up 7.3% year over year while that fromRoller bearingsincreased 0.8% to $36.1 million.Ball bearings’ revenues were $19.5 million, up 2.1%. Revenues fromEngineered productstotaled $38.6 million, down 10.4%.
Margins Improve Y/Y
In the reported quarter, RBC Bearings’ cost of sales declined 0.7% year over year to $109.2 million. It represented 59.9% of net sales versus 61.1% recorded in the year-ago quarter. Gross profit in the quarter increased 4.6% to $73 million. Margin in the quarter grew 130 basis points to 40.1%.
Selling, general and administrative expenses of $29.5 million decreased 0.3%, and represented 16.2% of net sales versus 16.5% in the year-ago quarter. Adjusted operating income in the reported quarter increased 7% to $41.2 million. Adjusted margin was 22.6% versus 21.4% in the year-ago quarter.Effective tax rate was 20.8%, lower than 25.5% a year ago.
Balance Sheet and Cash Flow
As of Mar 30, 2019, RBC Bearings had cash and cash equivalents of $29.9 million, decreasing 44.8% from $54.2 million recorded as of Mar 31, 2018. Total debt was $43.6 million, down from $173.4 million.
In fiscal 2019, the company generated net cash of $108.5 million from operating activities, down 16.7% from $130.3 million in fiscal 2018. Capital spending totaled $41.3 million, increasing 47.5%.
During fiscal 2019, the company repurchased shares worth $5.2 million while backlog at the end of the year was $445.1 million.
Outlook
RBC Bearings anticipates net sales of $182-$184 million for the first quarter of fiscal 2020 (ending June 2019), representing growth of 3.4-4.6% year over year.
How Have Estimates Been Moving Since Then?
Fresh estimates followed an upward path over the past two months.
VGM Scores
Currently, RBC Bearings has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
RBC Bearings has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportRBC Bearings Incorporated (ROLL) : Free Stock Analysis ReportTo read this article on Zacks.com click here. |
Best Buy (BBY) Up 2.6% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Best Buy (BBY). Shares have added about 2.6% in that time frame, underperforming the S&P 500. Will the recent positive trend continue leading up to its next earnings release, or is Best Buy due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers. Best Buy Q1 Earnings Beat Estimate, Sales in Line Best Buy posted first-quarter fiscal 2020 results, wherein the bottom line exceeded the Zacks Consensus Estimate for the sixth straight time, while sales came in-line. Results gained from decent comparable sales growth in the reported quarter. Also, the company has been progressing well with its Best Buy 2020: Building the New Blue initiative. Despite reporting better-than-expected earnings, management retained its outlook for fiscal 2020 considering the recent increase in tariffs to 25% from 10% on products worth $200 billion imported from China. Also, it issued guidance for second-quarter fiscal 2020, wherein the bottom line is expected to be 95 cents to $1. Let’s Delve Deep This consumer electronics retailer posted fiscal first-quarter adjusted earnings of $1.02 per share, surpassing the Zacks Consensus Estimate of 88 cents. Moreover, the bottom line improved 24% year over year. On a GAAP basis, earnings came in at 98 cents, up 36.2% from the year-ago quarter. The top line increased nearly 0.4% year over year and came in-line with the consensus mark of $9,142 million. Enterprise comparable sales were up 1.1% compared with 7.1% in the prior-year quarter. However, adjusted operating profit came in at $351 million, up 16.2% year over year. Also, adjusted operating margin expanded 50 basis points (bps) to 3.8%. Segment Details Domestic segment revenues inched up 0.8% year over year to $8,481 million, driven by decent comps and contributions from the GreatCall acquisition. This was partly offset by decline in revenues due to the shutdown of 12 large-format and 105 Best Buy Mobile stores in the past year. The company witnessed comparable sales growth of 1.3%, backed by robust demand in wearable devices, tablets and appliances. In addition, comparable online sales at this division increased 14.5% to $1.31 billion, mainly stemming from higher traffic and average order values. The segment’s gross profit advanced 2.4% to $2,009 million, while adjusted gross margin expanded 40 bps year over year to 23.7%. Further, adjusted operating income increased 15.2% to $349 million, with the operating margin expanding 50 bps to 4.1%. International segment revenues decreased 5.2% to $661 million due to unfavorable impact of foreign currency to the tune of 390 bps. The company recorded comparable sales decline of 1.2% in the reported quarter. The segment’s gross profit dipped 1.8% to $160 million in the reported quarter but adjusted gross margin expanded 80 bps to 24.2%. Adjusted operating income came in at $2 million, narrower than the adjusted operating loss of $1 million in the year-ago quarter. Other Financial Details Best Buy ended the quarter with cash and cash equivalents of $1,561 million, long-term debt of $1,193 million and total equity of $3,354 million. In the fiscal first quarter, the company returned about $232 million to its shareholders via buybacks of $98 million and dividends of $134 million. Moreover, it announced to buy back shares worth $750 million to $1 billion in fiscal 2020. Guidance Best Buy has reiterated its guidance for fiscal 2020. Management continues to forecast Enterprise revenues of $42.9-$43.9 billion compared with $42.9 billion reported in fiscal 2019. Furthermore, comps are still expected to be up 0.5-2.5%, down from 4.8% recorded in fiscal 2019. The company anticipates adjusted operating income rate of about 4.6%, flat with the fiscal 2019 level, on a 52-week basis. Meanwhile, it expects an effective tax rate of 24.5%. Adjusted earnings are still anticipated to be $5.45-$5.65 per share. For the fiscal second quarter, management anticipates Enterprise revenues of $9.5-$9.6 billion and comps growth of 1.5-2.5%. Also, it expects an effective tax rate of 24.5%. Story continues How Have Estimates Been Moving Since Then? Fresh estimates followed an upward path over the past two months. VGM Scores Currently, Best Buy has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy. Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in. Outlook Best Buy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Best Buy Co., Inc. (BBY) : Free Stock Analysis Report To read this article on Zacks.com click here. |
Ross Stores (ROST) Up 10% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Ross Stores (ROST). Shares have added about 10% in that time frame, outperforming the S&P 500. Will the recent positive trend continue leading up to its next earnings release, or is Ross Stores due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers. Ross Stores Q1 Earnings Beat, Sales Miss Ross Stores reported mixed first-quarter fiscal 2019 results, wherein earnings beat estimates while sales missed. The company’s operating profit margin continued to be impacted by higher freight costs. Further, it expects headwinds related to higher freight costs to persist in fiscal 2019. Q1 Highlights Ross Stores posted earnings of $1.15 per share, which beat the Zacks Consensus Estimate of $1.12 and surpassed the company’s guidance of $1.05-$1.11. Further, earnings increased nearly 3.6% from $1.11 reported in the prior-year period. Total sales rose 6% to $3,796.6 million but missed the Zacks Consensus Estimate of $3,806 million. Comparable-store sales (comps) improved 2% on increased average basket size. Comps were also in line with the company’s guidance of flat to up 2%. Further, comps gained from strength in the men’s category, offset by softness in ladies apparel. Midwest was the best performing region. Cost of goods sold (COGS) increased 7.1% to $2,701.7 million. As a percentage of sales, COGS increased 85 basis points (bps) due to higher freight costs, distribution expenses, and buying and occupancy costs, partly offset by increase in merchandise margins. Selling, general and administrative expenses increased 6.5% to $558.3 million and 10 bps as a percentage of sales, owing to higher wages. Operating margin of 14.1% in the reported quarter declined about 95 bps from the prior-year quarter. This contraction was attributed to higher COGS and freight costs, offset by increased merchandise margin and favorable timing of expenses. Store Update As of May 4, 2019, Ross Stores operated 1,745 outlets — including 1,502 Ross Dress for Less stores and 243 dd's DISCOUNTS stores. In the fiscal second quarter, the company expects to open 28 stores, including 22 Ross and 6 dd’s DISCOUNTS stores. In fiscal 2019, it anticipates opening 100 stores, including 75 Ross Dress for Less and 25 dd’s DISCOUNTS outlets. This does not include its planned closure or relocation of nearly 10 older stores. Financials Ross Stores ended the fiscal first quarter with cash and cash equivalents of $1,366.6 million, long-term debt of $312.5 million, and total shareholders’ equity of $3,267.6 million. In the reported quarter, the company repurchased 3.4 million shares for nearly $320 million. It is now on track to repurchase shares worth $1.275 billion in fiscal 2019. Guidance In second-quarter fiscal 2019, it anticipates comps to be up 1-2%. Total sales are estimated to increase 5-6%. Operating margin is projected at 13.2-13.4%, whereas it recorded 13.8% in the prior-year quarter. This decline is likely to result from higher wage and freight costs, partially offset by last year's negative impact of pack-away timing. Further, it expects occupancy deleverage in the fiscal second quarter. Consequently, the company envisions earnings per share of $1.06-$1.11 compared with $1.04 recorded in the prior-year quarter. Driven by fiscal first-quarter results and expectations for the second quarter, Ross Stores raised its earnings view for fiscal 2019. It now estimates earnings per share of $4.38-$4.52 compared with $4.30-$4.50 mentioned earlier. Story continues How Have Estimates Been Moving Since Then? Fresh estimates followed a downward path over the past two months. VGM Scores Currently, Ross Stores has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy. Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in. Outlook Ross Stores has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ross Stores, Inc. (ROST) : Free Stock Analysis Report To read this article on Zacks.com click here. View comments |
Deckers (DECK) Up 19.1% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Deckers (DECK). Shares have added about 19.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Deckers due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Deckers Q4 Earnings & Sales Beat EstimatesDeckers Outdoor Corporation posted better-than-expected fourth-quarter fiscal 2019 results. Impressive performance across HOKA ONE ONE and Koolaburra brands aided the quarterly results. This was the ninth straight quarter of positive sales and earnings surprises. However, we note that while earnings per shares surged year over year, net sales declined from the year-ago period.Let’s Delve DeepThis Goleta, CA-based company reported adjusted earnings of 85 cents a share that crushed the Zacks Consensus Estimate of 10 cents and improved substantially from 50 cents reported in the prior-year period. Improved margins, additional cost savings, early shipment of spring wholesale order, and higher sales related to domestic e-commerce in the UGG brand facilitated the bottom line.The top line fell 1.6% to $394.1 million during the reported quarter, following an increase of 7.8% in the preceding quarter. Fall in net sales was primarily owing to retail store closures. However, net sales came ahead of the Zacks Consensus Estimate of $377.4 million. On a constant currency basis, net sales declined 1.3%.Deckers had earlier guided net sales in the range of $360-$374 million and earnings per share in the range of approximately break-even to 10 cents for the quarter under review. However, the company went on to report better-than-expected results. Earlier than expected wholesale shipments in the UGG brand led to better-than-anticipated net sales, which also benefited from delivery of spring summer product into the marketplace before time and higher domestic e-commerce sales for the UGG brand.Gross margin expanded 360 basis points to 51.6% on the back of improved full-price selling and supply chain efficiencies. Adjusted SG&A expenses were $170.4 million, down 1.2% from the same period last year, while as a percentage of net sales adjusted SG&A expenses came in at 43.2% marginally up from 43.1% in the year-ago period. Adjusted operating income came in at $32.9 million, up significantly from $19.9 million in the year-ago quarter, while operating margin expanded 330 basis points to 8.3%.Sales by Geography & ChannelThe company’s domestic net sales jumped 1.2% to $252 million in the reported quarter. Meanwhile, international net sales declined 6.3% to $142.1 million. Direct-to-Consumer net sales declined 11.8% to $156.6 million. Direct-to-Consumer comparable sales dipped 0.5% year over year. Wholesale net sales in the reported quarter grew 6.4% to $237.5 million.Brand-wise DiscussionUGG brand net sales fell 7.2% to $239 million in the reported quarter. Net sales for the Sanuk brand, known for its exclusive sandals and shoes, came in at $31.5 million, down 11.7% year over year. HOKA ONE ONE brand net sales soared 33.2% to $67.1 million, while Teva brand net sales decreased 3.8% to $52.9 million. Koolaburra in the quarter under review grew 67% to $3.6 million.Other Financial AspectsAt the end of the quarter, Deckers had cash and cash equivalents of $589.7 million, total short-term borrowings and mortgage payable of $31.5 million and shareholders’ equity of $1,045.1 million. During the quarter under review, Deckers did not buy back any shares and has $350 million, as of Mar 31, 2019, remaining under share repurchase authorization. Management anticipates capital expenditures in the range of $35-$40 million for fiscal 2020.FY20 GuidanceDeckers now anticipates fiscal 2020 net sales to be in the band of $2.095-$2.120 billion, which reflects year-over-year increase of 4-5%. The company also forecast adjusted earnings between $8.20 and $8.40 per share. Further, the company had delivered adjusted earnings of $8.84 per share in fiscal 2019. Management guided revenues from UGG brand to be up low-single digit and sales from Teva brand to be roughly flat. Sanuk brand sales are also expected to be roughly flat. Meanwhile, sales at HOKA ONE ONE brand are projected to be up in mid-20% range.Gross margin for the fiscal year is anticipated to be in the range of 50-50.5% compared with 51.5% reported in fiscal 2019. Further, SG&A expense as a percentage of sales is projected to be at or marginally better than 36%. Operating margin is envisioned to be in the range of 14.2-14.5% compared with 16.2% in fiscal 2019.For first-quarter fiscal 2020, net sales are estimated to be in the range of $250-$260 million compared with $250.6 million reported in the year-ago period. Management forecasts first-quarter bottom-line loss of $1.15-$1.25. The company had reported a loss of 98 cents a share in the prior-year quarter.
How Have Estimates Been Moving Since Then?
Fresh estimates followed a downward path over the past two months. The consensus estimate has shifted -20.21% due to these changes.
VGM Scores
Currently, Deckers has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Deckers has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportDeckers Outdoor Corporation (DECK) : Free Stock Analysis ReportTo read this article on Zacks.com click here. |
How Much is GMS Inc.'s (NYSE:GMS) CEO Getting Paid?
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Mike Callahan became the CEO of GMS Inc. (NYSE:GMS) in 2015. 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for GMS
According to our data, GMS Inc. has a market capitalization of US$745m, and pays its CEO total annual compensation worth US$1.2m. (This is based on the year to April 2018). While we always look at total compensation first, we note that the salary component is less, at US$750k. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO total compensation was US$2.7m.
Most shareholders would consider it a positive that Mike Callahan takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
The graphic below shows how CEO compensation at GMS has changed from year to year.
On average over the last three years, GMS Inc. has grown earnings per share (EPS) by 35% each year (using a line of best fit). Its revenue is up 19% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Shareholders might be interested inthisfreevisualization of analyst forecasts.
Since shareholders would have lost about 14% over three years, some GMS Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
It looks like GMS Inc. pays its CEO less than similar sized companies. Many would consider this to indicate that the pay is modest since the business is growing. Unfortunately, some shareholders may be disappointed with their returns, given the company's performance over the last three years. So while we don't think, Mike Callahan is paid too much, shareholders may hope that business performance translates to investment returns before pay rises are given out.
When I see fairly low remuneration, combined with earnings per share growth, but without big share price gains, it makes me want to research the potential for future gains. If you think CEO compensation levels are interesting you will probably really likethis free visualization of insider trading at GMS.
Important note:GMS may not be the best stock to buy. You might find somethingbetterinthis list of interesting companies with high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Apple's China Problem Is All Anyone Is Talking About
Applehas a China problem.
This week, theNikkei Asian Reviewreported that Apple had asked its contract manufacturers to evaluate shifting as much as 30% of its iPhone production from China to other countries. It was the latest in a string of recent reports that call into question whether Apple should—or even could—move iPhone production from China to escape tariffs being considered by the Trump Administration.
But Apple hasn’t said a word publicly about the topic, creating uncertainty about its plans.
In addition to the China news, TF International Securities analyst Ming-Chi Kuo told investors this week that Apple may debut three new iPhones next year. His report came around the same time a study that said that office workers worldwide feel more productive on a Mac than a Windows PC.
Read on for more about Apple’s week:
China The week’s biggest news came fromNikkei Asian Review,which reported that Apple has asked manufacturing partners to assessmoving up to 30% of Apple’s iPhone production from China. The move is a response to the U.S.-China trade war, according to the report, andApple’s fear that its iPhone manufacturing costs will risesignificantly if the U.S. imposes $300 billion in new tariffs on China-made products.
After the report, Wedbush analyst Dan Ivescast doubt that Apple would be able to move such a big part of its iPhone productionfrom China. He told investors in a note thatApple would only be able to shift up to 7% of its productionfrom China within the next 12 to 18 months, at best. Ives added that Apple reliance on China is such that it’s difficult to move substantial manufacturing elsewhere.
Hoping to make iteasier for Apple users to get their devices fixed, Apple said that it will addnearly 1,000 Best Buy retail locationsto its list of Apple-authorized repair locations.Best Buytechnicians at those locations will be Apple-certified and any fixes they make will be covered under Apple’s product warranties. Previously, Apple customers were required to either bring their devices to an Apple Store or a third-party authorized technician. In some areas, there were few authorized technicians.
Market research firm Jamf reported the results of a new study recently aboutsatisfaction among corporate workers with Apple devices.The company found that 97% of respondents who moved from a Windows PC to a Mac believed they weremore productive on Apple computers. Ninety-five percent said the Mac made them more creative.
Apple Watch will remain the most popular smartwatchthrough 2023, IDC predicted this week. The researcher said that131.6 million wearables will ship to stores in 2023, and Apple Watch will account for 25.9% of all those shipments. Competing Android devices from device makers including Samsung and Huawei will account for the remaining share, but none of them will come close to matching Apple, according to the report.
Job review site Glassdoor this week released itsannual list of top CEOs,ranked by whether employees approve of the job that they’re doing.Apple CEO Tim Cook was ranked No. 69with a 92% approval rating. It was bad news for Cook, who continues to see his approval rating slip. In 2012, he was first on Glassdoor’s list with a 97% approval rating and then hovered around No. 10 in subsequent years. But his showing this year was better than in 2018, when he was ranked No. 96.
TF International Securities analyst Ming-Chi Kuo said this week that he expectsApple to introduce three new iPhones in 2020with screen sizes of 6.7 inches, 6.1 inches, and 5.4 inches. Kuo,who cited unnamed sources, but is one of the more accurate Apple predictors, said that the 6.7-inch and 5.4-inch models would each support high-speed 5G connections that carriers likeVerizonandAT&Tare rolling out.
Apple is trying a few new things in its Apple Stores, Apple-tracking site9to5Mac reported this week. The report said thatApple is adding new displays inside stores about iPhonesthat that more completely describe their features. Apple Watch display tables have also been changed to make it easier to find a watchband that goes with a particular Apple Watch face, according to the report.
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Uber, Lyft Could Fleece Consumers to Satisfy Wall Street's Thirst for Profits
The much-hyped IPO machine ofLyft(NASDAQ: LYFT)andUber Technologies(NYSE: UBER)got off to a stuttering start as investors took note ofthe red flagsthese companies were waving before going public. The good thing is that stocks of both ridesharing specialists are finally trading above the prices at which they made their debuts. But don't expect them to keep climbing, because they are caught in a double whammy.
Lyft and Uber's IPO filings revealed that they are in deep losses, while the latter went on to make it clear that it may not be able to achieve profitability. But that's not going to cut it on Wall Street, where stock prices and earnings performances matter the most. Investors and analysts will want answers as to how Lyft and Uber plan to get profitable, and there's one obvious answer to this question: higher fares.
Image Source: Lyft.
Dave Maney, the chairman of digital marketing firm Deke Digital, told Fox Business in an interview in April:
When the money runs out and going public is a good way to kind of -- obviously they can access capital but now they've got to report and they've got to be responsible. And lots of people are looking at this and saying, "Yeah the party could in fact be over."
Maney's words are right on point given the losses Lyft's and Uber's IPO filings revealed. Lyft incurred a loss of $911 million last year, a significant jump from the 2017 loss of $688 million. The company's 2016 loss was $682 million.
Lyft has already warned investors that its losses will increase in the future thanks to international expansion and subsidized rides to boost ridership. The company brought somerelief to investorswhen it reported a slightly smaller adjusted loss in its first quarter as a public company.
But the outlook clearly told us why the company could think of hiking fares. Lyft expects top-line growth of 59% to 60% in the second quarter as compared to the prior-year period. That seems great at first, but you shouldn't forget that the company's revenue jumped a whopping 95% during the first quarter.
What's more, investors won't like the full-year outlook either, since the company expects its adjusted EBITDA loss to fall between $1.15 billion and $1.175 billion. That would be a big jump from the year-ago period's figure of $943.5 million.
On the other hand, Uber's IPO filing revealed a loss of nearly $2 billion last year, and its first-quarter results indicate that things won't be improving anytime soon. Uber delivered an operating loss of just over $1 billion in the first quarter of 2019 as compared to $478 million in the year-ago period. Don't be surprised if these losses keep on climbing. According to the company's S-1 filing:
We have incurred significant losses since inception, including in the United States and other major markets. We expect our operating expenses to increase significantly in the foreseeable future, and we may not achieve profitability.
But that's not how Wall Street works. Once revenue growth starts slowing down and losses balloon further, Lyft and Uber will have to find a way to show profitability to save their stock prices from crashing. Raising fares is one way to do that, because such a move will boost Lyft's and Uber's top lines and help arrest losses.
Uber and Lyft customers have already been struck with fare hikes this year thanks to a minimum-wage law for drivers, which is expected to raise an average driver's pay by $9,600 annually so that they are not underpaid.
This poses another threat for Uber's and Lyft's bottom lines: The two companies will have to contend with driver unions across the globe wherever they think of starting operations. Any further increases in driver wages will most likely be passed on to customers in due course, leading to fare hikes.
In fact, Uber has been hiking fares regularly to pull in more revenue. For instance, the company raised its fares by 10% in the Indian market in 2017, followed by a 15% hike last year, according to research firm RedSeer Consulting. What's more,The Guardianreportsthat the ridesharing companies are not passing on the benefits of surge passing to drivers, in what seems like an underhand attempt to increase revenue.
This isn't surprising, since Uber's IPO filing revealed that the company has witnessed a big slowdown in revenue growth. The company's top line was up 42% in 2018 after a much more impressive increase of 106% the prior year.
The company's first-quarter results showed that revenueincreased by just 20%.
Now that both Uber and Lyft are public, it won't be surprising to see them come under more pressure to deliver consistent revenue growth and reduce losses. This is why riders need to be ready for bigger holes in their wallets. The likes of Lyft and Uber will likely have to resort to fare hikes to satisfy Wall Street's demands; otherwise, their stock prices could take a hit on account of slowing growth and higher losses.
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Harsh Chauhanhas no position in any of the stocks mentioned. The Motley Fool recommends Uber Technologies. The Motley Fool has adisclosure policy. |
BTC, ETH, XRP, LTC, BCH, EOS, BNB, BSV, XLM, ADA: Price Analysis 22/06
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Market data is provided by theHitBTCexchange.
Bitcoin’s dominance has reached 58% and its rally has helped the total market capitalization of cryptocurrencies cross$300billion. This rise has been backed by an increase in Bitcoin futuresopen interestthat has hit an all-time high on the CME. The recovery from the lows has also helped bitcoin’shashrateclock a new high. Both these are bullish signs and indicate that the rally is on firm ground.
A new survey by Moscow-based cybersecurity firm Kaspersky Lab has stated that19%of people across the world have bought cryptocurrencies before 2019. For a new asset class, this is a very high and impressive number.RippleCEO Brad Garlinghouse recently revealed that he waslong on Bitcoinbecause he considered it a store of value.
While the adoption of cryptocurrencies is increasing, it still has its naysayers. The Reserve Bank ofAustraliadoes notexpectcryptocurrencies to find wide use in Australia if the existing financial system remains robust. Similarly, Patrick Gaulthier, vice president ofAmazonPay, said that they do not have any plans of creating crypto in the short-term as they do not deal inspeculativeassets.
Bitcoin (BTC) has picked up momentum in the past two days,blowing past$10,000 andreaching$11,000. Both the moving averages are sloping up and the RSI is close to the overbought zone. This shows that bulls are in command.
The zone between $10,000 and the resistance line of the ascending channel is a stiff hurdle to cross but with momentum backing theBTC/USDpair, a rally to $12,000 is possible. There is nothing negative on the charts that suggests that the rally will stall at the resistance line of the channel.
Contrary to our assumption, if the bears defend the overhead resistance zone, a fall to the 20-day EMA is possible. This is likely to act as strong support, but if it cracks, the next support is at the 50-day SMA. A breakdown of $7,413.46 will change the trend from bullish to bearish.
Ether (ETH) hasbrokenout of the overhead resistance at over $300. This indicates a resumption of the uptrend. The next level to watch on the upside is $322.06, and above it $335. Both the moving averages are trending up and the RSI is close to overbought territory, which suggests that bulls have the upper hand.
Contrary to our expectation, if theETH/USDpair fails to sustain above the $280 mark, it can slide to the 20-day EMA. If this level breaks down, it can correct to the 50-day SMA. The trend will turn negative on a breakdown and close below $225.39.
The pullback from the resistance line of the symmetrical triangle found support at the 20-day EMA. Currently, Ripple (XRP) is again attempting to break out of the triangle. If successful, it can move up to $0.57259 and above it to $0.6250. With both the moving averages sloping up and the RSI in the positive zone, the path of least resistance is to the upside.
Our bullish view will be invalidated if the bulls fail to scale above the resistance line of the triangle. In such a case, a drop to 20-day EMA is probable. Traders can wait for four hours and if theXRP/USDpair fails to break out within that time frame, 40% of the positions can be closed.
Litecoin (LTC) has been trading in a small range near $140.3450 for the past few days. This shows that the bulls are not in a hurry to book profits and they start buying on every minor dip. Both the moving averages are sloping up and the RSI is close to the overbought zone, which shows that the bulls have the upper hand.
The breakout and close above $143.3047 could propel theLTC/USDpair to $158.91 and above it to $184.7949. On the contrary, if the pair turns down from the current levels and breaks down of the 20-day EMA, the momentum will weaken. Therefore, traders can protect the remaininglongposition with a stop loss below 20-day EMA. As the price surges higher, traders can tighten the stops further to protect paper profits.
Bitcoin Cash (BCH) is again attempting to bounce off the 20-day EMA. A breakout over $460 could rally to the recent highs of $481.99. Above this level, the uptrend can continue to the resistance line of the ascending channel, which might act as a roadblock. However, the cryptocurrency has a history of vertical rallies. If momentum picks up, it can even reach $639 and above it $889.
On the other hand, if theBCH/USDpair struggles to break out of the overhead resistance, it might dip back to the 20-day EMA. It remains bullish as long as both the moving averages are sloping up and the price remains above the moving averages. It will signal a change in trend on a breakdown and close (UTC time frame) below the support line of the channel.
EOShas been holding the 20-day EMA for the past three days but is struggling to bounce off it. This shows a lack of demand at higher levels. With the bulls pushing the price above $7.2691, a rally to the resistance line of the channel is probable. Above this level, the rally can extend to $8.6503. Traders can maintain the stop loss on thelongposition at $5.80.
If the bulls fail to push the price higher, the bears will try to break down below the 20-day EMA. If successful, theEOS/USDpair can plummet to the 50-day SMA and below it to the support line of the ascending channel. If this level cracks, the trend will weaken and a fall to $4.4930 is likely. We should see a decisive move within the next three to four days.
Binance Coin (BNB) has surpassed the overhead resistance of $38.6463356 where it was facing stiff resistance. A breakout and close (UTC time frame) above the lifetime highs can propel the cryptocurrency to $46.1645899. Both the moving averages are sloping up and the RSI is close to the overbought zone, which suggests that buyers have the upper hand.
However, if theBNB/USDpair reverses direction from the current levels, it can fall to the 20-day EMA and below it to $28. If this level holds, the pair might remain range-bound for a few days but if the support cracks, the next stop is $20. Therefore, traders can keep the stop loss on thelongposition at $28.
Bitcoin SV (BSV) pushed against the overhead resistance of $237.390, hitting over $255 today. Both the moving averages are trending up and the RSI is close to the overbought zone, which shows that bulls are in command.
Contrary to our assumption, if theBSV/USDpair plummets below the 20-day EMA, it can drop to $175, which is a strong support. If this level holds, the pair might remain range bound between $175 and $237.390 for a few days. But if the bears sink the price below $175, the trend will turn negative and a drop to $152.015, which is 50% retracement of the recent rally, is probable.
Stellar (XLM) had previously struggled to break out of the downtrend line of the descending triangle as both the moving averages were flat and the RSI was just below the midpoint, which points to a state of equilibrium.
The trend will turn in favor of the bears if theXLM/USDpair plunges below $0.11507853. The pattern target of this breakdown is $0.06678607 but the pair might find support at $0.0855 or below it at the lows.
On the other hand, if the price breaks out of the downtrend line of the descending triangle, it can move up to $0.14861760. A breakout and close (UTC time frame) above $0.14861760 will complete a bullish inverse head and shoulders pattern. Traders can buy this breakout and close (UTC time frame) based on ourearlierrecommendation.
Cardano (ADA) is currently range-bound between $0.076254 and $0.10. The 20-day EMA has flattened out and the RSI is just above 50, which suggests consolidation in the short term.
If the bears sink theADA/USDpair below $0.076254, it can dip to the next support at $0.057898. Conversely, if the bulls scale above $0.10, the pair will complete a rounding bottom pattern that can start a new uptrend. Therefore, we retain our buy recommendation given in anearlieranalysis.
Market data is provided by theHitBTCexchange. Charts for analysis are provided byTradingView.
• BTC, ETH, XRP, LTC, BCH, EOS, BNB, BSV, XLM, ADA: Price Analysis 19/06
• BTC, ETH, XRP, LTC, BCH, EOS, BNB, BSV, XLM, ADA: Price Analysis 17/06
• BTC, ETH, XRP, LTC, BCH, EOS, BNB, BSV, XLM, ADA: Price Analysis 14/06
• BTC, ETH, XRP, LTC, BCH, EOS, BNB, BSV, XLM, ADA: Price Analysis 12/06 |
Introducing Philippine Metals (CVE:PHI), A Stock That Climbed 45% In The Last Three Years
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By buying an index fund, investors can approximate the average market return. But many of us dare to dream of bigger returns, and build a portfolio ourselves. Just take a look atPhilippine Metals Inc.(CVE:PHI), which is up 45%, over three years, soundly beating the market return of 13% (not including dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 33% in the last year.
Check out our latest analysis for Philippine Metals
Philippine Metals 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 shareholders are too busy dreaming about the progress to come than dwelling on the current (lack of) revenue. It seems likely some shareholders believe that Philippine Metals will find or develop a valuable new mine 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.
Philippine Metals had cash in excess of all liabilities of just CA$16k when it last reported (December 2018). So if it has not already moved to replenish reserves, we think the near-term chances of a capital raising event are pretty high. Given how low on cash the it got, investors must really like its potential for the share price to be up 13% per year, over 3 years. You can click on the image below to see (in greater detail) how Philippine Metals's cash levels have changed over time.
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. Luckily we are in a position to provide you with thisfreechart of insider buying (and selling).
It's good to see that Philippine Metals has rewarded shareholders with a total shareholder return of 33% in the last twelve months. Since the one-year TSR is better than the five-year TSR (the latter coming in at 5.9% per year), it would seem that the stock's performance has improved in recent times. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. Most investors take the time to check the data on insider transactions. You canclick here to see if insiders have been buying or selling.
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 CA 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. |
Can Guess', Inc. (NYSE:GES) Improve Its Returns?
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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 Guess', Inc. (NYSE:GES), by way of a worked example.
Guess' has a ROE of 3.1%, based on the last twelve months. One way to conceptualize this, is that for each $1 of shareholders' equity it has, the company made $0.031 in profit.
See our latest analysis for Guess'
Theformula for return on equityis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for Guess':
3.1% = US$13m ÷ US$570m (Based on the trailing twelve months to May 2019.)
Most know that net profit is the total earnings after all expenses, but the concept of shareholders' equity is a little more complicated. It is all the money paid into the company from shareholders, plus any earnings retained. 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. A higher profit will lead to a higher ROE. So, all else being equal,a high ROE is better than a low one. 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. However, this method is only useful as a rough check, because companies do differ quite a bit within the same industry classification. As shown in the graphic below, Guess' has a lower ROE than the average (13%) in the Specialty Retail industry classification.
That's not what we like to see. It is better when the ROE is above industry average, but a low one doesn't necessarily mean the business is overpriced. Nonetheless, it might be wise tocheck if insiders have been selling.
Companies usually need to invest money to grow their 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 use of debt will improve the returns, but will not change the equity. That will make the ROE look better than if no debt was used.
Guess' has a debt to equity ratio of 0.57, which is far from excessive. Its ROE is certainly on the low side, and since it already uses debt, we're not too excited about the company. Conservative use of debt to boost returns is usually a good move for shareholders, though it does leave the company more exposed to interest rate rises.
Return on equity is a useful indicator of the ability of a business to generate profits and return them to shareholders. Companies that can achieve high returns on equity without too much debt are generally of good quality. 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 when a business is high quality, the market often bids it up to a price that reflects this. The rate at which profits are likely to grow, relative to the expectations of profit growth reflected in the current price, must be considered, too. So you might want to take a peek at thisdata-rich interactive graph of forecasts for the company.
Of courseGuess' may not be the best stock to buy. So you may wish to see thisfreecollection of other companies that have high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
4 Ways to Avoid Botching a Job Interview
Acing a job interview could be your ticket to an offer letter and the start of a great new career opportunity. The problem? Most job candidates don't. A good 55% of working professionals have admitted to botching a job interview, according to LinkedIn. The top offenses included being overly nervous (32%), not preparing well enough in advance (27%), and mispronouncing words (10%), which could be problematic if the words in question are business terms you should be familiar with. Of course, one reason why it's so hard to excel at job interviews is that most of us don't go on them all that frequently, especially once we've established our careers. But nailing a job interview is the only way you're going to get yourself hired at a new company, so here are a few ways you can manage to do just that. Woman in business suit shaking hands with man across the table Image source: Getty Images. 1. Research the company at hand thoroughly Showing up to an interview unprepared is downright unacceptable, as it sends the message that you couldn't be bothered to spend time to do your research. Don't send that message. Instead, read up on the company you're about to meet with. Study its website, and search for articles about it so you're aware of news and developments. It also helps to familiarize yourself with the company's products or services. If you're unable to sample them directly (say, because they cost too much money), read up on them so you're coming in educated. 2. Prepare to answer tough interview questions It's common to have tough questions thrown at you during a job interview. You know what else is common? The questions themselves . Classics like "What's your greatest weakness?" or "How have you failed in the past?" are more likely than not to get hurled your way, so spend some time thinking about how you'll answer them in advance. 3. Do a few trial runs You might think you're ready to go on a job interview, only to get extremely nervous or thrown the moment you sit down across from your interviewer in a conference room. A good bet, therefore, is to enlist the help of a family member or friend and go through a few trial runs. It may seem hokey or unnecessary, but it could end up serving the very important purpose of getting you comfortable with the process as a whole. Story continues 4. Utilize free resources The internet is loaded with free resources that can help you gear up for an interview -- so use them. LinkedIn, for example, recently released a new set of interview tools that can help you prepare for the process. These and similar tools are developed by professionals, so why not capitalize on their expertise? Botching a job interview is a good way to guarantee that you won't be getting hired for the position in question. Rather than let that happen, research the companies you're meeting with, read up on common interview questions, practice the actual act of interviewing, and explore online tools at your disposal. With any luck, you'll wow your next interviewer to the point where an offer letter quickly follows suit. More From The Motley Fool 10 Best Stocks to Buy Today The $16,728 Social Security Bonus You Cannot Afford to Miss 20 of the Top Stocks to Buy (Including the Two Every Investor Should Own) What Is an ETF? 5 Recession-Proof Stocks How to Beat the Market The Motley Fool has a disclosure policy . |
Other nations, not just US, 'need to step up' in negotiations with Iran: analyst
U.S. tensions with Iran reached new heights Friday morning after President Donald Trump said hecalled off a planned military strike on the country. The tweet followed reports that Iran shot down one of U.S.’s surveillance drones over the Strait of Hormuz Thursday.
“The president’s actions show one that he is being very measured,” said The Heritage Foundation Senior Research Fellow for Defense Programs Thomas Callender to Yahoo Finance’sOn the Move. “He’s offering right now with this opportunity, talks for Iran to come back and negotiate… if they don’t or if they continue to escalate… I think then you would see a U.S. military response.”
The growing pressure has hit the oil market, with Crude oil (CL=F) jumping over 12% since last week’s low following Iran’s suspected attack on two oil tankers in the Gulf of Oman.
If the price of oil continues to rise, Callender said it’s not just America that needs to respond, since the U.S. doesn’t get most of its oil from the Gulf, “It’s Europe, it’s China, its these other nations that are getting the oil from them. They need to step up and help secure the shipping through there, it’s not just going to be the U.S.”
Callender also noted that the U.S.-Iran tensions could come up during talks between Trump and Chinese President XI Jinping at the G20 summit next week,“It’s not gonna just to be the U.S. to ensure freedom and navigation for tankers through the region, but it’s gonna have to be an international coalition.”
Kenneth Underwood is a senior producer for Yahoo Finance. Follow him on Twitter@TheKennyU.
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Facebook ‘Too Powerful’ to Run Libra Without Rules, Says Democratic Senator
ByCCN Markets: Facebook has too much power to engage with a cryptocurrency, a United States senator has warned, days after the social media giantlaunchedLibra.
Sherrod Brown, a Democratic senator from Ohio, toldBloomberg TVthat the public has increasing concerns around the social network.
Facebook is too big and too powerful. I don’t know that people would have said that two or three or five years ago, but the public increasingly believes they’re too big and too powerful, particularly to engage in a risky cryptocurrency. Running a cryptocurrency system out of a Swiss bank is a big concern to people.
Brown is the latest politician to caution againstFacebook’s cryptocurrency, unveiled earlier this week with collaboration from 27 other firms.
Read the full story on CCN.com. |
Trump defends pre-dawn Ice raids on migrant families set to begin on Sunday
Photograph: Smiley N Pool/AP Raids on migrants in cities including New York, Chicago and Miami could begin as early as Sunday. Related: Trump orders Ice to target migrant families in pre-dawn Sunday raids – live The raids, which Donald Trump described in a tweet earlier this week, will target more than 2,000 migrants who have received letters ordering them to appear in immigration court, according to the Miami Herald . The operation, which the Washington Post said the president has ordered, could target people in Miami, Atlanta, Chicago, Baltimore, Denver, Houston, Los Angeles, New Orleans, New York and San Francisco. The Department of Homeland Security agency that oversees deportations , Immigration and Customs Enforcement (Ice), said the agency does not provide details about enforcement operations, citing the safety of Ice personnel. “All of those in violation of the immigration laws may be subject to immigration arrest, detention and – if found removable by final order – removal from the United States,” an Ice spokesman said. Trump defended the raids on Saturday morning, tweeting: “When people come into our country illegally, they will be DEPORTED!” Over the past seven years , more undocumented people have entered the US legally on visas then become undocumented when their visas expire, or by illegally crossing the border. In a second tweet, Trump incorrectly conflated having a deportation order with evading the law. It is not unusual for people with deportation orders to routinely check in with Ice while they seek other forms of immigration relief or challenge the orders in court. Since Trump announced on Twitter that “millions” of migrants would be deported next week, immigration advocacy groups across the US have said they are prepared for the raids, which could not reach a million people because of limited staffing at Ice. “We have spent the last two and a half years learning how to respond to these situations, teaching our communities how to respond and creating materials with how to support them,” said Camille Mackler, director of immigration legal policy at the New York Immigration Council (NYIC). Story continues Related: Mexico immigration chief vows to cut number of people migrating by 60% NYIC represents more than 200 migrant and refugee communities in New York state, which has long been home to one of the biggest Central American populations in the US. Trump has for months complained about Central American families crossing the southern border. This week, NYIC has ramped up education and awareness efforts , including encouraging people to use resources on its website, advising those who have received a deportation order to contact a lawyer and telling people to make a plan for their family in case they are arrested. “We know how to respond to these raids,” Mackler said. She and other immigration advocates condemned the raids as a political ploy timed to follow Trump’s formal announcement that he is running for re-election on Tuesday and to support an administration narrative that Central American families at the border are criminals, not people fleeing violence and poverty to pursue their right to seek asylum. Sandra Cordero, director of Families Belong Together, a coalition fighting family separations , said in a statement the potential raids are “a disgusting political ploy to stoke fear and rile up Trump’s base for 2020”. Cordero said: “This is yet another flagrant disregard for the welfare of children on behalf of a cruel administration bent on fomenting fear and creating chaos.” The acting homeland security secretary, Kevin McAleenan, has been encouraging Ice to narrow the operation, according to the Washington Post . McAleenan reportedly raised concerns that the larger operation would lead to renewed family separation – because parents and guardians of US citizen children are expected to be affected – and undermine the agency’s argument that it needs emergency funding to address the record number of families approaching the border. Though Trump has made aggressive immigration enforcement a cornerstone of his presidency, he has deported far fewer people than Barack Obama. In the last fiscal year, Ice removed 250,000 undocumented migrants compared to 410,000 removed in 2012. Trump, however, has done away with deportation priorities Obama put in place in his second term, and used anti-migrant rhetoric that creates fear. Kevin Lo, staff attorney for the Immigrant Rights Program at Asian Americans Advancing Justice’s Asian Law Caucus, said calls to the group’s multiple migration hotlines have increased since Trump’s tweet, with more people reporting activity that looks like it could be Ice. Lo said the Cambodian community he works with has seen Ice raids every four months and that each time a raid occurs it has an immediate, devastating impact. People who are able to fight their case in court still suffer devastating consequences, Lo said – after being arrested in a raid and detained, people lose work and fail to make payments on cars and homes, while trying to pay for calls to their family from detention and for family visits. “Families definitely don’t recover from this,” Lo said, “even if their loved one gets to stay.” |
Read This Before Judging Guess', Inc.'s (NYSE:GES) ROE
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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 Guess', Inc. (NYSE:GES), by way of a worked example.
Guess' has a ROE of 3.1%, based on the last twelve months. One way to conceptualize this, is that for each $1 of shareholders' equity it has, the company made $0.031 in profit.
View our latest analysis for Guess'
Theformula for ROEis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for Guess':
3.1% = US$13m ÷ US$570m (Based on the trailing twelve months to May 2019.)
Most know that net profit is the total earnings after all expenses, but the concept of shareholders' equity is a little more complicated. It is the capital paid in by shareholders, plus any retained earnings. The easiest way to calculate shareholders' equity is to subtract the company's total liabilities from the total assets.
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 yearly profit. The higher the ROE, the more profit the company is making. So, as a general rule,a high ROE is a good thing. That means it can be interesting to compare the ROE of different companies.
Arguably the easiest way to assess company's ROE is to compare it with the average in its industry. Importantly, this is far from a perfect measure, because companies differ significantly within the same industry classification. If you look at the image below, you can see Guess' has a lower ROE than the average (13%) in the Specialty Retail industry classification.
Unfortunately, that's sub-optimal. We prefer it when the ROE of a company is above the industry average, but it's not the be-all and end-all if it is lower. Still,shareholders might want to check if insiders have been selling.
Most companies need money -- from somewhere -- to grow their profits. The cash for investment can come from prior year profits (retained earnings), issuing new shares, or borrowing. In the first and second cases, the ROE will reflect this use of cash for investment in the business. In the latter case, the use of debt will improve the returns, but will not change the equity. That will make the ROE look better than if no debt was used.
Although Guess' does use debt, its debt to equity ratio of 0.57 is still low. Its ROE is certainly on the low side, and since it already uses debt, we're not too excited about the company. Conservative use of debt to boost returns is usually a good move for shareholders, though it does leave the company more exposed to interest rate rises.
Return on equity is a useful indicator of the ability of a business to generate profits and return them to shareholders. Companies that can achieve high returns on equity without too much debt are generally of good quality. If two companies have around the same level of debt to equity, and one has a higher ROE, I'd generally prefer the one with higher ROE.
But ROE is just one piece of a bigger puzzle, since high quality businesses often trade on high multiples of earnings. The rate at which profits are likely to grow, relative to the expectations of profit growth reflected in the current price, must be considered, too. So I think it may be worth checking thisfreereport on analyst forecasts for the company.
Of course,you might find a fantastic investment by looking elsewhere.So take a peek at thisfreelist of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
High levels of arsenic in bottled water sold at Whole Foods, Target, Walmart, study says
Despite its popularity and its distribution in places such asFlint, Michigan, bottled water might not be as safe as you think.
A test conducted by California nonprofit Center for Environmental Health finds thattwo bottled water brands— Peñafiel, owned by Keurig Dr Pepper and Starkey, owned by Whole Foods — contain levels of arsenic that are higher than tap water, violating state guidelines as a result.
High levels of arsenic, Californialaw states, can cause reproductive harm and cancer. Products that violate recommended state levels of arsenic have to be labeled with a warning.
“Customers typically purchase bottled water at exorbitantly high costs with the assumption that it is safer and healthier to drink than tap water, unaware that they are ingesting an extremely toxic metal linked to birth defects and cancer," said Michael Green, the organization's CEO, in a statement.
The latest:After high arsenic reports, Keurig Dr Pepper pulls bottled water sold at Target, Walmart
Studies also show that it can cause hormone disruption and organ damage, especially in children.
It corroborates independent findings releasedearlier this year by Consumer Reports, which found that the same brands of water have nearly double the federal limit of arsenic in water.
Keurig Dr Pepper stopped production of Peñafiel for two weeks after the release of the initial Consumer Reports study, with proposals to improve water filtration. So far, the Food and Drug Administration has yet to recall either brand of bottled water.
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“Beyond the required annual testing by an FDA certified lab, we have an accredited third-party lab test every production run of water before it is sold, and our test results from the same lot analyzed by Consumer Reports show that these products are fully compliant with FDA standards for heavy metals," said a Whole Foods spokesperson to USA TODAY. "We would never sell products that do not meet FDA requirements.”
Peñafiel is currently sold at Target, Walmart and other vendors, while Starkey is sold at Whole Foods.
Earlier this year,Consumer Reports foundpotentially harmful levels of metals including arsenic in fruit juices.
On Friday,Keurig Dr Pepper announced it was voluntarily pulling the waterand offering consumers refunds.
This article originally appeared on USA TODAY:High levels of arsenic in bottled water sold at Whole Foods, Target, Walmart, study says |
Biden attack ads featuring his comments on race to be launched by right-wing group
Club for Growth, a conservative political group, will launch new attack ads against Democratic presidential frontrunner Joe Biden targeting his past statements about race next week. The ads, which come amid criticism of Mr Bidens work with segregationists in the 1970s, will run during his first Democratic debate appearance. The decision to attack Mr Biden is based on internal polling Club for Growth conducted that has been viewed by Reuters. The ads will air on MSNBC and NBC stations in Des Moines, Iowa , according to the organisation. Iowa holds the nation's first nominating contest. Club for Growth, whose stated top policy goals include reducing income tax rates, a full repeal of Obamacare and reducing the size of the federal government, will never back a Democrat for president, but it is wading into the Democratic primary likely because Mr Biden poses the greatest risk to Donald Trump 's re-election bid. Early national polling and surveys in important swing states have repeatedly shown Mr Biden beating Mr Trump in a hypothetical match up. Club for Growth's poll found voters were less inclined to vote for Mr Biden if they were told he had previously taken positions that included opposing slavery reparations and busing of school children as part of desegregation systems. "Joe Bidens past statements and positions on race issues present a serious challenge to his candidacy for the Democratic presidential nomination according to our polling," Club for Growth president David McIntosh said in a statement to Reuters. "This poll and the coming ad are designed to help voters and observers of the 2020 Democratic presidential primary understand the field as well as the strengths and weaknesses of the frontrunner, former vice president Joe Biden." Mr Biden, who has consistently been the frontrunner in the Democratic presidential primary, drew sharp criticism from his Democratic rivals this week when he pointed to the "civility" during his early time in the US Senate in the 1970s when he worked with segregationists. Story continues He has refused to apologise, pointing out that he opposed segregationists. Mr Biden is one of two dozen Democrats vying to challenge Mr Trump in the November 2020 election . The Democrats will go head-to-head in Miami next week in their first debate. The Club for Growth poll - which included 1,000 voters in the 18 states that are the first to hold primary contests - reaffirmed Mr Biden's position as a frontrunner. It found, like other polls, that Mr Biden's lead is being fuelled largely by black voters. The poll found 46 per cent of black voters, 29 per cent of Hispanic voters and 33 per cent white voters are backing Mr Biden. The poll found Mr Biden followed by US senator Bernie Sanders and then senator Elizabeth Warren . The research also looked more closely at the four states that conduct the first nominating contests: Iowa, New Hampshire , South Carolina and Nevada . In those states Mr Biden leads, but Ms Warren edges out Mr Sanders - a possible sign of her growing support in states that are pivotal for the primary contest. The poll was conducted 10-13 June by Republican polling firm WPAi Intelligence. Reuters |
Hard-hit Turkish assets hinge on election, Trump-Erdogan meeting
By Nevzat Devranoglu and Ceyda Caglayan
ANKARA/ISTANBUL (Reuters) - Investors could snap up sold-off Turkish assets or dump them with force depending on the outcome of Sunday's re-run election in Istanbul and, days later, a high-stakes meeting between President Tayyip Erdogan and his U.S. counterpart Donald Trump.
The Turkish lira, stocks and bonds have sagged since March amid uncertainty over how the vote might affect Erdogan's economic policies, and strained relations between Ankara and Washington over Turkey's purchase of Russian S-400 defence systems.
The outcomes may set the stage for a rebound or a further slump in the lira by the end of next week, bankers and analysts say. The currency has lost 10% against the dollar so far this year, following a 30% fall in last year's currency crisis.
The stock market, at its lowest levels in dollar terms in about a decade, might revive after the Istanbul election if foreign investors regain trust in Turkey, said Mehmet Gerz, who heads Ata Portfoy fund management firm.
When the initial March vote was scrapped, investors questioned the integrity of Turkey's democratic institutions and wondered whether the months of additional campaigning would distract from needed economic reforms.
A slew of unorthodox government measures to protect the lira raised further questions.
"Turkish stocks are at the cheapest level in a decade," Gerz said, adding "the political framework that will be formed after the election" would set the new direction.
On March 31, the main opposition party pulled off a mayoral victory over Erdogan's ruling AK Party, a stinging defeat for the president seen in part as a rejection of his handling of the economy that tipped into recession last year.
Another AKP loss on Sunday could weaken his iron grip on power, but also restore some faith in democracy. Concerns over the central bank's autonomy, as well as a separate diplomatic row with Washington, set off last year's lira plunge.
In May, when the re-run was announced, foreign investors sold a net $345 million of Turkish stocks.
Compounding the pressure, locals have flocked to foreign currencies since last year's lira crisis, with forex deposits and funds including precious metals held by Turkish local individuals and institutions rising to a record high by June 7.
The trend could change, however, and confidence in Turkish assets increase if reforms are put in place "to get back to rational and rule-based economic management," Gerz said.
SANCTIONS LOOM
Erdogan and Trump are set to meet at a G20 summit in the Japanese city of Osaka on June 29-30, in part to discuss Turkey's S-400s purchase and the threat of U.S. sanctions.
Investors have held out hope the leaders can find a solution despite Ankara's repeated assertions that it will accept delivery of the defence systems and, in the U.S. Congress, a strong resolve to punish Turkey if it does and a U.S. law requiring that sanctions would be implemented.
On Thursday Erdogan told foreign reporters in Istanbul that he would ask Trump whether he thought such sanctions were suitable, adding: "I believe he does not."
U.S. sanctions, which could come as soon as July, could set off another bout of selling in the lira and other Turkish assets. But some investors said much would depend on the details of such a move.
"The current view is that Turkey may not be facing heavy sanctions but (rather) measured economic sanctions over the S-400 purchase. This could create negative flows but I do not expect heavy sales," said Eral Karayazici, a fund manager at Gedik Portfoy.
But Ulrich Leuchtmann, head of forex and emerging markets research at Commerzbank, said that Turkey would be "really hurt" if the U.S. enforces its sanctions globally.
"Optimists are saying this is just a lot of noise, it won't be that bad in the end. But I am not so sure about this," he said.
(Reporting by Nevzat Devranoglu and Ceyda Caglayan; Additional reporting by Karin Strohecker in London; Writing by Ezgi Erkoyun; Editing by Jonathan Spicer and Clelia Oziel) |
Why Fuling Global Inc. (NASDAQ:FORK) Could Be Your Next Investment
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Fuling Global Inc. (NASDAQ:FORK) is a company with exceptional fundamental characteristics. Upon building up an investment case for a stock, we should look at various aspects. In the case of FORK, it is a company with great financial health as well as a a great track record of performance. Below, I've touched on some key aspects you should know on a high level. If you're interested in understanding beyond my broad commentary, read the fullreport on Fuling Global here.
In the previous year, FORK has ramped up its bottom line by 21%, with its latest earnings level surpassing its average level over the last five years. Not only did FORK outperformed its past performance, its growth also exceeded the Consumer Durables industry expansion, which generated a 19% earnings growth. This is an notable feat for the company. FORK's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This indicates that FORK has sufficient cash flows and proper cash management in place, which is a crucial insight into the health of the company. FORK's has produced operating cash levels of 0.33x total debt over the past year, which implies that FORK's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
For Fuling Global, there are three fundamental factors you should further examine:
1. Future Outlook: What are well-informed industry analysts predicting for FORK’s future growth? Take a look at ourfree research report of analyst consensusfor FORK’s outlook.
2. Valuation: What is FORK 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 FORK is currently mispriced by the market.
3. Other Attractive Alternatives: Are there other well-rounded stocks you could be holding instead of FORK? Exploreour interactive list of stocks with large potentialto get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Fuling Global Inc. (NASDAQ:FORK): The Best Of Both Worlds
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Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on Fuling Global Inc. (NASDAQ:FORK) due to its excellent fundamentals in more than one area. FORK is a company with great financial health as well as a a great track record of performance. In the following section, I expand a bit more on these key aspects. If you're interested in understanding beyond my broad commentary, read the fullreport on Fuling Global here.
In the previous year, FORK has ramped up its bottom line by 21%, with its latest earnings level surpassing its average level over the last five years. Not only did FORK outperformed its past performance, its growth also exceeded the Consumer Durables industry expansion, which generated a 19% earnings growth. This is an optimistic signal for the future. FORK's strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This suggests prudent control over cash and cost by management, which is a key determinant of the company’s health. FORK seems to have put its debt to good use, generating operating cash levels of 0.33x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows.
For Fuling Global, I've put together three fundamental factors you should look at:
1. Future Outlook: What are well-informed industry analysts predicting for FORK’s future growth? Take a look at ourfree research report of analyst consensusfor FORK’s outlook.
2. Valuation: What is FORK 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 FORK is currently mispriced by the market.
3. Other Attractive Alternatives: Are there other well-rounded stocks you could be holding instead of FORK? Exploreour interactive list of stocks with large potentialto get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Why Plus Products Inc. (CNSX:PLUS) Could Be Your Next Investment
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Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on Plus Products Inc. (CNSX:PLUS) due to its excellent fundamentals in more than one area. PLUS is a company with robust financial health as well as an optimistic growth outlook. Below, I've touched on some key aspects you should know on a high level. For those interested in understanding where the figures come from and want to see the analysis, read the fullreport on Plus Products here.
PLUS is an attractive stock for growth-seeking investors, with an expected earnings growth reaching triple digits in the upcoming year. The optimistic bottom-line growth is supported by a similarly outstanding revenue growth over the same time period, which indicates that earnings is driven by top-line activity rather than purely unsustainable cost-reduction initiatives. PLUS's strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This indicates that PLUS has sufficient cash flows and proper cash management in place, which is a crucial insight into the health of the company. With a debt-to-equity ratio of 36%, PLUS’s debt level is acceptable. This implies that PLUS has a healthy balance between taking advantage of low cost debt funding as well as sufficient financial flexibility without succumbing to the strict terms of debt.
For Plus Products, there are three relevant aspects you should look at:
1. Historical Performance: What has PLUS's returns been like over the past? Go into more detail in the past track record analysis and take a look atthe free visual representations of our analysisfor more clarity.
2. Valuation: What is PLUS 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 PLUS is currently mispriced by the market.
3. Other Attractive Alternatives: Are there other well-rounded stocks you could be holding instead of PLUS? Exploreour interactive list of stocks with large potentialto get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Daimler to recall 60,000 Mercedes diesels in Germany over emissions
FRANKFURT (Reuters) - Daimler must recall 60,000 Mercedes diesel cars in Germany after regulators found that they were fitted with software aimed at distorting emissions tests, the Transportation Ministry said on Saturday.
The model affected is the Mercedes-Benz GLK 220 produced between 2012 and 2015.
Daimler confirmed that the recall was ordered on Friday but said that it would appeal against the decision while continuing to cooperate with regulators.
The ministry said that it was expanding its investigation into further models.
Since rival Volkswagen admitted in 2015 to cheating U.S. emissions tests, the scandal has spread to other carmakers. Daimler has ordered the recall of 3 million vehicles to fix excess emissions coming from their diesel engines.
Germany's Bild am Sonntag, which first reported the recall on Saturday, had reported in April that the German auto regulator was looking into suspicious software in the Mercedes-Benz GLK 220 CDI cars produced between 2012 and 2015, after tests showed they only meet emissions limits when a certain function is activated.
(Reporting by Ralf Banser in Frankfurt, Jan C. Schwartz in Hamburg, and Christian Ruettger in Berlin; Writing by Tom Sims; Editing by Alison Williams) |
Plus Products Inc. (CNSX:PLUS) Has Attractive Fundamentals
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Plus Products Inc. (CNSX:PLUS) is a company with exceptional fundamental characteristics. Upon building up an investment case for a stock, we should look at various aspects. In the case of PLUS, it is a company with strong financial health as well as an optimistic growth outlook. Below, I've touched on some key aspects you should know on a high level. If you're interested in understanding beyond my broad commentary, take a look at thereport on Plus Products here.
PLUS is an attractive stock for growth-seeking investors, with an expected earnings growth reaching triple digits in the upcoming year. The optimistic bottom-line growth is supported by a similarly outstanding revenue growth over the same time period, which indicates that earnings is driven by top-line activity rather than purely unsustainable cost-reduction initiatives. PLUS's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This indicates that PLUS has sufficient cash flows and proper cash management in place, which is a crucial insight into the health of the company. With a debt-to-equity ratio of 36%, PLUS’s debt level is acceptable. This indicates a good balance between taking advantage of low cost funding through debt financing, but having enough financial flexibility and headroom to grow debt in the future.
For Plus Products, there are three key factors you should look at:
1. Historical Performance: What has PLUS's returns been like over the past? Go into more detail in the past track record analysis and take a look atthe free visual representations of our analysisfor more clarity.
2. Valuation: What is PLUS 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 PLUS is currently mispriced by the market.
3. Other Attractive Alternatives: Are there other well-rounded stocks you could be holding instead of PLUS? Exploreour interactive list of stocks with large potentialto get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Do Institutions Own Evertz Technologies Limited (TSE:ET) Shares?
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If you want to know who really controls Evertz Technologies Limited (TSE:ET), then you'll have to look at the makeup of its share registry. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.'
Evertz Technologies has a market capitalization of CA$1.4b, so we would expect some institutional investors to have noticed the stock. Taking a look at our data on the ownership groups (below), it's seems that institutions are noticeable on the share registry. Let's delve deeper into each type of owner, to discover more about ET.
View our latest analysis for Evertz Technologies
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
We can see that Evertz Technologies does have institutional investors; and they hold 9.7% of the stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone, since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Evertz Technologies, (below). Of course, keep in mind that there are other factors to consider, too.
Hedge funds don't have many shares in Evertz Technologies. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
The definition of company insiders can be subjective, and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Our most recent data indicates that insiders own the majority of Evertz Technologies Limited. This means they can collectively make decisions for the company. Insiders own CA$907m worth of shares in the CA$1.4b company. That's extraordinary! Most would argue this is a positive, showing strong alignment with shareholders. You canclick here to see if they have been selling down their stake.
The general public, with a 24% stake in the company, will not easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too.
I like to dive deeperinto how a company has performed in the past. You can accessthisinteractive graphof past earnings, revenue and cash flow, for free.
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can checkthis free report showing analyst forecasts for its future.
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. |
Shareholders Are Thrilled That The Radian Group (NYSE:RDN) Share Price Increased 126%
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The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But in contrast you can make muchmorethan 100% if the company does well. For example, theRadian Group Inc.(NYSE:RDN) share price has soared 126% in the last three years. How nice for those who held the stock! It's also good to see the share price up 13% over the last quarter.
View our latest analysis for Radian Group
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
Radian Group was able to grow its EPS at 35% per year over three years, sending the share price higher. We don't think it is entirely coincidental that the EPS growth is reasonably close to the 31% average annual increase in the share price. This suggests that sentiment and expectations have not changed drastically. Rather, the share price has approximately tracked EPS growth.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
We know that Radian Group has improved its bottom line over the last three years, but what does the future have in store? Thisfreeinteractive report on Radian Group'sbalance sheet strengthis a great place to start, if you want to investigate the stock further.
It's good to see that Radian Group has rewarded shareholders with a total shareholder return of 37% in the last twelve months. Of course, that includes the dividend. That gain is better than the annual TSR over five years, which is 8.9%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. Most investors take the time to check the data on insider transactions. You canclick here to see if insiders have been buying or selling.
If you are like me, then you willnotwant to miss thisfreelist of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on 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. |
If You Had Bought CVB Financial (NASDAQ:CVBF) Shares Five Years Ago You'd Have Made 33%
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The main point of investing for the long term is to make money. But more than that, you probably want to see it rise more than the market average. Unfortunately for shareholders, while theCVB Financial Corp.(NASDAQ:CVBF) share price is up 33% in the last five years, that's less than the market return. Zooming in, the stock is actually down 10% in the last year.
See our latest analysis for CVB Financial
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
During five years of share price growth, CVB Financial achieved compound earnings per share (EPS) growth of 6.0% per year. That makes the EPS growth particularly close to the yearly share price growth of 5.8%. That suggests that the market sentiment around the company hasn't changed much over that time. Indeed, it would appear the share price is reacting to the EPS.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
We know that CVB Financial has improved its bottom line lately, but is it going to grow revenue? Check if analysts think CVB Financial willgrow revenue in the future.
When looking at investment returns, it is important to consider the difference betweentotal shareholder return(TSR) andshare price return. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, CVB Financial's TSR for the last 5 years was 52%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!
CVB Financial shareholders are down 7.9% for the year (even including dividends), but the market itself is up 6.1%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 8.7% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. Before spending more time on CVB Financialit might be wise to click here to see if insiders have been buying or selling shares.
Of course,you might find a fantastic investment by looking elsewhere.So take a peek at thisfreelist of companies we expect will grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on 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. |
Circle K adds Bitcoin ATMs to 20 convenience stores
US-based crypto venture DigitalMint has teamed with convenience store chain, Circle K, installing 20 Bitcoin ATMs across Arizona and Nevada as part of a pilot programme. We are thrilled to be partnering with a respected organisation like Circle K, says Marc Grens, President and Co-Founder, DigitalMint. This opens the door for massive expansion of Bitcoin access to new markets around the globe. Customers can buy up to $20,000 in Bitcoin per day. DigitalMint charges 12% of a transaction, although rate reductions are available . The Arizona ATMs are located in Phoenix, Mesa, Tempe, Tucson, Flagstaff, Surprise, Maricopa and Nevada ATMs in Las Vegas. DigitalMint says that the partnership makes it the largest Bitcoin ATM and PoS operator in the US. It currently has over 250 locations in 25 states. Joel Konicke, Category Manager, Circle K Stores, comments: Partnering with DigitalMint allows us to provide our customers with seamless access to Bitcoin, at a very reasonable price. Meanwhile, over in Canada
The first Bitcoin ATM was installed in Vancouver during 2013. But now the Mayor of the Canadian city is now proposing a ban on the machines, arguing that they open the door to money laundering. Its important to remember who exactly is using them; some of these people are often on societys fringes, especially sex workers. Vancouvers potential ban on such machines will affect that vulnerable group disproportionately, argues Ethan Lou, a former journalist who these days runs a mining company in Canada and whose first book, Once a Bitcoin Miner, will be published next year. In an article for The Globe and Mail , he says: Make no mistake, the issue of Bitcoin ATMs is one of social class. Sex workers use cryptocurrency to buy ads or run websites because credit card issuers often refuse to work with the platforms and hosting services that cater to their industry. Using cryptocurrency also grants a certain anonymity, which is of particular importance; many sex workers deliberately avoid using online exchange platforms, which have lower fees, but often require bank accounts, credit cards, a fixed address or other identification. Story continues What makes the ATMs attractive to sex workers is also attractive to money launderers, Lou concedes. British Columbia has wide-ranging issues with dirty money and it is not a stretch to say the ATMs could be involved. But cleaning ill-gotten gains is almost as old as sex work. Are Bitcoin ATMs used more so than, or even as frequently as, restaurants, casinos, convenience stores or any other business? Ultimately, those who launder money might end up little affected, he argues. With the right will and means, it is not hard to buy Bitcoin anonymously for cheaper than through ATMs. As the City of Vancouver goes about its research, it is incumbent upon staff to at least consult the sex workers who, through no fault of their own, are caught in someone elses fight, potentially made to suffer from someone elses sins, Lou concludes. The post Circle K adds Bitcoin ATMs to 20 convenience stores appeared first on Coin Rivet . |
The Rolls-Royce Cullinan Is a Diamond Designed for Rough Terrain
“It’s the first Rolls-Roycethat looks better dirty,” says the brand’s CEO, Torsten Müller-Ötvös, as he overlooks a small fleet of the marque’s first SUV model, dubbed Cullinan—the three vehicles suitably caked in mud and dust from a daylong romp around Grand Teton National Park in Wyoming. “It’s a remarkable departure for the brand.”
Cullinan, named for the largest gem-quality rough diamond ever found, nominally starts at $325,000, but no Rolls-Royce is delivered in its base form: One can add tens if not hundreds of thousands of dollars to the price in bespoke paint, leather, woodwork, or custom cabinetry.
That’s all in the service of distinguishing it from luxury SUV segment leader Range Rover, whose offerings have grown increasingly grand in recent years but can’t touch the opulence of its rival from Goodwood. If anyone was going to be the “Rolls-Royce of SUVs,” it was going to be Rolls-Royce.
While Cullinan will no doubt find its way into the valet lots of Beverly Hills and Bahrain, it’s built for much more.
“For the first time, Rolls-Royce is using words like practical, functional, and versatile,” Müller-Ötvös says. “You can put the family in, take your dogs, go fly-fishing—whatever you want. It can be even dirty for a couple of days—no problem.”
Cullinan’s performance credentials are bolstered by its 563-horsepower, twin-turbo V12 engine from parent company BMW and an “off-road” button that helps the car glide over rough terrain as the suspension works double time beneath.
Rolls-Royce is a latecomer to the highly profitable luxury SUV market. One by one, manufacturers that specialized for the better part of a century in premium sports cars and chauffeured saloons have bowed to recent pressure to keep customers who want taller vehicles from defecting to rival brands.
Their efforts have been rewarded. The Bentley Bentayga, Lamborghini Urus, and Maserati Levante have vaulted to bestseller status within their respective brands. Aston Martin expects its DBX crossover to help double the brand’s global sales once it arrives later this year. Consumer interest is unlikely to flag. Tall cars have long since graduated from the new normal to the norm.
Rolls-Royce, which sells just 4,000 cars each year, is expecting similar results. Still, the stakes for introducing an SUV are high, says spokesman Richard Carter. “If you sell 4,000 cars per year, and you get it wrong, you can very quickly sell 1,000 a year.”
For his part, Müller-Ötvös says he is not interested in sales volume. “The last thing I want to talk about is volume,” he notes. “Volume is the contradiction of luxury. It’s the last thing customers want to hear. I don’t want to see a Rolls-Royce on every street corner.”
He does not like to discuss the competition, either, asserting instead that there is plenty of room in the market. “It’s not so much that our competition is with other cars,” he says, adding that customers are likelier to weigh the purchase of a new Rolls-Royce against that of a boat or a piece of art. “If they want both, they buy both.”
When creating Cullinan, the Rolls-Royce design team asked themselves: Is there any history whatsoever that would allow us to make an SUV? They soon realized they could draw inspiration from the high running boards of the WWI-era Silver Ghost and the designer wardrobe trunks strapped to the rear of 1920s Phantoms.
They emerged with a boxy, angular design featuring short overhangs that hint at off-road robustness and a commanding perch. Unfussy enough for an owner to flip down the rear seats to toss in a riding tack or shotgun cases, yet with the precision in craftsmanship expected of a Rolls.
Already, Rolls-Royce is seeing the car resonate with customers new to the brand, including women and millennials. And while orders are rising in Rolls-Royce’s biggest North American markets—California and Florida—the ruggedness and four-wheel drive is prompting an uptick in orders from Canada, New England, and the Rockies. Says Müller-Ötvös: “It is opening new garages for us.”
A version of this article appears in the July 2019 issue of Fortune with the headline “A Diamond Takes the Rough.”
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Trump Says His Immigration Policies Are Gaining Him Support From Latino Voters
President Donald Trump is claiming that his policies to stop illegal immigration are helping his standing with Latino voters, and he is taking undue credit for uniting families who were separated at the border.
Trump made the statements in a sometimes combative interview that aired Thursday on the Spanish-language network Telemundo.
Trump said Hispanics want toughness at the border and his poll numbers with the increasingly important voting bloc have “gone way up” because he’s delivered.
“They don’t want people coming and taking their jobs,” Trump said. “They don’t want criminals to come because they understand the border.”
The most recent AP-NORC poll conducted in mid-June showed Trump with 26 percent support among Hispanics. The White House did not provide supporting polls for Trump’s claim.
The president also said his administration inherited a practice of separating families from the Obama administration. “They separated. I put ’em together,” Trump said.
“You did not,” replied Telemundo anchor Jose Diaz-Balart. Diaz-Balart then said 2,800 children were united with their families after the administration instituted a zero-tolerance policy, prompting Trump to interrupt and state, “because I put ’em together.”
Trump began separating families on a large scale in 2017 and made it general practice under a “zero tolerance” policy that was announced in May 2018 to criminally prosecute every adult who crossed the border illegally. More than 2,700 children had been separated from families when a federal judge halted the practice the following month. Nearly all have been reunited, but a government watchdog said in January that thousands more families were believed to have split earlier in the administration, which is currently trying to find them under court order. It has no precise count due to inadequate tracking systems at the time.
Obama separated families under limited circumstances, but Trump took it to an entirely new level by making it standard practice, sparking a massive international backlash. U.S. District Judge Dana Sabraw in San Diego forced Trump to revert to Obama’s policy to separate families only in limited circumstances, like doubt about parentage, a parent’s criminal record and concerns for a child’s safety.
Trump also indicated Thursday he was “looking at” the $15 minimum wage that some Democratic presidential candidates are calling for on the campaign trail. But Trump said, “much more importantly,” wages have gone up “tremendously” since he became president.
With the unemployment rate at 3.6%, the lowest since December 1969, employers are struggling to fill jobs and offering higher wages. That has pushed up pay for the lowest-paid one-quarter of workers more quickly than for everyone else since 2015. In April, the poorest 25% saw their paychecks increase 4.4% from a year earlier. Hourly pay for retail workers has risen 4.1% in the past year and 3.8% for hotel and restaurant employees. Manufacturing workers have seen pay rise 2.2% and construction workers, 3.2%.
—Trump’sMAGA rallies cost big bucks—and cities foot the bills
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—What you need to know about theupcoming 2020 primary debates
Get up to speed on your morning commute withFortune’sCEO Dailynewsletter. |
Is Royal Gold, Inc. (NASDAQ:RGLD) Struggling With Its 5.1% Return On Capital Employed?
Want to participate in a short research study ? Help shape the future of investing tools and you could win a $250 gift card! Today we are going to look at Royal Gold, Inc. ( NASDAQ:RGLD ) to see whether it might be an attractive investment prospect. In particular, we'll consider its Return On Capital Employed (ROCE), as that can give us insight into how profitably the company is able to employ capital in its business. First up, we'll look at what ROCE is and how we calculate it. Second, we'll look at its ROCE compared to similar companies. And finally, we'll look at how its current liabilities are impacting its ROCE. Understanding Return On Capital Employed (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. In general, businesses with a higher ROCE are usually better quality. In brief, it is a useful tool, but it is not without drawbacks. Author Edwin Whiting says to be careful when comparing the ROCE of different businesses, since 'No two businesses are exactly alike.' How Do You Calculate Return On Capital Employed? 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 Royal Gold: 0.051 = US$136m ÷ (US$2.7b - US$49m) (Based on the trailing twelve months to March 2019.) Therefore, Royal Gold has an ROCE of 5.1%. View our latest analysis for Royal Gold Does Royal Gold Have A Good ROCE? When making comparisons between similar businesses, investors may find ROCE useful. We can see Royal Gold's ROCE is meaningfully below the Metals and Mining industry average of 9.1%. This performance is not ideal, as it suggests the company may not be deploying its capital as effectively as some competitors. Regardless of how Royal Gold stacks up against its industry, its ROCE in absolute terms is quite low (especially compared to a bank account). There are potentially more appealing investments elsewhere. Story continues As we can see, Royal Gold currently has an ROCE of 5.1% compared to its ROCE 3 years ago, which was 3.3%. This makes us wonder if the company is improving. NasdaqGS:RGLD Past Revenue and Net Income, June 22nd 2019 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 only a point-in-time measure. Given the industry it operates in, Royal Gold could be considered cyclical. Future performance is what matters, and you can see analyst predictions in our free report on analyst forecasts for the company . How Royal Gold's Current Liabilities Impact Its ROCE Current liabilities are short term bills and invoices that need to be paid in 12 months or less. 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 counter this, investors can check if a company has high current liabilities relative to total assets. Royal Gold has total liabilities of US$49m and total assets of US$2.7b. Therefore its current liabilities are equivalent to approximately 1.8% of its total assets. With barely any current liabilities, there is minimal impact on Royal Gold's admittedly low ROCE. What We Can Learn From Royal Gold's ROCE Still, investors could probably find more attractive prospects with better performance out there. Of course, you might find a fantastic investment by looking at a few good candidates. So take a peek at this free list of companies with modest (or no) debt, trading on a P/E below 20. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket. 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. |
United Technologies' Best Company After the Breakup Will Be...
There's a lot going on withUnited Technologies(NYSE: UTX), and investors can be forgiven for failing to keep up. Just when you thought its future was clear --a breakup into three constituent partsthat will hopefully unlock the conglomerate discount and lead to a rerating overall --CEO Greg Hayes goes and arranges a mergerwithRaytheon(NYSE: RTN). That said, there's one business that stands out as having the best potential for after the separation, so let's take a look at why.
Image source: Getty Images.
There's little doubt that most of the media attention is on the merger proposal, and to be fair, the logic behind the deal looks like a good one. There's little crossover between the two businesses, and the defense business of Raytheon should provide a relatively stable stream of cash flows to support investment in big-ticket items like Pratt & Whitney's geared turbofan (GTF) engine. It also holds out the promise of enabling Pratt to produce a GTF for wide-body aircraft --General Electricinvestors beware.
However, it's a deal that's likely to be highly complex, and given that United Technologies has only just started integrating its acquisition of Rockwell Collins, a company that has held aircraft interior and seating manufacturer BE Aerospace for only a couple of years, it's hard not to think there are going to be growing pains along the way.
The world's leading elevator and escalator company is a powerful cash cow of a business with over 2 million units under maintenance. That's the good news; the bad news is that margin and profit have been declining in recent years.
[{"Otis Segment Metric": "Revenue (in millions)", "2018": "$12,904", "2017": "$12,341", "2016": "$11,893"}, {"Otis Segment Metric": "Adjusted operating profit (in millions)", "2018": "$1,986", "2017": "$2,050", "2016": "$2,206"}, {"Otis Segment Metric": "Margin", "2018": "15.4%", "2017": "16.6%", "2016": "18.5%"}]
Data source: United Technologies presentations.
To be fair, this is partially self-inflicted. Otis had been losing market share for equipment in the all-important and highly price-competitive China market (the Asia-Pacific region contributes slightly over a third of Otis sales). so management decided to cut prices in order to drive unit sales growth.
The idea is that new unit sales will drive service revenue growth in the future, particularly as Otis is augmenting its service offering in China by rolling out mobile devices for its personnel so they can use the Internet of Things (IoT) to better service equipment.
On a positive note,there are signs of improvement, notably on equipment unit sales, and Hayes thinks Otis' margin will improve in the second half of 2019, but investors won't feel fully confident until they can see the improvement in the numbers.
There are three key reasons. First, Carrier is the business that's been the most hamstrung in being part of a conglomerate. This is a particularly important point because the general consensus is that the heating, ventilation, and air-conditioning (HVAC) industry is set for a period of industry consolidation. As such an independent Carrier will be more able to participate in industry consolidation. .
Second,the long-term fundamentals for the HVAC industrylook excellent. Not only is global growth shifting to hotter countries, but their populations are also urbanizing. Meanwhile, the regulatory movement toward environmental sustainability and energy productivity in the developed world should favor higher quality HVAC players like Carrier.
In addition, the need for transport and commercial refrigeration given the growth in online grocery store sales -- Carrier generates slightly more than half its sales from HVAC, with the rest coming from the fire & security and refrigeration businesses.
Third, it's fair to say that Carrier's key rival,Ingersoll-Rand's(NYSE: IR)Tranehas significantly outperformed Carrier in recent years, particularly with regard to margin improvement in the face of rising commodity prices. Clearly there's an opportunity to improve performance in line with its peer.
[{"Carrier Segment Metric": "Revenue (in millions)", "2018": "$18,922", "2017": "$17,812", "2016": "$16,851"}, {"Carrier Segment Metric": "Adjusted operating profit (in millions)", "2018": "$3,058", "2017": "$2,993", "2016": "$3,053"}, {"Carrier Segment Metric": "Margin", "2018": "16.2%", "2017": "16.8%", "2016": "18.1%"}]
Data source: United Technologies presentations.
The United Technologies breakup will create some interesting investment options in the future, but it's the business with the least amount of media attention that investors should be focusing on. Moreover, while the exact details of how much debt is going to be loaded into each company, management said that United Technologies will contribute $24 billion of debt to Raytheon Technologies and given that United Technologies' net debt is currently around $40 billion, it looks likely that Carrier won't be overloaded with debt.
All told, the opportunity to improve performance at Carrier is clear, and the execution risk is arguably a lot smaller than at Otis or the future Raytheon Technologies.
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Lee Samahaowns shares of Ingersoll-Rand. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has adisclosure policy. |
Is Now The Time To Put CenterState Bank (NASDAQ:CSFL) On Your Watchlist?
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For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it completely lacks a track record of revenue and profit. But as Peter Lynch said inOne Up On Wall Street, 'Long shots almost never pay off.'
In the age of tech-stock blue-sky investing, my choice may seem old fashioned; I still prefer profitable companies likeCenterState Bank(NASDAQ:CSFL). While profit is not necessarily a social good, it's easy to admire a business than can consistently produce it. Loss-making companies are always racing against time to reach financial sustainability, but time is often a friend of the profitable company, especially if it is growing.
View our latest analysis for CenterState Bank
As one of my mentors once told me, share price follows 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 CenterState Bank's stratospheric annual EPS growth of 49%, 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.
Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. I note that CenterState Bank's revenuefrom operationswas lower than its revenue in the last twelve months, so that could distort my analysis of its margins. While we note CenterState Bank's EBIT margins were flat over the last year, revenue grew by a solid 54% to US$537m. That's progress.
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.
You don't drive with your eyes on the rear-view mirror, so you might be more interested in thisfreereport showing analyst forecasts for CenterState Bank'sfutureprofits.
It makes me feel more secure owning shares in a company if insiders also own shares, thusly more closely aligning our interests. As a result, I'm encouraged by the fact that insiders own CenterState Bank shares worth a considerable sum. Given insiders own a small fortune of shares, currently valued at US$77m, they have plenty of motivation to push the business to succeed. This should keep them focused on creating long term value for shareholders.
It's good to see that insiders are invested in the company, but are remuneration levels reasonable? A brief analysis of the CEO compensation suggests they are. I discovered that the median total compensation for the CEOs of companies like CenterState Bank with market caps between US$2.0b and US$6.4b is about US$5.2m.
The CenterState Bank CEO received total compensation of just US$2.4m in the year to December 2018. That's clearly well below average, so at a glance, that arrangement seems generous to shareholders, and points to a modest remuneration culture. CEO remuneration levels are not the most important metric for investors, but when the pay is modest, that does support enhanced alignment between the CEO and the ordinary shareholders. It can also be a sign of a culture of integrity, in a broader sense.
CenterState Bank's earnings have taken off like any random crypto-currency did, back in 2017. The sweetener is that insiders have a mountain of stock, and the CEO remuneration is quite reasonable. The strong EPS improvement suggests the businesses is humming along. Big growth can make big winners, so I do think CenterState Bank is worth considering carefully. Of course, just because CenterState Bank 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 CenterState Bank 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. |
HIGHLIGHTS-Key quotes from Kushner interview with Reuters Television
WASHINGTON, June 22 (Reuters) - White House senior adviser Jared Kushner spoke to Reuters Television exclusively in advance of the release of a U.S. economic plan for the Palestinian economy and surrounding countries to be unveiled at a workshop in Bahrain next week.
The following are highlights from the interview.
"The plan would invest about $50 billion in the region. It would create a million jobs in the West Bank and Gaza. It would take their unemployment rate from about 30 percent to the single digits. It would reduce their poverty rate by half, if it's implemented correctly. It's a ten-year plan. It would double their GDP. We've had it peer-reviewed now by about a dozen economists in a dozen countries and we're very excited to put it forward and share it now with a lot of leading business leaders, a lot of leading investing institutions, and then also the public."
"I have to say that this is one of the hardest problems that exists in the world. This conflict has been going on for a very, very long time and there's been a lot of attempts at it which have all been very well-intended and noble attempts to try and solve it. When we got involved, we looked at all these attempts and we tried to study why they didn't work and there's a lot of good things that were done. We tried to take the good things they did and then come up with a new approach to try to bring this forward. We thought that the economics was a very important part."
"I find that in the real world, the way you solve problems is by really going into the details, putting forward proposals, agreeing, disagreeing on certain things - that's very healthy, that's how you resolve a conflict. Remember, nobody agrees up until right before they do so. It's not unexpected for people to posture and to criticize things but what we're hoping to do is create a framework where we can change the discussion and get people to look at these problems differently and more granularly and hopefully in a way that can lead to some breakthroughs."
"People are tired of the way that this has been stuck in the mud for so long and what we're hoping we can do is get people to look at this a little bit differently, come together, share ideas, and then hopefully we can create a framework on which to move forward economically. But I will say that you can't push the economic plan forward without resolving the political issues as well. We're fully aware of that and we intend to address that at a later time."
"There'll be praise from some places, there'll be criticism from some places, hopefully it will be constructive. I always prefer having people share what they're for as opposed to what they're against and if people have constructive criticism, we'll welcome it and we'll try and make modifications but the hope is that we can bring all of the different people together from Europe, from Asia, from the Middle East, and agree on this would be a good path forward if we're able to resolve the political issues."
"I would say that the political side and the economic side are two very robust efforts and to digest both of them at one time would be very, very hard so it was necessary to break them up, so the question is - which one do you put first? Our thought was that it was better to put the economic plan first. It's less controversial. Let's let people study it, give feedback. Let's try to finalize if we can all agree on what that could look like in the event of a peace agreement."
"We view our job as to try. It's very easy to find reasons why this could fail - we think about that all the time - but our job is to try to be more optimistic and to come up with situations that could maybe change the paradigm and I hope that by seeing this plan that we've spent a lot of time working on for a better economic future for the Palestinian people and for the region, people will start to look at this problem through a slightly different lens and maybe that leads to some badly needed breakthroughs."
(Reporting by Steve Holland and Matt Spetalnick, Editing by Rosalba O'Brien) |
I Ran A Stock Scan For Earnings Growth And CenterState Bank (NASDAQ:CSFL) Passed With Ease
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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. Unfortunately, high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson.
In the age of tech-stock blue-sky investing, my choice may seem old fashioned; I still prefer profitable companies likeCenterState Bank(NASDAQ:CSFL). Now, I'm not saying that the stock is necessarily undervalued today; but I can't shake an appreciation for the profitability of the business itself. Conversely, a loss-making company is yet to prove itself with profit, and eventually the sweet milk of external capital may run sour.
See our latest analysis for CenterState Bank
As one of my mentors once told me, share price follows earnings per share (EPS). It's no surprise, then, that I like to invest in companies with EPS growth. Who among us would not applaud CenterState Bank's stratospheric annual EPS growth of 49%, 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). I note that CenterState Bank's revenuefrom operationswas lower than its revenue in the last twelve months, so that could distort my analysis of its margins. CenterState Bank maintained stable EBIT margins over the last year, all while growing revenue 54% to US$537m. That's a real positive.
You can take a look at the company's revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers.
The trick, as an investor, is to find companies that aregoing toperform well in the future, not just in the past. To that end, right now and today, you can checkour visualization of consensus analyst forecasts for future CenterState Bank EPS100% free.
It makes me feel more secure owning shares in a company if insiders also own shares, thusly more closely aligning our interests. So it is good to see that CenterState Bank insiders have a significant amount of capital invested in the stock. Given insiders own a small fortune of shares, currently valued at US$77m, they have plenty of motivation to push the business to succeed. That's certainly enough to make me think that management will be very focussed on long term growth.
It means a lot to see insiders invested in the business, but I find myself wondering if remuneration policies are shareholder friendly. Well, based on the CEO pay, I'd say they are indeed. For companies with market capitalizations between US$2.0b and US$6.4b, like CenterState Bank, the median CEO pay is around US$5.2m.
The CenterState Bank CEO received total compensation of just US$2.4m in the year to December 2018. That looks like modest pay to me, and may hint at a certain respect for the interests of shareholders. CEO remuneration levels are not the most important metric for investors, but when the pay is modest, that does support enhanced alignment between the CEO and the ordinary shareholders. It can also be a sign of good governance, more generally.
CenterState Bank's earnings per share growth has been so hot recently that thinking about it is making me blush. The cherry on top is that insiders own a bucket-load of shares, and the CEO pay seems really quite reasonable. The sharp increase in earnings could signal good business momentum. CenterState Bank certainly ticks a few of my boxes, so I think it's probably well worth further consideration. While we've looked at the quality of the earnings, we haven't yet done any work to value the stock. So if you like to buy cheap, you may want tocheck if CenterState Bank is trading on a high P/E or a low P/E, relative to its industry.
You can invest in any company you want. But if you prefer to focus on stocks that have demonstrated insider buying, here isa list of companies with insider buying in the last three months.
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. |
The Cheapest States for Car Insurance
LOS ANGELES, CA / ACCESSWIRE / June 22, 2019 /Compare-autoinsurance.org has released a new blog post that presents the cheapest states to insure a car in 2018.
For more info and free car insurance quotes online, visithttp://compare-autoinsurance.org/the-cheapest-states-for-auto-insurance-in-2018/.
The cheapest states for auto insurance have several characteristics in common. Their population lives preponderantly in rural areas, they are safe from extreme weather, and favorable legislation.
The state with thecheapest average rate is Vermont. Annual premiums in Vermont average $932, which is well below (32 percent) the national average of $1,365. Vermont has a sparse population which lives predominantly in rural areas. Vermont also has a low number of accidents and uninsured drivers. Iowa is described as a perfect rural-state, with more than 86.000 farms.
A high number ofinsurance companies selling coverage in the same area will reduce the averagerates.Ohio, Idaho and Virginia are perfect examples. Only in Virginia, there are around 300 insurance companies. The high competitiveness benefits the policyholders the most.
A favorablelegislation will also help drivers get cheaper coverage.The client is protected by unfair price increases. Virginia has a stable regulatory environment, the State Corporation Commission (SCC), of which the Bureau of Insurance is a part. SCC activities include licensing, regulation, examination, and investigation of insurance companies, agencies and agents. This means that rates increases are thoroughly analyzed.
For more car insurance info and free online quotes, please visithttp://compare-autoinsurance.org.
Compare-autoinsurance.orgis an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc.
"The cheapest states to insure cars have several things incommon. Living in rural areas and having numerous companies to choose from willmake rates cheaper," said Russell Rabichev, Marketing Director of InternetMarketing Company.
Contact:cgurgu@internetmarketingcompany.biz
SOURCE:Internet Marketing Company
View source version on accesswire.com:https://www.accesswire.com/549540/The-Cheapest-States-for-Car-Insurance |
Investors Who Bought SELLAS Life Sciences Group (NASDAQ:SLS) Shares A Year Ago Are Now Down 97%
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It's not a secret that every investor will make bad investments, from time to time. But serious investors should think long and hard about avoiding extreme losses. We wouldn't blameSELLAS Life Sciences Group, Inc.(NASDAQ:SLS) shareholders if they were still in shock after the stock dropped like a lead balloon, down 97% in just one year. That'd be a striking reminder about the importance of diversification. SELLAS Life Sciences Group may have better days ahead, of course; we've only looked at a one year period. Furthermore, it's down 88% in about a quarter. That's not much fun for holders.
While a drop like that is definitely a body blow, money isn't as important as health and happiness.
View our latest analysis for SELLAS Life Sciences Group
SELLAS Life Sciences Group hasn't yet reported any revenue yet, so it's as much a business idea as an actual business. This state of affairs suggests that venture capitalists won't provide funds on attractive terms. 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 SELLAS Life Sciences Group has the funding to invent a new product before too long.
As a general rule, if a company doesn't have much revenue, and it loses money, then it is a high risk investment. 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 such companies go on to make revenue, profits, and generate value, others get hyped up by hopeful naifs before eventually going bankrupt. It certainly is a dangerous place to invest, as SELLAS Life Sciences Group investors might realise.
Our data indicates that SELLAS Life Sciences Group had US$9,401,000 more in total liabilities than it had cash, when it last reported in March 2019. That puts it in the highest risk category, according to our analysis. But since the share price has dived -97% in the last year, it looks like some investors think it's time to abandon ship, so to speak. The image below shows how SELLAS Life Sciences Group's balance sheet has changed over time; if you want to see the precise values, simply click on the image.
In reality it's hard to have much certainty when valuing a business that has neither revenue or profit. Would it bother you if insiders were selling the stock? I would feel more nervous about the company if that were so. It only takes a moment for you tocheck whether we have identified any insider sales recently.
Given that the market gained 6.1% in the last year, SELLAS Life Sciences Group shareholders might be miffed that they lost 97%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. The share price decline has continued throughout the most recent three months, down 88%, suggesting an absence of enthusiasm from investors. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. Most investors take the time to check the data on insider transactions. You canclick here to see if insiders have been buying or selling.
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 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. |
Calculating The Fair Value Of Cohu, Inc. (NASDAQ:COHU)
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Today we will run through one way of estimating the intrinsic value of Cohu, Inc. (NASDAQ:COHU) by taking the expected future cash flows and discounting them to today's value. I will be 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. Anyone interested in learning a bit more about intrinsic value should have a read of theSimply Wall St analysis model.
View our latest analysis for Cohu
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. 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 ($, Millions)", "2019": "$46.68", "2020": "$52.31", "2021": "$57.16", "2022": "$61.34", "2023": "$64.97", "2024": "$68.20", "2025": "$71.14", "2026": "$73.86", "2027": "$76.44", "2028": "$78.94"}, {"": "Growth Rate Estimate Source", "2019": "Est @ 16.07%", "2020": "Est @ 12.07%", "2021": "Est @ 9.27%", "2022": "Est @ 7.3%", "2023": "Est @ 5.93%", "2024": "Est @ 4.97%", "2025": "Est @ 4.3%", "2026": "Est @ 3.83%", "2027": "Est @ 3.5%", "2028": "Est @ 3.27%"}, {"": "Present Value ($, Millions) Discounted @ 11.9%", "2019": "$41.72", "2020": "$41.78", "2021": "$40.79", "2022": "$39.12", "2023": "$37.03", "2024": "$34.74", "2025": "$32.38", "2026": "$30.04", "2027": "$27.79", "2028": "$25.64"}]
Present Value of 10-year Cash Flow (PVCF)= $351.02m
"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. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 10-year government bond rate (2.7%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 11.9%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = US$79m × (1 + 2.7%) ÷ (11.9% – 2.7%) = US$884m
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= $US$884m ÷ ( 1 + 11.9%)10= $287.22m
The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is $638.25m. 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 $15.56. Compared to the current share price of $15.76, the company appears around fair value at the time of writing. 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.
The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the 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 Cohu 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 11.9%, which is based on a levered beta of 1.539. 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 Cohu, I've put together three essential aspects you should further research:
1. Financial Health: Does COHU 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 COHU'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 COHU? 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 US 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. |
Exclusive: White House's Kushner unveils economic portion of Middle East peace plan
By Matt Spetalnick and Steve Holland
WASHINGTON (Reuters) - The White House on Saturday outlined a $50 billion Middle East economic plan that would create a global investment fund to lift the Palestinian and neighboring Arab state economies, and fund a $5 billion transportation corridor to connect the West Bank and Gaza.
The "peace to prosperity" plan, set to be presented by White House senior adviser Jared Kushner at an international conference in Bahrain next week, includes 179 infrastructure and business projects, according to details of the plan and interviews with U.S. officials. The approach toward reviving the moribund Israeli-Palestinian peace process was criticized by the Palestinians on Saturday.
The ambitious economic revival plan, the product of two years of work by Kushner and other aides, would take place only if a political solution to the region's long-running problems is reached.
More than half of the $50 billion would be spent in the economically troubled Palestinian territories over 10 years while the rest would be split between Egypt, Lebanon and Jordan. Some of the projects would be in Egypt's Sinai peninsula, where investments could benefit Palestinians living in adjacent Gaza, a crowded and impoverished coastal enclave.
The plan also proposes nearly a billion dollars to build up the Palestinians' tourism sector, a seemingly impractical notion for now given the frequent flareups between Israeli forces and militants from Hamas-ruled Gaza, and the tenuous security in the occupied West Bank.
The Trump administration hopes that wealthy Gulf states and nations in Europe and Asia, along with private investors, would foot much of the bill, Kushner told Reuters.
"The whole notion here is that we want people to agree on the plan and then we'll have a discussion with people to see who is interested in potentially doing what," Kushner told Reuters Television.
The unveiling of the economic blueprint follows two years of deliberations and delays in rolling out a broader peace plan between Israelis and Palestinians. The Palestinians, who are boycotting the event, have refused to talk to the Trump administration since it recognized Jerusalem as the Israeli capital in late 2017.
Veteran Palestinian negotiator Hanan Ashrawi dismissed the proposals on Saturday, saying: "These are all intentions, these are all abstract promises" and said only a political solution would solve the conflict.
Kushner made clear in two interviews with Reuters that he sees his detailed formula as a game-changer, despite the view of many Middle East experts that he has little chance of success where decades of U.S.-backed peace efforts have failed.
"I laugh when they attack this as the 'Deal of the Century'," Kushner said of Palestinian leaders who have dismissed his plan as an attempt to buy off their aspirations for statehood. "This is going to be the 'Opportunity of the Century' if they have the courage to pursue it."
Kushner said some Palestinian business executives have confirmed their participation in the conference, but he declined to identify them. The overwhelming majority of the Palestinian business community will not attend, businessmen in the West Bank city of Ramallah told Reuters.
Several Gulf Arab states, including Saudi Arabia, will also participate in the June 25-26 U.S.-led gathering in Bahrain's capital, Manama, for Kushner's rollout of the first phase of the Trump peace plan. Their presence, some U.S. officials say privately, appears intended in part to curry favor with Trump as he takes a hard line against Iran, those countries' regional arch-foe.
The White House said it decided against inviting the Israeli government because the Palestinian Authority would not be there, making do instead with a small Israeli business delegation.
POLITICAL DISPUTES REMAIN
There are strong doubts whether potential donor governments would be willing to open their checkbooks anytime soon, as long as the thorny political disputes at the heart of the decades-old Palestinian conflict remain unresolved.
The 38-year-old Kushner - who like his father-in-law came to government steeped in the world of New York real estate deal-making - seems to be treating peacemaking in some ways like a business transaction, analysts and former U.S. officials say.
Palestinian officials reject the overall U.S.-led peace effort as heavily tilted in favor of Israel and likely to deny them a fully sovereign state of their own.
Kushner's attempt to decide economic priorities first while initially sidestepping politics ignores the realities of the conflict, say many experts.
"This is completely out of sequence because the Israeli-Palestinian issue is primarily driven by historical wounds and overlapping claims to land and sacred space," said Aaron David Miller, a former Middle East negotiator for Republican and Democratic administrations.
Kushner acknowledges that "you can't push the economic plan forward without resolving the political issues as well." The administration, he said, will "address that at a later time," referring to the second stage of the peace plan's rollout now expected no earlier than November.
Kushner says his approach is aimed at laying out economic incentives to show the Palestinians the potential for a prosperous future if they return to the table to negotiate a peace deal.
Kushner stressed that governments would not be expected to make financial pledges on the spot.
"It is a small victory that they are all showing up to listen and partake. In the old days, the Palestinian leaders would have spoken and nobody would have disobeyed," he said.
TRAVEL CORRIDOR
Kushner's proposed new investment fund for the Palestinians and neighboring states would be administered by a "multilateral development bank." Global financial lenders including the International Monetary Fund and World Bank plan to be present at the meeting.
The fund would include "accountability, transparency, anti-corruption, and conditionality safeguards" to protect investments.
A signature project would be to construct a travel corridor for Palestinian use that would cross Israel to link the West Bank and Gaza. It could include a highway and possibly a rail line. The narrowest distance between the territories, whose populations have long been divided by Israeli travel restrictions, is about 40 km (25 miles).
Kushner said that if executed the plan would create a million jobs in the West Bank and Gaza, reduce Palestinian poverty by half and double the Palestinians' GDP.
But most foreign investors will likely stay clear for the moment, not only because of security and corruption concerns but also because of the drag on the Palestinian economy from Israel's West Bank occupation that obstructs the flow of people, goods and services, experts say.
Kushner sees his economic approach as resembling the Marshall Plan, which Washington introduced in 1948 to rebuild Western Europe from the devastation of World War Two. Unlike the U.S.-funded Marshall Plan, however, the latest initiative would put much of the financial burden on other countries.
President Donald Trump would "consider making a big investment in it" if there is a good governance mechanism, Kushner said. But he was non-committal about how much the president, who has often proved himself averse to foreign aid, might contribute.
Economic programs have been tried before in the long line of U.S.-led peace efforts, only to fail for lack of political progress. Kushner's approach, however, may be the most detailed so far, presented in two pamphlets of 40 and 96 pages each that are filled with financial tables and economic projections.
In Manama, the yet-to-released political part of the plan will not be up for discussion, Kushner said.
The economic documents offer no development projects in predominantly Arab east Jerusalem, which Palestinians want as the capital of their future state.
What Kushner hopes, however, is that the Saudis and other Gulf delegates will like what they hear enough to urge Palestinian President Mahmoud Abbas to consider the plan.
The message Kushner wants them to take to Ramallah: "We'd like to see you go to the table and negotiate and try to make a deal to better the lives of the Palestinian people."
(Reporting By Matt Spetalnick and Steve Holland; Additional reporting by Rami Ayyub in Ramallah; Editing by Ross Colvin and Chizu Nomiyama) |
A Look At The Fair Value Of STEP Energy Services Ltd. (TSE:STEP)
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Today we'll do a simple run through of a valuation method used to estimate the attractiveness of STEP Energy Services Ltd. (TSE:STEP) as an investment opportunity by taking the expected future cash flows and discounting them to today's value. This is done using the Discounted Cash Flow (DCF) model. Don't get put off by the jargon, the math behind it is actually quite straightforward.
Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. Anyone interested in learning a bit more about intrinsic value should have a read of theSimply Wall St analysis model.
View our latest analysis for STEP Energy Services
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 discount the value of these future cash flows to their estimated value in today's dollars:
[{"": "Levered FCF (CA$, Millions)", "2019": "CA$20.40", "2020": "CA$57.58", "2021": "CA$32.00", "2022": "CA$19.39", "2023": "CA$14.15", "2024": "CA$11.56", "2025": "CA$10.14", "2026": "CA$9.33", "2027": "CA$8.87", "2028": "CA$8.61"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x5", "2020": "Analyst x4", "2021": "Analyst x1", "2022": "Est @ -39.41%", "2023": "Est @ -27.01%", "2024": "Est @ -18.32%", "2025": "Est @ -12.24%", "2026": "Est @ -7.98%", "2027": "Est @ -5%", "2028": "Est @ -2.92%"}, {"": "Present Value (CA$, Millions) Discounted @ 13.87%", "2019": "CA$17.92", "2020": "CA$44.41", "2021": "CA$21.67", "2022": "CA$11.53", "2023": "CA$7.39", "2024": "CA$5.30", "2025": "CA$4.09", "2026": "CA$3.30", "2027": "CA$2.76", "2028": "CA$2.35"}]
Present Value of 10-year Cash Flow (PVCF)= CA$120.72m
"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. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 10-year government bond rate (1.9%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 13.9%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = CA$8.6m × (1 + 1.9%) ÷ (13.9% – 1.9%) = CA$74m
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= CA$CA$74m ÷ ( 1 + 13.9%)10= CA$20.09m
The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is CA$140.81m. 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 CA$2.11. Relative to the current share price of CA$2.01, the company appears about fair value at a 4.8% 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. If you don't agree with these result, have a go at the calculation yourself and play with the 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 STEP Energy Services 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 13.9%, 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. For STEP Energy Services, I've compiled three additional factors you should further research:
1. Financial Health: Does STEP 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 STEP'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 STEP? 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 CA 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. |
What Does Ciena Corporation's (NYSE:CIEN) P/E Ratio Tell You?
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The goal of this article is to teach you how to use price to earnings ratios (P/E ratios). We'll show how you can use Ciena Corporation's (NYSE:CIEN) P/E ratio to inform your assessment of the investment opportunity.Ciena has a price to earnings ratio of 32.43, based on the last twelve months. That means that at current prices, buyers pay $32.43 for every $1 in trailing yearly profits.
See our latest analysis for Ciena
Theformula for price to earningsis:
Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS)
Or for Ciena:
P/E of 32.43 = $43.52 ÷ $1.34 (Based on the year to April 2019.)
A higher P/E ratio means that investors are payinga higher pricefor each $1 of company earnings. That is not a good or a bad thingper se, but a high P/E does imply buyers are optimistic about the future.
Generally speaking the rate of earnings growth has a profound impact on a company's P/E multiple. That's because companies that grow earnings per share quickly will rapidly increase the 'E' in the equation. That means even if the current P/E is high, it will reduce over time if the share price stays flat. So while a stock may look expensive based on past earnings, it could be cheap based on future earnings.
Ciena shrunk earnings per share by 75% over the last year. But over the longer term (3 years), earnings per share have increased by 144%.
The P/E ratio essentially measures market expectations of a company. The image below shows that Ciena has a higher P/E than the average (28.6) P/E for companies in the communications industry.
That means that the market expects Ciena will outperform other companies in its industry. Clearly the market expects growth, but it isn't guaranteed. So investors should always consider the P/E ratio alongside other factors, such aswhether company directors have been buying shares.
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. The exact same company would hypothetically deserve a higher P/E ratio if it had a strong balance sheet, than if it had a weak one with lots of debt, because a cashed up company can spend on growth.
Such expenditure might be good or bad, in the long term, but the point here is that the balance sheet is not reflected by this ratio.
Since Ciena holds net cash of US$125m, it can spend on growth, justifying a higher P/E ratio than otherwise.
Ciena trades on a P/E ratio of 32.4, which is above the US market average of 17.9. Falling earnings per share is probably keeping traditional value investors away, but the healthy balance sheet means the company retains potential for future growth. If fails to eventuate, the current high P/E could prove to be temporary, as the share price falls.
Investors have an opportunity when market expectations about a stock are wrong. If the reality for a company is better than it expects, you can make money by buying and holding for the long term. So thisfreevisualization of the analyst consensus on future earningscould help you make theright decisionabout whether to buy, sell, or hold.
You might be able to find a better buy than Ciena. If you want a selection of possible winners, check out thisfreelist of interesting companies that trade on a P/E below 20 (but have proven they can grow earnings).
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Will Ciena Corporation's (NYSE:CIEN) Earnings Grow In The Next 12 Months?
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On 30 April 2019, Ciena Corporation (NYSE:CIEN) announced its earnings update. Overall, analysts seem fairly confident, as a 27% increase in profits is expected in the upcoming year, though this is comparatively lower than the historical 5-year average earnings growth of 48%. Currently with trailing-twelve-month earnings of -US$344.7m, we can expect this to reach -US$437.8m by 2020. Below is a brief commentary on the longer term outlook the market has for Ciena. For those keen to understand more about other aspects of the company, you canresearch its fundamentals here.
Check out our latest analysis for Ciena
Over the next three years, it seems the consensus view of the 19 analysts covering CIEN is skewed towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
By 2022, CIEN's earnings should reach -US$490.9m, from current levels of -US$344.7m, resulting in an annual growth rate of 11%. EPS reaches $1.89 in the final year of forecast compared to the current $-2.4 EPS today. Margins are currently sitting at -11%, which is expected to expand to -13% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Ciena, there are three pertinent 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 Ciena 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 Ciena is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of Ciena? 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. |
Is Devon Energy Corporation's (NYSE:DVN) CEO Overpaid Relative To Its Peers?
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Dave Hager has been the CEO of Devon Energy Corporation (NYSE:DVN) since 2015. First, this article will compare CEO compensation with compensation at other large companies. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for Devon Energy
According to our data, Devon Energy Corporation has a market capitalization of US$12b, and pays its CEO total annual compensation worth US$12m. (This figure is for the year to December 2018). That's below the compensation, last year. While we always look at total compensation first, we note that the salary component is less, at US$1.3m. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$11m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
So Dave Hager receives a similar amount to the median CEO pay, amongst 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, below, how CEO compensation at Devon Energy has changed over time.
Over the last three years Devon Energy Corporation has grown its earnings per share (EPS) by an average of 112% per year (using a line of best fit). Its revenue is up 15% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. It could be important to checkthis free visual depiction ofwhat analysts expectfor the future.
With a three year total loss of 19%, Devon Energy Corporation would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
Dave Hager is paid around what is normal the leaders of larger companies.
We'd say the company can boast of its EPS growth, but we cannot say the same about the lacklustre shareholder returns (over the last three years). We'd be surprised if shareholders want to see a pay rise for the CEO, but we'd stop short of calling their pay too generous. If you think CEO compensation levels are interesting you will probably really likethis free visualization of insider trading at Devon Energy.
Arguably, business quality is much more important than CEO compensation levels. So check out thisfreelist of interesting companies, that have HIGH return on equity and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Did You Manage To Avoid Arcus Development Group's (CVE:ADG) 30% Share Price Drop?
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Arcus Development Group Inc.(CVE:ADG) shareholders are doubtless heartened to see the share price bounce 40% in just one week. But that doesn't change the fact that the returns over the last five years have been less than pleasing. In fact, the share price is down 30%, which falls well short of the return you could get by buying an index fund.
Check out our latest analysis for Arcus Development Group
Arcus Development Group hasn't yet reported any revenue yet, so it's as much a business idea as an actual business. You have to wonder why venture capitalists aren't funding it. 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 Arcus Development Group will find or develop a valuable new mine 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 such companies go on to make revenue, profits, and generate value, others get hyped up by hopeful naifs before eventually going bankrupt.
Arcus Development Group had cash in excess of all liabilities of just CA$74k when it last reported (January 2019). So if it has not already moved to replenish reserves, we think the near-term chances of a capital raising event are pretty high. With that in mind, you can understand why the share price dropped 6.9% per year, over 5 years. You can click on the image below to see (in greater detail) how Arcus Development Group's cash levels have changed over time.
Of course, the truth is that it is hard to value companies without much revenue or profit. What if insiders are ditching the stock hand over fist? It would bother me, that's for sure. It costs nothing but a moment of your time tosee if we are picking up on any insider selling.
Arcus Development Group shareholders are down 30% for the year, but the market itself is up 0.8%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 6.9% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. You might want to assessthis data-rich visualizationof its earnings, revenue and cash flow.
We will like Arcus Development Group better if we see some big insider buys. While we wait, check out thisfreelist of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA 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. |
Did AutoNation, Inc. (NYSE:AN) Use Debt To Deliver Its ROE Of 14%?
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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). By way of learning-by-doing, we'll look at ROE to gain a better understanding of AutoNation, Inc. (NYSE:AN).
Our data showsAutoNation has a return on equity of 14%for the last year. Another way to think of that is that for every $1 worth of equity in the company, it was able to earn $0.14.
View our latest analysis for AutoNation
Theformula for ROEis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for AutoNation:
14% = US$395m ÷ US$2.8b (Based on the trailing twelve months to March 2019.)
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. 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. A higher profit will lead to a higher ROE. So, all else equal,investors should like a high ROE. That means ROE can be used to compare two businesses.
Arguably the easiest way to assess company's ROE is to compare it with the average in its industry. Importantly, this is far from a perfect measure, because companies differ significantly within the same industry classification. The image below shows that AutoNation has an ROE that is roughly in line with the Specialty Retail industry average (13%).
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. For those who like to findwinning investmentsthisfreelist of growing companies with recent insider purchasing, could be just the ticket.
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. Thus the use of debt can improve ROE, albeit along with extra risk in the case of stormy weather, metaphorically speaking.
It's worth noting the significant use of debt by AutoNation, leading to its debt to equity ratio of 2.32. Its ROE is quite good but, it would have probably been lower without the use of debt. Debt does bring extra risk, so it's only really worthwhile when a company generates some decent returns from it.
Return on equity is one way we can compare the business quality of different companies. In my book the highest quality companies have high return on equity, despite low debt. If two companies have the same ROE, then I would generally prefer the one with less debt.
But when a business is high quality, the market often bids it up to a price that reflects this. The rate at which profits are likely to grow, relative to the expectations of profit growth reflected in the current price, must be considered, too. So you might want to take a peek at thisdata-rich interactive graph of forecasts for the company.
Of course,you might find a fantastic investment by looking elsewhere.So take a peek at thisfreelist of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Have Insiders Been Buying Assertio Therapeutics, Inc. (NASDAQ:ASRT) Shares?
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We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares inAssertio Therapeutics, Inc.(NASDAQ:ASRT).
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, such insiders must disclose their trading activities, and not trade on inside information.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard Universitystudyfound that 'insider purchases earn abnormal returns of more than 6% per year.'
Check out our latest analysis for Assertio Therapeutics
In the last twelve months, the biggest single sale by an insider was when the Director, William McKee, sold US$59k worth of shares at a price of US$4.70 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (US$3.14). So it may not tell us anything about how insiders feel about the current share price. William McKee was the only individual insider to sell shares in the last twelve months.
Over the last year, we can see that insiders have bought 21000 shares worth US$87k. But they sold 12500 for US$59k. In the last twelve months there was more buying than selling by Assertio Therapeutics insiders. 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!
Assertio Therapeutics is not the only stock insiders are buying. So take a peek at thisfreelist of growing companies with insider buying.
Over the last three months, we've seen significant insider selling at Assertio Therapeutics. Specifically, Director William McKee ditched US$59k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
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 US$2.3m worth of Assertio Therapeutics stock, about 1.1% of the company. I generally like to see higher levels of ownership.
An insider hasn't bought Assertio Therapeutics stock in the last three months, but there was some selling. In contrast, they appear keener if you look at the last twelve months. Still, insiders don't own a great deal of the stock. So the company doesn't look great on this analysis. Therefore, you should should definitely take a look at thisFREEreport showing analyst forecasts for Assertio Therapeutics.
But note:Assertio Therapeutics 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. |
Is BEST Inc. (NYSE:BEST) A Financially Sound Company?
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While small-cap stocks, such as BEST Inc. (NYSE:BEST) with its market cap of US$2.1b, are popular for their explosive growth, investors should also be aware of their balance sheet to judge whether the company can survive a downturn. Since BEST is loss-making right now, it’s crucial to assess the current state of its operations and pathway to profitability. The following basic checks can help you get a picture of the company's balance sheet strength. However, this is just a partial view of the stock, and I recommend youdig deeper yourself into BEST here.
Over the past year, BEST has ramped up its debt from CN¥1.6b to CN¥6.8b made up of predominantly near term debt. With this rise in debt, BEST's cash and short-term investments stands at CN¥2.4b , ready to be used for running the business. Additionally, BEST has generated cash from operations of CN¥1.0b during the same period of time, resulting in an operating cash to total debt ratio of 15%, indicating that BEST’s operating cash is less than its debt.
With current liabilities at CN¥8.9b, the company may not have an easy time meeting these commitments with a current assets level of CN¥7.5b, leading to a current ratio of 0.84x. The current ratio is the number you get when you divide current assets by current liabilities.
With a debt-to-equity ratio of 55%, BEST 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. But since BEST is currently unprofitable, sustainability of its current state of operations becomes a concern. Running high debt, while not yet making money, can be risky in unexpected downturns as liquidity may dry up, making it hard to operate.
BEST’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. Though its low liquidity raises concerns over whether current asset management practices are properly implemented for the small-cap. This is only a rough assessment of financial health, and I'm sure BEST has company-specific issues impacting its capital structure decisions. I suggest you continue to research BEST to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for BEST’s future growth? Take a look at ourfree research report of analyst consensusfor BEST’s outlook.
2. Valuation: What is BEST 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 BEST 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. |
Estimating The Fair Value Of Tredegar Corporation (NYSE:TG)
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Does the June share price for Tredegar Corporation (NYSE:TG) 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. I will be using 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. 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.
Check out our latest analysis for Tredegar
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. 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 ($, Millions)", "2019": "$39.57", "2020": "$36.81", "2021": "$35.31", "2022": "$34.59", "2023": "$34.38", "2024": "$34.52", "2025": "$34.90", "2026": "$35.45", "2027": "$36.14", "2028": "$36.92"}, {"": "Growth Rate Estimate Source", "2019": "Est @ -11.15%", "2020": "Est @ -6.99%", "2021": "Est @ -4.07%", "2022": "Est @ -2.03%", "2023": "Est @ -0.6%", "2024": "Est @ 0.4%", "2025": "Est @ 1.1%", "2026": "Est @ 1.59%", "2027": "Est @ 1.93%", "2028": "Est @ 2.17%"}, {"": "Present Value ($, Millions) Discounted @ 8.87%", "2019": "$36.35", "2020": "$31.06", "2021": "$27.37", "2022": "$24.63", "2023": "$22.48", "2024": "$20.74", "2025": "$19.26", "2026": "$17.97", "2027": "$16.82", "2028": "$15.79"}]
Present Value of 10-year Cash Flow (PVCF)= $232.45m
"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 2.7%. We discount the terminal cash flows to today's value at a cost of equity of 8.9%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = US$37m × (1 + 2.7%) ÷ (8.9% – 2.7%) = US$618m
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= $US$618m ÷ ( 1 + 8.9%)10= $264.32m
The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is $496.77m. The last step is to then divide the equity value by the number of shares outstanding.This results in an intrinsic value estimate of $15.01. Relative to the current share price of $16.41, the company appears around fair value at the time of writing. 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 Tredegar 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 8.9%, which is based on a levered beta of 1.03. 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.
Although the valuation of a company is important, 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. For Tredegar, There are three additional factors you should further research:
1. Financial Health: Does TG 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 TG? 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 NYSE 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. |
Man who says he invented bitcoin but would not show evidence sues doubters for defamation
At a convention on digital currency, rarely does an audience Q&A session include a question as incendiary as, "Why is this fraud allowed to speak at this conference?" But that's how a discussion about bitcoin ended up last year in Seoul . The supposed fraud is Craig Wright , an Australian-born technologist who gained notoriety three years ago when he declared himself the inventor of bitcoin. The provocateur is Vitalik Buterin, a baby-faced Russian-Canadian programmer who helped create another popular digital currency called Ether . No one disputes Mr Buterin's role in Ether; many reject Mr Wright's claim to be Satoshi Nakamoto, the mysterious genius behind bitcoin. Mr Wright is a comic-book supervillain for some in the world of cryptocurrency . Mr Buterin's rant was applauded by a handful of people at the conference, including one of the panellists and a man on the sidelines wearing a vest and metallic fibre shirt. It had the feel of an impromptu live performance of a Twitter flame war. The whole thing lasted 90 seconds. Footage recorded from the crowd provided an amusing YouTube video and sparked a fresh round of tweets mocking Mr Wright. That appeared to be that, until a year later when Mr Buterin received a letter from Mr Wright's attorney. The legal notice, dated 12 April, said Mr Wright intends to sue Mr Buterin in the UK for defamation . Less than a week later, Mr Wright filed a lawsuit with similar claims against a podcaster named Peter McCormack, seeking £100,000 in damages. And on 2 May, Mr Wright's lawyers served Roger Ver, an early bitcoin investor, at a cryptocurrency meet-up in London . Mr Ver said by email he intends to defend himself in court. Mr Buterin and Mr McCormack did not respond to requests for comment, but all three have recently posted messages online calling Mr Wright a fraud. In a blog post, Mr Buterin painted the legal dispute as being about censorship , free speech and truth. Story continues Mr Wright has spent much of the last year with lawyers. He is currently defending against claims in a US court that he defrauded the estate of Dave Kleiman, a former business partner who died in 2013. Mr Wright is accused of stealing bitcoins he and Mr Kleiman mined together about a decade ago. A federal judge ordered Mr Wright to submit documentation of his early bitcoin holdings, which were sealed on Monday, and he attended mediation on Tuesday in Florida . At some point, he determined the courts could be a useful venue for achieving his own goals. Mr Wright, who says he holds a master's degree in law from Northumbria University in the UK, hopes a series of lawsuits can establish himself as the father of bitcoin. "This will give me the chance to prove my credentials in front of a judge, rather than being judged by Twitter," Mr Wright told Bloomberg in an email. If he really is Satoshi Nakamoto, Mr Wright will have no trouble funding a protracted legal war on his critics. The true creator of bitcoin is estimated to hold about $9bn (£7bn) of the coins. In most cases, the expensive prospect of getting sued tends to make rational people keep critical views to themselves. "There's some really broad recognition that the threat of defamation lawsuits really substantially chills speech," says David Greene, senior staff attorney at the Electronic Frontier Foundation, a civil liberties advocacy group. For whatever reason, that did not occur here. Online discussion of Mr Wright reached a peak shortly after his lawsuit against Mr McCormack, and the content was overwhelmingly scathing. During the week following his suit, 65 per cent of posts expressed a negative sentiment, compared with about half before, according to Brand24, which monitors conversations on social media. Crowdfunding efforts have popped up to assemble legal defence funds for some of Mr Wright's defendants. Data from Google suggests the litigation drew the most attention to Mr Wright since his contentious claims in 2016, when he offered what he called definitive proof of his role in creating bitcoin. Although digital currencies have a market value of more than $280bn today, the circus surrounding Mr Wright shows that the industry still operates as a free-for-all. Experts are not entirely sure who conceived of the world's most valuable form of digital money, but there is enough of it to go around that the threat of costly lawsuits does not seem to deter anyone from speaking their mind. John McAfee is a prime example. The software pioneer turned digital coin advocate says he knows the real Satoshi Nakamoto, and it is not Mr Wright. "I am going to tell the truth no matter what the consequences are," Mr McAfee said. "I've been sued over 200 times in my life. I am not afraid of getting sued." In response, Mr Wright called him "McScammer" and suggested they resolve their dispute in court. The cryptocurrency business is full of colourful characters. Mr Wright joined the starring cast in late 2015, when Wired magazine and Gizmodo reported that he and Mr Kleiman may have invented bitcoin. A few days later, Wired said Mr Wright may instead be "a brilliant hoaxer." Police raided his home in Australia as part of a tax investigation; he moved to Britain. In May 2016, the BBC, the Economist and - most important in the eyes of bitcoin zealots - several prominent leaders of the cryptocurrency movement said Mr Wright furnished what appeared to be evidence of his claim to the throne. They said he gave a private demonstration of a special digital signature used by Satoshi Nakamoto. "The proof is conclusive, and I have no doubt that Craig Steven Wright is the person behind the bitcoin technology," Jon Matonis, founding director of the Bitcoin Foundation, wrote in a blog post at the time. This did not quiet the doubters, either. "It would be like if I was trying to prove that I was George Washington and to do that, provided a photocopy of the Constitution and said, look, I have George Washington's signature," Peter Todd, a key bitcoin developer, told Vice's Motherboard. Bitcoin holdings attributed to Satoshi Nakamoto have not moved in years, according to online ledgers. Critics have urged Mr Wright to verify his identity by transferring some coins, a proposal he has refused. As Mr Wright spars with some cryptocurrency faithful, he is hoping to get the community's help with identifying his next legal target. He said he intends to sue an anonymous Twitter user known as Hodlonaut, whose profile picture is represented by a cartoon cat wearing a space helmet. Mr Wright posted a $5,000 reward for information to locate the person behind the account and referred bounty hunters to photos the user had posted showing arm tattoos. Hodlonaut wrote in a tweet on Monday that he had issued legal proceedings against Mr Wright in Norway. Mr McCormack, the podcaster Mr Wright sued in April, is piling on as he awaits his day in court. He wrote a satirical response to Mr Wright's lawyers, saying, "I find it difficult to understand how I can affect the reputation of your client; this mistakenly states that he has any reputation left." In addition to widespread derision, Mr Wright's crusade has inflicted damage on his business interests. He is now pushing a coin called Bitcoin SV, which he says is bitcoin the way Satoshi Nakamoto truly intended. Mr Wright's lawsuits drew a harsh rebuke from Zhao Changpeng, the head of one of the world's largest cryptocurrency exchanges, Binance. Mr Zhao said he was "against fraud," and then Binance delisted bitcoin SV. The coin's market value plummeted 50 per cent over two days, though it recovered during the broader cryptocurrency rally in May. Mr Wright and his few vocal allies are undeterred. On 21 May, Mr Wright said he was granted a US copyright for early bitcoin code and for the original whitepaper authored by Satoshi Nakamoto. Three days later, someone named Wei Liu filed a competing copyright claim. A spokesperson for the agency said it "does not investigate the truth of any statements made." Calvin Ayre, a dot-com-era gambling tycoon and the most persistent supporter of Mr Wright, said he would release evidence proving Mr Wright's claim by the end of May. He did not. "But now that we have somebody challenging the copyright, we can take that to a legal conclusion, which is what we are now trying to do," Ed Pownall, a spokesperson for Mr Ayre, wrote in an email. Mr Wright sees the insults as something more sinister than routine internet trolling. He says his detractors are criminals, who profit from human trafficking, and that their true motive is to sabotage his attempts to eliminate illegal uses of bitcoin. "I designed bitcoin to stop all of this," Mr Wright said. "That is why they hate me." The Washington Post |
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