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Does South32 (ASX:S32) Deserve A Spot 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. But as Peter Lynch said inOne Up On Wall Street, 'Long shots almost never pay off.'
In contrast to all that, I prefer to spend time on companies likeSouth32(ASX:S32), which has not only revenues, but also profits. While profit is not necessarily a social good, it's easy to admire a business than can consistently produce it. Conversely, a loss-making company is yet to prove itself with profit, and eventually the sweet milk of external capital may run sour.
View our latest analysis for South32
Over the last three years, South32 has grown earnings per share (EPS) like young bamboo after rain; fast, and from a low base. So I don't think the percent growth rate is particularly meaningful. Thus, it makes sense to focus on more recent growth rates, instead. Like a wedge-tailed eagle on the wind, South32's EPS soared from US$0.22 to US$0.28, in just one year. That's a impressive gain of 27%.
One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. I note that, last year, South32's revenuefrom operationswas lower than its revenue, so that could distort my analysis of its margins. South32 maintained stable EBIT margins over the last year, all while growing revenue 6.9% to US$8.0b. That's a real positive.
You can take a look at the company's revenue and earnings growth trend, in the chart below. For finer detail, click on the image.
Of course the knack is to find stocks that have their best days in the future, not in the past. You could base your opinion on past performance, of course, but you may also want tocheck this interactive graph of professional analyst EPS forecasts for South32.
Like standing at the lookout, surveying the horizon at sunrise, insider buying, for some investors, sparks joy. That's because insider buying often indicates that those closest to the company have confidence that the share price will perform well. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.
Not only did South32 insiders refrain from selling stock during the year, but they also spent US$176k buying it. That's nice to see, because it suggests insiders are optimistic. Zooming in, we can see that the biggest insider purchase was by Independent Non-Executive Director Ntombifuthi Temperance Mtoba for AU$64k worth of shares, at about AU$3.89 per share.
The good news, alongside the insider buying, for South32 bulls is that insiders (collectively) have a meaningful investment in the stock. To be specific, they have US$18m worth of shares. That shows significant buy-in, and may indicate conviction in the business strategy. Despite being just 0.1% of the company, the value of that investment is enough to show insiders have plenty riding on the venture.
You can't deny that South32 has grown its earnings per share at a very impressive rate. That's attractive. Not only that, but we can see that insiders both own a lot of, and are buying more, shares in the company. So it's fair to say I think this stock may well deserve a spot on your watchlist. If you think South32 might suit your style as an investor, you could go straight to its annual report, or you could first checkour discounted cash flow (DCF) valuation for the company.
As a growth investor I do like to see insider buying. But South32 isn't the only one. You can see aa free list of them here.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Australia's Green makes first win a major at Women's PGA
(Reuters) - Hannah Green became the third Australian woman to win a major with a one-stroke victory over South Korean Park Sung-hyun at the Women's PGA Championship in Chaska, Minnesota on Sunday. After a poor six-iron approach into a bunker at the final hole, Green made a clutch up-and-down par, sinking a four-foot putt for the win at Hazeltine National. She carded an even-par 72 to complete a wire-to-wire triumph, only the second player this century to lead alone after every round. Green finished at nine-under 279, while last year's champion Park (68) birdied the final hole for second place on 280. "I was really nervous playing the last five holes," Green said, her voice cracking with emotion. "To be winning a major as my first event, I'm just over the moon." The 22-year-old from Perth, Western Australia, came into the championship ranked 114th in the world but now belongs in the same major club as compatriots Karrie Webb (seven) and Jan Stephenson (three). Webb was the last Australian to claim a major at the 2006 Kraft Nabisco Championship, since rebranded the ANA Inspiration. Green is a former recipient of the Karrie Webb Scholarship, and seven-times major winner Webb was among a half-dozen Australian friends who mobbed the champion on the 18th green. FRITTERED AWAY LEAD Earlier, Green built a handy lead before all but frittering it away with three bogeys in a four-hole stretch around the turn as nerves appeared to take hold. Her lead was trimmed to one stroke over American Nelly Korda, but Green lifted under pressure. A 15-foot birdie at the 16th hole steadied Green but Park, playing in the group ahead, was not done. The Korean birdied the par-four 18th to put the heat on Green and the Australian stumbled with a poor approach shot on the final hole. Finding a good lie in the bunker, Green nipped the shot nicely but the ball did not stop close enough to take the putt for granted. After an almost unbearable four-minute wait while the other members of her group putted out, Green rolled in the winning putt and the tears quickly flowed. Runnerup Park had earlier rued a missed birdie chance at the 17th before making amends at the last. "There were a lot of putts that didn't go in but I was really glad to make that birdie putt on 18," Park said. "I would like to congratulate Hannah." Korda (71) and England's Mel Reid (66) tied for third, three shots back. Thailand's Ariya Jutanugarn, who started the day one shot behind Green, had a nightmare 77 to plunge into a tie for 10th on three-under. (Reporting by Andrew Both in Cary, North Carolina; Editing by Ken Ferris / Ian Ransom) View comments |
Opposition win in Istanbul a blow to Turkey's Erdogan
ISTANBUL (AP) — The opposition candidate for mayor of Istanbul celebrated a landmark win Sunday in a closely watched repeat election that ended weeks of political tension and broke the long hold President Recep Tayyip Erdogan's party had on leading Turkey's largest city. "Thank you, Istanbul," Ekrem Imamoglu, 49, said to the tens of thousands of people who gathered to mark his victory after unofficial results showed he won a clear majority of the vote. The governing party's candidate, former Turkish Prime Minister Binali Yildirim, conceded moments after returns showed him trailing well behind Imamoglu, 54% to 45%. Imamoglu increased his lead from a March mayoral election by hundreds of thousands of votes. Erdogan congratulated Imamoglu in a tweet. Analysts noted the president, who is grappling with an economic downturn and several international crises, could limit the mayor's power or undermine Imamoglu's authority in other ways. Imamoglu narrowly won an earlier mayoral election on March 31, but Erdogan's Justice and Development Party, AKP, challenged the vote over alleged irregularities. He spent 18 days in office before Turkey's electoral board annulled the results after weeks of partial recounts. The voided vote raised concerns domestically and abroad about the state of Turkish democracy and whether Erdogan's party would accept any electoral loss. AKP has governed Turkey since 2002. "You have protected the reputation of democracy in Turkey with the whole world watching," Imamoglu, his voice hoarse after weeks of campaigning, told supporters. Jubilant supporters chanted "Mayor again! Mayor again!" Others hung out of cars, blaring horns and waving red-and-white Turkish flags. Erdogan campaigned hard for Yildirim in Istanbul, where the president started his political career as mayor in 1994. Lisel Hintz, an assistant international relations professor at Johns Hopkins University SAIS, said Imamoglu withstood a divisive campaign and prevailed with a positive message. Story continues The significance of his win "cannot be understated," Hintz said. "We now have to wait and see whether Imamoglu's tenure as mayor will be interfered with in any way, whether by cutting off funding and hampering his office's ability to provide services or by removing him under some legal pretext," Hintz said. AKP also lost control of the capital city of Ankara in Turkey's March local elections, which were held as the country battled high inflation and two credit rating downgrades in the past year. Melahat Ugen said she switched her vote to the opposition because she could not afford to cover basic expenses. "I've certainly never voted left before," she said. "But I'm 62, and a bag of onions costs too much. Everything is imported and we can't afford it." Istanbul, a city of more than 15 million, draws millions of tourists each year and is Turkey's commercial and cultural hub. Straddling Europe and Asia, Istanbul accounted for 31% of Turkey's GDP in 2017. Erdogan has previously signaled an unwillingness to work with an opposition mayor, saying his party controls 25 of Istanbul's 39 districts and a majority in the municipal assembly. Imamoglu will have to work with those officeholders to govern Istanbul, and he promised to do so Sunday. Addressing Erdogan in a speech, Imamoglu said, "I'm ready to work with you" to solve Istanbul's problems. Ozgur Unluhisarcikli, Ankara office director of the German Marshall Fund, argued that the loss of Istanbul is likely to fuel speculation of divisions within the ruling party and among its supporters. "It's now clear that a sizable portion of the AKP voters is seriously dissatisfied by policies of the AKP," he said. "The (opposition) was a house that was united. The AKP house looked like one that was already divided." He argued Erdogan is already facing an "a perfect storm" this summer. Erdogan was already at odds with Western allies over Turkey's plans to buy the Russian-made S-400 missile defense system and its challenge of EU-member Cyprus over natural gas drilling rights. ___ Bulut Emiroglu and Ayse Wieting in Istanbul contributed. ___ Follow Bilginsoy http://twitter.com/zbilginsoy and Gatopoulos at http://www.twitter.com/dgatopoulos |
Does South32 (ASX:S32) Deserve A Spot On Your Watchlist?
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Like a puppy chasing its tail, some new investors often chase 'the next big thing', even if that means buying 'story stocks' without revenue, let alone profit. 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 likeSouth32(ASX:S32). Even if the shares are fully valued today, most capitalists would recognize its profits as the demonstration of steady value generation. 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.
See our latest analysis for South32
Over the last three years, South32 has grown earnings per share (EPS) like young bamboo after rain; fast, and from a low base. So I don't think the percent growth rate is particularly meaningful. Thus, it makes sense to focus on more recent growth rates, instead. Like a falcon taking flight, South32's EPS soared from US$0.22 to US$0.28, over the last year. That's a commendable gain of 27%.
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, last year, South32's revenuefrom operationswas lower than its revenue, so that could distort my analysis of its margins. South32 maintained stable EBIT margins over the last year, all while growing revenue 6.9% to US$8.0b. That's a real positive.
The chart below shows how the company's bottom and top lines have progressed over time. To see the actual numbers, click on the chart.
While we live in the present moment at all times, there's no doubt in my mind that the future matters more than the past. So why not checkthis interactive chart depicting future EPS estimates, for South32?
Like standing at the lookout, surveying the horizon at sunrise, insider buying, for some investors, sparks joy. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.
Not only did South32 insiders refrain from selling stock during the year, but they also spent US$176k buying it. That puts the company in a nice light, as it makes me think its leaders are feeling confident. It is also worth noting that it was Independent Non-Executive Director Ntombifuthi Temperance Mtoba who made the biggest single purchase, worth AU$64k, paying AU$3.89 per share.
The good news, alongside the insider buying, for South32 bulls is that insiders (collectively) have a meaningful investment in the stock. To be specific, they have US$18m worth of shares. That's a lot of money, and no small incentive to work hard. Even though that's only about 0.1% of the company, it's enough money to indicate alignment between the leaders of the business and ordinary shareholders.
For growth investors like me, South32's raw rate of earnings growth is a beacon in the night. On top of that, insiders own a significant stake in the company and have been buying more shares. So it's fair to say I think this stock may well deserve a spot on your watchlist. Of course, identifying quality businesses is only half the battle; investors need to know whether the stock is undervalued. So you might want to consider thisfreediscounted cashflow valuationof South32.
There are plenty of other companies that have insiders buying up shares. So if you like the sound of South32, you'll probably love thisfreelist of growing companies that insiders are buying.
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. |
Argentina beats Qatar to escape elimination at Copa America
PORTO ALEGRE, Brazil (AP) Lionel Messi avoided another disappointment with the national team as Argentina escaped elimination in the group stage of the Copa America. Lautaro Martinez and Sergio Aguero scored a goal in each half as Argentina defeated guest team Qatar 2-0 to secure a spot in the quarterfinals of the South American competition. "We needed a victory to give us confidence and tranquility," Messi said. "What I liked the most was the team's attitude, its desire to win the game." Argentina finished second in Group B behind Colombia, which did Argentina a huge favor by beating Paraguay 1-0 in the other group match on Sunday. Colombia finished with nine points, Argentina four, Paraguay two and Qatar one. The top two teams in each of the three groups advance, along with the two best third-place finishers. Paraguay will advance only if Japan and Ecuador draw on Monday in Group C. Argentina, which hasn't been eliminated in the first round of the South American tournament since 1983, will face Venezuela in the quarterfinals at the Maracana Stadium in Rio de Janeiro. It was Argentina's first win at this year's Copa America after opening with a 2-0 loss to Colombia and a 1-1 draw with Paraguay. Argentina struggled again on Sunday, unable to impose its game against the Asian champion. Messi again was far from his best, unable to spark his team into a dominant performance. Martinez opened the scoring only four minutes into the match after a mistake by Qatari defender Bassam Al Rawi while trying to pass to a teammate in front of his area. Martinez intercepted the pass and found the net to open the scoring at the Arena Gremio. Qatar, making its first appearance as a guest in the Copa America, stayed in contention during most of the match but Aguero sealed Argentina's win with a run past a couple of defenders in the 82nd. "The pressure was there," Argentina coach Lionel Scaloni said. "Luckily we got an early goal." Story continues Argentina's last title with the senior team was the 1993 Copa America. It has come close to victory in recent years with Messi, losing in the final in the World Cup in 2014 and in the Copa America in 2015 and 2016. Argentina entered the match last in the group, knowing only a victory would guarantee its place in the next round. Qatar, led by Spanish coach Felix Sanchez, was making its first appearance as a guest in the Copa America, hoping to gain experience for when it hosts the 2022 World Cup. It was eliminated despite opening with a gritty 2-2 draw against Paraguay and a late loss to Colombia. Qatar will also play in next year's Copa America co-hosted by Colombia and Argentina. Venezuela, Argentina's next opponent, was second to Brazil in Group A. It drew 0-0 with the hosts in its second game in the Copa America. "It will be a difficult opponent," said Scaloni, whose team lost 3-1 to Venezuela in a friendly in Madrid in March. "It's an interesting team, it has been playing together for a long time." ___ More AP soccer: https://apnews.com/apf-Soccer and https://twitter.com/AP_Sports |
TrendMicro Detects Crypto Mining Malware Affecting Android Devices
A new cryptocurrency-mining botnet has been detected exploiting Android Debug Bridge ports, a system designed to resolve app defects installed on a majority of Android phones and tablets.
The botnet malware, as reported by Trend Micro, has been detected in 21 countries and is most prevalent in South Korea.
The attack takes advantage of the way open ADB ports don’t require authentication by default, and once installed is designed to spread to any system that has previously shared an SSH connection. SSH connections connect a wide range of devices – everything from mobile to Internet of Things (IoT) gadgets – meaning a lot of products are susceptible.
Related:Russian Hackers May Have Carried Out Largest Ever Crypto Exchange Theft
“Being a known device means the two systems can communicate with each other without any further authentication after the initial key exchange, each system considers the other as safe,” the researchers say. “The presence of a spreading mechanism may mean that this malware can abuse the widely used process of making SSH connections.”
It begins with an IP address.
45[.]67[.]14[.]179 arrives through the ADB and uses the command shell to update the working directory to “/data/local/tmp,” as .tmp files often have default permission to execute commands.
Once the bot determines its entered a honeypot, it uses the wget command to download the payload of three different miners, and curl if wget is not present in the infected system.
Related:New Monero Botnet Looks Like Last Year’s Outlaw Attack
The malware determines which miner is best suited to exploit the victim depending on the system’s manufacturer, architecture, processor type, and hardware.
An additional command, chmod 777 a.sh, is then executed to change the permission settings of the malicious drop. Finally, the bot conceals itself from the host using another command, rm -rf a.sh*, to delete the downloaded file. This also hides the trail of where the bug originated from as it spreads to other victims.
Researchers examined the invading script and determined the three potential miners that can be used in the attack – all delivered by the same URL – are:
http://198[.]98[.]51[.]104:282/x86/bashhttp://198[.]98[.]51[.]104:282/arm/bashhttp://198[.]98[.]51[.]104:282/aarch64/bash
They also found the script enhances the host’s memory by enabling HugePages, which enables memory pages that are greater than its default size, to optimize mining output.
If miners are already found using the system the botnet attempts to invalidate their URL and kill them by changing the host code.
Pernicious and malicious cryptomining drops are continually evolving new ways to exploit their victims. Last summer, Trend Micro observed another ADB-exploiting that they dubbed the Satoshi Variant.
Outlaw, was spotted in the past weeks spreading another Monero mining variant across China through brute-force attacks against servers. At the time researchers hadn’t determined whether the botnet had begun mining operations, but found an Android APK in the script, indicating Android devices may be targeted.
Image via Shutterstock.
• Crypto Developer Komodo ‘Hacks’ Wallet Users to Foil $13 Million Theft
• North Korean Hackers Target Crypto Exchange UPbit’s South Korean Users |
Facebook Won't Launch Its Cryptocurrency Wallet in Its Biggest Market
Facebook(NASDAQ: FB)recently introduced Libra, a cryptocurrency it developed with a consortium of payment service and tech companies. It also launched Calibra, a digital wallet for making payments with Libra, and the service will probably be integrated into Facebook's family of apps -- which include Messenger, WhatsApp, and Instagram.
Facebookdeclared that Libracould solve payment issues for the 1.7 billion people who still didn't have bank accounts worldwide, and the transfers would be faster and cheaper than bank-to-bank transfers. In other words, Facebook wants to create a global digital currency, and its adoption could support the expansion of its e-commerce efforts -- which already include shoppable posts and in-app checkouts for Instagram, integrated payments in Messenger and WhatsApp, and its Craigslist-like Marketplace.
Image source: Getty Images.
However, roadblocks for Facebook's global ambitions have already appeared. Facebook won't launch Calibra in U.S.-sanctioned countries, countries where Facebook doesn't have a presence, and countries that ban or regulate cryptocurrencies.
That last restriction means Facebook won't launch Calibra in India -- which recently proposed 10-year jail sentences for people who "mine, hold, sell, transfer, dispose, issue, or deal in cryptocurrencies." Let's discuss why getting locked out of India's crypto market represents a significant setback for Facebook's long-term plans for the country.
India, which is set to overtake China as the world's most populous country within the next decade, is one of Facebook's fastest-growing markets in terms of daily active users (DAUs). During last quarter's conference call, CFO Dave Wehner said Facebook's DAUs rose 8% annually to 1.56 billion, "led by growth in India, Indonesia, and the Philippines." Jefferies estimates that India is Facebook's largest market, with 310 million users, and that figure could surge to 440 million by 2023.
India currently has a population of nearly 1.4 billion and a low internet penetration rate of just over 40%. Between 2017 and 2022, the percentage of Indians using smartphones could grow from 27% to 60%, according toCisco.
That's why Facebook -- which faces peaking growth in many of its developed markets -- is eager to court Indian users with "lite" Facebook apps, which use less data, and new features for WhatsApp, which also ranks India as its top market with over 200 million users.
India also has the world's second largest unbanked population after China, with the latest World Bank numbers indicating that 191 million Indians over age 15 still don't have bank accounts. Facebook sees an overlap between those unbanked people and its mobile app users -- that's why it started testing out WhatsApp Pay, a peer-to-peer payments feature for WhatsApp, for Indian users in early 2018.
Image source: Getty Images.
However, WhatsApp Pay still trails far behind Paytm, which has over 230 million users, in the Indian market, and it still faces stiff competition from rivals such asAlphabet's Google Pay, Flipkart's PhonePe, and the government's own BHIM app. Therefore, integrating cryptocurrency purchases and payments into its apps -- asSquaredid with its Cash App -- could help Facebook differentiate itself from the competition.
Facebook CEO Mark Zuckerberg has held numerous talks with Prime Minister Narendra Modi to discuss his plans for the Indian market, but regulators are still wary of the tech giant's long-term ambitions.
Three years ago, Indian regulatorsbannedFacebook's "Free Basics," which allowed carriers to offer data-free versions of its core apps, on grounds that it violated net neutrality and marginalized competitors. The government's promotion of BHIM, a payment app linked to banks, also aims to unite the fragmented payments market under a single, easily regulated umbrella that could deter illegal transfers and tax evasion.
That's why Indian regulators aren't eager to embrace cryptocurrencies, which could let payments fly under the radar or across national borders. Facebook might eventually launch Calibra in India with significant compromises, but that idea, as lucrative as it might be, will stay on the back burner for now.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors.Leo Sunowns shares of Cisco Systems, Facebook, and Square. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Facebook, and Square. The Motley Fool has adisclosure policy. |
Mets' Mickey Callaway, Jason Vargas snap on reporter
CHICAGO – Mickey Callaway — and Jason Vargas — snapped. The New York Mets manager cursed out a Newsday reporter following Sunday’s 5-3 loss to the Chicago Cubs , and Vargas later threatened to hit the reporter, eventually charging him. No punches were thrown. The incident happened after a back-breaking loss to the Cubs that featured a questionable decision by Callaway in not using closer Edwin Diaz in the eighth inning. Seth Lugo allowed a go-ahead, three-run homer to Javier Báez , and Diaz, who had pitched once in eight days, never appeared in the game. New York Mets manager Mickey Callaway lost his cool with a reporter on Sunday. (USA TODAY Sports) Callaway was questioned repeatedly about the decision after the game and was defiant about the team’s plans, even responding to one question about not using Diaz for five outs with: “Just because you think so?” As reporters waited for Diaz, Callaway, wearing a black shirt, emerged from his office and walked past a reporter, who told him “see you tomorrow, Mickey.” Callaway, still on edge from the loss, turned around and yelled, “Don’t be a smarta--, motherf-----.” He later returned and engaged the reporter about the comment, which was not made maliciously, and Callaway raised his voice while he hurled expletives, telling a team public relations official to remove the reporter. “Get the f----- out of here,” Callaway said. “We don’t need that bulls--- here.” Vargas, who was standing about 15 feet away from the reporter, got into a stare down with the reporter, who said to Vargas that it seemed he had something to say. The lefty then mentioned the possibility of having a fight. “I’ll knock you the f--- out, bro,” Vargas said. Vargas ultimately charged the reporter, having to be restrained by Noah Syndergaard and Carlos Gomez . Vargas did not come close to the reporter since the visitor’s clubhouse at Wrigley Field is rather cramped. New York Mets starting pitcher Jason Vargas also found himself in the middle of a incident with a Newsday reporter. (USA TODAY Sports) The reporter later left the room before the remaining reporters participated in one final interview with Diaz. While Callaway has never had an outburst like this before with a reporter, the second-year manager has pushed back when asked critical questions. Story continues Vargas had not had an incident like this with a Mets reporter since he joined the team last year. The Mets released a statement several hours after the event. “The Mets sincerely regret the incident that took place with one of our beat writers following today’s game in the clubhouse,” the team said. “We do not condone this type of behavior from any employee. The organization has reached out and apologized to this reporter and will have further discussions internally with all involved parties.” More from Yahoo Sports: Is this the best USWNT of all time? One player says yes Morgan, Ertz expected to play for U.S. against Spain LaVar Ball talks again, makes ’First Take’ drama worse Sources: UConn move to the Big East inevitable |
What Did Clover Corporation Limited's (ASX:CLV) CEO Take Home Last Year?
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Peter Davey has been the CEO of Clover Corporation Limited (ASX:CLV) since 2014. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for Clover
According to our data, Clover Corporation Limited has a market capitalization of AU$339m, and pays its CEO total annual compensation worth AU$1.2m. (This is based on the year to July 2018). While we always look at total compensation first, we note that the salary component is less, at AU$394k. When we examined a selection of companies with market caps ranging from AU$144m to AU$578m, we found the median CEO total compensation was AU$748k.
Thus we can conclude that Peter Davey receives more in total compensation than the median of a group of companies in the same market, and of similar size to Clover Corporation Limited. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Clover has changed over time.
Clover Corporation Limited has increased its earnings per share (EPS) by an average of 65% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 11%.
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. You might want to checkthis free visual report onanalyst forecastsfor future earnings.
Boasting a total shareholder return of 442% over three years, Clover Corporation Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We examined the amount Clover Corporation Limited pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Even better, returns to shareholders have been plentiful, over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Whatever your view on compensation, you might want tocheck if insiders are buying or selling Clover 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. |
Yemeni rebels strike Saudi airport ahead of US-Saudi talks
DUBAI, United Arab Emirates (AP) — One person was killed and seven others were wounded in an attack by Iranian-allied Yemeni rebels on an airport in Saudi Arabia Sunday evening, the Saudi military said, as the U.S. secretary of state was on his way to the country for talks on Iran. Regional tensions have flared in recent days. The U.S. abruptly called off military strikes against Iran in response to the shooting down of an unmanned American surveillance drone on Thursday. The Trump administration has combined a "maximum pressure" campaign of economic sanctions with a buildup of American forces in the region following the U.S. withdrawal from the 2015 nuclear deal between Iran and world powers. A new set of U.S. sanctions on Iran are expected to be announced Monday. The Sunday attack by the Yemeni rebels, known as Houthis, targeted the Saudi airport in Abha. Saudi Arabia has been at war with the Houthis in Yemen for more than four years. A Houthi spokesman, Yahia al-Sarie, said earlier Sunday the rebels had launched drones targeting Saudi airports in the southern cities of Abha and Jizan. Saudi Arabia's military spokesman Col. Turki al-Maliki did not say what type of weapon was used in Sunday's attack, which took place shortly after 9 p.m. local time. The Saudi Press Agency reported that a Syrian resident of Saudi Arabia had been killed, but did not identify the nationalities of those wounded. It was the second attack in less than two weeks on Abha's airport. The Houthis launched a cruise missile at the airport on June 12, wounding 26 passengers inside. The Iranian-backed Houthis also claimed responsibility for bomb-laden drone strikes that targeted a key Saudi oil pipeline in recent weeks. Also Sunday, U.S Secretary of State Mike Pompeo was traveling to Saudi Arabia and the United Arab Emirates for talks on Iran. His meetings in Saudi Arabia will be in the Red Sea city of Jiddah, about 315 miles (505 kilometers) north of where the Saudi airport was struck. Speaking to reporters before flying out, he said he'll be talking to the two U.S. allies "about how to make sure that we are all strategically aligned" and how to build a global coalition to "push back against the world's largest state sponsor of terror." At the same time, Pompeo reiterated that the U.S. was prepared to negotiate with Iran to ease tensions. "We're prepared to negotiate with no preconditions. They know precisely how to find us," he said. Meanwhile, U.S. national security adviser John Bolton was in Jerusalem on Sunday, where he said Iran should not "mistake U.S. prudence and discretion for weakness." President Donald Trump has said he backed away from planned strikes after learning 150 people would be killed. Story continues Bolton's tough message seemed to be aimed not only at Tehran, but also at reassuring key U.S. allies that the White House remains committed to maintaining pressure on Iran. Israel, along with Arab countries in the Gulf, considers Iran to be their greatest threat, and Trump's last-minute about face appears to have raised questions about U.S. willingness to use force against the Islamic Republic. On Sunday, Iranian President Hassan Rouhani blamed the United States' "interventionist military presence" for fanning the flames. He was quoted by the official IRNA news agency. Bolton, a longtime Iran hawk, emphasized that the U.S. reserved the right to attack at a later point. "No one has granted them a hunting license in the Middle East. As President Trump said on Friday our military is rebuilt, new and ready to go," Bolton said alongside Israeli Prime Minister Benjamin Netanyahu, himself a vocal critic of Iran over the years. Netanyahu, a longtime opponent of the nuclear deal, has remained uncharacteristically quiet throughout the current crisis between the U.S. and Iran. The Israeli leader appears to be wary of being seen as pushing the U.S. into a new Middle Eastern military conflict. Standing alongside Bolton, Netanyahu said Iranian involvement in conflicts across the region had increased as a result of the nuclear deal, which lifted sanctions on Iran in exchange for set limits on its uranium enrichment levels. Netanyahu made no mention of the called-off airstrike and said he was "pleased" by U.S. plans for increased economic pressure. But some Israeli commentators said that Trump's about-face was a cause for concern. Iran's foreign minister said Bolton was trying to force the U.S. into a conflict with Iran. Javad Zarif tweeted that the presidential adviser was "moments away from trapping" Trump into a "war," before the U.S. president called off the strikes against Iran. America's European allies have expressed deep concern about the volatile standoff. A top British diplomat was in Tehran on Sunday to discuss preventing any "escalation and miscalculation," according to the UK Foreign Office. The two-day visit of Andrew Murrison, the UK's minister of state for the Middle East, was aimed at "open, frank and constructive engagement" with his Iranian counterparts, according to the Foreign Office. This included reiterating the UK's assessment that Iran almost certainly bears responsibility for recent attacks on oil tankers in the Gulf of Oman, which Iran denies. Murrison added that Iran must continue to meet its commitments under the nuclear deal. Iran has threatened to break the limits set on its uranium stockpile by the deal in the coming days, if European powers don't find a way to circumvent U.S. sanctions. According to IRNA, Iranian officials told Murrision they hoped that European signatories to the nuclear deal will pursue "normal relations and trade" despite the sanctions. Also Sunday, a top Iranian military commander warned that any conflict with Iran would have uncontrollable consequences across the region and endanger the lives of U.S. forces. Maj. Gen. Gholamali Rashid's remarks, published by the semi-official Fars news agency, were made while addressing Iran's powerful Revolutionary Guards Corps during a field visit to a command center for Iranian radars and missile systems. Throughout the recent crisis, Trump has wavered between bellicose language and actions toward Iran and a more accommodating tone. His administration is aiming to cripple Iran's economy and force policy changes by re-imposing sanctions, including on Iranian oil exports. He's also dangled the prospect of eventually becoming an unlikely "best friend" of America's longtime Middle Eastern adversary. The regional tensions have prompted major international carriers, including Saudi Arabia's state airline Saudia, to divert flight routes away from the Gulf of Oman and Strait of Hormuz. The U.S. Federal Aviation Administration on Friday barred U.S.-registered aircraft from operating over parts of the Persian Gulf. ___ Superville reported from Washington. Associated Press writers Aron Heller in Jerusalem and Nasser Karimi in Tehran, Iran contributed to this report. View comments |
Is Clover Corporation Limited's (ASX:CLV) CEO Being Overpaid?
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Peter Davey has been the CEO of Clover Corporation Limited (ASX:CLV) since 2014. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for Clover
At the time of writing our data says that Clover Corporation Limited has a market cap of AU$339m, and is paying total annual CEO compensation of AU$1.2m. (This figure is for the year to July 2018). We think total compensation is more important but we note that the CEO salary is lower, at AU$394k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of AU$144m to AU$578m. The median total CEO compensation was AU$748k.
As you can see, Peter Davey is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Clover Corporation Limited is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Clover has changed over time.
Clover Corporation Limited has increased its earnings per share (EPS) by an average of 65% a year, over the last three years (using a line of best fit). Its revenue is up 11% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. 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.
Boasting a total shareholder return of 442% over three years, Clover Corporation Limited has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
We examined the amount Clover Corporation Limited pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. If you think CEO compensation levels are interesting you will probably really likethis free visualization of insider trading at Clover.
Important note:Clover 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. |
Kyle Dubas, Morgan Rielly happily focus on community while celebrating Pride
Toronto Maple Leafs general manager Kyle Dubas was happy to celebrate Pride among the city's residents on Sunday. (Rene Johnston/Toronto Star via Getty Images) TORONTO — Kyle Dubas and Morgan Rielly have cemented themselves as indispensable parts of the Toronto Maple Leafs organization, so it’s a natural extension for them to be at Pride, celebrating the city’s vibrant LGBTQ community. After being stopped by adoring fans, most of whom were thrilled that Patrick Marleau is now off the books for the Maple Leafs, Dubas spoke about what it means to participate in Pride, an event that’s essential to Toronto’s fabric. “It's one of the most diverse cities in the world. What I've seen over time is as different events have happened in hockey or elsewhere, people look to sports as their support release and a source of joy,” Dubas told reporters just outside the heart of the parade Sunday. “With that comes, you bring all different people in the community. Not a better example than last week with the Raptors; you see millions of people in the streets and you see what sports can do in the community. Doing our part, we want to make sure that we're inclusive of everybody with the Maple Leafs and at MLSE.” Kyle Dubas is at Pride to support the LGBTQ community. pic.twitter.com/YOP0aK5J9h — Yahoo Sports Canada (@YahooCASports) June 23, 2019 For some executives, the comments may ring as inauthentic but the 33-year-old Maple Leafs general manager is part of a generation that’s viewed LGBTQ rights as essential human rights, and has focused on inclusion, diversity and tolerance stemming back from his tenure with the OHL’s Soo Greyhounds. Dubas is almost uniquely qualified to understand what the Maple Leafs mean to Toronto, and with him and Rielly standing as avatars of this latest iteration, with genuine Cup aspirations to boot, it’s important that they’re outwardly supportive of their constituency. "I think what we see is in hockey, we see that players are very open and accepting of everybody. It's so awesome to see Morgan here, from our team, willing to be here and march in the parade with us,” Dubas said. Story continues “I think in hockey, and the Maple Leafs in Toronto, for us to be able to be a part of this and show that we're in support entirely, with words and being here and showing that in action is a great opportunity for us and we're thrilled to be here.” Morgan Rielly says it’s important to take part in Pride as it’s something the Maple Leafs feel passionate about as a group. Said he went to the parade in Vancouver last year. pic.twitter.com/jeI1sLvx94 — Yahoo Sports Canada (@YahooCASports) June 23, 2019 At 25, it’s sometimes hard to believe that Rielly just completed his sixth season with the Maple Leafs and is one of the core leaders of the team, some viewing him as the future captain. It appears that he truly understands what makes this city tick. “I think it's important. The campaign, Hockey is for Everyone is true,” Rielly said, citing the NHL’s league-wide inclusion initiative. “Not just for hockey but with life, in all walks of life, in all jobs, I think it's important that it's relayed. Being in Toronto, getting to live in Canada, work in Canada, be a part of a place that's as diverse as Toronto is, I think it's important that you're a part of it and you embrace Toronto for Toronto and what it is, and the people here. I'm really looking forward to it.” Rielly’s appearance comes after a season in which he was briefly under fire for having possibly using a homophobic slur during a game. The NHL’s investigation found that he did not use a derogatory term, but Rielly used that opportunity to double down that such language has no place in the modern game. “I was 100 percent confident I didn’t use the word,” he said at the time . “There is no place for slurs like that in sports or in life.” Other notes: Dubas and Rielly later marched with the You Can Play team. You Can Play is a movement focused on eliminating homophobia in sports. The Leafs partnered with the group earlier in the 2018-19 season, hosting You Can Play night on Feb. 25, when the team squared off against the Buffalo Sabres. Celebrating #PrideTO with @YouCanPlayTeam and sports associations from across Canada! #HockeyIsForEveryone pic.twitter.com/AWZLmRskrK — Toronto Maple Leafs (@MapleLeafs) June 23, 2019 Patrick Marleau was traded to the Carolina Hurricanes on Saturday, and the Maple Leafs won’t absorb any of his $6.25 million cap hit for the 2019-20 season. Although it’s a relief to some fans, the organization felt otherwise and Dubas lauded the 39-year-old veteran for his leadership. “He was unbelievable with our group, in the dressing room, on the ice, on the road. You saw it everyday in addition to how he played and his contributions on the ice. When you look back at history on how the Maple Leafs have developed and progressed, Patty Marleau's contributions are going to be seen as massive. We're happy to facilitate a positive move for him and his family and we'll move from there.” Andreas Johnsson and Kasperi Kapanen’s extensions are being finalized. Dubas said that assistant general manager Brandon Pridham has been responsible for the negotiations, and said that an update would be provided shortly. “We're right at the finish line with them. I haven't heard from Brandon - Brandon Pridham's flying back here all day and he's handled that and handled it so well for us. He'll have that answer here for us tonight or tomorrow,” Dubas said. More NHL coverage from Yahoo Sports |
20% of Americans Grapple With This Financial Obstacle
Many working Americans struggle to manage their money on an ongoing basis, especially when unplanned bills pop up out of the blue. But most U.S. employees have the benefit of knowing how much money they'll be collecting in their paychecks on a regular basis. For 20% of Americans, however, that figure is much harder to come by. That's because roughly one in five Americans deals with unpredictable income, according to anew reportby financial services company Netspend.
One reason why variable incomes are so widespread is that thegig economyhas really taken off. So, those who work on a freelance or contractor basis are frequently subject to substantial fluctuations in monthly income. The same holds true for small business owners who tend to do well seasonally but struggle for the remainder of the year.
IMAGE SOURCE: GETTY IMAGES.
Not surprisingly, 59% of Americans with variable income say it's either difficult or very difficult to save money. But if you're grappling with a variable income, therearea few things you can do to overcome that challenge.
One of the best ways to keep track of your spending and ensure that you're meeting your savings goals is to follow abudget. But it's hard to set up a budget when you don't know exactly how much income to base it on. Your best bet, therefore, is to commit to fixed expenses that your lowest monthly income can cover. This way, you'll avoid racking up debt during periods when business is slower.
Imagine that over the past year, you've earned anywhere from $4,000 to $7,000 on a monthly basis. In that case, you should base your budget on that $4,000 figure and only commit to fixed expenses -- things like rent, a car payment, a phone plan, and a cable package -- that you're able to pay for based on that lower earnings figure. If you go overboard on fixed expenses, you might easily land in debt any month your earnings come in on the low side.
As far as variable expenses go (things like food, utilities, and leisure), aim to keep them low when your earnings are low, and feel free to spend a bit more when your income rises. Of course, you won't have this option witheveryvariable expense. For example, you can't torture yourself inside a freezing house because you're in the midst of a lower-earning month and don't want to pay for adequate heat. But youcancut back on things like expensive groceries or takeout meals when your earnings dip.
Just as you're apt to have months of lower earnings, so too will you be privy to months when your income gets a boost. The smart thing to do here is to take advantage of those higher paychecks while you have them, whether by padding youremergency savings, making additional contributions to your retirement plan, or paying down existing debt so that it eats up less of your income.
Now this isn't to say that you can't spend a little more money when your income goes up. For example, if you have a month when your earnings are $1,000 higher than usual, then go ahead and buy concert tickets, or treat yourself to a new gadget with some of that cash. But don't blowallof it. Instead, sock a good amount away so that when your income declines, you have more of a cushion to fall back on.
Dealing with a variable income isn't easy. Budget carefully and take advantage of upswings to avoid undue financial stress.
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Is Resource Development Group Limited's (ASX:RDG) CEO Pay Justified?
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Andrew Ellison has been the CEO of Resource Development Group Limited (ASX:RDG) 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for Resource Development Group
At the time of writing our data says that Resource Development Group Limited has a market cap of AU$10m, and is paying total annual CEO compensation of AU$167k. (This number is for the twelve months until June 2018). Notably, the salary of AU$167k is the vast majority of the CEO compensation. We examined a group of similar sized companies, with market capitalizations of below AU$289m. The median CEO total compensation in that group is AU$358k.
Most shareholders would consider it a positive that Andrew Ellison 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.
You can see, below, how CEO compensation at Resource Development Group has changed over time.
On average over the last three years, Resource Development Group Limited has shrunk earnings per share by 120% each year (measured with a line of best fit). Its revenue is up 408% over last year.
Investors should note that, over three years, earnings per share are down. On the other hand, the strong revenue growth suggests the business is growing. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Although we don't have analyst forecasts, you might want to assessthis data-rich visualizationof earnings, revenue and cash flow.
I think that the total shareholder return of 33%, over three years, would leave most Resource Development Group Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
It appears that Resource Development Group Limited remunerates its CEO below most similar sized companies.
Andrew Ellison is paid less than what is normal at similar size companies, and the total shareholder return has been pleasing over the last three years. We would like to see EPS growth, but in our view it seems the CEO is modestly remunerated. Shareholders may want tocheck for free if Resource Development Group insiders are buying or selling shares.
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. |
Kawhi Leonard to become free agent; Raptors favorites to land him
Toronto Raptors star Kawhi Leonard will decline his 2019-20 player option worth $21.3 million to become an unrestricted free agent, league sources told Yahoo Sports. The 6-foot-7 All-Star will be one of the marquee free agents on the open market. The Raptors are the only team that can offer Leonard a max contract for five years and $190 million. Leonard, 27, is believed to be seriously considering re-signing with the Raptors, sources said. Kawhi Leonard celebrates during the Raptors' championship parade. (Frank Gunn/The Canadian Press via AP) But there are a handful of teams who could secure a meeting with the 2019 NBA Finals MVP, sources said. The appeal of returning home to Southern California is enticing to the two-time NBA Defensive Player of the Year, but with the trust the Raptors built while Leonard led the franchise to its first NBA title by upsetting the Golden State Warriors, rival executives view his current team as the favorite to land him when the free-agent negotiating period begins June 30, sources said. Leonard had career highs in points (26.6) and rebounds (7.3) in his lone season with the Raptors. Leonard was drafted in 2011 and was the 2014 NBA Finals MVP with the San Antonio Spurs. After a tumultuous season with the Spurs, he was traded to Toronto last summer along with Danny Green for DeMar DeRozan, Jakob Poeltl and a first-round draft pick. In eight seasons, the three-time All-Star has averaged 17.7 points, 6.3 rebounds and 1.8 steals. More from Yahoo Sports: Is this the best USWNT of all time? One player says yes Morgan, Ertz expected to play for U.S. against Spain LaVar Ball talks again, makes First Take drama worse Sources: UConn move to the Big East inevitable |
Pregnant Blake Lively & Ryan Reynolds's Boston PDA Is So Adorable
Photo credit: Instagram From Harper's BAZAAR Ryan Reynolds just posted an adorable Instagram Story featuring his pregnant wife, Blake Lively , and an extremely nostalgic Back to the Future reference. Lively revealed that she's expecting her third baby with Reynolds while on the red carpet for the premiere of Pokémon Detective Pikachu in May 2019. Reynolds and Lively already have two children-James, 4, and Inez, 2. Whether they're trolling one another online, or stepping out at a glitzy Hollywood event, Ryan Reynolds and Blake Lively never fail to be one of the most adorable couples around. Having recently revealed that they're expecting their third child together, Reynolds and Lively continue to be cuter than ever. And in a new Instagram Story , Reynolds shared the sweetest photo taken with his wife, as she visited him on the set of his latest movie, Free Guy, in Boston. Along with a Back to the Future GIF, and the quote "Great Scott!" from the movie, Reynolds and Lively posed in front of a very familiar looking clock tower : View this post on Instagram #NEW via @vancityreynolds instagram story! 💕 #blakelively #couplegoals @vancityreynolds @blakelively A post shared by blake lively australia ✨💫🌟⚡️ (@blakelivelyaustralia) on Jun 23, 2019 at 2:12am PDT The married couple looked as loved-up as ever as they posed in front of the town hall building, reminiscent of one of the key locations in Back to the Future , with Lively nuzzling into her husband's neck. It was just last month that the two performers revealed that they are expecting their third child together. Supporting her husband on the red carpet of his latest movie, Pokémon Detective Pikachu , Lively channeled the film's lead character by wearing a bright yellow $670 Retrofête gown , which also debuted her baby bump. Photo credit: Steven Ferdman - Getty Images Photo credit: . ('You Might Also Like',) The Essential British Packing List 30 Facial Moisturizers for Every Budget We Cut Bangs on 16 Different Women With The Help of Celebrity Stylist Justine Marjan |
Are Insiders Buying REFFIND Ltd (ASX:RFN) Stock?
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We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sellREFFIND Ltd(ASX:RFN), you may well want to know whether insiders have been buying or selling.
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia Universitystudyfound that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
See our latest analysis for REFFIND
While there weren't any large insider transactions in the last twelve months, it's still worth looking at the trading.
The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
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.
For a common shareholder, it is worth checking how many shares are held by company 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 30% of REFFIND shares, worth about AU$624k. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. Given that insiders also own a fair bit of REFFIND we think they are probably pretty confident of a bright future.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.
Of courseREFFIND 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. |
2019 FIFA Women's World Cup:
REIMS, France — These days when Ali Krieger needs a cup of coffee, she doesn’t linger. She knows that throngs of supporters may stop her, even thousands of miles away from the U.S. in France. Although the support is appreciated, she wants to stay in her team bubble and hyper-focused on preparing to win the Women’s World Cup. “That’s the tough part – you see a bunch of our fans and supporters, which has been incredible, but it’s a bit tough to move around freely and be normal,” Krieger says. “I haven’t walked around too much. If so, it’s just been to grab a cup of coffee and walk back – or sprint back.” To be sure, that is not a problem that most teams in this World Cup have as the United States’ uncommon support continues to set the bar for the non-host countries competing in France. The Americans have played to packed stadiums everywhere they’ve gone, and according to FIFA, Americans make up the largest contingent of fans visited from outside of France for the World Cup. As of this week, 130,905 of the tournament’s tickets have been allocated to Americans, which is the second-most behind France and more than the rest of the countries in the World Cup combined. “I’ve actually been really surprised – I didn’t expect this many Americans to come over,” says Kelley O’Hara. “The stadiums have been jam-packed for us and just full of American support. Walking around the streets and seeing people in jerseys and in USA gear has been really cool.” Megan Rapinoe and the USWNT have seen overwhelming support from the American fans in France. (Getty) For some of those fans, it has been years in the making to get here to France and experience this World Cup. Disappointed that they had missed the U.S. win the World Cup in Canada when the tournament was in their own backyard, Liisa Harkins, 32, and MacKenzie Hanna, 34, of Vail, Colorado had been saving up for years. They will be following the USWNT as far as they get through the World Cup and all the way to final. While in Paris, the atmosphere around the tournament was subdued, they said, but in other cities, it has felt like Americans have taken over. "We were surprised how in Paris it doesn’t seem like it knows what’s going on," Harkins said before the U.S. faced Chile. “In Reims, they cared about it — it was everywhere and that felt incredible to be there and have the whole town support it,” Hanna added. "It seemed like the whole town was flooded with Americans while we were there,” Harkins said. Now the Americans are back in Reims and it has been a boost for local businesses. Ahead of the USA’s opening match of the group stage in Reims, every hotel in the city was sold out with popular travel websites listing no rooms available. By Sunday night, the day before the USA’s round of 16 match against Spain, Reims was listed as being 97 percent booked on one popular travel website. Story continues Kelley O'Hara posed for a picture with fans after the Chile match. There's been no shortage of opportunities for the USWNT to do so at the World Cup. (Getty) Although it’s harder for fans to come to France than it was to head north of the border in 2015 to Canada, where the drive was relatively inexpensive, American interest in this World Cup is booming. FOX Sports, the English-language broadcaster of the tournament in the U.S., has seen ratings on a record pace. More Americans have tuned into this year’s group stage games for the U.S. than they did four years ago, despite the 2015 World Cup being in the same time zone as the American audience. FOX and FS1 averaged 916,000 viewers throughout this group stage, which is 6 percent higher than the 2015 Women’s World Cup and 73 percent above the 2011 Women’s World Cup. For many fans who made the trip to France, it was a chance to make up for having missed the USA’s thrilling victory in Canada four years. "The last World Cup in Canada we really wanted to go but we didn’t plan ahead,” said 20-year-old Michael Lee from Las Vegas. “But we made a deal that if this was in a place we wanted to go, we’d go.” “The minute it was announced it would be France, we were like ‘OK, we’re going,’” said his mom, Wendy Lee, 47. While the Americans are dominant and considered favorites to win, the players believe that their fan support gives them an extra edge. “Fans are coming from all over the world just to see us,” Krieger says. “We run into our American fans on the streets when were out and they’re telling us where they’re from. And its just for one game – they’re flying all the way France to watch us play. It is so incredible and inspiring.” More from Yahoo Sports: Is this the best USWNT of all time? One player says yes Morgan, Ertz expected to play for U.S. against Spain LaVar Ball talks again, makes ’First Take’ drama worse Sources: UConn move to the Big East inevitable View comments |
Did REFFIND Ltd (ASX:RFN) Insiders Buy Up More 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 we'll take a look at whether insiders have been buying or selling shares inREFFIND Ltd(ASX:RFN).
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 logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'
View our latest analysis for REFFIND
While there weren't any large insider transactions in the last twelve months, it's still worth looking at the trading.
You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at thisfreelist of companies. (Hint: insiders have been buying them).
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that REFFIND insiders own 30% of the company, worth about AU$624k. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest REFFIND insiders are well aligned, and that they may think the share price is too low. To put this in context, take a look at how a company has performed in the past. You can accessthisdetailed graphof past earnings, revenue and cash flow.
But note:REFFIND 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. |
Lizzo Reveals Why She's 'So Excited' to Play for 'Her People' at the BET Awards (Exclusive)
Lizzo is ready to take the 2019 BET Awards by storm! Ahead of the show on Sunday, ET's Kevin Frazier caught up with the 31-year-old singer on the red carpet and she couldn't help but gush about having the opportunity to take the stage at the annual event. "This is a big deal to me because I've been doing music for a long a** time," Lizzo, wearing a custom House of Holland wood grain look, said. "Like, I've been putting music out for, like, the last 10 years and playing shows. But to play for black people, my people... I've been making music as a big black woman for big black women." "And so now this just shows that my music is finally reaching the black community and I'm just so excited to just share with my people today," she added. Despite her long history in the music business, the last year was a breakout one for Lizzo, which culminated with the April release of her major label debut, Cuz I Love You. "I feel like the world is ready to love themselves. The world is ready for self-love. That's what my music is all about," she said of her blockbuster year. "My music is all about positivity. The world is ready for positivity. I just remained true to myself and now the world is ready for Lizzo." Even with the recent release of her album, fans are already ready for new music from the "Juice" singer. "I just put out an album! Damn!" Lizzo quipped of if she's working on new tracks. "I've been doing some things. I've been doing something strange for a little piece of change, aka going in the studio and making music," she said with a laugh. "I do have some new stuff coming, but I just need to slow down. I'm playing shows every 13 seconds. B***h, I'm about to go play a show right now." As for what's next for Lizzo, she only had one thought in mind: "World domination." RELATED CONTENT: BET Awards 2019: Everything You Need to Know Ahead of the Show Story continues BET Awards 2019: Watch ET Live on the Red Carpet Lizzo Reveals Which ‘Fine’ Young Musician Has Joined Her Fandom (Exclusive) Related Articles: Hollywood Bikini Bods Over 40 Biggest Celebrity Breakups of 2019 -- So Far! Celebrities in Their Underwear |
Best of Bitcoin & Tether Combined? 10 Libra Whitepaper Takeaways
Facebook'sLibra cryptocurrencywhitepaper dropped this week, sending shockwaves through the Bitcoin and altcoin community.
Is Libra the thing that pulls blockchain kicking and screaming into the mainstream, for the benefit of one and all? Or is it the final nail in the coffin of a cryptocurrency experiment just a decade old?
Here are 10 key takeaways from the newly releasedLibra whitepaper.
While plans for Libra involve the eventual setup of a decentralized governance model, it’s starting with several “founding members." Those includeMastercard,Visa,Facebook,PayPal,eBay, Bitcoin exchange giantCoinbase, and more.
By 2020, the team hopes to have set up the Libra Association - a community-driven entity which oversees the blockchain’s development.
Read the full story on CCN.com. |
A nurse was beaten unconscious. Now, more workers attacked at Iowa mental health facility
DES MOINES, Iowa – At least four state employees have been injured in violent outbursts from patients at the Independence Mental Health Institute in the past two weeks. It’s the same facility that made headlines in May after nurse Tina Suckow spoke publicly about being beaten unconscious and ultimately removed from the state’s payroll for what she contends was “not healing quickly enough.” The latest assaults include a nurse punched in the nose and three residential treatment workers who sustained head or neck injuries from patient attacks, according to information from the American Federation of State, County and Municipal Employees. The Independence Mental Health Institute Thursday, April 11, 2019. The nurse initially gave two weeks' notice after the attack, but she rendered her resignation immediate after she was left – during the same June 6 shift – to work in the sex offender unit by herself while coworkers responded to another emergency, AFSCME said. Homosexuality was labeled illness in 50s: Now psychoanalysts are apologizing At least one of the other injured employees is on workers’ compensation while being treated for injuries sustained in one of the attacks, the union said. “There is a safety crisis taking place for the employees and the state of Iowa is showing no urgency to address it,” said Danny Homan, president of the American Federation of State, County and Municipal Employees Iowa Council 61. Hand out photos show injuries Tina Suckow suffered while working as a nurse at the Independence Mental Health Institute. The basic facts about the cases outlined by the union were not contested by Matt Highland, a spokesman for the Iowa Department of Human Services. Highland said workplace injuries are down at the facility compared to the prior year, but he did not respond Thursday to a request for safety data. The 146-year-old institute serves about 60 adults and children who are considered to have among the most serious or complex psychiatric needs in the state. The patients oftentimes have been expelled from or denied entry into privately owned care facilities because of medical or behavioral issues. 'A mental health crisis': 3 NYPD officers die by suicide in 10 days DHS employees are provided training to avert or deescalate situations when patients become violent. Treatment provided to aggressive patients is frequently reviewed to help reduce incidents of violence, Highland said. “Unfortunately, due to the nature of the work, injuries do occur,” he said. Hand out photos show injuries Tina Suckow suffered while working as a nurse at the Independence Mental Health Institute. Highland refuted an assertion from AFSCME that positions are being left unfilled at the institute. On average 23 of the 25 registered nurse positions, 10 of 12 licensed nurse practitioners and 52 of 55 resident treatment worker positions have been filled in the current fiscal year, he said. Story continues There were four registered nurse vacancies and one residential treatment worker vacancy at the institute as of Tuesday, Highland said. This article originally appeared on Des Moines Register: A nurse was beaten unconscious. Now, more workers attacked at Iowa mental health facility View comments |
Oil Price Fundamental Weekly Forecast – Gains Could Be Limited with US Preparing to Negotiate With Iran
The same factors that drove U.S. West Texas Intermediate and international-benchmark Brent crude oil futures higher last week will be at the forefront this week so traders should brace for heightened volatility and expanded trading ranges. The factors include the U.S. Dollar, U.S.-China trade relations, U.S. inventories and the escalating conflict between the U.S. and Iran.
Last week,August WTI crude oilsettled at $57.43, up $4.66 or +8.83% andAugust Brent crude oilclosed at $65.20, up $3.19 or +4.89%.
Investors are pricing in a 100% chance of a Fed rate cut in late July, and others to follow in September and December. This is driving the U.S. Dollar sharply lower against a basket of major currencies. A weaker dollar tends to increase foreign demand for dollar-denominated gold, which is supportive for higher prices.
Will they or won’t they meet? That is the question some crude oil traders are asking this week. The “they” refers to U.S. President Trump and China President Xi Jinping.
Last week, Trump said that teams from the two sides would begin preparations for the leaders to sit down at the G20 summit in Osaka, Japan. China, which previously declined to say whether the two leaders would meet, confirmed the get-together.
White House officials declined to go into detail about the preparations or expected outcomes of the talks in Japan, but both sides reiterated long-held positions: U.S. officials called for structural changes in the Chinese economy and in how Beijing treats U.S. businesses; China called for dialogue instead of expensive tariffs.
Positive developments from the talks should be bullish for crude oil because they could help turn around the global economy, leading to increased demand.
Last week, the U.S. Energy Information Administration (EIA) reported that U.S. crude supplies fell by 3.1 million barrels for the week-ended June 14. That followed two consecutive weeks of gains. Gasoline and distillate inventories also fell. This could be positive if the trend continues this week.
According to the American Petroleum Institute (API), the net build in inventories this year is 34.02 million barrels for the 25-week reporting period so far this year. Bullish traders would like to see this figure start to drop.
Last week, the key issues driving prices higher were Iran’s shooting down of a U.S. drone over international waters, and Trump’s last minute cancellation of an attack on Iran.
Over the weekend, President Trump said the United States would impose “major additional sanctions” against Iran on Monday, after calling off military strikes against the Islamic Republic over concerns about the loss of life.
The Trump administration also said over the weekend that the United States is prepared to negotiate with Iran without preconditions. Trump, when asked whether he had conditions for talking with Iran, said “not as far as I’m concerned, no preconditions,” though he reiterated that his administration expected Iran to discuss its nuclear program.
Trump’s position was reiterated by Secretary of State Mike Pompeo as he prepared to depart for the Middle East.
“We’re prepared to negotiate with no preconditions,” Pompeo told reporters Sunday. “I am confident that at the very moment they are ready to engage with us, we will be able to begin these conversations.”
Vice President Mike Pence added, “Iran needs to understand we’ll never allow them to obtain a nuclear weapon and we will not allow them to continue to show violence across this region.’
Gains could be limited if traders decide to take the U.S.-Iran military conflict premium off the table, at least temporarily. The G-20 meeting between Trump and Xi will probably take place over the week-end so this won’t be an issue during the week unless the meeting is cancelled.
If there is any inter-week volatility then it will likely be fueled by the API report late Tuesday and the EIA inventories report on Wednesday. Any reaction to the dollar is likely to be small.
Thisarticlewas originally posted on FX Empire
• Gold Price Forecast – Gold markets continue to grind higher
• E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – June 24, 2019 Forecast
• Forex Daily Recap – Fiber Gained, Shrugging over Dovish ECB Stances
• Natural Gas Price Forecast – Natural Gas markets rally to kick off week
• Gold Price Prediction – Prices Soar into Extreme Overbought Levels
• USD/JPY Price Forecast – US dollar still look soft |
Is Leyou Technologies Holdings Limited's (HKG:1089) ROE Of 8.8% Impressive?
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While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. By way of learning-by-doing, we'll look at ROE to gain a better understanding of Leyou Technologies Holdings Limited (HKG:1089).
Our data showsLeyou Technologies Holdings has a return on equity of 8.8%for the last year. One way to conceptualize this, is that for each HK$1 of shareholders' equity it has, the company made HK$0.088 in profit.
See our latest analysis for Leyou Technologies Holdings
Theformula for ROEis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for Leyou Technologies Holdings:
8.8% = US$20m ÷ US$231m (Based on the trailing twelve months to December 2018.)
Most know that net profit is the total earnings after all expenses, but the concept of shareholders' equity is a little more complicated. It is all the money paid into the company from shareholders, plus any earnings retained. Shareholders' equity can be calculated by subtracting the total liabilities of the company from the total assets of the company.
ROE measures a company's profitability against the profit it retains, and any outside investments. The 'return' is the amount earned after tax over the last twelve months. A higher profit will lead to a higher ROE. So, all else being equal,a high ROE is better than a low one. Clearly, then, one can use ROE to compare different companies.
By comparing a company's ROE with its industry average, we can get a quick measure of how good it is. Importantly, this is far from a perfect measure, because companies differ significantly within the same industry classification. You can see in the graphic below that Leyou Technologies Holdings has an ROE that is fairly close to the average for the Entertainment industry (8.6%).
That's neither particularly good, nor bad. ROE tells us about the quality of the business, but it does not give us much of an idea if the share price is cheap. If you like to buy stocks alongside management, then you might just love thisfreelist of companies. (Hint: insiders have been buying them).
Virtually all companies need money to invest in the business, to grow profits. 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.
Although Leyou Technologies Holdings does use debt, its debt to equity ratio of 0.19 is still low. I'm not impressed with its ROE, but the debt levels are not too high, indicating the business has decent prospects. Conservative use of debt to boost returns is usually a good move for shareholders, though it does leave the company more exposed to interest rate rises.
Return on equity is one way we can compare the business quality of different companies. Companies that can achieve high returns on equity without too much debt are generally of good quality. 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.
Having said that, while ROE is a useful indicator of business quality, you'll have to look at a whole range of factors to determine the right price to buy a stock. The rate at which profits are likely to grow, relative to the expectations of profit growth reflected in the current price, must be considered, too. Check the past profit growth by Leyou Technologies Holdings by looking at thisvisualization of past earnings, revenue and cash flow.
If you would prefer check out another company -- one with potentially superior financials -- then do not miss thisfreelist of interesting companies, 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. |
Estimating The Fair Value Of Kolte-Patil Developers Limited (NSE:KOLTEPATIL)
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Does the June share price for Kolte-Patil Developers Limited (NSE:KOLTEPATIL) 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. It may sound complicated, but actually it is quite simple!
We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in theSimply Wall St analysis model.
View our latest analysis for Kolte-Patil Developers
We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. 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 (\u20b9, Millions)", "2019": "\u20b92.15k", "2020": "\u20b92.25k", "2021": "\u20b92.37k", "2022": "\u20b92.51k", "2023": "\u20b92.67k", "2024": "\u20b92.86k", "2025": "\u20b93.06k", "2026": "\u20b93.28k", "2027": "\u20b93.51k", "2028": "\u20b93.77k"}, {"": "Growth Rate Estimate Source", "2019": "Est @ 3.03%", "2020": "Est @ 4.39%", "2021": "Est @ 5.34%", "2022": "Est @ 6%", "2023": "Est @ 6.47%", "2024": "Est @ 6.79%", "2025": "Est @ 7.02%", "2026": "Est @ 7.18%", "2027": "Est @ 7.29%", "2028": "Est @ 7.37%"}, {"": "Present Value (\u20b9, Millions) Discounted @ 18.39%", "2019": "\u20b91.82k", "2020": "\u20b91.60k", "2021": "\u20b91.43k", "2022": "\u20b91.28k", "2023": "\u20b91.15k", "2024": "\u20b91.04k", "2025": "\u20b9937.20", "2026": "\u20b9848.41", "2027": "\u20b9768.84", "2028": "\u20b9697.23"}]
Present Value of 10-year Cash Flow (PVCF)= ₹11.57b
"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 (7.6%) 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 18.4%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = ₹3.8b × (1 + 7.6%) ÷ (18.4% – 7.6%) = ₹37b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= ₹₹37b ÷ ( 1 + 18.4%)10= ₹6.91b
The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is ₹18.48b. In the final step we divide the equity value by the number of shares outstanding.This results in an intrinsic value estimate of ₹242.86. Compared to the current share price of ₹206.9, the company appears about fair value at a 15% discount to where the stock price trades currently. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out.
We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Kolte-Patil Developers 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 18.4%, which is based on a levered beta of 1.261. 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 Kolte-Patil Developers, I've compiled three further factors you should further examine:
1. Financial Health: Does KOLTEPATIL 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 KOLTEPATIL? 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 NSE 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. |
Should You Be Impressed By Sudarshan Chemical Industries Limited's (NSE:SUDARSCHEM) ROE?
Want to participate in a short research study ? Help shape the future of investing tools and you could win a $250 gift card! Many investors are still learning about the various metrics that can be useful when analysing a stock. This article is for those who would like to learn about Return On Equity (ROE). We'll use ROE to examine Sudarshan Chemical Industries Limited ( NSE:SUDARSCHEM ), by way of a worked example. Our data shows Sudarshan Chemical Industries has a return on equity of 28% for the last year. That means that for every ₹1 worth of shareholders' equity, it generated ₹0.28 in profit. Check out our latest analysis for Sudarshan Chemical Industries How Do I Calculate Return On Equity? The formula for ROE is: Return on Equity = Net Profit ÷ Shareholders' Equity Or for Sudarshan Chemical Industries: 28% = ₹1.6b ÷ ₹5.7b (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 all the money paid into the company from shareholders, plus any earnings retained. The easiest way to calculate shareholders' equity is to subtract the company's total liabilities from the total assets. What Does Return On Equity Signify? ROE looks at the amount a company earns relative to the money it has kept within the business. The 'return' is the amount earned after tax over the last twelve months. The higher the ROE, the more profit the company is making. So, all else being equal, a high ROE is better than a low one . That means it can be interesting to compare the ROE of different companies. Does Sudarshan Chemical Industries Have A Good Return On Equity? By comparing a company's ROE with its industry average, we can get a quick measure of how good it is. The limitation of this approach is that some companies are quite different from others, even within the same industry classification. As is clear from the image below, Sudarshan Chemical Industries has a better ROE than the average (13%) in the Chemicals industry. Story continues NSEI:SUDARSCHEM Past Revenue and Net Income, June 24th 2019 That's what I like to see. In my book, a high ROE almost always warrants a closer look. For example you might check if insiders are buying shares. The Importance Of Debt To Return On Equity Virtually all companies need money to invest in the business, to grow profits. The cash for investment can come from prior year profits (retained earnings), issuing new shares, or borrowing. In the 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. In this manner the use of debt will boost ROE, even though the core economics of the business stay the same. Combining Sudarshan Chemical Industries's Debt And Its 28% Return On Equity Although Sudarshan Chemical Industries does use debt, its debt to equity ratio of 0.53 is still low. When I see a high ROE, fuelled by only modest debt, I suspect the business is high quality. Judicious use of debt to improve returns can certainly be a good thing, although it does elevate risk slightly and reduce future optionality. In Summary Return on equity is one way we can compare the business quality of different companies. Companies that can achieve high returns on equity without too much debt are generally of good quality. If two companies have the same ROE, then I would generally prefer the one with less debt. 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. You can see how the company has grow in the past by looking at this FREE detailed graph of past earnings, revenue and cash flow . But note: Sudarshan Chemical Industries may not be the best stock to buy . So take a peek at this free list of interesting companies with high ROE and low debt. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com . This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Cardi B Gives Husband Offset a Lap Dance During Sexy 2019 BET Awards Performance
Cardi B knows how to slay! The 26-year-old rapper set the tone for the 2019 BET Awards on Sunday night as the crowd got hyped with a sexy, high-energy opening number. To oohs and aahs from the watching audience, Cardi gave her husband, Offset, a sexy lap dance on stage while performing her hit track, "Press." Cardi looked incredible in a sparkly green look as she danced on top of her hubby, before completing the mind-blowing opening performance with a choreographed dance alongside incredible backup dancers. That's The Way You Open Up The BET Awards With @iamcardib And @OffsetYRN #BETAwards pic.twitter.com/vnnqqtMRGK — Jared Coalmon (@jared_coalmon93) June 24, 2019 CARDI B SLAYED THE BET AWARDS! 🗣 #BETAwards pic.twitter.com/sEptaAJWNA — bardi b. (@bardicalis) June 24, 2019 Paras Griffin/VMN19/Getty Images for BET Cardi teased her performance hours before the show. "Sooo I'm opening the show today and my anxiety is killing me. Wish me luck guys. BET AWARDS," she tweeted on Sunday morning. Sooo I’m opening the show today and my anxiety is killing me .Wish me luck guys .BET AWARDS — iamcardib (@iamcardib) June 23, 2019 The mom of one is nominated for Best Collaboration for "Please Me" with Bruno Mars and "I Like It" with J Balvin and Bad Bunny, Best Female Hip-Hop Artist, Video of the Year for "Please Me" and "Money," Album of the Year for Invasion of Privacy and the 2019 Coca-Cola Viewers' Choice Award for "I Like It." Story continues It's been a week of ups and downs for Cardi, who was indicted by a grand jury in Queens, New York, on Friday, connected to misdemeanor charges stemming from an August altercation at a strip club. The rapper is clearly focusing on the positive and putting on a show for her fans. See more on Cardi in the video below. RELATED CONTENT: Cardi B Indicted on Assault Charges Stemming From Strip Club Altercation Cardi B Performs in a Bathrobe After Her Costume Rips Onstage Cardi B Says She’s Never Getting Plastic Surgery Again Related Articles: Hollywood Bikini Bods Over 40 Biggest Celebrity Breakups of 2019 -- So Far! Celebrities in Their Underwear |
A Blockchain System for Azerbaijan’s Digital Economy
Azerbaijan has been a hotbed for a series of ambitious fintech-related announcements over the past several months, as the nation’s authorities were apparently moving to implement a series of innovative technological solutions in banking and e-government systems.
Repeated statements by government representatives suggested that at least part of the program relied on blockchain infrastructure. Most recently, as Cointelegraphreported, the chairman of Azerbaijan’s State Customs Committee revealed plans to implement blockchain technology to build an online-accessible cargo transportation database. Earlier in May, a high-ranking official for the Central Bank of Azerbaijan (CBA), speaking at theFintexsummit in Baku,mentionedthe forthcoming implementation of a “blockchain system and artificial intelligence in the banking sector.” How are these disparate elements supposed to work together, and what is the scope of these blockchain-based solutions’ intended uses?
The snippets of news about a massive government initiative involving blockchain technology being underway in Azerbaijan began to pop up here and there back in October 2018. Farid Osmanov, CBA’s chief information officer, firstannouncedthe five-year program for the digital transformation of the economy — including a partnership withIBMon a distributed ledger system to be used in the banking sector — at the Azerbaijan-Germany Business Forum on Energy and ICT. In November, chairman of the Azerbaijani Internet Forum, Osman Gunduz,toldthe press that a few other state agencies were on the course to implement distributed ledger-based solutions in areas such as housing, utilities and even the court system to facilitate record-keeping and notary services.
While it became clear from early statements that the pilot blockchain system was to be built in collaboration with IBM on Hyperledger Fabric, it was not until April 2019, when mediareportsbegan to surface, that a branch of another big-name technology firm — Lenovo Professional Services — was also involved in the project on the hardware side. With two major industry players on board, it became clear that a comprehensive state program is at work here.
According to Nijat Asadli, manager of Azerbaijan’s Digital Trade Hub (DTH), there are three main areas in which the government seeks to boost innovation by deploying digital infrastructure: the DTH itself, the e-Government portal and central bank operations. The DTH is an electronic public-private partnership platform designed to facilitate the development of e-commerce in Azerbaijan and the broader region. It connects a number of governmental agencies, banks and private companies to provide a range of domestic, international and electronic services for businesses and private citizens alike.
One of the solutions available on the DTH platform is called the Single Export Application. It allows local producers to obtain all the documentation they need to hit the international markets — including licenses, permissions, customs declarations and even to apply for a government export subsidy. Another unique service available through DTL, Asadli told Cointelegraph, is electronic and mobile residency:
“Azerbaijan is the second country in the World after Estonia to offer electronic residency and first ever to offer a mobile residency. This service allows non-residents to establish a company online within a day in Azerbaijan and use all of the e-Services in the country. All they require is a smart phone — and they can start a location-independent business in Azerbaijan.”
The e-Government portal, integrated with all the user-facing government organizations, provides online access to more than 400 additional governmental services.
It has to be noted that both the DTH and the e-Government portal are built on open-source X-Road technology, a data exchange layer (DXL) solution that enables organizations to communicate over the internet and offer online services. Originally developed in Estonia in the early 2000s, X-Road underpins the Baltic country’s e-government infrastructure, as well asintegrationwith neighboring Finland’s data exchange layer.
While X-Road developersdescribeit as a “distributed integration layer between information systems,” which led to speculations that it relies on blockchain technology internally, it is, in fact, not the case. As the Nordic Institute for Interoperability Solutions (NIIS), the organization responsible for developing the X-Road core, went on to explain, both blockchain and X-Road use cryptographic hash functions for linking data items to each other, otherwise they “serve very different purposes and use cases.” Each X-Road server maintains its own message log archive and stores it locally; other participants of the ecosystem, unlike the nodes on a distributed ledger network, do not have access to those archives.
Right now, the only digital infrastructure initiative of the Azerbaijani government that relies on blockchain technology is the one that the nation’s central bank is overseeing. As the CBA’s chief information officer, Farid Osmanov, told Cointelegraph in an email, the government enacted a document in September 2018 entitled the State Program on Expansion of Digital Payments for 2018-2020 — a roadmap for coordinating technological advancements in digital banking. According to Osmanov:
“By implementing new financial technologies in the market, they believe they can boost the cashless economy and extend digital services, making them transparent and available for citizens.”
As a key condition to enable digital banking services, the program outlined a “private blockchain framework with trusted nodes, permissioned access and consensus services” for user identification.
The pilot project that the CBA embarked on to advance the goals of the state program has three prongs: the development of a strategic digital innovation plan, the creation of the blockchain-based digital identification system, and the deployment of the blockchain hardware. Lenovo was summoned to advance the latter goal in October 2018. According to Osmanov, the infrastructure that they put up relies on some of the company’s most innovative tech:
“The solution uses Lenovo ThinkAgile HX7820 Appliance software and hardware, which is the first 4-socket HX system installation in the world. The solution operates on the latest Intel Xeon Scalable processors from the Skylake generation and Acropolis OS from Nutanix is chosen as the virtualization platform. This solution is based on the RDMA technology, and this installation was the first in the world, where RDMA configured in productive environment.”
The open-sourceHyperledger Fabric protocol, hosted by the Linux Foundation, serves as the software foundation for the identification system. Having used Hyperledger extensively to develop numerous corporate blockchains, IBM is now contributing expertise to the Azerbaijani government’s initiative. Its sponsors expect that the system will see full operational implementation by the end of 2019.
The main use of the prospective identification system will be in enabling citizens and businesses to deliver their personal data to banks and credit organizations in the form of digitally signed documents. Essentially, the blockchain system will automate the Know Your Customer (KYC) process, all the while dramatically decreasing processing time. The digital identification system will be incorporated into the e-Government system, and the open API architecture will allow banks to integrate it with their digital infrastructures through a standardized process.
Another remarkable efficiency that the system is expected to introduce will be a high level of user control over what data — and how much — they would like to share with financial organizations, Osmanov noted:
“Banks will have access to required personal data only after customer’s confirmation, so individuals and legal entities can personally control and authorize data sharing.”
The central bank’s CIO also mentioned that the authorities recognize the need for an improved legislative framework that comes with such massive technological developments. The CBA is already doing its research on international best practices and benchmarks, and is engaging with other state agencies in a conversation regarding regulatory improvements that the new system’s advent could evoke.
With the new digital identification system on the way, Azerbaijan is about to take its place among the ranks of countries that have implemented permissioned blockchain solutions to improve the efficiency of a certain aspect of government operations. The expansion of this effort might well see the state’s performance in other domains of record-keeping — like the customs database announced recently — benefit from the introduction of distributed ledger technology. Still, yet another adherent of the “blockchain before crypto” approach, the nation is only ready to go so far: According to a November 2018statementby the CBA’s first chairman, issuing a state-backed digital currency is out of the question for Azerbaijan.
• Microsoft and Ethereum Foundation Swell the Hyperledger Ranks Amid Growing Cross-Industry Blockchain Collaboration
• Visa Set to Join the Expanding Field of Blockchain-Based International Payment Providers
• IBM Announces New Multicloud Update to Blockchain
• IBM, Hyperledger Blockchain ID System for Banks Launches in Brazil |
What Investors Should Know About Leeport (Holdings) Limited's (HKG:387) Financial Strength
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Investors are always looking for growth in small-cap stocks like Leeport (Holdings) Limited (HKG:387), with a market cap of HK$274m. However, an important fact which most ignore is: how financially healthy is the business? Evaluating financial health as part of your investment thesis is vital, as mismanagement of capital can lead to bankruptcies, which occur at a higher rate for small-caps. Let's work through some financial health checks you may wish to consider if you're interested in this stock. However, this is just a partial view of the stock, and I recommend youdig deeper yourself into 387 here.
Over the past year, 387 has ramped up its debt from HK$143m to HK$203m , which includes long-term debt. With this growth in debt, the current cash and short-term investment levels stands at HK$134m , ready to be used for running the business. Its negative operating cash flow means calculating cash-to-debt wouldn't be useful. As the purpose of this article is a high-level overview, I won’t be looking at this today, but you can assess some of 387’soperating efficiency ratios such as ROA here.
Looking at 387’s HK$446m in current liabilities, it appears that the company arguably has a rather low level of current assets relative its obligations, with the current ratio last standing at 0.98x. The current ratio is the number you get when you divide current assets by current liabilities.
387 is a relatively highly levered company with a debt-to-equity of 46%. This is somewhat unusual for small-caps companies, since lenders are often hesitant to provide attractive interest rates to less-established businesses. We can test if 387’s debt levels are sustainable by measuring interest payments against earnings of a company. Ideally, earnings before interest and tax (EBIT) should cover net interest by at least three times. For 387, the ratio of 2.55x suggests that interest is not strongly covered, which means that lenders may be more reluctant to lend out more funding as 387’s low interest coverage already puts the company at higher risk of default.
387’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 lack of liquidity raises questions over current asset management practices for the small-cap. I admit this is a fairly basic analysis for 387's financial health. Other important fundamentals need to be considered alongside. I suggest you continue to research Leeport (Holdings) to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for 387’s future growth? Take a look at ourfree research report of analyst consensusfor 387’s outlook.
2. Historical Performance: What has 387'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.
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. |
Do Institutions Own Shares In Aditya Birla Fashion and Retail Limited (NSE:ABFRL)?
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The big shareholder groups in Aditya Birla Fashion and Retail Limited (NSE:ABFRL) have power over the company. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Companies that have been privatized tend to have low insider ownership.
With a market capitalization of ₹163b, Aditya Birla Fashion and Retail is a decent size, so it is probably on the radar of institutional investors. In the chart below below, we can see that institutional investors have bought into the company. Let's take a closer look to see what the different types of shareholder can tell us about ABFRL.
View our latest analysis for Aditya Birla Fashion and Retail
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.
Aditya Birla Fashion and Retail already has institutions on the share registry. Indeed, they own 28% of the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Aditya Birla Fashion and Retail's earnings history, below. Of course, the future is what really matters.
We note that hedge funds don't have a meaningful investment in Aditya Birla Fashion and Retail. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
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 information suggests that Aditya Birla Fashion and Retail Limited insiders own under 1% of the company. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own ₹1.3b worth of shares. It is good to see board members owning shares, but it might be worth checkingif those insiders have been buying.
With a 15% ownership, the general public have some degree of sway over ABFRL. 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.
With an ownership of 9.1%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.
It seems that Private Companies own 30%, of the ABFRL stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
It appears to us that public companies own 17% of ABFRL. 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.
It's always worth thinking about the different groups who own shares in a company. But to understand Aditya Birla Fashion and Retail better, we need to consider many other factors.
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. |
Bitcoin Eases After Rising Above $11,000 Level
Investing.com - Bitcoin eased slightly on Monday after rising to its highest levels in 18 months amid the view that public acceptance of digital currencies is on the rise after Facebook (NASDAQ:FB) announced that it is planning its own digital currency, Libra.
Bitcoin rose as high as $11,344.1, the most since March 2018, before pulling back to $10,706 by 12:13 PM ET (04:13 GMT).
Other major cryptocurrencies traded slightly lower, with Ethereum down 3.43% to $303.88, XRP sliding 5.31% to $0.45808, and Litecoin slipping 4.42% to $135.63.
The gains in Bitcoin are reminiscent of the 2017 rally, which saw the world's largest digital currency rise to record highs of around $20,000 on some exchanges, before a steep selloff which saw it drop to just over $3,000.
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What Should Investors Know About CK Asset Holdings Limited's (HKG:1113) Earnings Trajectory?
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The latest earnings announcement CK Asset Holdings Limited (HKG:1113) released in April 2019 confirmed that the business gained from a robust tailwind, leading to a double-digit earnings growth of 33%. Below is a brief commentary on my key takeaways on how market analysts perceive CK Asset Holdings's earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
Check out our latest analysis for CK Asset Holdings
Analysts' outlook for the coming year seems pessimistic, with earnings declining by a double-digit -30%. Over the medium term, earnings are expected to continue to be below today's level, with a decline of -36% in 2021, eventually reaching HK$26b in 2022.
Although it is useful to understand the growth each year relative to today’s level, it may be more valuable determining the rate at which the company is growing every year, on average. The pro of this method is that we can get a better picture of the direction of CK Asset Holdings's earnings trajectory over the long run, irrespective of near term fluctuations, fluctuate up and down. To compute this rate, I've inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is -15%. This means, we can expect CK Asset Holdings will chip away at a rate of -15% every year for the next few years.
For CK Asset Holdings, there are three relevant aspects you should further research:
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 1113 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 1113 is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 1113? 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. |
The Klein Law Firm Reminds Investors of Class Actions on Behalf of Shareholders of JMIA, AOS and CLDR
NEW YORK, NY / ACCESSWIRE / June 23, 2019 /The Klein Law Firm announces that class action complaints have been filed on behalf of shareholders of the following companies. If you suffered a loss you have until the lead plaintiff deadline to request that the court appoint you as lead plaintiff.
Jumia Technologies AG (JMIA)Class Period: Purchasers of American Depositary Shares between April 12, 2019 and May 9, 2019Lead Plaintiff Deadline: July 15, 2019
Throughout the class period, Jumia Technologies AG allegedly made materially false and/or misleading statements and/or failed to disclose that: (a) Jumia had materially overstated its active customers and active merchants; (b) Jumia's representations about its orders, order cancellations, undelivered orders and returned orders lacked a sufficient factual basis and materially overstated the Company's sales; (c) Jumia failed to sufficiently disclose related party transactions; and (d) Jumia's financial statements were presented in violation of applicable accounting standards.
Get additional information about theJMIAlawsuit:http://www.kleinstocklaw.com/pslra-1/jumia-technologies-ag-loss-submission-form?id=2035&from=1
A. O. Smith Corporation (AOS)Class Period: July 26, 2016 to May 16, 2019Lead Plaintiff Deadline: July 29, 2019
The lawsuit alleges that throughout the class period, A. O. Smith Corporation made materially false and/or misleading statements and/or failed to disclose that: (a) A.O. Smith had undisclosed business connections and entanglements with UTP through which it funneled up to 75% of its China product sales; (b) A.O. Smith had used UTP to engage in channel stuffing by artificially inflating inventories purportedly sold through distributors that were not based on consumer demand, thereby approximately doubling the normal level of inventory at such distributors; (c) A.O. Smith had used its UTP relationship to artificially inflate the sales figures it reported to investors by as much as 8% and to conceal worsening sales trends that the Company was experiencing in China; (d) A.O. Smith's sales growth had been primarily in lower margin products as its higher priced products were being undercut by competition in "second-tier" Chinese cities, causing the Company to experience significant margin pressures; (e) A.O. Smith had increased its cash reserves in China to over $530 million in furtherance of its channel stuffing and sales manipulation scheme, encumbering the Company's ability to repatriate the cash or use it for capital expenditures; and (f) as a result of (a)-(e) above, A.O. Smith's business, operations, and prospects were significantly worse than publicly represented and the Company was poised for sales and earnings declines in China, its most important international market.
Get additional information about theAOSlawsuit:http://www.kleinstocklaw.com/pslra-1/a-o-smith-corporation-loss-submission-form?id=2035&from=1
Cloudera, Inc. (CLDR)Class Period: April 28, 2017 to June 5, 2019Lead Plaintiff Deadline: August 6, 2019
According to the complaint, Cloudera, Inc. allegedly made materially false and/or misleading statements and/or failed to disclose that: (i) Cloudera was finding it increasingly difficult to identify large enterprises interested in adopting the Company's Hadoop-based platform; (ii) Cloudera needed to expend an increasing amount of capital on sales and marketing activities to generate new revenues, even as new revenue opportunities were diminishing; and (iii) Cloudera had materially diminished sales opportunities and prospects and could not generate annual positive cash flows.
Get additional information about theCLDRlawsuit:http://www.kleinstocklaw.com/pslra-1/cloudera-inc-loss-submission-form?id=2035&from=1
Your ability to share in any recovery doesn't require that you serve as a lead plaintiff. There is no cost or obligation to you. If you suffered a loss during the class period and wish to obtain additional information, please contact J. Klein, Esq. by telephone at 212-616-4899 or visit the webpages provided.
J. Klein, Esq. represents investors and participates in securities litigations involving financial fraud throughout the nation. Attorney advertising. Prior results do not guarantee similar outcomes.
CONTACT:J. Klein, Esq.Empire State Building350 Fifth Avenue59th FloorNew York, NY 10118jk@kleinstocklaw.comTelephone: (212) 616-4899Fax: (347) 558-9665www.kleinstocklaw.com
SOURCE:The Klein Law Firm
View source version on accesswire.com:https://www.accesswire.com/549590/The-Klein-Law-Firm-Reminds-Investors-of-Class-Actions-on-Behalf-of-Shareholders-of-JMIA-AOS-and-CLDR |
Are Dividend Investors Making A Mistake With Delfi Limited (SGX:P34)?
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Is Delfi Limited (SGX:P34) a good dividend stock? How would you know? Dividend paying companies with growing earnings can be highly rewarding in the long term. Yet sometimes, investors buy a stock for its dividend and lose money because the share price falls by more than they earned in dividend payments.
While Delfi's 1.9% dividend yield is not the highest, we think its lengthy payment history is quite interesting. When buying stocks for their dividends, you should always run through the checks below, to see if the dividend looks sustainable.
Explore this interactive chart for our latest analysis on Delfi!
Dividends are usually paid out of company earnings. If a company is paying more than it earns, then the dividend might become unsustainable - hardly an ideal situation. So we need to form a view on if a company's dividend is sustainable, relative to its net profit after tax. In the last year, Delfi paid out 51% of its profit as dividends. A payout ratio above 50% generally implies a business is reaching maturity, although it is still possible to reinvest in the business or increase the dividend over time.
Another important check we do is to see if the free cash flow generated is sufficient to pay the dividend. Unfortunately, while Delfi pays a dividend, it also reported negative free cash flow last year. While there may be a good reason for this, it's not ideal from a dividend perspective. It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.
Remember, you can always get a snapshot of Delfi's latest financial position,by checking our visualisation of its financial health.
One of the major risks of relying on dividend income, is the potential for a company to struggle financially and cut its dividend. Not only is your income cut, but the value of your investment declines as well - nasty. For the purpose of this article, we only scrutinise the last decade of Delfi's dividend payments. The dividend has been cut by more than 20% on at least one occasion historically. During the past ten-year period, the first annual payment was US$0.02 in 2009, compared to US$0.019 last year. The dividend has shrunk at a rate of less than 1% a year over this period.
When a company's per-share dividend falls we question if this reflects poorly on either the business or management. Either way, we find it hard to get excited about a company with a declining dividend.
Given that the dividend has been cut in the past, we need to check if earnings are growing and if that might lead to stronger dividends in the future. Over the past five years, it looks as though Delfi's EPS have declined at around 18% a year. If earnings continue to decline, the dividend may come under pressure. Every investor should make an assessment of whether the company is taking steps to stabilise the situation.
To summarise, shareholders should always check that Delfi's dividends are affordable, that its dividend payments are relatively stable, and that it has decent prospects for growing its earnings and dividend. Delfi gets a pass on its dividend payout ratio, but it paid out virtually all of its cash flow as dividends. This may just be a one-off, but we'd keep an eye on this. Second, earnings per share have been in decline, and its dividend has been cut at least once in the past. Using these criteria, Delfi looks quite suboptimal from a dividend investment perspective.
Are management backing themselves to deliver performance? Check their shareholdings in Delfi inour latest insider ownership analysis.
Looking for more high-yielding dividend ideas? Try ourcurated list of dividend stocks with a yield above 3%.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Do Directors Own Mittal Life Style Limited (NSE:MITTAL) Shares?
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If you want to know who really controls Mittal Life Style Limited (NSE:MITTAL), 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 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.'
Mittal Life Style is not a large company by global standards. It has a market capitalization of ₹1.2b, which means it wouldn't have the attention of many institutional investors. Taking a look at our data on the ownership groups (below), it's seems that institutional investors have bought into the company. Let's take a closer look to see what the different types of shareholder can tell us about MITTAL.
See our latest analysis for Mittal Life Style
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.
Mittal Life Style already has institutions on the share registry. Indeed, they own 23% 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 Mittal Life Style's historic earnings and revenue, below, but keep in mind there's always more to the story.
We note that hedge funds don't have a meaningful investment in Mittal Life Style. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Our information suggests that insiders maintain a significant holding in Mittal Life Style Limited. Insiders have a ₹360m stake in this ₹1.2b business. This may suggest that the founders still own a lot of shares. You canclick here to see if they have been buying or selling.
The general public holds a 16% stake in MITTAL. 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.
Our data indicates that Private Companies hold 30%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
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 would prefer check out another company -- one with potentially superior financials -- then do not miss thisfreelist of interesting companies, backed by strong financial data.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Is Ratnamani Metals & Tubes Limited (NSE:RATNAMANI) A High Quality Stock To Own?
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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 Ratnamani Metals & Tubes Limited (NSE:RATNAMANI), by way of a worked example.
Over the last twelve monthsRatnamani Metals & Tubes has recorded a ROE of 17%. That means that for every ₹1 worth of shareholders' equity, it generated ₹0.17 in profit.
View our latest analysis for Ratnamani Metals & Tubes
Theformula for ROEis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for Ratnamani Metals & Tubes:
17% = ₹2.5b ÷ ₹15b (Based on the trailing twelve months to March 2019.)
Most know that net profit is the total earnings after all expenses, but the concept of shareholders' equity is a little more complicated. It is all the money paid into the company from shareholders, plus any earnings retained. The easiest way to calculate shareholders' equity is to subtract the company's total liabilities from the total assets.
ROE looks at the amount a company earns relative to the money it has kept within the business. The 'return' is the yearly profit. 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. The limitation of this approach is that some companies are quite different from others, even within the same industry classification. Pleasingly, Ratnamani Metals & Tubes has a superior ROE than the average (11%) company in the Metals and Mining industry.
That's what I like to see. 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.
Companies usually need to invest money to grow their profits. The cash for investment can come from prior year profits (retained earnings), issuing new shares, or borrowing. In the first 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. That will make the ROE look better than if no debt was used.
While Ratnamani Metals & Tubes does have a tiny amount of debt, with debt to equity of just 0.043, we think the use of debt is very modest. The fact that it achieved a fairly good ROE with only modest debt suggests the business might be worth putting on your watchlist. 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. A company that can achieve a high return on equity without debt could be considered a high quality business. If two companies have around the same level of debt to equity, and one has a higher ROE, I'd generally prefer the one with higher ROE.
But when a business is high quality, the market often bids it up to a price that reflects this. It is important to consider other factors, such as future profit growth -- and how much investment is required going forward. So I think it may be worth checking thisfreereport on analyst forecasts for the company.
But note:Ratnamani Metals & Tubes 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. |
What Are Analysts Saying About Ryman Healthcare Limited's (NZSE:RYM) Future?
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On 31 March 2019, Ryman Healthcare Limited (NZSE:RYM) announced its latest earnings update. Overall, it seems that analyst forecasts are fairly pessimistic, with profits predicted to drop by 9.3% next year against the past 5-year average growth rate of 11%. With trailing-twelve-month net income at current levels of NZ$326m, the consensus growth rate suggests that earnings will decline to NZ$296m by 2020. Below is a brief commentary on the longer term outlook the market has for Ryman Healthcare. Investors wanting to learn more about other aspects of the company shouldresearch its fundamentals here.
View our latest analysis for Ryman Healthcare
The 6 analysts covering RYM view its longer term outlook with a positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of RYM's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
This results in an annual growth rate of 15% based on the most recent earnings level of NZ$326m to the final forecast of NZ$463m by 2022. EPS reaches NZ$1.05 in the final year of forecast compared to the current NZ$0.65 EPS today. Margins are currently sitting at 85%, approximately the same as previous years. With analysts forecasting revenue growth of 0.40174 and RYM's net income growth expected to roughly track that, this company may add value for shareholders over time.
Future outlook is only one aspect when you're building an investment case for a stock. For Ryman Healthcare, I've put together three essential factors you should further examine:
1. Financial Health: Does it have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Future Earnings: How does Ryman Healthcare'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-Growth Alternatives: Are there other high-growth stocks you could be holding instead of Ryman Healthcare? 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. |
Dr. Reddy's Laboratories Limited (NSE:DRREDDY): What Does The Future Look Like?
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As Dr. Reddy's Laboratories Limited (NSE:DRREDDY) released its earnings announcement on 31 March 2019, it seems that analyst forecasts are fairly optimistic, as a 14% increase in profits is expected in the upcoming year, relative to the past 5-year average growth rate of -13%. Currently with trailing-twelve-month earnings of ₹19b, we can expect this to reach ₹21b by 2020. Below is a brief commentary around Dr. Reddy's Laboratories's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those keen to understand more about other aspects of the company, you canresearch its fundamentals here.
See our latest analysis for Dr. Reddy's Laboratories
The view from 34 analysts over the next three years is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of DRREDDY's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
This results in an annual growth rate of 13% based on the most recent earnings level of ₹19b to the final forecast of ₹28b by 2022. EPS reaches ₹166.92 in the final year of forecast compared to the current ₹113.28 EPS today. In 2022, DRREDDY's profit margin will have expanded from 12% to 13%.
Future outlook is only one aspect when you're building an investment case for a stock. For Dr. Reddy's Laboratories, there are three fundamental 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 Dr. Reddy's Laboratories 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 Dr. Reddy's Laboratories is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of Dr. Reddy's Laboratories? 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. |
Dr. Reddy's Laboratories Limited (NSE:DRREDDY): What We Can Expect From This Growth Stock
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Looking at Dr. Reddy's Laboratories Limited's (NSE:DRREDDY) earnings update on 31 March 2019, it seems that analyst forecasts are fairly optimistic, with profits predicted to increase by 14% next year against the past 5-year average growth rate of -13%. Currently with trailing-twelve-month earnings of ₹19b, we can expect this to reach ₹21b by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you canresearch its fundamentals here.
View our latest analysis for Dr. Reddy's Laboratories
The longer term expectations from the 34 analysts of DRREDDY is tilted towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To get an idea of the overall earnings growth trend for DRREDDY, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
This results in an annual growth rate of 13% based on the most recent earnings level of ₹19b to the final forecast of ₹28b by 2022. This leads to an EPS of ₹166.92 in the final year of projections relative to the current EPS of ₹113.28. Margins are currently sitting at 12%, 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 Dr. Reddy's Laboratories, I've compiled three relevant 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 Dr. Reddy's Laboratories 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 Dr. Reddy's Laboratories is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of Dr. Reddy's Laboratories? 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. |
Here’s What Hedge Funds Think About Boston Private Financial Holdings, Inc. (BPFH)
A market surge in the first quarter, spurred by easing global macroeconomic concerns and Powell's pivot ended up having a positive impact on the markets and many hedge funds as a result. The stocks of smaller companies which were especially hard hit during the fourth quarter slightly outperformed the market during the first quarter. Unfortunately, Trump is unpredictable and volatility returned in the second quarter and smaller-cap stocks went back to selling off. We finished compiling the latest 13F filings to get an idea about what hedge funds are thinking about the overall market as well as individual stocks. In this article we will study the hedge fund sentiment to see how those concerns affected their ownership of Boston Private Financial Holdings, Inc. (NASDAQ:BPFH) during the quarter.
IsBoston Private Financial Holdings, Inc. (NASDAQ:BPFH)the right investment to pursue these days? The best stock pickers are getting more optimistic. The number of long hedge fund positions increased by 1 recently. Our calculations also showed that BPFH isn't among the30 most popular stocks among hedge funds.BPFHwas in 14 hedge funds' portfolios at the end of March. There were 13 hedge funds in our database with BPFH holdings at the end of the previous quarter.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We're going to check out the fresh hedge fund action regarding Boston Private Financial Holdings, Inc. (NASDAQ:BPFH).
At the end of the first quarter, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of 8% from the fourth quarter of 2018. On the other hand, there were a total of 10 hedge funds with a bullish position in BPFH a year ago. With the smart money's sentiment swirling, there exists a few notable hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
According to Insider Monkey's hedge fund database, Israel Englander'sMillennium Managementhas the most valuable position in Boston Private Financial Holdings, Inc. (NASDAQ:BPFH), worth close to $14.5 million, corresponding to less than 0.1%% of its total 13F portfolio. Coming in second is Jim Simons ofRenaissance Technologies, with a $8.7 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other peers that hold long positions encompass D. E. Shaw'sD E Shaw, Mario Gabelli'sGAMCO Investorsand Ken Griffin'sCitadel Investment Group.
As aggregate interest increased, key hedge funds were leading the bulls' herd.Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, assembled the biggest position in Boston Private Financial Holdings, Inc. (NASDAQ:BPFH). Arrowstreet Capital had $1 million invested in the company at the end of the quarter. George Zweig, Shane Haas and Ravi Chander'sSignition LPalso initiated a $0.4 million position during the quarter. The other funds with brand new BPFH positions are Thomas Bailard'sBailard Incand Gavin Saitowitz and Cisco J. del Valle'sSpringbok Capital.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Boston Private Financial Holdings, Inc. (NASDAQ:BPFH) but similarly valued. We will take a look at The Buckle, Inc. (NYSE:BKE), Fluidigm Corporation (NASDAQ:FLDM), MAG Silver Corporation (NYSE:MAG), and Radius Health Inc (NASDAQ:RDUS). All of these stocks' market caps are similar to BPFH's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BKE,11,26165,-2 FLDM,19,157106,0 MAG,11,38491,-3 RDUS,22,309498,4 Average,15.75,132815,-0.25 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 15.75 hedge funds with bullish positions and the average amount invested in these stocks was $133 million. That figure was $44 million in BPFH's case. Radius Health Inc (NASDAQ:RDUS) is the most popular stock in this table. On the other hand The Buckle, Inc. (NYSE:BKE) is the least popular one with only 11 bullish hedge fund positions. Boston Private Financial Holdings, Inc. (NASDAQ:BPFH) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately BPFH wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); BPFH investors were disappointed as the stock returned 3.6% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Is Interface, Inc. (TILE) A Good Stock To Buy?
Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 750 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds' 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Interface, Inc. (NASDAQ:TILE) in this article.
Interface, Inc. (NASDAQ:TILE)has seen a decrease in hedge fund sentiment lately. Our calculations also showed that TILE isn't among the30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
[caption id="attachment_746830" align="aligncenter" width="473"]
Matthew Hulsizer of PEAK6 Capital[/caption]
Let's take a look at the new hedge fund action surrounding Interface, Inc. (NASDAQ:TILE).
At the end of the first quarter, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -13% from one quarter earlier. By comparison, 20 hedge funds held shares or bullish call options in TILE a year ago. With hedge funds' capital changing hands, there exists a select group of key hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
The largest stake in Interface, Inc. (NASDAQ:TILE) was held byAriel Investments, which reported holding $17 million worth of stock at the end of March. It was followed by D E Shaw with a $8.8 million position. Other investors bullish on the company included Royce & Associates, Renaissance Technologies, and AQR Capital Management.
Seeing as Interface, Inc. (NASDAQ:TILE) has faced bearish sentiment from the entirety of the hedge funds we track, it's easy to see that there was a specific group of funds that slashed their positions entirely last quarter. At the top of the heap, Peter Algert and Kevin Coldiron'sAlgert Coldiron Investorsdropped the biggest investment of all the hedgies watched by Insider Monkey, worth an estimated $2.3 million in stock. Steve Cohen's fund,Point72 Asset Management, also sold off its stock, about $1.6 million worth. These transactions are interesting, as total hedge fund interest dropped by 2 funds last quarter.
Let's also examine hedge fund activity in other stocks similar to Interface, Inc. (NASDAQ:TILE). We will take a look at Perficient, Inc. (NASDAQ:PRFT), Kforce Inc. (NASDAQ:KFRC), National Energy Services Reunited Corp. (NASDAQ:NESR), and HealthStream, Inc. (NASDAQ:HSTM). All of these stocks' market caps are similar to TILE's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PRFT,16,29517,2 KFRC,22,79198,1 NESR,8,34574,4 HSTM,14,49266,0 Average,15,48139,1.75 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $48 million. That figure was $47 million in TILE's case. Kforce Inc. (NASDAQ:KFRC) is the most popular stock in this table. On the other hand National Energy Services Reunited Corp. (NASDAQ:NESR) is the least popular one with only 8 bullish hedge fund positions. Interface, Inc. (NASDAQ:TILE) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately TILE wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); TILE investors were disappointed as the stock returned 2.2% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Is DMC Global Inc. (BOOM) A Good Stock To Buy?
Is DMC Global Inc. (NASDAQ:BOOM) a good equity to bet on right now? We like to check what the smart money thinks first before doing extensive research. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It's not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
DMC Global Inc. (NASDAQ:BOOM)was in 14 hedge funds' portfolios at the end of the first quarter of 2019. BOOM investors should pay attention to an increase in hedge fund interest lately. There were 12 hedge funds in our database with BOOM holdings at the end of the previous quarter. Our calculations also showed that BOOM isn't among the30 most popular stocks among hedge funds.
To most traders, hedge funds are perceived as slow, outdated investment tools of years past. While there are over 8000 funds with their doors open at present, Our researchers hone in on the masters of this group, about 750 funds. These money managers administer bulk of the hedge fund industry's total capital, and by monitoring their finest investments, Insider Monkey has brought to light numerous investment strategies that have historically outrun the S&P 500 index. Insider Monkey's flagship hedge fund strategy defeated the S&P 500 index by around 5 percentage points a year since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in ourlatest quarterly updateand they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).
Let's review the key hedge fund action regarding DMC Global Inc. (NASDAQ:BOOM).
Heading into the second quarter of 2019, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 17% from one quarter earlier. By comparison, 9 hedge funds held shares or bullish call options in BOOM a year ago. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically,Renaissance Technologieswas the largest shareholder of DMC Global Inc. (NASDAQ:BOOM), with a stake worth $21.6 million reported as of the end of March. Trailing Renaissance Technologies was Encompass Capital Advisors, which amassed a stake valued at $15.8 million. Nokomis Capital, Driehaus Capital, and Manatuck Hill Partners were also very fond of the stock, giving the stock large weights in their portfolios.
Consequently, key hedge funds were leading the bulls' herd.Driehaus Capital, managed by Richard Driehaus, established the most outsized position in DMC Global Inc. (NASDAQ:BOOM). Driehaus Capital had $10.8 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace'sMarshall Wace LLPalso made a $1.6 million investment in the stock during the quarter. The following funds were also among the new BOOM investors: Peter Rathjens, Bruce Clarke and John Campbell'sArrowstreet Capital, David Harding'sWinton Capital Management, and Ken Griffin'sCitadel Investment Group.
Let's now review hedge fund activity in other stocks similar to DMC Global Inc. (NASDAQ:BOOM). These stocks are Party City Holdco Inc (NYSE:PRTY), Everi Holdings Inc (NYSE:EVRI), INTL Fcstone Inc (NASDAQ:INTL), and Verso Corporation (NYSE:VRS). This group of stocks' market caps are similar to BOOM's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PRTY,19,69139,1 EVRI,26,244606,0 INTL,15,78246,2 VRS,24,142939,2 Average,21,133733,1.25 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $134 million. That figure was $87 million in BOOM's case. Everi Holdings Inc (NYSE:EVRI) is the most popular stock in this table. On the other hand INTL Fcstone Inc (NASDAQ:INTL) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks DMC Global Inc. (NASDAQ:BOOM) is even less popular than INTL. Hedge funds clearly dropped the ball on BOOM as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on BOOM as the stock returned 24.7% during the same period and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published atInsider Monkey.
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Here’s What Hedge Funds Think About SP Plus Corp (SP)
The government requires hedge funds and wealthy investors that crossed the $100 million equity holdings threshold are required to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on March 31. We at Insider Monkey have made an extensive database of nearly 750 of those elite funds and famous investors' filings. In this article, we analyze how these elite funds and prominent investors traded SP Plus Corp (NASDAQ:SP) based on those filings.
SP Plus Corp (NASDAQ:SP)was in 14 hedge funds' portfolios at the end of the first quarter of 2019. SP investors should pay attention to an increase in support from the world's most elite money managers lately. There were 12 hedge funds in our database with SP holdings at the end of the previous quarter. Our calculations also showed that SP isn't among the30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We're going to review the latest hedge fund action regarding SP Plus Corp (NASDAQ:SP).
At the end of the first quarter, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 17% from one quarter earlier. On the other hand, there were a total of 16 hedge funds with a bullish position in SP a year ago. With the smart money's sentiment swirling, there exists an "upper tier" of key hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
Among these funds,P2 Capital Partnersheld the most valuable stake in SP Plus Corp (NASDAQ:SP), which was worth $38.6 million at the end of the first quarter. On the second spot was Renaissance Technologies which amassed $18.2 million worth of shares. Moreover, Lionstone Capital Management, AQR Capital Management, and Intrepid Capital Management were also bullish on SP Plus Corp (NASDAQ:SP), allocating a large percentage of their portfolios to this stock.
With a general bullishness amongst the heavyweights, key money managers were leading the bulls' herd.Intrepid Capital Management, managed by Mark Travis, created the most valuable position in SP Plus Corp (NASDAQ:SP). Intrepid Capital Management had $6.8 million invested in the company at the end of the quarter. David Harding'sWinton Capital Managementalso made a $0.4 million investment in the stock during the quarter.
Let's go over hedge fund activity in other stocks similar to SP Plus Corp (NASDAQ:SP). These stocks are Duluth Holdings Inc. (NASDAQ:DLTH), Cara Therapeutics Inc (NASDAQ:CARA), Seacor Holdings, Inc. (NYSE:CKH), and Ruth's Hospitality Group, Inc. (NASDAQ:RUTH). This group of stocks' market caps resemble SP's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position DLTH,12,10556,4 CARA,8,16562,-1 CKH,11,122642,-5 RUTH,15,64794,-2 Average,11.5,53639,-1 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 11.5 hedge funds with bullish positions and the average amount invested in these stocks was $54 million. That figure was $102 million in SP's case. Ruth's Hospitality Group, Inc. (NASDAQ:RUTH) is the most popular stock in this table. On the other hand Cara Therapeutics Inc (NASDAQ:CARA) is the least popular one with only 8 bullish hedge fund positions. SP Plus Corp (NASDAQ:SP) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately SP wasn't nearly as popular as these 20 stocks and hedge funds that were betting on SP were disappointed as the stock returned -5% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Did Hedge Funds Drop The Ball On Addus Homecare Corporation (ADUS) ?
As we already know from media reports and hedge fund investor letters, many hedge funds lost money in fourth quarter, blaming macroeconomic conditions and unpredictable events that hit several sectors, with technology among them. Nevertheless, most investors decided to stick to their bullish theses and recouped their losses by the end of the first quarter. We get to see hedge funds' thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about Addus Homecare Corporation (NASDAQ:ADUS).
Hedge fund interest inAddus Homecare Corporation (NASDAQ:ADUS)shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare ADUS to other stocks including ANI Pharmaceuticals Inc (NASDAQ:ANIP), Kornit Digital Ltd. (NASDAQ:KRNT), and Boot Barn Holdings Inc (NYSE:BOOT) to get a better sense of its popularity.
If you'd ask most market participants, hedge funds are viewed as underperforming, outdated financial vehicles of years past. While there are more than 8000 funds in operation today, Our experts hone in on the top tier of this group, about 750 funds. These hedge fund managers manage the majority of the smart money's total asset base, and by monitoring their inimitable stock picks, Insider Monkey has uncovered several investment strategies that have historically outpaced Mr. Market. Insider Monkey's flagship hedge fund strategy defeated the S&P 500 index by around 5 percentage points a year since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in ourlatest quarterly updateand they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).
[caption id="attachment_746893" align="aligncenter" width="473"]
Paul Marshall of Marshall Wace[/caption]
We're going to analyze the recent hedge fund action regarding Addus Homecare Corporation (NASDAQ:ADUS).
Heading into the second quarter of 2019, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 8 hedge funds with a bullish position in ADUS a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Addus Homecare Corporation (NASDAQ:ADUS) was held byRenaissance Technologies, which reported holding $25.6 million worth of stock at the end of March. It was followed by Deerfield Management with a $16.1 million position. Other investors bullish on the company included Millennium Management, AQR Capital Management, and Point72 Asset Management.
Seeing as Addus Homecare Corporation (NASDAQ:ADUS) has faced bearish sentiment from the smart money, it's safe to say that there were a few fund managers who sold off their entire stakes heading into Q3. Intriguingly, Matthew Hulsizer'sPEAK6 Capital Managementsold off the biggest stake of the 700 funds monitored by Insider Monkey, totaling an estimated $0.6 million in stock, and Bruce Kovner's Caxton Associates LP was right behind this move, as the fund said goodbye to about $0.2 million worth. These transactions are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's go over hedge fund activity in other stocks similar to Addus Homecare Corporation (NASDAQ:ADUS). These stocks are ANI Pharmaceuticals Inc (NASDAQ:ANIP), Kornit Digital Ltd. (NASDAQ:KRNT), Boot Barn Holdings Inc (NYSE:BOOT), and Washington Trust Bancorp, Inc. (NASDAQ:WASH). This group of stocks' market valuations resemble ADUS's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ANIP,17,82176,4 KRNT,10,42618,-4 BOOT,23,154459,4 WASH,4,25232,-2 Average,13.5,76121,0.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 13.5 hedge funds with bullish positions and the average amount invested in these stocks was $76 million. That figure was $74 million in ADUS's case. Boot Barn Holdings Inc (NYSE:BOOT) is the most popular stock in this table. On the other hand Washington Trust Bancorp, Inc. (NASDAQ:WASH) is the least popular one with only 4 bullish hedge fund positions. Addus Homecare Corporation (NASDAQ:ADUS) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Hedge funds were also right about betting on ADUS as the stock returned 19.3% during the same period and outperformed the market by an even larger margin. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published atInsider Monkey.
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Hedge Funds Have Never Been This Bullish On Encore Capital Group, Inc. (ECPG)
"Since 2006, value stocks (IVE vs IVW) have underperformed 11 of the 13 calendar years and when they beat growth, it wasn't by much. Cumulatively, through this week, it has been a 122% differential (up 52% for value vs up 174% for growth). This appears to be the longest and most severe drought for value investors since data collection began. It will go our way eventually as there are too many people paying far too much for today's darlings, both public and private. Further, the ten-year yield of 2.5% (pre-tax) isn't attractive nor is real estate. We believe the value part of the global equity market is the only place to earn solid risk adjusted returns and we believe those returns will be higher than normal," said Vilas Fund in itsQ1 investor letter. We aren't sure whether value stocks outperform growth, but we follow hedge fund investor letters to understand where the markets and stocks might be going. That's why we believe it would be worthwhile to take a look at the hedge fund sentiment on Encore Capital Group, Inc. (NASDAQ:ECPG) in order to identify whether reputable and successful top money managers continue to believe in its potential.
Encore Capital Group, Inc. (NASDAQ:ECPG)investors should pay attention to an increase in support from the world's most elite money managers in recent months. Our calculations also showed that ECPG isn't among the30 most popular stocks among hedge funds.
In the financial world there are a lot of metrics shareholders employ to evaluate stocks. Two of the most useful metrics are hedge fund and insider trading moves. We have shown that, historically, those who follow the top picks of the elite money managers can outclass the market by a very impressive margin (see the details here).
We're going to take a gander at the recent hedge fund action encompassing Encore Capital Group, Inc. (NASDAQ:ECPG).
At the end of the first quarter, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 75% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards ECPG over the last 15 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds,BloombergSenheld the most valuable stake in Encore Capital Group, Inc. (NASDAQ:ECPG), which was worth $20 million at the end of the first quarter. On the second spot was Second Curve Capital which amassed $13.7 million worth of shares. Moreover, EJF Capital, Marshall Wace LLP, and Laurion Capital Management were also bullish on Encore Capital Group, Inc. (NASDAQ:ECPG), allocating a large percentage of their portfolios to this stock.
As one would reasonably expect, key money managers were breaking ground themselves.EJF Capital, managed by Emanuel J. Friedman, initiated the most valuable position in Encore Capital Group, Inc. (NASDAQ:ECPG). EJF Capital had $7.4 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace'sMarshall Wace LLPalso made a $6.7 million investment in the stock during the quarter. The other funds with brand new ECPG positions are Benjamin A. Smith'sLaurion Capital Management, Anand Parekh'sAlyeska Investment Group, and Peter Rathjens, Bruce Clarke and John Campbell'sArrowstreet Capital.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Encore Capital Group, Inc. (NASDAQ:ECPG) but similarly valued. We will take a look at Movado Group, Inc (NYSE:MOV), Meridian Bancorp, Inc. (NASDAQ:EBSB), Addus Homecare Corporation (NASDAQ:ADUS), and ANI Pharmaceuticals Inc (NASDAQ:ANIP). This group of stocks' market values are closest to ECPG's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MOV,23,73287,0 EBSB,15,75687,5 ADUS,14,73546,0 ANIP,17,82176,4 Average,17.25,76174,2.25 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 17.25 hedge funds with bullish positions and the average amount invested in these stocks was $76 million. That figure was $61 million in ECPG's case. Movado Group, Inc (NYSE:MOV) is the most popular stock in this table. On the other hand Addus Homecare Corporation (NASDAQ:ADUS) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks Encore Capital Group, Inc. (NASDAQ:ECPG) is even less popular than ADUS. Hedge funds clearly dropped the ball on ECPG as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on ECPG as the stock returned 27.8% during the same period and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published atInsider Monkey.
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Is Mercer International Inc. (MERC) A Good Stock To Buy?
Is Mercer International Inc. (NASDAQ: MERC ) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas. Mercer International Inc. (NASDAQ: MERC ) investors should be aware of a decrease in support from the world's most elite money managers lately. Our calculations also showed that MERC isn't among the 30 most popular stocks among hedge funds . Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 ( see the details here ). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. Jeffrey Gates Gates Capital We're going to take a look at the latest hedge fund action encompassing Mercer International Inc. (NASDAQ: MERC ). What have hedge funds been doing with Mercer International Inc. (NASDAQ:MERC)? At the end of the first quarter, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of -13% from the fourth quarter of 2018. On the other hand, there were a total of 17 hedge funds with a bullish position in MERC a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves. Story continues MERC_june2019 When looking at the institutional investors followed by Insider Monkey, Jeffrey Gates's Gates Capital Management has the number one position in Mercer International Inc. (NASDAQ:MERC), worth close to $40.4 million, corresponding to 1.8% of its total 13F portfolio. Coming in second is Jonathan Kolatch of Redwood Capital Management , with a $28 million position; the fund has 1.9% of its 13F portfolio invested in the stock. Other members of the smart money with similar optimism contain Jim Simons's Renaissance Technologies , Tom Wagner and Ara Cohen's Knighthead Capital and Ernest Chow and Jonathan Howe's Sensato Capital Management . Due to the fact that Mercer International Inc. (NASDAQ:MERC) has experienced a decline in interest from the smart money, logic holds that there lies a certain "tier" of hedgies that slashed their positions entirely heading into Q3. Interestingly, Cliff Asness's AQR Capital Management sold off the biggest investment of the "upper crust" of funds followed by Insider Monkey, totaling an estimated $0.7 million in stock. Andrew Feldstein and Stephen Siderow's fund, Blue Mountain Capital , also sold off its stock, about $0.6 million worth. These moves are interesting, as aggregate hedge fund interest fell by 2 funds heading into Q3. Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Mercer International Inc. (NASDAQ:MERC) but similarly valued. These stocks are Solar Capital Ltd. (NASDAQ: SLRC ), Social Capital Hedosophia Holdings Corp. (NYSE: IPOA ), Qiwi PLC (NASDAQ: QIWI ), and Changyou.Com Ltd (NASDAQ: CYOU ). This group of stocks' market valuations are closest to MERC's market valuation. [table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SLRC,11,60312,-1 IPOA,22,283400,1 QIWI,12,77832,4 CYOU,11,47035,4 Average,14,117145,2 [/table] View table here if you experience formatting issues. As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $117 million. That figure was $141 million in MERC's case. Social Capital Hedosophia Holdings Corp. (NYSE: IPOA ) is the most popular stock in this table. On the other hand Solar Capital Ltd. (NASDAQ: SLRC ) is the least popular one with only 11 bullish hedge fund positions. Mercer International Inc. (NASDAQ:MERC) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on MERC as the stock returned 10.5% during the same time frame and outperformed the market by an even larger margin. Disclosure: None. This article was originally published at Insider Monkey . Related Content How to Best Use Insider Monkey To Increase Your Returns Billionaire Ken Fisher’s Top Dividend Stock Picks 30 Stocks Billionaires Are Crazy About: Insider Monkey Billionaire Stock Index |
Here’s What Hedge Funds Think About Assertio Therapeutics, Inc. (ASRT)
"Since 2006, value stocks (IVE vs IVW) have underperformed 11 of the 13 calendar years and when they beat growth, it wasn't by much. Cumulatively, through this week, it has been a 122% differential (up 52% for value vs up 174% for growth). This appears to be the longest and most severe drought for value investors since data collection began. It will go our way eventually as there are too many people paying far too much for today's darlings, both public and private. Further, the ten-year yield of 2.5% (pre-tax) isn't attractive nor is real estate. We believe the value part of the global equity market is the only place to earn solid risk adjusted returns and we believe those returns will be higher than normal," said Vilas Fund in itsQ1 investor letter. We aren't sure whether value stocks outperform growth, but we follow hedge fund investor letters to understand where the markets and stocks might be going. This article will lay out and discuss the hedge fund and institutional investor sentiment towards Assertio Therapeutics, Inc. (NASDAQ:ASRT).
Assertio Therapeutics, Inc. (NASDAQ:ASRT)was in 14 hedge funds' portfolios at the end of March. ASRT has experienced a decrease in hedge fund interest of late. There were 16 hedge funds in our database with ASRT positions at the end of the previous quarter. Our calculations also showed that asrt isn't among the30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We're going to go over the new hedge fund action surrounding Assertio Therapeutics, Inc. (NASDAQ:ASRT).
Heading into the second quarter of 2019, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -13% from the fourth quarter of 2018. By comparison, 14 hedge funds held shares or bullish call options in ASRT a year ago. With the smart money's sentiment swirling, there exists a select group of notable hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
More specifically,Renaissance Technologieswas the largest shareholder of Assertio Therapeutics, Inc. (NASDAQ:ASRT), with a stake worth $26.3 million reported as of the end of March. Trailing Renaissance Technologies was Rima Senvest Management, which amassed a stake valued at $5.1 million. D E Shaw, Marshall Wace LLP, and AQR Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.
Judging by the fact that Assertio Therapeutics, Inc. (NASDAQ:ASRT) has experienced declining sentiment from the aggregate hedge fund industry, we can see that there is a sect of funds that slashed their full holdings by the end of the third quarter. Interestingly, Steven Boyd'sArmistice Capitaldropped the biggest stake of the "upper crust" of funds watched by Insider Monkey, totaling close to $11.8 million in stock, and Israel Englander's Millennium Management was right behind this move, as the fund said goodbye to about $0.4 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 2 funds by the end of the third quarter.
Let's also examine hedge fund activity in other stocks similar to Assertio Therapeutics, Inc. (NASDAQ:ASRT). These stocks are Rimini Street, Inc. (NASDAQ:RMNI), Solid Biosciences Inc. (NASDAQ:SLDB), Rockwell Medical Inc (NASDAQ:RMTI), and Trilogy Metals Inc. (NYSE:TMQ). This group of stocks' market values are similar to ASRT's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RMNI,4,6124,1 SLDB,10,73429,-1 RMTI,3,2056,1 TMQ,13,120065,1 Average,7.5,50419,0.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 7.5 hedge funds with bullish positions and the average amount invested in these stocks was $50 million. That figure was $46 million in ASRT's case. Trilogy Metals Inc. (NYSE:TMQ) is the most popular stock in this table. On the other hand Rockwell Medical Inc (NASDAQ:RMTI) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Assertio Therapeutics, Inc. (NASDAQ:ASRT) is more popular among hedge funds. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately ASRT wasn't nearly as popular as these 20 stocks and hedge funds that were betting on ASRT were disappointed as the stock returned -37.5% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Is The Habit Restaurants, Inc. (HABT) A Good Stock To Buy?
Reputable billionaire investors such as Jim Simons, Cliff Asness and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won't accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and vast resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.
The Habit Restaurants, Inc. (NASDAQ:HABT)has experienced an increase in enthusiasm from smart money lately. Our calculations also showed that HABT isn't among the30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_746893" align="aligncenter" width="473"]
Paul Marshall of Marshall Wace[/caption]
Let's review the latest hedge fund action encompassing The Habit Restaurants, Inc. (NASDAQ:HABT).
At the end of the first quarter, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 8% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in HABT over the last 15 quarters. With hedge funds' positions undergoing their usual ebb and flow, there exists an "upper tier" of notable hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
Among these funds,Renaissance Technologiesheld the most valuable stake in The Habit Restaurants, Inc. (NASDAQ:HABT), which was worth $15.9 million at the end of the first quarter. On the second spot was Greenhouse Funds which amassed $10.7 million worth of shares. Moreover, Marshall Wace LLP, Two Sigma Advisors, and Millennium Management were also bullish on The Habit Restaurants, Inc. (NASDAQ:HABT), allocating a large percentage of their portfolios to this stock.
As one would reasonably expect, some big names were breaking ground themselves.GLG Partners, managed by Noam Gottesman, initiated the most valuable position in The Habit Restaurants, Inc. (NASDAQ:HABT). GLG Partners had $0.3 million invested in the company at the end of the quarter. Gavin Saitowitz and Cisco J. del Valle'sSpringbok Capitalalso initiated a $0.1 million position during the quarter.
Let's go over hedge fund activity in other stocks similar to The Habit Restaurants, Inc. (NASDAQ:HABT). We will take a look at Tarena International Inc (NASDAQ:TEDU), Lawson Products, Inc. (NASDAQ:LAWS), Ceragon Networks Ltd. (NASDAQ:CRNT), and Tecnoglass Inc. (NASDAQ:TGLS). This group of stocks' market valuations are similar to HABT's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TEDU,8,9658,1 LAWS,4,9838,0 CRNT,6,22142,-3 TGLS,7,13625,3 Average,6.25,13816,0.25 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 6.25 hedge funds with bullish positions and the average amount invested in these stocks was $14 million. That figure was $45 million in HABT's case. Tarena International Inc (NASDAQ:TEDU) is the most popular stock in this table. On the other hand Lawson Products, Inc. (NASDAQ:LAWS) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks The Habit Restaurants, Inc. (NASDAQ:HABT) is more popular among hedge funds. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately HABT wasn't nearly as popular as these 20 stocks and hedge funds that were betting on HABT were disappointed as the stock returned -5.5% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Here’s What Hedge Funds Think About Realty Income Corporation (O)
At Insider Monkey, we pore over the filings of nearly 750 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we've gathered as a result gives us access to a wealth of collective knowledge based on these firms' portfolio holdings as of March 31. In this article, we will use that wealth of knowledge to determine whether or not Realty Income Corporation (NYSE:O) makes for a good investment right now.
Realty Income Corporation (NYSE:O)shareholders have witnessed a decrease in enthusiasm from smart money lately.Owas in 15 hedge funds' portfolios at the end of the first quarter of 2019. There were 18 hedge funds in our database with O holdings at the end of the previous quarter. Our calculations also showed that O isn't among the30 most popular stocks among hedge funds.
In the eyes of most shareholders, hedge funds are perceived as unimportant, outdated investment tools of years past. While there are greater than 8000 funds with their doors open at present, We look at the upper echelon of this club, about 750 funds. These hedge fund managers command most of all hedge funds' total asset base, and by following their highest performing investments, Insider Monkey has discovered many investment strategies that have historically surpassed Mr. Market. Insider Monkey's flagship hedge fund strategy outpaced the S&P 500 index by around 5 percentage points per annum since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in ourlatest quarterly updateand they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).
Let's take a peek at the new hedge fund action surrounding Realty Income Corporation (NYSE:O).
Heading into the second quarter of 2019, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -17% from the previous quarter. On the other hand, there were a total of 16 hedge funds with a bullish position in O a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds,Zimmer Partnersheld the most valuable stake in Realty Income Corporation (NYSE:O), which was worth $73.6 million at the end of the first quarter. On the second spot was Point72 Asset Management which amassed $31.9 million worth of shares. Moreover, Adage Capital Management, AQR Capital Management, and Citadel Investment Group were also bullish on Realty Income Corporation (NYSE:O), allocating a large percentage of their portfolios to this stock.
Because Realty Income Corporation (NYSE:O) has faced declining sentiment from the entirety of the hedge funds we track, logic holds that there is a sect of hedge funds who were dropping their full holdings by the end of the third quarter. Intriguingly, Jasjit Rekhi'sSanoor Capitalsold off the largest investment of all the hedgies followed by Insider Monkey, worth close to $6.3 million in stock. John Overdeck and David Siegel's fund,Two Sigma Advisors, also said goodbye to its stock, about $6 million worth. These transactions are interesting, as aggregate hedge fund interest fell by 3 funds by the end of the third quarter.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Realty Income Corporation (NYSE:O) but similarly valued. We will take a look at Concho Resources Inc. (NYSE:CXO), TELUS Corporation (NYSE:TU), Parker-Hannifin Corporation (NYSE:PH), and FirstEnergy Corp. (NYSE:FE). This group of stocks' market caps are similar to O's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CXO,26,530505,-9 TU,13,336110,2 PH,28,516590,-2 FE,41,3727862,2 Average,27,1277767,-1.75 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 27 hedge funds with bullish positions and the average amount invested in these stocks was $1278 million. That figure was $176 million in O's case. FirstEnergy Corp. (NYSE:FE) is the most popular stock in this table. On the other hand TELUS Corporation (NYSE:TU) is the least popular one with only 13 bullish hedge fund positions. Realty Income Corporation (NYSE:O) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately O wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); O investors were disappointed as the stock returned 0.2% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Here’s What Hedge Funds Think About Rogers Communications Inc. (RCI)
We at Insider Monkey have gone over 738 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds' and investors' portfolio positions as of March 31st. In this article, we look at what those funds think of Rogers Communications Inc. (NYSE:RCI) based on that data.
IsRogers Communications Inc. (NYSE:RCI)a good investment now? Hedge funds are getting more bullish. The number of long hedge fund positions inched up by 2 recently. Our calculations also showed that RCI isn't among the30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let's take a look at the fresh hedge fund action surrounding Rogers Communications Inc. (NYSE:RCI).
At the end of the first quarter, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 15% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards RCI over the last 15 quarters. With the smart money's capital changing hands, there exists a few notable hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
The largest stake in Rogers Communications Inc. (NYSE:RCI) was held byRenaissance Technologies, which reported holding $190.1 million worth of stock at the end of March. It was followed by GLG Partners with a $181.4 million position. Other investors bullish on the company included AQR Capital Management, Two Sigma Advisors, and GAMCO Investors.
Now, key hedge funds have been driving this bullishness.Laurion Capital Management, managed by Benjamin A. Smith, assembled the biggest position in Rogers Communications Inc. (NYSE:RCI). Laurion Capital Management had $18.5 million invested in the company at the end of the quarter. Minhua Zhang'sWeld Capital Managementalso initiated a $0.8 million position during the quarter. The other funds with brand new RCI positions are Michael Platt and William Reeves'sBlueCrest Capital Mgmt., Ken Griffin'sCitadel Investment Group, and Ronald Hua'sQtron Investments.
Let's now review hedge fund activity in other stocks similar to Rogers Communications Inc. (NYSE:RCI). We will take a look at Global Payments Inc (NYSE:GPN), Interactive Brokers Group, Inc. (NASDAQ:IBKR), Lululemon Athletica inc. (NASDAQ:LULU), and Imperial Oil Limited (NYSE:IMO). This group of stocks' market values are closest to RCI's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GPN,29,557425,2 IBKR,23,940831,2 LULU,42,1770036,6 IMO,17,85055,-2 Average,27.75,838337,2 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 27.75 hedge funds with bullish positions and the average amount invested in these stocks was $838 million. That figure was $560 million in RCI's case. Lululemon Athletica inc. (NASDAQ:LULU) is the most popular stock in this table. On the other hand Imperial Oil Limited (NYSE:IMO) is the least popular one with only 17 bullish hedge fund positions. Compared to these stocks Rogers Communications Inc. (NYSE:RCI) is even less popular than IMO. Hedge funds dodged a bullet by taking a bearish stance towards RCI. Our calculations showed that the top 20 most popular hedge fund stocks returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately RCI wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); RCI investors were disappointed as the stock returned -0.1% during the same time frame and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in the second quarter.
Disclosure: None. This article was originally published atInsider Monkey.
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Does The S Chand and Company Limited (NSE:SCHAND) Share Price Tend To Follow The Market?
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If you own shares in S Chand and Company Limited (NSE:SCHAND) then it's worth thinking about how it contributes to the volatility of your portfolio, overall. In finance, Beta is a measure of volatility. Volatility is considered to be a measure of risk in modern finance theory. Investors may think of volatility as falling into two main categories. The first type is company specific volatility. Investors use diversification across uncorrelated stocks to reduce this kind of price volatility across the portfolio. The second 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. 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 S Chand
Looking at the last five years, S Chand has a beta of 1.41. The fact that this is well above 1 indicates that its share price movements have shown sensitivity to overall market volatility. Based on this history, investors should be aware that S Chand 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 S Chand's revenue and earnings in the image below.
S Chand is a noticeably small company, with a market capitalisation of ₹3.1b. Most companies this size are not always actively traded. Relatively few investors can influence the price of a smaller company, compared to a large company. This could explain the high beta value, in this case.
Beta only tells us that the S Chand share price is sensitive to broader market movements. This could indicate that it is a high growth company, or is heavily influenced by sentiment because it is speculative. Alternatively, it could have operating leverage in its business model. Ultimately, beta is an interesting metric, but there's plenty more to learn. This article aims to educate investors about beta values, but it's well worth looking at important company-specific fundamentals such as S Chand’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 SCHAND’s future growth? Take a look at ourfree research report of analyst consensusfor SCHAND’s outlook.
2. Past Track Record: Has SCHAND 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 SCHAND's historicalsfor more clarity.
3. Other Interesting Stocks: It's worth checking to see how SCHAND 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 Accuray Incorporated (ARAY) A Good Stock To Buy?
The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31 holdings, data that is available nowhere else. Should you consider Accuray Incorporated (NASDAQ:ARAY) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
Accuray Incorporated (NASDAQ:ARAY)investors should pay attention to a decrease in hedge fund interest of late.ARAYwas in 15 hedge funds' portfolios at the end of the first quarter of 2019. There were 17 hedge funds in our database with ARAY holdings at the end of the previous quarter. Our calculations also showed that ARAY isn't among the30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We're going to review the fresh hedge fund action regarding Accuray Incorporated (NASDAQ:ARAY).
At Q1's end, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of -12% from the fourth quarter of 2018. The graph below displays the number of hedge funds with bullish position in ARAY over the last 15 quarters. With hedgies' sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
Among these funds,Renaissance Technologiesheld the most valuable stake in Accuray Incorporated (NASDAQ:ARAY), which was worth $25.6 million at the end of the first quarter. On the second spot was Archon Capital Management which amassed $15.2 million worth of shares. Moreover, D E Shaw, Royce & Associates, and Marshall Wace LLP were also bullish on Accuray Incorporated (NASDAQ:ARAY), allocating a large percentage of their portfolios to this stock.
Judging by the fact that Accuray Incorporated (NASDAQ:ARAY) has faced bearish sentiment from the smart money, it's safe to say that there was a specific group of money managers who sold off their positions entirely in the third quarter. It's worth mentioning that Vishal Saluja and Pham Quang'sEndurant Capital Managementdumped the largest investment of the "upper crust" of funds followed by Insider Monkey, comprising close to $1.6 million in stock, and Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital was right behind this move, as the fund sold off about $0.7 million worth. These moves are important to note, as aggregate hedge fund interest was cut by 2 funds in the third quarter.
Let's also examine hedge fund activity in other stocks similar to Accuray Incorporated (NASDAQ:ARAY). These stocks are Veritiv Corp (NYSE:VRTV), Limoneira Company (NASDAQ:LMNR), Cellcom Israel Ltd. (NYSE:CEL), and Hibbett Sports, Inc. (NASDAQ:HIBB). This group of stocks' market values match ARAY's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position VRTV,12,101897,2 LMNR,2,8529,-2 CEL,2,14426,0 HIBB,15,113528,0 Average,7.75,59595,0 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 7.75 hedge funds with bullish positions and the average amount invested in these stocks was $60 million. That figure was $89 million in ARAY's case. Hibbett Sports, Inc. (NASDAQ:HIBB) is the most popular stock in this table. On the other hand Limoneira Company (NASDAQ:LMNR) is the least popular one with only 2 bullish hedge fund positions. Accuray Incorporated (NASDAQ:ARAY) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately ARAY wasn't nearly as popular as these 20 stocks and hedge funds that were betting on ARAY were disappointed as the stock returned -19.9% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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What Should Investors Know About The Future Of Cera Sanitaryware Limited's (NSE:CERA)?
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Cera Sanitaryware Limited's (NSE:CERA) latest earnings update in May 2019 suggested that the business experienced a strong tailwind, eventuating to a double-digit earnings growth of 12%. Below, I've presented key growth figures on how market analysts perceive Cera Sanitaryware's earnings growth trajectory over the next few years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
View our latest analysis for Cera Sanitaryware
Analysts' expectations for the coming year seems positive, with earnings increasing by a robust 18%. This growth seems to continue into the following year with rates arriving at double digit 41% compared to today’s earnings, and finally hitting ₹1.8b by 2022.
Although it is helpful to be aware of the rate of growth year by year relative to today’s level, it may be more beneficial estimating the rate at which the company is growing on average every year. The benefit of this technique is that we can get a better picture of the direction of Cera Sanitaryware's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I've inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 16%. This means that, we can expect Cera Sanitaryware will grow its earnings by 16% every year for the next couple of years.
For Cera Sanitaryware, I've compiled three essential aspects you should look at:
1. Financial Health: Does it have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Valuation: What is CERA 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 CERA is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of CERA? 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. |
Bitcoin Climbs Above 10,831.5 Level, Up 0.89%
Investing.com - Bitcoin rose above the $10,831.5 threshold on Monday. Bitcoin was trading at 10,831.5 by 01:00 (05:00 GMT) on the Investing.com Index, up 0.89% on the day. It was the largest one-day percentage gain since June 23.
The move upwards pushed Bitcoin's market cap up to $191.2B, or 59.12% of the total cryptocurrency market cap. At its highest, Bitcoin's market cap was $241.2B.
Bitcoin had traded in a range of $10,622.6 to $10,897.3 in the previous twenty-four hours.
Over the past seven days, Bitcoin has seen a rise in value, as it gained 17.6%. The volume of Bitcoin traded in the twenty-four hours to time of writing was $20.7B or 29.96% of the total volume of all cryptocurrencies. It has traded in a range of $8,962.7354 to $11,361.2832 in the past 7 days.
At its current price, Bitcoin is still down 45.49% from its all-time high of $19,870.62 set on December 17, 2017.
Ethereum was last at $308.00 on the Investing.com Index, down 2.25% on the day.
XRP was trading at $0.46381 on the Investing.com Index, a loss of 3.66%.
Ethereum's market cap was last at $32.6B or 10.09% of the total cryptocurrency market cap, while XRP's market cap totaled $19.6B or 6.06% of the total cryptocurrency market value.
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Rookie Will Smith hits record third straight walk-off for Dodgers
On Saturday, the Los Angeles Dodgers became the first team to win back-to-back games on walk-off homers hit by a rookie, but why stop there? Called up mere hours earlier, rookie catcher Will Smith piled on with a walk-off home run of his own on Sunday — his third homer in four games. Knotted at three apiece in the bottom of the ninth, the Colorado Rockies intentionally walked Russell Martin to get to closer Kenley Jansen’s spot. Smith came up to pinch hit and made them pay by launching a 1-0 hanging slider 386 feet over the right-center fence for the win. The @Dodgers are the first team in @MLB history to have rookies hit walk-off HR in THREE STRAIGHT games -- or even two in a row. h/t: @Eliassports pic.twitter.com/gIMRuoOjVN — MLB Stats (@MLBStats) June 23, 2019 The bomb was Smith’s third in just 24 plate appearances and his second walk-off of his brief career. He also ended a game on June 1 with a solo shot to left-center in his fourth ever game . Smith’s homer wrapped up a dramatic series against the Rockies. On Friday, sophomore starter Walker Buehler struck out 16 without issuing a walk in a complete game but didn’t get enough run support until Matt Beaty’s ninth-inning two-run homer. Then on Saturday, Alex Verdugo ended a marathon game after 11 innings with a 362-foot shot to right. Smith isn’t just swinging a hot bat, he’s also considered a key part of the Dodgers’ future. Although he’s rated behind fellow Dodgers catching prospect Keibert Ruiz, he entered the season ranked highly by ESPN (79), FanGraphs (80) and Baseball America (95). Dodgers rookie Will Smith hit a second walk-off homer in his last four games. (AP Photo/Mark J. Terrill) Hugs for the MVP favorite in Chavez Ravine Smith stole the spotlight with his big hit, but fans showed their appreciation for MVP heavyweight Cody Bellinger earlier in the game as well — although perhaps they showed it a little too much. Story continues During the middle of an inning, a young woman jumped onto the field and ran towards Bellinger in right field. She eventually asked for and gave Bellinger a hug before being tackled by security guards. “It’s definitely odd,” Bellinger said after the game . “She got tackled, and I said, ‘You know you’re going to jail?’ She said, ‘Yeah, I know.’ She said it was worth it, so I guess, but maybe not for her parents.” After that incident, the crowd broke out into MVP chants. The 23-year-old’s 5.3 WAR this season is tied with Mike Trout for the league lead, and he is slashing .353/.447/.706 overall with 25 home runs. Unfortunately, Bellinger was also involved in a scary incident in the first inning of the game when a foul ball off his bat struck another young fan in the head . She had to be taken to the hospital for precautionary reasons but was awake and stable condition. More from Yahoo Sports: Is this the best USWNT of all time? One player says yes Morgan, Ertz expected to play for U.S. against Spain LaVar Ball talks again, makes ’First Take’ drama worse Sources: UConn move to the Big East inevitable |
Want To Invest In Beijing Enterprises Environment Group Limited (HKG:154)? Here's How It Performed Lately
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Improvement in profitability and outperformance against the industry can be important characteristics in a stock for some investors. Below, I will assess Beijing Enterprises Environment Group Limited's (HKG:154) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.
View our latest analysis for Beijing Enterprises Environment Group
154's trailing twelve-month earnings (from 31 December 2018) of HK$265m has jumped 39% 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 54%, indicating the rate at which 154 is growing has slowed down. Why could this be happening? Well, let's examine what's occurring with margins and whether the whole industry is facing the same headwind.
In terms of returns from investment, Beijing Enterprises Environment Group has fallen short of achieving a 20% return on equity (ROE), recording 9.5% instead. Furthermore, its return on assets (ROA) of 3.2% is below the HK Commercial Services industry of 6.3%, indicating Beijing Enterprises Environment Group's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Beijing Enterprises Environment Group’s debt level, has increased over the past 3 years from 1.6% to 5.4%.
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Beijing Enterprises Environment Group gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Beijing Enterprises Environment Group to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for 154’s future growth? Take a look at ourfree research report of analyst consensusfor 154’s outlook.
2. Financial Health: Are 154’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out ourfinancial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore ourfree list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2018. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Gold Resumes Rally, Climbs Above $1,400
Investing.com - Gold prices resumed their recent rally on Monday, rising above the $1,400 level as prospects for easier monetary policy from the Federal Reserve and other central banks boosted inflows into the precious metal.
Gold futures for August delivery, traded on the Comex division of the New York Mercantile Exchange, were up 0.5% at $1,406.55 per ounce by 12:38 AM ET (04:38 GMT). The contract gained 4.1% last week.
Gold has been gaining since the Fed indicated at its meeting last week that it could cut interest rates, possibly as soon as next month, to offset the effects of slowing global growth as a result of trade tensions and subdued inflation. The European Central Bank and the Bank of England also sounded more dovish last week.
Lower interest rates make safe-haven assets such as gold, which does not yield interest, more attractive while weighing on the U.S. dollar.
Heightened geopolitical tensions in the Middle East also boosted safe haven demand for the yellow metal. Late last week, Iran shot down an American surveillance drone and accused the U.S. of incursion and spying over Iranian airspace, while the Pentagon said that the aircraft was in international airspace when it was targeted.
The administration most recently accused Iran of last week's attacks on oil tankers in the Persian Gulf, which Tehran strongly denied involvement in the explosion.
Investors tend to seek out gold, seen as a safe haven asset in times of political or economic uncertainty.
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Should You Be Adding Playmates Holdings (HKG:635) To Your Watchlist Today?
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Some have more dollars than sense, they say, so even companies that have no revenue, no profit, and a record of falling short, can easily find investors. 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.
If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested inPlaymates Holdings(HKG:635). Even if the shares are fully valued today, most capitalists would recognize its profits as the demonstration of steady value generation. Conversely, a loss-making company is yet to prove itself with profit, and eventually the sweet milk of external capital may run sour.
View our latest analysis for Playmates Holdings
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. We can see that in the last three years Playmates Holdings grew its EPS by 12% per year. That's a good rate of growth, if it can be sustained.
I like to take a look at earnings before interest and (EBIT) tax margins, as well as revenue growth, to get another take on the quality of the company's growth. Playmates Holdings's EBIT margins are flat but, of some concern, its revenue is actually down. Suffice it to say that is not a great sign of growth.
The chart below shows how the company's bottom and top lines have progressed over time. To see the actual numbers, click on the chart.
Playmates Holdings isn't a huge company, given its market capitalization of HK$2.3b. That makes it extra important to check on itsbalance sheet strength.
Like that fresh smell in the air when the rains are coming, insider buying fills me with optimistic anticipation. Because oftentimes, the purchase of stock is a sign that the buyer views it as undervalued. Of course, we can never be sure what insiders are thinking, we can only judge their actions.
It's a pleasure to note that insiders spent HK$117m buying Playmates Holdings shares, over the last year, without reporting any share sales whatsoever. And so I find myself almost expectant, and certainly hopeful, that this large outlay signals prescient optimism for the business. We also note that it was the , Chun Hoo Chan, who made the biggest single acquisition, paying HK$114m for shares at about HK$1.05 each.
And the insider buying isn't the only sign of alignment between shareholders and the board, since Playmates Holdings insiders own more than a third of the company. In fact, they own 65% of the company, so they will share in the same delights and challenges experienced by the ordinary shareholders. This makes me think they will be incentivised to plan for the long term - something I like to see. In terms of absolute value, insiders have HK$1.5b invested in the business, using the current share price. That's nothing to sneeze at!
One positive for Playmates Holdings is that it is growing EPS. That's nice to see. On top of that, we've seen insiders buying shareseven though they already own plenty. To me, that all makes it well worth a spot on your watchlist, as well as continuing research. Of course, profit growth is one thing but it's even better if Playmates Holdings is receiving high returns on equity, since that should imply it can keep growing without much need for capital.Click on this link to see how it is faring against the average in its industry.
There are plenty of other companies that have insiders buying up shares. So if you like the sound of Playmates Holdings, you'll probably love thisfreelist of growing companies that insiders are buying.
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. |
A Look At The Fair Value Of AGC Networks Limited (NSE:AGCNET)
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How far off is AGC Networks Limited (NSE:AGCNET) from its intrinsic value? Using the most recent financial data, we'll take a look at whether the stock is fairly priced by taking the expected future cash flows and discounting them to today's value. I will use the Discounted Cash Flow (DCF) model. Don't get put off by the jargon, the math behind it is actually quite straightforward.
We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. 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 AGC Networks
We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. 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, so we need to discount the sum of these future cash flows to arrive at a present value estimate:
[{"": "Levered FCF (\u20b9, Millions)", "2019": "\u20b9490.65", "2020": "\u20b9531.80", "2021": "\u20b9575.06", "2022": "\u20b9620.84", "2023": "\u20b9669.49", "2024": "\u20b9721.38", "2025": "\u20b9776.86", "2026": "\u20b9836.28", "2027": "\u20b9899.99", "2028": "\u20b9968.37"}, {"": "Growth Rate Estimate Source", "2019": "Est @ 8.74%", "2020": "Est @ 8.39%", "2021": "Est @ 8.14%", "2022": "Est @ 7.96%", "2023": "Est @ 7.84%", "2024": "Est @ 7.75%", "2025": "Est @ 7.69%", "2026": "Est @ 7.65%", "2027": "Est @ 7.62%", "2028": "Est @ 7.6%"}, {"": "Present Value (\u20b9, Millions) Discounted @ 24.75%", "2019": "\u20b9393.31", "2020": "\u20b9341.72", "2021": "\u20b9296.21", "2022": "\u20b9256.34", "2023": "\u20b9221.59", "2024": "\u20b9191.39", "2025": "\u20b9165.22", "2026": "\u20b9142.57", "2027": "\u20b9122.99", "2028": "\u20b9106.08"}]
Present Value of 10-year Cash Flow (PVCF)= ₹2.24b
"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 (7.6%) 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 24.8%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = ₹968m × (1 + 7.6%) ÷ (24.8% – 7.6%) = ₹6.1b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= ₹₹6.1b ÷ ( 1 + 24.8%)10= ₹663.31m
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 ₹2.90b. The last step is to then divide the equity value by the number of shares outstanding.This results in an intrinsic value estimate of ₹98.07. Compared to the current share price of ₹112.1, 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.
We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. 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 AGC Networks 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 24.8%, 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.
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 AGC Networks, There are three important factors you should further examine:
1. Financial Health: Does AGCNET 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 AGCNET? 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 IN 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. |
Did You Manage To Avoid Bharat Wire Ropes's (NSE:BHARATWIRE) Painful 67% Share Price Drop?
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The nature of investing is that you win some, and you lose some. Anyone who heldBharat Wire Ropes Limited(NSE:BHARATWIRE) over the last year knows what a loser feels like. To wit the share price is down 67% in that time. Longer term shareholders haven't suffered as badly, since the stock is down a comparatively less painful 18% in three years. The falls have accelerated recently, with the share price down 42% in the last three months.
Check out our latest analysis for Bharat Wire Ropes
While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
During the last year Bharat Wire Ropes saw its earnings per share drop below zero. Buyers no doubt think it's a temporary situation, but those with a nose for quality have low tolerance for losses. Of course, if the company can turn the situation around, investors will likely profit.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
Before buying or selling a stock, we always recommend a close examination ofhistoric growth trends, available here..
The last twelve months weren't great for Bharat Wire Ropes shares, which cost holders 67%, while the market wasupabout 0.3%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. The three-year loss of 6.5% per year isn't as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. You could get a better understanding of Bharat Wire Ropes's growth by checking outthis more detailed historical graphof earnings, revenue and cash flow.
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 IN exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Oil mixed on crude demand fears and U.S.-Iran tensions
By Laila Kearney
NEW YORK (Reuters) - Oil prices were mixed on Monday as market concerns about the possibility of a conflict between the United States and Iran eased, while worries about declining crude demand resurfaced.
Benchmark Brent crude futures settled at $64.86 a barrel, losing 34 cents, or 0.5%. U.S. crude futures settled at $57.90 a barrel, rising 47 cents, or 0.8%.
Last week, Brent climbed 5% and U.S. crude surged 10% after Iran shot down a U.S. drone on Thursday in the Gulf, adding to tensions stoked by attacks on oil tankers in the area in May and June that Washington has blamed on Iran, which denies having any role in the attacks.
U.S. President Donald Trump imposed new sanctions on Iran on Monday. Trump on Friday, however, called off a retaliatory attack on the Middle East nation at the last minute after the drone was downed, limiting oil price gains.
"I think some of the risk premium that got built in because of U.S. tensions with Iran is easing a bit," said John Kilduff, a partner at Again Capital Management in New York. "I think we're also starting to see the economic concerns and demand concerns re-emerge for the market."
Hopes are waning for progress in Sino-U.S. trade talks at this week's G20 meeting as investors await a meeting between Presidents Donald Trump and Xi Jinping.
"The most important factor weighing on the oil price of late was the fear of a massive slowdown in demand growth, especially in view of the trade conflict between the US and China," Commerzbank said in a note. "We do not expect any agreement to be reached during the meeting between Presidents Trump and Xi during the G20 summit at the end of the week."
Weak manufacturing data released on Monday by the Federal Reserve Bank of Dallas added to worries about slipping demand for crude oil.
Supply is expected to remain relatively tight, as the Organization of the Petroleum Exporting Countries and its allies including Russia, an alliance known as OPEC+, appear likely to extend a deal on curbing output when they meet on July 1-2 in Vienna, analysts said.
Russian Energy Minister Alexander Novak said on Monday that international cooperation on crude production had helped stabilize oil markets and was more important than ever. He also voiced concerns about demand.
(Reporting by Laila Kearney in New York; Additional reporting by Noah Browning in London; Editing by David Gregorio and Matthew Lewis) |
Investors Who Bought Centrum Capital (NSE:CENTRUM) Shares A Year Ago Are Now Down 54%
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Even the best stock pickers will make plenty of bad investments. And unfortunately forCentrum Capital Limited(NSE:CENTRUM) shareholders, the stock is a lot lower today than it was a year ago. In that relatively short period, the share price has plunged 54%. Centrum Capital hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time. The falls have accelerated recently, with the share price down 17% in the last three months. 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 Centrum Capital
There is no denying that markets are sometimes efficient, but prices do not always reflect 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.
Even though the Centrum Capital share price is down over the year, its EPS actually improved. It's quite possible that growth expectations may have been unreasonable in the past. The divergence between the EPS and the share price is quite notable, during the year. But we might find some different metrics explain the share price movements better.
With a low yield of 0.2% we doubt that the dividend influences the share price much. On the other hand, we're certainly perturbed by the 98% decline in Centrum Capital's revenue. Many investors see falling revenue as a likely precursor to lower earnings, so this could well explain the weak share price.
Depicted in the graphic below, you'll see revenue and earnings over time. If you want more detail, you can click on the chart itself.
Take a more thorough look at Centrum Capital's financial health with thisfreereport on its balance sheet.
While Centrum Capital shareholders are down 54% for the year (even including dividends), the market itself is up 0.3%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. The share price decline has continued throughout the most recent three months, down 17%, 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. Before forming an opinion on Centrum Capital you might want to consider these3 valuation metrics.
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 IN exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Global stocks mostly flat ahead of G20; dollar slips
By Herbert Lash NEW YORK (Reuters) - Global equity markets traded mostly flat on Monday as investors awaited U.S.-China trade talks the end of this week at the G20 summit, and the dollar fell to three-month lows on bets the Federal Reserve may cut interest rates more than once this year. European stocks stumbled on fears of an escalation in Iran tensions, which also kept gold prices near a six-year high. U.S. President Donald Trump targeted Iranian Supreme Leader Ayatollah Ali Khamenei and other Iranian senior officials with new sanctions on Monday. Earlier in China, shares closed higher on hopes of a thaw in the U.S.-China trade dispute, which has been blamed for slowing global growth. The blue-chip CSI300 index rose 0.2%, and the Shanghai Composite Index also gained 0.2%. Chinese state media said on Sunday that President Xi Jinping will attend the G20 summit in Osaka, Japan, in the first official confirmation of his attendance at a gathering where he is expected to meet with Trump. On Wall Street, the S&P 500 closed slightly lower as healthcare companies lost ground. The technology-rich Nasdaq also fell while the Dow industrials edged higher. Stocks are unlikely to push much higher without progress on U.S.-China trade or a Fed rate cut, said Rick Meckler, a partner at Cherry Lane Investments in New Vernon, New Jersey. "Until we get that G20 meeting and start to get some feedback from the (Trump) administration, it's going to be tough to go higher," he said. MSCI's gauge of equity performance around the globe gained 0.05%. In Europe, the FTSEurofirst 300 index of leading regional shares closed down 0.25% on weak German economic data and a profit warning from Mercedes-Benz maker Daimler. German business morale fell in June to its lowest level since November 2014, an Ifo institute survey showed, adding weight to expectations that Europe's largest economy contracted in the second quarter. Germany's DAX index fell 0.53%. Story continues On Wall Street, the Dow Jones Industrial Average rose 8.41 points, or 0.03%, to 26,727.54. The S&P 500 lost 5.11 points, or 0.17%, to 2,945.35, and the Nasdaq Composite dropped 26.01 points, or 0.32%, to 8,005.70. The dollar softened against a basket of currencies on bets the Fed may lower rates more than once this year, while U.S.-Iranian tensions provided safe-haven support for the yen. The dollar index fell 0.22% and the euro rose 0.25% to $1.1394. The Japanese yen rose 0.04% versus the greenback at 107.34 per dollar. Interest rate futures implied traders have priced in a 100% chance the Fed will cut rates at its next policy meeting at the end of July, with a high probability for two additional rate cuts, according to CME Group's FedWatch program. U.S. Treasury yields fell, holding just above almost three-year lows. The benchmark 10-year U.S. Treasury note rose 13/32 in price to push yields down to 2.0211%. The glum German data pushed down bond yields across the euro zone and reinforced expectations for an ECB rate cut. In developing markets, the Turkish lira strengthened as much as 2% after Turkey's main opposition won a re-run election in Istanbul for mayor on Sunday, a blow to President Tayyip Erdogan. The lira later pared gains. Bitcoin pulled back from 15-month highs after jumping more than 10% over the weekend. Analysts said the gains came amid growing optimism over the adoption of cryptocurrencies after Facebook announced its Libra digital coin. Brent crude, the international benchmark, fell on concerns about the possibility of weakening demand after large gains last week caused tensions between the United States and Iran. Benchmark Brent crude fell 34 cents to settle at $64.86 a barrel, while U.S. crude futures rose 47 cents to settle at $57.90 a barrel. Gold prices rose more than 1 percent to a near six-year peak as the dollar fell, with safe-haven bullion also boosted by Trump's announcement of fresh sanctions on Iran. U.S. gold futures settled up 1.3% at $1,418.20 an ounce. (Reporting by Herbert Lash; Editing by David Gregorio and Leslie Adler) |
U.S. Dollar Extends Losses on Dovish Fed; G-20 Summit in Focus
Investing.com - The U.S. dollar extended losses on Monday in Asia after trading lower for three straight sessions as the U.S. Federal Reserve signalled it was prepared to cut interest rates later this year to counter a global economic slowdown, exacerbated by global trade tensions.
The U.S. dollar index that tracks the greenback against a basket of other currencies was down 0.1% to 95.643 by 1:18 AM ET (05:18 GMT).
The focus this week will be whether Washington and Beijing can resolve their trade dispute at an upcoming summit in Japan of leaders from the Group of 20 leading world economies.
U.S. President Donald Trump and Chinese President Xi Jinping have both confirmed that they will be meeting each other at the summit to discuss trade-related issues.
However, just a few days ahead of the summit, the U.S. put five more Chinese tech entities on a trade, raising uncertainty of whether a trade deal could be struck.
In China, the country’s state-run People’s Daily said in an editorial Saturday that Beijing will “fight to the end” if Trump and his administration persists with continuing the trade war.
The U.S. must drop all tariffs imposed on China if it wants to negotiate on trade, the newspaper said. It “must show some good faith, take account of key concerns from both sides and cancel all tariffs,” the paper said.
Meanwhile, the AUD/USD pair gained 0.5% to 0.6954. Australian central bank chief Philip Lowe on Monday casted doubt on how effective a new round of monetary policy easing would be in supporting global growth.
“But if everyone is easing, there is no exchange-rate channel,” the Reserve Bank of Australia governor said. “We trade with one another, we don’t trade with Mars, so if everyone’s easing, the effect that we get from exchange-rate depreciation via the transmission mechanism isn’t there.”
The yen, which often serves as a safe haven in times of political angst, fell against the dollar today even after tensions grew between Iran and the U.S.
The USD/JPY pair last traded at 107.43, up 0.2%.
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Introducing Centrum Capital (NSE:CENTRUM), The Stock That Slid 54% In The Last Year
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The nature of investing is that you win some, and you lose some. And unfortunately forCentrum Capital Limited(NSE:CENTRUM) shareholders, the stock is a lot lower today than it was a year ago. The share price is down a hefty 54% in that time. Centrum Capital may have better days ahead, of course; we've only looked at a one year period. Furthermore, it's down 17% 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.
View our latest analysis for Centrum Capital
In his essayThe Superinvestors of Graham-and-DoddsvilleWarren Buffett described how share prices do not always rationally reflect the value of a business. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
During the unfortunate twelve months during which the Centrum Capital share price fell, it actually saw its earnings per share (EPS) improve by 131%. Of course, the situation might betray previous over-optimism about growth. It's fair to say that the share price does not seem to be reflecting the EPS growth. So it's well worth checking out some other metrics, too.
With a low yield of 0.2% we doubt that the dividend influences the share price much. In contrast, the 98% drop in revenue is a real concern. Many investors see falling revenue as a likely precursor to lower earnings, so this could well explain the weak share price.
Depicted in the graphic below, you'll see revenue and earnings over time. If you want more detail, you can click on the chart itself.
You can see how its balance sheet has strengthened (or weakened) over time in thisfreeinteractive graphic.
While Centrum Capital shareholders are down 54% for the year (even including dividends), the market itself is up 0.3%. 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. With the stock down 17% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. Is Centrum Capital cheap compared to other companies? These3 valuation measuresmight help you decide.
But note:Centrum Capital may not be the best stock to buy. So take a peek at thisfreelist of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on IN exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
FOREX-Euro hits 3-month high as Fed easing prospects weigh on dollar
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* Dollar struggles near multi-month lows vs euro, yen
* Aussie receives light lift after RBA Lowe's comments on policy
By Shinichi Saoshiro
TOKYO, June 24 (Reuters) - The euro rose to a three-month high against the dollar on Monday, as bearish bets on the U.S. currency remained solid on prospects of a near-term interest rate cut by the Federal Reserve.
The euro stretched its rally last week, up 1.4%, and advanced about 0.15% to $1.1386 in early Asian trade, its highest since March 22.
The dollar index versus a basket of six major currencies was a shade lower at 96.135, having struck 96.093 on Friday, its lowest since March 21, after the Fed last week opened the door for a potential rate cut as early as next month.
That weighed on the dollar and in turn reinvigorated its counterparts like the euro, which has had troubles of its own including Italy's debt problem and the possibility of the European Central Bank having to ease policy.
"It is true that the ECB may have to ease policy especially with the Fed having shifted to an easing bias," said Yukio Ishizuki, senior currency strategist at Daiwa Securities.
"But the ECB already employs a negative interest rate policy and does not have much further room to ease even if they wanted to, unlike the Fed. It is factors like these which have seemingly supported the euro."
The dollar nudged up 0.1% to 107.400 yen after retreating to a near six-month low of 107.045 on Friday.
The U.S. currency was pressured even more against the yen, which often serves as a safe haven in times of political angst, as tensions grew between Iran and the United States.
Also in focus was whether Washington and Beijing can resolve their trade dispute at a summit in Japan this week of leaders from the Group of 20 leading world economies.
The Australian dollar was up 0.4% at $0.6952 after Reserve Bank of Australia Governor Philip Lowe said it would be legitimate to question the effectiveness of global monetary policy easing to boost economic growth.
The comments were perceived to be slightly less dovish as just last week Lowe said a recent cut in Australia interest rates to an all-time low of 1.25% would not be enough to revive economic growth. (Editing by Shri Navaratnam) |
Bitcoin Tops $11.3K to Hit Fresh 2019 Highs
Bitcoin has set a new price high for 2019, reaching as high as $11,304 today before conceding a short-term period of profit taking.
At 21:00 UTC on June 23, the world’s largest cryptocurrency by market capitalization shot upwards on the daily chart, cementing a new high beyond June 22’s peak of $11,215. The move to another 2019 high comes after bitcoin’s price dropped to as low as $10,416 on June 23 before another surge of buying pressure pushed prices back above $10,750 within the same day.
From then BTC bolstered 6 percent, rising above $11,000 at around 19:00 UTC on Sunday evening and then reaching over $11,300 two hours later. It’s currently changing hands at $10,768 as per CoinDesk’s price data.
Related:Meeting Bitcoiners Online When They Live in the Same City
BTC’s 2019 bull run has already started off with a bang in recent weeks, a likely a combination of traders buying into their own fear-of-missing-out (FOMO) as well as institutions chasing the tail end announcement of Facebook’s projectLibra.
However, large levels of volume failed to accompany the rally, beginning at 97.6 billion traded over a 24-hour period and continued to decrease to as low as 67.5 billion by days end, meaning that the move was unsupported and a small sell-off from that point out, was definite.
Its “Real 10” volume – a metric that takes into account trading volume from exchanges reporting honest volume figures as identified in a report by Bitwise Asset Management – currently stands at $46.17 billion, a large difference, according to Messari.io.
Related:Above $300: Ether Price Clocks 10-Month High
Meanwhile, the rest of the market remains relatively flat today, with but a few in the top 20 posting gains. Cadano (ADA) and UNUS SED LEO (LEO) are the only two in the green within the top 20 at CoinMarketCap and are both posting 0.4-2.4 percent growth, respectively, over a 24-hour period.
In addition, the total market capitalization rose to a high of $331.8 billion, its highest point since July 31, 2018, while the market capitalization for altcoins is down $3.8 billion over a 24-hour period pointing to a preference in holding BTC above all else amongst the trading elite.
Disclosure:The author holds no cryptocurrency at the time of writing.Ferris wheelvia Shutterstock
• Bitcoin Price Tops $10K for First Time Since 2018
• Where to Find the Rising Stars of Bitcoin’s Developer Community |
Could Scott Technology Limited's (NZSE:SCT) Investor Composition Influence The Stock Price?
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Every investor in Scott Technology Limited (NZSE:SCT) should be aware of the most powerful shareholder groups. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. Warren Buffett said that he likes 'a business with enduring competitive advantages that is run by able and owner-oriented people'. So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.
With a market capitalization of NZ$177m, Scott Technology is a small cap stock, so it might not be well known by many institutional investors. Our analysis of the ownership of the company, below, shows that institutions are noticeable on the share registry. Let's delve deeper into each type of owner, to discover more about SCT.
See our latest analysis for Scott Technology
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.
We can see that Scott Technology does have institutional investors; and they hold 8.6% 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. 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 Scott Technology's earnings history, below. Of course, the future is what really matters.
We note that hedge funds don't have a meaningful investment in Scott Technology. As far I can tell there isn't analyst coverage of the company, so it is probably flying under the radar.
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board; and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board, themselves.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Our most recent data indicates that insiders own some shares in Scott Technology Limited. As individuals, the insiders collectively own NZ$9.7m worth of the NZ$177m company. It is good to see some investment by insiders, but I usually like to see higher insider holdings. It might be worth checkingif those insiders have been buying.
The general public holds a 34% stake in SCT. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
We can see that Private Companies own 52%, 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.
While it is well worth considering the different groups that own a company, there are other factors that are even more important.
I like to dive deeperinto how a company has performed in the past. You can findhistoric revenue and earnings in thisdetailed graph.
If you would prefer check out another company -- one with potentially superior financials -- then do not miss thisfreelist of interesting companies, backed by strong financial data.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Is SomnoMed Limited (ASX:SOM) Expensive For A Reason? A Look At Its Intrinsic Value
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How far off is SomnoMed Limited (ASX:SOM) from its intrinsic value? Using the most recent financial data, we'll take a look at whether the stock is fairly priced by taking the expected future cash flows and discounting them to their present value. I will use the Discounted Cash Flow (DCF) model. It may sound complicated, but actually it is quite simple!
Remember though, that there are many ways to estimate a company's value, and a DCF is just one method. 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 SomnoMed
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 (A$, Millions)", "2019": "A$-5.70", "2020": "A$2.60", "2021": "A$3.40", "2022": "A$4.06", "2023": "A$4.64", "2024": "A$5.13", "2025": "A$5.55", "2026": "A$5.91", "2027": "A$6.21", "2028": "A$6.48"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x1", "2020": "Analyst x1", "2021": "Analyst x1", "2022": "Est @ 19.37%", "2023": "Est @ 14.25%", "2024": "Est @ 10.67%", "2025": "Est @ 8.16%", "2026": "Est @ 6.41%", "2027": "Est @ 5.18%", "2028": "Est @ 4.32%"}, {"": "Present Value (A$, Millions) Discounted @ 7.72%", "2019": "A$-5.29", "2020": "A$2.24", "2021": "A$2.72", "2022": "A$3.01", "2023": "A$3.20", "2024": "A$3.29", "2025": "A$3.30", "2026": "A$3.26", "2027": "A$3.18", "2028": "A$3.08"}]
Present Value of 10-year Cash Flow (PVCF)= A$21.99m
"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 (2.3%) 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 7.7%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = AU$6.5m × (1 + 2.3%) ÷ (7.7% – 2.3%) = AU$123m
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= A$AU$123m ÷ ( 1 + 7.7%)10= A$58.36m
The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is A$80.35m. The last step is to then divide the equity value by the number of shares outstanding.This results in an intrinsic value estimate of A$1.28. Compared to the current share price of A$1.66, the company appears slightly overvalued 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. 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 SomnoMed as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.7%, which is based on a levered beta of 0.907. 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 SomnoMed, There are three fundamental aspects you should further examine:
1. Financial Health: Does SOM 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 SOM'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 SOM? 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 AU 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. |
Is SomnoMed Limited (ASX:SOM) Worth AU$1.66 Based On Its Intrinsic Value?
Want to participate in a short research study ? Help shape the future of investing tools and you could win a $250 gift card! In this article we are going to estimate the intrinsic value of SomnoMed Limited ( ASX:SOM ) by estimating the company's future cash flows and discounting them to their present value. I will be using the Discounted Cash Flow (DCF) model. It may sound complicated, but actually it is quite simple! Remember though, that there are many ways to estimate a company's value, and a DCF is just one method. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in the Simply Wall St analysis model . See our latest analysis for SomnoMed Is SomnoMed fairly valued? We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. Generally we assume that a dollar today is more valuable than a dollar in the future, so we discount the value of these future cash flows to their estimated value in today's dollars: 10-year free cash flow (FCF) forecast 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Levered FCF (A$, Millions) A$-5.70 A$2.60 A$3.40 A$4.06 A$4.64 A$5.13 A$5.55 A$5.91 A$6.21 A$6.48 Growth Rate Estimate Source Analyst x1 Analyst x1 Analyst x1 Est @ 19.37% Est @ 14.25% Est @ 10.67% Est @ 8.16% Est @ 6.41% Est @ 5.18% Est @ 4.32% Present Value (A$, Millions) Discounted @ 7.72% A$-5.29 A$2.24 A$2.72 A$3.01 A$3.20 A$3.29 A$3.30 A$3.26 A$3.18 A$3.08 Present Value of 10-year Cash Flow (PVCF) = A$21.99m Story continues "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 (2.3%) 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 7.7%. Terminal Value (TV) = FCF 2029 × (1 + g) ÷ (r g) = AU$6.5m × (1 + 2.3%) ÷ (7.7% 2.3%) = AU$123m Present Value of Terminal Value (PVTV) = TV / (1 + r) 10 = A$AU$123m ÷ ( 1 + 7.7%) 10 = A$58.36m 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 A$80.35m. The last step is to then divide the equity value by the number of shares outstanding. This results in an intrinsic value estimate of A$1.28 . Compared to the current share price of A$1.66, the company appears slightly overvalued 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. ASX:SOM Intrinsic value, June 24th 2019 The assumptions 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 SomnoMed as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.7%, which is based on a levered beta of 0.907. 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. Next Steps: Valuation is only one side of the coin in terms of building your investment thesis, and it shouldnt 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 SomnoMed, There are three additional factors you should further research: Financial Health : Does SOM have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk. Future Earnings : How does SOM'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 our free analyst growth expectation chart . Other High Quality Alternatives : Are there other high quality stocks you could be holding instead of SOM? Explore our interactive list of high quality stocks to 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 ASX every day. If you want to find the calculation for other stocks just search 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 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. |
The Crypto Daily – The Movers and Shakers 24/06/19
Bitcoin bucked the trend on Sunday, rising by 1.57% to end the day at $10,913.00. 6 days in the green out of 7 saw Bitcoin rally by 21.5%, Monday through Sunday.
On the day, a mixed morning saw Bitcoin fall from an early morning high $10,985.00 to a late morning intraday low $10,572.00.
Steering well clear of the major support and resistance levels, Bitcoin found support through the afternoon. A late rally saw Bitcoin break through the first major resistance level at $11,290.67 to strike an intraday high and new swing hi $11,369.00.
A late pullback left Bitcoin back at sub-$11,000 levels.
Across the rest of the top 10 cryptos, it was a sea of red for the major cryptos.
Litecoin led the way down on the day, sliding by 3.34%. EOS was close behind, falling by 3.13%.
Ethereum saw the most modest losses on the day, falling by 0.49% to hold onto $300 levels.
For the week, Litecoin and Stellar’s Lumen saw red, with losses of 0.25% and 0.66% respectively.
While Bitcoin led the way with the 21.5% rally, Binance Coin and Ethereum also saw solid gains. The pair ended the week up by 15.4% and by 14.4% respectively.
Bitcoin Cash ABC and Bitcoin Cash SV also saw double-digit gains on the week.
Bitcoin’s trend-bucking move on Sunday led to a further rise in dominance to 59% levels, with a further rise anticipated.
Over the course of the week, the total crypto market cap jumped from $285.84bn to $325bn levels on Sunday.
24-hour trading volumes were choppy through the week, however. Volumes fell to $46bn levels on Thursday before recovering to $72bn levels on Sunday.
At the time of writing, Bitcoin was down by 1.73% to $10,724.00. A bearish start to the day saw Bitcoin fall from a morning high $10,922.00 to a low $10,560.00 before finding support.
Falling well short of the major resistance levels, Bitcoin came within range of the first major support level at $10,533.67.
Elsewhere, it was red across the crypto-board. Leading the way down was Bitcoin Cash SV, with a 3.96% loss. Stellar’s Lumen continued to struggle, falling by 3.03%
Ethereum saw more modest losses early on, down by just 0.78% at the time of writing.
Bitcoin would need to move through the morning high $10,922.00 to $10,950 levels to support a return to $11,000 levels.
Support from the broader market would be needed, however, for Bitcoin to take a run at the first major resistance level at $11,330.67.
Barring a broad-based crypto rally, the first major resistance level and Sunday’s high $11,369 would likely limit any upside on the day.
Failure to move through to $10,950 levels could see Bitcoin fall deeper into the red before any recovery.
A pullback through the morning low $10,560.00 would likely see Bitcoin fall through the first major support level at $10,533.67.
Barring an extended sell-off through the day, Bitcoin should steer clear of sub-$10,400 levels.
Get Into Cryptocurrency Trading Today
Thisarticlewas originally posted on FX Empire
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Did Sumit Woods Limited (NSE:SUMIT) Insiders Buy Up More 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 inSumit Woods Limited(NSE:SUMIT).
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'
Check out our latest analysis for Sumit Woods
While there weren't any large insider transactions in the last twelve months, it's still worth looking at the trading.
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!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at thisfreelist of companies. (Hint: insiders have been buying them).
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. I reckon it's a good sign if insiders own a significant number of shares in the company. Sumit Woods insiders own 65% of the company, currently worth about ₹448m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest Sumit Woods insiders are well aligned, and quite possibly think the share price is too low. That's what I like to see! To put this in context, take a look at how a company has performed in the past. You can accessthisdetailed 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 interesting companies, that have HIGH return on equity and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Have Insiders Been Buying Sumit Woods Limited (NSE:SUMIT) Shares?
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We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sellSumit Woods Limited(NSE:SUMIT), you may well want to know whether insiders have been buying or selling.
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'
Check out our latest analysis for Sumit Woods
There wasn't any very large single transaction over the last year, but we can still observe some trading.
The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Sumit Woods is not the only stock that insiders are buying. For those who like to findwinning investmentsthisfreelist of growing companies with recent insider purchasing, could be just the ticket.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Sumit Woods insiders own 65% of the company, currently worth about ₹448m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Sumit Woods. That's what I like to see!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.
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. |
Is National Storage Affiliates Trust (NSA) A Good Stock To Buy?
Based on the fact that hedge funds have collectively under-performed the market for several years, it would be easy to assume that their stock picks simply aren't very good. However, our research shows this not to be the case. In fact, when it comes to their very top picks collectively, they show a strong ability to pick winning stocks. This year hedge funds' top 20 stock picks easily bested the broader market, at 18.7% compared to 12.1%, despite there being a few duds in there like Berkshire Hathaway (even their collective wisdom isn't perfect). The results show that there is plenty of merit to imitating the collective wisdom of top investors.
National Storage Affiliates Trust (NYSE:NSA)was in 16 hedge funds' portfolios at the end of March. NSA investors should be aware of a decrease in support from the world's most elite money managers recently. There were 17 hedge funds in our database with NSA positions at the end of the previous quarter. Our calculations also showed that NSA isn't among the30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
We're going to review the key hedge fund action encompassing National Storage Affiliates Trust (NYSE:NSA).
At the end of the first quarter, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -6% from the fourth quarter of 2018. The graph below displays the number of hedge funds with bullish position in NSA over the last 15 quarters. With hedge funds' positions undergoing their usual ebb and flow, there exists an "upper tier" of key hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
According to Insider Monkey's hedge fund database,Renaissance Technologies, managed by Jim Simons, holds the number one position in National Storage Affiliates Trust (NYSE:NSA). Renaissance Technologies has a $41.3 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is David Harding ofWinton Capital Management, with a $18.6 million position; 0.4% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that are bullish comprise Israel Englander'sMillennium Management, Peter Rathjens, Bruce Clarke and John Campbell'sArrowstreet Capitaland Ken Griffin'sCitadel Investment Group.
Seeing as National Storage Affiliates Trust (NYSE:NSA) has faced falling interest from the smart money, we can see that there lies a certain "tier" of funds that slashed their positions entirely heading into Q3. At the top of the heap, Matthew Hulsizer'sPEAK6 Capital Managementdumped the largest stake of the 700 funds tracked by Insider Monkey, valued at close to $1.3 million in stock, and Benjamin A. Smith's Laurion Capital Management was right behind this move, as the fund sold off about $0.3 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 1 funds heading into Q3.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as National Storage Affiliates Trust (NYSE:NSA) but similarly valued. These stocks are Harsco Corporation (NYSE:HSC), Hovnanian Enterprises, Inc. (NYSE:HOV), Blucora Inc (NASDAQ:BCOR), and Opko Health Inc. (NASDAQ:OPK). This group of stocks' market caps match NSA's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position HSC,19,102389,-5 HOV,3,3359,-6 BCOR,12,137883,1 OPK,13,21755,-2 Average,11.75,66347,-3 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 11.75 hedge funds with bullish positions and the average amount invested in these stocks was $66 million. That figure was $94 million in NSA's case. Harsco Corporation (NYSE:HSC) is the most popular stock in this table. On the other hand Hovnanian Enterprises, Inc. (NYSE:HOV) is the least popular one with only 3 bullish hedge fund positions. National Storage Affiliates Trust (NYSE:NSA) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Hedge funds were also right about betting on NSA, though not to the same extent, as the stock returned 4.9% during the same time frame and outperformed the market as well.
Disclosure: None. This article was originally published atInsider Monkey.
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Here’s What Hedge Funds Think About Ferro Corporation (FOE)
Investing in small cap stocks has historically been a way to outperform the market, as small cap companies typically grow faster on average than the blue chips. That outperformance comes with a price, however, as there are occasional periods of higher volatility. The last 8 months is one of those periods, as the Russell 2000 ETF (IWM) has underperformed the larger S&P 500 ETF (SPY) by nearly 9 percentage points. Given that the funds we track tend to have a disproportionate amount of their portfolios in smaller cap stocks, they have seen some volatility in their portfolios too. Actually their moves are potentially one of the factors that contributed to this volatility. In this article, we use our extensive database of hedge fund holdings to find out what the smart money thinks of Ferro Corporation (NYSE:FOE).
Ferro Corporation (NYSE:FOE)was in 16 hedge funds' portfolios at the end of the first quarter of 2019. FOE has experienced a decrease in support from the world's most elite money managers of late. There were 19 hedge funds in our database with FOE positions at the end of the previous quarter. Our calculations also showed that FOE isn't among the30 most popular stocks among hedge funds.
In the eyes of most market participants, hedge funds are seen as unimportant, outdated investment vehicles of the past. While there are over 8000 funds in operation at present, We hone in on the masters of this club, around 750 funds. It is estimated that this group of investors orchestrate bulk of the smart money's total asset base, and by paying attention to their inimitable stock picks, Insider Monkey has determined numerous investment strategies that have historically outperformed the S&P 500 index. Insider Monkey's flagship hedge fund strategy surpassed the S&P 500 index by around 5 percentage points per annum since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in ourlatest quarterly updateand they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).
Let's view the recent hedge fund action surrounding Ferro Corporation (NYSE:FOE).
Heading into the second quarter of 2019, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -16% from one quarter earlier. By comparison, 16 hedge funds held shares or bullish call options in FOE a year ago. With the smart money's capital changing hands, there exists a few notable hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
More specifically,GAMCO Investorswas the largest shareholder of Ferro Corporation (NYSE:FOE), with a stake worth $81 million reported as of the end of March. Trailing GAMCO Investors was Luminus Management, which amassed a stake valued at $75.9 million. Royce & Associates, Brigade Capital, and Scopus Asset Management were also very fond of the stock, giving the stock large weights in their portfolios.
Seeing as Ferro Corporation (NYSE:FOE) has witnessed bearish sentiment from the entirety of the hedge funds we track, it's safe to say that there lies a certain "tier" of fund managers that elected to cut their full holdings in the third quarter. It's worth mentioning that Ken Griffin'sCitadel Investment Groupsold off the largest stake of the "upper crust" of funds watched by Insider Monkey, valued at close to $0.9 million in stock, and Paul Marshall and Ian Wace's Marshall Wace LLP was right behind this move, as the fund cut about $0.9 million worth. These transactions are intriguing to say the least, as total hedge fund interest dropped by 3 funds in the third quarter.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Ferro Corporation (NYSE:FOE) but similarly valued. These stocks are Prestige Consumer Healthcare Inc. (NYSE:PBH), Matson, Inc. (NYSE:MATX), FBL Financial Group, Inc. (NYSE:FFG), and AMC Entertainment Holdings Inc (NYSE:AMC). This group of stocks' market values resemble FOE's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PBH,13,66863,-2 MATX,9,6472,-3 FFG,7,7522,1 AMC,18,121829,-3 Average,11.75,50672,-1.75 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 11.75 hedge funds with bullish positions and the average amount invested in these stocks was $51 million. That figure was $216 million in FOE's case. AMC Entertainment Holdings Inc (NYSE:AMC) is the most popular stock in this table. On the other hand FBL Financial Group, Inc. (NYSE:FFG) is the least popular one with only 7 bullish hedge fund positions. Ferro Corporation (NYSE:FOE) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately FOE wasn't nearly as popular as these 20 stocks and hedge funds that were betting on FOE were disappointed as the stock returned -19.6% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Here’s What Hedge Funds Think About Central Garden & Pet Co (CENT)
Insider Monkey finished processing more than 738 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2019. What do these smart investors think about Central Garden & Pet Co (NASDAQ:CENT)?
Central Garden & Pet Co (NASDAQ:CENT)was in 16 hedge funds' portfolios at the end of March. CENT shareholders have witnessed a decrease in hedge fund sentiment in recent months. There were 24 hedge funds in our database with CENT holdings at the end of the previous quarter. Our calculations also showed that CENT isn't among the30 most popular stocks among hedge funds.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
We're going to take a look at the recent hedge fund action encompassing Central Garden & Pet Co (NASDAQ:CENT).
At Q1's end, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a change of -33% from the fourth quarter of 2018. On the other hand, there were a total of 18 hedge funds with a bullish position in CENT a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey,Renaissance Technologies, managed by Jim Simons, holds the number one position in Central Garden & Pet Co (NASDAQ:CENT). Renaissance Technologies has a $23.6 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second most bullish fund manager isCQS Cayman LP, led by Michael Hintze, holding a $19.1 million position; 0.9% of its 13F portfolio is allocated to the stock. Other professional money managers with similar optimism contain Jim Simons'sRenaissance Technologies, Greg Poole'sEcho Street Capital Managementand D. E. Shaw'sD E Shaw.
Judging by the fact that Central Garden & Pet Co (NASDAQ:CENT) has experienced falling interest from the entirety of the hedge funds we track, we can see that there lies a certain "tier" of hedgies that decided to sell off their full holdings by the end of the third quarter. Intriguingly, George McCabe'sPortolan Capital Managementcut the largest position of the 700 funds tracked by Insider Monkey, valued at close to $9.2 million in stock, and Mark N. Diker's Diker Management was right behind this move, as the fund dumped about $2.6 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 8 funds by the end of the third quarter.
Let's now take a look at hedge fund activity in other stocks similar to Central Garden & Pet Co (NASDAQ:CENT). We will take a look at Park National Corporation (NYSEAMEX:PRK), MRC Global Inc (NYSE:MRC), Calavo Growers, Inc. (NASDAQ:CVGW), and Advanced Drainage Systems, Inc. (NYSE:WMS). This group of stocks' market values resemble CENT's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PRK,5,12810,-2 MRC,18,105875,3 CVGW,12,46900,-2 WMS,17,273479,0 Average,13,109766,-0.25 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $110 million. That figure was $125 million in CENT's case. MRC Global Inc (NYSE:MRC) is the most popular stock in this table. On the other hand Park National Corporation (NYSEAMEX:PRK) is the least popular one with only 5 bullish hedge fund positions. Central Garden & Pet Co (NASDAQ:CENT) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Hedge funds were also right about betting on CENT as the stock returned 10.2% during the same period and outperformed the market by an even larger margin. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published atInsider Monkey.
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Hedge Funds Have Never Been More Bullish On Tootsie Roll Industries, Inc. (TR)
Hedge funds and other investment firms that we track manage billions of dollars of their wealthy clients' money, and needless to say, they are painstakingly thorough when analyzing where to invest this money, as their own wealth also depends on it. Regardless of the various methods used by elite investors like David Tepper and David Abrams, the resources they expend are second-to-none. This is especially valuable when it comes to small-cap stocks, which is where they generate their strongest outperformance, as their resources give them a huge edge when it comes to studying these stocks compared to the average investor, which is why we intently follow their activity in the small-cap space.
Tootsie Roll Industries, Inc. (NYSE:TR)has experienced an increase in support from the world's most elite money managers lately. Our calculations also showed that TR isn't among the30 most popular stocks among hedge funds.
To most shareholders, hedge funds are viewed as worthless, outdated financial vehicles of the past. While there are over 8000 funds trading at the moment, Our researchers look at the masters of this group, about 750 funds. Most estimates calculate that this group of people control bulk of all hedge funds' total asset base, and by following their matchless investments, Insider Monkey has come up with a number of investment strategies that have historically outpaced the market. Insider Monkey's flagship hedge fund strategy outperformed the S&P 500 index by around 5 percentage points annually since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in ourlatest quarterly updateand they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).
Let's analyze the new hedge fund action surrounding Tootsie Roll Industries, Inc. (NYSE:TR).
Heading into the second quarter of 2019, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a change of 45% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in TR over the last 15 quarters. With hedgies' capital changing hands, there exists a few key hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Mario Gabelli'sGAMCO Investorshas the number one position in Tootsie Roll Industries, Inc. (NYSE:TR), worth close to $36.6 million, accounting for 0.3% of its total 13F portfolio. The second largest stake is held by Chuck Royce ofRoyce & Associates, with a $31.7 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Remaining members of the smart money that hold long positions encompass Jim Simons'sRenaissance Technologies, John D. Gillespie'sProspector Partnersand Scott Wallace'sWallace Capital Management.
With a general bullishness amongst the heavyweights, key money managers have been driving this bullishness.Citadel Investment Group, managed by Ken Griffin, initiated the most outsized position in Tootsie Roll Industries, Inc. (NYSE:TR). Citadel Investment Group had $0.9 million invested in the company at the end of the quarter. Mike Vranos'sEllingtonalso made a $0.6 million investment in the stock during the quarter. The following funds were also among the new TR investors: Joel Greenblatt'sGotham Asset Management, Noam Gottesman'sGLG Partners, and David Harding'sWinton Capital Management.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Tootsie Roll Industries, Inc. (NYSE:TR) but similarly valued. These stocks are Dycom Industries, Inc. (NYSE:DY), Horace Mann Educators Corporation (NYSE:HMN), Diamond Offshore Drilling Inc (NYSE:DO), and Universal Corp (NYSE:UVV). This group of stocks' market values match TR's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position DY,17,60413,-1 HMN,14,28217,1 DO,18,66179,2 UVV,17,104058,2 Average,16.5,64717,1 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 16.5 hedge funds with bullish positions and the average amount invested in these stocks was $65 million. That figure was $94 million in TR's case. Diamond Offshore Drilling Inc (NYSE:DO) is the most popular stock in this table. On the other hand Horace Mann Educators Corporation (NYSE:HMN) is the least popular one with only 14 bullish hedge fund positions. Tootsie Roll Industries, Inc. (NYSE:TR) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately TR wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); TR investors were disappointed as the stock returned 2.4% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Is Industrial Logistics Properties Trust (ILPT) A Good Stock To Buy?
"The end to the U.S. Government shutdown, reports of progress on China-U.S. trade talks, and the Federal Reserve’s confirmation that it did not plan further interest rate hikes in 2019 allayed investor fears and drove U.S. markets substantially higher in the first quarter of the year. Global markets followed suit pretty much across the board delivering what some market participants described as a “V-shaped” recovery," This is how Evermore Global Value summarized the first quarter in itsinvestor letter. We pay attention to what hedge funds are doing in a particular stock before considering a potential investment because it works for us. So let’s take a glance at the smart money sentiment towards one of the stocks hedge funds invest in.
Industrial Logistics Properties Trust (NASDAQ:ILPT)shareholders have witnessed a decrease in support from the world's most elite money managers lately.ILPTwas in 16 hedge funds' portfolios at the end of the first quarter of 2019. There were 19 hedge funds in our database with ILPT holdings at the end of the previous quarter. Our calculations also showed that ILPT isn't among the30 most popular stocks among hedge funds.
If you'd ask most stock holders, hedge funds are assumed to be slow, old financial vehicles of years past. While there are greater than 8000 funds in operation at the moment, Our experts look at the aristocrats of this group, approximately 750 funds. Most estimates calculate that this group of people command the lion's share of the hedge fund industry's total capital, and by tailing their top equity investments, Insider Monkey has determined many investment strategies that have historically outperformed Mr. Market. Insider Monkey's flagship hedge fund strategy outstripped the S&P 500 index by around 5 percentage points annually since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in ourlatest quarterly updateand they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).
We're going to take a glance at the latest hedge fund action surrounding Industrial Logistics Properties Trust (NASDAQ:ILPT).
Heading into the second quarter of 2019, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -16% from the previous quarter. By comparison, 11 hedge funds held shares or bullish call options in ILPT a year ago. With hedge funds' capital changing hands, there exists a select group of notable hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
The largest stake in Industrial Logistics Properties Trust (NASDAQ:ILPT) was held byHBK Investments, which reported holding $43.8 million worth of stock at the end of March. It was followed by Indaba Capital Management with a $38.3 million position. Other investors bullish on the company included Yost Capital Management, Cloverdale Capital Management, and Sabrepoint Capital.
Since Industrial Logistics Properties Trust (NASDAQ:ILPT) has witnessed a decline in interest from the entirety of the hedge funds we track, we can see that there was a specific group of fund managers that slashed their full holdings last quarter. Intriguingly, Thomas Steyer'sFarallon Capitalsold off the largest position of the "upper crust" of funds watched by Insider Monkey, worth an estimated $12 million in stock, and Shane Finemore's Manikay Partners was right behind this move, as the fund sold off about $11.6 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 3 funds last quarter.
Let's go over hedge fund activity in other stocks similar to Industrial Logistics Properties Trust (NASDAQ:ILPT). These stocks are Clovis Oncology Inc (NASDAQ:CLVS), Fresh Del Monte Produce Inc (NYSE:FDP), Getty Realty Corp. (NYSE:GTY), and MGP Ingredients Inc (NASDAQ:MGPI). This group of stocks' market caps are closest to ILPT's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CLVS,29,567447,5 FDP,14,43087,-1 GTY,9,89875,1 MGPI,13,24351,5 Average,16.25,181190,2.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 16.25 hedge funds with bullish positions and the average amount invested in these stocks was $181 million. That figure was $181 million in ILPT's case. Clovis Oncology Inc (NASDAQ:CLVS) is the most popular stock in this table. On the other hand Getty Realty Corp. (NYSE:GTY) is the least popular one with only 9 bullish hedge fund positions. Industrial Logistics Properties Trust (NASDAQ:ILPT) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately ILPT wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); ILPT investors were disappointed as the stock returned 2.4% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Hedge Funds Have Never Been This Bullish On Kadmon Holdings, Inc. (KDMN)
How do we determine whether Kadmon Holdings, Inc. (NYSE:KDMN) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.
IsKadmon Holdings, Inc. (NYSE:KDMN)a bargain? Prominent investors are taking an optimistic view. The number of long hedge fund bets improved by 5 lately. Our calculations also showed that KDMN isn't among the30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_745225" align="aligncenter" width="473"]
Noam Gottesman, GLG Partners[/caption]
We're going to check out the fresh hedge fund action regarding Kadmon Holdings, Inc. (NYSE:KDMN).
At Q1's end, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 50% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards KDMN over the last 15 quarters. With hedge funds' sentiment swirling, there exists an "upper tier" of key hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
The largest stake in Kadmon Holdings, Inc. (NYSE:KDMN) was held byPerceptive Advisors, which reported holding $34.8 million worth of stock at the end of March. It was followed by Vivo Capital with a $33.3 million position. Other investors bullish on the company included Consonance Capital Management, Third Point, and Millennium Management.
As aggregate interest increased, key hedge funds were breaking ground themselves.Consonance Capital Management, managed by Mitchell Blutt, established the largest position in Kadmon Holdings, Inc. (NYSE:KDMN). Consonance Capital Management had $30.7 million invested in the company at the end of the quarter. Peter Algert and Kevin Coldiron'sAlgert Coldiron Investorsalso made a $0.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Ken Griffin'sCitadel Investment Group, Noam Gottesman'sGLG Partners, and Michael Gelband'sExodusPoint Capital.
Let's check out hedge fund activity in other stocks similar to Kadmon Holdings, Inc. (NYSE:KDMN). These stocks are Peoples Financial Services Corp. (NASDAQ:PFIS), Daktronics, Inc. (NASDAQ:DAKT), BioLife Solutions, Inc. (NASDAQ:BLFS), and RR Donnelley & Sons Company (NYSE:RRD). This group of stocks' market values resemble KDMN's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PFIS,1,2374,0 DAKT,10,15269,-1 BLFS,15,83044,3 RRD,14,21806,-3 Average,10,30623,-0.25 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $31 million. That figure was $151 million in KDMN's case. BioLife Solutions, Inc. (NASDAQ:BLFS) is the most popular stock in this table. On the other hand Peoples Financial Services Corp. (NASDAQ:PFIS) is the least popular one with only 1 bullish hedge fund positions. Kadmon Holdings, Inc. (NYSE:KDMN) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately KDMN wasn't nearly as popular as these 20 stocks and hedge funds that were betting on KDMN were disappointed as the stock returned -31.8% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Is Duke Realty Corporation (DRE) A Good Stock To Buy?
Hedge funds are known to underperform the bull markets but that's not because they are bad at investing. Truth be told, most hedge fund managers and other smaller players within this industry are very smart and skilled investors. Of course, they may also make wrong bets in some instances, but no one knows what the future holds and how market participants will react to the bountiful news that floods in each day. Hedge funds underperform because they are hedged. The Standard and Poor’s 500 Index returned approximately 12.1% in the first 5 months of this year through May 30th (including dividend payments). Conversely, hedge funds’ top 20 large-cap stock picks generated a return of 18.7% during the same 5-month period. An average long/short hedge fund returned only a fraction of this due to the hedges they implement and the large fees they charge. Our research covering the last 18 years indicates that investors can outperform the market by imitating hedge funds' stock picks rather than directly investing in hedge funds. That's why we believe it isn't a waste of time to check out hedge fund sentiment before you invest in a stock like Duke Realty Corporation (NYSE:DRE).
IsDuke Realty Corporation (NYSE:DRE)going to take off soon? Prominent investors are in a bearish mood. The number of long hedge fund bets were cut by 6 recently. Our calculations also showed that dre isn't among the30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We're going to view the new hedge fund action regarding Duke Realty Corporation (NYSE:DRE).
At the end of the first quarter, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -27% from the fourth quarter of 2018. Below, you can check out the change in hedge fund sentiment towards DRE over the last 15 quarters. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
The largest stake in Duke Realty Corporation (NYSE:DRE) was held byAEW Capital Management, which reported holding $128.5 million worth of stock at the end of March. It was followed by Millennium Management with a $52.2 million position. Other investors bullish on the company included Renaissance Technologies, Balyasny Asset Management, and Winton Capital Management.
Seeing as Duke Realty Corporation (NYSE:DRE) has witnessed a decline in interest from hedge fund managers, logic holds that there were a few fund managers who sold off their entire stakes by the end of the third quarter. Interestingly, Greg Poole'sEcho Street Capital Managementsold off the largest position of the "upper crust" of funds followed by Insider Monkey, worth close to $6.5 million in stock, and Ray Dalio's Bridgewater Associates was right behind this move, as the fund dumped about $2.2 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 6 funds by the end of the third quarter.
Let's now review hedge fund activity in other stocks similar to Duke Realty Corporation (NYSE:DRE). We will take a look at Lamb Weston Holdings, Inc. (NYSE:LW), Tableau Software Inc (NYSE:DATA), PTC Inc (NASDAQ:PTC), and EXACT Sciences Corporation (NASDAQ:EXAS). This group of stocks' market valuations are closest to DRE's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LW,41,1255203,9 DATA,44,2281877,8 PTC,25,1387214,-6 EXAS,33,814522,3 Average,35.75,1434704,3.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 35.75 hedge funds with bullish positions and the average amount invested in these stocks was $1435 million. That figure was $303 million in DRE's case. Tableau Software Inc (NYSE:DATA) is the most popular stock in this table. On the other hand PTC Inc (NASDAQ:PTC) is the least popular one with only 25 bullish hedge fund positions. Compared to these stocks Duke Realty Corporation (NYSE:DRE) is even less popular than PTC. Hedge funds clearly dropped the ball on DRE as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on DRE as the stock returned 6.3% during the same period and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published atInsider Monkey.
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Hedge Funds Have Never Been More Bullish On TIM Participacoes SA (TSU)
Is TIM Participacoes SA (NYSE:TSU) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
TIM Participacoes SA (NYSE:TSU)was in 16 hedge funds' portfolios at the end of March. TSU has experienced an increase in activity from the world's largest hedge funds in recent months. There were 14 hedge funds in our database with TSU positions at the end of the previous quarter. Our calculations also showed that tsu isn't among the30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Let's take a look at the fresh hedge fund action surrounding TIM Participacoes SA (NYSE:TSU).
Heading into the second quarter of 2019, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a change of 14% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards TSU over the last 15 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds,AQR Capital Managementheld the most valuable stake in TIM Participacoes SA (NYSE:TSU), which was worth $113 million at the end of the first quarter. On the second spot was Paulson & Co which amassed $75.4 million worth of shares. Moreover, Renaissance Technologies, GoldenTree Asset Management, and Citadel Investment Group were also bullish on TIM Participacoes SA (NYSE:TSU), allocating a large percentage of their portfolios to this stock.
Now, key money managers have been driving this bullishness.D E Shaw, managed by D. E. Shaw, established the most valuable position in TIM Participacoes SA (NYSE:TSU). D E Shaw had $2.8 million invested in the company at the end of the quarter. Benjamin A. Smith'sLaurion Capital Managementalso initiated a $1.5 million position during the quarter. The only other fund with a brand new TSU position is Roy Vermus and Shlomi Bracha'sNoked Capital.
Let's go over hedge fund activity in other stocks similar to TIM Participacoes SA (NYSE:TSU). These stocks are Voya Financial Inc (NYSE:VOYA), AMERCO (NASDAQ:UHAL), Aramark (NYSE:ARMK), and News Corp (NASDAQ:NWSA). This group of stocks' market caps are closest to TSU's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position VOYA,45,1331987,7 UHAL,12,390787,5 ARMK,38,853818,-1 NWSA,21,517519,-2 Average,29,773528,2.25 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 29 hedge funds with bullish positions and the average amount invested in these stocks was $774 million. That figure was $342 million in TSU's case. Voya Financial Inc (NYSE:VOYA) is the most popular stock in this table. On the other hand AMERCO (NASDAQ:UHAL) is the least popular one with only 12 bullish hedge fund positions. TIM Participacoes SA (NYSE:TSU) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately TSU wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); TSU investors were disappointed as the stock returned -1.2% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Did Hedge Funds Drop The Ball On Companhia de Saneamento Básico do Estado de São Paulo SABESP (SBS) ?
It seems that the masses and most of the financial media hate hedge funds and what they do, but why is this hatred of hedge funds so prominent? At the end of the day, these asset management firms do not gamble the hard-earned money of the people who are on the edge of poverty. Truth be told, most hedge fund managers and other smaller players within this industry are very smart and skilled investors. Of course, they may also make wrong bets in some instances, but no one knows what the future holds and how market participants will react to the bountiful news that floods in each day. The Standard and Poors 500 Index returned approximately 12.1% in the first 5 months of this year (through May 30th). Conversely, hedge funds top 20 large-cap stock picks generated a return of 18.7% during the same 5-month period, with the majority of these stock picks outperforming the broader market benchmark. Coincidence? It might happen to be so, but it is unlikely. Our research covering the last 18 years indicates that hedge funds' stock picks generate superior risk-adjusted returns. That's why we believe it isn't a waste of time to check out hedge fund sentiment before you invest in a stock like Companhia de Saneamento Básico do Estado de São Paulo - SABESP (NYSE: SBS ). Is Companhia de Saneamento Básico do Estado de São Paulo - SABESP (NYSE: SBS ) ready to rally soon? Prominent investors are becoming less hopeful. The number of long hedge fund bets fell by 1 in recent months. Our calculations also showed that sbs isn't among the 30 most popular stocks among hedge funds . Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 ( see the details here ). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. Story continues [caption id="attachment_30621" align="aligncenter" width="487"] AQR CAPITAL MANAGEMENT Cliff Asness of AQR Capital Management[/caption] We're going to check out the recent hedge fund action encompassing Companhia de Saneamento Básico do Estado de São Paulo - SABESP (NYSE: SBS ). Hedge fund activity in Companhia de Saneamento Básico do Estado de São Paulo - SABESP (NYSE:SBS) At the end of the first quarter, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -6% from the previous quarter. The graph below displays the number of hedge funds with bullish position in SBS over the last 15 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves. No of Hedge Funds with SBS Positions Among these funds, AQR Capital Management held the most valuable stake in Companhia de Saneamento Básico do Estado de São Paulo - SABESP (NYSE:SBS), which was worth $118.4 million at the end of the first quarter. On the second spot was Impax Asset Management which amassed $71.9 million worth of shares. Moreover, Renaissance Technologies, Arrowstreet Capital, and Millennium Management were also bullish on Companhia de Saneamento Básico do Estado de São Paulo - SABESP (NYSE:SBS), allocating a large percentage of their portfolios to this stock. Since Companhia de Saneamento Básico do Estado de São Paulo - SABESP (NYSE:SBS) has faced a decline in interest from the aggregate hedge fund industry, logic holds that there exists a select few hedge funds who were dropping their positions entirely in the third quarter. It's worth mentioning that Minhua Zhang's Weld Capital Management sold off the largest stake of all the hedgies tracked by Insider Monkey, valued at about $0.2 million in stock, and Matthew Hulsizer's PEAK6 Capital Management was right behind this move, as the fund dumped about $0.1 million worth. These moves are interesting, as total hedge fund interest fell by 1 funds in the third quarter. Let's now take a look at hedge fund activity in other stocks similar to Companhia de Saneamento Básico do Estado de São Paulo - SABESP (NYSE:SBS). We will take a look at PRA Health Sciences Inc (NASDAQ: PRAH ), Ceridian HCM Holding Inc. (NYSE: CDAY ), Universal Display Corporation (NASDAQ: OLED ), and Sealed Air Corporation (NYSE: SEE ). This group of stocks' market valuations match SBS's market valuation. [table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PRAH,28,411788,3 CDAY,30,987099,13 OLED,18,133100,8 SEE,29,1118989,-2 Average,26.25,662744,5.5 [/table] View table here if you experience formatting issues. As you can see these stocks had an average of 26.25 hedge funds with bullish positions and the average amount invested in these stocks was $663 million. That figure was $330 million in SBS's case. Ceridian HCM Holding Inc. (NYSE: CDAY ) is the most popular stock in this table. On the other hand Universal Display Corporation (NASDAQ: OLED ) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks Companhia de Saneamento Básico do Estado de São Paulo - SABESP (NYSE:SBS) is even less popular than OLED. Hedge funds clearly dropped the ball on SBS as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on SBS as the stock returned 19.3% during the same period and outperformed the market by an even larger margin. Disclosure: None. This article was originally published at Insider Monkey . 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Hedge Funds Have Never Been This Bullish On BioLife Solutions, Inc. (BLFS)
Amid an overall bull market, many stocks that smart money investors were collectively bullish on surged during the first quarter. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 40% and 25% respectively. Our research shows that most of the stocks that smart money likes historically generate strong risk-adjusted returns. That's why we weren't surprised when hedge funds’ top 20 large-cap stock picks generated a return of 18.7% during the first 5 months of 2019 and outperformed the broader market benchmark by 6.6 percentage points.This is why following the smart money sentiment is a useful tool at identifying the next stock to invest in.
BioLife Solutions, Inc. (NASDAQ:BLFS)was in 15 hedge funds' portfolios at the end of March. BLFS investors should be aware of an increase in enthusiasm from smart money lately. There were 12 hedge funds in our database with BLFS holdings at the end of the previous quarter. Our calculations also showed that BLFS isn't among the30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let's go over the new hedge fund action encompassing BioLife Solutions, Inc. (NASDAQ:BLFS).
At Q1's end, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 25% from the fourth quarter of 2018. By comparison, 4 hedge funds held shares or bullish call options in BLFS a year ago. With hedge funds' positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
The largest stake in BioLife Solutions, Inc. (NASDAQ:BLFS) was held byCasdin Capital, which reported holding $43.4 million worth of stock at the end of March. It was followed by Sandler Capital Management with a $17.3 million position. Other investors bullish on the company included Driehaus Capital, Renaissance Technologies, and Millennium Management.
Now, key hedge funds were breaking ground themselves.ExodusPoint Capital, managed by Michael Gelband, established the biggest position in BioLife Solutions, Inc. (NASDAQ:BLFS). ExodusPoint Capital had $0.4 million invested in the company at the end of the quarter. Peter S. Park'sPark West Asset Managementalso made a $0.4 million investment in the stock during the quarter. The other funds with new positions in the stock are David Harding'sWinton Capital Managementand Frederick DiSanto'sAncora Advisors.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as BioLife Solutions, Inc. (NASDAQ:BLFS) but similarly valued. These stocks are RR Donnelley & Sons Company (NYSE:RRD), MidWestOne Financial Group, Inc. (NASDAQ:MOFG), Adverum Biotechnologies, Inc. (NASDAQ:ADVM), and Endeavour Silver Corp. (NYSE:EXK). All of these stocks' market caps are closest to BLFS's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RRD,14,21806,-3 MOFG,6,19475,2 ADVM,12,52296,-5 EXK,7,19804,0 Average,9.75,28345,-1.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 9.75 hedge funds with bullish positions and the average amount invested in these stocks was $28 million. That figure was $83 million in BLFS's case. RR Donnelley & Sons Company (NYSE:RRD) is the most popular stock in this table. On the other hand MidWestOne Financial Group, Inc. (NASDAQ:MOFG) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks BioLife Solutions, Inc. (NASDAQ:BLFS) is more popular among hedge funds. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately BLFS wasn't nearly as popular as these 20 stocks and hedge funds that were betting on BLFS were disappointed as the stock returned -1.6% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Here’s What Hedge Funds Think About Vipshop Holdings Limited (VIPS)
Is Vipshop Holdings Limited (NYSE:VIPS) a good equity to bet on right now? We like to check what the smart money thinks first before doing extensive research. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It's not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
IsVipshop Holdings Limited (NYSE:VIPS)an attractive investment today? The best stock pickers are taking a pessimistic view. The number of bullish hedge fund positions went down by 5 recently. Our calculations also showed that VIPS isn't among the30 most popular stocks among hedge funds.VIPSwas in 17 hedge funds' portfolios at the end of March. There were 22 hedge funds in our database with VIPS holdings at the end of the previous quarter.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let's review the new hedge fund action encompassing Vipshop Holdings Limited (NYSE:VIPS).
At Q1's end, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of -23% from one quarter earlier. By comparison, 39 hedge funds held shares or bullish call options in VIPS a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey,Keywise Capital Management, managed by Fang Zheng, holds the number one position in Vipshop Holdings Limited (NYSE:VIPS). Keywise Capital Management has a $58.7 million position in the stock, comprising 26.2% of its 13F portfolio. Coming in second isIndus Capital, managed by David Kowitz and Sheldon Kasowitz, which holds a $24.4 million position; the fund has 3.2% of its 13F portfolio invested in the stock. Remaining peers that are bullish contain Ken Griffin'sCitadel Investment Group, Nitin Saigal and Dan Jacobs'sKora Managementand Cliff Asness'sAQR Capital Management.
Because Vipshop Holdings Limited (NYSE:VIPS) has witnessed falling interest from the smart money, we can see that there is a sect of money managers that elected to cut their entire stakes by the end of the third quarter. Interestingly, Michael Johnston'sSteelhead Partnersdropped the biggest investment of the "upper crust" of funds tracked by Insider Monkey, valued at close to $27.1 million in stock, and Daniel Gold's QVT Financial was right behind this move, as the fund dropped about $16 million worth. These moves are interesting, as total hedge fund interest dropped by 5 funds by the end of the third quarter.
Let's now take a look at hedge fund activity in other stocks similar to Vipshop Holdings Limited (NYSE:VIPS). These stocks are Array Biopharma Inc (NASDAQ:ARRY), Transocean Ltd (NYSE:RIG), Hudson Pacific Properties Inc (NYSE:HPP), and Lincoln Electric Holdings, Inc. (NASDAQ:LECO). This group of stocks' market valuations are closest to VIPS's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ARRY,32,1106924,1 RIG,37,756782,4 HPP,12,362610,0 LECO,26,308752,7 Average,26.75,633767,3 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 26.75 hedge funds with bullish positions and the average amount invested in these stocks was $634 million. That figure was $125 million in VIPS's case. Transocean Ltd (NYSE:RIG) is the most popular stock in this table. On the other hand Hudson Pacific Properties Inc (NYSE:HPP) is the least popular one with only 12 bullish hedge fund positions. Vipshop Holdings Limited (NYSE:VIPS) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately VIPS wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); VIPS investors were disappointed as the stock returned 2.1% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Here’s What Hedge Funds Think About Pool Corporation (POOL)
The 700+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Pool Corporation (NASDAQ:POOL).
Pool Corporation (NASDAQ:POOL)investors should pay attention to a decrease in hedge fund interest in recent months.POOLwas in 16 hedge funds' portfolios at the end of March. There were 17 hedge funds in our database with POOL holdings at the end of the previous quarter. Our calculations also showed that pool isn't among the30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
We're going to check out the recent hedge fund action surrounding Pool Corporation (NASDAQ:POOL).
At the end of the first quarter, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -6% from the previous quarter. By comparison, 26 hedge funds held shares or bullish call options in POOL a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds,Fisher Asset Managementheld the most valuable stake in Pool Corporation (NASDAQ:POOL), which was worth $87.8 million at the end of the first quarter. On the second spot was Impax Asset Management which amassed $66.3 million worth of shares. Moreover, Royce & Associates, GLG Partners, and Echo Street Capital Management were also bullish on Pool Corporation (NASDAQ:POOL), allocating a large percentage of their portfolios to this stock.
Due to the fact that Pool Corporation (NASDAQ:POOL) has faced a decline in interest from the entirety of the hedge funds we track, we can see that there exists a select few fund managers that elected to cut their positions entirely in the third quarter. At the top of the heap, Richard Chilton'sChilton Investment Companysaid goodbye to the largest stake of the "upper crust" of funds watched by Insider Monkey, valued at an estimated $10.7 million in stock, and Jim Simons's Renaissance Technologies was right behind this move, as the fund dropped about $9.4 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds in the third quarter.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Pool Corporation (NASDAQ:POOL) but similarly valued. We will take a look at Phillips 66 Partners LP (NYSE:PSXP), KT Corporation (NYSE:KT), Ultrapar Participacoes SA (NYSE:UGP), and Newell Brands Inc. (NASDAQ:NWL). This group of stocks' market values resemble POOL's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PSXP,4,9165,-2 KT,19,267347,3 UGP,12,60086,9 NWL,30,1295242,0 Average,16.25,407960,2.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 16.25 hedge funds with bullish positions and the average amount invested in these stocks was $408 million. That figure was $249 million in POOL's case. Newell Brands Inc. (NASDAQ:NWL) is the most popular stock in this table. On the other hand Phillips 66 Partners LP (NYSE:PSXP) is the least popular one with only 4 bullish hedge fund positions. Pool Corporation (NASDAQ:POOL) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on POOL as the stock returned 14.1% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published atInsider Monkey.
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Here’s What Hedge Funds Think About Galapagos NV (GLPG)
Before putting in our own effort and resources into finding a good investment, we can quickly utilize hedge fund expertise to give us a quick glimpse of whether that stock could make for a good addition to our portfolios. The odds are not exactly stacked in investors' favor when it comes to beating the market, as evidenced by the fact that less than 49% of the stocks in the S&P 500 did so during the second quarter. The stats were even worse in recent years when most of the advances in the market were due to large gains by FAANG stocks. However, one bright side for individual investors was the strong performance of hedge funds' top consensus picks. This year hedge funds' top 20 stock picks outperformed the S&P 500 Index by 6.6 percentage points through May 30th. Thus, we can see that the tireless research and efforts of hedge funds to identify winning stocks can work to our advantage when we know how to use the data. While not all of their picks will be winners, our odds are much better following their best stock picks than trying to go it alone.
IsGalapagos NV (NASDAQ:GLPG)a good investment now? The smart money is buying. The number of bullish hedge fund bets advanced by 1 lately. Our calculations also showed that glpg isn't among the30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let's take a gander at the fresh hedge fund action surrounding Galapagos NV (NASDAQ:GLPG).
At Q1's end, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 7% from the previous quarter. By comparison, 17 hedge funds held shares or bullish call options in GLPG a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey,Cormorant Asset Management, managed by Bihua Chen, holds the largest position in Galapagos NV (NASDAQ:GLPG). Cormorant Asset Management has a $35 million position in the stock, comprising 2.4% of its 13F portfolio. Coming in second isDeerfield Management, managed by James E. Flynn, which holds a $20.8 million position; 0.8% of its 13F portfolio is allocated to the stock. Remaining professional money managers with similar optimism consist of Panayotis Takis Sparaggis'sAlkeon Capital Management, Kris Jenner, Gordon Bussard, Graham McPhail'sRock Springs Capital Managementand Jim Simons'sRenaissance Technologies.
As industrywide interest jumped, some big names have jumped into Galapagos NV (NASDAQ:GLPG) headfirst.Cormorant Asset Management, managed by Bihua Chen, established the largest position in Galapagos NV (NASDAQ:GLPG). Cormorant Asset Management had $35 million invested in the company at the end of the quarter. Panayotis Takis Sparaggis'sAlkeon Capital Managementalso initiated a $20.6 million position during the quarter. The other funds with new positions in the stock are Ken Griffin'sCitadel Investment Group, Mike Vranos'sEllington, and Matthew Tewksbury'sStevens Capital Management.
Let's also examine hedge fund activity in other stocks similar to Galapagos NV (NASDAQ:GLPG). These stocks are Hubbell Incorporated (NYSE:HUBB), LATAM Airlines Group S.A. (NYSE:LTM), Autoliv Inc. (NYSE:ALV), and Planet Fitness Inc (NYSE:PLNT). This group of stocks' market valuations are similar to GLPG's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position HUBB,21,357892,-3 LTM,8,21281,0 ALV,13,444882,0 PLNT,25,498649,-5 Average,16.75,330676,-2 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 16.75 hedge funds with bullish positions and the average amount invested in these stocks was $331 million. That figure was $131 million in GLPG's case. Planet Fitness Inc (NYSE:PLNT) is the most popular stock in this table. On the other hand LATAM Airlines Group S.A. (NYSE:LTM) is the least popular one with only 8 bullish hedge fund positions. Galapagos NV (NASDAQ:GLPG) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on GLPG as the stock returned 7.1% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published atInsider Monkey.
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Is JBG SMITH Properties (JBGS) A Good Stock To Buy?
Legendary investors such as Jeffrey Talpins and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don't publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That's why we analyze the activity of those elite funds in these small-cap stocks. In the following paragraphs, we analyze JBG SMITH Properties (NYSE:JBGS) from the perspective of those elite funds.
JBG SMITH Properties (NYSE:JBGS)shareholders have witnessed a decrease in enthusiasm from smart money of late. Our calculations also showed that JBGS isn't among the30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_758450" align="aligncenter" width="450"]
Martin Whitman of Third Avenue Management[/caption]
Let's view the new hedge fund action regarding JBG SMITH Properties (NYSE:JBGS).
Heading into the second quarter of 2019, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of -15% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards JBGS over the last 15 quarters. With the smart money's sentiment swirling, there exists a few key hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, John Khoury'sLong Pond Capitalhas the number one position in JBG SMITH Properties (NYSE:JBGS), worth close to $81.6 million, amounting to 2.8% of its total 13F portfolio. The second largest stake is held bySessa Capital, led by John Petry, holding a $75.4 million position; the fund has 10.5% of its 13F portfolio invested in the stock. Remaining peers with similar optimism encompass Martin Whitman'sThird Avenue Management, Eduardo Abush'sWaterfront Capital Partnersand Joshua Nash'sUlysses Management.
Due to the fact that JBG SMITH Properties (NYSE:JBGS) has experienced falling interest from the entirety of the hedge funds we track, logic holds that there lies a certain "tier" of money managers who sold off their entire stakes heading into Q3. It's worth mentioning that Joshua Nash'sUlysses Managementsaid goodbye to the biggest stake of the 700 funds watched by Insider Monkey, comprising an estimated $34.6 million in stock. Paul Tudor Jones's fund,Tudor Investment Corp, also dropped its stock, about $1.9 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 3 funds heading into Q3.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as JBG SMITH Properties (NYSE:JBGS) but similarly valued. We will take a look at ITT Inc. (NYSE:ITT), Crane Co. (NYSE:CR), Insperity Inc (NYSE:NSP), and Bemis Company, Inc. (NYSE:BMS). This group of stocks' market valuations resemble JBGS's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ITT,22,395262,-3 CR,22,334024,-1 NSP,24,458494,0 BMS,29,373125,3 Average,24.25,390226,-0.25 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 24.25 hedge funds with bullish positions and the average amount invested in these stocks was $390 million. That figure was $313 million in JBGS's case. Bemis Company, Inc. (NYSE:BMS) is the most popular stock in this table. On the other hand ITT Inc. (NYSE:ITT) is the least popular one with only 22 bullish hedge fund positions. Compared to these stocks JBG SMITH Properties (NYSE:JBGS) is even less popular than ITT. Hedge funds dodged a bullet by taking a bearish stance towards JBGS. Our calculations showed that the top 20 most popular hedge fund stocks returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately JBGS wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); JBGS investors were disappointed as the stock returned 0.6% during the same time frame and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in the second quarter.
Disclosure: None. This article was originally published atInsider Monkey.
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Here’s What Hedge Funds Think About Donaldson Company, Inc. (DCI)
"Since 2006, value stocks (IVE vs IVW) have underperformed 11 of the 13 calendar years and when they beat growth, it wasn't by much. Cumulatively, through this week, it has been a 122% differential (up 52% for value vs up 174% for growth). This appears to be the longest and most severe drought for value investors since data collection began. It will go our way eventually as there are too many people paying far too much for today's darlings, both public and private. Further, the ten-year yield of 2.5% (pre-tax) isn't attractive nor is real estate. We believe the value part of the global equity market is the only place to earn solid risk adjusted returns and we believe those returns will be higher than normal," said Vilas Fund in itsQ1 investor letter. We aren't sure whether value stocks outperform growth, but we follow hedge fund investor letters to understand where the markets and stocks might be going. That's why we believe it would be worthwhile to take a look at the hedge fund sentiment on Donaldson Company, Inc. (NYSE:DCI) in order to identify whether reputable and successful top money managers continue to believe in its potential.
Donaldson Company, Inc. (NYSE:DCI)was in 16 hedge funds' portfolios at the end of the first quarter of 2019. DCI has experienced a decrease in hedge fund sentiment in recent months. There were 19 hedge funds in our database with DCI holdings at the end of the previous quarter. Our calculations also showed that dci isn't among the30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Let's view the key hedge fund action regarding Donaldson Company, Inc. (NYSE:DCI).
Heading into the second quarter of 2019, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -16% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in DCI over the last 15 quarters. With hedge funds' capital changing hands, there exists a select group of notable hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
More specifically,GAMCO Investorswas the largest shareholder of Donaldson Company, Inc. (NYSE:DCI), with a stake worth $45 million reported as of the end of March. Trailing GAMCO Investors was Impax Asset Management, which amassed a stake valued at $40.4 million. Arrowstreet Capital, Citadel Investment Group, and D E Shaw were also very fond of the stock, giving the stock large weights in their portfolios.
Due to the fact that Donaldson Company, Inc. (NYSE:DCI) has experienced falling interest from the aggregate hedge fund industry, it's safe to say that there exists a select few hedgies who sold off their positions entirely by the end of the third quarter. At the top of the heap, Paul Marshall and Ian Wace'sMarshall Wace LLPsold off the biggest stake of all the hedgies followed by Insider Monkey, comprising close to $3.3 million in stock. Jim Simons's fund,Renaissance Technologies, also dropped its stock, about $1.5 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 3 funds by the end of the third quarter.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Donaldson Company, Inc. (NYSE:DCI) but similarly valued. These stocks are Kirkland Lake Gold Ltd. (NYSE:KL), ServiceMaster Global Holdings Inc (NYSE:SERV), Tilray, Inc. (NASDAQ:TLRY), and Old Republic International Corporation (NYSE:ORI). This group of stocks' market valuations are similar to DCI's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position KL,25,323351,2 SERV,24,522396,-3 TLRY,10,22079,2 ORI,19,432254,-4 Average,19.5,325020,-0.75 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 19.5 hedge funds with bullish positions and the average amount invested in these stocks was $325 million. That figure was $122 million in DCI's case. Kirkland Lake Gold Ltd. (NYSE:KL) is the most popular stock in this table. On the other hand Tilray, Inc. (NASDAQ:TLRY) is the least popular one with only 10 bullish hedge fund positions. Donaldson Company, Inc. (NYSE:DCI) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately DCI wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); DCI investors were disappointed as the stock returned -0.7% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Does DigitalX Limited's (ASX:DCC) CEO Pay Matter?
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In 2016 Leigh Travers was appointed CEO of DigitalX Limited (ASX:DCC). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for DigitalX
According to our data, DigitalX Limited has a market capitalization of AU$36m, and pays its CEO total annual compensation worth US$918k. (This figure is for the year to June 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$134k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$248k.
It would therefore appear that DigitalX Limited pays Leigh Travers more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at DigitalX has changed over time.
On average over the last three years, DigitalX Limited has grown earnings per share (EPS) by 39% each year (using a line of best fit). It achieved revenue growth of 53% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Although we don't have analyst forecasts, shareholders might want to examinethis detailed historical graphof earnings, revenue and cash flow.
Given the total loss of 52% over three years, many shareholders in DigitalX Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared the total CEO remuneration paid by DigitalX Limited, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. Shareholders may want tocheck for free if DigitalX insiders are buying or selling shares.
Important note:DigitalX 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. |
What Should You Know About Dilip Buildcon Limited's (NSE:DBL) Earnings Trajectory?
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In May 2019, Dilip Buildcon Limited (NSE:DBL) released its latest earnings announcement, which confirmed that the company faced a minor headwind with earnings falling from ₹5.8b to ₹5.5b, a change of -4.4%. Below, I've laid out key growth figures on how market analysts predict Dilip Buildcon's earnings growth trajectory over the next few years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
View our latest analysis for Dilip Buildcon
Analysts' expectations for next year seems positive, with earnings increasing by a robust 26%. This growth seems to continue into the following year with rates arriving at double digit 47% compared to today’s earnings, and finally hitting ₹10b by 2022.
While it’s helpful to be aware of the rate of growth year by year relative to today’s value, it may be more beneficial to determine the rate at which the earnings are moving every year, on average. The pro of this method is that we can get a better picture of the direction of Dilip Buildcon's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I put a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 18%. This means, we can presume Dilip Buildcon will grow its earnings by 18% every year for the next few years.
For Dilip Buildcon, I've put together three important factors you should further research:
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 DBL 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 DBL is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of DBL? 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. |
China says both U.S., China should make compromises in trade talks
By Kevin Yao and Ben Blanchard BEIJING (Reuters) - Both China and the United States should make compromises in trade talks, Chinese Vice Commerce Minister Wang Shouwen said on Monday, ahead of a much anticipated meeting between the Chinese and U.S. presidents at this week's G20 summit in Japan. China and the United States last week said they were reviving talks ahead of the meeting between presidents Donald Trump and Xi Jinping. Hopes that it will lead to a de-escalation of a trade war that is damaging the global economy has cheered financial markets. Talks to reach a broad deal broke down last month after U.S. officials accused China of backing away from previously agreed commitments. Speaking at a news briefing on the G20 summit, Wang, who is also part of the trade negotiating team with the United States, said talks between the two countries' trade teams were underway, though he gave no details. China's principles are clear, he said - mutual respect, equality and mutual benefit and meeting each other halfway. "Mutual respect means each side must respect the other's sovereignty," Wang said. "Equality and mutual benefit means the consultations have to happen on an equal basis, the agreement to be reached has to be beneficial for both sides," he said. "Meeting each other half way means both sides have to compromise and make concessions, not just one side." Wang declined to answer a question about what specific compromises Xi may offer to win a trade deal with Trump. Both the Chinese and U.S. teams are making preparations for the Xi-Trump meeting, Assistant Foreign Minister Zhang Jun told the same briefing, again without offering details. The two countries are in the middle of a costly trade dispute and have slapped increasingly severe tariffs on each other's imports. China has vowed to not give in on issues of principle nor under U.S. pressure. Trump has threatened to put tariffs on another $325 billion of goods, covering nearly all the remaining Chinese imports into the United States, including consumer products such as cellphones, computers and clothing. Story continues RISING ECONOMIC RISKS Wang said rising protectionism has dampened global trade and posed a threat to the global economy, while Chen Yulu, a vice governor of China's central bank, warned that global economic and financial risks are rising significantly. "Signs of reversing monetary policy in major developed countries are becoming more evident," Chen told the same briefing. "At the same time, policy room of many countries after the crisis has been reduced and room for coping with a sharp economic slowdown is limited." Last week, the Federal Reserve signaled interest rate cuts beginning as early as July to cope with growing economic risks, which analysts say could increase pressure on China's central bank to ease policy to support the slowing economy. Another problem is U.S. sanctions on Chinese tech giant Huawei Technologies Co Inc. Wang said that Xi, when speaking by telephone to Trump last week, had said he hopes the United States can fairly treat Chinese companies. "We hope that the U.S. can remove certain unilateral measures inappropriately taken against Chinese companies, in the spirit of free trade and the World Trade Organization." The Trump administration has accused China of failing to protect intellectual property rights, forced technology transfers and of failing to provide a level playing field for U.S. companies. China has repeatedly promised to open its market wider to foreign investors and provide them with better services and treatment. China has also denied accusations of failing to protect intellectual property rights or of forcing foreign companies to transfer technology. (Reporting by Kevin Yao and Ben Blanchard; Writing by Ryan Woo; editing by Simon Cameron-Moore) |
Did Datamatics Global Services's (NSE:DATAMATICS) Share Price Deserve to Gain 65%?
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It might be of some concern to shareholders to see theDatamatics Global Services Limited(NSE:DATAMATICS) share price down 14% in the last month. But over three years, the returns would have left most investors smiling In the last three years the share price is up, 65%: better than the market.
View our latest analysis for Datamatics Global Services
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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 three years of share price growth, Datamatics Global Services achieved compound earnings per share growth of 18% per year. Notably, the 18% average annual share price gain matches up nicely with the EPS growth rate. This suggests that sentiment and expectations have not changed drastically.Au contraire, the share price change has arguably mimicked the EPS growth.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
It might be well worthwhile taking a look at ourfreereport on Datamatics Global Services's earnings, revenue and cash flow.
It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Datamatics Global Services the TSR over the last 3 years was 68%, which is better than the share price return mentioned above. And there's no prize for guessing that the dividend payments largely explain the divergence!
Datamatics Global Services shareholders are down 12% for the year (even including dividends), but the market itself is up 0.3%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 11%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. Is Datamatics Global Services cheap compared to other companies? These3 valuation measuresmight help you decide.
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 IN exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Energy on the agenda when Saudi crown prince visits South Korea this week
SEOUL (Reuters) - Saudi Crown Prince Mohammed bin Salman plans to visit South Korea this week as the two countries seek to bolster economic ties, officials in Seoul said on Monday. The two-day visit from Wednesday will be the first by an heir to the throne of the world's largest oil exporter since 1998. The crown prince, Saudi Arabia's de facto ruler and defense minister, will meet South Korean President Moon Jae-in on Wednesday, Moon's office said. "The two sides will sign a series of agreements to promote cooperation on areas including energy and public service," a South Korean official told Reuters. Saudi Arabia is South Korea's top oil supplier. South Korea imported 101.5 million barrels of crude oil from the Middle Eastern country in the first four months of 2019, down 2.7% from a year ago, according to data from state-run Korea National Oil Corp (KNOC). South Korea has also been keen on Saudi Arabia's nuclear power project. State-run utility Korea Electric Power Corp was shortlisted last July to bid for building nuclear plants in the kingdom. The trip follows a recent U.N. report that accused Saudi Arabia of the "deliberate, premeditated execution" of Saudi journalist Jamal Khashoggi in October. The report said the crown prince and other senior officials should be investigated over Khashoggi's murder. (Reporting by Hyonhee Shin and Jane Chung; Editing by Paul Tait) |
What You Must Know About Carnarvon Petroleum Limited's (ASX:CVN) Beta Value
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Anyone researching Carnarvon Petroleum Limited (ASX:CVN) might want to consider the historical volatility of the share price. Modern finance theory considers volatility to be a measure of risk, and there are two main types of price volatility. The first type is company specific volatility. Investors use diversification across uncorrelated stocks to reduce this kind of price volatility across the portfolio. The other type, which cannot be diversified away, is the volatility of the entire market. Every stock in the market is exposed to this volatility, which is linked to the fact that stocks prices are correlated in an efficient market.
Some stocks see their prices move in concert with the market. Others tend towards stronger, gentler or unrelated 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. 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.
Check out our latest analysis for Carnarvon Petroleum
Given that it has a beta of 1.91, we can surmise that the Carnarvon Petroleum share price has been fairly sensitive to market volatility (over the last 5 years). Based on this history, investors should be aware that Carnarvon Petroleum are likely to rise strongly in times of greed, but sell off in times of fear. 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 Carnarvon Petroleum fares in that regard, below.
With a market capitalisation of AU$785m, Carnarvon Petroleum is a small cap stock. However, it is big enough to catch the attention of professional investors. It has a relatively high beta, which is not unusual among small-cap stocks. Because it takes less capital to move the share price of a smaller company, actively traded small-cap stocks often have a higher beta that a similar large-cap stock.
Since Carnarvon Petroleum 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 CVN is a good investment for you, we also need to consider important company-specific fundamentals such as Carnarvon Petroleum’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 CVN’s future growth? Take a look at ourfree research report of analyst consensusfor CVN’s outlook.
2. Past Track Record: Has CVN 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 CVN's historicalsfor more clarity.
3. Other Interesting Stocks: It's worth checking to see how CVN 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. |
Bitcoin Cash – ABC, Litecoin and Ripple Daily Analysis – 24/06/19
Bitcoin Cash ABC fell by 1.67% on Sunday. Partially reversing a 9.93% bounce from Saturday, Bitcoin Cash ABC ended the week up 11.22% to $474.45.
A bullish start to the day saw Bitcoin Cash ABC rise to an early morning intraday high $498 before hitting reverse.
Falling short of the first major resistance level at $519.93, Bitcoin Cash ABC fell back to a morning low $472.05 before finding support.
Bitcoin Cash ABC recovered to $493.66, late in the day, before sliding back to an intraday low $470.00. Bitcoin Cash ABC steered well clear of the first major support level at $435.84 on the day.
At the time of writing, Bitcoin Cash ABC was down by 1.49% to $467.37. A mixed start to the day saw Bitcoin Cash ABC rise to an early morning high $473.78 before falling to a low $460.78.
The pullback saw Bitcoin Cash ABC fall through the first major support level at $463.63 before finding support.
For the day ahead, a move back through the morning high $473.78 to $480 levels would support a run at the first major resistance level at $491.63.
Bitcoin Cash ABC would need support from the broader market, however, to break out from $480 levels.
Barring a broad-based crypto rally, Bitcoin Cash ABC would likely fall short of $490 levels on the day.
Failure to move back through the morning high to $480 levels could see Bitcoin Cash ABC fall deeper into the red.
A fall back through the first major support level at $463.63 would bring the second major support level at $452.82 into play.
Litecoin slid by 3.34% on Sunday. Reversing a 1.6% gain from Saturday, Litecoin ended the week down 0.25% at $136.66.
Bearish through most of the day, Litecoin fell from an early intraday high $142.2 to a late morning low $139.0 before finding support.
Steering clear of the major support and resistance levels, Litecoin hovered at around $140 before a late sell-off. The sell-off saw Litecoin slide through the first major support level at $137.35 to a final hour intraday low $135.2.
At the time of writing, Litecoin was down by 1.28% to $134.91. Tracking the broader market, Litecoin fell from a morning high $136.66 to a low $133.21.
The early sell-off saw Litecoin fall through the first major support level at $133.84 before finding support.
For the day ahead, a move back through the morning high to $138 levels would support a run at the first major resistance level at $140.84.
Litecoin would need support from the broader market, however, to break out from $138 levels.
Barring a broad-based crypto rebound, the first major resistance level at $140.84 would likely limit any upside on the day.
Failure to move through to $138 levels could see Litecoin struggle through the day. A fall back through the first major support level at $133.84 could bring $132 levels into play.
Barring a crypto meltdown, Litecoin should steer clear of the second major support level at $131.02.
Ripple’s XRP fell by 1.5% on Sunday. Partially reversing a 7.15% rally from Saturday, Ripple’s XRP ended the week up 9.9% to $0.47086.
A bullish start to the daw saw Ripple’s XRP strike an early intraday high $0.49328 before hitting reverse.
Falling well short of the first major resistance level at $0.5109, Ripple’s XRP fell to a late morning low $0.47 before recovering to $0.489 late in the day.
A final hour sell-off saw Ripple’s XRP slide to an intraday low $0.46506 before recovering to $0.47 levels.
In spite of the late pullback, Ripple’s XRP held well above the first major support level at $0.4441.
At the time of writing, Ripple’s XRP was down by 3.09% to $0.45632. A particularly bearish start to the day saw Ripple’s XRP slide from a morning high $0.47046 to a low $0.44627 before steadying.
The reversal saw Ripple’s XRP fall through the first major support level at $0.4595 and second major support level at $0.4482.
For the day ahead, a move back through the morning high $0.47046 to $0.4770 levels would support a run at $0.48 levels.
Ripple’s XRP would need support from the broader market, however, to break through the first major resistance level at $0.4877.
Barring a broad-based crypto rebound, Ripple’s XRP would likely come up short of Sunday’s high $0.49328 on the day.
Failure to move back through the morning high $0.47046 to $0.4770 levels could see Ripple’s XRP see heavier losses.
A fall back through the second major support level at $0.4482 could bring $0.43 levels into play before any recovery.
Barring a crypto meltdown, Ripple’s XRP should steer clear of the third major support level at $0.4200.
Please let us know what you think in the comments below
Thanks, Bob
Thisarticlewas originally posted on FX Empire
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Is CV Check Ltd's (ASX:CV1) CEO Pay Justified?
Want to participate in a short research study ? Help shape the future of investing tools and you could win a $250 gift card! Rod Sherwood has been the CEO of CV Check Ltd ( ASX:CV1 ) since 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels. Check out our latest analysis for CV Check How Does Rod Sherwood's Compensation Compare With Similar Sized Companies? At the time of writing our data says that CV Check Ltd has a market cap of AU$51m, and is paying total annual CEO compensation of AU$331k. (This is based on the year to June 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$272k. We looked at a group of companies with market capitalizations under AU$289m, and the median CEO total compensation was AU$358k. So Rod Sherwood is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance. You can see, below, how CEO compensation at CV Check has changed over time. ASX:CV1 CEO Compensation, June 24th 2019 Is CV Check Ltd Growing? CV Check Ltd has increased its earnings per share (EPS) by an average of 72% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 14%. Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow. Story continues Has CV Check Ltd Been A Good Investment? With a total shareholder return of 0.7% over three years, CV Check Ltd has done okay by shareholders. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size. In Summary... Remuneration for Rod Sherwood is close enough to the median pay for a CEO of a similar sized company . The company is growing EPS but shareholder returns have been sound but not amazing. So upon reflection one could argue that the CEO pay is quite reasonable. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling CV Check (free visualization of insider trades). Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com . This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Does CV Check Ltd's (ASX:CV1) CEO Pay Reflect Performance?
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In 2016 Rod Sherwood was appointed CEO of CV Check Ltd (ASX:CV1). 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for CV Check
Our data indicates that CV Check Ltd is worth AU$51m, and total annual CEO compensation is AU$331k. (This number is for the twelve months until June 2018). While we always look at total compensation first, we note that the salary component is less, at AU$272k. We examined a group of similar sized companies, with market capitalizations of below AU$289m. The median CEO total compensation in that group is AU$358k.
So Rod Sherwood receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see a visual representation of the CEO compensation at CV Check, below.
On average over the last three years, CV Check Ltd has grown earnings per share (EPS) by 72% each year (using a line of best fit). Its revenue is up 14% over last year.
This demonstrates that the company has been improving recently. A good result. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Although we don't have analyst forecasts, shareholders might want to examinethis detailed historical graphof earnings, revenue and cash flow.
CV Check Ltd has not done too badly by shareholders, with a total return of 0.7%, over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
Rod Sherwood is paid around the same as most CEOs of similar size companies.
The company is growing EPS but shareholder returns have been sound but not amazing. So considering these factors, we think the CEO pay is probably quite reasonable. Whatever your view on compensation, you might want tocheck if insiders are buying or selling CV Check shares (free trial).
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. |
Did Changing Sentiment Drive CURA Technologies's (NSE:CURATECH) Share Price Down A Painful 93%?
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We're definitely into long term investing, but some companies are simply bad investments over any time frame. We really hate to see fellow investors lose their hard-earned money. Anyone who heldCURA Technologies Limited(NSE:CURATECH) for five years would be nursing their metaphorical wounds since the share price dropped 93% in that time. We also note that the stock has performed poorly over the last year, with the share price down 70%.
We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don't have to lose the lesson.
See our latest analysis for CURA Technologies
We don't think CURA Technologies's revenue of ₹7,977,000 is enough to establish significant demand. We can't help wondering why it's publicly listed so early in its journey. Are venture capitalists not interested? So it seems that the investors focused more on what could be, than paying attention to the current revenues (or lack thereof). Investors will be hoping that CURA Technologies can make progress and gain better traction for the business, before it runs low on cash.
We think companies that have neither significant revenues nor profits are pretty 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 go on to make revenue, profits, and generate value, others get hyped up by hopeful naifs before eventually going bankrupt. Some CURA Technologies investors have already had a taste of the bitterness stocks like this can leave in the mouth.
Our data indicates that CURA Technologies had ₹88,426,000 more in total liabilities than it had cash, when it last reported in March 2019. That makes it extremely high risk, in our view. But with the share price diving 42% per year, over 5 years, it's probably fair to say that some shareholders no longer believe the company will succeed. You can see in the image below, how CURA Technologies's cash levels have changed over time (click to see the values).
In reality it's hard to have much certainty when valuing a business that has neither revenue or profit. Given that situation, would you be concerned if it turned out insiders were relentlessly selling stock? 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.
While the broader market gained around 0.3% in the last year, CURA Technologies shareholders lost 70%. 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 42% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. You could get a better understanding of CURA Technologies's growth by checking outthis more detailed historical graphof earnings, revenue and cash flow.
If you like to buy stocks alongside management, then you might just love thisfreelist of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on IN exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Those Who Purchased CURA Technologies (NSE:CURATECH) Shares Five Years Ago Have A 93% Loss To Show For It
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Long term investing is the way to go, but that doesn't mean you should hold every stock forever. It hits us in the gut when we see fellow investors suffer a loss. Spare a thought for those who heldCURA Technologies Limited(NSE:CURATECH) for five whole years - as the share price tanked 93%. And some of the more recent buyers are probably worried, too, with the stock falling 70% in the last year.
While a drop like that is definitely a body blow, money isn't as important as health and happiness.
See our latest analysis for CURA Technologies
CURA Technologies recorded just ₹7,977,000 in revenue over the last twelve months, which isn't really enough for us to consider it to have a proven product. 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 CURA Technologies will significantly advance the business plan before too long.
Companies that lack both meaningful revenue and profits are usually considered high risk. There is usually a significant chance that they will need more money for business development, putting them at the mercy of capital markets. So the share price itself impacts the value of the shares (as it determines the cost of capital). While some companies like this go on to deliver on their plan, making good money for shareholders, many end in painful losses and eventual de-listing. Some CURA Technologies investors have already had a taste of the bitterness stocks like this can leave in the mouth.
Our data indicates that CURA Technologies had ₹88,426,000 more in total liabilities than it had cash, when it last reported in March 2019. That makes it extremely high risk, in our view. But since the share price has dived -42% per year, over 5 years, it looks like some investors think it's time to abandon ship, so to speak. You can click on the image below to see (in greater detail) how CURA Technologies's cash levels have changed over time.
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? I would feel more nervous about the company if that were so. It costs nothing but a moment of your time tosee if we are picking up on any insider selling.
While the broader market gained around 0.3% in the last year, CURA Technologies shareholders lost 70%. 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 42% per year over five years. We realise that Buffett has said investors should 'buy when there is blood on the streets', but we caution that investors should first be sure they are buying a high quality businesses. You might want to assessthis data-rich visualizationof its earnings, revenue and cash flow.
We will like CURA Technologies 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 IN exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
How Does Countplus Limited (ASX:CUP) Fare As A Dividend Stock?
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Could Countplus Limited (ASX:CUP) be an attractive dividend share to own for the long haul? Investors are often drawn to strong companies with the idea of reinvesting the dividends. Unfortunately, it's common for investors to be enticed in by the seemingly attractive yield, and lose money when the company has to cut its dividend payments.
With a 2.7% yield and a eight-year payment history, investors probably think Countplus looks like a reliable dividend stock. A low yield is generally a turn-off, but if the prospects for earnings growth were strong, investors might be pleasantly surprised by the long-term results. Remember though, due to the recent spike in its share price, Countplus's yield will look lower, even though the market may now be factoring in an improvement in its long-term prospects. When buying stocks for their dividends, you should always run through the checks below, to see if the dividend looks sustainable.
Explore this interactive chart for our latest analysis on Countplus!
Companies (usually) pay dividends out of their earnings. If a company is paying more than it earns, the dividend might have to be cut. As a result, we should always investigate whether a company can afford its dividend, measured as a percentage of a company's net income after tax. In the last year, Countplus paid out 39% of its profit as dividends. This is medium payout level that leaves enough capital in the business to fund opportunities that might arise, while also rewarding shareholders. One of the risks is that management reinvests the retained capital poorly instead of paying a higher dividend.
In addition to comparing dividends against profits, we should inspect whether the company generated enough cash to pay its dividend. Countplus's cash payout ratio in the last year was 27%, which suggests dividends were well covered by cash generated by the business. It's positive to see that Countplus's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.
Remember, you can always get a snapshot of Countplus's latest financial position,by checking our visualisation of its financial health.
From the perspective of an income investor who wants to earn dividends for many years, there is not much point buying a stock if its dividend is regularly cut or is not reliable. The first recorded dividend for Countplus, in the last decade, was eight years ago. Although it has been paying a dividend for several years now, the dividend has been cut at least once by more than 20%, and we're cautious about the consistency of its dividend across a full economic cycle. During the past eight-year period, the first annual payment was AU$0.08 in 2011, compared to AU$0.02 last year. This works out to a decline of approximately 75% over that time.
A shrinking dividend over a eight-year period is not ideal, and we'd be concerned about investing in a dividend stock that lacks a solid record of growing dividends per share.
Given that dividend payments have been shrinking like a glacier in a warming world, we need to check if there are some bright spots on the horizon. In the last five years, Countplus's earnings per share have shrunk at approximately 13% per annum. Declining earnings per share over a number of years is not a great sign for the dividend investor. Without some improvement, this does not bode well for the long term value of a company's dividend.
Dividend investors should always want to know if a) a company's dividends are affordable, b) if there is a track record of consistent payments, and c) if the dividend is capable of growing. First, we like that the company's dividend payments appear well covered, although the retained capital also needs to be effectively reinvested. Second, earnings per share have been in decline, and its dividend has been cut at least once in the past. Ultimately, Countplus comes up short on our dividend analysis. It's not that we think it is a bad company - just that there are likely more appealing dividend prospects out there on this analysis.
Are management backing themselves to deliver performance? Check their shareholdings in Countplus inour latest insider ownership analysis.
Looking for more high-yielding dividend ideas? Try ourcurated list of dividend stocks with a yield above 3%.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
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