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Here's Why You Should Retain Allscripts (MDRX) Stock Now
Allscripts Healthcare Solutions, Inc.MDRX is well poised for growth on the back of strategic acquisitions and divestments, and strong prospects in Sunrise EHR platform. However, integration risks remain a concern.The stock currently carries a Zacks Rank #3 (Hold).Price PerformanceShares of Allscripts have gained 17.4%, underperforming the industry’s growth of 32.5% on a year-to-date basis. However, the stock outpaced the S&P 500 Index’s rally of 16.4%.
What’s Weighing on the Stock?Given the dependence on acquisitions and mergers, the company is exposed to considerable integration risks.Moreover, stiff competition in the niche space is an added concern.Factors to Boost AllscriptsAllscripts continues to benefit from acquisitions and mergers, which in turn will accelerate the company’s overall performance and contribute substantially to the top line.Moreover, the company continues to gain traction from the prospective Sunrise and Paragon EHR platform — an important growth driver of Allscripts. Notably, the company’s EHR diagnostic tools, including dbMotion, EPSi, FollowMyHealth and 2bPrecise, have been witnessing a growing list of clients outside the company’s EHR base.Allscripts continues to gain from its Software, Delivery, Support and Maintenance units, which delivered solid growth in the last couple of quarters. Significant growth in bookings also buoys optimism.Which Way Are Estimates Headed?For 2019, the Zacks Consensus Estimate for revenues is pegged at $1.79 billion, indicating a decline of 15.9% from the year-ago period. For adjusted earnings per share, the same stands at 68 cents, suggesting a fall of 5.6% from the year-ago reported figure.Key PicksSome better-ranked stocks from the broader medical space are Cardiovascular Systems, Inc. CSII, Oxford Immunotec Global PLC OXFD and Haemonetics Corporation HAE, each sporting a Zacks Rank #1 (Strong Buy). You can seethe complete list of today’s Zacks #1 Rank stocks here.
Cardiovascular Systems has earnings growth rate for fiscal fourth quarter of 2019 of 33.3%.Oxford Immunotec has a long-term earnings growth rate of 25%.Haemonetics has a long-term earnings growth rate 13.5%.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportAllscripts Healthcare Solutions, Inc. (MDRX) : Free Stock Analysis ReportOxford Immunotec Global PLC (OXFD) : Free Stock Analysis ReportHaemonetics Corporation (HAE) : Free Stock Analysis ReportCardiovascular Systems, Inc. (CSII) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
Trump attacks Federal Reserve again, wants interest rate cut
WASHINGTON (AP) President Donald Trump is continuing efforts to pressure the U.S. central bank system, saying the stock markets and economic growth would be much higher if not for its actions. Trump says the Federal Reserve "doesn't know what it's doing" and raised interest rates too quickly. The Republican president tweeted Monday "think of what it could have been if the Fed had gotten it right." Trump is encouraging the Federal Reserve to cut interest rates, saying "now they stick, like a stubborn child, when we need rates cuts, & easing, to make up for what other countries are doing against us. Blew it!" The Fed at its last meeting kept its benchmark rate in a range of 2.25% to 2.5% but hinted at future cuts. The rate influences many consumer and business loans. |
Germany to ban exports of side-arms to non-allies
BERLIN (Reuters) - Germany will ban exports of small side arms to most countries outside NATO and the European Union, government sources told Reuters on Monday, confirming an earlier report from the Funke media group. A small number of traditional allies - Australia, New Zealand, Japan and Switzerland - will be exempt from the ban, the government's latest attempt to implement the tightened arms export rules it promised in last year's coalition agreements. Earlier restrictions on exporting weapons systems to countries involved in the Yemen war prompted howls of protest from Britain and France, since the presence of German components in many joint projects risked harming lucrative export deals with Saudi Arabia and the United Arab Emirates. But this ban, which is much smaller in scale, is expected to have fewer international repercussions, since pistol, gun and rifle manufacture tends not to be transnational in nature. While German side-arm manufacturers, including companies like Mauser and Walther, are major suppliers to armed forces and police around the world, the government expects the financial implications of the ban to be limited: export licences were issued to a value of 39 million euros last year. The Funke media group also reported that the government was also planning on introducing tougher rules on technology transfer, since small arms are often built under licence in the country in which they are to be sold. (This story has been refiled to restore words cut from final paragraph). (Reporting by Tassilo Hummel and Andreas Rinke, Writing by Michelle Martin, editing by Thomas Escritt, William Maclean) |
U.S. Supreme Court declines to hear Argentina appeal over energy company dispute
WASHINGTON, June 24 (Reuters) - The U.S. Supreme Court on Monday rejected Argentina's bid to fend off a lawsuit by energy company Petersen Energía Inversora, S.A. seeking compensation for shares it owned in the now-nationalized YPF S.A. energy company.
The justices left in place a lower court ruling that allowed privately held Petersen to sue after Argentina's government refused to buy back the company's shares.
(Reporting by Lawrence Hurley; Editing by Will Dunham) |
Can You Imagine How Chuffed Pharmacolog i Uppsala's (STO:PHLOG B) Shareholders Feel About Its 112% Share Price Gain?
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It's been a soft week forPharmacolog i Uppsala AB (publ)(STO:PHLOG B) shares, which are down 10%. Despite this, the stock is a strong performer over the last year, no doubt about that. Indeed, the share price is up an impressive 112% in that time. So it may be that the share price is simply cooling off after a strong rise. Only time will tell if there is still too much optimism currently reflected in the share price.
Check out our latest analysis for Pharmacolog i Uppsala
Pharmacolog i Uppsala recorded just kr1,277,532 in revenue over the last twelve months, which isn't really enough for us to consider it to have a proven product. 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 Pharmacolog i Uppsala 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. You should be aware that there is always a chance that this sort of company will need to issue more shares to raise money to continue pursuing its business plan. 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 Pharmacolog i Uppsala investors have already had a taste of the sweet taste stocks like this can leave in the mouth, as they gain popularity and attract speculative capital.
Pharmacolog i Uppsala had cash in excess of all liabilities of just kr5.8m when it last reported (March 2019). So if it hasn't remedied the situation already, it will almost certainly have to raise more capital soon. Given how low on cash the it got, investors must really like its potential for the share price to be up 112% in the last year. You can click on the image below to see (in greater detail) how Pharmacolog i Uppsala's cash levels have changed over time.
It can be extremely risky to invest in a company that doesn't even have revenue. There's no way to know its value easily. However you can take a look at whether insiders have been buying up shares. It's usually a positive if they have, as it may indicate they see value in the stock. Luckily we are in a position to provide you with thisfreechart of insider buying (and selling).
We'd be remiss not to mention the difference between Pharmacolog i Uppsala'stotal shareholder return(TSR) and itsshare price return. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Pharmacolog i Uppsala hasn't been paying dividends, but its TSR of 129% exceeds its share price return of 112%, implying it has either spun-off a business, or raised capital at a discount; thereby providing additional value to shareholders.
It's nice to see that Pharmacolog i Uppsala shareholders have gained 129% (in total) over the last year. So this year's TSR was actually better than the three-year TSR (annualized) of 18%. The improving returns to shareholders suggests the stock is becoming more popular with time. You could get a better understanding of Pharmacolog i Uppsala's growth by checking outthis more detailed historical graphof earnings, revenue and cash flow.
But note:Pharmacolog i Uppsala 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 SE 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. |
Palestinians rally against Kushner's economic peace plan
By Nidal al-Mughrabi and Rami Ayyub GAZA/RAMALLAH (Reuters) - Palestinians burned portraits of President Donald Trump as they protested in both the Gaza Strip and the Israeli-occupied West Bank on Monday against U.S.-led plans for a conference on their economy in Bahrain. Many Palestinian business groups have said they will boycott the June 25-26 event, billed as part of Washington's long-awaited Israeli-Palestinian peace plan and spearheaded by Trump's adviser and son-in-law Jared Kushner. "Down with Bahrain, down with Trump, down with the Manama conference," chanted crowds in Gaza, which is ruled by the armed Islamist group Hamas. Some burned large paintings of Trump marked with the words: "Deal of the devil". Leaders in both territories have accused Washington of pro-Israel bias and railed against the conference's focus on economics, rather than their aspirations for an independent state. Kushner told Reuters on Saturday the plan would create a million jobs, halve Palestinian poverty and double the Palestinians' GDP. In the West Bank, hundreds marched through Ramallah's main squares, waving posters in support of President Mahmoud Abbas, whose Western-backed Palestinian Authority exercises limited self-rule in the territory. Protesters there burned posters of both Trump and Bahrain's King Hamad bin Isa Al Khalifa. The rallies marked a moment of political unity against the Bahrain conference, despite a 12-year political feud between Abbas's Fatah party and Hamas. "A WEDDING WITHOUT THE BRIDE" "The Manama conference is a comedy show, a wedding without the bride (the Palestinians) ... it will not succeed," said a protester who gave her name as Siham in Gaza City. The Bahrain conference will be attended by Gulf Arab states as well as Jordan and Egypt. Israel is expected to send a business delegation but no government officials. Mahmoud Barhoush, 25, said he didn't know whether to laugh or cry at what he called Arab states' "treasonous" participation. Story continues "Enough of your running into the arms of Trump and (Israeli Prime Minister Benjamin) Netanyahu," he said at the Ramallah protest. Other demonstrators criticized the lone Palestinian businessman named as an expected attendee in Bahrain, Ashraf Jabari. A U.S. official told Reuters that at least 15 Palestinians were expected to attend. "Whoever attends is not a Palestinian and is not welcomed in Palestine. There should be measures taken against them," said Maisoon Alqadoomi, 32, a Fatah activist from Ramallah. Palestinian leaders on Monday renewed their calls for a boycott of the conference. "This workshop is simply a political laundry for settlements and a legitimization of occupation," Palestinian Prime Minister Mohammad Shtayyeh told journalists ahead of a cabinet meeting. In Gaza, Hamas spokesman Hazem Qassem said: "They (Palestinians) will not sell out their rights for all treasures on earth". (Reporting by Nidal Almughrabi in Gaza and Rami Ayyub in Ramallah; Editing by Andrew Heavens) |
Crissy Rock reveals history of abuse at the hands of her grandfather
(ITV) Crissy Rock has spoken out for the first time about the physical and sexual abuse she suffered from her grandfather while growing up. In a heartbreaking interview on Loose Women , the Benidorm star told her story as part of the show’s Never Too Late To Tell campaign which encourages survivors of abuse to tell their stories. She said: “A lot of what happens in your life is related to mental health, and I’ve always known why I have these feelings and why I have these anxiety attacks. “But I’m able now to control it because I know why a smell, a sound, a noise has this domino effect that transports you right back.” @Crissy_Rock on #loosewoman what a remarkably brave woman you are speaking out, heartbreaking to watch if one person comes forward and speaks out would still change someone life sending big hugs xxx — jill boyle (@jillsb44) June 24, 2019 Rock explained that the abuse began from when she was seven years old as her entire family had been living in one house, but when her parents got their own home, she loved her grandmother so much that she decided to stay with her grandparents. Read more: 7 psychological impacts of surviving childhood trauma Talking about the effects of the abuse, she said: “I have a phobia of a bath, I can’t get in a bath. “People get in a bath and relax, but to me it was getting dragged out of bed by the scruff of your hair and thrown in a freezing cold bath, having water from a pan thrown all over you and scrubbed, while being told how disgusting and filthy you are and that it’s all your fault.” @Crissy_Rock What a courageous interview . Very emotional . Lots of love to you 😘 #loosewomen — Lucy Krater (@lucykrater) June 24, 2019 She added: “You were told it was your fault and they wouldn’t believe you. I couldn’t concentrate in school, that’s why I couldn’t read or write until I was 27. I didn’t know what was going to happen when I went home. Story continues “I did a lot of self-harming, 17 years. I was moving the pain, I was in control of when I was going to hurt.” Read more: Crissy Rock rushed to hospital with throat abscess Rock went on to become a household name and explained that channelling herself into comedy had helped her to cope. She said: “Being a comic helped a lot, because I never really had a home. I’d go to my mum’s and she’d say go home, then I’d go home and I didn’t want to be there. “So the only home I ever felt safe was on the stage.” My whole heart is aching for @Crissy_Rock , listening to her story on Loose Women. What a brave, courageous strong lady. Wow 💓 — ELLIE (@ellmcintyre) June 24, 2019 The abuse eventually ended when her grandfather had a stroke, although she had to care for him before he died. Rock admitted: “When he died I was so angry with him because how dare you just die and not say why? I loved you as a granddad and I still don’t understand why you did what you did. @Crissy_Rock @loosewomen Now that's a strong Lady. She's helped more people than she'll realise simply talking so openly. I hope she continues to lead a happy and fulfilled life filled with love 😘 — Anna-Marie Kemm (@kemmklan) June 24, 2019 “You’ve just gone and taken it away and I can’t ask any questions. “I sat in a room for three days, arguing with this dead person who wasn’t there anymore and I said if you walked in this door right now, I’d say I don’t understand why, but I’m going to forgive you because by forgiving you, I’m forgiving me.” |
The Pharmacolog i Uppsala (STO:PHLOG B) Share Price Is Up 112% And Shareholders Are Boasting About It
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ThePharmacolog i Uppsala AB (publ)(STO:PHLOG B) share price has had a bad week, falling 10%. On the other hand, over the last twelve months the stock has delivered rather impressive returns. We're very pleased to report the share price shot up 112% in that time. So it is important to view the recent reduction in price through that lense. The real question is whether the business is trending in the right direction.
See our latest analysis for Pharmacolog i Uppsala
With just kr1,277,532 worth of revenue in twelve months, we don't think the market considers Pharmacolog i Uppsala to have proven its business plan. So it seems that the investors focused more on what could be, than paying attention to the current revenues (or lack thereof). It seems likely some shareholders believe that Pharmacolog i Uppsala will significantly advance the business plan before too long.
As a general rule, if a company doesn't have much revenue, and it loses money, then it is a high risk investment. You should be aware that there is always a chance that this sort of company will need to issue more shares to raise money to continue pursuing its business plan. While some such companies go on to make revenue, profits, and generate value, others get hyped up by hopeful naifs before eventually going bankrupt. Of course, if you time it right, high risk investments like this can really pay off, as Pharmacolog i Uppsala investors might know.
Pharmacolog i Uppsala had cash in excess of all liabilities of just kr5.8m when it last reported (March 2019). So if it hasn't remedied the situation already, it will almost certainly have to raise more capital soon. It's a testament to the popularity of the business plan that the share price gained 112% in the last year, despite the weak balance sheet. The image below shows how Pharmacolog i Uppsala's balance sheet has changed over time; if you want to see the precise values, simply click on the image.
In reality it's hard to have much certainty when valuing a business that has neither revenue or profit. Given that situation, many of the best investors like to check if insiders have been buying shares. It's usually a positive if they have, as it may indicate they see value in the stock. Luckily we are in a position to provide you with thisfreechart of insider buying (and selling).
We'd be remiss not to mention the difference between Pharmacolog i Uppsala'stotal shareholder return(TSR) and itsshare price return. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Pharmacolog i Uppsala hasn't been paying dividends, but its TSR of 129% exceeds its share price return of 112%, implying it has either spun-off a business, or raised capital at a discount; thereby providing additional value to shareholders.
We're pleased to report that Pharmacolog i Uppsala rewarded shareholders with a total shareholder return of 129% over the last year. That gain actually surpasses the 18% TSR it generated (per year) over three years. These improved returns may hint at some real business momentum, implying that now could be a great time to delve deeper. You could get a better understanding of Pharmacolog i Uppsala'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 SE exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Is JetBlue Airways (JBLU) a Great Pick for Value Investors?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s putJetBlue Airways CorporationJBLUstock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, JetBlue Airways has a trailing twelve months PE ratio of 12.65, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 stands at about 18.28. If we focus on the long-term PE trend, JetBlue Airways’ current PE level puts it above its midpoint over the past five years.
Further, the stock’s PE compares favorably with the Zacks Transportation sector’s trailing twelve months PE ratio, which stands at 15.74. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that JetBlue Airways has a forward PE ratio (price relative to this year’s earnings) of just 9.74, so it is fair to say that a slightly more value-oriented path may be ahead for JetBlue Airways stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, JetBlue Airways has a P/S ratio of about 0.73. This is lower than the S&P 500 average, which comes in at 3.31 right now. Also, as we can see in the chart below, this is below the highs for this stock in particular over the past few years.
If anything, JBLU is in the lower end of its range in the time period from a P/S metric, suggesting some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, JetBlue Airways currently has a Zacks Value Score of A, putting it into the top 20% of all stocks we cover from this look. This makes JetBlue Airways a solid choice for value investors.
What About the Stock Overall?
Though JetBlue Airways might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth Score of B and a Momentum Score of A. This gives JBLU a Zacks VGM score — or its overarching fundamental grade — of A. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been encouraging. The current quarter has seen five estimates go higher in the past sixty days compared to no movement in the opposite direction, while the current year estimate has seen five upward revision compared to one downward in the same time period.
This has had a positive impact on the consensus estimate though as the current quarter consensus estimate has risen by 5.7% in the past two months, while the current year estimate has increased by 1.6%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
JetBlue Airways Corporation Price and Consensus
JetBlue Airways Corporation price-consensus-chart | JetBlue Airways Corporation Quote
Despite this positive trend, the stock has a Zacks Rank #3 (Hold), which indicates expectations of in-line performance from the company in the near term.
Bottom Line
JetBlue Airways is an inspired choice for value investors, as it is hard to beat its incredible line up of statistics on this front. A strong industry rank (among top 42% of more than 250 industries) further instils our confidence.
However, a Zacks Rank #3 makes it hard to get too excited about this company overall. In fact, over the past two years, the Zacks Transportation – Airline industry has clearly underperformed the market at large, as you can see below:
So, value investors might want to wait for industry trends to turn favorable in this name first, but once that happens, this stock could be a compelling pick.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportJetBlue Airways Corporation (JBLU) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
paragon GmbH & Co. KGaA (ETR:PGN) Might Not Be A Great Investment
Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card!
Today we'll evaluate paragon GmbH & Co. KGaA (ETR:PGN) to determine whether it could have potential as an investment idea. In particular, we'll consider its Return On Capital Employed (ROCE), as that can give us insight into how profitably the company is able to employ capital in its business.
First of all, we'll work out how to calculate ROCE. Next, we'll compare it to others in its industry. Then we'll determine how its current liabilities are affecting its ROCE.
ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. All else being equal, a better business will have a higher ROCE. In brief, it is a useful tool, but it is not without drawbacks. Renowned investment researcher Michael Mauboussinhas suggestedthat a high ROCE can indicate that 'one dollar invested in the company generates value of more than one dollar'.
The formula for calculating the return on capital employed is:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
Or for paragon GmbH KGaA:
0.048 = €14m ÷ (€361m - €77m) (Based on the trailing twelve months to March 2019.)
Therefore,paragon GmbH KGaA has an ROCE of 4.8%.
Check out our latest analysis for paragon GmbH KGaA
ROCE can be useful when making comparisons, such as between similar companies. We can see paragon GmbH KGaA's ROCE is meaningfully below the Auto Components industry average of 9.1%. This could be seen as a negative, as it suggests some competitors may be employing their capital more efficiently. Aside from the industry comparison, paragon GmbH KGaA's ROCE is mediocre in absolute terms, considering the risk of investing in stocks versus the safety of a bank account. It is possible that there are more rewarding investments out there.
paragon GmbH KGaA's current ROCE of 4.8% is lower than its ROCE in the past, which was 8.1%, 3 years ago. So investors might consider if it has had issues recently.
It is important to remember that ROCE shows past performance, and is not necessarily predictive. ROCE can be misleading for companies in cyclical industries, with returns looking impressive during the boom times, but very weak during the busts. ROCE is only a point-in-time measure. Future performance is what matters, and you can see analyst predictions in ourfreereport on analyst forecasts for the company.
Current liabilities are short term bills and invoices that need to be paid in 12 months or less. Due to the way the ROCE equation works, having large bills due in the near term can make it look as though a company has less capital employed, and thus a higher ROCE than usual. To counteract this, we check if a company has high current liabilities, relative to its total assets.
paragon GmbH KGaA has total assets of €361m and current liabilities of €77m. As a result, its current liabilities are equal to approximately 21% of its total assets. This is a modest level of current liabilities, which would only have a small effect on ROCE.
With that in mind, we're not overly impressed with paragon GmbH KGaA's ROCE, so it may not be the most appealing prospect. You might be able to find a better investment than paragon GmbH KGaA. If you want a selection of possible winners, check out thisfreelist of interesting companies that trade on a P/E below 20 (but have proven they can grow earnings).
If you are like me, then you willnotwant to miss thisfreelist of growing companies that insiders are buying.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
4 Payment Stocks Rise More Than 25% YTD: More Room to Run
The Financial Transaction Services sector, placed within the top 16% of the 16 Zacks sectors, has increased roughly 23.5% so far in the year, outpacing the S&P 500 composite’s growth of approximately 7.3%. Higher consumer spending led by a strong labor market, rising disposable income and an upbeat consumer environment are working in favor of the sector.
Further, any cut in the benchmark interest rate at this juncture will ramp up investment activities and reinforce consumer spending, thereby leading to a rise in payments. Since payments are increasingly being made via cashless modes, payment processors in the entire payment ecosystem stand to gain.
We note that consumer spending — which accounts for more than two-thirds of U.S. economic activity — has picked up pace in recent months. This is evident from an uptick of 0.5% in retail sales during May, following an upwardly revised reading of 0.3% in April. This dissipates the fear of losing economic steam to a certain degree.
Meanwhile, payments are shifting modes from cash to other easier, safer, quicker, cheaper alternative mediums, such as credit/debit cards, mobile payments, online et al.
Per Statista, in 2018, online sales of physical goods amounted to $504.6 billion and are projected to surpass $735 billion in 2023. Apparel and accessories retail e-commerce in the United States is estimated to generate in excess of $138.7 billion in revenues by 2022.
This spurt in online and ecommerce sales should fuel the usage of alternative modes of payments. Nevertheless, the usage of these new payment modes are not just confined to online and e-commerce sales. Owing to the ease and flexibility that these modern payments offer, shoppers are availing of the same to make payments while purchasing at the brick and mortar stores.
Among these payment methods, credit cards hold the prime importance. Per a Statista survey, in 2018, nearly 62% of online transactions was made via credit and other cards of which credit card was mostly preferred. One of the factors favoring credit cards, when making holiday purchases, is earning rewards. However, the speed, ease and flexibility delivered by electronic payment modes cannot be overlooked. Also, mobile payment trend is being widely adopted by the younger generation.
This clearly points to the fact that a shift to the digital mode of payments will steadily catch up with demographic changes. Companies in this space have already sensed this and are consistently investing billions of dollars in their systems, procedures and networks.
Though the payments space is dynamic and requires the application of cutting-edge technology (involving huge expenditure) by companies to provide a superior, cost-effective, secured service to customers, opportunities for growth are aplenty in the industry as cash is still a dominant means of payment in many markets and geographies. These underpenetrated markets promise immense growth potential for the established players with their robust payment networks.
Artificial intelligence, blockchain technology, biometric and contactless technology will further revolutionize the industry. Thus, the industry bigwigs are staying abreast of technical breakthroughs to enable them to fly high.
Here we have highlighted four stocks that have rallied more than 25% year to date and look well poised, based on their sound fundamentals and earnings growth prospects.
You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Global Payments, Inc.GPN is the country’s fifth-biggest merchant acquirer, helping businesses handle credit and debit card payments. The company’s stupendous performance, driven by its vociferous inorganic growth strategy, has yielded results by expanding its scales, size, geography, business and product portfolio. Its growth graph should get even better going forward, courtesy of the acquisition of Total Systems, which will create huge synergies for the merged entity.
The Zacks Consensus Estimate for its current-year earnings has inched 0.5% up over the past 60 days. The company’s expected earnings growth rate for the current year is 16.6% compared with the industry’s anticipated ascent of 13%. Year to date, the stock has soared 56%. It carries a Zacks Rank #2 (Buy).
Mastercard Inc.MA is poised for growth, given its solid market position, ongoing expansion and digital initiatives, plus opportunities from the transition toward electronic payments. Its numerous buyouts have aided revenue growth. For the last many quarters, the company has been benefiting from higher switched transactions, expansion in cross-border volume and gross dollar volume, and uptrends from integrations, partly offset by a climb in rebates and incentives. A strong balance sheet also enables business investment, thereby contributing to growth.
This stock with a Zacks Rank of 2 has witnessed a northward movement in 2019 earnings estimates by 0.4% over the past 60 days. The company’s earnings growth prediction rate for the current year is 17.1% compared with the industry’s growth of 12.8%. Year to date, the stock has surged 40%.
Visa Inc.V leads the payments space with the highest volumes of transactions processed. Its numerous discreet acquisitions and alliances plus technology upgrades and effective marketing have paved the way for long-term growth and a constant improvement in revenues. The consolidation of Visa Europe is a long-term growth strategy for the company. Its international business has been burgeoning and adds diversification benefits. Visa is well-poised to gain traction from the growing electronic payment processing and a solid brand name. Its solid capital position facilitates business investments.
This Zacks #2 Ranked stock has witnessed an upward revision in 2019 earnings estimates over the past 60 days. The company’s earnings growth rate for the current year is envisioned to be 16.5% compared with the industry’s growth of 12.8%. Year to date, the stock has augmented 31.4%.
Euronet Services Inc.EEFT is an industry leader in providing secure electronic financial transaction solutions. The company offers financial payment middleware, financial network gateways, outsourcing and consulting services to financial institutions and mobile operators.
Its sturdy position is backed by stable expansions across the globe through strategic takeovers, and impressive results of the Electronic Funds Transfer and Money Transfer segments. Its revenue base has been inflated over the past few years on the back of its diversity across products and geographies. Its healthy balance sheet boosts investment in business.
This stock with a Zacks Rank #3 (Hold) has seen a northbound revision in 2019 earnings estimates over the past 60 days. The company’s earnings growth rate for the current year is forecast at 25.5% compared with the industry’s growth of 9.4%. Year to date, the stock has jumped 57.7%.
More Stock News: This Is Bigger than the iPhone!It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.Click here for the 6 trades >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportEuronet Worldwide, Inc. (EEFT) : Free Stock Analysis ReportVisa Inc. (V) : Free Stock Analysis ReportMastercard Incorporated (MA) : Free Stock Analysis ReportGlobal Payments Inc. (GPN) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
Why We’re Not Impressed By paragon GmbH & Co. KGaA’s (ETR:PGN) 4.8% ROCE
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Today we'll evaluate paragon GmbH & Co. KGaA (ETR:PGN) to determine whether it could have potential as an investment idea. Specifically, we're going to calculate its Return On Capital Employed (ROCE), in the hopes of getting some insight into the business.
First, we'll go over how we calculate ROCE. Next, we'll compare it to others in its industry. Last but not least, we'll look at what impact its current liabilities have on its ROCE.
ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. All else being equal, a better business will have a higher ROCE. Overall, it is a valuable metric that has its flaws. Author Edwin Whitingsaysto be careful when comparing the ROCE of different businesses, since 'No two businesses are exactly alike.'
Analysts use this formula to calculate return on capital employed:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
Or for paragon GmbH KGaA:
0.048 = €14m ÷ (€361m - €77m) (Based on the trailing twelve months to March 2019.)
So,paragon GmbH KGaA has an ROCE of 4.8%.
Check out our latest analysis for paragon GmbH KGaA
When making comparisons between similar businesses, investors may find ROCE useful. We can see paragon GmbH KGaA's ROCE is meaningfully below the Auto Components industry average of 9.1%. This could be seen as a negative, as it suggests some competitors may be employing their capital more efficiently. Aside from the industry comparison, paragon GmbH KGaA's ROCE is mediocre in absolute terms, considering the risk of investing in stocks versus the safety of a bank account. Investors may wish to consider higher-performing investments.
As we can see, paragon GmbH KGaA currently has an ROCE of 4.8%, less than the 8.1% it reported 3 years ago. Therefore we wonder if the company is facing new headwinds.
It is important to remember that ROCE shows past performance, and is not necessarily predictive. ROCE can be deceptive for cyclical businesses, as returns can look incredible in boom times, and terribly low in downturns. This is because ROCE only looks at one year, instead of considering returns across a whole cycle. Since the future is so important for investors, you should check out ourfreereport on analyst forecasts for paragon GmbH KGaA.
Current liabilities are short term bills and invoices that need to be paid in 12 months or less. The ROCE equation subtracts current liabilities from capital employed, so a company with a lot of current liabilities appears to have less capital employed, and a higher ROCE than otherwise. To counter this, investors can check if a company has high current liabilities relative to total assets.
paragon GmbH KGaA has total liabilities of €77m and total assets of €361m. Therefore its current liabilities are equivalent to approximately 21% of its total assets. This very reasonable level of current liabilities would not boost the ROCE by much.
If paragon GmbH KGaA continues to earn an uninspiring ROCE, there may be better places to invest. But note:make sure you look for a great company, not just the first idea you come across.So take a peek at thisfreelist of interesting companies with strong recent earnings growth (and a P/E ratio below 20).
I will like paragon GmbH KGaA better if I see some big insider buys. While we wait, check out thisfreelist of growing companies with considerable, recent, insider buying.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Italy may have until Jan to address debt woes if EU action launched - minutes
By Francesco Guarascio BRUSSELS (Reuters) - The European Commission could give Italy until January to make fiscal policy changes under an EU debt procedure, minutes of an EU meeting show, setting a relatively long deadline to help avert fines and any backlash from Rome's eurosceptics. Unless the government makes concessions this week on its spending plans for 2019 and 2020, the EU executive is expected to propose on July 2 that a disciplinary procedure be opened over Italy's rising debt. The procedure, which EU finance ministers would need to endorse at meetings on July 8-9, would force Italy to quickly tighten fiscal policy or face fines. Under EU rules, once a disciplinary procedure is launched against a member state, the Commission can set tight deadlines for action. The shortest is three months, which would mean Rome would need to adopt new fiscal measures by October. But Brussels is considering giving Italy six months to address the most urgent shortfalls, according to minutes of the Commission's June 5 meeting that were published on Friday. After that meeting, the Commission said a procedure against Italy was warranted because it had violated EU debt rules in 2018 and was forecast to go further beyond the agreed limits this year and next. Italy's debt grew to 132.2% of gross domestic product in 2018, more than twice the EU's 60% ceiling, and is expected to rise even further, defying rules that say it should fall. Commissioners at the meeting insisted that data underpinning the possible procedure could not be contested by Rome. But the minutes show the Commission was open to giving Italy more time to address shortfalls, in an attempt to avoid antagonising Italian eurosceptics. Economic commissioner Pierre Moscovici said it was important to show Brussels was ready to listen "to avoid the Commission's position being exploited for political ends in certain quarters in Italy," according to the minutes. Story continues He said the Commission could propose a deadline of six months instead of three for the Italian government to take initial corrective measures. Under the procedure, other spending cuts or taxes would need to be adopted in following years. The current Commission's mandate ends in November, unless it is extended. An EU official said a six-month deadline would allow the Commission to align its monitoring of Italy's compliance with requirements under the possible procedure and Brussels' regular annual assessment of the country's budget, which must be approved by the Italian parliament by the end of the year. Italy's Deputy Prime Minister Matteo Salvini has repeatedly said EU fiscal rules are obsolete and is pushing for broad tax cuts that could further breach existing fiscal requirements. But many in Italy want to avert the EU disciplinary action, which could push up the cost of servicing its debt, the EU's second highest in proportion to output after bailed-out Greece. A decision on whether to launch the procedure had initially been expected on June 25 but it was delayed pending the release of new Italian fiscal data on June 26, one EU official told Reuters last week. (Reporting by Francesco Guarascio; Additional reporting by Jan Strupczewski; Editing by Catherine Evans) |
Can We See Significant Institutional Ownership On The Premier Gold Mines Limited (TSE:PG) Share Register?
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A look at the shareholders of Premier Gold Mines Limited (TSE:PG) can tell us which group is most powerful. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. We also tend to see lower insider ownership in companies that were previously publicly owned.
Premier Gold Mines is not a large company by global standards. It has a market capitalization of CA$417m, which means it wouldn't have the attention of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions own shares in the company. Let's delve deeper into each type of owner, to discover more about PG.
See our latest analysis for Premier Gold Mines
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
We can see that Premier Gold Mines does have institutional investors; and they hold 34% of the stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Premier Gold Mines's historic earnings and revenue, below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in Premier Gold Mines. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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.
I can report that insiders do own shares in Premier Gold Mines Limited. In their own names, insiders own CA$13m worth of stock in the CA$417m company. It is good to see some investment by insiders, but it might be worth checkingif those insiders have been buying.
The general public, mostly retail investors, hold a substantial 51% stake in PG, suggesting it is a fairly popular stock. This size of ownership gives retail investors collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.
Private equity firms hold a 12% stake in PG. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.
It's always worth thinking about the different groups who own shares in a company. But to understand Premier Gold Mines 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.
But ultimatelyit is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look atthis free report showing whether analysts are predicting a brighter future.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
US STOCKS SNAPSHOT-Wall Street opens higher on tech boost
June 24 (Reuters) - U.S. stocks opened slightly higher on Monday, boosted by technology shares, while investors pinned their hopes on a meeting between Presidents Donald Trump and Xi Jinping later this week to de-escalate trade tensions.
The Dow Jones Industrial Average rose 8.48 points, or 0.03%, at the open to 26,727.61.
The S&P 500 opened higher by 0.96 points, or 0.03%, at 2,951.42. The Nasdaq Composite gained 8.87 points, or 0.11%, to 8,040.58 at the opening bell. (Reporting by Amy Caren Daniel in Bengaluru; Editing by Anil D'Silva) |
Findit Offers Everyone the Ability to Get The Web Pages They Want Indexed in Findit Search By Submitting The URLs Free
ATLANTA, GA / ACCESSWIRE / June 24, 2019 /Findit, Inc. (OTC PINK: FDIT) a Nevada Corporation helps web pages get indexed in Findit search results.
Findit is the complete social media content management platform that also provides members with guaranteed search results in Findit's interactive search engine. Anyone that wants web pages indexed in Findit Search can now do so by submitting the URL of the web pages or the entire website they want indexed in Findit Search, free. By submitting the web pages you want to be indexed in Findit search it guarantees that these pages will be indexed in Findit Search results. By doing this, you provide anyone searching Findit the ability to see your web pages appear in Findit Search results.
Previously, Findit charged a nominal fee forsubmitting URLs to index in Findit Search. The nominal fee was removed this past week to unlock the barrier for anyone that is looking to increase their overall online presence through Findit by giving them one more online tool to manage all of the content they want people to see about them or their company in Findit. Now, anyone looking to have their web pages indexed in a search engine can do so, on Findit. Free of charge. This can include podcasts, video, blog pages along with their e-commerce stores, articles written about them any pages they want, excluding pornography.
Clark St. Amant of Findit stated, "Findit is the complete content management platform site, giving anyone who wants to use it, a single place to create the content they want seen shared and indexed. This can be status updates, pictures, podcasts, videos, articles and more. Members of Findit can then share these pieces of content to other social sites. Even visitors who are not members can share the content they are viewing on the site across their social platforms. And now, you can take your content that is on another website or other URL or URLs and have them index in Findit free of charge, guaranteeing that your content is indexing in Findit's Search engine."
Submitting web pages or websites you want indexed in Findit Search is very easy. Findit provides an interface to upload a CSV file or manually submit URLs. In addition to submitting the URLs, Findit provides and area for a title and description that Findit uses to index the page and return queries matching the information submitted.
https://www.youtube.com/watch?v=Z8vsGjaqVNM
How To Submit Your URLs To Index Into Findit Search
The first step is very easy, you create your Findit account. After that, pick the web pages you want Findit to index and submit them either individually or through a CSV file. Findit indexes all web pages submitted as well as all content posted into Findit account sites. Findit currently does not crawl web pages on its own. Only content directly submitted into Findit is indexed.
Once the URLs are picked that you want to have indexed in Findit Search you can enter a title that includes up to 80 characters and a description that can include up to 220 characters. These words are what will produce matches in search queries. The best titles and descriptions are the ones that most people would place in a search to return the pages you want them to find. You can submit the same web page URL multiple times with various titles and descriptions to increase the probability of indexing in Findit.
Benefits of Indexing in Findit Search
Findit Search is interactive and only returns search results that were submitted to Findit or content on Findit. To ensure your web pages index in Findit is completely up to you. Having your web pages indexed in Findit will ensure that they will show up in Findit Search .
Make sure your Social Media online marketing and SEO campaign is including Findit.
https://www.youtube.com/watch?v=6uAv8hIP4GU
About Findit, Inc.
Findit, Inc., ownsFindit.comwhich is a Social Media Content Management Platform that provides an interactive search engine for all content posted in Findit to appear in Findit Search. The site is an open platform that provides access to Google, Yahoo, Bing and other search engines access to its content posted to Findit so it can be indexed in these search engines as well. Findit provides Members the ability to post, share and manage their content. Once they have posted in Findit, we ensure the content gets indexed in Findit Search results. Findit provides an option for anyone to submit URLs that they want indexed in Findit Search result, along with posting status updates through Findit Right Now. Status Updates posted in Findit can be crawled by outside search engines which can result in additional organic indexing. All posts on Findit can be shared to other social and bookmarking sites by members and non-members. Findit provides Real Estate Agents the ability to create their own Findit Site where they can pull in their listing and others through their IDX account. Findit offers News and Press Release Distribution. Findit, Inc., is focused on the development of monetized Internet-based web products that can provide an increased brand awareness of our members. Findit, Inc., trades under the stock symbol FDIT on theOTC Pinksheets.
Safe Harbor:
This press release contains forward-looking information within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including statements regarding potential sales, the success of the company's business, as well as statements that include the word believe or similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Findit, Inc. to differ materially from those implied or expressed by such forward-looking statements. This press release speaks as of the date first set forth above, and Findit, Inc. assumes no responsibility to update the information included herein for events occurring after the date hereof. Actual results could differ materially from those anticipated due to factors such as the lack of capital, timely development of products, inability to deliver products when ordered, inability of potential customers to pay for ordered products, and political and economic risks inherent in international trade.
Contact:
Clark St. AmantPhone: 404 443 3224
SOURCE:Findit, Inc.
View source version on accesswire.com:https://www.accesswire.com/549649/Findit-Offers-Everyone-the-Ability-to-Get-The-Web-Pages-They-Want-Indexed-in-Findit-Search-By-Submitting-The-URLs-Free |
Yahoo Finance is now available on Fire TV, Android TV and Apple TV
The Yahoo Finance app for Fire TV, Android TV and Apple TV gives you : Free access to the Yahoo Finance programming livestream , including daily bell-to-bell coverage. An editorially-curated playlist of the day’s best Yahoo Finance content. Searchable highlights and key moments , so you never miss a thing. |
Constellation Brands Earnings: What to Watch
Investors have lost some of their enthusiasm forConstellation Brands'(NYSE: STZ)stock lately. The alcoholic beverage giant recently posted its weakest annual sales and profit gains in five years, after all, and its aggressive bets on the emerging consumer marijuana space aren't yet showing signs of paying off.
On Friday, June 28, the company will have an opportunity to improve on that sour investing thesis as it kicks off a new fiscal year that could bring a quick return to the impressive results shareholders had been used to seeing from 2012 through 2018.
Let's take a closer look.
Image source: Getty Images.
Constellation Brands tried for over a year to get its struggling wine and spirits segment back on track, but management finally threw in the towel and announced plans todivest a group of over 30 brandsvalued at $1.7 billion. Executives described the move as aiming to shore up its remaining wine and spirits division by removing the lower-price point offerings so the company can focus on premium franchises like Kim Crawford and Meiomi wines and Svedka vodka. Management even went so far as to predict that sales growth will quickly return to the paired down segment, and operating margin should rise to around 30% of sales from 26%.
Investors will find out if Constellation Brands still stands behind that optimistic outlook on Friday. They'll also get a chance to see how the smaller wine and alcohol portfolio fared over the last few months, both in terms of sales growth and profitability. By comparison, the segment had been shrinking by 3% in the prior 12 months to trail the beer division by a wide margin.
The beer division has been the real engine of Constellation Brands' growth lately and investors are hoping to see those positive trends carry on into fiscal 2020. In addition to market-beating sales and pricing trends for core franchises like Corona, Modelo, and Pacifico, look for updates on Corona Premier, the most ambitious addition to this imported beer brand in decades.
Overall, Constellation Brands is targeting beer growth that's right on par with last year's 8% increase. Hitting that mark would translate into another year of market share gains for its premium beer portfolio.
Constellation Brands' efficient use of capital has been a big factorsupporting huge investor returnsover the past decade, and management has been busy in this area lately. Its recent brand divestments will generate excess cash that should count on seeing in the form of higher dividends and stock repurchase spending.
But for Friday's report the focus will be on Constellation Brands' massive bet on the emerging recreational marijuana industry. Its over $4 billion investment inCanopy Growthwill ensure that it books noncash gains, or charges, in connection with that stock's price movement from quarter to quarter.
The more important long-term story is how management decides to use its flexible arrangement with Canopy Growth to maximize shareholder value. It's a different situation, but if this capital investment plays out similarly to management's $4 billion acquisition of its imported beer portfolio in 2012, then investors might see game-changing long-term gains from Constellation's early move into the consumer marijuana space.
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Demitrios Kalogeropouloshas no position in any of the stocks mentioned. The Motley Fool recommends Constellation Brands. The Motley Fool has adisclosure policy. |
Does Premier Gold Mines Limited (TSE:PG) Have A Volatile Share Price?
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If you own shares in Premier Gold Mines Limited (TSE:PG) then it's worth thinking about how it contributes to the volatility of your portfolio, overall. In finance, Beta is a measure of volatility. Modern finance theory considers volatility to be a measure of risk, and there are two main types of price volatility. First, we have company specific volatility, which is the price gyrations of an individual stock. Holding at least 8 stocks can reduce this kind of risk across a portfolio. The second sort is caused by the natural volatility of markets, overall. For example, certain macroeconomic events will impact (virtually) all stocks on the market.
Some stocks are more sensitive to general market forces than others. Beta is a widely used metric to measure a stock's exposure to market risk (volatility). Before we go on, it's worth noting that Warren Buffett pointed out in his 2014 letter to shareholders that 'volatility is far from synonymous with risk.' Having said that, beta can still be rather useful. The first thing to understand about beta is that the beta of the overall market is one. 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.
View our latest analysis for Premier Gold Mines
Looking at the last five years, Premier Gold Mines has a beta of 0.81. The fact that this is well below 1 indicates that its share price movements haven't historically been very sensitive to overall market volatility. This means that -- if history is a guide -- buying the stock would reduce the impact of overall market volatility in many portfolios (depending on the beta of the portfolio, of course). Share price volatility is well worth considering, but most long term investors consider the history of revenue and earnings growth to be more important. Take a look at how Premier Gold Mines fares in that regard, below.
Premier Gold Mines is a rather small company. It has a market capitalisation of CA$417m, which means it is probably under the radar of most investors. Very small companies often have a low beta value because their share prices are not well correlated with market volatility. This could be because the price is reacting to company specific events. Alternatively, the shares may not be actively traded.
Since Premier Gold Mines is not heavily influenced by market moves, its share price is probably far more dependend on company specific developments. It could pay to take a closer look at metrics such as revenue growth, earnings growth, and debt. In order to fully understand whether PG is a good investment for you, we also need to consider important company-specific fundamentals such as Premier Gold Mines’s financial health and performance track record. I highly recommend you dive deeper by considering the following:
1. Financial Health: Are PG’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out ourfinancial health checks here.
2. Past Track Record: Has PG 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 PG's historicalsfor more clarity.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore ourfree list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Google to spend further 1 billion euros to build Dutch data centers
AMSTERDAM (Reuters) - Alphabet Inc.'s Google said on Monday it will invest an additional 1 billion euros ($1.14 billion) to build data centers in the Netherlands, including a new facility in Middenmeer.
The company had previously said it is spending 1.5 billion euros to build and then expand a data center currently under construction in Eemshaven, Netherlands.
On a call with reporters, Joe Kava, Google's chief of data centers, said the two sites will employ around 500 people once they are built.
($1 = 0.8784 euros)
(Reporting by Toby Sterling, editing by Deepa Babington) |
US Treasury secretary voices support for new FATF rules regarding crypto exchanges
Steven Mnuchin, secretary of the U.S. Department of the Treasury, is in favor of the latest guidelines handed to cryptocurrency exchanges by the Financial Action Task Force (FATF), according to a Bloombergreport.
The global money-laundering watchdogannouncedlast week that cryptocurrency exchanges need to collect and transfer customer information during transactions. Mnuchin said that with these guidelines, the FATF will ensure that “virtual asset service providers do not operate in the dark shadows."
"This will enable the emerging FinTech sector to stay one-step ahead of rogue regimes and sympathizers of illicit causes searching for avenues to raise and transfer funds without detection," Mnuncin added.
However, execs at leading cryptocurrency companies like Circle, Coinbase and Chainalysis believe that adhering to the FATF guidelines could be costly to implement and force unprecedented collaboration between exchanges. |
Read This Before You Buy Any New Cancer Drug Stocks
If you've been paying attention to merger and acquisition activity in the oncology space, you've probably seen plenty of headlines related to exciting new cell-based cancer therapies and the use ofbi-specific antibodies. Unless you've been watching very closely, though, you probably haven't noticed that biopharma companies with money to burn are more interested in simpler, easy-to-swallow solutions.
Among 2018's top-selling cancer therapies, four of the top 10 weresmall molecule drugs. Over the past two and a half years, cash-laden biopharma companies have spent a stunning $32 billion to acquire smaller biotechs at steep premiums and hoping their candidates will be the next to reach the top-10 list.
[{"Company (Symbol)": "Cascadian Therapeutics", "Acquirer": "Seattle Genetics", "Deal Valuation": "$614 million", "Acquisition Premium": "151%", "Lead Asset": "tucatinib", "Target": "HER2"}, {"Company (Symbol)": "Ignyta", "Acquirer": "Roche", "Deal Valuation": "$1.7 billion", "Acquisition Premium": "70%", "Lead Asset": "entrectinib", "Target": "TRK and ROS1"}, {"Company (Symbol)": "Tesaro", "Acquirer": "GlaxoSmithKline", "Deal Valuation": "$5.1 billion", "Acquisition Premium": "119%", "Lead Asset": "Zejula (niraparib)", "Target": "PARP"}, {"Company (Symbol)": "Ariad Pharmaceuticals", "Acquirer": "Takeda", "Deal Valuation": "$5.2 billion", "Acquisition Premium": "75%", "Lead Asset": "Iclusig (ponatinib)", "Target": "BCR-ABL"}, {"Company (Symbol)": "Loxo Oncology", "Acquirer": "Eli Lilly", "Deal Valuation": "$8.0 billion", "Acquisition Premium": "67%", "Lead Asset": "Vitrakvi (larotrectinib)", "Target": "TRK"}, {"Company (Symbol)": "Array Biopharma(NASDAQ: ARRY)", "Acquirer": "Pfizer(NYSE: PFE)", "Deal Valuation": "$11.4 billion", "Acquisition Premium": "80%", "Lead Asset": "Braftovi (encorafenib)", "Target": "BRAF"}]
Data source: company filings.
Let's look at two key reasons bigger companies are paying steep premiums to acquire these drugs, before trying to figure out which one Big Pharma wants to buy next.
All six of the drugs in the table are designed to shrink tumors by inhibiting specific proteins that are stimulating their growth. That might sound easy, but getting a small molecule to bind to a particular pocket in a folded protein and prevent its activity is like stopping a motorcycle by throwing a wrench at it.
In recent years, the rate of tumor genome sequencing has exploded, which means plenty of potential targets are showing themselves, but it isn't easy to find a pocket for a drug to bind to. With some help from computational models, though, investigators can also aim for pockets that exist for only a brief moment while the target protein is changing and then freeze them into an inactive shape.
Image source: Getty Images.
Cells can begin dividing uncontrollably for all sorts of reasons, but mutated genes producing overactive proteins that stimulate tumor growth are usually to blame. Drugs that target overactive proteins to prevent them from stimulating tumor growth have been gaining ground against indiscriminate chemotherapy for two solid decades. Until recent years, though, targeted cancer treatments have usually been so large that they must be delivered slowly by infusion under the watchful eye of healthcare professionals.
Biopharma giants know that compliance isn't as much of an issue with small-molecule drugs. Chemotherapy's ruthless side effects are often so fierce that many patients would rather let their disease take its own course than suffer through another round of any infused treatment. Patient compliance with capsules and tablets that can be taken in the comfort of their own home are higher. That means more recurring revenue from patients as they remain in remission.
Image source: Getty Images.
Exelixis(NASDAQ: EXEL)owns a small-molecule drug called Cabometyx that treats patients with kidney and liver cancer. The odds Exelixis will receive a juicy buyout offer seem mighty slim, though. Cabometyx has been shown to inhibit 13 different tyrosine kinases, all of which play a role in the life of normal healthy cells.
When it comes to targeted cancer therapies, specifically inhibiting the overactive proteins at fault while leaving the rest unaffected might be the most important factor. If so,Mirati Therapeutics(NASDAQ: MRTX)could be the next midsize biotech to receive a juicy buyout offer.
With a recentmarket capof just $3.7 billion, Mirati is within range of a midsize buyout, and its lead candidate, MRTX849, has an exceptional pedigree. It was Array Biopharma that discovered half of the drugs in the table, and MRTX849 could be its most exciting accomplishment to date.
The candidate Mirati commissioned from Array inhibits KRAS, a protein that scientists have known for decades to play a role in a variety of aggressive malignancies. Recently, Mirati stock jumped after apotential competitorfrom the same class as MRTX849 produced interesting human proof-of-concept results from 10 evaluable patients.
Image source: Getty Images.
It's easy to see why Pfizer is acquiring Array for a whopping $11.6 billion. Its drug discovery program has an uncanny knack for developing drugs that hit targets previously considered impossible.
We won't get our first look at results for the KRAS inhibitor that Array designed for Mirati until the end of the year, but after a string of successes, it would be surprising to see MRTX849's first clinical trial produce data that isn't exciting.
While Array's track record might give you confidence in Mirati, you should know that there's a lot to lose if Array didn't hit a bull's-eye again. If MRTX849 doesn't look like it can compete, Mirati will be left with practically zero clinical-stage new drug candidates.
Mirati doesn't have anything to sell, and the only other new drug candidate in its pipeline, sitravatinib, hasn't been on anyone's radar since it delivered disappointing results in a midstage study. Poor results from MRTX849's first trial could lead to swift and heavy losses.
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Cory Renauerhas no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Seattle Genetics. The Motley Fool has adisclosure policy. |
Meet Samir Ali, A New Face for a New Decade
Meet Samir Ali, A New Face for a New Decade Samir Ali Per Götesson Spring 2020 Menswear Photo: Filippo Fior / Gorunway.com Samir Ali Bode Spring 2020 Menswear Photo: Alessandro Viero / Gorunway.com Samir Ali Amiri Spring 2020 Menswear Photo: Alessandro Viero / Gorunway.com Samir Ali JW Anderson Spring 2020 Menswear Photo: Filippo Fior / Gorunway.com Samir Ali Loewe Spring 2020 Menswear Photo: Alessandro Lucioni / Gorunway.com Samir Ali Kiko Kostadinov Spring 2020 Menswear Photo: Alessandro Viero / Gorunway.com Samir Ali Lanvin Spring 2020 Menswear Photo: Alessandro Viero / Gorunway.com Samir Ali Bode Spring 2020 Menswear Photo: Alessandro Viero / Gorunway.com Samir Ali Samir Ali , a sinewy and intense model born in England and raised between that country and Norway, made his runway debut for the men’s Spring 2020 season. He currently has eight show credits to his name, but there will certainly be more because he has a presence and confidence that belies his age (20) and experience. Ali, who was scouted online, describes himself as “a multicultural young man with different backgrounds and ethnicities [his parents are from Djibouti and Yemen] from different places, who’s taken the best out of each thing and adapted it to my everyday life.” He’s multilingual, too, telling Vogue he speaks three and a half languages. The half is “Arabic because I don’t speak it well, but I understand it,” then there’s English and Norwegian, and the third is Afar. “Afar,” he explains, “is a tribe that comes from the Djibouti/Eritrean East African area. What’s crazy is that the Afar community is so supportive, they keep tagging me on Insta Stories ‘Afar King.’ It feels good to represent. I think I’m the only Afar person to do fashion shows or similar.” Like Jeenu Mahadevan , his colleague at Team Models in Oslo, he is also representing the changing face of the Nordics. Here Ali talks to us about his mom, looking fierce, and what he’s listening to on the subway. Where were you raised? I was born in London but moved to Norway when I was 10-years-old. Almost 10 years later I moved back to London. I enjoy both places just as well. They are both home. What did you want to be growing up; did modeling ever cross your mind? I had a long phase when I wanted to be a secret agent ’cause I was watching a lot of MI5 at the time. After that it was a footballer for some time. At some point I just understood I didn’t want a 9 to 5 job and started to try to get my priorities straight. Modeling did cross my mind, but the thing is that you don’t realize what modeling is until you’re actually in it. When you take a hot Instagram photo, the boys will be like, ‘You should be a model,’ but you don’t really take it seriously. Well, at least not until it actually happens. Story continues What was it like walking in your first show, what was going through your mind? It was quite the experience. I felt a bit of nerves but as soon as I stepped on the runway, everything I had done up to that moment was just built up and then I tried to take control over it. I feel it went well. At my first shows I was thinking, ‘Don’t mess this up Samir.’ But recently, when I face the cameras I’m telling myself, ‘OMG, you gotta get this picture looking hard. Tilt your head and get a mad picture.’ Have you had to overcome any hurdles to get where you are? Yes, I was living in a homeless shelter for some time until I got a spot in the hostel that I live in now. It was an extremely humbling experience, as you sleep with 25-30 other people in a shelter. You get a flat bed, a pillow, and a duvet. Obviously, you have to adhere to the rules and the times, but in general it’s the feeling of not having your own place that is very eye-opening. One of the worst things was perhaps keeping it all to [myself] as none of my friends back home knew of my situation. Perhaps that’s also why I connected to the people from the shelter; you need someone to vent to, as do they. Who do you look up to? There’s no one greater than my mom: she’s at the center of everything I do. She keeps fuel in me and everything I do is for her, literally. Like I could be at a casting, with a long line after a long day, but we FaceTime and my mood changes completely after. My mom is magical. Has anything about the industry surprised you? First of all, that it is super small; it seemed so much bigger before. It’s nice to see similar people from job to job. Also, you always learn something new, no matter what the job is. That’s what I like about it. But most of all, how nice the other models are and how easy it is to talk to them. I’m so hungry for information; if you ask any of them, they’d say, ‘Samir asks a hundred questions.’ What’s your personal style? I like to buy clothes at thrift shops. There’s a good one two blocks from where I live. You can fill a bag for ten pounds and I caught my favorite casting shirt there. How would you describe your look? I would call it fierce. People tend to tell me, ‘Samir, on the runway you look so serious and angry, but off the runway you’re the smiliest guy ever.’ I call it the game face: I lower my eyebrows and tilt my head and that’s it. Boom! The rest is history. Is there anything you’ve worn on the runway that you’d wear IRL? If you would have asked me yesterday, I would have said my closing outfit for Götesson, but I’m not gonna lie: The outfit I wore at Amiri was crazy good, so I would definitely go with that one. What are your hobbies? Music is playing at all times, it’s one of my main motivations. Another one is playing football. I love it—been playing it since I was 10. And the last one is meditating; it’s an important part of my day. What are you listening to? I listen to a lot of rap and a lot of jazz. Rap is for all situations, my basic go-to what I need to get hyped. People like Polo G, Lucki, and Playboi Carti are my go-tos right now. The jazz is for public transport. Anytime you see me on public transport, you know I’m listening to jazz. Are there issues or causes that are important to you? Yes, definitely. Being in the situation I was in, I would like to help out the rough sleeping crisis in London. There are 170,000 rough sleeping, and that’s only in the capital. We all need to work together to help out and reduce homelessness. It’s definitely a cause I would love to work for. What are your wishes for the future? You’re asking this question to a very ambitious boy. I have very high hopes. Before the next five years, I’d love to start a business to earn some money and have a stable future. Most of all, I want my mom to be taken care of. Fashionwise, I would love to do a campaign. It feels like the next pillar that I’m trying to get to. This interview has been edited and condensed for clarity. See the videos. Originally Appeared on Vogue |
UPDATE 2-Challenge to Trump steel tariffs nixed by U.S. Supreme Court
(Adds comment from steel institute, Trump administration declining to comment)
By Lawrence Hurley
WASHINGTON, June 24 (Reuters) - The U.S. Supreme Court on Monday turned away a challenge to President Donald Trump's tariffs on imported steel brought by an industry group that argued that a key part of the law under which he imposed the duties violates the U.S. Constitution.
The justices declined to hear the American Institute for International Steel's appeal of a March ruling by the U.S. Court of International Trade that rejected the group's lawsuit. The institute is a pro-free trade group that represents steel importers and users of imported steel.
Trump imposed 25% tariffs on imported steel and 10% tariffs on imported aluminum in March 2018 based on national security grounds. Exemptions have been granted to Argentina, Australia, Brazil and South Korea in exchange for quotas. Canada and Mexico were exempted in May. In response, both countries lifted their retaliatory tariffs on the United States.
The institute brought its lawsuit in June 2018, arguing that Section 232 of the 1962 Trade Expansion Act, which allows presidents to impose tariffs based on national security concerns, is unconstitutional because it delegates too much discretion to the president at the expense of Congress.
When the lower court rejected the challenge, the steel group chose to appeal directly to the Supreme Court instead of taking the case first to the U.S. Court of Appeals for the Federal Circuit.
Richard Chriss, a spokesman for the steel group, said the institute will now revert to filing an appeal in the usual fashion with the Federal Circuit.
"We continue to believe that we have a strong legal case that Section 232 is unconstitutional. Once the Federal Circuit has spoken, we expect that the losing party will ask the Supreme Court to review that decision," Chriss said.
The Justice Department declined to comment.
Steel trader Kurt Orban Partners and oil pipe supplier Sim-Tex LP also joined the lawsuit.
Trump has rattled the world trade order by imposing unilateral tariffs to combat what he calls unfair trade practices by China, the European Union and other major trading partners of the United States. The bulk of Trump's tariffs have been aimed at China, covering $250 billion worth of Chinese goods so far.
China and other countries have retaliated by imposing their own tariffs on U.S. goods.
(Reporting by Lawrence Hurley; editing by Will Dunham) |
Is Spirit Airlines (SAVE) A Great Pick for Value Investors?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s putSpirit Airlines, Inc.SAVE stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:PE RatioA key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.On this front, Spirit Airlines has a trailing twelve months PE ratio of 9.95, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 compares in at about 18.28. If we focus on the stock’s long-term PE trend, the current level puts Spirit Airlines’ current PE ratio somewhat below its midpoint (which is 12.82) over the past five years.
Further, the stock’s PE also compares favorably with the Zacks Transportation sector’s trailing twelve months PE ratio, which stands at 15.74. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Spirit Airlines Holdings has a forward PE ratio (price relative to this year’s earnings) of just 8.47, so it is fair to say that a slightly more value-oriented path may be ahead for Spirit Airlines’ stock in the near term too.P/S RatioAnother key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.Right now, Spirit Airlines has a P/S ratio of about 0.94. This is substantially lower than the S&P 500 average, which comes in at 3.31 right now. Also, as we can see in the chart below, this is somewhat below the highs for this stock in particular over the past few years.
If anything, this suggests some level of undervalued trading—at least compared to historical norms.Broad Value OutlookIn aggregate, Spirit Airlines currently has a Value Style Score of A, putting it into the top 20% of all stocks we cover from this look. This makes SAVE a solid choice for value investors.What About the Stock Overall?Though Spirit Airlines might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of A and a Momentum score of D. This gives SAVE a VGM score—or its overarching fundamental grade—of A. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been disappointing. The current quarter has seen five estimates go lower in the past sixty days compared to none higher, while the full year estimate has seen six downward and one upward revision in the same time period.This has had a noticeable impact on the consensus estimate, as the current quarter consensus estimate has fallen 10.8% in the past two months, while the full year estimate has declined 6.9%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Spirit Airlines, Inc. Price and Consensus
Spirit Airlines, Inc. price-consensus-chart | Spirit Airlines, Inc. Quote
This bearish trend is why the stock has just a Zacks Rank #3 (Hold) and why we are looking for in-line performance from the company in the near term.Bottom LineSpirit Airlines is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Moreover, a good industry rank (top 42% out of more than 250 industries) further supports the growth potential of the stock. However, with a Zacks Rank #3, it is hard to get too excited about this company overall. However, over the past one year, the sector has clearly underperformed the broader market, as you can see below:
So, value investors might want to wait for estimates, analyst sentiment and industry trends to turn favorable in this name first, but once that happens, this stock could be a compelling pick.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportSpirit Airlines, Inc. (SAVE) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
This High-Yield Dividend Stock Could Have Big-Time Upside in the Second Half of 2019
Most investors buyhigh-yield dividend stocksto collect their generous income streams. However, some add to their appeal by complementing their above-average dividends with equally compelling growth prospects. Those dual fuels enable them to generate higher total returns, which can make them into even bigger winners for investors.
One stock that offers both a big-time yield and high-octane growth prospects ismidstream companyTarga Resources(NYSE: TRGP). What makes it currently stand out is that it has several needle-moving expansion projects on track to start up later this year. That near-term catalyst could give its stock a big boost in the second half of this year.
Image source: Getty Images.
Targa Resources offers income investors an eye-popping 9.4%-yielding dividend. That payout, however, is onshaky groundat the moment, since Targa pays out virtually all its cash flow to support the current dividend level. The company has had to be creative to get the funding needed to expand its operations.
The company has left no stone unturned in its search for financing. Early last year, for example, the company entered into a $1.1 billion development joint venture with a private equity company to help finance three of its expansion projects. Meanwhile, Targa has also sold several assets, including a 45% stake in its gathering and processing operations in the Bakken Shale for $1.6 billion earlier this year.
Image source: Getty Images.
All that wheeling and dealing is about to pay off for Targa Resources. The company is nearing an inflection point because it has several large-scale growth projects about to enter service. Those expansions should drive significant cash flow growth in the second half of 2019.
One of its largest projects is the Grand Prix NGL pipeline, which will transport natural gas liquids from both the fast-growing Permian Basin and theSTACK/SCOOP region of Oklahomato a processing hub in Mont Belvieu, Texas. That pipeline will enter full service during the third quarter of this year, providing Targa with a big near-term uptick in cash flow.
In addition, the company is one of several partners helping fund the construction ofKinder Morgan's(NYSE: KMI)Gulf Coast Express pipeline, which will transport natural gas from the Permian Basin to the Texas Gulf Coast. Construction on that project is well under way, which leads Kinder Morgan to believe it will enter service in October.
Meanwhile, Targa Resources is also wrapping up construction on several smaller projects. In the Bakken Shale, for example, it's working withHess Midstream Partners(NYSE: HESM)to build the Little Missouri 4 natural gas processing plant. Targa and Hess Midstream expect this project to be online early in the third quarter. Targa also has several gas processing plants and related infrastructure under construction in the Permian Basin that will start up this year. Its Hopson Plant already began service during the second quarter, while Pembrook should be online early in the third quarter and Falcon should start up by year-end. Finally, the company just finished construction on its six NGL processing facility in Mont Belvieu during the second quarter.
The start-up of all these expansion projects should significantly boost Targa's earnings and cash flow over the next few quarters. As that occurs, it will help improve Targa's dividend payout and leverage ratios. That should help lift the weight of worries currently holding down Targa's stock, which could send it skyward in the second half of this year.
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Matthew DiLalloowns shares of Kinder Morgan. The Motley Fool owns shares of and recommends Kinder Morgan. The Motley Fool recommends Targa Resources. The Motley Fool has adisclosure policy. |
Is Paylocity Holding Corporation (NASDAQ:PCTY) Potentially Undervalued?
Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card!
Paylocity Holding Corporation (NASDAQ:PCTY), which is in the software business, and is based in United States, saw a decent share price growth in the teens level on the NASDAQGS over the last few months. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Today I will analyse the most recent data on Paylocity Holding’s outlook and valuation to see if the opportunity still exists.
See our latest analysis for Paylocity Holding
Paylocity Holding appears to be overvalued by 40.32% at the moment, based on my discounted cash flow valuation. The stock is currently priced at US$97.95 on the market compared to my intrinsic value of $69.81. This means that the buying opportunity has probably disappeared for now. If you like the stock, you may want to keep an eye out for a potential price decline in the future. Given that Paylocity Holding’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Paylocity Holding’s earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.
Are you a shareholder?It seems like the market has well and truly priced in PCTY’s positive outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe PCTY should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor?If you’ve been keeping tabs on PCTY for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for PCTY, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Paylocity Holding. You can find everything you need to know about Paylocity Holding inthe latest infographic research report. If you are no longer interested in Paylocity Holding, you can use our free platform to see my list of over50 other stocks with a high growth potential.
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. |
StockBeat - Canopy Growth Continues Slide as Earnings Paint Hazy Outlook
Investing.com - Canopy Growth on Monday extended its slide from last week, as traders continued to mull over the company’s wider-than-expected loss and narrower margins. Canopy Growth (NYSE:CGC) fell 2.7%, adding to its nearly 11% slump on Friday, when the marijuana giant reported a fiscal fourth-quarter loss per share of C$0.98 and revenue of C$94.1 million, up 313%. The company attributed the surge in revenue to “value-added products, extraction services, and clinic partners," but the revenue growth was more than offset by a ramp up in costs, weighing on margin growth. Gross margin for the quarter fell to 16% of net revenue, down from 34% of net revenue a year earlier, which CFO Mike Lee blamed on "operating expenses for facilities not yet cultivating or facilities that had underutilized capacity." Looking ahead, some on Wall Street expect Canopy to improve margins, even as costs will likely climb as the company ramps up manufacturing and processing to boost output. While BMO said it believes Canopy's gross margins will improve, analysts expressed some doubt on the contribution to growth from edibles and vapes. The bank also questioned the company's ability to hit its C$1 billion run-rate guidance by the end of fiscal 2020 as the operating expenses required to ramp manufacturing and processing could be higher than planned. Related Articles UK puts mini-bond regulation under spotlight after LCF collapse Sweden stocks lower at close of trade; OMX Stockholm 30 down 1.07% Netherlands stocks lower at close of trade; AEX down 0.41% |
Is There Now An Opportunity In Paylocity Holding Corporation (NASDAQ:PCTY)?
Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card!
Paylocity Holding Corporation (NASDAQ:PCTY), which is in the software business, and is based in United States, saw a double-digit share price rise of over 10% in the past couple of months on the NASDAQGS. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s examine Paylocity Holding’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
See our latest analysis for Paylocity Holding
According to my valuation model, the stock is currently overvalued by about 40.32%, trading at US$97.95 compared to my intrinsic value of $69.81. This means that the buying opportunity has probably disappeared for now. If you like the stock, you may want to keep an eye out for a potential price decline in the future. Given that Paylocity Holding’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to more than double over the next couple of years, the future seems bright for Paylocity Holding. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
Are you a shareholder?It seems like the market has well and truly priced in PCTY’s positive outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe PCTY should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor?If you’ve been keeping an eye on PCTY for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for PCTY, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Paylocity Holding. You can find everything you need to know about Paylocity Holding inthe latest infographic research report. If you are no longer interested in Paylocity Holding, you can use our free platform to see my list of over50 other stocks with a high growth potential.
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 United Continental (UAL) Stock a Suitable Value Pick Now?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s putUnited Continental Holdings, Inc.UAL stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:PE RatioA key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.On this front, United Continental has a trailing twelve months PE ratio of 8.80, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 stands at about 18.28. If we focus on the long-term PE trend, United Continental’s current PE level puts it slightly above its midpoint over the past five years.
Further, the stock’s PE also compares favorably with the industry’s trailing twelve months PE ratio, which stands at 11.89. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that United Continental has a forward PE ratio (price relative to this year’s earnings) of just 7.78, so it is fair to say that a slightly more value-oriented path may be ahead for United Continental stock in the near term too.P/S RatioAnother key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.Right now, United Continental has a P/S ratio of about 0.56. This is significantly lower than the S&P 500 average, which comes in at 3.31 right now. Also, as we can see in the chart below, this is below the highs for this stock in particular over the past few years.
As we can see, the stock is trading near its median value for the time period from a P/S metric. This does not provide us with a conclusive direction as to the relative valuation of the stock in comparison to its historical trend.Broad Value OutlookIn aggregate, United Continental currently has a Zacks Value Style Score of A, putting it into the top 20% of all stocks we cover from this look. This makes United Continental a solid choice for value investors, and some of its other key metrics make this pretty clear too.For example, the PEG ratio for United Continental is 0.37, a level that is lower than the industry average of 0.61. The PEG ratio is a modified PE ratio that takes into account the stock’s earnings growth rate. Clearly, UAL is a solid choice on the value front from multiple angles.What About the Stock Overall?Though United Continental might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of A and a Momentum score of F. This gives UAL a Zacks VGM score—or its overarching fundamental grade—of A. (You can read more about the Zacks Style Scores here >>)Meanwhile, the company’s recent earnings estimates have been mixed at best. The current quarter has seen one estimate go higher in the past sixty days compared to four lower, while the full year estimate has seen four upward and one downward revision in the same time period.As a result, the current quarter consensus estimate has inched lower by 0.7% in the past two months, while the full year estimate has inched up by 0.3%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
United Continental Holdings, Inc. Price and Consensus
United Continental Holdings, Inc. price-consensus-chart | United Continental Holdings, Inc. Quote
Despite this somewhat mixed trend, the stock has a Zacks Rank #2 (Buy) on the back of its strong value metrics and this is why we are expecting outperformance from the company in the near term.Bottom LineUnited Continental is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Furthermore, a robust industry rank (among the Top 42%) and a solid Zacks Rank instills investor confidence.However, it is hard to get too excited about this company overall as over the past two years, the industry has underperformed the broader market, as you can see below:
So, value investors might want to wait for estimates, analyst sentiment and broader factors to turn around in this name first, but once that happens, this stock could be a compelling pick.More Stock News: This Is Bigger than the iPhone!It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.Click here for the 6 trades >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportUnited Continental Holdings, Inc. (UAL) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
Mad Crypto: Libra was just the cherry on top of this rally
This post first appeared in Frank Chaparro’s weekly column “Mad Crypto,” which is sent to Genesis members’ inbox every Monday morning.
Pundits and media professionals often struggle to pinpoint the Holy Grail behind each bitcoin price increase. And the 17.2% increase this past week to around $11,000, its highest point in over 15 months, is no different.
Naturally, Facebook’s Libra announcement is alluded to at the bottom of many “price posts” out there (such as this one from theFinancial Times).
But as our friendLionel Laurent at Bloomberg Newspoints out in his Sunday morning column, readers would be unwise to attribute bitcoin’s bullish run over the past week solely to Mark Zuckerberg’s plan to gatecrash the digital currency market with a stablecoin-like token backed by giants such as PayPal, Uber, and Visa.
Join Genesis nowand continue reading,Mad Crypto: Libra was just the cherry on top of this rally! |
Does Market Volatility Impact Puma Biotechnology, Inc.'s (NASDAQ:PBYI) Share Price?
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Anyone researching Puma Biotechnology, Inc. (NASDAQ:PBYI) might want to consider the historical volatility of the share price. 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 are more sensitive to general market forces than others. Some investors use beta as a measure of how much a certain stock is impacted by market risk (volatility). While we should keep in mind that Warren Buffett has cautioned that 'Volatility is far from synonymous with risk', beta is still a useful factor to consider. To make good use of it you must first know that the beta of the overall market is one. A stock with a beta below one is either less volatile than the market, or more volatile but not corellated with the overall market. In comparison a stock with a beta of over one tends to be move in a similar direction to the market in the long term, but with greater changes in price.
View our latest analysis for Puma Biotechnology
Looking at the last five years, Puma Biotechnology has a beta of 1.18. 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 Puma Biotechnology are likely to rise strongly in times of greed, but sell off in times of fear. Beta is worth considering, but it's also important to consider whether Puma Biotechnology is growing earnings and revenue. You can take a look for yourself, below.
Puma Biotechnology is a small cap stock with a market capitalisation of US$533m. Most companies this size are actively traded. It is quite common to see a small-cap stock with a beta greater than one. In part, that's because relatively few investors can influence the price of a smaller company, compared to a large company.
Beta only tells us that the Puma Biotechnology 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 Puma Biotechnology’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 PBYI’s future growth? Take a look at ourfree research report of analyst consensusfor PBYI’s outlook.
2. Past Track Record: Has PBYI 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 PBYI's historicalsfor more clarity.
3. Other Interesting Stocks: It's worth checking to see how PBYI 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. |
Stock Market News For Jun 24, 2019
Markets closed in the red on Friday as chip stocks weighed on the markets after a U.S. Department of Commerce ruling in which five more Chinese companies were banned from doing business with the United States. Meanwhile, the three major benchmarks are on track for record breaking performance in June. For the day, however, the three major benchmarks ended in the red.
The Dow Jones Industrial Average (DJI) decreased 0.1%, to close at 26,719.13. The S&P 500 decreased 0.1% to close at 2,950.46. The tech-laden Nasdaq Composite Index closed at 8,031.71, losing 0.2%.
The fear-gauge CBOE Volatility Index (VIX) increased 5% to close at 15.49. Market volatility was higher than usual on Friday due to quadruple witching which marks the expiration of single-stock options and futures as well as index options and futures. Decliners outnumbered advancers on the NYSE by a 1.47-to-1 ratio. On Nasdaq, a 1.71-to-1 ratio favored declining issues.
How Did the Benchmarks Perform?
The Dow dipped 34 points to close in the red. Losses for the 30-stock index were broad. Shares of Disney DIS dipped 1.3% and weighed on the Dow. Disney has a Zacks Rank #3 (Hold). You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The S&P 500 lost 3.7 points to end in negative territory. Of the 11 major sectors of the S&P 500, nine ended in the red, with real estate and consumer staples stocks leading the decliners. The Real Estate Select Sector SPDR Fund (XLRE) and Consumer Staples Select Sector SPDR Fund (XLP) decreased 1.9% and 1.1%, respectively on Friday.
Meanwhile, the U.S. Department of Commerce banned five more Chinese companies from buying components made in the United States. Higon, Chengdu Haiguang Integrated Circuit, Chengdu Haiguang Microelectronics Technology, Sugon and Wuxi Jiangnan Institute of Computing Technology were the five companies which the department banned.
Following such an announcement, shares of Micron Technology MU, Advanced Micro Devices AMD and Xilinx XLNX declined 2.6%, 3% and 2.3%, respectively and weighed on the overall semiconductor sector.
Meanwhile, the Nasdaq declined 19.6 points to also close in the red. Losses for the Nasdaq were broad-based. Further, shares of Amazon AMZN dipped 0.4% and weighed on the Nasdaq.
Fed Speaks
Minneapolis Fed President Neel Kashkari stated in an essay on the website of the bank that he advocated “for a 50-basis-point rate cut.” He is in favor of reducing the benchmark interest rates to the range of 1.75% - 2% from 2.25% - 2.5% currently. However, it should be noted that Kashkari is not a voting member of this year’s rate-setting Federal Open Market Committee.
Meanwhile, St. Louis Fed President James Bullard stated that he wanted the rates to be reduced this week against the backdrop of slow economic growth and weak inflation levels. Notably, Bullard was the only member who had voted against Fed’s unanimous decision on Jun 19 to hold interest rate steady.
Economic Data
On the economic data front, the National Association of Realtors stated that existing home sales for the month of May came in at 5.34 million units, higher than the consensus estimate of 5.27 million units.
Meanwhile, IHS Markit reported that its flash manufacturing purchasing managers index declined to 50.1 in June from 50.5 in the previous month. This marked the metric’s lowest level since September 2009.
On the other hand, IHS Markit’s flash services purchasing managers decreased to 50.7 in June from 50.9 in the previous month. This marked the metric’s lowest level since March 2016.
Weekly Roundup
For the week, the Dow, the S&P 500 and the Nasdaq rose 2.4%, 2.2% and 3%, respectively. Moreover, it is estimated that if the markets extend their month-to-date gains into the last week of this month, the Dow is on track to exhibit its strongest performance for June since 1938. Meanwhile, the S&P 500 and the Nasdaq are also expected to have best June since 1955 and 2000, respectively.
Fed kept the federal fund target rate unchanged while giving a clear indication that the central bank might cut rates at least once in this year. The European Central Bank (ECB) had also given a strong indication of a near-term rate cut a day earlier. Assurance of pursuing of accommodative monetary policies from two major central banks boosted investors’ confidence in equities.
The S&P 500 hit a new record-high on Jun 20 as investors’ appetite for risky assets like equities were bolstered by the Fed’s indication that a rate cut was likely this year. Moreover, geopolitical tensions with Iran resulted in a rally in energy stocks. Meanwhile, President Trump stated that he will meet his Chinese counterpart during the G-20 summit.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportThe Walt Disney Company (DIS) : Free Stock Analysis ReportAmazon.com, Inc. (AMZN) : Free Stock Analysis ReportAdvanced Micro Devices, Inc. (AMD) : Free Stock Analysis ReportMicron Technology, Inc. (MU) : Free Stock Analysis ReportXilinx, Inc. (XLNX) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
One Thing To Remember About The Puma Biotechnology, Inc. (NASDAQ:PBYI) Share Price
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If you own shares in Puma Biotechnology, Inc. (NASDAQ:PBYI) then it's worth thinking about how it contributes to the volatility of your portfolio, overall. In finance, Beta is a measure of volatility. Modern finance theory considers volatility to be a measure of risk, and there are two main types of price volatility. The first type is company specific volatility. Investors use diversification across uncorrelated stocks to reduce this kind of price volatility across the portfolio. The second sort is caused by the natural volatility of markets, overall. For example, certain macroeconomic events will impact (virtually) all stocks on the market.
Some stocks see their prices move in concert with the market. Others tend towards stronger, gentler or unrelated price movements. Beta is a widely used metric to measure a stock's exposure to market risk (volatility). Before we go on, it's worth noting that Warren Buffett pointed out in his 2014 letter to shareholders that 'volatility is far from synonymous with risk.' Having said that, beta can still be rather useful. The first thing to understand about beta is that the beta of the overall market is one. A stock with a beta greater than one is more sensitive to broader market movements than a stock with a beta of less than one.
Check out our latest analysis for Puma Biotechnology
Zooming in on Puma Biotechnology, we see it has a five year beta of 1.18. This is above 1, so historically its share price has been influenced by the broader volatility of the stock market. Based on this history, investors should be aware that Puma Biotechnology 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 Puma Biotechnology fares in that regard, below.
Puma Biotechnology is a small cap stock with a market capitalisation of US$533m. Most companies this size are actively traded. 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 Puma Biotechnology tends to moves up when the market is going up, and down when it's going down, potential investors may wish to reflect on the overall market, when considering the stock. In order to fully understand whether PBYI is a good investment for you, we also need to consider important company-specific fundamentals such as Puma Biotechnology’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 PBYI’s future growth? Take a look at ourfree research report of analyst consensusfor PBYI’s outlook.
2. Past Track Record: Has PBYI 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 PBYI's historicalsfor more clarity.
3. Other Interesting Stocks: It's worth checking to see how PBYI 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. |
UK weather: Temperatures could soar to 35C by Saturday but not before heavy rain and thunderstorms
People enjoying the hot weather in St James's Park in London. (Picture: PA/Getty) Temperatures in the UK could reach 35C at the weekend, but not before heavy rain and thunderstorms lash the country in the early part of this week. The Met Office said temperatures in the mid-30s could be experienced in London by Saturday. Thunderstorms are set to make way for sunshine and warmth in time for Glastonbury this weekend. The June washout will continue on Monday and Tuesday, with severe Met Office weather warnings for rain and thunderstorms covering large parts of the UK. A woman eats an ice-cream in Green Park, London (Picture: PA/Getty) However, hot air moving in from continental Europe will bring with it drier, sunnier and warmer conditions, and by Saturday parts of London could get as hot as 35C. The June record is 35.6C, which was set in Southampton in 1978. As the week progresses the heat is forecast to build, with southern areas getting the hottest weather. Peak daily temperatures across much of England and Wales are predicted to be well above 20C all week. Scotland and Northern Ireland will be slightly cooler, although the mercury is expected to rise above 20C on Saturday. Picture: PA France is bracing itself for a 40C heatwave later this week, temperatures there were already well into the 30s on Monday. Germany, Belgium and Switzerland could all see national records broken this week. Picture: PA Met Office spokeswoman Nicola Maxey said: "The continent is seeing some very high temperatures, with record-breaking temperatures expected across France, Spain and Belgium. Read more Men jailed after filming dogs mauling badgers to death in act of 'medieval barbarity' Boris Johnson's neighbour speaks out after calling the police to domestic disturbance Woman arrested after RAF jets scrambled to escort Jet2 flight back to Stansted "We are not seeing temperatures as hot as Europe, but it will be warm for the UK." She added: "By Saturday we could be looking at 30C in the south, with London looking at 30C but with isolated spots of 33C, 34C or 35C, maybe." Last year's record for June, a month in which the UK was hit by a series of wildfires, was 33C recorded at Porthmadog in Gwynedd. Story continues Glastonbury festival-goers will be treated to consistently warm and dry weather, with temperatures expected to largely remain in the mid to high-20s throughout the weekend. People sunbathe near the Trocadero fountains and the Eiffel tower in Paris as a heatwave is expected in much of France (Picture: Reuters) Tourists enjoying the heat at the Louvre Museum in Paris (Picture: Getty) On Friday it could get as hot as 31C at the music festival. Both the UV index and the pollen count are forecast to remain high this week. Ms Maxey said: "People who suffer from hay fever might feel quite uncomfortable." The highest temperature of the year so far was 28.8C, recorded in Norfolk on June 2. ---Watch the latest videos from Yahoo UK--- |
Energy ETF & Stock Winners of Last Week
Oil price surged last week on rising U.S.-Iranian tensions and hopes of rate cuts, which may stimulate global demand. Notably, Brent rose about 5% last week - its first weekly gain in five weeks - while crude jumped about 10% - its biggest weekly percentage gain since December 2016.Tensions in the Middle East escalated after Iran shot down a U.S. drone over the vital oil shipping lane, the Strait of Hormuz. This can disrupt supplies from the Middle East, which provides more than a fifth of the world’s oil output. The tanker attacks in the Gulf of Oman, which feeds into the Strait of Hormuz, earlier this month also threatened oil supply (read: Iran Downs U.S. Drone: Sector ETFs & Stocks to Gain).Overall, supply conditions remained tight, given declines in Venezuela, Iran, potentially Libya and temporary outages in Russia. The Organization of the Petroleum Exporting Countries (OPEC) production also fell to its lowest level in five years. The OPEC and some non-OPEC producers including Russia have been withholding oil supply since the start of the year to tackle global supply glut and rebalance the oil market. They are set to discuss whether to extend oil supply cuts beyond June later this month or early next month.However, the ongoing trade worries coupled with bouts of weak data across the globe and an inverted yield curve, which suggests a recession, make the oil outlook gloomy. This is because factory activity contracted in the United States, Europe and Asia last month due to deepening trade dispute between Washington and Beijing, which will weigh on demand. The International Energy Agency (IEA) recently reduced oil demand forecast by 100,000 barrels per day to 1.2 million barrels per day for this year.The OPEC last week also reduced its forecast for global oil demand growth and warned of further potential cuts amid fears of U.S.-China trade dispute and an economic slowdown. The cartel expects world oil demand to rise 1.14 million barrels per day this year, 70,000 barrels per day less than previously expected.Give the spike in oil price, the energy sector enjoyed a strong surge last week. As such, we have highlighted the five top-performing energy ETFs and stocks of last week that are poised to perform well, should oil price rise.Best ETFsSPDR S&P Oil & Gas Equipment & Services ETF XESThis fund tracks the S&P Oil & Gas Equipment & Services Select Industry Index, which measures the performance of the companies engaged in the oil and gas equipment and services industry (read: Energy ETFs Jump on Tanker Attacks: What Lies in Store?).Zacks Rank: #5 (Strong Sell)AUM: $186 millionExpense Ratio: 0.35%Last Week Return: 10.9%VanEck Vectors Oil Services ETF OIHThis fund tracks the MVIS U.S. Listed Oil Services 25 Index, which offers exposure to the companies involved in oil services to the upstream oil sector, including oil equipment, oil services or oil drilling.Zacks Rank: #5AUM: $779.9 millionExpense Ratio: 0.35%Last Week Return: 9.8%Invesco S&P SmallCap Energy ETF PSCEThis fund offers exposure to the small-cap segment of the energy sector by tracking the S&P Small Cap 600 Capped Energy Index.Zacks Rank: #5AUM: $23.1 millionExpense Ratio: 0.29%Last Week Return: 9.3%Invesco Dynamic Oil & Gas Services ETF PXJThis product follows the Dynamic Oil Services Intellidex Index, which thoroughly evaluates companies based on a variety of investment merit criteria, including price momentum, earnings momentum, quality, management action and value.Zacks Rank: #5AUM: $15.3 millionExpense Ratio: 0.63%Last Week Return: 9.3%iShares U.S. Oil Equipment & Services ETF IEZThis ETF offers exposure to U.S. companies that provide equipment and services for oil exploration and extraction by tracking the Dow Jones U.S. Select Oil Equipment & Services Index (see: all the Energy ETFs here).Zacks Rank: #5AUM: $126.5 millionExpense Ratio: 0.43%Last Week Return: 8.9%Best StocksApproach Resources Inc. AREXThis independent energy company is engaged in the exploration, development, exploitation, production and acquisition of unconventional natural gas and oil properties onshore in the United States and Western Canada. You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks Rank: #2 (Buy)VGM Score: FMarket Cap: $31.6 millionLast Week Return: 48%Roan Resources Inc. ROANThis oil and natural gas company is focused on the development, exploration and acquisition of unconventional oil and natural gas reserves in the Merge, SCOOP and STACK plays of the Anadarko Basin in Oklahoma.Zacks Rank: #3VGM Score: AMarket Cap: $254.7 millionLast Week Return: 44%NCS Multistage Holdings Inc. NCSMThis company provides engineered products and support services for oil and natural gas well completions and field development strategies internationally, primarily the United States.Zacks Rank: #3VGM Score: DMarket Cap: $181.5 millionLast Week Return: 38.9%Lonestar Resources US Inc. LONEThis oil and gas company is involved in exploration, production and acquisition of unconventional oil and gas reserves (read: ETFs & Stocks From Top-Ranked Sector to Buy).Zacks Rank: #3VGM Score: DMarket Cap: $68.6 millionLast Week Return: 29.7%Chaparral Energy Inc. CHAPThis oil and natural gas exploration and production company is focused on deposits of Stack, Meramec and Osage, Oswego, and Woodford located in Oklahoma and the Texas Panhandle.Zacks Rank: #3VGM Score: DMarket Cap: $178.4 millionLast Week Return: 25.9%Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportSPDR S&P Oil & Gas Equipment & Services ETF (XES): ETF Research ReportsInvesco Dynamic Oil & Gas Services ETF (PXJ): ETF Research ReportsVanEck Vectors Oil Services ETF (OIH): ETF Research ReportsiShares U.S. Oil Equipment & Services ETF (IEZ): ETF Research ReportsInvesco S&P SmallCap Energy ETF (PSCE): ETF Research ReportsLonestar Resources US Inc. (LONE) : Free Stock Analysis ReportApproach Resources Inc. (AREX) : Free Stock Analysis ReportChaparral Energy, Inc. (CHAP) : Free Stock Analysis ReportNCS Multistage Holdings, Inc. (NCSM) : Free Stock Analysis ReportRoan Resources, Inc. (ROAN) : Free Stock Analysis ReportTo read this article on Zacks.com click here. |
Innovative Industrial (IIPR) Acquires Property in Michigan
Innovative Industrial PropertiesIIPR has completed the acquisition of a Michigan property and entered into a long-term, triple-net lease agreement with an affiliate of Emerald Growth Partners.Specifically, Innovative Industrial Properties shelled out $6.9 million (excluding transaction costs) for this property in Harrison, which comprises around 45,000 square feet of industrial space. The affiliate of Emerald Growth Partners will use the property as licensed medical-use cannabis cultivation and processing facility following some redevelopment efforts.Innovative Industrial Properties has also committed to provide up to approximately $3.1 million as reimbursement for the tenant improvements, resulting in its total investment in the property reaching around $10 million.The expansion in Michigan is a strategic fit for Innovative Industrial Properties which is focused on cannabis-centered real estate portfolio. This is because Michigan is one of the largest medical-use cannabis markets in the United States, including around 270,000 medical-use cannabis cardholders as of the end of 2017, per ArcView Market Research.Also, last year, the state legalized adult-use cannabis and according to ArcView projections, by 2022, Michigan is set emerge as one of the top 10 regulated cannabis markets, with total regulated cannabis sales of $1.4 billion.Moreover, according to Innovative Industrial Properties’ press release, Emerald Growth Partners obtained pre-qualification status for comprehensive vertical incorporation by the Michigan Marijuana Regulatory Agency for four “Class C” cultivation licenses, one “Class A” cultivation license, one processor license, as well as 12 provisioning center licenses.Amid these, the expansion of portfolio in the state and its lease with an affiliate of Emerald Growth Partners is expected to help Innovative Industrial Properties bank on the favorable trends and boost its top line.Innovative Industrial Properties currently carries a Zacks Rank #3 (Hold). In the year-to-date period, shares of the company have outperformed the industry. While the stock has surged 158.9%, the industry has increased 21.8% during this period.
Stocks to ConsiderSome better-ranked stocks from the real-estate space include Duke Realty Corp. DRE, Lamar Advertising Company LAMR and PS Business Parks, Inc. PSB, each carrying a Zacks Rank of 2 (Buy), at present. You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Duke Realty’s Zacks Consensus Estimate for 2019 funds from operations (FFO) per share moved marginally north to $1.41 in the past two months.Lamar’s FFO per share estimates for the current year inched up 0.3% to $5.83 over the past month.PS Business Parks’ Zacks Consensus Estimate for the ongoing year’s FFO per share moved up 1.5% to $6.71 in the past month.Note:Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.More Stock News: This Is Bigger than the iPhone!It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.Click here for the 6 trades >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportLamar Advertising Company (LAMR) : Free Stock Analysis ReportPS Business Parks, Inc. (PSB) : Free Stock Analysis ReportInnovative Industrial Properties, Inc. (IIPR) : Free Stock Analysis ReportDuke Realty Corporation (DRE) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
CannTrust Holdings (CTST): Even With Entry Into U.S. Market, Investors Must Remain Patient
By Gary Bourgeault
CannTrust Holdings (CTST) recently announced it has gained entry into the U.S. market via a partnership with Elk Grove Farming, located in California. Over time it'll use it as a base to expand into other U.S. markets as the opportunity arises.
Per terms of the deal, CannTrust signed a non-binding letter of intent with Elk Grove Farming to produce hemp together on up to 300 of the over 3,000 acres Elk Grove farms. Both companies have a 50 percent stake in the venture.
According to CannTrust, its purpose is to supply and scale CBD products derived from hemp. Management believes demand for CBD products will continue to grow at the global retail and manufacturing level.
It should be understood that from the point of view of Canadian-based CannTrust, the U.S. is an international market, and of course, the largest cannabis market in the world. So when the company talks about scaling at the international and manufacturing level, it's primarily referring to doing so in the U.S. That's what this deal is all about.
We'll look at what this means to the company in the near and long term.
The CBD market
The much cited projection from Brightfield Group is that the CBD market could be valued at about $22 billion by 2022; a huge increase from the estimated $591 million in sales generated in 2018. A lot of that growth will come from the U.S.
One thing to consider on the scaling side in the United States is it's not quite as easy as it looks because of the disparate rules and regulations in different states, and even different counties and cities. But for a smaller company like CannTrust, it's not as big of an issue as it would be with industry giant Aurora Cannabis, because even smaller scale for CannTrust could significantly boost its performance over time.
In its press release the company stated it will invest as much as $20 million through 2020 to support U.S. growth. The company assumes cultivation of up to 300 acres by 2020. That will include costs of cultivation, harvesting and post-harvest processing in relationship to the partnership.
How it fits into the company growth trajectory
Concerning production capacity, CannTrust expects to reach its projected full capacity of 50,000 kilograms annually at the completion of its Phase 2 expansion in the third quarter of 2019.
It has also started work on its Phase 3 expansion in Niagara, which should add another 50,000 kilograms in annual production capacity to the company. By the end of 2020 the company estimates its annual run-rate should jump to a range of 200,000 to 300,000 kilograms. Even at the lower end of the projection it would make it one of the top producers in the industry.
One of the challenges for the company is it is taking a long time to reach this level of production. Many of its larger competitors are already close to or above the 100,000 kilogram per year mark. The industry is changing rapidly, and it's impossible to know what the market conditions will be when CannTrust finally reaches a high level of annual production.
That's important because many of its larger competitors may secure significant partnerships and licenses long before CannTrust does, which could essentially lock them out of key markets, or at least, force them to make deals with weaker and smaller competitors.
The reason that could happen even more than it already has, is because the market is looking for consistent and reliable partners it can count on to deliver on their supply promises. This will become increasingly important going forward. Companies must have ample supply in order to attract the best partners and deals.
So with the entry into the U.S. market, it somewhat aligns with the pace of the growth trajectory of CannTrust as the company stands today. A lot of the potential will come together over the next year or two.
Again, the issue is what type of market will CannTrust be competing in once it has its abundant supply ready to sell. Also, what potential major deals will be available by the time it has the level of production capacity that could make a difference for its customers.
The company is one of only several companies to have supply deals in place with all 10 Canadian provinces, but I'm thinking in terms of international deals and the long-term value they'll add to the company. Too much exposure to recreational pot in Canada will become a major problem for many producers once supply catches up with demand. I don't think it's going to be too long before that happens. CannTrust must reduce its risk to that in the not-too-distant future.
Conclusion
While CannTrust is doing a lot of things right, it has been slower than its key competitors in ramping up production capacity and lowering its exposure to its domestic recreational pot market.
On a positive note, it has partnered with Apotex, the largest generic drugmaker in Canada, to develop and build out its medical cannabis business.
Its medical business could offset some of the recreational pot risks, as it has grown the number of its number of registered patients to about 68,000 at the end of the first calander quarter, resulting in medical cannabis sales of C$11.37 million.
It also has a stake in CannaTrek, based in Australia, and Stenocare, based in Denmark, both plays in the medical cannabis segment.
If it wasn't for its medical cannabis revenue, the last quarter would have been more dismal than it already was, as the company company's wholesale revenue, meaning recreational pot, fell from C$6.52 million in the fourth quarter to $C$5.48 million in the last first quarter.
The bottom line for CannTrust is it does have a lot of potential, but it will have to find ways to secure more agreements with significant partners, while building out its international medical cannabis business, and with the partnership with Elk Grove Farming, build out a robust CBD business.
The recent closing of an equity offering of $170 million provides it with the capital to give it a go, but investors will have to be patient as it works on its production capacity, hopefully finds ways to expand the number of international markets its competes in, and see how if it is able to execute on its plans to scale out a CBD business in the U.S.
If it can execute on these things, it could surprise the market to the upside, but it's going to take time to do it. My concern is when the company finally achieves a high level of production capacity, it may find it difficult to leverage its supply to generate sustainable revenue and earnings.
To read more on the nitty gritty of what’s going on in the rising cannabis industry,click here.
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• Should You Follow Jefferies and Buy CannTrust Stock?
• Canntrust Stock Remains an Attractive Cannabis Pick
• Should Investors Buy CannTrust Stock on Weakness? This Cannabis Expert Says Yes
• Why Investors Should Buy Cannabis Stock CannTrust on Dip
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Hounded by US, Huawei finds a receptive market in Germany
Huawei company headquarters in Shenzhen, Guangdong province, China. Photo: Aly Song/Reuters While US President Donald Trump wages war on Huawei, the Chinese telecoms company appears to be thriving in Germany. On Monday, Huawei released a study commissioned from the consulting arm of the German Institute for Economic Research (DIW Econ) highlighting its positive effects on the German economy. Entitled “the economic footprint of Huawei in Germany,” the study said the Shenzhen-based company invested over €450m in research and development in Germany between 2013 and 2017. Huawei directly employs 2,600 workers in Germany — 400 of those at its biggest European R&D centre in Munich — and has indirectly created some 28,000 jobs. In 2018, the study found, Huawei had a gross value-added-effect of €2.3bn and an average revenue growth of 26% annually between 2008 and 2018 — to around €2.7bn last year. Trump has blocked Huawei’s equipment from the US, and forbidden US tech companies from doing business with the Chinese telecoms company. Germany has refused to bow to Washington’s demands to ban the Chinese company from the 5G network auction over fears that the Chinese government could use Huawei’s tech to spy on other countries. During his visit to Berlin on 31 May, US secretary of state Mike Pompeo made not-so-veiled threats that the US may withhold national security data from countries whose networks contained Huawei gear. Last week in Shanghai, Germany’s economy minister Peter Altmaier said “it is up to Huawei to show it meets our security requirements.” READ MORE: Huawei set to unveil huge UK tech hub just as security fears grow Walter Haas, the CTO of Huawei in Germany, said that questions about security were nothing new for the company. Speaking in Berlin on Monday about the ongoing issues with the US, Haas said “I assume that the issue will sooner or later be resolved.” “I can not imagine that the global economy and global value chains will continue to function under the current paradigm,” he added. Network security, Haas said, is “not the problem.” The more important challenge is keeping connected devices safe from cyberhacks in a fully-connected world. Jochen Homann, the president of Germany's Federal Network Agency, told the Financial Times earlier this year that Huawei is a major patent holder, and excluding it from the German market “would delay the roll-out of the digital networks." The British government is considering banning Huawei equipment only from core parts of its 5G network. Yahoo Finance UK reported in May that Huawei is moving ahead with plans for a huge new research and development facility in the UK. |
Wonderfilm Relaunches Corporate Website and Retains Strategic Investor Relations Firm Resources Unlimited
Vancouver, British Columbia--(Newsfile Corp. - June 24, 2019) - The Wonderfilm Media Corporation (TSXV: WNDR) (OTC Pink: WDRFF), ("Wonderfilm" or the "Company") announced today that it has relaunched its corporate websiteWonderfilm.com, while also bringing on the strategic investor relations firm Resources Unlimited.
Wonderfilm CEO, Kirk Shaw, stated: "As we close out another successful year in Wonderfilm's young history, we found it necessary to not only to give our website a fresh new look, but also bring on a new investor relations firm to assist in what we feel will be an exciting start to our 2019-2020 fiscal year."
The corporate site will be a vital resource for investors to stay informed on all the latest company news, investor data, current and future movie projects along with information on some of the recent key acquisitions and subsidiaries.
Moving forward, the company plans to address its investors via an in-depth shareholder letter later this week which will update everyone on the company's progress over this past year, along with all the current and future projects shareholders can look forward to. Wonderfilm is currently in transition from a movie production company into a full fledge entertainment company.
"Our firm is honored to be working with Kirk, and his experienced team at Wonderfilm," commented Mike Sheikh, Resources Unlimited co-founder. "The company's mission is to build a better film company. We look forward to sharing their exciting story to the investment community and educating everyone on how all the recent acquisitions are undeniably morphing Wonderfilm into a profitable entertainment giant for years to come. Our first goals are to assist the company in providing the shareholders an update in the coming days, clear up any outstanding issues so U.S. investors can easily trade the company under the ticker symbol 'WDRFF' and up-list the company to 'QB' status with OTC Markets. Even though Wonderfilm is a Canadian company, it is in the company's best interest to have them successfully trading on both exchanges while gaining credibility in the investment community."
About Kirk Shaw
Over his 30-year career, Kirk's producer credits exceed 230 movies and six series, making him Hollywood's second most prolific film producer in history. Best known for his business and financing prowess, Kirk has contributed his talents to both U.S. television series and feature films, including the Oscar winning, "The Hurt Locker." Kirk's worked with all major studios, plus many notable "A" list stars such as Charlize Theron, John Travolta, Woody Harrelson, Kim Basinger, John Cusack, Ray Liotta, Nicolas Cage, Thomas Jane and Cuba Gooding Jr. Among his many past successes, is the creation of Canada's largest production company, Insight Film Studios, which in 2007 and '08 did $100 million consolidated revenue each year. To jump-start Wonderfilm's production acquisitions and library exploitation, Kirk vended 46 completed movies into Wonderfilm.
As CEO of Wonderfilm, Kirk remains on the cutting edge of industry trends, actively shaping Wonderfilm's financing and production packaging to meet the demands of a fast-changing industry.
Neither the TSX Venture Exchange Inc. ("Exchange") nor its regulation services provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this press release.
About Wonderfilm Media
Wonderfilm is a leading publicly traded (TSX Venture Exchange) entertainment company with offices in Beverly Hills, Vancouver, Canada and Seoul, South Korea. Wonderfilm's main business is the production of high-quality feature films and episodic television that offer international appeal through the Company's guiding philosophy of bringing new financing solutions to an entertainment industry increasingly looking for funding and co-production alternatives. Wonderfilm is a producer and distributor only for the projects disclosed. The legal ownership of movie productions is held in a special purpose legal entity held at arm's length to the Company to facilitate for the qualification of various levels of domestic and foreign government tax credit incentives that are customary in the film and production business.
About Resources Unlimited
Resources Unlimited is a full-service investor relations firm for small cap companies. Resources Unlimited's mission is to assist entrepreneurs, corporate executives and investors in the public market realize their visions and achieve their goals by delivering effective communications and investor relations services. Our goal is to be that bridge between the company and the investment community, assisting in all aspects from social media, company awareness, press, media content, strategy and more. For additional service info on our Investor Relations, please visitwww.ResourcesUnlimitedLLC.com.
Cautionary Statements
This press release contains forward-looking statements that are subject to substantial risks, uncertainties and assumptions. All statements other than statements of historical fact contained in this press release are forward-looking statements. These statements often include words such as "believe," "expect," "target," "anticipate," "forecast," "intend," "plan," "projects," "seek," "will," "may" or similar expressions. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond Wonderfilm's control and Wonderfilm's actual results could well differ materially from those stated or implied in forward-looking statements due to many various factors.
Although Wonderfilm believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee that the events and circumstances reflected in the forward-looking statements will be achieved or occur. The timing of events and circumstances and actual results could differ materially from those projected in the forward-looking statements. Accordingly, one should not place undue reliance on forward-looking statements. All such reflect the date made only. Wonderfilm undertakes no obligation to update or publicly revise any forward-looking statements, whether as a result of new information, future events or otherwise.
For further details, please see the Company's documents filed on the System for Electronic Document Analysis and Retrieval atwww.sedar.com.
Resources Unlimited860-908-4133info@resourcesunlimitedllc.com
To view the source version of this press release, please visithttps://www.newsfilecorp.com/release/45824 |
Company News For Jun 24, 2019
• Canopy Growth Corporation’s CGC shares dipped 8.1% after the company reported that its recreational marijuana sales fell to $52.2 million in fourth quarter fiscal 2019 from $54.3 million in the previous quarter
• CarMax, Inc.’s KMX shares gained 3.2% after the company reported first quarter fiscal 2020 earnings per share of $1.59, surpassing the Zacks Consensus Estimate of $1.49
• Shares of Medtronic plc MDT gained 0.1% after the company raised its quarterly dividend to $0.54 a share from $0.50 earlier
• Shares of Red Hat, Inc. RHT dipped 0.4% after the company reported first quarter 2019 earnings per share of $1, lower than the previous quarter earnings of $1.16 a share
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportCarMax, Inc. (KMX) : Free Stock Analysis ReportRed Hat, Inc. (RHT) : Free Stock Analysis ReportMedtronic PLC (MDT) : Free Stock Analysis ReportCanopy Growth Corporation (CGC) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
Is Now The Time To Look At Buying Air Lease Corporation (NYSE:AL)?
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Air Lease Corporation (NYSE:AL), which is in the trade distributors business, and is based in United States, received a lot of attention from a substantial price increase on the NYSE over the last few months. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s examine Air Lease’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
View our latest analysis for Air Lease
Great news for investors – Air Lease is still trading at a fairly cheap price. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 7.97x is currently well-below the industry average of 16.55x, meaning that it is trading at a cheaper price relative to its peers. What’s more interesting is that, Air Lease’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Air Lease’s earnings over the next few years are expected to increase by 48%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
Are you a shareholder?Since AL is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor?If you’ve been keeping an eye on AL for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy AL. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Air Lease. You can find everything you need to know about Air Lease inthe latest infographic research report. If you are no longer interested in Air Lease, you can use our free platform to see my list of over50 other stocks with a high growth potential.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
UPDATE 1-Acacia Mining says Barrick offer undervalues the company
(New throughout, adds current deal value, updates share prices)
By Noor Zainab Hussain and Nichola Saminather
June 24 (Reuters) - Acacia Mining on Monday strongly disagreed with majority shareholder Barrick Gold Corp's valuation of the company, saying Barrick's proposal undervalued its life of mine plans and appears to have ignored the value of its exploration and development assets.
However a fair value buyout offer from the world's No. 2 gold miner would be attractive, it added.
Barrick's proposal to take full control of its African unit to resolve a long-standing tax dispute with Tanzania has drawn the ire of Acacia's minority shareholders, who may have the ultimate vote on a deal.
Toronto-based Barrick's May 21 share-for-share proposal valued Acacia at $979 million as of Friday's close, versus $787 million when it first proposed the deal, thanks to a 27% jump in Barrick shares. Barrick said last week its proposed offer is "more than fair" and will engage with Acacia's board and minority shareholders to win them over.
Barrick shares rose 0.8% to C$20.73 in early trade in Toronto. Acacia shares were little changed at 182.2 pence in London, bringing gains since before Barrick's offer to 14.4%.
Barrick valued Acacia's assets at $1.3 billion in its 2018 annual report but said last week that following a review it had concluded that some of Acacia's assumptions about its assets were not supportable.
Acacia said its life of mine plans have been formulated in line with "industry standard methodology", adding that it hosted Barrick representatives for site visits during the first quarter of 2019 and gave Barrick its draft life of mine plans.
Acacia also said independent technical consultant SRK Consulting, which it had engaged to review its modeling, mine plans and reserve and resource statements, had concluded its processes were robust.
Barrick did not immediately respond to a request for comment.
Barrick spun off Acacia in 2010, but maintains a 63.9% stake. Its proposal last month followed two years of wrangling over a $190 billion Tanzanian tax bill, which has since been reduced to $300 million.
Acacia said in the statement that Barrick's management of the negotiations with the government of Tanzania have undermined Acacia in the country.
"The perception that Acacia has been the roadblock to the settlement has led to a material deterioration of Acacia's operating position in Tanzania," the company said, adding it did not invite Barrick's intervention into the negotiations. (Reporting by Noor Zainab Hussain in Bengaluru and Nichola Saminather in Toronto; Editing by Jan Harvey and David Gregorio) |
Can Value Investors Consider CAI International (CAI) Stock?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s putCAI International, Inc.CAI stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, CAI International has a trailing twelve months PE ratio of 6.6, as you can see in the chart below:
This level actually compares quite favorably with the market at large, as the PE for the S&P 500 stands at about 18.28. Also, if we focus on the long-term PE trend, CAI International’s current PE level puts it below its midpoint of 7.02 over the past five years.
The stock’s PE also compares quite favorably with the Transportation Market’s trailing twelve months PE ratio, which stands at 15.74. This indicates that the stock is quite undervalued right now, compared to its peers.
Moreover, CAI International has a forward PE ratio (price relative to this year’s earnings) of 6.43, which is slightly lower than the current level. So, it is fair to say that a slightly more value-oriented path may be ahead for CAI International stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, CAI International has a P/S ratio of just 1.03. This is quite lower than the S&P 500 average, which comes in at 3.31x right now. Also, as we can see in the chart below, this is below the highs for this stock in particular over the past few years.
Broad Value Outlook
In aggregate, CAI International currently has a Value Score of A, putting it into the top 20% of all stocks we cover from this look. This makes CAI International a solid choice for value investors.
What About the Stock Overall?
Though CAI International might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth Score of B and a Momentum Score of D. This gives CAI a Zacks VGM score — or its overarching fundamental grade — of A. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been discouraging. The current quarter has seen no upward revisions versus two downward revisions over the past sixty days, while the current-year estimates have seen one upward revision and two downward revisions in the past sixty days.
This has had a negative impact on the consensus estimate as the current-quarter consensus estimate which dipped 7.3% over the past two months, while the current-year estimate has decreased 5.5%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
CAI International, Inc. Price and Consensus
CAI International, Inc. price-consensus-chart | CAI International, Inc. Quote
Such bearish analyst sentiments is the reason why the stock has a Zacks Rank #3 (Hold) and it is the reason why we are looking for in-line performance from the company in the near term.
Bottom Line
CAI International is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. However, despite a strong industry rank (among Top 13% of more than 250 industries), with a Zacks Rank #3, it is too hard to get excited about the stock.
Also, over the past two years, the broader industry has clearly underperformed the market at large, as you can see below:
Thus, investors might want to wait for the estimates and Zacks Rank to turn around, but once that happens, the stock will be a compelling pick.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportCAI International, Inc. (CAI) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
Cooper Cos. (COO) Is Up 0.36% in One Week: What You Should Know
Momentum investing revolves around the idea of following a stock's recent trend in either direction. In the 'long' context, investors will be essentially be "buying high, but hoping to sell even higher." With this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.
While many investors like to look for momentum in stocks, this can be very tough to define. There is a lot of debate surrounding which metrics are the best to focus on and which are poor quality indicators of future performance. The Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.
Below, we take a look atCooper Cos. (COO), which currently has a Momentum Style Score of B. We also discuss some of the main drivers of the Momentum Style Score, like price change and earnings estimate revisions.
It's also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. Cooper Cos. Currently has a Zacks Rank of #2 (Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of A or B outperform the market over the following one-month period.
You can see the current list of Zacks #1 Rank Stocks here >>>
Set to Beat the Market?
Let's discuss some of the components of the Momentum Style Score for COO that show why this surgical and contact lens products maker shows promise as a solid momentum pick.
Looking at a stock's short-term price activity is a great way to gauge if it has momentum, since this can reflect both the current interest in a stock and if buyers or sellers have the upper hand at the moment. It is also useful to compare a security to its industry, as this can help investors pinpoint the top companies in a particular area.
For COO, shares are up 0.36% over the past week while the Zacks Medical - Dental Supplies industry is up 0.71% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 12.65% compares favorably with the industry's 3.08% performance as well.
While any stock can see its price increase, it takes a real winner to consistently beat the market. That is why looking at longer term price metrics -- such as performance over the past three months or year -- can be useful as well. Over the past quarter, shares of Cooper Cos. Have risen 11.49%, and are up 40.56% in the last year. In comparison, the S&P 500 has only moved 3.76% and 9.3%, respectively.
Investors should also take note of COO's average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. Right now, COO is averaging 308,679 shares for the last 20 days.
Earnings Outlook
The Zacks Momentum Style Score encompasses many things, including estimate revisions and a stock's price movement. Investors should note that earnings estimates are also significant to the Zacks Rank, and a nice path here can be promising. We have recently been noticing this with COO.
Over the past two months, 11 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost COO's consensus estimate, increasing from $12.01 to $12.24 in the past 60 days. Looking at the next fiscal year, 7 estimates have moved upwards while there have been 2 downward revisions in the same time period.
Bottom Line
Given these factors, it shouldn't be surprising that COO is a #2 (Buy) stock and boasts a Momentum Score of B. If you're looking for a fresh pick that's set to soar in the near-term, make sure to keep Cooper Cos. On your short list.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportThe Cooper Companies, Inc. (COO) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
Invitation Home (INVH) Is Up 2.48% in One Week: What You Should Know
Momentum investing revolves around the idea of following a stock's recent trend in either direction. In the 'long' context, investors will be essentially be "buying high, but hoping to sell even higher." With this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.
Even though momentum is a popular stock characteristic, it can be tough to define. Debate surrounding which are the best and worst metrics to focus on is lengthy, but the Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.
Below, we take a look atInvitation Home (INVH), which currently has a Momentum Style Score of A. We also discuss some of the main drivers of the Momentum Style Score, like price change and earnings estimate revisions.
It's also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. Invitation Home currently has a Zacks Rank of #2 (Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of A or B outperform the market over the following one-month period.
You can see the current list of Zacks #1 Rank Stocks here >>>
Set to Beat the Market?
Let's discuss some of the components of the Momentum Style Score for INVH that show why this real estate investment trust focused on single-family rentals shows promise as a solid momentum pick.
Looking at a stock's short-term price activity is a great way to gauge if it has momentum, since this can reflect both the current interest in a stock and if buyers or sellers have the upper hand at the moment. It is also useful to compare a security to its industry, as this can help investors pinpoint the top companies in a particular area.
For INVH, shares are up 2.48% over the past week while the Zacks Real Estate - Operations industry is flat over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 6.35% compares favorably with the industry's 0% performance as well.
While any stock can see a spike in price, it takes a real winner to consistently outperform the market. Over the past quarter, shares of Invitation Home have risen 12.28%, and are up 20.08% in the last year. On the other hand, the S&P 500 has only moved 3.76% and 9.3%, respectively.
Investors should also pay attention to INVH's average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. INVH is currently averaging 5,175,934 shares for the last 20 days.
Earnings Outlook
The Zacks Momentum Style Score also takes into account trends in estimate revisions, in addition to price changes. Please note that estimate revision trends remain at the core of Zacks Rank as well. A nice path here can help show promise, and we have recently been seeing that with INVH.
Over the past two months, 4 earnings estimates moved higher compared to 1 lower for the full year. These revisions helped boost INVH's consensus estimate, increasing from $1.24 to $1.25 in the past 60 days. Looking at the next fiscal year, 2 estimates have moved upwards while there have been 1 downward revision in the same time period.
Bottom Line
Given these factors, it shouldn't be surprising that INVH is a #2 (Buy) stock and boasts a Momentum Score of A. If you're looking for a fresh pick that's set to soar in the near-term, make sure to keep Invitation Home on your short list.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportInvitation Home Inc. (INVH) : Free Stock Analysis ReportTo read this article on Zacks.com click here. |
What Makes Ansys (ANSS) a Strong Momentum Stock: Buy Now?
Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the 'long' context, investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades. While many investors like to look for momentum in stocks, this can be very tough to define. There is a lot of debate surrounding which metrics are the best to focus on and which are poor quality indicators of future performance. The Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us. Below, we take a look at Ansys (ANSS) , which currently has a Momentum Style Score of B. We also discuss some of the main drivers of the Momentum Style Score, like price change and earnings estimate revisions. It's also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. Ansys currently has a Zacks Rank of #2 (Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of A or B outperform the market over the following one-month period. You can see the current list of Zacks #1 Rank Stocks here >>> Set to Beat the Market? Let's discuss some of the components of the Momentum Style Score for ANSS that show why this maker of engineering-simulation software shows promise as a solid momentum pick. Looking at a stock's short-term price activity is a great way to gauge if it has momentum, since this can reflect both the current interest in a stock and if buyers or sellers have the upper hand at the moment. It's also helpful to compare a security to its industry; this can show investors the best companies in a particular area. For ANSS, shares are up 1.99% over the past week while the Zacks Computer - Software industry is flat over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 11.58% compares favorably with the industry's 2.82% performance as well. While any stock can see a spike in price, it takes a real winner to consistently outperform the market. Over the past quarter, shares of Ansys have risen 11.47%, and are up 10.48% in the last year. On the other hand, the S&P 500 has only moved 3.76% and 9.3%, respectively. Story continues Investors should also take note of ANSS's average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. Right now, ANSS is averaging 330,807 shares for the last 20 days. Earnings Outlook The Zacks Momentum Style Score encompasses many things, including estimate revisions and a stock's price movement. Investors should note that earnings estimates are also significant to the Zacks Rank, and a nice path here can be promising. We have recently been noticing this with ANSS. Over the past two months, 6 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost ANSS's consensus estimate, increasing from $5.77 to $5.91 in the past 60 days. Looking at the next fiscal year, 5 estimates have moved upwards while there have been no downward revisions in the same time period. Bottom Line Given these factors, it shouldn't be surprising that ANSS is a #2 (Buy) stock and boasts a Momentum Score of B. If you're looking for a fresh pick that's set to soar in the near-term, make sure to keep Ansys on your short list. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ANSYS, Inc. (ANSS) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research View comments |
Is Alaska Air Group, Inc.'s (NYSE:ALK) Balance Sheet Strong Enough To Weather A Storm?
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Small-cap and large-cap companies receive a lot of attention from investors, but mid-cap stocks like Alaska Air Group, Inc. (NYSE:ALK), with a market cap of US$7.7b, are often out of the spotlight. While they are less talked about as an investment category, mid-cap risk-adjusted returns have generally been better than more commonly focused stocks that fall into the small- or large-cap categories. ALK’s financial liquidity and debt position will be analysed in this article, to get an idea of whether the company can fund opportunities for strategic growth and maintain strength through economic downturns. Remember this is a very top-level look that focuses exclusively on financial health, so I recommend a deeper analysisinto ALK here.
Check out our latest analysis for Alaska Air Group
ALK has built up its total debt levels in the last twelve months, from US$2.4b to US$3.7b , which accounts for long term debt. With this growth in debt, ALK's cash and short-term investments stands at US$1.4b to keep the business going. Additionally, ALK has generated cash from operations of US$1.4b over the same time period, resulting in an operating cash to total debt ratio of 37%, meaning that ALK’s current level of operating cash is high enough to cover debt.
Looking at ALK’s US$3.4b in current liabilities, it appears that the company may not have an easy time meeting these commitments with a current assets level of US$2.0b, leading to a current ratio of 0.59x. The current ratio is calculated by dividing current assets by current liabilities.
With debt reaching 52% of equity, ALK may be thought of as relatively highly levered. This is not unusual for mid-caps as debt tends to be a cheaper and faster source of funding for some businesses. We can check to see whether ALK is able to meet its debt obligations by looking at the net interest coverage ratio. A company generating earnings before interest and tax (EBIT) at least three times its net interest payments is considered financially sound. In ALK's, case, the ratio of 24.33x suggests that interest is comfortably covered, which means that debtors may be willing to loan the company more money, giving ALK ample headroom to grow its debt facilities.
ALK’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. But, its low liquidity raises concerns over whether current asset management practices are properly implemented for the mid-cap. I admit this is a fairly basic analysis for ALK's financial health. Other important fundamentals need to be considered alongside. I recommend you continue to research Alaska Air Group to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for ALK’s future growth? Take a look at ourfree research report of analyst consensusfor ALK’s outlook.
2. Valuation: What is ALK 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 ALK is currently mispriced by the market.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore ourfree list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Sabre Partners Cheetah, Boosts Airline Solutions Segment
Sabre CorporationSABR is riding on partnerships to augment its growth. The company recently announced that it has collaborated with marketing technology company, Cheetah Digital, to add loyalty management capabilities to its comprehensive offerings.Cheetah Loyalty solution enables brands to create comprehensive marketing programs that deliver unique customer engagements. Sabre integrated the cloud-based Cheetah Loyalty solution into the Sabre Commercial Platform, which enables the company’s airline clients to virtually manage and market loyalty programs to their consumers.Sabre's airline clients will have better information of their travellers and more advanced predictors like preferences shared on social media.Additionally, airlines will have mobile apps for consumer engagement and transactions, real-time engagement analysis and data to identify potentially high-value customers.Partnerships to Boost Airline Solutions BusinessSabre’s Airline Solutions segment, despite witnessing a 3.1% year-over-year growth in the first quarter of 2019, is facing several headwinds. Accidents at Lion and Ethiopian Airlines, suspended operations at Jet Airways and the overall impact of the grounded 737 MAX aircraft have taken a toll on the company. As a result, Sabre now expects a 2-4% decline in Airline Solutions revenues for the full year of 2019.The company is therefore banking on key partnerships to enhance the segment. It is taking a collaborative approach to deliver next-generation retailing experience through its airline clients.In May, this year, Sabre announced a long-term agreement with Vietnam Airlines, which adopted the Sabre AirVision In-Flight solution. In the same month, the company also renewed its partnership with Polish carrier LOT.In its last-reported quarter, the company launched its first set of NDC APIs with United Airlines and next-generation shopping solutions, which are expected to be key growth drivers in the long term.Moreover, Delta Air Lines joined Sabre’s Beyond NDC program recently, and is working with the company on its newly announced Next Generation Storefront.Such initiatives helped Sabre become a certified IATA ONE Order Capable for air flight transaction as an order management system and delivery provider, making it the first passenger service system to receive this certification.Notably, Sabre’s customer centricity and continued efforts to enhance client experience has helped the company witness consistent revenue growth since its initial public offering in 2014. We therefore believe continued collaborations and extended partnerships will help the company revive its profitable Airline Solutions business.
Sabre Corporation Revenue (TTM)
Sabre Corporation revenue-ttm | Sabre Corporation Quote
Zacks Rank & Key PicksSabre currently has a Zacks Rank #3 (Hold).A few better-ranked stocks in the broader Computer and Technology sector are eGain Corporation EGAN, j2 Global, Inc. JCOM and Cirrus Logic, Inc. CRUS, each sporting a Zacks Rank #1 (Strong Buy). You can seethe complete list of today’s Zacks #1 Rank stocks here.Long-term earnings growth for eGain, j2 Global and Cirrus is projected to be 30%, 8% and 15%, respectively.More Stock News: This Is Bigger than the iPhone!It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.Click here for the 6 trades >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportj2 Global, Inc. (JCOM) : Free Stock Analysis ReporteGain Corporation (EGAN) : Free Stock Analysis ReportSabre Corporation (SABR) : Free Stock Analysis ReportCirrus Logic, Inc. (CRUS) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
US military is a bigger polluter than as many as 140 countries – shrinking this war machine is a must
US Air Force fighters during the 1991 Gulf War. Everett Historical/Shutterstock The US military’s carbon bootprint is enormous. Like corporate supply chains, it relies upon an extensive global network of container ships, trucks and cargo planes to supply its operations with everything from bombs to humanitarian aid and hydrocarbon fuels. Our new study calculated the contribution of this vast infrastructure to climate change. Greenhouse gas emission accounting usually focuses on how much energy and fuel civilians use. But recent work , including our own, shows that the US military is one of the largest polluters in history, consuming more liquid fuels and emitting more climate-changing gases than most medium-sized countries. If the US military were a country, its fuel usage alone would make it the 47th largest emitter of greenhouse gases in the world, sitting between Peru and Portugal. In 2017, the US military bought about 269,230 barrels of oil a day and emitted more than 25,000 kilotonnes of carbon dioxide by burning those fuels. The US Air Force purchased US$4.9 billion worth of fuel, and the navy US$2.8 billion, followed by the army at US$947m and the Marines at US$36m. A US Navy warship refuelling off the coast of California. Jason Orender/Shutterstock It’s no coincidence that US military emissions tend to be overlooked in climate change studies. It’s very difficult to get consistent data from the Pentagon and across US government departments. In fact, the United States insisted on an exemption for reporting military emissions in the 1997 Kyoto Protocol . This loophole was closed by the Paris Accord , but with the Trump administration due to withdraw from the accord in 2020 , this gap will will return. Our study is based on data retrieved from multiple Freedom of Information Act requests to the US Defense Logistics Agency, the massive bureaucratic agency tasked with managing the US military’s supply chains, including its hydrocarbon fuel purchases and distribution. The US military has long understood that it isn’t immune from the potential consequences of climate change – recognising it as a “ threat multiplier ” that can exacerbate other risks. Many, though not all, military bases have been preparing for climate change impacts like sea level rise. Nor has the military ignored its own contribution to the problem. As we have previously shown , the military has invested in developing alternative energy sources like biofuels, but these comprise only a tiny fraction of spending on fuels. Story continues The American military’s climate policy remains contradictory. There have been attempts to “green” aspects of its operations by increasing renewable electricity generation on bases , but it remains the single largest institutional consumer of hydrocarbons in the world . It has also locked itself into hydrocarbon-based weapons systems for years to come, by depending on existing aircraft and warships for open-ended operations. Not green, but less, military Climate change has become a hot-button topic on the campaign trail for the 2020 presidential election. Leading Democratic candidates, such as Senator Elizabeth Warren , and members of Congress like Alexandria Ocasio-Cortez are calling for major climate initiatives like the Green New Deal . For any of that to be effective, the US military’s carbon bootprint must be addressed in domestic policy and international climate treaties. Our study shows that action on climate change demands shuttering vast sections of the military machine. There are few activities on Earth as environmentally catastrophic as waging war. Significant reductions to the Pentagon’s budget and shrinking its capacity to wage war would cause a huge drop in demand from the biggest consumer of liquid fuels in the world. It does no good tinkering around the edges of the war machine’s environmental impact. The money spent procuring and distributing fuel across the US empire could instead be spent as a peace dividend, helping to fund a Green New Deal in whatever form it might take. There are no shortage of policy priorities that could use a funding bump. Any of these options would be better than fuelling one of the largest military forces in history . Click here to subscribe to our climate action newsletter. Climate change is inevitable. Our response to it isn’t. This article is republished from The Conversation under a Creative Commons license. Read the original article . The Conversation Benjamin Neimark conducted this research with sustainability consultant Cara Kennelly. Oliver Belcher and Patrick Bigger do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment. |
Grange Insurance Selects ISO Electronic Rating Content to Help Grow Commercial Lines Business
JERSEY CITY, N.J., and Columbus, Ohio, June 24, 2019- Verisk (VRSK), a leading data analytics provider, and Grange Insurance, an Ohio-based insurance company, announced today that Grange has selected ISO Electronic Rating ContentTM(ERCTM) to help increase speed to market and grow its commercial lines business. ISO is a Verisk business.
As a leading provider of advanced tools and analytics for the property/casualty insurance industry, ISO regularly develops and updates advisory loss costs, rules, and forms and communicates them to its customers in circulars published regularly. ISO ERCTMis an InsurTech solution that helps insurers save significant time and effort by automating the manual implementation process of these critical updates across ten commercial lines of business.
"Grange continues to push the envelope when it comes to delivering new products to our agents and customers with speed and efficiency," said Gerry Heare, Grange`s commercial lines chief underwriting and product officer. "ISO ERC helps us achieve that goal by keeping our rating content up to date and giving us the time to focus on growing our business."
With ISO ERC, insurers can more easily create and deliver new products to help meet the frequently changing needs of the commercial lines market. According to a recent Celent white paper,Does ERC Deliver the Goods?,insurers using ERC can process an ISO change on average with 70 percent less elapsed time than insurers not using ERC. The time saved allows ERC customers to be more responsive in the marketplace.
"The automated updates provided by ISO ERC are helping a growing number of customers accelerate profitable growth and improve their speed to market," said Deborah Morris, senior vice president of ISO Commercial Lines. "The decision by Grange to use ISO ERC shows the significant benefits the solution can provide for a wide range of insurers looking to expand and innovate in commercial lines."
About ISOISO, a Verisk (VRSK) business, is a leading provider of advanced tools and analytics for the property/casualty insurance industry. Drawing on unique data assets and deep domain expertise, ISO products and services help insurers underwrite and price risks with greater precision and efficiency and manage claims more effectively across the spectrum of commercial and personal lines of insurance. For nearly 50 years, ISO has been a leader in developing innovative solutions and working with multiple stakeholders in the property/casualty insurance marketplace, including insurers, reinsurers, third-party administrators, agents and brokers, insurance regulators, and riskmanagers. For more information, please visitwww.verisk.com/iso.
About GrangeGrange Insurance, with $3 billion in assets and more than $1 billion in annual revenue, is an insurance provider founded in 1935 and based in Columbus, Ohio. Through its network of independent agents, Grange offers auto, home, life, and business insurance protection. Life insurance is offered by Grange Life Insurance and Kansas City Life Insurance. The company and its affiliates serve policyholders in Georgia, Illinois, Indiana, Iowa, Kentucky, Michigan, Minnesota, Ohio, Pennsylvania, South Carolina, Tennessee, Virginia, and Wisconsin.
Contact:
Eboni ThomasEdelman (for Verisk)212-642-7784eboni.thomas@edelman.com
Amy NicholsCorporate Communications ManagerGrange614-445-2682nicholsa@grangeinsurance.com
This announcement is distributed by West Corporation on behalf of West Corporation clients.The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.Source: Verisk Analytics Inc. via GlobeNewswireHUG#2246373 |
IEA concerned about Middle East tensions, stands ready to act
By Padraic Halpin
DUBLIN (Reuters) - The International Energy Agency (IEA) is very concerned about the impact that tensions in the Middle East may have on global energy security and will act if there is any physical disruption to supplies, its executive director said on Monday.
Oil prices rose on Monday, extending large gains last week that were prompted by tensions between the United States and Iran, although concerns about the possibility of weakening demand kept a lid on gains.
Strong growth in the price of U.S. shale oil has also contained stronger increases, the IEA's Fatih Birol added on Monday.
"We are monitoring the situation very closely and are very worried. In case of physical disruption, we are ready to act in an appropriate way," Birol told a news conference at the IEA's annual energy efficiency conference in Dublin.
Last week, benchmark Brent crude climbed 5% and U.S. crude surged 10% after Iran shot down a U.S. drone on Thursday in the Gulf, adding to strains stoked by attacks on oil tankers in the area in May and June that Washington has blamed on Iran.
Iran denies any role in the tanker attacks.
Birol said earlier this month that the attacks on two tankers in the Gulf of Oman, which stoked concern of reduced flows of crude on one of the world's key shipping routes, threatened global energy security.
However on Monday he cited the strength of U.S. shale oil prices for supporting the market, similar to the buffer it provided through U.S. sanctions imposed on oil exporters Iran and Venezuela.
"This would definitely have bad implications for the global economy but despite those attacks, we have not seen a major impact on the prices and the main reason is United States shale oil prices are growing so strongly that there is a lot of oil in the markets now," he said.
"It provides a ceiling on the price hikes which is very good news for consumers around the world."
(Reporting by Padraic Halpin, editing by Louise Heavens) |
How Financially Strong Is Alaska Air Group, Inc. (NYSE:ALK)?
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Mid-caps stocks, like Alaska Air Group, Inc. (NYSE:ALK) with a market capitalization of US$7.7b, aren’t the focus of most investors who prefer to direct their investments towards either large-cap or small-cap stocks. Surprisingly though, when accounted for risk, mid-caps have delivered better returns compared to the two other categories of stocks. This article will examine ALK’s financial liquidity and debt levels to get an idea of whether the company can deal with cyclical downturns and maintain funds to accommodate strategic spending for future growth. Remember this is a very top-level look that focuses exclusively on financial health, so I recommend a deeper analysisinto ALK here.
Check out our latest analysis for Alaska Air Group
ALK's debt levels surged from US$2.4b to US$3.7b over the last 12 months – this includes long-term debt. With this increase in debt, ALK's cash and short-term investments stands at US$1.4b to keep the business going. Additionally, ALK has generated cash from operations of US$1.4b during the same period of time, leading to an operating cash to total debt ratio of 37%, signalling that ALK’s current level of operating cash is high enough to cover debt.
At the current liabilities level of US$3.4b, it seems that the business may not have an easy time meeting these commitments with a current assets level of US$2.0b, leading to a current ratio of 0.59x. The current ratio is the number you get when you divide current assets by current liabilities.
ALK is a relatively highly levered company with a debt-to-equity of 52%. This is not unusual for mid-caps as debt tends to be a cheaper and faster source of funding for some businesses. No matter how high the company’s debt, if it can easily cover the interest payments, it’s considered to be efficient with its use of excess leverage. A company generating earnings after interest and tax at least three times its net interest payments is considered financially sound. In ALK's case, the ratio of 24.33x suggests that interest is comfortably covered, which means that lenders may be inclined to lend more money to the company, as it is seen as safe in terms of payback.
Although ALK’s debt level is towards the higher end of the spectrum, its cash flow coverage seems adequate to meet debt obligations which means its debt is being efficiently utilised. But, its lack of liquidity raises questions over current asset management practices for the mid-cap. Keep in mind I haven't considered other factors such as how ALK has been performing in the past. You should continue to research Alaska Air Group to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for ALK’s future growth? Take a look at ourfree research report of analyst consensusfor ALK’s outlook.
2. Valuation: What is ALK 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 ALK is currently mispriced by the market.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore ourfree list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Chinas favorite food delivery service is now worth more than its biggest internet search firm
The triumvirate of Chinas biggest tech giants has long been known by the acronym BAT, short for Baidu, Alibaba, and Tencent. Together, theyve dominated search, e-commerce, and social media, respectively, helping them become the most valuable listed Chinese companies. But now, its more accurate to refer to Chinas top tech firms as ATM. On May 20, one of Chinas newer tech giants, Hong Kong-listed food delivery firm Meituan Dianping, saw its market cap edge above Baidus, according to Factset and Ychart data. Its now managed to hold on to that perch for a month, although the gap between them isnt large, with Nasdaq-listed Baidus market cap at around $41 billion at the close of trading in the US last week, while Meituan is at around $47 billion today . Meituan counts some 400 million users of its food delivery and other services in China. Plant-based meats sound healthy, but theyre still processed foods Alibaba and Tencent remain in a different league, valuation-wise, with market caps each above $400 billion. Its not surprising, perhaps, that Baidu is struggling to retain its place in the top three. It has had a hard time recovering from the hits to its reputation over medical advertising . Users boycotted it in 2016 when a cancer patient died after spending thousands of dollars on a treatment advertised by a hospital on the search engine . The search engines results didnt rank information that explained the treatment was experimental as highly as the paid result, and the college student detailed his experience online before his death. The company also hasnt been as adept developing services for the mobile age as Alibaba and Tencent. Baidus revenues remain reliant on advertising, and it continues to face regulatory scrutiny over its ads , while its self-driving projects are far from yielding profits. That said, Meituans food delivery app has had its own struggles, fighting a war of attrition with Alibaba . Story continues Facebooks Libra is spurring central banks interest in issuing cryptocurrency The dust has not settled, of course. China tech watchers have long said that TMD will rival BAT . M stands for Meituan, which went public last year. T is for news app Toutaio, whose parent company is Bytedance, the worlds most valuable startup (and owner of the hit video-sharing app TikTok). D is for ride-hailing giant Didi. But before this new trio can mount a challenge to the old guard, Bytedance and Didi have to go public. Jason Karaian and Jane Li contributed to this post. Sign up for the Quartz Daily Brief , our free daily newsletter with the worlds most important and interesting news. More stories from Quartz: Google and Facebook are circling Africa with huge undersea cables to get millions online The new White House press secretary took on North Korean security for US reporters |
Lufthansa will look at new Airbus A321XLR, but it's no game-changer: CEO
FRANKFURT (Reuters) - Lufthansa will look at ordering Airbus's new long-range A321XLR jets, Chief Executive Carsten Spohr said on Monday but added that he did not think the new model was a game changer.
"The new XLR could be used in our network. We look at it. But in my view it is a niche product," Spohr told investors at Lufthansa's capital markets day in Frankfurt.
He pointed out that it was not comfortable to spend more than four hours on a flight in a narrow-bodied aircraft, adding: "It will not be a game changer."
(Reporting by Ilona Wissenbach; Writing by Michelle Martin, editing by Thomas Escritt) |
Vertex's (VRTX) Symdeko Gets FDA Nod for Use in Children
Vertex Pharmaceuticals IncorporatedVRTX announced that the FDA has granted approval to Symdeko to treat eligible cystic fibrosis patients as young as six years of age.
With the latest approval, Symdeko can be prescribed to children with cystic fibrosis in the age group of 6 through 11 years who have two copies of the F508del-CFTR mutation or who have at least one mutation in the cystic fibrosis transmembrane conductance regulator (CFTR) gene that is responsive to Symdeko. The drug, which was until now approved to treat patients 12 years and above, is now approved for eligible CF patients 6 years of age and older.
This year so far, Vertex’ shares have rallied 11% compared with the industry’s increase of 6.4%.
Symdeko, a combination of Vertex’s other CF medicine, Kalydeco (ivacaftor) and tezacaftor/ivacaftor, was Vertex’s third CF medicine to get approved in the United States in February 2018 and in the European Union in November 2018 (marketed as Symkevi). Other than Symdeko and Kalydeco, Vertex markets another CF medicine, Orkambi (lumacaftor) in combination with ivacaftor.
Symdeko, in a very short time, has become the primary driver of CF revenues. It generated sales of $320.3 million in the reported quarter, reflecting an increase of 8.8% sequentially. Symdeko’s uptake is being driven by new patient starts as well as shift from Orkambi and Kalydeco.
Following the recent approval, once Symdeko is administered to the younger patients in the United States, it should further boost revenues from the drug.
Also, along with the approval in children, the FDA also granted approval to an additional dosage (tezacaftor 50 mg/ivacaftor 75 mg and ivacaftor 75 mg) of Symdeko tablets.
Meanwhile, Vertex plans to submit an application seeking approval for use in children aged 6 through 11 years in Europe in the second half of 2019.
Vertex’s three CF medicines are collectively approved to treat around 50% of the 75,000 CF patients in North America, Europe and Australia. Meanwhile, Vertex evaluated two next-generation CFTR correctors (VX-659 and VX-445) in phase III studies as part of a triple combination with tezacaftor and ivacaftor. It plans to file regulatory submissions for one of the two regimens and has chosen VX-445 triple combination regimen for regulatory submissions in 2019. If the triple-combo regimen is approved, Vertex can address a significantly larger CF patient population – almost 90% of patients with CF - in the future.
Vertex currently has a Zacks Rank #2 (Buy). Some other top-ranked stocks from the biotech sector include Anika Therapeutics Inc. ANIK, Merus N.V. MRUS and Acorda Therapeutics, Inc. ACOR, all sporting a Zacks Rank #1 (Strong Buy). You can seethe complete list of today’s Zacks #1 Rank stocks here.
Anika’s earnings estimates have been revised 8.3% upward for 2019 and 9.9% for 2020 over the past 60 days. The stock has gained 19.9% so far this year.
Merus’ shares have gained 1.8% this year so far. Its loss estimates have narrowed by 22.2% for 2019 and 17.2% for 2020 over the past 60 days.
Acorda’s loss estimates have narrowed 6.5% for 2019 and 6.9% for 2020 over the past 60 days.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportVertex Pharmaceuticals Incorporated (VRTX) : Free Stock Analysis ReportMerus N.V. (MRUS) : Free Stock Analysis ReportAcorda Therapeutics, Inc. (ACOR) : Free Stock Analysis ReportAnika Therapeutics Inc. (ANIK) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
Can Value Investors Consider C.H. Robinson (CHRW) Stock?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s putC.H. Robinson Worldwide, Inc.CHRW stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, C. H. Robinson has a trailing twelve months PE ratio of 17.01, as you can see in the chart below:
This level actually compares quite favorably with the market at large, as the PE for the S&P 500 stands at about 18.28. Also, if we focus on the long-term PE trend, C. H. Robinson’s current PE level puts it below its midpoint of 11.06 over the past five years.
The stock’s PE also compares quite favorably with the Transportation Market’s trailing twelve months PE ratio, which stands at 15.74. This indicates that the stock is quite undervalued right now, compared to its peers.
Moreover, C.H. Robinson has a forward PE ratio (price relative to this year’s earnings) of 16.76, which is slightly lower than the current level. So, it is fair to say that a slightly more value-oriented path may be ahead for stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, C.H. Robinson has a P/S ratio of 0.7. This is quite lower than the S&P 500 average, which comes in at 3.31x right now. Also, as we can see in the chart below, this is below the highs for this stock in particular over the past few years.
Broad Value Outlook
In aggregate, C.H. Robinson currently has a Value Score of B, putting it into the top 40% of all stocks we cover from this look. This makes C.H. Robinson a solid choice for value investors.
What About the Stock Overall?
Though C.H. Robinson might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth Score of A and a Momentum Score of B. This gives CHRW a Zacks VGM score — or its overarching fundamental grade — of A. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been discouraging. The current quarter has seen one upward revision versus four downward revisions over the past sixty days, while the current-year estimates have seen three upward revisions and eight downward revisions in the past sixty days.
This has had a negative impact on the consensus estimate as the current-quarter consensus estimate which dipped 2.4% over the past two months, while the current-year estimate has decreased 1%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
C.H. Robinson Worldwide, Inc. Price and Consensus
C.H. Robinson Worldwide, Inc. price-consensus-chart | C.H. Robinson Worldwide, Inc. Quote
Such bearish analyst sentiments is the reason why the stock has a Zacks Rank #3 (Hold) and it is the reason why we are looking for in-line performance from the company in the near term.
Bottom Line
C.H. Robinson is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. However, with a sluggish industry rank (among Bottom 22% of more than 250 industries) and a Zacks Rank #3, its is too hard to get excited about the stock.
Also, over the past two years, the broader industry has clearly underperformed the market at large, as you can see below:
Hence, investors might want to wait for analyst sentiments and the Zacks Rank to improve, because once that happens, the stock will be a compelling pick.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportC.H. Robinson Worldwide, Inc. (CHRW) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
I Ran A Stock Scan For Earnings Growth And Allied Motion Technologies (NASDAQ:AMOT) Passed With Ease
Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card!
Some have more dollars than sense, they say, so even companies that have no revenue, no profit, and a record of falling short, can easily find investors. Unfortunately, high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson.
So if you're like me, you might be more interested in profitable, growing companies, likeAllied Motion Technologies(NASDAQ:AMOT). While profit is not necessarily a social good, it's easy to admire a business than can consistently produce it. While a well funded company may sustain losses for years, unless its owners have an endless appetite for subsidizing the customer, it will need to generate a profit eventually, or else breathe its last breath.
Check out our latest analysis for Allied Motion Technologies
If you believe that markets are even vaguely efficient, then over the long term you'd expect a company's share price to follow its earnings per share (EPS). That means EPS growth is considered a real positive by most successful long-term investors. Over the last three years, Allied Motion Technologies has grown EPS by 16% per year. That's a good rate of growth, if it can be sustained.
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). Allied Motion Technologies maintained stable EBIT margins over the last year, all while growing revenue 23% to US$328m. That's a real positive.
You can take a look at the company's revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers.
The trick, as an investor, is to find companies that aregoing toperform well in the future, not just in the past. To that end, right now and today, you can checkour visualization of consensus analyst forecasts for future Allied Motion Technologies EPS100% free.
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.
We do note that Allied Motion Technologies insiders netted -US$3.2k worth of shares over the last year. On the other hand, Director Michael Winter paid US$49k for shares, at a price of about US$35.35 per share. So, on balance, that's positive.
On top of the insider buying, it's good to see that Allied Motion Technologies insiders have a valuable investment in the business. Given insiders own a small fortune of shares, currently valued at US$65m, they have plenty of motivation to push the business to succeed. At 19% of the company, the co-investment by insiders gives me confidence that management will make long-term focussed decisions.
One important encouraging feature of Allied Motion Technologies is that it is growing profits. Better yet, insiders are significant shareholders, and have been buying more shares. To me, that all makes it well worth a spot on your watchlist, as well as continuing research. Of course, just because Allied Motion Technologies is growing does not mean it is undervalued. If you're wondering about the valuation, check outthis gauge of its price-to-earnings ratio, as compared to its industry.
The good news is that Allied Motion Technologies is not the only growth stock with insider buying. Here'sa a list of them... with insider buying in the last three months!
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Trump struggles to explain why Obamas jobs numbers were better than his
Donald Trump has repeatedly struggled to explain why the number of jobs created during his presidency compared unfavourably with the new employment figures under Barack Obama . Presented with a chart which depicted the unemployment rate from the peak of the recession, the president was asked to account for slower rate of job creation since he entered the White House. In the interview on NBCs Meet the Press after Mr Trump had claimed his economy was great Chuck Todd said: Your economy is great. Im not saying its not great. But this recovery started and in the 28 months that youve been president and the last 28 months of Obamas presidency, he averaged more new jobs than your first 28. Mr Trump initially responded by claiming that Mr Obama started with a bad base. He was then asked if his jobs numbers were merely a continuation of those under his predecessor. Mr Trump said: Yeah, but Chuck, you have to understand, nobody was working. The whole place was a disaster. And I dont Id never take that away. Mr Trump continued to attempt to explain, he said But its very easy -- because when that turned around they pumped a tremendous amount of money into the economy. He also had a Federal Reserve person who kept the interest rates low. I dont. I dont have that privilege. Mr Todd retorted: Sounds like you do now. Do you feel like you have sent the threat, your threat to demote him, do you think thats had an impact? The president dismissed suggestions he had threatened to demote Federal Reserve Chairman Jerome Powell, which Mr Todd questioned, saying: Theres been some talk that you might demote him to the number two slot. Mr Trump responded: Well, Id be able to do that if I wanted but I havent suggested that. No, no, I have the right to do that. But I havent said that. What hes done is $50 billion a month in quantitative tightening. Thats ridiculous. What hes done is he raised interest rates too fast. Story continues Mr Todd then asked the president if he was concerned that the raised interest rates would harm his chances at re-election. I think the economys so strong were going to pull through it, Mr Trump said. But Im not happy with his actions. No, I dont think hes done a good job. I think this, if he didnt raise rates Obama had very low rates. So Obama was playing with funny money. I wasnt. Im playing with the real stuff. Obama had somebody that kept the rates very low. I had somebody that raised the rates very rapidly. Too much. He made a mistake. Thats been proven. And yet my economy is phenomenal. We have now the best economy, maybe in the history of our country. One -- just to finish off, when I took over, this country, the economy was ready to collapse. You take a look at the numbers. It was ready to collapse. Mr Todd suggested the numbers indicated the economy was stronger than the president implied, saying: I just showed you the numbers. It was not ready to collapse. Mr Trump disagreed: You showed me unemployment numbers. Excuse me. Take a look at your GDP, take a look at your jobs, take a look at your optimism. Take a look at all of the charts. When I took over from election day on, I mean, you show me one chart which, where I did. Take a look at some of the optimism charts and everything else. It went from 57 to 92. Nobodys ever seen anything that right after I won. Mr Todd conceded that job optimism was at a higher rate after Mr Trump was elected, but still maintained that his jobs numbers were lower than those of his predecessors. Mr Trump replied: Well, optimism is a big part of success in business. |
U.S. Senate Takes on Big Tech, Plus "Merger Monday"
Monday, June 24, 2019Lately, we’ve been getting “Merger Monday” news in dribs and drabs — Pfizer PFE buying biopharma Array ARRY and United Technologies UTX coming together with Raytheon RTN being the last two examples — and this morning is no exception:Eldorado Resorts ERIhas agreed to buyCaesars CZRfor $8.6 billion.The cash and stock deal, priced at $12.75 per share, would create one of the biggest gaming entertainment companies in the domestic market. Activist investor Carl Icahn, who had come aboard Caesars, praised its board of directors for “acting decisively” on the deal. Eldorado shares are down 7.2% in today’s pre-market, while Caesars share are up 12.7%.The Senate & Big Tech User DataA bipartisan bill in the U.S. Senate has been drawn up by Mark Warner (D-VA) and Josh Hawley (R-MO), whereby Big Tech firms likeFacebook FB,Alphabet GOOGL,Amazon AMZN, etc. would be required to calculate the value of all data collected, and release the results annually. This would apply to social media companies with a base of more than 100 million active users. The SEC would create the formula for determining the user value for these companies, and there would also be an opt-out feature where users might delete their data.Putting a price tag on this information may be a step toward proving these Big Tech firms enjoy something akin to “monopoly status,” which in turn might make them easier to be broken up into different entities. This is already an issue being taken up by some Democratic presidential candidates for 2020. Even major tech investors like Roger McNamee have compared these companies to the Ma Bell monopoly of the 1980s, which was broken up and uncorked millions of dollars in additional profit potential more than 30 years ago.This is the very early stages for Congress acting demonstrably on this subject. For years, hearings have been held trying to gain an understanding for how these “free” platforms like Facebook are able to accrue so much wealth so fast. Now that there seems to be a handle on this, we would do well to keep an eye on developments here going into next year’s campaign season.Mark VickerySenior EditorQuestions or comments about this article and/or its author? Click here>>
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportCaesars Entertainment Corporation (CZR) : Free Stock Analysis ReportAmazon.com, Inc. (AMZN) : Free Stock Analysis ReportFacebook, Inc. (FB) : Free Stock Analysis ReportAlphabet Inc. (GOOGL) : Free Stock Analysis ReportPfizer Inc. (PFE) : Free Stock Analysis ReportEldorado Resorts, Inc. (ERI) : Free Stock Analysis ReportUnited Technologies Corporation (UTX) : Free Stock Analysis ReportRaytheon Company (RTN) : Free Stock Analysis ReportArray BioPharma Inc. (ARRY) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report |
4 Thrivent Mutual Funds to Add to Your Portfolio
Thrivent Mutual Funds is part of Thrivent Financial and had more than $134 billion worth of assets under management as of December 2018. It serves at least 2 million customers and has more than 100 investment professionals.
Moreover, it has invested in 24 actively managed mutual funds across a wide range of categories including equity, income plus, asset allocation and fixed income funds. Thrivent Mutual Funds aims to offer simple and smart investing, and has a strong record of competitive performance.
Below we share with you four top-ranked Thrivent mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of funds.
Thrivent Aggressive Allocation Fund Class STAAIX seeks appreciation of capital for the long run. TAAIX invests at least three-fourth of its assets in equity securities, and up to one-fourth of its assets in debt securities. Thrivent Aggressive Allocation Fund Class S has three-year annualized returns of 10.2%.
Darren Bagwell is one of the fund managers of TAAIX since 2016.
Thrivent Large Cap Value Fund Class STLVIX seeks long-term capital appreciation. The fund invests most of its assets in equity securities of large companies. The fund’s advisor mostly focuses on equity securities of large companies that are based in the United States or outside with market capitalization similar to those included on the S&P 500 Index, the MSCI USA Large Cap Index or the large company market capitalization classifications published by Lipper, Inc. TLVIX has three-year annualized returns of 9%.
As of March 2019, TLVIX held 67 issues with 6.02% of its assets invested in Cisco Systems Inc.
Thrivent Income Fund Class ALUBIX aims for high current income while also opting for capital preservation. The fund invests the majority of its assets in debt securities or preferred stocks that are rated investment grade by utilizing the middle rating of S&P, Fitch or Moody’s. Thrivent Income Fund may also invest in high-yield, high-risk bonds, notes, debentures and other debt obligations or preferred stocks. LUBIX has a three-year annualized return of 3.8%.
LUBIX has an expense ratio of 0.77% compared with the category average of 0.85%.
Thrivent High Yield Fund Class ALBHYX aims for high current income. The fund invests most of its assets in high-yield, high-risk bonds, notes, debentures and other debt obligations. LBHYX has three-year annualized returns of 5.6%.
As of March 2019, LBHYX held 286 issues with 1.19% of its assets invested in Sprint Corporation 7.62%.
To view the Zacks Rank and past performance of all diversified bond mutual funds, investors can click here to see the complete list of funds.
Want key mutual fund info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportGet Your Free (TLVIX): Fund Analysis ReportGet Your Free (LBHYX): Fund Analysis ReportGet Your Free (TAAIX): Fund Analysis ReportGet Your Free (LUBIX): Fund Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
Permian Witnesses Oil Rig Count Decline in 9 of 10 Weeks
In its weekly release,Baker Hughes, a GE companyBHGE reported a decline in weekly rig count in the United States.
More on the Rig Count
Baker Hughes’ data, issued at the end of every week since 1944, helps energy service providers gauge the overall business environment of the oil and gas industry.
A change in the Houston-based oilfield services player’s rotary rig count affects demand for energy services like drilling, completion and production provided by the likes of Halliburton Company HAL, Schlumberger Limited SLB, Diamond Offshore Drilling, Inc DO and Transocean Ltd. RIG.
Details
Total US Rig Count Decreases:Rigs engaged in the exploration and production of oil and natural gas in the United States totaled 967 in the week ended Jun 21, down from the prior-week tally of 969. With this, the tally declined in 10 of the past 11 weeks. The current national rig count is also lower than the prior year’s 1052.
The number of onshore rigs, through the week ended Jun 21, totaled 939, lower than the previous week’s count of 941. However, four rigs operated in inland waters and 24 rigs worked in the offshore plays. The count of both inland and offshore rigs was in line with the prior-week tally.
US Adds One Oil Rig:Oil rig tally was 789, up from 788 in the week ended Jun 14. This marks an increase after two consecutive weeks of decline. However, the current total, far from the peak of 1,609 attained in October 2014, is lower than 862 a year ago.
Natural Gas Rig Count Decreases in US:The natural gas rig count of 177 is lower than the count of 181 for the week ended Jun 14.
Moreover, the count of rigs exploring the commodity is lower than the prior-year weeks’ tally of 188. Per the latest report, the number of natural gas-directed rigs is 89% below the all-time high of 1,606 recorded in 2008.
Rig Count by Type:The number of vertical drilling rigs totaled 53 units against the previous week’s 49. However, the horizontal/directional rig count (encompassing new drilling technology with the ability to drill and extract gas from dense rock formations, also known as shale formations) of 914 was below the prior-week level of 920.
Gulf of Mexico (GoM) Rig Count Flat:The GoM rig count is 24 units, of which 22 were oil-directed. The count was in line with the prior-week tally.
Permian Basin Count
Two oil drilling rigs were removed from the Permian Basin. Notably, Permian — the most prolific basin in the United States which employs roughly half of the nation’s total rigs — has seen a decline in oil rigs in nine of the last 10 weeks. This reflects conservative capital spending by domestic explorers as instead of putting more effort to pump black gold, investors are urging upstream energy players to focus on returning capital to shareholders through dividend payments and stock repurchases.
Despite the bearish landscape, it would be wise for investors to consider Permian drillers as they have become more efficient with the deployment of lesser rigs to produce more of crude volumes. Two Permian drillers that investors may consider are Devon Energy Corporation DVN and Pioneer Natural Resources Company PXD. Both the stocks carry a Zacks Rank #3 (Hold). You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportHalliburton Company (HAL) : Free Stock Analysis ReportSchlumberger Limited (SLB) : Free Stock Analysis ReportTransocean Ltd. (RIG) : Free Stock Analysis ReportDiamond Offshore Drilling, Inc. (DO) : Free Stock Analysis ReportDevon Energy Corporation (DVN) : Free Stock Analysis ReportPioneer Natural Resources Company (PXD) : Free Stock Analysis ReportBaker Hughes, a GE company (BHGE) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
Supply Glut Drives Natural Gas Prices to Lowest Since 2016
The U.S. Energy Department's weekly inventory release showed another larger-than-expected increase in natural gas supplies. The bearish injection, which was also higher than the five-year average, intensified a sell-off that left the U.S. benchmark with its lowest close in more than three years.
Analysis: Another Triple-Digit Supply Build
Stockpiles held in underground storage in the lower 48 states rose by 115 billion cubic feet (Bcf) for the week ended Jun 14, above the guidance (of 104 Bcf gain) as per the analysts surveyed by S&P Global Platts. Moreover, the increase was higher than the five-year (2014-2018) average net injection of 84 Bcf and last year’s increase of 95 Bcf for the reported week.
The latest rise in inventories puts total natural gas stocks at 2.203 trillion cubic feet (Tcf) - 209 Bcf (10.5%) above 2018 levels at this time but 199 Bcf (8.3%) under the five-year average.
Fundamentally speaking, total supply of natural gas averaged 93.8 Bcf per day, unchanged on a weekly basis. While dry production inched up to 89 Bcf per day from 88.6 Bcf per day, 9% less gas flowed into the country from Canada.
Daily consumption also remained essentially flat at 81.9 Bcf compared to 82 Bcf in the previous week as declining power generation and industrial sector demand was offset by increased residential/commercial usage.
Natural Gas Slumps to a 37-Month Low
Natural gas prices fell to their lowest level in more than three years after U.S. government data revealed a weekly injection in domestic stockpiles that was much more than expected. The commodity, which dropped to a new low since May 2016 at $2.185 per MMBtu on Thursday, is now more than 40% down from its Jan 15 high of $3.722 per MMBtu.
Market Dynamics Points to Further Pains
The fundamentals of natural gas consumption continue to be favorable. The demand for cleaner fuels and the commodity’s relatively lower price has catapulted natural gas' share of domestic electricity generation to 35%, from 25% in 2011. Moreover, new pipelines to Mexico, together with large-scale liquefied gas export facilities have meant that exports out of the U.S. are set for a quantum leap. Finally, higher consumption from industrial projects will likely ensure strong natural gas demand.
However, record high production in the United States and expectations for explosive growth through 2020 means that supply will keep pace with demand. Therefore, prices are likely to trade sideways but for weather-driven movements. Also, with the traditional withdrawal season (when supplies fall on heating demand due to cold weather) having ended in March and predictions for a subdued early summer, consumption is likely to decline in the near term.
Conclusion
Natural gas prices might experience short-lived surge based on positive weather forecasts but any powerful turnaround looks unlikely at the moment.
Buy the Dip?
The bearish natural gas fundamentals and its seasonal nature is responsible for the understandable reluctance on investors’ part to dip their feet into these stocks.
Moreover, most natural gas-heavy upstream companies like Gulfport Energy Corporation GPOR, Antero Resources AR, Cabot Oil & Gas Corporation COG, SilverBow Resources, Inc. SBOW, Southwestern Energy Company SWN etc. carry a Zacks Rank #3 (Hold), which means that investors should preferably wait for a better entry point before buying shares in them. Some like Chesapeake Energy Corporation CHK are further down the pecking order, with Zacks Rank #4 (Sell).
If you are looking for near-term natural gas play, Montage Resources Corporation MR might be an excellent selection. The company has a Zacks Rank #1 (Strong Buy).
You can seethe complete list of today’s Zacks #1 Rank stocks here.
Over 30 days, the Irving, TX-based company has seen the Zacks Consensus Estimate for 2019 earnings per share increase 26.1% to $2.66.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportSouthwestern Energy Company (SWN) : Free Stock Analysis ReportEclipse Resources Corporation (MR) : Free Stock Analysis ReportCabot Oil & Gas Corporation (COG) : Free Stock Analysis ReportChesapeake Energy Corporation (CHK) : Free Stock Analysis ReportGulfport Energy Corporation (GPOR) : Free Stock Analysis ReportAntero Resources Corporation (AR) : Free Stock Analysis ReportSilverBow Resources Inc. (SBOW) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
Target Displays Solid 6-Month Run-Up, Adds More Than 40%
Target CorporationTGT has emerged as an investor favorite courtesy of sound fundamentals and growth efforts that reinforce its position in the ultra-competitive retail landscape. We note that shares of this general merchandise retailer have advanced 42.3% in the past six months compared with the industry’s growth of 35.9%.
This Zacks Rank #2 (Buy) stock has also comfortably outperformed the Retail-Wholesale sector and the S&P 500 Index that advanced 26.4% and 24.3%, respectively, in the said time frame. Further, the stock is hovering close to its 52-week high of $90.39. There is a likelihood that Target with a long-term earnings growth rate of 7.1% can attain new highs. You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Strategic Endeavors to Drive Momentum
Retail is no more restricted to brick-&-mortar and the scenario has drastically changed with the advancement of technology and digital transformation, which have altered consumer shopping. In fact, Target has taken steps that have improved prospects in a big way. The company’s initiatives such as the development of omni-channel capacities, diversification and localization of assortments along with emphasis on flexible format stores to generate higher sales productivity bode well.
Robust traffic, favorable store comps and surge in comparable digital sales are clearly aiding results. Comparable sales rose 4.8% in the first quarter of fiscal 2019. Comparable digital channel sales surged 42% and added 2.1 percentage points to comparable sales. Management envisions both second quarter and fiscal 2019 comparable sales to increase in low-to-mid-single digit range.
Target envisions second-quarter adjusted earnings between $1.52 and $1.72 per share, higher than $1.47 reported in the year-ago period. For fiscal 2019, management continues to anticipate adjusted earnings in the band of $5.75-$6.05 per share, up from $5.39 reported in fiscal 2018.
Taking Strides in Delivery Business
The company has rolled out Target Restock program that enable customers to restock their shipping box with essential items online and get them delivered at their doorstep by the next business day for a nominal charge. Further, in order to improve supply chain and expand delivery capabilities, the company acquired Grand Junction.
Earlier, Target had teamed up with popular online grocery delivery service, Instacart, to capture the booming online grocery delivery market. Further, the company made significant headway in the same-day delivery race by acquiring Internet-based grocery delivery service, Shipt, to provide same-day delivery of groceries, essentials, home, electronics, toys and other products.
Shipt operates in more than 1,500 outlets in more than 200 markets. Per media reports, online shoppers can now get items delivered on the same day by paying a fee of $9.99 per order.
Wrapping Up
Target is deploying resources to enhance omni-channel capabilities, coming up with new brands, remodeling or refurbishing stores, and expanding same-day delivery options to take on Amazon AMZN, Walmart WMT and Kroger KR. The company has undertaken rationalization of supply chain with same-day delivery of in-store purchases along with technology and process improvements.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportAmazon.com, Inc. (AMZN) : Free Stock Analysis ReportTarget Corporation (TGT) : Free Stock Analysis ReportWalmart Inc. (WMT) : Free Stock Analysis ReportThe Kroger Co. (KR) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
Should You Be Adding Allied Motion Technologies (NASDAQ:AMOT) To Your Watchlist Today?
Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card!
It's only natural that many investors, especially those who are new to the game, prefer to buy shares in 'sexy' stocks with a good story, even if those businesses lose money. Unfortunately, high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson.
If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested inAllied Motion Technologies(NASDAQ:AMOT). Now, I'm not saying that the stock is necessarily undervalued today; but I can't shake an appreciation for the profitability of the business itself. While a well funded company may sustain losses for years, unless its owners have an endless appetite for subsidizing the customer, it will need to generate a profit eventually, or else breathe its last breath.
See our latest analysis for Allied Motion Technologies
If you believe that markets are even vaguely efficient, then over the long term you'd expect a company's share price to follow its earnings per share (EPS). That makes EPS growth an attractive quality for any company. We can see that in the last three years Allied Motion Technologies grew its EPS by 16% per year. That growth rate is fairly good, assuming the company can keep it up.
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. While we note Allied Motion Technologies's EBIT margins were flat over the last year, revenue grew by a solid 23% to US$328m. That's progress.
You can take a look at the company's revenue and earnings growth trend, in the chart below. To see the actual numbers, click on the chart.
The trick, as an investor, is to find companies that aregoing toperform well in the future, not just in the past. To that end, right now and today, you can checkour visualization of consensus analyst forecasts for future Allied Motion Technologies EPS100% free.
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. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.
We do note that Allied Motion Technologies insiders netted -US$3.2k worth of shares over the last year. On the other hand, Director Michael Winter paid US$49k for shares, at a price of about US$35.35 per share. And that's a reason to be optimistic.
Along with the insider buying, another encouraging sign for Allied Motion Technologies is that insiders, as a group, have a considerable shareholding. Given insiders own a small fortune of shares, currently valued at US$65m, they have plenty of motivation to push the business to succeed. At 19% of the company, the co-investment by insiders gives me confidence that management will make long-term focussed decisions.
One positive for Allied Motion Technologies 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. While we've looked at the quality of the earnings, we haven't yet done any work to value the stock. So if you like to buy cheap, you may want tocheck if Allied Motion Technologies is trading on a high P/E or a low P/E, relative to its industry.
The good news is that Allied Motion Technologies is not the only growth stock with insider buying. Here'sa a list of them... with insider buying in the last three months!
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Exclusive: Italy's UniCredit puts possible Commerzbank bid on ice for now - sources
By Pamela Barbaglia and Gianluca Semeraro
LONDON/MILAN (Reuters) - Italy's UniCredit has put a possible bid for Commerzbank on ice as the German rival does not want to engage in negotiations so soon after the collapse of merger talks with Deutsche Bank, four sources said.
UniCredit had stepped up preparations for a potential takeover of Commerzbank by engaging Lazard and its banker Joerg Asmussen, a former German deputy finance minister, along with JP Morgan, people familiar with the matter said in May.
That raised the prospect of a deal that would allow Italy's largest bank by assets to shift its focus away from its struggling domestic market, a key plank of Chief Executive Jean-Pierre Mustier's strategy.
But the advisers have had little luck discussing a possible bid with Commerzbank, which is represented by Goldman Sachs and Rothschild, and have been left on stand-by, the sources said.
Mustier has been forced to put his ambitions on the backburner as Commerzbank has asked for some "breathing space" and is not ready to negotiate another deal just yet, the sources said.
"Commerzbank told UniCredit they need time to think about the best course of action," said one of the sources, who has direct knowledge of the matter.
This source ruled out a bid being revived over the summer. He said things might change with time, although it was unclear when the Germans might be ready to sit at the table for talks with the Italian bank.
UniCredit and Commerzbank declined to comment.
UniCredit has long been interested in expanding in Germany as it seeks to reduce its exposure toward its Italian home market, which has been weighing down its share price, several sources familiar with management's thinking have said.
The Milan-based lender, which has a market capitalization of around 24 billion euros ($27.3 billion) compared to Commerzbank's 8 billion euros, already owns HVB, a large German lender based in Munich.
But the Italian bank, which has been concentrating on its own turnaround plan, had been awaiting the outcome of merger talks between Commerzbank and its larger Frankfurt neighbor, Deutsche Bank, which unraveled in April.
DETAILED PLAN
UniCredit's plans for a tie-up with Commerzbank were already at an advanced stage, the sources said.
Under its plans, UniCredit would merge HVB and some of its central European operations with Commerzbank, while separating and ringfencing its Italian business, one of the sources said.
UniCredit's Central European network includes Bank Austria which ranks as a leading retail bank in the country employing 4.800 people in 123 branches as of March.
The German combination would be listed in Frankfurt, while UniCredit would maintain its listing and headquarters in Milan. Two bankers close to the situation said UniCredit would need a capital increase of between 5-7 billion euros to finance the deal.
Mindful that UniCredit's exposure to Italy was regarded as a deterrent to a deal in Germany, Mustier also moved last month to cut it, including by announcing the bank would reduce its vast portfolio of Italian government bond holdings. UniCredit had 54 billion euros of Italian bonds at the end of March.
However, he is holding fire for now on Commerzbank, trying to figure out how to persuade the Germans, a second source said.
Two separate sources said Commerzbank, in which the German state has a 15 percent stake, would only engage in merger negotiations with UniCredit if it was certain they would succeed, as it could not afford another round of failed tie-up talks.
Both banks are due to update investors on their strategy before the end of the year - UniCredit on Dec.3, Commerzbank probably by early October - and face questions from investors about where earnings growth will come from after years of restructuring.
(Additional reporting by Andreas Rinke, Hans Seidenstuecker; Editing by Keith Weir) |
Trump blasts Federal Reserve as 'stubborn child' on rate policy
President Donald Trump renewed his attack on the Federal Reserve on Monday, declaring that the central bank “doesn’t know what it is doing” when it comes to boosting the U.S. economy.
In a series of posts on Twitter,Trumpreignitedhis feud with the central bank and Fed Chair Jerome Powell— the top policy-maker he appointed. The president accused the Fed of raising rates far to fast last year, with too much large scale tightening.
As the global economy slows,benchmark U.S. rates are among the highest of large industrializedeconomies. In some ways, it enhance the appeal of American assets for investors hunting for higher yields, such as stocks.
Trump boasted that major stock benchmarks are on track to have “one of the best months of June in U.S. history.” In early U.S. trading, The S&P 500 (^GSPC) slipped 0.04%, or 1.06 points, as of 9:55 a.m. ET. The Dow (^DJI) climbed 0.21%, or 57.08 points, while the Nasdaq (^IXIC) fell 0.11%, or 9.82 points.
Last week, the Fed held benchmark interest rates steady near 2.25%, with analysts widely expecting a new easing cycle to begin as early as next month. However, Trump implicitly blasted the policy decision, accusing the Fed of acting like a “stubborn child” on its refusal to ease policy amid a deceleration.
A slowing U.S. economy needs rate cuts, Trump said, in order to “make up for what other countries are doing against us. Blew it!”
For months,Trump has been sharply criticizing Powell on policy— first, for the Fed’s rate-hiking campaign last year, then for refusing to cut rates in the face of a slowing economy and an escalating fight with China on trade.
In December, Trump reportedly floated the idea of ousting Powell from the Fed, an idea thatmost market observers said at the time was neither legalnor beneficial to markets. Although Trump backed off the idea, he has still repeatedly teed off on the Fed chief.
In an interview with NBC’s “Meet the Press” which ran on Sunday, Trump stressed that he is not pleased with Powell, claiming the Fed raised rates “too fast” and that he does not think Powell is doing a “very good job.”
Trump went on to deny that he threatened to demote Powell, but claimed that he would have the authority to do so.
“I didn’t ever threaten to demote him... “I’d be able to do that if I wanted, but I haven’t suggested that,” Trumpsaid. When asked last Tuesday if he would demote Powell, Trump played it coy.
“Let’s see what he does.”
Donovan Russo is a writer for Yahoo Finance. Follow him@Donovanxrusso.
Follow Yahoo Finance onTwitter,Facebook,Instagram,Flipboard,LinkedIn, andreddit. |
Imagine Owning HUYA (NYSE:HUYA) And Wondering If The 20% Share Price Slide Is Justified
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HUYA Inc.(NYSE:HUYA) shareholders should be happy to see the share price up 20% in the last month. But in truth the last year hasn't been good for the share price. The cold reality is that the stock has dropped 20% in one year, under-performing the market.
See our latest analysis for HUYA
Given that HUYA didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last twelve months, HUYA increased its revenue by 107%. That's well above most other pre-profit companies. Given the revenue growth, the share price drop of 20% seems quite harsh. Our sympathies to shareholders who are now underwater.Prima facie, revenue growth like that should be a good thing, so it's worth checking whether losses have stabilized. Our brains have evolved to think in linear fashion, so there's value in learning to recognize exponential growth. We are, in some ways, simply the wisest of the monkeys.
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.
HUYA is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. You can see what analysts are predicting for HUYA in thisinteractivegraph of future profit estimates.
Given that the market gained 6.6% in the last year, HUYA shareholders might be miffed that they lost 20%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. With the stock down 3.0% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. You might want to assessthis data-rich visualizationof its earnings, revenue and cash flow.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss thisfreelist of companies that have proven they can grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
How Big Is Lululemon Athletica's International Opportunity?
lululemon athletica(NASDAQ: LULU)turned inanother stellar roundof earnings results last quarter. One of the highlights was international growth, up 39% year over year. Regular followers of Lululemon know that numbers like this are business as usual for the brand.
The momentum isn't going to slow down anytime soon, based on management's target to quadruple international sales in five years. Lululemon's brand is resonating not only on its home turf but also in Europe and Asia. But exactly how big is the international opportunity?
IMAGE SOURCE: GETTY IMAGES.
We know how big the athletic apparel market is globally -- about $300 billion, according toMorgan Stanley. But with so many competitors vying for position, it doesn't tell us, specifically, what the opportunity is for Lululemon. We can get an idea by looking at Lululemon's recent international growth and comparing its geographic makeup to its larger peers.
Lululemon's international sales made up only 11% of total revenue last year, with the balance coming from the U.S. and Canada. But recent trends suggest the international segment is on track to one day make up a much larger portion of the company's revenue.
Over the last several quarters, international growth has hovered around 40% to 50% each quarter. It's been especially strong in China, where market growth skyrocketed 70% in the first quarter.
One thing we know is that demand for athletic wear is universal, given thatNikeandAdidasgenerate the majority of their revenue outside of their home turf. Nike generates about 57% of its revenue outside of North America, while Adidas generates more than 60% of its revenue outside of Europe. These numbers make Lululemon's 11% of revenue coming from international regions look out of step, but it also gives us a hint of the potential size of Lululemon's international revenue over the long term.
Lululemon has a massive opportunity in Asia, not to mention Europe, where the brand is starting to take off. Demand for athletic wear in Asia has just started to pick up in the last 10 years, mainly because Asians haven't always been into the athleisure craze like people in the U.S. and Europe. Because of this, the athletic apparel market in China is still in its infancy.
Nike and Adidas have been experiencing double-digit growth in China for a while, which reflects two things: 1) The growing demand for athletic wear in that country, and 2) A growing Chinese middle class, which is already the size of the total U.S. population and is expected to double to 600 million in 10 years.
Because of global demand for athletic wear, Lululemon will likely see most of its revenue come from outside of North America in the next few decades, consistent with its peers. This means Lululemon's international revenue, which last year totaled $360 million, could eventually surpass the company's current annual revenue of $3.75 billion, based on this year's guidance. Of course, management has already guided that international revenue will increase fourfold to $1.44 billion in five years, but hitting that target is just the tip of the iceberg.
It's clear that the skyrocketing growth in Asia and Europe, coupled with the disproportionately small revenue contribution coming from outside North America, is pointing to a multibillion-dollar opportunity unfolding for Lululemon.
What all this means is that buying Lululemon stock today could be like buying Nike stock 20 or 30 years ago. Even as Lululemon's international opportunity is in the early stages of development, North America sales continue to grow steadily,up 18% last quarter. With the company's goal to bring the men's business more in balance with the women's category (which makes up most of its sales), North America should be posting double-digit growth for a while before it dramatically slows down.
It's for these reasons that Lululemon continues to be one of my favorite retail stocks to buy.
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John Ballardowns shares of Lululemon Athletica. The Motley Fool owns shares of and recommends Lululemon Athletica and Nike. The Motley Fool has adisclosure policy. |
The Zacks Analyst Blog Highlights: Microsoft, Cisco, Twitter, Akamai and Cadence Design
For Immediate Release
Chicago, IL –June 24, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Microsoft Corp. MSFT, Cisco Systems Inc. CSCO, Twitter Inc. TWTR, Akamai Technologies Inc. AKAM and Cadence Design Systems Inc. CDNS.
Here are highlights from Friday’s Analyst Blog:
Will the S&P 500 Cross 3000? 5 Top Picks If It Does
The impressive turnaround of Wall Street in June after the market turmoil in May achieved a milestone on Jun 20. Buoyed by Fed’s strong signal of interest rate cut in 2019, the S&P 500 Index set a fresh all-time high. This is the second time so far in 2019 when the benchmark index has hit a new high.
At present, the S&P 500 Index is just 1.4% away to reach the 3,000 level for the first time. However, the important question is can it happen this year despite the presence of disturbing factors like trade conflict, geopolitical concerns and global economic slowdown?
S&P 500 Soars on Fed’s Rate Cut Hints
On Jun 19, in his speech following the FOMC meeting, Fed Chair Jerome Powell said that the benchmark lending rate was kept intact at 2.25-2.5%. However, the central bank said that the adoption of a more accommodative policy is gaining ground as some economic data raised concerns about U.S. and global growth. The noticeable fact is that out of 17 voting members of the Fed, a strong bunch of eight is expecting a rate cut this year.
Fed’s statement boosted investor confidence. Per CME FedWatch, traders are assigning 100% probability for a rate cut of at least 25 basis points in July. Consequently, on Jun 20, the S&P 500 Index closed at 2,954.18 after touching an intraday high of 2,958.06. The previous highest close of the broad-market index was 2,933.68 recorded on Apr 23.
Year to date, the S&P 500 is 17.8% after finishing in the negative territory in 2018. So far in June, the index is up 7.6%, witnessing a complete turnaround after plunging 6.6% in May.
Market Contingent Upon U.S.-China Trade Deal
Wall Street’s performance in 2019 will largely depend upon a trade deal between the United States and China, which broke down abruptly on May 5. So far, the United States has imposed 25% tariffs on $250 billion Chinese goods. China has retaliated by levying 25% tariff on $160 billion U.S. exports. President Trump had threatened imposing 25% tariffs on another $300 billion of Chinese goods if stalemate prevails in trade negotiations for an indefinite time period.
However, on Jun 18, Trump tweeted that he had a very good telephonic conversation with Chinese President Xi Jinping. He added: “We will be having an extended meeting next week at the G-20 in Japan. Our respective teams will begin talks prior to our meeting.” The G-20 summit of developed nations is scheduled for Jun 28-29 at Osaka.
Will Technology Sector Push S&P 500 to 3,000?
The biggest catalyst for the S&P 500’s rebound in 2019 is the technology sector, which has rallied 27.4% year to date. And from the eve of Christmas last year, when the benchmark index hit rock bottom, the sector has gained nearly 37%. Year to date, technology is the best-performing sector of the S&P 500. In the past one month also, this sector has recorded 6.6% growth, despite severe market volatility.
A trade deal with China will benefit the technology sector the most. China is the largest market for high-tech products of U.S. companies. At the same time, China plays the role of a low-cost supplier of intermediary products and other inputs to high-tech U.S. industries. Moreover, clinching a lasting agreement with China, which will strictly protect U.S. intellectual properties, will be immensely beneficial for the homegrown tech behemoths.
Our Top Picks
At this stage, it will be prudent to invest in technology stocks within the S&P 500 Index for solid gains. We have been able to narrow down our search on five stocks, strong growth potential. All five stocks currently sport a Zacks Rank #2 (Buy). You can seethe complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Microsoft Corp.is one of the largest broad-based technology providers in the world. Although software is the most-important revenue source, its offerings include hardware and online services. The company has an expected earnings growth rate of 18.3% for the current year. The Zacks Consensus Estimate for the current year has improved 4.1% over the last 60 days.
Cisco Systems Inc.designs, manufactures, and sells Internet Protocol based networking and other products related to the communications and information technology industry worldwide. The company has an expected earnings growth rate of 18.5% for the current year. The Zacks Consensus Estimate for the current year has improved 0.7% over the last 60 days.
Twitter Inc.operates as a platform for public self-expression and conversation in real time. It offers a real-time, global platform where any user can create a tweet and any user can follow other users. The company has an expected earnings growth rate of 22.1% for the current year. The Zacks Consensus Estimate for the current year has improved 20.7% over the last 60 days.
Akamai Technologies Inc.provides cloud services for delivering, optimizing, and securing content and business applications over the Internet in the United States and internationally. The company has an expected earnings growth rate of 15.2% for the current year. The Zacks Consensus Estimate for the current year has improved 2% over the last 60 days.
Cadence Design Systems Inc.provides software, hardware, services, and reusable integrated circuit design blocks worldwide. The company offers functional verification services, including emulation and prototyping hardware. The company has an expected earnings growth rate of 12.3% for the current year. The Zacks Consensus Estimate for the current year has improved 2.4% over the last 60 days.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportCisco Systems, Inc. (CSCO) : Free Stock Analysis ReportAkamai Technologies, Inc. (AKAM) : Free Stock Analysis ReportTwitter, Inc. (TWTR) : Free Stock Analysis ReportCadence Design Systems, Inc. (CDNS) : Free Stock Analysis ReportMicrosoft Corporation (MSFT) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
Is iEnergizer Limited (LON:IBPO) A Financially Sound Company?
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While small-cap stocks, such as iEnergizer Limited (LON:IBPO) with its market cap of UK£384m, are popular for their explosive growth, investors should also be aware of their balance sheet to judge whether the company can survive a downturn. Evaluating financial health as part of your investment thesis is vital, since poor capital management may bring about bankruptcies, which occur at a higher rate for small-caps. Let's work through some financial health checks you may wish to consider if you're interested in this stock. However, this is not a comprehensive overview, so I suggest youdig deeper yourself into IBPO here.
Over the past year, IBPO has reduced its debt from US$66m to US$52m , which also accounts for long term debt. With this debt repayment, IBPO's cash and short-term investments stands at US$36m to keep the business going. Additionally, IBPO has generated US$37m in operating cash flow during the same period of time, leading to an operating cash to total debt ratio of 71%, meaning that IBPO’s current level of operating cash is high enough to cover debt.
At the current liabilities level of US$72m, it appears that the company has maintained a safe level of current assets to meet its obligations, with the current ratio last standing at 1.02x. The current ratio is the number you get when you divide current assets by current liabilities. Usually, for IT companies, this is a suitable ratio as there's enough of a cash buffer without holding too much capital in low return investments.
With a debt-to-equity ratio of 43%, IBPO can be considered as an above-average leveraged company. This is somewhat unusual for small-caps companies, since lenders are often hesitant to provide attractive interest rates to less-established businesses. We can test if IBPO’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 IBPO, the ratio of 8.08x suggests that interest is appropriately covered, which means that lenders may be inclined to lend more money to the company, as it is seen as safe in terms of payback.
Although IBPO’s debt level is towards the higher end of the spectrum, its cash flow coverage seems adequate to meet obligations which means its debt is being efficiently utilised. This may mean this is an optimal capital structure for the business, given that it is also meeting its short-term commitment. This is only a rough assessment of financial health, and I'm sure IBPO has company-specific issues impacting its capital structure decisions. I suggest you continue to research iEnergizer to get a more holistic view of the small-cap by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for IBPO’s future growth? Take a look at ourfree research report of analyst consensusfor IBPO’s outlook.
2. Valuation: What is IBPO 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 IBPO is currently mispriced by the market.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore ourfree list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
U.S. Supreme Court to hear insurers' bid for $12 billion in Obamacare money
By Nate Raymond
(Reuters) - The U.S. Supreme Court on Monday agreed to decide whether insurers can seek $12 billion from the federal government under a program set up by the Obamacare law aimed at encouraging them to offer medical coverage to previously uninsured Americans.
The justices will hear an appeal by a group of insurers of a lower court's ruling that Congress had suspended the government's obligation to make such payments. The insurers have said that ruling, if allowed to stand, would let the government pull a "bait-and-switch" and withhold money the companies were promised.
Moda Inc unit Moda Health Plan Inc and other insurers that sued to try to compel the Department of Health and Human Services (HHS) to make the payments have said the government was supposed to help them recover from early losses they suffered after the 2010 passage of the Affordable Care Act under Democratic former President Barack Obama.
The law, dubbed Obamacare, has enabled millions of Americans who previously had not medical coverage to obtain insurance.
Other insurers involved in the case include Blue Cross and Blue Shield of North Carolina, Maine Community Health Options and Land of Lincoln Mutual Health Insurance Company.
If the Supreme Court sides with the insurers, it could result in a significant one-time cash infusion for major companies such as Humana Inc, Anthem Inc and Centene Corp, according to a note by Evercore ISI. The insurers had previously written off the value of the payments.
Payments would have come through the law's so-called risk corridor program that was designed to mitigate insurers' risks from 2014 to 2016 when they sold coverage to previously uninsured people who bought insurance on exchanges established under the Affordable Care Act.
Robert Gootee, chief executive of Moda Inc, said he was encouraged that the Supreme Court agreed to hear the case.
"We remain confident that the court will ultimately hold the government to its promise to pay those companies, including Moda, who answered the government's call to provide access to affordable health care for the neediest of Americans," Gootee said in a statement.
HHS declined to comment.
Under the risk corridor program, insurers that paid out significantly less in claims on policies sold through the exchanges than they took in from premiums provided some of their gains to the government. Insurers that paid out more were entitled to government compensation for part of their losses.
Republicans, who have opposed Obamacare from the outset and sought numerous times to repeal it in Congress, have called the risk-corridor program a "bailout" for the insurance industry.
In December 2014, Congress passed an appropriations bill for the 2015 fiscal year that included a rider barring HHS from using general funds to pay the government's risk corridor obligations.
As a result, the government could compensate insurers only with the money it collected from insurance companies that paid less than they took in from premiums. Congress enacted identical riders for fiscal years 2016 and 2017.
Payments from insurers, though, could not fund all of the claimed risk corridor payments. In November 2017, HHS published statistics indicating that payments from insurers for the three-year period fell short of claimed payments by $12 billion.
The U.S. Court of Appeals for the Federal Circuit ruled 2-1 last year that Congress, in passing the appropriations riders, implicitly repealed its statutory obligation to pay the insurers. The insurers appealed, arguing that Supreme Court precedents require much more explicit legislative language to eliminate a previously adopted payment obligation.
For a graphic on major Supreme Court rulings, click https://tmsnrt.rs/2V2T0Uf
(Reporting by Nate Raymond and Lawrence Hurley; Editing by Will Dunham) |
Calculating The Intrinsic Value Of iEnergizer Limited (LON:IBPO)
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Today we will run through one way of estimating the intrinsic value of iEnergizer Limited (LON:IBPO) by projecting its future cash flows and then discounting them to today's value. This is done using the Discounted Cash Flow (DCF) model. It may sound complicated, but actually it is quite simple!
Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in theSimply Wall St analysis model.
Check out our latest analysis for iEnergizer
We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. To begin with, we have to get estimates of the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
Generally we assume that a dollar today is more valuable than a dollar in the future, so we discount the value of these future cash flows to their estimated value in today's dollars:
[{"": "Levered FCF ($, Millions)", "2019": "$30.50", "2020": "$32.70", "2021": "$32.98", "2022": "$33.30", "2023": "$33.65", "2024": "$34.02", "2025": "$34.40", "2026": "$34.80", "2027": "$35.22", "2028": "$35.64"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x1", "2020": "Analyst x1", "2021": "Est @ 0.86%", "2022": "Est @ 0.97%", "2023": "Est @ 1.05%", "2024": "Est @ 1.1%", "2025": "Est @ 1.14%", "2026": "Est @ 1.16%", "2027": "Est @ 1.18%", "2028": "Est @ 1.2%"}, {"": "Present Value ($, Millions) Discounted @ 7.58%", "2019": "$28.35", "2020": "$28.25", "2021": "$26.49", "2022": "$24.86", "2023": "$23.35", "2024": "$21.94", "2025": "$20.63", "2026": "$19.40", "2027": "$18.24", "2028": "$17.16"}]
Present Value of 10-year Cash Flow (PVCF)= $228.67m
"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 (1.2%) 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 7.6%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = US$36m × (1 + 1.2%) ÷ (7.6% – 1.2%) = US$568m
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= $US$568m ÷ ( 1 + 7.6%)10= $273.35m
The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is $502.02m. The last step is to then divide the equity value by the number of shares outstanding. This results in an intrinsic value estimate in the company’s reported currency of $2.64. However, IBPO’s primary listing is in Guernsey, and 1 share of IBPO in USD represents 0.788 ( USD/ GBP) share of AIM:IBPO,so the intrinsic value per share in GBP is £2.08.Compared to the current share price of £2.06, the company appears about fair value at a 0.9% discount to where the stock price trades currently. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind.
Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at iEnergizer as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.6%, which is based on a levered beta of 1.066. 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 iEnergizer, I've put together three pertinent aspects you should further research:
1. Financial Health: Does IBPO 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 IBPO'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 IBPO? 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 LON 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. |
Trump says other countries should do more to protect oil tankers
WASHINGTON (Reuters) - U.S. President Donald Trump said on Monday that other countries, including China and Japan, should protect their own oil tankers in the Middle East.
"So why are we protecting the shipping lanes for other countries (many years) for zero compensation," Trump said on Twitter. "All of these countries should be protecting their own ships on what has always been a dangerous journey."
Trump made the comments amid an escalation in tensions with Iran, as Washington has blamed Tehran for attacks on two oil tankers, owned by Japan and Norway, in the Strait of Hormuz and the downing of a U.S. drone off the coast of Iran. Both Washington and Tehran have said they do not want a war.
The United States is expected to unveil new sanctions against Iran on Monday, aimed at further restricting Tehran's resources.
Trump's remarks echo those he has made about the North Atlantic Treaty Organization (NATO). He has called for the alliance's member nations to spend more on defense.
(Reporting by Makini Brice; Editing by Doina Chiacu and Nick Zieminski) |
4 GARP Stocks to Scoop Up for Maximum Returns
Growth at a reasonable price or GARP is an excellent way for investors to make some quick gains. This strategy helps investors gain exposure to stocks that have impressive prospects and are trading at a discount.The GARP approach leads to the identification of stocks that are priced below the market or any reasonable target determined by fundamental analysis. These stocks also have solid prospects in terms of cash flow, revenues, earnings per share (EPS) and so on.That means a portfolio created on the basis of GARP strategy is expected to have stocks that offer the best of both value and growth investing.GARP Metrics – Mix of Growth & Value MetricsThe GARP strategy seeks to offer an ideal investment by utilizing the best features of both value and growth investing. Investors adopting the GARP approach will prefer to buy stocks that are priced below the market or any reasonable target determined by fundamental analysis. These stocks also have solid prospects in cash flow, revenues, earnings per share (EPS) and so on.Growth MetricsBoth strong earnings growth history and impressive earnings prospects are the main concepts that GARP investors borrow from the growth investing strategy. However, instead of super-normal growth rates, pursuing stocks with a more stable and reasonable growth rate is also a tactic of GARP investors. Hence, growth rates between 10% and 20% are considered ideal under the GARP strategy.Another growth metric that is considered by both growth and GARP investors is return on equity (ROE). GARP investors look for strong and higher ROE compared to the industry average to identify superior stocks. Moreover, stocks with positive cash flow find precedence under the GARP plan.Value MetricsGARP investing gives priority to one of the popular value metrics – price-to-earnings (P/E) ratio. Though this investing style picks stocks with higher P/E ratios compared to value investors, it avoids companies with extremely high P/E ratios. Moreover, the price-to-book value (P/B) ratio is also considered.Using the GARP principle, we have run a screen to identify stocks that should offer solid returns in the near term.Screening ParametersAlong with the criteria discussed in the above section, we have considered a favorableZacks Rank #1 (Strong Buy) or 2 (Buy).Last 5-year EPS & projected 3–5 year EPS growth rates between 10% and 20%(Strong EPS growth history and prospects ensure improving business.)ROE (over the past 12 months) greater than the industry average(Higher ROE compared to the industry average indicates superior stocks.)P/E and P/B ratios less than M-industry average(P/E and P/B ratios less than that of the industry indicate that the stocks are undervalued.)Here are four of the six stocks that made it through the screen:LPL Financial Holdings Inc.LPLA is engaged in providing an integrated platform of brokerage and investment advisory services to independent financial advisors and financial advisors at financial institutions. The company sports a Zacks Rank #1. It has an average trailing four-quarter positive surprise of 10.62%. You can seethe complete list of today’s Zacks #1 Rank stocks here.Intuit Inc.INTU is a business and financial software company that develops and sells financial, accounting and tax preparation software and related services. The company carries a Zacks Rank #2. It has an average trailing four-quarter positive surprise for 55.51%.Cadence Design System, Inc.CDNS offers software, hardware, services and reusable IC design blocks (IPs) to electronic systems and semiconductor customers. The company carries a Zacks Rank #2. Its average trailing four-quarter earnings surprise is 12.09%.Microsoft CorporationMSFT is a broad-based technology provider whose offerings include software, hardware, online and support services. The company carries a Zacks Rank #2. It has a four-quarter average positive surprise of 9.82%.Get the rest of the stocks on the list and start putting this and other ideas to the test. It can all be done with the Research Wizard stock picking and back testing software.The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.Click here to sign up for a free trial to the Research Wizard today.Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportIntuit Inc. (INTU) : Free Stock Analysis ReportCadence Design Systems, Inc. (CDNS) : Free Stock Analysis ReportMicrosoft Corporation (MSFT) : Free Stock Analysis ReportLPL Financial Holdings Inc. (LPLA) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
Existing Home Sales Rebound in May: Top 4 Housing Picks
After experiencing a tough time in the last two months, sales of previously owned houses rebounded strongly in May 2019, rising in each of the four major U.S. regions. The Northeast witnessed the biggest increase last month.Declining mortgage rates, moderating home prices, rising wages and dovish Federal Reserve stance helped the U.S. housing market regain its momentum.Home Sales Data EncouragingThe National Association of Realtors’ (“NAR”) said on Friday that sales of existing homes, accounting for more than 90% of total U.S. home sales, increased 2.5% to a seasonally adjusted annual rate of 5.34 million units last month from 5.19 million in April. However, the metric decreased 1.1% from 5.4 million a year ago.Notably, the recent data marked the second highest level since the beginning of 2019.
Regionally, sales in the Northeast, which account for the majority of existing home sales, rose 4.7% to 670,000 units, almost in line with the prior-year period. While sales in the Midwest advanced 3.4% in May, the same increased 1.8% in both South and West regions.Median sales price in May rose 4.8% to $277,700 from the comparable year-ago period, marking the 87th straight month of year-over-year increase.In May, total housing inventory grew 4.9% from the previous month and 2.7% from the prior-year period. It will take just 4.3 months to deplete the current supply of homes, up from 4.2 months in April as well as in May 2018.First-time buyers accounted for 32% of sales in May, in line with the prior month but up from 31% recorded a year ago. Moreover, NAR revealed that the annual share of first-time buyers in 2018 was 33%.The uptick in each of the abovementioned metrics reflects that buyers are excited to reap the benefits of favorable market conditions. Lawrence Yun, NAR’s chief economist, said “The purchasing power to buy a home has been bolstered by falling mortgage rates, and buyers are responding.”Declining Mortgage Rates to Boost SalesThe overall housing industry has been booming over the past few months, backed by declining mortgage rates and strengthening builder’s confidence.Although mortgage rates increased 2 points last week, it remained 73 points lower than a year ago. The average U.S. rate for a 30-year fixed mortgage was 3.84% for the week ending Jun 20, according to the latest Freddie Mac Primary Mortgage Market Survey. This marked an increase from the previous week’s 3.82% but was down from 4.57% a year ago. The recent decline in mortgage rates should benefit existing home sales in the near term.Homebuilder confidence has also been growing since the beginning of the year. Though the metric fell two points in June from the previous month, as measured by the National Association of Home Builders’ Index, the gap does not reflect that homebuyer demand has stalled. As evident from increased refinance activity and loan amounts, consumers still have the willingness and capacity to purchase homes.Meanwhile, investors remain optimistic that the Federal Reserve or Fed will cut federal funds interest rate in July. Recently, the Fed opted to keep the benchmark rate in a target range of 2.25-2.5%, with a vote of 9-1, indicating readiness to lower interest rates for the first time in more than a decade, citing “uncertainties” in the outlook. Notably, after raising federal funds rate nine times in three years, the Fed reversed its course last December on concerns related to slowing economy and U.S.-China trade war. This is indeed a major boon for the rate-sensitive housing market.In a nutshell, improving economic conditions, rising disposable income and favorable demographic changes are likely to support demand in the near term.4 Must-Buy Housing StocksThere are plenty of reasons to be optimistic about the broader housing sector over both the short and the long term. However, picking winning stocks may be difficult.With the help of the Zacks Stock Screener, we have zeroed in on four stocks that have a Zacks Rank #1 (Strong Buy) or 2 (Buy) and a VGM Score of A or B. A top Zacks Rank indicates that these stocks have been witnessing positive estimate revisions, which generally translates into rapid price appreciation.Our VGM Score identifies stocks that have the most attractive value, growth and momentum characteristics. In fact, our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2, make a solid investment choice. You can seethe complete list of today’s Zacks #1 Rank stocks here.PulteGroup, Inc.PHM primarily engages in the homebuilding business in the United States. The company currently sports a Zacks Rank #1 and has a VGM Score A. The Zacks Consensus Estimate for its current-year earnings has increased 0.9% over the past 60 days. The company is expected to see earnings growth of 6.8% over the next three to five years.NVR, Inc.NVR, which operates as a homebuilder in the United States, also sports a Zacks Rank #1 and has a VGM Score A. The Zacks Consensus Estimate for its current-year earnings has remained stable over the past 60 days. The company's expected three-five-year earnings growth is 10.7%.M/I Homes, Inc.MHO operates as a builder of single-family homes in Ohio, Indiana, Illinois, Minnesota, Maryland, Virginia, North Carolina, Florida, and Texas, the United States. The company currently has a Zacks Rank #2 and has a VGM Score B. The Zacks Consensus Estimate for its current-year earnings has remained steady over the past 60 days.Ethan Allen Interiors Inc.ETH, an interior designer, manufacturer and home furnishings retailer, currently carries a Zacks Rank #2. The stock has an expected earnings growth rate of 15% for the next three to five years. Moreover, the company currently has a VGM Score of A.More Stock News: This Is Bigger than the iPhone!It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.Click here for the 6 trades >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportM/I Homes, Inc. (MHO) : Free Stock Analysis ReportNVR, Inc. (NVR) : Free Stock Analysis ReportPulteGroup, Inc. (PHM) : Free Stock Analysis ReportEthan Allen Interiors Inc. (ETH) : Free Stock Analysis ReportTo read this article on Zacks.com click here. |
The Zacks Analyst Blog Highlights: EMCOR, Great Lakes, MasTec, North American Construction and Anhui
For Immediate Release
Chicago, IL –June 24, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: EMCOR Group, Inc. EME, Great Lakes Dredge & Dock Corporation GLDD, MasTec, Inc. MTZ, North American Construction Group Ltd. NOA and Anhui Conch Cement Co. AHCHY.
Here are highlights from Friday’s Analyst Blog:
5 Construction Stocks to Add to Your Portfolio
The construction sector, which has returned 23.99% year to date, is one of the most attractive areas right now. The sector P/E (F1) is 14.08X compared to 17.66X for the S&P 500. Its PEG of 1.40X is also better than the 1.92X for the S&P 500.
Of the 80 companies in the sector that have reported to date, 49 (61%) topped the Zacks Consensus estimate, 3 (4%) were in line while 27 (34%) missed. Despite a substantial number of negative estimate revisions, EPS is still expected to grow 10.25% this year, better than the 5.94% growth expected of the S&P 500.
Primary Catalysts
Data from the U.S. Bureau of Economic Analysis shows that in 2018, the industry’s contribution to U.S. GDP was close to its 2008 peak level while output was much higher.
While the sector is coming off a relatively strong 2018, there are indications that growth will continue this year, albeit at a slower rate.
Thinking of the sector as the sum of its parts, we have public works like highways and bridges and building construction, including residential (single family and multi-family) and other (commercial, institutional, government).
As far as thepublic works segmentis concerned, the Chief Economist, American Road & Transportation Association (ARTBA) says that spending on public highway, street and related investment will be up 4.8% from $63.4 billion in 2018 to $66.5 billion this year. Additionally, the real value of bridge and tunnel construction work will increase 1.5% from $31.2 billion to $31.7 billion.
Both federal and state governments will contribute to the increased spending. Following initiatives to raise funds by increasing or adjusting motor fuel tax rates and other fees by 30 states, local governments now have sufficient resources to pump into required construction projects. Federal investments through the 2018 appropriations bill that approved spending of $2.5 billion and the 2015 FAST Act will add to these funds, when the states choose to deploy them (they can take up to 4 years).
Theresidential construction marketis expected to be flattish this year because the positives and negatives are roughly balancing off. High prices, raised interest rates and steady mortgage rates have impacted affordability on the demand side through last year and with interest rates holding steady this year, there is limited incentive to buy.
On the other hand, rising labor and materials costs have made it more difficult to profitably produce the smaller apartments that are more affordable and so in greater demand. This is leading to inventory buildup in more expensive units and short supply in the more affordable dwellings. Cost inflation is the primary factor driving dollar growth in the segment. The National Association of Home Builders (NAHB) expects construction activity to be mostly concentrated in the west and south where job and population growth remains strong.
Thecommercial and other constructionside remains more attractive because of continued spending on lodging, data centers, warehouses, airports and K-12 schools.
Main Roadblocks
The primary challenge for the industry is the scarcity ofskilled labor. The softness in homebuilding may free up some labor, but the shortage actually stems from an aging skilled force. According to IHS Markit, 30% of the industry’s skilled workforce will retire over the next 10 years. So training, retraining, building and retaining the workforce is a top priority. This is raising costs for construction companies.
Compounding this problem istechnological disruptionin the form of robotics, drones, 3D printing, artificial intelligence and modularization. If the industry is able to harness technology as it trains new hands, it may be able to come out of the labor shortage problem. But it is typically slow to change, so these moves will take time.
The other major factor impacting costs ismaterialsstemming from the government’s decision to increase tariffs on steel and aluminum. Since the higher prices are being passed on to construction companies, it is raising costs for them, which they in turn are trying to pass off on to customers.
Also, because the market is expected to be less robust than in 2018, there will be morecompetitionfor projects.
Given this backdrop, here are some great picks –
EMCOR Group, Inc.
EMCOR Group is a provider of critical infrastructure systems including electrical, mechanical, lighting, air conditioning, heating, security, fire protection, and power generation systems across sectors. EMCOR Construction Services is a nationwide group of mechanical and commercial electrical contractors for U.S. commercial, healthcare, institutional, education, hospitality, manufacturing, transportation and water and wastewater markets.
EMCOR Building Services is involved in maintenance of facilities. EMCOR Industrial Services focuses on project execution in the refining and petrochemical industries.
This Zacks Rank #1 (Strong Buy) company topped estimates in the last quarter by 21.9% (average 4-quarter surprise is 14.46%). Its 2019 estimate is up 3.8% and 2020 estimate is up 4.5% in the last 60 days. Its 15.0% expected growth for the next 5 years surpasses the industry’s 9.80%.
Great Lakes Dredge & Dock Corporation
Great Lakes Dredge & Dock Corporation is the largest provider of dredging services in the U.S., maintaining shipping channels, reclaiming ocean land and re-nourishing storm-damaged coastlines. Around 25% of its operations are international, mainly in the Middle East.
This Zacks Rank #1 company topped estimates in the last quarter by 357.14% (average 4-quarter surprise is 547.62%). Its 2019 estimate is up 47.8% and 2020 estimate is not available yet. It has grown 10.6% in the last 5 years.
MasTec, Inc.
MasTec is one of the largest providers of construction services to the U.S. telecommunications industry. It is primarily involved in the installation and maintenance of aerial, underground and buried copper and fiber optic cable, underground conduit, manhole systems and related construction for local telephone companies, including regional bell operating companies such as BellSouth Telecommunications, U.S. West and SBC Communications, and non-Bell local telephone companies such as Sprint and GTE.
This Zacks Rank #1 company topped estimates in the last quarter by 34.88% (average 4-quarter surprise is 11.23%). Its 2019 estimate is up 4.6% and 2020 estimate is up 4.9% in the last 60 days. It has grown 17.9% over the last five years and will grow at an average 8.0% in the next five.
North American Construction Group Ltd.
North American Construction Group provides heavy construction and mining services primarily in Canada. It offers services to large oil, natural gas and resource companies.
This Zacks Rank #1 company topped estimates in the last quarter by 8.33% (average 4-quarter surprise is 36.11%). Its 2019 estimate is up 16.4% and 2020 estimate is up 8.1% in the last 60 days. Its revenue and EPS are expected to grow 64.35% and 221.43%, respectively in 2019.
Anhui Conch Cement Co.
Anhui Conch Cement Company Limited, together with its subsidiaries, manufactures and sells clinkers and cement products under the CONCH brand in the People's Republic of China and internationally. It also provides construction and installation services for industrial purposes; logistic and loading services; and mining and related services.
In addition, the company manufactures and sells cement packaging products and refractory materials; trades in coal products; and develops and sells profile and related products, as well as exports clinker and cement products. Anhui Conch or Conch Cement is the largest cement manufacturer in mainland China.
You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportAnhui Conch Cement Co. (AHCHY) : Free Stock Analysis ReportGreat Lakes Dredge & Dock Corporation (GLDD) : Free Stock Analysis ReportMasTec, Inc. (MTZ) : Free Stock Analysis ReportEMCOR Group, Inc. (EME) : Free Stock Analysis ReportNorth American Construction Group Ltd. (NOA) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
Volatility 101: Should HUYA (NYSE:HUYA) Shares Have Dropped 20%?
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HUYA Inc.(NYSE:HUYA) shareholders should be happy to see the share price up 20% in the last month. But that doesn't change the reality of under-performance over the last twelve months. In fact the stock is down 20% in the last year, well below the market return.
Check out our latest analysis for HUYA
Because HUYA is loss-making, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
HUYA grew its revenue by 107% over the last year. That's well above most other pre-profit companies. The share price drop of 20% over twelve months would be considered disappointing by many, so you might argue the company is getting little credit for its impressive revenue growth. On the bright side, if this company is moving profits in the right direction, top-line growth like that could be an opportunity. Our brains have evolved to think in linear fashion, so there's value in learning to recognize exponential growth. We are, in some ways, simply the wisest of the monkeys.
The chart below shows how revenue and earnings have changed with time, (if you click on the chart you can see the actual values).
HUYA is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. If you are thinking of buying or selling HUYA stock, you should check out thisfreereport showing analyst consensus estimates for future profits.
While HUYA shareholders are down 20% for the year, the market itself is up 6.6%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. With the stock down 3.0% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. You could get a better understanding of HUYA's growth by checking outthis more detailed historical graphof earnings, revenue and cash flow.
Of course,you might find a fantastic investment by looking elsewhere.So take a peek at thisfreelist of companies we expect will grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
FOREX-Dollar dips on U.S. rate-cut bets, bitcoin on fire
* Investors await outcome on Trump-Xi meeting at G20 summit * U.S.-Iran tension underpins safe-haven support for yen * Dollar remains pressured by bets on multiple U.S. rate cuts * Bitcoin breaks $11,000 for first time since March 2018 * Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh (Updates market action, changes dateline, previous LONDON) By Richard Leong NEW YORK, June 24 (Reuters) - The dollar softened against a basket of currencies on Monday on bets the Federal Reserve may lower interest rates more than once this year, while tensions between Iran and the United States provided safe-haven support for the yen. Bitcoin held firm after its torrid run over the weekend, when it broke above $11,000 for the first time since March 2018. The world's biggest and best-known cryptocurrency has risen nearly 200% this year as Facebook's plan to introduce its Libra digital coin stoked optimism about a widening usage of virtual currencies. Investors awaited whether U.S. President Donald Trump and China President Xi Jinping would at least call a truce on their trade war at a summit in Japan later this week. "The Trump-Xi meeting at the G20 this coming weekend and heightened tensions in the Gulf, with the U.S. set to impose new sanctions on Iran's crippled economy are keeping investors on edge," said Marc Chandler, chief market strategist at Bannockburn Global Forex LLC. Both China and the United States should make compromises in trade talks, Chinese Vice Commerce Minister Wang Shouwen said on Monday. Markets believe that if Washington and Beijing fail to dial back their heated rhetoric on trade, then the Fed will be forced to cut interest rates to prevent a wider economic slowdown resulting from higher U.S. tariffs on imports. Interest rates futures implied traders priced in a 100% chance the Fed would cut rates at the end of July, while they are betting on a high probability it might lower rates two more times after that, according to CME Group's FedWatch program. Expectations of falling U.S. rates have weakened the greenback. An index that tracks the dollar against a group of six currencies fell 1.57% last week, its biggest weekly loss in four months. At 9:38 a.m. (1338 GMT), the dollar index dipped 0.1% at 96.126. The latest weekly positioning data confirmed the view of a weakening dollar. Hedge funds have turned mildly bearish on the greenback, and have increased bets on weakness in other currencies such as the Australian dollar as their outlook on the global economy has soured. Meanwhile, the yen retreated from its strongest levels against the dollar since January after President Trump called off a military strike against Iran but tensions between the two nations remain high. The yen was down 0.18% at 107.495 per dollar after reaching 107.045 on Friday as nervous traders piled into the safe-haven currency. Among digital currencies, bitcoin was steady at $10,857.77 after breaking above $11,000 this past weekend on the Luxembourg-based Bitstamp exchange. ======================================================== Currency bid prices at 10:08AM (1408 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar EUR= $1.1378 $1.1366 +0.11% -0.79% +1.1398 +1.1363 Dollar/Yen JPY= 107.5000 107.3000 +0.19% -2.50% +107.5300 +107.2600 Euro/Yen EURJPY= 122.34 121.98 +0.30% -3.07% +122.3900 +122.0000 Dollar/Swiss CHF= 0.9751 0.9762 -0.11% -0.64% +0.9782 +0.9744 Sterling/Dollar GBP= 1.2715 1.2740 -0.20% -0.33% +1.2766 +1.2709 Dollar/Canadian CAD= 1.3205 1.3221 -0.12% -3.17% +1.3221 +1.3178 Australian/Doll AUD= 0.6953 0.6923 +0.43% -1.39% +0.6961 +0.6929 ar Euro/Swiss EURCHF= 1.1096 1.1099 -0.03% -1.40% +1.1130 +1.1095 Euro/Sterling EURGBP= 0.8949 0.8923 +0.29% -0.39% +0.8957 +0.8920 NZ NZD= 0.6604 0.6587 +0.26% -1.68% +0.6615 +0.6582 Dollar/Dollar Dollar/Norway NOK= 8.5042 8.4950 +0.11% -1.56% +8.5106 +8.4703 Euro/Norway EURNOK= 9.6780 9.6627 +0.16% -2.30% +9.6860 +9.6493 Dollar/Sweden SEK= 9.3198 9.3509 -0.22% +3.97% +9.3548 +9.3000 Euro/Sweden EURSEK= 10.6074 10.6307 -0.22% +3.35% +10.6396 +10.5925 (Additional reporting by Saikat Chatterjee in LONDON Editing by Mark Heinrich and Nick Zieminski) |
U.S. Supreme Court allows foul language trademarks in F-word case
By Andrew Chung
WASHINGTON (Reuters) - The Supreme Court on Monday struck down a longstanding U.S. ban on trademarks on "immoral" or "scandalous" words and symbols, ruling in a case involving a clothing brand with an indelicate name that the law violates constitutional free speech rights.
The justices ruled against President Donald Trump's administration, which defended the law that had been in place since 1905, and in favor of Los Angeles streetwear designer Erik Brunetti, who was turned down by U.S. Patent and Trademark Office when he sought to trademark his brand name FUCT.
All nine justices agreed in the decision written by liberal Justice Elena Kagan that the prohibition on "immoral" trademarks ran afoul of the U.S. Constitution's First Amendment right to free expression. However, three justices wrote dissents to say the bar on "scandalous" trademarks should have been upheld.
The Supreme Court followed a course it took in 2017 when it struck down a similar law forbidding the registration of "disparaging" trademarks in a case involving an Asian-American dance rock band called The Slants, a name federal trademark officials had deemed offensive to Asians.
When the 2011 trademark application for FUCT was rejected, the Patent and Trademark Office noted that brand name sounds like a profanity - sometimes politely called the "F-word" - though is spelled differently, and concluded that Brunetti's products contained sexual imagery, misogyny and violence.
"There are a great many immoral and scandalous ideas in the world (even more than there are swear words)," Kagan wrote in Monday's decision, adding that the trademark law covers them all. "It therefore violates the First Amendment."
"Today is a good day for Americans," Brunetti's lawyer John Sommer said. "The U.S. Supreme Court has taken the government out of the business of deciding questions of morality."
The Patent and Trademark Office said it was reviewing the decision. The Justice Department declined to comment.
The justices, who are due to wrap up their current term in the coming days with a handful of other major rulings on tap, upheld a 2017 lower court ruling striking down the law. The decision removes the authority of government officials to bar federal trademark registration for profane language or sexually graphic images.
The Trump administration had warned that invalidating the law would unleash a torrent of extreme words and sexually graphic images on the marketplace.
Brunetti's brand includes products such as a pullover sweatshirt saying "The world is fuct," sweatpants saying "We are fuct," and a T-shirt saying "Fuct is free speech, free speech is fuct."
'ODIOUS RACIAL EPITHET'
Justices Sonia Sotomayor, Stephen Breyer and John Roberts were the three justices who partly dissented. Sotomayor said the government will now have no choice but to register "the most vulgar, profane or obscene words and images imaginable."
Breyer said such words could even lead to physical altercations. "Just think about how you might react if you saw someone wearing a t-shirt or using a product emblazoned with an odious racial epithet," Breyer said.
Brunetti sought a trademark because it would make it easier to protect his brand of casual clothing against counterfeiters. The brand's name is clever, Brunetti said, because of its association with the profanity, while the acronym also means "Friends U Can't Trust."
The U.S. Court of Appeals for the Federal Circuit, which specializes in intellectual property law, ruled in Brunetti's favor in 2017.
The American Civil Liberties Union called the ruling a victory for the First Amendment. "Government bureaucrats should not be deciding what speech is or is not deserving of trademark protection based on what they consider to be too 'scandalous' and 'immoral,'" ACLU attorney Emerson Sykes said.
The Trump administration had argued that banning vulgar terms and sexually indecent images did not discriminate against anyone's viewpoint, and that the government should not be forced through the trademark system to promote words and images that would be shocking or profane to the public.
On Monday, Kagan offered examples of the law's bias toward certain views, highlighting the government's approval of anti-drug or pro-religious messages but rejection of a trademark for "Bong Hits 4 Jesus."
The dissenting justices suggested the "scandalous" provision of the law could be salvaged to forbid obscenity or profanity because it does not attack ideas, but only the way in which ideas are expressed.
Justice Samuel Alito, who agreed to strike down the law, said Congress could come up with a narrower statute banning vulgarity that conveys only emotion. "The registration of such marks (trademarks) serves only to further coarsen our popular culture," Alito said.
The case marked the latest important free speech decision by the justices.
In another free speech case decided last year, the court struck down a Minnesota law prohibiting apparel bearing political messages in polling sites.
Also last year, the court blocked a California law requiring clinics that counsel women against abortion to notify clients of the availability of abortions paid for by the state, finding that it violated the free speech rights of the Christian-based facilities..
For a graphic on major Supreme Court rulings, click https://tmsnrt.rs/2V2T0Uf
(Reporting by Andrew Chung; Editing by Will Dunham) |
Zacks.com featured highlights include: Hibbett Sports, Comtech, Quanta Services, Principal Financial and Zions
For Immediate Release
Chicago, IL – June 24, 2019 - Stocks in this week’s article areHibbett Sports, Inc.HIBB,Comtech Telecommunications Corp.CMTL,Quanta Services, Inc.PWR,Principal Financial Group, Inc.PFG andZions BancorporationZION.
Tap These 5 Value Stocks with Impressive EV/EBITDA Ratios
The price-to-earnings (P/E) ratio is by far the most widely used metric in value investing given its apparent simplicity. The idea of chasing stocks with a low P/E is ingrained in the minds of many investors. However, even this broadly used valuation multiple is not without its shortcomings.
What Makes EV/EBITDA a Better Choice?
Although P/E is preferred by many investors while uncovering value stocks, another valuation metric called EV/EBITDA does a better job. The ratio is sometimes viewed as a superior substitute as it offers a clearer picture of a firm’s valuation and its earnings potential. EV/EBITDA, also referred to as the enterprise multiple, has a more comprehensive approach to valuation as it determines a firm’s total value. In contrast, P/E just considers the equity portion of a firm.
EV/EBITDA is the enterprise value (EV) of a stock divided by its earnings before interest, taxes, depreciation and amortization (EBITDA). EV is the sum of a company’s market capitalization, its debt and preferred stock minus cash and cash equivalents.
The other element of the multiple, EBITDA, gives the true picture of a company’s profitability as it removes the impact of non-cash expenses like depreciation and amortization that depress net earnings. It is also often used as a proxy for cash flows.
Generally, the lower the EV/EBITDA ratio, the more attractive it is. A low EV/EBITDA ratio could signal that a stock is potentially undervalued.
EV/EBITDA takes into account the debt on a company’s balance sheet that P/E ratio does not. Given this reason, EV/EBITDA is usually used to value possible acquisition targets. Stocks with a low EV/EBITDA multiple could be seen as potential takeover candidates.
Moreover, P/E can’t be used to value a loss-making firm. A firm’s earnings are also subject to accounting estimates and management manipulation. On the other hand, EV/EBITDA is difficult to manipulate and can also be used to value companies that are making loss but are EBITDA-positive.
EV/EBITDA is also a useful tool in assessing the value of firms that are highly leveraged and have a high degree of depreciation. It also can be used to compare companies with different levels of debt.
However, EV/EBITDA has its limitations too. It varies across industries and is generally not appropriate while comparing stocks in different industries given their diverse capital spending requirements.
As such, a strategy entirely based on EV/EBITDA might not fetch the desired outcome. But you can club it with other major ratios such as price-to-book (P/B), P/E and price-to-sales (P/S) to screen true value stocks.
For the rest of this Screen of the Week article please visit Zacks.com at:https://www.zacks.com/stock/news/432661/tap-these-5-value-stocks-with-impressive-evebitda-ratios
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportComtech Telecommunications Corp. (CMTL) : Free Stock Analysis ReportZions Bancorporation (ZION) : Free Stock Analysis ReportQuanta Services, Inc. (PWR) : Free Stock Analysis ReportPrincipal Financial Group, Inc. (PFG) : Free Stock Analysis ReportHibbett Sports, Inc. (HIBB) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
Blend raises $130 million to make banks cool. Already processes $2 billion in loans per day.
Blend’s software makes banks cool.
While many finance startupsrip big banks, Blend secretly powers them.
They’re one of those tech companies you don’t always see as a consumer, but they process $2 billion in loans per day for lenders that comprise about 25% of the U.S. mortgage market, and are now moving into deposits, insurance, and the rest of your bank’s offerings.
They count Wells Fargo and U.S. Bank among their 150 bank and lender customers, and in in 2019 alone Blend has done the following:
– Launched products that let you tap home equity without headaches. Americans have the most home equity in 13 years—about $5.6 trillion—after a long run of home appreciation, but still a third of you fund home improvements with credit cards because that’s been easier than getting a home equity loan. Until now. Blend powers your lender to do all this from your phone, andclose 19 days fasterthan you could before this technology existed.
– Hired the former head of Fannie Mae Tim Mayopoulos as their president. Fannie Mae sets most mortgage lending guidelines in America. The Basis Point recently led a webinar with Blend and Fannie Mae calledBut seriously, how close are we to a fully digital mortgage?. It’s been a 26 year journey so far because ofa few key reasons, but now well-funded, properly-connected teams like Blend will help make all your finance digital and safe, while also keeping the system safe.
– Added non-mortgage products like bank account openings, which make your entire banking experience super easy without having to leave your existing bank.
– Added former Pixar CFO Ann Mather to its board. She also sits on boards of Google parent Alphabet, Netflix, and Airbnb, so she knows a thing or two about how to help consumer companies get big and do the right thing.
– Raised $130 million in Series E funding today, bringing their total funding to $310 million so they can keep building. Now they add Temasek and General Atlantic to this list of top tier investors.
When companies like Blend are making big moves like this, it’s a good thing for consumer finance and for you. Please reach out to us with any questions.___Reference:
–How To Blend Home Equity With Your Budget
–But seriously, how close are we to a fully digital mortgage?
–Main reasons it’s taken 26 years so far to digitize mortgages
–Blend raises $130m Series E funding to power one-tap mortgages & consumer loans
This guy says he owns an NYC hotel because he stayed there for one night
2 jobs numbers reveal a hidden weakness in the U.S. economy
Linkage: Check out this new app that lets you rent friends! |
IPO Outlook For The Week: Biotech, Real Estate, IT Solutions And Secondhand Luxury E-Tail
None |
Will the Proposed $21B Wildfire Fund Aid California Utilities?
California governor Gavin Newsom recently proposed to create a fund worth $21 billion that will help the state’s utilities settle claims arising from damages caused by wildfires, allegedly caused by these utilities. The catalyst behind the proposition is the crisis that renowned utility operator, PG&E Corp. PCG is going through, with $30 billion in liabilities from wildfires. Wildfire Situation in California Wildfires in California have worsened in the past couple of years. Per a report by Reuters, since 2000, California has endured 15 of the 20 most destructive wildfires in the state’s history. The wildfire in 2018, also known as Camp Fire, was the deadliest and most destructive fire in California’s history. It killed dozens of people and burned down the town of Paradise and was the world's costliest single natural disaster in 2018. German insurance company Munich Re said the Camp Fire alone caused losses of $16.5 billion. Impact on Utilities Per the doctrine of inverse condemnation, California utilities are responsible for wildfire damage caused by their equipment irrespective of whether the companies act negligently or not. This is why utilities in the Golden State have to bear the brunt of these devastating wildfires. The state’s largest electric utility PG&E Corp. suffered the most. Cal Fire blamed the utility’s equipment for at least 17 wildfires in the state’s wine country in October 2017, including two blazes that resulted in 13 fatalities. Also, Cal Fire held PG&E’s electrical transmission lines responsible for the November 2018 Camp Fire. The company filed for bankruptcy this January, anticipating that it could face $30 billion in liabilities from the 2017 and 2018 fires. Meanwhile, fire investigators blamed Edison International’s EIX Southern California Edison (SCE) unit for the deadly Thomas Fire in Ventura and Santa Barbara counties. The unit is facing multiple lawsuits in connection with November’s Woolsey Fire, a deadly blaze, which destroyed more than 1,600 structures and damaged another 360 structures in LA and Ventura counties. Story continues Moreover, Sempra Energy’s SRE San Diego Gas and Electric (SDG&E) has been blamed for the state’s deadly wildfires in 2007. Notably, both SCE and SDG&E have seen their credit ratings being downgraded over wildfire concerns in the recent past. Key Elements of the Plan Per the Wall Street Journal, governor Gavin has outlined two possible models for the fund—one valued at $10.5 billion and another at $21 billion. The $10.5 billion proposal will be structured as a revolving loan funded by extending a surcharge on electricity bills and securitizing revenues through state-issued bonds. The $21 billion proposal will include an additional insurance policy worth $10.5 billion, which needs contribution from the three major utilities of the state. Will the Plan Aid Utilities? Per New York Times, the governor’s proposal requires the utilities to spend $3 billion on safety improvements every three years. The improvements will include early warning and wildfire-detection systems and utility equipment upgrades to strengthen the electric grid against fires. The plan requires utilities to obtain an annual safety certification from the Public Utilities Commission. We believe this funding, if approved, would benefit utility players in California, by protecting the companies from the sort of financial shock that resulted in PG&E filing for bankruptcy protection. Moreover, utilities will have to keep a regular tab on their grids and transmission lines, thereby lowering the chance of wildfire events on account of negligence. However, there remain a few uncertainties related to this proposal. First, it is difficult to guarantee whether the $21 billion fund will be big enough to absorb the cost of future fires as a more devastating blaze can occur in the future. Second, the plan might put excessive burden on utility ratepayers in case utilities add too much surcharges on consumer bills. Nevertheless, considering the fact that utilities are regulated in the United States, we can hope that the Public Utilities Commission will not allow any exorbitant imposition of surcharge. Considering the rapid climate change along with poor forest management, wildfires are inevitable. So, even if not enough, the fund, if created, would provide partial refuge to Californian utilities that are bearing huge wildfire related costs. More Stock News: This Is Bigger than the iPhone! It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market. Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Edison International (EIX) : Free Stock Analysis Report Pacific Gas & Electric Co. (PCG) : Free Stock Analysis Report Sempra Energy (SRE) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research |
Should You Investigate Immedia Group Plc (LON:IME) At UK£0.21?
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Immedia Group Plc (LON:IME), which is in the media business, and is based in United Kingdom, received a lot of attention from a substantial price movement on the AIM over the last few months, increasing to £0.31 at one point, and dropping to the lows of £0.21. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Immedia Group's current trading price of £0.21 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Immedia Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for Immedia Group
The stock seems fairly valued at the moment according to my relative valuation model. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 18.95x is currently trading slightly below its industry peers’ ratio of 23.66x, which means if you buy Immedia Group today, you’d be paying a fair price for it. And if you believe that Immedia Group should be trading at this level in the long run, then there’s not much of an upside to gain from mispricing. Furthermore, it seems like Immedia Group’s share price is quite stable, which means there may be less chances to buy low in the future now that it’s fairly valued. This is because the stock is less volatile than the wider market given its low beta.
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 96% over the next year, the near-term future seems bright for Immedia Group. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
Are you a shareholder?It seems like the market has already priced in IME’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at IME? Will you have enough conviction to buy should the price fluctuate below the true value?
Are you a potential investor?If you’ve been keeping tabs on IME, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic forecast is encouraging for IME, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Immedia Group. You can find everything you need to know about Immedia Group inthe latest infographic research report. If you are no longer interested in Immedia Group, you can use our free platform to see my list of over50 other stocks with a high growth potential.
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. |
Rihanna Paid Tribute to Mary J. Blige in Head to Toe Leather
Photo: Getty Images The BET Awards yielded plenty of surprises last night, but none more exciting than a guest appearance from Rihanna . On hand to present music legend Mary J. Blige with a lifetime achievement award for groundbreaking career, Rihanna stepped on stage in head-to-toe Fenty. In a custom jacket, pants, and coordinating fanny pack, she channeled both the spirit of Blige’s personal style—no one pulls of head-to-toe leather like the queen of hip hop soul—and the sleek look of her label’s latest drop . Accessorized with layers of Neil Lane necklaces, a diamond studded cross pendant from Loree Rodkin, and Manolo Blahnik sandals, the look delivered glamour with a cool edge. Blige has served as more than a fashion inspiration for Rihanna. It’s hard to imagine the bad gal swagger existing without Blige’s streetwise persona proceeding it. The work she and her contemporaries did in the ’90s laid the groundwork for many of today’s stars and Rihanna praised her for opening doors for women in the music industry. “On behalf of all the women who came after you like myself, thank you for being you,” she said. “So we could feel comfortable with being ourselves.” See the videos. Originally Appeared on Vogue |
New study linked drinking coffee with weight loss
Coffee has been linked to weight loss. [Photo: Getty] Coffee drinkers, rejoice – a new study has found your favourite caffeinated drink might be the key to losing weight . Researchers found coffee might help the body to burn calories . It does this through stimulating certain fat cells – known as brown adipose tissue – into releasing their energy. The study, conducted University of Nottingham scientists, used thermal imaging to monitor participants’ brown fat reserves. Drinking coffee had a positive effect on the cells’ ability to generate heat, burning energy in the process. What is brown fat? Our body has two different types of fat cells: brown cells and white cells. The brown fat cells primarily burn energy, while the white fat cells are there to store energy. READ MORE: Drinking up to 25 coffees a day 'not bad for heart' "Brown fat works in a different way to other fat in your body and produces heat by burning sugar and fat, often in response to cold,” said study co-author professor Michael Symonds, from the School of Medicine at the University of Nottingham. "Increasing its activity improves blood sugar control as well as improving blood lipid levels and the extra calories burnt help with weight loss. “However, until now, no one has found an acceptable way to stimulate its activity in humans." Coffee and weight loss While these findings are promising, Symonds warns slimmers shouldn’t be reaching for the cafetière just yet. For a start, the study only involved nine people – four men and five women. What’s more, the researchers are as of yet unsure of exactly what component in coffee causes the weight loss. "The results were positive and we now need to ascertain that caffeine as one of the ingredients in the coffee is acting as the stimulus or if there's another component helping with the activation of brown fat," Symonds said. READ MORE: Add milk to hot drinks to cut your risk of cancer If you’re looking for an alternative way to justify your coffee-drinking habits, you might be interested in a recent study published in the European Journal of Epidemiology , which found a twice daily caffeine hit could help you to live longer. However, bear in mind excessive coffee drinking can be linked to jitteriness and anxiety – so, for some individuals, less is more. |
COLUMN-Boom-and-bust lithium market needs a pricing rethink: Andy Home
(The opinions expressed here are those of the author, a columnist for Reuters.)
* Lithium Prices: https://tmsnrt.rs/2ZJsukY
By Andy Home
LONDON, June 24 (Reuters) - Albemarle Corp., the world's largest lithium producer, is not impressed by the London Metal Exchange's (LME) plans to launch a lithium contract.
"An exchange contract tends to support a commodity market, and that's not what we believe this (lithium market) is," David Ryan, the company's head of corporate strategy and investor relations, told an industry conference in Chile earlier this month.
The conference was hosted by Fastmarkets, which has been chosen by the LME to provide the reference price for the new contract, but Albemarle won't be contributing, for now at least.
It and other established producers believe that lithium is a specialty chemicals market and should be priced on a contract-by-contract basis.
At a chemical composition level that may well be right, but in terms of pricing, lithium is conforming perfectly to the boom-and-bust pattern of a classic commodity market. The challenge for the lithium industry is how to live with such volatility.
FROM BOOM TO BUST
The lithium market has lost much of its previous heat over the last year or so.
Chinese spot lithium carbonate prices, as assessed by Fastmarkets, have collapsed from a peak of $26.23 per kilogram in November 2017 to $10.93 last month.
Producers such as Albemarle don't even like the concept of a spot Chinese price, arguing it is not representative of the bigger volumes changing hands under longer-term contracts.
However, term contract prices have also been sliding. Those for delivery to China, Japan and Korea are currently assessed at $11.75 per kg, down from $18.50 per kg in the first half of 2018.
Indeed, the way pricing has evolved over recent months suggests that the spot price has led contract pricing, undermining the contention that the Chinese market is a chaotic side-show.
Moreover, the convergence of spot and contract pricing suggests, to quote Fastmarkets analyst Will Adams, that "lithium is finding the commodity aspects within its inherent chemical nature."
SUPPLY AND DEMAND
Lithium has gone from boom to bust on good old-fashioned commodity fundamentals.
While underlying demand from the electric vehicle (EV) battery sector remains robust, Beijing's rejig of its EV subsidy scheme has injected a lot of short-term unpredictability.
Battery makers have been scrambling to adjust battery chemistries to meet the higher thresholds for subsidies, while a flagged end to all subsidies after 2020 threatens a period of consolidation in a crowded Chinese battery sector.
Supply, meanwhile, has been surging in response to the 2016-2017 price spike.
Fastmarkets estimates the global lithium market has transitioned from supply shortfall to surplus.
Its base case forecast is for the surplus to grow from 28,000 tonnes last year to 68,000 tonnes this year and 146,000 tonnes next year.
It's therefore no surprise that producers are putting the brakes on their growth plans.
Chile's SQM, for example, has pushed back an expansion of its domestic brine capacity until the end of 2021. It is also seemingly stockpiling material in the short term with projected sales of 45,000-50,000 tonnes this year falling below anticipated production of 60,000 tonnes.
Toyota Tsusho Corp, which produces about 15,000 tonnes of lithium carbonate at its plant in Argentina through a joint venture with Australian miner Orocobre, said on Friday it would study the market for at least two more years before deciding whether to further expand supply.
Producers were caught out by the original price boom. The lithium market appears to have wrong-footed them again, this time on the downside.
AND BOOM AGAIN?
Expect more price turbulence ahead.
The current period of weaker prices is almost certainly storing up trouble for future supply.
The electrification revolution is still only in its infancy. Even in China, which accounts for one in every two new EVs sold globally, new EV passenger sales last year accounted for under 5% of total sales.
However, the ratio is rising all the time, while automotive companies in the rest of the world are articulating ever more ambitious plans to switch from conventional to electric vehicles.
Demand for batteries is going to experience exponential growth over the coming years, which means that demand for lithium is going to follow suit.
The danger is that supply isn't going to be there to meet it, just as happened in the original boom.
Low lithium prices are translating into low equity prices for junior mining companies, making it difficult for them to raise sufficient financing to bring new capacity to the market.
Established producers, meanwhile, may have latent expansion potential but bringing new capacity on stream cannot be done at the flick of a switch.
FUTURE VISIBILITY
The lithium market is still in transition from niche chemical product to something much bigger.
It's no surprise that progress is erratic, given a long list of unknowns as to how fast the EV sector will grow.
Demand uncertainty is in turn generating supply uncertainty.
The current nature of lithium market pricing is actively exacerbating the problem as producers react to first the boom and now the bust in prices.
What both producers and consumers really need is a forward price curve. Not only would it inject some much-needed transparency into the market but it would allow for forward hedging, a key facilitator of bank financing in the minerals sector.
Without some external reference point for future prices, junior producers are going to struggle to persuade financiers to invest in future production.
This is of course what the LME is proposing to provide, although there is still no hard launch date for the new contract.
Established players such as Albemarle may not like the commoditisation of their product, but lithium is already starting to show all the behavioural characteristics of any other commodity market.
As other metal markets such as copper have found out, cyclicality, extreme at times, is the norm. But at least copper producers and consumers have the option of hedging against the resulting booms and busts. Lithium players currently don't have that luxury.
(Editing by Mark Potter) |
What does Johnson Matthey Plc's (LON:JMAT) Balance Sheet Tell Us About Its Future?
Want to participate in a short research study ? Help shape the future of investing tools and you could win a $250 gift card! Mid-caps stocks, like Johnson Matthey Plc ( LON:JMAT ) with a market capitalization of UK£6.1b, aren’t the focus of most investors who prefer to direct their investments towards either large-cap or small-cap stocks. Despite this, commonly overlooked mid-caps have historically produced better risk-adjusted returns than their small and large-cap counterparts. Today we will look at JMAT’s financial liquidity and debt levels, which are strong indicators for whether the company can weather economic downturns or fund strategic acquisitions for future growth. Note that this commentary is very high-level and solely focused on financial health, so I suggest you dig deeper yourself into JMAT here . View our latest analysis for Johnson Matthey JMAT’s Debt (And Cash Flows) JMAT has built up its total debt levels in the last twelve months, from UK£1.1b to UK£1.3b , which includes long-term debt. With this rise in debt, JMAT currently has UK£459m remaining in cash and short-term investments , ready to be used for running the business. Additionally, JMAT has generated cash from operations of UK£334m over the same time period, resulting in an operating cash to total debt ratio of 25%, meaning that JMAT’s operating cash is sufficient to cover its debt. Can JMAT meet its short-term obligations with the cash in hand? Looking at JMAT’s UK£2.1b in current liabilities, it appears that the company has been able to meet these commitments with a current assets level of UK£3.4b, leading to a 1.64x current account ratio. The current ratio is calculated by dividing current assets by current liabilities. For Chemicals companies, this ratio is within a sensible range since there's a sufficient cash cushion without leaving too much capital idle or in low-earning investments. LSE:JMAT Historical Debt, June 24th 2019 Is JMAT’s debt level acceptable? With a debt-to-equity ratio of 50%, JMAT can be considered as an above-average leveraged company. This is not uncommon for a mid-cap company given that debt tends to be lower-cost and at times, more accessible. No matter how high the company’s debt, if it can easily cover the interest payments, it’s considered to be efficient with its use of excess leverage. A company generating earnings after interest and tax at least three times its net interest payments is considered financially sound. In JMAT's case, the ratio of 12.33x suggests that interest is comfortably covered, which means that lenders may be less hesitant to lend out more funding as JMAT’s high interest coverage is seen as responsible and safe practice. Story continues Next Steps: Although JMAT’s debt level is towards the higher end of the spectrum, its cash flow coverage seems adequate to meet obligations which means its debt is being efficiently utilised. Since there is also no concerns around JMAT's liquidity needs, this may be its optimal capital structure for the time being. Keep in mind I haven't considered other factors such as how JMAT has been performing in the past. I suggest you continue to research Johnson Matthey to get a more holistic view of the mid-cap by looking at: Future Outlook : What are well-informed industry analysts predicting for JMAT’s future growth? Take a look at our free research report of analyst consensus for JMAT’s outlook. Valuation : What is JMAT worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether JMAT is currently mispriced by the market. Other High-Performing Stocks : Are there other stocks that provide better prospects with proven track records? Explore our free 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 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. |
eHealth Surges 114% Year to Date: Will the Rally Continue?
eHealth, Inc.’s EHTH shares have surged 113.8% year to date, outperforming the industry's rise of 28.8% and Zacks S&P 500 composite’s increase of 16.5%. With market capitalization of $1.9 billion, average volume of shares traded in the last three months was 0.5 million. In fact, shares of the company hit a new 52-week high of $83.53 in its last trading session.
What’s Aiding the Upside?
eHealth’s Medicare business continues to deliver. The company remains committed to pursuing investments in Medicare-related marketing initiatives, expanding telesales capacity and enhancing technology platform and online sales capability. Its equity offering of $126 million will help it continue with organic growth strategies including capitalizing on the opportunities offered by the Medicare market and expanding the Medicare business at rates in excess of market growth.Medicare segment revenues are now estimated between $281 million and $297 million in 2019, up from the earlier expectation of $256 million and $272 million.The company’s individual and family plan business too continues to perform well. eHealth expects substantial increase in estimated lifetime values of individual and family plan members going forward and estimates revenues between $34 million and $38 million in 2019.eHealth upped its 2019 revenue expectation to a range of $315 million to $335 million from the prior range of $290 million to $310 million. Adjusted EBITDA is estimated between $55 million and $60 million, up from the earlier expectation of $45 million to $50 million. Concurrently, adjusted earnings are expected between $1.54 and $1.73 per share, up from the earlier expectation of $1.11 and $1.25 per share.eHealth boasts a solid balance sheet with improving liquidity position and no debt.eHealth delivered positive earnings surprise in two of the last four reported quarters with the average beat being 127.23%. It currently sports a Zacks Rank #1 (Strong Buy). You can seethe complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for 2019 has been revised higher by 30.7% and 17.6% in the past 60 days.The consensus mark for earnings indicates year-over-year improvement of 49.6% for 2019 and 28.9% for 2020.The company has a favorable Growth Score of A. This style score analyzes the growth prospects of a company. Back-tested results show that stocks with a Growth Score of A or B coupled with a Zacks Rank #1 or #2 (Buy) offer better returns.Other Stocks to ConsiderSome other top-ranked stocks in the insurance industry include Brown & Brown, Inc. BRO, Erie Indemnity Company ERIE and Cigna Corporation CI. Each of these stocks carries a Zacks Rank #2.Brown & Brown markets and sells insurance products and services in the United States, England, Canada, Bermuda and the Cayman Islands. The company delivered positive surprise of 13.89% in the last reported quarter.Erie Indemnity operates as a managing attorney-in-fact for subscribers at the Erie Insurance Exchange in the United States. The company delivered positive surprise of 5.11% in the last reported quarter.Cigna provides insurance and related products and services in the United States and internationally. The company delivered positive surprise of 4.28% in the last reported quarter.More Stock News: This Is Bigger than the iPhone!It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free reportBrown & Brown, Inc. (BRO) : Free Stock Analysis ReporteHealth, Inc. (EHTH) : Free Stock Analysis ReportErie Indemnity Company (ERIE) : Free Stock Analysis ReportCigna Corporation (CI) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research |
Tesla Stock Is Back Above $200 — Time To Short It
Shares ofTesla(NASDAQ:TSLA) have run into some serious resistance even after after avoiding any headline risk over the past several weeks. TSLA stock seems to be stalling out after a red hot rally off the recent lows at $180. Given the ongoing cash burn and deteriorating demand, I look for Tesla stock to put on the brakes and head lower over the coming months.
Goldman Sachs recently slashed their price target by 20%, citing “sustainable demand” as the key factor. In the note from June 20, Goldman dropped the price target on Tesla stock from $200 to just $158, representing a 28% discount to the $221.86 closing price of TSLA. Goldman also brought up the possibility if yet another additional-and further dilutive-capital raise.
According toTesla analysts, demand forecasts for Tesla will, once again, underperform. While CEO Elon Musk yet again predicts that sales could hit record levels, second-quarter projections point to deliveries of just88,900 units— well under expectations. At some point investors will likely begin to tire of the continued ability of Tesla to overpromise and under deliver.
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The technicals also point to a pullback on the horizon. TSLA stock became overbought on an RSI basis. MACD also reached an extreme while momentum turned lower. The 50 day moving average at $221.86 should provide additional overhead resistance as well.
Click to Enlarge
Unfortunately for Elon Musk’s electric car manufacturer, indicators point to the likelihood that demand will continue to be an issue for Tesla. Market saturation is a huge concern. Within the coming year,other major auto manufacturersare looking to debut their own electric cars. Additionally, some alternatives — like the Chevy Bolt — have already found great success and are crowding out the market’s demand.
Interestingly, the usually-boisterous Elon Musk has beenuncharacteristically subduedas of late. And although the relative silence may have bolstered investor confidence, it seems unlikely the change will reflect a softer approach for the Tesla CEO. Instead, it appears as if Musk’s focus has shifted away from Tesla, largely because he has his hands full with his other business venture, SpaceX.
SpaceX is currently in the midst of a high-stakeslawsuitas it looks to capitalize on the ongoing politicization of the Launch Service Agreement (LSA). The LSA is the flagship space program for the Air Force. Musk is certain to be focused with the ongoing litigation to bolster SpaceX. This is especially true given the string of recent failures for the Space X program. Indeed, some have suggested the SpaceX is obstructing national security interests to secure a courtroom victory to win LSA contracts.
With a potential public relations crisis brewing, Musk’s apparent decision to shift his attention to SpaceX makes sense. This is even more likely given that SpaceX wasrecently valuedto be worth more than Tesla. While Tesla investors may appreciate a less controversial CEO at the helm, at the end of the day profits matter. With demand sagging and production woes continuing, it may be time for investors to short TSLA stock on any rally.
As of this writing, Tim Biggam did not hold a position in any of the aforementioned securities. Anyone interested in finding out more about option-based strategies or for a free trial of theDelta Desk Research Reportcan email Tim at timbiggam@gmail.com.
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Is Macy's, Inc. (NYSE:M) Trading At A 50% Discount?
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Does the June share price for Macy's, Inc. (NYSE:M) reflect what it's really worth? Today, we will estimate the stock's intrinsic value by taking the expected future cash flows and discounting them to 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 theSimply Wall St analysis model.
Check out our latest analysis for Macy's
We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, so we need to discount the sum of these future cash flows to arrive at a present value estimate:
[{"": "Levered FCF ($, Millions)", "2019": "$1.50k", "2020": "$641.67", "2021": "$946.50", "2022": "$902.14", "2023": "$879.94", "2024": "$871.98", "2025": "$873.61", "2026": "$881.90", "2027": "$894.99", "2028": "$911.61"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x4", "2020": "Analyst x3", "2021": "Analyst x4", "2022": "Est @ -4.69%", "2023": "Est @ -2.46%", "2024": "Est @ -0.9%", "2025": "Est @ 0.19%", "2026": "Est @ 0.95%", "2027": "Est @ 1.48%", "2028": "Est @ 1.86%"}, {"": "Present Value ($, Millions) Discounted @ 8.36%", "2019": "$1.39k", "2020": "$546.48", "2021": "$743.90", "2022": "$654.34", "2023": "$588.99", "2024": "$538.64", "2025": "$498.01", "2026": "$463.95", "2027": "$434.51", "2028": "$408.43"}]
Present Value of 10-year Cash Flow (PVCF)= $6.27b
"Est" = FCF growth rate estimated by Simply Wall St
After calculating the present value of future cash flows in the intial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 10-year government bond rate (2.7%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 8.4%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = US$912m × (1 + 2.7%) ÷ (8.4% – 2.7%) = US$17b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= $US$17b ÷ ( 1 + 8.4%)10= $7.45b
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 $13.72b. To get the intrinsic value per share, we divide this by the total number of shares outstanding.This results in an intrinsic value estimate of $44.41. Relative to the current share price of $22.3, the company appears quite good value at a 50% 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.
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 Macy's as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 8.4%, which is based on a levered beta of 0.945. 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 Macy's, I've compiled three pertinent factors you should further examine:
1. Financial Health: Does M 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 M'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 M? Exploreour interactive list of high quality stocksto get an idea of what else is out there you may be missing!
PS. Simply Wall St updates its DCF calculation for every US stock every day, so if you want to find the intrinsic value of any other stock justsearch here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
The tangled personal life of Boris Johnson
Conservative party leadership candidate Boris Johnson during the first party hustings at the ICC in Birmingham. Hes the frontrunner to become the next Conservative Party leader, and Prime Minister but Boris Johnson has led a complicated life. Born in New York and educated at Eton and the European School of Brussels, he has served as Mayor of London and an MP and become one of the most colourful characters in British politics - and not always for the right reasons. From being sacked for lying to former Tory leader Michael Howard over an affair, to offering to disclose details of a journalist who wrote a story exposing an associate - he has often fallen foul of societys moral compass. But just how tangled is his private life? Boris Johnson leaving his home in south London, ahead of ballots which will see the contenders for the Conservative party leadership reduced to two by the end of the day. Hes not always been faithful... Aside from being sacked for lying over an affair when he was reported to be having an affair with Spectator columnist Petronella Wyatt. The relationship resulted in two terminated pregnancies, and Johnsons sacking from his role At first he called the claims piffle but once proven he was asked to resign by then Tory leader Michael Howard, when he was refused he was sacked. His second marriage, to lawyer Marina Wheeler, broke down when it emerged he was having an affair with former Tory head of press Carrie Symonds, to whom he is now engaged. What about the family? Conservative party leadership contender Boris Johnson arrives at BBC Broadcasting House in London for a Live TV debate with Tory leadership hopefuls. Hes been married twice, and is currently divorcing his second wife. Allegra Mostyn-Owen in 1987 but they divorced six years later and had no children. Very shortly afterwards he married high-flying barrister Marina Wheeler - who was already pregnant with their first child Lara Lettice, now 26. The couple went on to have three more kids - Milo Arthur, 24, Cassia Peaches, 22, and Theodore Apollo, 20. He also fathered a daughter following a short-lived fling with Helen Macintyre, the wife of a property developer, in 2009. Stanley Johnson introduces himself to Carrie Symonds at an anti-whaling protest outside the Japanese Embassy in central London. Stephanie - said to be the spitting image of Boris - was born later that year. Ms Macintyre sued a newspaper which reported on Boris' love child, but lost as judges ruled the public had a right to know about the issue. Story continues But they split last year after Ms Wheeler finally got fed up with her husband's cheating when details emerged of his affair with Ms Symonds. And the children? It cant be easy having your fathers misadventures so widely reported. Following his affair with Ms Symonds his daughter Lara was heard calling her father a "selfish b******" and adding: "Mum is finished with him. She will never take him back now." Former Mayor of London Boris Johnson speaks to employees during a visit to Reid Steel, Christchurch, Dorset, ahead of the EU referendum in 2016. Still, hes settled down now? At the weekend newspapers reported how one of Johnsons neighbours called police after hearing a disturbance at the home he shares with Ms Symonds. Police were called and a woman was heard screaming Get off me. He later refused to answer questions about the incident and on Monday a photograph of him and Ms Symonds apparently enjoying a tender moment featured on the front of the London Evening Standard. Has he tried drugs? Hes admitted previously using both cannabis and cocaine. Read more from Yahoo News UK: John Prescott in hospital after suffering stroke Woman bailed after trying to open plane door mid-air Firefighters smash window to rescue baby trapped in hot car What about his friendships? Boris fell out of favour with David Cameron after backing Vote Leave during the referendum, and peddled inaccurate information about the NHS. In 2016 Michael Gove was to be his campaign manager in his Tory leadership bid, but he famously shafted Boris by entering the race himself and dropping Johnsons campaign. And Chris Patten, former governor of Hong Kong, said Johnson was "one of the greatest exponents of fake journalism" following spells at the Telegraph and the Times in the 1990, where he fabricated a number of stories about EU policy. Watch the latest videos from Yahoo UK |
What the SEC's new 'best interest' rule means for you
The SEC recently passed new regulations it says will ensure that brokers act in their clients' "best interest." But what does that mean for you?
THE RULE
Brokers and advisers must disclose information about fees, costs and potential conflicts of interest.
THE ISSUE
Consumer advocates have long argued for more rules to protect Americans seeking advice and other help investing their money. They say investors lose billions of dollars a year because of advice from brokers whose financial incentives are at odds with their clients' best interests.
THE PROFESSIONALS
The "best interest" rule, as it is known, changes things more for brokers than advisers.
Brokers sell stocks, bonds, mutual funds, annuities and other investments, which they may recommend to clients. They often receive commissions for selling specific products. Currently, they are only required to make suggestions based on what is "suitable" for their client, based on the client's age, goals, risk tolerance and other factors.
Under the new rules, brokers cannot put their own interests ahead of that of their clients. They will also not be allowed to use the term "adviser" as part of their name or title in dealing with retail investors.
Investment advisers, on the other hand, were already required to divulge their potential conflicts of interest and put their clients' interests above their own. The new rules don't prohibit conflicts of interest, they just require that advisers disclose them.
THE CRITICS
Critics, such as AARP and the Consumer Federation of America, say the new rule doesn't go far enough and muddies the waters for consumers with confusing paperwork. Critics also say the rule is not as strong as the fiduciary rule, a proposal that was opposed by President Donald Trump and defeated in federal court with the help of some in the financial industry.
THE TIMING
Firms have until June of 2020 to come into compliance with the rules.
Consumers should become more diligent about reading and understanding the paperwork they are given in the future, said Geoffrey Brown, CEO of the National Association of Personal Financial Advisors, which opposes the new regulations.
"There is a lot of confusion," Brown said. "The SEC missed a great opportunity to lessen consumer confusion about the duties of a financial professional."
Brown suspects there may be more clarification between now and 2020 as experts wade through the lengthy final rules. Some states may also take their own steps to protect consumers, Brown said.
In the meantime, Brown suggests finding an adviser affiliated with industry organizations like his own, or consider a certified financial planner who adheres to the fiduciary standard.
________
Follow Sarah Skidmore Sell on Twitter @sarahssell
Want to suggest a personal finance topic that Quick Fix can address? Email apmoney@ap.org. |
What Do Analysts Think About Kainos Group plc's (LON:KNOS) Future?
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In May 2019, Kainos Group plc (LON:KNOS) released its latest earnings announcement, which confirmed that the business gained from a strong tailwind, leading to a double-digit earnings growth of 45%. Today I want to provide a brief commentary on how market analysts perceive Kainos Group's earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
View our latest analysis for Kainos Group
Market analysts' consensus outlook for the coming year seems positive, with earnings climbing by a robust 11%. This growth seems to continue into the following year with rates reaching double digit 27% compared to today’s earnings, and finally hitting UK£24m by 2022.
While it’s informative knowing the rate of growth each year relative to today’s level, it may be more insightful estimating the rate at which the earnings are rising or falling every year, on average. The pro of this method is that it ignores near term flucuations and accounts for the overarching direction of Kainos Group's earnings trajectory over time, 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 11%. This means, we can expect Kainos Group will grow its earnings by 11% every year for the next couple of years.
For Kainos Group, I've compiled three fundamental 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 KNOS 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 KNOS is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of KNOS? 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. |
How Do Analysts See Kainos Group plc (LON:KNOS) Performing In The Years Ahead?
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The latest earnings update Kainos Group plc (LON:KNOS) released in May 2019 suggested that the company benefited from a robust tailwind, leading to a double-digit earnings growth of 45%. Below, I've laid out key numbers on how market analysts view Kainos Group's earnings growth trajectory over the next couple of 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.
See our latest analysis for Kainos Group
Analysts' outlook for next year seems optimistic, with earnings growing by a robust 11%. This growth seems to continue into the following year with rates arriving at double digit 27% compared to today’s earnings, and finally hitting UK£24m by 2022.
Even though it is informative knowing the growth rate each year relative to today’s value, it may be more beneficial to gauge the rate at which the business is growing on average every year. The pro of this technique is that we can get a bigger picture of the direction of Kainos Group's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I put a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 11%. This means, we can assume Kainos Group will grow its earnings by 11% every year for the next couple of years.
For Kainos Group, I've compiled three relevant 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 KNOS 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 KNOS is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of KNOS? 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. |
New bill would force big tech to reveal the value of your data
A new bipartisan bill would require social media companies to put a price on consumer data.
Sen. Mark Warner (D-VA) and Sen. Josh Hawley (R-MO) announced the Designing Accounting Safeguards to Help Broaden Oversight And Regulations on Data (DASHBOARD) Act on Monday.
“As user data increasingly represents one of the most valuable, albeit intangible, assets held by technology firms, shining light on how this data is collected, retained, monetized, and protected, is critical,” the senators said in a press release.
The bill would force big tech companies like Google, Facebook and Amazon to regularly tell consumers and regulators what data they are collecting, how that data is being used and how much the data is worth.
The rules would only apply to platforms with more than 100 million monthly users.
“For years, social media companies have told consumers that their products are free to the user. But that’s not true – you are paying with your data instead of your wallet,” said Warner in a statement.
The senators want the Securities and Exchange Commission to develop a formula for calculating the value of consumer data.
“The overall lack of transparency and disclosure in this market have made it impossible for users to know what they’re giving up, who else their data is being shared with, or what it’s worth to the platform. Our bipartisan bill will allow consumers to understand the true value of the data they are providing to the platforms, which will encourage competition and allow antitrust enforcers to identify potentially anticompetitive practices,” Warner said.
The proposal would also make the tech companies file an annual report on the value of user data collected and the contracts with third parties that involve data collection.
“When a big tech company says its product is free, consumers are the ones being sold. These 'free' products track everything we do so tech companies can sell our information to the highest bidder and use it to target us with creepy ads," said Hawley in a statement. "Even worse, tech companies do their best to hide how much consumer data is worth and to whom it is sold. This bipartisan legislation gives consumers control of their data and will show them how much these 'free' services actually cost."
The legislation also aims to give consumers more control of their data, by requiring services to give users a way to delete all or some of their data.
The bill comes at a timewhen big techisunder intensified scrutinyby the federal government. TheHouse Judiciary Committeeannounced this month it is investigating whether companies likeGoogle, Apple,Facebookand Amazon violateanti-trust laws.
Both senators have long beencriticsof big tech. Hawleytold Yahoo Financelast week he thinks regulators should consider breaking up Facebook.
“We look forward to continuing our ongoing conversations with the bill’s sponsors,” said a Facebook spokesperson in a statement to Yahoo Finance.
The Internet Association — a lobbying group whose members include Amazon, Facebook and Google — didn’t take a position on the DASHBOARD Act, but told Yahoo Finance data helps businesses provide consumers with better products and services.
“We are encouraged by policymaker interest in addressing consumer privacy and providing Americans with greater transparency and control over how their data is used and protected,” said Michael Beckerman, Internet Association President and CEO. “The internet industry supports a comprehensive, economy-wide federal privacy law that covers all companies - from social media sites to local grocery stores to data brokers - to give consumers the protections and rights they need to take full control of the data they provide to companies.”
Jessica Smith is a reporter for Yahoo Finance based in Washington, D.C. Follow her on Twitter at@JessicaASmith8.
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US STOCKS-Wall Street edges higher as tech offsets healthcare loss
(For a live blog on the U.S. stock market, click or type LIVE/ in a news window.)
* Healthcare weighed by Celgene, Bristol-Myers
* Caesars jumps as Eldorado Resorts to buy co
* United Technologies up on Cowen upgrade
* Dow up 0.23%, S&P rises 0.11%, Nasdaq inches 0.06% higher (Updates to open)
By Shreyashi Sanyal
June 24 (Reuters) - U.S. stocks posted slight gains on Monday, as technology stocks more than offset a decline in healthcare sector, while investors awaited a high-stakes meeting between U.S. and Chinese leaders at the G20 summit later this week.
The S&P 500 index hit a record high last week, boosted by rising expectations that the Federal Reserve would cut interest rates and optimism over a revival in trade talks between the United States and China.
Presidents Donald Trump and Xi Jinping are expected to meet at the G20 summit on June 28-29 in Japan.
"Markets are generally optimistic about the fact that both sides are continuing to meet, talk, discuss and debate tariffs, and so there's still the potential for progress," said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.
"Don't think markets are expecting a deal, but at least as long as there's dialogue, there's hope for progress."
The trade-sensitive industrial sector edged 0.2% higher. But the biggest boost to the markets came from the technology sector, which rose 0.24%.
Countering the gains, healthcare sector dropped 0.42%, weighed by a 4.6% decline in shares of Celgene Corp and a 7% fall in those of Bristol-Myers Squibb Co .
Bristol-Myers said its planned $74 billion deal to buy drugmaker Celgene was expected to close at the end of 2019 or beginning 2020, compared with its earlier expectations of closing the deal in the third quarter.
At 10:30 a.m. ET the Dow Jones Industrial Average was up 61.00 points, or 0.23%, at 26,780.13, the S&P 500 was up 3.17 points, or 0.11%, at 2,953.63 and the Nasdaq Composite was up 4.51 points, or 0.06%, at 8,036.22.
Also weighing on sentiment was rising tensions between the United States and Iran, after Tehran shot down an American drone last week.
Trump said on Sunday he was not seeking war with Iran after a senior Iranian military commander warned any conflict in the Gulf region could spread uncontrollably and threaten the lives of U.S. troops.
The financial sector rose 0.39% after the 18 largest banks operating in the United States cleared the first stage of their yearly health checks with the U.S. Federal Reserve that assess their ability to weather a major economic downturn.
Among other stocks, shares of casino operator Caesars Entertainment Corp jumped 14.5% after rival Eldorado Resorts Inc said it agreed to buy the company for $8.5 billion. Shares of Eldorado fell 9%.
United Technologies Corp gained 0.78% after Cowen & Co upgraded shares of the building and aerospace supplier to "outperform" from "market perform".
Advancing issues outnumbered decliners by a 1.16-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.18-to-1 ratio on the Nasdaq.
The S&P index recorded 26 new 52-week highs and three new lows, while the Nasdaq recorded 34 new highs and 37 new lows. (Reporting by Shreyashi Sanyal and Aparajita Saxena in Bengaluru; Editing by Anil D'Silva) |
Ikea Started Testing Food Delivery, But There's a Catch
Click here to read the full article. On those weekends when all you’re craving is a serving of Ikea ’s famous meatballs or their increasingly popular vegan hot dogs topped with cabbage and spicy mustard, imagine not having to take that arduous trip to Ikea. Sounds great, right? Well, the Swedish retailer is taking steps to make that a reality for its diehard customers, as Ikea just started testing food delivery . According to Spanish publication El Confidencial, Ikea is currently testing its food delivery service in Paris . As part of the trial run, Parisians can choose from Ikea’s menu of Swedish foods, including salads, salmon, beets and cabbage. And if the pilot program is successful, Ikea will expand its delivery to other parts of Europe — and hopefully expand its menu to include its meatballs . Why they aren’t initially offered is beyond us. Related stories Celebrate the Summer Solstice In the Best Way Possible -- With Free Food Postmates Is Giving Away Free The Marvelous Mrs. Maisel Meal Packs That Are as Amazing as They Sound Panera's New Dinner Menu Is Making Us Hardcore Drool View this post on Instagram We hope you're spending #NationalMeatballDay with the (m)eatballs you love the most. Which is your favorite: Swedish, chicken, salmon or veggie? A post shared by IKEA USA (@ikeausa) on Mar 9, 2019 at 9:00am PST What’s not clear, however, is whether Ikea is delivering hot meals or frozen items. Fast Company reached out to Ikea for more information, and a representative told them that they “do not have any further details to share at this point, as [they] are very early in the process.” Ikea’s decision to test food delivery is a smart one, too: A study by Adroit Market Research reveals that online food delivery market is expected to hit nearly $162 billion by 2023 , globally. In the United States, specifically, it’s expected to generate a revenue of just over $115 billion. View this post on Instagram The IKEA Kitchen Event starts today! Save 10% on your dream kitchen now through July 28. Learn more at link in bio. A post shared by IKEA USA (@ikeausa) on Jun 19, 2019 at 2:34pm PDT As we eagerly await the arrival of Ikea’s food delivery to the states, we’ll be shopping Ikea’s two major summer sales . The Ikea Summer Sale includes discounts on home furnishing and home essentials, like duvets, mattresses, bookcases, coffee tables, lamps, rugs and cushions. Their other sale is called the Ikea Kitchen Event, where customers can design their dream kitchen at an affordable price. Sign up for SheKnows' Newsletter . For the latest news, follow us on Facebook , Twitter , and Instagram . View comments |
Russia May Allow Crypto Trading in Upcoming Legislation: Official
As Russia’s cryptocurrency bill slowly inches forward, a government official has hinted at what may lie ahead when the legislation is finally passed.
According to areportfrom local news source Interfax.ru, Deputy Finance Minister Alexei Moiseyev told journalists on Friday that among the options currently being discussed is to allow the buying and selling of cryptocurrencies. Crypto payments are not on the table, however.
Worryingly for the country’s crypto community, the bill could still see cryptocurrency use banned outright.
Related:BIS Wants ‘Level Playing Field’ for Banks Amid Threat from Facebook
Moiseyev said that the finance ministry had met with the Russian central bank and the Federal Security Service, the nation’s security agency, to discuss the bill.
“There is a range [of possibilities] from prohibition to the possibility of purchase,” he explained. “Like with foreign currency, it would be possible to buy and sell [cryptocurrencies], but impossible to use them for payments. After a political decision is made on this issue, we will have the responsibility.”
Russia’s bill on digital financial assets was expected to be considered at the plenary session of the State Duma on March 19, but was postponed.
According to the report, Anatoly Aksakov, head of the Duma Financial Market Committee, has said that Russia must adopt a bill on cryptocurrency before the end of this year in order to comply with recommendations from international watchdog, the Financial Action Task Force (FATF).
Related:G7 Forming Task Force in Response to Facebook’s Libra Cryptocurrency
In related news, FATFannouncednew standards on Friday that include acontroversialrequirement that “virtual asset service providers,” including crypto exchanges, pass information about their customers to one another when transferring funds between firms. Its 37 member nations are not obliged to apply its guidance, but non complying countries can be blacklisted, which would be harmful financially.
State Dumaimage via Shutterstock
• Japan Watchdog Charges Zaif Crypto Exchange Owner with ‘Legal Violations’
• Brazilian Financial Authorities Announce Regulatory Sandbox For Blockchain |
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