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Barack and Michelle Obama Hang with George and Amal Clooney Near Their Lake Como Home During Italian Getaway
The Obama family continued their luxurious European vacation over the weekend, spending time in Italy with two special friends: George and Amal Clooney ! The former first couple arrived in Milan around lunchtime on Saturday via private jet and a phalanx of security and vehicles. “We often see important people arriving here in Milan, but rarely have I seen such an impressive security operation,” a source says. “They even had one big van just for their luggage and a police helicopter which took off as soon as they departed from the airport to escort them all the way to their final destination” The Obamas arrived at the Clooneys’ villa just as the day’s stormy weather began to break, around 2:30 p.m. local time. On Sunday, the former president and the Catch-22 star were spotted arriving by boat near a dock on Lake Como in Cernobbio — near where the Clooneys have a home. According to Italian news reports, Barack Obama . 57. and former First Lady Michelle Obama , 55, were spotted out with the actor, 58, and his international human rights lawyer wife, 41, on Saturday. On Sunday night they headed to nearby five-star Hotel Villa D’Este. RELATED: Michelle Obama Shares Sweet Throwback Photo of Pre-Teen Malia and Sasha During First Visit to Sesame Street Mr. and Mrs. Obama have been on vacation with former first daughters Sasha Obama , 18, and Malia Obama , 20. Their trip started in the South of France last Friday, days after Sasha’s high school graduation, where they were spotted in Provence — hiking, dining out and absorbing the area’s rich culture, sources previously told PEOPLE. While the Obamas’ office declined to discuss their plans, citing their status as private citizens, the four were closely tracked by local media and the tabloid press . They even visited another famous friend: Bono , stopping by his estate in Èze. George Clooney (left) with Barack Obama in Italy | SplashNews.com Michelle Obama (center-left) with Amal Clooney in Italy | INSTARimages RELATED: The Obamas Head to France for Vacation (and Father’s Day) After Sasha’s Graduation. Next Up: Visiting the Clooneys? From left: Sasha, Barack, Michelle and Malia Obama. Life has changed for the former first family since leaving 1600 Pennsylvania Ave. in 2017. Both of the girls are now out of high school, and their parents are keeping busy. “I’ve got an initiative, I’ve got a book, I’ve got a husband I can see again,” Mrs. Obama told PEOPLE in November. “I feel good about it,” she added of becoming an empty-nester. The former commander-in-chief, on the other hand, is getting a chance to relax. (He is also working on a forthcoming memoir.) David Axelrod, chief strategist for the Obama campaign and close friend to the 44th president, told PEOPLE in 2017 that Obama “no longer has that mortal power in his hands or the grave responsibilities. And for a guy who took those very seriously, that’s a liberating thing.” Story continues RELATED: How to Win a Double Date with Amal Clooney and Her ‘Husband George’ at Lake Como, Italy Amal and George Clooney | TIZIANA FABI/AFP/Getty Meanwhile, those looking to follow in the double date with the Obamas and Clooneys are in luck. As part of a campaign to raise donations for the Clooney Foundation for Justice through Omaze , the famous couple is opening the doors of their luxurious villa on Lake Como to one lucky couple, in a new sweepstakes. Anyone can enter, simply by going to omaze.com/clooney . The experience includes lunch with George and Amal, samples of some of Italy’s finest Prosecco, charcuterie and cheese, as well as a roundtrip airfare for two including 4-star hotel accommodations. All of the proceeds will go toward the Clooney Foundation for Justice , which advocates for justice through accountability for human rights abuses around the world. “That’s right, to benefit the Clooney Foundation for Justice, we’re inviting you and a guest to go on a double date with Amal, a world-renowned human rights lawyer, law school professor and a leading thinker on the concept of justice throughout the world and me… an actor,” George joked in a video announcing the contest back in May . • With reporting by PRAXILLA TRABATTONI View comments |
Online game helps fight the spread of fake news: study
LONDON (Reuters) - An online game that allows people to deploy Twitter bots, photo-shop evidence and incite conspiracy theories has proven effective at raising their awareness of "fake news", a study from the University of Cambridge has found.
Results from the study of 15,000 users of the "Bad News" game, launched last year by the university's Cambridge Social Decision-Making Lab (CDSMLab), showed it was possible to train the public to be better at spotting propaganda.
"Research suggests that fake news spreads faster and deeper than the truth, so combatting disinformation after the fact can be like fighting a losing battle," said Sander van der Linden, the CDSMLab's director.
Facebook has invested in prevention of the spread of fake news and Russia has been accused of spreading false information to influence elections. Russia has denied any such actions.
The study, published in the journal Palgrave Communications on Tuesday, showed that playing "Bad News" for just 15 minutes helped users to develop "mental antibodies" against fake news.
The results showed that players were 21 percent less likely to believe fake news than they were before they played the game.
The team has translated the game into nine languages, including German, Serbian, Polish and Greek in partnership with Britain's foreign ministry, and WhatsApp has commissioned a new game for the messaging platform, CDSMLab said.
For a copy of the study, please click on: https://www.nature.com/articles/s41599-019-0279-9
(Reporting by Katya Sanigar; Editing by William Schomberg) |
Investors Who Bought New Energy Minerals (ASX:NXE) Shares Five Years Ago Are Now Down 99%
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Some stocks are best avoided. We really hate to see fellow investors lose their hard-earned money. Anyone who heldNew Energy Minerals Ltd(ASX:NXE) for five years would be nursing their metaphorical wounds since the share price dropped 99% in that time. Shareholders have had an even rougher run lately, with the share price down 48% in the last 90 days.
We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don't have to lose the lesson.
Check out our latest analysis for New Energy Minerals
New Energy Minerals didn't have any revenue in the last year, so it's fair to say it doesn't yet have a proven product (or at least not one people are paying for). This state of affairs suggests that venture capitalists won't provide funds on attractive terms. So it seems shareholders are too busy dreaming about the progress to come than dwelling on the current (lack of) revenue. It seems likely some shareholders believe that New Energy Minerals will find or develop a valuable new mine before too long.
Companies that lack both meaningful revenue and profits are usually considered high risk. There is almost always a chance they will need to raise more capital, and their progress - and share price - will dictate how dilutive that is to current holders. While some such companies do very well over the long term, others become hyped up by promoters before eventually falling back down to earth, and going bankrupt (or being recapitalized). It certainly is a dangerous place to invest, as New Energy Minerals investors might realise.
Our data indicates that New Energy Minerals had AU$2,920,207 more in total liabilities than it had cash, when it last reported in December 2018. That makes it extremely high risk, in our view. But with the share price diving 62% per year, over 5 years, it's probably fair to say that some shareholders no longer believe the company will succeed. You can see in the image below, how New Energy Minerals's cash levels have changed over time (click to see the values).
In reality it's hard to have much certainty when valuing a business that has neither revenue or profit. Would it bother you if insiders were selling the stock? It would bother me, that's for sure. You canclick here to see if there are insiders selling.
Investors should note that there's a difference between New Energy Minerals's total shareholder return (TSR) and its share price change, which we've covered above. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. New Energy Minerals hasn't been paying dividends, but its TSR of -92% exceeds its share price return of -99%, implying it has either spun-off a business, or raised capital at a discount; thereby providing additional value to shareholders.
Investors in New Energy Minerals had a tough year, with a total loss of 12%, against a market gain of about 11%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. However, the loss over the last year isn't as bad as the 40% per annum loss investors have suffered over the last half decade. We would want clear information suggesting the company will grow, before taking the view that the share price will stabilize. Before spending more time on New Energy Mineralsit might be wise to click here to see if insiders have been buying or selling shares.
Of course,you might find a fantastic investment by looking elsewhere.So take a peek at thisfreelist of companies we expect will grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
5 Secrets to Retiring Rich
Can you come up with $10 a day? If so, you can potentially retire with over $2.7 million dollars to your name. That's what you would wind up with if you invest $10 a day for a 45-year career at a 9.5% annual rate of return. Given that that rate is about the level of long-run returns the stock market has provided over the decades, it's in the realm of possibility. Even if the market in the future delivers returns at around a 7% annualized rate, $10 a day for 45 years would still turn into over $1 million.
Of course, if it were that easy to retire rich, everyone would be doing it, and we would not be in a situation wheremore than 40% of Americans are in danger of retiring broke. So clearly it takes more than a few bucks a day to wind up comfortable in retirement. While it's not rocket science, it does take effort and planning. These five secrets will help you improve your chances of retiring rich, even if you're starting from ground zero today.
Image source: Getty Images.
Time is the ally of the young investor and the enemy of the older one. To get to that same $2.7 million level at retirement, an investor with only 15 years left to retirement would need to sock away around $225 per day. That's far more than the $10 someone fairly young would need to come up with, and it's really achievable only for the highest earners among us.
To be frank, even a high earner isn't likely to be able to go from nothing to socking away the $6,750 per month indicated by that $225 per day. When you've got the income, it's easy toget trapped in a high-cost lifestylethat ultimately keeps you from saving. So starting early not only means you can build wealth for less outlay each month, it also means you get that much more of your money working for you instead of trapping you in your lifestyle.
That daily investment target? That really is the amount you need to sock away each and every day in order to have a chance at winding up with a substantial pile of money in your golden years. That includes weekends, holidays, vacations, sick days, and all the other curveballs and important milestones life throws your way.
For your money to compound on your behalf, you have to put it to work for you. You have to recognize, for instance, that your retirement is abigger financial priority than your kids' college educations. You have to be willing todrive around in a reliable older vehicleinstead of sporting a brand-new ride. It's perfectly fine to spend some of your money on other priorities and on enjoying the finer things in life, but if you don't make investing for your future a priority, you won't build real wealth.
Image source: Getty Images.
If you invest in a tax-advantaged retirement account, Uncle Sam will let you defer your taxes on your returns. In addition, you may be able to either contribute pre-tax money in a traditional-style plan or withdraw your money completely tax-free in retirement in a Roth-style plan.
On top of the money Uncle Sam offers you for contributing toward your retirement, your boss may also offer you money to contribute to your employer-sponsored retirement plan. 401k matches are very common, with atypical match being 50% of whatever you contributeup to some percentage of your total salary. Whether the money comes from you, your boss, or Uncle Sam, once it's in your account, it's compounding on your behalf, getting you that much closer to your goal.
The stock market may have historically delivered returns around 9.5% annually, but that doesn't mean the typical investor received those returns. Indeed,mutual fund investors often substantially trail the overall market's returns. Much of that can be traced to the high costs of running actively managed mutual funds. With research costs, the churn costs of heavy trading, and marketing charges, the money investors pay to hold those funds add up, taking away from those investors' returns.
Instead focus on a long-term, low-cost strategy. One of the best available to most people isdollar-cost averaging into low-cost index funds. Index funds are generally passively managed, meaning they pay a lot less in overhead and research costs. They also tend to trade a lot less, keeping the churn costs of investing down. Those lower costs help assure more of the market's returns end up in your pocket -- instead of getting lost to charges associated with managing your money.
By making regular contributions -- or dollar-cost averaging -- into those funds, you buy more shares when the market is lower and fewer when the market is higher. That's one of the best methods available for ordinary investors to come close to the old market maxim of "buy low, sell high." Keep it up throughout your investing career, and you increase your chances of actually getting market-like returns on your hard-earned money.
Image source: Getty Images.
While the overall stock market has been an incredible creator of wealth over the long term, the day-to-day and even year-to-year returns are not guaranteed. The market can, and will, go down. For investors with a long-term perspective,market corrections are a great time to buy more shares. Without that long-term perspective, it gets easy to panic-sell into a declining market, effectively "buying high and selling low" -- the exact opposite of what you really want to do.
The reality is that even once you've retired, you may very well havedecadesahead of you. While retirees and near-retirees will likely want some money inmore conservative assets like bonds, with a time frame measured in decades, there's still a need to keep money with a long-term focus. As a result, not only should stocks and stock index funds play an important role while you're saving for retirement, they should also play a role (albeit a slightly different one) in getting you through retirement.
If these five secrets seem pretty straightforward, it's because they are. Perhaps the biggest "secret" of them all in the money management business is that there really is no secret to retiring rich. It's largely just a matter of time, money, discipline, and patience. Make it a priority throughout your career, keep a long-term perspective, and stick with it through the ups and downs of the market cycles, and you will have a very strong chance at succeeding.
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Chuck Salettahas no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has adisclosure policy. |
Shopify Wants to Give Merchants an Alternative to Fulfillment by Amazon
Shopify(NYSE: SHOP)has big plans to help its merchants make more sales and get items to customers faster and more easily. It's investing $1 billion to set up a network of fulfillment centers in the United States for its merchants. The company aims to use the network to help merchants cut down on their fulfillment expenses and generate a new stream of revenue through its Merchant Solutions business.
But $1 billion might seem like chump change compared withAmazon.com's(NASDAQ: AMZN)investments in its fulfillment network. The online retail giant invested about $800 million more than it had originally planned in the second quarter alone to speed up its transition from guaranteed two-day shipping to one-day shipping for Prime members. The company's Fulfillment by Amazon service has become a dominant force in order fulfillment for small merchants like those using Shopify's platform.
Shopify's budget might be minuscule compared with Amazon's, but it presents a significant competitor in a space where Amazon has been able to run the show.
Image source: Getty Images
When it comes to third-party fulfillment for small online merchants, Amazon is at the top of mind and the top of the pile for most. That includes merchants that don't even sell items on Amazon's marketplace.
But Amazon has come under scrutiny lately for its pricing policies. It charges merchants one price for orders that come through its own online marketplace and a higher price for orders coming from competing platforms. The same item can cost126% moreto fulfill by Amazon if sold through a competing marketplace, compared with the fulfillment cost when sold on Amazon's marketplace, according to tech news website Re/Code.
That kind of anti-competitive pricing is only possible because merchants don't have many options -- certainly none as reliable and fast as Amazon. Shopify's Fulfillment Network will look to change that. And Amazon's relatively high pricing gives it room to undercut the incumbent despite not having nearly the same scale.
If any company can compete with Amazon, however, it's Shopify. It has over 800,000 businesses on its platform selling over $40 billion worth of goods. For comparison, Amazon is still much bigger, selling nearly $300 billion in merchandise last year.
But Shopify carries considerable heft in the industry, and it's growing quickly. It also doesn't have its own retail operations like Amazon, which compete directly with third-party merchants. Some merchants even accuse Amazon of copying its products if they sell well on its marketplace.
Shopify has room to scale its Fulfillment Network with demand practically built in. That's the same way Amazon came to dominate the market.
The Shopify Fulfillment Network ought to make its other products more appealing to merchants, improving customer acquisition and reducing churn. Shopify's entire value proposition is that it makes starting and running an online storefront easy. A fulfillment network taking care of inventory management and getting orders to customers makes running a store even easier.
The Fulfillment Network might also drive gross merchandise volume higher. Merchants should be able to guarantee faster shipping by using Shopify's service, which has become increasinglyimportant in today's online retail environment. That could help it complete more sales compared with competing marketplaces or retailers that offer faster shipping, including Amazon.
So, not only will building out a fulfillment service help Shopify attract more merchants, it should also help those merchants attract more customers. That's a network effect that should produce significant growth for the company as it scales.
While the opportunity is great for Shopify, it needs to be vigilant. It's going to go head to head with Amazon, which is a ruthless competitor. While it could put pressure on Amazon's pricing, the online retail giant has never shied away from reducing its margins to shut out competitors. Fulfillment by Amazon is a big profit center for the company, but the scale of its third-party marketplace and the number of sellers on it gives it a lot of pricing flexibility if it needs to check Shopify.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors.Adam Levyowns shares of Amazon. The Motley Fool owns shares of and recommends Amazon and Shopify. The Motley Fool has adisclosure policy. |
President of Uganda to Lead Blockchain Conference in Kampala in July
The President ofUganda, Yoweri Museveni, will officiate the 2019AfricaBlockchainConference, according to areportby Kabuubi Media Africa on June 24
According to the report, The 2019 Africa Blockchain Conference — not to be confused with The Blockchain Africa Conference 2019 which occurred in April — will be held from July 3 to July 4, and the theme is ’Africa 4.0: Preparing Africa for the 4th Industrial Revolution.’ The conference topics will reportedly includefintech,paymentsystems, and the future ofeducation.
President Museveni reportedly supported the use of blockchain technology in Uganda during his inaugural speech. Museveni is said to have cited four economic areas that he believes should be supported by blockchain technology:agriculture, manufacturing and processing, services, and the ICT sector.
Blockchain tech firm CryptoSavannah will reportedly be one of the organizers for the 2019 conference. The company’s director, Noah Baalesanvu, commented on the maturation ofcryptocurrenciesin Africa, saying:
“While initially being marred byscamsand cons, significant value has moved to cryptos with major markets likeNigeria,KenyaandSouth Africawith significant crypto holdings also trading activity.”
In 2018, CryptoSavannahpartneredwith the majorcryptocurrency exchangeBinanceto gain financial support for blockchain growth in Uganda. Binance CEOChangpeng Zhaoclaimed that his organization would create thousands of jobs in the country, tweeting:
“@binance will partner with @cryptosavannah @AggieKonde @HelenHaiyu to support Uganda's economic transformation and youth employment through blockchain, embracing the 4th industrial revolution. We will do this by creating thousands of jobs and bringing investments to Uganda.”
As previouslyreportedby Cointelegraph, BinanceCharityFoundation signed a Memorandum of Understanding with a non-governmental organization based out of Uganda this April. The MoU aims to bolster the educational system of Kampala by providing a variety of supplies, ranging from solar panels to sanitary pads.
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Have Insiders Been Selling Reverse Corp Limited (ASX:REF) Shares?
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We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares inReverse Corp Limited(ASX:REF).
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'
See our latest analysis for Reverse
Over the last year, we can see that the biggest insider sale was by the , James Manning, for AU$115k worth of shares, at about AU$0.031 per share. That means that even when the share price was below the current price of AU$0.042, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was 100% of James Manning's holding. Notably James Manning was also the biggest buyer, having purchased AU$176k worth of shares.
All up, insiders sold more shares in Reverse than they bought, over the last year. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love thisfreelist of companies. (Hint: insiders have been buying them).
Over the last three months, we've seen significant insider selling at Reverse. Specifically, insiders ditched AU$184k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It's great to see that Reverse insiders own 42% of the company, worth about AU$1.7m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
Insiders sold Reverse shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company.I like to dive deeperinto how a company has performed in the past. You can findhistoric revenue and earnings in thisdetailed graph.
Of courseReverse may not be the best stock to buy. So you may wish to see thisfreecollection of high quality companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Scream Series Moves From MTV to VH1 for July Debut
The long-gestating third season of the Scream series is finally debutingbut not on its original network. Variety has confirmed that the series will air on VH1 instead of MTV as originally planned. Scream will debut on VH1 on July 8 and air two one-hour episodes back-to-back for three straight nights. Related stories 'The Hills': MTV Exec on New Drama, Mischa Barton & Continuing Without the Entire Cast Tracee Ellis Ross to Star in, Executive Produce 'Daria' Spinoff Series at MTV MTV Studios and Quibi to Remake 'Punk'd,' 'Singled Out' The third season of the series based on the horror movie franchise of the same name was first announced in 2016. Since then, both VH1 and MTV have largely moved away from scripted programming. This marks the latest instance of Viacom shuffling properties around its cable portfolio. Most recently it was announced that Tracy Olivers First Wives Club series would find its fourth home on the upcoming streaming service BET+ after having previously been set up at TV Land, Paramount Network, and BET. Season 3 revolves around Deion Elliot (RJ Cyler), a local star running back whose tragic past comes back to haunt him at the worst time, threatening his hard-earned plans for his future and the lives of his unlikely group of friends. The season will also star Mary J. Blige, Tyga, Keke Palmer, Tyler Posey, Giorgia Whigham, CJ Wallace, Jessica Sula, and Giullian Yao Gioiello. Wes Craven the late mastermind behind the film franchise is credited as executive producer on the series along with Queen Latifah, Tony DiSanto, Liz Gateley, Marianne Maddalena, and Cathy Konrad. Matthew Signer and Keith Levine serve as producers. VH1s Maggie Malina and Dana Gotlieb-Carter are the executives overseeing Scream. The Hollywood Reporter first broke the news of the move to VH1. Sign up for Varietys Newsletter . For the latest news, follow us on Facebook , Twitter , and Instagram . |
Need To Know: Reverse Corp Limited (ASX:REF) Insiders Have Been Selling Shares
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We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares inReverse Corp Limited(ASX:REF).
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard Universitystudyfound that 'insider purchases earn abnormal returns of more than 6% per year.'
View our latest analysis for Reverse
Over the last year, we can see that the biggest insider sale was by the , James Manning, for AU$115k worth of shares, at about AU$0.031 per share. That means that an insider was selling shares at slightly below the current price (AU$0.042). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was 100% of James Manning's holding. Notably James Manning was also the biggest buyer, having purchased AU$176k worth of shares.
Over the last year we saw more insider selling of Reverse shares, than buying. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you willnotwant to miss thisfreelist of growing companies that insiders are buying.
The last three months saw significant insider selling at Reverse. In total, insiders sold AU$184k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Reverse insiders own about AU$1.7m worth of shares (which is 42% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
Insiders haven't bought Reverse stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. It is good to see high insider ownership, but the insider selling leaves us cautious. Along with insider transactions, I recommend checking if Reverse is growing revenue. This free chart ofhistoric revenue and earnings should make that easy.
Of courseReverse may not be the best stock to buy. So you may wish to see thisfreecollection of high quality companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Calculating The Intrinsic Value Of Frasers Property Limited (SGX:TQ5)
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Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Frasers Property Limited (SGX:TQ5) as an investment opportunity by estimating the company's future cash flows and discounting them to their present value. I will be using the Discounted Cash Flow (DCF) model. Don't get put off by the jargon, the math behind it is actually quite straightforward.
We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in theSimply Wall St analysis model.
View our latest analysis for Frasers Property
We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
Generally we assume that a dollar today is more valuable than a dollar in the future, so we discount the value of these future cash flows to their estimated value in today's dollars:
[{"": "Levered FCF (SGD, Millions)", "2019": "SGD1.30k", "2020": "SGD1.24k", "2021": "SGD830.50", "2022": "SGD631.37", "2023": "SGD529.76", "2024": "SGD473.74", "2025": "SGD441.94", "2026": "SGD424.23", "2027": "SGD415.27", "2028": "SGD411.99"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x2", "2020": "Analyst x2", "2021": "Analyst x2", "2022": "Est @ -23.98%", "2023": "Est @ -16.09%", "2024": "Est @ -10.57%", "2025": "Est @ -6.71%", "2026": "Est @ -4.01%", "2027": "Est @ -2.11%", "2028": "Est @ -0.79%"}, {"": "Present Value (SGD, Millions) Discounted @ 14.22%", "2019": "SGD1.14k", "2020": "SGD951.57", "2021": "SGD557.29", "2022": "SGD370.91", "2023": "SGD272.46", "2024": "SGD213.31", "2025": "SGD174.22", "2026": "SGD146.41", "2027": "SGD125.47", "2028": "SGD108.98"}]
Present Value of 10-year Cash Flow (PVCF)= SGD4.06b
"Est" = FCF growth rate estimated by Simply Wall St
We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 10-year government bond rate (2.3%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 14.2%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = S$412m × (1 + 2.3%) ÷ (14.2% – 2.3%) = S$3.5b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= SGDS$3.5b ÷ ( 1 + 14.2%)10= SGD935.33m
The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is SGD4.99b. The last step is to then divide the equity value by the number of shares outstanding.This results in an intrinsic value estimate of SGD1.71. Compared to the current share price of SGD1.83, the company appears around fair value at the time of writing. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out.
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 Frasers Property as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 14.2%, which is based on a levered beta of 2. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Whilst important, DCF calculation shouldn’t be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. For Frasers Property, I've put together three additional aspects you should further research:
1. Financial Health: Does TQ5 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 TQ5'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 TQ5? 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 SGX 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. |
Bristol-Myers Squibb Loses $6 Billion in Value on Celgene Deal Setback: Brainstorm Health
Happy Monday, readers!
Bristol-Myers Squibbhasn’t exactly had a pristine path to its proposed acquisition ofCelgene. Sure, the legacy pharma giantracked up more than 75% of shareholder votesto approve the $74 billion acquisition following a quickly-quashed rebellion from some activist naysayers. But the company hit another hurdle in its Celgene acquisition quest that sent Bristol Myers stock tumbling nearly 7.5%, a $6 billion erasure in market value.
The reason(s)? For one, Bristol-Myers Squibb reported an unfortunate clinical trial result from a late-stage study of its cancer immunotherapy superstar Opdivo in liver cancer. For another—BMS made a somewhat surprising announcement that it would spin off Celgene’s blockbuster psoriasis and arthritis drug Otezla, slated to rake in nearly $2 billion in sales this year alone, in order to address Federal Trade Commission (FTC) antitrust concerns over the M&A.
That means the Bristol-Myers Celgene deal may not close until early 2020, rather than the originally expected timeline by the end of this year.
“Bristol-Myers Squibb reaffirms the significant value creation opportunity of the acquisition of Celgene,” the firm said in a statement. “Together with $2.5 billion of cost synergies, a compelling pipeline and a strong portfolio of marketed products, the company continues to expect growth in sales and earnings through 2025.”
Investors can be a fickle bunch. For now, though, they don’t seem particularly pleased at the decision to lop off one of Celgene’s tried and true cash cows.
Read on for the day’s news.
Sy Mukherjee@the_sy_guysayak.mukherjee@fortune.com
1. DIGITAL HEALTHThe digital health funding fever.I explore the record digital health VC funding figures for my latest piece in theFortuneprint issue (on news stands, online, and something you’re just generallygoing to have to click onto get the goods). OK, one spoiler: The venture funding in the field reached an all-time record in 2018.(Fortune)UnitedHealth snaps up PatientsLikeMe.Health insurance giant UnitedHealth is already a titan of the medical industry, its grip reaching everything from the pharmacy benefits business to doctors’ networks. It’s now extending into the digital health business via an acquisition of the online PatientsLikeMe portal, according to MobiHealthNews. “This independent unit of UnitedHealth Group invests in research that speeds improvements to drive innovation in healthcare,” said PatientsLikeMe CEO Jamie Heywood in a statement. “We’ve chosen to join with UnitedHealth Group Research & Development because they share that same drive to improve health at the individual level and to ensure that healthcare outcomes across the board are more effective.”(MobiHealthNews)
2. INDICATIONSTrump signs health care price transparency executive order.President Donald Trump on Monday signed an executive order aimed at making health care prices more transparent. It’s a pet issue for Health and Human Services Secretary Alex Azar, who claimed that the move would force health care companies to drive down prices once exposed to the light of day. That remains to be seen—public shaming isn’t a proven method for reducing such prices. But at the very least the move should reveal more information on how such pricing works.(The Hill)
3. THE BIG PICTURESupreme Court decides to hear out insurers on Obamacare payments in a surprise.In a surprise decision, the Supreme Court has decided to review lower court rulings that insurance companies aren’t entitled to certain payments under the Affordable Care Act (ACA), aka Obamacare. The so-called “risk corridor” payments were meant to be a safeguard against rising premiums but combated by the Trump administration, which classified them as “bailouts” for insurance companies.(Reuters)
4. REQUIRED READINGLessons from the VC Who’s Seen It All Before,by Polina MarinovaCommentary: The CEO’s Toughest Leadership Challenge—Leading Themselves,by Ron WilliamsWhy Microsoft’s Slack Ban May Be a Mistake,by Aaron PressmanIn Hindsight: How Warby Parker Got Its Start,by Dinah EngProduced by Sy Mukherjee@the_sy_guysayak.mukherjee@fortune.comFind past coverage. Sign up for other Fortune newsletters. |
Crypto Analyst Says Bitcoin Price Could Hit $100,000 During Next Bull Run
ThinkMarkets chief market analyst Naeem Aslam predicts that bitcoin (BTC) will hit somewhere between $60,000 and $100,000 during its next bull run, according to a Fox Businessinterviewon June 24.
Aslam had previouslypredictedon June 17 that BTC would hit $10,000 in “a couple of weeks,” citing institutional involvement as a major driver. Bitcoin successfullyreachedthe five figure mark on June 22, marking a record high that has not been seen in over one year.
According to Aslam, the major price points to look out for now are $20,000 and $50,000. He argues that by hitting $20,000, discussion will move from conservative estimates exceeding the number onecryptocurrency’sall-time high to forecasts of $50,000; from there, breaking $50,000 will move the price target to $100,000.
Aslam also discussed the use of BTC as a means to avoid risk, comparing BTC, which is often called “digital gold,” withgold. He remarks that in the last two months, there is a huge spike in price for these two assets, which he attributes to a lack of confidence in thestock marketalong with the ongoingU.S.–Chinatrade war.
Aslam also points to unrest and even a potential war in the Middle East as the biggest driver of recent growth in these diversifying assets. He also remarks that BTC now has a reputation as a safe haven for storing wealth, saying there is evidence of investors “parking” their capital in the leading crypto.
As previouslyreportedby Cointelegraph, Bitcoin podcast hostTrace Mayersaid that the bitcoin price in 2019 will likely close at $21,000, according to the trajectory posited by his ‘Mayer Multiple’ price indicator. The Mayer Multiple reportedly is an equation that involves dividing current BTC price by its 200-day moving average.
• Bitcoin Generates More Carbon Emissions Than Some Countries, Study Warns
• CEO of Major American VC Firm Digital Currency Group: Crypto Winter Is Ending
• Focus on Bitcoin, Not Blockchain, Crypto Entrepreneur Proclaims
• Genesis Capital: Institutional Activity in Crypto Up 300% in 12 Months |
A Look At The Intrinsic Value Of Frasers Property Limited (SGX:TQ5)
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Today we will run through one way of estimating the intrinsic value of Frasers Property Limited (SGX:TQ5) by estimating the company's future cash flows and discounting them to their present value. This is done using the Discounted Cash Flow (DCF) model. It may sound complicated, but actually it is quite simple!
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.
See our latest analysis for Frasers Property
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 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.
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 (SGD, Millions)", "2019": "SGD1.30k", "2020": "SGD1.24k", "2021": "SGD830.50", "2022": "SGD631.37", "2023": "SGD529.76", "2024": "SGD473.74", "2025": "SGD441.94", "2026": "SGD424.23", "2027": "SGD415.27", "2028": "SGD411.99"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x2", "2020": "Analyst x2", "2021": "Analyst x2", "2022": "Est @ -23.98%", "2023": "Est @ -16.09%", "2024": "Est @ -10.57%", "2025": "Est @ -6.71%", "2026": "Est @ -4.01%", "2027": "Est @ -2.11%", "2028": "Est @ -0.79%"}, {"": "Present Value (SGD, Millions) Discounted @ 14.22%", "2019": "SGD1.14k", "2020": "SGD951.57", "2021": "SGD557.29", "2022": "SGD370.91", "2023": "SGD272.46", "2024": "SGD213.31", "2025": "SGD174.22", "2026": "SGD146.41", "2027": "SGD125.47", "2028": "SGD108.98"}]
Present Value of 10-year Cash Flow (PVCF)= SGD4.06b
"Est" = FCF growth rate estimated by Simply Wall St
We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 10-year government bond rate of 2.3%. We discount the terminal cash flows to today's value at a cost of equity of 14.2%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = S$412m × (1 + 2.3%) ÷ (14.2% – 2.3%) = S$3.5b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= SGDS$3.5b ÷ ( 1 + 14.2%)10= SGD935.33m
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 SGD4.99b. 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 SGD1.71. Compared to the current share price of SGD1.83, the company appears around fair value at the time of writing. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent.
The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Frasers Property as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 14.2%, which is based on a levered beta of 2. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Valuation is only one side of the coin in terms of building your investment thesis, and it shouldn’t be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. For Frasers Property, I've put together three fundamental aspects you should look at:
1. Financial Health: Does TQ5 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 TQ5'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 TQ5? 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 SG 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. |
Imagine Owning Future Data Group (HKG:8229) And Wondering If The 34% Share Price Slide Is Justified
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Future Data Group Limited(HKG:8229) shareholders should be happy to see the share price up 20% in the last quarter. But in truth the last year hasn't been good for the share price. After all, the share price is down 34% in the last year, significantly under-performing the market.
View our latest analysis for Future Data Group
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
Unfortunately Future Data Group reported an EPS drop of 46% for the last year. This fall in the EPS is significantly worse than the 34% the share price fall. So despite the weak per-share profits, some investors are probably relieved the situation wasn't more difficult. With a P/E ratio of 48.30, it's fair to say the market sees an EPS rebound on the cards.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
It might be well worthwhile taking a look at ourfreereport on Future Data Group's earnings, revenue and cash flow.
It is important to consider the total shareholder return, as well as the share price return, for any given stock. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of Future Data Group, it has a TSR of -30% for the last year. That exceeds its share price return that we previously mentioned. And there's no prize for guessing that the dividend payments largely explain the divergence!
We doubt Future Data Group shareholders are happy with the loss of 30% over twelve months (even including dividends). That falls short of the market, which lost 5.8%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. It's great to see a nice little 20% rebound in the last three months. This could just be a bounce because the selling was too aggressive, but fingers crossed it's the start of a new trend. Keeping this in mind, a solid next step might be to take a look at Future Data Group's dividend track record. Thisfreeinteractive graphis a great place to start.
For those who like to findwinning investmentsthisfreelist of growing companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HK exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
AICPA Proposes New Standards That Would Apply to Blockchain-Based Audit Data
TheAmericanInstitute of Certified Public Accountants (AICPA) has proposed a new set of standards for audit evidence including accommodation forblockchain-based data, according to areportby trade publication Accounting Today on June 24.
The new proposal, the so-dubbed Proposed Statement on Auditing Standards (SAS), Audit Evidence, will purportedly set guidelines on how preparers and auditors should evaluate audit evidence that is based on new tech such as blockchain and data analytics.
The new standards are apparently a source-indifferent, multidimensional set of metrics for evaluating audit data. The aim of the proposal is reportedly to help auditors determine whether their received information is sufficient and appropriate for audit evidence.
AICPA Chief Auditor Robert Dohrer commented in a statement last week on the need to accommodate new sources of audit data, saying:
“Given the rapid evolution of audit evidence sources that are available today, it is critically important that auditors have a robust, durable set of attributes that allows them to make consistent assessments about the sufficiency and appropriateness of audit evidence obtained.”
The AICPA is an organization of certified public accountants in theUnited Statesthat sets auditing standards for various types of companies and government organizations, including federal, state and localgovernments.
As previouslyreportedby Cointelegraph, the world’s four biggest auditing firms — Deloitte, Ernst & Young, KPMG and PwC — partnered with 20 Taiwanese banks in a pilot program that used blockchain technology to conduct fiscal audits.
The blockchain solution aimed to streamline the ‘external confirmation’ processes in audits of companies’ interim financial reports. Taiwan's Financial Information Service Co., one of the contributors to the pilot program, projected that this solution would cut auditing time from around two weeks to one day — almost a 93% reduction in audit time.
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• Philippine Government Tech Department Signs Deal With Blockchain Firm |
If You Had Bought Future Data Group (HKG:8229) Stock A Year Ago, You'd Be Sitting On A 34% Loss, Today
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Future Data Group Limited(HKG:8229) shareholders should be happy to see the share price up 20% in the last quarter. But that doesn't change the fact that the returns over the last year have been less than pleasing. The cold reality is that the stock has dropped 34% in one year, under-performing the market.
See our latest analysis for Future Data Group
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
Unhappily, Future Data Group had to report a 46% decline in EPS over the last year. This fall in the EPS is significantly worse than the 34% the share price fall. So the market may not be too worried about the EPS figure, at the moment -- or it may have expected earnings to drop faster. With a P/E ratio of 48.30, it's fair to say the market sees an EPS rebound on the cards.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
Before buying or selling a stock, we always recommend a close examination ofhistoric growth trends, available here..
When looking at investment returns, it is important to consider the difference betweentotal shareholder return(TSR) andshare price return. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, Future Data Group's TSR for the last year was -30%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!
We doubt Future Data Group shareholders are happy with the loss of 30% over twelve months (even including dividends). That falls short of the market, which lost 5.8%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. It's great to see a nice little 20% rebound in the last three months. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). Importantly, we haven't analysed Future Data Group's dividend history. Thisfreevisual report on its dividendsis a must-read if you're thinking of buying.
We will like Future Data Group better if we see some big insider buys. While we wait, check out thisfreelist of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HK exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Megadeath's Dave Mustaine thanks fans for outpouring of love after cancer diagnosis
Dave Mustaine reached out to his fans during cancer treatment. (Photo: JP Yim/Getty Images for NARAS) Megadeth’s Dave Mustaine is feeling the love. The rocker took to Facebook to share a video message with those who’ve sent well wishes since he revealed last week that he’s been diagnosed with throat cancer. “Hi, I wanted to take a moment real quick and thank my family, my friends and the best fans in the world for all of your support and love over the last few days,” said Mustaine, 57. “We’re gonna beat this thing together.” He captioned it simply, “Thank you.” This latest update was met with cheers from fans. “You can do this. Sending continued prayers and positive vibes!” one fan wrote. “Love you, Dave. Thanks for all the incredible music and sorry to hear you're unwell,” a commenter wrote. “Wishing you all the best — the world is a much better place with you in it.” “You got this Dave! Everything they've ever thrown at you you've faced head on and came through,” another fan encouraged him. “This is no different. We love you! Get well at your own pace. We'll still be right here with you as always!” When Mustaine revealed his illness, the musician said that he was already undergoing the treatment that he and his doctors had decided upon. He said doctors estimated it had a 90 percent success rate. The Megadeath founder said the band would cancel most of its concerts for the rest of the year, although members would participate in the 2019 Megacruise, which the band had planned to host in October, “in some form.” He also shared that the band is working on a new album in the studio. Mustaine was flooded with well wishes following his announcement. Slash wrote, “I have 100% faith you will conquer this as you do everything else. Get better soon my friend.” Judas Priest, Black Sabbath, Paul Stanley and countless others sent kind words, too. For Dave Mustaine: Full on Metal Power Dave for a strong healing! Judas Priest — Judas Priest (@judaspriest) June 18, 2019 #BlackSabbath wish @DaveMustaine a very speedy recovery pic.twitter.com/XHYBuqukVx — BlackSabbath (@BlackSabbath) June 18, 2019 Let’s All Send Prayers And Support To Dave Mustaine As He Battles And Wins His Fight Against Cancer. @DaveMustaine @ClassicRockMag @RollingStone pic.twitter.com/zg66n0EyWw — Paul Stanley (@PaulStanleyLive) June 19, 2019 Read more on Yahoo Entertainment: Jada Pinkett Smith says she's been in a non-sexual throuple with Will Smith's ex-wife for years James Gandolfini's son Michael remembers his dad on anniversary of his death: 'Six years is too long' Kristin Cavallari reveals secrets from 'The Hills' reboot (even though she won't be on it) Want daily pop culture news delivered to your inbox? Sign up here for Yahoo Entertainment & Lifestyle's newsletter. |
New Zealand economy faces risks from rising home prices, trade tensions: OECD
WELLINGTON (Reuters) - The Organisation for Economic Cooperation and Development (OECD) said on Tuesday that soaring house prices and global trade tensions are some of the key risks facing New Zealand's economy.
New Zealand's house prices have soared more than 50 percent over the past decade, and almost doubled in its biggest city, Auckland, raising concerns that high mortgage debt could pose a systemic risk if the market turns down sharply.
The OECD bi-annual survey released on Tuesday said the main domestic risk for New Zealand was a housing market correction.
"The effects of a contraction would be magnified by the elevated household debt levels resulting from sustained house price increases," the report said.
Real house prices have soared and are much higher than other OECD countries such as Canada and Australia, the survey showed.
New Zealand's centre-left government, which took office in 2017, has taken some measures to improve housing supply including a new government project to build affordable housing, called KiwiBuild.
But tight regulations have disrupted building activity, which has constrained the supply of new housing, the survey said.
"In housing, the new Urban Development Authority will cut through red tape to increase housing supply," Finance Minister Grant Robertson said in response to the findings of the survey.
The report also said rising trade restrictions internationally could have "substantial negative repercussions" for New Zealand as a small open economy highly exposed to international commodity prices.
New Zealand has expressed concerns over the growing U.S.-China trade tensions and was flagged as one reason for the central bank's interest rate cut in May.
Growth has slowed from the high rates recorded in 2015 and 2016 to around 2.5%, just under OECD's estimates of potential growth, it said, while private consumption growth has softened as immigration fell from its peak.
Low business confidence has contributed to weak business investment, despite capacity constraints, it added.
(Reporting by Praveen Menon; Editing by Sam Holmes) |
E. Kentucky's Cameron Catron seriously injured in shooting
Cameron Catron was reportedly "nearly dead" by the time he reached the hospital. (Getty Images) An Eastern Kentucky football player was left seriously injured after a fight outside a bar escalated into a shooting early Sunday morning, local outlets WKYT and WYMT report. EKU wide receiver Cameron Catron was reportedly in a fight outside Two Keys Tavern in Lexington, Kentucky, after which the other man ran to his vehicle, pulled out a gun and shot the redshirt sophomore. The Eastern Kentucky program has not confirmed the news. The shooter is still reportedly at large, with police describing him as wearing a blue shirt and having dreadlocks with frosted tips. Our hearts are broken with the sad news coming out of Lexington this morning, Please Pray for @catron_cameron , he is a stand up guy on & off the field and our community couldnt bare to lose him. We have seen prayer work all to often & Camron needs our help, PLEASE PRAY!! pic.twitter.com/8ZUBsLK2ko David & Darryl Sports (@DavidandDarryl) June 23, 2019 Catron, who has appeared in just two games in his Eastern Kentucky career, has since undergone two surgeries to remove the bullet and repair damage. The players mother told WYMT that he was nearly dead when he arrived at the hospital. Via WKYT: "Hes one of the biggest hearted guys I know. Whoever done that to him was just really in a bad place right now," said Gunner Slone, who played football against Catron in high school, and with him at EKU. More from Yahoo Sports: Sources: Kawhi to become free agent; Raptors favorite Paul denies trade request: Happy to stay in Houston After profane tirade, Mets have to fire manager Callaway France beats Brazil, keeps possibility of dream QF alive View comments |
The Zhejiang United Investment Holdings Group (HKG:8366) Share Price Is Up 342% And Shareholders Are Delighted
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Zhejiang United Investment Holdings Group Limited(HKG:8366) shareholders have seen the share price descend 17% over the month. But that doesn't change the fact that the returns over the last three years have been spectacular. The longer term view reveals that the share price is up 342% in that period. As long term investors the recent fall doesn't detract all that much from the longer term story. The thing to consider is whether there is still too much elation around the company's prospects.
See our latest analysis for Zhejiang United Investment Holdings Group
Because Zhejiang United Investment Holdings Group is loss-making, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
In the last 3 years Zhejiang United Investment Holdings Group saw its revenue shrink by 5.0% per year. So it's pretty amazing to see the stock price has zoomed up 64% per year in that time. This clear lack of correlation between revenue and share price is surprising to see in a money losing company. So there is a serious possibility that some holders are counting their chickens before they hatch.
Depicted in the graphic below, you'll see revenue and earnings over time. If you want more detail, you can click on the chart itself.
Balance sheet strength is crucual. It might be well worthwhile taking a look at ourfreereport on how its financial position has changed over time.
It's nice to see that Zhejiang United Investment Holdings Group shareholders have gained 47% (in total) over the last year. The TSR has been even better over three years, coming in at 64% per year. Shareholders might want to examinethis detailed historical graphof past 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 HK exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Scammers Target Libra Fans With Fake Sites, Zuckbucks
Several exploitative websites launched over the weekend aiming to separate credulous Libra investors from their cash.
ThoughLibrahas not seen its public debut, the media buzz around it has piqued some would-be investor’s attention. While the majority of searches around buying Libra are focused on how to exchange it forBTC, according to Google Trends and Reddit, some nefarious scammers are hoping to ensnare the hapless trader in a supposed Libra pre-sale.
One site, calìbra.com, (note the ì) is a mirror image of Facebook’s legitimate website,calibra.com.
Related:Security Researcher Tears Up a Binance Scam Site to Find the Hackers
The artifice begins by switching the normal English i for a a grave accent ì. Those unfamiliar with Alcozauca Mixtec, Italian, Sardinian, Taos, Vietnamese, Welsh, Scottish Gaelic or the constructed language Na’vi, may have the unicode character – that at least one reporter confused for a bit of dust.
Like the URL, the customer-facing scam website has some slight differences when compared side-by-side to the legitimate site. Both websites have the same marketing materials, wording, fonts, color schemes, interactive displays, and slogans – although the fraudulent one looks askew.
Additionally, in the top right corner is a button that says “Pre-Sale Libra Currency,” instead of the social media giant’s welcoming induction to “Get Started.”
Clicking the button opens another webpage that claims to offer a 25 percent bonus for trading Libra. Better act now, as the pre-sale is 93 percent complete, the scammers allege.
Related:Crypto and Forex Scam Reports Tripled in the UK Last Year, Watchdog Says
Traders are offered the option to swap 600 LBR (Libra) for 2 ethereum, or 8,000 LBR for 20 ethereum, which is approximately the same one to one Libra to dollar conversion Facebook was intending.
While this particular scam – hosted in Russia, no less – is an obvious ploy to capitalize on the general incoherence of Facebook’s plan, some of the chicanery put online is of a more derisive sort.
Zuckbucks.cash offers visitors the option to swap ethereum for ZBUX, “an ERC20 token which can be used to do absolutely nothing.”
“Want to buy a cup of coffee with your ZBUX? Too bad! Need to pay your bills? Better use another currency! Want to pile on to Mark Zuckerberg’s already incredibly overinflated bank account? Now we’re getting somewhere!,” according to the website.
Indeed, if Facebook is behind zuckbucks, it surely would be the quickest and most convenient way to “feed Mark Zuckerberg’s insatiable greed.”
The masterminds behind zuckbucks promise to spend the funds they collect on gas and kick the remaining balance up to the dev-team. They write, “Just like LIBRA, Zuckbucks offers no inherent benefit besides putting your money directly into the pocket of the developers.”
Of the 1.5 million ZBUX available, 961,845 are currently in circulation.
Mark Zuckerberg photo via Shutterstock
• FTC Sues Smart Backpack Crowdfunder Who Spent Proceeds On Bitcoin
• Crypto Crime Blotter: Scammers Dupe Jersey Island Man Out of £1.2 million, Backpage Laundered Cash With Crypto |
Should You Be Worried About Shanghai Jiaoda Withub Information Industrial Company Limited's (HKG:8205) 6.2% Return On Equity?
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Many investors are still learning about the various metrics that can be useful when analysing a stock. This article is for those who would like to learn about Return On Equity (ROE). We'll use ROE to examine Shanghai Jiaoda Withub Information Industrial Company Limited (HKG:8205), by way of a worked example.
Our data showsShanghai Jiaoda Withub Information Industrial has a return on equity of 6.2%for the last year. That means that for every HK$1 worth of shareholders' equity, it generated HK$0.062 in profit.
Check out our latest analysis for Shanghai Jiaoda Withub Information Industrial
Theformula for return on equityis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for Shanghai Jiaoda Withub Information Industrial:
6.2% = CN¥4.4m ÷ CN¥71m (Based on the trailing twelve months to March 2019.)
It's easy to understand the 'net profit' part of that equation, but 'shareholders' equity' requires further explanation. It is all the money paid into the company from shareholders, plus any earnings retained. The easiest way to calculate shareholders' equity is to subtract the company's total liabilities from the total assets.
ROE looks at the amount a company earns relative to the money it has kept within the business. The 'return' is the amount earned after tax over the last twelve months. That means that the higher the ROE, the more profitable the company is. So, all else being equal,a high ROE is better than a low one. That means it can be interesting to compare the ROE of different companies.
One simple way to determine if a company has a good return on equity is to compare it to the average for its industry. The limitation of this approach is that some companies are quite different from others, even within the same industry classification. As shown in the graphic below, Shanghai Jiaoda Withub Information Industrial has a lower ROE than the average (9.8%) in the Electronic industry classification.
That certainly isn't ideal. We'd prefer see an ROE above the industry average, but it might not matter if the company is undervalued. Still,shareholders might want to check if insiders have been selling.
Companies usually need to invest money to grow their profits. That cash can come from issuing shares, retained earnings, or debt. In the first two cases, the ROE will capture this use of capital to grow. In the latter case, the debt required for growth will boost returns, but will not impact the shareholders' equity. Thus the use of debt can improve ROE, albeit along with extra risk in the case of stormy weather, metaphorically speaking.
Shanghai Jiaoda Withub Information Industrial is free of net debt, which is a positive for shareholders. Although I don't find its ROE that impressive, it's worth remembering it achieved these returns without debt. At the end of the day, when a company has zero debt, it is in a better position to take future growth opportunities.
Return on equity is one way we can compare the business quality of different companies. In my book the highest quality companies have high return on equity, despite low debt. All else being equal, a higher ROE is better.
But ROE is just one piece of a bigger puzzle, since high quality businesses often trade on high multiples of earnings. It is important to consider other factors, such as future profit growth -- and how much investment is required going forward. So I think it may be worth checking thisfreethisdetailed graphof past earnings, revenue and cash flow.
If you would prefer check out another company -- one with potentially superior financials -- then do not miss thisfreelist of interesting companies, that have HIGH return on equity and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Jordyn Woods Co-Designed a 60-Piece Size-Inclusive Collection With Boohoo
Social media influencer and model Jordyn Woods is back for a second act with fast-fashion label Boohoo . Much like her 2016 partnership with the British brand, Woods co-designed a size-inclusion collection that aligns her message of body-confidence with Boohoos offerings for women of all shapes. Related stories Delilah Hamlin Talks New Boohoo Collection, Flip-Flops in the City and the Trend She Wants to See Stop Boohoo's Impressive Growth Proves Ultrafast Fashion Is Still on the Rise Jordyn Woods Hits Coachella in Classic Combat Boots and Bright Orange Shades The collaborative line is a 60-piece collection made to take women from day to night. Woods was inspired by the latest trends, like vibrant bright colors, metallics and statement blazers. The collection ranges in sizes U.S. 2-24 and retails for $15-$60; the capsule will be available Wednesday on Boohoo.com . With my new collection, I wanted to offer size-inclusive pieces with designs that reflect my personal style, Woods said in a statement. I hope this collection empowers women and encourages them to dream big. Woods shot to fame as Kylie Jenners best friend featured in the Keeping Up With the Kardashians spinoff series Life of Kylie. Last year she collaborated with Barneys New York on shoes , and she also starred in campaigns for French Connection . Boohoos co-founder Carol Kane said Woods is everything the Boohoo girl embodies. The retailer has partnered with other celebrities on capsule collections, including Zendaya, Charli XCX and Paris Hilton. Boohoo boasts a global demographic of 16- to 30-year-olds and has 13 million registered customers, according to the brand. Along with Nasty Gal and PrettyLittleThing brands under its umbrella, the fast-fashion group beat expectations for fiscal 2019 , reporting a 49% lift in both earnings and annual profits. Adjusted profits for the year ended Feb. 28 were £76.3 million ($99 million), up from £51 million in 2018 and ahead of the £66.9 million forecast by analysts. Revenues reached £856.9 million ($1.1 billion), up 48% year over year, with U.K. sales up 37% and international sales up 64%. Story continues Want more? Delilah Hamlin Talks New Boohoo Collection , Flip-Flops in the City and the Trend She Wants to See Stop Boohoos Impressive Growth Proves Ultrafast Fashion Is Still on the Rise Quavo Talks His Coachella-Inspired Boohoo Man Collection , Toe Grooming and More Sign up for FN's Newsletter . For the latest news, follow us on Facebook , Twitter , and Instagram . |
Do Directors Own KOALA Financial Group Limited (HKG:8226) Shares?
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A look at the shareholders of KOALA Financial Group Limited (HKG:8226) can tell us which group is most powerful. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.'
KOALA Financial Group is not a large company by global standards. It has a market capitalization of HK$81m, which means it wouldn't have the attention of many institutional investors. Taking a look at our data on the ownership groups (below), it's seems that institutions are not really that prevalent on the share registry. Let's delve deeper into each type of owner, to discover more about 8226.
View our latest analysis for KOALA Financial Group
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
Since institutions own under 5% of KOALA Financial Group, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.
We note that hedge funds don't have a meaningful investment in KOALA Financial Group. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Our most recent data indicates that insiders own a reasonable proportion of KOALA Financial Group Limited. Insiders own HK$22m worth of shares in the HK$81m company. I would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You canclick here to see if those insiders have been buying or selling.
The general public, mostly retail investors, hold a substantial 69% stake in 8226, suggesting it is a fairly popular stock. With this size of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to decline an acquisition or merger that may not improve profitability.
It's always worth thinking about the different groups who own shares in a company. But to understand KOALA Financial Group better, we need to consider many other factors.
I like to dive deeperinto how a company has performed in the past. You can findhistoric revenue and earnings in thisdetailed graph.
If you would prefer check out another company -- one with potentially superior financials -- then do not miss thisfreelist of interesting companies, backed by strong financial data.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Can Banka BioLoo Limited (NSE:BANKA) Maintain Its Strong Returns?
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One of the best investments we can make is in our own knowledge and skill set. With that in mind, this article will work through how we can use Return On Equity (ROE) to better understand a business. To keep the lesson grounded in practicality, we'll use ROE to better understand Banka BioLoo Limited (NSE:BANKA).
Our data showsBanka BioLoo has a return on equity of 21%for the last year. Another way to think of that is that for every ₹1 worth of equity in the company, it was able to earn ₹0.21.
Check out our latest analysis for Banka BioLoo
Theformula for ROEis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for Banka BioLoo:
21% = ₹45m ÷ ₹219m (Based on the trailing twelve months to March 2019.)
Most know that net profit is the total earnings after all expenses, but the concept of shareholders' equity is a little more complicated. It is the capital paid in by shareholders, plus any retained earnings. You can calculate shareholders' equity by subtracting the company's total liabilities from its total assets.
ROE looks at the amount a company earns relative to the money it has kept within the business. The 'return' is the yearly profit. A higher profit will lead to a higher ROE. So, all else being equal,a high ROE is better than a low one. Clearly, then, one can use ROE to compare different companies.
One simple way to determine if a company has a good return on equity is to compare it to the average for its industry. The limitation of this approach is that some companies are quite different from others, even within the same industry classification. As you can see in the graphic below, Banka BioLoo has a higher ROE than the average (7.1%) in the Commercial Services industry.
That is a good sign. We think a high ROE, alone, is usually enough to justify further research into a company. One data point to check is ifinsiders have bought shares recently.
Virtually all companies need money to invest in the business, to grow profits. That cash can come from retained earnings, issuing new shares (equity), or debt. In the case of the first and second options, the ROE will reflect this use of cash, for growth. In the latter case, the debt used for growth will improve returns, but won't affect the total equity. Thus the use of debt can improve ROE, albeit along with extra risk in the case of stormy weather, metaphorically speaking.
Although Banka BioLoo does use a little debt, its debt to equity ratio of just 0.035 is very low. The fact that it achieved a fairly good ROE with only modest debt suggests the business might be worth putting on your watchlist. Judicious use of debt to improve returns can certainly be a good thing, although it does elevate risk slightly and reduce future optionality.
Return on equity is a useful indicator of the ability of a business to generate profits and return them to shareholders. A company that can achieve a high return on equity without debt could be considered a high quality business. If two companies have the same ROE, then I would generally prefer the one with less debt.
Having said that, while ROE is a useful indicator of business quality, you'll have to look at a whole range of factors to determine the right price to buy a stock. It is important to consider other factors, such as future profit growth -- and how much investment is required going forward. You can see how the company has grow in the past by looking at this FREEdetailed graphof past earnings, revenue and cash flow.
But note:Banka BioLoo may not be the best stock to buy. So take a peek at thisfreelist of interesting companies with high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Spotify faces tough competition: Analyst
Shares of Spotify (SPOT) recovered losses that followed a bearish call from Evercore, ending slightly higher for the session Monday. Evercore analyst Kevin Rippey wrote in a note to investors that the stock’s recent rally is representative of “an overly opportunistic view” as the company faces higher publisher rates, intensifying competition, and a limited potential for podcasts to bring in revenue.
“We simply do not see a path by which [Spotify] can generate the level of gross profit demanded by Street estimates over the medium-term,” he wrote.
Evercore downgraded Spotify to underperform, and slashed its price target on shares from $125 to $110.
With regards to the higher publisher rates, the issue can be traced back to Spotify’s appeal of the Copyright Royalty Board’s decision toraise royalty ratesover a five-year period. The music streaming servicerecently claimedthat it overpaid songwriters and publishers. Rippey thinks that “more caution is warranted” on this issue because Spotify may simply not win the appeal.
On competition, he makes the case for why investors are not paying enough attention to competition from other streaming services, particularly abroad. As of March 31,Spotify boasted100 million subscribers across 79 markets. But Rippey notes SensorTower data shows that at the country level, competition is far more intense than suggested by global aggregates.
“[In a scenario where SPOT was to leave any given market, consumers would likely quickly switch to a close alternative, resulting in a far smaller impact to the labels than implied by headline numbers,” Rippey says. “As a result, we see SPOT’s leverage over the major labels as less than many bulls suspect and limits our confidence that SPOT can force any material concessions from the labels in potential 2019 or 2021 rate negotiations.”
As for podcasts, Rippey says listening numbers are too small to lift the key metric of gross margin.
Despite these points of caution, most Wall Street analysts who cover the stock are bullish, with more than 20 “buy” ratings. Shares of service are up more than 30% for the year.
Pamela Granda is a producer on Yahoo Finance’s closing bell show, The Final Round. Follow her onTwitter.
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Official blasts complacency before fatal 2017 train crash
SEATTLE (AP) — The National Transportation Safety Board has published its final report Monday on a deadly Amtrak derailment in Washington state in 2017, with the agency's vice chairman blasting what he described as a "Titanic-like complacency" among those charged with ensuring train operations were safe. The train was on its first paid passenger run on a new route from Tacoma to Portland, Oregon, when it plunged onto Interstate 5, killing three people and injuring dozens. In findings released last month, the NTSB said the engineer lost track of where he was and failed to slow down before a curve. The agency said a series of decisions or inactions by Amtrak as well as state and federal regulators set the engineer up to fail. The agency's vice chairman, Bruce Landsberg, wrote in comments published with the final report Monday that the root cause was "extremely lax safety oversight, unclear responsibility, and poor training." "There was a Titanic-like complacency and certainty exhibited by those tasked with the safety, operation and management of the Point Defiance Bypass rail line before the revenue service started in 2017," Landsberg wrote. "The term 'accident' is inappropriate because that implies that this was an unforeseen and unpredictable event. It was anything but unforeseeable." Landsberg noted that the NTSB has been investigating derailments caused by speeding trains around curves for decades, and that the agency has also spent decades urging the Federal Railroad Administration to require "positive train control," GPS-based technology that can automatically slow or stop trains. Congress mandated the technology by the end of last year, but compliance has been spotty and the deadline has been extended. It hadn't been implemented on the new bypass route in Washington when the derailment occurred, but it is now in effect on the bypass and on the rest of the Amtrak Cascades passenger route from the Canadian border to Eugene, Oregon. Story continues The railroad administration said in an emailed statement Monday that it is reviewing the report and dedicated to helping ensure the full implementation of positive train control. The NTSB pointed out that earlier this month, the railroad administration filed a rulemaking notice that it is seeking to further delay requirements that commuter and intercity passenger railroads implement "system safety programs" where they identify and mitigate all risks along their routes. NTSB member Jennifer Homendy said in a press release Monday that if the railroad administration is going to continue to drag its feet, the railroads should act on their own. "The Federal Railroad Administration's notice of proposed rulemaking once again delays the implementation of regulations that will make passenger rail operations safer," Homendy said. "The absence of a sense of urgency to implement this safety recommendation and the willingness to continue to jeopardize the safety of train crews and their passengers is unacceptable." In the final report, the NTSB faulted regional transit agency Sound Transit for not sufficiently mitigating the danger of the sharp bend; Amtrak for not better training the engineer; the state Department of Transportation for not ensuring the route was safe before green-lighting passenger train service; and the railroad administration for allowing the use of European-style rail cars that didn't meet updated safety standards. In a written statement, Amtrak said it has worked with the NTSB to address its recommendations, to implement positive train control across its network, and to identify and mitigate risks. It submitted its system safety program to the railroad administration last November, it noted. "We remain deeply saddened by the loss of life and injuries due to this tragic event," Amtrak said in a written statement Monday. "Amtrak remains committed to continuously improving safety for both our customers and employees." The NTSB's final report issued 26 new safety recommendations and reiterated three that already exist. They included the placement of more signs along tracks to remind engineers where they are and of speed limits, and the replacement of four Talgo trainsets used on the Amtrak Cascades line. Janet Matkin, a spokeswoman for the Washington Department of Transportation's rail division, said the Talgo trains — two owned by Washington state, and two owned by Amtrak — met safety standards when they were first used on the Cascades line about two decades ago. Their use was grandfathered in when the standards were later updated. "The finding that we're focusing on right now is the recommendation that we replace the Talgo trainset as soon as possible," she said. "We are working with Amtrak to identify substitute equipment we can move to the Pacific Northwest. It's not easy to find extra equipment, especially during the busy summer travel times." The state had already planned to replace the four trains in the mid-2020s, at a cost of $25 million each. The Oregon Department of Transportation also owns two Talgo trains, but those are newer and do meet safety requirements, Matkin said. |
What Do Analysts Think About PI Industries Limited's (NSE:PIIND) Earnings Outlook?
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The most recent earnings update PI Industries Limited's (NSE:PIIND) released in May 2019 showed that the business experienced a strong tailwind, eventuating to a double-digit earnings growth of 12%. Below is a brief commentary on my key takeaways on how market analysts perceive PI Industries's earnings growth outlook over the next few years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
View our latest analysis for PI Industries
Market analysts' prospects for this coming year seems positive, with earnings rising by a robust 28%. This growth seems to continue into the following year with rates arriving at double digit 57% compared to today’s earnings, and finally hitting ₹7.5b by 2022.
Although it’s helpful to be aware of the growth rate year by year relative to today’s level, it may be more valuable analyzing the rate at which the company is growing every year, on average. The benefit of this approach is that it removes the impact of near term flucuations and accounts for the overarching direction of PI Industries's earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I put a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 20%. This means that, we can expect PI Industries will grow its earnings by 20% every year for the next few years.
For PI Industries, I've put together three pertinent aspects you should further research:
1. Financial Health: Does it have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Valuation: What is PIIND 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 PIIND is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of PIIND? 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. |
AMD's "Chinese Clone" Plans Implode as U.S. Regulators Close In
The lengthy trade dispute between the U.S. and China has had huge implications for many industries that drive the U.S. economy. In technology, the conflict has put pressure on companies that have aimed to bridge the gulf between the two nations and take advantage of the opportunity to bring new products to the growing Chinese market.
Back in 2016,AMD(NASDAQ: AMD)launched Tianjin Haiguang Advanced Technology Investment Co., or THATIC, a joint venture with a consortium of Chinese companies, to license its x86 chip designs to Chinese chipmakers. AMD and THATIC also set up two other joint ventures -- Chengdu Haiguang Microelectronics Technology (CHMT) and Haiguang IC Design (Hygon).
AMD retained a majority stake in CHMT, which prevented its chip designs from being transferred to THATIC. THATIC, in turn, retained a majority stake in Hygon, which licensed AMD's chip designs from CHMT. CHMT produced the chips by outsourcing them to a foundry, and then sent them to Hygon for packaging, marketing, and sales to Chinese customers.
Image source: Getty Images.
That arrangement led to Hygon's launch last summer of Dhyana, a high-end x86 CPU for Chinese data centers. The launch initially seemed like a breakthrough for China's domestic CPU market, but Dhyana was technically just alegal cloneof AMD's EPYC.
For a while, AMD and THATIC's deal placated Washington and Beijing. AMD's intellectual property would only be licensed, not transferred, to a Chinese company, and a Chinese chipmaker gained the ability to sell high-end x86 data-center CPUs.
Unfortunately for AMD, Washington's position recently shifted when it added THATIC, CHMT, and Hygon to its growing "entity list" of Chinese companies with which American companies are barred from doing business.
The Commerce Department cited those joint ventures' close relationships with Sugon, which designs and sells supercomputers for Chinese companies and government agencies, as the main reason for the decision. As a result, AMD won't receive any more royalties from helping Chinese chipmakers produce a "clone army" of EPYC CPUs.
AMD's joint ventures in China were clearly aimed at helping it profit from the Chinese market without tripping regulatory alarms. Selling x86 CPUs to China was already a thorny issue under the Obama administration, andthe U.S. bannedIntel(NASDAQ: INTC)from selling its top Xeon chips to China's supercomputer centers back in 2015. Chinese chipmakers developed new CPUs -- but their MIPS, PowerPC, and x86 CPUs couldn't match the horsepower of Intel and AMD's chips.
Image source: Getty Images.
That's why the consortium of Chinese companies turned to AMD. AMD -- eager to tap into the Chinese market, showcase EPYC's power, and reduce Intel's near-monopoly in data-center chips -- seemed eager to comply. However, the Trump administration probably sees AMD's joint ventures as covers for the "forced technology transfers" it aims to block.
AMD generated $60 million in licensing revenues from THATIC last quarter, which accounted for 5% of its top line. However, the inclusion of that high-margin revenue significantly boosted its operating profit, which rose nearly fivefold annually to $68 million.
The loss of its Chinese licensing fees will initially sting, but the THATIC deal only covered the first generation of AMD's EPYC designs. AMD plans to launch its second-gen EPYC CPUs in the third quarter, and the upgrade should leave Hygon's Dhyana chips in the dust and allay concerns about AMD's empowerment of Chinese chipmakers.
Going into the second half of the year, stronger sales of AMD's new EPYC, Ryzen, and Navi chips could easily offset the loss of THATIC's licensing revenue. That loss certainly represents a missed opportunity for AMD, but investors shouldn't overreact and sell the stock on this news alone. Instead, they should focus on EPYC and Ryzen's market share gains against Intel, especially as Intel struggles with itsongoing chip shortage, and the ability of its new Navi GPUs to challengeNVIDIA's latest GPUs.
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Leo Sunhas no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends NVIDIA. The Motley Fool has adisclosure policy. |
Police: Gunman, victims shot before hours-long standoff
SAN FRANCISCO (AP) — A gunman likely killed four people and then himself before police arrived in a California cul-de-sac neighborhood, authorities said Monday. Officers responding to reports of shots fired Sunday night say they did not hear any gunfire after they arrived at the chaotic, bloody scene in San Jose. They say several people streamed out of the home, including the wife and daughter of the gunman. Police used an armored vehicle to take two victims, an adult man and woman, away from the house. They were transported to a hospital, where both died. Two other adult women and the gunman remained inside the residence that officers surrounded and eventually entered around 1:25 a.m. Monday. They found all three people with at least one gunshot wound. All died at the scene, police said. "Family members reported that a man at the house had used a handgun to shoot several people inside," police Sgt. Enrique Garcia said. Garcia said no others were shot. Authorities haven't released the names of the dead, or how they might have been connected. They have not discussed a motive. Neighboring homes were evacuated as SWAT officers surrounded the home and negotiators tried to contact the gunman. Police say there are no other suspects, and they are treating the deaths as a murder-suicide. Next-door neighbor Alan Bui said he provided refuge for the gunman's wife. Bui told The Mercury News in San Jose that he was in his backyard helping his young son assemble a toy when he heard arguing followed by a rapid succession of pops. "I took my kid and my wife into the master bedroom and hid. But I accidentally left the sliding door open," Bui said. "The wife jumped the fence and ran into my house and then she locked the door in my kid's room." View comments |
PI Industries Limited (NSE:PIIND): Commentary On Fundamentals
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Attractive stocks have exceptional fundamentals. In the case of PI Industries Limited (NSE:PIIND), there's is a company with impressive financial health as well as an optimistic future outlook. Below, I've touched on some key aspects you should know on a high level. If you're interested in understanding beyond my broad commentary, take a look at thereport on PI Industries here.
Investors seeking high cash growth potential should consider PIIND, with forecasted operating cash flow growth of 65%. This is expected to flow down into an impressive return on equity of 20% over the next couple of years. PIIND's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This implies that PIIND manages its cash and cost levels well, which is a key determinant of the company’s health. PIIND seems to have put its debt to good use, generating operating cash levels of 32.26x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows.
For PI Industries, I've put together three relevant factors you should further examine:
1. Historical Performance: What has PIIND's returns been like over the past? Go into more detail in the past track record analysis and take a look atthe free visual representations of our analysisfor more clarity.
2. Valuation: What is PIIND 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 PIIND is currently mispriced by the market.
3. Other Attractive Alternatives: Are there other well-rounded stocks you could be holding instead of PIIND? Exploreour interactive list of stocks with large potentialto get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Is IAMGOLD a Buy?
Amid rumors that the company was shopping around its assets, IAMGOLD (NYSE: IAG) has seen its shares skyrocket more than 28% over the past month. The stock's climb, however, has failed to compensate for the disfavor investors expressed for the stock earlier in the year. Since the start of 2019, the stock has fallen about 11%. While the stock's price tag is steeper now, that alone doesn't dismiss it as a potential buy. Let's dig in to see if shares of IAMGOLD deserve a place in investors' portfolios. Stacks of gold coins sit on rows of gold bars. Image source: Getty Images. The good One of IAMGOLD's most alluring aspects is its solid balance sheet. Mining gold doesn't come cheaply, and it's common to see mining companies with balance sheets burdened with significant amounts of debt. But not in IAMGOLD's case. The company ended the first quarter of 2019 sporting a net cash position of $281 million. Management, moreover, appears to be intent on maintaining this degree of financial health in the future. On the company's Q1 2019 conference call, Steve Letwin, IAMGOLD's president and CEO, said that, regarding its individual mines, management is "going to be focusing on each and every one of them to reduce the cost, increase margins, preserve cash, and fund all our cash requirements with these site cash flows." Another compelling feature of the company is the number of projects in its pipeline. As IAMGOLD depletes the gold resources at its five operating assets, the numerous projects in varying phases of development ensure the company will be able to replenish its resources, providing more opportunities to dig. IAMGOLD has numerous projects in varying phases of development. Image source: IAMGOLD corporate website. Following, in part, the completion of feasibility studies at the Cote Gold Project and Boto Gold Project in 2018, IAMGOLD reported a 23% increase in its proven and probable gold reserves. And in 2019, the company will probably expand its reserves even further as it completes a feasibility study at Essakane and continues exploration at Westwood and Nelligan. Story continues The bad While IAMGOLD glitters with regard to its balance sheet and pipeline, it appears less attractive when considering the high-cost at which it digs the yellow stuff out of the ground. In 2018, for example, IAMGOLD reported all-in sustaining costs (AISC) of $1,057 per gold ounce -- an increase from the $1,003 it reported in 2017. That represents a slim gold margin, considering the company reported average gold prices per ounce of $1,270 and $1,261 in 2018 and 2017, respectively. And it doesn't seem as if IAMGOLD will be achieving a significant reduction in costs in the near future. According to guidance, IAMGOLD will report AISC per gold ounce between $1,030 and $1,080 in 2019. Beyond the company's financials, the stock's lack of a dividend represents another reason to be unenthusiastic -- especially when juxtaposed with the company's gold-mining peers. Yamana Gold (NYSE: AUY) , for example, recently announced a doubling of its dividend , and Harmony Gold (NYSE: HMY) currently offers investors an attractive 3.2% yield. With no indication that the company intends to reinstate a dividend, and given that the stock has traditionally underperformed the S&P 500 and the price of gold, there are numerous inauspicious signs regarding the prospect of holding a position in IAMGOLD. And the ugly No consideration of IAMGOLD's stock would be complete without looking at the price tag. Since the earnings figures of mining companies are often complicated by the non-cash expenses tied to the depreciation of their assets, examining these stocks in terms of their cash flows provides better insight. In regard to IAMGOLD, we find that the stock is currently trading at 16.3 times cash from operations on a trailing-12-month basis. In addition to this seeming richly valuation compared to its five-year multiple of 9.8, according to Morningstar , the stock seems pricey next to its peers. Yamana Gold and Harmony Gold trade at price-to-cash flow multiples of 7.9 and and 3.3, respectively. The golden takeaway Although IAMGOLD's unburdened balance sheet and strong pipeline suggest that the company warrants consideration for investors interested in gaining or expanding exposure to gold-mining stocks, there are plenty of reasons to hit the pause button. Besides the slim margin at which it mines the yellow metal, the lack of a dividend and steep price tag provide investors with several reasons to look elsewhere. More From The Motley Fool 10 Best Stocks to Buy Today The $16,728 Social Security Bonus You Cannot Afford to Miss 20 of the Top Stocks to Buy (Including the Two Every Investor Should Own) What Is an ETF? 5 Recession-Proof Stocks How to Beat the Market Scott Levine has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy . |
3 Warren Buffett Stocks Worth Buying Now
Investors around the world understandably pay close attention to how Warren Buffett, the CEO ofBerkshire Hathawayand arguably the world's greatest living investor, puts his staggering fortune of more than $80 billion to work.
Of course, the bulk of that wealth is held in the form of shares of Berkshire Hathaway, where Buffett and histwo most trusted stock pickers, Ted Weschler and Todd Combs, manage an enviable portfolio of industry-leading businesses.
That certainly doesn't mean all investors should simply mimic the positions in Berkshire's portfolio, which have been built using an enormous base and at widely varyingcost bases. But that raises the question: Are there any "Warren Buffett stocks" worth buying today?
Read on to see why three of our top Motley Fool contributors thinkCostco(NASDAQ: COST),Apple(NASDAQ: AAPL), andAmazon.com(NASDAQ: AMZN)could be worth considering.
IMAGE SOURCE: THE MOTLEY FOOL.
Steve Symington(Costco):It's no mystery Warren Buffett admires durable businesses with sustainable moats -- so it should be equally unsurprising that Berkshire Hathaway currently owns a 1% stake in Costco worth nearly $1.2 billion.
The discount warehouse retailer has consistently thrived despite the rise of low-margin online competitors, thanks largely to the combination of its own bare-bones operating structure, steadily growing store base, exceedingly loyal paid members, and even its own e-commerce initiatives (where comparable sales soared 22% in itsmost recent quarter). What's more, Costco is set to even further streamline its business with plans toadd self-checkout kiosksto hundreds of higher-volume locations in the coming months.
That said, with shares trading at all-time highs right now, it's clear the market has rewarded Costco for its relative outperformance. But with a healthy dividend yielding around 1% annually at today's prices and no signs of its underlying business losing momentum, I think the stock is still worth buying for patient, long-term shareholders.
Keith Noonan(Apple):Berkshire making Apple its biggest stock holding represents a valuable vote of confidence, but investors have had to contend with declining iPhone sales and the possibility that the tech business will no longer be able to rely on its handset lines to drive growth. That poses a significant risk for Apple, but the company still looks to be in pretty good position to thrive over the long term. Between the opportunities in further building out its software and services ecosystem and introducing devices that present bigger technological leaps compared to the iterative improvements that have come to define the mobile market, it would be a mistake to think Apple's growth avenues have been closed off.
The iCompany already captures a portion of third-party sales made through the App Store, and it's made a push into subscription entertainment offerings with services like Apple Music. These initiatives helped services revenue grow 16% year over year last quarter, and the segment still has gas in the tank. The company is launching its own video streaming and gaming services, and management sees a substantial growth opportunity in payment services, as more users make in-app purchases and mobile becomes even more integrated into everyday business.
The company should also have chances to reenergize its handset sales with feature additions that represent more dramatic upgrades than the ones delivered in recent years, and opportunities in categories like smart-home technologies and wearables suggest the company still has long-term avenues to growth in the hardware space. If product categories likeaugmented realitytake off, it seems like a solid bet that Apple will be at the forefront. The company not only managed to pioneer the smartphone, it managed to build one of the world's most valuable lifestyle brands. Coupled with its design expertise, that's an advantage that should help it lead the next big tech shifts.
Chris Neiger(Amazon.com):Warren Buffett's Berkshire Hathaway snatched up shares of Amazon in the first quarter of this year, and any time the famed investor's company makes an investment move, it's worth taking a closer look. Amazon is, of course, the largest online retailer in the U.S., with about 38% of all e-commerce sales in the country occurring on its platform.
Amazon's lead in the e-commerce market has given the company a substantial advantage, and considering that just 10% of all U.S. retail sales happen online right now, there's still tons of room for more growth.
Aside from Amazon's e-commerce dominance, the company also makes money from its growing advertising business, which is thethird-largest digital ad companyin the U.S., and its Amazon Web Services (AWS) cloud computing company. AWS is Amazon'skey profit generatorright now and is the leading cloud computing service. With cloud computing poised to become a $278 billion market by 2021, Amazon will surely benefit for years to come.
With its strong e-commerce business, promising advertising opportunities, and dominance in the cloud computing market, Amazon is the fantastic company investors are looking for: one that still has lots of potential for more share price gains.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors.Chris Neigerhas no position in any of the stocks mentioned.Keith Noonanhas no position in any of the stocks mentioned.Steve Symingtonhas no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon, Apple, and Berkshire Hathaway (B shares). The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool recommends Costco Wholesale. The Motley Fool has adisclosure policy. |
Despite Its High P/E Ratio, Is Pansari Developers Limited (NSE:PANSARI) Still Undervalued?
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This article is written for those who want to get better at using price to earnings ratios (P/E ratios). We'll look at Pansari Developers Limited's (NSE:PANSARI) P/E ratio and reflect on what it tells us about the company's share price. Looking at earnings over the last twelve months,Pansari Developers has a P/E ratio of 20.36. That means that at current prices, buyers pay ₹20.36 for every ₹1 in trailing yearly profits.
View our latest analysis for Pansari Developers
Theformula for P/Eis:
Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS)
Or for Pansari Developers:
P/E of 20.36 = ₹22.8 ÷ ₹1.12 (Based on the year to March 2019.)
The higher the P/E ratio, the higher the price tag of a business, relative to its trailing earnings. That isn't necessarily good or bad, but a high P/E implies relatively high expectations of what a company can achieve in the future.
Companies that shrink earnings per share quickly will rapidly decrease the 'E' in the equation. Therefore, even if you pay a low multiple of earnings now, that multiple will become higher in the future. Then, a higher P/E might scare off shareholders, pushing the share price down.
Pansari Developers shrunk earnings per share by 39% over the last year. And EPS is down 22% a year, over the last 5 years. This growth rate might warrant a below average P/E ratio.
We can get an indication of market expectations by looking at the P/E ratio. As you can see below, Pansari Developers has a higher P/E than the average company (17.4) in the real estate industry.
Its relatively high P/E ratio indicates that Pansari Developers shareholders think it will perform better than other companies in its industry classification. Clearly the market expects growth, but it isn't guaranteed. So further research is always essential. I often monitordirector buying and selling.
It's important to note that the P/E ratio considers the market capitalization, not the enterprise value. So it won't reflect the advantage of cash, or disadvantage of debt. Hypothetically, a company could reduce its future P/E ratio by spending its cash (or taking on debt) to achieve higher earnings.
While growth expenditure doesn't always pay off, the point is that it is a good option to have; but one that the P/E ratio ignores.
Net debt totals a substantial 159% of Pansari Developers's market cap. If you want to compare its P/E ratio to other companies, you must keep in mind that these debt levels would usually warrant a relatively low P/E.
Pansari Developers's P/E is 20.4 which is above average (15.4) in the IN market. With relatively high debt, and no earnings per share growth over twelve months, it's safe to say the market believes the company will improve its earnings growth in the future.
Investors should be looking to buy stocks that the market is wrong about. As value investor Benjamin Graham famously said, 'In the short run, the market is a voting machine but in the long run, it is a weighing machine.' Although we don't have analyst forecasts, you could get a better understanding of its growth by checking outthis more detailed historical graphof earnings, revenue and cash flow.
But note:Pansari Developers may not be the best stock to buy. So take a peek at thisfreelist of interesting companies with strong recent earnings growth (and a P/E ratio below 20).
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
American Airlines Is Betting on the Airbus A321XLR
As expected,Airbus(NASDAQOTH: EADSY)launched the longest-range variant of its popular A321neo jet --the A321XLR-- at last week's Paris Air Show. With a stated range of 4,700 nautical miles, the A321XLR will have by far the most range in its size class, allowing airlines to open up new long-haul routes that don't have enough demand to support wide-body service.
The A321XLR has already attracted substantial interest from airlines. During the air show, Airbus won 48 firm orders and 79 commitments for the new model, and customers converted another 99 firm orders from other models to the A321XLR.
No. 1 global airlineAmerican Airlines(NASDAQ: AAL)made the biggest commitment to the new jet model, agreeing to take 50. Let's take a look at why American Airlines is so bullish on the A321XLR.
Like the other two big U.S. network carriers, American Airlines currently usesBoeing757-200s for "long-and-thin" routes between the East Coast and Europe, as well as on certain routes to South America. However, the 757 has been out of production for 15 years. The 34 Boeing 757s that American still operates are nearly 20 years old on average.
American Airlines plans to replace 10 of its remaining 757s later this year, but there is no good substitute currently available for the other 24, which serve longer routes. The A321XLR is perfect, though, offering more range and 30% lower fuel burn per seat.
American Airlines will add 50 A321XLRs to its fleet between 2023 and 2025. Image source: Airbus.
As a result, American has decided to convert 30 of its existing Airbus A321neo orders to the A321XLR variant. The first eight will arrive in 2023 -- the first year of availability -- with the remaining 22 coming in 2024. That will be perfect timing for replacing American Airlines' last 24 757s.
However, American Airlines' management sees the Airbus A321XLR as more than just a replacement for the carrier's current 757s. The airline exercised 20 of its A321neo options to order additional A321XLRs that will arrive in 2025, bringing its A321XLR fleet to a total of 50 aircraft.
Given that American Airlines plans to take roughly twice as many A321XLRs as it would need to replace the 24 757s that will remain in its fleet after this year, the airline clearly expects this aircraft to open up new growth opportunities.
The A321XLR could be particularly useful in Philadelphia, American's main transatlantic hub. Philadelphia doesn't have the same level of local demand as New York, whereDelta Air LinesandUnited Continentalhave their main transatlantic gateways. Thus, having a smaller long-haul aircraft could be vital for sustaining service to destinations that attract less traffic.
Image source: American Airlines.
American will also be able to fly from its Miami hub to pretty much anywhere in South America using the A321XLR. This could help the carrier expand its service to Brazil, where it has had to eliminate several routes in recent years due to a downturn in demand. Demand for travel to South America tends to be counterseasonal compared to the transatlantic market, so American may be able to serve smaller international destinations on a seasonal basis, flying A321XLRs to Europe during the spring and summer and to South America during the fall and winter.
The international expansion opportunities provided by the Airbus A321XLR will help American Airlines diversify away from the domestic market, to which it hasgreater exposurethan its main rivals.
As a small, fuel-efficient aircraft capable of flying long-haul routes, the A321XLR will improve American Airlines' ability to match capacity to demand in its international network. And by enabling the carrier to add more international routes to its arsenal, the new aircraft will put American Airlines in a better position to win valuable corporate travel contracts.
American's A321XLRs will also enable the airline to simplify its fleet, as the plane will be very similar to the A321s and A321neos that American Airlines already operates. Meanwhile, the older 757 family will be fully retired by 2025 at the latest, reducing the company's costs.
The Airbus A321XLR certainly isn't a complete solution to American Airlines' recent struggles with weak profitability. Nevertheless, it could become an important part of the airline's turnaround plan.
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Adam Levine-Weinbergowns shares of Delta Air Lines and is long January 2020 $20 calls on American Airlines Group. The Motley Fool owns shares of and recommends Delta Air Lines. The Motley Fool has adisclosure policy. |
Can You Imagine How Space Group Holdings's (HKG:2448) Shareholders Feel About The 22% Share Price Increase?
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The simplest way to invest in stocks is to buy exchange traded funds. But investors can boost returns by picking market-beating companies to own shares in. To wit, theSpace Group Holdings Limited(HKG:2448) share price is 22% higher than it was a year ago, much better than the market return of around -9.3% (not including dividends) in the same period. If it can keep that out-performance up over the long term, investors will do very well! Space Group Holdings hasn't been listed for long, so it's still not clear if it is a long term winner.
See our latest analysis for Space Group Holdings
While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
During the last year, Space Group Holdings actually saw its earnings per share drop 46%. So we don't think that investors are paying too much attention to EPS. Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.
Unfortunately Space Group Holdings's fell 16% over twelve months. So the fundamental metrics don't provide an obvious explanation for the share price gain.
You can see how revenue and earnings have changed over time in the image below, (click on the chart to see cashflow).
Thisfreeinteractive report on Space Group Holdings'sbalance sheet strengthis a great place to start, if you want to investigate the stock further.
It's nice to see that Space Group Holdings shareholders have gained 22% over the last year. And the share price momentum remains respectable, with a gain of 14% in the last three months. This suggests the company is continuing to win over new investors. Before forming an opinion on Space Group Holdings you might want to consider these3 valuation metrics.
If you like to buy stocks alongside management, then you might just love thisfreelist of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HK exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
FedEx, Micron earnings — What you need to know in markets Tuesday
After the bell Tuesday, industrial heavyweight FedEx (FDX) and chipmaker Micron (MU) will release quarterly results.
FedEx is often looked to by investors as a reliable bellwether for global economic activity. In December of 2018, FedEx issued weak guidance andwarned investors that the company was seeing continued deceleration internationally. The industrial giant cut its guidance again in March. Investors and analysts will likely be paying close attention to what management says on the earnings call in regards to heightened trade tensions and how those issues are impacting FedEx’s business.
In addition, after a longtime partnership, FedEx announced earlier this month that it would no longer be providing express U.S. shipping services for e-commerce giant Amazon (AMZN). Amazon has also been beefing up its in-house freight services. Though FedEx explained that Amazon was not a huge customer and only accounted for about 1.3% of total revenue in 2018, investors will be curious to see FedEx fares in the longterm following that divorce.
Analysts polled by Bloomberg expect FedEx to report adjusted earnings of $4.83 per share on $17.8 billion in revenue.
Micron’s report comes on the heels of rival Broadcom’s (AVGO)announcement earlier this month warning investorsthat the U.S. ban on Chinese tech giant Huawei and the ongoing trade war will likely cut into its revenue by $2 billion.
Analysts are predicting that demand weakness surrounding dynamic random-access memory (DRAM) chips and NAND memory chips will likely weigh on Micron.
“We are reducing estimates for [Micron] to account for worse-than-expected [average selling price] trends (particularly for Server DRAM) and a halt in shipments to Huawei, [Micron]'s largest customer,” Susquehanna analyst Mehdi Hosseini wrote in a note June 3. “We also expect [Micron] to have negative FCFs for a few quarters. The key question is whether [Micron] could keep [operating margin] above the break even point.”
Micron is expected to report adjusted earnings of 78 cents per share on $4.68 billion in revenue, according to data compiled by Bloomberg.
—
Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter:@heidi_chung.
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Did Automotive Axles Limited's (NSE:AUTOAXLES) Recent Earnings Growth Beat The Trend?
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After reading Automotive Axles Limited's (NSE:AUTOAXLES) most recent earnings announcement (31 March 2019), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is a crucial aspect. Below is a brief commentary on my key takeaways.
View our latest analysis for Automotive Axles
AUTOAXLES's trailing twelve-month earnings (from 31 March 2019) of ₹1.2b has jumped 45% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 42%, indicating the rate at which AUTOAXLES is growing has accelerated. How has it been able to do this? Let's see whether it is merely because of an industry uplift, or if Automotive Axles has seen some company-specific growth.
In terms of returns from investment, Automotive Axles has invested its equity funds well leading to a 23% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 13% exceeds the IN Auto Components industry of 7.9%, indicating Automotive Axles has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Automotive Axles’s debt level, has increased over the past 3 years from 17% to 30%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 20% to 12% over the past 5 years.
Though Automotive Axles's past data is helpful, it is only one aspect of my investment thesis. While Automotive Axles has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I suggest you continue to research Automotive Axles to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for AUTOAXLES’s future growth? Take a look at ourfree research report of analyst consensusfor AUTOAXLES’s outlook.
2. Financial Health: Are AUTOAXLES’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out ourfinancial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore ourfree list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 2019. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
China, U.S. trade officials talk ahead of Trump-Xi meeting
SHANGHAI (Reuters) - Senior Chinese and U.S. trade officials spoke by telephone on Monday ahead of talks between Chinese President Xi Jinping and U.S. President Donald Trump set for later this week, as the world's two largest economies remain locked in a tariff war.
Trump and Xi are expected to meet on the second day of the Friday-Saturday Group of 20 summit in Japan, the first face-to-face meeting for the leaders since trade talks broke off in May.
Chinese Vice Premier Liu He held a phone conversation with U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin, China's Ministry of Commerce said in a statement posted to its website on Tuesday morning.
During the call the Chinese and U.S. officials exchanged opinions on trade in accordance with the instructions of the two countries' heads of state, and agreed to maintain communications, the statement said.
China's official Xinhua News Agency said on Tuesday that the call took place at the request of U.S. officials.
A senior U.S. official said Monday that Trump views the meeting with Xi as a chance to see where Beijing stands on the two countries' trade war, and is "comfortable with any outcome."
(Reporting by Andrew Galbraith; editing by Simon Cameron-Moore) |
Does Automotive Axles Limited's (NSE:AUTOAXLES) 45% Earnings Growth Make It An Outperformer?
Want to participate in a short research study ? Help shape the future of investing tools and you could win a $250 gift card! For investors, increase in profitability and industry-beating performance can be essential considerations in an investment. Below, I will examine Automotive Axles Limited's ( NSE:AUTOAXLES ) track record on a high level, to give you some insight into how the company has been performing against its long term trend and its industry peers. See our latest analysis for Automotive Axles How Well Did AUTOAXLES Perform? AUTOAXLES's trailing twelve-month earnings (from 31 March 2019) of ₹1.2b has jumped 45% compared to the previous year. Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 42%, indicating the rate at which AUTOAXLES is growing has accelerated. How has it been able to do this? Let's see if it is solely a result of an industry uplift, or if Automotive Axles has experienced some company-specific growth. NSEI:AUTOAXLES Income Statement, June 25th 2019 In terms of returns from investment, Automotive Axles has invested its equity funds well leading to a 23% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 13% exceeds the IN Auto Components industry of 7.9%, indicating Automotive Axles has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Automotive Axles’s debt level, has increased over the past 3 years from 17% to 30%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 20% to 12% over the past 5 years. What does this mean? Though Automotive Axles's past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Automotive Axles gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Automotive Axles to get a more holistic view of the stock by looking at: Story continues Future Outlook : What are well-informed industry analysts predicting for AUTOAXLES’s future growth? Take a look at our free research report of analyst consensus for AUTOAXLES’s outlook. Financial Health : Are AUTOAXLES’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here . 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 . NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 2019. This may not be consistent with full year annual report figures. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com . This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Should You Buy The Karur Vysya Bank Limited (NSE:KARURVYSYA) For Its Dividend?
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Could The Karur Vysya Bank Limited (NSE:KARURVYSYA) be an attractive dividend share to own for the long haul? Investors are often drawn to strong companies with the idea of reinvesting the dividends. Yet sometimes, investors buy a stock for its dividend and lose money because the share price falls by more than they earned in dividend payments.
With a 0.8% yield and a nine-year payment history, investors probably think Karur Vysya Bank looks like a reliable dividend stock. A 0.8% yield is not inspiring, but the longer payment history has some appeal. When buying stocks for their dividends, you should always run through the checks below, to see if the dividend looks sustainable.
Explore this interactive chart for our latest analysis on Karur Vysya Bank!
Companies (usually) pay dividends out of their earnings. If a company is paying more than it earns, the dividend might have to be cut. Comparing dividend payments to a company's net profit after tax is a simple way of reality-checking whether a dividend is sustainable. In the last year, Karur Vysya Bank paid out 23% of its profit as dividends. Given the low payout ratio, it is hard to envision the dividend coming under threat, barring a catastrophe.
Remember, you can always get a snapshot of Karur Vysya Bank's latest financial position,by checking our visualisation of its financial health.
One of the major risks of relying on dividend income, is the potential for a company to struggle financially and cut its dividend. Not only is your income cut, but the value of your investment declines as well - nasty. The first recorded dividend for Karur Vysya Bank, in the last decade, was nine years ago. Although it has been paying a dividend for several years now, the dividend has been cut at least once by more than 20%, and we're cautious about the consistency of its dividend across a full economic cycle. During the past nine-year period, the first annual payment was ₹1.56 in 2010, compared to ₹0.60 last year. Dividend payments have fallen sharply, down 61% over that time.
When a company's per-share dividend falls we question if this reflects poorly on either the business or management. Either way, we find it hard to get excited about a company with a declining dividend.
Given that dividend payments have been shrinking like a glacier in a warming world, we need to check if there are some bright spots on the horizon. It's not great to see that Karur Vysya Bank's have fallen at approximately 18% over the past five years. If earnings continue to decline, the dividend may come under pressure. Every investor should make an assessment of whether the company is taking steps to stabilise the situation.
We'd also point out that Karur Vysya Bank issued a meaningful number of new shares in the past year. Trying to grow the dividend when issuing new shares reminds us of the ancient Greek tale of Sisyphus - perpetually pushing a boulder uphill. Companies that consistently issue new shares are often suboptimal from a dividend perspective.
To summarise, shareholders should always check that Karur Vysya Bank's dividends are affordable, that its dividend payments are relatively stable, and that it has decent prospects for growing its earnings and dividend. Firstly, we like that Karur Vysya Bank has a low and conservative payout ratio. Second, earnings per share have been in decline, and its dividend has been cut at least once in the past. In summary, we're unenthused by Karur Vysya Bank as a dividend stock. It's not that we think it is a bad company; it simply falls short of our criteria in some key areas.
Given that earnings are not growing, the dividend does not look nearly so attractive. See if the 8 analysts are forecasting a turnaround in ourfree collection of analyst estimates here.
We have also put together alist of global stocks with a market capitalisation above $1bn and yielding more 3%.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Drones disrupt flights at Singapore airport for second time in a week
SINGAPORE (Reuters) - Unauthorized drone flying caused the second spate of delays and flight diversions in less than a week at Singapore's Changi airport on Monday night, the city-state's aviation authority said. Around 18 departures and arrivals were delayed and seven flights were diverted from the global transit hub due to "bad weather and unauthorized drone activities", the Civil Aviation Authority of Singapore said in a statement on Tuesday. A similar incident involving drone flying affected 38 flights on Tuesday and Wednesday last week. Authorities are investigating. A surge in the availability of drones has become an increasing security concern for airports around the world. In December, drone sightings caused three days of travel chaos at London's Gatwick airport, resulting in the cancellation or diversion of about 1,000 flights at an estimated cost of more than 50 million pounds ($64 million). (Reporting by John Geddie; Editing by Paul Tait) View comments |
With A 4.0% Return On Equity, Is Orient Bell Limited (NSE:ORIENTBELL) A Quality Stock?
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One of the best investments we can make is in our own knowledge and skill set. With that in mind, this article will work through how we can use Return On Equity (ROE) to better understand a business. To keep the lesson grounded in practicality, we'll use ROE to better understand Orient Bell Limited (NSE:ORIENTBELL).
Over the last twelve monthsOrient Bell has recorded a ROE of 4.0%. One way to conceptualize this, is that for each ₹1 of shareholders' equity it has, the company made ₹0.040 in profit.
See our latest analysis for Orient Bell
Theformula for ROEis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for Orient Bell:
4.0% = ₹93m ÷ ₹2.3b (Based on the trailing twelve months to March 2019.)
Most readers would understand what net profit is, but it’s worth explaining the concept of shareholders’ equity. It is all the money paid into the company from shareholders, plus any earnings retained. You can calculate shareholders' equity by subtracting the company's total liabilities from its total assets.
ROE measures a company's profitability against the profit it retains, and any outside investments. The 'return' is the profit over the last twelve months. That means that the higher the ROE, the more profitable the company is. So, as a general rule,a high ROE is a good thing. That means ROE can be used to compare two businesses.
One simple way to determine if a company has a good return on equity is to compare it to the average for its industry. However, this method is only useful as a rough check, because companies do differ quite a bit within the same industry classification. If you look at the image below, you can see Orient Bell has a lower ROE than the average (7.7%) in the Building industry classification.
Unfortunately, that's sub-optimal. It is better when the ROE is above industry average, but a low one doesn't necessarily mean the business is overpriced. Nonetheless, it could be useful todouble-check if insiders have sold shares recently.
Virtually all companies need money to invest in the business, to grow profits. That cash can come from issuing shares, retained earnings, or debt. In the case of the first and second options, the ROE will reflect this use of cash, for growth. In the latter case, the debt used for growth will improve returns, but won't affect the total equity. Thus the use of debt can improve ROE, albeit along with extra risk in the case of stormy weather, metaphorically speaking.
Although Orient Bell does use debt, its debt to equity ratio of 0.43 is still low. Its ROE is certainly on the low side, and since it already uses debt, we're not too excited about the company. Careful use of debt to boost returns is often very good for shareholders. However, it could reduce the company's ability to take advantage of future opportunities.
Return on equity is useful for comparing the quality of different businesses. Companies that can achieve high returns on equity without too much debt are generally of good quality. If two companies have around the same level of debt to equity, and one has a higher ROE, I'd generally prefer the one with higher ROE.
Having said that, while ROE is a useful indicator of business quality, you'll have to look at a whole range of factors to determine the right price to buy a stock. Profit growth rates, versus the expectations reflected in the price of the stock, are a particularly important to consider. So I think it may be worth checking thisfreethisdetailed graphof past earnings, revenue and cash flow.
But note:Orient Bell may not be the best stock to buy. So take a peek at thisfreelist of interesting companies with high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
After Hours: MarketAxess and Axon Rise Up the S&P Ranks, CrowdStrike CEO Joins HPE's Board
In contrast to today's standard trading hours, the aftermarket hasn't seen many fresh, stock-moving news items -- which is a big reason why we're not seeing a lot of price leaps for most of the market's significant companies.
Turning to the news thathascome in tonight, theS&P 500index is getting an adjustment, while the CEO of a tech company still new to the market has nabbed a plum outside job. Here's more on both developments.
Image source: Getty Images.
Bond market trading platform operatorMarketAxess Holdings(NASDAQ: MKTX)is about to become much more well known. The stock is to be a constituent of the highly influential S&P 500 index, a move announced after market hours today by the S&P 500's parent company, S&P Dow Jones Indices.
MarketAxess is the choice to replace current S&P 500 memberL3 Technologies, a communications equipment defense company. Last year, peer companyHarris Corp.reached a deal to effectivelyacquire L3 Technologies in an all-stock arrangementthat is expected to close momentarily. Following the absorption of L3 Technologies into Harris, it will cease to be a separately traded stock.
MarketAxess, which is a component of the S&P MidCap 400 index, will ascend to the S&P 500 on July 1. It will be replaced on the S&P MidCap 400 by energy weapons specialistAxon Enterprise(NASDAQ: AAXN), which is a component of the S&P SmallCap 600 index.
For both MarketAxess and Axon, their respective index advancements should garner fresh attention from investors. MarketAxess will also likely attract more interest from the many index funds prowling the market; this effect should be less pronounced in Axon's case. In spite of this, both stocks are trading down slightly in after-hours action.
George Kurtz, co-founder and CEO of rising IT sector starCrowdStrike Holdings(NASDAQ: CRWD), is now part of a legacy company in the sector.Hewlett Packard Enterprise(NYSE: HPE)said in a press release circulated after market close that Kurtz has taken a seat on its board of directors.
The move comes mere weeks afterCrowdStrike's very successful IPO, which saw the cybersecurity solutions provider's stock rocket, surging to nearly twice its IPO price on the close of its first trading day.
Hewlett Packard Enterprise, citing Kurtz's 26 years of experience in the IT business with such companies as McAfee, said that Kurtz's "deep roots in important technology segments including cloud and cybersecurity will bring even stronger market insights to the Board and Company as we continue to further invest in market innovation."
Although joining the board of a famous name in the IT sector confers renown on a person, this doesn't seem to be reflected in CrowdStrike's share price at the moment. Post-market, CrowdStrike stock is trading down by slightly over 1%. The shares of Hewlett Packard Enterprise, meanwhile, are flatlining.
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Eric Volkmanhas no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Axon Enterprise and MarketAxess Holdings. The Motley Fool is short shares of Hewlett Packard Enterprise Co. The Motley Fool has adisclosure policy. |
PRESS DIGEST- British Business - June 25
June 25 (Reuters) - The following are the top stories on the business pages of British newspapers. Reuters has not verified these stories and does not vouch for their accuracy.
The Times
Britain-based hedge fund Seneca Investment Managers is understood to have approached other institutional shareholders to force changes to the five-person board at Woodford Patient Capital Plc. https://bit.ly/2J2jeSd
British digital lender Monzo hit a valuation of more than 2 billion pounds after raising 113 million pounds ($143.94 million) in a new round from a group led by the Y Combinator Continuity Fund, a Silicon Valley investor. https://bit.ly/2ZKl68K
The Guardian
UK homes hoping to shrink their carbon footprint by installing a solar-battery system face a steep VAT increase from October under new laws proposed by HM Revenue and Customs. https://bit.ly/2xeajaF
Canada-based Aurora Cannabis Inc said the UK was failing patients who might benefit from medicinal cannabis, as well as forfeiting economic gain, due to the restrictions of the existing regulatory regime. https://bit.ly/31Sdran
The Telegraph
UK Labour's finance chief, John McDonnell, has confirmed Labour plans to delist from the London Stock Exchange any company that "fails" to address the climate change crisis. https://bit.ly/2LdBt9T
Switzerland will ban European Union stock exchanges from trading Swiss shares in retaliation for Brussels' freezing its bourses out from the EU market. https://bit.ly/2XtngfD
Sky News
British asset and wealth management company Schroders Plc will oppose the re-election of FirstGroup Plc Chairman Wolfhart Hauser at Tuesday's general meeting. https://bit.ly/31V8EVw
British privately owned furniture retailer Oak Furnitureland has appointed advisers to explore options for funding an expansion programme a decade after its first store opened. https://bit.ly/2X4zwDN
The Independent
U.S. President Donald Trump has signed an executive order imposing further sanctions on Iran, as tensions between the United States and the Middle Eastern country have escalated following an attack on an American surveillance drone. https://bit.ly/2X3d0X8
($1 = 0.7851 pounds) (Compiled by Bengaluru newsroom) |
Taking A Look At Sandhar Technologies Limited's (NSE:SANDHAR) ROE
Want to participate in a short research study ? Help shape the future of investing tools and you could win a $250 gift card! While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. By way of learning-by-doing, we'll look at ROE to gain a better understanding of Sandhar Technologies Limited ( NSE:SANDHAR ). Sandhar Technologies has a ROE of 13% , based on the last twelve months. Another way to think of that is that for every ₹1 worth of equity in the company, it was able to earn ₹0.13. View our latest analysis for Sandhar Technologies How Do You Calculate Return On Equity? The formula for ROE is: Return on Equity = Net Profit ÷ Shareholders' Equity Or for Sandhar Technologies: 13% = ₹959m ÷ ₹7.2b (Based on the trailing twelve months to March 2019.) Most readers would understand what net profit is, but it’s worth explaining the concept of shareholders’ equity. It is all earnings retained by the company, plus any capital paid in by shareholders. Shareholders' equity can be calculated by subtracting the total liabilities of the company from the total assets of the company. What Does Return On Equity Mean? ROE looks at the amount a company earns relative to the money it has kept within the business. The 'return' is the amount earned after tax over the last twelve months. That means that the higher the ROE, the more profitable the company is. So, all else equal, investors should like a high ROE . That means it can be interesting to compare the ROE of different companies. Does Sandhar Technologies Have A Good ROE? One simple way to determine if a company has a good return on equity is to compare it to the average for its industry. Importantly, this is far from a perfect measure, because companies differ significantly within the same industry classification. If you look at the image below, you can see Sandhar Technologies has a similar ROE to the average in the Auto Components industry classification (13%). Story continues NSEI:SANDHAR Past Revenue and Net Income, June 25th 2019 That's neither particularly good, nor bad. ROE can give us a view about company quality, but many investors also look to other factors, such as whether there are insiders buying shares. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket. How Does Debt Impact Return On Equity? Companies usually need to invest money to grow their profits. The cash for investment can come from prior year profits (retained earnings), issuing new shares, or borrowing. In the case of the first and second options, the ROE will reflect this use of cash, for growth. In the latter case, the debt required for growth will boost returns, but will not impact the shareholders' equity. Thus the use of debt can improve ROE, albeit along with extra risk in the case of stormy weather, metaphorically speaking. Sandhar Technologies's Debt And Its 13% ROE Although Sandhar Technologies does use debt, its debt to equity ratio of 0.37 is still low. I'm not impressed with its ROE, but the debt levels are not too high, indicating the business has decent prospects. Conservative use of debt to boost returns is usually a good move for shareholders, though it does leave the company more exposed to interest rate rises. The Bottom Line On ROE Return on equity is one way we can compare the business quality of different companies. Companies that can achieve high returns on equity without too much debt are generally of good quality. If two companies have around the same level of debt to equity, and one has a higher ROE, I'd generally prefer the one with higher ROE. But ROE is just one piece of a bigger puzzle, since high quality businesses often trade on high multiples of earnings. It is important to consider other factors, such as future profit growth -- and how much investment is required going forward. So you might want to check this FREE visualization of analyst forecasts for the company . If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. If you spot an error that warrants correction, please contact the editor 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. |
Pompeo in Mideast talks on building a coalition against Iran
DUBAI, United Arab Emirates (AP) — U.S. Secretary of State Mike Pompeo held talks Monday with leaders in Saudi Arabia and the United Arab Emirates about countering the military threat from Iran by building a broad, global coalition that includes Asian and European countries. While Pompeo has seemingly willing and wealthy partners in the two Arab allies, he is likely to face a tough sell in Europe and Asia, particularly from those nations still committed to the 2015 nuclear deal with Iran that President Donald Trump repudiated last year. With tensions running high in the region after Iran shot down a U.S. surveillance drone on June 20 and Trump said he aborted a retaliatory strike, Iran's naval commander warned that his forces won't hesitate to down more U.S. drones that violate its airspace. The U.S. has been building up its military presence in the Persian Gulf. The U.S. announced additional sanctions Monday on Iran aimed at pressuring the Iranian leadership into talks. The sanctions, re-imposed after Trump withdrew from the nuclear deal, have crippled the Iranian economy and pushed up the cost of living. Iran has decried U.S. sanctions, which essentially bar it from selling its oil internationally, as "economic terrorism." At the United Nations, Iran's ambassador said talks with the U.S. were impossible in the face of escalating sanctions and intimidation. Ambassador Majid Takht Ravanchi said the Trump administration should de-escalate tensions by stopping "its military adventurism" in the region and moving away from "economic warfare against the Iranian people." After departing Saudi Arabia, where he met King Salman and Crown Prince Mohammed bin Salman, Pompeo met in the UAE with Abu Dhabi Crown Prince Mohammed bin Zayed to sell the Trump administration's idea for maritime security in the Persian Gulf. The plan would involve the UAE, Saudi Arabia and another 20 countries, Pompeo was heard telling the Abu Dhabi prince. Story continues "We'll need you all to participate, your military folks," Pompeo told the Abu Dhabi prince in the presence of some reporters traveling with him. "The president is keen on sharing that the United States doesn't bear the cost of this." While in Saudi Arabia earlier, Pompeo tweeted that he'd had a "productive meeting" with the Saudi monarch and discussed "heightened tensions in the region and the need to promote maritime security" in the Strait of Hormuz. Pompeo, considered a hard-liner in Washington, referred to Iran as "the world's largest state sponsor of terror" before he embarked on the hastily arranged Middle East stops en route to India, Japan and South Korea. He said he'd be speaking with leaders in Saudi Arabia and the UAE "about how to make sure that we are all strategically aligned, and how we can build out a global coalition ... not only throughout the Gulf states, but in Asia and in Europe" that is prepared to push back against Iran. But Germany, France and Britain, as well as Russia and China, remain part of the nuclear accord that lifted sanctions on Iran in exchange for set limits on its uranium enrichment levels. Trump pulled the U.S. out of the deal last year. Germany, Britain and France have sent envoys to Tehran recently, signaling they remain committed to diplomacy and dialogue. They cautioned against moves that can lead to conflict between the U.S. and Iran. Berlin appears cool toward U.S. talk of a global coalition against Iran as it tries to salvage the nuclear deal. German media have drawn parallels between Pompeo's talk of a coalition and President George W. Bush's "coalition of the willing" against Iraq in 2003, which Germany and France opposed. German Foreign Ministry spokesman Christofer Burger said his country had "taken note via the media" of Pompeo's comments and that Germany's "top aim is and remains a de-escalation of the serious situation." On Monday, Trump tweeted that China and Japan depend on the security of the Persian Gulf waterways for the bulk of their oil imports, and he asked why the U.S. is protecting the shipping lanes for other countries "for zero compensation." "All of these countries should be protecting their own ships on what has always been a dangerous journey." He said the U.S. doesn't "even need to be there" because it produces much of its own energy needs. Brian Hook, the U.S. special envoy for Iran, said one option could be to "enhance" an existing multinational maritime force of about 30 countries that currently fights drug and arms smuggling in the region. Alternatively, he said allied nations with commercial interests in the oil-rich region could launch an all-new maritime security initiative. Another option could be military ships patrolling the Gulf waters and equipped with surveillance equipment to keep watch on Iran. The narrow Strait of Hormuz, which lies between Iran and Oman and opens to the Persian Gulf, is paramount for Asian oil importers. An estimated 18 million to 20 million barrels of oil — much of it crude — pass through the strait every day. The U.S. Navy, which has its 5th Fleet based in Bahrain to protect the strait, escorted oil tankers to ensure American energy supplies in the 1980s when Iran and Iraq were targeting each other's exports, but the U.S. is no longer as reliant on Arabian producers. Today, any conflict that threatens tankers would badly disrupt crude supplies for energy-hungry countries like China, Japan, South Korea, Singapore and Indonesia, which are among the top five importers of Arabian oil. Pompeo's Mideast stops may also be aimed at reassuring Washington's Sunni Gulf Arab allies that the White House remains committed to keeping pressure on Shiite Iran following Trump's decision against retaliation, which likely raised questions about U.S. willingness to use force against the Islamic Republic. On a visit to Israel on Sunday, U.S. National Security Adviser John Bolton, also considered a U.S. hard-liner, said Iran should not "mistake U.S. prudence and discretion for weakness." Iran's naval commander, Rear Adm. Hossein Khanzadi, declared that Tehran is capable of shooting down other American spy drones that violate its airspace, saying "the crushing response can always be repeated." He spoke during a meeting of defense officials in Iran. Trump has wavered between bellicose language and actions toward Iran and a more accommodating tone, including an offer for negotiations. Iran has said it is not interested in a dialogue with Trump. Saudi Arabia and the U.S. accused Iran of being behind attacks on tankers near the Persian Gulf in recent weeks, while the UAE has been urging diplomacy to avert a wider conflict. On the eve of Pompeo's visit to the kingdom, Yemen's Iranian-allied rebels attacked a Saudi airport near the Saudi-Yemen border, killing a Syrian resident and wounding 21 other civilians, the Saudi military said. The Houthi rebels claimed they used bomb-laden drones to attack the Abha airport, the second in less than two weeks. Drones were also used against a Saudi oil pipeline last month. In a statement, Pompeo condemned the Abha airport attack and said the war in Yemen is not an isolated conflict. He accused Iran of funneling cash, weapons, and armed support to the Houthis, which Iran denies. Saudi Arabia has been at war with the rebel Houthis in Yemen for more than four years. The Houthis say the attacks are a response to relentless Saudi airstrikes on Yemen that have killed thousands. ___ Associated Press writers Jon Gambrell in Dubai; Nasser Karimi in Tehran, Iran; Geir Moulson in Berlin; Edith M. Lederer at the United Nations, and Darlene Superville in Washington contributed. |
High court strikes down 'scandalous' part of trademark law
WASHINGTON (AP) The Supreme Court struck down a section of federal law Monday that prevented businesses from registering trademarks seen as scandalous or immoral, handing a victory to California fashion brand FUCT. The high court ruled that the century-old provision is an unconstitutional restriction on speech. Between 2005 and 2015, the United States Patent and Trademark Office ultimately refused about 150 trademark applications a year as a result of the provision. Those who were turned away could still use the words they were seeking to register, but they didn't get the benefits that come with trademark registration. Going after counterfeiters was also difficult as a result. The Trump administration had defended the provision, arguing that it encouraged trademarks that are appropriate for all audiences. The high court's ruling means that the people and companies behind applications that previously failed as a result of the scandalous or immoral provision can re-submit them for approval. And new trademark applications cannot be refused on the grounds they are scandalous or immoral. Justice Elena Kagan said in reading her majority opinion that the most fundamental principle of free speech law is that the government can't penalize or discriminate against expression based on the ideas or viewpoints they convey. She said Lanham Act's ban on "immoral or scandalous" trademarks does just that. In an opinion for herself and five colleagues, both conservatives and liberals, Kagan called the law's immoral or scandalous provision "substantially overbroad." "There are a great many immoral and scandalous ideas in the world (even more than there are swearwords), and the Lanham Act covers them all. It therefore violates the First Amendment," she wrote. Kagan's opinion suggested that a narrower law covering just lewd, sexually explicit or profane trademarks might be acceptable. The justices' ruling was in some ways expected because of one the court made two years ago . In 2017, the justices unanimously invalidated a related provision of federal law that told officials not to register disparaging trademarks, finding that restriction violated the First Amendment. In that case, an Asian-American rock band sued after the government refused to register its band name, "The Slants," because it was seen as offensive to Asians. Story continues The case the justices ruled in Monday involves Los Angeles-based FUCT, which began selling clothing in 1991. Federal officials refused to register the brand's name, calling it "highly offensive" and "vulgar." Attorney John R. Sommer, who represented Erik Brunetti, the artist behind the brand, said his client was pleased with the decision. He said he expected FUCT to be a registered trademark within the next six months. The court's decision could result in an uptick in requests to the United States Patent and Trademark Office to register trademarks that would have previously been considered scandalous or immoral. But Barton Beebe, a New York University law professor who has studied the provision the justices struck down and co-authored a Supreme Court brief in the case , said he thinks that's unlikely. Beebe said he doesn't believe there's a large, pent-up demand for trademark registration by people refused it previously under the provision. A spokesman for the patent office, Paul Fucito, said the office is reviewing the decision. The case is Iancu v. Brunetti, 18-302. ___ Follow Jessica Gresko on Twitter at http://twitter.com/jessicagresko |
Khloé Kardashian and Tristan Thompson 'Weren't in Proper Relationship' During Jordyn Woods Scandal
When news about Tristan Thompson and Jordyn Woods ‘ tryst broke earlier this year, his relationship with Khloé Kardashian was already on the rocks, according to a source. “When the Jordyn drama happened, Khloé and Tristan were not in a proper relationship,” a source tells PEOPLE. “They had not been for weeks. They didn’t even spend Valentine’s Day together, which was right before he messed around with Jordyn.” While the scandal was heartbreaking for Kardashian — who shares 14-month-old daughter True with Thompson — to learn about, she was still hopeful of reconciling with the 28-year-old NBA star. “But this doesn’t mean that it was completely over for Khloé. It was very difficult for her to find out about Tristan and Jordyn. But this is what made her realize that Tristan would never change,” says the source. “It was heartbreaking for her.” For Kardashian, “she always hoped there was a way things could work out, because that’s what she wanted for True,” the source explains. “She wanted True to live with both her parents.” RELATED: Khloé Kardashian Claims Tristan Thompson Threatened to Kill Himself After Jordyn Woods Scandal Reports of Woods and Thompson’s scandal first surfaced in February. On March 1, Woods shared her side of the story in a tell-all interview with Jada Pinkett Smith on Facebook Watch’s Red Table Talk , claiming that Thompson kissed her at an afterparty at his house on Feb. 17 after a long night of drinking. She adamantly denied having sex with him . Woods has since moved out of Kylie’s house and remains estranged from the family. After finding out about the betrayal, the source says that the Keeping Up with the Kardashians star not only suffered emotionally, but the heartbreak also took a physical toll on her. Jamie McCarthy/Getty; George Pimentel/Getty; Mike Marsland/WireImage “She was very stressed out and angry with Tristan. It made her physically ill. She was not in a good place,” says the source. Story continues Ultimately, Kardashian made the difficult decision to break things off with Thompson. “Instead of her going back and forth with Tristan, she made a decision for herself that she needed to never go back to him,” says the source. According to an insider, “Tristan was doing everything he could after to get Khloé back.” But despite his apologies, Kardashian chose to move on for good. “He did ask her at one point to reconsider, but Khloé was too angry and disappointed with him,” says the source. In the months since their split, Kardashian has been focused on her own well-being and raising her baby girl. Although Kardashian and Thompson reunited to celebrate True’s first birthday in April , the mother of one has no intention of ever getting back together with the Cleveland Cavaliers player. Tristan Thompson and True “Now, she would never go back with Tristan,” says the source. “She knows that he will never change.” RELATED: Khloé Kardashian Was ‘Throwing Up Blood,’ Worried She Was Pregnant Before Jordyn Woods Scandal While the Revenge Body star isn’t interested in romantically being involved with Thompson in the future, she isn’t using any pain from her past to negatively impact his relationship with True. Khloe Kardashian and True In March, Kardashian came to Thompson’s defense after multiple sources said that he wasn’t spending enough time with their daughter. Responding to a fan who tweeted that all True “needs is her mom,” Kardashian called Thompson a “good dad.” “Thank you love! You’re so very sweet,” she wrote. “But he is a good dad to her. My sweet and special baby True will NEVER be put in the middle of him and I. I can promise that.” |
Calculating The Fair Value Of Tejas Networks Limited (NSE:TEJASNET)
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In this article we are going to estimate the intrinsic value of Tejas Networks Limited (NSE:TEJASNET) 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!
We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in theSimply Wall St analysis model.
Check out our latest analysis for Tejas Networks
We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company's cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, so we discount the value of these future cash flows to their estimated value in today's dollars:
[{"": "Levered FCF (\u20b9, Millions)", "2019": "\u20b9784.00", "2020": "\u20b92.68k", "2021": "\u20b91.26k", "2022": "\u20b91.67k", "2023": "\u20b91.80k", "2024": "\u20b91.94k", "2025": "\u20b92.09k", "2026": "\u20b92.25k", "2027": "\u20b92.42k", "2028": "\u20b92.60k"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x1", "2020": "Analyst x2", "2021": "Analyst x2", "2022": "Analyst x1", "2023": "Est @ 7.73%", "2024": "Est @ 7.68%", "2025": "Est @ 7.64%", "2026": "Est @ 7.61%", "2027": "Est @ 7.59%", "2028": "Est @ 7.58%"}, {"": "Present Value (\u20b9, Millions) Discounted @ 16.72%", "2019": "\u20b9671.67", "2020": "\u20b91.97k", "2021": "\u20b9793.24", "2022": "\u20b9901.80", "2023": "\u20b9832.32", "2024": "\u20b9767.80", "2025": "\u20b9708.04", "2026": "\u20b9652.77", "2027": "\u20b9601.70", "2028": "\u20b9554.57"}]
Present Value of 10-year Cash Flow (PVCF)= ₹8.45b
"Est" = FCF growth rate estimated by Simply Wall St
The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 10-year government bond rate of 7.6%. We discount the terminal cash flows to today's value at a cost of equity of 16.7%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = ₹2.6b × (1 + 7.6%) ÷ (16.7% – 7.6%) = ₹31b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= ₹₹31b ÷ ( 1 + 16.7%)10= ₹6.50b
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 ₹14.96b. In the final step we divide the equity value by the number of shares outstanding.This results in an intrinsic value estimate of ₹164.53. Compared to the current share price of ₹144.85, the company appears about fair value at a 12% discount to where the stock price trades currently. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out.
We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Tejas Networks as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 16.7%, which is based on a levered beta of 1.067. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Whilst important, DCF calculation shouldn’t be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. For Tejas Networks, I've put together three additional aspects you should further research:
1. Financial Health: Does TEJASNET 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 TEJASNET'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 TEJASNET? Exploreour interactive list of high quality stocksto get an idea of what else is out there you may be missing!
PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the NSE every day. If you want to find the calculation for other stocks justsearch here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
California Legislature OKs health insurance mandate
SACRAMENTO, Calif. (AP) — The California Legislature voted Monday to tax people who refuse to buy health insurance, bringing back a key part of former President Barack Obama's health care law in the country's most populous state after it was eliminated by Republicans in Congress. The tax now heads to Democratic Gov. Gavin Newsom, who proposed a similar plan in January — an indication he will likely approve it. The federal Affordable Care Act required everyone to buy health insurance or pay a penalty. The U.S. Supreme Court upheld the law, ruling the penalty was a tax. In 2017, Republicans in Congress eliminated the penalty — beginning this year — as part of an overhaul of the federal tax code. The bill passed by Democrats in California would reinstate the tax, effective Jan. 1. No Republicans voted for it. One Democrat in the state Assembly — Rudy Salas Jr. — voted against it. The penalty won't apply to everyone, including people living in the country illegally. Lawmakers on Monday also approved a bill that would expand government-funded health insurance to low-income young adults living in the U.S. illegally. People in prison and those who are members of an American Indian tribe are also exempt, mirroring what had been in the federal law. Democrats say the plan is part of their efforts to make sure everyone in California has health insurance. If the bill becomes law, California would join Massachusetts, New Jersey, Vermont and Washington, D.C., next year as the only governments in the U.S. to penalize people who don't buy health insurance. It would also make California the only state to use money it gets from the penalty to help people who earn as much as six times the federal poverty limit pay their monthly health insurance premiums. That means a family of four earning up to $150,000 a year would be eligible. "These new subsidies will impact almost 1 million Californians and help them get the health care access that they deserve," said Democratic Assemblyman Phil Ting of San Francisco. Story continues Republican state Sen. John Moorlach said in 2014 that 82% of Californians who paid the penalty for not having health insurance had taxable incomes of $50,000 or less. "This trailer bill will take money away from people making $30,000 to $50,000 a year and give it to people making between $75,000 and $130,000 a year," GOP Assemblyman Jay Obernolte said. "That makes no sense." The state has already extended government health benefits to children living in the country illegally. The plan approved Monday would extend that coverage to people as old as 25. While the proposal easily passed the Legislature, it brought a rebuke from Democratic Sen. Maria Elena Durazo from Los Angeles. She criticized the bill for not providing health care coverage to people 65 and older living in the country illegally. "We've missed an opportunity to create fairness and inclusion," she said. |
Is Visaka Industries Limited (NSE:VISAKAIND) An Attractive Dividend Stock?
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Dividend paying stocks like Visaka Industries Limited (NSE:VISAKAIND) tend to be popular with investors, and for good reason - some research suggests a significant amount of all stock market returns come from reinvested dividends. If you are hoping to live on the income from dividends, it's important to be a lot more stringent with your investments than the average punter.
While Visaka Industries's 1.9% dividend yield is not the highest, we think its lengthy payment history is quite interesting. When buying stocks for their dividends, you should always run through the checks below, to see if the dividend looks sustainable.
Explore this interactive chart for our latest analysis on Visaka Industries!
Dividends are usually paid out of company earnings. If a company is paying more than it earns, then the dividend might become unsustainable - hardly an ideal situation. So we need to form a view on if a company's dividend is sustainable, relative to its net profit after tax. Visaka Industries paid out 16% of its profit as dividends, over the trailing twelve month period. With a low payout ratio, it looks like the dividend is comprehensively covered by earnings.
We also measure dividends paid against a company's levered free cash flow, to see if enough cash was generated to cover the dividend. The company paid out 62% of its free cash flow, which is not bad per se, but does start to limit the amount of cash Visaka Industries has available to meet other needs. It's positive to see that Visaka Industries's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.
Consider gettingour latest analysis on Visaka Industries's financial position here.
One of the major risks of relying on dividend income, is the potential for a company to struggle financially and cut its dividend. Not only is your income cut, but the value of your investment declines as well - nasty. Visaka Industries has been paying dividends for a long time, but for the purpose of this analysis, we only examine the past 10 years of payments. This dividend has been unstable, which we define as having fallen by at least 20% one or more times over this time. During the past ten-year period, the first annual payment was ₹3.00 in 2009, compared to ₹7.00 last year. This works out to be a compound annual growth rate (CAGR) of approximately 8.8% a year over that time. The growth in dividends has not been linear, but the CAGR is a decent approximation of the rate of change over this time frame.
Dividends have grown at a reasonable rate, but with at least one substantial cut in the payments, we're not certain this dividend stock would be ideal for someone intending to live on the income.
With a relatively unstable dividend, it's even more important to see if earnings per share (EPS) are growing. Why take the risk of a dividend getting cut, unless there's a good chance of bigger dividends in future? Strong earnings per share (EPS) growth might encourage our interest in the company despite fluctuating dividends, which is why it's great to see Visaka Industries has grown its earnings per share at 41% per annum over the past five years. The company is only paying out a fraction of its earnings as dividends, and in the past been able to use the retained earnings to grow its profits rapidly - an ideal combination.
To summarise, shareholders should always check that Visaka Industries's dividends are affordable, that its dividend payments are relatively stable, and that it has decent prospects for growing its earnings and dividend. Visaka Industries's dividend payout ratios are within normal bounds, although we note its cash flow is not as strong as the income statement would suggest. We were also glad to see it growing earnings, but it was concerning to see the dividend has been cut at least once in the past. Visaka Industries has a number of positive attributes, but it falls slightly short of our (admittedly high) standards. Were there evidence of a strong moat or an attractive valuation, it could still be well worth a look.
Earnings growth generally bodes well for the future value of company dividend payments. See if the 3 Visaka Industries analysts we track are forecasting continued growth with ourfreereport on analyst estimates for the company.
If you are a dividend investor, you might also want to look at ourcurated list of dividend stocks yielding above 3%.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Visaka Industries Limited (NSE:VISAKAIND) Is Yielding 1.9% - But Is It A Buy?
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Today we'll take a closer look at Visaka Industries Limited (NSE:VISAKAIND) from a dividend investor's perspective. Owning a strong business and reinvesting the dividends is widely seen as an attractive way of growing your wealth. Unfortunately, it's common for investors to be enticed in by the seemingly attractive yield, and lose money when the company has to cut its dividend payments.
While Visaka Industries's 1.9% dividend yield is not the highest, we think its lengthy payment history is quite interesting. There are a few simple ways to reduce the risks of buying Visaka Industries for its dividend, and we'll go through these below.
Click the interactive chart for our full dividend analysis
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Comparing dividend payments to a company's net profit after tax is a simple way of reality-checking whether a dividend is sustainable. Visaka Industries paid out 16% of its profit as dividends, over the trailing twelve month period. With a low payout ratio, it looks like the dividend is comprehensively covered by earnings.
We also measure dividends paid against a company's levered free cash flow, to see if enough cash was generated to cover the dividend. The company paid out 62% of its free cash flow, which is not bad per se, but does start to limit the amount of cash Visaka Industries has available to meet other needs. It's positive to see that Visaka Industries's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.
Consider gettingour latest analysis on Visaka Industries's financial position here.
From the perspective of an income investor who wants to earn dividends for many years, there is not much point buying a stock if its dividend is regularly cut or is not reliable. Visaka Industries has been paying dividends for a long time, but for the purpose of this analysis, we only examine the past 10 years of payments. The dividend has been cut by more than 20% on at least one occasion historically. During the past ten-year period, the first annual payment was ₹3.00 in 2009, compared to ₹7.00 last year. This works out to be a compound annual growth rate (CAGR) of approximately 8.8% a year over that time. The growth in dividends has not been linear, but the CAGR is a decent approximation of the rate of change over this time frame.
Dividends have grown at a reasonable rate, but with at least one substantial cut in the payments, we're not certain this dividend stock would be ideal for someone intending to live on the income.
With a relatively unstable dividend, it's even more important to see if earnings per share (EPS) are growing. Why take the risk of a dividend getting cut, unless there's a good chance of bigger dividends in future? Strong earnings per share (EPS) growth might encourage our interest in the company despite fluctuating dividends, which is why it's great to see Visaka Industries has grown its earnings per share at 41% per annum over the past five years. Earnings per share have grown rapidly, and the company is retaining a majority of its earnings. We think this is ideal from an investment perspective, if the company is able to reinvest these earnings effectively.
When we look at a dividend stock, we need to form a judgement on whether the dividend will grow, if the company is able to maintain it in a wide range of economic circumstances, and if the dividend payout is sustainable. Visaka Industries's dividend payout ratios are within normal bounds, although we note its cash flow is not as strong as the income statement would suggest. We were also glad to see it growing earnings, but it was concerning to see the dividend has been cut at least once in the past. Overall we think Visaka Industries is an interesting dividend stock, although it could be better.
Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 3 analysts we track are forecasting for Visaka Industriesfor freewith publicanalyst estimates for the company.
We have also put together alist of global stocks with a market capitalisation above $1bn and yielding more 3%.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Gold soars to six-year high, stocks slide after Powell speech
By Herbert Lash
NEW YORK (Reuters) - Gold soared to an almost six-year high on Tuesday on escalating U.S.-Iran tensions, while equity markets slid on disappointing economic data and uncertainty on whether the Federal Reserve will cut interest rates in July as has been expected.
Fed Chairman Jerome Powell said in a speech the U.S. central bank is insulated from short-term political pressures as policymakers wrestle with whether to cut rates amid slowing growth as President Donald Trump has demanded.
Equity markets have rallied this month in anticipation that Fed policymakers would cut rates, but Powell's remarks cast doubt on those expectations when he referred to the Fed's independence.
"Clearly, he's referring to comments from the White House," said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey. "The market wants to hear the Fed remains steadfast - what it perceives is the correct path to follow in terms of monetary policy, rather than acquiescing to the administration."
The dollar rebounded and gold prices retreated after Powell's comments trimmed market expectations that the U.S. central bank will cut rates by half a percentage point next month.
Gold had gained 10% in price so far in June, climbing above $1,400 an ounce for the first time since August 2013 after briefly touching the psychological barrier on Monday.
The dollar had fallen to a three-month low against the euro and dropped to its weakest against the Japanese yen since early January as the prospect of a Fed rate cut eroded demand. The yen also benefited from concerns about U.S.-Iranian tensions.
Tehran said new U.S. sanctions permanently closed the path to diplomacy between the two countries.
The dollar index rose 0.19%, while the euro reversed course to fall 0.25% to $1.1369. The yen strengthened 0.1% versus the greenback at 107.17 per dollar.
Disappointing economic data weighed on stocks.
U.S. consumer confidence tumbled to a 21-month low in June as households grew a bit more pessimistic about business and labor market conditions amid concerns of an escalation in the trade tensions between the United States and China.
The U.S. economy's prospects were further dimmed by other data showing sales of new single-family homes unexpectedly fell for a second straight month in May.
MSCI's gauge of global equity markets, most major European indexes and stocks on Wall Street slipped.
MSCI's gauge of stocks across the globe shed 0.73%, while the pan-European STOXX 600 index closed down 0.1%.
The Dow Jones Industrial Average fell 179.32 points, or 0.67%, to 26,548.22. The S&P 500 lost 27.97 points, or 0.95%, to 2,917.38 and the Nasdaq Composite dropped 120.98 points, or 1.51%, to 7,884.72.
U.S. benchmark Treasury yields fluctuated around the key 2% level as investors weighed the outlook for the U.S.-China trade spat against the prospect that the Fed may be less dovish than traders expect.
The benchmark 10-year Treasury note rose 8/32 in price to push yields down to 1.9918%.
Trump threatened to obliterate parts of Iran if it attacked "anything American," in a new war of words. Tehran condemned the latest U.S. sanctions on Iran and called White House actions "mentally retarded."
Trump is due to meet one-on-one with at least eight world leaders at the G20 summit in Osaka, Japan, at the end of the week, including Chinese President Xi Jinping, for discussions on trade, and Russian President Vladimir Putin.
Chinese investors seemed none too hopeful as Shanghai blue chips slipped 1%. Japan's Nikkei dropped 0.4%.
Oil prices rose slightly ahead of U.S. data expected to show crude stocks declining there, outweighing investors' concerns that U.S.-China trade tensions could weigh on fuel demand.
Benchmark Brent crude futures rose 19 cents to settle at $65.05 per barrel.
U.S. crude futures slid 7 cents to settle at $57.83 a barrel.
U.S. gold futures were little changed on settlement at $1,418.7 an ounce.
(Reporting by Herbert Lash; editing by Steve Orlofsky, Leslie Adler and Jonathan Oatis) |
Should We Worry About The Western India Plywoods Limited's (NSE:WIPL) P/E Ratio?
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The goal of this article is to teach you how to use price to earnings ratios (P/E ratios). We'll show how you can use The Western India Plywoods Limited's (NSE:WIPL) P/E ratio to inform your assessment of the investment opportunity.Western India Plywoods has a P/E ratio of 66.67, based on the last twelve months. That is equivalent to an earnings yield of about 1.5%.
View our latest analysis for Western India Plywoods
Theformula for price to earningsis:
Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS)
Or for Western India Plywoods:
P/E of 66.67 = ₹80 ÷ ₹1.2 (Based on the year to March 2019.)
A higher P/E ratio means that buyers have to paya higher pricefor each ₹1 the company has earned over the last year. That isn't necessarily good or bad, but a high P/E implies relatively high expectations of what a company can achieve in the future.
If earnings fall then in the future the 'E' will be lower. That means even if the current P/E is low, it will increase over time if the share price stays flat. So while a stock may look cheap based on past earnings, it could be expensive based on future earnings.
Notably, Western India Plywoods grew EPS by a whopping 38% in the last year. Unfortunately, earnings per share are down 20% a year, over 3 years.
The P/E ratio essentially measures market expectations of a company. As you can see below, Western India Plywoods has a much higher P/E than the average company (8.9) in the forestry industry.
Western India Plywoods's P/E tells us that market participants think the company will perform better than its industry peers, going forward. The market is optimistic about the future, but that doesn't guarantee future growth. So investors should always consider the P/E ratio alongside other factors, such aswhether company directors have been buying shares.
The 'Price' in P/E reflects the market capitalization of the company. So it won't reflect the advantage of cash, or disadvantage of debt. Theoretically, a business can improve its earnings (and produce a lower P/E in the future) by investing in growth. That means taking on debt (or spending its cash).
While growth expenditure doesn't always pay off, the point is that it is a good option to have; but one that the P/E ratio ignores.
Net debt totals 23% of Western India Plywoods's market cap. This could bring some additional risk, and reduce the number of investment options for management; worth remembering if you compare its P/E to businesses without debt.
Western India Plywoods's P/E is 66.7 which suggests the market is more focussed on the future opportunity rather than the current level of earnings. Its debt levels do not imperil its balance sheet and its EPS growth is very healthy indeed. So to be frank we are not surprised it has a high P/E ratio.
When the market is wrong about a stock, it gives savvy investors an opportunity. If the reality for a company is better than it expects, you can make money by buying and holding for the long term. We don't have analyst forecasts, but you could get a better understanding of its growth by checking outthis more detailed historical graphof earnings, revenue and cash flow.
Of courseyou might be able to find a better stock than Western India Plywoods. So you may wish to see thisfreecollection of other companies that have grown earnings strongly.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Amelia Gray Hamlin Says She Would Have Relapsed If She Hadn’t Revealed Anorexia Disorder
Amelia Gray Hamlin is opening up about why she chose to share her battle with anorexia with the world and how it’s helped her get control of her health. “If I’m being honest, if I hadn’t come out about my eating disorder when I did, I probably would have relapsed,” Amelia, 18, told Glamour . Amelia, who is the daughter of Real Housewives of Beverly Hills star Lisa Rinna and actor Harry Hamlin , went on to explain that “sharing my story has helped keep me accountable.” “I have eyes on me 24/7,” she told Glamour . “After sharing my story, they weren’t just anonymous eyes but eyes that knew this intimate detail about my life, that were watching me and my body every single day.” “When you’re in recovery from an eating disorder, it’s so difficult to continue pushing through even when you have bad days where you just want to go back your old habits,” she told the publication. Amelia also revealed she chose to “come out” about her disorder because she didn’t want young girls and boys to look at the changes in her body and think it was “normal.” Amelia Gray Hamlin and Lisa Rinna | Stefanie Keenan/Getty “All these young girls were following me and commenting on my posts, and I realized I didn’t want them to be following a lie,” Amelia told Glamour . “I couldn’t allow little girls, or little boys, or whoever, to look at the changes in my body and think I’d just hit puberty — that the really skinny photos of me from the year before were just a normal prepubescent body.” “I couldn’t stop thinking about the message those comments about my body sent,” Amelia continued to Glamour . When she decided to share her truth, Amelia explained she “felt lighter.” “I started crying. Even for me, it was powerful to read the truth,” she told Glamour . However, Amelia also faced other health obstacles. View this post on Instagram I feel comfort with finally posting something that I wish I was confident enough to post long ago. I’m getting many comments comparing my body today vs. my body last year. I think that the support from my followers has really pushed me into writing this. Anyways, last year at this time there was no doubt that I was not okay. Not only physically but also mentally. I feel like sometimes people forget that just because your job involves being in front of the camera, doesn’t mean you can’t have bad days. We’re human. All of us. Instead of people ever commenting on my mental stability, people commented on my weight. Usually, when people are struggling with an eating disorder it stems from your mind, and your body is a reflection of it. I could go on and on about that time of my life, but the most important part about it was waking up one morning and deciding to stop sabotaging myself. My health, my physical health, my mental health and everything about myself. Once I got the help that I needed, shortly after the second photo was taken, I began to try to love myself for me. I am SO beyond humbled and grateful to have the platform that I do at such a young age, and to wake up every morning with a little girl reaching out to me and telling me I am her inspiration, really makes me feel like I have a purpose. I went through this journey not for attention, not for people to pitty me, but to help. I am on this earth to help people, and I know that. One in 200 women in the US suffer from anorexia. And I want to help. The first photo, taken today is not a photo of the perfect girl. That is a photo of me, trying to figure out my body, and owing my curves that I naturally have, and not forcing myself to starve them away. I have a lot of health complications after starving myself for so long so it’s going to be a journey that I go through for a large part of my life. I still have an extremely healthy life style and I workout so hard all week to maintain my Body. Not to say that recently being diagnosed with hashimotos has also been an extreme challenge for me to balance when still getting over this part of my life, but I am getting there. One day at a time. I want to help. A post shared by Amelia (@ameliagray) on Mar 31, 2018 at 5:57pm PDT RELATED: Lisa Rinna Claps Back at ‘Body-Shaming’ Troll Who Blamed Her for Daughter Amelia’s Eating Disorder Story continues “In the wake of my anorexia, I was diagnosed with Hashimoto’s disease, an autoimmune disease that screws with your thyroid. My body was reacting to being starved for so long,” she told Glamour . Throughout it all, Amelia said she has learned a very crucial lesson: “nourish my body.” “I used to hear all the time, ‘Your body is a temple!’ but I really didn’t care,” Amelia told Glamour . “Learning about how to nourish my body and how to fuel my body with the goods that make my body happy and energized makes me feel good… I’ve come out of it with such a different passion for health,” she said. The young model has also learned the importance of confidence. “It transcends weight, and size, and social media filters. When you truly love yourself on the inside, the way you carry yourself is so different,” Amelia told Glamour . Amelia’s testimony comes after viewers of The Real Housewives of Beverly Hill s watched as she lashed out at her father Harry, 67, due to her “fear of food.” While sitting down for a meal with her family, Amelia kept turning away the food her father had prepared, and eventually grew so angry with the actor that she gave him the middle finger. Delilah Belle Hamlin and Amelia Gray Hamlin, Lisa Rinna and Harry Hamlin | David Livingston/Getty Images “Tonight on the housewives you will see how my eating disorder affected myself and my family. There is a scene where I am EXTREMELY rude to my dad and the food that he wants me to eat,” Amelia wrote in one of her Instagram Stories after the episode aired. “During that time, one year ago — I was not in a good place at all,” Amelia added. “I may have looked like I was recovered, but I was most definitely not. Within the scene, you will see me lashing out due to my fear of food.” “The person displayed in tonight’s episode is not the person I am. It was the person anorexia made me… I just wanted everyone to know why I acted the way that I did,” Amelia explained. Lisa, 55, has also opened up about watching her daughter suffer explaining on RHOBH , “I don’t want to see her suffer. You want to fix it,” said the mother of two. “You want to make it go away. You want to erase it. You know, you just want to take your child out of pain. You don’t want your child to be in pain.” Said Lisa in a confessional interview, “You can’t help but blame yourself. You know, it’s like, ‘What did we do to f— her up?’ Maybe we did something. I don’t know. I just know that it’s really, really hard to watch Amelia be in pain.” View this post on Instagram THE GRADUATE. 🎓🦋💙 A post shared by Lisa Rinna (@lisarinna) on Jun 8, 2019 at 10:54am PDT Amelia first revealed her eating disorder in a lengthy Instagram post in March 2018. Amelia said she woke up “one morning” and decided to stop “sabotaging myself…my health, my physical health, my mental health and everything about myself.” She continued: “Once I got the help that I needed, shortly after the second photo was taken, I began to try to love myself for me.” “I am SO beyond humbled and grateful to have the platform that I do at such a young age,” Amelia added. “And to wake up every morning with a little girl reaching out to me and telling me I am her inspiration, really makes me feel like I have a purpose. I went through this journey not for attention, not for people to pitty [sic] me, but to help. I am on this earth to help people, and I know that.” RELATED: Kyle Richards Reveals She Had an Eating Disorder and Weighed 99 Lbs. In addition to making strides with her health, Amelia has tackled a number of major milestones as of lately. Earlier this month, Amelia graduated from high school and in May the model went to her senior prom. If you or someone you know is battling an eating disorder, please contact the National Eating Disorders Association (NEDA) at 1-800-931-2237 or go to NationalEatingDisorders.org. |
Boasting A 19% Return On Equity, Is Centum Electronics Limited (NSE:CENTUM) A Top Quality Stock?
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Many investors are still learning about the various metrics that can be useful when analysing a stock. This article is for those who would like to learn about Return On Equity (ROE). To keep the lesson grounded in practicality, we'll use ROE to better understand Centum Electronics Limited (NSE:CENTUM).
Over the last twelve monthsCentum Electronics has recorded a ROE of 19%. Another way to think of that is that for every ₹1 worth of equity in the company, it was able to earn ₹0.19.
Check out our latest analysis for Centum Electronics
Theformula for ROEis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for Centum Electronics:
19% = ₹468m ÷ ₹2.4b (Based on the trailing twelve months to March 2019.)
Most know that net profit is the total earnings after all expenses, but the concept of shareholders' equity is a little more complicated. It is the capital paid in by shareholders, plus any retained earnings. The easiest way to calculate shareholders' equity is to subtract the company's total liabilities from the total assets.
Return on Equity measures a company's profitability against the profit it has kept for the business (plus any capital injections). The 'return' is the profit over the last twelve months. The higher the ROE, the more profit the company is making. So, all else being equal,a high ROE is better than a low one. Clearly, then, one can use ROE to compare different companies.
One simple way to determine if a company has a good return on equity is to compare it to the average for its industry. Importantly, this is far from a perfect measure, because companies differ significantly within the same industry classification. Pleasingly, Centum Electronics has a superior ROE than the average (9.9%) company in the Electronic industry.
That's what I like to see. We think a high ROE, alone, is usually enough to justify further research into a company. One data point to check is ifinsiders have bought shares recently.
Companies usually need to invest money to grow their profits. That cash can come from issuing shares, retained earnings, or debt. In the first two cases, the ROE will capture this use of capital to grow. In the latter case, the debt used for growth will improve returns, but won't affect the total equity. That will make the ROE look better than if no debt was used.
Centum Electronics clearly uses a significant amount of debt to boost returns, as it has a debt to equity ratio of 1.57. while its ROE is respectable, it is worth keeping in mind that there is usually a limit to how much debt a company can use. Investors should think carefully about how a company might perform if it was unable to borrow so easily, because credit markets do change over time.
Return on equity is useful for comparing the quality of different businesses. In my book the highest quality companies have high return on equity, despite low debt. All else being equal, a higher ROE is better.
Having said that, while ROE is a useful indicator of business quality, you'll have to look at a whole range of factors to determine the right price to buy a stock. It is important to consider other factors, such as future profit growth -- and how much investment is required going forward. Check the past profit growth by Centum Electronics by looking at thisvisualization of past earnings, revenue and cash flow.
Of courseCentum Electronics may not be the best stock to buy. So you may wish to see thisfreecollection of other companies that have high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
The CardieX (ASX:CDX) Share Price Is Down 76% So Some Shareholders Are Rather Upset
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It's not possible to invest over long periods without making some bad investments. But really bad investments should be rare. So take a moment to sympathize with the long term shareholders ofCardieX Limited(ASX:CDX), who have seen the share price tank a massive 76% over a three year period. That might cause some serious doubts about the merits of the initial decision to buy the stock, to put it mildly. Shareholders have had an even rougher run lately, with the share price down 26% in the last 90 days.
See our latest analysis for CardieX
Given that CardieX 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. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Over the last three years, CardieX's revenue dropped 1.2% per year. That's not what investors generally want to see. The share price fall of 38% (per year, over three years) is a stern reminder that money-losing companies are expected to grow revenue. This business clearly needs to grow revenues if it is to perform as investors hope. There's no more than a snowball's chance in hell that share price will head back to its old highs, in the short term.
The graphic below shows how revenue and earnings have changed as management guided the business forward. If you want to see cashflow, you can click on the chart.
Take a more thorough look at CardieX's financial health with thisfreereport on its balance sheet.
CardieX shareholders gained a total return of 7.4% during the year. But that was short of the market average. But at least that's still a gain! Over five years the TSR has been a reduction of 20% per year, over five years. So this might be a sign the business has turned its fortunes around. You might want to assessthis data-rich visualizationof its earnings, revenue and cash flow.
Of courseCardieX may not be the best stock to buy. So you may wish to see thisfreecollection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Google Warns Staff About Protests During Official Pride Events
(Bloomberg) -- Google warned employees about protesting against the internet giant at official company events during Pride celebrations, according to people familiar with the situation.
Some workers have been planning protests at the Pride parade this weekend in San Francisco to speak out against the company’s policies on harassment of LGBTQ people on YouTube.
The Google video service has been under fire for how it responded to homophobic and racist jokes made in clips by conservative comedian and commentator Steven Crowder. Some Google workers spoke out against YouTube on Twitter, and a small group organized protests last week during the annual shareholder meeting of parent company Alphabet Inc.
One of the next steps planned by these employees is to speak out about YouTube during Pride activities this weekend because they think the company hasn’t done enough to quash LGBTQ harassment on the video service, the people said. The parade in San Francisco requires people to be invited to a specific contingent to march, so that often means workers attend as part of groups organized by their employers.
Google warned workers not to protest against the company if they are marching with Google’s official contingent. Doing so would violate the company’s code of conduct, according to internal memos viewed by the people. The Verge reported the memos earlier. A Google spokeswoman didn’t respond to a request for comment on Monday.
The company’s actions may violate federal labor law protecting workplace activism, as well as a California law protecting employees’ political activities, according to University of California at Berkeley law professor Catherine Fisk. "Maintaining the policy would chill speech that is protected by law," she said.
"Google has undermined their own reason for participating in the Pride parade by trying to prevent its gay workers from criticizing Google’s alleged failure to address homophobic hate speech," she added. "They have sort of shot themselves in the foot on this one."
--With assistance from Gerrit De Vynck.
To contact the reporters on this story: Joshua Brustein in New York at jbrustein@bloomberg.net;Josh Eidelson in San Francisco at jeidelson@bloomberg.net
To contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Alistair Barr, Andrew Pollack
For more articles like this, please visit us atbloomberg.com
©2019 Bloomberg L.P. |
How Does Central Depository Services (India) Limited (NSE:CDSL) Stand Up To These Simple Dividend Safety Checks?
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Today we'll take a closer look at Central Depository Services (India) Limited (NSE:CDSL) from a dividend investor's perspective. Owning a strong business and reinvesting the dividends is widely seen as an attractive way of growing your wealth. Yet sometimes, investors buy a popular dividend stock because of its yield, and then lose money if the company's dividend doesn't live up to expectations.
Central Depository Services (India) has only been paying a dividend for a year or so, so investors might be curious about its 1.8% yield. When buying stocks for their dividends, you should always run through the checks below, to see if the dividend looks sustainable.
Explore this interactive chart for our latest analysis on Central Depository Services (India)!
Dividends are usually paid out of company earnings. If a company is paying more than it earns, then the dividend might become unsustainable - hardly an ideal situation. So we need to form a view on if a company's dividend is sustainable, relative to its net profit after tax. Looking at the data, we can see that 37% of Central Depository Services (India)'s profits were paid out as dividends in the last 12 months. This is medium payout level that leaves enough capital in the business to fund opportunities that might arise, while also rewarding shareholders. Besides, if reinvestment opportunities dry up, the company has room to increase the dividend.
Remember, you can always get a snapshot of Central Depository Services (India)'s latest financial position,by checking our visualisation of its financial health.
Before buying a stock for its income, we want to see if the dividends have been stable in the past, and if the company has a track record of maintaining its dividend. With a payment history of less than 2 years, we think it's a bit too soon to think about living on the income from its dividend. During the past one-year period, the first annual payment was ₹3.50 in 2018, compared to ₹4.00 last year. Dividends per share have grown at approximately 14% per year over this time.
The dividend has been growing pretty quickly, which could be enough to get us interested even though the dividend history is relatively short. Further research may be warranted.
The other half of the dividend investing equation is evaluating whether earnings per share (EPS) are growing. Growing EPS can help maintain or increase the purchasing power of the dividend over the long run. Strong earnings per share (EPS) growth might encourage our interest in the company despite fluctuating dividends, which is why it's great to see Central Depository Services (India) has grown its earnings per share at 18% per annum over the past five years. A company paying out less than a quarter of its earnings as dividends, and growing earnings at more than 10% per annum, looks to be right in the cusp of its growth phase. At the right price, we might be interested.
Dividend investors should always want to know if a) a company's dividends are affordable, b) if there is a track record of consistent payments, and c) if the dividend is capable of growing. We're glad to see Central Depository Services (India) has a low payout ratio, as this suggests earnings are being reinvested in the business. Next, earnings growth has been good, but unfortunately the company has not been paying dividends as long as we'd like. Central Depository Services (India) has a credible record on several fronts, but falls slightly short of our standards for a dividend stock.
Earnings growth generally bodes well for the future value of company dividend payments. See if the 3 Central Depository Services (India) analysts we track are forecasting continued growth with ourfreereport on analyst estimates for the company.
Looking for more high-yielding dividend ideas? Try ourcurated list of dividend stocks with a yield above 3%.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
The Best Side Hustle I've Ever Had
Here's how some of our writers have supplemented their income over the years.
Image source: Getty Images.
Over the past decade or so, the so-called gig economy has exploded. More Americans than ever are finding ways to supplement their income through part-time "side hustles." We asked three of The Ascent's contributors about the best side hustles they've ever had, and here's what they had to say.
Matt Frankel, CFP:I've had a few side hustles in my life -- even before that term existed. When I was a high school teacher, I worked at an after-school tutoring center. Before that, when I was working toward my masters and still bartending for a living, I substitute-taught a few days each week to save money.
However, at the risk of sounding like I'm just saying what my bosses want to hear, the best side hustle I've ever had was the one that led to my current job: writing for The Motley Fool (The Ascent's parent company). To be perfectly clear, I'm still a freelancer, but these days, writing on investing and personal finance is mymaingig.
Back when I was a struggling high school teacher, I stumbled upon a project known as The Motley Fool's "Blog Network," which was essentially a platform that allowed people to share their thoughts on stocks and, if their content was good, to get paid for doing it. Well, about eight years and over 5,000 articles later, here I am. It's been quite a journey, and it has allowed me to help countless people invest and manage their personal finances better.
The Blog Network isn't around anymore, but freelance writing gigs of many kinds are abundant if you have expertise in a certain area as well as a knack for explaining complex topics in an easy-to-understand way. So if this sounds like you, and you're looking for a side hustle, I highly recommend checking out some freelance employment marketplaces (Upwork is a good one) and seeing what's available.
Maurie Backman:Before I became a full-time freelance writer, I would dabble in part-time writing gigs to supplement my income, build my portfolio, and gain experience in the content field. And while I've certainly taken on my share of random assignments, one gig that stands out in my mind was a stint writing copy about a topic many of us might find awkward, to say the least: sexually transmitted infections.
Now, I won't get into the nitty-gritty ofwhatI wrote about, but let's just say that in the course of that job, I learned more about unsavory symptoms than I care to remember. Here's what I loved about the gig, though: The company would contact me at the start of the week and ask for these short, snippet paragraphs that would get attached to ads for home STI testing kits. I'd then have a good four or five days to submit my work, which meant I could do it at my own pace and convenience.
Some weeks, I'd be given a batch of four or five content pieces. Other weeks, I'd have double the load. The pay was excellent, given the limited time commitment and flexibility, and over the course of about six months (which was how long the project lasted), I earned a few thousand dollars without really having to disrupt my life. That money then went toward paying for a vacation so I wouldn't have to tap mysavings.
The best part? The company that hired for me that project was so pleased with my work that my contact referred me to another medical content project -- one that was quite lucrative, too.
If you're in the market for a side hustle, be willing to do something outside your comfort zone. You never know what opportunities it might lead to, and it never hurts to have a little extra money to play with or save.
Christy Bieber:The best side hustle I ever had was one I took on in law school: tutoring students preparing for the SAT and the Law School Admissions Test (LSAT).
At the time I took the tutoring job, it seemed like a great gig because of the generous hourly rate and the fact that students would come to my house for their tutoring so I didn't have to try to commute in Los Angeles traffic. It was also rewarding to help people grasp concepts they didn't fully understand and to help them make their dreams of getting into a great school come true.
What I couldn't have imagined was that this side hustle would ultimately lead me down a winding career path that led to my true dream job: writing full-time for a living.
I kept tutoring all through school and for about six months after school, too -- once I figured out I didn't want to use my expensive law degree to practice law. Then, with the tutoring experience under my belt, I was able to land a job writing LSAT and SAT questions.
This, in turn, led to more educational writing, including ghost-writing textbooks -- which subsequently led to writing for websites, including an online dictionary site. Writing for the Web ultimately helped me to develop the career as a full-time writer that I have today.
My career took a winding path and looks very different from what I had originally expected to do with my life. I'm much happier working from home, setting my own hours, and doing interesting work than I would have been practicing law. And it all started because of the transferrable skills I developed through my side hustle.
The Motley Fool owns and recommends MasterCard and Visa, and recommends American Express. We’re firm believers in the Golden Rule. If we wouldn’t recommend an offer to a close family member, we wouldn’t recommend it on The Ascent either. Our number one goal is helping people find the best offers to improve their finances. That is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team. |
Central Depository Services (India) Limited (NSE:CDSL) Has Got What It Takes To Be An Attractive Dividend Stock
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Dividend paying stocks like Central Depository Services (India) Limited (NSE:CDSL) tend to be popular with investors, and for good reason - some research suggests a significant amount of all stock market returns come from reinvested dividends. Unfortunately, it's common for investors to be enticed in by the seemingly attractive yield, and lose money when the company has to cut its dividend payments.
Central Depository Services (India) has only been paying a dividend for a year or so, so investors might be curious about its 1.8% yield. Some simple analysis can reduce the risk of holding Central Depository Services (India) for its dividend, and we'll focus on the most important aspects below.
Explore this interactive chart for our latest analysis on Central Depository Services (India)!
Companies (usually) pay dividends out of their earnings. If a company is paying more than it earns, the dividend might have to be cut. Comparing dividend payments to a company's net profit after tax is a simple way of reality-checking whether a dividend is sustainable. In the last year, Central Depository Services (India) paid out 37% of its profit as dividends. A medium payout ratio strikes a good balance between paying dividends, and keeping enough back to invest in the business. Besides, if reinvestment opportunities dry up, the company has room to increase the dividend.
Consider gettingour latest analysis on Central Depository Services (India)'s financial position here.
One of the major risks of relying on dividend income, is the potential for a company to struggle financially and cut its dividend. Not only is your income cut, but the value of your investment declines as well - nasty. With a payment history of less than 2 years, we think it's a bit too soon to think about living on the income from its dividend. During the past one-year period, the first annual payment was ₹3.50 in 2018, compared to ₹4.00 last year. Dividends per share have grown at approximately 14% per year over this time.
We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.
Examining whether the dividend is affordable and stable is important. However, it's also important to assess if earnings per share (EPS) are growing. Over the long term, dividends need to grow at or above the rate of inflation, in order to maintain the recipient's purchasing power. It's good to see Central Depository Services (India) has been growing its earnings per share at 18% a year over the past 5 years. Earnings per share have been growing at a good rate, and the company is paying less than half its earnings as dividends. We generally think this is an attractive combination, as it permits further reinvestment in the business.
To summarise, shareholders should always check that Central Depository Services (India)'s dividends are affordable, that its dividend payments are relatively stable, and that it has decent prospects for growing its earnings and dividend. We're glad to see Central Depository Services (India) has a low payout ratio, as this suggests earnings are being reinvested in the business. Next, earnings growth has been good, but unfortunately the company has not been paying dividends as long as we'd like. Overall we think Central Depository Services (India) is an interesting dividend stock, although it could be better.
Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 3 analysts we track are forecasting for Central Depository Services (India)for freewith publicanalyst estimates for the company.
We have also put together alist of global stocks with a market capitalisation above $1bn and yielding more 3%.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Investors Who Bought CardieX (ASX:CDX) Shares Three Years Ago Are Now Down 76%
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Every investor on earth makes bad calls sometimes. But really bad investments should be rare. So consider, for a moment, the misfortune ofCardieX Limited(ASX:CDX) investors who have held the stock for three years as it declined a whopping 76%. That would be a disturbing experience. The falls have accelerated recently, with the share price down 26% in the last three months.
See our latest analysis for CardieX
CardieX isn't a profitable company, so it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Over the last three years, CardieX's revenue dropped 1.2% per year. That is not a good result. The share price fall of 38% (per year, over three years) is a stern reminder that money-losing companies are expected to grow revenue. We're generally averse to companies with declining revenues, but we're not alone in that. Don't let a share price decline ruin your calm. You make better decisions when you're calm.
The graphic below shows how revenue and earnings have changed as management guided the business forward. If you want to see cashflow, you can click on the chart.
You can see how its balance sheet has strengthened (or weakened) over time in thisfreeinteractive graphic.
CardieX shareholders gained a total return of 7.4% during the year. But that return falls short of the market. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 20% endured over half a decade. So this might be a sign the business has turned its fortunes around. You might want to assessthis data-rich visualizationof its earnings, revenue and cash flow.
If you like to buy stocks alongside management, then you might just love thisfreelist of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Should Carindale Property Trust (ASX:CDP) Be Part Of Your Income Portfolio?
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Is Carindale Property Trust (ASX:CDP) a good dividend stock? How would you know? Dividend paying companies with growing earnings can be highly rewarding in the long term. If you are hoping to live on the income from dividends, it's important to be a lot more stringent with your investments than the average punter.
With Carindale Property Trust yielding 5.4% and having paid a dividend for over 10 years, many investors likely find the company quite interesting. We'd guess that plenty of investors have purchased it for the income. Some simple analysis can offer a lot of insights when buying a company for its dividend, and we'll go through this below.
Click the interactive chart for our full dividend analysis
Companies (usually) pay dividends out of their earnings. If a company is paying more than it earns, the dividend might have to be cut. As a result, we should always investigate whether a company can afford its dividend, measured as a percentage of a company's net income after tax. Looking at the data, we can see that 103% of Carindale Property Trust's profits were paid out as dividends in the last 12 months. A payout ratio above 100% is definitely an item of concern, unless there are some other circumstances that would justify it.
Another important check we do is to see if the free cash flow generated is sufficient to pay the dividend. The company paid out 99% of its free cash flow as dividends last year, which is adequate, but reduces the wriggle room in the event of a downturn. It's good to see that while Carindale Property Trust's dividends were not covered by profits, at least they are affordable from a cash perspective. If executives were to continue paying more in dividends than the company reported in profits, we'd view this as a warning sign. Very few companies are able to sustainably pay dividends larger than their reported earnings.
We update our data on Carindale Property Trust every 24 hours, so you can always getour latest analysis of its financial health, here.
One of the major risks of relying on dividend income, is the potential for a company to struggle financially and cut its dividend. Not only is your income cut, but the value of your investment declines as well - nasty. For the purpose of this article, we only scrutinise the last decade of Carindale Property Trust's dividend payments. This dividend has been unstable, which we define as having fallen by at least 20% one or more times over this time. During the past ten-year period, the first annual payment was AU$0.27 in 2009, compared to AU$0.36 last year. Dividends per share have grown at approximately 2.9% per year over this time. The growth in dividends has not been linear, but the CAGR is a decent approximation of the rate of change over this time frame.
It's good to see some dividend growth, but the dividend has been cut at least once, and the size of the cut would eliminate most of the growth, anyway. We're not that enthused by this.
With a relatively unstable dividend, it's even more important to see if earnings per share (EPS) are growing. Why take the risk of a dividend getting cut, unless there's a good chance of bigger dividends in future? Over the past five years, it looks as though Carindale Property Trust's EPS have declined at around 3.6% a year. If earnings continue to decline, the dividend may come under pressure. Every investor should make an assessment of whether the company is taking steps to stabilise the situation.
To summarise, shareholders should always check that Carindale Property Trust's dividends are affordable, that its dividend payments are relatively stable, and that it has decent prospects for growing its earnings and dividend. We're not keen on the fact that Carindale Property Trust paid out such a high percentage of its income, although its cashflow is in better shape. Second, earnings per share have been in decline, and its dividend has been cut at least once in the past. There are a few too many issues for us to get comfortable with Carindale Property Trust from a dividend perspective. Businesses can change, but we would struggle to identify why an investor should rely on this stock for their income.
Now, if you want to look closer, it would be worth checking out ourfreeresearch on Carindale Property Trustmanagement tenure, salary, and performance.
If you are a dividend investor, you might also want to look at ourcurated list of dividend stocks yielding above 3%.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Women's World Cup: Record ticket price expected for US-France
The United States’ quarterfinal matchup against the host nation of France will be one of the most highly anticipated matches of the FIFA Women’s World Cup, and the ticket prices match the hype. Although the results won’t be clear until after the match, it appears likely to become the most expensive Women’s World Cup game ever. The cheapest tickets available on StubHub are being sold for €740.78, or the equivalent of $844.73. One user is selling a pair of tickets for €12,450 ($14,196.98) — although the seat locations aren’t listed — and there are 28 sets of tickets going for at least $2,000. The Women’s World Cup is obviously a massive worldwide event and only occurs every four years, but these prices are well outside the norm. Tickets for Thursday's quarterfinal match between England and Norway range between $28.51 and $169.91. The prices are especially impressive considering how much lower they were at the last Women’s World Cup. As ESPN pointed out , the USWNT’s quarterfinal match against China had an average resale price of $165, while the final against Japan had a high of $368. United States is set to take on the host nation of France on Friday in the quarterfinals of the FIFA Women's World Cup. (AP Photo/Alessandra Tarantino) America’s impressive attendance at the tournament is a big factor driving the ticket prices, as is France’s standing as the home team. There are naturally going to be more fans from each of those country willing to buy tickets as the teams go deeper into the tournament. Still, it should be noted that the match is expensive because these are two of the best teams in the world. The U.S. entered the tournament as favorites to repeat, and France came in with the second-highest Soccer Power Index. "Hopefully (it's) a complete spectacle, just an absolute media circus," U.S. midfielder Megan Rapinoe said . "I hope it's huge and crazy; that's what it should be. This is the best game. This is what everybody wanted. I think we want it. Seems like they're up for it. You guys of course are up for it, and all the fans. Maybe it'll be a pretty even split between the fans in the stadium. We've been traveling pretty deep in this World Cup. So I hope it's just a total s---show circus. It's going to be totally awesome. This is what everybody wants, and these are the biggest games that you kind of dream about as a kid." Story continues FiveThirtyEight gives the U.S. a 54 percent chance of advancing to the semifinals , but either country would be favored in the next round. The website gives America a 29 percent chance to win it all with France having the second-best odds at 22 percent. More from Yahoo Sports: Sources: Kawhi to become free agent; Raptors favorite Paul denies trade request: ‘Happy’ to stay in Houston After profane tirade, Mets have to fire manager Callaway France beats Brazil, keeps possibility of dream QF alive |
Is Carindale Property Trust (ASX:CDP) A Risky Dividend Stock?
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Today we'll take a closer look at Carindale Property Trust (ASX:CDP) from a dividend investor's perspective. Owning a strong business and reinvesting the dividends is widely seen as an attractive way of growing your wealth. On the other hand, investors have been known to buy a stock because of its yield, and then lose money if the company's dividend doesn't live up to expectations.
A high yield and a long history of paying dividends is an appealing combination for Carindale Property Trust. We'd guess that plenty of investors have purchased it for the income. Before you buy any stock for its dividend however, you should always remember Warren Buffett's two rules: 1) Don't lose money, and 2) Remember rule #1. We'll run through some checks below to help with this.
Click the interactive chart for our full dividend analysis
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. So we need to form a view on if a company's dividend is sustainable, relative to its net profit after tax. Carindale Property Trust paid out 103% of its profit as dividends, over the trailing twelve month period. A payout ratio above 100% is definitely an item of concern, unless there are some other circumstances that would justify it.
In addition to comparing dividends against profits, we should inspect whether the company generated enough cash to pay its dividend. Carindale Property Trust paid out 99% of its cash flow last year. This may be sustainable but it does not leave much of a buffer for unexpected circumstances. It's good to see that while Carindale Property Trust's dividends were not covered by profits, at least they are affordable from a cash perspective. If executives were to continue paying more in dividends than the company reported in profits, we'd view this as a warning sign. Extraordinarily few companies are capable of persistently paying a dividend that is greater than their profits.
Consider gettingour latest analysis on Carindale Property Trust's financial position here.
From the perspective of an income investor who wants to earn dividends for many years, there is not much point buying a stock if its dividend is regularly cut or is not reliable. Carindale Property Trust has been paying dividends for a long time, but for the purpose of this analysis, we only examine the past 10 years of payments. This dividend has been unstable, which we define as having fallen by at least 20% one or more times over this time. During the past ten-year period, the first annual payment was AU$0.27 in 2009, compared to AU$0.36 last year. This works out to be a compound annual growth rate (CAGR) of approximately 2.9% a year over that time. The growth in dividends has not been linear, but the CAGR is a decent approximation of the rate of change over this time frame.
We're glad to see the dividend has risen, but with a limited rate of growth and fluctuations in the payments, we don't think this is an attractive combination.
With a relatively unstable dividend, it's even more important to evaluate if earnings per share (EPS) are growing - it's not worth taking the risk on a dividend getting cut, unless you might be rewarded with larger dividends in future. Over the past five years, it looks as though Carindale Property Trust's EPS have declined at around 3.6% a year. If earnings continue to decline, the dividend may come under pressure. Every investor should make an assessment of whether the company is taking steps to stabilise the situation.
To summarise, shareholders should always check that Carindale Property Trust's dividends are affordable, that its dividend payments are relatively stable, and that it has decent prospects for growing its earnings and dividend. We're a bit uncomfortable with its high payout ratio, although at least the dividend was covered by free cash flow. Second, earnings per share have been in decline, and its dividend has been cut at least once in the past. In this analysis, Carindale Property Trust doesn't shape up too well as a dividend stock. We'd find it hard to look past the flaws, and would not be inclined to think of it as a reliable dividend-payer.
You can also discover whether shareholders are aligned with insider interests bychecking our visualisation of insider shareholdings and trades in Carindale Property Trust stock.
Looking for more high-yielding dividend ideas? Try ourcurated list of dividend stocks with a yield above 3%.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Oil prices mixed ahead of U.S. crude stock data
By Collin Eaton
HOUSTON (Reuters) - Oil prices were mixed on Tuesday ahead of data expected to show U.S. crude stocks declining, outweighing investors' concerns that U.S.-China trade tensions could dampen fuel demand.
Benchmark Brent crude futures settled up 19 cents, or 0.3%, at $65.05 a barrel.
U.S. crude futures fell 7 cents, or about 0.1%, at $57.83 a barrel.
Investors shrugged off U.S. President Donald Trump's comments on Tuesday that the United States would obliterate parts of Iran if it attacked "anything American."
Oil-market jitters over the escalating tension between the United States and Iran have eased after Trump targeted Supreme Leader Ayatollah Ali Khamenei and other top Iranian officials with sanctions on Monday, after calling off a retaliatory air strike, analysts said.
Sending a bullish signal, a preliminary Reuters poll showed on Monday that U.S. crude oil inventories likely fell for a second consecutive week last week.
The numbers came ahead of crude stock data from the American Petroleum Institute (API), an industry group, at 4:30 p.m. EDT (2030 GMT) on Tuesday, and the Energy Information Administration (EIA), an agency of the U.S. Department of Energy, due on Wednesday.
But concerns over U.S.-China trade tensions and global growth still were pressuring prices, analysts said.
"You're going to see oil have trouble picking a direction over the next couple days," said Josh Graves, senior market strategist at RJO Futures in Chicago. "There's a tug-of-war between bullish and bearish factors."
Weighing on prices, hopes for progress in the trade war between China and the United States during this week's G20 meeting were dampened by a senior U.S. official saying Trump was "comfortable with any outcome" from the talks.
"The U.S.-China meeting on the side of G20 could signal further rapprochement on trade, but the market needs something it can sink it's teeth into," said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut.
"We've been going back and forth on U.S.-China trade disputes for over a year now," McGillian added.
Demand concerns were briefly overcome last week when Brent climbed 5% and U.S. crude surged almost 10%, its strongest week since 2016, after Iran shot down a U.S. drone, adding to tensions stoked by previous attacks on oil tankers in the area.
Washington has blamed the tanker attacks on Iran, which denies any role.
The Organization of the Petroleum Exporting Countries and its allies including Russia appear likely to extend a deal on curbing output when they meet on July 1-2.
Russian Energy Minister Alexander Novak said international cooperation on crude production had helped stabilize oil markets and was more important than ever. He also voiced concerns about demand.
The chief executive of Saudi Aramco, the state oil firm of OPEC's de facto leader, said its spare capacity of 12 million barrels per day (bpd) was sufficient and that it would meet its customers' needs.
U.S. sanctions on Iran and Venezuela have cut oil exports from the two OPEC members, but U.S. production has been rising.
(Reporting by Collin Eaton; Additional reporting by Shadia Nasralla in London, Aaron Sheldrick in TOKYO; Editing by Lisa Shumaker) |
With EPS Growth And More, Credit Corp Group (ASX:CCP) Is Interesting
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Like a puppy chasing its tail, some new investors often chase 'the next big thing', even if that means buying 'story stocks' without revenue, let alone profit. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses.
If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested inCredit Corp Group(ASX:CCP). While that doesn't make the shares worth buying at any price, you can't deny that successful capitalism requires profit, eventually. In comparison, loss making companies act like a sponge for capital - but unlike such a sponge they do not always produce something when squeezed.
See our latest analysis for Credit Corp Group
As one of my mentors once told me, share price follows earnings per share (EPS). Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. It certainly is nice to see that Credit Corp Group has managed to grow EPS by 19% per year over three years. If the company can sustain that sort of growth, we'd expect shareholders to come away winners.
I like to take a look at earnings before interest and (EBIT) tax margins, as well as revenue growth, to get another take on the quality of the company's growth. I note that Credit Corp Group's revenuefrom operationswas lower than its revenue in the last twelve months, so that could distort my analysis of its margins. While we note Credit Corp Group's EBIT margins were flat over the last year, revenue grew by a solid 8.0% to AU$265m. That's progress.
The chart below shows how the company's bottom and top lines have progressed over time. To see the actual numbers, click on the chart.
You don't drive with your eyes on the rear-view mirror, so you might be more interested in thisfreereport showing analyst forecasts for Credit Corp Group'sfutureprofits.
It makes me feel more secure owning shares in a company if insiders also own shares, thusly more closely aligning our interests. As a result, I'm encouraged by the fact that insiders own Credit Corp Group shares worth a considerable sum. Indeed, they hold AU$17m worth of its stock. That shows significant buy-in, and may indicate conviction in the business strategy. Despite being just 1.2% of the company, the value of that investment is enough to show insiders have plenty riding on the venture.
You can't deny that Credit Corp Group has grown its earnings per share at a very impressive rate. That's attractive. I think that EPS growth is something to boast of, and it doesn't surprise me that insiders are holding on to a considerable chunk of shares. Fast growth and confident insiders should be enough to warrant further research. So the answer is that I do think this is a good stock to follow along with. Once you've identified a business you like, the next step is to consider what you think it's worth. And right now is your chance to view our exclusivediscounted cashflow valuationof Credit Corp Group. You might benefit from giving it a glance today.
You can invest in any company you want. But if you prefer to focus on stocks that have demonstrated insider buying, here isa list of companies with insider buying in the last three months.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Calavo Growers Inc (CVGW) Chairman, President and CEO Lecil E Cole Sold $8.9 million of Shares
Chairman, President and CEO of Calavo Growers Inc (NASDAQ:CVGW) Lecil E Cole sold 90,775 shares of CVGW on 06/21/2019 at an average price of $97.9 a share. |
Mickey Callaway reportedly ordered to take Jacob deGrom out
Things just keep getting worse for the New York Mets. Just hours after manager Mickey Callaway apologized for getting into a verbal altercation with a media member, another bombshell report claims the team is in even more disarray. Turns out, maybe Callaway isn’t totally responsible for all those questionable managerial decisions. General manager Brodie Van Wagenen might actually be giving the orders , according to Mike Puma of the New York Post. Van Wagenen was reportedly behind the decision to remove ace Jacob deGrom from a tight game in June, according to Puma. The source said Van Wagenen, who was watching the game at home on TV, communicated with a member of the Mets support staff with an order to remove deGrom from the game. Callaway complied with the order, and deGrom was visibly upset as he departed the field, certain that he could continue pitching. The manager was grilled for the move, but at the time insisted the decision was his. The Mets led the contest 4-1 when deGrom was taken out of the game. They wound up losing 6-5 in extras. That’s not the only time Callaway has been restricted this season. The front office reportedly set the rule that closer Edwin Diaz can only pitch in the ninth inning. Callaway has used Diaz for more than three outs twice this season. The Seattle Mariners used Diaz in the same manner in 2018. Diaz went longer than three outs only three times last season. That frustration may have contributed to Callaway’s verbal outburst at a reporter following Sunday’s game. The Mets lost after Seth Lugo gave up a home run in the eighth inning. Callaway received criticism for not turning to Diaz for a lengthy save appearance. Following the contest, Callaway called a reporter a “ motherf----- .” Pitcher Jason Vargas had to be restrained after threatening to fight that reporter. Callaway and Vargas were fined by the team . Callaway, Van Wagenen and Vargas all spoke to reporters Monday regarding the verbal altercation Sunday. Van Wagenen told reporters “frustrations are high.” Story continues He said that just hours before Puma’s report shed even more light on why that might be the case. ——— Chris Cwik is a writer for Yahoo Sports. Have a tip? Email him at christophercwik@yahoo.com or follow him on Twitter! Follow @Chris_Cwik More from Yahoo Sports: Sources: Kawhi to become free agent; Raptors favorite Paul denies trade request: ‘Happy’ to stay in Houston After profane tirade, Mets have to fire manager Callaway France beats Brazil, keeps possibility of dream QF alive |
NBA Awards: Luke Doncic wins Rookie of the Year
Luka Doncic was an instant impact player with the Mavericks. (AP Photo/David Zalubowski) The NBAs elite turned up in Los Angeles to see Shaquille ONeal rap and the NBAs major awards handed out, capping off a wild year in the league. The league MVP was won by a player who is still only 24, the Rookie of the Year saw its first European recipient since Pau Gasol and the awards overall saw a very international flavor. Giannis Antetokounmpo wins Most Valuable Player After dripping with potential for years, Giannis Antetokounmpo finally received his official coronation as one of the premier talents in the league as the 2019 Most Valuable Player . Antetokounmpo averaged 27.7 points, 12.9 rebounds and 5.9 assists per game while shooting a mind-boggling 57.8 percent from the field. The Greek Freak was strong enough on defense to garner a Defensive Player of the Year nomination (more on that below) and was the dominant force behind the NBAs best record in the regular season. The most exciting part about Antetkounmpos win is that at only 24 years old, we still might only be seeing the beginning of a reign atop the league. Antetokounmpo faced a strong challenge from Houston Rockets guard James Harden and his mind-boggling 36.1 points per game. That average beat second place by more than eight points. Still, Antetokounmpos dominance on defense and on the boards ended up giving him the win. Oklahoma City Thunder forward Paul George was the other finalist, and might have been a stronger contender had it not been for a midseason shoulder injury. Rudy Gobert wins Defensive Player of the Year Utah Jazz center Rudy Gobert won the Defensive Player of the Year award thanks to a dominating presence in the paint. Gobert finished second in the league in blocks with 187 while also averaging 12.9 rebounds per game. Gobert is the first back-to-back winner of the award since Kawhi Leonard three years ago. He also set the NBA record for dunks in a season , which has nothing to do with defense but is still pretty cool. Gobert beat out fellow finalists Antetokounmpo and George, but the pair likely had a bigger award on their mind. Story continues Mike Budenholzer wins Coach of the Year For taking the Milwaukee Bucks from the middle of the Eastern Conference to the best record in the NBA, Mike Budenholzer was awarded Coach of the Year. Budenholzer took over a team that finished seventh in the East last season at 44-38 after firing Jason Kidd, and soon presided over a team that led the NBA in defensive rating and watched Giannis Antetokounmpos rise as one of the top players in the league. Obviously, votes for the award were cast before the playoffs, where Budenholzer and the Bucks fell to Nick Nurses Toronto Raptors. Denver Nuggets coach Michael Malone and Los Angeles Clippers coach Doc Rivers were the other finalists for the award. Lou Williams wins Sixth Man of the Year For the third time in his career, Lou Williams won the Sixth Man of the Year, tying Jamal Crawford for most times ever winning the award. You can never have too many of these, right? Williams said after winning the award. Williams averaged 20.0 points per game off the bench for a Los Angeles Clippers team that surged into the playoffs after trading away star Tobias Harris. Funnily enough, this is also the fourth time in six years that a Clipper won the award. At the podium, Lou Williams said he thought the 2017-18 season was his last in the NBA. Told his friends and family it was quits. Now he's won two Sixth Man awards in a row. Andrew Greif (@AndrewGreif) June 25, 2019 WIlliams blew away the field with 96 out of 100 first-place votes. The other finalists were Clippers center Montrezl Harrell and Indiana Pacers forward Domantas Sabonis. Pascal Siakam wins Most Improved Player Given that votes are made before the playoffs, it should tell you something how good Pascal Siakam was to win Most Improved Player . The Raptors forward averaged 16.9 points, 6.9 rebounds and 3.1 assists during the regular season, then helped push the Raptors to their first championship in franchise history. Pretty good for a guy who averaged only 7.3 points per game last year and was taken late in the first round out of New Mexico State during the 2016 NBA draft. Siakam gave a moving speech while accepting the award, remembering the support he received from his father. Siakam: "For people that know my story, they know how important my dad is... He had this crazy dream. People back home never believed in him but he always believed this would be possible. I'm just blessed to make his dream become a reality & have an opportunity to keep it alive." Josh Lewenberg (@JLew1050) June 25, 2019 Siakam received 86 first-place votes. Brooklyn Nets guard DAngelo Russell (12 first-place votes) and Sacramento Kings guard DeAaron Fox (one first-place vote) were the other finalists, and Derrick Rose also received a first-place vote. Luka Doncic wins Rookie of the Year Luka Doncic had some strong competition, but the Dallas Mavericks guards well-rounded game unsurprisingly ended up winning out in the Rookie of the Year race. The Slovenian star won the award after averaging 21.2 points, 7.8 rebounds and 6.0 assists while establishing himself as the foundation of the Mavericks future. Doncic was a nearly unanimous pick, winning 98 of 100 first-place votes. Luka Doncic is the 2nd @dallasmavs player in franchise history to win Rookie of the Year, joining Jason Kidd, who shared the award with Grant Hill in 1994-95. @luka7doncic was the 5th rookie to average 20-5-5 in a season. All 5 won the ROY. pic.twitter.com/ORfMrfVssl ESPN Stats & Info (@ESPNStatsInfo) June 25, 2019 The Mavericks reached an agreement to acquire Doncic from the Atlanta Hawks after he went third overall in the 2018 NBA draft. The price 2018 fifth overall pick Trae Young and 2019 10th overall pick Cameron Reddish was significant, but few in Dallas are complaining about the teams new core going forward . Funnily enough, it was Young who finished second in the Rookie of the Year race after averaging 19.1 points and 8.1 assists per game. Phoenix Suns center Deandre Ayton was the other finalist, with Memphis Grizzlies big man Jaren Jackson Jr. and Cleveland Cavaliers point guard Collin Sexton rounding out the top 5. Mike Conley, Bradley Beal among other winners In addition to the above awards, the NBA handed out the following minor awards at the show: Hustle Award: Marcus Smart, Boston Celtics Sportsmanship Award: Mike Conley, Memphis Grizzlies Teammate of the Year: Mike Conley, Memphis Grizzlies Moment of the Year: Derrick Rose going for 50 , Minnesota Timberwolves Community Assist Award: Bradley Beal, Washington Wizards Sager Strong: Robin Roberts, ABC Executive of the Year: Jon Horst, Milwaukee Bucks Lifetime Achievement Award: Larry Bird and Magic Johnson More from Yahoo Sports: Sources: Kawhi to become free agent; Raptors favorite Paul denies trade request: Happy to stay in Houston After profane tirade, Mets have to fire manager Callaway France beats Brazil, keeps possibility of dream QF alive |
Sony and Third Point Meet Again
In a June 2019 letter toSony(NYSE: SNE), hedge fund Third Point disclosed a $1.5 billion investment and called for the company to break up. If reading this feels like déjà vu, that's probably because Third Point made a similar call for Sony to break up in a 2013 activist campaign. Third Point's first bout with Sony was bittersweet; Sony did not make any of the changes the hedge fund called for but the company's stock still ran higher -- providing the hedge fund with a tidy profit. What is likely to happen with Third Point's renewed effort?
This move marks Third Point's second attempted intervention effort at Sony in six years. In 2013,Third Point accumulated a 7% stake in Sonyworth roughly $1.4 billion and called for the company tospin offor sell its movie and music businesses.
At the time, Third Point argued that it made no sense for Sony to operate its technology and media businesses under the same corporate umbrella. Third Point believed the two business units did not benefit each other to operate within the same company and may have hindered each other due to lack of management focus and resulting business underinvestment.
Ultimately, Sony ignored Third Point's demands, and the hedge fund sold its Sony stock in 2014. Despite the failed attempt to enact change at the company, Sony's stock performed well, and Third Point ended up making a 20% profit on its 2013 investment.
This time around, Third Point is making similar demands for a break up but has taken a different tack. In Third Point's most recent letter to Sony, the hedge fund is more complimentary to the company and congratulates management on its success in growing Sony over the past several years. The letter notes that despite fostering four "crown jewel" businesses, Sony's stock trades at a significant discount to its fair value because of the company's complex corporate structure.
As exhibited in the table below, Sony generates more than 75% of its earnings from four businesses: gaming, music, film, and semiconductors. These businesses are large and span several industries. Because of the company's size and diversity, it's hard for most investors to comprehend the scale and depth of the company as a whole, which in turn causes investors to apply a "conglomerate discount," to Sony. This mode of thinking creates what many believe is an undervalued stock.
[{"Sony's \"crown jewel\" businesses": "Gaming", "Description": "World's leading video game platform under the PlayStation brand", "Contribution to earnings": "43%"}, {"Sony's \"crown jewel\" businesses": "Music", "Description": "One of the world's three largest music labels", "Contribution to earnings": "16%"}, {"Sony's \"crown jewel\" businesses": "Pictures", "Description": "Fifth largest Hollywood film studio", "Contribution to earnings": "8%"}, {"Sony's \"crown jewel\" businesses": "Semiconductors", "Description": "World's leading image sensor semiconductor manufacturer", "Contribution to earnings": "20%"}]
Data sources: Third Point letter and presentation to Sony.
Third Point believes that Sony's stock is discounted by as much as 50% to its fair value. The investment firm arrived at its estimate of fair value by valuing each of Sony's major business units in a way consistent with publicly traded peers and then adding the value of the company's massive cash and investment portfolio.
The conglomerate discount appears to be steep, but it doesn't need to be a permanent condition. Third Point has highlighted a few steps the company can take to realize the value of its assets.
Third Point wants Sony to break up its dissimilar business units and use debt to repurchase stock in order to close the "conglomerate discount" and increase shareholder value.
In 2013, Third Point called for Sony to separate its entertainment businesses from its technology business. This time around, Third Point thinks the best course is to spin off Sony's semiconductor unit. The unit is a leader in chips that power cameras in smartphones and other optical devices. This segment is primarily a manufacturing business operating chip fabrication plants.
Third Point makes a good case for separating the semiconductor business. As a manufacturing business, it requires significant capital investment and has a different growth profile than Sony's media and gaming segments. It's hard to imagine any meaningful business advantages lost by separating semiconductors from media and entertainment, but it's easy to see how having the businesses together adds to complexity and leads to what Third Bridge views as a steep conglomerate discount.
The other key asset Third Point has identified is Sony's balance sheet, which has an investment portfolio of publicly traded stocks worth as much as $12 billion and a net cash position. For example, Sony ownsSpotify(NYSE: SPOT)stock worth more than $1 billion.
The hedge fund argues that shareholders would benefit if Sony liquidates its investments and returns the cash in the form ofstock repurchasesand dividends. Third Point also notes that Sony could even afford to take on balance-sheet debt to finance returning capital to shareholders.
Again, Third Point makes a good argument. Sony's balance sheet is underutilized by Western standards -- although large cash hoards and investment portfolios are common for Japanese companies. The cash and investments do not directly contribute to the company's earnings but represent a significant value for shareholders. If the investments are divested, Sony's stock would represent a more pure bet on its underlying businesses (gaming, music, pictures), which could make it a more attractive stock. And shareholders are always happy to receive additional dividends.
Third Point has presented a compelling argument that Sony's stock suffers from a conglomerate discount, and it has presented strong solutions that could alleviate that discount. Whether or not the company will heed any of the hedge fund's demands is another story.
Image source: Sony.
It's unlikely that Sony will make significant changes based on Third Point's suggestions. During the first confrontation in 2013, Third Point took a 7% stake versus the roughly 3% stake it has today. Despite that larger stake, Sony was able to completely ignore Third Point without consequence. Third Point may have some good ideas, but it's unclear what mechanisms the hedge fund has to force Sony to listen or care.
Third Point is also fighting an uphill battle against Japanese corporate culture. In Japan, corporations tend to be very conservative by overcapitalizing balance sheets with cash and holding a collection of investments in noncore businesses and public stocks. There has been a push by the Japanese government to encourage Japanese conglomerates to unwind nonproductive assets and improve returns on capital, but this is a slow-moving train.
Perhaps there is some hope after Third Point's success with Japan-basedFanuc-- the company substantially increased its payout to stockholders at Third Point's request. But Sony is not Fanuc, and this time may prove to be no different from last.
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Luis Sanchezhas no position in any of the stocks mentioned. The Motley Fool recommends Fanuc. The Motley Fool has adisclosure policy. |
FOREX-Dollar weighed by Fed prospects; Swiss franc, gold shine on geopolitics
* Dollar index at 3-month low as market bets on big Fed easing
* Swiss franc near 9 month high vs dollar, 2-year high vs euro
* Gold keeps rising, bitcoin holds above $10,000
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Hideyuki Sano
TOKYO, June 25 (Reuters) - The dollar on Tuesday remained shackled by the prospects of monetary easing by the Federal Reserve while the safe-haven Swiss franc and gold were supported by simmering tensions between Washington and Tehran.
The euro hit a three-month high of $1.14065 in early Asia trade. It has gained 2.0% from a two-week low of $1.1181 touched a week ago as the dollar has lost steam.
The dollar was on the defensive against the yen at 107.35 yen, a tad above Friday's five-month low of 107.045.
The U.S. currency's index against a basket of six major rivals fell to its lowest level in three months to 95.953 , having lost 1.7% over the past week.
Selling in the dollar accelerated after the U.S. Federal Reserve signalled it would cut interest rates before year-end on mounting worries about the fallout from tariff wars President Donald Trump is waging against China and many other trading partners.
U.S. bond yields dropped on Monday, with money market derivatives increasing bets on a 50-basis-point rate cut next month. A 25-basis-point cut is already fully priced in.
Investors looked to whether Trump and Chinese President Xi Jinping would at least call a truce in their trade war when they are expected to meet at the G20 summit in Osaka later this week.
Trump considers his meeting with Xi at the G20 summit in Japan this week an opportunity to "maintain his engagement" and see where China is on their trade dispute, a senior U.S. official said on Monday.
The dollar's weakness was the most notable against traditional safe-haven assets, reflecting concerns about tensions between the United States and Iran.
Trump targeted Iranian Supreme Leader Ayatollah Ali Khamenei and other top Iranian officials with sanctions on Monday, taking a dramatic, unprecedented step to increase pressure on Iran.
The dollar traded at 0.9721 franc, having slipped to 0.9710 on Monday, its lowest since late September.
The Swiss currency strengthened to near two-year highs against the euro to 1.1079 per euro, within touching distance of 1.1057 hit on Thursday, its highest since July 2017.
Gold also shot up to $1,425.3 per ounce, reaching its highest levels in nearly six years.
Even the price of bitcoin held firm, staying near onea-year high above $11,000.
"Assets that can be used as an alternative means of settlement are favoured, as the dollar is being shunned. Geopolitics and the Fed are two main reasons behind this," said Ayako Sera, market economist at Sumitomo Mitsui Trust Bank.
Elsewhere, the British pound remains dogged by Brexit concerns as eurosceptic Boris Johnson is seen as likely to win a majority of votes from Conservative party members who will decide the next leader and prime minister.
Johnson reiterated his promise to take Britain out of the European Union on Oct. 31, with or without a deal.
The pound fetched $1.2737, capped by resistance around $1.2760-65.
Against the euro, the pound was on the back foot at 89.475 pence per euro, near five-month lows of 89.74 set a week ago. (Editing by Shri Navaratnam) |
3 Top Dividend Stocks With Yields Over 5%
Buying and holding high-quality, high-yield dividend stocks is a great way for investors to predictably generate market-beating returns over the long term. But not all dividends are created the same. In fact, when dividends are too high, it could be a sign that the business supporting it is facing trouble and may soon suspend or lower its payout.
So we asked three top Motley Fool contributors to each find a dividend stock that's worth consideration and yieldsat least5% annually. Read on to see why they likeTanger Factory Outlet Centers(NYSE: SKT),AT&T(NYSE: T), andIron Mountain(NYSE: IRM).
IMAGE SOURCE: GETTY IMAGES
Steve Symington(Tanger Factory Outlet Centers):Tanger Factory Outlet Centers looks mighty temping, with its enormous 9.1% dividend yield -- though a payout that high seems to indicate the market anticipates the outlet center-focused real estate investment trust (REIT) is in jeopardy.
Indeed, there's a chance Tanger could lower its dividend if well-known pressures facing the retail industry spread more broadly into its niche. And the company recently took the strategic step ofselling four of its non-coreproperties that were in decline so it could redirect resources to higher-potential assets.
Meanwhile, the outlet-center model remains an attractive channel for both consumers looking for deals and retailer tenants looking to move inventory. And company CEO Steven Tanger insisted early last month that with healthy cash flows, a rock-solid balance sheet, and a reasonablepayout ratioof 61%, the company plans to maintain its dividend while simultaneously deploying capital toward its most promising development and redevelopment projects to drive longer-term growth.
For shareholders willing to buy now and collect that dividend as Tanger implement's those plans, the stock could be a greater bargain than even the products their tenants offer.
Keith Noonan(AT&T):Among investors seeking big yield, AT&T is a name that tends to pop up a lot -- and for good reason. Shares yield a hefty 6.3%, and the company has raised its payout annually for 35 years running while still boasting safe payout ratios.
On the other hand, shareholders have mostly had to be content with the telecom giant's sizable dividend payout in recent years. The company's mobile wireless segment has had pricing power diminished by tough competition, and the DIRECTV segment that it shelled out big bucks for in 2015 is losing subscribers to cord cutting. Shares are up less than 30% over the past decade, lagging far behind the roughly 200% climb for the S&P 500 index.
So, while AT&T has a reputation for being a go-to, high-yield dividend stock, it's fair to say that the market is down on the company's growth prospects -- and that the business hasn't done enough to buck that assessment. Shareholders can probably expect the DIRECTV business to continue declining, but AT&T maintains a strong position in mobile communications and has opportunities to put its newfound strength in entertainment content to use and deliver better-than-expected growth.
The rollout of5G network technologypresents a dramatic advancement, and the improved download and upload speeds will pave the way for an explosion of new connected devices that are capable of doing things that are impossible to replicate at scale on current networks. AT&T's Time Warner acquisition also made it a world leader in content, and while the company has yet to figure out an ideal way to package this content in the age of streaming, there's a good chance these new assets can be leveraged to offset DIRECTV's decline and bring customers into its mobile ecosystem through bundling.
AT&T offers a large, dependable yield backed by a business that looks pretty sturdy next to many other companies sporting yields north of 5%. Its stock stands out as a worthwhile buy trading at roughly 9 times this year's expected earnings.
Chris Neiger(Iron Mountain):High dividend yields are great, but only if the company that's handing them has the ability to pay them consistently. That's why income investors need to consider document storage company Iron Mountain, and its trailing dividend yield of 7.8%. Like Tanger Factory Outlet Centers, the company is structured as aREIT, which means that 90% or more of its income has to be paid out as dividends.
Iron Mountain's core business comes from its document storage and shredding businesses, but the company is diversifying its revenue with its data storage services as well. Between now and 2020, Iron Mountain's management has set a goal of generating 30% of its total sales from its "growth opportunities," which is primarily made up of its growing data storage services.
Admittedly, the company didn't have the best quarter recently, as revenue grew less than 1%, and CEO William Meaney pointed to "temporary higher labor costs in our North America businesses," causing Iron Mountain's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to fall 5.4% from the year-ago quarter. But the company said the costs should turn around later this year, and Iron Mountain's management still maintained its full-year guidance for 2019.
Investors looking for a stock with an impressive dividend, and one that still has lots of potential to tap into the growing data storage market, need to keep an eye on Iron Mountain.
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Chris Neigerhas no position in any of the stocks mentioned.Keith Noonanowns shares of AT&T.Steve Symingtonhas no position in any of the stocks mentioned. The Motley Fool recommends Tanger Factory Outlet Centers. The Motley Fool has adisclosure policy. |
Capacit'e Infraprojects Limited (NSE:CAPACITE) Delivered A Better ROE Than Its Industry
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While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. We'll use ROE to examine Capacit'e Infraprojects Limited (NSE:CAPACITE), by way of a worked example.
Our data showsCapacit'e Infraprojects has a return on equity of 12%for the last year. That means that for every ₹1 worth of shareholders' equity, it generated ₹0.12 in profit.
Check out our latest analysis for Capacit'e Infraprojects
Theformula for return on equityis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for Capacit'e Infraprojects:
12% = ₹973m ÷ ₹8.4b (Based on the trailing twelve months to March 2019.)
Most know that net profit is the total earnings after all expenses, but the concept of shareholders' equity is a little more complicated. It is all the money paid into the company from shareholders, plus any earnings retained. Shareholders' equity can be calculated by subtracting the total liabilities of the company from the total assets of the company.
ROE measures a company's profitability against the profit it retains, and any outside investments. The 'return' is the amount earned after tax over the last twelve months. That means that the higher the ROE, the more profitable the company is. So, all else equal,investors should like a high ROE. That means ROE can be used to compare two businesses.
Arguably the easiest way to assess company's ROE is to compare it with the average in its industry. The limitation of this approach is that some companies are quite different from others, even within the same industry classification. As is clear from the image below, Capacit'e Infraprojects has a better ROE than the average (3.4%) in the Real Estate industry.
That's clearly a positive. We think a high ROE, alone, is usually enough to justify further research into a company. For example,I often check if insiders have been buying shares.
Most companies need money -- from somewhere -- to grow their profits. That cash can come from retained earnings, issuing new shares (equity), or debt. In the first two cases, the ROE will capture this use of capital to grow. In the latter case, the debt used for growth will improve returns, but won't affect the total equity. Thus the use of debt can improve ROE, albeit along with extra risk in the case of stormy weather, metaphorically speaking.
While Capacit'e Infraprojects does have some debt, with debt to equity of just 0.28, we wouldn't say debt is excessive. Although the ROE isn't overly impressive, the debt load is modest, suggesting the business has potential. Judicious use of debt to improve returns can certainly be a good thing, although it does elevate risk slightly and reduce future optionality.
Return on equity is one way we can compare the business quality of different companies. In my book the highest quality companies have high return on equity, despite low debt. If two companies have the same ROE, then I would generally prefer the one with less debt.
But when a business is high quality, the market often bids it up to a price that reflects this. The rate at which profits are likely to grow, relative to the expectations of profit growth reflected in the current price, must be considered, too. So you might want to take a peek at thisdata-rich interactive graph of forecasts for the company.
Of courseCapacit'e Infraprojects may not be the best stock to buy. So you may wish to see thisfreecollection of other companies that have high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Should You Be Excited About Capacit'e Infraprojects Limited's (NSE:CAPACITE) 12% Return On Equity?
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Many investors are still learning about the various metrics that can be useful when analysing a stock. This article is for those who would like to learn about Return On Equity (ROE). By way of learning-by-doing, we'll look at ROE to gain a better understanding of Capacit'e Infraprojects Limited (NSE:CAPACITE).
Over the last twelve monthsCapacit'e Infraprojects has recorded a ROE of 12%. One way to conceptualize this, is that for each ₹1 of shareholders' equity it has, the company made ₹0.12 in profit.
Check out our latest analysis for Capacit'e Infraprojects
Theformula for return on equityis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for Capacit'e Infraprojects:
12% = ₹973m ÷ ₹8.4b (Based on the trailing twelve months to March 2019.)
Most readers would understand what net profit is, but it’s worth explaining the concept of shareholders’ equity. It is all earnings retained by the company, plus any capital paid in by shareholders. The easiest way to calculate shareholders' equity is to subtract the company's total liabilities from the total assets.
Return on Equity measures a company's profitability against the profit it has kept for the business (plus any capital injections). The 'return' is the profit over the last twelve months. That means that the higher the ROE, the more profitable the company is. So, as a general rule,a high ROE is a good thing. That means ROE can be used to compare two businesses.
One simple way to determine if a company has a good return on equity is to compare it to the average for its industry. The limitation of this approach is that some companies are quite different from others, even within the same industry classification. Pleasingly, Capacit'e Infraprojects has a superior ROE than the average (3.4%) company in the Real Estate industry.
That's what I like to see. In my book, a high ROE almost always warrants a closer look. For example,I often check if insiders have been buying shares.
Companies usually need to invest money to grow their profits. That cash can come from issuing shares, retained earnings, or debt. In the first and second cases, the ROE will reflect this use of cash for investment in the business. In the latter case, the use of debt will improve the returns, but will not change the equity. That will make the ROE look better than if no debt was used.
Although Capacit'e Infraprojects does use debt, its debt to equity ratio of 0.28 is still low. Although the ROE isn't overly impressive, the debt load is modest, suggesting the business has potential. Conservative use of debt to boost returns is usually a good move for shareholders, though it does leave the company more exposed to interest rate rises.
Return on equity is useful for comparing the quality of different businesses. Companies that can achieve high returns on equity without too much debt are generally of good quality. All else being equal, a higher ROE is better.
Having said that, while ROE is a useful indicator of business quality, you'll have to look at a whole range of factors to determine the right price to buy a stock. The rate at which profits are likely to grow, relative to the expectations of profit growth reflected in the current price, must be considered, too. So I think it may be worth checking thisfreereport on analyst forecasts for the company.
Of courseCapacit'e Infraprojects may not be the best stock to buy. So you may wish to see thisfreecollection of other companies that have high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Gold retraces from six-year peak after comments from U.S. Fed officials
By Karthika Suresh Namboothiri and Diptendu Lahiri
(Reuters) - Gold prices retreated from a six-year high on Tuesday after comments from U.S. Federal Reserve officials trimmed expectations that the central bank will lower interest rates by half a percentage point next month.
Federal Reserve Chairman Jerome Powell said the U.S. central bank is "insulated from short-term political pressures," as policymakers wrestle with whether to cut rates.
The comments came after St. Louis Federal Reserve Bank President James Bullard said he does not think the U.S. central bank needs to cut interest rates by a half-percentage point at its next meeting in July.
Spot gold was up 0.3% at $1,423.26 per ounce as of 2:36 p.m. EDT (1836 GMT). Prices had touched a high of $1,438.63 in the session, a level last seen in May 2013, and were set for a sixth straight sessions of gains.
U.S. gold futures were little changed on settlement at $1,418.7.
"The whole gold move (higher) was on the back of the Fed's signal to cut rates by 50 basis points in the last FOMC (Federal Open Market Committee) meeting," said Bob Haberkorn, senior market strategist at RJO Futures.
"Now, Bullard and Powell's comments are going against that and Trump's wishes. It is probable that gold might continue paring gains to until the G20 meeting."
The comments lifted the dollar and pressured gold, prompting bullion to turn negative briefly, after it had rallied more than 1% earlier in the session on the back of expectations of monetary easing by the Fed and a subdued dollar.
Lower interest rates reduce the opportunity cost of holding non-yielding bullion, and gold had gained nearly $100 in value since the Fed's statement last week that hinted at monetary easing.
Meanwhile, tensions between Iran and the United States lifted demand for safe-haven gold. Investors also watched for further cues on trade negotiations between Washington and China at the G20 summit.
"People have been buying what they feel could be an additional haven on more upcoming volatility caused by global economic pullback, the tinder box of the Middle East with Iran, and the G20, which may not bring the (trade) deal with China that everybody is expecting," said George Gero, managing director at RBC Wealth Management.
Indicating investor interest in gold, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.37% on Monday, after posting their biggest percentage gain in nearly 11 years on Friday.
Among other precious metals, platinum declined 0.71% to $804.25 per ounce, while silver dipped 0.5% to $15.36. Palladium slipped 0.5% to $1,527.01 after hitting its highest level since March 26 at $1,551, earlier in the session.
(Reporting by Karthika Suresh Namboothiri and Diptendu Lahiri in Bengaluru; Editing by Will Dunham and Matthew Lewis) |
Raptors' Pascal Siakam wins NBA's Most Improved Player award
Siakam's growth this season was one of the biggest reasons the Raptors won the championship. (Photo by Ezra Shaw/Getty Images) The NBA Awards show’s worst-kept secret is officially out. Toronto Raptors forward Pascal Siakam is 2018-19’s most improved player, beating out Brooklyn Nets point guard D’Angelo Russell and Sacramento Kings point guard De’Aaron Fox for the award. Playing 11 more minutes a game, Siakam upped his scoring from 7.3 points last season to 16.9 this year, his rebounding from 4.5 to 6.9 and, most notably, his three-point percentage from 22 to 36.9 percent. Throw in his ability to defend multiple positions extremely effectively, and the other two finalists were really up against it to pull off the upset. While the playoffs don’t factor into the final voting, Siakam’s performance this post-season further established his position as a rising star in the league. Over 24 playoff games, he averaged 19 points, 7.1 rebounds, 2.8 assists and a steal a game. While his three-point success struggled to carry over from the regular season (27.9%), he still made 54.1 percent of his shots inside the arc during Toronto’s title run. The most impressive aspect of Siakam’s 2018-19 campaign was the fact that he consistently improved over the course of the season, highlighted by a career-high 44 points to go along with 10 rebounds against the Washington Wizards in February. He emerged as a secondary scorer to Kawhi Leonard, and his ability on the fast break helped the Raptors finish the regular season as the most efficient transition team. He also set the NBA Finals stage alight in Game 1 against the Golden State Warriors, scoring 32 points on 14-of-17 shooting, including 11 straight field goal makes at one point. This is a player who was sent down to the G League after struggling to cope with the NBA level just two seasons ago, and has consistently been on the rise ever since, winning G League Finals MVP in 2017. The final voting tally was a runaway win for Siakam, totalling 86 of 100 first place votes. Here's the voting breakdown for Most Improved Player. pic.twitter.com/97y7Co3sXo — Howard Beck (@HowardBeck) June 25, 2019 More Raptors coverage from Yahoo Sports |
Does Cougar Metals NL's (ASX:CGM) CEO Pay Compare Well With Peers?
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Randal Swick is the CEO of Cougar Metals NL (ASX:CGM). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Cougar Metals
According to our data, Cougar Metals NL has a market capitalization of AU$1.2m, and pays its CEO total annual compensation worth AU$218k. (This number is for the twelve months until June 2018). It is worth noting that the CEO compensation consists almost entirely of the salary, worth AU$218k. We took a group of companies with market capitalizations below AU$289m, and calculated the median CEO total compensation to be AU$358k.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see a visual representation of the CEO compensation at Cougar Metals, below.
Cougar Metals NL has reduced its earnings per share by an average of 2.3% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is down -200%.
In the last three years the company has failed to grow earnings per share. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you might want to assessthis data-rich visualizationof earnings, revenue and cash flow.
Given the total loss of 50% over three years, many shareholders in Cougar Metals NL are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
It looks like Cougar Metals NL pays its CEO less than similar sized companies.
Randal Swick is paid less than CEOs of similar size companies, but the company isn't growing and total shareholder returns have been disappointing. Considering all these factors, we'd stop short of saying the CEO pay is too high, but we don't think shareholders would want to see a pay rise before business performance improves. Shareholders may want tocheck for free if Cougar Metals insiders are buying or selling shares.
If you want to buy a stock that is better than Cougar Metals, thisfreelist of high return, low debt companies is a great place to look.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
With job intact, Nissan's CEO pins Renault alliance on mutual respect, flags inequality risk
By Naomi Tajitsu
YOKOHAMA, Japan (Reuters) - Nissan Motor Co Ltd on Tuesday threw cold water on hopes for a quick fix to strained relations with France's Renault SA, saying inequality between the partners could unravel their two-decade-old automaking alliance.
Speaking at Nissan's annual general meeting in Yokohama, Chief Executive Hiroto Saikawa said he wanted to preserve the spirit of equality - in an alliance whose shareholding structure Nissan has long seen as lopsided.
During a three-hour affair peppered with heckling, shareholders returned Saikawa to the automaker's board as widely expected and in defiance of opposition from proxy advisors. The executive now faces the task of repairing trust with Renault, which has deteriorated in past weeks as the French automaker has sought more control within Nissan.
Tuesday's meeting, the first since the ouster last year of former Chairman Carlos Ghosn, comes just days after Saikawa and Renault Chairman Jean-Dominique Senard resolved an unusually public disagreement over appointments to Nissan's new governance committees.
"We want a win-win relationship with Renault. The alliance has been successful until now because we have respected each others' independence," said Saikawa.
"If necessary, we will put our capital structure on the table. If the relationship becomes a win-lose one, the relationship will break up very quickly."
The comments are some of the starkest in recent memory and signal Nissan's deepening concern over the alliance, in which Renault owns 43% of the Japanese automaker, which in turn holds a 15%, non-voting stake in its partner.
Saikawa also said Nissan would "postpone discussions" on the future direction of the alliance as the automaker prioritised recovery of its dismal financial performance.
France's finance ministry, Renault's biggest shareholder with a 15% stake, declined to comment on Saikawa's comments.
FRAYING TRUST
Shareholders at Japan's second-biggest automaker voted in favour of a new governance structure and 11-member board to address lax auditing revealed after the arrest of Ghosn over financial misconduct allegations he denies.
Renault had demanded additional representation on Nissan groups overseeing company auditing and personnel nominations. The move was widely speculated to be a reprisal after Nissan abstained from endorsing Renault's doomed merger plan with Italian-American peer Fiat Chrysler Automobiles NV.
Saikawa had initially pushed back at those demands, but late last week Nissan granted seats to Senard and Renault CEO Thierry Bollore on its nominations and auditing committees respectively, even though Nissan itself will not be represented.
The automakers' deteriorating ties were highlighted by a shareholder who accused Senard, who serves as vice chairman of Nissan's board, of failing to look after the interests of Nissan and its employees as promised when he took up his role in April.
In response, Senard told shareholders: "Since I arrived, I have done everything I can to smooth the relationship of an alliance that I found in a much worse state than I thought."
"I had no intention to be aggressive towards Nissan," he said. "I beg you to believe me on that."
ALLIANCE VISION?
Saikawa won a reprieve on his leadership, fighting off a rare public rebuke by international proxy firms International Shareholder Services and Glass Lewis, which earlier this month urged shareholders to vote against reappointing the former Ghosn lieutenant as director.
Still, people at both automakers have said the recent public disagreements have dissolved the image of unity the automakers promoted only months ago, raising questions about whether Saikawa, Senard and former Ghosn ally Bollore are the right people to break from Ghosn's legacy in the longer term.
Some Nissan shareholders at the meeting said they were concerned that Saikawa has been overly focused on rebuffing Renault, rather than finding ways to cooperate with its partner to achieve the "win-win relationship" he promoted on Tuesday.
"There are so many alliance-related issues which are occupying the company that it's a shame that Nissan is unable to focus on bigger, external issues" like improving global competitiveness, shareholder Hideyuki Tamura said after the meeting.
"It's not to say we need to merge, but I'm worried that our leadership may be lacking a forward-looking vision of the alliance."
(Reporting by Naomi Tajitsu; Additional reporting by Leigh Thomas in Paris; Editing by David Dolan and Christopher Cushing) |
What Do Analysts Think About Can Fin Homes Limited's (NSE:CANFINHOME) Earnings Trajectory?
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Can Fin Homes Limited's (NSE:CANFINHOME) latest earnings announcement in June 2019 confirmed that the company experienced a slight tailwind, eventuating to a single-digit earnings growth of 3.7%. Investors may find it useful to understand how market analysts predict Can Fin Homes's earnings growth outlook 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.
View our latest analysis for Can Fin Homes
Market analysts' consensus outlook for this coming year seems optimistic, with earnings growing by a robust 22%. This growth seems to continue into the following year with rates reaching double digit 55% compared to today’s earnings, and finally hitting ₹4.8b by 2022.
While it’s informative understanding the growth year by year relative to today’s figure, it may be more insightful analyzing the rate at which the business is moving on average every year. The advantage of this technique is that we can get a better picture of the direction of Can Fin Homes's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I've appended 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 18%. This means, we can expect Can Fin Homes will grow its earnings by 18% every year for the next few years.
For Can Fin Homes, I've compiled three relevant factors you should further examine:
1. Financial Health: Does it have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Valuation: What is CANFINHOME 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 CANFINHOME is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of CANFINHOME? 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. |
South Korea to exit Woori Financial Group by 2022
SEOUL (Reuters) - South Korea said on Tuesday it would sell its entire stake in Woori Financial Group Inc within three years, in a move to recoup taxpayers' money spent to bail out the company two decades ago.
The Financial Services Commission (FSC) said in a statement that it had decided to sell the 18.3% stake owned by the state-funded Korea Deposit Insurance Corp from 2020 to 2022.
In the aftermath of the 1997-1998 Asian financial crisis, the government spent 12.8 trillion won ($11.10 billion) to bail out the bank and has since then gradually sold stakes to recoup the public funds.
(Reporting by Hayoung Choi; Editing by Subhranshu Sahu) |
How Do Analysts See Can Fin Homes Limited (NSE:CANFINHOME) Performing In The Years Ahead?
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The most recent earnings announcement Can Fin Homes Limited's (NSE:CANFINHOME) released in June 2019 revealed that the company experienced a small tailwind, eventuating to a single-digit earnings growth of 3.7%. Below, I've laid out key numbers on how market analysts perceive Can Fin Homes's earnings growth trajectory over the next few 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 Can Fin Homes
Analysts' outlook for the coming year seems buoyant, with earnings expanding by a robust 22%. This growth seems to continue into the following year with rates reaching double digit 55% compared to today’s earnings, and finally hitting ₹4.8b by 2022.
While it is useful to understand the rate of growth year by year relative to today’s level, it may be more beneficial determining the rate at which the business is growing on average every year. The advantage of this approach is that it ignores near term flucuations and accounts for the overarching direction of Can Fin Homes's earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I've appended 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 18%. This means that, we can anticipate Can Fin Homes will grow its earnings by 18% every year for the next few years.
For Can Fin Homes, there are three essential factors you should further research:
1. Financial Health: Does it have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Valuation: What is CANFINHOME 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 CANFINHOME is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of CANFINHOME? Exploreour interactive list of stocks with large growth potentialto get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Is Uni-Asia Group Limited's (SGX:CHJ) 5.4% Dividend Sustainable?
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Dividend paying stocks like Uni-Asia Group Limited (SGX:CHJ) tend to be popular with investors, and for good reason - some research suggests a significant amount of all stock market returns come from reinvested dividends. Yet sometimes, investors buy a popular dividend stock because of its yield, and then lose money if the company's dividend doesn't live up to expectations.
Uni-Asia Group has only been paying a dividend for a year or so, so investors might be curious about its 5.4% yield. Some simple analysis can offer a lot of insights when buying a company for its dividend, and we'll go through this below.
Click the interactive chart for our full dividend analysis
Dividends are usually paid out of company earnings. If a company is paying more than it earns, then the dividend might become unsustainable - hardly an ideal situation. As a result, we should always investigate whether a company can afford its dividend, measured as a percentage of a company's net income after tax. Looking at the data, we can see that 140% of Uni-Asia Group's profits were paid out as dividends in the last 12 months. Unless there are extenuating circumstances, from the perspective of an investor who hopes to own the company for many years, a payout ratio of above 100% is definitely a concern.
We update our data on Uni-Asia Group every 24 hours, so you can always getour latest analysis of its financial health, here.
Before buying a stock for its income, we want to see if the dividends have been stable in the past, and if the company has a track record of maintaining its dividend. This company has been paying a dividend for less than 2 years, which we think is too soon to consider it a reliable dividend stock. During the past one-year period, the first annual payment was US$0.03 in 2018, compared to US$0.03 last year. Its dividends have grown at less than 1% per annum over this time frame.
We like that the dividend hasn't been shrinking. However we're conscious that the company hasn't got an overly long track record of dividend payments yet, which makes us wary of relying on its dividend income.
The other half of the dividend investing equation is evaluating whether earnings per share (EPS) are growing. Over the long term, dividends need to grow at or above the rate of inflation, in order to maintain the recipient's purchasing power. Over the past five years, it looks as though Uni-Asia Group's EPS have declined at around 22% a year. Declining earnings per share over a number of years is not a great sign for the dividend investor. Without some improvement, this does not bode well for the long term value of a company's dividend.
To summarise, shareholders should always check that Uni-Asia Group's dividends are affordable, that its dividend payments are relatively stable, and that it has decent prospects for growing its earnings and dividend. We're a bit uncomfortable with its high payout ratio. Earnings per share are down, and to our mind Uni-Asia Group has not been paying a dividend long enough to demonstrate its resilience across economic cycles. In short, we're not keen on Uni-Asia Group from a dividend perspective. Businesses can change, but we've spotted a few too many concerns with this one to get comfortable.
You can also discover whether shareholders are aligned with insider interests bychecking our visualisation of insider shareholdings and trades in Uni-Asia Group stock.
We have also put together alist of global stocks with a market capitalisation above $1bn and yielding more 3%.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
How Cigniti Technologies Limited (NSE:CIGNITI) Could Add Value To Your Portfolio
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Cigniti Technologies Limited (NSE:CIGNITI) is a company with exceptional fundamental characteristics. Upon building up an investment case for a stock, we should look at various aspects. In the case of CIGNITI, it is a company with great financial health as well as a a strong history of performance. Below is a brief commentary on these key aspects. If you're interested in understanding beyond my broad commentary, read the fullreport on Cigniti Technologies here.
Over the past few years, CIGNITI has more than doubled its earnings, with its most recent figure exceeding its annual average over the past five years. The strong earnings growth is reflected in impressive double-digit 98% return to shareholders, which is what investors like to see! CIGNITI's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This indicates that CIGNITI has sufficient cash flows and proper cash management in place, which is a crucial insight into the health of the company. CIGNITI seems to have put its debt to good use, generating operating cash levels of 0.47x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows.
For Cigniti Technologies, I've put together three important aspects you should further research:
1. Future Outlook: What are well-informed industry analysts predicting for CIGNITI’s future growth? Take a look at ourfree research report of analyst consensusfor CIGNITI’s outlook.
2. Valuation: What is CIGNITI 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 CIGNITI is currently mispriced by the market.
3. Other Attractive Alternatives: Are there other well-rounded stocks you could be holding instead of CIGNITI? Exploreour interactive list of stocks with large potentialto get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
A Look At The Intrinsic Value Of CIL Nova Petrochemicals Limited (NSE:CNOVAPETRO)
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In this article we are going to estimate the intrinsic value of CIL Nova Petrochemicals Limited (NSE:CNOVAPETRO) by estimating the company's future cash flows and discounting them to their present value. This is done using the Discounted Cash Flow (DCF) model. Don't get put off by the jargon, the math behind it is actually quite straightforward.
Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in theSimply Wall St analysis model.
See our latest analysis for CIL Nova Petrochemicals
We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company's cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. To begin with, we have to get estimates of the next ten years of cash flows. Seeing as no analyst estimates of free cash flow are available to us, we have extrapolate the previous free cash flow (FCF) from the company's last reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
Generally we assume that a dollar today is more valuable than a dollar in the future, and so the sum of these future cash flows is then discounted to today's value:
[{"": "Levered FCF (\u20b9, Millions)", "2019": "\u20b936.35", "2020": "\u20b940.20", "2021": "\u20b944.08", "2022": "\u20b948.06", "2023": "\u20b952.19", "2024": "\u20b956.50", "2025": "\u20b961.06", "2026": "\u20b965.88", "2027": "\u20b971.02", "2028": "\u20b976.51"}, {"": "Growth Rate Estimate Source", "2019": "Est @ 11.86%", "2020": "Est @ 10.57%", "2021": "Est @ 9.66%", "2022": "Est @ 9.03%", "2023": "Est @ 8.59%", "2024": "Est @ 8.27%", "2025": "Est @ 8.06%", "2026": "Est @ 7.91%", "2027": "Est @ 7.8%", "2028": "Est @ 7.72%"}, {"": "Present Value (\u20b9, Millions) Discounted @ 17.05%", "2019": "\u20b931.06", "2020": "\u20b929.34", "2021": "\u20b927.48", "2022": "\u20b925.60", "2023": "\u20b923.75", "2024": "\u20b921.97", "2025": "\u20b920.28", "2026": "\u20b918.70", "2027": "\u20b917.22", "2028": "\u20b915.85"}]
Present Value of 10-year Cash Flow (PVCF)= ₹231.24m
"Est" = FCF growth rate estimated by Simply Wall St
We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 10-year government bond rate (7.6%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 17.1%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = ₹77m × (1 + 7.6%) ÷ (17.1% – 7.6%) = ₹866m
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= ₹₹866m ÷ ( 1 + 17.1%)10= ₹179.35m
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 ₹410.58m. In the final step we divide the equity value by the number of shares outstanding.This results in an intrinsic value estimate of ₹13.96. Relative to the current share price of ₹12.9, the company appears about fair value at a 7.6% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent.
We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. 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 CIL Nova Petrochemicals 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 17.1%, which is based on a levered beta of 1.105. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Valuation is only one side of the coin in terms of building your investment thesis, and it shouldn’t be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. For CIL Nova Petrochemicals, I've put together three pertinent aspects you should look at:
1. Financial Health: Does CNOVAPETRO have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Other High Quality Alternatives: Are there other high quality stocks you could be holding instead of CNOVAPETRO? Exploreour interactive list of high quality stocksto get an idea of what else is out there you may be missing!
PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the NSE every day. If you want to find the calculation for other stocks justsearch here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Is Camlin Fine Sciences Limited's (NSE:CAMLINFINE) ROE Of 0.7% Concerning?
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One of the best investments we can make is in our own knowledge and skill set. With that in mind, this article will work through how we can use Return On Equity (ROE) to better understand a business. To keep the lesson grounded in practicality, we'll use ROE to better understand Camlin Fine Sciences Limited (NSE:CAMLINFINE).
Over the last twelve monthsCamlin Fine Sciences has recorded a ROE of 0.7%. One way to conceptualize this, is that for each ₹1 of shareholders' equity it has, the company made ₹0.0070 in profit.
Check out our latest analysis for Camlin Fine Sciences
Theformula for ROEis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for Camlin Fine Sciences:
0.7% = ₹5.8m ÷ ₹4.3b (Based on the trailing twelve months to March 2019.)
Most know that net profit is the total earnings after all expenses, but the concept of shareholders' equity is a little more complicated. It is all earnings retained by the company, plus any capital paid in by shareholders. The easiest way to calculate shareholders' equity is to subtract the company's total liabilities from the total assets.
Return on Equity measures a company's profitability against the profit it has kept for the business (plus any capital injections). The 'return' is the profit over the last twelve months. A higher profit will lead to a higher ROE. So, as a general rule,a high ROE is a good thing. Clearly, then, one can use ROE to compare different companies.
One simple way to determine if a company has a good return on equity is to compare it to the average for its industry. The limitation of this approach is that some companies are quite different from others, even within the same industry classification. As is clear from the image below, Camlin Fine Sciences has a lower ROE than the average (13%) in the Chemicals industry.
That certainly isn't ideal. It is better when the ROE is above industry average, but a low one doesn't necessarily mean the business is overpriced. Nonetheless, it could be useful todouble-check if insiders have sold shares recently.
Companies usually need to invest money to grow their profits. That cash can come from issuing shares, retained earnings, or debt. In the first and second cases, the ROE will reflect this use of cash for investment in the business. In the latter case, the use of debt will improve the returns, but will not change the equity. Thus the use of debt can improve ROE, albeit along with extra risk in the case of stormy weather, metaphorically speaking.
It's worth noting the significant use of debt by Camlin Fine Sciences, leading to its debt to equity ratio of 1.00. Its ROE is quite low, even with the use of significant debt; that's not a good result, in my opinion. Debt increases risk and reduces options for the company in the future, so you generally want to see some good returns from using it.
Return on equity is useful for comparing the quality of different businesses. In my book the highest quality companies have high return on equity, despite low debt. If two companies have around the same level of debt to equity, and one has a higher ROE, I'd generally prefer the one with higher ROE.
But ROE is just one piece of a bigger puzzle, since high quality businesses often trade on high multiples of earnings. It is important to consider other factors, such as future profit growth -- and how much investment is required going forward. So you might want to take a peek at thisdata-rich interactive graph of forecasts for the company.
Of course,you might find a fantastic investment by looking elsewhere.So take a peek at thisfreelist of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Does Cochin Shipyard Limited's (NSE:COCHINSHIP) Recent Track Record Look Strong?
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Measuring Cochin Shipyard Limited's (NSE:COCHINSHIP) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess COCHINSHIP's recent performance announced on 31 March 2019 and compare these figures to its historical trend and industry movements.
Check out our latest analysis for Cochin Shipyard
COCHINSHIP's trailing twelve-month earnings (from 31 March 2019) of ₹4.8b has jumped 21% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 18%, indicating the rate at which COCHINSHIP is growing has accelerated. What's the driver of this growth? Let's take a look at whether it is merely due to industry tailwinds, or if Cochin Shipyard has seen some company-specific growth.
In terms of returns from investment, Cochin Shipyard has fallen short of achieving a 20% return on equity (ROE), recording 14% instead. However, its return on assets (ROA) of 9.4% exceeds the IN Machinery industry of 7.7%, indicating Cochin Shipyard has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Cochin Shipyard’s debt level, has declined over the past 3 years from 18% to 15%.
Cochin Shipyard's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that have performed well in the past, such as Cochin Shipyard gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Cochin Shipyard to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for COCHINSHIP’s future growth? Take a look at ourfree research report of analyst consensusfor COCHINSHIP’s outlook.
2. Financial Health: Are COCHINSHIP’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out ourfinancial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore ourfree list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 2019. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Better Buy: Scotts Miracle-Gro vs. Corteva Agriscience
Humans have been trying to make plants grow since the beginning of time, and modern farmers and gardeners have it much easier than it was in past generations thanks to the work of companies such asScotts Miracle-GroandCorteva Agriscience.
Although Scotts and Corteva cater to different areas of the global agriculture industry, they both specialize in chemicals and other products designed to improve plant performance and protect them from pests and other vulnerabilities. Both have solid, established businesses to rely on, and investors in both can hope that demographic or political trends will help fuel growth in the years to come.
[{"Company": "Corteva Agrisciences(NYSE: CTVA)", "2018 Revenue": "$14.3 billion", "2018 EBITDA": "$2.7 billion", "Market Cap": "$20.37 billion"}, {"Company": "Scotts Miracle-Gro(NYSE: SMG)", "2018 Revenue": "$2.66 billion", "2018 EBITDA": "$482 million", "Market Cap": "$5.42 billion"}]
Data sources: Yahoo! Finance, company filings. Data as of June 21, 2019.
Weekend gardeners are more likely to pick products from Scotts Miracle-Gro, while commercial farmers would lean toward Corteva. But which company is a better pick for investors? Here's a deep dive into the two businesses to determine which is a better buy today.
Corteva is a collection of well-established businesses under a new corporate banner and stock symbol. The company was formerly the agricultural units of DowDuPont, formed through a2018 chemicals industry megamergerand spun out as an independent in early June.
The company is focused on the commercial agriculture industry, operating in more than 130 countries and generating about half of its revenue from crop protection and half from seeds. It's an important industry for a growing world, with technologies from Corteva and its rivals seen as the key to generating ever higher yields needed to feed a growing global population.
Image source: Getty Images.
But for all the long-term promise, Corteva has a troubled recent history. Unit revenue fell throughout 2018, leading then-parent DowDuPont last October to takea massive $4.6 billion impairment charge. Bad weather and a poor planting season were partially to blame, with those issues compounded by declines in corn and soybean planting acreage exacerbated by the ongoing U.S. trade war with China and a corresponding fall in demand for soybeans.
This year hasn't been much better, with farmers, and their suppliers, stung by flooding in the Midwest that has limited corn planting. No surprise Corteva's introduction to public markets has been shaky. Shares traded at $32 apiece on a "when-issued" basis leading up to the spinoff, but as of June 21 they traded 14% below that price.
Year to year, season to season, the agriculture business can be volatile, but the underlying demographic trends are in Corteva's favor. The company has targeted long-term sales growth of 3% to 5% annually, including annual organic sales growth of 1% to 2% above the market in seeds and 1.5% to 2.5% above the market for crop protection.
Scotts Miracle-Gro is best known for its consumer lawn and garden products, and as the owner or marketer of brands including Ortho lawn treatment products, Roundup weed killer, and Tomcat rodent control, as well as the grass seeds and plant fertilizer products for which it gets its name.
That's a steady but not spectacular business, which tends to ebb and flow with the seasons. What has investors excited, and the stock up 58% year to date, is its emerging role as a lead supplier to the U.S. cannabis industry. A series of acquisitions by Scotts' Hawthorne Gardening subsidiary has made the unit a top supplier of hydroponics, fertilizers, and lighting systems.
Image source: Getty Images.
Hawthorne was a driving force behind Scotts Miracle Gro'sbetter-than-expected fiscal second-quarter results announced in late April. Scotts beat estimates on both revenue and earnings, with Hawthorne revenue up 245% year over year. Much of that was thanks to the company's 2018acquisition of Sunlight Supply, but Hawthorne revenue was still up 21% from a year prior, even without Sunlight's contribution.
Scotts Miracle-Gro through Hawthorne is positioned to be the fertilizer that grows the nascent marijuana industry. California is the big prize for now, accounting for more than half of Hawthorne's total revenue, but assuming the trend toward liberalized state laws on marijuana use continues, Hawthorne should have plenty of opportunities to grow.
The bull case for Scotts Miracle-Gro is in part that the company is an uncontroversial, incumbent-driven way to profit from the growth of the marijuana business, without taking on the uncertainty of an emerging industry. In that sense it's similar to howUnited Parcel ServiceandFedExwere once seen as less risky backdoor ways to profit from the early days of the e-commerce boom.
Corteva's off to a rocky start, but there is a lot to like about the company over the long term. Now that it's finally on its own after nearly two years of corporate reshuffling, company management should find opportunities to streamline operations, and its powerful R&D arm is expected to churn out new products in the years to come. Patient, long-term investors able to block out near-term headline risk and focus on the long term should do well owning Corteva.
That said, for a growth-oriented investor, Scotts Miracle-Gro is the better buy today. The company has a strong foundation with its lawn and garden business, and a potential blockbuster in its Hawthorne unit. A bet on Scotts Miracle-Gro today is largely a bet that U.S. state marijuana laws, and eventually even federal laws, will continue to loosen. As dangerous as it is to speculate on politics, that seems like a pretty good bet.
At worst, Scotts Miracle-Gro looks like a stable consumer supplier, with an attractive 2.25% dividend yield. At best, Scotts Miracle-Gro could be one of the big winners from the cannabis revolution. Corteva is an intriguing long-term investment, but for most investors, Scotts Miracle-Gro is the better buy.
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Lou Whitemanhas no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends FedEx. The Motley Fool has adisclosure policy. |
What Should You Know About The Future Of CapitaLand Limited's (SGX:C31)?
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Since CapitaLand Limited (SGX:C31) released its earnings in March 2019, the consensus outlook from analysts appear pessimistic, with earnings expected to decline by 15% in the upcoming year against the past 5-year average growth rate of 13%. Presently, with latest-twelve-month earnings at S$1.8b, we should see this fall to S$1.5b by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those keen to understand more about other aspects of the company, you canresearch its fundamentals here.
Check out our latest analysis for CapitaLand
The longer term expectations from the 17 analysts of C31 is tilted towards the positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of C31's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
This results in an annual growth rate of 6.8% based on the most recent earnings level of S$1.8b to the final forecast of S$1.8b by 2022. However, if we exclude extraordinary items from net income, we see that earnings is projected to fall over time, resulting in an EPS of SGD0.36 in the final year of forecast compared to the current SGD0.42 EPS today. Analysts are predicting this high revenue growth to squeeze profit margins over time, from 31% to 22% by the end of 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For CapitaLand, there are three key 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. Future Earnings: How does CapitaLand's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with ourfree analyst growth expectation chart.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of CapitaLand? 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. |
Can We See Significant Insider Ownership On The Butterfly Gandhimathi Appliances Limited (NSE:BUTTERFLY) Share Register?
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A look at the shareholders of Butterfly Gandhimathi Appliances Limited (NSE:BUTTERFLY) can tell us which group is most powerful. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.'
Butterfly Gandhimathi Appliances is a smaller company with a market capitalization of ₹2.8b, so it may still be flying under the radar of many institutional investors. In the chart below below, we can see that institutional investors have bought into the company. Let's take a closer look to see what the different types of shareholder can tell us about BUTTERFLY.
View our latest analysis for Butterfly Gandhimathi Appliances
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
We can see that Butterfly Gandhimathi Appliances does have institutional investors; and they hold 6.9% 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 Butterfly Gandhimathi Appliances's historic earnings and revenue, below, but keep in mind there's always more to the story.
We note that hedge funds don't have a meaningful investment in Butterfly Gandhimathi Appliances. There is some analyst coverage of the stock, but it could still become more well known, with time.
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board; and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board, themselves.
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.
It seems insiders own a significant proportion of Butterfly Gandhimathi Appliances Limited. It has a market capitalization of just ₹2.8b, and insiders have ₹954m worth of shares in their own names. This may suggest that the founders still own a lot of shares. You canclick here to see if they have been buying or selling.
The general public, with a 17% stake in the company, will not easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
With an ownership of 5.6%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. 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.
Our data indicates that Private Companies hold 37%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
While it is well worth considering the different groups that own a company, there are other factors that are even more important.
I like to dive deeperinto how a company has performed in the past. You can findhistoric revenue and earnings in thisdetailed graph.
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. |
Meghan Markle Appears to Have Totally Changed Her Engagement Ring
Photo credit: MALCOLM PARK / ALAMY STOCK PHOTO From Country Living Earlier this month, the Duchess of Sussex made her first public appearance following the arrival of her son Archie at Trooping the Colour. Naturally, all eyes were on Meghan at the Queen's annual birthday parade, and royal watchers swiftly noticed a stunning new ring on her finger: a diamond eternity band , which was likely a present from her husband Prince Harry in honor of either the birth of their first child or their one-year wedding anniversary. But in all the excitement over Meghan's new gift, another significant jewelry story was overlooked: Meghan appears to have redesigned her three-stone engagement ring . In photos from Trooping the Colour, the ring looks like it has been reset, and now features a thin micro-pavé band, as opposed to the original solid yellow gold one. It's difficult to tell if the diamonds were altered as well. See a comparison of the two rings here: Photo credit: MALCOLM PARK / ALAMY STOCK PHOTO It's unclear when these changes to the ring were made, as Meghan opted not to wear her engagement band during the final months of her pregnancy, possibly because her fingers had swelled. (There's also a small chance that this is an entirely new ring, designed for Meghan to wear as her body transitions after pregnancy.) A second look at pictures from baby Archie's first photo call reveals that she was wearing the new design then as well. Photo credit: WPA Pool - Getty Images Meghan is known to favor dainty jewelry , and perhaps the redesign stemmed from a desire to have a cohesive set of three rings: her engagement ring, her simple Welsh gold wedding band, and her new eternity ring. The eternity band was reportedly crafted by the Queen's personal jeweler Harry Collins, but it's unclear if he also made the changes to her engagement ring. Prince Harry originally worked with jewelers Cleave and Company to custom design Meghan's ring using one diamond originally from Botswana and two smaller stones from Pricness Diana's collection. "The ring is obviously yellow gold because that's [Markle's] favorite and the main stone itself I sourced from Botswana and the little diamonds either side are from my mother's jewelry collection, to make sure that she's with us on this crazy journey together," Harry said during the couple's first sit-down interview with the BBC , shortly after they announced their engagement. Story continues Photo credit: Karwai Tang - Getty Images Meghan was clearly touched by how Harry incorporated his mother's legacy into the ring. "Everything about Harry’s thoughtfulness and the inclusion of [Princess Diana’s stones] and obviously not being able to meet his mom, it’s so important to me to know that she’s a part of this with us," Meghan said. ('You Might Also Like',) 60+ Grilling Recipes for an Epic Summer Cookout The Best Reese Witherspoon Movies, Ranked 70 Impressive Tiny Houses That Maximize Function and Style |
If You Like EPS Growth Then Check Out Barrack St Investments (ASX:BST) Before It's Too Late
Want to participate in a short research study ? Help shape the future of investing tools and you could win a $250 gift card! For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it completely lacks a track record of revenue and profit. And in their study titled Who Falls Prey to the Wolf of Wall Street?' Leuz et. al. found that it is 'quite common' for investors to lose money by buying into 'pump and dump' schemes. In the age of tech-stock blue-sky investing, my choice may seem old fashioned; I still prefer profitable companies like Barrack St Investments ( ASX:BST ). While that doesn't make the shares worth buying at any price, you can't deny that successful capitalism requires profit, eventually. Conversely, a loss-making company is yet to prove itself with profit, and eventually the sweet milk of external capital may run sour. View our latest analysis for Barrack St Investments How Quickly Is Barrack St Investments Increasing Earnings Per Share? If a company can keep growing earnings per share (EPS) long enough, its share price will eventually follow. It's no surprise, then, that I like to invest in companies with EPS growth. Impressively, Barrack St Investments has grown EPS by 19% per year, compound, in the last three years. If the company can sustain that sort of growth, we'd expect shareholders to come away winners. I like to take a look at earnings before interest and (EBIT) tax margins, as well as revenue growth, to get another take on the quality of the company's growth. Barrack St Investments shareholders can take confidence from the fact that EBIT margins are up from -827% to -68%, and revenue is growing. Ticking those two boxes is a good sign of growth, in my book. You can take a look at the company's revenue and earnings growth trend, in the chart below. For finer detail, click on the image. Story continues ASX:BST Income Statement, June 25th 2019 Since Barrack St Investments is no giant, with a market capitalization of AU$17m, so you should definitely check its cash and debt before getting too excited about its prospects. Are Barrack St Investments Insiders Aligned With All Shareholders? Personally, I like to see high insider ownership of a company, since it suggests that it will be managed in the interests of shareholders. So as you can imagine, the fact that Barrack St Investments insiders own a significant number of shares certainly appeals to me. In fact, they own 43% of the shares, making insiders a very influential shareholder group. I'm always comforted by solid insider ownership like this, as it implies that those running the business are genuinely motivated to create shareholder value. Of course, Barrack St Investments is a very small company, with a market cap of only AU$17m. So despite a large proportional holding, insiders only have AU$7.4m worth of stock. That's not a huge stake in absolute terms, but it should help keep insiders aligned with other shareholders. Does Barrack St Investments Deserve A Spot On Your Watchlist? You can't deny that Barrack St Investments has grown its earnings per share at a very impressive rate. That's attractive. Further, the high level of insider buying impresses me, and suggests that I'm not the only one who appreciates the EPS growth. Fast growth and confident insiders should be enough to warrant further research. So the answer is that I do think this is a good stock to follow along with. Of course, identifying quality businesses is only half the battle; investors need to know whether the stock is undervalued. So you might want to consider this free discounted cashflow valuation of Barrack St Investments. Although Barrack St Investments certainly looks good to me, I would like it more if insiders were buying up shares. If you like to see insider buying, too, then this free list of growing companies that insiders are buying , could be exactly what you're looking for. Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. If you spot an error that warrants correction, please contact the editor 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. |
Trump says he can remove federal reserve chairman, but has no plans to
President Trump said he has no plans of removingFederal Reserve ChairmanJerome Powell from his post despite claiming he has the authority to do so.
“If I wanted to, but I have no plans to do anything,” Trump said when asked by The Hill on Monday if he had the power to remove Powell.
FOX Business’ Charlie Gasparinoreported last weekthat President Trump feels that he can get rid of Federal Reserve Chairman Jerome Powell.
Trump has been very critical of Powelland slammed the head of the U.S. central bank for leaving interest rates unchanged.
“Despite a Federal Reserve that doesn’t know what it is doing - raised rates far too fast (very low inflation, other parts of world slowing, lowering & easing) & did large scale tightening, $50 Billion/month, we are on course to have one of the best Months of June in U.S. history,” the president tweeted in a two-part post.
Trump even suggested last week that the stock market would be “10,000 points higher” if the Fed did not raise interest rates in December, marking itthe fourth hike in 2018.
A Bloomberg report stated the White House explored the legal avenue to potentially demote Powell. Despite his repeated criticism, the president has denied he threatened to remove Powell from his post.
“I didn't ever threaten to demote him,” Trump said during an interview on “Meet the Press.”
“I'd be able to do that if I wanted, but I haven't suggested that.”
CLICK HERE TO GET THE FOX BUSINESS APP
Powell was nominated to theFed Chairposition by Trump and confirmed by the United States Senate in February of 2018. His term ends in 2022.
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Do Institutions Own USP Group Limited (SGX:BRS) Shares?
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Every investor in USP Group Limited (SGX:BRS) should be aware of the most powerful shareholder groups. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Warren Buffett said that he likes 'a business with enduring competitive advantages that is run by able and owner-oriented people'. So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.
With a market capitalization of S$7.2m, USP Group is a small cap stock, so it might not be well known by many institutional investors. Our analysis of the ownership of the company, below, shows that institutions are not on the share registry. We can zoom in on the different ownership groups, to learn more about BRS.
View our latest analysis for USP Group
Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.
There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. Alternatively, there might be something about the company that has kept institutional investors away. USP Group might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.
USP Group is not owned by hedge funds. As far I can tell there isn't analyst coverage of the company, so it is probably flying under the radar.
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board; and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board, themselves.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Our most recent data indicates that insiders own a reasonable proportion of USP Group Limited. It has a market capitalization of just S$7.2m, and insiders have S$3.3m worth of shares in their own names. I would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You canclick here to see if those insiders have been buying or selling.
The general public holds a 31% stake in BRS. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
With an ownership of 14%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.
We can see that Private Companies own 9.4%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
It's always worth thinking about the different groups who own shares in a company. But to understand USP Group 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.
Of coursethis may not be the best stock to buy. Therefore, you may wish to see ourfreecollection of interesting prospects boasting favorable financials.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
What You Must Know About USP Group Limited's (SGX:BRS) Beta Value
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If you own shares in USP Group Limited (SGX:BRS) 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 category is company specific volatility. This can be dealt with by limiting your exposure to any particular stock. The second sort is caused by the natural volatility of markets, overall. For example, certain macroeconomic events will impact (virtually) all stocks on the market.
Some stocks mimic the volatility of the market quite closely, while others demonstrate muted, exagerrated or uncorrelated price movements. Beta can be a useful tool to understand how much a stock is influenced by market risk (volatility). However, Warren Buffett said 'volatility is far from synonymous with risk' in his 2014 letter to investors. So, while useful, beta is not the only metric to consider. To use beta as an investor, you must first understand that the overall market has a beta of one. A stock with a beta greater than one is more sensitive to broader market movements than a stock with a beta of less than one.
See our latest analysis for USP Group
Given that it has a beta of 1.93, we can surmise that the USP Group share price has been fairly sensitive to market volatility (over the last 5 years). If this beta value holds true in the future, USP Group shares are likely to rise more than the market when the market is going up, but fall faster when the market is going down. 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 USP Group fares in that regard, below.
USP Group is a noticeably small company, with a market capitalisation of S$7.2m. Most companies this size are not always actively traded. Relatively few investors can influence the price of a smaller company, compared to a large company. This could explain the high beta value, in this case.
Beta only tells us that the USP Group 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 USP Group’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 BRS’s future growth? Take a look at ourfree research report of analyst consensusfor BRS’s outlook.
2. Past Track Record: Has BRS 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 BRS's historicalsfor more clarity.
3. Other Interesting Stocks: It's worth checking to see how BRS 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. |
Why A-Sonic Aerospace Limited (SGX:BTJ) Could Be Your Next Investment
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As an investor, I look for investments which does not compromise one fundamental factor for another. By this I mean, I look at stocks holistically, from their financial health to their future outlook. In the case of A-Sonic Aerospace Limited (SGX:BTJ), it is a company that has been able to sustain great financial health, trading at an attractive share price. Below is a brief commentary on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, take a look at thereport on A-Sonic Aerospace here.
BTJ's strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This suggests prudent control over cash and cost by management, which is a crucial insight into the health of the company. BTJ seems to have put its debt to good use, generating operating cash levels of 0.67x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows. BTJ's share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of BTJ's earnings, investors now have the opportunity to buy into the stock to reap capital gains. Compared to the rest of the logistics industry, BTJ is also trading below its peers, relative to earnings generated. This bolsters the proposition that BTJ's price is currently discounted.
For A-Sonic Aerospace, I've put together three fundamental factors you should further examine:
1. Future Outlook: What are well-informed industry analysts predicting for BTJ’s future growth? Take a look at ourfree research report of analyst consensusfor BTJ’s outlook.
2. Historical Performance: What has BTJ's returns been like over the past? Go into more detail in the past track record analysis and take a look atthe free visual representations of our analysisfor more clarity.
3. Other Attractive Alternatives: Are there other well-rounded stocks you could be holding instead of BTJ? Exploreour interactive list of stocks with large potentialto get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
What Investors Should Know About Brigade Enterprises Limited's (NSE:BRIGADE) Financial Strength
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While small-cap stocks, such as Brigade Enterprises Limited (NSE:BRIGADE) with its market cap of ₹34b, 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, as mismanagement of capital can lead to bankruptcies, which occur at a higher rate for small-caps. The following basic checks can help you get a picture of the company's balance sheet strength. Nevertheless, this is just a partial view of the stock, and I suggest youdig deeper yourself into BRIGADE here.
BRIGADE's debt level has been constant at around ₹34b over the previous year including long-term debt. At this stable level of debt, the current cash and short-term investment levels stands at ₹2.7b to keep the business going. On top of this, BRIGADE has generated cash from operations of ₹4.5b during the same period of time, leading to an operating cash to total debt ratio of 13%, indicating that BRIGADE’s operating cash is less than its debt.
Looking at BRIGADE’s ₹50b in current liabilities, it appears that the company has been able to meet these commitments with a current assets level of ₹58b, leading to a 1.16x current account ratio. The current ratio is the number you get when you divide current assets by current liabilities. Generally, for Real Estate companies, this is a reasonable ratio since there's a sufficient cash cushion without leaving too much capital idle or in low-earning investments.
BRIGADE is a highly-leveraged company with debt exceeding equity by over 100%. This is a bit unusual for a small-cap stock, since they generally have a harder time borrowing than large more established companies. No matter how high the company’s debt, if it can easily cover the interest payments, it’s considered to be efficient with its use of excess leverage. A company generating earnings before interest and tax (EBIT) at least three times its net interest payments is considered financially sound. In BRIGADE's case, the ratio of 2.33x suggests that interest is not strongly covered, which means that lenders may refuse to lend the company more money, as it is seen as too risky in terms of default.
BRIGADE’s high cash coverage means that, although its debt levels are high, the company is able to utilise its borrowings efficiently in order to generate cash flow. This may mean this is an optimal capital structure for the business, given that it is also meeting its short-term commitment. Keep in mind I haven't considered other factors such as how BRIGADE has been performing in the past. I recommend you continue to research Brigade Enterprises to get a more holistic view of the small-cap by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for BRIGADE’s future growth? Take a look at ourfree research report of analyst consensusfor BRIGADE’s outlook.
2. Valuation: What is BRIGADE 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 BRIGADE 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. |
Corporate Boards Are Supposed to Oversee Companies but Often Turn a Blind Eye
This article was written by Siri Terjesen, Dean's Faculty Fellow in Entrepreneurship, American University Kogod School of Business, and originally appeared onThe Conversation, a not-for-profit news site dedicated to unlocking ideas and knowledge from academic experts.
A lot of giant companies are getting into big trouble these days.
WhenBoeing(NYSE: BA)737 Max aircraft crashed in Indonesia and Ethiopia, killing a total of 346 people in October 2018 and March 2019, the disasters raised serious questions about the safety of the aviation leader's anti-stall system.
When some 5,000Wells Fargo(NYSE: WFC)employees fraudulently opened over 1 million bank and credit card accounts, it had to pay billions in penalties and fines.
Then there'sTesla(NASDAQ: TSLA)founder Elon Musk, who tweeted about having "funding secured" to take the publicly traded electric automaker and solar energy company private in August 2018. The Securities and Exchange Commission a month later fined Musk and Tesla US$20 million each for making misleading statements that could manipulate the stock market.
In each case, I wondered: Why didn't anyone on their boards intervene before it was too late?
I've researched corporate boards for more than 15 years. Seeing these problems reminded me that boards of directors often fail to act in time to protect brands, prevent harm to the public and safeguard investors. What's more, there are few if any consequences for their inaction, especially for independent directors who don't hold executive positions in the firms.
Boeing, Wells Fargo and Tesla are all publicly traded corporations – meaning that they have sold shares to the public. That means they are legally bound to follow rules established by the New York Stock Exchange orNASDAQ(NASDAQ: NDAQ).
In addition, they must have a board of directors whose members must follow their own bylaws for board structure, operations and ethics as they exercise their managerial and strategic responsibilities.
Corporate boards hire and fire chief executive officers and monitor their performance and develop succession plans in case the CEO falters, quits or dies. Boards also work closely with the company's leaders on decisions that promote the company's long-term success, such as budgeting and personnel management.
Boards are also supposed to set the appropriate tone and cultivate a corporate culture.
The average U.S. corporate board has nine members, but board sizes range from three to more than 30. Directors are, at least technically, elected by shareholders and have what's known as a fiduciary duty to act on behalf of anyone who owns the company's stock.
They are supposed to ensure that operations run smoothly, profitably and without any wrongdoing. Directors are supposed to be selected because they can help the business, but it's often a question of who they know. In practice, directors were traditionally very closely connected to one another, often serving on one another's boards.
Most board members are paid. At public companies, their annual compensation typically amounts to around $260,000 for a part-time job. Boeing's directors earned between $315,000 and $371,000 in 2018.
Because their obligations can occupy only a few hours at a stretch, the time commitment is hard to measure. Some common estimates range from eight to 33 days of service a year.
Many of Boeing's board members had extensive experience in aviation, related industries and government. Former Boeing board members who asked for anonymity have told The Washington Post that the board considered "safety was just a given" and that "the board doesn't have any tools to oversee" safety.
But in contrast to other corporations supplying products and services that depend on safety, Boeing's corporate governance guidelines do not even mention that word. As Boeing's success truly depends on its safety record, I believe its board should have been held more accountable for safety and actively appointed safety experts to the board.
The Federal Reserve cracked down on Wells Fargo to punish it for a lack of oversight following the fake accounts scandal. The Fed demanded that the bank replace four board members, three of whom had been on board for more than 10 years.
Tesla's board expressed confidence in Musk after his tweet and other bizarre behavior, such as indicating he was drinking whiskey and getting high during a podcast and telling investors and analysts that their "boring, bonehead questions are not cool" during an conference call.
When the SEC fined Musk and Tesla, it also ordered him to stop chairing the board for at least three years. Robyn Ault, an independent member of the board of directors with significant experience in the auto and technology industries, replaced Musk as chair. But Tesla also added two new directors who are Musk's close friends.
That hardly offers assurance that the board is going to become independent enough to sniff out problems and demand action at a time when the company faces a rising number of safety concerns for drivers and workers alike.
The Federal Aviation Administration plans to step up its oversight of Boeing, starting in July 2019. It remains unclear what steps other government agencies besides the FAA will take to discipline the aircraft manufacturer.
Perhaps the clearest case of the disasters that await when board members shirk their responsibilities is Enron, the energy company that collapsed in 2001. Enron's board voted twice to waive the corporation's ethical code to allow then-Chief Financial Officer Andrew S. Fastow to conduct complex transactions that contributed to the company's demise.
Even though Enron's directors failed at their missions most suffered no serious consequences. The only Enron board member who served time behind bars was also one of its executives: CEO Jeffrey Skilling, who completed his prison sentence in 2019. Another, Enron founder Ken Lay, died of a heart attack in 2006 while awaiting what might have been a life sentence.
The only punishment for the rest of Enron's board was being largely banished from corporate America. As of 2019, based on what I found by searching board data, only one of Enron's 16 directors still sits on a corporate board. Herbert S. Winokur Jr. is on the board of Nano Terra, a government and corporate contractor that engineers nanomaterials.
I know of only one case where corporate board members have served time and it involved an Icelandic bank in the wake of that country's banking crisis. To me, it seems clear that greater accountability is warranted in the United States and everywhere else.
The Motley Fool owns shares of and recommends Tesla. The Motley Fool recommends Nasdaq. The Motley Fool has adisclosure policy. |
What To Know Before Buying Brigade Enterprises Limited (NSE:BRIGADE) For Its Dividend
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Is Brigade Enterprises Limited (NSE:BRIGADE) a good dividend stock? How would you know? Dividend paying companies with growing earnings can be highly rewarding in the long term. Yet sometimes, investors buy a popular dividend stock because of its yield, and then lose money if the company's dividend doesn't live up to expectations.
Investors might not know much about Brigade Enterprises's dividend prospects, even though it has been paying dividends for the last nine years and offers a 0.8% yield. A 0.8% yield is not inspiring, but the longer payment history has some appeal. When buying stocks for their dividends, you should always run through the checks below, to see if the dividend looks sustainable.
Click the interactive chart for our full dividend analysis
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Comparing dividend payments to a company's net profit after tax is a simple way of reality-checking whether a dividend is sustainable. In the last year, Brigade Enterprises paid out 11% of its profit as dividends. We like this low payout ratio, because it implies the dividend is well covered and leaves ample opportunity for reinvestment.
We also measure dividends paid against a company's levered free cash flow, to see if enough cash was generated to cover the dividend. Last year, Brigade Enterprises paid a dividend while reporting negative free cash flow. While there may be an explanation, we think this behaviour is generally not sustainable. It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.
As Brigade Enterprises has a meaningful amount of debt, we need to check its balance sheet to see if the company might have debt risks. A rough way to check this is with these two simple ratios: a) net debt divided by EBITDA (earnings before interest, tax, depreciation and amortisation), and b) net interest cover. Net debt to EBITDA is a measure of a company's total debt. Net interest cover measures the ability to meet interest payments on debt. Essentially we check that a) a company does not have too much debt, and b) that it can afford to pay the interest. Brigade Enterprises is carrying net debt of 3.93 times its EBITDA, which is getting towards the upper limit of our comfort range on a dividend stock that the investor hopes will endure a wide range of economic circumstances.
Net interest cover can be calculated by dividing earnings before interest and tax (EBIT) by the company's net interest expense. With EBIT of 2.33 times its interest expense, Brigade Enterprises's interest cover is starting to look a bit thin.
Consider gettingour latest analysis on Brigade Enterprises's financial position here.
Before buying a stock for its income, we want to see if the dividends have been stable in the past, and if the company has a track record of maintaining its dividend. The first recorded dividend for Brigade Enterprises, in the last decade, was nine years ago. The dividend has been quite stable over the past nine years, which is great to see - although we usually like to see the dividend maintained for a decade before giving it full marks, though. During the past nine-year period, the first annual payment was ₹1.20 in 2010, compared to ₹2.00 last year. Dividends per share have grown at approximately 5.8% per year over this time.
Brigade Enterprises has been growing its dividend at a decent rate, and the payments have been stable despite the short payment history. This is a positive start.
Examining whether the dividend is affordable and stable is important. However, it's also important to assess if earnings per share (EPS) are growing. Growing EPS can help maintain or increase the purchasing power of the dividend over the long run. It's good to see Brigade Enterprises has been growing its earnings per share at 17% a year over the past 5 years. Earnings per share are growing at a solid clip, and the payout ratio is low. We think this is an ideal combination in a dividend stock.
When we look at a dividend stock, we need to form a judgement on whether the dividend will grow, if the company is able to maintain it in a wide range of economic circumstances, and if the dividend payout is sustainable. Brigade Enterprises has a low payout ratio, which we like, although it paid out virtually all of its generated cash. Next, earnings growth has been good, but unfortunately the company has not been paying dividends as long as we'd like. Ultimately, Brigade Enterprises comes up short on our dividend analysis. It's not that we think it is a bad company - just that there are likely more appealing dividend prospects out there on this analysis.
Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 7 analysts we track are forecasting for Brigade Enterprisesfor freewith publicanalyst estimates for the company.
Looking for more high-yielding dividend ideas? Try ourcurated list of dividend stocks with a yield above 3%.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
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